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You are here: BAILII >> Databases >> England and Wales Court of Appeal (Civil Division) Decisions >> Smart v London Borough of Lambeth [2013] EWCA Civ 1375 (07 November 2013)
URL: http://www.bailii.org/ew/cases/EWCA/Civ/2013/1375.html
Cite as: [2014] HLR 7, [2013] 46 EG 108, [2013] EWCA Civ 1375

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Neutral Citation Number: [2013] EWCA Civ 1375
Case No: B5 2012 3202

IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE CENTRAL LONDON COUNTY COURT
CHANCERY BUSINESS
HHJ DIGHT

Royal Courts of Justice
Strand, London, WC2A 2LL
07th November 2013

B e f o r e :

LORD JUSTICE LONGMORE
LORD JUSTICE UNDERHILL
and
LORD JUSTICE FLOYD

____________________

Between:
ROBERT SMART
Appellant
- and -

THE MAYOR AND BURGESSES OF THE LONDON BOROUGH OF LAMBETH

Respondent

____________________

(Transcript of the Handed Down Judgment of
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____________________

Simon Williams (instructed by Public Access) for the Appellant
Terence Gallivan (instructed by Devonshires) for the Respondent

____________________

HTML VERSION OF JUDGMENT
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    Lord Justice Floyd:

  1. The appellant, Robert Smart ("Mr Smart"), claims on this appeal that he and his predecessors were in adverse possession of a property known as 11 Lillieshall Road, London, SW4 0LP ("the property") for a continuous period of 12 years prior to 4 November 1993. On the basis of this period of adverse possession he claims to have extinguished the registered title of the respondents, the Mayor and Burgesses of the London Borough of Lambeth ("Lambeth"). HHJ Dight, sitting in the Central London County Court, rejected Mr Smart's claim by his judgment dated 30 August 2012, along with similar claims of other claimants occupying other properties in Lillieshall Road. The principal ground on which he did so was that Mr Smart's (and his co-claimants') occupation of the property had been with the express or implied permission of Lambeth, and therefore not adverse possession at all. From that decision, Mr Smart appeals with the permission of Arden LJ. There is no appeal by the other claimants.
  2. Background

