J A Pye _Oxford_ Ltd v

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					J A Pye (Oxford) Ltd v. Graham [2002] UKHL 30, [2003] 1 AC 419


 1 My Lords, for the reasons given by my noble and learned friend Lord Browne-
Wilkinson, which I have had the privilege of reading in draft, I would allow this appeal
and restore the order of the judge. In doing so, I would echo the misgivings expressed by
the judge in the closing paragraph of his judgment: [2000] Ch 676, 709-710.

  2 The Grahams have acted honourably throughout. They sought rights to graze or cut
grass on the land after the summer of 1984, and were quite prepared to pay. When Pye
failed to respond they did what any other farmer in their position would have done: they
continued to farm the land. They were not at fault. But the result of Pye's inaction was
that they enjoyed the full use of the land without payment for 12 years. As if that were
not gain enough, they are then rewarded by obtaining title to this considerable area of
valuable land without any obligation to compensate the former owner in any way at all.
In the case of unregistered land, and in the days before registration became the norm,
such a result could no doubt be justified as avoiding protracted uncertainty where the
title to land lay. But where land is registered it is difficult to see any justification for a
legal rule which compels such an apparently unjust result, and even harder to see why the
party gaining title should not be required to pay some compensation at least to the party
losing it. It is reassuring to learn that the Land Registration Act 2002 has addressed the
risk that a registered owner may lose his title through inadvertence. But the main
provisions of that Act have not yet been brought into effect, and even if they had it
would not assist Pye, whose title had been lost before the passing of the Act. While I am
satisfied that the appeal must be allowed for the reasons given by my noble and learned
friend, this is a conclusion which I (like the judge, at p 709f) "arrive at with no


  4 My Lords, in this case the defendants, as personal representatives of the late Michael
John Graham, seek to establish a possessory title to 25 hectares of agricultural land at
Henwick, Thatcham, Berkshire ("the disputed land"). At all material times the paper title
to that land has undoubtedly been vested in the first plaintiff J A Pye (Oxford) Land Ltd
and its predecessor in title in the same group J A Pye (Oxford) Ltd ("Pye") as registered
proprietors of the disputed land at Her Majesty's Land Registry. At the trial Neuberger J
[2000] Ch 676 held that the defendants had established title by possession but his
decision was reversed by the Court of Appeal [2001] Ch 804 (Mummery, Keene LJJ and
Sir Martin Nourse). The defendants appealed to your Lordships' House.

 5 I will later have to deal with the law at some length but at this stage it is sufficient to
highlight the essential issue. The Grahams, in order to succeed, will have to show that
they "dispossessed" Pye more than 12 years before Pye started proceedings on 30 April
1998. As will appear, this requires the Grahams to prove that Pye were dispossessed
between 31 August 1984 (when the Grahams' occupation ceased to be with the
permission of Pye) and 30 April 1986. It is the actions and intentions of the parties
during this period that will determine the proper outcome of the case.

  6 Until 1977 Pye was the owner of Henwick Manor together with a substantial amount
of surrounding land. In 1977 Pye sold the farmhouse and approximately 67 hectares of
the land (Manor Farm) but retained the disputed land which was considered to have
development potential. It was, and remains, Pye's intention to retain the disputed land
until planning permission can be obtained for development.

  7 The disputed land consists of four fields, the Drive Field, Hill Field, Paddocks and
Wallis Field. The farmhouse at Manor Farm is approached by a private drive owned with
Manor Farm which runs from a public highway to the farmhouse. Abutting the southern
side of the drive is the northern boundary of the disputed land. There is a further part of
the disputed land to the west of the driveway and immediately south of the farmhouse
and farm buildings. The eastern boundary of the disputed land abuts the public highway.
Apart from the gates I shall mention, all the boundaries of the disputed land are
separated from the adjoining land by hedges.

 8 On the eastern boundary, there is a gate from the public highway into Drive Field.
That gate has been padlocked at all material times, the key to that padlock being held by
Mrs Michael Graham. The hedge between the driveway and Drive Field and the
Paddocks has three gates. Pye has no rights of access over the driveway. There is a fourth
gate on to the disputed land on its northern boundary from the farmhouse into Hill
Field. There is a public footpath going through Manor Farm and then, over a stile,
through Hill Field.

Acquisition of Manor Farm

  9 In 1982 Mr John Graham and his wife purchased Manor Farm. From then on, until
his unhappy death in 1998, the farming activities at Manor Farm were the day-to-day
responsibility of their son Michael Graham. Initially he was farming the land for the
benefit of a family partnership but later on behalf of himself and his wife Caroline

  10 At the time the Grahams acquired Manor Farm, they were aware that the disputed
land had been used as grazing land under agreements between the owners of Manor
Farm and Pye. The Grahams were aware that this disputed land was owned by Pye and
had been acquired by Pye in the hope of being able to develop it in the future. As I have
said, the disputed land was fully enclosed so as to exclude the whole world except for
access with the use of the key held by the Grahams from the public highway and by foot
over the footway that I have mentioned.

Grazing agreement

  11 On 1 February 1983 Pye entered into a written agreement with John Graham who is
described as "the grazier". That agreement permitted use of the disputed land until 31
December 1983 in return for a payment of £2,000. It limited the use of the disputed land
to grazing or mowing for one cut of grass and the grazier was obliged to restrict the use
of the disputed land to the grazing of sheep, cattle and horses. He was also obliged to
keep the disputed land free of weeds, the gates, fences and ditches in good order, and to
use the land in a good and husband-like manner. It further provided that Mr Graham
would not permit any trespass upon the land and further that he would not part with
"possession" of the disputed land. It further reserved to Pye the right to terminate the
agreement and gain "possession" on the service of six months' notice. It also expressly
provided that any grazing after its expiry would have to be by a new and distinct

  12 The Grahams had previously enjoyed an informal licence to graze the disputed land
from September 1982 until 1 February 1983. It is not clear whether the Grahams vacated
the land prior to the commencement of the 1983 agreement on 1 February 1983. The
Grahams occupied the land under the grazing agreement until 31 December 1983. On 30
December 1983 Mr Evans, a chartered surveyor acting for Pye, wrote to Pye suggesting
that Mr John Graham be granted a fresh grazing agreement for 1984. On the same day
he wrote to Mr John Graham noting that the grazing agreement was on the verge of
expiration and requiring the Grahams to vacate the land. In January 1984 Pye refused the
request for a grazing agreement for 1984 because they anticipated seeking planning
permission for the development of all or part of the disputed land and were firmly
advised that it would be sensible for them to have the disputed land in hand at the time
of the proposed planning application and the planning appeal which would almost
certainly ensue. The Grahams were also led to believe that Pye would soon be making an
application for planning permission and did not want the disputed land to be grazed
because such grazing, in Pye's view, might damage the prospects of obtaining permission.
No change of attitude on the part of Pye was ever communicated to the Grahams.

 13 Notwithstanding the requirement to vacate the land at the expiry of the 1983
agreement on 31 December 1983, the Grahams remained in occupation on 1 January
1984 and have remained in occupation at all times since that date. Even though there was
no grazing agreement in place in 1984, Michael Graham spread dung and loose housing
straw on the disputed land during the winter of 1983-84. He was aware at the time he
was spreading the dung that he was doing so at his own risk as a grazing agreement for
1984 might not be forthcoming.

  14 In approximately March 1984 the Grahams turned cattle out on to the disputed land
and left them to graze until about November 1984. He harrowed, rolled and fertilised the
land and spread dung and straw in February and March 1984. He did this on the basis
that it was his intention to carry on using the land for grazing until requested not to do
so. No request to vacate or to pay for the grazing which was taking place was made. If it
had been made, Michael Graham would happily have paid. He took advantage of the
ability to use the disputed land as no one challenged him and he was keen not to waste
the effort that he had put into preparing the grazing during 1983 and over the winter of

 15 In June 1984 an agreement was reached whereby Pye agreed to sell to John Graham
the standing crop of grass on the disputed land for £1,100. That grass was cut by the
Grahams and the judge made a finding that the cut was completed by 31 August 1984.
The charge of £1,100 was paid in November 1984. In the circumstances, all use of the
disputed land by the Grahams from 1 September 1984 onwards was made without the
permission of Pye.

 16 In December 1984, pursuant to a request from the Grahams an inquiry was made of
Pye whether the Grahams could take another cut of hay or preferably have a grazing
agreement in 1985. There was no answer to this letter from Pye or to subsequent letters
sent to Pye in May 1985. Thereafter, the Grahams did not attempt to make contact with
  17 From September 1984 onwards until 1999 the Grahams used the whole of the
disputed land for farming. The Grahams never vacated the disputed land: they kept
farming all the year round. Dry cattle and yearlings were kept in a shed on part of the
disputed land throughout the year. Dung was spread two or three times during 1984/85
and the disputed land was harrowed and rolled in February/March 1985, fertilised at
Easter 1985 and limed in early 1985. In doing this Michael Graham was aware that there
was a risk that he would not obtain the benefit of the work as there was no grazing
agreement or agreement to take a cut of hay. He would have been prepared to pay Pye
for a grazing licence or the hay but in the absence of any agreement he was willing to
take a chance that an agreement would be forthcoming later.

  18 The same use and management of the whole of the disputed land for grazing was
maintained until 1994 when the use of the Drive Field changed to arable. Save during the
mid-winter months there would be between 80 and 140 cattle grazing on the disputed
land. In addition part of the disputed land was limed in 1985 and re-seeded in 1988. The
boundary hedges were trimmed every year from 1983 onwards by someone employed by
the Grahams and from 1984 onwards the boundary fencing was maintained by the
Grahams as were the ditches on the disputed land.

 19 Various witnesses confirmed that the disputed land appeared to them to be part of
Manor Farm and some gave evidence that they believed that Michael Graham owned it.
When asked in cross-examination what an occupying owner of the disputed land might
have done, over and above what had been done by the Grahams between 1984 and 1997,
Mr Evans, an experienced chartered surveyor, was unable to think of anything.

  20 In his draft witness statement Michael Graham said that in the light of the lack of
interest shown by Pye in the land he continued to use the land for what he considered to
be its best use. He hoped a further agreement would be forthcoming in 1984. After he
received no replies to his inquiries in 1985 he "gave up trying" and waited to see if Pye
contacted him. He anticipated that Pye would contact him at some point and was happy
to leave matters until they did. From May 1985 at the latest, his attitude was simply that
he would have preferred to have obtained a formal agreement and, if Pye had asked him
to pay for his occupation, he would have done so. In his draft witness statement he says
that at the time he believed that it was possible to obtain ownership of land after it had
been occupied for a sufficient number of years which he mistakenly thought to be seven

 21 As to the activities of Pye on the disputed land between 1984 and 1999, there were
none. In 1993 a representative of Pye visited the disputed land to inspect it but even then
he only viewed it from the road and from the drive; he did not actually go on to the land.
Pye showed no interest in the agricultural management of the land. Pye carried out
certain paper transactions during this period relating to the disputed land. But it is not
suggested that they were sufficient to constitute possession. Indeed nothing was done by
or on behalf of Pye to the land itself from 1 January 1984 onwards.

 22 In 1997 Michael Graham registered cautions at the Land Registry against Pye's title
on the grounds that he had obtained "squatter's title" by adverse possession. . . . On 19
February 1998 Michael Graham was most unhappily killed in a shooting accident.

