England and Wales High Court (Chancery Division) Decisions

IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
ON APPEAL FROM HM LAND REGISTRY (LR/119/2003)

		Royal Courts of Justice Strand, London, WC2A 2LL
		01/07/2005

Mr Justice David Richards :

1. This is an appeal from a decision of Mr G Greenwood, the deputy solicitor to the Land Registry. It concerns a claim by Mr H.J. Wretham, the appellant, to a possessory title to various outbuildings and pieces of land adjoining a freehold property known as Greywell Cottage, Callow Hill, Virginia Water, Surrey, of which he is the registered proprietor.
2. Mr Wretham applied to the Land Registry to be registered as the proprietor of seven parcels of land. His application succeeded as regards the whole of one parcel and part of another parcel, but failed as regards the remainder. His appeal relates to the parcel where he partially failed and four of the other parcels. There is no cross-appeal.
3. Greywell Cottage and the disputed parcels originally formed part of the Greywell Court estate. The estate comprised the main house, a coach house, a gardener's cottage and a large area of undeveloped land. The estate was bought in 1954 by Bedward Properties Limited. It was registered in its name under title SY120553. The houses were sold but the undeveloped land was retained. In November 1954 Captain and Mrs William Warwick bought the gardener's cottage, which is Greywell Cottage. It was transferred out of title SY120553 and registered under title SY127151. It comprises the cottage and a walled garden, and it is bounded on three sides by land retained under title SY120553. It was sold in 1994 by Captain Warwick to Mr Wretham and his then wife. Mr Wretham has been the sole registered proprietor since 2001.
4. The retained land was transferred by Bedward Properties Limited to its sole or principal shareholder, Mr Marcus Bedward, in 1965. He died in 1968. His executors and trustees were the registered proprietors until 1990, when it was registered in the names of the respondents as the residuary beneficiaries of his estate.
5. The parcels of land in dispute are on the northern and western sides of the walled garden. They are shown on a plan annexed to the deputy solicitor's judgment and are described by him as follows:

"Parcel "1" is a wooden shed built against the garden wall on the north western side of Greywell Cottage.

Parcel "2" is a brick stable adjoining the wooden shed referred to above, and again built against the garden wall.

Parcel "3" is a corrugated iron shed adjoining the brick stable referred to above, and again built against the garden wall.

Parcel "4" is grassed land on the north western corner of Greywell Cottage.

Parcel "5" is an area of land adjoining the wall on the north eastern side of Greywell Cottage. A pre-fabricated garage now stands on part of this land.

Parcel "6" is described as a timber shed between the garage referred to above and a brick outbuilding within the title to Greywell Cottage.

Parcel "7" is a strip of land surrounding the south and southwest boundaries of Greywell Cottage."

6. The application succeeded in respect of parcel 6 and that part of parcel 5 occupied by the pre-fabricated garage. It failed as regards the other parcels. Mr Wretham does not appeal the rejection of his application as regards parcel 7.
7. Mr Wretham relies on the continuous possession of the remaining parcels by Captain Warwick from 1968 and, since 1994, by himself, without the consent of the proprietors of the retained land under title SY120553. On this basis he claims to have acquired title to the parcels in issue by virtue of sections 15(1) and (6) of, and Schedule 1 Part 1 to, the Limitation Act 1980. He relies on possession during a period of at least 12 years ending before 13 October 2003, when the Land Registration Act 2002 came into force, so that the claim is unaffected by the reforms introduced by that Act.
8. In view of the evidence that until Mr Bedward's death in 1968, Captain Warwick's use of the disputed parcels was in accordance with an oral agreement with Mr Bedward, Mr Wretham does not rely on any possession before Mr Bedward's death. It is accepted for the respondents that the agreement ended at that point and that no similar agreement was made with Mr Bedward's successors in title.
9. The appeal was heard after the decision in Beaulane Properties Ltd v Palmer (Times 13.4.2005), but the respondents confirmed that no point on the Human Rights Act 1998 was taken by them. The alleged adverse possession occurred long before the Act came into force.
10. Mr Wretham does not dispute any of the deputy solicitor's findings of fact. It is accepted that for the appeal to succeed the court must be satisfied that the deputy solicitor was wrong in law or that he reached a conclusion which, properly applying the law, no tribunal could reasonably have reached.
11. The principal ground for appeal was that the deputy solicitor had applied an incorrect legal test in determining whether Mr Wretham and his predecessors in title had been in possession of the disputed parcels for over 12 years and whether the paper owners had been dispossessed.
12. The correct approach to these issues is governed by the decision of the House of Lords in J A Pye (Oxford) Ltd v Graham [2003] 1 AC 419, which approved in large part the judgment of Slade J in Powell v McFarlane (1977) 38 P & CR 452. The deputy solicitor was referred to both these authorities and cited passages from them in his judgment.
13. The legal test applied by the deputy solicitor appears from his consideration of each parcel of disputed land. In respect of parcel 1 he said at p 23:

"I find that the limited use made of the shed did not constitute factual possession. Consequently there were no acts which would have manifested to the paper owner visiting the site the clear intention to exclude them."

A similar approach was applied to parcel 3 at the top of p 25:

"I have to conclude that the use made of it by Captain Warwick was very limited and insufficient to constitute factual possession. Again there were no acts which would have manifested to the paper owner visiting the site the clear intention to exclude them."

14. As regards parcels 2, 4 and 5 the deputy solicitor's statement of his approach does not refer in terms to whether Captain Warwick and Mr Wretham had been in factual possession of the land, but asked whether the paper owners would be put on notice that there was anyone in possession of the land with the intention of excluding them.
15. On this appeal Mr Weekes challenged the approach adopted by the deputy solicitor. He should not have asked himself whether the use of the land would have manifested to the paper owner a clear intention to exclude him, but instead the straightforward question whether Captain Warwick and Mr Wretham had exercised exclusive physical control of the disputed parcels for at least 12 years. The requisite intention to possess could be inferred from such physical control. Mr Weekes submitted that the test applied by the deputy solicitor was wrong for two reasons. First, it is not a requirement that the squatter should have an intention to exclude specifically the paper owner. Secondly, it was wrong to formulate the legal test by reference to what the paper owner, or anyone else, might have inferred from a visit to the site.
16. The leading speech in Pye v Graham, with which all the other members of the committee agreed, was given by Lord Browne-Wilkinson. At para 32 he cited with approval a passage from Slade J's judgment in Powell v McFarlane which included the following:

"In the absence of authority, therefore, I would for my own part have regarded the word "possession" in the 1939 Act as bearing the traditional sense of that degree of occupation or physical control, coupled with the requisite intention commonly referred to as animus possidendi, that would entitle a person to maintain an action of trespass in relation to the relevant land; likewise I would have regarded the word "dispossession" in the Act as denoting simply the taking of possession in such sense from another without the other's licence or consent."

At paras 36 and 37, he said:

"36 Many of the difficulties with these sections which I will have to consider are due to a conscious or subconscious feeling that in order for a squatter to gain title by lapse of time he has to act adversely to the paper title owner. It is said that he has to "oust" the true owner in order to dispossess him; that he has to intend to exclude the whole world including the true owner; that the squatter's use of the land has to be inconsistent with any present or future use by the true owner. In my judgment much confusion and complication would be avoided if reference to adverse possession were to be avoided so far as possible and effect given to the clear words of the Acts. The question is simply whether the defendant squatter has dispossessed the paper owner by going into ordinary possession of the land for the requisite period without the consent of the owner.

37 It is clearly established that the taking or continuation of possession by a squatter with the actual consent of the paper title owner does not constitute dispossession or possession by the squatter for the purposes of the Act. Beyond that, as Slade J said, the words possess and dispossess are to be given their ordinary meaning."