  3. The property is a Georgian or Victorian cottage situated in what is now a conservation area in Clapham, South London. The freehold of the property was acquired by Lambeth pursuant to compulsory purchase powers in December 1971. The property, along with others in Lillieshall Road, was then in a relatively poor condition. Lambeth had decided, at some stage, to demolish the property as part of a redevelopment of the area. This did not happen immediately, and so, in the mid to late 1970s, squatters moved into the property. In about 1978, Alannah Currie, one of Mr Smart's predecssors in the property, entered the property and took possession of it.
  4. By virtue of the Housing Act 1974, grants were available to housing associations for projects which included providing, improving, or repairing housing or residential accommodation, being "dwellings which are or are to be let or available for letting". By the late 1970s Lambeth were aware that there were squatters in the properties on Lillieshall Road, including the property. Lambeth decided on a policy which would involve re-housing rather than evicting the squatters if possible. To this end, Lambeth set about negotiating both with the squatters (and their subsequently formed housing co-operative) and with a housing association named Solon Housing Association ("Solon"). They had in mind a scheme whereby the houses in Lillieshall Road could be repaired and improved (using housing association grants) so that they could be used as a short-term source of housing accommodation for those who were then squatting in them ("the scheme"). The scheme which Lambeth intended to adopt is summarised thus at [24] in the judge's judgment:
  5. "(i) Lambeth would enter into a licence with Solon;
    (ii) Solon in turn would enter into agreements with a housing co-operative (which insofar as these houses are concerned came to be known as the Lillieshall Road Housing Co-operative Limited) to provide temporary accommodation for its members;
    (iii) the squatters in the houses in Lillieshall Road would become members of the co-operative and they would be permitted to occupy various houses on the road on a temporary basis;
    (iv) Solon would obtain small grants from the Housing Corporation under the Housing Act (and therefore called mini-HAGs) to carry out repairs to the houses;
    (v) the grant monies would be passed to the co-operative to administer in putting the houses occupied by its members into habitable condition."
  6. Lillieshall Road Housing Co-operative ("LRHC") was in due course formed under the Industrial and Provident Societies Act 1965. It is common ground that LRHC has legal personality. Its rules were in due course resolved to be amended to restrict membership to residents of Lambeth registered on its housing waiting list.
  7. The grants from the Housing Corporation were not available directly to Lambeth to carry out the work, but only to housing associations. The interposition of Solon was necessary to enable applications for grants to be made. If it were otherwise, Lambeth could have obtained the grants and licensed LRHC and other co-operatives directly.
  8. The judge found that the purpose of the scheme was to provide short-term accommodation in a suitable state of repair to people who were initially squatters. Regularisation of the occupation of the property was, as a result of the statute and Lambeth's policy, a necessary part of the scheme. He also held that squatters in the houses in Lillieshall Road (who did not at this stage include Mr Smart) became aware of the scheme and, with that in mind, were actively considering forming a housing co-operative through which they could negotiate with Lambeth over the future occupation of the houses. The judge also found that the claimants and their predecessors knew that the obtaining of repair grants for the houses and control of occupation of those houses by Lambeth were two sides of the same coin.
  9. In September 1980 the secretary of LRHC wrote to the chairman of Lambeth's housing committee indicating that LRHC would be prepared to negotiate a suitable arrangement with Lambeth to cover the houses in Lillieshall Road including the property. In a document entitled "LRHC Statement of Intent", the treasurer and secretary of LRHC wrote that Solon had agreed to act as management agents for LRHC when applications for Housing Corporation grant (so-called "mini-HAGs") were made.
  10. On 16 October 1980 there was a meeting between LRHC and Lambeth. The judge found that it was agreed in principle at that meeting that there should be a scheme pursuant to which, with the co-operation of Solon, the houses could be occupied by members of LRHC (so long as they were on Lambeth's housing list), Solon would be appointed to manage the properties in Lillieshall Road, and Lambeth would grant a licence of up to five years depending on the life expectancy of the property in question. The judge also held that it was implicit in the scheme, well understood by all the claimants and their predecessors, that the existing occupiers of houses in Lillieshall Road would, on joining LRHC, be permitted to stay in their houses. The meeting was attended by Mr Smart's predecessor in the property, Alannah Currie. A letter written by LRHC in November 1980 discusses delay in the grant of the "Council licence". A letter from LRHC to Lambeth later in November 1980 expressed the hope that the licence would be granted in the near future. The judge concluded that LRHC were dealing with Lambeth on the understanding that they would be part of the implementation of the scheme which had already been discussed with Lambeth, and that the members of the co-operative would be permitted to stay in the houses on a temporary basis on condition that they participated in the scheme.
  11. Solon wasted no time in making a mini-HAG application to the Housing Corporation. In its application it explained that "Property is licensed by Lambeth to user groups, via Solon as an intermediary..." and that LRHC were negotiating a licence with Lambeth which would be issued subject to the availability of mini-HAG funding.
  12. Subsequently, in January 1981, Lambeth's Urgency Sub-Committee formally approved the proposal for the squatters, through LRHC, to remain in the properties to assist in carrying out repairs with the support of mini-HAGs obtained with the assistance of Solon. Thereafter Lambeth wrote to Solon explaining that a licence would be granted to Solon expiring in January 1986. The judge explained at [42] of the judgment:
  13. "The later records show that the recommendations in this briefing were approved and the council resolved to enter into the scheme which had been outlined. The subsequent documentary evidence satisfies me, on the balance of probabilities, that the policy and the scheme were then implemented and whether directly or indirectly the squatters were granted permission by Lambeth to occupy their houses in accordance with the scheme."
  14. By March 1981 LRHC had started to collect rent from occupiers to be paid into a common fund to be used for essential repairs. The judge found that these sums were paid by the occupiers in respect of their occupation of the land, and not merely for membership of LRHC. He said this at [45] of the judgment:
  15. "At that point in time, therefore, the occupiers of the houses, including the occupiers of numbers 10, 11 and 19, had begun to pay fees to the co-operative in respect of their occupation of the houses. The co-operative expressly recognised that Lambeth was the owner of the houses and that it was entitled to control the occupation of the houses in the street, which they did by delegating the day to day administration of the occupation and funding and carrying out of repairs to the co-operative and Solon."
  16. By June 1981 Solon had received mini-HAG funds which, after consultation with Lambeth, it agreed to spend on the Lillieshall Road properties. In September 1981 Lambeth wrote to Solon enclosing a draft licence which it proposed to use to license short life properties to entities such as Solon. The draft was obviously still the subject of discussion as to its terms between Solon and Lambeth for some time thereafter. No copy of the executed licence agreement has survived, but the judge inferred that such a licence was subsequently granted and Mr Smart does not ask us to disturb that finding. The parties have worked on the basis that the document was executed on the terms of a draft which we have. It is intended to be a tripartite document involving the council, the housing association (i.e. Solon) and the housing co-operative (i.e. LRHC). I will call this licence "the first Solon licence". However, the judge did not make a finding as to precisely when the first Solon licence was granted. Lambeth invites us to make a finding that it was granted in April or May 1982, based on statements made by Lambeth in subsequent legal proceedings. For reasons which will appear I do not consider it necessary to make such a finding.
  17. The material recitals of the first Solon licence, as apparent from the draft, were as follows:
  18. "(v) It is intended that the Council will make available the property(ies) for improvement under the Mini HAG scheme administered by the Housing Corporation to bring vacant short life properties back into use
    (vi) [Solon] will take and retain ultimate responsibility for the management of the property(ies) and will apply for Mini HAG Finance for the improvement and management of the property(ies)
    (vii) [Solon] in turn will enter into a management agreement with [LRHC] whereby [LRHC] will in effect act as Managing Agent for [Solon] such agreement to be subject to the prior approval of the Council."
  19. The first Solon licence contained the following terms:
  20. 1. The Council hereby licenses [Solon] to use and permit those persons defined in paragraph (2) hereof but no other persons to occupy the property(ies) from the date hereof until the expiry of the 'Licence Period'. [Solon] will take and retain ultimate responsibility for improvement and management of the property(ies).
    2. All the occupants of the property(ies) will be licensees of and members of [LRHC] and shall first be registered on the Council's Housing Waiting List.
    13. Provided always and it is hereby agreed and declared whereas (a) [Solon] intends to part with possession of the property(ies) (b) [LRHC is not a tenant within the meaning of Section 28(3) of the Housing Act 1980 and (c) [Solon] shall not grant nor shall this licence be construed as granting exclusive possession of any property(ies) or any part or parts thereof to any individual.
    Neither [Solon] nor [LRHC] nor any person or persons accommodated in any of the properties the subsequent licence [sic] shall be secure tenants by virtue of Sections 37(b), 28(3) and the appropriate paragraphs of the III Schedule of the Housing Act 1980".
  21. The first Solon licence accordingly conferred on Solon the right to sub-license the property to a class of persons, namely occupants of the property who were licensees and members of LRHC and on the Council's housing list.
  22. In December 1981 Solon entered into a written licence agreement with LRHC to manage the properties on behalf of Solon. I will call this "the 1981 LRHC agreement". The 1981 LRHC agreement provided:
  23. "LRHC shall assume full management responsibility from the date of this agreement.
    LRHC will allocate the parts of the dwelling to its members as it sees fit bearing in mind at all times Solon's aims and objects are to provide housing for people in necessitous circumstances. LRHC may only grant a right of occupation in the form attached hereto." (emphasis supplied)"
  24. The closing words of the second of the clauses quoted above from the 1981 LRHC agreement form an important part of Mr Smart's case on this appeal, as he contends that he never signed a document in the form required by that agreement. By contrast, he accepts that if he had signed such an agreement, then his occupation would have been with the permission of Lambeth, as the chain of consents (Lambeth ? Solon ? LRHC) would thereby have been complete.
  25. The 1981 LRHC agreement also contained the following terms:
  26. "LRHC will keep and maintain clear records of fees received from each occupant and such records shall be available at all reasonable times for scrutiny by Solon or its agents.
    LRHC shall be manager of Solon for the dwellings in respect of moving in and out of residents, the collection of fees, visiting occupants in the event of arrears, the general upkeep of the communal parts and the external parts of the dwelling and the neighbourly behaviour of occupants.
