REF/2004/1242

THE ADJUDICATOR TO HER MAJESTY’S LAND REGISTRY
LAND REGISTRATION ACT 2002

IN THE MATTER OF LAND AT THE JUNCTION OF ALUM ROCK ROAD AND ADDERLEY ROAD SALTLEY 

BETWEEN
J C DECAUX LTD 
APPLICANT
and

KWIK SAVE STORES LTD 

RESPONDENT

Title Number: WM188303

Before: Mr Owen Rhys sitting as Deputy Adjudicator to HM Land Registry

Sitting at: Court 7 Procession House 55 Ludgate Hill London EC4 M 7JW

On: 15th and 16th May 2006

Applicant Representation:  Mr C Stoner (instructed by Arnold Thompson) 
Respondent Representation:  Mr M Wonnacott (instructed by Hill Dickinson)

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DECISION
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KEYWORDS – Land Registration Act 1925 section 75 - Limitation Act 1980 section 15 and Sch 1 Para 8(4) - Adverse possession - Agreement – Lease or Licence – Whether consent given by paper owner – Whether squatter had intention to possess –  Adverse possession not made out – Application dismissed

Cases referred to:

Provincial Bill Posting Co v Low Moor Iron Co [1909] 2 KB 344 
Wallis’s Cayton Bay Holiday Camp Ltd v Shell-Mex & P Ltd [1975] QB 94.
Gleeson v Wippell [1977] 1 WLR 510
Street v Mountford [1985] AC 805
Kewal Investments Ltd v Arthur Maiden Ltd [1990] 1 EGLR 193,
Pye (Oxford) Ltd v Graham [2003] AC 419
Clear Channel UK Ltd v Manchester City Council [2004] EWHC 2873 (Ch)) and [2005] 1 EGLR 128
Batsford Estates (1983) Limited v Taylor [2005] 2 EGLR 12
Clowes Developments (UK) Ltd  v Walter and others [2005] EWHC 669

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INTRODUCTION
1.	This case concerns two advertising hoardings erected on land adjacent to the car park of a supermarket, at the junction of Alum Rock Road and Adderley Road, Saltley, Birmingham, West Midlands.  The hoardings consist of two large panels, the larger one of which faces Adderley Road, the smaller being almost at right angles to the road, and facing the entrance drive to the car park.  The position and alignment of the panels can be seen from the plan attached to the Applicant’s Statement of Case (at page 3a of the Trial Bundle).  The claim is made by J C Decaux Ltd (“Decaux”), one of the leading outdoor advertising specialists in the UK, with some 10,000 freehold and leasehold sites.  The Respondent, Kwik Save Stores Ltd (“Kwik Save”), is the registered proprietor of the affected title.  Decaux’s claim is based on the alleged adverse possession of the site since a date in the 1980’s, and relates to (a) the entire site on which the hoardings are erected including the triangular grass-covered areas between the hoardings and the roads or, in the alternative (b) the area occupied by the hoardings, and their foundations, alone, excluding any surrounding land.

2.	Decaux originally applied to HM Land Registry to be registered as the proprietor of the site on 24th March 2003. In the light of Kwik Save’s objections, the matter was referred for adjudication on 7th December 2004.  It is accepted on both sides that the adverse possession, if established, pre-dates the commencement (in 2000) of the Human Rights Act 1998, and accordingly it is not necessary to consider recent authorities which have interpreted the Limitation Act 1980 by reference to the European Convention on Human Rights.  The law to be applied is therefore as it was stated by the House of Lords in the case of Pye (Oxford) Ltd v Graham [2003] AC 419.

3.	A summary of my conclusions can be found in the final paragraph of this Decision.  Page references are (unless otherwise stated) references to the Trial Bundle.

THE HISTORY OF THE SITE PRIOR TO 1980
4.	Throughout the 1970’s, there was a supermarket at the junction of Adderley Road and Alum Rock Road.  At that time it was owned by a company called Paddy’s Superstores Ltd (“Paddy’s”).  The supermarket was and is built to the south of Alum Rock Road, and to the south-east of the junction with Adderley Road.  This junction was originally formed by a crossroads, but in recent years this has been re-aligned to form a roundabout.  It seems that there has always been a car park serving the store, the vehicular entrance to which is and at all material times was on the east side of Adderley Road.  There has always been a public house on the actual corner of the two roads, and two further houses – Nos 4 and 6 Adderley Road – between the pub and the car park entrance.  

