FAIRWEATHER
v.
ST. MARYLEBONE PROPERTY CO. LTD.
Lord Radcliffe
16th April 1962.
Lord Radcliffe
Lord Denning
Lord Morris of Borth-y-Gest
Lord Guest
my lords,
This appeal raises a short but, possibly, important point with regard to the
effect of the Real Property Limitation Acts. For the purpose of deciding it
we were invited to consider a good deal of ancient learning and somewhat
obscure pronouncements by sages of the past as to such subjects as the
operation of mergers and surrenders and the ” drowning” of estates. I
do not at all complain of this, because the argument was in itself informa-
tive and, no doubt, such statutes as the Real Property Limitation Act, 1833,
cannot be understood without reference to older forms arid conceptions of
conveyancing, many of which are now outmoded. Nevertheless I have come
to the conclusion that the solution of the problem which we have before us
depends upon nothing more than the inferences to be drawn from one or
two principles about real property limitation that are themselves, I believe,
incapable of being disputed at the present day.
Let me try to state our facts in skeleton form, for their details do not con-
tribute anything that is material. What is in dispute between the Appellant
and the Respondents is which of them is presently entitled to possession of
part of a shed. The shed has been so constructed at some past date that its
entrance is on a property known as No. 311 West End Lane, Hampstead, and
its back wall on the adjoining property, No. 315 ; three-fourths of the length
in 315, one-fourth in 311. The Respondents own the freehold of No. 315,
and since they acquired it they have bought and taken a surrender of the only
outstanding lease of that property, a lease for 99 years granted in 1894 to
expire by effluxion of time on the 29th September, 1992.
The Appellant derives his rights to the shed from a sublease of the ground
floor and shop of No. 311, of which he is the assignee and which runs for
a term of 21 years from the 29th September, 1951. There is no dispute
that that sublease included the shed in the premises demised, as appurtenant
to the ground floor and shop, or that there passed under the demise squatter’s
rights to so much of the shed as was actually on the site of No. 315. The
squatter’s rights in question arose from adverse possession of that part of the
shed by the Appellant’s predecessors in title, who, since the year 1920, had
maintained adverse possession without acknowledgment of title against the
lessee of No. 315, who or whose successors in title have now surrendered
their lease to the Respondents.
The Respondents’ claim to possession can be stated in a few words. They
are the fee simple owners of No. 315, including the site of the shed, so far as
it is on that land; they have cleared off the lease which stood between them
and their present right to possession ; and, although the Appellant as squatter
was entitled to hold possession against the lessee, he had held no adverse
possession against them until by the surrender of the lease, which took place
on the 14th December, 1959, their right to claim possession from him accrued
for the first time. As they ‘began their ejectment proceedings in August, 1960,
their right is not statute barred.
The Appellant’s position is a little more complicated to state. By 12 years
adverse possession as against the lessee of No. 315 his predecessor, he says,
acquired a squatter’s rights in that part of the shed that was on the property
and upon that event the lessee’s title thereto became extinguished. That
extinguishment would have occurred some time in the year 1932. Had the
lease continued for its full term, until 1992, he would have been entitled by
virtue of his rights against the lessee to continue to occupy the shed as squatter
and the lessee, he says, cannot by surrendering the lease to the landlord put
the landlord in a position to claim possession against him before the time
2
when the lease would have expired. One branch of his argument is to say
that the lessee had lost any right or title to possession of the shed, because
his title was extinguished under section 34 of the Real Property Limitation
Act, 1833, and he had nothing, therefore, in this respect that he could transfer
to the landlord: the other branch involves the proposition that until 1992
the landlord could only claim a present right to possession through the lessee
and, if the lessee himself had no right to possession against the squatter,
the landlord claiming through him could be in no better position.
It is plain that the case on each side involves several deductive steps which
are claimed to follow by irrefutable logic from their respective premises.
After some hesitation between two inviting paths, I have come to the
conclusion that the Appellant’s arguments are vitiated by the fact that their
reasoning contains an engaging but considerable fallacy. It seeks to revive
in an elegant new form tine rejected proposition that a squatter becomes in
some way the successor to the title of the dispossessed owner.
It is necessary to start, I think, by recalling the principle that defines
a squatter’s rights. He is not at any stage of his possession a successor to
the title of the man he has dispossessed. He comes in and remains in
always by right of possession, which in due course becomes incapable of
disturbance as time exhausts the one or more periods allowed by statute
for successful intervention. His title, therefore, is never derived through
but arises always in spite of the dispossessed owner. At one time during
the 19th century it was thought that section 34 of the Act of 1833 had
done more than this and effected a statutory transfer of title from dispossessed
to dispossessor at the expiration of the limitation period. There were eminent
authorities who spoke of the law in just these terms. But the decision of
the Court of Appeal in 1892 in Tichborne v. Weir, 67 L.T. 735, put an end
to this line of reasoning by holding that a squatter who dispossessed a
lessee and ” extinguished ” his title by the requisite period of occupation
did not become liable in covenant to the lessee’s landlord by virtue of any
privity of estate. The point was fully considered by the members of the
Court, and they unanimously rejected the idea that the effect of the limita-
tion statute was to make a ” Parliamentary conveyance ” of the dispossessed
lessee’s title or estate to the dispossessing squatter.
In my opinion this principle has been settled law since the date of that
decision. It formed the basis of the later decision of the Divisional Count
in Taylor v. Twinberrow [1930] 2 K.B. 16, in which it was most clearly
explained by Scrutton, L.J. that it was a misunderstanding of the legal
effect of 12 years adverse possession under the Limitation Acts to treat it
as if it gave a title whereas its effect is ” merely negative ” and, where the
possession had been against a tenant, its only operation was to bar his right
to claim against the man in possession (see loc. cit. p. 23). I think that
this statement needs only one qualification: a squatter does in the end get a
title by his possession and the indirect operation of the Act and he can convey
a fee simple.