    Solon will upon request from LRHC take proceedings to recover possession against any occupant in breach of agreement or of the conditions of occupation contained in the attached licence or against any occupant in arrears with charges for more than four weeks…".
  27. The prescribed form of grant of rights of occupation said to be attached to the 1981 LRHC agreement has not survived in a form which can definitively be identified as such. However a document dated 31st March 1982 entitled "Licence to occupy" in relation to the property and in favour of a Mr Bailey, was in evidence before the judge, as was an identical licence in relation to the adjoining house, 10 Lillieshall Road in favour of Mr Lawrence, the third claimant in these proceedings. The document is headed with the name and address of Solon, and appears therefore to be a grant by Solon rather than LRHC, but nothing turns on that. The judge concluded from this material that occupiers were being granted permission to live in the houses in the street, including the property, by or on behalf of Solon.
  28. All these events occurred before Mr Smart entered into possession of the property. Some time in 1983 he was given the keys to the property by Ms Currie. Ms Currie did not attend the trial, but in her witness statement said that she had lived in the property from mid 1978. In 1981 she was joined by her boyfriend, the Mr Bailey who signed the licence to occupy in March of 1982. In 1983 Ms Currie gave the keys to Mr Smart so that he could use the property, as the judge found "to house-sit", while she and Mr Bailey were away. Ms Currie and Mr Bailey moved out of the property in 1984 and went to America, whereupon Mr Smart became the sole occupier, which he has been ever since. Thereafter, Mr Smart carried out works to the property, part funded by grant monies made available by the scheme. The judge found he was well aware of the existence and purpose of LRHC from about the time he moved into the property, and he knew about the basis of the scheme. So, for example, he or his representative attended a meeting of LRHC on 31 October 1984 at which the "extension of licence 86-88" was discussed.
  29. The arrangements which I have described continued after 1986, despite the expiry of the first Solon licence. LRHC continued actively to control the occupation of the premises, including in one case taking possession proceedings against occupiers who had failed to pay rent. In 1989 Mr Smart himself was taken to task by LRHC for arrears of rent. He was told that ultimately, if the problem persisted, he could lose his "tenancy". The judge found that these events showed that LRHC plainly saw itself as having a right to control occupation of the houses and to set and recover rent, and viewed membership of LRHC as a route to the right of occupation of the property. Those rights plainly derived from the first Solon licence and the 1981 LRHC agreement.
  30. In about 1989 or 1990 Mr Smart had become active in the affairs of LRHC, signing letters on their behalf. The judge found that Mr Smart was very much involved in the day to day running of the co-operative and that Mr Smart accepted the basis on which the housing stock in Lillieshall Road was managed and administered. Thus, when LRHC took proceedings against the occupiers of No 22 Lillieshall Road for possession and arrears of rent, Mr Smart was called as a witness at the hearing. In a letter of 18 October 1990, on LRHC notepaper, Mr Smart reported the progress of the proceedings to Lambeth in terms which clearly recognised the existence of a licence from Lambeth to LRHC. He stated that LRHC's "defence" to the claim by the occupiers of No 22 that they had a secure tenancy was that "LRHC managed the properties on behalf of Lambeth according to a licence which states that the properties are situated on land required for development and the co-op are to ensure that no "secure tenancy" is granted".
  31. In September 1990 Lambeth entered into a further short term agreement with Solon in respect of a number of properties including the property. The schedule to the agreement indicated that the licence in respect of the property was extended until 1995. The agreement, which I will call "the second Solon licence" provided by clauses 1 and 2 that:
  32. "…the Council gives leave and licence to [Solon] in common with [Lambeth] to use and manage the properties on behalf of [Lambeth] for the periods agreed upon the terms and conditions hereinafter appearing."
    "The licensee shall be able to grant a subsidiary interest in the individual properties to a Housing Co-operative which has been recognised by the Lambeth Housing Committee."
  33. The second Solon licence also contained a term requiring Solon to use their best endeavours to ensure that no occupier becomes a secure tenant within the meaning of the Housing Acts or the Rent Acts. It also required the use of best endeavours to ensure that all occupiers entered into a form of licence agreement designed, by reference to certain statutory provisions, to minimise the risk of the creation of a secure tenancy in any occupier.
  34. Solon in due course transferred all its assets, which included the benefit of the second Solon licence to Family Housing Association Limited, now known as Family Mosaic. For simplicity I will continue to refer to it as Solon.
  35. On 04 November 1993 Mr Smart applied for the right to buy the property under the provisions of the Housing Act 1985. When Lambeth refused to acknowledge such a right, Mr Smart applied in Wandsworth County Court for declarations that he was a secure tenant of Lambeth and entitled to exercise the 'right to buy' within the 1985 Act. Mr Smart's case was that the property was owned by Lambeth and let to him pursuant to a tenancy which began in February 1982. Lambeth, on the other hand, contested the proceedings on the basis that Mr Smart was not a tenant but a licensee or sub-licensee. In 1999, those proceedings were discontinued. Those proceedings explain why Mr Smart's case on adverse possession has to be made out by early November 1993: his application to buy the property on the basis that he was Lambeth's tenant on any view constituted an acknowledgement that his occupation was with Lambeth's permission.
  36. The judge found that the occupiers continued to pay for their occupation of their houses until 2000.
  37. Adverse possession

