REF/2008/0088
REF/2086/0089

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

IN THE MATTER OF A REFERENCE FROM HM LAND REGISTRY

BETWEEN
NATALIE HEDGES

APPLICANT

and

MAYLAND PARISH COUNCIL

RESPONDENT

Property Address:  Land adjoining 26a Katonia Avenue, Mayland, Chelmsford, Essex
Title Number:  EX801010

Before: Mr. Michael Mark sitting as Deputy Adjudicator to HM Land Registry

Sitting at:  Procession House
On: 16 January 2009

Applicant Representation:  Counsel
Respondent Representation: Counsel

___________________________________________________________________________

DECISION

Possessory title claim.  Strip of land enclosed as part of garden under licence.  Effect on licence of change of owner of the garden and on sale of the strip of land.  Owner of strip informs new licensee of transfer of title and tells licensee to pay licence fee to new owner, but new owner does not communicate with licensee and no fee is paid for 17 years.  Claim that the old licence survived or that a new licence was to be implied is rejected.  Authorities reviewed.

1.	For the reasons given below I shall direct the Chief Land Registrar to give effect to the application of the Applicant dated 11 September 2007 and to deal with the application of the Respondent dated 16 July 2007 on the basis that the land which is the subject of the Applicant’s application is the property of the Applicant and not of the Respondent. 

2.	The Applicant, Ms Hedges, lives at 26a Katonia Avenue, Mayland.  The dispute concerns a strip of land which has formed part of the garden of that property at least since 1981.  In 1981, that strip of land formed part of a 10 acre plot owned by Maldon District Council (Maldon).  By a licence dated 28 October 1981, Maldon and the then owner of 26a Katonia Avenue, a Mr. Crombie, there described as “the Licensee”, entered into a document described as a licence.  It recited that Maldon had agreed that the disputed strip should be used temporarily for gardening purposes.

3.	By clause 2 of the licence it was provided that Maldon granted “a licence to the Licensee to use as garden ground and the Licensee agrees to accept from the dat4e hereof [the disputed strip] FOR the annual fee of TWO POUNDS 20P payable in advance the first payment to be made on the signing of this Licence.”  Clause 3 of the Licence permitted Maldon to give three months notice in writing varying the annual fee, and the varied fee would then become payable on the next anniversary of the signing of the Licence following the expiry of the notice.  Clauses 4 and 5 provided that either party could give 11 months’ notice to the other party determining the Licence.  There was also provision for any fences on the land to be of a type approved by Maldon, for the Licensee to keep the land clean and tidy, and, clause 10, that the Licensee should not erect or permit to be erected on the disputed strip any building or structure.  Clause 11 provided that the Licensee “shall not at any time transfer to any person the benefit of this Licence.” 

4.	The 10 acre plot, other than the disputed strip, has subsequently been developed and the land adjoining the disputed strip is a car park.  The disputed strip is separated from the car park by a fence.  It is wholly enclosed as part of 26a Katonia Avenue.  It is heavily planted with well-established trees and shrubs and has on it a shed that has plainly been there for very many years.  There is an old gate in the fence, which is kept locked.  It was conceded by counsel for the Respondent, Mayland, that it has been so enclosed and used as part of the garden in this way for very many years and probably since the 1980’s.  It is plain that this concession is correct.  The user is established by the 1981 licence and for security reasons, it is plain that the garden needed to be enclosed by the fence.

