Adverse possession — Crown — Period of limitation — Title held by Crown for intervening period — Schedule 1 to para 12 of Limitation Act 1980 — Whether 30-year limitation period applying to successor to Crown where cause of action accrued prior to Crown’s period of ownership — Whether successor to Crown entitled to rely upon 30-year limitation period — Commencement of limitation period
The former London County Council were originally the registered proprietors of land, part of which was in dispute between the parties (the disputed land). Until April 1986, the Greater London Authority remained the registered proprietors of the disputed land. Title subsequently passed to the Secretary of State for Transport and the disputed land became Crown land. Following the making of a compulsory purchase order and the Greater London Authority Roads and Side Roads (Transfer of Property etc) Order 2000, title to the disputed land, together with other land, was vested, or purportedly vested, in the defendant for a road scheme. The claimants contended that, between November 1985 and July 2000, they and their predecessor in title had been in adverse possession of the disputed land, and that because adverse possession had commenced prior to the period of the Crown’s ownership, at the moment of vesting, the defendant’s title was extinguished and that they were therefore entitled to compensation. They accepted that if adverse possession had commenced during the intervention of the Crown, the 30-year limitation period would have applied, and that period had not expired by July 2000. However, the defendant asserted that even if adverse possession had begun prior to such intervention, the 30-year limitation period applicable to the Crown also applied to a person claiming through the Crown by virtue of the provisions of para 12 of Part II of Schedule 1 to the 1980 Act; the limitation period had not therefore expired.
Held: The claim was dismissed. The period during which the Crown could have brought an action was 30 years from the date upon which the right of action originally accrued, whether that right accrued to the Crown or to a predecessor. Paragraph 12 of Part II to Schedule 1 gives the Crown’s successor in title the benefit of that same period (or the alternative para 12(b) period, whichever expires first). On the evidence, the claimants had been in adverse possession for not less than 12 years commencing in 1987, but not before. Accordingly, the claim would have failed on its facts.
The following case is referred to in this report.
Secretary of State for Foreign and Commonwealth Affairs v Tomlin The Times 4 December 1990, CA
This was a claim by the claimants, Norman Hill and Terence Welford, that they held title to land purportedly vested in the defendant, Transport for London.
Kirk Reynolds QC and Philip Kremen (instructed by Hughmans) appeared for the claimants; Thomas Jefferies (instructed by Eversheds LLP) represented the defendant.
Giving judgment, Rimer J said:
Introduction
[1] The claimants are Norman Hill and Terence Welford. They claim title to certain land by adverse possession. The defendant, Transport for London (TfL), disputes the claim. The disputed land comprises the land lying between, and the airspace enclosed by, 10 arches built in around 1930 to support a flyover forming part of the A13 (the East India Dock Road) at Canning Town, where it rises to cross the River Lea. The claimants make no claim to the structure of the arches.
Title to the relevant land
[2] The former London County Council were originally the registered proprietors of the road, the structure of the arches, the disputed land and certain adjoining land. That land became vested in the Greater London Council (the GLC), which were also the highway authority. It was registered under title no LN 42480.
[3] On 18 November 1985, in consideration of £22,000, the GLC transferred part of this land to John Elliott and Alan Bailey. The part transferred comprised a triangle of land to the east of Lanrick Road and to the immediate north of, and adjacent to, the arches. It is known as Iron Bridge Wharf North and was registered under title no EGL 174822. On the same day, also in consideration of £22,000, Messrs Elliott and Bailey transferred the same land to Blackwall Transfer Station Ltd (BTSL), a company of which the two claimants were the sole directors and shareholders. The transfers were subject to the following easement reserved to the GLC, namely:
a right of access approximately four metres wide along the entire length of the retaining wall for East India Dock Road in favour of the [GLC] as is shown coloured brown on the plan annexed hereto.
That right gave the GLC access to the arches (which remained in their ownership) from Lanrick Road and over Iron Bridge Wharf North.
[4] On 20 November 1985, BTSL took a transfer from John Jennings and Messrs Elliott and Bailey of a larger piece of land also lying to the east of Lanrick Road and adjacent to the north-eastern boundary of Iron Bridge Wharf North. This land was known as Moody Wharf and was registered under title no NGL 71125.
[5] Some time in 1987, BTSL negotiated a proposed sale of the bulk of its land (mainly comprising Moody Wharf, but also part of Iron Bridge Wharf North: I will call it “the Shanks land”) to Shanks & McEwan (Southern) Ltd (Shanks) for some £3m. No sale agreement is in evidence.
[6] On 26 February 1988, and prior to the transfer of any land to Shanks, BTSL transferred the land in both its titles to the claimants, a transfer stated to be for a consideration of £300,000. On 29 March 1988, the claimants and BTSL charged Moody Wharf and part of Iron Bridge Wharf North to Shanks “with the payment… of any monies due from the [claimants and/or BTSL] pursuant to the provisions of an |page:2| agreement dated 29th March 1988 and made between [the claimants] (1) [BTSL] (2) and the Mortgagor [sic] (3)”. No copy of that agreement is in evidence, and I assume that “Mortgagor” should read “Mortgagee”, a reference to Shanks. A statutory declaration that the claimants made in 2001 suggests that a contract for the sale of the Shanks land was signed on 26 February 1988, and their evidence is that the Shanks land was transferred to Shanks sometime later. The charges register for Iron Bridge Wharf North indicates, however, that the Shanks sale agreement was dated 29 March 1988. The Shanks land did not include a strip of land immediately adjacent to the arches and forming part of Iron Bridge Wharf North, which the claimants retained.
