ADVERSE POSSESSION: WHAT’S CHANGED?

by DESIREE ARTESI, Barrister

The elements of adverse possession

Adverse possession, what does it mean? How can one adversely possess land, which was not theirs to possess in the first place? This was a question recently asked of me by a layperson. It set me to thinking. A layperson, had, by applying the simple rules of natural justice arrived at what is in fact the undercurrent of the European Court of Human Right’s judgment in the case of J.A. Pye (Oxford) Ltd v Graham [2003] 1 A.C. 419; ECHR [2005] 15 November.

There are observers who may well have noted which way the wind of change was blowing following the case of Beaulane Properties Limited v Palmer (ChD) The times, 13 April 2005. Mr Palmer occupied registered land close to Heathrow Airport. He used the land to graze horses some of which belonged to him and some to other people. He had been using the land for 12 years before applying in 2003 under section 75 of the Land Registration Act 1925 to be registered with possessory title. Until that time, Beaulane Properties Limited had allowed Mr Palmer to use the land. Palmer’s application, of course, prompted Beaulane to commence proceedings for possession of the land.

In his judgment Deputy Judge Nicholas Strauss QC accepted that Mr Palmer had occupied the land for the necessary 12 years. The other crucial factor to be proved in establishing adverse possession is that of “intention to possess”. On this point, however, the Learned Judge looked back over to the previous line of cases and came to the view that Mr Palmer’s claim must fail, as his claim did not truly run until it could be shown that his use or intended use of the land conflicted with that of the true owners Beaulane, The position here was that Beaulane had no immediate plans to use the land and were content to allow Mr Palmer to use the land.

A very different approach on the question of the intention to possess was taken by the House of Lords in J.A Pye (Oxford) Limited v Graham [2003] 1 A.C. 419. The Grahams occupied farmland for some 15 years without the permission of the landlords Pye. Pye brought proceedings for possession of the land and in the High Court Neuberger J dismissed the claim, holding that the Grahams had enjoyed factual possession and that their intention to possess took effect so that Pye’s title was extinguished; the Grahams were accordingly entitled to be registered at the Land Registry as the owners of the land. The Court of Appeal reversed Neuberger J’s decision, holding that the requisite intention to possess the land had not been shown and applying a similar test on the intention point as did Deputy Judge Nicolas Strauss QC in the Beaulane case, the test being that the adverse possessor (Graham) was unable show that he was using the land with an intention which was inconsistent with that of the true owner.

The case went to the House of Lords and in a strong judgment their Lordships stated (after referring to past rulings on what constituted adverse possession) that the belief that “the sufficiency of possession depends on the intention, not of the squatter, but of the true owner is heretical and wrong”. The test for establishing adverse possession is now clarified as being factual possession of the land coupled with an intention to assert possession over that land. That intention however, is not established by reference to the intention of the true owner.


Adverse Possession and the Human Rights Act

Although the question whether the result achieved in the House of Lords was incompatible with Pye’s rights under Article 1 of Protocol 1 of the Convention was not pursued by their Lordships, Lord Browne- Wilkinson made this observation:

“ 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”.

It is not surprising therefore that the ECHR in Pye, held that there had been a violation of Article 1 of Protocol No. 1 and that the operation of the 1925 and 1980 Acts deprived the applicant company of their title to the registered land in way that placed on them an individual and excessive burden and upset the fair balance between the demands of the public interest on the one hand and the applicants’ right to the peaceful enjoyment of their land on the other. (paragraphs 75 & 76 ECHR judgment).

It was interesting that both Neuberger J and the Judges of the European
Court of Human Rights arrived at similar observations, namely
that "where a land owner has no immediate use for the land, but where he
takes no steps to evict an adverse possessor, the loss of the land
without payment of compensation is draconian and disproportionate
particularly in a climate of increasing awareness of human rights”. This was also echoed in Beaulane, Deputy Judge Nicholas Strauss QC stating in his judgment that the Limitation Act 1980 led to a registered proprietor inadvertently losing their title without proper compensation and was therefore incompatible with Article 1 of the First Protocol of ECHR.


The effect of the Land Registration Act 2002

In the case of unregistered land, the Limitation Act 1980 operates so that the effect of adverse possession is to extinguish the title of the documentary owner and to create a new fee simple title in the adverse possessor. It is worth noting that cases such as Pye and Beaulane do not affect unregistered land. The essential difference is that under the provisions of the Land Registration Act 2002, the occupiers of unregistered titles can still apply for possessory title by establishing occupation for a continuous period of 10 years and satisfying the requirements under Schedule 6 of the Land Registration Act 2002. In effect, when the adverse possessor makes an application to the Land Registry, the true owner of the land is served with a notice, which operates so as to give the true owner an opportunity to make representations as to why their title should not be extinguished. The Act also reduces the period before a claim can be brought from 12 years to 10 years.

In the case of registered land, the Land Registration Act 2002 now makes it far harder for a registered owner to lose title inadvertently through adverse possession. This is because the true owner can request that the application be dealt with under paragraph 5 of Schedule 6. This would then require the adverse possessor to satisfy three conditions before the title could be entered in their favour.


Conclusion

Arguably, the cumulative effect over the coming years of the
implementation of the Land Registration Act 2002 is to create a system of
registered title which has as one of its objectives the realisation of the
concept of absolute title established by register. It may well be that one
of the consequences of the establishment of such a system is the
decline of claims by adverse possessors. This coupled with the ECHR judgment, which effectively paves the way for compensation claims to be made against the Government in certain cases, will most surely see the gradual if not rapid decline of adverse possession claims.

Desiree Artesi
July 2006