Neutral Citation Number: [2008] EWCA Civ 660
Case No: B5/2007/1452
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE CROYDON COUNTY COURT
H.H. JUDGE ELLIS
LOWER COURT NO: 6CR22664
Royal Courts of Justice
Strand, London, WC2A 2LL

Date: 16/06/2008
Before :

LADY JUSTICE ARDEN
LORD JUSTICE WALL
and
LORD JUSTICE WILSON
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Between :

	ANTHONY JONES	Appellant	
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	THE MAYOR AND BURGESSES OF THE LONDON BOROUGH OF MERTON	Respondents	

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Mr Robert Latham (instructed by Hammersmith and Fulham Community Law Centre) appeared for the Appellant.
Mr Lloyd Sefton-Smith (instructed by Civic and Legal Services, London Borough of Merton) appeared for the Respondents.

Hearing date: 6 March 2008
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Judgment
Lord Justice Wilson:
SECTION A: INTRODUCTION
1.	If a former secure tenant of a dwelling-house who has become a “tolerated trespasser” in it decides to cease to occupy it, does his liability to pay mesne profits to his former landlord in respect of the dwelling-house cease when he gives up possession of it or does it continue until, additionally, his former landlord is notified that he is no longer in possession of it?
Such is the primary question raised by this appeal. On 11 June 2007 the appeal came before Mr Justice Tugendhat sitting in the High Court, Queen’s Bench Division, and, pursuant to Rule 52.14(1)(a) of the Civil Procedure Rules, he ordered it to be transferred to this court on the basis that it raised an important point of principle.
2.	The Appellant (“Mr Jones”) was a tenant of a one bedroom flat in Mitcham under a secure tenancy within Part IV of the Housing Act 1985 (“the Act”). The Respondents, the Mayor and Burgesses of the London Borough of Merton (“Merton”), were his landlords. On 11 February 2005, by virtue of an order for possession made against him on 14 January 2005, he became a tolerated trespasser in the flat. On 21 December 2006 in the Croydon County Court His Honour Judge Ellis ordered Mr Jones to pay to Merton £3,200.77 by way of mesne profits referable to the flat for the period from 3 October 2005 to 25 September 2006. Mr Jones appeals against the order. Mr Latham, who appears for Mr Jones but did not to do so before the judge, submits that he gave up possession of the flat before, or at any rate no later than, 3 October 2005 and so was not liable to pay mesne profits in respect of any part of the period thereafter. Mr Sefton-Smith, who appears for Merton but, likewise, did not do so before the judge, submits, by contrast, that, even if (which he disputes) Mr Jones gave up possession of the flat by 3 October 2005, Merton were not notified that he had done so until a much later date, say 3 July 2006. The liability of Mr Jones, as a tolerated trespasser, to pay mesne profits continued, says Mr Sefton-Smith, until Merton were notified that he had given up possession; and so Mr Sefton-Smith defends the judge’s award in respect of the period at least until 3 July 2006, even if not until 25 September 2006. Mr Latham replies that, even if (which he disputes) the liability of Mr Jones to pay mesne profits extended until Merton were notified that he had given up possession, he had so notified them by 3 October 2005 and thus that, even were Mr Sefton-Smith’s submission valid in law, the appeal should nevertheless succeed. It follows that, in addition to the issue of law, we have to address the issue of fact as to when Mr Jones gave up possession and, subject to the issue of law, as to when Merton were notified that he had done so.
3.	Unfortunately counsel who represented Merton before the judge made what Mr Sefton-Smith accepts to have been an entirely erroneous submission of law; and even more unfortunately, notwithstanding that it was the subject of energetic challenge on the part of counsel who then represented Mr Jones, the judge upheld it. The submission was that the principles by which a tenant effects the surrender of his tenancy also govern the circumstances in which a tolerated trespasser secures discharge of his obligation to pay mesne profits to his former landlord. In that the surrender of a tenancy requires an unequivocal acceptance on the part of the landlord that the tenancy should end, and in that at no material time had Merton accepted that the liability of Mr Jones to pay mesne profits should end, the judge’s erroneous premise led him without difficulty to conclude that the liability of Mr Jones had continued until the date at which Merton chose to end the calculation of their claim, namely 25 September 2006. Although in his judgment the judge usefully addressed matters relevant to the factual issues of possession and notification which are raised before us, such issues were not the subject of his direct focus because his enquiry took the wrong course.
4.	The phrase “a tolerated trespasser” was famously introduced by Lord Browne-Wilkinson in the House of Lords in Burrows v. Brent LBC [1996] 1 WLR 1448 at 1455D in order to describe a former secure tenant under Part IV of the Act of 1985 who, as a result of the conjunction of s.82(2) and s.85(2) and (4) of that Act, is in what, at 1454H, Lord Browne-Wilkinson described as “limbo”.
5.	Section 82(2) of the Act of 1985 provides as follows:
“(2) Where the landlord obtains an order for the possession of the dwelling-house, the tenancy ends on the date on which the tenant is to give up possession in pursuance of the order.”
By providing that the tenancy ends on the date on which the tenant is to give up possession rather than on the date on which he does so, the subsection has caused profound difficulties, to which the courts have sought to respond by giving birth to the tolerated trespasser. But his likely expectation of life seems now to be short: by s.298 of, and para.2(3) of Schedule 10 to, the Housing and Regeneration Bill, currently before Parliament, the government proposes to substitute for s.82(2) a provision which – it seems – would sweep the difficulties away.
