Allen v Matthews [2007] EWCA Civ 216

[2007] EWCA Civ 216Case No B2/2006/1416
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE CENTRAL LONDON COUNTY COURT (SITTING AT KINGSTON CROWN COURT)
HIS HONOUR JUDGE PAUL COLLINS CBE
5B053913
Venue Royal Courts of Justice, Strand, London, WC2A 2LLDate 13 th March 2007
Before
LORD JUSTICE WARDLORD JUSTICE MOORE-BICKLORD JUSTICE LAWRENCE COLLINS
Between
WILLIAM ALFRED ALLENClaimant/RespondentCHARLES MATTHEWSDefendant/Appellant
(Transcript of the Handed Down Judgment ofWordWave International LtdA Merrill Communications Company190 Fleet Street, London EC4A 2AGTel No: 020 7421 4040 Fax No: 020 7831 8838Official Shorthand Writers to the Court)
Mrs Jane Giret QC and Mr Tim Cowen (instructed by Blake Lapthorn Tarlo Lyons) for Claimant/RespondentMr Paul Morgan QC and Mr Damian Falkowski (instructed by Gersten & Nixon) for Defendant/AppellantHearing Hearing date : February 19, 2007
Judgment

Introduction

[1]This is an appeal from an order of HH Judge Collins CBE made on June 21, 2006 for possession of land at 1-7 (odd) Brunel Street and 76 Victoria Dock Road, Canning Town (“the Property”) registered at the Land Registry under title numbers EGL144246 and EGL169052.[2]The site comprises a yard and two dilapidated sheds/warehouses, and was originally owned by Mr William (Billy) Allen (“Mr Allen”) and his father, Jimmy Allen, who were in business together as J W Allen Commercials, trading in secondhand commercial vehicles. Mr Allen is now the registered titleholder, but at least one of the titles (EGL169052) was registered at the time of the death of Mr Allen’s father in 1986 in the names of both Mr Allen and his father.[3]Mr Allen and his father knew Mr Charles Matthews (“Mr Matthews”) and Allen Penny (“Mr Penny”). Mr Matthews and his son Charles Matthews Jr traded as scrap metal merchants. Mr Penny and his son Mark Penny had a haulage tipping business, which they ran through two companies, A E Penny & Son Ltd, which was owned by Mr Penny, and Templewing Ltd, which was initially owned by Mark Penny, and later (after Mark Penny had been killed tragically in March 1994 in a motor cycle accident) by Mr Penny himself.[4]Mr Allen brought proceedings against Mr Matthews for possession of the Property. Mr Matthews claimed that he and Mr Penny and/or A E Penny & Son Ltd and/or Templewing Ltd had been in adverse possession of the Property continuously for more than 12 years, and that Mr Allen’s title had been extinguished by 1999 pursuant to sections 15 and 17 of the Limitation Act 1980.[5]Although Judge Collins found that there had been adverse possession for the 12 year period under section 15 of the Limitation Act, Mr Allen succeeded because the judge found that a letter written in 1994 by Mr Penny’s solicitors to the trustee in bankruptcy of Mr Allen amounted to an acknowledgment of title for the purposes of sections 29 and 30 of the Limitation Act 1980 and so restarted the period for adverse possession.[6]The background to the case is one of violence and crime. Mr Allen’s father, Jimmy Allen, was murdered in December 1986. In February 1987 Mr Allen entered into a bogus contract to sell the Property for £750,000, and obtained a loan of £500,000 from Barclays Bank on the security of the Property. Later that year Mr Allen was charged with involvement in the murder of his father, but he was acquitted in the following year. He was convicted of fraud in respect of the fraudulent contract of sale, and was in prison until 1992. In 1996 he was convicted of serious assault and sentenced to six years in prison.[7]Mr Matthews himself was arrested in February 1987 and charged with involvement in the manufacture and supply of amphetamines. He was convicted and sentenced to 10 years in prison. He was released in 1992, but in 1996 his appeal against conviction was allowed by the Court of Appeal (when the presiding judge was Ward LJ) on the ground that false evidence had been fabricated by the police. While Mr Matthews was in prison the Property was used by his son, Charles Matthews Jr, who was himself later convicted of VAT frauds.[8]There have been two actions in connection with the Property. A bankruptcy order was made against Mr Allen in November 1991, and so his interest vested in his trustee in bankruptcy by virtue of the provisions of the Insolvency Act 1986, section 306.[9]The first action for possession was commenced in 2004by Mr Allen. Mr Matthews had taken the point that it was only the trustee in bankruptcy who had the right to sue, and accordingly the trustee assigned his rights in the Property to Mr Allen. In 2005HH Judge Simpson decided that because the assignment was after the date proceedings had commenced it was insufficient to clothe Mr Allen with standing to bring proceedings, and he dismissed or struck out the action.[10]Mr Allen then brought the present proceedings shortly thereafter by virtue of a deed of assignment entered into between Mr Allen and the trustee in bankruptcy.[11]The trial commenced before Mr Recorder Bridge at Central London County Court on February 6, 2006. On the first day the Recorder decided as a preliminary issue that the deed of assignment was sufficient to give Mr Allen the right to sue and the trial was to proceed on the basis that it was then for Mr Matthews to make good his counterclaim based on adverse possession. At the end of the first day, some evidence was heard on the counterclaim.[12]On the second day the trial was aborted. A group of about 15-20 men attacked Mr Allen’s associates in the building. Judge Collins subsequently ordered that the trial should take place in a secure location, and the trial was transferred to Kingston Crown Court.[13]This was not all. In his judgment following the second trial the judge found that Mr Penny, who was one of the principal witnesses, had been threatened with violence unless he made a statement retracting what he had said in a previous statement. After the trial Mr Penny gave a statement to the police, who were investigating the assault at Central London County Court, in which he said that he had not been threatened. Mr Allen discovered the existence of this statement, and applied for it to be admitted as new evidence on this appeal. Mr Matthews’ solicitor then put in a witness statement making serious allegations of partiality by the police, including claiming that the statement had been produced by police officers partial to Mr Allen, whom (the solicitor said) Mr Matthews suspected of having been an informant in connection with the drug offences of which Mr Matthews had been wrongly convicted. The Metropolitan Police then wrote to the court to say (among other things) that in March 2006 more than £500,000 worth of stolen and counterfeit goods were recovered from the Property, and that Mr Matthews’ son had been charged with conspiracy to steal and handle the stolen goods, and was in custody awaiting trial.