If this principle is applied, as it must be, to the Appellant’s situation,
it appears that the adverse possession completed in 1932 against the lessee
of No. 315 did not transfer to him either the lessee’s’ term or his rights
against or has obligations to the landlord who held the reversion. The
appellant claims to be entitled to keep the landlord at bay until the expira-
tion of the term by effluxion of time in 1992: but, if he is, it cannot be
because he is the transferee or holder of the term which was granted to
the lessee. He is in possession by his own right, so far as it is a right:
and it is a right so far as the statutes of limitation which govern the
matter prescribe both when the rights to dispossess him are to be treated
as accruing and when, having accrued, they are thereafter to be treated as
barred. In other words, a squatter has as much protection as but no more
protection than the statutes allow: but he has not the title or estate of the
owner or owners whom he has dispossessed nor has he in any relevant
sense an estate ” commensurate with ” the estate of the dispossessed. All
that this misleading phrase can mean is that, since his possession only defeats
the rights of those to whom it has been adverse, there may be rights
3
not prescribed against, such, for instance, as equitable easements, which axe
no less enforceable against him in respect of the land than they would have
been against the owners he has dispossessed.
No one supposes that adverse possession against a lessee during his term
is itself adverse possession against his landlord. It is necessary, therefore,
to see what provision the limitation statutes have made for the accrual
of a landlord’s right to make his entry against a squatter on demised land.
Until 1939 there is no doubt, I think, that the general provision about the
landlord (there were special sections for special cases) was to be found in
section 2 of the Real Property Limitation Act, 1874, and that the landlord
was to be regarded as having for this purpose “an estate or interest in
” reversion or remainder “. It has long been common to speak of a landlord
as having a reversion expectant upon the determination of a term of years,
and as early as the case of Doe d. Davy v. Oxenham (1840) 7 M. & W. 131, he
had been treated as having an estate “in remainder” and as falling within
the corresponding but earlier provisions of the Real Property Limitation
Act 1833. It is true that in Wakefield and Barnsley Union Bank Ltd. v.
Yates [1916] 1 Ch. 452 both Lord Cozens-Hardy, M.R., and Warrington, L.J.
were at pains to point out in relation to section 3 of the 1833 Act that an
estate in fee subject to a lease is an estate in possession, not an estate in
remainder or reversion. And so in many senses it is: but I think that in
stating their proposition in such an unqualified form they were to some
extent seduced by the vigour of language and clarity of thought that dis-
tinguishes Mr. Challis’s book on the Law of Real Property. In my opinion,
both for the purposes of section 2 of the Real Property Limitation Act, 1874,
and for the purposes of section 6 (1) of the Limitation Act, 1939, which has
taken the place of the relevant portion of that section, an owner in fee
simple subject to a term of years has an estate or interest in reversion or
remainder and, consequently, his right of action against a squatter on the
demised land is to be deemed to have accrued at the date when the preceding
estate or interest represented by the term determines in such manner that his
estate or interest falls into possession. It is, therefore, vital to the decision
of this case to make up one’s mind at what date the lease which preceded
the Respondents’ fee simple interest and so their right to possession is to be
treated as determining.
In the ordinary way one would regard a lease or tenancy as being deter-
minable by effluxion of time, by notice, by forfeiture on breach of condition
or by surrender. Ostensibly the lease of No. 315, including the site of the
shed, was determined by the surrender in December, 1959, and upon that
event, one would say. the fee simple owner’s right to possession of the
demised property accrued. According to the Appellant’s argument, however,
the surrender was ineffective in law to determine the lease so far as it extended
to the site of the shed because by virtue of section 34 of the Limitation Act
of 1833 the lessee’s right and title to that part of the demised premises was
” extinguished ” upon the barring of his right to dispossess the squatter: and,
if his right and title had been thus extinguished in 1932, he had nothing by
way of title that he could pass to the landlord by his ostensible surrender.
Nemo dot quod non habet. That is the argument and line of reasoning that
prevailed with a Divisional Count in Walter v. Yalden [1902] K.B. 304, and it
assumes that it is correct to apply that general and probably unimpeachable
proposition to the circumstances of the present case.
It becomes necessary, therefore, to determine what is meant by this phrase,
which in section 34 of the 1833 Act runs: “at the determination of the
period limited by this Act to any person for making an entry or distress, or
bringing . . . any action or suit, the right and title of such person to the land,
rent or advowson, for the recovery whereof such entry, distress, action or
suit respectively might have been made or brought within such period, shall be
extinguished “, and in section 16 of the Limitation Act, 1939, runs: “… at
the expiration of the period prescribed by this Act for any person to bring
an action to recover land … the title of that person to the land . . . shall
be extinguished “. On one view, which seems not an implausible one having
regard to the structure of the respective sections, the right or title extinguished
is coterminous with the right of action the barring of which is the occasion
4
of the extinguishment. This would mean that, when a squatter dispossesses a
lessee for the statutory period, it is the lessee’s right and title as against the
squatter that is finally destroyed but not his right or title as against persons
who are not or do not take through the adverse possessor. On the other
view, that upon which the Appellant’s case depends, the lessee’s right and,
title to the premises becomes extinguished for all purposes and in all rela-
tions, so that as between himself and the lessor, for instance, he has thereafter
no estate or interest in the land demised.
My Lords, I think that even at first impression I should have been inclined
to favour the former of these two possible interpretations as being more con-
sistent with the apparent purpose of the Limitation Acts. But the major
difficulty that I see in considering the adoption of the second alternative is
that its logical application is very far-reaching indeed, much more far-reaching
than is convenient for the Appellant’s argument, and would produce
situations that would seem to me neither reasonable nor just. First, if the
lessee’s estate or right or title or interest—I do not believe that there is any
useful distinction between these words in this connection—is really extin-
guished as against his landlord, I see no escape from the conclusion that the
landlord’s right to possession against the squatter accrues upon that event.
The squatter has not got the lessee’s term or estate and there is nothing between
the fee simple owner and the man in possession. In the terms of this case,
the landlord’s right of action would have accrued in 1932 and become barred
for good in 1944: and this, although the lessee was continuing throughout
the period to pay the rent under the lease and, for all that appears, the
landlord had neither means of knowing nor reason to know that dispossession
of part of the premises had taken place or that time was running against
him. This seems quite wrong; yet if the lessee’s estate was extinguished for
all purposes it must also have ” determined ” at the same time within the
meaning of section 2 of the 1874 Act and section 6 (1) of the 1939 Act.