[7] Until 1 April 1986, the GLC remained the proprietors of East India Dock Road, the structure of the arches, the land between them and the airspace enclosed by them (such land and airspace being the disputed land). I shall call all this land “the retained land”. The GLC were abolished on 1 April 1986, when (by the combined effect of the Metropolitan Roads Trunking Order 1986 and section 265 of the Highways Act 1980) the retained land was vested in the Secretary of State for Transport. As from 1 April 1986, the retained land therefore became Crown land.
[8] From around 1988 and during the 1990s, road improvements were planned in the area. They necessitated the compulsory acquisition of certain land, including the disputed land. A compulsory purchase order was made on 6 August 1998. The title to the retained land – including the disputed land – remained with the Secretary of State until 3 July 2000. On that day, and pursuant to article 2 of the GLA Roads and Side Roads (Transfer of Property etc) Order 2000, the disputed land (with other land) was vested (or purportedly vested) in TfL. TfL claims that it thereafter took possession of the arches (and, therefore, also of the disputed land) on various dates between 11 July and 11 September 2000. The claimants dispute that, and say that TfL did not take such possession until 27 November 2000, but nothing turns on that difference.
[9] The issue raised by the claim is whether (as the claimants contend) at the very moment the disputed land purportedly vested in TfL, on 3 July 2000, TfL’s title was extinguished by the claimants’ prior adverse possession. It is no part of the claimants’ case that, immediately prior to such transfer (that is, by 2 July 2000), they had extinguished the Crown’s title to the land. If the claimants are correct, they are entitled to compensation for the compulsory acquisition of the disputed land, although quantum remains to be assessed. If they are wrong, their claim fails. Although the claim is in form therefore about adverse possession, it is in reality about money and not about still-disputed claims to possession. The claim turns on whether, at any time on or after 3 July 2000, TfL could have established a title to the disputed land as against the claimants. The case was argued as if it were a claim by TfL to recover possession of the disputed land from them.
Limitation Act 1980
[10] The Crown’s title to the disputed land from 1 April 1986 until 2 July 2000 has raised an issue as to the interpretation of the relevant provisions of the Limitation Act 1980. The argument for TfL, for which Mr Thomas Jefferies appeared, is that the scheme of the legislation is that, even if the claimants prove all the adverse possession that they assert (namely from November 1985 onwards), the intervention of the Crown’s ownership during that period means that the relevant limitation period has not expired. By contrast, the claimants, for whom Mr Kirk Reynolds QC and Mr Philip Kremen appeared, have submitted that this is wrong, although they accept that, on their suggested construction of the legislation, they need to prove adverse possession of the disputed land by themselves and their predecessor (BTSL) from a date prior to the Crown’s acquisition of its title on 1 April 1986. Mr Reynolds accepted that if any such possession commenced during the Crown’s ownership, the claim fails. To see how these rival arguments arise, it is necessary to consider the relevant provisions of the 1980 Act.
[11] Section 15 – “Time limit for actions to recover land” – provides, so far as material:
(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. …
…
(7) Part II of [Schedule 1] contains provisions modifying the provisions of this section in their application to actions brought by, or a person claiming through, the Crown or any spiritual or eleemosynary corporation sole.
[12] Section 17 – “Extinction of title to land after expiration of time limit” – provides:
Subject to –
(a) section 18 of this Act [which is not material]; and
(b) section 75 of the Land Registration Act 1925;
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.
[13] Section 75 of the Land Registration Act 1925 – “Acquisition of title by possession”- provides, so far as material:
(1) The Limitation Acts shall apply to registered land in the same manner and to the same extent as those Acts apply to land not registered, except that where, if the land were not registered, the estate of the person registered as proprietor would be extinguished, such estate shall not be extinguished but shall be deemed to be held by the proprietor for the time being in trust for the person who, by virtue of the said Acts, has acquired title against any proprietor, but without prejudice to the estates and interests of any other person interested in the land whose estate or interest is not extinguished by those Acts.
[14] Part II of Schedule 1 to the 1980 Act provides, in paras 10 and 12, so far as material (and omitting references to spiritual and eleemosynary corporations sole):
10. … section 15(1) of this Act shall apply to the bringing of an action to recover any land by the Crown… with the substitution for the reference to twelve years of a reference to thirty years… .
…
12. Notwithstanding section 15(1) of this Act, where in the case of any action brought by a person other than the Crown… the right of action first accrued to the Crown… through whom the person in question claims, the action may be brought at any time before the expiration of –
(a) the period during which the action could have been brought by the Crown…; or
(b) twelve years from the date on which the right of action accrued to some person other than the Crown…;
whichever period first expires.