5.	In the spring of 1986, Mr. Crombie sold 26a Katonia Avenue to a Mr. and Mrs. Barford.  The conveyance is dated 17 April 1986, and there is a note on the 1981 licence “Mr. and Mrs. Barford 6/3/86  Fee now £2.80”.  In 2005, Mr. and Mrs. Barford sold 26a Katonia Avenue to Ms Hedges, and by a statutory declaration dated 24 June 2005, Mr. Barford stated that at the date of that 1986 conveyance, it was the understanding of him and his wife that the whole of 26a Katonia Avenue, including the disputed strip was being assigned to them, and they had no reason to think otherwise.  I was told by counsel for Ms Hedges that although attempts had been made to trace him, Mr. Barford could not be found, and was not therefore available to give evidence at the hearing of this reference.  While I note what Mr. Barford stated in his statutory declaration, it appears to me on the balance of probabilities that he was informed that the disputed strip was occupied by Mr. Crombie under licence, that he or somebody on his behalf made enquiries as to this from Maldon, probably before exchange of contracts, and that on 6 March 19896 he was given the information set out on the 1981 licence.

6.	It does not follow, however, that he was provided with a copy of the 1981 licence, and in the absence of any evidence that he was provided with it, or even told of its terms beyond the licence fee, I find that all he understood was that the disputed strip was held on licence by Mr. Crombie in return for an annual fee of £2.80.

7.	Mr. Barford states in his statutory declaration that he only found out that the land belonged to Maldon when he received a letter from Maldon about a year after moving in and that he then found that he had to pay £2 per year for the land.  He says that he then paid the £2 per year for two or three years.  I find that this is most likely to have been a demand for the annual payment of £2.80 which Maldon would probably have made around October of each year on the anniversary of the 1981 licence.

8.	In 1988, Maldon transferred the whole of the 10 acre plot, including the disputed strip, to Mayland, the transfer being described as an agreement and dated 29 July 1988.  There is no express transfer of the benefit of any agreement in respect of the disputed strip, but when handing over the title deeds, these included a copy of the 1981 licence.  In addition, Maldon wrote to Mr. and Mrs. Barford by letter also dated 29 July 1988, referring to “the licence which you hold from the Council for the [now disputed] strip of land… and write to advise you that the ownership of this land, together with the Lawling Playing Field, has now been transferred to the Mayland Parish Council, whose Clerk is Mrs. A. Ellis, 8 Hillcrest, Mayland, Chelmsford, Essex CH3 6AZ.  Will you please therefore arrange for future licence fees to be sent to Mrs. Ellis at this address.  The letter is marked c.c. Treasurer and Mrs. Ellis’s name also appears in handwriting at the top of the copy produced in these proceedings.  The copy letter was found with the title deeds and I am satisfied that it was sent to Mr. and Mrs. Barford, and on the balance of probabilities received by them, despite Mr. Barford’s failure to refer to it in his statutory declaration, and that it was copied to Mayland.

9.	There is no evidence that Mayland ever had any contact whatsoever of any sort with Mr. and Mrs. Barford about the disputed strip.  In particular, Mr. and Mrs. Barford received no invoices and paid no fee.  It would appear from the evidence of the present secretary to the parish council, Jenny Rackham, that members regarded the disputed strip as being used under licence by Mr. and Mrs. Barford, but did not think it worthwhile asking for the £2.80 annual fee, or apparently ever writing to them to confirm the position as they understood it.

10.	Mr. Barford, who makes no reference at all to Mayland in his statutory declaration, states in that declaration that having received no further invoices for some years he telephoned Maldon to ask why he had received nothing, to be told that the land was now owned by a housing association.  After various telephone conversations with both Maldon and the housing association, he says that both effectively told him that the disputed strip was not theirs and even if it was they had no interest in it and he should treat it as his own.  

11.	It appears to me to be likely, and I find, that Mr. Barford did make some such unsuccessful enquiry of Maldon at some point, probably in the early 1990’s, having long since mislaid or thrown out and forgotten the letter dated 29 July 1988 to which I have referred.  He and his wife continued to treat the disputed strip as part of their garden until they sold the property to Ms Hedges in 2005, and she has continued in the same way since that time.  Ms Hedges confirmed that she had been told by her solicitor that there was a problem with the paper title to the disputed strip, but there is no suggestion that she was ever aware of either the 1981 licence or any else beyond what ultimately appeared in Mr. Barford’s statutory declaration.  In view of the date of Mr. Barford’s statutory declaration and the fact that in paragraph 4 he states that he understands that when Ms Hedges’s solicitors applied for first registration the disputed strip and another strip were not included in her title, it may be that she only discovered that there was a potential problem at all after completion.  Her evidence was a little vague as to this, and her solicitors’ conveyancing file had neither been disclosed by her nor sought by Mayland.