This situation, manifestly unjust, could occur whenever there is current a
long term of years and there have been 12 years or more of adverse possession
of a portion or even the whole of the demised premises during the currency
of the term. It is to be noted that the expiration by efftuxion of time of the
term granted by the lease ceases to be of any significance, once the Appellant’s
conception is accepted, for in respect of the premises the title to which was
previously extinguished no estate or interest exists which can then expire.
The difficulties of such an interpretation stretch out further. If the lessee’s
estate or title is destroyed for all purposes, there disappears with it any
privity of estate between him and the landlord. If privity of estate is gone
so are gone the covenants on the part of the lessee which depend on such
privity: if the current lessee is an assignee of the lease, as he is likely to be
if the term in question is a long term of years, the landlord will find himself
deprived by the act of the Legislature of the right to enforce in respect of the
squatter’s portion of the land a set of covenants of value to him and he will
have been so deprived without compensation or any necessary notice that the
event that brings it about has in fact ‘taken place. The squatter himself, on
the other hand, is entitled to remain in possession as against the landlord
without personal liability for rent or convenant. It seems a strange statutory
scheme.
Then there is the question of forfeiture. The Appellant’s argument, I think,
included the proposition that, if he does not take the incautious step of accept-
ing a surrender, the landlord could achieve a forfeiture on breach of condition
and under it enter on the squatter’s land. But I have not been able to see how
this can be. A condition, the breach of which justifies a forfeiture or re-entry,
must be attached to the estate the grant of which imposes the condition ; and
if a statute has itself wiped out or destroyed the estate, so that the squatter
is in possession by a different title derived aliunde, I cannot see how the land-
lord can any longer rely upon the condition or forfeit an interest which has
ceased to exist.
I (think, therefore, that it is a false approach to the provisions of the
Limitation Acts to regard the ” extinguishment of title ” as exitinguishing more
than the title of the dispossessed against the dispossessor. Where the person
dispossessed is a lessee, I do not think it right to try to build legal conclusions
on the assumption that the nexus between him and his lessor has been
5
destroyed; or, consequently, that, once adverse possession has been com-
pleted, he ceases to hold the term of years and estate in it granted to him
by his lessor. If I may express my point of view by an illustration which was
propounded during the course of the argument, if after 12 years adverse
possession a squatter vacates the premises and leaves the possession vacant.
would it be the lessee or his lessor who would have the better right to
possession as between themselves? Of course, the answer begs the question,
because the answer one gives depends on the view of the law one takes; but I
think that it would be very difficult for anyone to reply that during the
remainder of the term the landlord could exclude the lessee. If he cannot
it shows that, as against him, the lessee still holds the estate granted and it has
not been extinguished for all purposes. But, if he can, it can only be because
the landlord enjoys a present right of possession and this view brings in again
the former difficulty that his right of action against the squatter must then
have accrued as soon as the 12 years adverse possession against the lessee
had completed the ouster of the latter.
I conclude, therefore, that the effect of the ” extinguishment” sections of
the Limitation Acts is not to destroy the lessee’s estate as between himself
and the lessor; and that it would be incorrect to say that if he offers a
surrender to the lessor he has nothing to surrender to him in respect of the
land in the possession of the squatter. Nemo dot quod non habet, and I
dare say that he does not, but, as Pearson, L.J. indicated in the Court of
Appeal, the question here is not whether there are any exceptions from that
general principle but whether, as a principle, it is relevant to the situation
that we have here. In my opinion it is not.
What the lessee surrendered in this case was the encumbrance on the
fee simple in possession which was represented by the term of years. It was
that encumbrance and nothing else, I think, which until then prevented the
fee simple owner from asserting a claim to possession against the squatter.
This is clear, if one assumes claims made at three successive points of time and
asks what the defence to them would be. If the fee simple owner claimed
possession against the squatter before his adverse possession against the lessee
had been completed, I do not see what defence would be open to the squatter
except that the outstanding term of years prevented the landlord from having
a present title to possession. He would defend himself by alleging the
grant to the lessee. Secondly, if the landlord came against him after he
had enjoyed his 12 years adverse possession against the lessee, his defence
would have to be the same, for otherwise the landlord would have a present
and unbarred right to possession. Yet this would be after the limitation
statute had extinguished the lessee’s title. Now, thirdly, if the landlord
then goes to the lessee and gets him to surrender the outstanding term,
which encumbers his fee simple in possession, then the squatter’s defence
against the landlord disappears and, since he has not completed adverse
possession against the landlord, he must give up to the rightful owner’s claim
to the land. That is the situation that we have here.
This appeal then requires a choice between two decisions that have hitherto
ranked as of equal authority, Walter v. Yalden [1902] 2 K.B. 304 and Taylor
v. Twinberrow [1930] 2 K.B. 16. Each was decided by a Divisional Court,
one sixty yea-re, the other thirty years ago. I regard their decisions as
inconsistent with each other, since the lines of distinction suggested in the
later case (more out of propriety than conviction, I think) are not capable
of supporting a relevant difference. It cannot really matter whether the
squatter is being attacked by a landlord who has taken a surrender of a
lease or by a lessee who has taken a conveyance of the fee simple : nor
can it matter whether the interest defeated by adverse possession is a
fixed term of years or a tenancy from year to year. In my opinion, Waller
v. Yalden (supra) was wrongly decided, since it depends on what I regard
as the mistaken idea that the squatter can defend his possession against the
fee simple owner even though he is not entitled to and has no interest in
the intervening term of years.
We have been in a little difficulty over a point that was argued for the
Appellant with regard to the operation of section 75 of the Land Registra-
tion Act, 1925, because, although his Counsel was able to take this point
in the Court of Appeal despite the fact that it was not raised in the County
6
Court, he was refused leave to adduce further evidence bearing upon it. The
result is that neither that Court nor this House had available enough of the
facts to know whether the point had any actual bearing upon the case
or not. As I think that the true meaning of section 75 (1) is not at all
easy to discover and may have to be fully considered on some other occasion,
I think it best on this occasion to say as little about it as possible.
