Abolished Possession in Relation to Unregistered and Registered Land - Case Study Example

The Land Registration Act 2002 makes registered land virtually squatter-proof but it would have been far preferable – and just – if adverse possession had been abolished completely in relation to both unregistered and registered land. In order to discuss whether adverse possession ought to have been abolished entirely for registered and unregistered land it is necessary to examine what is meant by adverse possession and how adverse possession might still occur in registered and unregistered land. In order to substantiate a claim for adverse possession the person asserting the right must demonstrate factual possession as well as the intention to possess the land. Factual possession is determined by evidence that the possession of the land has been peaceable and open, used exclusively by the person claiming the right and is against the right or consent of the paper owner of the land. In Bryant v Foot (1867)1 Cockburn CJ concluded that the rights acquired were founded ‘not on the ground that possession over a given period gave an indefeasible right, but on the assumption, where possession or enjoyment had been carried back as far as living memory would go, that a grant had once existed which had since been lost.’ It is not necessary for the applicant to have physical occupation of the land, and the courts have recognised claims for adverse possession where there is evidence that the land has been maintained by the applicant or where the applicant has used the land as grazing for animals2. Exclusivity of usage can be evidenced in situations where the applicant has erected a fence around the area of land claimed, although it is not always necessary to fence in the land to establish exclusivity. If the paper owner has consented to the applicant using the land then a claim for adverse possession cannot be substantiated. However, if the paper owner of the land knows that the applicant has been using the land without their consent, and has failed to take any action to stop this, then a claim for adverse possession is likely to be successful. Anyone claiming adverse possession must show that they intended to take possession of the land in order to succeed in their claim3. It was decided by the court in Treloar v Nute [1976]4 that a squatter would only be entitled to claim possession of the property if they could demonstrate that the true owner had been ‘dispossessed’, by their occupation of the land. This possession had to be factual possession as subsequently described in Powell v McFarlane (1977)5. In this case Slade J made the observation that "(1)  In the absence of evidence to the contrary, the owner of land with the paper title is deemed to be in possession of the land as being the person with the prime facie right to possession. The law will thus, without reluctance, ascribe possession either to the paper owner or to persons who can establish a title as claiming through the paper owner. (2) If the law is to attribute possession of land to a person who can establish no paper title to possession, he must be shown to have both factual possession and the requisite intention to possess ("animus possidendi")." Slade J went on to say that "(3)  Factual possession signifies an appropriate degree of physical control. It must be a single and [exclusive] possession, though there can be a single possession exercised by or on behalf of several persons jointly. Thus an owner of land and a person intruding on that land without his consent cannot both be in possession of the land at the same time. The question what acts constitute a sufficient degree of exclusive physical control must depend on the circumstances, in particular the nature of the land and the manner in which land of that nature is commonly used or enjoyed. …. Everything must depend on the particular circumstances, but broadly, I think what must be shown as constituting factual possession is that the alleged possessor has been dealing with the land in question as an occupying owner might have been expected to deal with it and that no-one else has done so." Slade J was also keen to point out in this case that "If his acts are open to more than one interpretation and he has not made it perfectly plain to the world at large by his actions or words that he has intended to exclude the owner as best he can, the courts will treat him as not having had the requisite animus possidendi and consequently as not having dispossessed the owner." When considering the issue of intention, Lindley MR in Littledale v Liverpool College [1900]6 made the point that the registered owners "could not be dispossessed unless the plaintiffs obtained possession themselves; and possession by the plaintiffs involves an animus possidendi— ie, occupation with the intention of excluding the owner as well as other people". The court in Leigh v Jack (1879)7 rejected a claim for adverse possession on the basis that, it was obvious from the actions of the true owner, Leigh, concerning the work carried out on the land during the disputed 20 year period, that Leigh had not discontinued possession or been dispossessed by the defendant. In this case, Leigh had erected a fence separating Grundy Street from the other land, and had at all times, spoke of his intention to use the land in the future. This gave rise to what subsequently became known as the ‘implied licence theory’, under which a squatter had ‘mere’ possession of the land and did not interfere with any future intentions of the real owner. Prior to the introduction of the Land Registration Act 2002 anyone claiming adverse possession only had to