England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM WORCESTER COUNTY COURT
MR RECORDER EVANS

		Royal Courts of Justice Strand, London, WC2A 2LL
		29 April 2005

SIR MARTIN NOURSE :

1. The primary question arising on this appeal is whether, on the actual facts of the case, there was an occupation of land by the implied permission of the person entitled to it within the second part of para 8(4) of schedule 1 to the Limitation Act 1980.
2. The disputed land consists of, first, the Old Farmhouse, Aston Magna, Moreton-in-Marsh, Gloucestershire, (sometimes called "the blue land"), secondly, the adjoining farmyard and buildings (sometimes called "the green land") and, thirdly, two pieces of land across the road (sometimes called "the red land"), which are known as the orchard and the paddock respectively; the orchard includes a barn. The owner of the paper title to the disputed land is the claimant, Batsford Estates (1983) Co. Ltd. (to which and its predecessor the Batsford Estate Company I will refer as "the Estate"), in which is vested Lord Dulverton's Batsford Park Estate.
3. As often happens in cases of this kind, it was necessary for Mr Recorder (Roger) Evans in the court below to set out the background facts at greater length than is necessary in this court. The following abbreviated statement is taken from his careful judgment and many of the facts can be stated in his own words.
4. From 29 September 1939 three brothers, Henry, Cyril and Algy Taylor (who were or had been gardeners at Batsford Park) were tenants of the Old Farm, Aston Magna, which included the disputed land and consisted of what the recorder called a proper working farm of 170 acres or thereabouts. Mr Algy Taylor had a son, the first defendant Gerald Algy Taylor, who, except for the period hereafter referred to, has lived at the Old Farmhouse all his life. The second defendant, Margaret Taylor, is his wife.
5. By the mid-1960s the Estate had become dissatisfied with the Taylor brothers' farming of the Old Farm. On 6 September 1967 a notice to quit was served, relying on section 24(2) of the Agricultural Holdings Act 1948 (failure to comply with the rules of good husbandry). There then followed what the recorder described as a series of curious mistakes and happenings which affected the relationship between the Taylor family and the Estate. As at August 1970 the position that had been arrived at was stated by the recorder thus (para 9):

"What then seems to have happened was that an agreement was come to … The arrangement seems to have been no dilapidations, £3,000 payment by way of compensation for disturbance, farmhouse for life of last survivor and peppercorn rent, landlord to carry out repairs outstanding and a reference to tenant right."

The recorder added that an oral agreement to surrender the tenancy was made, but subject to "a tenancy or some sort of an arrangement to allow the Taylor brothers, or some of them, to stay there for life."

6. On 27 October 1970 the land agents acting for the Taylor brothers forwarded to the Estate a draft agreement, which provided for the surrender of the premises:

"subject however, to the Landlords entering into an Agreement to allow the occupation of the Farmhouse on a new tenancy by Mr A.L. Taylor at an annual rent of £1 payable in arrear on 29 September in each and every year such tenancy to be for the life of the said Mr A.L. Taylor or the last surviving member of his family."

Not surprisingly, in the light of the previous oral agreement, the Estate replied on 2 November 1970 to the effect that the suggested tenancy should be a joint one between Messrs. Cyril and Algy Taylor for the life of the survivor of them, but not the last surviving member of their families. On 29 December 1970, after further exchanges, the parties executed a surrender agreement in which the material passage was as follows:

"The Tenant shall on the 27th day of September 1970 give vacant possession to the Landlords of the premises … subject, however, to the Landlords entering into an Agreement to allow the occupation of the Farmhouse on a new joint tenancy by Messrs. Algy Louis Taylor and Cyril Jesse Taylor at an annual rent of £1 payable in arrear on 29 September in each and every year."

