Human Rights challenge to squatters' rights rejected

The Court of Appeal last week (6th February 2001) gave judgement in the appeal of J.A. Pye (Oxford) Ltd v Graham and although the proposed developer succeeded in the appeal it lost on its challenge to adverse possession under the Human Rights Act 1998.

The Facts

Pye, a company, owned land in Oxfordshire (about 53 hectares) and granted the Grahams a grazing licence over this land in February 1983 which expired in December 1983. During 1984 and early 1985 the Grahams attempted to negotiate a new grazing licence and during that time took "cuts of hay" from the land with the permission of Pye. By about May 1985 all formal arrangements regarding use of the land had come to an end.

Pye had purchased the land with a view to redeveloping it and was awaiting the ideal opportunity to do so.

In June 1997 the Grahams registered cautions at H M Land Registry in respect of the land stating that they had gained title to the land by adverse possession. Pye took action to have these cautions removed but did not actually commence possession proceedings until January 1999.

The Issues

The Grahams needed to demonstrate that for 12 years (1) they had factual possession of the land, (2) they had the requisite intention to possess (known as the "animus possidendi") and (3) the possession had been "adverse" within the meaning of the Limitations Act 1980. If they could prove this then they would be the owners of the land due to 12 years' adverse possession.

In the Court of Appeal it was also argued by Pye that the Human Rights Act 1998 applied to this case. Pye asserted that the deprivation of its property without compensation was disproportionate to any legitimate public interest. They did not argue that the 12 year limitation period on actions to recover land is, in itself, incompatible with the Convention rights, but maintained that it is not justified in all cases relating to land.

The Court of Appeal decision

The Court of Appeal unanimously overturned the very detailed and full judgement of Mr Justice Neuberger in the High Court and stated that the Grahams had not proved they had been in adverse possession at all during the period 1985 to 1999. The Court of Appeal stated that Pye had not been dispossessed of its land. Lord Justice Mummery said:

"As already explained, however, there is no dispossession of the paper title owner for the purposes of the 1980 Act unless and until there is a person in adverse possession ie in actual possession to the exclusion of the owner and with the requisite intention to possess the land to his exclusion. In many cases the intention to possess can and will be inferred from all the circumstances surrounding the factual use of the land by the squatter, but, in my view, simply continuing a limited use of land after the expiration of a personal limited licence does not necessarily justify an inference of the necessary intention to possess."

In other words, the Court of Appeal found on the facts that the Grahams had simply continued to use the land in the same way as they had when they had been given a formal licence. Nothing had changed. In effect they did not have the intention to dispossess the paper title owner.

The Human Rights Act arguments were not dealt with in full by the Court of Appeal because they decided it was not necessary to do so. However, they did confirm that:

• the Act has retrospective effect and can therefore be applied in cases where the facts occurred before the Act came into force;
• they confirmed that the 12 year limitation period for adverse possession is compatible with Convention rights and is not a breach of Article 1 of the First Protocol of the Convention and even if it were, the provisions of the Limitation Act 1980 are conditions provided for by law and "in the public interest" within the meaning of Article 1.

Practical Impact of the Decision

It is considered that developers can breathe a sigh of relief even though this case was determined on its own facts. It seems to suggest a new higher test to prove adverse possession where a person has been in possession lawfully at some point but then continues to hold over "unlawfully" - ie the occupier must demonstrate he used the land in a different way to that when he held it lawfully from the paper title owner and this must demonstrate that he intends to dispossess all the world (including the paper title owner).

It also seems to confirm the generally held view that adverse possession is not incompatible with the Human Rights Act 1998 even though the consequence of this is that a person gets land for free and the true paper title owner is dispossessed with no compensation.

However, a lesson for developers sitting on land banks is that to avoid such litigation themselves they should properly supervise their land bank holdings and initiate appropriate inspections to avoid any adverse possession claims. If squatters are, or appear to be, exercising rights over the land preventative measures should be taken.

For further information, please contact Richard Hanson at [email protected] or on +44 (0)20 7367 2903 or Caroline Potter at [email protected] or on +44 (0)20 7367 2721.