Limitation — Limitation Act 1980 Schedule 1 para 9 — Intestate estate — Failure to obtain administration — Possession by one of four beneficiaries for period exceeding 12 years — Whether beneficiaries statute-barred
In May 1965, following the grant of letters of
administration and an assent, Mrs H became the sole legal and beneficial owner
of a farm when her husband died intestate. In 1983 Mrs H died, also intestate.
The farm was the principal asset of her estate. There were four children; one
son, who had lived with his mother and continued to live at the farm after her
death, and three daughters, who are the plaintiffs. In July 1992 the defendant
went to live with the son at the farm. On 17 October 1995 they married. On 9
November 1995 the son made a will, and on 14
plaintiffs claimed that, on their mother’s death, they were each entitled to a
quarter share in her estate. The defendant maintained that the son, and she
successively, had been in adverse possession of the farm since the death of Mrs
H in 1983, a period of more than 12 years. Two of the plaintiffs obtained a
grant of letters of administration of their mother’s estate. In proceedings in
the county court, the judge, in dismissing the defendant’s claim to the farm
based on adverse possession, relied on para 9 of Schedule 1 to the Limitation
Act 1980. She appealed.
Held: The appeal
was dismissed. The broad effect of section 7(5) of the Limitation Act 1939, and
subsequently para 9 of Schedule 1 to the Limitation Act 1980, may be said to be
the reintroduction of the doctrine of non-adverse possession among beneficial
co-owners of land, allowance being made for the trust for sale that the Law of
Property Act 1925 had made an inevitable feature of such ownership. A person
absolutely entitled to a share of an unadministered estate does have an
interest of a kind, it is a sufficient interest for the purposes of para 9 of
Schedule 1 to the 1980 Act.
The following cases are
referred to in this report.
Commissioner of Stamp Duties (Queensland) v Livingston [1965] AC 694; [1964] 3 WLR 963; [1964] 3 All
ER 692, PC
Deans, Re [1954]
1 WLR 332; [1954] 1 All ER 496
Leigh’s Will Trusts, Re [1970] Ch 277; [1969] 3 WLR 649; [1969] 3 All ER 432
Paradise Beach & Transportation Co Ltd v Price-Robinson [1968] AC 1072; [1968] 2 WLR 873; [1968] 1
All ER 530, PC
Williams, Re
(1886) 34 ChD 558
This was an appeal by the
defendant, Josephine Hyde Hartley, from a decision of Judge Barry, in Halifax
County Court, who had determined a preliminary issue in proceedings by the
plaintiffs, Anne Hyde Earnshaw, Marion Robinson and Lucy Hyde Fielden, in
proceedings by the plaintiffs claiming, inter alia, a declaration as to
the beneficial interests in the subject property.
Paul Creaner (instructed by Waddington & Son,
of Burnley) appeared for the appellant defendant; Barry Coulter (instructed by
Ursula Bagnall & Co, of Totnes) represented the respondent plaintiffs.
Giving the first judgment, NOURSE LJ said: This appeal raises
a question on para 9 of Schedule 1 to the Limitation Act 1980, which appears
under the rubric ‘Possession of beneficiaries not adverse to others interested
in settled land or land held on trust for sale’.
By a conveyance made
on 17 September 1948 William Hyde Hartley (the father) acquired a freehold
property consisting of a farmhouse, farm buildings and just over 14 acres of
land known as Height Top Farm, Cornholme, Todmorden in West Yorkshire (the
farm). He was married to Mary Hartley (the mother) and they had four children:
a son, also named William Hyde Hartley, and three daughters, Ann Hyde Earnshaw,
Marion Robinson and Lucy Hyde Fielden . The son was born in 1938 and the
daughters in 1941, 1943 and 1948 respectively.
On 8 April 1965 the father died intestate. On 25
May 1965, his estate having been sworn at £1,363 gross and £1,303 net, letters
of administration were granted to the mother, she being the only person
beneficially entitled to the estate. By an assent in writing made on
30
assented to the vesting of the farm in herself. It is clear that at that stage
she was the sole legal and beneficial owner of the farm.
After the father’s death, the son, who had not
then married, continued to live with the mother at the farm until her death on
18
administration to her estate was obtained at that stage. The position in law
was that, by virtue of section 9 of the Administration of Estates Act 1925, her
real and personal estate, including the farm, vested in the President of the
Family Division until administration was granted in respect thereof. It appears
that the farm was the only asset or the only substantial asset of the estate.
If and when administration was granted, the farm would, by virtue of section
33(1)(a) of the 1925 Act be held on trust for sale and, subject to
administration, would, by virtue of sections 46(1)(ii) and 47(1)(i) of the Act,
be held in trust for the son and the daughters in equal shares absolutely.