6.	In its present form section 85(2)(3) and (4) provides as follows:
“(2) On the making of an order for possession of such a dwelling-house … or at any time before the execution of the order, the court may –
(a) stay or suspend the execution of the order, or
(b) postpone the date of possession,
for such period or periods as the court thinks fit.
(3) On such [a] stay, suspension or postponement the court – 
(a) shall impose conditions with respect to the payment by the tenant of arrears of rent (if any) and rent or payments in respect of occupation after the termination of the tenancy (mesne profits), unless it considers that to do so would cause exceptional hardship to the tenant or would otherwise be unreasonable, and
(b) may impose such other conditions as it thinks fit.
(4) If the conditions are complied with, the court may, if it thinks fit, discharge or rescind the order for possession.”
7.	The effect of the conjunction of the subsections is therefore that, although a tenancy will have ended on the date on which the tenant is to give possession pursuant to any order for possession, it can be revived at any time before execution of the order, whether 
(a)	by an order for postponement of the date of possession under s.85(2)(b); or
(b)	by an order for discharge or rescission of the order for possession under s.85(4) following compliance with any conditions of its stay or suspension imposed under s.85(3)(a).
In the event that the tenancy is thus revived, the revival is retrospective, with the result that the landlord and tenant are required to comply with such of their obligations under the tenancy agreement as arose even during the period of limbo: Lambeth LBC v. Rogers (2000) 32 HLR 361.
8.	A tolerated trespasser is a former secure tenant against whom an order for possession has been made in which the specified date for him to give possession has passed but which has not been executed. So he has a valuable right potentially to secure the revival of his tenancy. He can be tolerated in any of three different senses. He can be actively tolerated by the former landlord who enters into an agreement with him not to seek to enforce the order for possession in the event that he complies with specified terms, in particular for payment of mesne profits and by way of reduction of arrears of rent: such were the facts in Burrows, cited above, (see 1450E-F). Or he can be passively tolerated by the former landlord who simply neglects to take steps to enforce the order for possession: such, as I will explain, are the facts of the present case. Or he can be tolerated not by the former landlord but by the court which, contrary to the submissions of the former landlord, stays or suspends execution of the order, usually upon conditions imposed by it pursuant to s.85(3)(a).
9.	The Housing Law Practitioners Association estimates that there are as many as 750,000 tolerated trespassers in public sector housing in England and Wales; indeed a recent survey suggests that in inner London between 10% and 20% of occupants of local authority housing are tolerated trespassers rather than tenants. It seems that, because of the chance that tolerated trespassers will secure a revival of their tenancies, many owners of public sector housing stock, however unwisely, omit to distinguish between their tenants and their tolerated trespassers. The present is a case in point: for between about August 2005 and November 2006 Merton, although apparently mindful of the fact that they had obtained an order for possession against Mr Jones, were clearly unaware that he was no longer a tenant. They treated him as a tenant and told him that he was a tenant and had the obligations of a tenant. Mr Sefton-Smith concedes that ordinary trespassers on land are not liable for mesne profits in respect of any period after they have given up possession of it even in the absence of notification to the owner that they have done so. But, says Mr Sefton-Smith correctly, tolerated trespassers, who have in effect been recognised by the law only for the last 12 years, are sui generis; and, so he contends, there are substantial reasons of public policy which should lead this court to develop its analysis of their liabilities in such a way as to encourage early notification to owners of the housing stock that their possession, and thus the chance of revival of their tenancies, no longer subsist.
SECTION B: THE FACTS
10.	In 2002 Mr Jones became a secure tenant of the flat. The order for possession against him was made by a district judge of the Croydon County Court on 14 January 2005.  The order was in the following terms:
“1. The defendant give the claimant possession of [the flat] on or before 11 February 2005 suspended on payment of arrears of £388.11.
2. The defendant pay the claimant’s costs of the claim assessed at £130.
3. Money judgment for the claimant in the sum of £388.11.
Payments required
£388.11 and £130 to be paid buy (sic) the defendant by 14 February 2005.”
It is odd – and for Mr Jones was no doubt very confusing – that the order should have provided first for possession to be given by 11 February, albeit “suspended on payment …”, and then for the sums to be paid by 14 February. The reference to 14 rather than 11 February was probably a careless error. But it was of no consequence; for Mr Jones made no payment pursuant to the orders whether by 11 or 14 February.
11.	It is – and was before the judge – common ground that in the above circumstances Mr Jones became a tolerated trespasser on 11 February 2005. Mr Latham submits, but Mr Sefton-Smith disputes, that, even had Mr Jones paid £388.11 on or before 11 February 2005 he would nevertheless, by virtue of the form of words favoured by the district judge, have then become a tolerated trespasser, albeit that the order for possession could not have been enforced and no doubt he would have had a cast-iron claim for revival of his tenancy. The issue is entirely academic. Nevertheless, in that the notion of ‘suspension’ used by the district judge is applied by s.85(2) of the Act of 1985 to execution of the order for possession rather than to the order itself and in that “it is necessary … to construe a possession order made under Part IV of the Act with the provisions of sections 82(2) and 85(2) in mind” (per Chadwick LJ in Harlow DC v. Hall [2006] EWCA Civ 156, [2006] 1 WLR 2116, at [25]), I incline to the view that technically Mr Latham is correct: irrespective of compliance with the terms of suspension of execution, “the date on which the tenant is to give up possession in pursuance of the order” within the meaning of s.82(2) was 11 February 2005. The court can avoid such a result by instead attaching its conditions for payment to a postponement of the date of possession: Bristol City Council v. Hassan [2006] EWCA Civ 656, [2006] 1 WLR 2582.