[15] Paragraph 10 shows that where the Crown seeks to recover land, a limitation period of 30 years is substituted for the 12-year period prescribed by section 15(1), but that otherwise section 15(1) operates according to its terms. That means that if the Crown had claimed to recover possession from the claimants, it would enjoy a 30-year limitation period from the date upon which the right of action originally accrued and its claim would have succeeded. In particular, it would make no difference that the right of action had (as the claimants assert on the facts) originally accrued to the GLC, through which the Crown claims. This latter point is illustrated by the decision of the Court of Appeal in Secretary of State for Foreign and Commonwealth Affairs v Tomlin The Times 4 December 1990. In that case, premises owned by the Royal Government of Cambodia, and used for its diplomatic mission in the UK, were (so the first defendant claimed) occupied by him as a trespasser on 6 August 1976 following the closure of the embassy in 1975. He claimed that he had remained in occupation ever since. The title to the premises remained vested in the Royal Government until 30 March 1988, when it was vested in the Secretary of State by a deed poll executed pursuant to section 2 of the Diplomatic and Consular Premises Act 1987. On 18 April 1990, the Secretary of State served summonses on the defendant claiming possession under RSC Order 113. Farquharson LJ said the case depended upon the 1980 Act and upheld Mantell J’s decision that the modification of section 15(1) by para 10 entitled the Secretary of State to the benefit of the extended 30-year limitation period. Russell and Neill LJJ agreed. |page:3| The Secretary of State was therefore entitled to recover possession from the defendant.
[16] The Crown is not, however, the notional claimant to recover possession in the present case: TfL is that claimant. In those circumstances, Mr Reynolds’s submission was that (subject to one qualification) Part II of Schedule 1 has no relevant effect. The claimants’ case, on the facts, is that they commenced adverse possession of the disputed land in November 1985, when the GLC were the owners. It followed that the right of action to recover possession first accrued to the GLC, but no action to recover possession was taken either by the GLC or by their successor in title, the Crown. Mr Reynolds submitted that the result was that the title had become extinguished by adverse possession at the moment the disputed land was purportedly vested by the Crown in TfL on 3 July 2000. He did not submit that it had become extinguished by November 1997 (12 years from November 1985), since Tomlin precluded that argument. But once the Crown was out of the picture by purporting to vest the land in TfL, and the notional possession claim thereupon became one by TfL, the prior intervention of the Crown’s ownership became an historical irrelevance. Mr Reynolds submitted that there is nothing in the 1980 Act prescribing a limitation period different from the basic 12-year period in circumstances in which: (a) the right to recover possession first accrued to an owner other than the Crown; (b) the title was then transferred to the Crown; and (c) more than 12 years after the right of action first accrued, the Crown’s title was transferred (or purportedly transferred) to the claimant. All that needs to be proved in order to defeat the claimants’ title is 12 years of adverse possession prior to its purported ownership.
[17] For TfL, Mr Jefferies submitted that para 12 of Part II of Schedule 1 provides TfL with a complete answer to the claim, even if the claimants had been in adverse possession since before 1 April 1986 so that the right of action originally accrued to the GLC. His submission was that para 12 shows that, on 3 July 2000, TfL acquired the benefit of whichever of the two limitation periods referred to in paras 12(a) and (b) first expires. The former is 30 years from whenever the right of action originally accrued, and the latter is 12 years from 3 July 2000. The latter will expire first, but TfL is well within it. Counsel agreed that the reference in para 12(b) to “some person other than the Crown” is, in this case, to TfL.
[18] The difference between these rival submissions turns on the sense of the word “first” in the phrase “first accrued to the Crown” in para 12. Mr Jefferies submitted that it means “earlier” or “previously” rather than “originally”. If that is right, then, even if the right of action to recover the disputed land originally accrued to the GLC, it “first accrued to the Crown” within the true sense of the word “first” as used in para 12. So interpreted, para 12 defeats the claim.
[19] Mr Reynolds’ submission was that “first” in that phrase does not mean “earlier” or “previously”. It means “first” in the sense of “originally”, and he pointed to the use of the same word in section 15(1), where he said that it obviously means “originally”, not “earlier” or “previously”. Since Part II of Schedule 1 modifies section 15, it would, he said, be odd if para 12 was using the word in a different sense. If this interpretation of para 12 is correct, Mr Reynolds’ further submission was that, subject to one qualification, para 12 has no application to this case. That is because the claimants’ case is that their adverse possession dates from November 1985, when the right of action “first” accrued to the GLC. If, however, they did not commence any adverse possession prior to the Crown’s acquisition of the title on 1 April 1986, but did so only afterwards, Mr Reynolds conceded that this would be a para 12 case (since the right of action would then have “first accrued to the Crown”). In that event, he accepted that the claimants could not succeed, because TfL would be entitled to the extended limitation period conferred by para 12.
[20] So, does “first” in para 12 mean “originally” or does it mean “earlier” or “previously”? For reasons submitted by Mr Reynolds, an interpretation in harmony with section 15(1) points to the former meaning, and my initial instinct was that that was likely to be the better interpretation. If so, however, it produces odd consequences.
[21] First, para 10 shows that the Crown enjoys a 30-year limitation period from the date upon which the cause of action originally accrued. Second, Tomlin shows that it will enjoy that period even if it claims as a successor in title to one that originally had the right of action. Third, the primary intention of para 12 is to prescribe the limitation period applicable to a person claiming through the Crown. It is agreed that “some person other than the Crown” in para 12(b) refers to that person, and the basic scheme of para 12 appears to be to give that person a limitation period of: (a) 30 years from when the cause of action originally accrued (see my first and second points); or (b) 12 years from when he (or the first non-Crown owner through whom he claims) acquired the title from the Crown, whichever period expires first.