17. Possession in the ordinary sense of the word involves two necessary elements:

"(1) a sufficient degree of physical custody and control ("factual possession"); (2) an intention to exercise such custody and control on one's own behalf and for one's own benefit ("intention to possess")"

Lord Browne-Wilkinson rejected a submission that there was no need to show separately an intention to possess in addition to objective acts of physical possession, although "[s]uch intention, may be, and frequently is, deduced from the physical acts themselves".

18. Lord Browne-Wilkinson regarded factual possession as sufficiently defined by Slade J in the following passage from Powell v McFarlane:

"(3) Factual possession signifies an appropriate degree of physical control. It must be a single and [exclusive] possession, though there can be a single possession exercised by or on behalf of several persons jointly. Thus an owner of land and a person intruding on that land without his consent cannot both be in possession of the land at the same time. The question what acts constitute a sufficient degree of exclusive physical control must depend on the circumstances, in particular the nature of the land and the manner in which land of that nature is commonly used or enjoyed ... Everything must depend on the particular circumstances, but broadly, I think what must be shown as constituting factual possession is that the alleged possessor has been dealing with the land in question as an occupying owner might have been expected to deal with it and that no-one else has done so."

19. As to the intention to possess, Lord Browne-Wilkinson stressed that it is not necessary to show an intention to own the property. At para 43 he approved Slade J's formulation of the intention which was required to be shown as:

"an intention, in one's own name and on one's own behalf, to exclude the world at large, including the owner with the paper title if he be not himself the possessor, so far as is reasonably practicable and so far as the processes of the law will allow."

20. Lord Hope of Craighead reiterated the need for both factual possession and an intention to possess, adding that "[i]n practice, the best evidence of intention is frequently found in the acts which have taken place" (para 70). He continued that the necessary intention is "the intent to exercise exclusive control over the thing for oneself" and in a passage relied on by the appellant:

"The important point for present purposes is that it is not necessary to show that there was a deliberate intention to exclude the paper owner or the registered proprietor. The word "adverse" in the context of section 15(1) of the Limitation Act 1980 does not carry this implication. The only intention which has to be demonstrated is an intention to occupy and use the land as one's own…So I would hold that, if the evidence shows that the person was using the land in the way one would expect him to use it if he were the true owner, that is enough."

21. Lord Hutton said at para 76:

"Where the evidence establishes that the person claiming title under the Limitation Act 1980 has occupied the land and made full use of it in the way in which an owner would, I consider that in the normal case he will not have to adduce additional evidence to establish that he had the intention to possess. It is in cases where the acts in relation to the land of a person claiming title by adverse possession are equivocal and are open to more than one interpretation that those acts will be insufficient to establish the intention to possess. But it is different if the actions of the occupier make it clear that he is using the land in the way in which a full owner would and in such a way that the owner is excluded."

The respondents relied on Lord Hutton's citation with approval of the following passage from Clarke LJ's judgment in Lambeth LBC v Blackburn (2001) 82 P & CR 494 at 504:

"I would not for my part think it appropriate to strain to hold that a trespasser who had established factual possession of the property for the necessary 12 years did not have the animus possidendi identified in the cases. I express that view for two reasons. The first is that the requirement that there be a sufficient manifestation of the intention provides protection for landowners and the second is that once it is held that the trespasser has factual possession it will very often be the case that he can establish the manifested intention. Indeed it is difficult to find a case in which there has been a clear finding of factual possession in which the claim to adverse possession has failed for lack of intention."

