England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM BOW COUNTY COURT
His Honour Judge Bradbury
BO351072

		Royal Courts of Justice Strand, London, WC2A 2LL
		19 July 2005

Lord Justice Neuberger :
 


1. This is an appeal from a decision given on 25 November 2004 by His Honour Judge Bradbury sitting in the Bow County Court. He ordered the defendants, Alfred and Valerie Barrett, to give up possession to the London Borough of Tower Hamlets ("the Council"), of a piece of open land ("the area") at Palm Street London E 15.

The factual background

2. The area is registered at Her Majesty's Land Registry with Title Number 409135. It is about 27 metres long (north to south) and 6 metres wide (east to west). It is located immediately to the west of the Palm Tree Public House ("the Palm Tree"). The Palm Tree's postal address is 24 to 26 Palm Street and it is registered at the Land Registry with Title Number 416904. The Council is the statutory successor of the registered proprietor of the area at the Land Registry. The principal defence which was raised below by the Barretts to the claim was that they had acquired title to the area by adverse possession.
3. The relevant background, as agreed between the parties or decided by the Judge, is as follows. With the exception of the Palm Tree, all the buildings on, and in the immediate vicinity of, the area were demolished over a period starting in about 1960, first by the Greater London Council ("the GLC"), and more recently by the Council, in connection with the creation and expansion of Mile End Park, which in part abuts the Grand Union Canal ("the canal").
4. Until the demolition of all the surrounding buildings, the Palm Tree was on the corner of Lessada Street (to its east) and Palm Street (to its south). Immediately to its west is the area, on which there used to be a house whose postal address was 28 Palm Street. The western boundary of the area adjoins further open land which fronted on to Palm Street, and on which there used to be houses whose postal addresses were 30 to 34 Palm Street. The canal, or more precisely its eastern towing path, runs immediately to the west of what used to be 34 Palm Street.
5. The building on the area shared a party wall with the Palm Tree, and, when it was demolished in the 1970s, substantial wooden props were erected by the GLC on the area. These props were apparently erected partly to support the western flank wall of the Palm Tree, and partly to provide protection from its brickwork, which overhung the area and was attributable to the shared chimney of the two buildings. The GLC also enclosed the area with corrugated metal fencing, apparently to protect the props from vandalism. At that time, the GLC was the registered proprietor of the freehold of the area, and Truman's Brewery Ltd ("Trumans") were the registered proprietors of the freehold of the Palm Tree.
6. The relevant history of the paper title to the Palm Tree is as follows. On 22 June 1977, Trumans let the Palm Tree (initially to Mr Barrett, but shortly thereafter) to Mr and Mrs Barrett, on an annual tenancy. Since then, the Barretts have occupied the Palm Tree and run it as a public house. Trumans subsequently granted an overriding 99-year lease of the Palm Tree to Brent Walker Ltd ("Brent Walker") on 30 April 1990. This lease was registered at the Land Registry with Title Number EGL 276522. Thereafter, on 18 March 1992, apparently as part of an internal group reorganisation, Trumans executed a transfer of the freehold of the Palm Tree to Pubmaster Ltd ("Pubmaster"), although the transfer was never registered at the Land Registry.
7. By an agreement ("the 1993 agreement") between Pubmaster, Brent Walker and the Barretts dated 21 July 1993, Pubmaster agreed to sell the freehold of the Palm Tree, and Brent Walker agreed to sell its long lease of the Palm Tree, to the Barretts for a total consideration of £95,000. The 1993 agreement identified "the property" the subject of the agreed sale as "The Palm Tree Public House 24 Palm Street Bow London". By clause 12, it was provided that the property was sold "subject to the existing tenancy in favour of the purchaser". The 1993 agreement was completed, and the Barretts became registered as the proprietors of the Palm Tree on 8 December 1993. Since that date, the Barretts have been the freeholders of the Palm Tree in possession.
8. Since 1978 the freehold of the area together with the land adjoining it to its west (i.e. what were 28 Palm Street– now the area – and 30, 32, and 34 Palm Street) has been registered at the Land Registry in the name of the GLC. However, as a result of two successive statutory transfers, it became vested first in the London Residuary Body and then, in 1986, in the Council, in whom it remains vested, subject to the Barretts' adverse possession claim in relation to the area.
9. As I have mentioned, at about the same time as the supporting props were erected, the area was enclosed by the GLC with corrugated metal fencing on the three sides which did not adjoin the Palm Tree. The Barretts' evidence, in summary terms, was that shortly after they became tenants of the Palm Tree in 1977, being under the impression that the area was included in the letting of the Palm Tree, they removed a panel of the metal fencing and replaced it with a lockable gate to which they kept the only keys, and that they used the area for storage of chattels (mostly of unwanted goods), and that this situation continued until 1989 or 1990.
10. This evidence was accepted by the Judge. He described the storage as being of items used in connection with the public house business, such as beer kegs and crates, which he referred to as "fairly durable though perhaps useless objects". He also mentioned that, for part of this period, the Barretts also permitted a scrap dealer to store items on the area. Although the Judge accepted the Barretts' evidence as to fencing generally, he found that part of it was vandalised or blown down on one or two occasions.
11. Meanwhile, in 1980, discussions started between Trumans (who were of course the freeholders of the Palm Tree) and the GLC about the use of land to the west of the Palm Tree in conjunction with the public house business carried on at the Palm Tree. The only evidence before the Judge relating to these negotiations was in written form. Internal GLC documents suggest that in 1980 and 1981 Trumans were proposing to improve the appearance and character of the Palm Tree, "in return for the GLC giving alternative access and car parking and making canal-side land available for use as a beer garden". A letter from the GLC to Trumans on 12 May 1981 indicated that the "canal elevation" of the public house would be improved and that a building agreement in respect of certain land was contemplated, but it is not entirely clear what that land was, as the plan referred to therein is missing.
12. An internal GLC memorandum of 1 November 1984 recorded that Trumans proposed that more extensive "refreshment facilities", including a café, "be built adjoining the pub on the canal side elevation". This was followed by a letter headed "Subject to Contract" and "Without Prejudice" on 29 March 1985 from the GLC to Trumans. That letter expressed agreement in principle to the sale of "land shown…on the attached plan", upon which Trumans were to provide a "permanent refreshment facility", by the GLC to Trumans for £25,000. Unfortunately, once again, no copy of the plan has survived. Trumans' reply of 30 April 1985, which was similarly headed, stated that the writer was "prepared to recommend these terms to my board", but warned that this was subject to "final costings". The evidence relating to these negotiations stops there.
13. In or around 1988/9, the Barretts considered carrying out works to the area, which included removing the props and erecting an extension to the public house. In anticipation, they cleared the area of their chattels, and of vegetation. By the end of 1992, they were in discussions with the Council about the possibility of a grant towards the cost of these works, which the Council was prepared to agree at £5,000, which sum was duly paid to Mrs Barrett in April 1993.
14. Around April or May 1993, the Barretts removed the props and strengthened the flank wall of the Palm Tree, and they obtained planning permission to erect a two-storey extension to the public house on the area in 1994. They started building works on the area the following year. Those works consisted of digging foundations, and laying drainage services underneath and hardcore and concrete on top. They removed the props and strengthened the flank wall of the Palm Tree. They also removed the fence and gate in 1993 to enable access to the area to be obtained by builders.
15. Some time in 1995, as a result of a representative of the Council pointing out to the Barretts that they were not registered as the proprietors of the area, they stopped the works and re-erected a new metal fence along the three open sides of the area. This fence was constructed along lines which were a few inches inside the perimeter of the area, and it therefore enclosed the great majority, but not quite all, of the area. Thereafter, the Barretts kept the area clean and tidy. In January 2002 they applied to the Land Registry to be registered as the proprietors of the area on the basis that they had acquired title by adverse possession. This prompted the present claim for possession which was issued by the Council on 24 February 2003.