5.	On 9th October 1973 an Agreement (“the 1973 Agreement”) was made between Paddy’s (1) and The London & Provincial Poster Group Limited (“LPP”) (2).  It is said that Decaux is the successor in title to LPP and I shall consider this point in due course.  This agreement provided as follows:	“During the currency of this Agreement the Company shall have the exclusive right to erect and maintain 2/48-sheet and 2/16-sheet advertisement poster panels and to display advertisements on land situated at adjoining No.6 Adderley Road, Saltley, Birmingham”.  I shall consider the precise terms of this and other agreements in greater detail elsewhere in this decision.  At this stage, however, I would note the following matters. 
a.	The description of the poster panels – 48-sheet and 16-sheet – was apparently a normal method of describing the panel size, based on the number of poster sized sheets then required to display the advertisement.  As I understand it, a 48-sheet panel is 6.4 metres by 3.2 metres and a 16-sheet therefore one-third the size.  These are accordingly substantial structures.
b.	Much of the correspondence and other documents relating to the 1973 Agreement (and subsequent agreements) remains extant, and can be found at Tab I of the Trial Bundle.  It is apparent from this material that, when the 1973 Agreement was made, none of the poster panels was in place.  
c.	However, at that time (October 1973) LPP had submitted a planning application for the erection of 2/48-sheet and 2/16-sheet panels, and permission was granted in January 1974.  LPP then instructed a contractor to erect the panels, and the work order was placed on 3rd January 1974.  This document (page 313) shows that a drawing had been prepared to identify the location of the panels: this drawing is part of Exhibit “EX 2” of the Statutory Declaration dated 27th February 2003 of Elaine Duncan (page 125).  It shows three separate panels filling the space between the flank wall of No 6, and the entrance to the supermarket car park.  It is apparent that the central panel as shown on the plan consists of 2/16-sheet panels.  The drawing and work order also specifies the construction of a 2 foot 6 inch high ranch fence behind the pavement along the boundary with Adderley Road with a 62-foot run.
d.	The panels were erected on 15th January 1974 and Paddy’s was notified of this on 6th February 1974.  I think it may be inferred from the documents that the fence was also constructed at this time.

6.	A further agreement was made between Paddy’s (1) and LPP (2) on or about 18th May 1977 (“the 1977 Agreement”).  This is in the same form as the 1973 Agreement save for the dates and the rent payable.  The draft agreement was sent to Paddy’s under cover of a letter dated 18th May 1977 so it seems unlikely that it was actually executed on that day, although that is the date which it bears.  Furthermore, at the date of this agreement the four poster panels referred to had already been constructed some years earlier and would have been clearly visible on the site.

7.	In November 1977 LPP wrote to Paddy’s proposing that a further agreement should be made for an additional 48-sheet poster panel to be constructed on the site.  A rough plan is referred to in that letter, and was presumably sent with it, but no copy of that plan has been produced.  It is eminently possible that the plan is that which has been produced at page 236, which shows both the original panels and the additional panel.  In any event, having regard to the internal memorandum dated 31st October 1977 (page 301 of the Bundle), it is clear that the new panel was to be erected on the return frontage to the car park entrance, namely at a right angle to Adderley Road.  LPP obtained planning permission for the erection of the additional panel and notified Paddy’s of this fact by letter dated 14th February 1978.  It seems that the panel was actually erected on 22nd April 1978 (see page 290).  In the event, Paddy’s executed an additional agreement on 10th July 1978 (“the 1978 Agreement”), relating to the new panel but in all other respects (save as to rent and the term) identical to the 1973 and 1977 Agreement.  The form of agreement used was, as before, LPP’s standard form.

8.	It seems to be common ground between the parties that in 1980 the registered title upon which the hoardings were built – namely Title No WM188303 – was sold by Paddy’s to Kwik Save Supermarkets Ltd, the current Respondent.  Curiously, there was no direct evidence of this and no documentation has been produced.  Furthermore, the office copy entries show that Kwik Save itself only became registered as proprietor of the land in 1995.  I note that the Case Summary prepared by the Land Registrar makes reference to Decaux’s claim that a predecessor of Kwik Save, namely Kwik Save Discount Group Limited, became the registered proprietor in 1980.  I shall assume for the purposes of this decision that this is correct. Manifestly, this is a critical point – if Paddy’s remained the registered proprietor until 1995, according to their terms the various agreements would have continued in force, whether or not they could be categorised as licences.

9.	Notwithstanding the sale of the land to Kwik Save or a predecessor in title of Kwik Save in 1980, LPP and its successors have continued to maintain advertising hoardings on the site since that time, up to and including the present day.  Decaux – relying on the periods of occupation of LPP, and then a company called Mills & Allen Ltd (“Mills”) – claims by 1999 at the latest that it had acquired a title under the Limitation Act 1980.  As I have mentioned, the claim is put in the alternative: either to the entire area on which the hoardings are erected, or alternatively to the actual structure of the hoardings themselves, including the foundations on which they rest.

10.	Decaux relied on the evidence of Elaine Duncan, its Property Manager, who had worked for Mills since 1994.  Prior to that, she had worked in the surveying business, and had no special knowledge of the poster advertising  industry.  It had also submitted a witness statement by Mr Halford.  This consisted largely of argument, but also exhibited two Opinions of Counsel: one obtained by Decaux itself, and the other by HM Land Registry with regard to three other titles.  Mr Wonnacott, for Kwik Save, objected to the admission of these legal Opinions, relying on Gleeson v Wippell [1977] 1 WLR 510 and in particular the words of Megarry V-C at page 519: “A Court does not hear expert evidence on what the law of England is, or what the rights of parties are under that law.”   It seemed to me that the same principle should apply to this process, and accordingly I did not allow this “evidence” to be adduced.  Mr Stoner, for Decaux, then withdrew the witness statement of Mr Halford in its entirety, since its primary purpose was to introduce these legal Opinions.  Kwik Save relied on the evidence of a Mr Robert Parry and a Mr Christopher Lowe.  Mr Parry was the Regional Maintenance Manager for Somerfield Stores Ltd (Kwik Save’s parent company) and had been since 1996.  He had no knowledge of the site prior to that date.  Mr Lowe is a Director of a company of Building Contractors which had the contract to maintain Kwik Save stores since 1996 onwards.  However, Mr Lowe said that in general terms he was familiar with the site since approximately 1988 onwards, and his office was situated very close to the land in question.  