[22] Mr Reynolds would not, I think, disagree with most of that. However, he would say that that analysis of para 12 applies only to cases in which the cause of action originally accrued to the Crown because that is the sense of the word first. If the Crown is merely a successor to the owner to whom the right of action so accrued, para 12 has no application. The consequence is that although para 10 and Tomlin show that, as such a successor, the Crown has 30 years from the original accrual of that right of action in which to sue, a successor to the Crown that purportedly acquires title more than 12 years following the original accrual of the right of action will acquire no right of action at all. According to Mr Reynolds, the Crown has a full title to the relevant land immediately prior to the purported transfer to the Crown’s successor: but at the very moment of such transfer, the title is extinguished by section 17. The successor in title will have a right of action only if that right is one that originally accrued to the Crown.
[23] In my judgment, Mr Reynolds’ interpretation of para 12 does not identify the correct sense of Part II of Schedule 1 read as a whole. The period during which the Crown could have brought an action is 30 years from the date upon which the right of action originally accrued, whether that right accrued to the Crown or to a predecessor. Paragraph 12 gives the Crown’s successor in title the benefit of that same period or the alternative para 12(b) one, whichever expires first. That shows that the feature of paramount importance in the scheme of para 12 is that the claimant to possession is someone claiming through the Crown, which itself had a right of action. Whether or not the right of action originally accrued to the Crown or to someone else appears to be of no importance since, whether it did or not, the longer 30-year period runs from the date of that original accrual. Mr Reynolds’ submission that the Crown’s successor will enjoy only the benefit of the extended para 12 period if the right of action originally accrued to the Crown rather than to its predecessor appears, therefore, to be a subtlety lacking a rational basis. The argument, of course, has the support of the narrower, and perhaps more natural, meaning of the word “first” in the relevant phrase. But, in my judgment, it is not possible to derive from Part II as a whole, and para 12 in particular, any logical reason for interpreting “first” in that narrow way. Nor does it have to be so construed: in an appropriate context it can undoubtedly mean “earlier” or “previously”, for example, a condition that a particular course of action cannot be followed without “first” serving a notice.
[24] Moreover, if Mr Reynolds is right in his suggested interpretation, what is the limitation period prescribed by the 1980 Act that bars TfL’s claim? As I understand it, it is said to be the basic 12-year one prescribed by section 15(1), even though, during the Crown’s tenure, that period was superseded by the 30-year period. That being so, the argument must be that, once the Crown’s tenure has expired (after the 12-year period), that basic period was retrospectively reactivated so as to provide an immediate bar to the bringing of a claim by TfL. I accept that this is conceptually possible, but I cannot discern in Part II an indication that it forms part of the legislative intention. If it had, I regard it as likely that Part II would have spelt it out in terms approximately as follows:
12A. For the avoidance of doubt, and notwithstanding anything in paragraphs 10 and 12, where in the case of any action brought by a person other than the Crown… the right of action originally accrued to a person other than the Crown but subsequently accrued to the Crown… through whom the person in question claims, the action may not be brought by that person after the |page:4| expiration of twelve years from the date on which the right of action originally accrued.
[25] Part II does not spell that out, and I consider that this is because that was not the intention. The omission to spell it out creates, if Mr Reynolds is right, a lacuna in the legislation. How can the claimants in the present case assert, or the court hold, that the freeholder’s title became extinguished in November 1997, after 12 years adverse possession, when para 10 shows that the title had not become so extinguished by then? If, in fact, it became extinguished only at midnight on 2-3 July 2000 – after something over 14 years of adverse possession – under which provision in the 1980 Act is that said to be the prescribed limitation period? In my judgment, the answer to these questions is that para 12 provides a complete code for claims brought by persons claiming through the Crown, whether the right of action accrued originally to the Crown or only so accrued earlier, and I so hold. I agree with, and accept, Mr Jefferies’ submission that the true sense of the word “first” in para 12 is that of “earlier” or “previously”.
[26] The consequence of that conclusion is that the claim fails, whether or not the claimants can prove that they were in adverse possession of the disputed land from November 1985. In case, however, I am wrong in my interpretation of para 12, and Mr Reynolds is correct that it applies only to the case in which the right of action originally accrued to the Crown, I must also make findings on the facts. Before coming to them, I record that Mr Jefferies also submitted that, even if Mr Reynolds were correct as to the true interpretation of para 12, the consequence of his argument could not be to negative the express effect of article 5 of the 2000 Order under which, inter alia, the disputed land was statutorily vested in TfL on 3 July 2000. That raises a difficult question, to which it is unnecessary to venture an answer, and so I say no more about it.
Facts
[27] Evidence in support of the claimants’ claim was given by Mr Terence Welford. He made a witness statement on 2 February 2005, confirmed its truth in his oral evidence in chief and was cross-examined. He explained in it that, in his business dealings, he had sometimes used his wife’s maiden name of Walsh (he did so in the charge of 29 March 1988). He is 59, was born in Stepney, has always worked in the East End and, since the age of 20, his business activities have largely involved him in scrap dealing and road haulage. He met his co-claimant, Mr Hill, more than 30 years ago, after which they ran their merged haulage companies from premises in Blackwall Goods Yard in the East India Dock Road. Around two years later, they acquired Blackwall Transfer Station, a waste-transfer station, which became so successful that they ceased their haulage business save that they used its vehicles to service the waste-transfer business. The nature of that business was that third parties would deposit waste on the site, usually from skips, the claimants would then process and recycle it and transfer the balance to landfill sites in Essex.