Identification of the issues in the case

The issues of principle which divide the parties

16. Although there was a claim below based on estoppel (rightly rejected by the Judge), it is now common ground that the only possible answer to the Council's claim for possession of the area is the Barretts' claim that they have acquired title to it, or at least the Council has lost title to sue for possession, on the basis of their adverse possession. That claim has to be judged by reference to the Limitation Act 1980, which applied to registered land until October 2002, when it was effectively replaced, but not with retrospective effect, by the provisions of sections 96 to 98 of the Land Registration Act 2000 ("the 2000 Act"). Without going into details, the 2000 Act generally renders it significantly harder for title to be lost or acquired by adverse possession.
17. For title by adverse possession to have been obtained, 12 years uninterrupted "dispossession" of, or "discontinuance [of possession]" by, the person with paper title to the land ("the paper owner") must be established by the person alleging adverse possession ("the squatter") – see section 15 of, and paragraph 1 of Schedule 1 to, the Limitation Act 1980 ("the 1980 Act"). In particular, section 15(1) provides that:

"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…".

18. Where a squatter can establish 12 years of adverse possession of unregistered land, he effectively can claim to have acquired the legal estate, albeit that it is a new "possessory" title rather than a notional conveyance of the paper owner's extinguished title. The position is a little more complex in the case of registered land, as is involved in this case, as title ultimately turns on registration. Section 75(1) of the Land Registration Act 1925 (repealed by the 2000 Act, but, again, not retrospectively) provides that the 1980 Act applies to registered land in the same way as it does to unregistered land, except that the title of the registered proprietor is not "extinguished", but is "deemed to be held on trust" for the squatter. (For simplicity's sake I shall refer to a squatter on registered land for more than 12 years as acquiring possessory title, although that may be, strictly speaking, inappropriate in relation to registered land).
19. The Judge found that, but for the effect of the props (whose presence was sufficient to enable the Council to have retained factual possession of the area), the Barretts would have established more than 12 year's adverse possession of the area by 1990. He went on to find that Trumans may have given a written acknowledgment of the GLC's title in 1985, but it was unclear whether it was in respect of any part of the area, but that the Barretts' claim to have acquired title by adverse possession would have failed anyway, as they were tenants at the time that such title would have been obtained. The arguments as developed on this appeal involve consideration of all the aspects involved in those conclusions.
20. The Barretts' adverse possession claim has thrown up the following questions on this appeal:

i) Were the Barretts' activities on and in relation to the area insufficient to justify the Judge's conclusion, subject to questions (ii) (iii) (iv) and (v), that they were in adverse possession of the area for more than 12 years?

ii) If not, was the Judge right to reject the Barretts' claim on the basis that the Council maintained factual possession as a result of the presence on the area of props shoring up the Palm Tree?

iii) If not, should the Barretts' claim fail because there was (a) an acknowledgment in the 1985 negotiations of the Council's title, and/or (b) the grant by the Council in and before 1985 of an implied licence to occupy the area (a new point raised by the Council)?

iv) Was the Judge right to accept the contention that, if title was acquired to the area by adverse possession in 1989/90, it is not the Barretts, but their former landlords, Trumans, who, having acquired it, now retain it?

v) If the Council would otherwise have lost title to the area by adverse possession, can they rely on the Human Rights Act 1998 ("the 1998 Act") to rebut this conclusion (another new point raised by the Council)?

21. Questions (i) and (ii) raise the sort of issues which frequently, indeed normally, arise on disputed claims for adverse possession, and relate primarily to the position on the ground. Question (iii) raises the points that a claim to title based on 12 years adverse possession will fail, if, at any time during that period the squatter either has acknowledged in writing the title of the paper owner, or has the licence of the paper owner to occupy the land. Both questions (iii) and (iv) involve consideration of the effect and extent of the rather esoteric doctrine that, where a tenant encroaches on a third party's land for more 12 years, it is his landlord, rather than he, who obtains title thereto by adverse possession. To question (v), which would otherwise be difficult, there is a short answer.
22. On behalf of the Barretts, Mr John McDonnell QC and Mr Timothy Sisley contend that the answer to each of these questions is in the negative, whereas for the Council, Mr James Harris and Ms Genevieve Screeche-Powell argue that the answer to each question is in the affirmative. I propose to take the five questions in turn.
23. Before doing so, however, it is appropriate to consider three points of principle. It is sensible to consider these points first, because they arise in connection with more than one of the questions at issue, and because they are points which, to some extent, cause the questions to be inter-related. The three points are as follows. First, what constitutes adverse possession; secondly, the nature of the doctrine that a tenant is deemed to obtain title on behalf of his landlord; thirdly, the consequences, in principle, if the Council succeeds on question (iii).

What constitutes adverse possession?

24. The first and second questions are concerned with the issue of whether the Barretts were in possession of the area at any time (or, indeed, at all times) after 1977. They therefore engage, subject to question (v), the principles authoritatively discussed and conclusively determined by the House of Lords in JA Pye (Oxford) Ltd v Graham [2003] 1 AC 419. In that case, Lord Browne-Wilkinson, with whom the other members of House agreed, approved the approach of Slade J in Powell v McFarlane (1977) 38 P&CR 452. In particular, in paragraphs 40 to 43 of his speech, Lord Browne-Wilkinson, drawing on Slade J's judgment, identified certain principles of general application to adverse possession cases.
25. For present purposes, I consider that the following principles are of particular relevance. First, possession involves both factual possession ("a sufficient degree of exclusive physical control") and legal possession ("an intention to possess"). Secondly, what acts are sufficient to constitute factual possession "must depend on the circumstances, in particular the nature of the land and the manner in which the land is commonly used or enjoyed". Thirdly, legal possession means an "intention … to exclude the world at large … so far as is reasonably practicable". Fourthly, possession is exclusive, or unitary, so that the paper owner and a trespasser cannot both be in possession of the same land at the same time.

The doctrine that a tenant acquires possessory title for his landlord

26. The doctrine was clearly stated by Parke B in Kingsmill v Millard (1855) 11 Exch 313, at 318, in the following terms:

"It is laid down in all the cases – whether the inclosed land is part of the waste, or belongs to the landlord or a third person – that the presumption is, that the tenant has inclosed it for the benefit of his landlord unless he has done some act disclaiming the landlord's title. …The encroachment must be considered as annexed to the holding, unless it clearly appears that the tenant made it for his own benefit."

27. This passage was cited by Pennycuick V-C in Smirk v Lyndale Developments Ltd [1975] Ch 317 at 324 B-G in the course of an extensive review of the cases on this topic (between 323F and 331F). He observed at 323G that the cases demonstrated that "the law … has got into something of a tangle", but he went on to say at 324G that the doctrine, at least as summarised by Parke B, appeared to him to be "in accordance with justice and common sense". Although the Court of Appeal reversed his decision (on a ground not argued before him), Lawton LJ, giving the judgment of the Court, "accept[ed] Pennycuick V-C's statement of the law [on this topic] as being correct" – see at 337G.
28. It is difficult to discern the precise basis upon which the courts have decided that a tenant, who squats on a third party's land and thereby acquires title to that land, does so for the benefit of his landlord. As Thesiger LJ said in Attorney-General v Tomline (1880) 15 Ch D 150 at 161, "there is a difference of opinion among Judges as to the exact grounds of the doctrine that encroachments made by tenants enure for the benefit of their landlords". On the same page, he said that the doctrine was "founded upon a presumption of fact". That seems consistent with principle and with at least the bulk of the authorities on the topic considered in Smirk's case, and indeed with the judgments of James and Cotton LJJ in Tomline's case itself.
29. The notion that the doctrine exists and is based on a rebuttable presumption also seems entirely consistent with the judgment of Willes J in Whitmore v Humphries (1871-2) LR 7 CP 1, at 5, where he said that "as between the landlord and the tenant, the tenant must prima facie be deemed to have taken in the additional land as part of his tenancy" (emphasis added). He went on to refer to the tenant as having "availed himself of the opportunity afforded him by his tenancy to make encroachments", thereby rendering it appropriate to "presume" that the encroachment was "for the benefit of the reversioner".
30. Mr McDonnell does not seek to challenge the correctness of the doctrine as laid down in those cases, even though, as he points out, none of them actually involve cases of encroachment onto a third party's land (as opposed to land owned by the landlord or land which was part of the waste). In my view, it is right to proceed on the basis that the doctrine is too well-established by the cases considered at first instance in Smirk's case to be overruled, at any rate in this court, not least because of the approval by Lawton LJ in that case of the analysis and conclusions of Pennycuick V-C.
31. However, I would be sceptical about the application of the doctrine (especially in relation to land owned by a third party), unless the land to which possessory title is acquired is very close to the demised land and occupied by the tenant together with that demised land. That appears to accord with principle, in that Willes J in Whitmore's case at 5 referred to the "opportunity afforded to the tenant to take in adjoining land". He went on to explain, on the same page, that the doctrine was not only "in accordance with the rights of property", but was also based on the fact that it was "convenient". It is hard to see how convenience could be invoked in a case where the two pieces of land are not very close and are used and occupied together.

