Totton and Eling Town Council v Caunter & Anor

This is an appeal from a decision of Professor Robert Abbey, a deputy adjudicator ("the adjudicator") to HM Land Registry, dated 8 November 2007 whereby he upheld the claim for adverse possession brought by the respondents to this appeal, Mr and Mrs Caunter. The appellant, the Totton and Eling Town Council, held the paper title to the land in question, having acquired it on 2 September 1994 from the New Forest District Council ("the Council"). This appeal has been brought pursuant to section 111 of the Land Registration Act 2002.

The land in question forms part of a large open area which was owned by the Council in 1984 when the Caunters purchased their house. Their rear garden abutted this open area. The boundary wall between the two pieces of land was in a state of disrepair. The area of Council land adjoining it was untidy and frequently covered with rubbish. In 1985 the Caunters tidied up the land and enclosed a part of it within a wooden fence, thereby in effect extending their rear garden. I shall refer to this strip of land belonging to the Council but enclosed by the Caunters simply as "the land". The appellant is represented before me today by Mr Radley-Gardiner of counsel, who did not appear below, and the Caunters appear in person by Mr Caunter.

Between 1990 and 1991 the Council was in correspondence with the Caunters about a proposed sale by it to them of the land. The appellant, as the Council's successor in title, contended before the adjudicator that a claim to adverse possession by the Caunters could not succeed because the effect of the correspondence was to confer upon them an implied licence to occupy the land which did not expire until the appellant had acquired the land, at least until 2 September 2004. The relevant 12-year period therefore could only have commenced in 1994 at the earliest and would not expire until after 13 October 2003. This is the date when the 2002 Act came into force. If so any claim to adverse possession would be governed by the specific procedure laid down by that Act and not by the old regime.

The adjudicator rejected that contention. He held that any period of adverse possession commenced no later than 30 August 1991. A 12-year period from then would end on 30 August 2003, ie just before the critical date of 13 October 2003. Accordingly adverse possession under the old law was made out. The appellant now contends that the adjudicator was wrong in law and in his analysis of the primary facts.

These are not in dispute. The relevant chronology begins with a letter from the Council to the Caunters dated 1 March 1990. The material parts read follows:

By a letter dated 3 April 1990 the Caunters responded thus:

Then he goes on to say that his neighbours had told him that this part of the land belonged to the builders who had built the estate and they had gone bankrupt. Then he continues:

I interpose here to say that the adjudicator found that this letter constituted an acknowledgement of the Council's title. The effect of this was to start time running again in relation to any claim for adverse possession (see paragraph 7 of his decision). I should also record at this point, to the extent that it matters, that today Mr Caunter has said that the effect of what he said in his letter was that the land belonged to the Council if the law said so. I do not think that this is a fair reading of the letter. I do accept that it was an acknowledgement, as the adjudicator found.

The Council in turn responded by a letter dated 10 April 1990, which reads follows:

This was then followed by another letter from the Council dated 16 July 1990. It states as follows:

Then on 24 October 1990 the Council wrote again. They said:

There was then apparently some form of meeting between the Council and on this occasion Mrs Caunter because on 16 November the Council wrote as follows:

There was then a lengthy period of inactivity but in around August 1991 Mr Caunter expressed his willingness to accept the Council's offer. Accordingly the Council wrote to him on 30 August 1991 as follows:

On the same day Mr Warren, the chief valuer, wrote to the Council's chief solicitors stating that he:

Thereafter nothing happened. The Caunters did not make a payment to the Council or take the question of formalities any further but remained in occupation of the land as before. The Council took no steps to repossess it. In his statement of arguments for the adjudicator Mr Caunter said this, among other things:

In the Caunters' statement of case dated 10 October 2007 they further said that they were still willing to proceed with the purchase of the land from the appellant on the same terms as had been set out in the letter dated 16 November 1990, referred to above.

The adjudicator's analysis of the point at issue begins in paragraph 8 of his decision. He referred there to only one of three authorities cited to him. That was the decision in BP Properties v Buckler [1987] at 55 P & CR 337. In that case the putative owner of the paper title wrote to the defendant who occupied the relevant property in October 1974 as follows:

At the time there was a pending warrant for possession against the defendant. Her solicitors produced the letter written to her from the paper title owner to the County Court judge who stayed the warrant as a result. They sought her instructions on the letter but before obtaining a response the then paper owner withdrew the warrant. The defendant never did respond to the letter by accepting or rejecting it. She remained in possession until her death some nine years later. The paper title owner contended subsequently that no claim for adverse possession could arise after October 1974 because by then the defendant was occupying the land pursuant to a licence and so her possession was not adverse. The licence was unilateral in the sense that it was not one to which she had expressly assented, but it was contended that this would make no difference. Dillon LJ, with whom Mustill LJ and Sir Edward Eveleigh agreed, accepted that argument, stating as follows:

A little further down, at page 346, he continued as follows:

He went on to say:

In the case of Lambeth v Rumbelow, decided on 25 January 2001, Etherton J accepted that a permission or licence could be inferred from the circumstances of the owner's action. At page 23 of his judgment he stated as follows:

That approach was followed in a later case called Bath and North Somerset District Council v Nicholson, decided on 22 February 2002. In this case the defendant occupied a house belonging to the claimant Council as a squatter. He undertook various improvements, on occasion assisted by the Council. There were then protracted and sporadic negotiations for a lease between 1982 and 1988 but no lease was agreed. Nothing then happened for three years. There was then some occasional contact but in 2000 the Council took possession proceedings and the defendant counterclaimed for adverse possession. Kim Lewison QC (as he then was), sitting as a deputy judge of the Chancery Division, held that there was no adverse possession because there was permission to occupy the property during the pendency of the negotiations for the lease. He cited the dicta of Etherton J already referred to. He held that, apart from the overt acts of assistance given by the Council, the continuation of negotiations for the lease while the defendant was in possession constituted a tacit acceptance by the Council of that possession. He added this at page 11:

Later he said:

He then said that in his view the licence probably did not end until a later stage because at paragraph 12 he said this:

The Bath and North Somerset District Council case was one of the two cases referred to in the written submissions made before the adjudicator but was not referred to by him in his decision. The Court of Appeal has endorsed the approach taken by the learned deputy judge in the Bath case in Dawson v King's Lynn Borough Council [2005] 2 P & CR 19. This also was a "negotiations" case and the Court of Appeal held that permission should be inferred where a person is in possession of a property pending negotiations for a grant of an interest in it.

Finally, I refer to Batsford Estates v Taylor [2005] EGLR 12. In this case the owner eventually decided and consciously decided not to take any possession proceedings against the occupiers following service of a notice to quit. The occupiers then remained in possession for more than 12 years. Sir Martin Nourse, with whom Gage and Pill LLJ agreed, held that after serving a notice to quit the owner did not take any further steps to obtain possession, even after Mr Taylor had moved back into the farmhouse in February 1986:

He added this at paragraph 26 that it had been submitted that:

This is the second of the two cases referred to in the submissions made by the appellant before the adjudicator to which he did not refer.

It is clear from the correspondence between the Council and the Caunters that they were in negotiations for the sale of the land. The Council offered to sell it to them for a very modest sum and the Caunters expressed a willingness to purchase it. Mr Caunter's statement of arguments, as noted above, refers to his mistake in not formally completing the matter and confirmed subsequently his willingness still to do so. The adjudicator found that there were negotiations, as appears from the beginning of paragraph 8 of his decision. In my judgment and consistent with the approach taken in the cases referred to above, from the Council's perspective it must have been tacitly allowing the Caunters to stay in occupation while those negotiations were pending. The fact that they did not expressly request or acknowledge this does not matter. It is an obvious inference from the negotiations. Thus the first limb of the test enunciated by Etherton J in the Lambeth case is fulfilled. So, in my judgment, is the second. Any reasonable observer would conclude that pending these negotiations the Caunters were being allowed to stay.

In paragraph 8 of his decision the adjudicator referred to the BP Properties case but then sought to distinguish it. He did so on the basis that the Caunters had made no written offer to purchase. However, that ignores the clear terms of the letter of 16 November 1990 which presupposes that Mrs Caunter had asked if the Council was prepared to sell the land. There is no need of course for any particular aspect of the negotiations to be in writing. Moreover, it would be entirely logical for the Caunters to take that approach, given that they had acknowledged the Council's title back in April 1990, as the adjudicator had found. The adjudicator then said that Mr Caunter did nothing to indicate that the Council had in some way actually given him permission to stay on the disputed land by way of some unilateral licence, but of course on the basis of BP Properties where the defendant did not respond one way or the other to the landowner and it made no difference, Mr Caunter did not have to do so.

The adjudicator then stated that, having regard to the copy letters from the Council put before him, there was nothing in these letters either to suggest a unilateral licence. But there is no difference in principle between the negotiations as constituted in part by these letters and the negotiations at issue in the Bath and Dawson cases where the implied licence was made out. Had the adjudicator given consideration to the Bath case, which was before him, it seems likely that he would have taken a different view or, if he did have it in mind, he failed to give proper effect to it. Although the adjudicator ended his paragraph 8 by saying that he was satisfied that there was no evidence of an implied licence, I conclude that his consideration of the legal position and his analysis of the primary facts in this respect and in paragraph 8 were flawed.

That said, in paragraph 11 of the decision the adjudicator came back to the letter of 30 August 1991. He attached importance to it because he said this:

On a fair reading of this passage the adjudicator here seems to have accepted that something prevented time from running until the date of the last letter. To this extent he may have been acknowledging that there was an implied licence of sorts, but on any view he then determined that it ended with the last letter. There was no detailed consideration at this point in his decision as to the principles applicable to the termination of such an implied licence. This may or may not be because his principal point, as evidenced in paragraph 8, seems to have been that there was no licence anyway.

In any event and in my judgment it cannot be the case that the negotiations, and hence any implied licence, ended as soon as 30 August 1991 for the following reasons. Firstly, the Council would on any view have been bound to have given the Caunters a reasonable period to respond and complete the formalities. There is no evidence as to when they actually received the documents and of course they would no doubt have needed to check the plans annexed to the transfer, and so on.