The background and the judge’s decision

[14]The retrial took place on June 20 and 21, 2006 at Kingston Crown Court. Judge Collins gave judgment in favour of Mr Allen, ordered Mr Matthews to give up possession of the Property, dismissed the counterclaim, ordered Mr Matthews to pay 2/3rds of Mr Allen’s costs, and made provision for Mr Allen’s mesne profits claim.[15]The judge decided that there had been possession for more than 12 years prior to the commencement of proceedings in 2005, but that time had stopped running in June 1994 by virtue of an acknowledgment of title in a letter written on June 7, 1994 by Mr Penny’s solicitors.[16]Mr Matthews appeals, with the permission of Neuberger LJ, against the finding that the letter constituted an acknowledgment of title. Mr Allen, by Respondent’s Notice, seeks to uphold the judgment on the grounds that(a) the judge was wrong to hold that Mr Matthews’ occupation went beyond the consent given by Mr Allen (and his father) to the point where he was in adverse possession; and(b) the judge was wrong to reject Mr Penny’s original evidence that his possession and that of his companies was with the consent of Mr Allen. Mr Allen seeks to adduce new evidence to show that Mr Penny was on the property with consent. Mr Allen also cross-appeals against the judge’s costs order.[17]Originally both Mr Matthews and Mr Penny used premises near the property for their businesses.[18]It was common ground that prior to the end of 1986, Mr Allen and his father had given some permission to Mr Matthews to use the Property for storage. Mr Matthews’ witness statement said that he was allowed to use part of the property for storage of scrap metals and for works of reclamation on them. Mr Allen’s evidence (at least initially) was that he and his father were happy for Mr Matthews to leave equipment and vehicles in the premises, but he was not allowed to store scrap metal or carry out any reclamation.[19]Mr Matthews’ evidence was that, shortly after the murder of Jimmy Allen, Mr Allen asked Mr Matthews to lend him £100,000 to finance the purchase of vehicles, and that he lent him the money. He says that Mr Allen did not repay the money, and that when Mr Allen did not appear, Mr Matthews decided that the best security he could get for the loan would be to take maximum occupation of the Property. By mid-January 1987 he had filled much of the yard with scrap and set up substantial reclamation work there. He bought two secondhand Portakabins which he installed at the Property. While he was in prison the business was carried on by his son.[20]Mr Matthews’ case was that from 1987 the Property was used and occupied by his business in conjunction with Mr Penny and/or A E Penny& Son Ltd and/or Templewing Ltd, and that in practice his business used most of the yard and the larger shed, and Mr Penny’s companies used the smaller shed and the rest of the yard.[21]Mr Penny’s involvement was that in late 1986 or early 1987 he expressed interest to Mr Allen in buying the Property, and they agreed a price of £250,000.[22]But, as I have already mentioned, in February 1987 Mr Allen entered into a bogus contract to sell the Property for £750,000, and obtained a loan of £500,000 from Barclays Bank on the security of the Property.[23]In April 1987 A E Penny & Son Ltd paid a £10,000 deposit to Mr Allen, and contracts were exchanged on May 15, 1987, conditional on grant of probate to Mr Allen of his father’s estate. A further deposit was paid. On May 28, 1987 cautions were registered by A E Penny & Son Ltd against the Property.[24]Shortly afterwards Mr Penny and his son moved their lorries and other belongings onto the site, occupied the workshop and the smaller shed and part of the yard. His evidence was that A E Penny & Son Ltd and Templewing Ltd traded from there from early June 1987 as well as from their existing premises, and exclusively there from the end of 1987.[25]Mr Allen’s evidence was while he was in prison he agreed that Mr Penny could occupy the Property until Mr Allen’s affairs were sorted out when he came out of prison. Mr Penny’s evidence was that he took possession before anyone else did, after Mr Allen disappeared following his father’s death. Shortly before the trial he made a statement that Mr Allen had given him permission to occupy the Property.[26]A bankruptcy order was made against Mr Allen on November 15, 1991.[27]Around 1992 Mr Matthews was released from prison and resumed the management of his business, around which time he changed the name to London City Metals Ltd.[28]Also in 1992, Mr Allen was released from prison. It was Mr Allen’s case that around the time of his release he had a conversation giving permission to Mr Penny to stay in the Property.[29]A.E. Penny & Son Ltd was dissolved on February 17, 1994. Mr Penny’s son was killed in March 1994 and Mr Penny took over Templewing Ltd from this date.[30]In February 1994 Alan Price of Casson Beckman & Partners was appointed trustee in bankruptcy, and on May 23, 1994 a letter was written on his behalf to A E Penny & Son Ltd informing it that Mr Allen had been made bankrupt and asking whether it still held a caution over the Property.