Briefly, section 75 (1) appears to set out with the purpose of applying
the Limitation Acts and therefore the statutory consequences of adverse
possession to registered land, but then goes on to provide that where the
estate of a 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 . . . has acquired
” title against any proprietor “. It therefore succeeds in making a provision
at the end of the subsection which is wholly inconsistent with the con-
ceptions of the limitation Acts as previously understood and achieves just
that ” Parliamentary conveyance” (through the medium of trustee and
cestui que trust) which was denied by the decision in Tichborne v. Weir
supra. It would certainly be very satisfactory for the appellant if this is
what the 1925 Act has really done, because it would give him just that
beneficial interest in the lessee’s term which, in my view, he lacks under
the Limitation Acts themselves.
But. although it is known from the Land Registry that the lease had been
entered on the Charges Register as an incumbrance on the Absolute Title
and the entry of it had later been cancelled, presumably after the surrender,
there is no evidence to show at what date the lessee himself had thus come
upon the Register as a ” proprietor”. As ” proprietor” in the Act is
defined as meaning ” registered proprietor “, it is pointed out that it is impos-
sible on the evidence to say whether or not the lessee was a registered
proprietor at the date when the Act came into force, or for that matter
was a registered proprietor at the date when adverse possession was
completed.
The Court of Appeal were unanimous in holding that this uncertainty by
itself was fatal to the success of the Appellant’s argument, since, to use the
words of Holroyd Pearce, L.J : ” Section 75(1) clearly deals with the future,
” not the past “. He said that, had the Appellant’s counsel been able to
establish by evidence that the leasehold title was registered before the Act
came into force, his point might well have had weight. My Lords, I agree
with this view in the sense that I regard section 75 (1) as operating only
upon events occurring after the Act came into force, and if the Limitation
Acts effected extinguishment at a date when the lessee was not a registered
proprietor, the subsection would not operate.
I do not think, therefore, that the Appellant can succeed on this point. I
only wish to add that at present I am not at all satisfied that section 75 (1)
does create a trust interest in the squatter of the kind that one would expect
from the words used. So to hold would raise difficulties which I do not now
explore; and the trust of the dispossessed owner’s title under subsection (1)
must somehow be reconciled with the provision under subsection (2) for the
squatter to apply to register his own title, which would presumably be his
independent possessory title acquired by the adverse possession.
For the reasons that I have given I think that the appeal ought to be
dismissed.
My Lords, my noble and learned friend, Lord Guest, who is not able to
be here today, has asked me to say that he has read my Opinion and
concurs in it.
Lord Denning
my lords,
At the back of a leasehold house in Hampstead there is a shed. In the
year 1920 the next door neighbour, Mr. Millwood, saw it was unused and
out of repair. He went in and repaired it and has treated it as his own ever
7
since. Mr. Millwood has actually sublet it as part of his own house. Now
a property company has bought the freehold of the property on which the
shed stands and wants to recover possession of the shed. Can it do so, or is
it barred by the statutes of limitation?
There are three important persons to consider:
(1) The freeholder who in 1893 let the premises on which the shed
stands on a lease for 99 years at a ground rent with a repairing covenant
and a proviso for re-entry. The 99 years will not expire till 1992.
-
-
-
The leaseholder who has token no steps for more than 12 years
to recover possession of the shed which stands on part of his leasehold
premises. His right of action first accrued in 1920. So the 12 years
for him to sue expired in 1932. -
The squatter who has been in possession of the shed since 1920,
by himself or his subtenants.
-
-
And there is one important event to consider:
The surrender in 1959 by the leaseholder to the freeholder of ‘the rest of
the term of 99 years. Whereupon the freeholder claims that he is entitled
to possession of the shed. But the squatter says he is entitled to stay in it
until 1992.
It is quite clear from the statutes of limitation that in the year 1932 the
” title ” of the leaseholder to the land was ” extinguished “. What does this
mean? There are four suggestions to consider.
The first suggestion is that the title of the leaseholder to the shed is
extinguished completely, not only against the squatter, but also against the
freeholder. So that the leasehold interest disappears altogether, and the
freeholder becomes entitled to the land. I reject this suggestion completely.
It would mean in this case that the freeholder would have become entitled
to possession of the shed in the year 1932 and time would have begun to run
against him from 1932. So that 12 years later the title of the freeholder
to the shed would have been extinguished, that is, in 1944. That cannot
be right. And it was not seriously suggested. In 99 cases out of 100,
the freeholder has no knowledge that the squatter is on the premises at
all. It would be utterly wrong if the title of the freeholder could be eroded
away during the lease without his knowledge. The correct view is that the
freehold is an estate in reversion within section 6 (1) of the 1939 Act and time
does not run against the freeholder until the determination of the lease, see
Doe d. Davy v. Oxenham (1840) 7 M. & W. 131.
The second suggestion is that the title of ‘the leaseholder to the shed is
extinguished so far as the leaseholder is concerned—so that he is no longer
entitled to the shed—but that the leasehold interest itself persists and is
vested in the squatter. In other words, the squatter acquired a title which is
” commensurate ” with the leasehold interest which has been extinguished.
This suggestion was made in 1867 in the first edition of Darby and Bosanquet’s
book at p. 390 and it was accepted in 1888 as correct by the Court in
Ireland in Rankin v. McMurtry (1889) 24 L.R. Irish (Q.B.) 290. But it has
since been disapproved. If it were correct, it would mean that the squatter
would be in the position of a statutory assignee of the shed, and he would
by reason of privity of estate, be liable on the covenants and subject to the
conditions of the lease. I reject this suggestion also: for the simple reason
that the operation of the statutes of limitation is merely negative. It destroys
the leaseholder’s title to the land but does not vest it in the squatter. The
squatter is not liable on the repairing covenants, see Tichborne v. Weir
(1892) 67 L.T. 735. Nor, when the leasehold is a tenancy from year to year,
does he step into the shoes of the tenant so as to be himself entitled to six
months’ notice to quit, see Taylor v. Twinberrow [1930] 2 K.B. 16.
The third suggestion is that the title of the leaseholder is extinguished
but that his estate in the land is not. This is too fine a distinction for me.
And so it was for Parliament. For Parliament itself uses the two words as
if they meant the same. See section 16 of the Limitation Act, 1939, and
section 75 of the Land Registration Act, 1925.