What if there was an acknowledgment or licence in 1985?

32. The Judge proceeded on the implicit assumption that, if title by adverse possession was obtained, it would have been by 1989 or 1990, because the Barretts claimed to have been in possession of the area since 1977 or 1978. Subject to the Council's contention that there was an implied licence to occupy the area, or that there was an acknowledgment of the Council's title, i.e. subject to question (iii), that would, at any rate at first sight, seem to have been correct.
33. Time could not have run in the Barretts' favour after February 2003, when the present claim was issued, and therefore the latest date on which time could have started to have run would have been February 1991. As the essential facts established below did not (as I shall explain) change substantially during the period 1977/1978 to 1989/1990 (subject again to the effect of the alleged acknowledgment or implied licence raised by question (iii)), it would appear that this case should be determined by deciding whether the claim to title by adverse possession was established over that period, and, if so, what the legal consequences are.
34. However, it appears to me that it may nonetheless be necessary to consider the position after 1990, for this reason. If the 1985 negotiations did amount to an acknowledgment or if there was an implied licence up to 1985, i.e. if the Council succeeds on question (iii), then that would not necessarily be the end of the Barretts' case. The effect of an acknowledgment in 1985 or an implied licence until 1985 would be to negative time accruing up to that date. However they would not prevent time accruing thereafter. Accordingly, if the Council succeeds on question (iii), the Barretts could, at least in principle, still establish 12 years adverse possession between late 1985 (or any date thereafter before February 1991, that date being 12 years before the Council brought the present claim).
35. There is a further twist. If the Council succeeds on question (iii), any claim for adverse possession would, as mentioned, have to be based on the proposition that the 12 years of adverse possession start some time in 1985 at the earliest. Accordingly, the 12-year period would run over the date the Barretts acquired the freehold the area, namely December 1993. On that basis, if the Barretts otherwise establish 12 year's adverse possession for a period ending after 1993, success on the points raised by question (iii) would not assist the Council. The fact that the Barretts were tenants of the Palm Tree for the first part of the 12 years would not alter the fact that for the last part, and, crucially, at the end of, that 12-year period, they were freeholders of the Palm Tree.
36. The central point in this connection is what bars the paper owner from claiming possession is a continuous period of 12 years of dispossession – see section 15(1) of, and paragraph 1 of Schedule 1 to, the 1980 Act. Accordingly, unless there is a hiatus between the periods of possession of successive squatters (in which case paragraph 8(2) of the Schedule would prevent the second squatter being able to rely on the period of adverse possession by the first) the second squatter, whether he has purchased from the first squatter or dispossessed him in some other way, can rely on the first squatter's period of adverse possession. This view is supported by Asher v Whitlock (1865) LR 1 QB 1 and Willis v Earl Howe [1893] 2 Ch 545.
37. As I see it, therefore, if time started running against the Council after 1985, the Barretts would be entitled to add the first part (say 1986 to 1993) of the 12-year period, when, on the Council's argument, time would have been accruing on behalf of their landlords, to the second part (1994 to 1998), when time would have been accruing for the Barretts themselves. On this basis, therefore, when the 12-year period expired, it would have been the Barretts who, on any view, would be entitled to claim title to the area by adverse possession.

The first question: were the Barretts in adverse possession?

The period between 1977/1978 and 1989/1990

38. The first question involves considering the Council's contention that the Judge was wrong to conclude (subject to the resolution of the other four questions) that the Barretts would have acquired title to the area by adverse possession by 1989/90. In my view, the Judge was right on that point. In summary, the Barretts physically used and occupied the land and effectively secured it from access by third parties including the paper owner, believing that it was part of the property demised to them. Accordingly, at least in the absence of other facts which assist the contention that they were not in possession, or that the paper owner was in possession, their case is strong, in that they would appear to have had factual and legal possession.
39. As to factual possession, although the Barretts did not erect the fence which effectively enclosed off the area from access, they installed a gate in it, which they kept locked, retaining the keys, and they maintained and repaired the fence when it was damaged. Enclosure is strong evidence of possession – see per Millett LJ in London Borough of Hounslow v Minchinton (1997) 74 P&CR 221 at 230. While it cannot be determinative of the issue in every case, it is worth pointing out that the authority normally cited for the proposition that enclosure is not necessarily decisive, Littledale v Liverpool College [1900] 1 Ch 19, was referred to with disapproval (though not on this precise point) in Pye's case at paragraph 43.
40. An essential point which was established by the successful squatter in Pye's case was, to quote from paragraph 41 of the speech of Lord Browne-Wilkinson, that "the paper owner…was physically excluded from the land by the hedges and lack of any key to the road gate". So here, save for "hedges" read "metal fence". Like the squatters in Pye's case, who did not plant, but repaired and maintained the hedges, the Barretts did not first install the fence here, but they repaired and maintained it.
41. It is not merely a matter of enclosure. The Barretts also actually went onto and used, at least until 1988, the area for storage purposes. Their use may not have been very intensive, but it was much more than minimal, and it was continuous. The fact that they stopped using it for storage around 1988 is in my view irrelevant: they tidied it up, removing chattels and vegetation in anticipation of carrying out substantial works on it – very much the actions of a person, indeed an owner, in possession. Further, apart from permitting the scrap merchant to use it (which itself is redolent of their being in possession) the Barretts were the exclusive users and occupiers of the area – indeed, in light of the fence and locked gate with their retention of the key, that was inevitable, at least till 1993.
42. Further, effectively for the same reasons, they plainly satisfied the requirement of legal possession i.e. intention to possess. They believed their tenancy included the area. Hence they thought they were enjoying exclusive possession of it – i.e. they not only manifested, but, for what it is worth, they also subjectively had, what Slade J referred to as "the intention to exclude the world at large" quoted with approval in paragraph 43 of Pye's case.
43. Mr Harris relies on British Railways Board v G J Holdings Ltd (1974) 230 EG 973 to support the argument that using the area for depositing rubbish was insufficient to amount to possession. There are, in my opinion, two objections to that point. First, the reasoning of the Court of Appeal in that case was, at any rate largely, based on the fallacy identified by Lord Browne-Wilkinson in paragraph 32 in Pye's case, namely that there could be no adverse possession where the squatter's use of the land was not inconsistent with the use intended by the paper owner. Secondly, there was no question of the squatter in that case securing the land from access by anyone else, including the paper owner, as here.