[31]A holding response was written on June 1, 1994 by Alan Winter Peace & Co, the solicitors who had acted in 1987 on the contract of sale. On June 7, 1994 they wrote “Further to our letter to you of the 1st June we would advise you that our clients still hold a Caution of the above mentioned property. The Caution relates to a contract entered into by our client with Mr. Allen, the terms of which were never fulfilled. A deposit of £35,000.00 was paid to Mr. Allen in this respect and to secure our clients interest re these monies we registered the said Caution. We should be obliged if you would advise us as to what your intentions are with regard to the property. Has a buyer been found for the same, and if so is there any likelihood that our client will receive any monies. We look forward to hearing from you.” We look forward to hearing from you.”[32]The letter was written after the dissolution of A.E. Penny & Son Ltd and about two and half months after Mr Penny’s son was killed and Mr Penny took over Templewing Ltd. The reason it does not suggest that A E Penny & Son Ltd had some entitlement to the Property appears to be that in 1989 the solicitors were advised by counsel that the 1987 charge in favour of Barclays Bank took priority over the company’s rights, and that there might be a problem because Mr Allen’s late father had been a joint owner.[33]After his son’s death, Mr Penny began to reduce Templewing Ltd’s operations and the company used the Property less and less. In early 1998 Mr Penny decided to wind up Templewing Ltd get out of haulage all together, and so left the Property.[34]In mid-1998 Mr Matthews let the Property to his son, trading as London City Storage.[35]The judge’s findings were as follows. Possession of joint squatters could combine, as a matter of law, to constitute single exclusive possession. Since Mr Matthews’ claim was put on the basis of initially some joint possession with Mr Penny, and subsequent possession by Mr Matthews alone, the precise degree to which Mr Matthews and Mr Penny occupied the premises as between each other until 1998 did not seem to be “here or there”, provided one or both of them were in a sufficient degree of possession, dealing with the land as an occupying owner might have been expected to deal with it, and with no-one else doing so (para 10).[36]It was not necessary to decide whether only Mr Penny was in occupation until 1998, and it was not in dispute that the Property was thereafter exclusively occupied by Mr Matthews (para 11).[37]In mid-1998 Mr Matthews granted a tenancy agreement of the premises to his son, which was a clear indication of his having both a necessary physical control and the intention to possess, and regarding himself as in the position to create a letting of the whole (para 11).[38]It was common ground that prior to about the end of 1986 Mr Allen and his father had given some limited permission to Mr Matthews to use the Property for storage, and it was common ground that if Mr Matthews had done no more on the Property than he had originally been given permission to do by Mr Allen’s father, and acquiesced in by Mr Allen, then Mr Matthews could not acquire a possessory title: para 13.[39]Mr Penny’s second witness statement (in which he claimed that Mr Allen had given him permission to be on the Property) was made after he had been threatened with violence unless he made such a statement: para 23. It was unlikely that in any circumstances Mr Allen would have had any conversation with Mr Penny of the kind he mentioned: para 24.[40]The judge rejected Mr Allen’s evidence that when he emerged from prison in 1992, he visited the premises, and repeated to Mr Penny that he had permission to remain on the basis that he had to get out on three months notice: para 25.[41]It did not matter whether Mr Matthews’ occupation was from February 1987 (as he said) or by Mr Matthews’ son from the summer of 1987 (as Mr Penny said), because on the basis of Mr Penny’s evidence by mid 1987 the position was that Mr Matthews’ son acting on his father’s behalf had done a deal with Mr Penny, both of them knowing that they had no legal rights to the Property, both of them knowing that Mr Allen was in prison, that they would between them use the whole of the Property. It was very likely from the evidence that the arrangement was that Mr Matthews’ business would occupy the warehouse and that Mr Penny’s business would occupy the rest of the premises: para 29.[42]By the summer of 1987 the use to which Mr Matthews had put the Property very substantially exceeded the limited permission which Mr Allen said had been granted and amounted not only to a difference of degree but also a difference in nature. By the summer of 1987 Mr Matthews was not just storing the occasional vehicle on the premises, but he was dealing with the premises as an occupying owner might normally be expected to and no other person had done so except for Mr Penny.[43]But the judge held for Mr Allen on the ground that the letter of June 7, 1994 was a clear acknowledgment by the person signing it that the trustee had a better title to the property. It did not matter that it appeared to be written on behalf of A E Penny & Son Ltd, which had been dissolved, because the letter, sent apparently on behalf of a company which had ceased to exist, could fairly and properly be said to be coming from the person standing behind the company, namely Mr Penny. Consequently, the twelve year period started afresh in June 1994, and the action was therefore commenced within the limitation period. The appeal A Mr Matthews’ appeal: acknowledgment of title Mr Matthews’ position

