Экзамен зачет учебный год 2023 / Dixon, Principles of Land Law

Principles of Land Law

for the paper owner to retake physical possession of the land himself, but such self-help is not always successful, and may attract the attention of the criminal law.

If the registered land is subject to the new scheme under the LRA 2002 (that is, the Act is in force and the claim arises after this date), there is no ‘clock’ of limitation to stop as there is no limitation period. However, it is clear that the adverse possessor must have completed a minimum of 10 years adverse possession before being able to apply to be registered as the new proprietor and so it is perfectly possible for the true owner to prevent this 10 years from accruing by taking such action as would ‘stop the clock’ under the traditional principles.

11.5The effect of a successful claim of adverse possession in unregistered land and pre-LRA 2002 registered land

This section deals with the effects of a successful claim of adverse possession on land of unregistered title and as is currently the case with registered land under the LRA 1925. (The position under the new scheme of the LRA 2002 is discussed below.) In these cases, it should come as no surprise to learn that the effects of a successful claim of adverse possession vary according to the perspectives of the parties. In particular, the effect on tenants has attracted much interest in recent years.

11.5.1 Effect on the paper owner

It is settled law that, once the limitation period has run its course, both the paper owner’s right to sue and their title are extinguished by operation of statute (s 17 of the LimitationAct 1980).After this date, the conventional wisdom is that no acknowledgment of the paper owner’s title, written or otherwise, and no payment, or rent, or other sum, can revive the title (Nicholson v England (1962)). This should be uncontroversial, as it is simply the consequence of the application of the Limitation Act 1980 and an expression of its underlying policy. However, the Court of Appeal has held, in Colchester BC v Smith (1992), that, in some circumstances, a written acknowledgment of the paper owner’s title by the squatter, given after the period of limitation has ended, can be enough to prevent the squatter relying on adverse possession in the face of an action for possession by the owner. This remarkable decision appears to be based on an application of the estoppel doctrine, in that the squatter is estopped from denying the paper owner’s title by the written acknowledgment, freely given. Surprisingly, the court offers no convincing reason why the Limitation Act 1980 should be ignored in this fashion, or even why the paper owner deserves to benefit from an estoppel: after all, the paper owner has

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slept on his rights, and why should a court of equity now come running to his aid? Neither does the court consider Nicholson v England (1962) and, in this sense, the decision in Smith can be regarded as per incuriam. However, at present, the Colchester decision may be authority for the proposition that a bona fide compromise of a dispute between two persons (that is, paper owner and squatter), both of whom had legal advice, should be upheld on public policy grounds, even if the 12 year period of limitation has run. In other words, a man will be bound by his contract. Unfortunately, this seemingly unobjectionable principle does not, in the context of adverse possession, recognise that there is also a policy consideration—recognised and effected byAct of Parliament no less—to the effect that sleeping on one’s rights deprives a person of those rights. In short, the judgment in Smith fails to explain why a contract between the parties can override the express provisions of an Act of Parliament. Although some commentators accept that, in principle, contracting out of the Limitation Act 1980 should be possible, it is submitted that this should not be permitted, save in the most exceptional circumstances.

11.5.2 Effect on the squatter—generally

As noted at the outset of this chapter, the traditional doctrinal position is that a successful plea of adverse possession does not transfer the paper owner’s title to the squatter. It operates negatively, to prevent the paper owner from suing the squatter (or person now in possession: for example, a purchaser from the squatter) and extinguishes the title (s 17 of the Limitation Act 1980). There is no conveyance of the land from paper owner to squatter. Moreover, because the squatter is not a purchaser from (or even transferee of) the paper owner, the squatter takes the land subject to all proprietary obligations, whether these are registered or not. So, a squatter will be bound by the burden of unregistered equitable easements and unregistered restrictive covenants in both registered and unregistered land. The squatter can never be ‘equity’s darling’ or the ‘Registrar’s darling’, as the case may be. Yet, it is also true that a squatter does acquire something as a result of a successful adverse possession, because the squatter may go on to deal with the land as if it were his own. He may sell it, lease it, devise it (that is, by will), give it away, grant easements over it, etc. In other words, a successful adverse possessor does acquire a valuable asset. How, in practice, does this work?

