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Human rights
Pye v UK
European Court Grand Chamber decision
J.A. Pye (Oxford) Ltd v The United Kingdom
(Application no. 44302/02)
30 August 2007
(To find the case go to the ECHR case law search page and type in the word "Pye").
Summary
The Grand Chamber of the European Court of Human Rights has decided (by 10-7) that the English law of adverse possession (as it relates to claims under the law prior to the Land Registration Act 2002) is not incompatible with the Convention. Pye, which lost land under that law, is not therefore entitled to damages from the UK government.
Brief history
This case arises out of the HL decision in J A Pye (Oxford) Ltd v Graham [2002] UKHL. A fuller explanation of the case can be found on the site here. However, very briefly the facts were as follows: Pye is a company that owned some (registered) land adjacent to a farm, owned by Mr Graham. The land had development potential but because there was no immediate intention to carry out any development Pye allowed Graham, under a licence, to use the land for grazing. When the licence came to an end Mr Graham remained in occupation, fully farming the land. He continued to farm the land for more than 12 years. The HL held that as Graham had factually possessed the land and had intended to possess the land he had acquired beneficial ownership of it by adverse possession and was entitled to be registered as the owner (under the Limitation Act 1980 and s75 of the Land Registration Act 1925).
Pye therefore made an application to the ECHR for damages against the UK government arguing that it had lost its property as a consequence of a law that was inconsistent with Article 1 of the First Protocol of the Convention. In November 2005 a chamber of the court consisting of seven judges held by 4-3 in favour of Pye.
The Government then asked for the matter to be referred to the Grand Chamber of the Court (consisting of seventeen judges). It is this Grand Chamber that has now found in favour of the Government. The property which is perhaps worth in the region of '10m has been lost to Pye and it is not entitled to any compensation from the Government.
In coming to its conclusions the majority reached its decision by the following reasoning:
Did Article 1 of the First Protocol apply?
Pye lost the beneficial ownership of the land as a result of the operation of the 1925 and 1980 Acts. It was therefore accepted that Article 1 of the First Protocol was applicable.
Which part of that Protocol was relevant?
The majority pointed out that Pye did not lose its land because of legislation permitting the State to transfer ownership in particular circumstances, nor because of social policy 'but rather as the result of the operation of the generally applicable rules on limitation periods for actions for recovery of land' (para 65). The statutory provisions were therefore 'not intended to deprive paper owners of their ownership, but rather to regulate questions of title in a system' in which 12 years adverse possession extinguished title. Thus, the part of Article 1 which was engaged was not that relating to 'deprivation of possessions' but that which related to a 'control of use' of land in the second paragraph of the provision (para 66).
Did the limitation provisions pursue a legitimate aim?
The European Court has recognised in other contexts that limitation periods are a common feature of domestic legal systems and 'serve several important purposes, namely to ensure legal certainty and finality, protect potential defendants from stale claims which might be difficult to counter and prevent the injustice which might arise if courts were required to decide upon events which took place in the distant past on the basis of evidence which might become unreliable and incomplete because of the passage of time'. The existence of a 12-year limitation period for actions for recovery of land therefore also pursued a legitimate aim in the general interest (para 70). See in particular paragraph 74:"It is a characteristic of property that different countries regulate its use and transfer in a variety of ways. The relevant rules reflect social policies against the background of the local conception of the importance and role of property. Even where title to real property is registered, it must be open to the legislature to attach more weight to lengthy, unchallenged possession than to the formal fact of registration. The Court accepts that to extinguish title where the former owner is prevented, as a consequence of the application of the law, from recovering possession of land cannot be said to be manifestly without reasonable foundation. There existed therefore a general interest in both the limitation period itself and the extinguishment of title at the end of the period." Did the relevant provisions strike a fair balance between the demands of the general interest and the individuals concerned?
There were two particular points raised in arguments against the fairness of the limitation period: (1) the lack of any compensation to Pye and (2) the lack of any procedural safeguards.