12.	The claim of Mayland was only brought to Ms Hedges’ attention, it would seem, when Mayland brought its present application in 2007 to register its title.  She responded by applying to register a possessory title to the disputed strip and at the same time asserted a possessory title to two other areas of land that are on the boundaries of her property.  No objection has been raised by anybody in respect of those two areas, the only objection being that of Mayland in respect of the disputed strip.

13.	The hearing before me proceeded on the basis that the 1981 licence, and the subsequent arrangement with Mr. and Mrs. Barford were indeed licences.  I enquired as to the correctness of this assumption, bearing in mind cases such as Street v Mountford, and the matter was left on the basis that if my decision was to turn on the proper categorisation of any “licence” I would invite further submissions from the parties.  If there were a lease, then it was an oral one, and time would have started to run in favour of the lessee following the last payment of rent, and Mayland’s claim would long since have been statute barred.  As I have concluded that the claim is statute barred in any event, so that Ms Hedges is entitled to succeed, I have not found it necessary to consider this issue further.

14.	I am satisfied that any arrangement with Mr. Crombie terminated on his leaving Katonia Avenue.  There is no suggestion of any assignment of the benefit of the 1981 licence to Mr. and Mrs. Barford or that they even knew the terms of that licence.  If a licence, it was personal to Mr. Crombie and terminated on his departure.  If a lease, it would have needed to be assigned with consent of Maldon, and there is no suggestion that such consent was ever sought or that there was any assignment.

15.	It follows that a new “licence” was granted by implication by Maldon to Mr. and Mrs. Barford in return for an annual payment of £2.80.  Again, it is well established that a licence automatically terminates on the assignment of the grantor’s title, so that the licence to Mr. and Mrs. Barford will have terminated on 29 July 1988, although they may have been entitled as against Mayland in all the circumstances to remain until the end of the year for which they had paid.

The claim that Maldon assigned the benefit (and burden?) of its licence to Mayland
16.	Counsel for Mayland submitted first that the benefit of the licence granted by Maldon to Mr. and Mrs. Barford was assigned to Mayland.  There is no evidence that any licence fee was outstanding at the time, and none was ever demanded later.  But it is not enough that the benefit of the licence should be assigned.  The burden must also be assigned – that is the obligation to permit Mr. and Mrs. Barford to remain on the disputed strip as licensees until the licence granted by Maldon to them was properly terminated.  If that obligation was not assigned, then, subject to any obligation Mayland may have had as a matter of equity to permit them to remain, Mayland would have had an immediate right to possession of the disputed strip.

17.	The only evidence of any assignment of anything is the letter from Maldon to which I have referred.  Unless the licence was a lease, it did not create any interest in the land.  I am unable to see how the burden of a personal obligation on the part of Maldon could have been transferred in this way.  It was established in Ashburn Anstalt v Arnold, [1989] Ch 1 that a contractual licence is not to be treated as creating a proprietary interest in land so as to bind third parties who acquire the land with notice of it on this account alone.  It was further stressed in that case, and repeated by the Court of Appeal in Lloyd v Dugdale, [2001] EWCA Civ 1754, at paragraph 52(5), that since in matters relating to the title to land certainty is of prime importance, it is not desirable that constructive trusts of land should be imposed in reliance on inferences from slender material.  The only material here is the letter from Maldon, which was never acted on either by Mayland or Mr. and Mrs. Barford.  Mayland did nothing to adopt the contract of licence.  There was no communication of any sort between it and Mr. and Mrs. Barford, whatever the council members may privately have believed and stated between themselves to be the legal position.

