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Acknowledgement of title

A person claiming adverse possession who acknowledges the paper owner's title will set time running again. This can mean that he has not run up 12 years adverse possession prior to the coming into force of the Land Registration Act 2002 (13 October 2003); or if the application is made under the provisions of that Act that he has not acquired ten years adverse possession prior to the date of the application.

This page explains the position in relation to acknowledgement. It considers ss 29 and 30 of the Limitation Act 1980 and a number of recent cases including the House of Lords decision in Ofulue v Bossert.


Limitation Act, sections 29 and 30

Section 29(2) of the Limitation Act 1980 provides that the accrual of time in relation to adverse possession starts afresh in the event of an acknowledgment of the paper owner's title "by the person in possession of the land". Section 30(1) requires such an acknowledgment to be "in writing and signed by the person making it".
    "29(1) Subsections (2) and (3) below apply where any right of action 'to recover land'has accrued.

    (2) If the person in possession of the land 'in question acknowledges the title of the person to whom the right has accrued'
      (a) the right shall be treated as having accrued on and not before the date of acknowledgment.'

    30 (1) To be effective for the purposes of section 29 of this Act, an acknowledgement must be in writing and signed by the person making it.

    (2) For the purposes of section 29, any acknowledgement'
      (a) may be made by the agent of the person to whom it is required to be made under that section; and
      (b) shall be made to the person, or to an agent of the person, whose title or claim is being acknowledged '"


Acknowledgement? The basic rule

"For a document to constitute an acknowledgment of title all that is required is that, as between himself and the owner of the paper title, the person in possession acknowledges that the paper title owner has better title to the land. Whether or not such a particular writing amounts to an acknowledgment depends on the true construction of the document in all the surrounding circumstances: Edginton v Clark [1964] 1 QB 367 (CA)." (Allen v Matthews [2007] EWCA Civ 216, see para 75 of the judgment).


Particular cases

"Subject to contract"

In Tower Hamlets London Borough Council v Barrett [2005] EWCA CIV 923 an offer to purchase or the acceptance of an offer to sell, even if made "subject to contract", was held to be a sufficient acknowledgment of title. However, the person who made the acknowledgement was the landlord and not the tenants who were the persons in possession of the land for the purposes of the section.

Document drawn up fraudulently

Rehman v Benfield
[2006] EWCA Civ 1392

Introduction

This is an odd case in that the document relied upon by the paper owner as seeking to establish acknowledgement (a counterpart lease) was drawn up fraudulently at the behest of the squatters without the paper owner's knowledge.

The facts

The squatters were a married couple (Mr and Mrs Benfield). In the possession claim brought by the paper owner Mrs Benfield was claiming title by adverse possession. The document relied upon by the paper owner as providing the acknowledgement of title was a counterpart lease signed by Mrs Benfield, that was drawn up by the squatters' solicitors (together with the actual lease) at the behest of Mr Benfield. Mr Benfield arranged for a friend to impersonate the paper owner and sign the documents (as landlord) in front of the solicitors (Anna Arthur & Co), who as a result of this fraud, thought they were acting for the paper owner. In fact, the paper owner knew nothing about any of this at the time. The documents were drawn up so that Mrs Benfield would have 'an apparently official document to provide to anyone challenging her or her family's right' to occupy the Property.

The documents were signed in December 1991. If the counterpart (signed by Mrs Benfield) was a sufficient acknowledgement of title so as to restart time running Mrs Benfield did not have 12 years adverse possession by the time that the Land Registration Act 2002 came into force on 13 October 2002. (If the adverse possession ends on or after that date a squatter can only obtain title if the more restrictive provisions of schedule 6 of the 2002 Act apply). However, if the document did not constitute an acknowledgement Mrs Benfield had been in possession for more than 12 years prior to that date and would be entitled to the property.