11.	No witness was called who could give evidence as to the activities or appearance of the site earlier than 1988.  For reasons which will become apparent, it may be important to identify exactly when the advertising panels were erected in their present form.  Nevertheless, one potential witness, Mr John Poucher, of Mills, was not called, even though Ms Duncan told me that he was working for Decaux until as recently as Christmas 2005.  It was Mr Poucher who wrote an internal memorandum which included the date on which (as far as he was concerned) new panels had been erected on the site, and Decaux is relying on this material to support its contention that the existing panels have been in place since that date.  It is a matter of regret that such a witness was not made available in these proceedings.  Indeed, there is a paucity of direct evidence as to the use made by LPP/Mills/Decaux of the site, and its appearance, since 1980, and this has not made my task any easier.

12.	There is a certain amount of documentation available, from which the history of the site can be pieced together.  Curiously, there is a good deal of material for the period 1973 to 1985, which seems to coincide the period of LPP’s use of the site.  There is a complete absence of any documentation between 1985 and 1996.  Again, this does not make the task of deciding the issues in this case any easier.

THE ISSUES
13.	The principal issues in the case are as follows:
a.	Did the agreements made between Paddy’s (1) and LPP (2) create a licence or a tenancy of the advertising hoardings?  It has been conceded by Decaux that if a tenancy was created, the adverse possession claim is unsustainable since the tenancy would be a business tenancy which would have continued indefinitely until determined.  
b.	If the agreements created a licence (as opposed to a tenancy) was the licence determined, and if so, when?
c.	If the licence (if any) was determined, have Decaux and its predecessors in title (“the squatters”) been in adverse possession of the advertising hoardings and/or the site on which they stand (“the site”), for the requisite 12-year period?  This issue itself contains at least three sub-issues, namely
i.	Have the squatters been in factual possession of the site for the required period?
ii.	If so, has their occupation been with the express or implied consent of the paper owner?
iii.	If the answer to ii. is “no”, has their occupation been accompanied by the requisite animus possidendi to amount to “adverse” possession?
d.	If the answer to (c) is “yes, can Decaux take advantage of its predecessors’ occupation?  This is essentially the Respondent’s contention that Decaux is not the correct applicant.
There are a number of other issues which will be considered as they arise, but those listed above appear to be the principal groups of issues in the case.

THE AGREEMENTS WITH PADDY’S – LICENCE OR TENANCY
14.	As stated above, three agreements were made between Paddys (1) and LPP (2), of which only the 1977 and 1978 Agreements are material, the 1973 agreement having expired on the execution of the 1977 Agreement.  It is of critical importance in this case to determine whether the agreements created a tenancy or a licence.  In approaching that question, I have in mind the helpful passages in Woodfall at 1.020 to 1.033, which Mr Stoner cited to me.  The essential difference between the two categories, of course, is that a tenancy confers an interest in land, whereas a licence confers no such interest and is merely a personal privilege.  A licence will not bind a successor in title, whereas a tenancy will. Where – as here – the parties have entered into a written agreement, the court will analyse the substance of the rights and obligations contained in the agreement, and based upon a consideration of that substance will determine whether the relationship between the parties is that of licensor/licensee or landlord/tenant.  The Court is not bound by any particular label that the parties may have attached to the agreement. This is the judicial approach required by the House of Lords in Street v Mountford [1985] AC 805.  In construing the agreement, the subsequent actions of the parties may not be taken into account.  I shall therefore ignore the conduct of the parties after the agreements were entered into. 

15.	It is important to ascertain the substance of the agreement between the parties.  In deciding what constitutes the substance of the agreement, the individual clauses must be construed, and their cumulative effect, having regard to the circumstances, ascertained.  The essential question is whether the grantee obtained “exclusive possession” of the land in question – that is, the ability to exclude all persons, including the grantor, from possession.   It may be that there is little or no difference between the concept of adverse and exclusive possession: interestingly, the authority cited by Woodfall (at 1-023) as establishing the test for exclusive possession is Pye v Graham itself.  Mr Stoner also drew my attention to another passage in Woodfall (at para 1.025), in which it is stated that the grant of the right to erect an advertising hoarding and to display advertisements on it will “normally” amount to the grant of a licence.   He also cited two authorities, Provincial Bill Posting Co v Low Moor Iron Co [1909] 2 KB 344 and Kewal Investments Ltd v Arthur Maiden Ltd [1990] 1 EGLR 193, in support of that proposition.   Mr Wonnacott referred me to a recent case, Clear Channel UK Ltd v Manchester City Council [2005] 1 EGLR 128 in which the Court of Appeal considered whether a number of written agreements constituted licences rather than tenancies and held that they did.  The first instance Judge, Etherton J, had held that one of the agreements did indeed create a tenancy and this finding was not appealed.  I have taken the opportunity of reading his judgment ([2004] EWHC 2873 (Ch)) which I have found very helpful, especially as regards his general approach.   Like him, however, I did not feel greatly assisted by the earlier cases on the subject: every case must depend on its own particular circumstances, and each written agreement on its own precise wording, construed against the background of those circumstances.  However, I must take note of the fact that (as Woodfall correctly records) the general thrust of the decided cases relating to advertising hoardings is that the agreements governing their erection and use create licences rather than tenancies.

