Without Prejudice acknowledgment of title?

Ofulue v Bossert [2009] UKHL 16 was an adverse possession case – we commented on the Court of Appeal hearing here, and that post gives the background. There was an appeal to the House of Lords which was primarily concerned with the limitation period of adverse possession. This is a late and brief report because the issues involved were not housing law in particular, but broader ones of evidence, limitation and civil procedure.

There is only one possession related issue. The Court of Appeal had held that an admission of title in a defence to a possession claim was an admission of freehold, not of immediate right to possession and therefore not an acknowledgment of title for the purposes of the Limitation Act 1980 (of which more below). Lord Neuberger, without dissent from the others, found that was wrong. Firstly, the 1980 Act refers to title, not possession; and secondly, the acknowledgment was of right to possession, albeit subject to the tenant’s rights in law or in equity [para 75].

That disposed of, the evidence and limitation issues were as follows:

On appeal to the Lords, the appellants, the Ofulues, argued that:
i) a without prejudice letter from the respondent written during possession proceedings in January 1992 set the start of the twelve year period for adverse possession such that the appellant’s possession claim was commenced prior to the expiry of twelve years adverse possession.
ii) an acknowledgment of title in a defence to possession claim subsisted until the claim was struck out, some 6 years later.

This is important because of s.29(2) of the Limitation Act 1980:

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

The answer to argument by their Lordships to point ii) was in essence short and sweet. S.29(2)(a) refers to the date of acknowledgment. That is the date of signing and perhaps service of such an acknowledgement, but no later. There is nothing in s.29 to suggest or allow a continuing acknowledgment as long as proceedings last.

This left the without prejudice letter of January 1992, which contained an offer to purchase the property.

On this, their Lordships were split, 4 to 1. The majority held that public policy on the use of without prejudice negotiations meant that the letter should not be available as evidence of an acknowledgment of title in the later (second) set of possession proceedings.

The dissenter, Lord Scott, did so on the basis that without prejudice protection extended only to discussions or admissions as to the ‘facts to be determined in the case’ [para 23] or an admission made purely in an attempt to achieve a settlement [para 25]. In this case, the appellants’ title had been admitted in the defence, so the further admission in the letter of January 1992 was neither a fact to be determined in the case, nor an admission made purely to achieve settlement – it was already an openly admitted fact. So the ‘rule’ in Rush & Tompkins Ltd v Greater London Council [1989] AC 1280 that the without prejudice rule covers any subsequent litigation based on the same facts does not apply.

The majority, with Lord Neuberger’s judgment as lead, upheld the public policy view that without prejudice discussions should not be opened in proceedings. Lord Hope, Lord Rodger and Lord Walker argued that the difficulty of separating agreed fact from offer of settlement was such that the prospect would inhibit open negotiations between parties.

Lord Neuberger holds that:
i) the admitted fact was art of the same sentence as an offer to settle in this instance and inseparable from it, so the without prejudice rule applied.
ii) An admission of title where whether the title was unencumbered or not was at issue could not be said to be remote from the issues to be decided.
iii) The distinction drawn by the appellants between an admission as a matter of fact and taking it as evidence of the truth of the admission (i.e between the offer being admissible as evidence that the respondents admitted the appellants title, not as evidence that the appellants were the owners) is, in practice, too subtle to apply. The distinction between and acknowledgement and an admission is too unclear to draw, at least with public policy in view.
iv) The public policy embodied in s.29 of the 1980 Act did not override the public policy interests of the without prejudice rule. There is no special exception.

Although their Lordships consider that there may yet be further exceptions to the rule developed beyond those in Unilever plc v The Procter & Gamble Co [2000] 1 WLR 2436, this was not such a case.

About Giles Peaker

Giles Peaker is a solicitor and partner in the Housing and Public Law team at Anthony Gold Solicitors in South London. You can find him on Linkedin and on Twitter. Known as NL round these parts, and still is Nearly Legal on Google +.
Posted in Adverse possession, Housing law - All and tagged , , , .

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