7. As the recorder observed, that was an agreement simply to grant the two brothers an annual tenancy, being a tenancy determinable on six months notice at the end of any year; it was not what had been previously agreed. Notwithstanding that and the knowledge of the Estate's solicitors that a mistake had been made in drawing up the surrender agreement, the solicitors then prepared a tenancy agreement for signature by Messrs. Algy and Cyril Taylor providing for the letting of the Old Farmhouse to them for the term of one year from 29 September 1971 and thereafter from year to year until determined by either party giving to the other not less than six months notice in writing expiring on 29 September in any year. Thus, as the recorder pointed out, the mistake which had occurred in the surrender agreement was perpetuated and found its way into the tenancy agreement. The knowledge of the Estate and its solicitors having been what it was and they having been prepared, as the recorder found, to let things go unless challenged, it appears at least possible that Messrs. Algy and Cyril Taylor would have been entitled to have the tenancy agreement rectified on the ground of unilateral mistake under the principle established by the decision of Pennycuick J in Roberts & Co. Limited v Leicestershire County Council [1961] Ch.555, and approved by this court in Thomas Bates and Son Ltd v Wyndhams(Lingerie)Limited [1981] 1WLR 505.
8. The tenancy agreement was signed on 6 July 1972. Notwithstanding the surrender agreement, the Taylors refused to vacate the green land. The Estate commenced proceedings for possession in the Evesham County Court and on 19 January 1973 a consent order for possession of the green land was duly made. However, it appears that it was necessary for bailiffs to attend the premises on 27 June 1973 in order to evict Mr Algy Taylor's cattle from the farm buildings. Meanwhile the Estate's solicitors had turned their attention to the orchard, in respect of which Mr Henry Taylor was claiming a right of occupation. Separate proceedings for possession of the orchard were issued in the county court on 29 March 1973. Those proceedings were settled by a consent order made on 21 December 1973, which provided that Mr Henry Taylor should give up possession of the red land in exchange for a conveyance by the Estate to him of an outlying rectangle of land to the west. It took a long time to agree the form of the conveyance, which was not executed until 18 December 1981. At this point Mr Henry Taylor (who died on 19 July 1984) drops out of the story.
9. The next material date was 30 September 1983, when there occurred the only payment and acceptance of the £1 rent for the Old Farmhouse. Up to that time Mr Cyril Taylor (who was unmarried), Mr Algy Taylor and the first defendant continued to occupy the farmhouse. However, on 19 November 1984 the Estate's resident land agent, Mr Michael Hughes-Hallett, wrote to the first defendant expressing concern that there appeared to be no one living in the farmhouse. It appeared that the two Taylor brothers were living with their sister about five miles away and that the first defendant had moved to Shipston at some time in 1983.
10. On 20 March 1985 the Estate served on the two Taylor brothers a notice to quit the Old Farmhouse on 29 September following. To that there was an immediate response by solicitors acting on behalf of Mr Algy Taylor, asserting (though not quite accurately) his right to a tenancy of the farmhouse for life and that the tenancy agreement would be amended by the court. There was then a lot of to-ing and fro-ing between solicitors, into the details of which it is unnecessary to go. On 4 July 1985, during the course of those negotiations, Mr Algy Taylor's solicitors wrote to the Estate's solicitors a letter on which great reliance has been placed by the Estate in this court. Having referred to the Estate's offer to pay £1,000 for the surrender of the tenancy of the farmhouse and asking for an increase in that offer, the letter continued:

"In the event that satisfactory terms cannot be agreed our client and his brother will be returning to the property to live as they will have no alternative.

Should your client commence possession proceedings we shall be applying for legal aid in order to resist the proceedings and to commence an action for rectification of the Tenancy Agreement which we think it is probably now accepted does not reflect the intention of the parties at the time the Agreement was entered into."

11. The negotiations having proved unfruitful, on 30 September 1985, immediately after the expiration of the notice to quit, the Estate's solicitors wrote to Mr Hughes-Hallett asking him whether he would like them to investigate starting proceedings or would he wish to let the matter drop. The letter continued:

"I cannot at the moment offer any certainty that you will obtain possession although I think there is certainly a chance of this."

It was agreed that counsel's advice should be sought. On 10 October 1985 the £1 rent was tendered by the two Taylor brothers, but acceptance was refused by the Estate. In November 19885 the Estate's solicitors attended a conference with counsel, whose advice was inconclusive. Also in that month, Mr Hughes-Hallett reported that the defendants had moved into the farmhouse. In February 1986 Mr Algy Taylor received a written opinion from counsel who advised that he was unlikely to succeed in a claim to have the tenancy agreement rectified, the effect of that being that the Estate would succeed if they took action against him for possession. In a letter of 17 February 1986 to Mr Algy Taylor summarising counsel's advice his solicitor concluded by saying:

"You now have a choice to make, bearing in mind that you are not likely to wish to return to live in the property, although at present I understand that it is occupied by Mr Gerald Taylor and his wife who have no other accommodation available to them."