22. In my judgment it is clear from the speeches in Pye v Graham that the first issue for a court dealing with claims to adverse possession is whether the occupier has been in factual possession over the relevant period, i.e. has he used the land as an occupying owner might have been expected to use it while no-one else has done so: there must be "a sufficient degree of exclusive physical control."
23. As appears from the passages in the deputy solicitor's judgment cited above, he addressed this issue in terms in relation to parcels 1 and 3, but added also consideration of whether there had been any acts which would have manifested to the paper owner a clear intention to exclude him. However, he did not in terms pose the question of factual possession when dealing with parcels 2, 4 and 5. Instead he focused on whether there was clear "evidence of an intention to exclude the paper title owner" and whether the paper owner would be "put on notice that there was anyone in possession…with the intention of excluding them".
24. There is force in the appellant's criticism that these are not the correct questions to ask. Whether there was factual possession should be objectively assessed by reference to the squatter's acts relied on to constitute possession, and the absence of any acts of possession on the part of the paper owner. The second element of legal possession, the requisite intention, is to be deduced from the squatter's acts, unless either those acts are explicable in some other way (see Pye v Graham at para 40) or the acts are equivocal in which case some other compelling evidence is required (ibid para 77).
25. The requisite intention to possess the property is an "intention, in one's own name and on one's own behalf, to exclude the world at large, including the owner with the paper title if he be not the possessor, so far as is reasonably practicable and so far as the process of the law will allow" (per Slade J in Powell v McFarlane). There need not however be "a deliberate intention to exclude the paper owner or the registered proprietor… The only intention which has to be demonstrated is an intention to occupy and use the land as one's own" (per Lord Hope in Pye v Graham). The requisite intention is present if "the actions of the occupier make it clear that he is using the land in the way in which a full owner would and in such a way that the owner is excluded". Possession must be exclusive and the intention is therefore to occupy the land as one's own and thereby exclude everyone else.
26. The problem with the deputy solicitor's formulation of "evidence of an intention to exclude the paper title owner" is that it does not focus on the squatter's intention to be in possession of the property and to exclude the world at large, to be deduced in general from his acts, but instead focuses on an intention specifically directed at the exclusion of the paper owner.
27. Similarly, the speeches in Pye v Graham do not support the application of a test based on whether the paper owner would be put on notice that there was anyone in possession with the intention of excluding him.
28. In some of the authorities, tests have been put forward in terms of how the squatter's possession would appear to others. Thus, in Powell v McFarlane, Slade J referred at 478 "any objective informed observer". Referring to this apparent test, Peter Gibson LJ in Prudential Assurance Co Ltd v Waterloo Real Estate Inc [1999] 2 EGLR 85 said that the court was "reluctant to introduce into this now well understood area of the law, further tests, particularly those of an artificial nature". In Purbrick v Hackney LBC [2004] 1 P & CR 34, the deputy solicitor to the Land Registry had considered the question of how the occupation would have struck "a notional visitor to the site". Neuberger J rejected this approach, saying at p 561:

"In my view, one comes back to the fact there was here physical possession and… an intention to possess from 1988. Asking what a hypothetical observer might have thought would tend to confuse rather than assist."

29. The respondents in this case specifically rely on a passage in the judgment of Slade J in Powell v McFarlane at p 480:

"In view of the drastic results of a change of possession, however, a person seeking to dispossess an owner must, in my judgment, at least make his intentions sufficiently clear so that the owner, if present at the land, would clearly appreciate that the claimant is not merely a persistent trespasser, but is actually seeking to dispossess him."

They also rely on passages in the judgment of Clarke LJ in Lambeth LBC v Blackburn [2001] 82 p & CR 494. At p 499 Clarke LJ said :

"It can only be adverse if the adverse possession is apparent to the owner: that is if it is manifest to the owner that the trespasser intends to maintain possession against the whole world including the owner. That does not mean that it must in fact be known to the owner, but that it must be manifested to him so that, if he were present at the property he would be aware that the trespasser had taken possession of it and intended to keep others out."

30. These passages from the judgments in Powell v McFarlane and Lambeth LBC v Blackburn requiring the squatter's possession to be obvious to the paper owner if he visited the site are not incorporated as part of the test of possession by the House of Lords in Pye v Graham. They are not in fact referred to or cited in that case.
31. It is without question a vital protection to paper owners that there must be physical possession of the property by the squatter with the requisite intention of exclusive possession. It is hard to imagine cases where legal possession could be established without it being apparent to a properly-informed owner visiting the property at appropriate times in the 12-year period. As Clarke LJ said in Lambeth LBC v Blackburn at p 504 in a passage which was cited in Pye v Graham by Lord Hutton, "the requirement that there is a sufficient manifestation of the intention provides protection for landowners".
32. However, in the light of the decision in Pye v Graham, that protection is not achieved by the application of a test which requires consideration of what would be obvious to the paper owner visiting the property. It is achieved by consideration objectively whether the squatter was in factual possession and whether he had shown the necessary intention to possess the property.
33. I have therefore concluded that in this case the deputy solicitor did not apply the correct test to parcels 2, 4 and 5, and that he introduced into his consideration of parcels 1 and 3 an additional test not warranted by Pye v Graham. It was common ground that, if that were my conclusion, I should look at the deputy solicitor's findings of fact and reach my own conclusion. I propose to deal with each of the disputed parcels in turn, but taking account of the totality of the evidence.