The appeal

[44]Mr Matthews’ case on his appeal is principally that(a) the letter of June 7, 1994 is not an acknowledgment of title;(b) even if it is an acknowledgment of title it was written on behalf of a non-existent company which ex hypothesi was not “the person in possession” for the purposes of section 29(2) ;(c) in so far as the person in possession (of all or some of the Property) as at June 7, 1994 was Mr Matthews, there has been no suggestion that the letter of June 7, 1994 was written by or on behalf of Mr Matthews;(d) in so far as the persons in possession (of all or some of the Property) as at June 7, 1994 were Mr Penny and Mr Matthews jointly and if the court concludes that the letter was written on behalf of Mr Penny, then the letter is not an effective acknowledgment in relation to joint possessors.[45]The letter of June 7, 1994 does not amount, as a matter of construction, to an acknowledgment. The letter must be taken as a whole and to constitute an acknowledgment it must amount to an admission of the interest in question. It was Mr Penny’s company, A E Penny & Son Ltd, not Mr Penny, that had paid over the deposit monies to, and had been defrauded by, Mr Allen. The letter does not expressly or impliedly acknowledge title; it is a response to a question as to why A E Penny & Son Ltd holds a caution. No purchaser would have proceeded to buy the Property (which was already encumbered in any event) without first having sought to warn the caution off.[46]There was no evidence from which the judge could properly have found that Messrs Alan Winter, Peace & Co., were solicitors for Mr Penny personally or for Templewing Ltd (which company was in fact in possession in June 1994).[47]If the judge meant to find that Mr Matthews and Mr Penny were jointly in possession then the alleged acknowledgment was, at the highest, by Mr Penny alone. It was not suggested that Mr Matthews had made any acknowledgment. When there are two joint possessors the acknowledgment must be given by or on behalf of both of them: Richardson v Younger (1871) 6 Ch App 478; Asbury v Asbury [1898] 2 Ch 111. Accordingly, the alleged acknowledgment is of no effect.[48]If the judge meant to find that Mr Matthews was in possession of part of the land (i.e. the large warehouse) and Mr Penny was in possession of another part of the land (i.e. the small warehouse), and if the letter of June 7, 1994 amounted to an acknowledgment by Mr Penny, the limitation period would only have started running afresh in respect of the small warehouse occupied by Mr Penny and not the larger warehouse occupied by Mr Matthews.

Mr Allen’s position

[49]The letter acknowledges that the trustee in bankruptcy had better title to the land. It implicitly recognised that the trustee had the power to sell the land and by inquiring whether the solicitor’s client would receive any money, it implicitly recognised that the client did not have power to sell but was dependent upon action being taken by the trustee.[50]There are no serious grounds to challenge the findings of fact that at the time of the letter Mr Penny was in occupation of the land either personally or through some company other than the dissolved company, and that Mr Winter was Mr Penny’s solicitor, and acted on behalf of Mr Penny.[51]In the case of squatters in a scrap metal yard, it is not a realistic exercise to analyse under what company name any particular person is occupying the Property at any particular time. The judge found that that Mr Penny was in occupation at the time the letter was written. The letter was written on Mr Penny’s instructions not realising that the company had been dissolved. The reference to “our client” in the second paragraph of the letter cannot have referred to a dissolved company, because that was impossible. It can only realistically refer to Mr Penny. There is no evidence that the solicitors wrote the letter without instructions. Any instructions can only have come from Mr Penny. For all purposes, therefore, the letter is signed on behalf of Mr Penny.[52]There was no detailed evidence at the trial as to which parts of the Property were occupied and whether there was an exclusive division at any particular time. There was no finding that Mr Penny and Mr Matthews occupied distinct and separate areas at the time of the acknowledgment in 1994.[53]Mr Matthews’ case was put and judgment was given on the basis that Mr Penny and Mr Matthews were in joint possession of the Property, and not on the basis that there were two distinct plots of land which should be treated separately for the purposes of calculating adverse possession and acknowledgment of title. Mr Matthews should not be allowed in this appeal to put forward a case which is entirely different from that put forward at trial.[54]An acknowledgment given on behalf of one of two or more jointly in possession is effective, and the cases relied on by Mr Matthews are limited to trustees, who must act unanimously. B Respondent’s notice: consents to Mr Matthews and Mr Penny Mr Allen’s position