The period between 1989/1990 and 2004

44. Because it will be of considerable importance if the Council succeeds on question (iii), as I have explained, it is next necessary to consider whether the Barretts continued in adverse possession after 1989/1990. In that connection, nothing changed until about April 1993, when the Barretts removed the fencing to enable them to have works carried out on the area. Such works were carried out between 1993 and 1995, but they were not completed, because of the uncertainty over the Barretts' title to the area. When the Barretts stopped the works because of this, they fenced that part of the area on which foundations and drainage had been laid. This fenced part amounted to what the Judge called "slightly less than the whole of the [area]", as I have explained. The Barretts thereafter swept and cleaned the newly fenced part of the area "regularly", according to the evidence of Mrs Barrett, whose testimony the Judge accepted.
45. In my judgment, the Barretts certainly retained possession of the area until 1995, and, while this point is a little less clear, they did so up to the time the present claim was brought in 2003. The position up to the time the works were stopped in 1995 appears to me relatively straightforward. Although the original metal fence had been removed, that was because works were being carried out, and those works were redolent of the Barretts being in factual and legal possession.
46. After 1995, the correct analysis is less, but not much less, clear. So far as factual possession is concerned, I bear in mind that much depends on the circumstances of the case. It is worth referring to what Slade J said in a passage in Powell's case, quoted with approval in paragraph 41 of Pye's case, namely that "the alleged possessor [must show that he] has been dealing with the land … as an occupying owner might have been expected to deal with it, and that no-one else has done so".
47. The Barretts rely on the new fencing they erected in 1995, and their work keeping the area within that new fence swept and cleared. Not much happened on the area after 1995, and the fencing the Barretts erected did not quite enclose the whole of the area. Nonetheless, in the light of a number of factors, I consider that what they did was enough to constitute possession on their part.
48. First, there is the physical state of the area at that time, midway through substantial building works carried out by the Barretts. Secondly, there are the consequential limitations on the use to which it could have been put. Thirdly, there is the fact that the Barretts had previously had exclusive possession, and no steps were taken by anyone, including the Council, to dispossess them. Fourthly, there is the reason they stopped their works, so that it could not be suggested that the reduced activity on the area was attributable to a change in the nature of their occupation. Fifthly, there is the absence of any other occupiers. Finally, there is the erection and maintenance of the fencing.
49. The only specific difficulty about the Barretts' case from 1995 which is perhaps worth considering further is that the new fencing did not quite extend to the perimeter of the area. In my view, that is quite insufficient to assist the Council. It is not as if the Barretts had excluded themselves from the unfenced area. Having taken down the original fence to enable works to be carried out to the area, the acts of a person in possession, they then enclosed the major part of the area on which the works had been carried out, again the act of a person in possession of the area. They had undoubtedly been in possession of the whole of the area, and it cannot sensibly be said that the Council, or anyone else, had dispossessed them, or that they had done anything which could be construed as giving up possession, in respect of the unfenced part.
50. Therefore, viewed in context (and the effect of any action, like that of any word, must be assessed in its context), the erection and maintenance of the 1995 fencing was the act of an owner of, or at least a person in possession of, the whole of the area, and not just that part which was fenced off. Essentially for the same reasons, but also because their attitude to the area did not change significantly after 1995, I am also of the opinion that the Barretts had legal possession of the whole of the area from 1995 to 2003.

The second question: the effect of the props being on the area

51. The Judge accordingly was right to conclude that, at any rate subject to the resolution of the second question, the Barretts had been in adverse possession of the area between 1977/1978 and 1989/1990. That question is whether the Judge was right to conclude that the effect of the props being present on the area meant that the Council retained possession of the area.
52. The Judge's reasons for this view were expressed in these terms:

"In my judgment [the] area was not … quite within the [Barretts'] exclusive physical control. The GLC and later the [Council was] responsible for putting up and keeping in place the shoring to the flank wall of the public house. It may have been a passive responsibility, which did not require regular attention, but it was nonetheless a responsibility and an assumption of ownership. Indeed the willingness of the [Council] to provide a grant to amongst other matters remove the shoring is perhaps a recognition of responsibility for it. So the [Barretts] fail the test for factual possession."

53. In my opinion, this analysis involves a misunderstanding of the concept of factual possession. I am prepared to accept that the Judge was correct, as he probably was, in his apparent assumption that the Palm Tree had acquired an easement of support from the adjoining building previously on the area by implication or by prescription. However, the fact that land is burdened by an obligation to support an adjoining building cannot, of itself and without more, mean that the paper owner of the unencumbered freehold is in factual possession of that land.
54. Factual possession involves some sort of physical presence or at least being in physical control in some real way. It self-evidently cannot assist the paper owner to show that he had the right to go on the land during the 12-years the squatter was in occupation. (In a sense it is because the paper owner has that right that he is at risk of losing his title to the squatter.) It is hard to see why a contingent obligation of the paper owner, performance of which would require him to go on the land in certain circumstances, which did not arise during the 12 year period, should make any, let alone all, the difference to the issue of whether he enjoyed possession during that period.
55. The essential point is that, while the Council could have had cause, and could possibly have been compelled by the owner or occupier of the Palm Tree, to go on the area during the 12-year period, to repair or replace the props, it never actually did so.
56. The fact that the Council's predecessor erected the props, and the fact that the Council may have regarded itself as responsible for maintaining the props are relied on by Mr Harris. The former point is irrelevant, as it was completed before the alleged adverse possession started. The latter point is concerned with the paper owner's intention, which was not communicated to the squatter, and is therefore irrelevant – see again paragraph 32 in Pye's case. In any event, I am not convinced that there was any evidence before the Judge to support the proposition on the facts.
57. Mr Harris relies on an observation of Lord Browne-Wilkinson in Pye's case at paragraph 45, where he said that an intention to possess on the part of a squatter may be negatived if he "is aware of a special purpose for which the paper owner uses or intends to use the land and the use made by the squatter does not conflict with that use". That observation was concerned with intention to possess rather than factual possession, which is what the Judge considered was negatived by the presence of the props in this case.
58. In any event, I do not consider that what was said in that passage assists the Council's case. The factual foundation, as to the intention of the Council and as to the Barretts' knowledge of that intention, is lacking. Even if it existed, it would not assist the Council. The possibility canvassed in the passage is expressed in very tentative terms (such a finding, it is said, "may provide some support for" negativing an intention to possess, and would only apply "on a few occasions", and would be "a possible, if improbable, inference in some cases"). Further, Lord Browne-Wilkinson said that, in such a case, the intention to possess would be insufficient as it would be "an intention to occupy [the land] until needed by the paper owner". That is scarcely the basis upon which the Judge here found, or could have found, that possession by the Barretts was negatived by the presence of the props.
59. Mr Harris also argues that the Barretts did not abandon the easement of support which the Palm Tree enjoyed from the props until they removed them, as part of the works, in 1993. I accept that argument, to the extent that the Palm Tree continued to benefit from the support of the props until 1993. However, that does not, in my judgment, help one address the question of who was in possession of the area between 1977 and 1993.
60. If the props were part of the realty, then their existence takes matters no further, because they would simply be part of the land to which the claim for adverse possession extends. If they were chattels, that would not assist the Council either. The paper owner cannot defeat a claim to title by adverse possession simply by proving that he owned chattels which remained on the land during the 12 years of occupation by the trespasser now claiming title. If anything, by leaving his chattels on land in the possession of a trespasser, the paper owner may risk losing the right to reclaim the chattels, by virtue of limitation.
61. Quite apart from this, if the Judge was right, it would appear to mean that one could never acquire title by adverse possession to most flats or terraced houses, as the great majority are subject to easements of support. Indeed, carried to it logical conclusion, the argument would mean that one could not acquire title to any property which was subject to many types of covenant, and, in particular, it would mean a leaseholder would hardly ever be at risk of losing his title in this way. The owner of such land can always be said to be "responsible" for what occurs on the land, particularly if "passive responsibility" is enough.
62. Some might think that anything which impeded or prevented title being acquired or lost by adverse possession would be a good thing, and would therefore welcome the Judge's approach and conclusion. However, that approach, and therefore that conclusion, are contrary to the well-established principles which were authoritatively explained in Pye's case.
63. The Judge also thought that it was relevant that, in 1992, the Council made a grant of £5,000 towards the works carried out in 1993/4, because that demonstrated an acceptance of responsibility on its part for shoring up the Palm Tree from the area. I am unimpressed with that point. First, the grant appears clearly to have been made by the Council in its public role as a local authority seeking to encourage improvement of the local environment, rather than in its capacity as the owner of the area. Secondly, it was not in any event an act which involved exercising any physical control or occupation of the area, or can be said to involve manifesting an intention to possess. If anything, it was an acknowledgment or acceptance by the Council of the fact that the recipients of the grant, Mr and Mrs Barrett, were in possession of the area. That point is reinforced, as Mr McDonnell says, when one looks at the letter from the Council to the Barretts enclosing the grant application form. It referred to the "work to your property" (emphasis added).
64. Accordingly, I accept Mr McDonnell's contention that the Judge was wrong in the first of his reasons for rejecting the Barretts' case based on adverse possession.

The third question: acknowledgment in 1985 and licence until 1985

65. I turn then to the third question, namely whether there was a relevant acknowledgment of the GLC's title in 1985, or an implied licence from the GLC during (and possibly before) 1985. In this connection, the Council relies on the negotiations between the GLC and Trumans between 1980 and 1985, the nature of which I have summarised above. I begin by considering the issues without regard to the fact that the negotiations relied on by the Council were with the Barretts' landlord, Trumans, rather the Barretts themselves.