The first instance decision

The judge at first instance held that the lease was false and of no effect. He found that it was not communicated to the paper owner, that it was not relied on by Mrs Benfield and that it could not have been enforced by her against him. He thus found that it did not constitute an acknowledgement.

The appeal

On appeal by the paper owner the CA disagreed and granted the order for possession. Mummery LJ at paras 26-34 :
    "In my judgment the requirements of section 29 of the 1980 Act are satisfied. The statements clearly acknowledge the title of Mr Rehman to the Property. The right of action had accrued to him against Mrs Benfield in respect of her unauthorised possession of the Property. The acknowledgement was made by Mrs Benfield, who was in possession of the Property owned by Mr Rehman. The acknowledgement was in writing and it was signed by Mrs Benfield.

    The critical question is the communication of the acknowledgment in the counterpart by Mrs Benfield, or her agent, to Mr Rehman, or his agent, as required by section 30(2) of the 1980 Act..

    Mrs Benfield's solicitors, Ponsford Devenish, sent the signed counterpart to Anna Arthur & Co, as the solicitors who purported to act for Mr Rehman. Mrs Benfield does not, and could not, dispute that this must have been done with her authority. The firm of Anna Arthur & Co was not Mr Rehman's agent, although it thought it was.

    That is not the end of the matter, however, as in April 1992 the signed counterpart did in fact come into the possession of another firm of solicitors, Daybells, instructed by Mr Rehman.

    As appears from solicitors' correspondence ... Daybells requested a copy of the counterpart lease from Anna Arthur & Co on 31 March 1992. The request was made so that Daybells could obtain instructions from Mr Rehman, who was still in Pakistan. A copy of the counterpart lease was sent by Anna Arthur & Co to Daybells under cover of a letter dated 8 April 1992. It was actually delivered to and received by that firm as agent for Mr Rehman, to whom they then sent it.

    When Anna Arthur & Co was asked by Daybells for a copy of the counterpart lease, it had no good reason for refusing the request: it had acted in connection with the purported lease of the Property to Mrs Benfield and did so in the belief that Mr Rehman was its client.

    The counterpart lease containing the acknowledgement of title by Mrs Benfield was made to Mr Rehman as required by section 30 (2) of the 1980 Act. The counterpart lease was in the possession of Anna Arthur & Co with the authority of Mrs Benfield. There was no ground on which she could have objected to Anna Arthur & Co then sending a copy of it to Daybells, as agent for Mr Rehman, who was the very person for whom Anna Arthur & Co believed that it had acted in connection with the lease of the Property and the person from whom Mrs Benfield had purported to take the lease.

    In my judgment, the judge misunderstood the argument on acknowledgement when he said that Mr Rehman could not point to any document signed by Mrs Benfield. The counterpart signed by Mrs Benfield on 19 December 1991 was such a document. The fact that the documents were not effective to create a valid and binding lease of the Property did not prevent the statements made in the counterpart signed by Mrs Benfield from being an acknowledgement of Mr Rehman's title for the purposes of the 1980 Act, and so stop time from running before 19 December 1991.

    In these circumstances time did not start to run against Mr Rehman until the date of acknowledgement, which was, on any view, less than 12 years before the operative date of 13 October 2003 when the 2002 Act came into force."
Letter to trustee in bankruptcy

In Allen v Matthews [2007] EWCA Civ 216 the question was whether a letter written by a solicitor for the squatter to the trustee in bankruptcy of the paper owner amounted to an acknowledgement of title? The answer was 'yes'. Lawrence Collins LJ at para 77:
    "In the present case the solicitors wrote to the trustee in bankruptcy, in whom Mr Allen's interest was vested: 'We should be obliged if you would advise us as to what your intentions are with regard to the property. Has a buyer been found for the same, and if so is there any likelihood that our client will receive any monies.' I do not consider that this can mean anything else than an acknowledgment that the trustee has the right to sell and a query as to whether their client will receive any of the proceeds in the bankruptcy. I am satisfied that the judge was right to hold that it was a clear acknowledgment that the trustee had a better title to the Property."