B Respondent’s notice: consents to Mr Matthews and Mr Penny

[55]Mr Allen seeks to uphold the judge’s order on the ground that the occupation by Mr Matthews and by Mr Penny and his companies was, contrary to the judge’s findings, with the consent of Mr Allen or Mr Allen and his father.[56]Mr Allen’s grounds with respect to Mr Matthews are as follows. First, there must be a change in the nature of occupation in order for occupation by consent to become adverse possession. It is not enough simply to increase use beyond what was permitted or contemplated. This must be the case otherwise any licensee who goes beyond the ambit of his permission could claim adverse possession, despite having permission to carry out the relevant activity. On the other hand, if the nature of use or occupation changed altogether, then one could say that what is being done is without consent.[57]Second, it was common ground by the trial that Mr Matthews had the permission of Mr Allen and Mr Allen’s father to occupy the Property to store scrap metal and carry out works of reclamation. Mr Matthews said in oral evidence that at first he kept the scrap in lorries out of respect for Mr Allen’s father. Mr Matthews said that he had his own set of keys to the premises and could come and go as he wished. After Mr Allen’s father died in December 1986, Mr Matthews spread more scrap metal around the site to establish himself at the site more securely.[58]Third, it was no part of the evidence that there was any restriction on the amount of scrap metal to be brought onto the Property nor on the area over which it could be stored. It was never argued that this consent had been withdrawn. Mr Matthews’s evidence was that he never ran his business from the Property, he only ever used it as an overflow storage area. The judge therefore had no basis for holding that the permission was ever limited to storing the occasional vehicle; or that the permission to store scrap metal was superseded by some other different use.[59]Fourth, the judge should have held that there was no evidence that the actual use of the Property by Mr Matthews compared with the express consent given to Mr Matthews to use the land was of such a nature and extent that it could not be said to have been with the consent of the landowner. The judge looked only to Mr Allen’s evidence of the permission given in order to determine whether the ambit of that permission had been exceeded. That was irrational given that the judge clearly rejected the evidence of Mr Allen on all other matters. The judge rejected the evidence of Mr Allen as being unreliable. The judge did not refer to how Mr Allen appeared as a witness in the box, but gave two reasons:(a) Mr Allen had been convicted of offences of dishonesty in 1987; and(b) there were inconsistencies between his witness statements and a statutory declaration.[60]The judge accepted the evidence of Mr Matthews and Mr Matthews’ son (who gave evidence about the use of the Property from 1987 to 1992 while Mr Matthews was in prison) without apparent criticism despite the fact that:(a) Mr Matthews’s son gave evidence that he had been convicted of offences relating to VAT evasion; and(b) the accounts of Mr Matthews, Mr Matthews’ son and Mr Penny as to the order of events in 1987 and who did what were contradictory and inconsistent.[61]Fifth, the judge stressed that it was virtually impossible to reach a clear conclusion on Mr Matthews’s occupation of the Property since 1987 because of the elapse of 19 years. This should have led the judge to hold, in accordance with the burden of proof, that Mr Matthews had not made out his case on adverse possession.[62]As regards Mr Penny, Mr Allen seeks to rely on fresh evidence to challenge the finding that Mr Penny was in the Property without the permission of Mr Allen, which was based on the evidence of Mr Penny but ignored the second statement of Mr Penny which the judge found was induced by threats.[63]The fresh evidence is a copy of a statement given by Mr Penny to the police on August 31, 2006. The effect of the statement is that from 1986 to 1996, he was in sole occupancy of the Property with the permission of Mr Allen; and he was not threatened into making his second statement, which he made to clarify the first statement as a result of realising the gravity of the dispute.[64]The fresh evidence therefore satisfies the Ladd v Marshall guidelines for the exercise of discretion:(1) it could not have been obtained at trial with reasonable diligence, because the evidence post-dates the trial;(2) it would have an important effect on the result of the case for the reasons stated above; and(3) it is apparently credible given that Mr Penny had no apparent reason not to tell the truth when he was with the police and in the absence of any of the parties to this case.[65]It was accepted on the hearing of the appeal that if the new evidence were admitted a new trial would be required.

Mr Matthews’ position

[66]As regards Mr Matthews’ own occupation, his position is that the judge applied the right test, and was entitled on the evidence to come to the conclusion he did.[67]As regards Mr Penny and his police statement, it is not in substance new evidence. It is a restatement of old evidence which was before the court at the trial. The judge made detailed findings about the reliability of the second statement. The contents of the police statement were essentially what was being said in the second statement. The statement would not have had an important influence on the result of the case, in the same way as the second statement did not have an important influence on the result of the case. The statement is not to be believed, in the same way as the second statement is not to be believed.

Conclusions

[68]This appeal depends upon the interpretation and application of the Limitation Act 1980. It is common ground that because the period of adverse possession was from 1987 to 1999 no issues arise under the Human Rights Act 1998 and the case is unaffected by the coming into force of the Land Registration Act 2002.[69]Section 15(1) of the Limitation Act 1980 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 or, if it first accrued to some person through whom he claims, to that person.”[70]Section 17 provides that “ …. at the expiration of the period prescribed by this Act for any person to bring an action to recover land (including a redemption action) the title of that person to the land shall be extinguished.”[71]By Schedule 1, Part 1, paragraph 8:
“(4) For the purpose of determining whether a person occupying any land is in adverse possession of the land it shall not be assumed by implication of law that his occupation is by permission of the person entitled to the land merely by virtue of the fact that his occupation is not inconsistent with the latter’s present or future enjoyment of the land. This provision shall not be taken as prejudicing a finding to the effect that a person’s occupation of any land is by implied permission of the person entitled to the land in any case where such a finding is justified on the actual facts of the case.”
[72]By section 29(2):
“if the person in possession of the land … in question acknowledges the title of the person to whom the right of action has accrued— (a) the right shall be treated as having accrued on and not before the date of the acknowledgment; …”, and by section 30: “(1) To be effective for the purposes of section 29 of this Act, an acknowledgment must be in writing and signed by the person making it. (2) For the purposes of section 29, any acknowledgment … — (a) may be made by the agent of the person by whom it is required to be made under that section; and (b) shall be made to the person, or to an agent of the person whose title or claim is being acknowledged …”
[73]Section 31(1) provides that “an acknowledgment of the title to any land … by any person in possession of it shall bind all other persons in possession during the ensuing period of limitation.”