 23 . . . On 20 January 1999 Pye issued further proceedings seeking possession of the
disputed land. . .
The Limitation Act 1980

   25 Section 15 of the 1980 Act provides:
    "15(1) No action shall be brought by any person to recover any land after the
expiration of 12 years from the date on which the right of action accrued to him or, if it
first accrued to some person through whom he claims, to that person."
    "(6) Part I of Schedule 1 to this Act contains provisions for determining the date of
accrual of rights of action to recover land in the cases there mentioned."
Schedule 1, paragraph 1 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."
Schedule 1, paragraph 8 provides:
    "8(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 possession'); and where under the
preceding provisions of this Schedule any such right of action is treated as accruing on a
certain date and no person is in adverse possession on that date, the right of action shall
not be treated as accruing unless and until adverse possession is taken of the land."
    "(4) For the purpose of determining whether a person occupying any land is in adverse
possession of the land it shall not be assumed by implication of law that his occupation is
by permission of the person entitled to the land merely by virtue of the fact that his
occupation is not inconsistent with the latter's present or future enjoyment of the land.
    "This provision shall not be taken as prejudicing a finding to the effect that a person's
occupation of any land is by implied permission of the person entitled to the land in any
case where such a finding is justified on the actual facts of the case."

  26 It is to be noted that the right of action to recover the land is barred whenever 12
years have elapsed from the time when any right of action accrued: it does not have to be
a period immediately before action brought. In the case of unregistered land, on the
expiration of the limitation period regulating the recovery of the land, the title of the
paper owner is extinguished: 1980 Act, section 17. In the case of registered land, under
section 75(1) of the Land Registration Act 1925 on the expiry of the limitation period the
title is not extinguished but the registered proprietor is deemed to hold the land
thereafter in trust for the squatter. The provisions as to registered land have been
fundamentally altered by the Land Registration Act 2002 but that Act does not apply to
the present case.

The issues

  27 The action was brought by Pye at the earliest on 30 April 1998. The question
therefore is whether, prior to that date, there was a period of 12 years during which the
Grahams were in possession of the disputed land to the exclusion of Pye. More
accurately, there are two questions viz: (1) did Pye discontinue possession or was it
"dispossessed" of the disputed land (within the meaning of paragraph 1 of Schedule 1 to
the 1980 Act) before 30 April 1986; and if so (2) did the Grahams thereafter remain in
possession of the land for a period of 12 years?
 28 It is common ground that Pye did not "discontinue" possession within the meaning
of the Act. Further I did not understand there to be any claim by Pye that, if the
Grahams had at any time prior to 30 April 1986 dispossessed Pye, the Grahams
thereafter ceased to be in possession for the purposes of the Act.

 29 It was further common ground that so long as the Grahams were occupying the
disputed land with Pye's consent, they could not be treated as having dispossessed Pye.
Accordingly no relevant right of action can have accrued to Pye under Schedule 1,
paragraph 1 until after the expiry on or about 31 August 1984 of the grass-cutting

 30 The relevant question therefore is whether at some time between 1 September 1984
and 30 April 1986 Pye were "dispossessed" of the disputed land so that, at that date,
Pye's right of action accrued for the purposes of Schedule 1, paragraph 1 to the 1980

The law

  31 The apparently straight forward statutory provisions have given rise to considerable
difficulties, most of which flow from the remarks of the Court of Appeal in Leigh v Jack
(1879) 5 Ex D 264 and Littledale v Liverpool College [1900] 1 Ch 19. In a remarkable
judgment at first instance, Powell v McFarlane (1977) 38 P & CR 452, Slade J traced his
way successfully through a number of Court of Appeal judgments which were binding
on him so as to restore a degree of order to the subject and to state clearly the relevant
principles. Although there are one or two minor points on which (unlike Slade J) your
Lordships are not bound by authority and can therefore make necessary adjustments, for
the most part the principles set out by Slade J as subsequently approved by the Court of
Appeal in Buckinghamshire County Council v Moran [1990] Ch 623 cannot be improved
upon. Hereafter I adopt them without specific recognition beyond marking with inverted
commas those passages which I have quoted verbatim.

Possession, dispossession, ouster and adverse possession

  32 In Powell's case Slade J was considering the Limitation Act 1939. However, apart
from paragraph 8(4) of Schedule 1 to the 1980 Act the statutory provisions applicable in
the present case are identical in the 1939 Act and the 1980 Act. Slade J first addressed
himself to the question what was the meaning of possession and dispossession in the
statutory provisions. After noticing that possession and dispossession were not defined
in the 1939 Act he continued, at p 469:
   "Possession of land, however, is a concept which has long been familiar and of
importance to English lawyers, because (inter alia) it entitles the person in possession,
whether rightfully or wrongfully, to maintain an action of trespass against any other
person who enters the land without his consent, unless such other person has himself a
better right to possession. In the absence of authority, therefore, I would for my own
part have regarded the word 'possession' in the 1939 Act as bearing the traditional sense
of that degree of occupation or physical control, coupled with the requisite intention
commonly referred to as animus possidendi, that would entitle a person to maintain an
action of trespass in relation to *433 the relevant land; likewise I would have regarded
the word 'dispossession' in the Act as denoting simply the taking of possession in such
sense from another without the other's licence or consent; likewise I would have
regarded a person who has 'dispossessed' another in the sense just stated as being in
'adverse possession' for the purposes of the Act."
Save as to the last sentence I have quoted (as to which I will make certain further
comments below), I entirely agree with that statement of the law. Slade J felt doubts
whether, in the light of certain Court of Appeal judgments then binding on him, he could
properly adhere to the view that he expressed. Decisions (for example Wallis's Cayton
Bay Holiday Camp Ltd v Shell-Mex and BP Ltd [1975] QB 94) appeared to hold that use
of the land by a squatter which would have been sufficient to constitute possession in the
ordinary sense of the word was not enough: it was said that such use by the squatter did
not constitute "adverse possession" which was required for the purposes of limitation
unless the squatter's use conflicted with the intentions of the paper title owner as to his
present or future use of the disputed land. In those cases it was held that the use by the
squatter was, as a matter of law, to be treated as enjoyed with the implied consent of the
paper owner. Not surprisingly, Slade J found this line of reasoning difficult to follow. It
is hard to see how the intentions of the paper title owner (unless known to the squatter)
can affect the intention of the squatter to possess the land. In my judgment, Slade J was
right and the decision of the Court of Appeal in those cases wrong. In any event
Parliament (on the advice of the Law Reform Committee) has intervened to reverse the
principle of implied licence: see the 1980 Act, Schedule 1, paragraph 8(4). However there
remains a long standing confusion as to what constitutes "dispossession" and the place, if
any, of "adverse possession" in the modern law.

  33 The root of the problem is caused by the concept of "non-adverse possession". This
was a concept engrafted by the common law and equity onto the limitation statute of
James I (21 Jac 1, c 16). Before the passing of the Real Property Limitation Acts 1833 (3
& 4 Will 4, c 27) and 1874 (37 & 38 Vict c 57), the rights of the paper owner were not
taken away save by a "disseisin" or an ouster and use of the land by the squatter of a kind
which was clearly inconsistent with the paper title. Such inconsistent use was called
adverse possession: see Professor Dockray, "Adverse Possession and Intention" [1982]
Conveyancer 256, 260. Under the 1833 Act (sections 2 and 3 of which were substantially
to the same effect as the 1980 Act, section 15(1) and Schedule 1, paragraph 1) the right
of action was barred 20 years after "the right ... to bring such action shall have first
accrued" and "such right shall be deemed to have first accrued at the time of such
dispossession or discontinuance of possession". Soon after the passing of the 1833 Act it
was held that "the second and third sections of that Act ... have done away with the
doctrine of non-adverse possession, and ... the question is whether 20 years have elapsed
since the right accrued, whatever the nature of the possession": Denman CJ in Nepean v
Doe d Knight (1837) 2 M & W 894, 911. The same statement of the new law was made
in Culley v Doe d Taylerson (1840) 11 Ad & E 1008, 1015 where Denman CJ said: *434
   "The effect of [section 2] is to put an end to all questions and discussions, whether the
possession of lands, etc, be adverse or not; and, if one party has been in the actual
possession for 20 years, whether adversely or not, the claimant, whose original right of
entry accrued above 20 years before bringing the ejectment, is barred by this section."

 34 The same was held to be the law by the Privy Council in a carefully reasoned advice
delivered by Lord Upjohn in Paradise Beach and Transportation Co Ltd v Price-
Robinson [1968] AC 1072; see also Professor Dockray [1982] Conveyancer 256.

  35 From 1833 onwards, therefore, old notions of adverse possession, disseisin or ouster
from possession should not have formed part of judicial decisions. From 1833 onwards
the only question was whether the squatter had been in possession in the ordinary sense
of the word. That is still the law, as Slade J rightly said. After 1833 the phrase "adverse
possession" did not appear in the statutes until, to my mind unfortunately, it was
reintroduced by the Limitation Act 1939, section 10 of which is in virtually the same
words as para 8(1) of Schedule 1 to the 1980 Act. In my judgment the references to
"adverse possession" in the 1939 and 1980 Acts did not reintroduce by a side wind after
over 100 years the old notions of adverse possession in force before 1833. Paragraph
8(1) of Schedule 1 to the 1980 Act defines what is meant by adverse possession in that
paragraph as being the case where land is in the possession of a person in whose favour
time "can run". It is directed not to the nature of the possession but to the capacity of
the squatter. Thus a trustee who is unable to acquire a title by lapse of time against the
trust estate (see section 21) is not in adverse possession for the purposes of paragraph 8.
Although it is convenient to refer to possession by a squatter without the consent of the
true owner as being "adverse possession" the convenience of this must not be allowed to
reintroduce by the back door that which for so long has not formed part of the law.

  36 Many of the difficulties with these sections which I will have to consider are due to a
conscious or subconscious feeling that in order for a squatter to gain title by lapse of
time he has to act adversely to the paper title owner. It is said that he has to "oust" the
true owner in order to dispossess him; that he has to intend to exclude the whole world
including the true owner; that the squatter's use of the land has to be inconsistent with
any present or future use by the true owner. In my judgment much confusion and
complication would be avoided if reference to adverse possession were to be avoided so
far as possible and effect given to the clear words of the Acts. The question is simply
whether the defendant squatter has dispossessed the paper owner by going into ordinary
possession of the land for the requisite period without the consent of the owner.

 37 It is clearly established that the taking or continuation of possession by a squatter
with the actual consent of the paper title owner does not constitute dispossession or
possession by the squatter for the purposes of the Act. Beyond that, as Slade J said, the
words possess and dispossess are to be given their ordinary meaning.

  38 It is sometimes said that ouster by the squatter is necessary to constitute
dispossession: see for example Rains v Buxton (1880) 14 Ch D 537, 539 per Fry J. The
word "ouster" is derived from the old law of adverse possession and has overtones of
confrontational, knowing removal of the true owner from possession. Such an approach
is quite incorrect. There will be a "dispossession" of the paper owner in any case where
(there being no discontinuance of possession by the paper owner) a squatter assumes
possession in the ordinary sense of the word. Except in the case of joint possessors,
possession is single and exclusive. Therefore if the squatter is in possession the paper
owner cannot be. If the paper owner was at one stage in possession of the land but the
squatter's subsequent occupation of it in law constitutes possession the squatter must
have "dispossessed" the true owner for the purposes of Schedule 1, paragraph 1: see
Treloar v Nute [1976] 1 WLR 1295, 1300; Professor Dockray [1982] Conveyancer 256.
Therefore in the present case the relevant question can be narrowed down to asking
whether the Grahams were in possession of the disputed land, without the consent of
Pye, before 30 April 1986. If they were, they will have "dispossessed" Pye within the
meaning of paragraph 1 of Schedule 1 to the 1980 Act.