Acknowledgement must be from person in possession

However, the acknowledgment of title must be given by the person in possession. The letter (in Allen v Matthews) was written on behalf of a company which had been dissolved and did not exist. Was it written by a person in possession? The judge held, applying Lambeth London Borough Council v Bigden [2000] EWCA Civ 302, that a letter sent apparently on behalf of a company which had ceased to exist, could fairly and properly be said to be coming from the person standing behind the company, who at the time was the person in possession. However, the CA held that Bigden was distinguishable and that the letter in this case was not written on behalf of the person in possession. Collins LJ at paras 79, 80 and 82:
    "In my judgment for there to be an acknowledgment there must be a statement by or on behalf of the person in possession which is reasonably to be understood by the owner as an acknowledgment from that person. The owner does not have to know who is in possession, and the person acknowledging does not have to know who is the owner, but the acknowledgment must be by or on behalf of the person in possession' The letter of June 7, 1994 is plainly written as if [the] company still existed and on behalf of that company. It refers to their clients as holding the caution, and it refers to the contract of sale with Mr Allen. It cannot be construed as a letter written on behalf of whomever happens to be in possession of the Property, be it Mr Penny or Templewing Ltd. 'I do not consider that this decision [Bigden] is authority for the proposition that the court can ignore what the author of the acknowledgment intends and the recipient understands to be the person making the acknowledgment."

Earlier claim to be a tenant in a Defence and "without prejudice" letter

Ofulue v Bossert
[2009] UKHL 16

Summary

A defence pleading a tenancy in an earlier set of proceedings did not constitute an acknowledgement of title for the purposes of s29 of the Limitation Act 1980; nor did a without prejudice letter written during those earlier proceedings which contained an implied admission as to title.

Facts

This was a claim for possession by the paper owners of a property in which the defendant claimed adverse possession. There had been an earlier set of proceedings (subsequently stayed and then struck out) in which the defendant and her father (who subsequently died) had asserted that they had a tenancy of the premises. The claimants contended that this was an acknowledgement of their title so as to defeat the defendant's claim for adverse possession and start time running again. They also argued that an offer to purchase the property in "without prejudice" correspondence in the earlier proceedings amounted to an acknowledgement within s29.

The judge at first instance and the Court of Appeal found in favour of the defendant. The claimants appealed to the House of Lords.

Decision

The House of Lords (Lord Scott dissenting) upheld the decision of the Court of Appeal. The main speech was given by Lord Neuberger.

The defence: A statement in a pleading can constitute an acknowledgement for the purposes of s29 of the 1980 Act. The CA had held that the admission in the defence was not an acknowledgement within s29 because although it admitted that the claimant was the freehold owner, it did not admit that there was an immediate right to possession. However, the CA was wrong on this point. Section 29(2) refers in clear terms to acknowledging "the title" (see further Lord Neuberger at paras 74 and 75 of the judgment). Thus, the defence did acknowledge the claimant's title.

However, an acknowledgement in a pleading (in this case the defence) takes place on the date that the pleading is served (Lord Neuberger at para 79). As the defence was served more than 12 years before the beginning of the second set of proceedings it did not defeat the claim to adverse possession. It did not constitute a continuing acknowledgement (para 80).

The without prejudice offer: As the acknowledgement was in a without prejudice document it could not be relied upon. The fact that the without prejudice offer had been made in the earlier set of proceedings did not mean that the normal rule did not apply (Lord Neuberger at para 87 – he left open the question of whether or not the rule would apply if the second set of proceedings had been wholly unconnected with the first set: para 91 and 92; and see also Lord Hope at para 11)

Comment

The decision so far as it relates to "without prejudice" is obviously of general application and not confined to the narrow issue of acknowledgements under s29 of the 1980 Act.

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