J A Pye (Oxford) Ltd & Ors v Graham & Anor

This appeal concerns acquisition of title by long possession under the Limitation Act 1980, section 15 and Schedule 1. The House of Lords held that a person who demonstrates factual possession together with the requisite intention to possess (animus possidendi) can dispossess the paper owner for the purposes of limitation even where earlier occupation began under a licence. The court reaffirmed that possession requires both a sufficient degree of physical control and an intention to possess; it rejected the approach that the sufficiency of possession depends upon the paper owner's intentions as to present or future use. The court further held that a squatter's willingness to pay the owner if asked does not preclude a finding of an intention to possess. On the facts the Grahams had occupied the enclosed land, carried out acts of an occupying owner and, from after the expiry of the hay-cutting arrangement in August 1984, acted without the proprietor's permission so as to dispossess Pye before the limitation cut-off.

The dispute concerned 25 hectares of agricultural land owned on the register by J A Pye (Oxford) Ltd ("Pye") and occupied and farmed by the Grahams. Pye had licensed grazing for 1983 and sold a crop of hay taken in 1984; thereafter the Grahams continued to occupy, farm and maintain the enclosed land. Pye refused a further grazing licence in 1984 because it wished the land in hand for planning purposes. Pye later took steps to challenge the Grahams' cautions and issued proceedings for possession.

Procedural history: at first instance Neuberger J held the Grahams had acquired title by possession; the Court of Appeal reversed ([2001] Ch 804); the Grahams appealed to the House of Lords.

Nature of the application: the proprietors sought to recover possession and cancel cautions; the occupiers relied on title by long adverse possession under the Limitation Act 1980.

Issues before the court:

• Whether Pye had been dispossessed before the relevant limitation date (so that Pye's right of action accrued); and
• Whether, as a matter of law and fact, the Grahams had factual possession and the intention to possess.

Reasoning and decision: the House of Lords analysed the meaning of possession and dispossession under the Limitation Act 1980 (particularly Schedule 1 paras 1 and 8). It endorsed the test from Powell v McFarlane: legal possession requires both factual possession (sufficient degree of physical control) and intention to possess, which may be inferred from acts. The court rejected earlier authority and arguments that possession should be measured by the paper owner's intentions about present or future use, and rejected the proposition that a squatter’s readiness to pay, or that prior permissive occupation, necessarily negates animus possidendi. Applying these principles to the primary facts — exclusive control of an enclosed area, extensive farming and maintenance, overwintering stock and other acts of an occupying owner after permission ended, and Pye's refusal to license use — the House of Lords concluded the Grahams had dispossessed Pye before the limitation date and so acquired title by lapse of time. The appeal was allowed and the judge's order restored.

Appeal allowed. The House of Lords held that for the Limitation Act 1980 a person acquires title by long possession when he has factual possession and the requisite intention to possess (animus possidendi); prior occupation under a licence does not prevent subsequent dispossession once the licence expires, and a squatter's willingness to pay if asked does not preclude an intention to possess. Applying these principles the Grahams had dispossessed Pye before the limitation cut-off and acquired title.

Trial: Neuberger J found that the Grahams had acquired title by possession ([2000] Ch 676). Court of Appeal reversed the trial judge ([2001] Ch 804). The House of Lords allowed the appeal and restored the trial judge's order ([2002] UKHL 30).