## Facts

- Paddington Building Society (the mortgagee) and Mendelsohn (the mortgagor) were parties to a mortgage agreement concerning the occupation of property.
- A dispute arose regarding the mortgagor’s continued occupation of the mortgaged property and whether this occupation was adverse to the mortgagee’s interest.
- The mortgage agreement did not explicitly state whether the occupier’s presence was permissive or adverse.
- The issue centered on whether implied consent by the mortgagee could be inferred due to the nature of the mortgage arrangement and the occupier's conduct.
- The legal question was brought before the Court of Appeal, which evaluated the relevance of implied consent within the framework of adverse possession and mortgage agreements.

## Issues

1. Whether the mortgagor's continued occupation of the mortgaged property could be deemed adverse possession in the absence of the mortgagee's explicit consent.
2. Whether implied consent from the mortgagee, arising from the terms of the mortgage agreement and the parties’ conduct, could negate the “adverse” character needed to establish adverse possession.
3. Whether the occupation was sufficiently hostile to the mortgagee’s interests to constitute adverse possession.
4. What legal implications the mortgagor’s occupation under a mortgage agreement has for both mortgagees and mortgagors regarding claims of adverse possession.

## Decision

- The court held that the mortgagor’s possession of the property was not adverse to the mortgagee, as it was consistent with the rights granted under the mortgage agreement.
- The mortgagor’s occupation was found to be with the implied consent of the mortgagee, negating any claim of adverse possession.
- The Court of Appeal clarified that implied consent may be inferred in mortgage agreements unless the occupation is inconsistent or hostile to the mortgagee’s interest.
- The decision emphasized the necessity to examine the terms of the mortgage and the conduct of the parties when determining the presence or absence of implied consent.

## Legal Principles

- Adverse possession requires occupation that is exclusive, continuous, and without the owner’s permission; specifically, it must be adverse, not permissive.
- Implied consent can arise from the circumstances or relationship between the parties, especially in mortgage agreements.
- Possession consistent with a mortgage agreement is not hostile and therefore does not fulfill the hostility requirement for adverse possession.
- The distinction between permissive and adverse possession is essential in determining the validity of an adverse possession claim, particularly in property subject to a mortgage.

## Conclusion

The Court of Appeal’s decision in Paddington BS v Mendelsohn established that occupancy under a mortgage agreement, even if not expressly authorized, will generally be treated as with the mortgagee’s implied consent and thus cannot be considered adverse. This precedent highlights the need to scrutinize the relationship and relevant agreements between parties in adverse possession disputes and clarifies the position of both mortgagees and mortgagors regarding permissive versus adverse occupation.

Paddington BS v Mendelsohn (1985) 50 P & CR 244