[28] Mr Welford said that in around 1984 or 1985 Blackwall Goods Yard was compulsorily purchased. BTSL used the compensation to purchase Moody Wharf and Iron Bridge Wharf North for £235,000 (the two November 1985 purchases). The sites were a few hundred yards from the Blackwall Transfer Station. They were derelict, and he said that, in November 1985, there was nothing to identify the boundary between them save that each had a separate entrance from Lanrick Road. Immediately adjacent to the southern side of Iron Bridge Wharf North were the 10 arches.
[29] Mr Welford explained what he and Mr Hill did when BTSL purchased the two sites in November 1985. They cleared them of all rubbish and demolished the few derelict buildings. They built brick walls on their western and northern boundaries (the eastern one was bounded by the River Lea), retaining the two separate entrances on Lanrick Road, at which they erected metal gates, which were padlocked when the yards were shut. They installed drainage and rewired and concreted the sites. They later constructed a building to house the waste-transfer business, along with offices and a workshop. BTSL sold the sites to the claimants in 1988 prior to the onward sale of the Shanks land for £3m, that sale including the waste-transfer business.
[30] Mr Welford’s evidence then turned to what BTSL did in relation to the arches following the November 1985 acquisitions. He said that they were full of rubbish. Some had doors hanging off their hinges but all bore signs of past occupation. He knew that they had in the past been occupied by various transport and haulage businesses. He said that seven of them were bricked up on their southern side (although the brickwork was in poor condition) and that there was evidence that the three others had also been bricked up in the past. He said that it was evident that access to them was from Iron Bridge Wharf North and that it was plain that three of them could never have been accessed from the south, since two backed onto an abutment and one was built as a wedge-shaped structure. He said that he and Mr Hill “immediately bricked up the 3 arches that were open to Ironbridge Wharf South, and repaired and, where necessary, replaced the brickwork in the other Arches”. He said that once this had been done, and the boundary walls had been built, the site was completely closed off. He said that, after the sale to Shanks, access to the arches could be had only through the Lanrick Road gate into Iron Bridge Wharf North. The arches were served by a roadway within Iron Bridge Wharf North, which ran from the Lanrick Road gate along the entrances to the arches and then continued round the site. The roadway was not apparent at the time of the purchase; it was covered in rubbish.
[31] Mr Welford said that BTSL’s clearing of the sites (including the arches), the erection of the boundary walls and the bricking up of the southern side of the arches had been carried out within a few weeks of the November 1985 acquisition. He said that he and Mr Hill had been anxious to get an income stream from letting out the arches as soon as possible. This was because it was going to take time to get the waste-transfer business up and running. He said that they concreted over the ground of those arches that did not already have hard surfaces, and they rewired the arches and installed electricity meters in them. They installed doors to those arches where the original doors had been removed or were derelict. They installed toilet facilities outside the arches for use by the tenants of the arches and laid on a water supply for each tenant to access. He said in his statement that:
29. The first lettings of the Arches took place within a matter of weeks of [BTSL’s] acquisition of the site in 1985. Indeed, this happened whilst clearance of the rest of the site was still going on and prior to the boundary wall being completed. During this period the site was secured by security guards with dogs.
30. Until 1991 [Mr Hill] and I let out the Arches in a fairly informal way. We gave tenants rent books and collected the rents ourselves. There was a high demand for them and a regular turnover of tenants. That having been said, though, a number of them were there from the beginning until we had to give up the land in November 2000.
31. In 1991 we handed over the letting of the Arches to the managing agents Sovereign House Estates in Hackney. They found tenants and collected the rents. Unlike us they required tenants to sign tenancy agreements.
[32] Mr Welford said that the tenants were given keys to the gate serving Iron Bridge Wharf North and that they also had keys to their own units. He said that on several occasions between 1985 and November 2000 a representative of the local authority turned up at the site and asked for permission to inspect the arches. He had to arrange for the tenants to unlock the doors to the arches.
[33] In cross-examination, Mr Welford said that he and Mr Hill received £108,000 compensation for Blackwall Goods Yard and borrowed £200,000 to purchase Ironbridge Wharf North and Moody Wharf. The plan was to build a new transfer station on that site and then to sell Shanks the site (or part of it) complete with the new transfer station. They did not need to have a deal in place with Shanks before building the transfer station because they had a loan and were taking money out of their transfer business, which had been turning over around £1m a year, although Mr Welford could not say what profit they had made. He said that it took around nine months to build the new transfer station. He agreed that they had started the building work in 1987 and that it was finished in around August 1988. He said that they |page:5| had not intended to sell Shanks the strip of land adjoining the arches, which he and Mr Hill retained.
[34] Mr Welford was shown a statutory declaration that he and Mr Hill had made on 15 October 2001 in support of their claim for compensation for the disputed land following the compulsory purchase order. In paras 1 and 2, they described the purchase of the sites in November 1985 and the then state of the arches, which they appreciated were not included in their title. They said, in paras 3 and 5:
3. On acquisition of the Site [BTSL] made an application for planning permission to construct a waste transfer station on the site. Whilst that was ongoing we cleared the Site and immediately entered into possession of the Arches, which were used for the storage of machinery, tools, oil and diesel. We constructed a brick wall all the way round the Site save for the riverside wharf. …
…
5. During the course of the erection of the waste management station on the Site, [BTSL] decided to rent out the Arches under licence agreements for 3 months duration, although we have been advised that such licenses [sic] may well have actually constituted tenancies. The income generated helped Blackwall to pay the mortgage on the Site. The demand for the Arches was high and none stayed vacant for any length of time after a licensee had vacated.