  38. Section 15(1) of the Limitation Act 1980 ("the Act") provides:
  39. "No action shall be brought by any person to recover any land after the expiration of 12 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."
  40. Paragraph 1 of Schedule 1 to the Act reads as follows:
  41. "Where the person bringing an action to recover land, or some person through whom he claims, has been in possession of the land, and has while entitled to the land been dispossessed or discontinued his possession, the right of action shall be treated as having accrued on the date of the dispossession or discontinuance."
  42. Paragraph 8 of that Schedule contains the following:
  43. "(1) No right of action to recover land shall be treated as accruing unless the land is in the possession of some person in whose favour the period of limitation can run (referred to below in this paragraph as "adverse possession"); and where under the preceding provisions of this Schedule any such right of action is treated as accruing on a certain date and no person is in adverse possession on that date, the right of action shall not be treated as accruing unless and until adverse possession is taken of the land.
    (2) Where a right of action to recover land has accrued and after its accrual, before the right is barred, the land ceases to be in adverse possession, the right of action shall no longer be treated as having accrued and no fresh right of action shall be treated as accruing unless and until the land is again taken into adverse possession.
    (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. "
  44. In order to establish a case of adverse possession it is necessary to establish the two components of possession, factual possession and an intention to possess: J.A. Pye (Oxford) Limited v Graham [2003] 1 AC 419 at [40]. Mr Smart's case on possession is not the subject of challenge. Lambeth's challenge to the case advanced by Mr Smart concerns whether Mr Smart's possession and that of his predecessors was adverse to them. They contend it was not, because at all material times Mr Smart was in possession with their express or implied content.
  45. There is no dispute that possession with the consent of the owner is not adverse possession. That principle was often stated as "possession is never adverse if it can be referred to a lawful title". In J.A. Pye (Oxford) Limited v Graham (supra) Lord Browne-Wilkinson said at [37]:
  46. "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 by or possession by the squatter for the purposes of the Act."
  47. There is some guidance in the authorities about the ways in which permission can be granted. It is common ground that the permission may be either by the express, or, as made clear by paragraph 8(4) of Schedule 1 of the Act, the implied permission of the owner. In the latter case it is not enough simply to show that the occupation was not inconsistent with the owner's present or future enjoyment of the land.
  48. The consent does not have to be contractually binding. In BP Properties v Buckler (1988) 55 P. & C.R. 337, the consent relied on was contained in letters from the owner to the occupier allowing the latter to remain in the property for the rest of her life. The terms of these letters were neither accepted nor rejected by the occupier. Dillon LJ, with whom Mustill LJ and Sir Edward Eveleigh agreed, having explained that there was neither acceptance of nor consideration for the consent, said this at page 346-7:
  49. "Whether B.P. Properties Ltd. could or could not in law, in the absence of consideration have sought to determine in her lifetime the licence granted to Mrs. Buckler by the two letters, they did not in fact seek to do so. Had they sought to do so, they would in the absence of any repudiation of the letters by Mrs. Buckler have had to give Mrs. Buckler a reasonable time to quit as with any licensee.
    The nature of Mrs. Buckler's possession after receipt of the letters cannot be decided just by looking at what was locked up in her own mind. It must depend even more, on this aspect of the case, on the position as seen from the standpoint of the person with the paper title. What could that person have done? The rule that possession is not adverse if it can be referred to a lawful title applies even if the person in possession did not know of the lawful title; the lawful title would still preclude the person with the paper title from evicting the person in possession. So far as Mrs. Buckler was concerned, even though she did not "accept" the terms of the letters, B.P. Properties Ltd. would, in the absence of any repudiation by her of the two letters, have been bound to treat her as in possession as licensee on the terms of the letters. They could not have evicted her (if they could have done so at all) without determining the licence.
    I can see no escape therefore from the conclusion that, whether she liked it or not, from the time of her receipt of the letters, Mrs. Buckler was in possession of the farmhouse and garden by the licence of B.P. Properties Ltd., and her possession was no longer adverse within the meaning of section 10 of the 1939 Act."
  50. Where it is sought to imply consent from the circumstances of the case, there needs to be some overt act by the landowner or some demonstrable circumstance from which the consent can be implied: see per Etherton J, as he then was, in London Borough of Lambeth v Rumbelow (unreported, 25 January 2001, available on Westlaw as 2001 WL 238755). Etherton J went on to say that it was irrelevant that the user was aware of the overt act or demonstrable circumstance. It did, however, have to be established that a reasonable person would have appreciated that the user was with the permission of the owner. I agree with those propositions.
  51. Where a person in possession of land is negotiating with the owner for the grant of some interest in that land it may be a natural inference from the circumstances to say that the owner permits the occupier to be on the land pending the result of the negotiations: see the decision of the Court of Appeal (Rix and Jonathan Parker LJJ) in Colin Dawson Windows Ltd v King's Lynn, West Norfolk Borough Council [2005] EWCA Civ 9; [2005] 2 P. & C.R. 19 at [39] approving a decision of Mr Kim Lewison QC sitting as a Deputy Judge of the High Court in Bath & North Somerset District Council v Nicholson [2002] 10 E.G.C.S 156.
  52. The judgment

  53. The judge first considered the period when the occupiers were in negotiations with Lambeth via LRHC and Solon concerning the implementation of the scheme. He held that one of the key aspects of the scheme was the regularisation of the occupation of the houses so as to avoid the need to evict the existing squatters. From these negotiations he concluded that Lambeth tacitly or impliedly gave permission to each of the claimants (and thus to Mr Smart) to occupy the properties at least during the pendency of those negotiations.
  54. The judge went on to hold that the implementation of the scheme in 1981 (or 1982 at the latest) confirmed the grant of that permission, and was an express, alternatively an implied grant of permission to the occupiers. He rejected an argument about the extent of the authority of LRHC to grant rights of occupation on behalf of Solon. He said that LRHC undoubtedly had authority to grant permission on behalf of Lambeth and/or Solon. He also rejected a similar but not identical argument based on what was said to be a break in the chain of permissions in the absence of a written agreement between the claimants on the one hand and either Solon or LRHC on the other. He drew the inference from the payment of rent by the occupiers to LRHC that permission had been granted by either Solon or LRHC or both. He described the claimants' approach to consent as too mechanistic. The fact that Lambeth consented to the occupation of the houses by the claimants was incontrovertible.
  55. The judge also rejected the claim to adverse possession on two further grounds. The first was that Lambeth had parted with possession to Solon, and that therefore any adverse possession did not affect its rights as reversioner under the first or second Solon licences ("the reversion point"). The second was based on estoppel by convention. Given that the grants to repair the properties were only available on the footing that the properties were being let, it was not open to the occupiers to say that their possession was adverse to Lambeth ("the estoppel point").
  56. The arguments on this appeal

