Now the Courts are serving a slice of Pye

Recent cases in England dealing with adverse possession have applied the decisions from the House of Lords case of J A Pye (Oxford) Limited v Graham [2002] UKHL30, [2003] 1A.C.419 and from the Grand Chamber of the European Court of Human Rights decision on the case of J A Pye v United Kingdom on 30th August 2007.

27 March 2008

Recent cases in England dealing with adverse possession have applied the decisions from the House of Lords case of J A Pye (Oxford) Limited v Graham [2002] UKHL30, [2003] 1A.C.419 and from the Grand Chamber of the European Court of Human Rights decision on the case of J A Pye v United Kingdom on 30th August 2007.

The first of three recent cases calling on parts of the Pye judgment is Roberts v Swangrove Estates Limited [2008] EWCA Civ 98, which heavily relied on the judgement from the Pye case, where the meaning of possession was described as being "the ordinary sense of the word".  This principle also applied in the recent case of Ashe v National Westminster Bank plc [2008] EWCA Civ 55. 

The principles in the Pye judgment have also been applied in the case of Ofulue & Other v Bossert [2008] EWCA Civ 7. The Court of Appeal again used the judgement in Pye to interpret the meaning of possession and also looked at rules governing EC member states and instances when decisions from the European Court of Human Rights are to be applied in domestic situations.

The rules of Adverse Possession
Adverse possession is the means by which someone who does not own property (land and/or buildings) may claim title to that property by virtue of being in possession of that property for a specified period of time.  There are three potential situations, governed by different Acts and each is subject to time limits:

  • If the property is unregistered, a period of 12 years possession must exist for the Limitation Act 1980 to operate to extinguish the right to a challenge to that possession by the owner by title (but who is not in possession).
  • If the property is registered and the period of possession relied on ends before 13 October 2003, the same 12 years possession applies.
  • If the property is registered and the period of possession relied on occurs after 13 October 2003, the claim is governed by the rules of the Land Registration Act 2002. In this case the period of possession required is 10 years before a squatter may apply to have title registered in its name.

In all cases, there must be uninterrupted factual possession and there must be intention on the part of the person claiming possession to actually possess the land.

In the case of J A Pye (Oxford) Limited v Graham, the House of Lords analysed the meaning of possession.  The judgement referred to the case of Powell v McFarlane [1977] 38 P & CR452 for the principles of what constituted adverse possession and reinforced these principles.  To establish adverse possession it is necessary to have physical possession and control of the property. This must be coupled with the intention to possess to the exclusion of the owner (so far as reasonably possible and allowable by the process of law) and all others, and that without the consent of the owner of the title.  If this is proved, the person with title but not possession is barred from reclaiming title to the land.  The historical meanings of adverse and non-adverse possession were discussed and the judgement sought to simplify the meanings by interpreting them in the ordinary sense of the words.

How Pye is being applied
Factual possession and intention - In Roberts v Swangrove Estates Limited, Roberts, Swangrove Estates Limited and the Crown Estate Commissioners all claimed to have acquired titles to certain areas of foreshore and seabed of the River Severn, the latter parties by adverse possession.  Roberts argued on appeal that there existed a constitutional principle whereby the Crown could not acquire title by adverse possession except where the entry to the land was by lawful means.  The Court of Appeal applied the Limitation Act 1980 and confirmed that the Crown as well as any individual person could rely on this Act equally.  The Court then considered the matter of evidencing adverse possession.  The Court ruled that the actual method of obtaining possession was not relevant.  In order to ascertain whether or not adverse possession had taken place, the Court referred to the judgement in J A Pye (Oxford) v Graham:

"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."

The activities carried out by Swangrove and the Crown Estate included the dredging of the river bed and also use of the land for fishing, shooting and other acts of management of the land.  Therefore, the physical control of the land and use of it for its common use constituted factual possession.  This coupled with the intention to possess amounts to adverse possession.  The Court made further references to the judgement in Pye and clarified that the requirement to exclude the paper owner only needed to be so far as reasonably possible.  Swangrove's and the Crown Estate Commissioners' claims to the various areas of land were accepted by the Court and the appeal by Roberts was rejected.

No need to intend to remove the owner or acquire title -The background to the case of Ofulue & Other v Bossert was that Mr and Mrs Ofulue acquired title to property in London in August 1976.  They later left London to live abroad, leaving the property empty.  In 1981, a former tenant let Ms Bossert and her father into occupation and they began to pay rates for the property and carry out repairs.  Mr Ofulue returned to London in 1983 to find Bosserts in occupation and he sought to remove them although did not have sufficient funds to commence proceedings to evict them.  He returned in 1987 and in 1989 commenced proceedings for possession.  Mr Bossert counterclaimed on the basis that they had carried out extensive works to the property and had been offered a 14-year lease in return for doing so.  In 1991 and 1992 the Bosserts made "without prejudice" offers to the Ofulues to purchase the property that were not accepted.  In 1996 Mr Bossert died and his daughter remained in the property.  Further proceedings were entered into in the years that followed and in 2005 the case came before the County Court which ruled that the Ofulues' title had been extinguished in 1999. The judge ruled that the Bosserts had obtained adverse possession for the requisite period to prevent any claim now being made to recover title to the property, the decision being reached after consideration of the principles set out in the Pye case.  The Ofulues appealed the decision of the County Court. 