show 12 years of continuous occupation in order to succeed in obtaining a legal title to the land. Under the old rules the adverse possessor was regarded as the beneficial owner of the land, which was being held on trust by the paper owner. Such a person would also be entitled to register themselves as the legal owner of the land thereby extinguishing all the rights of the paper owner8. S15(1) of the Limitation Act 1980 prevented the paper owner of the land from bringing an action to recover the land, if the person claiming possession had been in possession for 12 years9. The right to claim adverse possession would have been lost if the occupier had acknowledged in writing that they were aware of the true owners title to the land10, or if the paper owner had allowed the occupier to use the land under a tenancy or a licence. A claim for adverse possession could also be extinguished if the real owner of the land physically re-enters onto the land. The LRA 2002 has attempted to address the problems associated with adverse possession. Under this Act, if the person claiming adverse possession has not been in possession for 12 years by 13 October 2003, they have to follow the rules laid down under the 2002 Act in order to claim adverse possession11. The applicant will be required to make an application to the Land Registry once they have been in occupation for 10 years12. Upon receipt of the application the Land Registry will notify the paper owner of the land of the application, and will give them 65 business days in which to respond13. Failure to respond will result in the title being transferred to the applicant. An objection to the application by the paper owner will generally result in the application for adverse possession to be rejected, though there are exceptions where the application might still be allowed. Under Schedule 6 para 5 of the LRA 2002 the court can allow an application for adverse possession if the adverse possessor can show that it would either, be unconscionable under the equity of estoppel to dispossess the applicant, or the applicant is entitled to be registered as the proprietor, or the land is adjacent to the land belonging to the applicant. In cases where the applicant is claiming the land on the basis that the land claimed is adjacent to his own land, the applicant must show that he reasonably believed the land belonged to him14. Proprietary estoppel is based on the common law doctrine of estoppel. Claims for estoppel can arise where a representation of fact has been made by one party in expectation that the other party will rely on this. If the person relying on the representation can show that they acted in their detriment on reliance of that representation the principle of estoppel might be applied. In Ramsden v Dyson15 Lord Kingdown found that proprietary estoppel should apply stating: If a man, under a verbal agreement with a landlord for a certain interest in land, or under an expectation, created or encouraged by the landlord, that he shall have a certain interest, takes possession of such land, with the consent of the landlord, and, upon the faith of such promise or expectation, with the knowledge of the landlord, and without objection by him, lays out money upon the land, a Court of equity will compel the landlord to give effect to such promise or expectation. In Thorner v Curtis [2007]16 the defendant claimed that he had the benefit of proprietary estoppel since he had acted in his detriment17 for the last 15 years on reliance of an expectation that had been repeatedly encouraged by the plaintiff that he would inherit the farm. In this case the defendant was unable to show that he had acted to his detriment and judgment in favour of the plaintiff was awarded. Once an application for adverse possession has been rejected, the paper owner must commence proceedings to have the adverse possessor evicted. Persons remaining in occupation that can establish an interest in the property, but cannot claim adverse possession, might continue to have an overriding interest in the property18. If no such proceedings are commenced within the 2 years the adverse possessor would be entitled to make a subsequent claim for possession of the land19. In these circumstances the paper owner would not be given a second opportunity to object to the application for adverse possession. Following the introduction of human rights legislation, registered owners of land have sought to rely on asserting that the automatic loss of their right to the land was a breach of Article 1 of Protocol 1 of the European Convention on Human Rights. Under this Article it states Every natural or legal person is entitled to the peaceful enjoyment of his possessions. No one shall be deprived of his possessions except in the public interest and subject to the conditions provided for by law and by the general principles of international law. The preceding provisions shall not, however, in any way impair the right of a State to enforce such laws as it deems necessary to control the use of property in accordance with the general interest or to secure the payment of taxes or other contributions or penalties. This was the assertion made by the applicant in J.A. Pye (Oxford) Ltd v United Kingdom20. The European Court of Human Rights held, in this case, that the automatic termination of the rights of the registered owner after 12 years of possession violated Article 1 of Protocol 1. This decision was subsequently overturned by the Grand Chamber in 200721, where it was determined that the Grahams had not violated the companies right to the peaceful enjoyment of their possessions. This case involved two UK companies J A Pye (Oxford) Ltd and J A Pye (Oxford) Land Ltd. Both were registered owners of land which they had lost title to following a successful claim for adverse possession. The claim for adverse possession had been made by the Grahams under s15 of the Limitation Act 1980, which entitled their claim to succeed if they had enjoyed possession of the land for a period of 12 years. Pye argued that there had initially been an agreement between the parties that the Grahams would be entitled to use the land until the 31 December 2003 for the price of £2000. Pye argued that despite the fact that the Grahams had continued to use the land after the expiration date of the agreement, their rights to the land should not be extinguished, as the Grahams were not acting as the owners of the land, and would have been prepared to pay Pye for the continued usage of the land. Pye did not take any action to recover the land until 1998. Initially the court held that the Grahams were entitled to claim adverse possession, however, the Court of Appeal reversed this decision on the grounds that there was an implied licence between the parties. The matter was referred to the House of Lords who applied the factual possession principles mentioned above. It was their opinion that the Grahams had demonstrated an intention to claim the land as their own, and had been in factual occupation for 12 years, therefore entitling them to successfully claim adverse possession. Lord Browne-Wilkinson referred to the words of Slade LJ in Buckingham County Council v Moran22 in which Slater LJ noted that what was required was ‘not an intention to own or even an intention to acquire ownership but an intention to possess.’ From this Lord Browne-Wilkinson Asserted that the Grahams had been able to prove that it was their intention to possess this land. In St Marylebone Property Co Ltd v Fairweather [1963]23 the court stated that a squatter cannot succeed in claiming adverse possession if his claim to the title has been disturbed. In this case, the tenant was able to dispossess the squatter by surrendering the remainder of the lease back to the landlord. This entitled the landlord to have the squatter removed, and then to re-issue a new lease to the tenant once the squatter had departed. This was one way in which the Limitation Act might be defeated, in a situation were the tenant has lost the right to claim against the adverse possession by not stating a claim against the squatter within the 12 year period. Lord Denning noted that such a decision created an anomaly of unfairness as ‘a squatter’s title can be destroyed by the leaseholder and freeholder putting their heads together… they can by a surrender – or by a surrender and regrant – destroy the squatter’s title completely and get rid of him. So be it. There is no way of preventing it." The argument raised by Pye, in the above case, was based on the fact that the Grahams did not have the intention to possess as they were prepared to pay to occupy the land, which amounted to an acknowledgement that they were aware that the land belonged to another. This same argument had been raised in Ocean Estates Ltd v Pinder [1969]24, in which Lord Diplock made the observation that the willingness of the squatter to pay for occupation of the land did not negate the intention of the squatter to possess the land as their own. In this case Lord Diplock stated ‘where questions of title to land arise in litigation the court is concerned only with the relative strengths of the titles proved by the rival claimants. If party A can prove a better title than party B he us entitled to succeed notwithstanding that C may have a better title than A, if C is neither party to the action nor a person by whose authority B is in possession or occupation of the land.’ The matter was subsequently addressed in the European Court of Human Rights, as mentioned above, whose decision was later overruled by the Grand Chamber. The Grand Chamber was of the opinion that Pye had had ample opportunities to remedy this matter, and could have prevented a claim being brought for adverse possession by the mere issue of a tenancy or licence to the adverse possessor. The Grand Chamber felt that allowing Pye to be able to reclaim the lost land would offend against the rules laid down by the Limitation Act 1980, and would also be incompatible with the Land Registration Act 2002 as Pye had failed to take any action to terminate the occupation of the Grahams on the land. Although, from the viewpoint of the landowner, it would have been preferable for adverse possession to have been totally abolished, there is however, sufficient argument in favour of the retention of adverse possession as can be demonstrated in some of the cases mentioned above. This is especially the case where the applicant can demonstrate that they have an interest in the property or where the principle of the equity of estoppel might apply. Although adverse possession claims can result in someone becoming dispossessed of their property, the changes brought about by the LRA 2002 appear to provide a sufficient safety net to protect true owners from losing their land. Difficulties arise where the true owner fails to notify the Land Registry when they have changed address. This could mean that the Land Registry would be unable to notify the true owner about the application made by the adverse possessor. The onus is on the true owner to notify of such changes, and therefore the Land Registry cannot be held accountable if the land is transferred to the adverse possessor without the true owner receiving the notification of the application. 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