 39 What then constitutes "possession" in the ordinary sense of the word?

   40 In Powell's case 38 P & CR 470 Slade J said, at p 470:
    "(1) In the absence of evidence to the contrary, the owner of land with the paper title
is deemed to be in possession of the land, as being the person with the prime facie right
to possession. The law will thus, without reluctance, ascribe possession either to the
paper owner or to persons who can establish a title as claiming through the paper owner.
(2) If the law is to attribute possession of land to a person who can establish no paper
title to possession, he must be shown to have both factual possession and the requisite
intention to possess ('animus possidendi')."
Counsel for both parties criticised this definition as being unhelpful since it used the
word being defined--possession--in the definition itself. This is true: but Slade J was only
adopting a definition used by Roman law and by all judges and writers in the past. To be
pedantic the problem could be avoided by saying there are two elements necessary for
legal possession: (1) a sufficient degree of physical custody and control ("factual
possession"); (2) an intention to exercise such custody and control on one's own behalf
and for one's own benefit ("intention to possess"). What is crucial is to understand that,
without the requisite intention, in law there can be no possession. Remarks made by
Clarke LJ in Lambeth London Borough Council v Blackburn (2001) 82 P & CR 494, 499
("It is not perhaps immediately obvious why the authorities have required a trespasser to
establish an intention to possess as well as actual possession in order to prove the
relevant adverse possession") provided the starting point for a submission by Mr
Lewison for the Grahams that there was no need, in order to show possession in law, to
show separately an intention to possess. I do not think that Clarke LJ was under any
misapprehension. But in any event there has always, both in Roman law and in common
law, been a requirement to show an intention to possess in addition to objective acts of
physical possession. Such intention may be, and frequently is, deduced from the physical
acts themselves. But there is no doubt in my judgment that there are two separate *436
elements in legal possession. So far as English law is concerned intention as a separate
element is obviously necessary. Suppose a case where A is found to be in occupation of a
locked house. He may be there as a squatter, as an overnight trespasser, or as a friend
looking after the house of the paper owner during his absence on holiday. The acts done
by A in any given period do not tell you whether there is legal possession. If A is there as
a squatter he intends to stay as long as he can for his own benefit: his intention is an
intention to possess. But if he only intends to trespass for the night or has expressly
agreed to look after the house for his friend he does not have possession. It is not the
nature of the acts which A does but the intention with which he does them which
determines whether or not he is in possession.

Factual possession

  41 In Powell's case Slade J said, at pp 470-471:
   "(3) Factual possession signifies an appropriate degree of physical control. It must be a
single and [exclusive] possession, though there can be a single possession exercised by or
on behalf of several persons jointly. Thus an owner of land and a person intruding on
that land without his consent cannot both be in possession of the land at the same time.
The question what acts constitute a sufficient degree of exclusive physical control must
depend on the circumstances, in particular the nature of the land and the manner in
which land of that nature is commonly used or enjoyed ... Everything must depend on
the particular circumstances, but broadly, I think what must be shown as constituting
factual possession is that the alleged possessor has been dealing with the land in question
as an occupying owner might have been expected to deal with it and that no-one else has
done so."
I agree with this statement of the law which is all that is necessary in the present case.
The Grahams were in occupation of the land which was within their exclusive physical
control. The paper owner, Pye, was physically excluded from the land by the hedges and
the lack of any key to the road gate. The Grahams farmed it in conjunction with Manor
Farm and in exactly the same way. They were plainly in factual possession before 30
April 1986.

Intention to possess

(a) To own or to possess?

   42 There are cases in which judges have apparently treated it as being necessary that
the squatter should have an intention to own the land in order to be in possession. In
Littledale v Liverpool College [1900] 1 Ch 19, 24 Sir Nathaniel Lindley MR referred to
the plaintiff relying on "acts of ownership": see also George Wimpey & Co Ltd v Sohn
[1967] Ch 487, 510. Even Slade J in Powell, at pp 476 and 478, referred to the necessary
intention as being an "intention to own". In the Moran case (1988) 86 LGR 472, 479 the
trial judge (Hoffmann J) had pointed out that what is required is "not an intention to
own or even an intention to acquire ownership but an intention to possess". The Court
of Appeal in that case [1990] Ch 623, 643 adopted this proposition which in my
judgment is manifestly correct. Once it is accepted that in the Limitation Acts, the word
"possession" has its ordinary meaning (being the same as in the law of trespass or
conversion) it is clear that, at any given moment, the only relevant question is whether
the person *437 in factual possession also has an intention to possess: if a stranger enters
on to land occupied by a squatter, the entry is a trespass against the possession of the
squatter whether or not the squatter has any long term intention to acquire a title.

 43 A similar manifestation of the same heresy is the statement by Sir Nathaniel Lindley
MR in Littledale v Liverpool College [1900] 1 Ch 19, 23 that the paper owners "could not
be dispossessed unless the plaintiffs obtained possession themselves; and possession by
the plaintiffs involves an animus possidendi--i e, occupation with the intention of
excluding the owner as well as other people". This requirement of an intention to
exclude the owner as well as everybody else has been repeated in subsequent cases. In
Powell's case 38 P & CR 452, 471-472 Slade J found difficulty in understanding what was
meant by this dictum since a squatter will normally know that until the full time has run,
the paper owner can recover the land from him. Slade J reformulated the requirement (to
my mind correctly) as requiring an "intention, in one's own name and on one's own
behalf, to exclude the world at large, including the owner with the paper title if he be not
himself the possessor, so far as is reasonably practicable and so far as the processes of
the law will allow".

(b) Must the acts of the squatter be inconsistent with the intentions of the paper owner?

  44 The decision of the Court of Appeal in Leigh v Jack 5 Ex D 264 has given rise to
repeated trouble in later cases. In that case the plaintiff's predecessor in title (Mr Leigh)
had laid out part of his estate as proposed streets to be known as Grundy Street and
Napier Place. He conveyed to the defendant certain land described as being "bounded
by" Grundy Street and Napier Place: therefore the intention to use the adjoining land for
streets was known to all parties. Within the 20-year limitation period, both Mr Leigh and
the defendant had carried out work on a fence separating Grundy Street from other land
of Mr Leigh, Regent Road. From 1854 onwards the defendant had placed on Grundy
Street and Napier Place old graving dock materials, screw propellers, boilers and refuse
from his foundry. In 1872 (four years before action brought) the defendant completely
enclosed Grundy Street and Napier Place. The Court of Appeal held that the defendant
had not acquired title to the enclosed land under the Limitation Act 1833.

  45 The decision on the facts is not a surprising one. Quite apart from anything else,
during the 20-year limitation period relied on, the paper owner (Mr Leigh) carried out
works on the fence separating Grundy Street from Regent Road. This was inconsistent
with a claim that he had either discontinued possession or been dispossessed.
Unfortunately, other reasons were given. Cockburn CJ said that the defendant's storage
of goods on the disputed land was not "done with the view of defeating the purpose of
the parties to the conveyances". It will be noted that the defendant was well aware of Mr
Leigh's intention to use the land as a public road since he was party to the conveyance so
stating. Cotton LJ relied solely on the repair of the fence by Mr Leigh which I have
mentioned as showing that there had been possession by him during the limitation
period. The real difficulty has arisen from the judgment of Bramwell LJ. He said, at p
       "I do not think that there was any dispossession of the plaintiff by the acts of the
       defendant: acts of user are not enough to take the soil out of the plaintiff and her
       predecessors in title and to vest it in the defendant; in order to defeat a title by
       dispossessing the former owner, acts must be done which are inconsistent with his
       enjoyment of the soil for the purposes for which he intended to use it ..."
The suggestion that the sufficiency of the possession can depend on the intention not of
the squatter but of the true owner is heretical and wrong. It reflects an attempt to revive
the pre-1833 concept of adverse possession requiring inconsistent user. Bramwell LJ's
heresy led directly to the heresy in the Wallis's Cayton Bay line of cases to which I have
referred, which heresy was abolished by statute. It has been suggested that the heresy of
Bramwell LJ survived this statutory reversal but in the Moran case the Court of Appeal
rightly held that however one formulated the proposition of Bramwell LJ as a
proposition of law it was wrong. The highest it can be put is that, if the squatter is aware
of a special purpose for which the paper owner uses or intends to use the land and the
use made by the squatter does not conflict with that use, that may provide some support
for a finding as a question of fact that the squatter had no intention to possess the land
in the ordinary sense but only an intention to occupy it until needed by the paper owner.
For myself I think there will be few occasions in which such inference could be properly
drawn in cases where the true owner has been physically excluded from the land. But it
remains a possible, if improbable, inference in some cases.

(c) Squatters' willingness to pay if asked

  46 In a number of cases (such as the present case) squatters have given evidence that if
they had been asked by the paper owner to pay for their occupation of the disputed land
or to take a lease they would have been prepared to do so. In Ocean Estates Ltd v Pinder
[1969] 2 AC 19, 24 Lord Diplock giving the advice of the Privy Council said that an
admission by the squatter to that effect "which any candid squatter hoping in due course
to acquire a possessory title would be almost bound to make" did not indicate an absence
of an intention to possess. In my judgment in the present case the Court of Appeal did
not give full weight to that decision. In my judgment the decision of the Court of Appeal
in R v Secretary of State for the Environment, Ex p Davies (1990) 61 P & CR 487 (the
decision in Pinder not having been cited) was wrong. The decision in Pinder is to be
preferred because it is consistent with principle. Once it is accepted that the necessary
intent is an intent to possess not to own and an intention to exclude the paper owner
only so far as is reasonably possible, there is no inconsistency between a squatter being
willing to pay the paper owner if asked and his being in the meantime in possession. An
admission of title by the squatter is not inconsistent with the squatter being in possession
in the meantime.

The decision of Neuberger J

  47 The judge in a very full and careful judgment set out all the facts I have stated
above. There are two points which I need to stress. First, although the judge referred to
the grazing agreement of 1 February 1983, he did not set it out or indeed appear to treat
it as being of major importance beyond showing that, during its continuance, the
Grahams were in possession with permission of the paper owner. As will be seen, the
Court of Appeal took quite a different view of the importance of that agreement.
Second, the judge found that the Grahams "never vacated the disputed land" but "just
kept farming all the year round". In addition to grazing the 80 to 140 head of cattle from
February to November in every year, as I have said, the Grahams overwintered dry cattle
and yearlings on the disputed land. In addition, in the years 1984/85 they dunged the
land and in 1985 harrowed, rolled and fertilised the disputed land.

