2015 A

Question 1

In January 1999, Aisha came across a disused cafe, the title to which was registered. Aisha
wrote to the cafe’s owner, Todd, asking to rent it for a short period so that she could try
opening a coffee house. Todd told Aisha that he was waiting until the market picked up and
he would then develop the premises. However, he agreed to grant her a licence until June
1999 so that they could both gauge whether it was viable as a coffee house. At the end of the
licence Aisha had attracted a large and loyal clientele and wrote to Todd offering to pay
rent but did not receive a reply. Aisha continued to run the coffee house and Todd finally
wrote to her in 2003 offering to grant her a lease but she ignored the letter. In 2004 Aisha
decided to take a year off and embarked upon a world cruise, employing a part-time
security guard, Ellen, to check the premises each evening. On receiving a postcard from
Aisha informing her that she was extending her holiday, Ellen resigned her position and,
despite Aisha’s objections, re-opened the coffee house herself in January 2006. Aisha has
still not returned and Badbucks have now contacted Todd seeking to buy the premises
from him.

a) Advise the parties. b) How, if at all, would your advice differ if title to the cafe was
unregistered?

Answer:

(a) The question concerns discussion over the issue of adverse possession and requires
consideration whether Aisha (A) and Ellen (E) would be able to assert possessory title
against Todd (T) or T would retain its title as the sole proprietor of the coffee house and
would be able to proceed with the sale to Badbucks (B) effectively.

In registered land the key issue for adverse possession is whether the claimant has
completed an uninterrupted period of 12 years’ use of land as required by s. 15 of the
Limitation Act 1980 (LA 1980) prior to the Act coming in force on 13 th October 2003. As
per the facts we are told that A was given license to use premises for 6 months until June
1999. The possible alleged dispossession could only be said to start after June 1999.
Despite the adverse possession beginning before LRA 2002 came into force, the problem
comes squarely within Schedule 6 LRA 2002 since 12 years of adverse possession was
not completed prior to the Act coming into the force on 13 October 2003.

It should be noted that no right of action accrue unless the land is in adverse possession in
a manner which demonstrates both factual possession and the intention to possess,
excluding all others. Factual possession means a sufficient degree of physical custody
and control for one’s own use. Whereas possession will not be presumed lightly from acts
that equivocal in nature or temporary in purpose, such as growing vegetables. Moreover,
the facts of possession must be accompanied by an intention to possess on the part of the
stranger, and the HOL in Pye v. Graham stated that the squatter must show intention to
exclude the paper owner and the rest of the world from the land, to the extent that is
reasonably practicable and so far as the law allows. Do factual possession and intention
to possess exist in case of A? Both factual possession and an intention possess surely
existed before the license expired as per the Lord Chadwick’s dissent in Manchester
Airport v. Dutton where he held that there is no doubt that a licensee may have a right
exclusive possession. However, A had continued the same possession, but now adversely,
as the permission expired at the end of the license JA Pye (Oxford) v. Graham. However,
it could possibly be argued that A’s letter to T offering him to pay rent could negate an
intention to possess the premises. The courts have made it clear in Lambeth v. Blackburn
where squatter’s argument that he would have negotiated or would have agreed to pay
were held not negate an intention to possess. However, if the letter to T amounts to
acknowledgment then the clock resets until the possession becomes adverse again as was
made clear by the COA in Colchester BC v. Smith where the apex court held that in some
circumstances a written acknowledgment of the paper’s owner title by the squatter would
negate intention to possess. This interesting decision appears to be based on the
application of estoppel in that the AP is estoppel from denying the paper owner’s title by
the written acknowledgment freely given. On the other hand, a mere demand by a paper
owner to be allowed back into possession is not a sufficient interference to interrupt the
possessory period—Higgs v. Leshel Maryas Investment Co Ltd. Does T’s offer for a
lease could amount for a successful action for possession? The issue was highlighted and
solved in the case of Markfield Investment Ltd. V Evans, where the paper owner argued
that the possession had been interrupted by an abortive court action by the claimant’s
predecessor –in-title. It was decided that a mere issuing of a claim for possession, a letter
and separate action could stop the clock running in favor of squatter.
However, the next question arose that whether A discontinued possession in 2004 or
continued it through E as her agent. In the case of Sze To Chun Keung v. Kung Kwok
Wai David, it was held that no physical presence is required to establish factual
possession and here a claim for adverse possession succeeded through a licensee.
Therefore, following this case it could easily be said that where a presence of licensee is
enough to prove factual possession for licensor, then why the presence of an agent could
not suffice to prove factual possession for principal. However, this is not conclusive as it
is a case from Privy Council and therefore does not have a binding effect on English
courts.

The next issue to be consider here is whether E’s resignation and reopening of coffee
shop amounts to A’s dispossession? As per the facts E’ actions are enough to suffice as
factual possession for the purposes of adverse possession, in which case the clock resets
in January 2006 under LRA 2002, Sch. 6 para 11 (2). In that scenario, E would have said
 to complete the necessary minimum requirement of 10 years as in January 2016and can
therefore apply for registration, at which point Todd is notified, given 3 months (65
working days) to respond and, if he objects, given a further 2 years to initiate possession
proceedings unless there is an innocent boundary mistake, estoppel or some other reason
whereby Ellen can be registered notwithstanding his objections. Another possible, but
unlikely, outcome would be if the court took the view that by her inaction Aisha had in
effect passed her possessory title to Ellen, as arguably occurred in Mount Carmel v
Thurlow, in which case the periods of adverse possession can be aggregated and the 10-
year minimum period attained. This would be more advantageous for E as he would be
able to apply for registration via the same process as stated above in June 2009. However,
the same had been ruled before the enactment of LRA 2003, and the LRA 2003
specifically mentions that adverse possession cannot be taken over from an earlier
squatter except where one is the successor of the other, having bought or inherited the
land. The latter option seems irrelevant as the necessary requirement had been met in
January 2016 and would be used as an opportunity only if the 10 year threshold had not
been met.

Conclusively, it could be said that A’s had no proprietary interest in the said premises,
however, it cannot be said same for E as the facts are not enough to suggest that whether
E had applied for registration or not, and whether there has been any objection from T. If
E had applied for registration and there is no objection, or in case if there is any
objection, but E continued to have possession for further two years, then and only T’s
right to the property extinguishes and E have a possessory title to the coffee house.

(b) In unregistered land, the clock would not reset after Ellen dispossessed Aisha, which
means Todd’s title would be extinguished in January 2011, after an aggregate of 12
years’ continuous adverse possession. Aisha, of course, still has until January 2018 (i.e.
12 years from her dispossession) to initiate possession proceedings against Ellen; unless
the court takes the unlikely view, as discussed above, that by her inaction she gave her
possessory title to Ellen and thus retains no rights in the land.