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England and Wales Court of Appeal (Civil Division) Decisions
You are here: BAILII >> Databases >> England and Wales Court of Appeal (Civil Division) Decisions >> National Westminster Bank Plc v Ashe  EWCA Civ 55 (08 February 2008)
Cite as:  NPC 14,  1 EGLR 123,  1 WLR 710,  2 P & CR 10,  WLR 710,  EWCA Civ 55,  BPIR 1,  7 EG 143
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COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
Mr RICHARD ARNOLD QC sitting as a Deputy High Court Judge
Strand, London, WC2A 2LL
B e f o r e :
LORD JUSTICE HUGHES
MR JUSTICE DAVID RICHARDS
| NATIONAL WESTMINSTER BANK PLC
|- and -
|MR ROBIN ASHE (Trustee in bankruptcy of Djabar Babai)
WordWave International Limited
A Merrill Communications Company
190 Fleet Street, London EC4A 2AG
Tel No: 020 7404 1400, Fax No: 020 7831 8838
Official Shorthand Writers to the Court)
Mr Michael Driscoll QC and Mr Peter Shaw (instructed by Moon Beaver) for the Respondent
Hearing dates: 18th and 19th October 2007
Crown Copyright ©
Lord Justice Mummery :
Public interest points
Background of appeal
The 1980 Act
" 15. (1) 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.
(6) Part I of Schedule I to this Act contains provisions for determining the date of accrual of rights of action to recover land in the cases there mentioned."
"1. 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."
"3. Where any person brings an action to recover land, being an estate or interest in possession assured otherwise than by will to him, or to some person through whom he claims, and-
(a) the person making the assurance was on the date when the assurance took effect in possession of the land…..; and
(b) no person has been in possession of the land by virtue of the assurance;
the right of action shall be treated as having accrued on the date when the assurance took effect."
"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."
"Subject to (a) section 18 of this Act…. 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."
"41. In the light of this exposition of the law, I have considerable difficulty in seeing how there could be a requirement for adverse possession by a mortgagor in order for time to run in his favour under section 15 if by "adverse possession" is meant possession without the consent of the mortgagee. The mortgagor is the owner of the land and is in possession of it both prior to and after executing the mortgage. True it is that the mortgagee has a legal interest in the land which entitled the mortgagee to possession in certain circumstances; but the mortgagee's right to possession does not arise because he has been dispossessed by the mortgagor. On the contrary, when the right arises and is enforced it is the mortgagee who (lawfully) dispossesses the mortgagor."
"44. Even if, contrary to the view that I have just expressed, a claim by a mortgagee does fall within paragraph 8, I consider that a mortgagor is a person in whose favour time can run so far as his capacity is concerned, and in that sense is in "adverse possession" as that expression is defined in paragraph 8(1). I see no reason in principle why time should not run from the date on which the mortgagee is entitled to possession, whether the mortgagee unequivocally demands possession on that date or forbears from doing so while attempting to persuade the mortgagor to pay up."
"69. I conclude that, in a case such as the present, time starts to run for the purposes of section 15(1) on the date on which the mortgagee becomes entitled to possession, and that it is not necessary in order for time to run that the mortgagor be in possession without the consent of the mortgagee. Accordingly, the Defendant's [the Bank] first ground of opposition to the claim fails."
The Bank's submissions
Discussion and conclusion on adverse possession point
(1) It is common ground that the Bank acquired an immediate right to possession of the Property on the granting of the legal charge on 8 June 1989. That was a right of action which could become statute barred under the 1980 Act. For time to start running against the Bank, however, its right of action was only treated as accruing if the requirement of adverse possession of the Property by Mr & Mrs Babai was satisfied.
(2) Mr Fenwick correctly submitted that, in holding that the requirement of adverse possession does not apply to mortgaged land which the mortgagee seeks to recover by action, the deputy judge was wrong. For reasons already given the requirement in paragraph 8 of Part I of Schedule 1 to the 1980 Act is applicable to a mortgagee's right of action for possession of the mortgaged land. The cases cited by the deputy judge in his judgment (paragraphs 52 and following) did not establish that adverse possession was unnecessary in the case of mortgaged land.
(3) The requirement of adverse possession must be applied in accordance with the exposition of it by the House of Lords in Pye and not that of the courts in the pre-1833 cases cited by Mr Fenwick. Adverse possession refers to the capacity of the person in possession of the land and not to the nature of that person's possession. Possession is to be given its ordinary meaning. There must be "ordinary possession" of the mortgaged land by a person in whose favour time can run. As explained in Pye the references to adverse possession in the 1939 Act and the 1980 Act did not reintroduce " by the back door" or "by a side wind after over 100 years the old notions of adverse possession in force before 1833": see paragraph 35 of the speech of Lord Browne-Wilkinson.
(4) Mr & Mrs Babai were in ordinary possession of the Property in the period following the legal charge and after the last payment by Mr Babai in respect of the mortgage debt, which caused the Bank's right of action to accrue afresh. It was exclusive possession. If they were not in possession of the Property, no one else was. The Bank had a right to possession of the Property, but it was not in possession of the Property
Other submissions of the Bank: discussion and conclusion
Common Luck case
Cotterell v. Price
Lord Justice Hughes:
Mr Justice David Richards: