Get off my lawn: how (not) to stop time running

Zarb v Parry [2011] EWCA Civ. 1306 [2012] 1 WLR 1240

In this case the Court of Appeal considered the important issues of i) when the ‘paper’ owner of registered land may be to said to have stopped an adverse possessor’s time running by physically retaking possession of the land; and ii) whether the possessor’s belief as to ownership of the disputed land ceases to be “reasonable” for the purposes of section 98 and Schedule 6 para. 5(4) Land Registration Act 2002 once the paper owner sets out his own case and title. It was a neighbour dispute of a familiar type, involving a discrepancy between physical and paper boundaries. The disputed strip had, for a period in excess of 10 years prior to the Zarbs’ commencement of proceedings, been enclosed by a hedge and fence as part of the Parrys’ garden. The plan to the conveyance which divided the plots, however, had on its true construction (as was later found) retained the strip as part of the Zarbs’ paper title.

The trial judge nevertheless held that the combined possession of the Parrys and their predecessors amounted to adverse possession for a suffi cient period in excess of 10 years prior to issue of possession proceedings, barring the Zarbs’ title – on the basis, under section 98 of the 2002 Act, that had the Parrys applied for possessory title immediately prior to the commencement of proceedings, all the conditions in Schedule 6 paragraph 5(4) of the 2002 Act would have been satisfi ed. The most problematic of these conditions is always (c):

“(c) for at least ten years of the period of adverse possession ending on the date of the application [NB and therefore, in a section 98 ‘defence to possession proceedings’ case, the date of issue of proceedings] the applicant (or any predecessor in title) reasonably believed that the land to which the application relates belonged to him”

Proceedings had been commenced in June 2009. Prior to that, on a “lovely morning” in July 2007, the Zarbs had entered on the Parrys’ lawn and begun banging some new posts into it. They also cut down a tree, tore up some fencing, and unwound a surveyor’s tape so as to delineate the boundary for which they contended, with Mr Zarb stating that he was taking the land by force as it belonged to him. After an angry confrontation and threats by the Parrys to call the police, they left some 20 minutes later.

It was argued at trial and on appeal that this was a suffi cient physical retaking of possession which had interrupted the Parrys’ required continuity of possession in the period prior to proceedings. Considering Bligh v Martin [1968] 1 AER 1157, the Court of Appeal held that the true owner had to retake possession so as to wholly exclude the ‘wrongful’ occupier from possession, as opposing parties could not both be in possession of the same land at the same time. The Zarbs had not gone far enough: they had the intent and the words, but had been interrupted in their attempt before completing it. Exclusion was required, not declarations of intent even when accompanied by some acts asserting possession, although at least in the view of the Master of the Rolls, it would have been a “pretty close run thing” if the Parrys had been absent for longer and the Zarbs had completed their efforts and put a fence up. One hopes that this is not taken as encouragement by the Court of physical self-help and retaking of possession in boundary disputes generally.

The other point of substance on the appeal was whether, after the Parrys received a solicitors’ letter setting out the Zarbs’ contentions as to the boundary and their paper title, in October 2007, their “belief” thereafter that they owned the strip in question could still be “reasonable” for the purposes of Schedule 6 paragraph 5(4). This was an issue I considered in an article in the Summer 2011 newsletter, referring to decisions of the Adjudicator to HM Land Registry. In this case, the Court of Appeal held that the Parrys’ belief continued to be reasonable after this point and up until the issue of proceedings. Indeed, an initial joint surveyor’s report had actually supported their position: a contrary report, which later formed the basis of the trial fi nding that the Zarbs had paper title, post-dating the proceedings. The fact that the boundary is known to be disputed, which therefore raises the possibility that you may be wrong about the title position, does not necessarily render “unreasonable” your belief to the contrary – even if you are later proved wrong.

This is an important point at the centre of Schedule 6 paragraph 5(4), because by definition in every such case the squatter will later be proved to have been wrong in his/her belief about paper title. That is why they are having to rely on adverse possession. Just how wrong (or obtuse) they can be, yet still be held to have had a “reasonable belief”, was considered in my Summer 2011 article and was further considered by the Court of Appeal in the case below....

