Mount Carmel Investments Ltd v Peter Thurlow Ltd

JurisdictionEngland & Wales
Judgment Date28 June 1988
Judgment citation (vLex)[1988] EWCA Civ J0628-4
Docket Number88/0551
CourtCourt of Appeal (Civil Division)
Date28 June 1988
Mount Carmel Investments Limited
Plaintiffs (Respondents)
Peter Thurlow Limited
First Defendants


Elizabeth Smee
Second Defendant (Appellant)

[1988] EWCA Civ J0628-4


Lord Justice Nourse

Lord Justice Nicholls


Lord Justice Mann







Royal Courts of Justice,

MR. A. MERRIMAN Q.C. (instructed by Messrs. Fremont & Co., London, Wl) appeared for the Second Defendant (Appellant)

MR. A. NEWMAN and MR. A. WHITE (instructed by Messrs. Sears Tooth & Co., London, W1) appeared for the Plaintiffs (Respondents)

THE FIRST DEFENDANTS were not present and were not represented.


This is the judgment of the court on an appeal which concerns the first and second floors of a mews property in Kensington: 38 Queen's Gate Place Mews, London, SW7. The ground floor is used as a garage. The first and second floors comprise residential accommodation. The plaintiff company, Mount Carmel Investments plc, is registered at the land registry as the proprietor of the freehold of the whole of no. 38 with absolute title. The defendant, Elizabeth Smee, is in occupation of the first and second floors. We shall call these two floors "the property". She claims that the plaintiff's title to the property has been extinguished by adverse possession which has continued since October 1970. On 15th May 1987 Mr. J. Peppitt Q.C., sitting as a Deputy High Court Judge of the Queen's Bench Division, found in favour of Miss Smee, and the plaintiff has appealed. The other defendant, Peter Thurlow Limited, has taken no part in the proceedings. Although the judge dismissed the claim for possession, he awarded damages to the plaintiff in respect of Miss Smee's occupation of the property from 30th January 1981, the date when the plaintiff's solicitors wrote to her demanding the delivery up of possession, until October 1982, when the plaintiff's title was extinguished. Miss Smee, whom for convenience we will refer to as "the defendant", has cross-appealed against that decision.


As the judge observed, the striking feature of this case was that the defendant herself gave no evidence, nor did she call any witnesses. Her case was founded on admissions made by the plaintiff in the pleadings and in the course of the hearing. This method of proceeding has meant that the court's knowledge of some parts of the unusual history of the property has not been as full as would have been normal and desirable in a case of this nature.


The plaintiff was registered with absolute title to the whole of 38 Queen's Gate Place Mews ("no. 38") on 26 July 1962. The two shareholders of the plaintiff were James Robert Devlin and his sister Maureen Elizabeth Margaret Devlin. Shortly thereafter the Devlins ceased to have any active interest in their company, or in no. 38. Miss Devlin became increasingly affected by religious conviction and ultimately disavowed worldly affairs altogether by entering a Carmelite nunnery. No. 38 became empty and remained unoccupied until 1970. The property, inevitably, deteriorated whilst unattended, and by 1970 it was fast becoming derelict. Queen's Gate Place Mews is, and it was then, a flourishing centre for the sale of vintage motor cars. A Mr. Christopher Renwick was a regular visitor to the news. He noticed that no. 38 was empty. Eventually early in 1970 he forced an entry, and he began to use the garage of no. 38 for the storage of vintage motor cars. In October 1970 he moved upstairs in no. 38 and took possession of the property adverse to the plaintiff. He carried out some repairs, and by April 1971 he had made the property habitable. He lived there intermittently with his wife for some time thereafter. He retained actual possession until the defendant and a Mr. Scott went into occupation, in the following circumstances. In January 1974 Mr. Renwick permitted a company called Peter Thurlow Limited to go into exclusive occupation, either as tenant or licensee, of one room on the first floor, and in or about April 1974 this arrangement was extended to the whole of the property. Peter Thurlow Limited carried on a business of publishers and designers. The defendant and Mr. Scott were its directors. They went into actual occupation of the property. In making these arrangements Mr. Renwick acted, or purported to act, on behalf of a company of which he was a director, Keithshire Properties Limited.


Meanwhile in August 1971 Mr. Renwick, it seems, caused to be registered at the land registry a purported lease dated 10 July 1971 by which purportedly the plaintiff, the registered proprietor of the freehold, granted a 150-year term of no. 38 to a Peter Clive Russell from 24 June 1971. Russell's address was stated as 38 Queen's Gate Place Mews. Subsequently on 30 November 1971 Mr. Renwick also caused to be entered at the land registry a purported assignment of that lease by Russell to Keithshire Properties Limited for the sum of £1. In fact and in law the plaintiff had never granted any such lease. The forged execution came to light, in the autumn of 1974. Mr.Renwick fled to the USA to avoid arrest, but later gave himself up. He was convicted of forgery at the Central Criminal Court in March 1979 and sentenced to a term of imprisonment. The entries relating to the forged lease and the assignment were then struck off the register, on 18 December 1980.


