St Marylebone Property Co Ltd v Fairweather (Fairweather v St Marylebone Property Co Ltd)

Adverse possession against a lessee extinguishes the lessee’s title only against the adverse possessor. It neither transfers the leasehold estate to the adverse possessor nor destroys the legal relationship between lessor and lessee.

The freeholder’s reversionary right to possession does not accrue while the lease continues. A surrender, forfeiture or other determination of the lease brings that right into possession. The freeholder may then recover the land unless adverse possession has independently barred the freeholder’s title. A lessee’s surrender is effective for this purpose although the lessee could no longer eject the adverse possessor.

The appellant occupied part of a shed situated on land held under a 99-year lease. His predecessors had possessed it adversely to the lessee from 1920, so that the lessee’s right to recover it had become barred in 1932. The respondents acquired the freehold in 1959 and then accepted a surrender of the lease. They commenced possession proceedings in 1960.

The County Court gave judgment for the respondents, and the Court of Appeal affirmed that result by a majority. The central question was whether surrender of the lease determined the intervening term and gave the freeholders an immediate right to possession against an adverse possessor whose possession had already extinguished the lessee’s title.

1. Appeal dismissed by a majority. Lord Radcliffe delivered the leading speech. Lord Guest concurred in it, and Lord Denning reached the same result by substantially corresponding reasoning. Lord Morris of Borth-y-Gest dissented.

2. Per Lord Radcliffe, adverse possession does not make the squatter the successor or statutory assignee of the dispossessed owner. The squatter’s title arises from possession and the operation of limitation, not through the owner. Where possession is adverse to a lessee, it bars the lessee’s claim but does not transfer the term, its covenants or its obligations to the squatter.

3. Per Lord Radcliffe and Lord Denning, the extinguishment provisions of the Real Property Limitation Act 1833 and the Limitation Act 1939 extinguish the lessee’s title only as against the adverse possessor. They do not destroy the leasehold estate as between lessor and lessee. The lessor may continue to enforce the lease and may determine it by an available contractual or proprietary means.

4. For section 6(1) of the Limitation Act 1939, a fee simple subject to a term of years is an interest in reversion or remainder. The freeholder’s right of action against the squatter accrues when the preceding leasehold interest determines and the freeholder’s interest falls into possession. A surrender determines the lease; it is not an assignment of the lessee’s barred right to possession. The surrender therefore removed the term which had prevented the respondents from claiming possession. Because time had not independently run against them, they could eject the appellant.

5. Walter v Yalden [1902] 2 KB 304 was overruled. Its reasoning incorrectly treated the surrendering lessee as incapable of removing the intervening term. Taylor v Twinberrow [1930] 2 KB 16 was preferred.

6. The appellant could not rely on section 75(1) of the Land Registration Act 1925. The evidence did not show that the lessee was a registered proprietor when the relevant extinguishment occurred. Lord Radcliffe held that the subsection operates only upon events occurring after the Act came into force, while reserving wider questions about the statutory trust.

7. Lord Morris would have allowed the appeal. He considered that the lessee could not surrender a right to possession already lost against the adverse possessor and would have followed Walter v Yalden.

1. House of Lords: The appellant’s appeal was dismissed by a majority of three to one. The respondents’ immediate right to possession following surrender of the lease was upheld.
2. Court of Appeal: By a majority, affirmed the order for possession. The court was unanimous that the evidential uncertainty concerning section 75(1) of the Land Registration Act 1925 was fatal to that argument.
3. County Court: Gave judgment for the respondents in their claim for possession of the disputed part of the shed.