  48 After considering the law and, broadly, directing himself in accordance with the
decisions in Powell and Moran the judge first held that, because of the hay-cutting
agreement, the Grahams had been on the disputed land with permission of Pye until 31
August 1984: time therefore could not start to run until after that date. He then dealt
with the question (which is no longer in issue) as to when time ceased to run. Thirdly, he
considered whether the Grahams had been in possession, i e factual possession with an
intention to possess. He held that the acts done by the Grahams on the land from 31
August 1984 onwards and in particular the exclusion of the whole world from any access
to the disputed land save on foot constituted factual possession. As to the intention to
possess, the judge reviewed the evidence and in particular took into account six factors.
First, what the Grahams had done on the land. Second, for many years before 1984 the
disputed land had been used for grazing purposes i e grazing was a normal farming use
of that land. Third, that although the Grahams had not themselves enclosed the disputed
land in fact the whole world (including Pye) was excluded from it save on foot: the
Grahams controlled all vehicular access to it. Fourth, the Grahams tended the land in the
same way as the rest of their farm by rolling, harrowing, fertilising and maintaining the
hedges and ditches. Fifth, the emphatic refusal by Pye to grant a further grazing licence
prevented Pye from alleging that anything done on the land thereafter by Graham had
been done with the intention of obtaining a further grazing licence. Sixth, the judge dealt
with the argument that since the Grahams knew of Pye's intention to obtain planning
permission, the Grahams should be taken as not intending to be in possession. The judge
pointed out that the Grahams had been refused a further grazing licence expressly on the
grounds that Pye did not want anyone using the land at that time when planning
permission was to be applied for and that accordingly any agricultural use of the land by
the Grahams thereafter was inconsistent with such intended future use by Pye.

  49 Considering all these factors together, the judge with considerable reluctance held
that the Grahams had the necessary intention to possess and had accordingly obtained
title under the Limitation Act.

The decision of the Court of Appeal
  50 The Court of Appeal [2001] Ch 804 attached great importance to the grazing
agreement of 1 February 1983 which Mummery LJ (giving the lead judgment) described
as a contemporaneous and irrefutable record of the common intention of Pye and the
Grahams regarding possession of the disputed land. Given that importance, I must
follow the example of the Court of Appeal and set out the agreement virtually in full.

  51 *440 By the agreement Pye agreed to grant to John Graham ("the grazier ") and he
agreed to take a "right to graze" the disputed land on the following terms:
   "1. The grazier shall have the right to occupy and graze or mow the said land from 1
February 1983 until 31 December 1983 and shall have the use of the said land only for
grazing or one cut of grass.
   "2. The grazier shall pay to the owner the sum of £2,000 in respect of the period of
occupation mentioned in clause 1 above ...
   "3. The grazier shall use the said land for the purpose only of grazing or mowing the
   "4. The grazier shall use only sheep/cattle/horses and/or ponies for the purpose of
grazing the said land and shall not allow the said land to be entered upon or in any way
used by goats, pigs, poultry or any diseased animals.
   "5. The grazier agrees to the following conditions (a) that he will not permit any
trespass upon the said land (b) that he will keep the said land clean and free from [weeds]
(c) that he will keep the gates, fences and ditches in good order (d) that he will not
pasture on the said land any but his own animals (e) that he will graze and use the said
land in a good and husband-like manner (f) that he will not assign the benefit of this
agreement or part with possession of the land."
   "8. This agreement is not a contract of tenancy for the purposes of the Agricultural
Holdings Act 1948.
   "9. It is expressly agreed and understood that the owner does not undertake to repeat
this grazing licence for another period but if he agrees to do so a fresh agreement will
have to be entered into by the grazier to operate from a date subsequent to the agreed
period such fresh agreement to operate as a new and distinct contract.
   "10. The owner reserves the right to terminate this agreement and gain possession of
the land on service of six months' notice at any time during the period of the agreement
with a proportional refund of the licence fee to the tenant but without any other form of

 52 The Court of Appeal considered that this agreement constituted a licence, not a
tenancy, and that it did not give possession of the land to the Grahams. In reciting the
facts, they stated that there was little change in the use of the land from the date of the
expiry of that licence and the expiry of the cutting agreement right down to 1999: the
Grahams continued to graze between 80 and 140 cattle on the land for nine or ten
months. They then set out the "seven " factors which the judge relied upon in finding
that the Grahams had an intention to possess. It is not clear to me where the Court of
Appeal discerned the seventh factor beyond the six enumerated by the judge. They held
that the judge significantly underestimated certain uncontradicted oral evidence as to the
Grahams' intentions which consequently led him to a conclusion justified neither by the
facts nor by a proper application of the 1980 Act.

 53 In outline their process of reasoning was as follows. The parties to the grazing
agreement "plainly did not intend that the Grahams should have exclusive possession of
the disputed land". When that agreement came to an end on 31 December 1983 and the
right to cut the grass had been exhausted by August 1984 the Grahams' intention in
relation to the land did not change: their intention remained to continue to graze, fertilise
and maintain the land in just the same way as under the licence, i e not as possessors of
the land of which Pye remained in possession. Although their occupation was no longer
permissive it still lacked the intention to possess. In finding that this was the intention of
the Grahams, the Court of Appeal relied on evidence given in the witness statement of
Mr Michael Graham. He said of the year 1984:
   "My intention was to carry on using the land for grazing until I was requested not to.
However, no request was ever made to me or my father to vacate the land or to pay for
the grazing which was taking place. Had Pye requested payment I would have happily
paid them. In short I took advantage of the ability to use the land as no one challenged
me ... I farmed the land during the autumn of 1984 through to the spring of 1985 in the
same way as I had in the previous year ... I was aware that there was a risk that I would
not obtain the benefit of that work as again in 1984 like 1983 there was no formal
grazing licence or an agreement to take a cut of hay. I would have paid Pye for a grazing
licence or a cut of hay but in the absence of any formal agreement I was willing to take a
chance that an agreement would be forthcoming later. In light of the lack of interest
shown by Pye during the 1984 grazing season I continued to use the land [for] what I
considered to be its best use ... During the spring of 1985 I believe I made one or two
telephone calls to Tim Evans to ask for a grazing licence for the 1985 season. I would
have preferred to have obtained a formal agreement but in the absence of one I
continued to farm the land in the same fashion as I had in the 1984 and 1983 seasons. I
did not receive a response from Tim Evans to my request and after a couple of attempts
I gave up trying and decided to leave matters until I heard from him or from Pye directly.
I believed at that time that it was possible to obtain ownership of land after it had been
occupied for a sufficient number of years which I mistakenly thought was a period of
seven years."

  54 The Court of Appeal [2001] Ch 804, 819-820 expressed their conclusions:
   "In my judgment, Mr Michael Graham's account of his state of mind when considered
in the context of the circumstances of an initial permissive use under licence and the
continuation of the same use after the expiration of the licence, is not that of a person
who is using the land with the intention of possessing it to the exclusion of Pye. It is that
of a person who, having obtained the agreement of Pye to the limited use of the land in
the past, continues to use it for the time being in exactly the same fashion in the hope
that in the future Pye will again be willing to accede to his requests to enter an agreement
authorising him to use it.
   "In brief, there was no direct evidence that the Grahams ever changed their intentions
regarding the use of the land after the end of August 1984 from what it had been when
they first started to use it under licence in September 1982. That initial use was on the
basis of a common intention that Pye should retain possession of it (i e as part of a land
bank for future development, if planning permission were granted) and that the Grahams
should use it only for the limited purpose of grazing it and without any intention to
possess it to the exclusion of Pye. After 31 August 1984 they did not do anything on the
disputed land which they could not have done, and had not in fact done, under the
grazing agreement. Their attitude to the land remained the same. Such direct evidence as
there was on the intention issue positively indicated there was probably no change in the
intentions of the Grahams or of Pye."

  55 It will be seen that the chain of reasoning of the Court of Appeal is as follows: first,
the grazing agreement of 1 February 1983 "plainly" did not give possession to the
Grahams; second, after the expiry of the grazing agreement the Grahams continued to
use the land for grazing in the same way. They said that "both the nature and extent of
the Grahams' use of the disputed land, which did not amount to factual possession of it
during the period of the licence, remained the same"; third, that Mr Michael Graham
made admissions against interest that he continued to farm the disputed land in just the
same way as in 1983.

  56 In my judgment each of the steps in that reasoning is suspect. First, did the Grahams
obtain possession under the grazing agreement? It is important to construe that
agreement against its background. In allowing the Grahams to use the land it was
essential to Pye that the Grahams did not obtain security of tenure under the Agricultural
Holdings Act 1948. Such security would have been obtained in any case where the rights
granted over the land (whether by way of tenancy or licence is irrelevant) endured for a
full year. Accordingly, in the present case it was of minor importance to the parties
whether the Grahams were given possession of the land: what was important was that
they did not enjoy whatever rights they had for a full year. Hence the grant of the grazing
right for 11 months only and the express provision in clause 9 that a further term would
only be granted by a new and distinct contract starting after the termination of 1
February 1983 agreement. It is against this background that the question whether the
Grahams obtained possession or not has to be determined. The fact that clause 5
contains a covenant by the Grahams "not to part with possession" and clause 10
expressly makes Pye's right to regain "possession" during the term dependent on serving
a notice does not provide a promising basis for the holding of the Court of Appeal that
the "parties plainly did not intend that the Grahams should have exclusive possession ".
However I accept that there are substantial arguments that the document did create only
a licence. Under the agreement the right granted is only a "right to graze"; the land could
only be used for grazing or mowing; the right is described as a "grazing licence" in clause
9 and the payment for the grazing is described in clause 10 as a "licence fee".

 57 I do not find it necessary to decide whether the Grahams obtained exclusive
possession under the agreement of 1 February 1983: I will assume that the Court of
Appeal was right in holding that they did not. But even on that assumption it must be
borne in mind that, ignorant of the legal niceties, the parties as lay people plainly thought
that the Grahams were obtaining "possession" for 11 months and in order to regain
"possession" during the currency of the agreement Pye would have had to serve notice.
In my judgment the form of the agreement is inconsistent with any clear distinction
being drawn by the parties between possession on the one hand and occupation without
possession on the other.

 58 The second stage of the Court of Appeal reasoning was that, after the termination of
the licence on 31 December 1983, and of the mowing agreement in August 1984, the
Grahams continued to use the land in just the same way as they had during the currency
of the grazing agreement: all that changed was that use was no longer permissive. In my
view the facts as found by the judge or agreed do not support this view. The grazing
agreement expired on 31 December 1983. In a letter from Pye's agents dated 30
December 1983 the Grahams were expressly required to vacate the disputed land. But
the Grahams did not vacate the disputed land either then or at any later date. They
spread dung on the land, harrowed it and rolled it. They overwintered dry cattle and
yearlings in a shed on the land. From 1 January 1984 onwards the Grahams repeatedly
did things on the disputed land which they would have had no right to do under the old
grazing agreement even if it had still been in force. The objective facts demonstrate that
the Grahams made such use of the disputed land as they wished irrespective of whether
it fell within the terms of any hypothetical grazing agreement.

  59 To this must be added another factor of some importance. When in January 1984
Pye refused to grant a further grazing licence they did so expressly on the grounds of the
advice which they had received that, for planning purposes, they should have all the land
in hand. Therefore, as the judge pointed out, the Grahams by grazing the land during
1984 and thereafter were not only acting without permission of the paper owner: they
were acting in a way which, to their knowledge, was directly contrary to the wishes of the

  60 The third limb of the Court of Appeal reasoning is that Michael Graham's evidence,
contrary to his interest, was consistent with the Grahams' intention being not to possess
the land on their own behalf but only to graze it as though there continued to be a
grazing licence. In expressing this view the Court of Appeal was selective in its choice of
the evidence in Michael Graham's witness statement, relying only on such evidence as
was contrary to his interest. It is true that from the decision in Powell onwards judges
have stressed the common sense caution to be shown towards self-serving evidence such
as that which can be given by a squatter as to his own intention at a past time. But this
case is different: the Court of Appeal is relying on part of Mr Michael Graham's evidence
as to his attitude whilst ignoring other parts of the evidence. In my judgment a proper
view can only be formed by looking at the whole of his evidence on the subject. The
judge specifically accepted his evidence that the disputed land was farmed together with
Manor Farm effectively as a single unit. As the judge pointed out, there was independent
evidence that Michael Graham "treated the [disputed] land" as his own. When all the
evidence is looked at in my judgment it is wholly consistent with the judge's view that,
although the Grahams would have been willing to pay for the use of the disputed land if
asked, such willingness is not inconsistent with them intending to possess the land in the
meantime as demonstrated by them treating the land as part of Manor Farm and
maintaining it on the same basis as the rest of the farm.