8
The fourth suggestion is that the title of the leaseholder to the shed is
extinguished as against the squatter, but remains good as against the free-
holder. This seems to me the only acceptable suggestion. If it is adopted,
it means that time does not run against the freeholder until the lease is
determined—which is only just. It also means that until that time the
freeholder has his remedy against the leaseholder in the covenants, as he
should have; and can also re-enter for forfeiture, as he should be able to do,
see Humphry v. Damion (1612) Cro. Jac. 300, and can give notice to deter-
mine on a ” break ” clause or notice to quit, as the case may be. Further,
it means that if the leaseholder should be able to induce the squatter to leave
the shed—or if the squatter quits and the leaseholder resumes possession
the leaseholder is at once in the same position as he was originally, being
entitled to the benefits and subject to the burdens of the lease in regard to
the shed. All this seems to me eminently reasonable, but it can only be
achieved if, despite the presence of the squatter, the title of the leaseholder
remains good as against the freeholder.
On this footing it is quite apparent that at the date of the surrender, the
leaseholder had something to surrender. He still had his title to the shed
as against the freeholder and was in a position to surrender it to him. The
maxim nemo dat quod non habet has no application to the case at all.
But there still remains the question: What was the effect of the surrender?
There are here two alternatives open :
-
-
-
On the one hand, it may be said that the surrender operated to
determine the term, just as a forfeiture does. If this is correct, it would
mean that the freeholder would be entitled to possession at once as soon
as the leaseholder surrendered the house. He could evict the squatter
by virtue of his freehold estate against which the squatter could say
nothing. And time would begin to run against the freeholder as soon
as the surrender took place. This view is based on Ecclesiastical Com-
missioners of England and Wales v. Rowe (1880) 5 App. Cas. 736 and
section 6 (1) of the Limitation Act, 1939. -
On the other hand, it may be said that the surrender operated as
an assignment by the leaseholder to the freeholder of the rest of the
99 years. If this is correct, it would mean that the freeholder could not
evict the squatter because the freeholder would be ” claiming through ”
the leaseholder and would be barred for the rest of the 99 years, just
as the leaseholder would be, see section 4 (3) of the Limitation Act.
Time would not begin to run against the freeholder until the 99 years
expired. This view is based on Walter v. Yalden [1902] 2 K.B. 304.
-
-
My Lords, I have come to the clear conclusion that a surrender operates
as a determination of the term. It is not an assignment of it. I am aware
that no less an authority than Lindley, L.J. once said that ” the surrender of
” the term only operated as an assignment of the surrenderor’s interest in it”,
see David v. Sabin [1893] 1 Ch. at p. 533. But if that be true, it is not by
any rule of the common law, only by force of statute: and then only in the
case of underleases, not in the case of trespasser or squatter.
At common law if a leaseholder made an underlease and afterwards
surrendered his term to the freeholder, then the freeholder could not evict
the underlessee during the term of the underlease, see Pleasant (Lessee of
Hayton) v. Benson (1811) 14 East 234. But this was not because
there was any assignment from surrenderer to surrenderee. It is clear that,
upon the surrender, the head term was determined altogether. It was extin-
guished completely, so much so that the freeholder could not sue the under-
lessee on the covenants or enforce the proviso for re-entry, see Webb v. Russell
(1789) 3 T.R. 393. The underlessee could enjoy the property without pay-
ment of rent and without performance of the covenants and conditions until
the end of the term of the underlease, see Ecclesiastical Commissioners for
England v. Treemer [1893] 1 Ch, at p. 174. This was remedied by the statutes
of 1740 and 1845 which have been re-enacted in sections 139 and 150 of
the Law of Property Act, 1925. Under those statutes, on a surrender of
the head lease, an underlessee becomes a direct tenant of the freeholder on
9
the terms of his underlease. So that the surrender does operate as if it were
an assignment of the surrenderor’s interest. But those statutes have no appli-
cation to trespassers or squatters.
The question may be asked: Why did the common law on a surrender
protect the underlessee from eviction? The answer is to be found in Coke
on Littleton II p. 338, where it is said that “having regard to the parties
” to the surrender, the estate is absolutely drowned . . . But having regard to
” strangers, who were not parties or privies thereunto, lest by a voluntary
” surrender they may receive prejudice touching any right or interest they
” had before the surrender, the estate surrendered hath in consideration of
” law a continuance”. This passage applies in favour of an underlessee
so as to protect him from eviction during the term of his underlease: but
it does not apply in favour of a trespasser. The reason for the difference is
because the underlessee comes in under a grant from the lessee ; and the lessee
cannot, toy a surrender, derogate from his own grant, see Davenport’s case
(1608) 8 Co. Rep. 144b, Mellor v. Watkins (1874) L.R. 9 Q.B. at p. 345
by Blackburn, J. But a trespasser comes in by wrong and not by grant of
the lessee. If the lessee surrenders his term, the freeholder is at once entitled
to evict the trespasser for the simple reason that, on the surrender, the lease
is determined, and there is no bar whatever to the freeholder recovering
possession, see Ecclesiastical Commissioners of England and Wales v. Rowe
(1880) 5 App. Cas. 736. And I see no reason why the same reasoning should
not apply even though, at the date of the surrender, the trespasser is a
squatter who has been there more than 12 years or, as against the freeholder,
he is still a trespasser. The freeholder’s right to possession does not arise
until the lease is determined by the surrender. It then comes into being
and time begins to run against him under section 6 (1) of the Limitation
Act, 1939.
The only reason, it seems to me, which can be urged against this conclusion
is that it means that a squatter’s title can be destroyed by the leaseholder and
freeholder putting their heads together. It is said that they can by a surrender
—or by a surrender and regrant—destroy the squatter’s title completely
and get rid of him. So be it. There is no way of preventing it. But I would
point out that, if we were to deny the two of them this right, they could
achieve the same result in another way. They could easily do it by the
leaseholder submitting to a forfeiture. If the leaseholder chooses not to
pay the rent, the freeholder can determine the lease under the proviso for
re-entry. The squatter cannot stop him. He cannot pay the rent without
the authority of the leaseholder. He cannot apply for relief against forfeiture.
The squatter’s title can thus be defeated by a forfeiture—or by a forfeiture
and regrant—just as it can by a surrender—or by a surrender and regrant.
So there is nothing in the point.
My Lords, so far as these questions under the Limitation Acts are con-
cerned, I must say that I see no difference between a surrender or merger or
a forfeiture. On each of those events the lease is determined and the free-
holder is entitled to evict the squatter, even though the squatter has been on
the land during the lease for more than twelve years: and on the determina-
tion of the lease, time then begins to run against the freeholder. It follows
that, in my opinion, Walter v. Yalden was wrongly decided and Taylor v.