After the mother’s death, the son continued to
live on at the farm on his own. The daughters claim that he did so with their
consent express or implied. Each of them was married and was living away from
home. The daughters also claim that in the five years between 1988 and 1993,
the son, who went to live with a friend nearby during that period, was not in
possession of the farm. However, that is not a question that arises for
decision at this stage. For present purposes we must assume that the son was
throughout in possession of the farm.
In the early 1990s the son became friendly with
the defendant, now Josephine Hyde Hartley, who went to live with him at the
farm in about July 1992. On 17 October 1995 they were married. On 9 November
1995 the son made a will in which he appointed the defendant to be the sole
executrix thereof and devised and bequeathed all his estate and effects both
real and personal whatsoever and wheresoever to her absolutely. On 14 November
1995 the son died.
On 27 November 1995 solicitors acting for the
daughters wrote to the defendant stating that they had been retained with a
view to effecting a sale of the property. The daughters maintained that they were
each entitled to a quarter of the net proceeds of sale of the farm. The
defendant maintained that the son and she successively had been in adverse
possession of the farm since the mother’s death on 18
period of more than 12 years, and that she, by succession and in her own right,
had therefore acquired a possessory title to it. There was then a period of
negotiation between the parties, but, by the beginning of 1998, negotiations
had broken down.
On 15 January 1998 two of the daughters, Mrs
Robinson and Mrs
the mother’s estate. On 12 March 1998 the defendant obtained a grant of probate
of the will of the son. By a summons issued on 11 June 1998, this action was
commenced by the daughters against the defendant in Halifax County Court. By
their particulars of claim, the daughters claimed various forms of relief,
including a declaration as to the beneficial interests in the farm, an order
for possession against the defendant, an order that the defendant should pay an
occupation rent, and an order that the farm be sold. By her defence and
counterclaim, the defendant alleged that, by virtue of the undisturbed
possession of the farm since the mother’s death by the son and herself, she had
acquired a possessory title to it.
On 13 July 1998 the district judge gave directions
for the filing of witness statements limited to the issue of adverse possession
and made an order that ‘the trial of the preliminary issue of adverse
possession be before the Circuit Judge’. The trial came on before Judge Barry
on 11
preliminary point in the issue, that the defendant’s claim to have
acquired title to the farm by adverse possession was on any footing defeated by
para 9 of Schedule 1 to the 1980 Act. The judge having decided that point in
favour of the daughters, the defendant accepted that that was effectively an
end of the proceedings.
By his order (as subsequently varied) the judge
accordingly dismissed the defendant’s claim for adverse possession and ordered
her to give up possession of the farm within 28 days. He also ordered her to
pay an occupation rent, to which I will refer at the end of this judgment. The
judge gave the defendant leave to appeal in respect of the dismissal of her
claim for adverse possession. In spite of that, on 3 February, he refused the
defendant’s application for a stay of execution over the hearing of the appeal.
The defendant then applied to this court for a stay, her application coming
before Ward LJ last Thursday, 24 March, when arrangements were made for the
appeal to be heard by us on Monday of this week, a stay having been granted by
Ward LJ in the meantime.
The provisions of the Limitation Act 1980 that are
material to the preliminary point are sections 15(1) and (6) and para 9 of
Schedule 1. So far as material, section 15(1) provides:
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…
Section 15(6)
provides that part 1 of Schedule 1 to the Act contains provisions for
determining the date of accrual of rights of action to recover land in the
cases there mentioned. Para 9 of Schedule 1 was amended by the Trusts of Land
and Appointment of Trustees Act 1996. However, since the 12-year period relied
on by the defendant expired on 17 November 1995, it is necessary to refer to it
in its unamended form:
Where any settled land or any land held on trust
for sale is in the possession of a person entitled to a beneficial interest in
the land or in the proceeds of sale (not being a person solely or absolutely
entitled to the land or the proceeds), no right of action to recover the land
shall be treated for the purposes of this Act as accruing during that
possession to any person in whom the land is vested as tenant for life,
statutory owner or trustee, or to any other person entitled to a beneficial
interest in the land or the proceeds of sale.
In regard to that
provision Mr Coulter, for the daughters, has argued that at all material times,
first, the farm was ‘in the possession of a person entitled to a beneficial
interest in the land or in the proceeds of sale’, namely the son, and, second,
that the daughters were other persons ‘entitled to a beneficial interest in the
land or the proceeds of sale’. On that footing, he submits, no right of action
accrued to the daughters during the son’s possession and time never started to
run against them.