Was there an implied licence?

66. The court will readily infer the grant of a licence during negotiations for the purchase or letting of land, where the negotiating purchaser or tenant is in occupation of the land concerned. Support for that proposition may be found in Colin Dawson Windows Ltd v King's Lynn Borough Council [2005] EWCA Civ 09, at paragraphs 33 and following. However, the insurmountable problem for the Council's case on this issue, as I see it, is that there is no evidence to suggest that the Council knew, or even suspected, that the area was occupied by the Barretts.
67. Although Colin Dawson's case shows that the Court is, understandably, very ready to infer the grant of a licence, to a prospective purchaser or tenant, to occupy during negotiations, whether the inference can be made in a particular case must depend on the application of normal legal principles to the facts of that case. The inference of a licence involves some sort of implied grant, or at least an indulgence, on the part of the licensor. I cannot accept that a grant, or even an indulgence, involving an implied permission, to occupy, can properly be inferred where, as here, the supposed licensor is unaware of the occupation of the supposed licensee.
68. The conclusion that there was an implied licence in this case as a result of the negotiations up to 1985 would be remarkable. It would mean that a licence to occupy should be inferred from negotiations, in circumstances where the alleged licensor was unaware of the occupation of the alleged licensee, and where the alleged licensee was not aware of the negotiations said to give rise to the licence. Legal fictions have their place, but this would be legal fairyland.

Was there an acknowledgment by Trumans?

69. Section 29(2) of the 1980 Act provides that the accrual of time in relation to adverse possession starts afresh in the event of an acknowledgment of the paper owner's title "by the person in possession of the land". Section 30(1) requires such an acknowledgment to be "in writing and signed by the person making it". Accordingly, it is not in dispute that, if, during the 12 year period he relies on to establish title, the squatter acknowledges the paper owner's title in writing, the period of possession up to that date can no longer be relied on by the squatter. It also appears clear that an offer to purchase the paper owner's interest, even if made "subject to contract", is a sufficient acknowledgment of his title: see Edginton v Clark [1964] 1 QB 367.
70. The Judge concluded that it was not clear that the negotiations, and in particular the letters in March and April 1985, referred to the whole, or indeed, any part, of the area. I understand his concern about the uncertainty on this point, especially in light of the extent of the open space near the Palm Tree and the absence of the plans referred to in the correspondence. However, the question whether the negotiations, and in particular Trumans' letter of 30 April 1985, referred to the area had to be determined by reference to the balance of probabilities.
71. Although the burden of proof lay on the Council to establish that the area was being referred to, I consider that the Judge should have concluded that the burden was discharged. Neither of the parties to this litigation was party to the negotiations, the correspondence took place nearly 20 years before trial, and there was no suggestion of anyone repressing documents. Therefore, the question which the Judge should have asked himself was whether, in the light of the documents he had seen relating to the negotiations between 1981 and 1985, it was more likely than not that the area, or part of it, was the subject of those negotiations.
72. In that connection, it seems to me that the crucial parts of the documents were as follows. First, the proposed "refreshment facility" was to be built in a location described both as "adjoining the pub" and as "on the canal side elevation" according to the GLC report of November 1984. Secondly, the reference to a "refreshment facility" is mirrored in the GLC's letter of 28 March 1985, to which Trumans' letter of 30 April was a reply.
73. In light of that, it appears to me that the land to be acquired would have been likely to have adjoined the Palm Tree, and to have been on the "canal side" of it. Accordingly, it follows that the land the subject of the negotiations must, in all likelihood, have constituted at least part of the area.
74. There is some force in the argument that it was, or at least may have been, only part of the area which was included in the negotiations. However, at the time of the negotiations, the area was fenced off from the remainder of the open land to the west of the Palm Tree, and had been a self-contained property before it had been fenced off. Further, the area was, even as a whole, not very large for the provision of "refreshment facilities" in conjunction with a public house. It therefore appears to me, at least in the absence of any evidence to the contrary, that the proper conclusion is that the whole of the area was included in the sale negotiations which culminated in the exchange of letters in March and April 1985.
75. Mr McDonnell nonetheless submits that the fact that the 30 April 1985 letter was written "without prejudice" means that it cannot operate as an acknowledgment. In support of that contention he cites the (strictly obiter, if strong, remarks of Mellish LJ in re River Steamer Company (1871) LR 6 Ch App 822 at 831) that "a letter which is stated to be without prejudice cannot be relied on to take a case out of the Statute of Limitations, for it cannot do so unless it can be relied upon as a new contract".
76. I do not accept that submission. First, the letter in the River Steamer case was genuinely "without prejudice" in the familiar legal sense in that it was written in the context of a dispute which had advanced to the point of an arbitrator having been appointed. Here the correspondence in March and April 1985 was not written in the context of projected litigation or arbitration, or even in the context of a dispute. The heading "without prejudice", introduced, it would seem, by the Council, was, at least in the eyes of a lawyer, inapt.
77. Secondly, the formulation of Mellish LJ, which may have been justified in relation to an effective acknowledgment of a debt under the seventeenth century Statute of Limitations then in force, does not appear to represent the law under section 29 of the 1980 Act. In Edginton's case, at 376, Upjohn LJ, giving the judgment of this court, said:

"If a man makes an offer to purchase freehold property, even though the offer be subject to contract, he is quite clearly saying that as between himself and the person to whom he makes the offer he realises that the latter has the better title, and that would seem to be the plainest possible form of acknowledgment."

78. If, as is clear from that passage, a plainly non-binding offer, i.e. one whose acceptance cannot lead to a concluded contract, can operate as an acknowledgment, it is very difficult to see how, at the same time, an acknowledgment can only be effective if "it can be relied upon as a new contract". In my view, we would be increasing the uncertainty in this already difficult area of law if we distinguished this case from the principle laid down in Edginton's case.
79. It is true that, in that case, Upjohn LJ said at 377, "it is not possible to lay down any general rule as to what constitutes an acknowledgment". However, the difference between a simple "subject to contract" offer, as in that case, and a slightly more tentative "subject to contract" acceptance, as in this case, is too slight to justify a different result, especially in light of the robust way in which Upjohn LJ expressed himself. (I should add that, although Upjohn LJ was considering the effect of the Limitation Act 1939, it was not relevantly different for present purposes from the 1980 Act).
80. It accordingly follows that I consider that the Council's case on acknowledgment under section 29 of the 1980 Act would, subject to the point that the acknowledgment was made by Trumans, rather than the Barretts, succeed, but that its case on implied licence fails.

The effect of the acknowledgment having been made by Trumans

81. Although any acknowledgment in this case was made by Trumans rather than by the Barretts, the Council relies on the doctrine that a tenant who has dispossessed a third party is deemed to do so on behalf of his landlord. The Council's case in this connection involves two steps. First, as the Barretts were Trumans' tenants of the premises adjoining the area between 1977/1978 and 1989/1990, the effect of the doctrine is that they would have acquired possessory title to the area in 1989/1990 on behalf of Trumans. Secondly, and accordingly, any acknowledgment by Trumans during the 12-year period would be an effective acknowledgment under section 29 of the 1980 Act.
82. As I have mentioned, the basis of the doctrine is somewhat obscure and confused. Nonetheless, aspects of the principles behind the doctrine are important in the present case, because of the reasons advanced by Mr McDonnell for contending that the doctrine is of no assistance to the Council on this third question. First, he says that a tenant-squatter's possessory rights cannot accrue for the benefit of his landlord until after the tenancy in question has come to an end. Secondly, he says that the doctrine only applies between the tenant-squatter and his landlord, and cannot be invoked by third parties, such as the paper owner.
83. The first argument, namely that the landlord does not acquire title until the tenancy expires, can be said, at least at first sight, to accord more with reality in this sense. If, before the tenancy has expired, the paper owner wishes to claim possession, it might seem surprising if he had to join anyone other than the actual squatter as a defendant: the squatter's landlord may not have the faintest idea that his tenant is squatting on neighbouring land.
84. However, the point that the landlord has no possession during the 12-year period, and may not be aware that he has acquired title at the end of it does not, in my view, justify the conclusion that the landlord could not have acquired possessory title at the end of the 12-year period. If it were a good point, it could equally well be said to call into question the conclusion that the landlord could acquire title at any time thereafter, including on the expiry of the tenancy. Further, any possession proceedings during the currency of the tenancy should anyway be brought against the tenant; even after the 12 years have accrued, the land is deemed to be added to the property comprised in the tenancy, and will therefore be in the possession of the tenant.
85. So far as principle is concerned, it is worth considering a case where a tenant-squatter encroaches on land belonging to his landlord for more than 12 years. The position is perhaps most clearly summarised by the statement in Megarry & Wade, The Law of Real Property (Sixth Edition, 2000) at paragraph 21-027, which includes this:

"If the tenant occupies other land belonging to the landlord but not included in the demise, 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 tenancy, and although the tenant may acquire title to it against the landlord for the remainder of the term, he must give it up to him when the tenancy ends".