Constructive trust
18.	In my judgment, unless the “licence” was a lease, it terminated on the transfer of the land to Mayland, and I can see no reason for imposing any constructive trust on Mayland beyond, at the latest, the end of the year for which Mr. and Mrs. Barford had paid.  

19.	I have already found that the licence to Mr. and Mrs. Barford was not on the terms on the 1981 licence but was a fresh licence which had never been reduced to writing.  Even if that is wrong, I reject the submission on behalf of Mayland that as the benefit of the 1981 licence agreement had been assigned to it by Maldon, Mayland would be bound by the provisions for termination in it.  Mayland never sought to realise the benefit of the licence by seeking payment of the licence fee, or in any other way, and clearly had no interest in that benefit.  I can find no reason why it should not have proceeded without reference to the licence in seeking possession.

Implied licence at £2.80 a year
20.	For substantially the same reasons, I can see no basis for the implication of a licence from Mayland to Mr. and Mrs. Barford, either at all, or if that is wrong, then beyond the expiry of the year for which they had paid.  The cases cited to me where a licence was implied were all cases where there was substantial contact between the parties and everybody was proceeding on the basis that a licence subsisted.  Here there was no contact, and Mr. Barford forgot entirely about the involvement of Mayland, checking as to the legal situation only with Maldon and the housing association to which he was referred.  All the information he received indicated that the licence was gone, and he acted accordingly.  

21.	It follows that on the transfer, or within a few months of it, at the end of the year for which Mr. and Mrs. Barford had paid, Mayland’s cause of action to recover the disputed strip arose.  As put by Judge Marshall QC, sitting as a Deputy Judge of the Chancery Division, in J. Alston & Sons Ltd v BOCM Pauls Ltd, in paragraph 114 of her judgment given on 28 November 2008, of which I supplied copies to both counsel before the hearing in this case,

“It is axiomatic that when a person remains in possession after the termination of such a licence by its expiry in time, time runs against the paper owner licensor, because his right to recover possession accrues at that time.”

A fortiori, time runs against a non-licensor who is prevented briefly by a constructive trust from recovering possession of the land.

22.	It further appears to me that, even if there was a licence initially and I am wrong that it terminated at latest at the end of the year for which payment had been made, anybody considering the legal position of the parties (ignoring the internal workings of Mayland’s collective mind) would have concluded by the early 1990’s that the licence agreement had been abandoned by both parties as neither had been acting on the basis of it for several years.  Even if I am wrong on my earlier findings, therefore, I conclude that the licence ended as a result of abandonment well over 12 years before Mayland applied for first registration of the disputed strip.

23.	I was referred by counsel for Mayland to Batsford Estates (1983) Co. Ltd v Taylor, [2005] 2 EGLR 12, where Nourse LJ rejected a submission that a permission to occupy could not be implied unless it was communicated by words or conduct.  In paragraph 128 of her judgment in Alston v Pauls, to which I have referred, Judge Marshall QC commented that “This would seem to lead to the conclusion that a permission can be given without the alleged permittee being aware that this either had been done, or must have been done, which seems curious.”  However, as she also points out, Nourse LJ rejected the submission on the ground that once it was communicated it would cease to be an implied permission and become an express one.  It does not appear to me that he can have been suggesting that a permission can be inferred from facts of which the supposed licensee can have no actual or imputed knowledge, whatever the source of that knowledge.  Still less does it appear to me that he is saying that permission can be imputed from facts which consist of the landowner doing nothing – not even taking a decision as to the question of permission – and, by doing nothing, acting in a manner inconsistent with the licence which had previously existed and inconsistently with the 1981 licence which Mayland appear to have been led by Maldon to believe governed the relationship between Mr. and Mrs. Barford and Maldon.