Mr Matthews’ appeal

[74]The principal questions are whether the letter is an acknowledgment of title, and whether it was given by the person in possession.[75]For a document to constitute an acknowledgment of title all that is required is that, as between himself and the owner of the paper title, the person in possession acknowledges that the paper title owner has better title to the land. Whether or not such a particular writing amounts to an acknowledgment depends on the true construction of the document in all the surrounding circumstances: Edginton v Clark [1964] 1 QB 367 (CA). In that case it was held that a letter written to the agents of the freeholder offering to purchase the site was sufficient to acknowledge title, even when the evidence was that the person in possession did not know the identity of the freehold owners. Lambeth London Borough Council v Bigden [2000] EWCA Civ 302, (2001) 33 HLR 43 concerned a petition signed by squatters in a block of flats against the sale of the flats by the paper owner to a third party. Mummery LJ held that the petition was an acknowledgment of title (at para 45):
“A request for a licence to occupy the property (or a request for something else) is not the only means by which a person in possession may acknowledge that another person has the better title to the property. This petition is a clear acknowledgement by those signing it that another person (i.e. the council) has the better title to Oval Mansions. It seeks to persuade the council not to sell Oval Mansions, where they live, to a named third party … The petition does not question the power of the council to sell or challenge its right to do so, let alone assert a better title to Oval Mansion so as to obstruct a sale by the council. The document implicitly recognises the power and right of the council to sell, but petitions it not to go ahead with the sale …”
[76]Simon Brown LJ added (para 60) that there was no reason why the court should strain against finding an acknowledgment.[77]In the present case the solicitors wrote to the trustee in bankruptcy, in whom Mr Allen’s interest was vested:
“We should be obliged if you would advise us as to what your intentions are with regard to the property. Has a buyer been found for the same, and if so is there any likelihood that our client will receive any monies.”
I do not consider that this can mean anything else than an acknowledgment that the trustee has the right to sell and a query as to whether their client will receive any of the proceeds in the bankruptcy. I am satisfied that the judge was right to hold that it was a clear acknowledgment that the trustee had a better title to the Property.[78]The next question is whether the acknowledgment was made by the person in possession. At the time the letter was written A E Penny & Son Ltd had been dissolved and did not exist. The judge held, applying Lambeth London Borough Council v Bigden, that in those circumstances the letter could properly be said to be coming from the person standing behind the company. The judge said: “37. … It is a clear acknowledgment by the person signing it that the trustee has a better title to the property. It does not challenge the trustee’s right to sell the property or question that right let alone assert a better title. It simply seeks information as to what will happen if the Trustee in Bankruptcy exercises that title. … 38. It is common ground that in June 1994, as between himself and any company through which he may have been trading Mr Penny was either in personal occupation of the land or in occupation through some other company than that which had registered the caution, that company having been struck off the register. On behalf of whom then was the letter of 7th June 1994 written? It has never been disputed that Mr Winter was Mr Penny’s solicitor and that he acted on behalf of Mr Penny. To argue as the defendant does and is compelled to do, that this letter was only written on behalf of a non-existent company and therefore not on behalf of Mr Penny or any other company of Mr Penny’s has an obviously artificial ring about it. … 40. It seems to me that the principle [in Lambeth London Borough Council v Bigden] must be exactly the same for the present case even though the facts are slightly different...[A] letter sent apparently on behalf of a company which had ceased to exist, can fairly and properly be said to be coming from the person standing behind the company, who at the time was the person in possession for the purposes of s 29 of the Act and for whom the solicitor undoubtedly acted. So that it seems to me that the argument put forward in relation to Section 30 must fail for those reasons.” …[79]In my judgment for there to be an acknowledgment there must be a statement by or on behalf of the person in possession which is reasonably to be understood by the owner as an acknowledgment from that person. The owner does not have to know who is in possession, and the person acknowledging does not have to know who is the owner, but the acknowledgment must be by or on behalf of the person in possession.[80]The owner in May 1994 was the trustee in bankruptcy. As part of its enquiries into Mr Allen’s assets the trustee wrote to A E Penny & Son Ltd. The trustee wrote to A E Penny & Son Ltd not because it was in possession, but because it was the person which had registered the caution on May 28, 1987. The letter of June 7, 1994 is plainly written as if that company still existed and on behalf of that company. It refers to their clients as holding the caution, and it refers to the contract of sale with Mr Allen. It cannot be construed as a letter written on behalf of whomever happens to be in possession of the Property, be it Mr Penny or Templewing Ltd.[81]In Lambeth London Borough Council v Bigden [2000] EWCA Civ 302, (2001) 33 HLR 43 the principal ground of decision was that a petition by the persons in possession against the sale of their homes presented to the Council was an acknowledgment of title. It was also argued that letters written by the Solon Housing Association and the Oval Housing Co-operative (OHC) to the Council about proposals for OHC to occupy the mansions were themselves acknowledgments. The letters were written on behalf of OHC, but when they were written OHC had not been incorporated. Mummery LJ said (para 48) that at that time OHC was still an unincorporated association of individuals, and that it could be argued that the letters were acknowledgments of title by the individual members acting through an agent. But it was not necessary to express a final view. Simon Brown LJ said that the court should not be reluctant to find the necessary relationship of agency, and that he would have had no hesitation in regarding the letters as an acknowledgment, because the housing co-operative was acting on behalf of the individual occupiers, and that would be so irrespective of whether it was incorporated at the time (paras 61-62). Latham LJ agreed with both judgments.[82]The point in Bigden is that Solon intended to write on behalf of the Housing Co-operative representing the individual occupiers and the Council understood that. It was a pure technicality that it had not been incorporated.While I would accept that the court should not lean in favour of a result which would deny an acknowledgment its intended effect, I do not consider that this decision is authority for the proposition that the court can ignore what the author of the acknowledgment intends and the recipient understands to be the person making the acknowledgment. The solicitor intended to write on behalf of A E Penny & Son Ltd as the holder of the caution and as the party to the contract of sale, and the trustee would have understood that. He was not writing on behalf of Mr Penny or Templewing Ltd.[83]It is therefore not necessary to decide the questions raised on behalf of Mr Matthews which would have arisen had the acknowledgment been regarded as being on behalf of Mr Penny (or Templewing Ltd). This would have involved the question, not decided by the judge, as to the relative positions of Mr Penny and his companies, and Mr Matthews in June 1994, and in particular whether they were jointly in possession of the whole of the Property, or separately of the parts which they used. In turn, had the position been that the possession was joint, it would have involved the question whether, to be effective, the acknowledgment could be given by one of those in possession, or whether it had to be given by both.