Twinberrow was rightly decided.
One word about section 75 (1) of the Land Registration Act, 1925. That
point was not raised in the County Court and its availability depends on
facts which were not proved. I do not think it is open to the Appellant here.
But in any case I doubt if .that puts registered land on a very different footing
from unregistered land. It is machinery so as to apply the Limitation Acts to
registered land, but it does not alter the substantive position very materially.
The registered leaseholder clearly remains liable on the covenants and sub-
ject to the conditions of the lease, including the proviso for re-entry: and I
do not see why, on a surrender, the freeholder should not recover possession
from a squatter, just as he can on a forfeiture. The freeholder has no notice
of the trust in favour of the squatter and his interests are not to be prejudiced
by the fact that the leasehold is registered. I say no more because the
point is not available here. Suffice it to say that for the reasons I have given,
I would dismiss this appeal.
10
Lord Morris of Borth-y-Gest
my lords,
The question which arises in this appeal is whether the plaintiffs were
entitled to possession of that .part of the shed which is on the land of No. 315.
The plaintiffs acquired the freehold of No. 315 in February, 1959. They
acquired it subject to the subsisting lease. That was a lease dated the 26th
April, 1894. It was for a term of 99 years which would expire in 1992. From
1920 onwards there had been continuous possession of the shed which was
adverse to the rights of the lessee of No. 315. After 1932 the lessee was not
entitled to eject Millwood from the shed. Nor thereafter could he eject either
Pliska or the defendant (Fairweather). The plaintiffs do not suggest that
the previous freeholder could in 1932 have ejected Millwood. Nor do they
suggest that the acquisition by them of the freehold in February, 1959, gave
them at that time the right to possession of the part of the shed which is on
No 315. Why, then, were they entitled to such possession in August, 1960,
at which date they took proceedings in the County Court? The only basis
for such entitlement which is asserted is that the plaintiffs after acquiring the
freehold of No. 315 took in December, 1959, what has been called a surrender
of the lease of No. 315. The result, it is asserted, is that though the surrenderor
could not have ejected the defendant the surrenderors (the plaintiffs) could
do so. This means that though the lessees could not have ejected the
defendant and though the plaintiffs could not have ejected the defendant,
yet the lessees and the plaintiffs could make some agreement between them-
selves or come to some arrangement as a result of which there arose in the
plaintiffs a right to eject the defendant. This would seem surprising.
The plaintiffs as the successors of the previous freeholder and lesser
became entitled to have possession of No. 315 on the expiry of the term of
the lease. They also had a right of re-entry if occasion for a forfeiture
arose. Under the terms of the lease the lessee had covenanted that at
the expiration or sooner determination of the term he would peaceably
surrender and yield up the demised premises. At the time when the
plaintiffs claimed possession in the County Court the term of the lease had
not expired and there had been no forfeiture. The plaintiffs were only
entitled to possession if the lessees had peaceably surrendered and yielded
up the demised premises. They relied upon the Deed of Surrender dated
the 14th December, 1959, which was intended to be supplemental to the
lease of the 26th April, 1894. The Deed recited that by virtue of divers
mesne assignments acts in law and events the lease was then vested for the
residue of the term in the persons described in the Deed as the lessees: it
further recited that the reversion immediately expectant on the termination
of the lease was vested in the plaintiffs who were described as the
” reversioner ” The Deed then provided: ” In consideration of the sum
” of one thousand eight hundred and seventy-five pounds paid by the rever-
” sioner to the lessees (the receipt whereof the lessees hereby acknowledge)
” and of the release hereinafter contained the lessees as trustees hereby
” convey surrender and yield up to the reversioner All and Singular the
” premises demised by the Lease subject to and with the benefit of the
” tenancies mentioned in the Schedule hereto To the Intent that the term
” of years granted by the Lease may merge and be extinguished in the
“reversion expectant thereof.” There followed a release of the lessees
from all liability claims and demands in respect of the rent reserved by or
any breach of the covenants contained in or otherwise arising under the lease.
There was also a schedule of the tenancies referred to.
If the lessees were not entitled to possession of one part of No. 315 (that
is, the part on which the shed stood) how could they yield up possession
of that part to the plaintiffs? If the plaintiffs were not entitled to eject the
defendant before the deed and if equally the lessees were not entitled to eject
the defendant before the deed, how does the deed give or how could the
lessees give to the plaintiffs a right to eject the defendant?
When a lessor grants a lease to a lessee for a term of years the lessee is
given a right to possession during the term. The lessee will have a right to
possession for the period of the term which will be effective as against his
11
lessor and as against everyone else. If thereafter the lessee wishes during
the term to place the lessor in the position of having a right to possession as
against everyone he does not do this merely by abandoning any such right
to possession as against the lessor as might be thought to exist: he must also
be in a position to cede to the lessor rights to possession as against everyone
else—which was one part of what he had obtained from the lessor. If,
however, he has lost all his rights to possession how can he reinvest his lessor
with any of them? Unless he is in a position to transfer those rights to his
lessor the lessor must wait until he acquires such rights in some other way.
If it can be said in a case where a squatter has during a lease remained in
possession for the statutory period that the lessee has merely lost his right to
possession vis-a-vis the squatter, how can his give his lessor a right to posses-
sion against such squatter?
In the present case the Deed of Surrender of the 14th December, 1959,
involved that, subject to the tenancies mentioned in the schedule, the right
to possession of the demised premises was to be given by the lessees to the
plaintiffs. As the lessees had not got possession or the right to possession
of that part of No. 315 on which the shed stood and as they did not obtain
such possession or the right to it they were not able to give such possession
to the plaintiffs. It follows, in my view, that the plaintiffs could not show
that they had any right to eject the defendant.