12.	Although from March until 20 June 2005 Mr Jones made three payments to the credit of his “rent” account with Merton, he remained continuously in arrears.
13.	On 23 June 2005 two masked men broke into Mr Jones’ flat and one of them shot him in the leg. The bullet went straight through it. He had no idea who his assailants were or why they had assaulted him. He was taken to hospital, detained overnight and at once went to stay with an aunt in Willesden. Thereafter he never returned to the flat. The judge found that, after he had been shot, Mr Jones had immediately decided that he could never return to the flat; and he found that it was reasonable for Mr Jones to be fearful of returning to it. It is clear that Mr Jones never reversed that decision. Following the assault, and apart from a payment made in October 2005 by his father on his behalf to which I will shortly refer, Mr Jones never made further payment into his “rent” account. In July 2005 he caused a friend to remove a few of his personal belongings from the flat.
14.	Soon after 23 June 2005 Mr Jones made clear to Merton that he had decided not to return to occupy the flat. The date when he did so is not entirely clear. He says that he did so by telephone a few days after discharge from hospital; and I infer that the judge accepted that evidence. On any view, however, Merton learnt of his decision within a few weeks. On 11 July 2005 the police informed Merton by letter that he had chosen not to return to the flat as he feared for his safety there and that they supported his application to be rehoused. Furthermore on 2 August 2005, by telephone, Mr Jones told one of Merton’s housing officers that he refused to return to the flat and wanted to be rehoused.
15.	On 3 October 2005 there was a meeting between Mr Jones, his father and Merton’s Principal Tenancy Officer. Mr Jones and his father made clear that they wanted him to be transferred to accommodation outside Merton, indeed in the London Borough of Hammersmith and Fulham (“Hammersmith”), where members of his family lived. The officer pointed out that arrears on the “rent” account had risen to £1231.76; that a transfer was out of the question until the arrears were paid and that, even in the event of their payment, it could not be guaranteed; that it was “his tenancy”; and that, quite apart from the arrears, he would have to continue to pay “the rent” as and when it accrued.
16.	On 5 October 2005 Mr Jones’ father paid the arrears of £1231.76. This led Merton on the following day to recommend that Mr Jones be subject to a “management transfer” pursuant to Part 3.5 of their allocation scheme then in force. Following the hearing, pursuant to our direction, Mr Sefton-Smith has provided us with a copy of the scheme; my perusal of it leads me to be far from satisfied that (even if such was what Mr Sefton-Smith was intending to suggest at the hearing) a “management transfer” might embrace a transfer to Hammersmith or otherwise “out of borough”. 
17.	Merton formally concede that, by 6 October 2005, they were aware that Mr Jones was no longer occupying the flat.
18.	To the increasing irritation of Mr Jones, there was very slow progress on the part of Merton in helping him to obtain a tenancy in Hammersmith under whatever part of their scheme might be engaged. On 21 October 2005 Merton’s Housing Needs Officer told Mr Jones that, even though he was refusing to live at the flat, he remained liable for the “rent”. Mr Jones accepted what she said but protested that he should not be liable for it. She also advised him not to end his “tenancy” until his rehousing arrangements had been finalised. By then arrears were again accruing and in November 2005 Merton wrote two letters to Mr Jones in which they pressed for payment of arrears of “rent”.
19.	Also in November 2005 Mr Jones caused a friend to visit the flat, to collect his bed, television, computer and stereo and to take them to the house of Mr Jones’ grandmother, where they were stored. Thus, as the judge observed, “certainly until November 2005 he had possessions in the flat”. As the judge’s words implied, there was no evidence that Mr Jones had for some reason chosen to leave other possessions in the flat thereafter. Although Merton gave evidence that thereafter there was some use of the fob key which had been provided to Mr Jones for use in entering the communal front door of the block of flats, his evidence, noted and not rejected by the judge, was that he had long since lost that key and that any such use of it after November 2005 was not by him or by any agent of his. Nevertheless he accepted that he continued to retain keys to the communal back door and to the flat itself.
20.	On 5 June 2006 Hammersmith granted Mr Jones a tenancy of a flat; and on 3 July 2006 they told Merton that they had done so. There had certainly been recent dialogue between the two councils as to a possible transfer of Mr Jones to Hammersmith on a “reciprocal” basis pursuant to a scheme apparently adopted, at least on the part of Merton, only in April 2006. It is unclear, however, whether in the event the tenancy of Mr Jones in Hammersmith arose as a result of a “reciprocal” with Merton. In December 2005 Mr Jones had applied to Hammersmith for housing under a different regime, namely as a homeless person eligible under Part VII of the Housing Act 1996; and thereafter Hammersmith’s Homeless Persons’ Unit made certain enquiries of Merton. Although Mr Latham concedes that the eventual grant by Hammersmith of the tenancy of a council flat must have been under Part VI, rather than Part VII, of the Act of 1996, he contends that it by no means follows that it was pursuant to a “reciprocal” with Merton; and Mr Sefton-Smith concedes that Merton’s records do not reveal the basis on which Hammersmith granted the tenancy to Mr Jones. The facts that by early 2006 Mr Jones’ “rent” account was again substantially in arrears and that Merton have always contended, including to Mr Jones, that an absence of arrears was a pre-requisite to a “reciprocal” lead me to suppose that Hammersmith’s grant of a tenancy may have been achieved without any assistance from Merton whatever; and, if my supposition be wrong, the fault lies with Merton for having failed to make the position clear.
21.	In the interim Merton had continued to deal with Mr Jones as would landlord with tenant. On 15 December 2005, again oblivious of the effect of the possession order already made, they sent Mr Jones a notice pursuant to s.83 of the Act of 1985 that they intended to seek an order for possession of the flat on the ground that, in breach of his tenancy agreement, he was in arrears of rent. By a letter dated 9 May 2006, upon which Mr Sefton-Smith relies, Merton’s housing officer told Mr Jones that Hammersmith had informed Merton that they were about to rehouse him; that he should take steps to arrange “surrender of the tenancy” of the flat and to return the keys; but that meanwhile he was still “responsible for [his] tenancy” and that the arrears were increasing. On 25 May 2006 Merton issued the present proceedings. Their Particulars of Claim were in conventional form, namely to the effect that Mr Jones was a secure tenant who was in arrears of rent due under the tenancy agreement; there was no reference to the order dated 14 January 2005. In them Merton sought an order for possession and a money judgment for arrears of rent until the date of the order and for mesne profits thereafter until Merton were to recover possession. The Defence filed on behalf of Mr Jones perpetuated the confusion: he likewise made no reference to the previous order and contended that Merton had accepted his surrender of the tenancy at the meeting on 3 October 2005 and that thereafter he had not been in possession of the flat. By their Reply Merton accepted only that Mr Jones had not been in possession of the flat since 5 June 2006, being the date of the grant of Hammersmith’s tenancy, and they denied that they had accepted a surrender of his tenancy of the flat, whether at the meeting on 3 October 2005 or otherwise.
22.	Merton’s claim was due to be heard on 28 November 2006. Counsel on both sides came to court with skeleton arguments. In them both referred to the order dated 14 January 2005; but only counsel for Mr Jones recognised its significance, namely that he had become a tolerated trespasser. The hearing was adjourned to 20 December 2006 so that counsel could prepare further submissions in the light of that fact.
SECTION C: DISCUSSION
(1) Notification
23.	It is, submits Mr Sefton-Smith, strongly in the public interest that public sector housing authorities should be made aware as soon as possible that the rights of a tenant or tolerated trespasser to continue to occupy their premises are at an end; for only when they are so aware can they re-let the premises. A secure tenant brings his periodic tenancy to an end by giving notice to quit under s.5 Protection from Eviction Act 1977; and (so the argument runs) the giving of notice by a tolerated trespasser that his trespass is at an end is analogously important and should be required in law. Thus, although the tolerated trespasser may give up possession, his liability for mesne profits is said to continue until his former landlord is notified thereof.
24.	The amount of damages payable by a trespasser on land is ordinarily the letting value of the premises: Swordheath Properties v. Tabet [1979] 1 WLR 285 at 288F. Thus where, until the trespass began, the premises were let to the trespasser, that value is conveniently taken to be the rent previously payable by him; and the measure of damages thus payable by the trespassing former tenant is still described, conventionally if feudally, as “mesne profits”.
25.	Mr Sefton-Smith concedes that a former tenant who wrongfully remains in possession after the end of an ordinary tenancy (i.e. not one that is secure under Part IV of the Act of 1985) ceases to be liable for mesne profits when he gives up possession, irrespective of notice; see, for example, Southport Tramways Co. v. Gandy [1897] 2 QB 66. In the light of his concession some of his arguments prove too much – and therefore nothing at all. Thus, for example, he relies on the words of Blackburn J in Henderson v. Squire (1869) LR 4 QB 170 at 173-174 as follows:
“The question is, where there is a tenancy …, whether there is an implied contract that the tenant shall not only go out of possession, but restore the possession to the landlord … I think that there is such an implied contact …”
Mr Sefton-Smith says that the distinction between going out of possession and restoring it to the landlord connotes an element of notification. With respect to him, it does nothing of the sort. Blackburn J was addressing a situation in which a (non-secure) tenant sublet the premises and the subtenant unlawfully retained possession following the termination of both tenancies: in that the tenant, although himself out of possession, had not given – or restored – possession to the landlord, he was liable to pay mesne profits.
26.	Is there anything to indicate that the law treats the extent of the liability of the tolerated trespasser to pay mesne profits differently from that of other former tenants who have wrongfully remained in possession? Mr Latham points out that the district judge’s order was – as orders against tenants, secure and non-secure, conventionally are – that the defendant should “give” possession to the claimant. Although, were the law to be derived from the terms of orders made in purported pursuance of it, the tail would be wagging the dog, I accept that it would indeed be odd if Mr Jones were liable for mesne profits in respect of a period after he had given possession in belated compliance with the order made against him. But more significant, surely, are the terms of s.85(3) of the Act, set out in [6] above, which, in the context of the stay or suspension of execution of an order for possession against a tolerated trespasser, define “mesne profits” as “payments in respect of occupation after the termination of the tenancy”. Whether or not, as Lord Browne-Wilkinson suggested in Burrows, cited above, at 1453B-C, the word “occupation”, as there used, is entirely synonymous with the word “possession”, it is impossible to read into it any element of notification.