86. That proposition is supported by Tabor v Godfrey (1895) 64 LJQB 245, in a passage at 247 in the judgment of Charles J, which was quoted with approval by Pennycuick V-C in Smirk's case at 326D-G (and indeed referred to with brief implied approval by the Court of Appeal at 338F). It is also the clear view expressed in Woodfall on Landlord and Tenant (looseleaf edition) Vol. I at paragraph 19.007. Thus, a tenant can insist, against the will of his landlord, on remaining on land of his landlord, on which he has encroached for more than 12 years, for the remainder of his tenancy. It could be said to follow, as a matter of logic (possibly a dangerous concept to invoke in this "tangled" area), that, so long as his tenancy subsists, a tenant, who has encroached for more than 12 years on the land of a stranger, can insist on retaining possession of that land as against his landlord. It is only when the tenancy expires that the principle affirmed in Smirk's case comes into play.
87. On analysis, I do not consider that that helps Mr McDonnell's argument. The passage I have cited from Megarry & Wade indicates that, where it is the landlord's land on which the encroachment occurs, the land becomes subject to the terms of the tenancy. Accordingly, it could be said, in my view with rather more force, that, where the tenant's encroachment is on a stranger's land, that land also becomes subject to the tenancy. If that is right, then it would assist the argument that it is indeed the landlord on whose behalf the tenant acquires title, where the land encroached on is owned by a stranger, even while the tenancy is running.
88. Furthermore, and to my mind crucially, the notion that there is uncertainty as to who owns the freehold between the expiry of the 12 years and the determination of the tenancy concerned seems more than strange. Yet that is the effect of Mr McDonnell's argument, and it is fair to say that it is supported by the decision of Laddie J in Batt v Adams [2001] 2 EGLR 92 at paragraphs 43 to 48. The basis of this argument appears to be that the application of the doctrine is rebuttable, and that events after the expiry of the 12-year period can be taken into account when deciding whether such a rebuttal is established.
89. Dicta in a number of cases on this topic, including, in particular, Tomline's case, clearly indicate that the conduct of the parties, even after the 12-year period has accrued, can be taken into account when deciding whether the doctrine applies in a particular case. However, I do not believe that it follows that the issue of whether the tenant has acquired possessory title to land for himself or his landlord can remain in limbo after the expiry of that period until the tenancy between them expires. Equally, I do not accept that it necessarily means that the ownership of the land could oscillate between the tenant and his landlord between the expiry of the 12 years and the determination of the lease, depending on what the parties do or say during that period.
90. As a matter of principle, once the 12 years of adverse possession have been established, the paper owner loses his title, and someone, either the landlord or the tenant, acquires it. The ownership of land should not, in my view, be in limbo, or be treated as being in limbo, save where statute requires it. Once the 12 years are up, one would expect that either the landlord or the tenant obtains possessory title to the land. If it is the landlord who then acquires title, the land is added to the holding comprised in the tenancy; if it is the tenant, then he holds the freehold of the land in possession.
91. The subsequent acts and statements of those parties may be relevant as casting light on what they intended or believed at the end of (and indeed during) the 12-year period (and in an extreme case they may give rise to a subsequent estoppel). That, in my judgment, is, on proper analysis, the reason that the court in Tomline's case relied on the acts of the parties subsequent to the expiry of the limitation period. To interpret the reasoning in that case as establishing that the conduct of the parties subsequent to the expiry of the 12 years can be directly relied on to establish who had title at the end of the 12 years (save for the purpose of raising an estoppel) would, in my view, be wrong in principle. It would also be inconsistent with what was said by Parke B in Doe d. Lewis v Rees (1834) 6 C&P 610, in a passage cited with approval in Doe d. Croft v Tidbury (1854) 14 CB 304 at 325. He said that encroachments made by a tenant enured for the benefit of his landlord, "unless it appears clearly by some evidence at the time of the making of the encroachments that the tenant intended the encroachments for his own benefit …" (emphasis added).
92. Further, as already indicated, I cannot accept, at least in the absence of clear and binding authority to that effect, either of the two alternative propositions which Mr McDonnell's argument on this point involves. The first of those two propositions is that the possessory title acquired at the end of the 12 years is in abeyance, so that the identity of its owner is unidentifiable, in that it could be either the landlord or the tenant. The alternative proposition is that, if title was acquired for the landlord (or, as the case may be, the tenant) at the end of the 12 years, either of the parties can so conduct themselves, short of an estoppel, to lead to a divesting, whether retrospective or contemporary, of the possessory title to the property in favour of the other. Both propositions are contrary to ordinary notions of property ownership, and they do not lie easily with what would happen if the land in question was owned by the landlord. To accept either proposition would involve adding a bizarre and unnecessary further knot to Pennycuick V-C's "tangle".
93. I turn to consider whether, in the present case, anything happened between 1977/1978 and 1989/1990, or indeed thereafter, to rebut the application of the doctrine. I do not consider that it did. During the whole of the 12-year period, the Barretts' use of the area was attributable to their occupation of the Palm Tree, and, with the exception of their licensing the scrap dealer's use, was directly connected with the business carried on at the Palm Tree. Further, throughout the period, the Barretts believed that the area was included in their tenancy of the Palm Tree (although I accept that mere uncommunicated belief may be irrelevant in this connection). As for the Barretts' actions after 1990, they were consistent with their belief that they were going to acquire the freehold of the area on the basis that it was included in their tenancy, which could scarcely be said to call into question the contention that the possessory title had vested in their landlord.
94. Accordingly, it seems to me that the application of the doctrine was not rebutted in the present case, and that the first reason advanced by Mr McDonnell for saying that Trumans' acknowledgment was ineffective must fail. It is therefore necessary to consider the second argument, namely that the doctrine cannot be invoked by the paper owner, a stranger to the landlord and tenant relationship. This argument also found favour with Laddie J in Batt's case – see at paragraphs 36 to 42.
95. On this issue, I would accept Mr McDonnell's argument, at least in so far as it is relates to acknowledgment for the purpose of section 29(2) of the 1980 Act. That provision refers to the acknowledgment being made by "the person in possession of the land". As a matter of ordinary language, Trumans were not in possession of the area during the period 1977/1978 to 1989/1990, and in particular in 1985: the Barretts were. Even if the Barretts' possession of the area would, in due course, have the effect of possessory title to the area being acquired by Trumans, it seems to me that it cannot be said that in 1985 Trumans were "in possession of the land", either to an ordinary (if somewhat legally literate) speaker of English or within the meaning of section 29(2) of the 1980 Act.
96. It appears to me that, while it may be that, as between the Barretts and Trumans, the Barretts were in possession of the area "on behalf of" Trumans, that was not a point which concerned the GLC, as paper owner of the area and as a stranger to the landlord and tenant relationship between the freeholder and occupier of the Palm Tree. Furthermore, although Trumans may have been entitled to possessory title to the area once 12 years adverse possession had accrued, they had no rights whatever in or over the area, even as against the Barretts (e.g. in respect of rent or damages for occupation), during the currency of those 12 years.
97. Section 29(2) of the 1980 Act appears to me to be concerned with an acknowledgment to the paper owner by the person who is in possession, and, in these circumstances, I consider that it would represent an unjustifiable gloss on the statutory language if it extended to a party who happened to be the landlord on adjoining property of that person. Quite apart from any question of principle, there could be the practical difficulty of knowing who could give an effective acknowledgment if it were otherwise, as it may be hard, even impossible, to know whether the tenant-squatter would obtain possessory title on his own behalf or for his landlord until the 12 years expired.
98. We were not referred to authorities on the point other than Batt's case, and it would be wrong to suggest that there is anything conclusive in earlier case law. Nonetheless, it does appear to me that the conclusion that the paper owner, as a stranger to the landlord and tenant relationship, cannot invoke an acknowledgment by the squatter's landlord, even in a case where the doctrine described in Kingsmill's case applies, does receive some indirect support from Doe d. Baddeley v Massey (1851) 17 QB 374. In that case, as summarised in the headnote, Lord Campbell CJ, in argument, said at 377, that "the landlord is thereby entitled against the tenant who took, but not against a third person", which ties in with his statement on the preceding page that the doctrine is based on estoppel.
99. I am therefore of the opinion that, although there was an acknowledgment during the 12 years before 1990, it was not given by "the person in possession of the land", and therefore was not an effective acknowledgment for the purposes of section 29(2) of the 1980 Act. In my judgment, possessory title to the area was therefore obtained, subject to question (v), in 1989/1990.