In unregistered land, as noted above, the squatter does not take, and is not treated as taking, a conveyance from the paper owner. Consequently, the paper owner has a bundle of worthless title documents and the squatter has no proof of title at all. Yet, in practice, a squatter with proof of established adverse possession usually can find a willing purchaser and will convey the land by deed to that purchaser. This new deed will be the first evidence of the squatter’s title and first evidence of the new purchaser’s. Necessarily, of course, the squatter will not be able to make out a good ‘root of title’ (see

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Chapter 3), but the purchaser may be happy with a statutory declaration of good title, supported, perhaps, by ‘title insurance’, being an insurance policy, paid for by the squatter, guaranteeing compensation if the squatter’s title should prove to be defective. In effect, then, a ‘new’ title is generated by the conveyancing process.

In registered land under the LRA 1925, the position is strikingly different. As we have seen in Chapter 2, registration as proprietor is a solid guarantee of title, and the paper owner is not deprived of that registration simply because adverse possession has run against them. However, according to s 75 of the LRA 1925, the registered proprietor (that is, paper owner) is deemed to hold his estate on trust for the adverse possessor until such time as the squatter can apply for rectification of the register and the registration of himself as proprietor. This will occur in due course (that is, on proof of adverse possession), and pending such rectification, the squatter’s interest is protected as an overriding interest under s 70(1)(f) and 70(1)(g) of the LRA 1925. So, should the paper owner seek to dispose of the land prior to rectification, the purchaser from the paper owner will find himself bound by the rights of the successful adverse possessor and himself be subject to rectification. To all intents and purposes, then, the mechanics of the LRA 1925 operate to ensure that the successful adverse possessor is protected and duly becomes registered proprietor, although usually, at first, with possessory title only. Interestingly, however, the fact that s 75 of the LRA 1925 says that the paper owner holds the estate on trust for the adverse possessor suggests that the estate acquired by the adverse possessor is equivalent to the estate formerly held by the paper owner. It may be true that registration of the squatter creates a ‘new’ title, but the fact that this title springs from that held on trust by the former paper owner illustrates that, in registered land, it is not necessarily accurate to say that nothing has been transferred from paper owner to squatter. In effect, there does appear to be a ‘parliamentary conveyance’. In the context of freehold land, this has little significance, but it becomes vital when considering leaseholds.

11.5.3 Effect on the squatter—leaseholds

The traditional doctrinal position that there is no conveyance of the paper owner’s estate to the squatter has some unusual consequences in the context of leaseholds, although recent decisions have suggested changing attitudes. It will be remembered that a successful 12 years’ adverse possession against a tenant extinguishes only the tenant’s estate, and the landlord has a further period after the end of the original period of the lease in which to eject the squatter before he, also, loses his title. This is all well and good because, as noted above, time can only run against a person when he has a right to recover land, and a landlord only has such a right when the lease expires.

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However, while it is true that the tenant has lost his estate by adverse possession vis à vis the squatter, it is also true that the tenant remains as tenant vis à vis the landlord for the entire duration of the original lease period. Once again, title is relative. So, during the lease, the landlord can bring forfeiture proceedings against the tenant for, say, non-payment of rent, even though the squatter is in possession of the land under a successful adverse possession. The effect of such forfeiture (in which the squatter has no right to apply for relief: Tickner v Buzzacott (1965)) is to terminate the lease and bring forward the landlord’s right to eject the squatter. Note, however, that the converse of the rule, that the ejected tenant remains ‘tenant’ vis à vis the landlord, is that the squatter is not the tenant, nor an assignee of the tenant, so cannot be liable on any leasehold covenants save those enforceable as restrictive covenants under Tulk v Moxhay (1848) (which run against any occupier: see Chapters 6 and 8).

Although apparently complicated, the picture painted above is quite simple: the squatter has extinguished the tenant’s title as far as the squatter is concerned, but the tenant remains the tenant of the landlord. The difficulties arise when the ejected tenant seeks to manipulate his continuing relationship with the landlord to defeat the adverse possessor. For example, we have just noted that the landlord may forfeit the lease in an action against the ejected tenant, thereby bringing forward the landlord’s right of action against the squatter: the landlord does not have to wait until the lease term has expired. What, however, if the tenant surrenders his lease to the landlord, despite having ‘lost’ title vis à vis the squatter? Does this also terminate the lease, and bring forward the landlord’s right of action?

