The Judicial Committee of the Privy Council Decisions

Ramnarace v. Lutchman (Trinidad and Tobago) [2001] UKPC 25 (21 May 2001)

Privy Council Appeal No. 8 of 2000

Goomti Ramnarace Appellant v.

Harrypersad Lutchman Respondent

FROM

THE COURT OF APPEAL OF

TRINIDAD AND TOBAGO

JUDGMENT OF THE LORDS OF THE JUDICIAL

COMMITTEE OF THE PRIVY COUNCIL,

Delivered the 21st May 2001

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Present at the hearing:-

Lord Bingham of Cornhill

Lord Nicholls of Birkenhead

Lord Hoffmann

Lord Millett

Lord Scott of Foscote

[Delivered by Lord Millett]

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1. In July 1974 with the consent of her uncle and aunt Angad and Kushmee Lutchman the appellant entered into occupation of a piece of land which they owned at Orange Field Road, Carapichaima, in central Trinidad. The land is described in the statement of claim as comprising 2½ lots more or less and measuring 75 feet on each of its northern and southern boundaries and 200 feet on each of its eastern and western boundaries and bounded on the north by Orange Field Road, on the south by lands occupied by Abdool, on the east by lands of Rampersad and on the west by lands of Mr and Mrs Lutchman. It became clear in the course of the trial that the reference to 2½ lots in the statement of claim is an error: the area so described comprises four lots. The land was unfenced, but identifiable on the ground.

2. The appellant had been living with her husband and three children rent-free in a house on another parcel of land a short distance away which belonged to her brother-in-law. He asked the appellant to leave as he needed the house, and she approached her uncle and aunt in search of somewhere to live. Her uncle told her that she could live on the land or as much of it as she wanted until she could afford to buy it. The appellant went into occupation with her family. She built a three-bedroomed wooden house on the highest part of the land, and has lived there ever since without paying any rent or other sums for her occupation. Her uncle died in 1977, her aunt in 1988. In 1990 she demolished the wooden house and built a concrete house in its place. She also enclosed an area of 2½ lots round the house ("the disputed land") by erecting a chain link fence around it. The appellant accepts that she had not then been in possession of the land for sufficiently long to have acquired a possessory title, and that thereafter she ceased to occupy the 1½ lots. She has remained in possession of the disputed land and claims to have acquired a possessory title to it.

3. The respondent, who is Mr and Mrs Lutchman's son, has periodically challenged the appellant's right to live on the land. In 1978 and again in 1985, on both occasions while his mother was alive, he served what purported to be a notice to quit on the appellant, though he took no steps to enforce either of them. The Court of Appeal criticised the judge for making no finding in regard to the service of these notices. Their Lordships consider the criticism to be misplaced. By themselves the notices were not effective to stop time running in favour of the appellant, and as will appear they were not relevant to anything which the judge had to decide.

4. The appellant remained in undisturbed possession of the whole of the land until October 1990, when she erected the chain link fence round the disputed land. The respondent thereupon used a wrecker to pull down the fence. In September 1991 the respondent cut down the appellant's iron gate with a cutting torch.

5. The appellant brought the present proceedings in November 1990. Time had not yet run in her favour, and she was unable to claim a possessory title. By her writ she sought a declaration that she was a tenant of the disputed land, damages for trespass and injunctive relief. By the time she served her statement of claim on 20th November 1991, however, time had run in her favour, and she claimed a declaration that the title of the respondent and his predecessors in title to the disputed land had been extinguished. By his defence and counterclaim served on 24th December 1991 the respondent disputed the appellant's claim and counterclaimed for a declaration that he was the owner of the disputed land and an order for possession. By her reply the appellant contended that the respondent's title (if any) to the disputed land had been extinguished before 24th December 1991.

6. The appellant's claim to a possessory title in the statement of claim may have been liable to be struck out as a departure from the relief claimed in the writ, but this is of no moment. The respondent did nothing to stop time running until he served his counterclaim for possession on 24th December 1991. The issue which falls to be decided thus arises, not in the action, but on the counterclaim.

7. The judge found that the appellant entered into occupation of the four lots as tenant at will in July 1974; that by virtue of section 8 of the Real Property Limitation Ordinance 1940 ("the Ordinance") the tenancy determined one year later at the end of July 1975; that she had remained in exclusive possession without interruption of the four lots until October 1990 and of the disputed land thereafter; and that by July 1991 the respondent's title to the disputed land was extinguished by the operation of section 3 of the Ordinance.

