Totton and Eling Town Council v Caunter & Anor

Negotiations for the sale or grant of an interest in land may give rise to an implied licence permitting an existing occupier to remain in possession. The occupier need not expressly request, accept or acknowledge that permission. The licence ordinarily continues while the parties are proceeding towards completion. It ends only when the intention not to proceed is mutually communicated, or otherwise objectively apparent to both parties. A transfer of the paper title may revoke such a licence by operation of law. Where the resulting period of adverse possession falls after the commencement of the Land Registration Act 2002, the statutory regime under that Act applies.

The Town Council appealed under section 111 of the Land Registration Act 2002 against a deputy adjudicator’s decision dated 8 November 2007. The adjudicator had upheld Mr and Mrs Caunter’s claim to adverse possession of land adjoining their garden.

The Caunters had occupied and maintained the land since 1985. In 1990 and 1991 the former owner corresponded with them about selling the land for a modest price, subject to contract. No transfer was completed, and neither party took further formal steps until after the appellant acquired the paper title in 1994.

The central issue was whether the negotiations created an implied licence, and, if so, when it ended. That issue determined whether the claim was governed by the former twelve-year limitation regime or by the adverse-possession procedure under the 2002 Act.

1. Appeal allowed. The adjudicator’s decision was reversed. The Caunters had not acquired title in these proceedings, and the register was to be altered to restore the appellant’s title.
2. The correspondence and negotiations objectively showed that the Council tacitly permitted the Caunters to remain in occupation while the proposed sale was being pursued. Applying the two-limb approach in Lambeth v Rumbelow, there was both an overt act or demonstrable circumstance from which permission could be inferred and a basis on which a reasonable person would have understood that occupation was permitted. The absence of an express acceptance by the Caunters was immaterial.
3. The adjudicator had wrongly distinguished BP Properties v Buckler and had failed to give proper effect to the approach in Bath and North Somerset District Council v Nicholson and Dawson v King’s Lynn Borough Council. Negotiations need not be wholly recorded in writing.
4. The implied licence did not end automatically on 30 August 1991, when the last letter was sent. The Council was required to allow a reasonable period for response and completion of the formalities. Under Sandhu v Farooqui, the licence continued until there was mutual communication, or equivalent objective conduct known to both parties, showing that the transaction would not proceed.
5. Accordingly, the licence still existed when the land was transferred to the appellant on 2 September 1994. It was then likely revoked by operation of law, following Terrunanse v Terruananse. Any twelve-year period therefore expired after the Land Registration Act 2002 came into force, so any further claim had to proceed under that Act. The court did not determine whether the Caunters satisfied the additional conditions in Schedule 6.

• Deputy adjudicator to HM Land Registry: On 8 November 2007, upheld the Caunters’ adverse-possession claim and treated the former twelve-year regime as applicable.
• High Court (Chancery Division): Allowed the appeal, reversed the adjudicator’s decision and directed alteration of the register to correct the resulting registration.