16.	In my judgment, the following terms of the written agreements, and the following circumstances, are material:
a.	The agreements confer “the exclusive right to erect and maintain [the] poster panels and to display advertisements on the said poster panels on premises situate at Adjoining No.6 Adderley Road…”.
b.	The agreement is to continue for a fixed term and thereafter indefinitely until terminated by either party by giving to the other six months’ notice in writing expiring on any usual quarter day.
c.	It is provided that “At all times the poster panels erected and maintained hereunder shall remain the exclusive property of [LPP]..”.
d.	It is provided that LPP “shall pay an annual rent of [£] such rent to be paid quarterly in advance the first payment (being a proportionate payment if necessary) to be in respect of the period from the day upon which erection of the said poster panel(s) is completed by [LPP] to the next quarter day following”.
e.	By Clause 4, LPP was obliged “to pay and discharge all local rates taxes charges assessments and outgoings whatsoever in respect of the said poster panel(s) erected by [LPP] and its user thereof”.
f.	Clause 6 contains a right on the part of LPP to call for a new five-year term from the expiry of the existing term at a rent to be agreed or failing agreement at a rent to be determined by an arbitrator appointed by the President of the RICS.
g.	It was provided that the expressions “the Grantor” – namely Paddy’s – and “the Company” – namely LPP – “shall where the context admits include their respective successors in title”.
h.	At the date of the 1977 Agreement, the hoarding had been erected in its present position, in the area bounded by the car park to the south-west, by the public highway to the north-west, by the entrance to the car park to the south, and by the flank wall of No 6 Adderley Road to the north.  It is not clear whether the “ranch fencing” referred to in the work order dated 3rd January 1974 (see page 124), in the position shown on the drawing attached (page 313), was still in place at this time.  It had certainly gone by the time the photograph at () had been taken (thought to be in the early 1980’s).  It may be noted that the work order refers to a “62 ft run”, which coincides with the 63 foot measurement shown on the undated (possibly 1978) plan.  
i.	Prior to the date of the 1978 Agreement, the additional panel had been erected facing the car park entrance and at a right angle to the original hoarding.

17.	In my judgment, the written agreements, in the circumstances of this case, create tenancies, and not licences.  My reasons are as follows.  First and foremost, it seems to me that the Agreements granted LPP exclusive possession of the area occupied by the hoardings, including of course their foundations.  In practical terms, this will have included the entire area between the hoardings and the road and entrance drive, which seems initially (in 1974) to have been fenced off from the road by LPP and may still have been so in 1977.  This is the same area as that claimed by Decaux, on its primary case, under the Limitation Act 1980 and I shall refer it as “the demised land”.  It is quite unrealistic to suggest that Paddy’s retained any right to occupy or use the demised land for so long as the agreements remained in force.  The hoardings themselves were intended to remain the property of LPP and Paddy’s had no right to use those hoardings for its own purposes.  The exclusive right to use and enjoy the hoardings was vested in LPP.   In argument it was suggested on behalf of Decaux that Paddy’s retained the right to require LPP to move the hoardings at any time to another part of the registered title.  In my view, this is a quite improbable construction of the agreements in the light of the circumstances existing when they were made.  The hoardings were in place when the parties executed the agreements, and they occupied a clearly defined area of the whole site, the remainder of which was in use as a car park.  It is simply not tenable to suggest that the agreement related to any land other than the demised land, also bearing in mind that the advertising hoardings would be of no value to LPP if they were placed in a position other than next to the public highway where they would be visible to passing traffic.  This also disposes of another argument addressed to me, that the Agreements did not identify the “demised” area with sufficient precision to amount to a tenancy.  Again, it seems to me that the parties knew exactly what they meant by the description “Premises situate at Adjoining No.6 Adderley Road”, namely the area actually in use as an advertising station (and at one stage at least fenced off by LPP).  In substance, therefore, the agreements were intended to and did grant LPP exclusive possession of the demised land.  If Paddy’s had attempted to use the advertising hoardings or any part of the land on which they were erected, LPP would clearly have been able to prevent them from doing so by reference to the Agreements.

18.	I must consider whether there are any terms of the agreements which detract from this construction.  In my judgment, the opposite is true – in other words, there are other terms of the agreements which strongly support this view.  In particular, clause 9, in which the terms “Grantor” and “Company” are defined as including their successors in title.  It must be borne in mind that these agreements were proffered by LPP as its standard form.  This clause demonstrates a clear intention that the rights and obligations of the Grantor should enure through successive ownership of the demised land.  In other words, it was intended and contemplated by the parties that the grant would create an interest in land, and not merely a personal right which is the hallmark of a licence.  If a licence was intended, this clause could not be given effect in any meaningful way: it would be entirely inoperative.  Ms Duncan, in her evidence, stated that LPP would try and insert terms in its agreement which it might not be strictly entitled to as a matter of law – to see what it could “get away with”, in effect. Mr Stoner for Decaux sought to explain away clause 9 on this basis.  However, I do not think that this evidence is either admissible or, if admissible, is of any value.  First, because it seems to be proffered as direct evidence of intention which under the usual rules of construction is inadmissible.  Secondly, because Ms Duncan could not possibly know what was in the mind of the officer of LPP who executed the agreement, having herself never even having worked for that company.  The best evidence of the parties’ intention are the words they have used.  I therefore regard Clause 9 as a useful cross-check on my construction of the document, and it strongly supports it.  Additionally, although far less weight can be placed on this, the agreement contains terminology (e.g “rent”, “quarter day”) appropriate for a lease, rather than a licence, and there are provisions – such as the right to renew the agreement at a rent to be fixed by an arbitrator – which would commonly be found in leases.  Finally, it may be noted that LPP was to pay all rates etc charged on the poster panels.  All these latter indications, however slight they may be individually, cumulatively reinforce the view that the agreements created leases rather than licences.