12. The recorder said that it seemed clear that what then happened was that Mr Algy Taylor was having none of the legal advice, because on 24 February 1986 Mr Hughes-Hallett reported to the Estate's solicitors that he had moved back into the farmhouse. Mr Hughes-Hallett's letter continued:

"I suspect that this means that we can do no more about it. If I now go and prepare a Schedule of Condition I suspect I will stir up trouble and I am inclined to think it best to let sleeping dogs lie, however unwelcome they may be."

On 7 March 1986 the Estate's solicitors replied to Mr Hughes-Hallett as follows:

"Thank you for letting me know that Algy Taylor appears to have moved back into the house. On the basis of the advice which we were given by Counsel at the end of last year, this does certainly weaken our case as, from our point of view, the arrangement is best seen as one under which the Taylors were given an annual tenancy which would run on for so long as either of them should wish to live in the house …

I think therefore that so long as either of the Taylor brothers remains living in the house there is really nothing you can do unless they commit any other breach of an obligation. I very much doubt if their solicitors will actually proceed on the claim to rectify the tenancy agreement as there would be no point in their doing so. If they do, then we can certainly have another look at the matter. I think you have now established that you are not prepared to see the house stand empty nor are you prepared to be bought out at an exorbitant figure."

The recorder observed that that letter was extremely important as to what then happened.

13. On 13 August 1987 Mr Cyril Taylor died. Mr Algy Taylor and the defendants continued to live in the farmhouse. No further payments of the £1 rent were made. No attempt was made by the Estate to enforce any of the covenants in the tenancy agreement. It appears that in the spring of 1987 and on a number of other occasions the Estate arranged for the septic tank which served the farmhouse, but was not situated on the disputed land, to be emptied, a charge being made for that service, as it was for other Estate properties in the village; the charges were duly met. In December 1997 the Estate's new land agent (Mr Hughes-Hallett had retired in about 1995) was allowed to inspect the interior of the farmhouse by Mr Algy Taylor.
14. On 3 March 2000 Mr Algy Taylor died. By his will he left all his estate to the first defendant, who obtained a grant of probate on 4 April 2000. On 26 November 2001 he registered a caution in respect of all the disputed land. On 25 June 2002 the Estate served on him a notice to quit expiring on 30 September 2002. On 22 July 2003 the Estate issued proceedings for possession in the Evesham County Court. By his defence and counterclaim the first defendant claimed a declaration that he was the fee simple absolute owner in possession of the disputed land. By its reply the Estate asserted that the 1985 notice to quit was invalid, alternatively that the two Taylor brothers would have been estopped from asserting its validity and, further or alternatively, that their occupation after 1985 was by permission of the Estate, such permission being implied from the Estate's not having pursued the 1985 notice to quit and allowing the two Taylor brothers to continue to occupy the farmhouse.
15. In greater detail, the defendants' pleaded case was that Mr Algy Taylor had acquired title to all the disputed land by adverse possession during his lifetime, because he had, since 1 October 1985, been continuously in possession of it, and any title which the Estate might have had to the land was extinguished at the expiration of twelve years from that date. Thus, Mr Algy Taylor's title was perfected long before his death, at which point his interest passed to the first defendant under his will. The first defendant claimed only through Mr Algy Taylor.
16. The action was heard by the recorder, sitting in Worcester, over three days in the summer of 2004. His reserved judgment was delivered on 4 October 2004. He ordered that the defendants should deliver up to the Estate with vacant possession all the disputed land on or before 18 October 2004. He also made a declaration that the defendants had no right, title, estate or interest in the disputed land and he ordered the caution to be vacated. He refused the defendants permission to appeal, but permission was granted by Lord Justice Jacob on consideration of the documents on 5 November 2004; he also granted a stay of the order for possession over the hearing of the appeal.
17. At para 52 of his judgment, the recorder said:

"Having considered the evidence, I accordingly determine and find, first, that Mr Algy Taylor asserted a right to occupy Old Farm and the other farm buildings and land as a right which was his as a matter of right for his life. That is, as a matter of law, wholly inconsistent with an intention to possess. Secondly, I find as a fact that in his lifetime Mr Algy Taylor was in occupation with the consent of the Claimants."

In para 53, the recorder added:

"The passivity, the letting of sleeping dogs lie, from the period of 1985/6 until the death of Mr Algy Taylor seems to me to be explained by the fact that each was respectively recognising the reality of his position, they were landlord and tenant. It follows on my finding that there was thus no animus possidendi and there was occupation with actual consent and the Defendants' case must fail."