  57. On behalf of Mr Smart, Mr Simon Williams submitted that the judge should have found that the permission to occupy during the negotiations was limited in time. He no longer sought to suggest that time was running against Lambeth, during the pendency of the negotiations. Instead he submitted that the implied permission came to an end in September 1981 "on the granting of the licence to Solon". I have no doubt that the concession that time ceased to run against Lambeth during the period of the negotiations was rightly made in the light of the authorities I have referred to. Time ceased to run because the occupation of the property by those in possession during the negotiations was permitted by Lambeth.
  58. As to the subsequent period, whenever that began, Mr Williams submitted that the occupation of the property by Ms Currie and Mr Bailey, and thereafter by Mr Smart was no longer with the consent of Lambeth, because the only way in which that consent could be obtained was in accordance with the form prescribed in the 1981 LRHC agreement. Mr Smart had never been given such a form. He accepted that if his client had been given and signed such a form, his possession would have been with the consent of Lambeth and not adverse to them.
  59. For Lambeth, Mr Terence Gallivan sought to build on the concession made by Mr Smart in this court by submitting that the negotiations must have continued until a date in 1982 when the first Solon licence was, he contended, executed. By this means he sought to present us with an attractive short cut, because there would by 1982 be less than 12 years before 4 November 1993, the date on which Mr Smart acknowledged Lambeth's title. Alternatively he submitted that the negotiations must have been continuing up to the date of the 1981 LRHC agreement, which was itself an essential component of the Scheme. He also supported the judge's approach, based on the grant of permission once the scheme was in place.
  60. If he was wrong about the permissive nature of the later possession, Mr Gallivan also supported the judge on the reversion and estoppel points.
  61. Discussion