19.	Although the written agreements contain no express rights of way, in my judgment this is explicable in this case, having regard to the extent of the demised land.  Access to the site would have been readily obtainable from the public highway, which immediately abuts the area on which the main hoarding is constructed.  Access to the return frontage – the second hoarding – would in practice have been obtained over the ungated entrance to the car park, to which the public had general access.

CONCLUSION
20.	This finding is sufficient to dispose of Decaux’s claim to have acquired title to the demised land by virtue of Section 15 of the Limitation Act 1980.  It has been conceded by Decaux – entirely correctly, it seems to me – that the leases continued in force until determined by Kwik Save by its service of a Section 25 notice (this being a business tenancy), and there has accordingly never been any adverse possession of the site.  On this basis, I direct the Land Registrar to reject Decaux’s application. 

THE EFFECT OF A LICENCE
21.	If I should be wrong on my primary finding – and that, on their true construction, the agreements with LPP created licences rather than tenancies – that would leave open the possibility that Decaux had obtained title to the land.  In case this matter should go any further, it seems to me that it would be appropriate for me to deal with the other issues that were addressed in the evidence and canvassed in argument.  These issues of fact and law are those which I have summarised in Paragraph 12 of this Decision. 

22.	The first point is uncontroversial. It is accepted on both sides that the licences (if such they were) will have been determined, by operation of law, when Paddy’s sold the registered title to Kwik Save’s predecessor in title.  This occurred some time in early 1980.  There is accordingly no real dispute that LPP’s licence to occupy the site determined at that time.  That leaves the three sub-issues set out at 12c, and the discrete issue at 12d, to be determined.

RELIANCE BY DECAUX ON ITS PREDECESSORS’ USER
23.	Before considering the issue of factual possession, it think it would be convenient to deal with the last of these issues – namely, whether Decaux can take advantage of any periods of occupation initially enjoyed by LPP, and then by Mills.  It was vigorously submitted on behalf of Kwik Save that Decaux was the wrong applicant, and that it was not entitled to take advantage of any prior periods of occupation by LPP or Mills.   LPP was the wholly-owned subsidiary of London and Provincial Poster Group Ltd (“LPPG”), the shares of which Mills acquired in 1987.  Mills changed its name to Decaux in 2002.   It was submitted that the relevant asset – namely the land itself, or at least the right to claim adverse possession of the land – has at all material times remained vested in LPP and has never been transferred to Mills or Decaux.  In the circumstances, it is LPP which has acquired possessory title, if anyone.  This is merely a bare summary of the points argued by Mr Wonnacott and does not do full justice to his argument.  Mr Stoner’s argument was quite simple.  He submitted that it is possible for successive squatters to aggregate the total period of adverse possession, at least where each successive squatter has been allowed into possession by the preceding squatter, and cited Jourdan’s Adverse Possession at paragraphs 6-36 to 6-46.  There is no actual English authority for this proposition, although there are Commonwealth cases which have so held.  However, it is the author’s view – see paragraph 6-38 of Jourdan – that the law of England and Wales is the same, and I respectfully agree.   Here, it appears that LPP and its holding company were bought by Mills in 1987, and (it can be inferred) Mills continued to use the hoardings in the same way as LPP had done.  This was obviously authorised by LPP, impliedly if not expressly.  In my judgment, the Respondent’s analysis of Decaux’s rights is artificial in the extreme, and the reality of the situation is that Decaux is a successor to LPP and can rely on LPP’s adverse possession (if proved) since 1980.

HAVE THE SQUATTERS BEEN IN FACTUAL POSSESSION FOR 12 YEARS?
24.	For the reasons set out in paragraphs 13 to 17 of this decision, it seems to me clear that LPP went into factual possession of both advertising hoardings when they were built.  In view of the physical layout of the site, its position between the car park and the road, and the original erection of the fence, the possession extended to the entire area between the hoarding fronting Adderley Road and the edge of the pavement.  When the 1978 Agreement took effect, LPP also went into possession of the site occupied by the second hoarding, up to the edge of the car park entrance.  In all practical senses, by the end of 1978, LPP had gone into factual possession of the area I have defined as “the demised land”.   If the agreements created licences, LPP was nonetheless still in possession of the demised land, even if not in “exclusive” possession thereof.  The difference is simply this – if LPP had a licence only, it did not have the right to exclude Paddy’s from the land.  The quality of the possession was however the same.