 61 If the view of the Court of Appeal were to be correct, the result would be
anomalous. Although from 1984 to 1997 the Grahams were the only people who did
anything on the disputed land and Pye had throughout that period been physically
excluded from the land, nevertheless Pye was throughout to be treated as in possession.
In my judgment, however favourably one approaches the claim of a paper owner to
possession, such a conclusion would be so unrealistic as to be an impossible one. For all
practical purposes the Grahams used the land as their own and in a way normal for an
owner to use it throughout the period from August 1984 onwards. During that whole
period Pye did nothing on the disputed land from which they were wholly excluded save
on foot.

 62 Therefore I cannot accept the reasoning on which the Court of Appeal and Pye in
their submissions before your Lordships sought to demonstrate that the Grahams did
not intend to possess the land.

 63 In his persuasive submissions for Pye Mr Gaunt, whilst adopting the general tenor of
the Court of Appeal reasoning, sought to concentrate attention on the first two and a
half years, i e from 31 December 1983 to 30 April 1986. He was inclined to concede that
at a later stage the Grahams might have been in possession. But, he submitted correctly,
the Grahams had to demonstrate that they had dispossessed Pye before 30 April 1986.
He submitted that this had not been done: from the date of the end of the grazing
agreement the Grahams were seeking to obtain further grazing licences from Pye.
Although this was initially refused they were granted the right to cut hay in 1984. Then in
1984 they again sought to obtain grazing licences but there was no response from Pye.
Therefore, he submitted, whatever may have been the position in the later stages the
Grahams had not demonstrated an intention to possess the disputed land on their own
behalf before 30 April 1986 and accordingly had not demonstrated that Pye had been
dispossessed before that date.

  64 This is the most persuasive way of formulating Pye's case but I do not accept it.
Despite Pye's notification to quit the land in December 1983, its peremptory refusal of a
further grazing licence in 1984 and the totally ignored later requests for a grazing licence,
after 31 December 1983 the Grahams stayed in occupation of the disputed land using it
for what purposes they thought fit. Some of those purposes (i e the grazing) would have
fallen within a hypothetical grazing agreement. But the rest are only consistent with an
intention, verified by Mr Michael Graham, to use the land as they thought best. That
approach was adopted from the outset. In my judgment, when the Grahams remained in
factual possession of the fully enclosed land after the expiry of the mowing licence they
manifestly intended to assert their possession against Pye.
  66 For these reasons I would allow the appeal and restore the judgment of Neuberger J.

Lord Hope
. . . one might have expected the law--in the context of a statutory regime where
compensation is not available--to lean in favour of the protection of a registered
proprietor against the actions of persons who cannot show a competing title on the
register. Fortunately, as my noble and learned friend, Lord Bingham of Cornhill has
pointed out, a much more rigorous regime has now been enacted in Schedule 6 to the
Land Registration Act 2002. Its effect will be to make it much harder for a squatter who
is in possession of registered land to obtain a title to it against the wishes of the
proprietor. The unfairness in the old regime which this case has demonstrated lies not in
the absence of compensation, although that is an important factor, but in the lack of
safeguards against oversight or inadvertence on the part of the registered proprietor.

 Appeal allowed with costs.