The contrary argument of Mr Creaner, for the
defendant, is based on a literal interpretation of para 9. First, he points
out, correctly, that it is expressed to apply to settled land (which is not
this case) or to land that is held on trust for sale. Second, he submits that,
while the farm was vested in the President of the Family Division, it was not
held on trust for sale, so that para 9 could not and did not apply during that
period. Third, he submits that, even if it could be said that the farm was held
on trust for sale, neither the son nor any of the daughters had a beneficial
interest in the proceeds of sale, but only a right to require the mother’s
estate to be duly administered and to receive a quarter share of the net estate
on completion of the administration: see Commissioner of Stamp Duties
(Queensland) v Livingston [1965] AC 694 and Re Leigh’s Will
Trusts [1970] Ch 277 at pp281-282.
Bearing in mind its purpose and antecedents, I am
unable to accept Mr Creaner’s interpretation of para 9. Its predecessor was
section 7(5) of the Limitation Act 1939, which was expressed in substantially
the same terms. Before that the material provisions were contained in the Real
Property Limitation Acts of 1833 and 1874, in particular in section 1 of the
1874 Act and section 12 of the 1833 Act. As was explained by Lord Upjohn in
delivering the judgment of the Privy Council in Paradise Beach
&Transportation Co Ltd v Price-Robinson [1968] AC 1072 at
pp1082-1083, the effect of those provisions was to do away with the previous
doctrine of ‘non-adverse’ possession, under which, in the absence of an ouster,
the possession of one joint tenant or tenant in common was regarded as the
possession of the others, so that time did not run against those that were not
in possession.
Although the thinking behind the enactment of
section 7(5) of the 1939 Act, and subsequently para 9, has not been explored in
argument, their broad effect may be said to have been the reintroduction of the
doctrine of non-adverse possession among beneficial co-owners of land, allowance
being made for the trust for sale, which the Law of Property Act 1925 had made
an inevitable feature of such ownership. Against that background it would, I
think, be quite wrong to give para 9 the literal interpretation that Mr Creaner
has put on it. Although it is no doubt correct to say that the President of the
Family Division, while the farm was vested in him, was not a trustee of it (cf
Re Deans [1954] 1 WLR 332) and that it was not held on trust for sale
during that period, it was presumptively so held and it would be artificial,
for limitation purposes, to distinguish between the states of affairs existing
before and after the grant of administration. It would be equally artificial,
for limitation purposes, to hold that, after the grant had caused the trust for
sale under section 33 to take effect, the son and the daughters did not have
beneficial interests in the proceeds of sale of the farm. As Buckley J said in Re
Leigh’s Will Trusts at p282D, a person absolutely entitled to a share of an
unadministered estate ‘does have an interest of a kind’ in the assets comprised
in it. In my judgment, it is a sufficient interest for the purposes of para 9.
Mr Creaner based an alternative argument on
section 26 of the 1980 Act, which provides that, for the purposes of the
provisions of the Act relating to actions for the recovery of land, an
administrator of the estate of a deceased person shall be treated as claiming
as if there had been no interval of time between the death of the deceased
person and the grant of the letters of administration. One of the purposes of
that section is to allow time to run against an administrator as from the
intestate’s death, irrespective of whether a grant of administration has been
obtained or not; cf Re Williams (1886) 34 ChD 558, a decision on section
6 of the 1833 Act. In the absence of such a provision, in the usual case where
a possessory title is claimed by an outsider, the claim could be defeated
simply because no grant had been obtained. But section 26 is entirely beside
the point where time has never started to run, for example by reason of para 9.
For these reasons, I am of the opinion that the
decision of Judge Barry on the preliminary point was correct. However, I cannot
leave the case without referring to his order that the defendant should pay an
occupation rent. That order was in the following terms:
The defendant do pay to the plaintiffs for the
period of her occupation of the property, such rent to be agreed between the
parties and in default of such agreement liberty to restore the determination
of such rent.
As Mr Coulter has accepted in argument, the
defendant can only be liable for an occupation rent as from the expiration of a
reasonable period after receipt of the plaintiffs’ solicitors’ letter of 27
November 1995, say from 1 January 1996. Further, since the defendant is
beneficially entitled to a quarter share of the mother’s residuary estate, she
can only be made liable for three-quarters of the rent. It is to be hoped that
all points in regard to this part of the judge’s order can be agreed between
the parties without further resort to the court.
I would dismiss this appeal.
Agreeing, BUXTON
LJ said: Using language in a completely non-technical sense, I would
be surprised to find that, where four persons have equal interests of some sort
in a property, one of those four can deprive the others of their interests by
being permitted by them to occupy the property for a substantial period of
time. Not only would that appear inequitable, but also the occupier would, in a
general sense, be occupying against his own interest: the same interest as was
held by his fellow beneficiaries. I am glad to find, with the assistance of the
illumination provided by my lord’s judgment, that the law does not compel or
permit of such an outcome in this case. For the reasons that he gives, I also
would dismiss this appeal.
SIR
CHRISTOPHER STAUGHTON agreed and did not add
anything.
Appeal dismissed.