In para 55, the recorder found that the notice to quit the farmhouse dated 20 March 1985 (para 10 above) "was never an effective notice to quit".

18. On these findings, it might have been thought that the legal position, at any rate in regard to the farmhouse (the blue land), was simple. If the notice to quit was ineffective, Mr Algy Taylor continued to occupy the farmhouse under the tenancy. If, on the other hand, the notice to quit was effective, the Estate must have impliedly permitted him to occupy it. Either way, the blue land was not "in the possession of some person in whose favour the period of limitation can run" (see below); Mr Algy Taylor was never in adverse possession of it. However, the arguments of counsel have not allowed us to adopt this simple approach. Though the matter remains straightforward, it must be considered more closely. The convenient course is to start with the recorder's finding that Mr Algy Taylor's occupation was with the consent of the Estate. If that finding is sustained, it will become practically unnecessary to consider any other question.
19. The relevant provisions of the Limitation Act 1980 are few in number. So far as material, s.15 headed "Time limit for actions to recover land", provides:

"(1) No action shall be brought by any person to recover any land after the expiration of twelve years from the date on which the right of action accrued to him or, if it first accrued, to some person through whom he claims, to that person …

(6) Part I of Schedule 1 to this Act contains provisions for determining the date of accrual of rights of action to recover land in the cases there mentioned."

So far as material, schedule 1 provides:

"1. Where the person bringing an action to recover land, or some person through whom he claims, has been in possession of the land, and has while entitled to the land been dispossessed or discontinued his possession, the right of action shall be treated as having accrued on the date of the dispossession or discontinuance …

8(1) No right of action to recover land shall be treated as accruing unless the land is in the possession of some person in whose favour the period of limitation can run (referred to below in this paragraph as 'adverse possession'); and where under the preceding provisions of this Schedule any such right of action is treated as accruing on a certain date and no person is in adverse possession on that date, the right of action shall not be treated as accruing unless and until adverse possession is taken of the land. … (emphasis added)

(4) For the purpose of determining whether a person occupying any land is in adverse possession of the land it shall not be assumed by implication of law that his occupation is by permission of the person entitled to the land merely by virtue of the fact that its occupation is not inconsistent with the latter's present or future enjoyment of the land.

This provision shall not be taken as prejudicing a finding to the effect that a person's occupation of any land is by implied permission of the person entitled to the land in any case where such a finding is justified on the actual facts of the case."

20. The purpose of the first part of paragraph 8(4) was to reverse the decision of the majority of this court in Wallis's Cayton Bay Holiday Camp Ltd v Shell-Mex and BP Ltd [1975] QB 94. However, the second part, which is in substance, though not in form, a proviso to the first, expressly permits a finding to the effect that a person's occupation of land is by implied permission of the person entitled to it "in any case where such a finding is justified on the actual facts of the case."
21. The recorder referred to Mr Algy Taylor's having been in occupation (para 52) "with the consent" of the Estate, and (para 53) "with actual consent". By the latter expression he cannot have intended to find that the occupation was with the express consent of the Estate, there having been no evidence to that effect. So the question is whether the occupation was with the implied consent of the Estate.
22. This question has recently been considered by this court (though without express reference to para 8(4) of schedule 1 to the 1980 Act) in Colin Dawson Windows Limited v Borough Council of King's Lynn & West Norfolk (20 January 2005 unreported) [2005] EWCA Civ 09. In giving the leading judgment (with which Jonathan Parker LJ agreed) Rix LJ, having read extensively from the judgment of Dillon LJ in BP Properties Limited v Buckler [1988] 55 P&CR 337, 354, referred to an unreported decision (22 February 2002) of Mr Lewison QC, sitting as a deputy High Court judge, in Bath & North Somerset District Council v Nicholson. In that case Mr Lewison, having stated that the court is able to infer the grant of a licence if the facts of the individual case justify the inference, applied the following test propounded by Etherton J in London Borough of Lambeth v Rumbelow (25 January 2001 unreported):

"In order to establish permission in the circumstances of any case two matters must be established. Firstly, there must have been some overt act by the land owner or some demonstrable circumstances from which the inference can be drawn that permission was in fact given. It is, however, irrelevant whether the users were aware of those matters. … Secondly, [it must be established that] a reasonable person would have appreciated that the user was with the permission of the land owner."