My Lords, if authority is needed to support this view it is to be found in
the decision in Walter v. Yalden [1902] 2 K.B. 304—a decision which has
stood for nearly 60 years. Channel, J. expressed the matter clearly when
he said (see p. 310) that a lessee “cannot convey to his landlord, any more
” than to anyone else, anything that he has not got himself “. In that case
there was a letting of certain premises on the 7th February, 1837. It was for
a term of 99 years if three named persons ” shall so long live “. Before
the year 1885 the lessees had lost their title. This was because certain persons
had been in possession of the land. By an indenture in 1885 made between
one Pothecary as sole surviving executor of the survivor of the lessees and
Walter, who was entitled to the fee simple, it was witnessed that Pothecary,
so far as he could or lawfully might, surrendered to Walter all the premises
demised by the lease to the intent that the residue of the term of years and
all the estate and interest of Pothecary as personal representative might be
merged and extinguished in the reversion and inheritance of the premises.
Walter died in 1894 and the plaintiff was his successor in title. In 1895 the
last of the three lives, for which the lease of 1837 had been granted, came to
an end. In 1902 the plaintiff claimed possession from the defendant who had
taken a conveyance of the premises from one Watts in 1867 and had since
then remained in possession. The premises were described in the conveyance
as having been for the previous thirteen years in the occupation of Watts and
before then for eleven years in the occupation of one Fulker from whom
Watts obtained possession. On behalf of the defendant it was contended
that when Walter accepted a surrender in 1885 he acquired an immediate
right of re-entry and that as the claim for possession had not been brought
within 12 years from that date the claim was barred. On behalf of the
plaintiff it was contended that time only began to run in 1895 and accordingly
that the plaintiff’s claim was not barred. The plaintiff succeeded. Lord
Alverstone, C.J. said .that the surrender could not operate to defeat the
defendant. Channel, J. said (see p. 310) that ” inasmuch as in 1885 Pothecary
” had lost all title as against the persons in possession of this particular
” land, he could not have assigned a right of entry to anybody else, and no
” more could he assign it to his lessor. The result is that a right of entry
” did not arise in the lessor at the date of the surrender, but only when the
” last life dropped on January 5,1895.”
The plaintiffs in the present case had a superior or paramount title which
would enable them to resume possession of No. 315 on the expiration of the
term of the lease. The adverse possession of Millwood and others after
1920 of a part of No. 315 could not interfere with the plantiffs’ right to
possession at such time. Nor could the adverse possession interfere with
the contractual provisions of the lease of No. 315 or debar the plaintiffs
12
from claiming a forfeiture or from exercising any right of re-entry. The
plaintiffs do not assert that their claim to possession in the action rested
upon any provision in the lease of No. 315: there was no forfeiture and no
exercise of any right of re-entry. It seems to me that the so-called surrender
gave to the plantiffs no right of action for possession of the part of No. 315
because the lessees could not yield to the plaintiffs something (that is, a right
to possession) which they had not got.
My Lords, this, as it seems to me, is the conclusion to which the reasoning
of the matter points: it seems to me further that the contrary conclusion
is undesirable. I see no reason why Coke’s statement (see Coke on Littleton
p. 338b) that ” having regard to the parties to the surrender the estate is
” absolutely drowned . . . But having regard to strangers, who were not
” parties or privies thereunto, lest by a voluntary surrender they may receive
” prejudice touching any right or interest they had before the surrender,
” the estate surrendered hath in consideration of law a continuance ” should
not embrace the situation where an adverse possessor has remained in
possession for the period specified by statute. If a lessee who has lawfully
assigned or sublet cannot by a surrender affect the rights of assignees or
sublessees, I do not see why a surrender should endow a lessor with a right
against an adverse possessor which was not possessed by the lessee. Further-
more, it is to be observed that the protection which is given by the Limitation
Act, 1939, to an adverse possessor is recognised in the Land Registration
Act, 1925. He is enabled in the case of a registered estate to be registered
as proprietor thereof. Section 75 (2) of the Land Registration Act, 1925,
provides that—” Any person claiming to have acquired a title under the
” Limitation Acts to a registered estate in the land may apply to be registered
” as proprietor thereof “.
It is provided by section 6 (1) of the Limitation Act, 1939, as follows: —
“6.—(1) Subject as hereafter in this section provided, the right of
” action to recover any land shall, in a case where the estate or interest
” claimed was an estate or interest in reversion or remainder or any other
” future estate or interest and no person has taken possession of the
” land by virtue of the estate or interest claimed, be deemed to have
” accrued on the date on which ‘the estate or interest fell into possession
” by the determination of the preceding estate or interest.”
The wording of section 6 (2) shows that the preceding estate or interest may
be a term of years absolute. A lessee’s estate or interest will consist of his
right to possession. A lessor’s right to possession may be regarded as a
future interest. That future interest may fall into possession by the ” deter-
” mination ” of the preceding estate or interest. It seems to me that there
could be a ” determination ” other than by effluxion of time and that the
word could cover a surrender. In the present case, however, the purported
” surrender”, whatever other effect it may have had, could not in my view,
for the reasons which I have set out, yield to the plaintiffs a right to immediate
possession of that small part of No. 315 on which the shed stood. The
circumstances that only a very small part of No. 315 is involved makes no
difference to the principles which are involved: if the adverse possession
after 1920 had been of the whole area of No. 315 the decision of the Court
of Appeal involves that after a purported ” surrender” by disentitled lessees
the plaintiffs would have been entitled to immediate possession.