Parcel 1

34. This is a small wooden shed built against the garden wall. An unbolted door in the wall gave direct access to it from the garden of Greywell Cottage. Captain Warwick used the shed for the storage of garden equipment and as a paraffin store from the date of his purchase to the date of sale. There was a second door from the shed to the land comprised in parcel 4. The deputy solicitor found that Captain Warwick kept this door locked. He also accepted the evidence of Captain Ronald Warwick, one of Captain Warwick's sons, that the shed had practically collapsed, and its state of collapse is clear from the photograph taken in 1997.
35. In my judgment, the combination of the exclusive use by Captain Warwick of the shed as a store and his action in keeping the door into the Greywell Court land locked amounted to factual possession by Captain Warwick. It was sufficient to demonstrate an intention to enjoy exclusive possession and, so far as possible, to exclude all others. The deputy solicitor attached importance to the physical state of the shed, particularly to the evidence of Captain Ronald Warwick, one of Captain Warwick's sons, that it had practically collapsed. His evidence on this appears to relate to its state after Mr Wretham had purchased Greywell Cottage. Captain Warwick's own evidence was that although he had used parcels 1, 2 and 3 over the periods stated by him they had by the time of his statutory declaration in December 1993 "reached the end of their natural life" and the time had come to pull them down and perhaps rebuild them. Whatever its state by then, the evidence of its use by Captain Warwick as a store and the locked outer door demonstrates that it had been physically capable of possession and had been in the possession of Captain Warwick over a long period. There is no finding, nor any evidence on which to make a finding, that such possession was for less than 12 years after 1968.
36. Accordingly, in my judgment, the deputy solicitor's decision on parcel 1 cannot stand.

Parcel 2

37. This is a brick stable also built against the garden wall and adjoining the wooden shed comprising parcel 1. It has two doors, both opening on to parcel 4, and it originally had an internal dividing wall. Captain Warwick's evidence in his statutory declarations, which was in large part accepted by the deputy solicitor, was that before 1968 he had used one part, and Mr Bedward had used the other part, for storage. In 1968 Captain Warwick removed the internal wall, blocked off one of the doors and padlocked the other door. From then on, he used the whole stable to store a variety of furniture, automotive parts, gardening items and other property. The deputy solicitor did not accept that all of Mr Bedward's property had been removed, but accepted Captain Ronald Warwick's evidence that a large petrol mower remained there until Greywell Cottage was sold in 1994. There is no evidence that the mower was used or claimed between 1968 and 1994.
38. The totality of this evidence, in my judgment, establishes factual possession of the stable from 1968 by Captain Warwick. The presence of one unclaimed item of property after Mr Bedward's death is insufficient to displace this conclusion. The deputy solicitor took account of the "further gradual deterioration of the stable to the point where it was virtually derelict". This gradual deterioration did not, however, prevent Captain Warwick from using the stable for storage and keeping it locked from 1968 until the sale in 1994. It did not affect his factual possession of the stable.
39. The deputy solicitor also relied on the evidence that in 1974 Captain Warwick asked permission to store old newspapers in the stable pending their collection for sale and pulp. The deputy solicitor found that the joint use of the stable from 1954 to 1968 could only be consistent with some form of agreement between Mr Bedward and Captain Warwick. Such agreement ended with Mr Bedward's death, but permission to store the newspapers was sought, and refused, in 1974 because it did not accord with the earlier agreement. Captain Warwick understood that the agreement still existed.
40. This evidence is relevant, not to factual possession by Captain Warwick, but to whether he had the necessary intention to possess the stable. The position was that he believed that he was using the stable with the owner's permission, but in fact from Mr Bedward's death in 1968 he did not have the owner's permission.
41. In my view this is an insufficient basis on which to conclude that he did not have the requisite intention to possess the property. The relevance of the actual consent of the owner is that it prevents the occupier from being in "adverse possession" for the purposes of Schedule 1 para 8 to the Limitation Act 1980. It does not mean that the occupier is not in possession. Likewise, an erroneous belief by the occupier that he has the consent of the owner does not mean that he is not in possession of the property. On the contrary, the missing element of the owner's consent will mean that he is in adverse possession.
42. This follows, as it seems to me, from the speech of Lord Browne-Wilkinson in Pye v Graham: see para 36 and 37 cited earlier in this judgment. At para 46 he considered the irrelevance of evidence that an occupier would, if asked, pay for his occupation and stated:

"Once it is accepted that the necessary intent is an intent to possess not to own and an intention to exclude the paper owner only so far as is reasonably possible, there is no inconsistency between a squatter being willing to pay the paper owner if asked and his being in the meantime in possession. An admission of title by the squatter is not inconsistent with the squatter being in possession in the meantime."

43. As Lord Hope observed in the passage cited earlier in this judgment, it is not necessary to demonstrate a deliberate intention to exclude the owner. It can fairly be inferred, from Captain Warwick's erroneous belief that he was using the stable with the owner's permission, that he would have given up occupation if requested to do so, but that does not prevent the existence of an intention to possess: see Lord Hutton at para 78.
44. In my judgment, the facts of Captain Warwick's possession of the stable demonstrated an intention on his part to possess it to the exclusion of all others persons, including the owner, unless and until asked to give up possession. His possession from Mr Bedward's death in 1968 was adverse because he did not have the owner's consent. It follows that his erroneous belief that the agreement with Mr Bedward continued did not prevent him, or through him the appellant, acquiring a possessory title to parcel 2.

Parcel 3

45. This is a corrugated iron shed on the other side of the stable from parcel 1 and again built against the garden wall. The deputy solicitor found that Captain Warwick used it as a dump for scrap items. There was no direct access to the garden of Greywell Cottage and the entrance to parcel 4 was not barred or locked. Unless Captain Warwick had acquired possession of parcel 4, he was clearly not in factual possession of parcel 3.

Parcels 4 and 5 (part)

46. This is the land to the north and west of the walled garden of Greywell Cottage. In support of his case that Captain Warwick and then Mr Wretham have been in possession of this land, Mr Weekes relies on the evidence that they have cut back bushes on the northern boundary to prevent encroachment, cut back the top growth on the land and stored old cars on the land. Mr Wretham has also kept a boat there and some building materials. The area, however, was not fenced and the evidence of Mr Peter Shaw was that he had over the years walked over the land and seen nothing to distinguish it from other land forming part of the estate. The deputy solicitor found that the cars would not have covered a significant proportion of the land.
47. In my judgment, these findings and evidence do not establish that Captain Warwick was in factual possession of the land in parcels 4 and 5. His rather limited use of the land may be contrasted with the evidence which established factual possession, for example, in Pye v Graham and Buckinghamshire CC v Moran [1990] Ch 623. The lack of any fencing, while not by itself conclusive, tells against a finding of factual possession.
48. It was particularly in relation to the open land in parcels 4 and 5 that Mr Weekes relied on the possession by Captain Warwick and Mr Wretham of the structures in parcels 1, 2 and 5. I do not consider that this provides significant support for his case. The use of those buildings was quite different from the limited use of the open land and, in contrast to the open land, they were locked and secured.

Conclusion

49. Although I have held that the deputy solicitor applied an incorrect test, I have concluded, on the facts as found by him, that the appeal in respect of parcels 3, 4 and 5 fails. However, I allow the appeal as regards parcels 1 and 2.