8. The Court of Appeal allowed the respondent's appeal. It did so on the ground that the appellant had entered into occupation originally as licensee and not as tenant at will, and that her licence had been determined at the earliest by the service of notice to quit by the respondent in 1985 and at the latest by the death of her aunt in 1988. She had thus not been in adverse possession of the land for the period required to extinguish the respondent's title. In holding the appellant to have been in occupation as licensee, the Court of Appeal relied on the dictum of Denning LJ in Facchini v Bryson (1952) 1 TLR 1386 at p. 1389 where he said:

"In all the cases where an occupier has been held to be a licensee there has been something in the circumstances such as a family arrangement, an act of friendship or generosity, or suchlike, to negative any intention to create a tenancy."

This statement was accepted as correct by Scarman LJ in Heslop v Burns (1974) 1 WLR 1241 at p. 1252.

9. The Ordinance substantially reproduces the provisions of the English Real Property Act, 1833. The limitation period for an action to recover land is 16 years, and the period starts when the right to bring the action first accrues to the person bringing the action or someone through whom he claims: section 3 of the Ordinance (corresponding to section 2 of the 1833 Act). Neither the Ordinance nor the 1833 Act contains any reference to the concept of adverse possession which became enshrined in the English statute by section 10(1) of the Limitation Act 1939, but this was no more than a statutory enactment of the case law on the earlier English Limitation Acts (see Moses v Lovegrove [1952] 2 QB 533, 539 per Sir Raymond Evershed MR). In these circumstances their Lordships do not doubt that the concept is incorporated into the Ordinance also.

10. Generally speaking, adverse possession is possession which is inconsistent with and in denial of the title of the true owner. Possession is not normally adverse if it is enjoyed by a lawful title or with the consent of the true owner. Section 8 of the Ordinance, however, (reproducing section 7 of the 1833 Act) provides that, where a person is in possession of any land as tenant at will, the right of the true owner to bring an action to recover the land "shall be deemed to have first accrued" at the expiration of one year from the commencement of the tenancy, at which time the tenancy "shall be deemed to have determined".

11. It follows that if a tenancy at will is determined during the first year the owner's right of action accrues immediately; otherwise it accrues automatically by virtue of section 8 at the end of the first year, and any later determination of the tenancy is ineffective for limitation purposes unless a new tenancy is created: see Day v Day (1871) LR 3 PC 751. This decision was unfortunately overlooked in Seesahai v Mangaree (1959) 1 WIR 363 and Chootoo v Joseph (1971) 18 WIR 134, where events after the expiry of the first year (in the former case requests by the owner to the occupier to leave the land and in the latter the death of the owner) were held to determine the tenancy at will and start time running afresh. This was contrary to the Ordinance; in each of the cases the tenancy at will had already been determined for limitation purposes by the operation of section 8 of the Ordinance, and the determination of the tenancy for other purposes (such as a claim for mesne profits) could not interrupt the running of time. Their Lordships consider that these cases were wrongly decided.

12. The effect of sections 3 and 8 of the Ordinance taken together is that if no action is taken by the true owner his title is extinguished after the expiration of 17 years from the commencement of the tenancy even though the possession of the occupier is permissive throughout: see Lynes v Snaith [1899] 1 QB 486. It was the deliberate policy of the legislature that the title of owners who allowed others to remain in possession of their land for many years with their consent but without paying rent or acknowledging their title should eventually be extinguished.

13. The law was settled to this effect until well after the end of the Second World War. Thereafter developments took place in England which had no counterpart in Trinidad and Tobago. Section 7 of the 1833 Act was re-enacted by section 9(1) of the Limitation Act, 1939. But in the 1960's and 1970's, largely under the influence of Lord Denning MR, the courts began to develop the idea of a non-contractual licence to occupy land. While in some respects such a licence was capable of providing a valuable means of giving legal effect to informal arrangements for the occupation of land, it was capable of being exploited by landlords who wished to circumvent the operation of statutory provisions which gave security of tenure to their tenants. It also undermined the basic policy of the Limitation Acts. Since the licence was consensual the occupation of the licensee did not constitute adverse possession; and since it was not a tenancy at will it fell outside section 9(1) of the 1939 Act. Accordingly time did not run in favour of a licensee so long as the licence endured: see Hughes v Griffin [1969] 1 WLR 23. For many years the operation of the Limitation Acts was further stultified by the doctrine of implied licence which attributed the presence of a trespasser on vacant land not required by the true owner to a licence. In Wallis's Cayton Bay Holiday Camp Ltd. v Shell-Mex and B.P. Ltd. [1975] QB 94 at p. 103 Lord Denning MR even said that it did not lie in a trespasser's mouth to assert "that he used the land of his own wrong as a trespasser". This was entirely contrary to the policy of the statutes, and was later described as "Lord Denning's original heresy": see Buckinghamshire County Council v Moran [1990] Ch 623, 646 per Nourse LJ.