23. Etherton J's test was approved and applied by this court, in my respectful view correctly, in the Colin Dawson Windows case. Although both that case and Bath & North Somerset District Council v Nicholson were examples of the more familiar kind of case where the occupation of the person claiming a possessory title is in the course, or as a result, of negotiations for his acquisition of the land, the test is a general one which is capable of applying to a case such as the present. It is therefore necessary to consider whether the two requirements of the test are satisfied here.
24. Perhaps because he thought the answer to the question was so obvious, the recorder did not spell out his reasons for finding that Mr Algy Taylor's occupation had been with the implied consent of the Estate. Provided, however, that it is supportable on the facts and by an application of the correct test, the finding cannot be impeached in this court.
25. Mr Morshead, for the Estate, relied on a number of matters, in particular on Mr Algy Taylor's solicitors' letter of 4 July 1985 (para 10 above) and the further facts, first, that Mr Algy Taylor never resiled from the position taken in that letter; second, that the Estate, though it refused to accept the rent in October 1985 (para 11 above), never took any further steps to obtain possession, even after Mr Algy Taylor had moved back into the farmhouse in February 1986 (para 12 above). In my judgment, though it may not be possible to point to some overt act by the Estate from which permission can be inferred, the matters relied on by Mr Morshead certainly constitute demonstrable circumstances from which the inference can be made. It is plain that by July 1985 the battle lines were drawn, and that thereafter the Estate, however reluctantly, accepted the status quo. Further, it is clear that a reasonable person (who must be assumed to have knowledge of the material facts) would have appreciated that Mr Algy Taylor's occupation was with the permission of the Estate.
26. Mr Wonnacott, for the defendants, submitted that a permission to occupy land can only be implied if it is communicated by words or conduct. At all events in the context of adverse possession, that submission cannot be correct. Once communicated, the permission would cease to be implied and would become express. The concept of a communicated implied permission is difficult, if not impossible, to comprehend.
27. For these reasons, I would decide the first question in favour of the Estate and hold that Mr Algy Taylor's occupation of the farmhouse (the blue land) was by the implied permission of the Estate within the second part of para 8(4) of schedule 1 to the Limitation Act 1980.
28. It remains to consider the position in regard to the green land and the red land. The recorder said that there was no dispute as to what had been done by way of acts of possession on either of those areas of land; Mr Hughes-Hallett had agreed in cross-examination that the acts relied on in the first defendant's witness statement had been done. He continued:

"59 … However, it seems to me that all these acts of occupation are bound up with and go with the occupation of Old Farmhouse itself. The point is that Mr Gerald Taylor, in particular, who was living there, is an agricultural contractor and he was spreading his possessions relating to that occupation around the farmhouse and its yard and the small portion of land that went with it.

60. That was done with the consent of the landlord. … [The Estate] regarded themselves as providing a home for Mr Algy Taylor and his brother and that was the arrangement to which they came and, provided that it did not do any harm to them and it wasn't (sic), they were perfectly prepared to consent to some form of occupation of at least other portions of land which went inextricably with the land which had been let in the form of the Old Farm."

29. The recorder then read the following passage from chapter 25 (headed "Encroachments") of Jourdan on Adverse Possession under the sub-heading "The Presumption":

"25-01 Sometimes the tenant under a lease takes possession of land belonging to the landlord, but not included in the demise, by virtue of his possession of the demised premises. If the tenant does this, that land is presumed to be an addition to the land demised to the tenant, so that it becomes subject to the terms of the lease and must therefore be given up to the landlord when it ends, unless the tenant's conduct shows that he occupied the land for his own benefit, and not as part of the demised premises."

The recorder said:

"I accept and apply that principle here. It seems to me that this occupation of the other portions of the land was inextricably bound up with the occupation of the Old Farmhouse."

30. Although no authority is cited in support of the general statement in Jourdan, there is no doubt that the principle is well established. As I understood Mr Wonnacott's argument, on the footing that there was an implied permission in regard to the blue land, he did not suggest that the principle was not a sound basis for holding that there was also an implied permission in regard to the green land and the red land. That question having been effectively removed from our decision, I would hold that there was the necessary permission.
31. The Estate is entitled to possession of all the disputed land. I would therefore dismiss this appeal.

LORD JUSTICE GAGE:

32. I agree.

LORD JUSTICE PILL

33. I also agree.