In unregistered land, the case of Fairweather v St Marylebone Property Co Ltd (1963) appears to provide a clear answer. In that case, a tenant against whom adverse possession had been completed successfully surrendered the lease to the landlord, and the House of Lords held that this was equivalent to the case of forfeiture. The lease was brought to an end by a person (the ejected tenant) who still had an estate vis à vis the landlord. The squatter had no remedy against the subsequent early termination of the lease by the landlord because the squatter is not the assignee of the tenant. The squatter does not occupy under the original lease, and is not entitled to remain for its full period if that lease is lawfully terminated. Logically this is difficult to fault, although, on a common sense view, it is difficult to see why the ejected tenant should have the power to surrender a lease which, to all intents and purposes, is an empty shell. The inequity to the squatter is even more apparent if the landlord, having then evicted the squatter, regrants a new lease to the ejected tenant.

In registered land subject to the LRA 1925, that is, where the lease is substantively registered with its own title number, the position is different. In Spectrum Investment Co v Holmes (1981), the ejected tenant again tried to surrender the lease to the freeholder, and so cause an early termination of the squatter’s rights, but the attempt was thwarted by the

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court. The narrow ground for the decision was that, by the time the ejected tenant attempted to surrender, she was no longer the registered proprietor of the lease, the register having been rectified in the squatter’s favour and the squatter given a new title. In other words, the ejected tenant had nothing to surrender, and the squatter could enjoy the remainder of the term. Obviously, such an outcome is different from Fairweather, although the principle of Fairweather was sidestepped, rather than departed from because of the registration issue. However, the case of Central London Commercial Estates Ltd v Kato Kagaku Ltd has tackled the matter head on. In that case, the ejected tenant surrendered its lease to the freeholder, and the registered title to that lease was closed. The squatter had not sought rectification in time, and the freeholder sought to evict the squatter before the period of the lease had expired. However, the court held that the effect of s 75 of the LRA 1925 was to ensure that the tenant’s interest was held on trust for the squatter, and that the tenant could not surrender after the period of limitation had run. In effect, the court held that the tenant’s interest in the lease did pass to the squatter, and the squatter could remain on the land for the remainder of the term. In fact, Sedley J goes so far as to say that there was, in reality, a statutory conveyance of the original lease with benefits and burdens intact. This has three important consequences. First, there is now a confirmed difference between unregistered and registered land: the ejected tenant may surrender to the landlord before the lease expires in the former case, but not in the latter. Secondly, in registered land, it seems as if there is a conveyance of the tenant’s interest to the squatter, along with all benefits and burdens of the lease. This is undoubtedly the sensible approach and it is confirmed obliquely by the Privy Council in Chung v Lam (1996), where the squatter was able to take advantage of a provision in the original lease and enforce it against the landlord. If correct, it has important consequences, and gives both landlords and squatters more rights and obligations than they might have thought (for example, under the leasehold covenants). Moreover, although this ignores traditional doctrine, it is interesting that the Privy Council, in Chung, refused to comment on Fairweather, save only to point out the ‘powerful critique’ by one academic commentator. This must be a hint that Fairweather would, today, be overruled. Thirdly, if a tenant cannot surrender before the lease expires (at least in registered land), can the landlord still forfeit the lease against that tenant? The logic of Spectrum, Central and Chung would suggest not, again on the simple ground that the tenant holds the lease on trust for the squatter and has ceased to have a meaningful interest. The lease has passed to the squatter. So, this might mean that the landlord must attempt to forfeit against the squatter and, if so, it must also mean that the squatter can apply for relief or avoid forfeiture by performing the covenants. Perhaps also Tickner v Buzzacott (1965) is now wrong.

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11.6The substantive nature of the squatter’s rights prior to completing the period of limitation in unregistered land and pre-LRA 2002 registered land