Respondent’s Notice

[84]Mr Allen seeks to uphold the judge’s order on the ground that the occupation by Mr Matthews and by Mr Penny and his companies was, contrary to the judge’s findings, with the consent of Mr Allen or Mr Allen and his father.[85]The issues on the Respondent’s Notice concern the relationship of consent to use or possess and the actual occupation of the Property by the persons claiming to be in adverse possession. A person seeking to establish title to land by adverse possession must show that for the requisite period of time(1) he had factual possession of the land;(2) he had the requisite intention to possess (animus possidendi); and(3) his possession of the land had been “adverse” within the meaning of the Act. In relation to factual possession the test is whether 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. As to intention, what is required is not an intention to own or even to acquire ownership, but an intention to possess to the exclusion of all others, including the owner with the paper title. See Powell v McFarlane (1977) 38 P&CR 452, 471; Buckingham County Council v Moran [1990] Ch. 623, 639-643; J.A. Pye (Oxford) Ltd v Graham [2002] UKHL 30, [2003] 1 AC 419, paras 32, 41. As in Lambeth London Borough Council v Bigden [2000] EWCA Civ 302, (2001) 33 HLR 43, it is not necessary for the adverse possession to be by one person for the whole of the period. As long as the period of adverse possession is continuous, the adverse possession of successive squatters may be aggregated.[86]The requirement that the possession be adverse requires only that the possession was not pursuant to a licence, whether express or implied, from the owner. This is because possession is not adverse if it is enjoyed under a legal title. Whether a person with limited permission to use or occupy land might rely on more extensive activity to claim adverse possession is a question of fact turning on the circumstances of the case. See Buckingham County Council v Moran [1990] Ch. 623, 636; J.A. Pye (Oxford) Ltd v Graham [2000] Ch 676, 694, 697.[87]There must be a change in the nature of occupation in order for use or occupation by consent to become adverse possession, and it is not enough simply to increase use beyond what was permitted or contemplated. But certainly use with consent which becomes occupation without consent would result in adverse possession.

Consent to Mr Matthews’ occupation?

[88]Mr Matthews’ statutory declaration of July 22, 2003 in support of his application at the Land Registry for possessory title stated that from time to time he was given permission by Mr Allen and his father to use the property for storage of scrap metals and reclamation work on them. Mr Penny’s evidence was that Mr Matthews told him in 1987 that he used the yard from time to time to store metals by agreement with Mr Allen and his father. Mr Allen’s evidence in the Land Registry was, initially, that on a number of occasions he and his father were happy to let Mr Matthews leave equipment and vehicles on the Property for short periods of time until he was ready to collect and sell them or the Allen business needed the space. In these proceedings his evidence was that he and his father allowed Mr Matthews to leave equipment in the vehicles he had purchase from the Allens, and that, had Mr Allen been asked, he would have let him store other equipment and he may have let him store lorries and perhaps even bins for scrap metal.[89]The judge accepted the account by Mr Allen of the limited permission given to Mr Matthews rather than the account given by Mr Matthews in his statutory declaration that he had been allowed to use the Property for storage and reclamation work. I am satisfied that on the evidence the judge was fully entitled to come to the conclusion that by the summer of 1987 the use to which Mr Matthews had put the Property very substantially exceeded the limited permission which Mr Allen said had been granted and amounted not only to a difference of degree but also a difference in nature; and that by the summer of 1987 Mr Matthews was not just storing the occasional vehicle on the premises, but he was dealing with the premises as an occupying owner might normally be expected to and no other person had done so except for Mr Penny. The judge saw Mr Matthews, Mr Matthews’ son, Mr Allen and Mr Penny in the witness box, and there is no basis for Mr Allen’s charge of irrationality in preferring in this respect Mr Allen’s evidence in preference to Mr Matthews’ statutory declaration.

Consent to Mr Penny’s occupation?