After a lessor has granted a lease to a lessee for a term of years, the right
to possession for the duration of the term is the substance of the lessee’s
title, and if anything is gained in this case by speaking separately of his
estate or interest—of his estate or interest as well. If a third person trespasses
on the land the lessee has a right of action to eject him, but at the expiration
of the period prescribed by Parliament for the bringing of an action to
recover possession the title of the lessee ” to the land ” is extinguished (see
Limitation Act, 1939, section 16, which replaced section 34 of the Real
Property Limitation Act, 1833.) There is then no one who can eject the
adverse possessor, and he has the best right to bring an action against
anyone who in turn intrudes upon his possession. There is no one with
a better title to possession until the time arrives when, at the end of the
13
period of the lease, the lessor is entitled to possession. That does not mean,
however, that the term is transferred to the adverse possessor so as to
make him liable on the covenants in the leases (see Tichborne v. Weir,
67 L.T. 735). Nor does it mean that the covenants and obligations which
bind the lessee are affected. The lessee’s title or estate or interest (whichever
word is used) consists of his right to possession. If a squatter remains in
possession for the statutory period, then the title or estate or interest of the
lessee is extinguished. But that does not mean that anything has happened
which relieves the lessee from his contractual obligations towards his lessor
or which in any way affects or adds to the pre-existing right of the lessor to
resume possession when the term of the lease expires. If the extinguishment
of the lessee’s title or estate or interest could be said to be a ” determination ”
within section 6 (1) of the Act of 1939, it would not be a determination which
would cause the future estate or interest of the lessor to fall into possession
within the meaning of that subsection. In the absence of any arrangement
between lessor and lessee the contractual obligations of the latter would
not only continue but would continue for the duration of their contractual
period. The adverse possessor is therefore in peril if circumstances give
occasion for the exercise by the lessor of a right of forfeiture, and it will be
for him to ensure that no such occasion arises. In this state of affairs it
seems to me that whatever a purported surrender by a lessee whose title
to the land has been extinguished may achieve, it cannot pass to the lessor
any title to the land: so far as title to the land is concerned the lessor will
have nothing added to his pre-existing right which was a right to resume
possession of the land at the end of the term granted by the lease. I cannot
find support in the case of Ecclesiastical Commissioners of England & Wales
v. Rowe (1880) 5 App. Cas. 736 for any contrary view. In that case there
was a surrender by a lessee to the Dean in 1828 and contemporaneously
the grant of a new lease. At the time there was a trespasser in occupation.
It was held that on the surrender a right of action to recover the premises
accrued to the Dean. In that case, however, at the time of the surrender
the period of adverse possession had not been such as to extinguish the
title of the lessee. This distinguishing feature of that case was put before
the Court by Mr. Buckmaster, Q.C., in his argument in Walter v. Yalden.
The majority in the Court of Appeal in the present case were influenced
by what was referred to as the mechanical difficulty which it was said may
arise in the case of periodic tenancies. If there is a tenancy from year to
year and if a squatter retains adverse possession against the tenant for over
the statutory period and if thereafter the tenant purchases the landlord’s
reversion (or equally if the tenant purports to surrender to his landlord)
can the squatter be ejected? In Taylor v. Twinberrow [1930] 2 K.B. 16 the
facts gave rise to one of these questions. On the 18th May, 1900, the father
of the plaintiff became tenant from year to year of a cottage. The father,
Mr. Taylor, senior, allowed Mr. Twinberrow to occupy rent free as a tenant
at will. By the combined effect of sections 7 and 34 of the Real Property
Limitation Act, 1833, and section 1 of the Real Property Limitation Act,
1874, the right and title of Mr. Taylor, senior, to the cottage became extin-
guished in or about the year 1913. On the 5th February, 1919, Mr. Taylor,
senior, bought the freehold of the cottage. In 1925 Mr. Twinberrow died.
The defendant was his widow. She continued to occupy. In 1928 Mr.
Taylor, senior, died, having by his will devised ‘the cottage to the plaintiff,
who in 1929 brought an action in the County Court against Mrs. Twinberrow
claiming possession of the cottage. Questions arose as to whether the claim
was barred and as to whether it could be brought in the absence of a
determination of the yearly tenancy by a notice to quit. The claim to
possession succeeded and an appeal to the Divisional Court failed. My
Lords, it seems to me that the result in that case was correct, though I would
reach that result by a somewhat different process of reasoning from that
contained in the judgments in the Divisional Court. I can see no difference
in principle between a case where there is possession which is adverse to a
tenant who has a lease for a fixed term and a case where .there is possession
which is adverse to a tenant from year to year. II a landlord lets from
year to year and if there is adverse possession for a statutory period against
14
the tenant, then the title of the tenant will be extinguished. His tenancy will,
however, not be transferred to the adverse possessor. The position will be
that the tenant will have lost the right to eject the adverse possessor. The
landlord can, however, give an appropriate notice to quit to his tenant, and
upon its expiration the landlord will be entitled to possession. What, then,
is the position if at a time after such tenant has lost his right to eject an
adverse possessor the tenant acquires the freehold from his landlord or
alternatively if the tenant purports to effect a surrender to his landlord?
The result should, I apprehend, be the same in either of these two eventualities.
My Lords, though this point does not directly arise in this appeal and does
not, therefore, call for a final expression of opinion, it seems to me that
the approach should be the same as in the situation where a tenant has a
tenancy for a fixed term. If a tenant from year to year who has lost his
right to eject a squatter proposes to acquire the freehold reversion he could
acquire it after his landlord has given him an appropriate notice to quit or
after he has given an appropriate notice to quit: having acquired the freehold
the tenant could then eject the squatter after such notice has expired. If no
notice to quit is given and the tenant acquires the freehold reversion he will
then possess the sum of the rights previously possessed by him together
with those previously possessed by the freehold landlord. If the landlord
previously had no right to eject the squatter and if the tenant also had no
such right, I cannot see that any such right could arise or be created as a
result of the joinder of the rights possessed by the landlord and the tenant.
It may well be that as such joinder would obviate any necessity for the
giving of a notice to quit the result would be that possession could be
obtained as against the squatter at such date as would have been the end
of the period of a notice to quit which apart from the merger could validly
have been given. In Taylor v. Twinberrow the position would therefore
be that Mr. Taylor, senior, after acquiring the freehold on the 5th February,
1919, became entitled to possession after the 18th May, 1920: before the
rights which he acquired from the freeholder could be extinguished by reason
of Mrs. Twinberrow’s possession time would have to run from such latter
date. As the action for possession was brought on the 24th October, 1929,
time had not run.
If there is a lease for a term of years with an option to determine before
such term expires and if a squatter is in adverse possession as against the
tenant for the statutory period, the contractual obligations as between the
landlord and tenant (including the break clause) would remain unaffected.
The question was raised in argument as to what would be the position if
before any exercise of the option there was a joinder of the rights of the
landlord and tenant either upon an acquisition by the tenant of the freehold
or upon a purported surrender by the tenant. This matter does not call for
present decision and might require consideration of particular provisions,
but it may well be that the squatter would not be protected from ejectment
after the date when but for the events that had taken place, the term, by the
exercise of an option, could have been terminated.
In view of the opinion which I have expressed I do not find it necessary
to deal with the submission which was made in reference to section 75 (1)
of the Land Registration Act, 1925.
For the reasons that I have given I would allow the appeal.
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