Finally, it should be noted that, pending completion of the period of limitation under the unmodified rules, the adverse possessor is taken to have certain rights in the land, even though these can be completely defeated by the paper owner within the period. Thus, an adverse possessor awaiting completion of the period may transfer such rights as they do have (for example, two years’ worth of possession, 10 years’ worth, etc) to another person either by will or inter vivos (Asher v Whitlock (1865)). The period so transferred may then be added to any period successfully completed by the legatee/assignee of the squatter’s rights in order to make up a total of 12 years’ worth of adverse possession. Such part-completion of the limitation period is also protected against a purchaser of registered land from the paper owner by s 70(1)(f) of the LRA 1925, being an overriding interest. So, if S has achieved six years’ adverse possession against A, and A sells the land to P, S’s six years’ worth of adverse possession is binding on P. Yet, although the squatter carries forward the part completion against the new paper owner, the new paper owner can bring immediate proceedings to recover the land before 12 years are completed. It should be noted, however, that under the LRA 2002, ‘squatters rights’ per se will not be overriding interests. Instead, such rights will only override the estate of a registered proprietor if the adverse possessor is in actual occupation of the land (the old s 70(1)(g) of the LRA 1925) within the meaning of Scheds 1 and 3 to the LRA 2002. Of course, most adverse possessors will meet this criterion, but it does mean that those that quit the land will effectively lose their accumulated possession in the face of a new registered proprietor.

11.7Adverse possession and Human Rights

It is clear from the preceding analysis that the rules of adverse possession— be they in relation to unregistered land, pre-LRA2002 registered land or under the scheme of the LRA 2002—can result in the destruction of the title of a duly certified ‘owner’. On a simple view, this might be thought to contradict a person’s right to peaceful enjoyment of their property under Art 1, Protocol 1 of the European Convention on Human Rights, as enacted in to English law by the Human Rights Act 1998. Not surprisingly, this argument has been raised already and took up much of the time of the Court of Appeal in Pye v Graham (2001). In that case, the Court of Appeal was faced with a barrage of arguments concerning adverse possession and its relation to the right to property guaranteed by Art 1 of Protocol 1. As it turned out, the discussion was obiter as the court denied that any case of adverse possession was made out and hence the alleged violation of the paper owner’s right of property was not in issue. However, Mummery LJ for the court gave a robust response

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to the human rights argument. In his view, it was clear that rules imposing a time limit on when persons could bring claims was not itself a contravention of any convention right. More importantly, the English rules on adverse possession (that is, no claims after 12 years’ adverse possession) were a lawful and proportionate application of the limitation rules and so title defeated by adverse possession was not title denied in violation of Art 12 of Protocol 1. Put simply, the rules on adverse possession were consistent with human rights law on the right to property. This is convincing reasoning as the right in Art 1 of Protocol 1 is not absolute and must yield in the face of public policy, as exemplified by rules limiting legal claims. Necessarily, given that the scheme of the LRA 2002 generally makes it more difficult to ‘take’ a registered proprietor’s land, it also must conform to the Convention and as much was certified during the passage of the Act through Parliament. Finally, we should note that the reasoning of the Court of Appeal in Pye (albeit obiter) is much more persuasive that that of the High Court in Family Housing Association v Donellan (2001) when considering the same issue. In Donellan, Park J suggests that ‘adverse possession’ is not contrary to Art 1 of Protocol 1 because this Article is designed to prevent State (that is, governmental) interference with property rights. It was not meant, apparently, to interfere with ‘private law’ issues like adverse possession, the latter being one individual ‘denying’ the property right of another and having nothing to do with the State. Two things only need be said about this. First, in Pye the Court of Appeal, decided that in substance the law of adverse possession was not contrary to human rights law. The identity of the person asserting adverse possession (State or individual) was irrelevant and the court proceeded on the basis that human rights law is relevant in ‘private’ law actions. Secondly, Park J’s formulation revisits the argument about whether the Human Rights Act 1998 is ‘vertically’ effective (applicable only where a public authority is one of the parties) or ‘horizontally’ effective (applicable where the parties are private litigants). The answer to that question really revolves around the meaning of the Human Rights Act 1998, particularly ss 3 and 6. It is not to be found in a restrictive interpretation of the very rights themselves.

11.8Adverse possession under the Land Registration Act 2002

As has been indicated above, when the relevant sections of the Land RegistrationAct 2002 enter force (which may be as early as 2003), a new scheme for dealing with claims of adverse possession of registered land will come into existence. Until that time, the ‘old rules’ will operate in the manner discussed in this chapter.

Under the new scheme, there will be no period of limitation and no sense in which a registered proprietor loses title merely because another person has adversely possessed the land for a fixed period of time (s 96 of the LRA 2002).