The fourth question: Is title vested in Trumans not the Barretts?

100. This conclusion therefore means that it is necessary to address the argument that, although possessory title to the area was obtained in 1989/1990, it was acquired by Trumans because of the doctrine considered in Smirk's case, and, when the freehold was transferred in 1993, the transfer only related to the Palm Tree, and did not extend to the area. Accordingly, it is said by the Council that it is Trumans, and not the Barretts, who are entitled to raise the contention that its title, and therefore its claim for possession, is defeated by the defence of adverse possession.
101. Before turning to the effect of the unusual facts of this case, it is said by Mr McDonnell, with some encouragement from the Bench, that this argument runs into difficulties of principle. In this connection, the illuminating discussion in Megarry & Wade (op. cit.) at paragraphs 3-115 to 3-126 on "Ownership, Possession and Title" is in point. Thus, at paragraph 3-117, it is stated that "Possession by itself gives a good title against all the world, except someone having a better legal right to possession". At paragraph 3-124, it is observed that "other persons who have themselves no title cannot exploit the relative weakness of [the title of the person in possession] by pleading jus tertii". And at paragraph 3-126, it is said that, subject to a possible exception in the case of the Crown, "English law knows no abstract ownership, as opposed to the right to recover possession".
102. On that basis, it seems to me that, if one were here concerned with unregistered land, the Council's case on the fourth question would run into difficulties on the following basis. The Barretts are in possession of the area; the Council, as paper owner, would be debarred from seeking possession by the clear words of section 15(1) of the 1980 Act; it would not be open to the Council to raise the argument that someone else, namely Trumans has a better right to possession than the Barretts; consequently, the claim for possession would inevitably fail.
103. However, I think that Mr Harris is right in his contention that this reasoning cannot apply in the present case, involving, as it does, registered land. Even though the Council may hold the title on trust, by virtue of section 75 of the Land Registration Act 1925, it is nonetheless the registered proprietor, and therefore the legal owner, of the area. It would follow that, at least unless possession is sought against the beneficiary of the statutory trust, the jus tertii argument does not present a problem to the Council, as the registered proprietor seeking possession. If the Barretts are the beneficiaries of the statutory trust, it would be because they will have succeeded in defeating the contention that Trumans both acquired and retained the possessory title to the area. I turn, then, to that contention.
104. I have already indicated, when considering the third question, that I consider that, while the Barretts had established 12 years adverse possession by 1989/1990, the possessory title in the area vested in Trumans, because of the doctrine enunciated by Parke B in Kingsmill's case, as explained by Pennycuick V-C, and approved by this court, in Smirk's case. However, a further effect of the doctrine was that the area was also included in the holding comprised in the Barretts' annual tenancy. Accordingly, the first point made by Mr McDonnell is that, even if possessory freehold title to the area is vested in Trumans, the Barretts remain entitled to retain possession of the area as their tenancy has not been determined.
105. Mr Harris's argument in answer is that any tenancy vested in the Barretts merged when they acquired the freehold. There are two reasons for rejecting that argument. The first involves invoking the principle that merger only can occur when the tenant acquires his landlord's reversion - see Megarry & Wade (op. cit.) at paragraph 14-176. The whole basis of the Council's case on this aspect is that Trumans retained the freehold of the area in 1993, and only sold the freehold of the Palm Tree to the Barretts. Accordingly, on the Council's case, the conditions for merger of the tenancy, in so far as it related to the area (as opposed to the Palm Tree), cannot arise.
106. The second reason for rejecting Mr Harris's argument is that, even if this first reason is wrong, the argument falls foul of the law relating to merger as explained in the following paragraph of Megarry & Wade. Merger only occurs if it is intended by the tenant who is acquiring the freehold, and, if there is no evidence as to his intention either way, it is to be presumed that there was no merger if merger would have been against his interest. Here, there is evidence, in the form of an answer by the Barretts' solicitors, to a pre-contract inquiry by the bank funding their purchase in 1993, that they intended their tenancy to continue, and not to merge, after their acquisition of the freehold. Further, for the very reason thrown up by this line of argument, it would have been in the Barretts' interest not to have a merger.
107. That is enough to dispose of the fourth question so far as it relates to the Council's claim for possession against the Barretts. However, it is my view there is a more fundamental reason why the Council cannot obtain possession of the area from the Barretts. It appears to me that, contrary to the assumption made in the last two paragraphs, the Barretts acquired Trumans' beneficial ownership of the freehold of the area in 1993, and accordingly, the Council hold the registered title to it on trust for them.
108. My reason for this conclusion is based on a rational and practical extension of the law as developed in cases such as Kingsmill's case, Whitmore's case and Tomline's case. As explained above, those cases establish that there is not an absolute rule, but only a presumption, that possessory title to adjoining land encroached on by a tenant is acquired by the landlord (and deemed to be included in the tenancy), and that one is entitled to take account of subsequent acts to see whether the presumption applies or is rebutted. It seems to me that, at least where the adjoining land is still included in the tenancy, it should be relatively easy to conclude, even to presume, that, where the landlord and tenant thereafter agree a sale of the reversion to, or, indeed, a new tenancy of, the land originally comprised in the tenancy, the sale or new tenancy should extend to the adjoining land, especially if subsequent acts confirm that conclusion.
109. So far as principle is concerned, the doctrine summarised by Parke B in Kingsmill's case appears to be based in part on fairness and in part on practicality. The tenant will normally have been able to encroach on the adjoining land because he was the tenant of his landlord's land: hence the perception that it is just that he should acquire possessory title of the adjoining land for the benefit of his landlord (see e.g. per Willes J in Whitmore's case, cited above). Further, the land to which possessory title is acquired will often be small, will often adjoin the demised land, and will normally have been enjoyed for at least 12 years together with the demised land. Thus, it would normally be much more practical for the freehold of that land to be vested in a person who owns the demised land (i.e. the landlord), rather than in someone who (after the end of the tenancy concerned) has no interest in it (i.e. the tenant).
110. These arguments strongly suggest that, where the landlord in such a case, having acquired title to the adjoining land, which is thereby also included in the tenancy, sells the reversion to the tenant, the adjoining land is likely to have been included. I would add that, if it were otherwise, one would expect to see provisions dealing with the effect of the reversion to the tenancy being severed (or the effect of part only of the property now comprised in the tenancy being the subject of merger). Yet, there are no such provisions in the present case. Indeed, as I have mentioned, the 1993 agreement, with its reference to the tenancy, suggests that all the property the subject of the tenancy is being sold.
111. The arguments of justice and convenience which have been invoked to justify the doctrine, that the possessory title to land acquired by a squatting tenant should be presumed to enure for the landlord's benefit, appear to me to justify the argument, albeit in a slightly modified way, that, on the sale of the reversion to the land originally comprised in the relevant tenancy, one should presume, or at least be relatively ready to accept, that the possessory title is included in the sale.
112. I am conscious that it may appear somewhat anomalous to be extending a doctrine whose unsatisfactory nature is plain. However, the extension would only apply in relatively rare circumstances, and it should not give rise to any further difficulties than already exist. Further, it appears to me that such an extension of the doctrine is both logical and fair. To some extent, it can be said to be an application of the adage what is sauce for the goose is sauce for the gander.
113. In addition, the conduct of Trumans and of the Barretts after the transfer in 1993 was, in my judgment, strongly supportive of the notion that the freehold of the area was transferred to the Barretts. Trumans had nothing whatever to do with the area, and the Barretts started works which were explicable on the basis that they owned the freehold, as opposed to having merely an annual tenancy, of the area. The reasoning in authorities such as Tomline's case suggests that subsequent actions can be taken into account in this rather esoteric field. However, the notion that one can take into account the post-contractual conduct of the parties in order to determine the meaning and effect of the contract is, at least in general, misconceived: see. Schuler AG v Wickman Machine Tool Sales Ltd [1974] AC 235, at 252 and 265. Having said that, there may be a somewhat anomalous exception in relation to conveyancing transactions – see the Privy Council case of Watcham v Attorney-General of the East Africa Protectorate [1919] AC 533, whose correctness was somewhat doubted in Schuler's case..
114. In the present instance, I consider that it is unnecessary to decide whether subsequent actions can be taken into account when determining the effect of the 1993 agreement and the subsequent transfer. I am prepared to assume, in favour of the Council, that one cannot have regard to the conduct of the parties after December 1993, when the sale of the freehold of the Palm Tree was completed. Even on that basis, I am of the view that the circumstances on the ground and the terms of the 1993 agreement were such that the right inference is that the freehold of the area was included with the transfer of the Palm Tree.
115. First, there is the fact that the area had been occupied by the Barretts together with the Palm Tree throughout their tenancy of the latter. Secondly, there is the fact that the area was added to the tenancy purely as a result of the actions of the Barretts as tenants of the Palm Tree. Thirdly, it seems inherently unlikely that the grant of the long lease to Brent Walker in 1990 was intended to effect a severance of the reversion to the Barretts' tenancy. Fourthly, there is the fact that the 1993 agreement referred to the sale to the Barretts being "subject to the existing tenancy", and the tenancy extended to the area. Fifthly, it is very unlikely that the parties to the 1993 agreement could have intended a severance of the reversion to the tenancy, without including any provision dealing with the consequences. Finally, there is the inconvenience of the freeholds of the Palm Tree and the area being in different ownerships, one of the reasons why the possessory title to the latter was owned by Trumans rather than the Barretts.
116. Mr McDonnell primarily puts his case on this issue on section 62 of the Law of Property Act 1925 ("section 62"), subsection (2) of which provides, so far as relevant:

"A conveyance of land, having houses or other buildings thereon, shall be deemed; to include and shall by virtue of this Act operate to convey with the land, houses, and other buildings, all …areas, courts, … demised, occupied, or enjoyed with … or appurtenant to the land, houses, or other buildings conveyed, or any of them …".

117. As a matter of language, one can easily appreciate the force of the argument that the area is an "area [or] court … demised, occupied, or [indeed, and] enjoyed with" the Palm Tree. However, I am in some doubt as to whether section 62 can have the effect of increasing the physical extent of the land actually transferred beyond that which is, as a matter of construction, transferred by the transfer in question. With one exception, we were not referred to any authority on that aspect of section 62; the case to which we were referred is Malekshad v Howard de Walden Estates Ltd [2003] 1 AC 1013. That case is of the highest possible authority and contains an observation on the effect of section 62, in paragraph 107 in the speech of Lord Scott of Foscote, which is undeniably helpful to the Barretts' case on the issue. However, it is not part of the ratio, it does not appear to have been the subject of much, if any, argument (see at 1015C – 1016F) or of the citation of relevant authority (see at 1014F – H), and it was an observation in connection with a somewhat peripheral aspect to the one in issue. In these circumstances, as it is unnecessary to decide the point, I think it safer to leave it open. It is nonetheless right to add that, if, as may be the case, section 62 could have such an effect but only in relatively exceptional circumstances, the present case would appear to me to be one where its application might be relatively easily justified.
118. For these reasons, I am of the view that, although Trumans did acquire possessory title to the area, that title is no longer vested in Trumans, having been included in the transfer of the freehold of the Palm Tree to the Barretts in 1993.

The fifth question: the effect of the 1998 Act

119. The Council contends that the conclusion that it has lost its freehold of the area pursuant to the provisions of the 1980 Act would represent an infringement of its human rights under Article 1 of the First Protocol to the European Convention on Human Rights ("Article 1"), and that, by virtue of section 3 of the 1998 Act, the interpretation of the 1980 Act should be revisited so as to avoid this conclusion, if at all possible. Although this is a new issue, the fact that it is raised at this late stage does not, I believe, prejudice the Barretts unfairly: on the present facts, it can be disposed of on the basis of a short point of law.
120. In an impressive judgment, given in Beaulane Properties Ltd v Palmer (23 March 2005, The Times 13 April 2005, (2005) 14 EGCS 129), Mr Nicholas Strauss QC, sitting as a Deputy Judge of the High Court, concluded that, in relation to registered land, the provisions of the 1980 Act, as interpreted according to the principles laid down in Pye's case, infringed the Article 1 rights of the paper owner. Accordingly, he construed the 1980 Act, and in particular as to what constituted adverse possession, in a much more restricted way (from the point of view of the squatter) than would otherwise have been appropriate on the basis of Lord Browne-Wilkinson's speech.
121. It is unnecessary to decide whether I agree with Mr Strauss's powerfully reasoned conclusion, or whether it would lead to a different result in this case from that at which I have arrived. On any basis, it seems clear, on the analysis contained in the preceding part of this judgment, that the Council's title was effectively extinguished by 1998 at the latest. In those circumstances, it is not open to the Council to contend that the principles laid down in Pye's case should be departed from on the basis of section 3 of the 1998 Act. As Mr Strauss said in paragraph 214 of his judgment:

"[T]he need to apply section 3 in this area is only likely to arise in relation to the acquisition of title by a trespasser between October 2000 [when the 1998 Act came into force] and October 2003 [when the 2000 Act came into force] …".

122. In other words, it is not legitimate to invoke section 3 of the 1998 Act in a case such as this, where the statutory deprivation was effected before the section came into force. That has obvious logic, because otherwise one would be invoking the Convention in 2004 or 2005 to deprive persons (in this case, the Barretts) of property which they had acquired before the Convention was brought into English law. If it were otherwise, the Barretts could argue with obvious force that their Article 1 rights were infringed by the subsequent deprivation of property they had already acquired by 12 years' adverse possession, namely the beneficial ownership of the freehold of the area.

Conclusion

123. Accordingly, the answers to the five questions are, in my judgment, as follows. First, the Barretts enjoyed adverse possession (within the meaning of that expression as explained in Pye's case) of the area from 1977/1978 to 1989/1990; (indeed, they were, in my view, in possession of the area up to the time these proceedings were issued). Secondly, the presence and purpose of the props on the area from before 1977 until after 1990 does not alter that view.
124. Thirdly, while there was no implied licence to occupy the area as a result of negotiations which ended in 1985, there was an acknowledgment of the paper owner's title in those negotiations; however, because that acknowledgment was not by the squatter, but by the squatter's landlord, it was ineffective for the purposes of section 29 of the 1980 Act. Fourthly, although possessory title to the area was acquired in 1989/1990 by Trumans, in the light of the doctrine considered in Smirk's case, that does not avail the Council in its claim for possession of the area, because the possessory title was transferred to the Barretts in 1993, and, in any event, because the Barretts' tenancy of the area still subsists. Fifthly, the 1998 Act does not justify a different conclusion as it can have no effect in a case where the 12 years of adverse possession had fully accrued before that Act came into force.
125. In the event, therefore, I would allow this appeal. It follows that the order for possession of the area in favour of the Council must be set aside, because the Barretts have acquired possessory title to the freehold of the area. More accurately, in the light of section 75 of the Land Registration Act 1925, as a result of the Barretts' adverse possession of the area and the effect of the 1993 agreement and the subsequent transfer, the Council holds the registered freehold title to the area on trust for the Barretts.

Lord Justice Wall:

126. I agree.

Lord Justice Thorpe:

127. I also agree.