[35] The assertions there made (under oath) differed from Mr Welford’s evidence (also under oath) in this action, made over three years later. First, there was no suggestion in his latter evidence that BTSL had originally used the arches for storage purposes. His evidence was to the effect that it had promptly proceeded to let them out, the first lettings being (so he originally said) “within a matter of weeks of” the acquisition, while the site was being cleared. In the statutory declaration, however, Mr Welford and Mr Hill had fixed the first lettings as dating from around the time of the construction of the waste-management station, which, Mr Welford said in his evidence to me, commenced in late 1987. That was a major discrepancy, which he sought to explain by saying that he thought that he had said the wrong thing in para 5 of the statutory declaration: he should there have said that the lettings dated from the development of the site, a reference to when BTSL sought planning permission for the construction of the new transfer station. He said that BTSL did rent out the arches before the building work started and that Coopers moved into nos 1 and 2 in the first week of BTSL’s occupation, during which week five arches in all had been let. This further explanation appeared, therefore, to put the first lettings at a rather earlier time than had his evidence in chief. Mr Welford said that he could have produced evidence of these lettings, but he produced none. He produced no evidence showing that any of the arches had been let prior to 1 April 1986. He produced no evidence that BTSL had received any rent for them before April 1986. It appears that BTSL’s affairs were not in good order: he said that there had been a tax investigation but that BTSL had paid all the tax that it owed.
[36] In connection with the claimants’ assertion that their letting of the arches dated from November 1985, Mr Reynolds placed reliance upon some 1988 correspondence. On 4 October 1988, Ashurst Morris Crisp, solicitor for the London Docklands Development Corporation (LDDC), wrote to Mr Hill recording LDDC’s understanding that he might have an interest in land east of Lanrick Road in respect of which the LDDC was proposing to make a compulsory purchase order for road-improvement purposes. It asked him to provide certain information relating to his ownership and occupation of an identified area, being a section of the East India Dock Road, including the arches. Mr Welford filled in and returned the information sheet, although the information that he provided was of a minimalist nature. To the question as to the “nature of interest in the premises”, he replied: “ARCHS” [sic]. To the question as to the “purpose for which the premises are being used”, he replied: “SMALL”. Below, and slightly to the right of, that response he put a mark of indeterminate nature. Mr Reynolds encouraged Mr Welford (his own witness) to agree that it was an ill-constructed “B” and that the sense of his response was that the arches were used for the purposes of small businesses. Mr Welford declined to be so led by Mr Reynolds and said that he could not explain the mark. The potential importance of the point was that to the next question, as to “when that use began”, Mr Welford replied: “NOVEMBER 1985”. He gave the same answer to the last question, as to the “time when any activities being carried out on the premises began”.
[37] There is, however, evidence that at least by 1987 (consistently with what the claimants had said in their statutory declaration) the arches had been let. AS Lee Glazing appears to have occupied no 7 since 1987; Messrs Derry appear to have occupied no 5 since 1988 (Mr Welford asserted, but was unable to corroborate it, that there was a previous tenant in occupation of that arch); and Axestone Engineering appears to have occupied no 3 since 1988. In a letter dated 15 January 2002, Clapshaws (a chartered surveyor) asserted that no 3 was in a poor state when Axestone first occupied it and that it had spent considerable sums in improving it, including the construction of an office and a tearoom and the bringing of electricity to it. That is to be contrasted with Mr Welford’s evidence that BTSL had put in the electricity, a job that he said had been done by his brother-in-law. His response to Clapshaws’ statement was that Axestone were welders and had had to lay on heavy duty cables.
[38] A report of an inspection carried out by Newham London Borough Council in 1987 for the Department of Transport records that, by then, all the arch units were being used for light engineering works or storage facilities. There is further evidence that they were each separately rated as from 1 April 1990 and that, as at May 1991, they were all occupied, apart only from no 2, which had been empty since 1 April 1990. On 20 September 1991, the department wrote to Sovereign House Estates, which was by then managing the letting of the arches for the claimants, pointing out that it was the highway authority for the A13 and asking for an explanation as to Sovereign’s interest in the arches, or that of anyone else known to have an interest in them. Sovereign’s reply, on 7 October 1991, was that the claimants were the joint freeholders of the arches and that Sovereign was the managing agent. They listed the occupiers of the arches. The department replied on 22 June 1992 asserting that the arches were comprised in the Secretary of State’s title and that therefore they “cannot belong to anyone else”. They also wrote to Mr Welford, asking him to explain his claim to the arches. He did not reply, and a chaser was sent to Mr Hill on 17 September 1992. That led to a letter from David D Lewis & Co, the claimants’ then solicitor, which asserted (so far as relevant) that the arches were “landlocked” and that:
the Arches have been used by the owners of the land since 1934 and if that point arises we are claiming prospective [sic] use and we are trying to trace back the title so that we can prepare a Statutory Declaration showing 15 years user.
The department’s reply was that the arches were not landlocked because it had the benefit of the right of way to them from Lanrick Road and over Iron Bridge Wharf North reserved to the GLC in November 1985. As to the solicitor’s apparent belief that proof of 15 years’ use would do the trick for the claimants, it referred them to Part II of Schedule 1 to the Limitation Act 1980. It threatened proceedings for possession, but took none.