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The onus shifts from the true owner to the adverse possessor. Thus, where a person claims to have completed at least 10 years’ adverse possession (and this is to be assessed by the traditional rules: Sched 6, para 11 of the LRA 2002), that person may apply to the Registrar to be registered as proprietor. This application will trigger notice to the current registered proprietor (and certain other persons, Sched 6, para 2 of the LRA 2002) and, if there is objection from suchperson,theadversepossessorcannotbeenteredasnewregisteredproprietor unless eitherofthreeexceptional groundsare established. These are where (Sched 6, para 5 of the LRA 2002):

…it would be unconscionable for the current proprietor to dispossess the adverse possessor because of an estoppel and the circumstances are such that the adverse possessor ought to be registered; or

where the adverse possessor is ‘for some other reason’ entitled to be registered as proprietor; or

where there is a boundary dispute concerning adjoining land and for at least 10 years the applicant reasonably believed the disputed land to be his, provided that the disputed land had been registered land for more than one year prior to the application.

However, assuming none of these grounds to be made out (and we must await litigation for their meaning to be elucidated), the ‘true’ registered proprietor will then have two further years following the application by the adverse possessor to recover possession of the land. If he does not so recover, then the adverse possessor may reapply at the expiry of the two year period and he willbeenteredasproprietor.Ifthenregisteredasproprietor,theadversepossessor takes the land subject to any interests affecting the estate, except any registered charge (unless registration is because of the exceptional situations outlined above in para 5): Sched 6, para 9 of the LRA 2002.

Clearly, this new scheme will have a dramatic effect on the frequency and success of claims of adverse possession. In essence, a registered proprietor will receive notice of any application by an adverse possessor and, unless one of the three exceptional grounds is made out, will have two years to recover possession. This is the case whether the adverse possessor applies for registration after 10 years or 110 years: there is no period of limitation. So, if the adverse possessor makes no application for registration, or does so and is evicted (assuming the exceptions do not apply), the registered proprietor is safe. For sure, this will do much to encourage the voluntary registration of titles, especially by those owners of large landholdings who find it difficult to monitor the state of their land: for example, large farms, local authorities. It will effectively reduce adverse possession of registered land to a trickle unless one of the ‘justice’ exceptions applies. Of course, we may well see ‘sympathetic’ interpretations of these exceptions, so as to permit adverse possession of registered land in a wider range of circumstances than is really intended by the Act. Then again, we may not. What is clear, however, is that this scheme means the end of one

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of the last operative feudal elements of English land law. Possibly, we should not lament it. On the other hand, we must also ask whether the LRA 2002 scheme will do anything to encourage negligent or inefficient landowners to make the most of their precious resource called ‘land’. Prior to entry into force of the LRA 2002, a landowner had to be attentive to his estate and failure to use land meant others could acquire it and use it more beneficially (see the Lambeth LBC cases, especially Lambeth LBC v Ellis (2000)). After the entry into force of the LRA2002, a landowner with registered title can sit back and wait for the Registrar to inform him that his land is subject to another’s claim and then he can evict at any time within the next two years. Then he can sink back into slumber.

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SUMMARY OF CHAPTER 11

ADVERSE POSSESSION

The traditional principle of adverse possession: the limitation of actions

The ability of an adverse possessor (a ‘squatter’ or ‘trespasser’) to acquire a better right to the land than the paper owner is based on the principle of limitation of actions. This means that a person (for example, the paper owner of the land) may be ‘statute barred’ from bringing a claim against the adverse possessor to recover possession of the land after the period of limitation has passed. In this sense, adverse possession operates negatively: it prevents an estate owner from suing on his rights and operates to extinguish his title. This will continue to govern cases in relation to unregistered land and registered land pending the entry into force of the LRA 2002.

The limitation period

In most cases, where a limited period is applicable (that is, not under the LRA 2002) that period will be 12 years from the moment of adverse possession by the claimant: s 15 of the Limitation Act 1980. If land is owned by someone for life, with remainder in fee simple to another person, the limitation period is either: adverse possession of six years from the date at which the interest in remainder falls into possession (assuming 12 years or more against the life tenant), or adverse possession of 12 years from when the life tenant was dispossessed, whichever is the longer (s 15 of the Limitation Act 1980). If the current paper owner is a tenant of the land under a lease, the period of limitation against the tenant is 12 years. The period for the landlord is also 12 years, but does not start to run until the original term of the tenancy has ended: Sched 1, para 4 of the Limitation Act 1980.

An intention to possess

Inordertomountasuccessfulclaim,theadversepossessormusthaveanintention to possess the land adversely to the exclusion of the whole world, including the paper owner.

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