  62. The case was presented to us in a way which differed significantly from that which was presented to the judge. Whilst the scheme was being negotiated, it is now common ground before us that those in occupation of the property were there with Lambeth's permission. If the period of permissive occupation pending finalisation of the scheme extended beyond 4 November 1981, Mr Smart will not be able to establish 12 years of subsequent adverse possession, whatever the nature of his possession after the scheme came into effect. However, as I have indicated, the judge did not make any findings as to precisely when the period of negotiation ended and the operation of the scheme began. The judge's findings were limited to saying that the scheme was implemented by 1981 or 1982 at the latest. There are some grounds for saying that the scheme was, in substance, implemented by September 1981. Equally there are grounds for saying that the first Solon licence was not formally executed until April or May 1982.
  63. It seems to me that identifying the precise date on which the negotiations came to an end and the scheme came into effect has its own difficulties. Attractive though it might seem to take Mr Gallivan's shortcut, I would only embark on the necessary fact finding exercise if it is rendered necessary by the way in which the case is now presented to us.
  64. I propose therefore to consider first whether the judge was right to hold that, once the scheme was implemented, the occupation of the property by Mr Smart and his predecessors was with the express or implied consent of Lambeth. For these purposes it makes no difference whether the scheme commenced in September 1981, as Mr Smart contends, or in early 1982 or alternatively December 1981 as Lambeth contend. If possession beyond November 1981 was with the consent of Lambeth, then Lambeth have an answer to Mr Smart's claim.
  65. The starting point is the first Solon licence. That document makes it clear that, in order to fulfil the intention of Lambeth spelled out in recital (v), namely to bring vacant short life property back into use, Solon was to have the right to permit a specific category of occupiers to occupy the premises. The category was to include licensees and members of the sub-licensee, that is to say the co-operative. The grant of permission by Solon to licensees and members of the co-operative to occupy was not required to be in any particular form. By clause 13, Solon (and Lambeth) were not to grant exclusive possession to any individual. Subject to that restriction, Lambeth were giving their overall consent to occupation of the property licensees and members of the co-operative. The scheme, as all involved appreciated, allowed current as well as future occupiers who were members or licensees of the co-operative to remain in possession.
  66. Looking at the matter from the other end, the occupiers, and in due course Mr Smart, were, on the facts found by the judge, well aware of the existence of the scheme. Ms Currie and Mr Bailey were plainly so aware, and Mr Bailey undoubtedly signed the written form of consent to his occupation.
  67. Can the occupiers avoid the conclusion that their occupation was permissive by reliance on the specific terms of the 1981 LRHC agreement? Mr Williams submits that they can, and that the only valid consent which LRHC can give is one which complies with the requirements of form specified in that agreement. The failure to sign such a form means, he submits, that occupation was never with the consent of Solon and therefore not permitted by Lambeth either. In consequence the occupiers were trespassers.
  68. I cannot accept this argument. The judge's conclusion that the occupiers continued to occupy the premises with the express permission of Lambeth was a finding of fact. Mr Williams' argument makes an assumption that the only way in which Lambeth could express its consent to the occupation of the properties once the scheme came into being was via the mechanism provided for in the 1981 LRHC agreement. I do not accept this assumption as correct. The first Solon licence invested Solon with the right to grant permission on behalf of Lambeth, but did not exclude Lambeth's right to communicate its own permission to the occupiers. The judge expressly found that Lambeth was giving its consent to the scheme in a much more general sense. In that sense, Lambeth was consenting to, indeed encouraging the continued occupation by the current occupiers when the scheme came into effect. It was that permission and consent that both Solon and LRHC had authority to convey to the occupiers, which they plainly did. Once the scheme came into effect there could not have been the slightest doubt in the minds of any current occupier of the property, that is to say either Ms Currie or Mr Bailey, that their continued occupation was with Lambeth's consent.
  69. Looked at more broadly, once it is conceded as it is that Ms Currie and Mr Bailey were permitted by Lambeth to occupy the property during the period of negotiation, it would be a surprising result if the successful conclusion of those negotiations was to make them trespassers. If the negotiations had reached deadlock, the occupiers would have been on notice that the temporary permission had come to an end. As the judge pointed out, no notice was given to them by Lambeth or anyone else that the permission to occupy which they had enjoyed during the negotiations had come to an end. When the negotiations arrived at their destination, allowing the continued use of the properties and making available the mini HAG funding, the existing occupiers were entitled to assume that their temporary right to occupy was going to continue until they received notice to the contrary. The inclusion of a term in the 1981 LRHC agreement between LRHC and Solon that permission to occupy was to be given in a specified form cannot constitute such notice.
  70. In those circumstances the judge was entitled to find that the occupation of the property was, once the scheme was implemented, with the consent of Lambeth. That state of affairs must have continued until at least 1984 when Ms Currie and Mr Bailey gave up possession. That is sufficient to answer Mr Smart's claim to have been in adverse possession for 12 years.
  71. Moreover, when in due course he took over possession of the property from Ms Currie and Mr Bailey, Mr Smart was aware that he derived his right to occupy the property from the superior title which LRHC possessed pursuant to the scheme, as demonstrated by the payment of rent, and his involvement in possession proceedings brought by LRHC against those who did not pay and his other active participation in the affairs of LHRC and implementation of the scheme. There were abundant circumstances from which he, or indeed any reasonable person, would be able to conclude that his occupation of the property was pursuant to the scheme. In short, he knew that he was amongst the class of people intended by Lambeth to be permitted to occupy the premises. I therefore consider that the judge was entitled to find that Mr Smart was in possession with Lambeth's consent as well.
  72. Those conclusions make it unnecessary for us to consider a further point which emerged in the course of the hearing, about whether a period of adverse possession interrupted by a period of occupation with consent is capable of defeating Lambeth's title. The point does not appear to have been taken before the judge, is not covered in any of the skeleton arguments and it is far from clear that the evidential basis exists for it. We did not, in any event, hear full argument on it. In those circumstances I prefer not to express any view on it. It is also unnecessary for us to decide the two further points on which the judge reinforced his conclusion, the reversion point and the estoppel point.
  73. For the reasons I have given, I would dismiss the appeal.
  74. Lord Justice Underhill

  75. I agree
  76. Lord Justice Longmore

  77. I also agree


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URL: http://www.bailii.org/ew/cases/EWCA/Civ/2013/1375.html