27.	But the fallacy of Mr Sefton-Smith’s argument is yet more clearly demonstrated by reflecting on the feature which principally confers upon the tolerated trespasser his distinctive status. It is the right to secure the revival of the tenancy by obtaining an order either for postponement of the date set by the order for possession or even for the discharge or  rescission of the order itself pursuant to s.85(2)(b) or (4) of the Act. This right is lost not only when the order for possession is executed against the tolerated trespasser (as provided by s.85(2)) but also when execution is no longer required to give effect to the order: see the decision of this court in Dunn v. Bradford MDC [2002] EWCA Civ 1137, [2003] 15 HLR 154. Chadwick LJ there said, at [37]:
“It cannot be right to attribute to Parliament an intention that the extended discretionary powers conferred by section 85(2) of the Act should continue to be exercisable once the former tenant had given up possession. The extended discretionary powers were conferred so that the court could maintain the former tenant in possession; once possession had been given up, there was no need for those extended powers.”
Indeed, at [63], Hale LJ even suggested that the words “execution of the order” in s.85(2) were themselves apt to cover the voluntary giving up of possession on the part of the tolerated trespasser so that the subsection needed no such wider, purposive interpretation. For present purposes, however, the point is that he loses his distinctive status upon giving up possession, irrespective of notification. In such circumstances Mr Sefton-Smith’s submission is exposed as thoroughly illogical. 
28.	In the above circumstances Mr Sefton-Smith’s submission that this court can graft on to the law a requirement that the liability of a tolerated trespasser for mesne profits should continue until his giving not only of possession but also of notification is, in my view, clearly invalid. I should add, however, that I am not even particularly sympathetic to the arguments of public policy which underlie his submission. Ex hypothesi the former landlord has an order for possession. If its conditions are breached, he can apply, without notice, for the issue of a warrant of possession, which the court bailiff will execute. The bailiff will attempt to notify the tolerated trespasser in advance of the proposed date for execution of the warrant; and the tolerated trespasser still in possession of the premises may, of course, then apply to the court for relief under s.85. But the tolerated trespasser out of possession is highly unlikely even to make such an application and, as we have seen, he cannot successfully do so. So, for social landlords, the upshot is simple: distinguish between your tenant and your tolerated trespasser; monitor whether you wish (or, by order, are required) to continue to tolerate your tolerated trespasser; in particular, monitor his payment of sums equivalent to rent; and, if such come significantly into arrears, apply for a warrant of possession. For the rights of your tolerated trespasser will end upon execution of the warrant of possession; and, alternatively, if, on application by your tolerated trespasser, the court should stay or suspend execution or postpone the date of possession, you will know the terms upon which the court has tolerated continuation of his trespass.
(2) Possession
29.	Thus the only remaining issue relates to the date when Mr Jones gave up possession of the flat. As already explained, the judge failed even to address it, let alone to resolve it. Both counsel invite us if possible to resolve it rather than to remit it to the judge; in my view we should accede to their invitation.
30.	In the decision of the House of Lords in JA Pye (Oxford) Ltd v. Graham [2002] UKHL 30, [2003] 1 AC 419, Lord Browne-Wilkinson said as follows, at [40]:
“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 to understand is that, without the requisite intention, in law there can be no possession … 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.”
	  Lord Hope added, at [70]:
“Occupation of the land alone is not enough, nor is an intention to occupy which is not put into effect by action. Both aspects must be examined, and each is bound up with the other. But acts of the mind can be, and sometimes can only be, demonstrated by acts of the body. In practice, the best evidence of intention is frequently found in the acts which have taken place.”
31.	Mr Latham argues that by 3 October 2005, being the starting date for the calculation of the mesne profits which the judge ordered him to pay, Mr Jones had given up possession of the flat, with the result that the entire order was wrongly made. Mr Latham accepts that, until November 2005 when personal possessions of some value belonging to Mr Jones were removed from the flat, he remained in factual possession of it; but, so Mr Latham submits, Mr Jones had by 3 October 2005 relinquished his intention to possess it. Mr Latham ascribes the relinquishment of his intention to any of three dates: primarily to 23 June 2005, being the date of the shooting itself, when Mr Jones immediately decided that he could never return to occupy the flat; or to 2 August 2005, when he told Merton that he refused to return to occupy the flat and wanted to be rehoused; or to 3 October 2005 itself, when, at the meeting with Merton, he and his father made clear that they were seeking his transfer to Hammersmith.
32.	I do not accept that the evidence justifies a conclusion that by 3 October 2005 Mr Jones had relinquished his intention to possess the flat. In my view its proper analysis is that by that date he had relinquished his intention to reside in the flat and indeed had formed the intention in the future to give up possession of it. But he knew that some of his personal possessions remained there, under lock and key, which, being of some value, he wished to retain but had not by then sought to remove; and in such circumstances I do not see how he can reasonably be said already to have relinquished his intention to possess the flat. It is accepted that, until at any rate November 2005, he did remain in factual possession of the flat; and I do not accept that he did so without intending to do so. To adapt the words of Lord Hope, set out at [30] above, the workings of Mr Jones’ mind at that time are best demonstrated by the physical circumstances which he then allowed to subsist.
