Smart v London Borough of Lambeth

Permission from the registered owner, whether express or implied, prevents occupation being adverse for limitation purposes. Implied permission must arise from the actual facts: mere compatibility with the owner’s present or future use is insufficient, but an overt act or demonstrable circumstance from which a reasonable person would infer permission may suffice. Permission need not be contractually binding or conveyed in a prescribed form. Where negotiations culminate in a scheme intended to regularise existing occupation, authorised intermediaries may convey the owner’s continuing consent. A successor occupier’s knowledge of the scheme and conduct, including paying rent and participating in its administration, may reinforce that inference. The appeal was dismissed because the claimant lacked 12 years’ adverse possession.

Robert Smart appealed from a judgment of HHJ Dight in the Central London County Court dated 30 August 2012, which rejected his claim that he and his predecessors had acquired Lambeth’s registered title to 11 Lillieshall Road by 12 years’ adverse possession. The property had been occupied by squatters and was later brought within a housing scheme involving Lambeth, Solon Housing Association and a housing co-operative. The central issue was whether occupation remained with Lambeth’s express or implied permission, despite the absence of a signed form contemplated by a management agreement. The court also considered, but did not need to decide, reversion and estoppel arguments.

Lord Justice Floyd delivered the leading judgment, with which Lord Justices Underhill and Longmore agreed.

1. Disposition. The appeal was dismissed. The court held that Mr Smart and his predecessors had not established 12 years’ adverse possession before 4 November 1993.
2. Applicable principles. Under section 15(1) of the Limitation Act 1980, the relevant limitation period was 12 years. Adverse possession requires factual possession and an intention to possess, as stated in J.A. Pye (Oxford) Limited v Graham [2003] 1 AC 419. Possession with the express or implied consent of the paper title owner is not adverse possession.
3. Under paragraph 8(4) of Schedule 1 to the Limitation Act 1980, permission cannot be inferred merely because occupation is consistent with the owner’s present or future enjoyment. It may, however, be inferred from an overt act or demonstrable circumstance which would lead a reasonable person to appreciate that occupation was permitted. The consent need not be contractually binding, as illustrated by BP Properties v Buckler (1988) 55 P. & C.R. 337.
4. Negotiations for the grant of an interest in land may naturally imply permission to remain pending their outcome: Colin Dawson Windows Ltd v King’s Lynn, West Norfolk Borough Council [2005] EWCA Civ 9, approving Bath & North Somerset District Council v Nicholson [2002] 10 E.G.C.S 156.
5. The housing scheme gave Lambeth’s overall consent to continued occupation by existing occupiers within the relevant class. The first Solon licence authorised permission to be conveyed through Solon and the co-operative, but did not require Lambeth’s consent to be expressed only through the form contemplated by the 1981 agreement. The absence of that form did not terminate permission, particularly since no notice had been given that the temporary permission had ended. Mr Smart’s knowledge of the scheme, payment of rent, participation in the co-operative and involvement in possession proceedings supported the inference that his occupation was permissive.
6. The court declined to decide whether adverse possession interrupted by a period of consensual occupation could defeat the owner’s title. It also found it unnecessary to determine the reversion and estoppel points.

• Court of Appeal (Civil Division) — Appeal dismissed in [2013] EWCA Civ 1375.
• Central London County Court — HHJ Dight rejected Mr Smart’s adverse possession claim by judgment dated 30 August 2012.