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Adverse possession and Pye v Graham
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Human rights

The Grand Chamber of the European Court of Human Rights 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, was not therefore entitled to damages from the UK government. This page discusses the case and its subsequent applicability in the UK.


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").

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."
Note

This case was later appealed to the House of Lords on other grounds: Ofulue v Bossert [2009] UKHL 16.



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