[39] Mr Welford was asked in cross-examination about his and Mr Hill’s joint statement in the statutory declaration that: “The income generated [from the lettings] helped [BTSL] to pay the Mortgage on the Site.” He replied that this was wrong too. He said that he knew what a mortgage was and said that BTSL had no mortgage. He said that they had borrowed money and had agreed to pay it back. He refused to say from whom the money had been borrowed, save that the lender was an offshore company, that the loan had been arranged between the accountant and the lender and that it had been explained to the Inland Revenue. He said that the loan had been for £250,000, which had been raised to buy the site. He said that the price of the site was £230,000 (in chief, he had said £235,000), but he also said that the documents showed that they had bought it for only £150,000. He could not remember the term of the loan but said that they had repaid it when they sold to Shanks for £3m and that they did not have to repay it before then. He agreed that they had made no repayments of the loan before 1988 and said that they had not needed the income from the lettings to service it or pay any mortgage. He said that they had needed |page:6| the income in order to run their business. He could not explain what had been secured by the legal charge to Shanks dated 29 March 1988. Although the transfer of 26 February 1988 from BTSL to the claimants evidenced the receipt by BTSL of the price of £300,000, he also said that that sum had not in fact been paid.
[40] Mr Welford was cross-examined about his evidence relating to the state of the southern sides of the arches when BTSL acquired the site in 1985. His evidence in chief was that seven were already bricked up and that he and Mr Hill “immediately” bricked up the other three. His evidence about this became confused. He could not remember which three they so bricked up, although whichever they were he said that they did it within the first couple of days of occupying the site. He agreed that, in fact, only nine of the 10 arches were accessible from the south. The report of the 1987 inspection recorded that the two most westerly arches “have no enclosing brickwork on this [south] face although the large amount of spoil deposited in this area reduces the possibility of unauthorised access from this location. … The presence of this material however also prevented close inspection of the piers and arch slabs to Arch Nos 1 & 2 at this location.” The report recommended the removal of the spoil and the bricking up of the southern side of those two arches so as to prevent unauthorised access. Mr Welford agreed that he had been wrong to say that these two arches were already “bricked up” in 1985: he should have said that they had been blocked off. He said that he and Mr Hill later bricked up these arches as well, although they had not done so by 1987. This claim is to be compared with a report of Newham’s 1993 inspection of the arches, which indicated that the removal of the spoil and the bricking up of arches nos 1 and 2 had been carried out not by the claimants but by the LDDC. Mr Welford denied this and was positive that he and Mr Hill had done this work. It is fair to note that the source of the different explanation in the report is not provided, and there is no direct contrary evidence as to who actually carried out the work.
[41] Mr Welford explained about the offices that he and Mr Hill had. Until 1988, they had one on land south of the East India Dock Road. Following the Shanks sale in 1988, they had one in Lanrick Road, over the road from the site. He remembered two occasions when representatives of the local authority had turned up to inspect the arches. He did not think that they would have done the inspections without permission.
[42] Mr Hill made a short witness statement confirming the truth of Mr Welford’s statement. He confirmed it under oath, but was not cross-examined. Any cross-examination of him would have required the putting of the same questions as were put to Mr Welford and Mr Reynolds said that that he would make no point on the omission to cross-examine Mr Hill. He was thereby acknowledging that the claimants’ case on the facts stood or fell with Mr Welford’s evidence. Mr Hill was a joint signatory of the 2001 statutory declaration, and so he, too, there swore to the truth of the same matters whose correctness Mr Welford now disputes.
[43] There was some evidence about the inspections carried out to the arches. I have made a particular mention of the one in November 1987. This was part of a programme agreed with the Department of Transport, the overall conclusion being that the basic arch structures were in sound condition. The reason for it was because the department was by then responsible for the maintenance of their structure. Newham carried out another inspection in December 1993/January 1994, again as agents for the department. The report recorded that all the arch units were occupied and used as repair workshops or for light engineering or storage facilities. It recorded that access to them was obtained from the north side and that no access was available from the south. A further inspection was carried out in 1995.
Conclusions on the evidence
[44] I find that, at least by some date in the latter part of 1987, the claimants had let out the arches, were receiving rent for them and that they thereafter continued to receive such rents for at least 12 years. I find that this receipt of rents amounted to possession by the claimants of the disputed land, and that such possession amounted to adverse possession for the purposes of the 1980 Act. I find that the inspections carried out on behalf of the Department of Transport in 1987, 1993 and 1995 did not amount to an interruption of such possession. They were relatively brief operations, involving the carrying out of minor tests, the most invasive ones being during the 1995 inspection. Although Mr Welford could not remember whether his permission had been sought for the 1987 inspection, he said that it had been sought for the latter two, and he had had to make arrangements for the tenants to give access to the inspectors. Moreover, the basis upon which the department was claiming to inspect was equivocal. It could have been in right of the Secretary of State’s ownership, but could also have been pursuant to the right of entry for survey purposes conferred on highway authorities by section 289 of the Highways Act 1980. In addition, the inspections were of premises occupied by, and known to be occupied by, people who were in no manner recognised as being there by the authority of the department and whose occupation was allowed to continue undisturbed. In my judgment, in all these circumstances, the inspections did not interrupt the claimants’ possession of the disputed land.
[45] All that these findings show, however, is that the claimants were in adverse possession from 1987 onwards. For reasons explained, the important question is whether they were in such possession from before 1 April 1986 (although this is important only if I am wrong in my interpretation of para 12 of Part II of Schedule 1 to the 1980 Act).