Parker v British Airways Board [1982] 1 QB 1004, CA
Donaldson LJ: On November 15, 1978, the plaintiff, Alan George Parker, had a date with fate
- and perhaps with legal immortality. He found himself in the international executive lounge at
terminal one, Heathrow Airport. And that was not all that he found. He also found a gold
bracelet lying on the floor.
  We know very little about Mr Parker, and it would be nice to know more. He was lawfully in
the lounge and, as events showed, he was an honest man. Clearly he had not forgotten the
schoolboy maxim "Finders keepers." But, equally clearly, he was well aware of the adult
qualification "unless the true owner claims the article." He had had to clear customs and
security to reach the lounge. He was almost certainly an outgoing passenger because the
defendants, British Airways Board, as lessees of the lounge from the British Airports Authority
and its occupiers, limit its use to passengers who hold first class tickets or boarding passes or
who are members of their Executive Club, which is a passengers' "club." Perhaps Mr Parker's
flight had just been called and he was pressed for time. Perhaps the only officials in sight were
employees of British Airways. Whatever the reason, he gave the bracelet to an anonymous
British Airways official instead of to the police. He also gave the official a note of his name and
address and asked for the bracelet to be returned to him if it was not claimed by the owner.
The official handed the bracelet to the lost property department of British Airways.
   Thus far the story is unremarkable. Mr Parker, the British Airways official and British
Airways themselves had all acted as one would have hoped and expected them to act.
Thereafter matters took what, to Mr Parker, was an unexpected turn. Although the owner
never claimed the bracelet, British Airways did not return it to Mr Parker. Instead they sold it
and kept the proceeds which amounted to £850. Mr Parker discovered what had happened and
was more than a little annoyed. I can understand his annoyance. He sued British Airways in the
Brentford County Court and was awarded £850 as damages and £50 as interest. British Airways
now appeal.
   It is astonishing that there should be any doubt as to who is right. But there is. Indeed, it
seems that the academics have been debating this problem for years. In 1971 the Law Reform
Committee reported that it was by no means clear who had the better claim to lost property
when the protagonists were the finder and the occupier of the premises where the property was
found. Whatever else may be in doubt, the committee was abundantly right in this conclusion.
The committee recommended legislative action but, as is not uncommon, nothing has been
done. The rights of the parties thus depend upon the common law.
   As a matter of legal theory, the common law has a ready made solution for every problem and
it is only for the judges, as legal technicians, to find it. The reality is somewhat different. Take
the present case. The conflicting rights of finder and occupier have indeed been considered by
various courts in the past. But under the rules of English jurisprudence, none of their decisions
binds this court. We therefore have both the right and the duty to extend and adapt the
common law in the light of established principles and the current needs of the community.
This is not to say that we start with a clean sheet. In doing so, we should draw from the
experience of the past as revealed by the previous decisions of the courts . . .
   Neither Mr Parker nor British Airways lay any claim to the bracelet either as owner of it or as
one who derives title from that owner. Mr Parker's claim is founded upon the ancient common
law rule that the act of finding a chattel which has been lost and taking control of it gives the
finder rights with respect to that chattel. British Airways' claim has a different basis. They
cannot and do not claim to have found the bracelet when it was handed to them by the
plaintiff. At that stage it was no longer lost and they received and accepted the bracelet from
the plaintiff on terms that it would be returned to him if the owner could not be found. They
must and do claim on the basis that they had rights in relation to the bracelet immediately before
Mr Parker found it and that these rights are superior to Mr Parker's. British Airways' claim is
based upon the proposition that at common law an occupier of land has such rights over all lost
chattels which are on that land, whether or not the occupier knows of their existence.
   The common law right asserted by Mr Parker has been recognised for centuries. In its
simplest form it was asserted by the chimney sweep's boy who, in 1722, found a jewel and
offered it to a jeweller for sale. The jeweller refused either to pay a price acceptable to the boy
or to return it and the boy sued the jeweller for its value: Armory v Delamirie (1722) 1 Stra. 505.
Pratt C.J. ruled "That the finder of a jewel, though he does not by such finding acquire an
absolute property or ownership, yet he has such a property as will enable him to keep it against
all but the rightful owner, and consequently may maintain trover."
   In that case the jeweller clearly had no rights in relation to the jewel immediately before the
boy found it and any rights which he acquired when he received it from the boy stemmed from
the boy himself. The jeweller could only have succeeded if the fact of finding and taking
control of the jewel conferred no rights upon the boy. The court would then have been faced
with two claimants, neither of which had any legal right, but one had de facto possession. The
rule as stated by Pratt CJ must be right as a general proposition, for otherwise lost property
would be subject to a free-for-all in which the physically weakest would go to the wall.
   Pratt CJ's ruling is, however, only a general proposition which requires definition. Thus one
who "finds" a lost chattel in the sense of becoming aware of its presence, but who does no
more, is not a "finder" for this purpose and does not, as such, acquire any rights.
   Some qualification has also to be made in the case of the trespassing finder. The person vis a
vis whom he is a trespasser has a better title. The fundamental basis of this is clearly public
policy. Wrongdoers should not benefit from their wrongdoing. This requirement would be
met if the trespassing finder acquired no rights. That would, however, produce the free-for-all
situation to which I have already referred, in that anyone could take the article from the
trespassing finder. Accordingly, the common law has been obliged to give rights to someone
else, the owner ex hypothesi being unknown. The obvious candidate is the occupier of the
property upon which the finder was trespassing.
   Curiously enough, it is difficult to find any case in which the rule is stated in this simple form,
but I have no doubt that this is the law. It is reflected in the judgment of Chitty J in Elwes v
Brigg Gas Co (1886) 33 ChD 562, 568, although the chattel concerned was beneath the surface
of the soil and so subject to different considerations. It is also reflected in the judgment of
Lord Goddard CJ. in Hibbert v McKiernan [1948] 2 KB 142, 149. That was a criminal case
concerning the theft of "lost" golf balls on the private land of a club. The only issue was
whether for the purposes of the criminal law property in the golf balls could be laid in someone
other than the alleged thief. The indictment named the members of the club, who were
occupiers of the land, as having property in the balls, and it is clear that at the time when the
balls were taken the members were very clearly asserting such a right, even to the extent of
mounting a police patrol to warn off trespassers seeking to harvest lost balls.
   It was in this context that we were also referred to the opinion of the Judicial Committee in
Glenwood Lumber Co Ltd v Phillips [1904] AC 405 and in particular to remarks by Lord Davey, at
p. 410. However, there the occupier knew of the presence of the logs on the land and had a
claim to them as owner as well as occupier. Furthermore, it was not a finding case, for the logs
were never lost.
   One might have expected there to be decisions clearly qualifying the general rule where the
circumstances are that someone finds a chattel and thereupon forms the dishonest intention of
keeping it regardless of the rights of the true owner or of anyone else. But that is not the case.
There could be a number of reasons. Dishonest finders will often be trespassers. They are
unlikely to risk invoking the law, particularly against another subsequent dishonest taker, and a
subsequent honest taker is likely to have a superior title: see, for example, Buckley v Gross (1863)
3 B & S 566. However, he probably has some title, albeit a frail one because of the need to
avoid a free-for-all. This seems to be the law in Ontario, Canada (see Bird v Fort Frances [1949] 2
DLR 791).
   In the interests of clearing the ground and identifying the problem, let me now turn to
another situation in respect of which the law is reasonably clear. This is that of chattels which
are attached to realty (land or buildings) when they are found. If the finder is not a wrongdoer,
he may have some rights, but the occupier of the land or building will have a better title. The
rationale of this rule is probably either that the chattel is to be treated as an integral part of the
realty as against all but the true owner and so incapable of being lost or that the "finder" has to
do something to the realty in order to get at or detach the chattel and, if he is not thereby to
become a trespasser, will have to justify his actions by reference to some form of licence from
the occupier. In all likely circumstances that licence will give the occupier a superior right to
that of the finder.
  Authority for this view of the law is to be found in South Staffordshire Water Co v Sharman
[1896] 2 QB 44 where the defendant was employed by the occupier of land to remove mud
from the bottom of a pond. He found two gold rings embedded in the mud. The plaintiff
occupier was held to be entitled to the rings. Dicta of Lord Russell of Killowen CJ, with whom
Wills J agreed, not only support the law as I have stated it, but go further and may support the
defendants' contention that an occupier of a building has a claim to articles found in that
building as opposed to being found attached to or forming part of it. However, it is more
convenient to consider these dicta hereafter. Elwes v Brigg Gas Co 33 ChD 562, to which we
were also referred in this context, concerned a prehistoric boat embedded in land. But I think
that, when analysed, the issue really turned upon rival claims by the plaintiff to be the true
owner in the sense of being the tenant for life of the realty, of the minerals in the land and of
the boat if it was a chattel and by the defendants as lessees rather than as finders.
  Again, in the interest of clearing the ground, I should like to dispose briefly of some of the
other cases to which we were quite rightly referred and to do so upon the grounds that, when
analysed, they do not really bear upon the instant problem. Thus, Re Cohen, National Provincial
Bank Ltd v Katz [1953] 1 Ch 88 concerned money hidden in a flat formerly occupied by a
husband and a wife who had died. The issue was whether the money belonged to the estate of
the husband or to that of the wife. The money had been hidden and not lost and this was not a
finding case at all. In Johnson v Pickering [1907] 2 KB 437 the issue was whether the sheriff on
behalf of a judgment creditor had a claim to money which the judgment debtor took to his
house at a time when the sheriff had taken walking possession of that house, albeit the sheriff
had been unaware of the arrival of the money. This again is not a finding case. In Moffatt v
Kazana [1969] 2 QB 152 the claimant established a title derived from that of the true owner.
This does not help. Finally, there is Hannah v Peel [1945] KB 509. This was indeed a finding
case, but the claimant was the non-occupying owner of the house in which the brooch was
found. The occupier was the Crown, which made no claim either as occupier or as employer of
the finder. It was held that the non-occupying owner had no right to the brooch and that
therefore the finder's claim prevailed. What the position would have been if the Crown had
made a claim was not considered.
  I must now return to the respective claims of Mr Parker and British Airways. Counsel for Mr
Parker relies heavily upon the decision of Patteson J and Wightman J, sitting in banc in Bridges v
Hawkesworth (1851) 21 LJQB 75, 15 Jur 1079. It was an appeal from the county court by case
stated. The relevant facts, as found, were as follows. Mr Bridges was a commercial traveller
and in the course of his business he called upon the defendant at his shop. As he was leaving
the shop, he picked up a small parcel which was lying on the floor, showed it to the shopman
and, upon opening it in his presence, found that it contained £65 in notes. Mr Hawkesworth
was called and Mr Bridges asked him to keep the notes until the owner claimed them. Mr
Hawkesworth advertised for the true owner, but no claimant came forward. Three years later
Mr Bridges asked for the money and offered to indemnify Mr Hawkesworth in respect of the
expenses which he had incurred in advertising for the owner. Mr Hawkesworth refused to pay
over the money and Mr Bridges sued for it. The county court judge dismissed his claim and he
  Patteson J gave the judgment of the court. The decision is sufficiently important, and the
judgment sufficiently short and difficult to find, for me to feel justified in reproducing it in full.
In so doing, I take the text of the report in the Jurist but refer to the Law Journal version in
square brackets where they differ. It reads as follows (15 Jur 1079 at 1082):
     "The notes which are the subject of this action were incidentally [evidently] dropped by
   mere accident, in the shop of the defendant, by the owner of them. The facts do not
   warrant the supposition that they had been deposited there intentionally, nor has the case
   been put at all upon that ground. The plaintiff found them on the floor, they being
   manifestly lost by some one. The general right of the finder to any article which has been
   lost, as against all the world, except the true owner, was established in the case of Armory v
   Delamirie 1 Stra 505, which has never been disputed. This right would clearly have accrued to
   the plaintiff had the notes been picked up by him outside the shop of the defendant; and if
   he once had the right, the case finds that he did not intend, by delivering the notes to the
   defendant, to waive the title (if any) which he had to them, but they were handed to the
   defendant merely for the purpose of delivering them to the owner, should he appear.
   Nothing that was done afterwards has altered the state of things; the advertisements inserted
   [indeed] in the newspaper, referring to the defendant, had the same object; the plaintiff has
   tendered the expense of those advertisements to the defendant, and offered him an
   indemnity against any claim to be made by the real owner, and has demanded the notes. The
   case, therefore, resolves itself into the single point on which it appears that the learned judge
   decided it, namely, whether the circumstance of the notes being found inside [`inside'
   emphasised in Law Journal] the defendant's shop gives him, the defendant, the right to have
   them as against the plaintiff, who found them. There is no authority in our law to be found
   directly in point. Perhaps the nearest case is that of Merry v Green (1841) 7 M & W 623, but it
   differs in many respects from the present. We were referred, in the course of the argument,
   to the learned work of Von Savigny, edited by Chief Justice Perry; but even this work, full as
   it is of subtle distinctions and nice reasonings, does not afford a solution of the present
   question. It was well asked, on the argument, if the defendant has the right, when did it
   accrue to him? If at all, it must have been antecedent to the finding by the plaintiff, for that
   finding could not give the defendant any right. If the notes had been accidentally kicked into
   the shop [`the street' in Law Journal, which must be right], and there found by someone
   passing by, could it be contended that the defendant was entitled to them from the mere fact
   of their being originally dropped in his shop? If the discovery had never [not] been
   communicated to the defendant, could the real owner have had any cause of action against
   him because they were found in his house? Certainly not. The notes never were in the
   custody of the defendant, nor within the protection of his house, before they were found, as
   they would have been had they been intentionally deposited there; and the defendant has
   come under no responsibility, except from the communication made to him by the plaintiff,
   the finder, and the steps taken by way of advertisement. These steps were really taken by the
   defendant as the agent of the plaintiff, and he has been offered an indemnity, the sufficiency
   of which is not disputed. We find, therefore, no circumstances in this case to take it out of
   the general rule of law, that the finder of a lost article is entitled to it as against all persons
   except the real owner, and we think that that rule must prevail, and that the learned judge
   was mistaken in holding that the place in which they were found makes any legal difference.
   Our judgment, therefore, is, that the plaintiff is entitled to these notes as against the
   defendant; that the judgment of the court below must be reversed, and judgment given for
   the plaintiff for £50."
  The ratio of this decision seems to me to be solely that the unknown presence of the notes on
the premises occupied by Mr Hawkesworth could not without more, give him any rights or
impose any duty upon him in relation to the notes.
  Counsel for British Airways submits that Bridges v Hawkesworth can be distinguished and he
referred us to the judgment of Lord Russell CJ, with which Wills J agreed, in South Staffordshire
Water Co v Sharman [1896] 2 QB 44. Sharman's case itself is readily distinguishable, either upon
the ground that the rings were in the mud and thus part of the realty or upon the ground that
the finders were employed by the plaintiff to remove the mud and had a clear right to direct
how the mud and anything in it should be disposed of, or upon both grounds. However, Lord
Russell CJ in distinguishing Bridges v Hawkesworth expressed views which, in the submission of
counsel for British Airways, point to British Airways having a superior claim to that of Mr
Parker on the facts of the instant case. Lord Russell CJ said, at p 46:
       "The principle on which this case must be decided, and the distinction which must be
    drawn between this case and that of Bridges v Hawkesworth is to be found in a passage in
    Pollock and Wright,s Essay on Possession in the Common Law, p. 41: `The possession of
    land carries with it in general, by our law, possession of everything which is attached to or
    under that land, and, in the absence of a better title elsewhere, the right to possess it also.
    And it makes no difference that the possessor is not aware of the thing's existence . . . It is
    free to anyone who requires a specific intention as part of a de facto possession to treat this
    as a positive rule of law. But it seems preferable to say that the legal possession rests on a
    real de facto possession, constituted by the occupier's general power and intent to exclude
    unauthorised interference.' That is the ground on which I prefer to base my judgment.
    There is a broad distinction between this case and those cited from Blackstone's
    Commentaries. Those were cases in which a thing was cast into a public place or into the
    sea - into a place, in fact, of which it could not be said that anyone had a real de facto
    possession, or a general power and intent to exclude unauthorised interference. The case of
    Bridges v Hawkesworth stands by itself, and on special grounds; and on those grounds it seems
    to me that the decision in that case was right. Someone had accidentally dropped a bundle
    of banknotes in a public shop. The shopkeeper did not know they had been dropped, and
    did not in any sense exercise control over them. The shop was open to the public, and they
    were invited to come there. A customer picked up the notes and gave them to the
    shopkeeper in order that he might advertise them. The owner of the notes was not found,
    and the finder then sought to recover them from the shopkeeper. It was held that he was
    entitled to do so, the ground of the decision being, as was pointed out by Patteson J, that the
    notes, being dropped in the public part of the shop, were never in the custody of the
    shopkeeper, or `within the protection of his house.' It is somewhat strange that there is no
    more direct authority on the question; but the general principle seems to me to be that where
    a person has possession of house or land, with a manifest intention to exercise control over
    it and the things which may be upon or in it, then, if something is found on that land,
    whether by an employee of the owner or by a stranger, the presumption is that the
    possession of that thing is in the owner of the locus in quo."
For my part, I can find no trace in the report of Bridges v Hawkesworth of any reliance by
Patteson J upon the fact that the notes were found in what may be described as the public part
of the shop. He could, and I think would, have said that if the notes had been accidentally
dropped in the private part unbeknownst to Mr Hawkesworth and had later been accidentally
kicked into the street, Mr Hawkesworth would have had no duty to the true owner and no
rights superior to that of the finder.
  However, I would accept Lord Russell CJ's statement of the general principle in South
Staffordshire Water Co v Sharman [1896] 2 QB 44, 46-47, provided that the occupier's intention to
exercise control over anything which might be on the premises was manifest. But it is
impossible to go further and to hold that the mere right of an occupier to exercise such control
is sufficient to give him rights in relation to lost property on his premises without overruling
Bridges v Hawkesworth. Mr Hawkesworth undoubtedly had a right to exercise such control, but
his defence failed.
  South Staffordshire Water Co v Sharman was followed and applied by McNair J in City of London
Corporation v Appleyard [1963] 1 WLR 982. There money was found in a safe, let into one of the
walls of a building, by workmen demolishing that building. The lease from the corporation to
the building owners preserved the corporation's right to any article of value found upon any
remains of former buildings and the workmen were employed by contractors working for the
building owners. McNair J upheld the corporation's claim. The workmen claimed as finders,
but it is clear law that a servant or agent who finds in the course of his employment or agency is
obliged to account to his employer or principal. The contractor similarly was bound to account
to the building owner and the building owner, who was the occupier, was contractually bound
 to account to the corporation. The principal interest of the decision lies in the comment of
 McNair J at p 987, that he did not understand Lord Russell CJ as intending to qualify or extend
 the principle stated in Pollock and Wright that possession of land carries with it possession of
 everything which is attached to or under that land when the Chief Justice restated the principle as:
     "... where a person has possession of house or land, with a manifest intention to exercise
     control over it and the things which may be upon or in it, then, if something is found on that
     land, whether by an employee of the owner or by a stranger, the presumption is that the
     possession of that thing is in the owner of the locus in quo."
 (my emphasis): see [1896] 2 QB 44 at 47.
   We were also referred to two Canadian authorities. In Grafstein v Holme and Freeman (1958) 12
DLR (2d) 727, the Ontario Court of Appeal considered the competing claims of Mr Grafstein,
the owner-occupier of a dry goods store, and Mr Holme and Mr Freeman, his employees. Mr
Holme found a locked box in premises which Mr Grafstein had acquired as an extension to his
store. He showed it unopened to Mr Grafstein and was told to put it on a shelf and leave it
there. Two years later Mr Holme and Mr Freeman decided to open the box and found that it
contained $Can 38,000 in notes. The court treated the moment of finding the money as that at
which the box was opened, rather than when the box was found. It held that Mr Grafstein had a
superior claim because he took possession and control of the box and of its unknown contents
when its existence was first brought to his attention. LeBel JA took a different view of Lord
Russell CJ's judgment in South Staffordshire Water Co v Sharman from that of McNair J in City of
London Corporation v Appleyard. He considered that Lord Russell CJ intended to extend the
statement of principle in Pollock and Wright to include things upon land or in a house. He
commented (12 DLR (2d) 727, 734):
     " . . . I do not think that anyone could seriously quarrel with the principle as extended by
     Lord Russell in that way so long as it is established in evidence as a basis for the presumption
     that the occupier has in fact the `possession of house or land, with a manifest intention to
     exercise control over it [ie the land or the house] and the things which may be upon or in it...'
     I say this because I think there must be a natural presumption of possession in favour of the
     person in occupation - a presumption which hardly needs a legal decision for its authority."
 The court did not decide the issues upon the basis that Messrs Holme and Freeman were the
 employees of Mr Grafstein acting within the scope of their employment, and LeBel JA
 indicated that in his view a claim by Mr Grafstein based upon that relationship might well have
   The second Canadian decision is that of the Manitoba Court of Appeal in Kowal v Ellis (1977)
 76 DLR (3d) 546. The plaintiff was driving across the defendant's land when he saw an
 abandoned pump on that land. Some question arose as to whether he was a trespasser, but the
 court held that at the time when he took possession of the pump he had the defendant's
 permission to go on the land.
   The judgment of the court was delivered by O'Sullivan JA and, so far as is material, was in the
 following terms (at pp 548-549):
     "The plaintiff, when he took possession of the pump, acquired a special property in it arising
     out of his relationship to the unknown owner. The relationship was one of bailment and,
     like any other bailee, the plaintiff has become entitled to sue in trover or, as here, in detinue
     anyone who has interfered with his right of possession, save only the true owner or someone
     claiming through or on behalf of the true owner. This is in accord with what was decided by
     Patteson J in Bridges v Hawkesworth 21 LJQB 75 at 78: `We find, therefore, no circumstances
     in this case to take it out of the general rule of law, that the finder of a lost article is entitled
     to it as against all parties except the real owner, and we think that that rule must prevail . . .'
     Bridges v Hawkesworth was followed by Birkett J in Hannah v Peel [1945] 1 KB 509. It follows
     that the plaintiff is entitled to possession of the pump, unless the defendant asserts and
     proves a title to the pump superior to that of the plaintiff. Such a superior title may arise
    independently of the original owner of the pump if the original owner has dealt with it in
    such a way as to enable the landowner to assert a claim as owner of the chattel, or it may
    arise by reason of the landowner having himself already become the bailee of the chattel on
    behalf of the true owner. In Elwes v Brigg Gas Co (1886) 33 ChD 562 the landowner
    succeeded against the finder of a boat because the landowner proved that it was the owner
    of the boat, which had become embedded in the soil. In that case, Chitty J said, at p. 568:
    `The first question which does actually arise in this case is whether the boat belonged to the
    plaintiff [landowner] . . . I hold that it did . . .' Naturally, a bailee by finding must surrender
    possession to the true owner of the chattel and, once it was held that the landowner owned
    the boat, the case was closed. A similar result was effected in Hibbert v McKiernan [1948] 2
    KB 142. Once there was a finding that the golf balls belonged to the members of the golf
    course, it followed that the finder had no right of possession as against the true owners of
    the balls. One can imagine cases where a chattel is abandoned by its first owner any may
    then become the property of someone else, perhaps a landowner who exercises control and
    dominion over it. In such a case, the landowner would assert a claim against the finder, not
    by virtue of his right as owner of land, but by virtue of his right as owner of the chattel. In
    the case before us, however, the defendant asserts no such right of ownership. The pump in
    question appears to have been cached rather than abandoned. So this is a case where the
    defendant does not even assert that he is the owner of the chattel in question; that being so,
    the defendant can succeed only by showing that he himself was in possession of the pump at
    the time of the finding in such a way that he, the defendant, had already constituted himself a
    bailee for the true owner. I know there have been weighty opinions expressed in favour of
    the proposition that the possessor of land possesses all that is on the land, and there is a
    sense in which that may be so, but to oust the claim of a bailee by finding it is not enough to
    establish some kind of metaphysical possession. What must be shown is that the landowner
    claimant, who has not acquired ownership of a chattel, is a prior bailee of the chattel with all
    the rights, but also with all the obligations, of a bailee. I am sure that no one would be more
    surprised than the defendant if, prior to the finding by the plaintiff, the true owner had come
    along and asserted that the defendant landowner owed him any duty either to take care of
    the pump or to seek out the owner of it. The reality is that the defendant, not even being
    aware of the existence of the pump, owed no duty with respect to it to its true owner. He
    was not a bailee of the pump and consequently has no claim to possession which can prevail
    over the special property which the plaintiff has by virtue of his having become a bailee by
One of the great merits of the common law is that it is usually sufficiently flexible to take
account of the changing needs of a continually changing society. Accordingly, counsel for
British Airways rightly directed our attention to the need to have common law rules which will
facilitate rather than hinder the ascertainment of the true owner of a lost chattel and a reunion
between the two. In his submission the law should confer rights upon the occupier of the land
where a lost chattel was found which were superior to those of the finder, since the loser is
more likely to make inquiries at the place of loss. I see the force of this submission. However,
I think that it is also true that if this were the rule and finders had no prospect of any reward,
they would be tempted to pass by without taking any action or to become concealed keepers of
articles which they found. Furthermore, if a finder is under a duty to take reasonable steps to
reunite the true owner with his lost property, this will usually involve an obligation to inform
the occupier of the land of the fact that the article has been found and where it is to be kept.
  In a dispute of this nature there are two quite separate problems. The first is to determine the
general principles or rules of law which are applicable. The second, which is often the more
troublesome, is to apply those principles or rules to the factual situation. I propose to confront
those two problems separately.
Rights and obligations of the finder
  1. The finder of a chattel acquires no rights over it unless (a) it has been abandoned or lost
and (b) he takes it into his care and control.
  2. The finder of a chattel acquires very limited rights over it if he takes it into his care and
control with dishonest intent or in the course of trespassing.
  3. Subject to the foregoing and to point 4 below, a finder of a chattel, whilst not acquiring
any absolute property or ownership in the chattel, acquires a right to keep it against all but the
true owner or those in a position to claim through the true owner or one who can assert a prior
right to keep the chattel which was subsisting at the time when the finder took the chattel into
his care and control.
  4. Unless otherwise agreed, any servant or agent who finds a chattel in the course of his
employment or agency and not wholly incidentally or collaterally thereto and who takes it into
his care and control does so on behalf of his employer or principal who acquires a finder's
rights to the exclusion of those of the actual finder.
  5. A person having a finder's rights has an obligation to take such measures as in all the
circumstances are reasonable to acquaint the true owner of the finding and present whereabouts
of the chattel and to care for it meanwhile.
Rights and liabilities of an occupier
  1. An occupier of land has rights superior to those of a finder over chattels in or attached to
that land and an occupier of a building has similar rights in respect of chattels attached to that
building, whether in either case the occupier is aware of the presence of the chattel.
  2. An occupier of a building has rights superior to those of a finder over chattels upon or in,
but not attached to, that building if, but only if, before the chattel is found, he has manifested
an intention to exercise control over the building and the things which may be upon it or in it.
  3. An occupier who manifests an intention to exercise control over a building and the things
which may be upon or in it so as to acquire rights superior to those of a finder is under an
obligation to take such measures as in all the circumstances are reasonable to ensure that lost
chattels are found and, upon their being found, whether by him or by a third party, to acquaint
the true owner of the finding and to care for the chattels meanwhile. The manifestation of
intention may be express or implied from the circumstances including, in particular, the
circumstance that the occupier manifestly accepts or is obliged by law to accept liability for
chattels lost upon his `premises' eg an innkeeper's or carrier's liability.
  4. An `occupier' of a chattel, eg a ship, motor car, caravan or aircraft, is to be treated as if he
were the occupier of a building for the purposes of the foregoing rules.
Application to the instant case
  Mr Parker was not a trespasser in the executive lounge and, in taking the bracelet into his care
and control, he was acting with obvious honesty. Prima facie, therefore, he had a full finder's
rights and obligations. He in fact discharged those obligations by handing the bracelet to an
official of British Airways although he could equally have done so by handing the bracelet to
the police or in other ways such as informing the police of the find and himself caring for the
  Mr Parker's prima facie entitlement to a finder's rights was not displaced in favour of an
employer or principal. There is no evidence that he was in the executive lounge in the course of
any employment or agency and, if he was, the finding of the bracelet was quite clearly collateral
thereto. The position would have been otherwise in the case of most or perhaps all British
Airways' employees.
  British Airways, for their part, cannot assert any title to the bracelet based upon the rights of
an occupier over chattels attached to a building. The bracelet was lying loose on the floor.
Their claim must, on my view of the law, be based upon a manifest intention to exercise control
over the lounge and all things which might be in it. The evidence is that they claimed the right
to decide who should and who should not be permitted to enter and use the lounge, but their
control was in general exercised upon the basis of classes or categories of user and the
availability of the lounge in the light of the need to clean and maintain it. I do not doubt that
they also claimed the right to exclude individual undesirables, such as drunks, and specific types
of chattels such as guns and bombs. But this control has no real relevance to a manifest
intention to assert custody and control over lost articles. There was no evidence that they
searched for such articles regularly or at all.
   Evidence was given of staff instructions which govern the action to be taken by employees of
British Airways if they found lost articles or lost chattels were handed to them. But these
instructions were not published to users of the lounge and in any event I think that they were
intended to do no more than instruct the staff on how they were to act in the course of their
   It was suggested in argument that in some circumstances the intention of the occupier to
assert control over articles lost on his premises speaks for itself. I think that this is right. If a
bank manager saw fit to show me round a vault containing safe deposits and I found a gold
bracelet on the floor, I should have no doubt that the bank had a better title than I, and the
reason is the manifest intention to exercise a very high degree of control. At the other extreme
is the park to which the public has unrestricted access during daylight hours. During those
hours there is no manifest intention to exercise any such control. In between these extremes are
the forecourts of petrol filling stations, unfenced front gardens of private houses, the public
parts of shops and supermarkets as part of an almost infinite variety of land, premises and
   This lounge is in the middle band and in my judgment, on the evidence available, there was
no sufficient manifestation of any intention to exercise control over lost property before it was
found such as would give British Airways a right superior to that of Mr Parker or indeed any
right over the bracelet. As the true owner has never come forward, it is a case of `finders
   I would therefore dismiss the appeal.
Eveleigh LJ: It is accepted on both sides that for the defendants to succeed it must be shown
that they had possession of the bracelet at the time when the plaintiff found it and took it into
his possession. Whatever the difficulties which surround the concept of possession in English
law, the two elements of control and animus possidendi must co-exist. Each of these elements
varies greatly in the circumstances of each case. We are concerned to consider them in relation
to a bracelet, obviously lost by its owner, found on the floor of the executive lounge at London
Airport. Against all but the true owner a person in possession has the right to possess. It
should follow therefore that an innocent handler of property who intends to take it for the
purpose of discovering the owner and returning it to him should not be in danger of infringing
any right in a third party. This makes it essential that the elements of possession should be
   In South Staffordshire Water Co v Sharman [1896] 2 QB 44, at 47, Lord Russell CJ said:
    "It is somewhat strange that there is no more direct authority on the question; but the
    general principle seems to me to be that where a person has possession of house or land,
    with a manifest intention to exercise control over it and the things which may be upon or in
    it, then, if something is found on that land, whether by an employee of the owner or by a
    stranger, the presumption is that the possession of that thing is in the owner of the locus in
In relation to the facts of the present case, I respectfully agree with Donaldson LJ when he says
that he would accept Lord Russell CJ's statement of the general principle, provided that the
occupier's intention to exercise control over anything which might be on the premises was
manifest. Indeed, I regard Lord Russell CJ as saying that it is necessary for the occupier to
prove that his intention was obvious. A person permitted upon the property of another must
respect the lawful claims of the occupier as the terms upon which he is allowed to enter, but it
is only right that those claims or terms should be made clear. What is necessary to do this must
depend on the circumstances. Take the householder. He has the key to the front door. People
do not enter at will. They come by very special invitation. They are not members of a large
public group, even a restricted group of the public, as users of the executive lounge may be. I
would be inclined to say that the occupier of a house will almost invariably possess any lost
article on the premises. He may not have taken any positive steps to demonstrate his animus
possidendi, but so firm is his control that the animus can be seen to attach to it. It is rather like
the strong room of a bank, where I think it would be difficult indeed to suggest that a bracelet
lying on the floor was not in the possession of the bank. The firmer the control, the less will be
the need to demonstrate independently the animus possidendi.
  The absence of both elements in Bridges v Hawkesworth (1851) 21 LJQB 75 was emphasised by
Lord Russell CJ in South Staffordshire Water Co v Sharman [1896] 2 QB 44 at 47, when he said
"The shopkeeper did not know they had been dropped, and did not in any sense exercise
control over them. The shop was open to the public, and they were invited to come there." I
do not myself support the criticism that has been levelled against Lord Russell CJ's words by
those who state broadly that the place makes no difference and call in support the words of
Patteson J in Bridges v Hawkesworth (at p 78): ". . . the learned judge was mistaken in holding that
the place in which they were found makes any legal difference." He was not saying that the
place is an irrelevant consideration. He was saying that there was nothing in the place where the
notes were found to rebut the principle of `finders keepers'. There was nothing special about it.
It was open to the public. One could not infer any special conditions of entry. Earlier,
however, he said (at p 78): "The notes never were in the custody of the defendant, nor within
the protection of his house before they were found . . ." I see in those words a recognition of
the fact that other considerations might apply in the case of a private house. In the present case
I have come to the conclusion that there is nothing so special in the place and no other
evidence to indicate that the defendants, on whom is the burden of proof, in any way
demonstrated that they possess the intention to exercise exclusive control over lost property or
that the permission to enter as a member of the travelling public, albeit having purchased the
special privilege of the executive lounge, was upon the terms that the commonly understood
maxim `finders keepers' would not apply. I therefore would dismiss this appeal.
Sir David Cairns: I agree that this appeal should be dismissed. While there is no authority
which is binding on this court, it seems to me that Bridges v Hawkesworth (1851) 21 LJ QB 75 is
the closest case on its facts to the present case. Though Bridges v Hawkesworth has been the
subject of much academic discussion, it has been either applied or distinguished in all the
reported cases of disputes between finders and occupiers for 130 years and I consider that it
should be followed on this occasion unless it can properly be distinguished.
  The only possible distinction is that in Bridges v Hawkesworth the notes were apparently found
in the part of the shop to which the public had, in practice, unrestricted access, whereas in the
instant case there was some degree of control of access to the lounge where the bracelet was
  In my judgment, that is not a sufficient ground for deciding this dispute in favour of the
occupier rather than the finder. There could be no logical reason for according more
favourable treatment to an airways board which admits only a fraction of the public to a
particular lounge (but a fraction which includes all first class passengers and some others) and a
shopkeeper who imposes no restriction on entry to his shop while it is open (but who would be
entitled to refuse entry to anybody if he thought fit).
  I agree with both Donaldson LJ and Eveleigh LJ that, in a situation at all similar to that which
we are considering, the occupier has a better claim than the finder only if he had possession of
the article immediately before it was found and that this is only so (in the case of an article not
in or attached to the land but only on it) when the occupier's intention to exercise control is
manifest. I also agree that such an intention would probably be manifest in a private house or in
a room to which access is very strictly controlled. Where the borderline should be drawn would
be difficult to specify, but I am satisfied that this case falls on the wrong side of the borderline
from British Airways' point of view.
  I am in full agreement with the analysis of the authorities which Donaldson LJ has made in
his judgment in relation to the facts in this case. As to thieves and trespassers (in the sense of
trespassers to the place where the thing was found) I express no concluded opinion, since Mr
Parker was not in either of those categories.
  Appeal dismissed with costs

