Stephen Hackett (instructed by RHF Solicitors) for the Appellants
Lord Justice Nugee:
This second appeal arises in the course of a claim in the County Court at Manchester for possession of a house. The question is whether the 1st to 4th Defendants should be permitted to amend their Defence and Counterclaim in the form put forward by them. Permission to amend was initially granted by DDJ Corscadden. On appeal however HHJ Evans (“the Judge”) reversed that decision and refused permission to amend. The 1st to 4th Defendants now appeal to this Court, with permission granted by Asplin LJ.
The appeal primarily turns on the exercise of discretion in relation to amendments to a pleading on the facts of this particular case. This issue, although significant to the parties, raises no particular question of general importance and would not by itself have merited a second appeal to this Court. But the appeal also incidentally raises more fundamental questions about the nature of adverse possession in the context of registered land which are of more general significance.
The late Mrs Michelle Healey was, and had been since 1984, the registered freehold proprietor of a house at 13 Hartley Road, Chorlton-cum-Hardy, Manchester. Mrs Healey died shortly before the hearing of the appeal and the claim is being continued by her husband, Mr Bernard Healey, who, having previously been his wife’s litigation friend, has now been appointed to represent her estate. This has no bearing on the questions argued. On 13 August 2021 Mrs Healey issued a claim for possession of the house in the County Court in Manchester against a number of defendants on the simple basis that they were in occupation of the property without ever having had her permission and were therefore trespassers.
Five defendants were named on the claim form but the fifth was “Persons Unknown” and can be ignored for present purposes; the effective defendants are the other four and I will refer to them as “the Defendants”. The 1st Defendant is Mr William Fraine senior (“Mr Fraine”), who admits that he is in occupation and that he lives in the house as he has done for a number of years; the others are members of his family (two of his sons and one of their partners). Mr Fraine says that he has allowed them to stay in the house for various periods. No separate question arises as to their position, and the case turns on whether Mr Fraine has any defence to the claim for possession brought by Mrs Healey as registered proprietor.
The claim form was accompanied by Particulars of Claim. These were short and to the point. They pleaded, so far as relevant, that Mrs Healey was the registered proprietor and had been since 1984 (para 1); that the house had been occupied by her father until 1990 and that subsequently she believed that her brother, Mr John Maloney, was letting it out (para 2); that the Defendants went into occupation without permission (para 3); that they had never been tenants, sub-tenants or licensees of the house (para 4); and that, despite being sent a notice demanding possession, they continued to occupy it without her permission (paras 6 to 8).
A Defence and Counterclaim was served. This is undated but is said to have been served on 3 September 2021. It admitted that Mrs Healey was the registered proprietor, although said that she had had no dealings with or played any part in the control, running or repair of the house, nor made herself known to the Defendants before April 2021 (para 2). It contained two suggested defences to the claim for possession.
The first was a plea that the Defendants were seeking adverse possession (para 3). The facts alleged in support of this plea were that Mr Fraine had from 2001 managed the house for Mr Maloney (Mrs Healey’s brother), who he believed was the owner, and his business partner, a Mr Martin Quinn (paras 4 and 5); that in around 2006/7 the house needed significant refurbishment, and Mr Maloney and Mr Quinn agreed with Mr Fraine that he would be left to maintain and repair it himself, which he did (paras 6 and 8), it being understood that there was an acrimonious relationship between Mr Maloney and his sister resulting in her wishing to have nothing more to do with the house (para 7); and that Mr Fraine, believing the property to have been abandoned, took adverse possession of it in 2006/7 as a family home for himself and the other Defendants (para 9). At paras 15 and 16 it repeated that the Defendants had adverse possession of the house and would seek a declaration to that effect.
The second suggested defence was a claim in the alternative that the Defendants had acquired an equitable interest in the property. This was based on the expenditure they had carried out over the years, and the Defendants sought a declaration under the provisions of the Trusts of Land and Appointment of Trustees Act 1996 (“TOLATA”) to that effect (paras 17 and 18).
The Counterclaim again asserted that the Defendants were in adverse possession and sought a declaration that they were entitled to be registered as proprietors; and in the alternative it sought a declaration as to their beneficial interest in the property.
Mr Thomas Grant KC, who appeared with Mr Stephen Hackett for the Defendants (and who did not appear below), did not seek to defend this pleading, which he admitted suffered from a number of shortcomings. Prominent among those is that under the Land Registration Act 2002 (“LRA 2002”) adverse possession of registered land no longer operates by itself as a defence to possession; indeed there is no limitation period applicable at all to a claim for possession of registered land. The scheme of the LRA 2002, as explained in more detail below, is that adverse possession does not prevent the registered proprietor from recovering the land, or entitle the adverse possessor to claim a right to be registered as proprietor, save in certain narrowly specified circumstances.