At the time of the appeal, the case of J A Pye v The United Kingdom was under review by the Grand Chamber of the European Court of Human Rights. The outcome of the Grand Chamber decision was available prior to the decision of the Court of Appeal in the Ofulue case.  The decision of the Grand Chamber confirmed the compatibility of the adverse possession rules with the principles of Article 1 of the Convention on Human Rights, namely the right to peaceful enjoyment of one's possessions.

The Court of Appeal recognised that it was not bound to take on board all decisions from the European Court.  However, there is a duty to follow such decisions where the European Court has already applied a particular test to circumstances from that country. The European Court recognises that individual countries know how best to apply such law to their own locality and this principle known as "the margin of appreciation" permits countries to depart from the guidance, based on principles of balancing competing interests and proportionality. The Court of Appeal took the view that it was obliged to follow the decision in Pye in relation to the current case.  The differences in facts between the Ofulue case and those in Pye were not sufficient to permit the Court to depart from the decision in Pye.  The test was to prove ordinary possession and intention to possess.  This did not extend to a need to intend to remove the owner or acquire title.  It was also noted that a squatter's admission of the paper owner's title is not inconsistent with possession. The offers made to purchase were done so on a without prejudice basis, thus not admissible as evidence. Therefore they did not operate to act as an interruption to the period of possession required in order to establish adverse possession.

Possession should be given its ordinary meaning -Finally, in Ashe v National Westminster Bank plc, the National Westminster Bank were appealing a decision against them, whereby a second legal charge in their favour over a property had been extinguished by virtue of the Limitation Act 1980.  A couple had a granted the mortgage over their property to secure the liabilities of the husband.  The husband did not meet all necessary payments and although formal demands were made, the Bank made no action to recover the debt.  The husband was later declared bankrupt and the trustee in bankruptcy made a declaration that given that the last payment to the Bank had been made over 12 years previously, the legal charge had extinguished and the Bank had no rights to recover the loan secured by the mortgage.  The case concluded that the couple had been in possession of the property adversely and extinguished the mortgage.  The Bank appealed basing its reliance on its understanding of the Pye decision that adverse possession meant possession "as of wrong" and that time did not commence running until the Bank's right to possession terminated.

The appeal court dismissed the appeal, applying the rule from Pye that possession should be given its ordinary meaning, referring to the capacity of the person possessing and not the nature of possession.  It was recognised that the Bank had a right to possession as soon as the legal charge had been signed, but that the Bank had not exercised this right.  The couple occupied the property based on their registered title, which did not prevent them from having ordinary possession. From the evidence available, it was not the case that the Bank gave positive permission to the couple to remain in the property and it did not follow from the Bank not exercising their right to possession that the Bank had therefore impliedly granted permission to the couple.  It was a case that inaction on the part of the Bank to exercise its rights resulted in the extinction of the rights under the legal charge after the period of 12 years.

What the law looks like now

The importance of prompt  enforceability - The strong message from these cases is the need for prompt enforceability of any rights of the person who is not in possession, if they believe a third party to be in adverse possession, or likely to be able to prove they were in adverse possession.  The onus of proof is on the non-possessing owner to prove title, to protect its interest, and to interrupt the possession by commencing proceedings within the statutory period of 10 years for land registration title and 12 years for unregistered titles. 

Increased protection for the paper owner - The Land Registration Act 2002 increases the protection for the "paper owner".  There is no limitation on the right to recover registered land. In addition, any person claiming adverse possession must apply to register title, and the owner is notified and given the opportunity to defend its position.

Unregistered land still not secure - The cumulative effect of the House of Lords decision in Pye and the decision of the Grand Chamber is that this general principle of adverse possession continues, and that it does not conflict with Article 1 of the Human Rights Act.  Article 1 states that the owner is entitled to peaceable enjoyment of his possessions and although the result of adverse possession does deprive the owner of this, by virtue of the Limitation Act 1980, the 1980 Act itself does not deprive the owner of its rights. The position for unregistered land is therefore still not secure.  The view of the courts is that the rules have been in place for some time and very little is required by the paper owner to protect its interest. Therefore the onus remains on the paper owner to keep its title free from competing possessory rights.