14. The difficulty of distinguishing between a tenancy at will and a licence led to a change in the law in England following a recommendation of the Law Reform Committee (Cmd. 6923) in 1977. The Committee commented that the distinction between a tenancy at will and a gratuitous licence was "at best tenuous", and recommended that, whether the land be occupied under a tenancy at will or a gratuitous licence, time should not begin to run in favour of the occupier until the tenancy or licence had actually been determined. The Committee's recommendation was given effect by section 3(1) of the Limitation Amendment Act 1980, which repealed section 9(1) of the 1939 Act. At the same time the opportunity was taken to abolish the doctrine of the implied licence.

15. Not long afterwards orthodoxy was restored by the decision of the House of Lords in Street v Mountford [1985] AC 809. This reaffirmed the principle that the distinguishing feature of a tenancy is that it grants the tenant exclusive possession. Lord Templeman expressly approved the reasoning of Windeyer J sitting in the High Court of Australia in Radaich v Smith (1959) 101 CLR 209, 222 where he said:

"What then is the fundamental right which a tenant has that distinguishes his position from that of a licensee? It is an interest in land as distinct from a personal permission to enter the land and use it for some stipulated purpose or purposes. And how is it to be ascertained whether such an interest in land has been given? By seeing whether the grantee was given a legal right of exclusive possession of the land for a term or from year to year or for a life or lives. If he was, he is a tenant. And he cannot be other than a tenant, because a legal right of exclusive possession is a tenancy and the creation of such a right is a demise. To say that a man who has, by agreement with a landlord, a right of exclusive possession of land for a term is not a tenant is simply to contradict the first proposition by the second."

16. A tenancy at will is of indefinite duration, but in all other respects it shares the characteristics of a tenancy. As Lord Templeman observed at p. 818, there can be no tenancy unless the occupier enjoys exclusive possession; but the converse is not necessarily true. An occupier who enjoys exclusive possession is not necessarily a tenant. He may be the freehold owner, a trespasser, a mortgagee in possession, an object of charity or a service occupier. Exclusive possession of land may be referable to a legal relationship other than a tenancy or to the absence of any legal relationship at all. A purchaser who is allowed into possession before completion and an occupier who remains in possession pending the exercise of an option each has in equity an immediate interest in the land to which his possession is ancillary. They are not tenants at will: see Essex Plan Ltd. v Broadminster (1988) 56 P & CR 353, 356 per Hoffmann J.

17. A person cannot be a tenant at will where it appears from the surrounding circumstances that there was no intention to create legal relations. A tenancy is a legal relationship; it cannot be created by a transaction which is not intended to create legal relations. This provides a principled rationalisation of the statement of Denning LJ in Facchini v Bryson on which the Court of Appeal relied in the present case. Before an occupier who is in exclusive occupation of land can be treated as holding under a licence and not a tenancy there must be something in the circumstances such as a family arrangement, an act of friendship or generosity or suchlike, to negative any intention to create legal relations.

18. In the present case the appellant was allowed into occupation of the land as part of a family arrangement and at least in part as an act of generosity. But not wholly so, for the appellant testified that the intention of the parties was that she would buy the land when she could afford to do so, and the judge accepted her evidence. Her uncle was generous in that he allowed her to remain indefinitely and rent-free pending her purchase, and in that he did not press her to negotiate. But a tenancy at will commonly arises where a person is allowed into possession while the parties negotiate the terms of a lease or purchase. He has no interest in the land to which his possession can be referred, and if in exclusive and rent-free possession is a tenant at will. In Hagee (London) Ltd. v A.B. Erikson and Larson [1976] QB 209 at 217 Scarman LJ described this as one of the "classic circumstances" in which a tenancy at will arose.

19. Whether the parties intended to create legal relations, and whether there was any genuine intention on their part to negotiate a sale of the land when the appellant could afford to buy it, were questions of fact for the judge. Although he made no express findings in this regard, there was evidence which he accepted from which he could properly conclude that the appellant entered into possession as tenant at will.

20. Their Lordships consider that, in reversing the judge's conclusion, the Court of Appeal gave insufficient weight to the facts that the appellant was throughout in exclusive possession and that her occupation was attributable, not merely to her uncle's generosity, but to the parties' intention that she should purchase the land in due course. On the appellant's evidence, which the judge accepted, she must be taken to have entered into possession of the disputed land in July 1974 as an intending purchaser and as a tenant at will. Her tenancy automatically came to an end for limitation purposes one year later in July 1975. Service of the notices to quit by the respondent thereafter without more was insufficient to stop time running in favour of the appellant, and accordingly the respondent's title was extinguished after a further 16 years in July 1991, that is to say before the respondent brought his action (by counterclaim) to recover the land.

21. The appeal will be allowed and the judgment of the judge restored. The respondent must pay the appellant's costs before the Board and below.