33.	The next question is whether Mr Jones gave up possession of the flat on the date in November 2005 when, by his friend, he removed the personal possessions from it. There was no evidence that he left other possessions in it thereafter but he continued to retain the keys to the communal back door and to the flat. In John Laing Construction Ltd v. Amber Pass Ltd, [2004] 2 EGLR 128, Mr Hildyard QC, sitting as a deputy judge of the High Court, Chancery Division, had to decide whether a tenant had yielded up premises to a landlord at the expiry of the lease. The tenant had not handed the keys of the premises back to the landlord. The deputy judge held that it had nevertheless yielded up the premises. He observed as follows, at [45(5)]:
“The fact of retention of keys (or the failure to return them) may be significant but, equally, it may not be. All it may signify is … an oversight or a desire to protect the premises both for the benefit of the [landlord] and in case the [tenant] might be found still to be liable, without in any way signifying any assertion of rights in respect of the property or being inconsistent with an effective termination of such rights …”
I respectfully agree with the deputy judge’s observations. In my view Mr Sefton-Smith put his argument on this point very fairly: it was not that Mr Jones’ retention of the keys demonstrated by itself that he remained in possession of the flat but that, by retaining them, Mr Jones had foregone a good opportunity to demonstrate to the contrary. In the end I find myself unable to attach any significance to Mr Jones’ retention of the keys.
34.	In support of his contention that Mr Jones remained in possession of the flat after November 2005 Mr Sefton-Smith relies upon Mr Jones’ repeated requests to Merton, from 3 October 2005 onwards, to arrange for Hammersmith to grant him a tenancy pursuant to their mutual scheme. Irrespective of whether in the event Merton played a part in causing Hammersmith to grant the tenancy to Mr Jones, it was (says Mr Sefton-Smith) a pre-requisite to his request to Merton for assistance in that regard that in the interim he should continue in possession of the flat and, in particular, should pay the “rent” referable to it. Thus on 21 October 2005 (so his argument runs) Merton’s Housing Needs Officer could hardly have made it clearer to Mr Jones that he should not end his “tenancy” until his rehousing arrangements had been finalised and that accordingly he should continue to pay the “rent”. Merton’s scheme for transfer to another housing authority (explains Mr Sefton-Smith) applies only to a tenant; but a tolerated trespasser who has a right to secure revival of his tenancy is treated by Merton as already again being a tenant and they consider such a right to exist only while there are no arrears on his “rent” account.
35.	I see no merit in Mr Sefton-Smith’s argument. It did not figure in the court below; so Merton, who did no more than to refer elliptically to it in Mr Sefton-Smith’s skeleton argument filed in this court, should have set it out in a respondent’s notice; such would have enabled Mr Latham to prepare for it and in particular perhaps to call for documents relevant to it. In the event Mr Sefton-Smith was constrained, in the course of his oral argument, baldly to articulate propositions about the terms of Merton’s transfer scheme; and in my view the material which, at our direction, Merton subsequently filed does not, at any rate clearly, corroborate his propositions. Indeed how should we square Merton’s contentions that, on the one hand, it was essential to Mr Jones’ eligibility for transfer that he should continue to pay the “rent” after October 2005 and that, on the other hand, they secured, or may have secured, his transfer notwithstanding that he paid no “rent” after October 2005? But there are other, more profound, objections to the argument. For the question is not whether it would have been wise for Mr Jones to retain possession of the flat after November 2005; nor even whether, unless he retained possession of it, Merton could not respond positively to his request for transfer. It is, rather, whether he did retain possession of it. To theorise about the workings of the transfer scheme does not help to provide an answer to that question.
36.	In my view the real problem is that, no doubt unintentionally, Merton misled Mr Jones. They repeatedly misinformed him that he was a “tenant” and thus that, until the “tenancy” was brought to an end, he was obliged in law to continue to pay the “rent”; and they added that, while his application for transfer was pending, he should not bring the “tenancy” to an end. But, if they were to choose to explain anything to him about his legal position, Merton should have explained that he was not actually a “tenant”; that nevertheless he did have rights; that, had he wished to secure an entitlement to continue to reside in the flat, it would have been in effect essential that he should continue to make the payments equivalent to “rent”; that, although they recognised that he did not wish to secure such an entitlement, it might well remain worthwhile for him to continue to make the payments because, in their absence, his request for transfer could not go forward; but that, alternatively, it was open to him to give up possession of the flat at any time, whereupon his liability to make those not insubstantial payments would at once cease; and thus that he had a choice.
37.	What somewhat disconcerts me about my conclusion that Mr Jones is liable for mesne profits from 3 October 2005 until the date of removal of his possessions from the flat in November 2005 is that, had Merton given him an explanation to some such effect on, say, 3 October, he might have chosen to remove his possessions from the flat, and thus to have given up possession of the flat, on an earlier date. But the factual scenario is speculative; the legal ramifications of the point are difficult; and Mr Latham has not taken it. It would be disproportionate for this judgment to proceed longer before arrival at its conclusions, namely that the appeal of Mr Jones be allowed; that the judge’s order that he should pay £3200.77 to Merton in respect of mesne profits be set aside; that, in lieu, he should be ordered to pay mesne profits to Merton for the period from 10 October 2005 until (in that the date in November 2005 when he removed his possessions is unidentified) 15 November 2005; and that such amount to £343.36.