Secondly, any such period would have to take account of the fact that this apparently simple matter had taken about 18 months to reach the stage that it did on 30 August 1991. The Council had many such cases to deal with, as is abundantly clear, and certainly the Council seems to have been relaxed about the whole matter for the period between November 1990 and August 1991. This is no doubt because the Council was not interested in reclaiming or profiting from the land, it simply wanted to regularise the position (see the letter of 10 April 1990 referred to above), hence the modest sum required from the claimants. The Council was no doubt happy that the claimants would continue to maintain the land rather than it.

Thirdly, the fact that the Council did not revert to the Caunters is not evidence that negotiations had broken down. It is surely evidence that the Council did not regard completion of the formalities as a particularly pressing matter. This is consistent, not inconsistent, with the continuation of an implied licence.

In the light of the above it might be tempting in this case to attempt to construct some reasonable period following 30 August 1991 after which it could be said that the licence had been withdrawn. This was in fact the approach taken by the appellant in its submissions before the adjudicator (see ground B at page 6 of the bundle). However, in my view that is not the correct approach. This is for the reasons given by Chadwick LJ in the important Court of Appeal case of Sandhu v Farooqui [2004] 1 P and CR 3. This was not cited to the adjudicator. In this case a claim to title by adverse possession was made by a purchaser of a flat owned by the defendants who had been let into possession pending completion of the intended sale, which completion never in fact occurred. I need refer only to paragraphs 23 to 25 of the judgment of Chadwick LJ, with whom Mummery and Auld LLJ agreed. He said this:

I should add that before making those remarks in paragraph 22 the learned Lord Justice had said:

It will be apparent from what I have said that the learned Lord Justice proceeded to endorse and approve the latter rather than the former approach. There is an echo of that approach at page 12 of the judgment of Kim Lewison QC (as he then was) in the Bath case in the passage to which I have already referred.

In Dawson the Court of Appeal did not consider whether the licence could have extended beyond the date of the last letter of the chain of correspondence (there, as here, August 1991), but it did not need to. That date was sufficient to prevent there being the required 12-year period. It is to be noted that the Court of Appeal in paragraph 39 referred to the implied licence having extended "at least" to August 1991. So far as the Sandhu case is concerned, I observe that if that case had been cited to the adjudicator it may well have caused him to rethink his approach, given what he said in paragraph 11.

For all those reasons I think that, on any sensible analysis from the Council's perspective, the Caunters were entitled to remain in possession of the land until such time as it chose to communicate with them to revoke it, no doubt after first giving them some form of deadline to comply with the formalities. Equally, any reasonable observer would have concluded thus as to the nature and extent of any permission. As at 1994, therefore, the implied licence still ran but upon transfer of the land from the Council to the appellant any implied licence arising by reason of the negotiations is likely to have been revoked by operation of law (see the decision of the Privy Council in Terrunanse v Terruananse [1968] AC 1086 at page 1095G). Accordingly, the adjudicator's determination in paragraph 11 that the last relevant date was 30 August 1991 cannot, in my judgment, stand.

It follows that, if the implied licence did not expire until 2 September 1994, any 12-year period commencing thereafter would have expired in 2006, some three years after the coming into force of the 2002 Act. That Act provides a discrete regime for the determination of adverse possession claims and it follows that the Caunters will now need to invoke that procedure if they wish to maintain their claim to the land. Since that matter is not before me I say no more about it, save to record the fact that whether such application is deemed to have been made already by virtue of the Caunters' initial application in this case in February 2006 or because of a fresh application to be made hereafter, the Council has indicated today that it would not contend that the required ten-year period of adverse possession required by paragraph 1 of schedule 6 had not elapsed. They would dispute, however, that the Caunters could establish any of the further conditions set out in paragraph 5, including for example an equity by estoppel. If an application is made under the 2002 Act that will be a contest for another day.

As to the present, however, the Caunters have no title to the land. Perhaps somewhat surprisingly, the Land Registry decided to act on the decision of the adjudicator at once rather than await the outcome of this appeal. Accordingly the Caunters have now been registered as the owners of the land. It is therefore necessary for me to direct the land registrar to correct it. I am told and I accept that procedurally the way forward is for me to make an order for the alteration of the register for the purpose of correcting it pursuant to paragraph 2 of the 2002 Act. This is a correction in effect simply to reverse the impact of the decision which has been successfully appealed. It does not appear to me to constitute rectification of the register, but if I am wrong about that so that paragraph 3 of schedule 4 applies, it seems to me, following the wording of paragraph 3.2(b), that insofar as it affects the title of any proprietor it would be unjust for the alteration not to be made. That is for the obvious reason that the order for correction being made now is simply the result of a successful appeal in a dispute between the two proprietors concerned.

Accordingly, for the reasons that I have given in this judgment, I allow the appeal, I reverse the decision of the adjudicator and I make an order along the lines that I have intimated, subject to any further wording which is put before me. So I have taken a different view from the adjudicator about this so that I am finding that it is land which belongs to the present Council, at least so far as these proceedings are concerned. It does not mean that the Caunters cannot make a subsequent claim, but it has to be made in a different way.