The Grand Chamber of the European Court of Human Rights has held that UK legislation, which provided for title to registered land to be acquired by a squatter after 12 years’ adverse possession, does not fall foul of Article 1 (protection of property) of the First Protocol to the European Convention for the Protection of Human Rights and Fundamental Freedoms.
This decision, which represents the culmination of a long legal battle in both the UK and the ECHR, will come as a welcome relief to property practitioners. Landowners must ensure they take adequate steps to protect their land from squatters - as the law of human rights alone will not protect them. A more detailed analysis of the decision, and the background leading up to it, is below.
J.A. Pye (Oxford) Land Limited was the registered proprietor of some 23 hectares of agricultural land. Mr and Mrs Graham, who owned adjacent land, were granted a grazing licence over the company’s property. After the grazing agreement expired, the Grahams continued to occupy the property for grazing and other agricultural purposes. This continued for more than 12 years, after which the Grahams registered a caution against the company’s title on the grounds that they had obtained title by adverse possession. The company brought possession proceedings. The case went all the way to the House of Lords where it was held that the requirements for adverse possession had been made out.
The UK law
The Limitation Act 1980 provides that no action can be brought to recover land from a squatter once the squatter has been in possession for 12 years. Prior to the Land Registration Act 2002, the Limitation Act applied to both registered and unregistered land. In the case of unregistered land, the squatter acquired title automatically at the end of the 12 year period. If (as in this case) the land was registered, the Land Registration Act 1925 provided that the registered proprietor would hold legal title to the land on trust for the squatter. The law in relation to registered land is now governed by the Land Registration Act 2002, but at the time the Grahams completed their 12 years’ occupation the old rules still applied.
The human rights angle
The UK has been a signatory to the European Convention since its inception in 1950. In 1998 the majority of the provisions of the Convention, including Article 1, were enshrined in the Human Rights Act (which came in force in October 2000). This enabled an action to be brought on them in the UK courts.
In the Court of Appeal, the company tried to rely on Article 1, via the Human Rights Act, in order to recover the land from the Grahams. However, the Human Rights Act came into force after the company had been denied the right to recover the land, and it does not have retrospective effect. In the House of Lords the company argued that the court should nevertheless construe UK legislation in accordance with the European Convention, on the basis that the UK had long since signed up to the Convention. The House of Lords held that such a principle of construction could only apply where there was an underlying ambiguity in the domestic legislation, which it did not find was the case.
Having failed to recover the land from the Grahams, the company then took direct action against the UK government in the European Court of Human Rights under the Convention. This was not an action for recovery of the land (this had been determined by the UK courts in accordance with UK legislation), but for compensation from the government for breach of the Convention. The value of the land was in dispute, but the company was seeking to recover in the region of £10 million.
The ECHR initially held that there was a breach of Article 1, which would give rise to an entitlement to compensation under Article 41, and ordered the UK government to pay compensation to the company (the exact figure had yet to be settled). However, on appeal the Grand Chamber overturned this decision, by a majority of ten to seven.
Article 1 provides: “Every … 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… [This] shall not, however, … 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”.
In order to be compatible with Article 1, any interference with the right to peaceful enjoyment of possessions must strike a fair balance between the demands of the general interest of the community and the interest of the individuals concerned. In relation to the second part of Article 1 - the right of the state to enforce laws controlling the use of property - the means of control employed by the state and the aim sought to be realised must be proportionate.
However, states are allowed a significant degree of latitude, particularly where, as here, a longstanding and complex area of law which regulates private law matters between individuals is at stake.
The court found that the existence of a 12 year limitation period for actions to recover land does pursue a legitimate aim. However, the UK legislation goes further than this and provides for title to be transferred to the squatter. The court found that a large number of member states have similar mechanisms for the transfer of title in these circumstances, without payment of compensation to the original owner, and accepted that to extinguish title where the former owner is prevented from recovering land was not manifestly unreasonable.
The court held that the fact that the 1925 and 1980 Acts had been in force for many years before the company acquired the land was relevant in assessing the proportionality of the legislation, since the company could not realistically say that it had not been aware of the law. The court further commented that even some minimal action on the part of the company, such as demanding rent from the Grahams, would have stopped time running against them. The company had argued that the change in the law effected by the Land Registration Act 2002 supported their contention that the previous rules were incompatible with Article 1. The court however recognised that legislative changes in complex areas such as land law take time to bring about, and that even judicial criticism of legislation is not of itself conclusive as to whether or not that legislation conforms with the Convention.
The court distinguished the situation here from previous cases that had come before it on the grounds that the 1925 and 1980 Acts were not intended to deprive property owners of their land in order to further some social policy of redistribution of property, but simply regulated questions of formal title in a system which prevented the former owner recovering possession after 12 years’ adverse possession. The company was therefore affected, not by a “deprivation of possessions” within the first part of Article 1, but rather by a “control of use” of land within the second part.
That being the case, the issue of compensation (or the lack of it) for deprivation of possessions was not applicable. The court noted that to require compensation in a situation brought about by a party failing to observe a limitation period would sit uneasily alongside the very concept of limitation periods. The court observed that, even under the new system in the Land Registration Act 2002, no compensation is payable by a squatter who becomes successfully registered as proprietor.
On that basis the court concluded that there had been no violation of Article 1.
A decision of the High Court in 2005 in the case of Beaulane Properties Ltd v Palmer (decided after Pye had gone through the UK courts), found that the law of adverse possession, as it related to registered land prior to the 2002 Act, was in breach of the equivalent provision to Article 1 in the Human Rights Act. As a result, the court “reinterpreted” the meaning of “adverse possession” to make the offending legislation compatible with the HRA. This had the effect of making it more difficult for squatters to obtain title by adverse possession. In accordance with that decision, the Land Registry has since required additional evidence in support of an application from anyone who completed a period of adverse possession between the period when the Human Rights Act came into force and when the new regime under the LRA 2002 took effect (2 October 2000 - 12 October 2003).
In the light of the ruling of the Grand Chamber of the ECHR in Pye that the UK’s law of adverse possession is consistent with the Convention, the basis of the decision in Beaulane must be in serious doubt. Until this point is resolved, a question mark remains over a small category of adverse possession claims, where the requisite 12 years’ occupation was completed during the period affected by the Beaulane decision. At the time of writing a response from the Land Registry to the Grand Chamber’s decision in Pye is awaited. Watch this space…