Lord Justice Wall: 
38.	I have had the advantage of reading Arden and Wilson LJJ’s judgments in draft.  I respectfully agree with Wilson LJ’s analysis of the law and the facts in section A and B  of his judgment, and with paragraphs 23 to 28 of  section C of the judgment under the heading “DISCUSSION, (1) Notification”. Like both Arden and Wilson LJJ, I would, accordingly, allow this appeal, and would set aside the judge’s order. 
39.	Left to myself, however, my conclusion would have been that the judge’s order that the appellant pay £3,200.77 should be set aside in its entirety. However, since both Arden and Wilson LJJ take the view (the latter in paragraphs 29 to 37 of his judgment) that  the appellant remained in possession of the flat until the removal of  his remaining possessions in  November 2005, I am content to adopt their  reasoning, and do not dissent from their conclusion. In the event, therefore, I concur in the result, which, as I understand it, is that the appeal will be allowed and that in place of the judge’s order that Mr. Jones pay Merton £3,200.77 there be substituted an order that he pay mesne profits to Merton in the sum of £343.36.
40.	I need to say a few words to explain my position. I was, I have to say, attracted by Mr. Latham’s submission that, at the latest, the appellant had given up possession of the flat, or should be deemed to have done so, on or shortly after 5 October 2005, when his father paid the “arrears” of £1,231.76, whereupon Merton “recommended” that he be the subject of a “management transfer” pursuant to its allocation scheme. I was attracted to that conclusion for the following reasons.
41.	It is very clear on the evidence that, from the very moment of the shooting, the appellant had no intention of returning to live in the flat.  Merton was aware of that fact by the latter part of June 2005, and in July 2005, the appellant caused a friend to remove some of his belongings from the flat.
42.	The only purpose in the appellant maintaining his status as a “tolerated trespasser”, as I understand Merton’s current argument, is that the appellant thereby retained a valuable bargaining chip in the proposed “management transfer” to Hammersmith. For that purpose, it contended, Mr Jones had to remain a “tolerated trespasser”, and the “rent/mesne profits” had to be up to date. Shortly after 5 October 2005, of course, they were. At that point, it seems to me, it was open to Merton to say that it wanted formal possession of the flat in order to re-let it. 
43.	I was unattracted by Merton’s argument that continued occupation/possession of the flat by Mr. Jones was necessary to obtain a tenancy of accommodation in Hammersmith. As it turns out, Hammersmith’s grant of a tenancy to the appellant appears to have had nothing whatsoever to do with Merton’s transfer scheme. In these circumstances, Merton’s inadvertent misleading of the appellant into the belief that he needed to maintain possession of the flat and to continue to pay the mesne profits on the flat seems to me, on the facts of this case, specious, and should not entitle Merton to claim mesne profits after the appellant, through the good offices of his father, had agreed to pay off the arrears – and, indeed had done so - in October 2005.
44.	In my judgment, the agreement reached between Merton, the appellant and his father in October 2005 was confirmation, if confirmation was needed, that the appellant did not intend to return to the flat, and that Merton could take possession of it, and re-let it. Merton, pursuant to that agreement, could and should have said to the appellant that it was going to retake possession, and that he should, accordingly, remove any of his remaining possession from the flat. The fact that he did not do so until November 2005 seems to me be to be quite arbitrary. He was not, after all, re-housed in Hammersmith until 5 June 2006 – a fact which, on the evidence, and as I have already said, appears to have had nothing whatsoever to do with Merton. At first blush, therefore, I think it unjust that Merton should seek to benefit from its own misleading conduct by seeking payments from the appellant after 5 October 2005.
45.	It is for these reasons, therefore, that, left to myself, I would have allowed the appeal in its entirety, and set aside the whole of the judge’s order. However, I fully see the force of Arden and Wilson LJJs’ reasoning (the latter in paragraphs  30 and  32 of his judgment) backed as it is  by the authority of JA Pye  (Oxford) Ltd v Graham and I respectfully agree with Wilson LJ’s rejection of  Merton’s argument in relation to the period after Mr Jones’  removal of his remaining belongings in November 2005.  As Arden LJ takes the same view as Wilson LJ on the date Mr Jones gave up possession, I do not seek to press my argument to a formal dissent from their conclusion, which results in the order predicated in paragraph [39] above.  

Lady Justice Arden: 
46.	I agree with the order which Lord Justice Wilson proposes and save as appears below with the reasons which he gives.  The crucial question of law is: what did Mr Jones have to show in order to establish that he had ceased to have possession of his flat?
47.	It is clear that to acquire possession a person must both obtain physical control of the relevant property and have formed an intention to control the use of that property to the exclusion of others.  Curiously, apart from the sparse authority cited to us, which Lord Justice Wilson has cited, there is little authority on when the cessation of possession occurs in law.  Mr Sefton Smith’s argument was that Mr Jones had to give notice to Merton that he intended to give up his possession of his flat.  But, while there may have been a term in his original tenancy requiring him to give notice if he wished to surrender possession of his flat to Merton, Mr Jones was at the material time no longer bound by that tenancy because, as from February 2005, he was only a tolerated trespasser.  