As to compensation the majority took the view that as the interference with Pye's possessions was a control of use rather than a deprivation of possessions 'the case-law on compensation for deprivations is not directly applicable'. Further, a requirement for compensation 'for the situation brought about by a party failing to observe a limitation period would not sit easily alongside the very concept of limitation periods' (para 79).
In response to Pye's argument that they had no procedural protection the majority was less than sympathetic: 'While the limitation period was running .. it was open to them to remedy the position by bringing a court action for re-possession of the land. Such an action would have stopped time running'. Finally, 'the registered land regime in the United Kingdom is a reflection of a long-established system in which a term of years' possession gave sufficient title to sell. Such arrangements fall within the State's margin of appreciation, unless they give rise to results which are so anomalous as to render the legislation unacceptable' (para 83). The majority did not think that they did so.
Minority view
The minority of the Grand Chamber judges raised strong arguments against the majority view. In particular they made a distinction between registered and unregistered land. They could see that a system of limitation had good justification in the case of unregistered land but not in the case of registered land where title depends not on possession but on registration of the proprietor. In a registered system 'it is difficult to see any justification for a legal rule which compels such an apparently unjust result as to deprive the owner of his beneficial title in favour of an adverse possessor' except by a proper process of compulsory acquisition for fair compensation.
General applicability of Pye v UK
Ofulue v Bossert
[2008] EWCA Civ 7
Summary
In Pye v UK the European Court of Human Rights held that English law on adverse possession (pre-Land Registration Act 2002) is not contrary to the European Convention on Human Rights (above). In this case the land owner sought to argue that the facts were different from those in Pye v UK which should therefore be distinguished; and that in this case the court should reach the conclusion that to deprive the owner of the title by adverse possession would be contrary to the Convention. The CA held that this was fundamentally to misunderstand the effect of the decision in Pye v UK. That decision applies to all cases of adverse possession.
More detail
The Claimants sought to argue that this case was distinguishable from Pye v UK because in that case, the owners did not assert their title until after the limitation period had run. By contrast, they relied on the fact that in this case the Claimants requested D and her father to leave the property as soon as they were discovered in 1983. Further demands were made in 1987 and 1988 and proceedings were issued in 1989. Moreover, the father had claimed to be a tenant and subsequently had made offers to buy the property. Such arguments were hopeless. Arden L at para 52:"The submissions of the [Claimants] proceed on the basis that it is open to this court to distinguish the decision in Pye on its facts or by reference to the applicability of the policy reasons for adverse possession identified by the Law Commission. In my judgment, this approach fundamentally misunderstands the purpose of the doctrine of the margin of appreciation. The Strasbourg court accepted that the national authorities could in general determine the rules for the extinction of title as a result of the occupation of the land by a person who was not the true owner. That determination applies to all decisions on adverse possession and it is not open to this court not to follow that determination because the case is distinguishable on its facts. For the doctrine of the margin of appreciation to be inapplicable, the results would have to be so anomalous as to render the legislation unacceptable and in my judgment that has not been demonstrated in this case.." And at para 53:"The Claimants'submissions additionally proceed on the basis that this court must apply the test of legitimate aim and proportionality to each different case of adverse possession which arises. Again, in my judgment this fundamentally misunderstands the function of this court. The Strasbourg court considered the compatibility with the Convention of the limitation period in the case of adverse possession with Art 1 of Protocol No.1 and assessed its legitimate aim and proportionality as a general rule and not simply in the context of the specific facts of the Pye case. It would not therefore be appropriate for this court to proceed to examine the questions of legitimate aim and proportionality simply from the perspective of the facts of this case and the relationship between them and the policy considerations in the Law Commission's Consultation Paper."
The Beaulane point
The 12 years adverse possession in Pye v Graham ended prior to the introduction of the Human Rights Act 1998 on 2 October 2000. It was for this reason that the Convention did not affect the decision in the House of Lords; and why it was necessary for Pye to seek compensation from the ECHR.