[46] Mr Welford gave evidence of minor acts carried out by BTSL in relation to the arches following the November 1985 acquisition. There was the somewhat confusing evidence about the bricking up of their southern side and there was also his evidence about the concreting of the ground of some of the arches, rewiring the arches and replacing or fitting doors to some of them. His evidence was also that BTSL let out the arches before 1 April 1986. His evidence about the more precise timing of the lettings changed, however, between his evidence in chief and in cross-examination. In chief, he said that the first lettings “took place within a matter of weeks of [BTSL’s] acquisition of the site in 1985. Indeed, this happened whilst clearance of the rest of the site was still going on and prior to the boundary wall being secured.” In cross-examination, it was pointed out to him that, in 2001, he and Mr Hill had sworn that the lettings had not started until 1987. He said that what he had then sworn to was wrong, and then proceeded to say that they had let as many as five arches in the first week of BTSL’s occupation, with Coopers moving into arches nos 1 and 2 in that week. The net result is that Mr Welford has given three different accounts under oath as to the timing of the lettings.
[47] I found Mr Welford’s evidence unsatisfactory. His cross-examination showed him to be a less than scrupulous businessman and his evidence was, on crucial matters, imprecise and inconsistent. It was critical to the claimants’ case to prove that BTSL’s assumption of possession of the disputed land predated 1 April 1986, and Mr Reynolds accepted that their case depended upon proving that BTSL had had tenants in the arches by then. If I were to conclude that the claimants had not proved this, he did not suggest that there was any other evidence justifying a finding that they had been in adverse possession of the disputed land since before 1 April 1986.
[48] I have no doubt that by the time that he came to give evidence Mr Welford was aware of the significance of 1 April 1986: his statement focused upon his and Mr Hill’s activities on the site during the weeks immediately following the November 1985 acquisition. Whether they were aware of the significance of 1 April 1986 when they made their 2001 declaration is unknown. I regard it as probable, however, that they were not, because that declaration did not make any overt attempt to focus with any precision upon the activities carried out in relation to the arches during that early period. In para 3, they swore that they “immediately entered into possession of the Arches, which were used for the storage of machinery, tools, oil and diesel”. In the context of the paragraph as a whole (earlier quoted in full), I am not clear as to what they meant by “immediately”, but even if they meant immediately after the November 1985 acquisition, that assertion no longer forms part of their case. They do not now suggest that they ever used the arches for their own storage purposes. On the contrary, their case has become one |page:7| in which there was an immediate drive to let them out on tenancies, with two arches being occupied in the first week of BTSL’s ownership of the adjoining land and a further three also being let during that week. In 2001, their case was that the first lettings had not been achieved until some time in 1987, when they commenced the construction of the new waste-transfer station. Mr Welford now says that that was an unfortunate mistake and that he did not there mean to say what he did say.
[49] I am not persuaded that the claimants did make any such mistake in the statutory declaration. The declaration can have been drafted only on the basis of the instructions that they had given, and the picture that they had then painted was that the arches were first used for their own storage purposes and only rather subsequently, but not till 1987, were they let out. The picture they now paint is different. I find myself, therefore, faced with conflicting accounts from the claimants as to the relevant facts, all made under oath. The primary question for me is whether I can accept that, on the balance of probabilities, the claimants did let out the arches before 1 April 1986, which is the case that they now make. It is for them to prove that and they have not satisfied me that they did. The inconsistencies in their evidence caused me to view their assertions about this with the greatest suspicion. Mr Reynolds urged that it was probable that they would have let the arches out immediately. I do not regard it as so probable, and I regard it as improbable that (as Mr Welford ultimately claimed) they let out five in the first week. In addition, there is no evidence corroborating the claim that any lettings were effected as early as is now being claimed. There was no evidence from any of the first alleged tenants, no documentary evidence of any such lettings, and no evidence of the receipt by BTSL of any rents during this early period. There was nothing more than the claimants’ unreliable and inconsistent assertions. Nor does Mr Welford’s 1988 reply to Ashurst’s request on behalf of the LDDC help him: he did not there suggest that BTSL had let out the arches as from November 1985. He merely gave a meaningless answer in response to the request as to the use to which the arches had been put since November 1985.
[50] I therefore reject the claimants’ case that BTSL let the arches prior to 1 April 1986. As regards Mr Welford’s other evidence of claimed acts of possession in relation to the disputed land – bricking up, concreting, rewiring, door fitting – I did not understand Mr Reynolds to suggest that these activities by themselves would amount to the assumption of possession of the disputed land. As to the claimed bricking up of the southern side of the arches, that was consistent (as Mr Reynolds accepted) merely with an intention to shut off a means of access from the south to Iron Bridge Wharf North and to Moody Wharf and did not by itself prove adverse possession of the disputed land. As regards the other alleged activities, I do not regard Mr Welford’s evidence as to their timing as in any way reliable, and I regard it as probable, and I find, that they were carried out only once the decision had been made to let the arches out, which appears to have been rather later than 1 April 1986.
Result
[51] The claimants have therefore failed to prove that they took possession of the disputed land prior to April 1986, although I accept that they did so in 1987. If I am wrong in my interpretation of para 12 of Part II of Schedule 1 to the 1980 Act, their claim anyway fails on the facts. The claim is dismissed.
Claim dismissed.