Costello v Chief Constable of Derbyshire Constabulary [2001] EWCA Civ 38
The police seizes a Ford Escort car from Mr Costello, believing it to be stolen. They were unable to trace
the true owner, and when their statutory powers to retain the car (under s. 22 of the Police and Criminal
Evidence Act 1984) were exhausted, Mr Costello demanded it back. The judge at first instance refused
to order the police it return it, having found as a fact that it had been stolen and that Mr Costello was
well aware of this. The Court of Appeal allowed Mr Costello’s appeal and ordered the police to return
the car to him:
Lightman J:
31. In my view on a review of the authorities, (save so far as legislation otherwise
provides) as a matter of principle and authority possession means the same thing and is
entitled to the same legal protection whether or not it has been obtained lawfully or by
theft or by other unlawful means. It vests in the possessor a possessory title which is
good against the world save as against anyone setting up or claiming under a better title.
In the case of a theft the title is frail, and of likely limited value (see e.g. Rowland v Divall
[1923] 2 KB 500), but nonetheless remains a title to which the law affords protection.
Support for this proposition can be found in the dicta of Wills J in R v D'Eyncourt (1888)
21 QBD 109 and Donaldson LJ in Parker (above). The decision in Buckley v Gross (1863 3
B & S 556 and the dicta of all three judges that a wrong-doer is entitled to protection
against a wrong-doer accords with the proposition; Blackburn J inclined to agree that
possession was protected even if obtained by a felonious taking; and in view of the
differences in the reports of the judgment of Crompton J (and the later decision on the
significance of a magistrate's order in Betts) I do not think that his judgment takes the
matter further. If Buckley is no obstacle in the way of acceptance of the proposition, then
Field v. Sullivan [1923] VLR 70 cannot be an obstacle either, for it merely leaves open the
effect of Buckley. The frailty of the protection is reflected in the decisions in Buckley . . .
that, if the stolen property in the possession of the thief or a receiver is seized by the
police and pursuant to statutory authority possession is transferred to someone else (but
not otherwise), the transferee obtain the possessory title in defeasance of that of the thief
or receiver. There are authorities . . . which reveal a natural moral disinclination (on
occasion expressed in terms of public policy) to recognise the entitlement of a thief,
receiver or other wrong-doer to the protection by the law of his possession, and one
decision (namely Solomon) refusing such protection. But it is clear from Webb v. Chief
Constable of Merseyside Police [2000] 2 WLR 546 that such a disinclination and public policy
do not afford a sufficient ground to deprive a possessor of such recognition and
protection. This conclusion is in accord with that long ago reached by the courts that
even a thief is entitled to the protection of the criminal law against the theft from him of
that which he has himself stolen: see e.g. Smith & Hogan, Criminal Law, 9th ed. p.522. I
accordingly reject the first suggested exception or qualification.

