Information Note on the Court’s case-law 80

November 2005

J.A. Pye (Oxford) Ltd and J.A. Pye (Oxford) Land Ltd v. the United Kingdom - 44302/02

Judgment 15.11.2005 [Section IV]

Article 1 of Protocol No. 1

Article 1 para. 1 of Protocol No. 1

Deprivation of property

Loss of registered land by application of the law on adverse possession: violation

[This case was referred to the Grand Chamber on 12 A pril 2006]

Facts : The applicants are two companies, the second one of which was the registered owner of a plot of 23 hectares of agricultural land. The owners of property adjacent to the land, Mr. and Mrs. Graham (“the Grahams”) occupied the land under a g razing agreement until 31 December 1983. On 30 December 1983 the Grahams were instructed to vacate the land as the grazing agreement was about to expire. Notwithstanding the requirement to vacate the land at the expiry of the 1983 agreement, the Grahams re mained in occupation at all times, continuing to use it for grazing. In 1997, Mr Graham registered cautions at the Land Registry against the applicant companies’ title on the ground that he had obtained title by adverse possession. The applicant companies sought the cancellation of the cautions before the High Court and issued further proceedings seeking possession of the disputed land. The Grahams contested the applicant companies’ claims under the Limitation Act 1980, which provides that a person cannot b ring an action to recover any land after the expiration of 12 years of adverse possession by another. They also relied on the Land Registration Act 1925, which provided that, after the expiry of the 12-year period, the registered owner held the land in tru st for the squatter. The High Court gave judgment in favour of the Grahams, holding that they had enjoyed adverse possession of the land as from September 1984 and that the applicant companies had lost their title to the land under the 1980 Act. The Graham s were thus entitled to be registered as the new owners. The Court of Appeal reversed this decision on the ground that the Grahams did not have the necessary intention to possess the land. However, the Grahams appealed to the House of Lords, which restored the order of the High Court, finding that the Grahams did have “possession” of the land in the ordinary sense of the word, and therefore the applicant companies had been “dispossessed” of it within the meaning of the 1980 Act. The Land Registration Act 20 02 – which does not have retroactive effect – now enables a squatter to apply to be registered as owner after ten years’ adverse possession and requires that the registered owner be notified of the application. The registered proprietor is then required to regularise the situation (for example, by evicting the squatter) within two years, failing which the squatter is entitled to be registered as the owner.

The applicants complained that the law on adverse possession, by which they lost land with developmen t potential to a neighbour, operated in violation of Article 1 of Protocol No. 1 in their case.

Law : Article 1 of Protocol No. 1 – Applicability : The provisions of the 1925 and 1980 Acts could not be regarded as limiting the applicants’ property rights at the moment of their acquisition. However, at the point when the Grahams had completed 12 years’ adverse possession, which directly led to the applicants’ loss of their title, Article 1 of Protocol No. 1 came into play. Moreover, the combined operation of t he two Acts had constituted an interference with the applicant companies’ rights under this provision. As to the nature of the interference, although the Government contended that it was in the nature of a “control of the use of property”, the Court consid ered the applicants had been “deprived of their possessions” by the contested legislation, and the case was to be examined under this angle of Article 1.

Legitimate aim : The Government argued that the contested provisions governing the adverse possession of land served two public interests: firstly, preventing uncertainty and injustice arising from stale claims, and, secondly, ensuring that the reality of unopposed occupation of land and its legal ownership coincided. With one or two limited exceptions, th e uncertainties which sometimes arose in relation to the ownership of land were very unlikely to arise in the context of a system of land ownership involving compulsory registration (as in the applicants’ case), where the owner of the land was readily iden tifiable. In the days before registration became the norm, a result whereby an adverse possessor of land was rewarded by obtaining title could be justified as avoiding protracted uncertainty as to where the title to land lay; where land was registered, it was difficult to see any justification for a legal rule which led to such an unjust result. Moreover, many common law jurisdictions which had systems of title registration had either abolished the doctrine of adverse possession completely or had substantia lly restricted its effects. However, despite the major changes to the law of adverse possession made by the Act of 2002, in the case of registered land, the law itself was not abolished. In these circumstances, and bearing in mind the margin of appreciatio n afforded to national authorities, the applicants’ argument that the law of adverse possession served no continuing public interest so far as registered land was concerned, could not be accepted. What remained to be determined was whether this public inte rest was of sufficient weight to find the interference proportionate.

Proportionality : The Court accepted that the limitation period of 12 years was relatively long and that the law of adverse possession was well-established and had not altered during the period of the applicants’ ownership of the land. It was further accepted that, in ord er to avoid losing their title, the applicants had to do no more than regularise the Grahams’ occupation of the land or issue proceedings to recover its possession within the 12-year period. The question nevertheless remained whether, even having regard to the lack of care on the part of the applicants, the deprivation of their title to the registered land and the transfer of ownership to those in unauthorised possession, had struck a fair balance with any legitimate public interest served. Firstly, not onl y were the applicants deprived of their property, but they received no compensation for the loss. The result for them was therefore one of exceptional severity. Under the Court’s case-law, the taking of property in the public interest without payment of co mpensation reasonably related to its value is justified only in exceptional circumstances. The lack of compensation in the applicants’ case had to be viewed in the light of the lack of adequate procedural protection for the right of property within the leg al system in force at the relevant time. In particular, although it was open to the dispossessed owner of the land to argue after the expiry of the 12-year period that the land had not been adversely possessed, during that period, no form of notification w hatever was required to be given to the owner, which might have alerted him to the risk of losing his title. In these circumstances, the application of the provisions of the 1925 and 1980 Acts to deprive the applicant companies of their title to the regist ered land imposed on them an individual and excessive burden and upset the fair balance between the demands of the public interest on the one hand and the applicants’ right to the peaceful enjoyment of their possessions on the other. There had therefore be en a violation of Article 1 of Protocol No. 1.

Conclusion : violation (four votes to three).

© Council of Europe/European Court of Human Rights This summary by the Registry does not bind the Court.

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