In Beaulane Properties Ltd v Palmer [2005] EWHC 817 (Ch) the adverse possession ended after 2 October 2000 (but before 12 October 2003 when the Land Registration Act 2002 came in force). In that case the judge held that our law on adverse possession in respect of registered land was contrary to the Convention. As part of the period of adverse possession extended beyond the date upon which the Human Rights Act 1998 came into force (2 October 2000) he sought to re-interpret English law in light of the convention so as to find against the 'squatter'. He held that s.75 of the Land Registration Act 1925 Act could be re-interpreted, purusant to s3 of the HRA, as being only applicable to those cases in which the trespasser established "possession" in accordance with the case law in existence at the time of its enactment. At that time the squatters action had to be inconsistent with the use of the land by the paper owner.
The Land Registry responded to the decision in Beaulane by issuing the following additional note to Practice Guide 5, which deals with adverse possession in transitional cases (ie cases where the squatter claims to have acquired the right to be registered as the owner by reason of adverse possession prior to 13 October 2003 when the 2002 Act came into force). It said:"Note that in light of Beaulane Properties v Palmer.. where an application is made under paragraph 18 of Schedule 12 to the Land Registration Act 2002, and the necessary period of adverse possession started after 2 October 1988, the applicant must show an arguable case for the possession being inconsistent with the use or intended use of the land by the registered proprietor, and not merely that the possession was without the registered proprietors consent." The reason for choosing 2 October 1988 was that if the adverse possession started on or before 2 October 1988 the 12 years will have expired before the coming into force of the Human Rights Act 1998 on 2 October 2000, in which case s.3 of that Act would not apply and so there was no justification for giving adverse possession anything other than the established interpretation, ie possession of the land without the owner's consent.
It seems to me that this is now all history. Since the Grand Chamber's decision it has become clear that the Convention is not applicable. Thus, the contortions made by the judge in Beaulane to seek to make our law consistent with the Convention are no longer required.
However, the Land Registry at the current time take a different view. They have produced a further note (Land Registry: Additional practice affecting Practice Guide 5) which states that in their view the decision of the Grand Chamber in Pye v UK does not affect current domestic case law; and that an applicant under the transitional provisions(ie where he claims to have 12 years adverse possession prior to 13 October 2003) where the adverse possession ended on or after 2 October 2000 (when the HRA came into force) must still show that his possession was inconsistent with the use, or intended use, of the land by the owner and not merely that it was without the owner's consent. In other words, that the decision in Beaulane remains good law until it is overturned.
I contacted the Land Registry to express the view that this is wrong. In reply they have referred to Kay v Lambeth LBC [2006] UKHL 10 and stated as follows:"It is clear from Lord Bingham's speech (see paragraphs 43 & 44) that if a case which was indistinguishable (in the legal sense) from Beaulane were to come before a county court today, the court would be obliged to apply the same interpretation of 'adverse possession' as adopted in Beaulane, albeit that the court might well express the view that Beaulane was inconsistent with the ruling of the ECtHR in Pye and ought to give leave to appeal. And if, as appears to be the case, a county court is obliged to follow the case law established by Beaulane, then Land Registry, in considering applications based on adverse possession, must equally follow this case law until Beaulane is over-ruled. Like the county court, we have to apply the law at it is, and this includes case law which might one day be over-ruled.' It therefore seems that until Beaulane is overturned (which is inevitable) an applicant to the Land Registry applying under the transitional provisions where the adverse possession ended on or after 2 October 2000 (when the Human Rights Act) came into force and who cannot jump through the extra "Beaulane hoop" will have the application rejected. To pursue the application further it will be necessary to apply to the Land Registry Adjudicator and, depending upon the view he takes, to appeal further to the courts.
Conclusion
Where a squatter has acquired 12 years adverse possession prior to the date upon which the Land Registration Act 2002 came into force (13 October 2003) he will be entitled to the land (whether it is registered or unregistered) and the ECHR will be of no relevance. However, there is still some doubt as to the position (at least so far as the Land Registry is concerned) where the 12 years adverse possession ended on or after 2 October 2000 (when HRA came into force).
Where the squatter does not have the benefit of 12 years adverse possession prior to 13 October 2003 he will need to apply under the new and much more restrictive provisions of the 2002 Act.
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