Exceptions to the Obligation to Restore
  32. The second suggested exception or qualification is that, even if a possessory title
vests in the thief or receiver, there are exceptions to the rule requiring property to be
restored to the person entitled to a possessory title and that those exceptions should
extend to the restoration of property to a thief or receiver. Authority for the existence of
exceptions is to be found in the judgment of du Parcq LJ in Bowmakers Ltd v. Barnet
Instrument [1945] KB 65. After stating the general rule that a man's right to possession
of an article will be enforced notwithstanding the fact that the article came into his
possession by reason of an illegal contract, he went on to say at p.72:
   "It must not be supposed that the general rule which we have stated is subject to no
exception. Indeed there is one obvious exception, namely that class of cases in which
goods claimed are of such a kind that it is unlawful to deal in them at all, as for example,
obscene books. No doubt there are others, but it is unnecessary, and would we think be
unwise, to seek to name them all or to forecast the decisions which would be given in a
variety of circumstances which may hereafter arise".

  33. What Pill LJ in Webb at p.564 described as echoes of that approach are to be found
in the judgment of Roskill LJ in Malone at p.71 where he said that it would not be right, in
circumstances where the claimant's initial possession of foreign currency forming part of
the cash seized was unlawful, to grant him equitable relief in the form of a mandatory
injunction for the return of the foreign currency. May LJ in Webb said that without
deciding he doubted if the view of Roskill LJ could stand in the face of Tinsley. In this
case it is necessary to decide this question.

  34. In my judgment, when considering the observations of du Parcq and Roskill LJJ, it
is important to bear in mind that they were made at a time when the question was very
much alive how far a court should protect a wrong-doer in asserting his rights of
ownership. In particular there were powerful voices dating from the time of Lord Eldon
to the effect that Equity should withhold its support. The House of Lords in Tinsley (as
appears from the passage which I have quoted) held that law and equity must now speak
with one voice in protecting that ownership based on possession. The exceptions to
which du Parcq LJ refers must in my view be confined to cases where it would be
unlawful for any reason for the Police to transfer the property to the claimant or it would
be unlawful for the claimant to be in possession of it (e.g. when the goods consist of
controlled drugs or a gun and the claimant does not have the necessary authorisation to
have possession of them); but where no such exception applies, the court cannot
withhold equitable relief in the form of a mandatory order for its delivery up to the
person legally entitled to possession, whether or not he be a thief or a receiver of stolen
property. I therefore also reject the second suggested exception or qualification.


  35. I accordingly hold that the claimant was entitled to the return of the car on the 5th
January 1997 and that he is entitled to an order for its delivery up and for damages for
the wrongful failure to deliver it up to him since the 5th January 1997 . . .
Keene LJ and Robert Walker LJ expressed agreement with Lightman J