The man upstairs

IAM Group PLC v Chowdrey [2012] EWCA Civ. 505

Mr C bought his shop premises at no. 26a in 1993. For the next seventeen years he also exclusively possessed and used as storage and offi ce rooms the upper fl oors of the neighbouring property, no. 26; as he had done in a brief earlier period as a tenant of no. 26a. Indeed, these areas were only accessible from no. 26a, and the ground fl oor tenant at no. 26 assumed that Mr C owned them too, even asking his permission to go there.

Mr C did not, in fact, own such a ‘fl ying freehold’ to these areas. They were part of the title to no. 26, which title was vertically divided from no. 26a in conventional fashion, as the judge found. Neither of the Land Registry titles to the relevant properties suggested any fl ying freehold attached to no. 26a, and showed the titles on the fi led plans as conventional red edged rectangles.

IAM, who had purchased their title to no. 26 in 2000, corresponded with Mr C via solicitors in 2009 and 2010; pointing out the position on the registered titles. They commenced possession proceedings in August 2010. The judge found that, for the purposes of section 98 and Schedule 6 para. 5(4), Mr C had accrued 10 or more years of possession prior to the issue of proceedings, and that in that period he reasonably believed this adjacent land to be his. He was therefore entitled to be registered as its proprietor.

On appeal, IAM argued that Mr C could not have had a “reasonable” belief that he actually owned such a fl ying freehold, genuine as that belief was. First, when he purchased No. 26a in 1993, his solicitors must have advised him, and the transfer, title copies and search results would have shown, that he was only buying a registered title to no. 26a, which did not include the first and second floors of the property next door. Neither the solicitors’ fi rm nor their fi le apparently still existed, but some such understanding should be imputed to him. Second, even if it had not been clear then, it was made clear in the letters before action in 2009 and 2010 when offi ce copies of the titles were shown to him. How could he then have maintained the necessary continuity of “reasonable belief” for the full ten years immediately prior to the possession proceedings?

Easily, said the Court of Appeal (in which Etherton LJ gave the leading judgment). It was not appropriate to impute to Mr C knowledge of what his solicitors, or reasonably competent solicitors in 1993, might have thought about the title position. It was what he believed personally which mattered. There was “nothing to put him on notice” in 1993 that his title did not include the adjacent areas of which he had already been in possession as a tenant, and which were physically accessible only from No. 26a. As for the 2009-2010 correspondence, by that stage he had already “enjoyed unchallenged exclusive occupation for some 18 years” so the letters did not then make his continued belief as to ownership unreasonable.

This seems somewhat unsatisfactory. First, would Mr C not have seen, at the very least, the actual transfer of land to him, which he presumably signed, including No. 26a only? The fi nding that there was “nothing to put him on notice” that he did not own the adjacent upstairs areas of No. 26 seems to be premised on a positive assumption that he was shown no title documents at all; or that if he was, he (reasonably) failed to take in their contents.

Secondly, the finding in relation to the later correspondence appears to contain an element of ‘bootstraps’ reasoning based on the fact of long possession itself. That possession may previously have been “unchallenged”, but now it was being challenged by correspondence giving chapter and verse on paper title. The issue under paragraph 5(4) is whether the squatter’s continued belief in his paper ownership is reasonable, for the full 10 year period up to the date of the application or proceedings. Merely to assert, in response to contrary evidence of paper title, the fact of possession itself is to duck that issue. The squatter needs to say what his own belief is on paper title, and later show (as in Zarb v Parry) that it was then a reasonable belief, even if ultimately proved wrong in the later proceedings. In this case Mr C was not arguing that he had a pre-2002 Act accrued possessory title: he was relying solely on the ‘new’ provisions of that Act, and Schedule 6 paragraph 5(4) in particular. He therefore had to show some other basis for a continued reasonable belief of paper ownership. One would have thought that this would require at least some reference to or arguments based on his own documents of title, not just long possession and a sincere but mistaken belief.