J A Pye (Oxford) Ltd and Others v Graham and Another

For limitation purposes, a squatter dispossesses the paper owner by taking ordinary legal possession of land without consent for the statutory period. Hostile ouster and use inconsistent with the owner’s plans are unnecessary. Legal possession requires factual possession and an intention to possess. Factual possession means exclusive control appropriate to the character of the land. The required intention is to control the land on one’s own behalf, not to own it or resist lawful recovery. A willingness to pay the owner if asked does not negate that intention. Owner-like use of enclosed land may establish both elements. Under the former regime for registered land, expiry of the 12-year period barred recovery and caused the registered proprietor to hold the land on trust for the possessor.

The respondents were the registered proprietors of 25 hectares of agricultural land adjoining Manor Farm. The appellants had initially used the land under permissive grazing and grass-cutting arrangements. After the last permission expired on 31 August 1984, they continued farming the whole enclosed area, controlled access, maintained it and excluded the registered proprietors from its practical use.

Neuberger J held that the appellants had acquired a possessory title: [2000] Ch 676. The Court of Appeal reversed that decision, concluding that the appellants lacked the necessary intention to possess because their use and attitude had not materially changed after the permissive arrangements ended: [2001] Ch 804.

The central issue before the House was whether the appellants had dispossessed the registered proprietors before 30 April 1986 and thereafter remained in possession for 12 years, so that recovery was barred under the Limitation Act 1980.

Appeal allowed unanimously. Lord Browne-Wilkinson delivered the leading speech. Lord Bingham, Lord Mackay, Lord Hope and Lord Hutton agreed with his reasons. The order of Neuberger J was restored.

1. Per Lord Browne-Wilkinson, a paper owner is dispossessed when another person takes ordinary legal possession of the land without the owner’s consent. Neither confrontational ouster nor possession inconsistent with the owner’s present or future purposes is required. The expression adverse possession describes the capacity in which limitation may run; it does not impose a requirement of hostility.
2. Legal possession has two elements: sufficient physical custody and control, and an intention to exercise that custody and control on one’s own behalf and for one’s own benefit. Factual possession requires exclusive physical control appropriate to the nature and ordinary use of the land. Broadly, the possessor must deal with the land as an occupying owner might be expected to deal with it, while nobody else does so.
3. The necessary intention is an intention to possess, not an intention to own. It is an intention to exclude the world at large, including the paper owner where the owner is not in possession, so far as reasonably practicable and lawful. A willingness to pay for occupation or take a licence if asked is consistent with possession in the meantime. The contrary approach in R v Secretary of State for the Environment, Ex p Davies was wrong; the principle in Ocean Estates Ltd v Pinder was applied.
4. The appellants had factual possession before 30 April 1986. They controlled the enclosed land, farmed and maintained it as part of their own farm, and used it in ways extending beyond the former grazing agreement. The registered proprietors did nothing on the land and were physically excluded. Viewed as a whole, the evidence also established an intention to possess from the expiry of the final permission. The appellants had consequently possessed the land for the required 12 years.
5. The pre-Human Rights Act 1998 principle favouring Convention-compatible construction applied only where statutory language was ambiguous. No relevant ambiguity existed in the Limitation Act 1980.

Lord Hope emphasised that the word adverse casts no light on whether possession exists. Lord Hutton added that unequivocal, owner-like use will normally manifest the required intention without separate evidence; additional proof assumes importance where the acts are equivocal. Lord Bingham and Lord Hope noted the apparent unfairness of the former regime for registered land, while recognising that the later Land Registration Act 2002 did not govern this dispute.

1. House of Lords: In [2002] UKHL 30 , unanimously allowed the appeal and restored Neuberger J’s order.
2. Court of Appeal: In [2001] Ch 804, reversed the first-instance decision and held that the appellants had not established the requisite intention to possess.
3. High Court: Neuberger J held that the appellants had acquired title by possession under the Limitation Act 1980: [2000] Ch 676.