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Publication:[not yet received]
Title:J.A. Pye (Oxford) Ltd v. The United Kingdom
Application No:44302/02
Respondent:The United Kingdom
Referred by:
Date of reference by Commission:
Date of reference by State:
Date of Judgment:15-11-2005
Articles:P1-1
41
Conclusion:Violation of article P1-1
Question under article 41 reserved
Keywords:PROPERTY

Summary:
(Press release)
The case concerns an application brought by two United Kingdom companies, J.A. Pye (Oxford) Ltd and J.A. Pye (Oxford) Land Ltd. J.A. Pye (Oxford) Land Ltd was the registered owner of a plot of 23 hectares of agricultural land in Berkshire (United Kingdom) valued at 21 million pounds sterling (approximately 31 million euros). J.A. Pye (Oxford) Ltd is the former owner of the land.The owners of property adjacent to the land, Mr. and Mrs. Graham ("the Grahams") occupied the land under a grazing 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. They did not do so. In January 1984 the applicants refused a request for a further grazing agreement for 1984 because they anticipated seeking planning permission for the development of all or part of the land and considered that continued grazing might damage the prospects of obtaining such permission. From September 1984 onwards until 1999 the Grahams continued to use the land for farming without the applicants' permission. In 1997, Mr Graham registered cautions (official warnings) at the Land Registry against the applicant companies' title on the ground that he had obtained title by adverse possession (occupation of property contrary to the rights of the real owner). 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 bring 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 trust for the squatter. On 4 February 2000 the High Court held that, since the Grahams enjoyed factual possession of the land from January 1984 and adverse possession took effect from September 1984, the applicant companies had lost their title to the land under the 1980 Act, and the Grahams were entitled to be registered as the new owners. The applicant companies appealed successfully, but their appeal was overturned by the House of Lords, which, on 4 July 2002, restored the order of the High Court. The Land Registration Act 2002 - 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 alleged that the United Kingdom law on adverse possession, by which they lost land with development potential to a neighbour, operated in violation of Article 1 of Protocol No. 1 in their case.

Article 1 of Protocol No. 1
Alleged interference with the applicants' property rights:
The Court found that the combined effect of the 1980 and 1925 Acts was both to deprive the applicants of their substantive property rights and to preclude them from lawfully repossessing the land, the beneficial title to which they had lost.

The Court accepted that it was the Grahams' adverse possession of the land for 12 years which directly led to the applicants' loss of their title. However, the Court also observed that, but for the provisions of the 1925 and 1980 Acts, the adverse possession of the land by the Grahams would have had no effect on the applicants' title or on their ability to repossess the land at any stage. It was the legislative provisions alone which deprived the applicants of their title and transferred the beneficial ownership to the Grahams. The Court accordingly found that the operation of the relevant provisions of the two Acts constituted an interference by the United Kingdom with the applicant companies' rights under Article 1 of Protocol No. 1.
 
Legitimate aim:
The Court took the view that, with one or two limited exceptions, the 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 identifiable. 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.
 
The Court further took note that many common law jurisdictions which had systems of title registration had either abolished the doctrine of adverse possession completely or had substantially 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. The Court, therefore, could not accept that the law of adverse possession in England and Wales served no continuing public interest so far as registered land was concerned.
 
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 order 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 and their advisers, the deprivation of their title to the registered land and the transfer of beneficial ownership to those in unauthorised possession struck a fair balance with any legitimate public interest served.
 
The Court noted that not only were the applicants deprived of their property, they received no compensation for the loss. The result for them was therefore one of exceptional severity.
 
The Court reiterated that the taking of property in the public interest without payment of compensation reasonably related to its value was 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 legal 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 whatever was required to be given to the owner, which might have alerted him to the risk of losing his title.
 
The United Kingdom Government argued that the State had no duty to protect a person against his own negligence. However, the Court observed that such negligence would have had no adverse consequences for the applicants but for the contested statutory provisions. More importantly, it was clear that Parliament itself recognised the deficiencies in the procedural protection of landowners under the then current system by enacting the Act of 2002. The new Act not only put the burden on a squatter to give formal notice of his wish to apply to be registered as the owner after 10 years adverse possession but required special reasons to be given to entitle him to acquire the property where the legal owner opposed the application.
 
The mere fact that a legal system was changed, to improve the protection provided under the Convention to an individual, did not necessarily mean that the previous system was inconsistent with the Convention. However, in judging the proportionality of the system as applied in the applicants' case, the Court attached particular weight, among other things, to the changes made in that system.
 
The Court concluded that the application of the provisions of the 1925 and 1980 Acts to deprive the applicant companies of their title to the registered 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 been a violation of Article 1 of Protocol No. 1.

Article 41
The Court considered that the question of the application of Article 41 (just satisfaction) was not ready for decision. (The judgment is available only in English.)

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Last Modified: 13-01-2014 16:18:19 (Documentation SIM)