48.	In my judgment, two elements are necessary for a cessation of possession by a person who is not under some contractual obligation to give notice in some way. The occupier must cease to control, or to have a legal right to control, the use of the property, and, in addition, he must have ceased to have an intention to control the use of the property to the exclusion of others. 
49.	The first element does not generally cause difficulty.  But what is necessary to demonstrate the second element, namely that a person has ceased to have an intention to possess? In my judgment, it is not enough that he states that it is his intention to give up possession if he has done acts that belie that intention.   
50.	Thus, in my judgment, in the present case, until Mr Jones removed his property from the flat in November 2005, he remained in possession of it.  By retaining a not insignificant amount of his goods there, he showed that he had an intention to retain control of the use of the flat.  This was the relevant intention, not the intention to live there.  He could still have an intention to control the use of the flat, even if he did not intend to live there himself. If he had not left goods there, then the fact that he ceased to live there, coupled with (on this hypothesis) the removal of his goods and the non-payment of mesne profits beyond any normal delay, would ordinarily and in the absence of other factors have been enough to lead to a finding that there had been an intention to discontinue possession.
51.	In any event, to cease to have possession, it is not enough simply to have an intention to give up possession.  The intention must be acted upon in such a way that the proper inference from those acts is that there was an intention to give up possession. A person who wishes to give up possession must make that intention manifest:  see per Lord Hope in JA Pye (Oxford) Ltd v Graham [2003] 1 AC 419, in the passage cited by Lord Justice Wilson at [30] above. This was also the view taken by Oliver Wendell Holmes, a Justice of United States Supreme Court, in The Common Law (1881).  He illustrated his view by an example (which I set out below), which shows the difference between an unimplemented intention to possess and an intention which has been made manifest.  From that example Holmes drew general conclusions about what is necessary in this context to prove intention.  The example was as follows:
“Suppose that a finder of a purse of gold has left it in his country house which is lonely and slightly barred, and he is a hundred miles away, in prison.  The only person within twenty miles is a thoroughly equipped burglar at his front door, who has seen the purse through a window, and who intends forthwith to enter and take it.  The finder’s power to reproduce his former physical relation to the gold is rather limited, yet I believe that no one would say that his possession was at an end until the burglar, by an overt act, had manifested his power and intent to exclude others from the purse.  The reason for this is the same which has been put with regard to the power to exclude at the moment of gaining possession.  The law deals, for the most part, with overt acts and facts which can be known by the senses.  So long as the burglar has not taken the purse, he has not manifested his intent; and until he breaks through the barrier which measures the present possessor’s power of excluding him, he has not manifested his power.  ” (Lecture VI, Possession) (emphasis added)
52.	This conclusion may seem similar to the submission of Mr Sefton Smith that the judge was right to say that there had to be a surrender to Merton by Mr Jones of his rights as a tolerated trespasser, but there is a difference between manifestation and communication of an intention in that the manifestation of an intention need not be to the true owner.  Therefore, it is not the same as the communication of an intention to cease to possess to the landlord.
53.	The judge was concerned about a possible breach of s 3 of the Protection from Eviction Act 1977 if Merton took proceedings prematurely, but (on the assumption that a tolerated trespasser should be treated as a tenant for the purpose of that Act) I do not consider that there would be a breach because on my analysis there cannot be a discontinuance of possession while the tolerated trespasser resides in the premises.  The judge was also concerned about the lack of clarity for the landlord if the tolerated trespasser does not have to give a notice of surrender, but in my judgment that is an unavoidable consequence of the fact that Mr Jones was a tolerated trespasser.  To some extent, the need for manifestation of intent means that the tolerated trespasser must show plainly that he has ceased to have an intention to possess. 
54.	I have not yet referred to Mr Sefton Smith’s submission as to the impact of Merton’s housing transfer scheme, which is referred to by Lord Justice Wilson at [35].  (It is perhaps worth adding that, after producing the scheme to the court after the hearing of the appeal, Merton expressly answered in the negative the court’s inquiry as to whether it intended to apply to put the housing scheme formally in evidence).The judge made no finding that Mr Jones intended to remain in possession after removing his goods from the flat in order to remain within Merton’s transfer scheme. It would in my judgment be wrong for this court itself to make a finding to that effect because Mr Jones has not had an opportunity of dealing with the point.  He may have been of the view that, once the housing committee had recommended the transfer (which occurred on 6 October 2005), he no longer needed to pay for the use and occupation of the flat he was no longer occupying.  In the circumstances, it is not necessary for me to decide whether, if he had continued to have an intention to possess because Merton misled him into thinking that he had to retain possession in order to stand a chance of a transfer to a secure tenancy granted by the London Borough of Hammersmith and Fulham, or, if Merton in effect agreed with him that if he did retain possession of his flat and continue to pay for the use and occupation of it, Merton would (subject to the housing committee’s approval) secure a transfer to a flat to that borough, his intention would be vitiated.  I leave all such questions open.
55.	For the foregoing reasons, I would make the order which Lord Justice Wilson proposes.  I have considered the arguments put forward by Lord Justice Wall in his judgment for the view that the relevant date was in October 2005.  However, for the reasons given above, and save insofar as I have left open as unnecessary for my decision arguments which have attracted him, I respectfully do not agree with them.  In particular I do not consider that there was any agreement, express or implied, between Mr Jones and Merton in October 2005 to the effect that Merton could take possession of his flat.