24.	At paragraph 129 of her judgment, Judge Marshall QC refers to the decision of Briggs J in Hicks Developments Lt v Chaplin, [2007] 1 EGLR 1, where he emphasised that “it is not enough that the demonstrable circumstances are consistent with there having been permission.  They must be probative of it”, and to the need which Briggs J emphasised to distinguish between “permission on the one hand and mere non-objection or acquiescence on the other.”  I also note that Judge Marshall QC indicated, although she did not have to decide the point, that she preferred the test, put forward by Mr. Stephen Jourdan, counsel for the squatter, based on the decision of the House of Lords in R (on the application of Beresford) v Sunderland City Council, [2004] 1 AC 889 that an implied licence would be the conveying of permission by non-verbal means.  If that were to be the test here, which I do not need to decide, then it is clear that permission was not conveyed by any means whatsoever, or even determined by the council internally, whatever some of its members may have believed amongst themselves.  Further, even as to the internal view of the members, the only evidence was that of the current clerk to the council, Jenny Rackham, who accepted that her first hand evidence only dated from 20 June 2001, nearly 13 years after the transfer from Maldon to Mayland.

Unilateral licence
25.	Put shortly, the letter from Maldon in 1988 did not emanate from Mayland, and Mayland did nothing to adopt it.  It cannot have granted a licence unilaterally or otherwise by silent acquiescence.  If, at the end of the year for which Mr. and Mrs. Barford had paid, Mayland had demanded immediate possession of the disputed strip, I am wholly unable to follow how its silence following receipt of the Maldon letter could have been said to amount to the grant of a new licence so that some period of notice was required before its right of action accrued.  Even less can I see how there can have been a unilateral licence for no consideration by silence, so that it could not thereafter have claimed mesne profits of at least £2.80 a year.

Actual possession
26.	There can be no doubt that Mr. and Mrs. Barford were in possession of the disputed strip at all times until they left the property on the sale to Ms Hedges.  It was incorporated as part of their garden and separated by a fence from the rest of the world.  It is submitted by counsel for Mayland in his skeleton argument, although not pressed with any vigour at the hearing, that there was no evidence of the purpose for which the disputed strip was used and nothing to demonstrate to the whole world that they intended to possess it.  Given the concession that it was fenced in with their garden and that it was plainly used as garden land, I find this surprising.  There was clearly actual possession even during the subsistence of the licence, and it is also clear that the disputed strip was maintained and occupied as part of the garden throughout.

Intention to possess
27.	Counsel for Mayland contended that Mr. and Mrs Barford had not shown the necessary intention to possess, relying on the decision of Hart J in Clowes Developments (UK) Ltd v Walters, [2005] All ER (D) 264, where he held at paragraph 40 that “a person who is in factual possession and who intends to remain in possession (and to use that possession for his own benefit) so long as the true owner continues to permit him to do so does not have the necessary intention to possess for the purpose of starting a period of limitation running in his favour.”

28.	As Judge Marshall QC pointed out in Alston v Pauls, this finding is in direct conflict with the decision of David Richards J in paragraph 4 of his judgment in Wretham v Ross, [2005] EWHC Civ 1259, where he stated at paragraph 40 that the squatter’s erroneous belief that a licence continued after the death of the licensor did not prevent him acquiring a possessory title.  After reviewing these and other authorities, Judge Marshall concluded at paragraph 100 that insofar as there was a conflict between Wretham and Clowes she unhesitatingly preferred the former, and the expressions of principle of David Richards J, as being more in accord with the judgments in Pye v Graham.  

29.	Both on that account, and because I find that, even if the approach of Hart J were to be preferred, from the early 1990’s Mr. and Mrs. Barford were occupying the disputed strip in the belief that there was no longer any licence, that nobody else wanted the property and that they could simply occupy it in their own right, I conclude that the necessary intention to possess was present.

Dated this 29th day of January 2009

By Order of The Adjudicator to HM Land Registry