25.	For this reason, it seems to me that it does not alter Decaux’s case as to factual possession that the current position of the hoardings is different from that which existed at the inception of the 1977 and 1978 Agreements – although this may possibly have an effect on the animus possidendi issue.  As previously stated, the original panels were erected in the position shown on the plan at page 125, consisting of two 48-sheets set diagonally to the pavement, and two inner 16-sheet panels parallel with the pavement.  In 1978 a further 48-sheet panel was constructed at right angles to the original hoarding, parallel with the car park entrance.  Furthermore, at some point in time the fence was removed: at present, the boundary between the registered title and the pavement is marked by small concrete bollards, as the photographs show.  There is no evidence as to when this was built or by whom.  It appears from the documents (see 264 and 264a) that the two 16-sheet panels were removed in 1983.  At some unknown date the two 48-sheet panels became a “twin” or 96-sheet panel, erected diagonally to the pavement.  It also appears that the 48-sheet panel on the return frontage was erected on a slightly different line, so that it is not now at an exact right angle to Adderley Road.   There is however very little evidence as to when this occurred.   As I have pointed out, there are no documents at all originating between 1985 and 1996.  The one document that is relied on by Decaux is the internal memorandum dated 27th September 1996, written by Mr Poucher, which includes the words “1/Twins & 1/48s build date 1/6/87”.  However, Mr Poucher has not given evidence, and there is no explanation as to where this date came from.  I note that another Mills internal memorandum, dated 25th November 1999, simply says “The original 2x48s have obviously been rebuilt to a Twins, on a different line, since that time.” but without indicating a date.  Ms Duncan told me in evidence that it was her understanding that the “Twins” format was introduced from the mid-1980s onwards, but could not of course state when this particular panel was erected.  In all the circumstances, I do not consider that Decaux is able to establish, on the balance of probabilities or at all, when the original panels were altered, save for the removal of the two small panels in 1983.  This point may, however, be of no significance, since in my judgment the original possession extended to the entire area defined as “the demised land”.  On any footing, the re-erected hoardings both fall within the boundaries of that land.  

26.	In all the circumstances, I conclude that LPP, then Mills, remained in factual possession of the demised land from the termination of the licence in early 1980 until the present day.

THE HISTORY OF THE SITE AFTER 1980
27.	That finding leads on the to the further issues of consent, and intention: sub-issues 12(c)(ii) and (iii).  Before considering the legal issues, I shall summarise the history of the site after early 1980 when the licence was terminated.  There is a certain amount of documentation within the files of LPP from which the history can be pieced together.  
a.	On 23rd April 1980 Mr Race, LPP’s Regional Administration Executive, wrote to Paddy’s (see page 275), stating that “according to our records, the Agreement for the latter site [the 3x48 sheet panels] is due for renewal in June this year.  Obviously, before we commence negotiations we would be grateful if you would kindly confirm that the property is still in your ownership.”
b.	 A chasing letter was sent on 9th July 1980 (page 274), to which Paddy’s agents responded (page 273).  These agents appear to have informed LPP that Kwik Save was the new owner.
c.	A Site Viability Study was prepared by LPP on 4th September 1980 recommending an offer to renew the “tenancy” for 3 years.  This was followed by a “Site Variation” memo (page 269), in which the author wrote “Hold rental until further notice. Awaiting the outcome of negotiations with the new owners.”
d.	Mr Perry on behalf of LPP wrote to the Estates Manager of Kwik Save on 12th October 1981 (268), referring to a telephone conversation “advising that I had discovered that our advertisement panel …and display …was still in situ…………. Before taking any direct action in the matter, I would be grateful if you would kindly clarify what the present day situation is and if removal is still required, please advise your local manager that our construction division will shortly be carrying out this work.  Alternatively, if there is a remote chance we can retain these panels subject to suitable agreement being reached, I would be happy to give the matter further consideration.”
e.	Chasing letters were written by Mr Perry in December 1981 (page 267) and May 1982 (page 266) to which no replies appear to have been received.  The May letter is annotated “hold pending” and bears a date – 8th October 1982 – and the instruction “put on 3 months B/Fd”.
f.	The document at page 265 contains a number of manuscript notes, including “leave pending”.
g.	The documents at pages 264 and 264a suggest that the 2/16 sheet panels were removed in 1983. 
h.	The last LPP document is dated 6th February 1985 (page 263) and states as follows. “You requested that this matter be held in abeyance for 6 months last September.  I would be grateful if you would confirm whether or not we should continue to hold this site pending: “”.  It is annotated “Ian – Continue to hold pending”.
i.	It would appear that LPP/Mills/Decaux did not make any payments to Kwik Save after its acquisition of the site.
j.	There is no communication from Kwik Save to LPP relating to this site, and the agreements were not renewed.
k.	Although there is no direct evidence that the hoardings have been in continual use since 1980, I think that this is something which I ought to infer. There seems little doubt that hoardings have existed on the site throughout the period from 1980 to date, and it seems most unlikely that LPP/Mills would not have used them in the normal way.  Mr Lowe’s evidence confirms, albeit somewhat tangentially, that advertisements were displayed from 1988 onwards.

28.	In the light of these facts and circumstances, I must decide whether the squatters’ possession has been enjoyed with Kwik Save’s consent, and, if not, whether they have established the necessary animus possidendi to amount to adverse possession.  There is no particular reason for the order in which I propose to consider these issues.

THE ISSUE OF CONSENT
29.	Kwik Save contends that the squatter’s occupation of the demised land since 1980 (assuming a licence) has been with the implied consent of the paper owner.  Despite judicial disapproval of cases such as Wallis’s Cayton Bay Holiday Camp Ltd v Shell-Mex & P Ltd [1975] QB 94, reflected in the Limitation Act 1980 itself, it is still open to a court to find that there has been implied permission from the paper owner, but only in cases where the actual facts justify such a finding – see the proviso to para 8(4) sch.1 to the Act.  Kwik Save says that LPP wrote, on 12th October 1981 (page 268) for permission to continue occupying the land.  Permission was never refused, and there is no evidence that Kwik Save ever did anything to evince a refusal of consent.  Decaux submits that the test to be applied is set out by the Court of Appeal in Batsford Estates (1983) Limited v Taylor [2005] 2 EGLR 12, where, at page 15B, Sir Martin Nourse referred to the following formulation as being correct:
“In order to establish permission in the circumstances of any case two matters must be established.  Firstly, there must have been some overt act by the land owner or some demonstrable circumstances from which the inference can be drawn that permission was in fact given.  It is, however irrelevant, whether the users were aware of those matters……Secondly, [it must be established that] a reasonable person would have appreciated that the user was with the permission of the land owner.”

30.	Decaux submits that there was never any overt act, or any “demonstrable circumstances” from which the inference can be drawn that permission was given. 

31.	In my judgment, consent can be inferred in this case, since the actual facts justify such a finding.  Clearly, LPP entered into occupation of the demised land with the express, written, consent of the paper owner.  This is not a case where a stranger took possession against the will of the paper owner. The licences expired automatically, due to the change in ownership.  Paddy’s did not serve any notice to quit, or other notice terminating the arrangement – the arrangement determined by operation of law.  LPP simply continued to hold over, in the hope that the licences would be renewed, initially by Paddy’s and then, when it became clear that Kwik Save was the owner, by Kwik Save.   The basis of its continued occupation was made clear to Paddy’s in April 1980 and subsequently to Kwik Save in the letter of 12th October 1981, which were “chased” on two occasions.  There is no reason to think that Kwik Save did not receive these letters, and was not aware both of LPP’s continuing occupation, and desire to take a renewal.  Although we can only speculate as to why Kwik Save failed to communicate with LPP, it seems to me that there are ample “demonstrable circumstances” from which can be inferred its permission to LPP to remain in possession.  This is quite unlike the Batsford case, or indeed the circumstances in Pye v Graham itself: in the former case, the paper owner had demanded that the occupier should deliver up possession, and in the latter case it had made it clear that no renewal would be granted.   However, even in the Batsford case the Court of Appeal considered that permission could be implied.  Here, the circumstances from which permission can be inferred are far stronger.   Furthermore, I consider that a reasonable person in the position of LPP would have appreciated that continued occupation was with Kwik Save’s consent.  Accordingly, I find that Kwik Save has demonstrated, on the balance of probabilities, that LPP and its successors occupied the demised land after 1980 with the implied permission of the paper owner.

ANIMUS POSSIDENDI
32.	If I should be wrong on this point, and no consent can be implied, Decaux cannot succeed in its claim unless it can show that it, and its predecessors, had the requisite animus possidendi.  Although this phrase may in the past have given rise to differing interpretations, the House of Lords in Pye v Graham has recently confirmed the definition as follows: an “intention, in one’s own name and on one’s own behalf, to exclude the world at large, including the owner with the paper title if he himself be not the possessor, so far as reasonably practicable and so far as the processes of the law will allow” (see Lord Browne-Wilkinson at 437C).

33.	However, the application of this simple formula to the facts of this case is not necessarily entirely straightforward.  In particular, how does it apply when the squatter was originally in possession pursuant to a licence: ie the alternative situation in this case?  The essence of a licence, as Mr Stoner has submitted, is that the licensee has factual possession without exclusive possession – without, that is, the intention of excluding the paper owner.  During the currency of the licence, therefore, it follows that the licensee cannot have had the requisite intention.  Once the licence comes to an end, does it necessarily and inevitably follow that the licensee who holds over acquires animus possidendi?  Clearly, the burden is on the squatter to establish that he has combined factual possession with animus possidendi for the required period.  Decaux must therefore satisfy me that LPP and/or Mills did indeed have animus possidendi.  

34.	In Pye v Graham, Lord Browne-Wilkinson was of the view that animus possidendi may be, and frequently is, deduced from the physical acts themselves – see page 435H.   Here, however, the physical acts, namely the occupation and use of the advertising hoardings, commenced at a time when LPP cannot have had animus possidendi – on the continuing hypothesis that the agreements constituted licences.  Can the squatters show that the intention changed and, if so, when?  The only actual, overt indications of LPP’s intentions are those which can be deduced from the documents I have referred to at paragraph 26 of this Decision.  I do not think that these documents can be relied on as showing any change of intention.  In particular, the letter of 12th October 1981 reveals an intention to occupy the land but only for so long as the paper owner consents.  I appreciate that in Pye v Graham Lord Browne-Wilkinson (see paragraph 46) stated that a squatter’s willingness to pay the paper owner for occupation, if asked, was not inconsistent with the squatter “being in [presumably adverse] in the meantime”. However, in Pye itself the paper owner had specifically refused to grant a new licence, and had explained why: so as not to prejudice any future development potential of the land.  In my view, the situation is quite different where, as here, the “squatter” openly and expressly solicits a renewal of the licence and there is no indication from the paper owner of any refusal.  The Site Viability Study dated 4th September 1980 is marked “Awaiting negotiations with new owners” and subsequent memoranda are also marked “hold pending”.   These notes indicate to me that the site was occupied on a temporary, permissive basis, pending a renewal.   The situation in the present case is, in my judgment, more akin to that which applied in the case of Clowes Developments (UK) Ltd  v Walter and others [2005] EWHC 669 (which was not cited to me).  In that case, the squatter had no reason to believe that the paper owner had withdrawn permission to occupy the land.  In the Pye case, the squatter knew perfectly well that the paper owner did not consent to the continued occupation.