[90]In his first statement of April 15, 2005 Mr Penny said that following the exchange of contracts between A E Penny and Son Ltd and Mr Allen, he discovered that Mr Allen had been dealing with other parties at the same time and there could be substantial difficulties in completing the purchase, and also that Mr Allen had disappeared. Having paid out £35,000 and with apparently nothing to show for it, he thought that he would at least take possession of the Property before anyone else did. He and his son Mark Penny moved their lorries onto the site, occupying the workshop and part of the warehouse and yard, and the companies both started trading there from early June 1987.[91]Mr Allen’s evidence in his statement of November 4, 2005 was that he was in touch with Mr Penny while Mr Allen was in prison, when Mr Penny asked whether Mr Allen would agree to him moving into the Property to take up occupation with a view to completing the contract of sale after Mr Allen was out of prison. Mr Allen said he agreed to this because it was fair and it would ensure that the Property was occupied in order to keep out squatters. In a second statement he said that in view of the fact that Mr Penny had paid a deposit and wanted to be on site he felt he had no option but to agree for him to be there.[92]In a second statement made on January 27, 2006 Mr Penny said that he had made his first statement at the request of Mr Matthews and his solicitors, and was not aware that he was supporting Mr Matthews in a claim for adverse possession. Once he became aware that this involved a court case, he said that he did not want to attend court, and the matter was having a detrimental effect on his health. He knew that he would still be required to attend court, and he had had the opportunity to study his statement again and wished to confirm that it was inaccurate.[93]His evidence was that when the contract of sale could not be fulfilled, Mr Allen, via an agent, gave him permission to occupy the Property, and it was agreed between Mr Allen and himself, on one of his visits to the Property, that he could stay in sole occupancy until such time as he sold it.[94]In the witness box he was asked by counsel for Mr Matthews about the circumstances in which he made the statement. His evidence was that he received the statement through the post, and then received a telephone call suggesting that he made another statement. He did not know who was the caller and did not recognise the voice. He was told that they would send him another statement. He was quite concerned about other things that had gone on about the trial and he was very frightened and concerned and that is why he signed the statement. He said that it was the first statement which was correct. In answer to questions from the judge he said that he had been concerned about the phone call because “they knew where I lived and they got my telephone number”. He again repeated that the second statement was not true. When he got it he put it in an envelope which came with it and posted it back.[95]The judge found that in view of the fact that Mr Allen had given several different accounts bearing on the circumstances in which Mr Penny took up occupation, he felt he should look for some corroboration of Mr Allen’s evidence in relation to any disputed matter.[96]The judge said that the effect of Mr Penny’s evidence in the witness box was that it was apparent that although he was reluctant to say so in so many words, for reasons which were entirely understandable, Mr Penny was in fact alleging that he had been threatened with consequent violence unless he made the second statement. The judge accepted Mr Penny’s account of how the second statement had come into existence. He found that in view of Mr Allen’s circumstances at the time it was unlikely that he would have had any conversation with Mr Penny of the kind which he had described in his evidence. At the relevant time in May 1987, Mr Allen’s position was a desperate one. He had been charged with murder, or incitement to murder, of his father; he had been charged with substantial fraud, and he was in prison awaiting trial; a very substantial financial edifice which he had been building up had collapsed; he knew perfectly well that any title Mr Penny might have acquired was subject, to put it mildly, to strongly competing claims on behalf of the bank: and he makes no mention of that fact in any of his statements.[97]The judge rejected Mr Allen’s evidence that when he emerged from prison in 1992, he visited the premises, and repeated to Mr Penny that he had permission to remain on the basis that he had to get out on three months notice. This would have been an extraordinary conversation if it had happened because Mr Penny had a contract and paid a deposit. In addition, Mr Allen had been adjudicated bankrupt in 1991 and his estate vested in his trustee in bankruptcy, and he was not in a position in that time to have any authoritative discussion of that kind. There was also an attendance note of a conversation with Mr Penny’s solicitor of November 23, 1992 which was inconsistent with the three months notice point. Accordingly he did not accept Mr Allen’s account either of the original discussions in 1987 or the discussions in 1992, and he did not believe that any occupation of the premises by Mr Penny or his companies was with Mr Allen’s consent.[98]Mr Penny’s witness statement made on August 31, 2006 stated:(1) He was in sole occupancy of the property from 1986 to 1996, but Mr Matthews’ business used part of the yard to store overflow material from their own premises.(2) He could not confirm if Mr Matthews used the yard as an overflow or in any other way between 1993 to 1996 on a permanent basis, because Mr Penny was rarely at the yard during that period.(3) He acknowledged that he was in occupancy with Mr Allen’s permission, which was given via an agent.(4) He initially made the first statement believing that he would not be required at court and thought it was a minor matter, but once he realised the gravity of the case and the individuals involved, he was petrified.(5) Although no direct threat was made to him prior to making the second statement he received a telephone call, during which it was explained to him the seriousness of the dispute. He was not threatened during the call and did not know who was speaking to him.(6) He had wanted to clarify his first statement because it might be misinterpreted, and the proceedings had had a detrimental effect on his health.[99]In my judgment there is no basis for the introduction of this statement and a consequent re-trial. It complies neither with the Ladd v Marshall guidelines nor with the overriding principle that the question is whether fairness requires the principle of finality to be overridden: Riyad Bank v Ahli United Bank (UK) plc [2005] EWCA Civ 1419, para 33.[100]There is nothing in the police statement which is new. The substance is the same as that of the second statement, and the denial of threats is consistent with his account in the witness box, where he did not explicitly claim that there had been a threat. The material goes essentially to credit, which is not normally a basis for the introduction of fresh evidence, and given its lack of detail it is not likely to have any influence on the outcome. It is not necessary to express a view on its credibility, about which there must be a serious question.[101]I would have no hesitation in rejecting the application for the introduction of this statement, which is the only basis for Mr Allen’s attack on the findings relating to Mr Penny.[102]I am left with the strong impression that neither side has told the judge the whole story, but I am satisfied that there was in law no acknowledgment of title by the person in possession, and that there are no grounds for interfering with the judge’s findings of fact on adverse possession. Consequently I would reject Mr Allen’s criticisms of the judgment and allow Mr Matthews’ appeal. Mr Allen has a cross-appeal on the judge’s costs order, which was dependent on success on the Respondent’s Notice, and for which permission to appeal was not given. The appropriate order on the costs cross-appeal would be to refuse permission to appeal. Lord Justice Moore-Bick: I agree. Lord Justice Ward: I also agree.

Cited in 1 later judgment