At this point in the narrative there is some obscurity. Precisely when, and in what circumstances, Mr. Renwick severed his connection with no. 38, and precisely what happened between then and the start of the present proceedings, was not established in evidence. What was established, by admission of the plaintiff, was that after Mr. Renwick took possession of the property, there was continuous possession adverse to the plaintiff up to the date when this action was brought, at which time the defendant was in possession of the property. The latter date, namely, the date on which the plaintiff issued its first writ seeking possession, was 28 February 1983. The issue of that writ came about in this way. In February 1982 a Mr. Geoffrey Pattinson, a well-known and respected dealer in vintage motor cars, through his company Kensington Holdings Limited, bought from the Devlins their shares in the plaintiff for £80,000. The plaintiff's only substantial asset was no. 38, and the price paid by Kensington Holdings Limited was a fair price at that time for the freehold of no. 38 with vacant possession. Mr. Pattinson, of course, knew that there were squatters living in the property.


It follows from this that, Mr. Renwick having taken possession adverse to the plaintiff in October 1970, more than twelve years had elapsed before the writ was issued on 28 February 1983. Prima facie, therefore, adverse possession having continued unbroken throughout this period, the plaintiff's title to the property was extinguished before the first writ was issued. At the trial the plaintiff advanced various responses, such as acknowledgment, to this limitation defence. The judge rejected them all. On this appeal Mr. Newman, appearing for the plaintiff, has advanced two arguments.


The letter demanding delivery up of possession


On 30 January 1981, which was some time before the sale of the shares in the plaintiff to Mr. Pattinson was effected, solicitors acting for the plaintiff wrote two letters, one to Peter Thurlow Limited and the other to Mr. Scott and the defendant, requiring the property to be vacated by 28 February 1981. On 13 February 1981 solicitors answered on behalf of all three, refuting the contention that any of them were in unlawful occupation, and denying that the plaintiff was "entitled to determine our client's right to occupy" the property. Mr. Newman's first argument was novel, and indeed startling in its implications. It was not an argument addressed to the judge. The argument was to the effect that the defendant ceased to be in possession, for the purpose of time running in her favour, when she received the letter from the plaintiff's solicitors dated 30 January 1981.


The relevant statutory provisions concerning limitation are to be found in the Limitation Act 1980. Section 15(1), so far as material, provides: "No action shall be brought by any person to recover any land after the expiration of twelve years from the date on which the right of action accrued to him..…"


Section 15(6) directs attention to Part 1 of Schedule 1 to the Act to identify the date of accrual of rights of action to recover land in certain cases. Paragraph 1 of that Schedule provides: "Where the person bringing an action to recover land, or some person through whom he claims, has been in possession of the land, and has while entitled to the land been dispossessed or discontinued his possession, the right of action shall be treated as having accrued on the date of the dispossession or discontinuance." So under that paragraph the plaintiff's right of action in respect of the property is treated as having accrued in October 1970. This paragraph has to be read with paragraph 8. The material parts are: "(1) No right of action to recover land shall be treated as accruing unless the land is in the possession of some person in whose favour the period of limitation can run (referred to below in this paragraph as 'adverse possesssion');…. (2) Where a right of action to recover land has accrued and after its accrual, before the right is barred, the land ceases to be in adverse possession, the right of action shall no longer be treated as having accrued and no fresh right of action shall...

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    ...person in possession that he is to give up possession, is not sufficient to take over possession from the possessor. 49 InMount Carmel Investments v Peter Thurlow Ltd (1988) 3 AER p. 129 at 133 (Court of Appeal) Nicholls L.J. had this to say: "We do not accept that, in a case where one pers......
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    ...over to him by “A” the Statute of Limitations continues to run against the true owner’. 85 To similar effect is Mount Carmel Investments Ltd v Peter Thurlow Ltd and another [1988] 3 All ER 129, in which it was held by the Court of Appeal of England and Wales that if a squatter dispossessed ......
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    ...all the rights of the owner of the land are determined.” 164. That case was followed and applied by the Court of Appeal in Mount Carmel Investments Ltd v Thurlow [1988] 1 WLR 1078 in which Nicholls LJ said that, having regard to principle: “When title to land is extinguished by the statute,......
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