• it prevents the owner of the land with 'paper title' from obtaining an order for possession from the court; and
• the person 'in possession' can apply to the Land Registry to be registered as the proprietor of the land with 'possessory title'.

Land Registration Act 2002
Over the years, Parliament has reduced the period of time during which the paper owner can take proceedings. In the case of unregistered land, s15 of the Limitation Act 1980 imposes a 12-year limitation period, after which the court will not order possession.

In the case of registered land, the Land Registration Act 2002 (which came into effect on 13 October 2003) modifies the position and makes it harder for unlawful occupiers to obtain possessory title. The 2002 Act contains transitional arrangements. Provided that the occupier can prove 12 years of possession prior to 13 October 2003, the old rules will continue to apply. The changes to overriding interests within the 2002 Act also impact on adverse possession.

In all other cases, the period before which an occupier can make an application for possessory title has been reduced from 12 to ten years. Once the application is made, notice is then served on the registered proprietor that the occupier wishes to be registered. If the registered proprietor objects, there are only limited grounds on which the Land Registry will proceed and register. The proprietor then has two years in which to take steps to recover possession before the Land Registry will consider the second application. Only if the proprietor does nothing and no proceedings are concluded or pending, can the applicant be registered with possessory title.

What constitutes adverse possession?
The leading case on adverse possession is the House of Lords decision in J A Pye (Oxford) Ltd v Graham. The Grahams were farmers who occupied fields owned by Pye. Pye had granted the Grahams a grazing right, but terminated this in August 1984. Thereafter, Pye showed no interest in recovering possession of the land and the Grahams carried on farming, using the land throughout the year for various agricultural purposes.

The case makes it clear that, in order to succeed in a claim to adverse possession, the occupier must prove:

(a) uninterrupted possession of the land; and
(b) an intention to possess.

Possession requires a sufficient degree of physical custody and control. In the Pye case, the occupiers, the Grahams, had been farming the land without consent for 15 years. It did not matter that they had not 'physically excluded' Pye from the land. There was no requirement to 'oust' the Grahams from the land. The activities carried on by the Grahams, the House of Lords decided, amounted to 'possession'.

An intention to possess is an intention to exercise that custody and control on behalf of oneself and for one's own benefit. The House of Lords decided in Pye that the Grahams had that intention. It was not negated by the fact that they were willing to pay rent for their occupation or enter into an agreement to remain on the land with the consent of the owner.

Topplan Estates v Townley
In October 2004, the Court of Appeal was asked to review the principles in Pye. Mr Townley (T) had been occupying 13 acres of land since 1982 without the consent of the paper owner. In 1993, council contractors, acting under licence from the paper owner, entered the land to use a small part of it for road widening and a temporary working area. T did not object, stating that he did not want to alert the paper owner to his occupation. Topplan Estates argued that this amounted to an interruption in possession of the whole 13 acres. The Court of Appeal disagreed. The area of land occupied by council contractors was small. It did not affect T's possession of the remaining land. Applying Pye, his claim was upheld.

Mackman v Brady
Also in October 2004, a County Court judge concluded that there is no reason why occupiers cannot acquire possessory title not just to open land or buildings, but to a stratum that they create themselves. This may include the footings of a building, a tunnel, or the eaves and guttering projecting from an overhanging roof. Whether the possessory title would extend to the surface and other areas would depend on the circumstances of the case.

The Future?
Perhaps the most interesting development is the challenge to the whole concept of adverse possession that has been launched in the European Court of Human Rights. On 8 June 2004, in J A Pye (Oxford) Ltd and another v UK, Pye was given unanimous permission to challenge the doctrine of adverse possession on the basis that it is incompatible with Article 1 of Protocol No 1 to the European Convention on Human Rights.

The government contends that there is a legitimate public interest in preventing stale claims being brought before the court and that the reality of unopposed occupation of land and its legal ownership coincide.

It is not the role of the state to protect a professional property developer from the consequences of its own inaction.

In contrast, Pye argues that:

• it is the legislation and not any inaction by the company that resulted in the loss of the land, (which it valued at £21m);
• the legislation breaches Article 1 in that it deprived the company of its possessions contrary to the public interest and without provision for compensation to be paid; and
• where land is registered, there is no uncertainty of ownership and no justification for depriving someone of their title simply because they have not objected to somebody else using their land. There is no public benefit in transferring land to persons in adverse possession.

Conclusions
In the House of Lords decision in Pye, we saw the balance shift from owners to squatters, who have arguably benefited from a more relaxed test for establishing adverse possession. Both Topplan and Mackman follow this line.

The introduction of the Land Registration Act 2002, however, marks a significant move in favour of landowners. Moving forward, we are likely to see landowners taking advantages of the tougher regime for registered land by voluntarily registering their titles. We await the outcome of the challenge in Europe. The arguments in the case go to the very heart of the doctrine of adverse possession. The consequences of a successful challenge would be far-reaching. What is certain is that the cases reported in 2004 are unlikely to be the end of the story.

Case references
J A Pye (Oxford) Ltd v Graham and another [2002] UKHL 30

Topplan Estates Ltd v Townley [2004] EWCA Civ 1369

Mackman v Brady (Unreported, 27 October 2004)

J A Pye (Oxford) Ltd and J A Pye (Oxford) Land Ltd v UK (2004, ECHR App no 44302/02) © In-House Lawyer