35.	Furthermore, LPP continued to use the demised land after 1980 in exactly the same way that it did pursuant to the licences.  As I have already stated, the actual use of the hoardings made by LPP and then Mills must to some extent be a matter of inference, since no direct evidence was called as to the period prior to 1994.  It must be inferred, I think, that LPP/Mills continued to display advertisements on these hoardings.  However, that is precisely what they were entitled to do under the licences.  The only factor suggested by Mr Stoner that went beyond the scope of the licences was, as I understood it, the re-erection of the hoardings along a slightly different line.  However, since the new hoardings were erected within the physical area comprised in the demised land, I do not agree that this would have been beyond LPP’s rights under the original agreements.  In any event, I do not think that it is possible for Decaux to prove exactly when this was done – and it must establish 12 years’ adverse possession prior to October 2000 when the Human Rights Act 1998 came into force.  

36.	In regard to this aspect of the argument, Mr Wonnacott (for Kwik Save) relied heavily on the passages in Pye v Graham which dealt with the Court of Appeal’s approach to the squatter’s claim.  These can be found at paragraphs 50 to 64 of the speech of Lord Browne-Wilkinson.  The Court of Appeal’s actual decision was, of course, reversed in the House of Lords.  However, it seems that its process of reasoning was endorsed. Lord Browne-Wilkinson refers to the “chain of reasoning of the Court of Appeal” (para 55) and goes on to hold that “each of the steps in that reasoning is suspect” (para 56).  On closer examination, however, it is apparent that he did not consider that the evidence in the case supported the reasoning: he does not suggest that the process of reasoning itself was flawed.   Two passages in particular appear relevant.  First, in paragraphs 58 and 59 Lord Browne-Wilkinson dealt with the argument that, after the licence terminated, “the Grahams continued to use the land in just the same way as they had during the currency of the grazing agreement”.    He held that, on the facts, this was not true.  First, because their use went considerably beyond the uses permitted by the grazing agreement.  Secondly, because Pye had already refused to grant a new grazing licence, and therefore the Grahams “were acting in a way which, to their knowledge, was directly contrary to the wishes of the proprietors.”  This discussion suggests to me that the House of Lords would have regarded it as a highly material factor, in assessing animus possidendi, if the Grahams’ use did not go outside the terms of the licence, and also if the Grahams did not know that their use was directly inconsistent with the paper owner’s wishes.

37.	This view is reinforced by the passage at paragraph 64 of the speech, in which Lord Browne-Wilkinson refers to “the most persuasive way of formulating Pye’s case”.   He evidently regarded it as highly material that the Grahams knew that no renewal would be granted by Pye after “its peremptory refusal” in 1984, and that most of the purposes for which the Grahams used the land after 31st December 1983 were outside the scope of the licence agreement.   This passage, together with those I have already referred to, demonstrates the importance attached by the House of Lords (a) to the disparity between the uses permitted by the grazing licence and the use made by the Grahams of the land after 1983, and (b) the actual knowledge on the Grahams’ part that their continued use of the land was in defiance of the paper owner’s express wishes.  Neither factor is present in the case of LPP/Mills.

38.	In my judgment, therefore, I do not consider that Decaux can establish that LPP or Mills ever acquired the necessary animus possidendi to have been in adverse possession of the land.  Accordingly, even if I am wrong on my primary finding – namely that the 1977 and 1978 Agreements created a relationship of landlord and tenant between LPP and Paddy’s – Decaux is unable to make out a sufficient period of adverse possession of the demised land to bar the title of Kwik Save, and bring the section 75 trust into operation.

39.	For all these reasons, therefore, I dismiss the Applicant’s application.  I have not of course heard any submissions as to costs.  Unless some particular factors are present in this case, it seems to me that costs should follow the event.  I therefore invite the parties to make submissions on costs in writing: the Respondent’s submissions to be filed and served within 14 days, the Applicant’s in reply within 14 days thereafter, and the Respondent may respond within 7 days of receiving the Applicant’s submissions.  If the parties would prefer to make oral submissions, they should notify the Adjudicator at the earliest opportunity so that suitable arrangements can be made.

SUMMARY OF CONCLUSIONS
40.	In my judgment, LPP occupied the demised land under tenancy agreements, and accordingly Decaux and its predecessors have never been in adverse possession of the land so occupied.  If I am wrong as to the true character of the agreements with Paddy’s, and they are licences only, Decaux is unable to establish 12 years’ adverse possession because
i.	The occupation was with the consent of the paper owner and
ii.	The occupiers did not have the required animus possidendi.
Accordingly, the Applicant’s claim is dismissed.

Dated this 23 Day of June 2006

OWEN RHYS
DEPUTY ADJUDICATOR TO HM LAND REGISTRY