Chapter 8: Adverse Possession
Ownership of land at common law is said to be relative, i.e. the person recognised as owner of the land is the person able to show the best legal right to possession. Thus a person in actual possession of property at any given time, is able to protect their rights against all bar those who can show a superior right to possession.
The reasons for this are historical. Actions for recovery of land based on possession were in the past so much more efficient than those based on ownership that even owners of land used possessory actions in preference to actions based on title.
By way of illustration, suppose that A is the legal owner of Blackacre. A is not resident on the property and B moves in as a squatter. B is there for 6 years, but eventually decides to leave to travel the world on his bicycle. C moves in immediately, and remains there for a further five years. Which of the following actions do you think would be successful?
1. An action by A to regain possession from B
2. An action by A to regain possession from C
3. An action by B to regain possession from C
4. A claim by C, in defence to an action for possession by B, that A is in any event the true owner
Answer: (1), (2) & (3)
A, being the owner of the legal title, has a better claim to possession than either B or C, and so can recover possession from either of them.
B, even though he technically had no right to be in the property, will have acquired an interest in it based on his adverse possession. His right to possession of the premises is superior to C's because he was resident in the premises earlier. B is consequently entitled to recover possession from C. C could not defend such an action on the grounds that A is the true owner, as this does not alter the fact that B's title is better than C's.
Future Interests and Disability
It is a little dangerous to assume that 12 years undisputed possession will always give rise to ownership by adverse possession, because the limitation period may be extended where the person with the prior right to possession:
1. holds a future interest, in which case, the limitation period will be the later of;
(a) 12 years; or
(b) 6 years from the date the future interest fell into possession.
Section 15(2) Limitation Act 1980
2. is under a disability, (e.g. is a minor), in which case the limitation period is the later of;
(a) 12 years; or
(b) 6 years from the date the disability ends or the person under the disability dies;
subject to a maximum period of 30 years.
Section 28 Limitation Act 1980
Leasehold Land
Where land is held under a lease, there are two estates against which limitation can operate:
1. the lease held by the tenant; and
2. the freehold reversion vested in the landlord.
A squatter must possess the land for a period that will extinguish both estates if he is to acquire an undisputed title. Time against the tenant will begin to run when the squatter takes possession, but time against the landlord will not begin to run until the lease has come to an end and the landlord's reversion has fallen in.
A squatter's possession of leasehold land is vulnerable until both the tenant and landlord's titles are extinguished, but what is the position as regards the lease between the expiry of the limitation period against the tenant and the expiry of the lease?
There are a number of possible options. Highlight the one which you think the law will have adopted. You will find assistance in the judgement of Lord Denning in St Marylebone Property Co. Ltd v Fairweather [1962] 2 WLR 1020.
1. The tenant's title to the lease becomes vested in the squatter.
2. The tenant's title to the lease is extinguished but the tenant's estate in the land is not.
3. The tenant's title to the lease is extinguished as against the squatter but not as against the landlord.
4. The tenant's title to the lease is extinguished as against the tenant and the landlord, leaving the landlord entitled to possession.
Answer: (3)
The issue arose in the case of Fairweather v St. Marylebone Property Co. Ltd [1962] 2 WLR 1020 , in which the court had to consider whether or not it was possible for a tenant whose right to recover possession of premises had been statute barred, to surrender the remainder of the lease to the landlord. The aim of the parties was to hasten the landlord's repossession of the property. The House of Lords concluded that in the case of unregistered land, it was possible for a landlord to recover possession in these circumstances. The case has however, been criticised on the grounds that it is difficult to see how a tenant who has lost title to a leasehold estate can still effectively deal with that estate.
A different approach is taken in the case of registered land, where a squatter would, after 12 years of squatting on leasehold property, be entitled to be registered as proprietor of the leasehold estate. Thereafter, the lessee cannot effectively surrender the lease - see Spectrum Investment Co v Holmes [1981] 1 WLR 221).
The Accrual of a Right of Action
As we have seen, squatters hoping to obtain undisputed title to land, must show that they have been in adverse possession of it for the requisite period. This period, will begin to run from the time that a right of action accrued to the true owner, namely where:
1. The owner has discontinued possession or been dispossessed; and
2. the squatter has taken up adverse possession.
The distinction between "discontinuing possession" and being "dispossessed" is a fine one, if it can be said to exist at all. It has been explained as follows:
"the one is where a person comes in and drives out the others from possession, the other case is where the person in possession goes out and is followed into possession by other persons"
(Rains v Buxton (1880) 14 Ch D 537 at 539-540)
The law is very reluctant to come to the conclusion that an owner has discontinued their use of any land that has been built upon.In the case of vacant land, the question of an owner's future intentions to develop or otherwise make use of the land has created some confusion.
In Leigh v Jack (1879) 5 Ex D 264, where the landowner intended to use a strip of land to build a road, it was said (at 273):
"in order to defeat a title by dispossessing the former owner, acts must be done which are inconsistent with his enjoyment of the soil for the purposes for which he intended to use it"
However, the Court of Appeal in Buckinghamshire County Council v Moran [1989] 3 WLR 152 disapproved of this suggestion that the owner's future intentions are so important. They are only relevant to the extent that they may effect the intentions of the squatter. Title is after all, acquired as a result of the squatter's possession and not because of any implied grant by the owner. It is thus the intentions of the squatter that are paramount, not those of the owner.
In Wallis Cayton Bay Holiday Camp Ltd v Shell Mex & BP Ltd [1975]1 QB 94, where the owners were intending to build a petrol station on the disputed land, Lord Denning sought to establish a general doctrine that where an owner intended to use land in the future, he granted an implied licence to squatters to use the land in a manner that was not inconsistent with his future intended use. Thus the squatters possession could not be adverse. The development of this implied licence doctrine was cut short however by the passing of paragraph 8(4) of Schedule 1 to the Limitation Act 1980, which prohibits any presumption that those occupying land are not in adverse possession of it, merely because their occupation is not inconsistent with the true owner's present or future enjoyment of the land.
The Meaning of Adverse Possession
Adverse possession comprises two elements:
1. factual possession; and
2. an intention to possess, or 'animus possidendi'.
Factual possession must be 'open not secret; peaceful, not by force; and adverse, not by consent of the true owner'. (Mulcahy v Curramore Pty Ltd [1974] 2 NSWLR 464 at 475)
It must involve 'an appropriate degree of physical control...[which] must depend on the circumstances, in particular the nature of the land and the manner in which land of that nature is commonly used or enjoyed'. (Powell v McFarlane (1979) 38 P&CR 452, at 470)
Animus Possidendi
Physical possession is not the whole story. The court is also concerned with the squatter's intention, ie:
"The intention, in one's own name and on one's own behalf, to exclude the world at large, including the owner with the paper title if he be not himself the possessor, so far as is reasonably practicable and so far as the processes of the law will allow". (Powell v McFarlane (1979) 38 P&CR 452 at 471).
The court will be guided largely by the squatter's action and the intention with which they were done in ascertaining their animus possidendi. Obviously, statements of intention made at the possession hearing could merely be self justifying and are given little weight. Where the squatter's actions are themselves unequivocal, ie they themselves demonstrate the necessary animus possidendi, little or no further evidence of intention will be necessary. Where the actions are more equivocal, ie they may or may not demonstrate the necessary animus possidendi, then the courts will be much more concerned to ascertain the intention with which they were done.
The reasons for this are historical. Actions for recovery of land based on possession were in the past so much more efficient than those based on ownership that even owners of land used possessory actions in preference to actions based on title.
By way of illustration, suppose that A is the legal owner of Blackacre. A is not resident on the property and B moves in as a squatter. B is there for 6 years, but eventually decides to leave to travel the world on his bicycle. C moves in immediately, and remains there for a further five years. Which of the following actions do you think would be successful?
1. An action by A to regain possession from B
2. An action by A to regain possession from C
3. An action by B to regain possession from C
4. A claim by C, in defence to an action for possession by B, that A is in any event the true owner
Answer: (1), (2) & (3)
A, being the owner of the legal title, has a better claim to possession than either B or C, and so can recover possession from either of them.
B, even though he technically had no right to be in the property, will have acquired an interest in it based on his adverse possession. His right to possession of the premises is superior to C's because he was resident in the premises earlier. B is consequently entitled to recover possession from C. C could not defend such an action on the grounds that A is the true owner, as this does not alter the fact that B's title is better than C's.
Future Interests and Disability
It is a little dangerous to assume that 12 years undisputed possession will always give rise to ownership by adverse possession, because the limitation period may be extended where the person with the prior right to possession:
1. holds a future interest, in which case, the limitation period will be the later of;
(a) 12 years; or
(b) 6 years from the date the future interest fell into possession.
Section 15(2) Limitation Act 1980
2. is under a disability, (e.g. is a minor), in which case the limitation period is the later of;
(a) 12 years; or
(b) 6 years from the date the disability ends or the person under the disability dies;
subject to a maximum period of 30 years.
Section 28 Limitation Act 1980
Leasehold Land
Where land is held under a lease, there are two estates against which limitation can operate:
1. the lease held by the tenant; and
2. the freehold reversion vested in the landlord.
A squatter must possess the land for a period that will extinguish both estates if he is to acquire an undisputed title. Time against the tenant will begin to run when the squatter takes possession, but time against the landlord will not begin to run until the lease has come to an end and the landlord's reversion has fallen in.
A squatter's possession of leasehold land is vulnerable until both the tenant and landlord's titles are extinguished, but what is the position as regards the lease between the expiry of the limitation period against the tenant and the expiry of the lease?
There are a number of possible options. Highlight the one which you think the law will have adopted. You will find assistance in the judgement of Lord Denning in St Marylebone Property Co. Ltd v Fairweather [1962] 2 WLR 1020.
1. The tenant's title to the lease becomes vested in the squatter.
2. The tenant's title to the lease is extinguished but the tenant's estate in the land is not.
3. The tenant's title to the lease is extinguished as against the squatter but not as against the landlord.
4. The tenant's title to the lease is extinguished as against the tenant and the landlord, leaving the landlord entitled to possession.
Answer: (3)
The issue arose in the case of Fairweather v St. Marylebone Property Co. Ltd [1962] 2 WLR 1020 , in which the court had to consider whether or not it was possible for a tenant whose right to recover possession of premises had been statute barred, to surrender the remainder of the lease to the landlord. The aim of the parties was to hasten the landlord's repossession of the property. The House of Lords concluded that in the case of unregistered land, it was possible for a landlord to recover possession in these circumstances. The case has however, been criticised on the grounds that it is difficult to see how a tenant who has lost title to a leasehold estate can still effectively deal with that estate.
A different approach is taken in the case of registered land, where a squatter would, after 12 years of squatting on leasehold property, be entitled to be registered as proprietor of the leasehold estate. Thereafter, the lessee cannot effectively surrender the lease - see Spectrum Investment Co v Holmes [1981] 1 WLR 221).
The Accrual of a Right of Action
As we have seen, squatters hoping to obtain undisputed title to land, must show that they have been in adverse possession of it for the requisite period. This period, will begin to run from the time that a right of action accrued to the true owner, namely where:
1. The owner has discontinued possession or been dispossessed; and
2. the squatter has taken up adverse possession.
The distinction between "discontinuing possession" and being "dispossessed" is a fine one, if it can be said to exist at all. It has been explained as follows:
"the one is where a person comes in and drives out the others from possession, the other case is where the person in possession goes out and is followed into possession by other persons"
(Rains v Buxton (1880) 14 Ch D 537 at 539-540)
The law is very reluctant to come to the conclusion that an owner has discontinued their use of any land that has been built upon.In the case of vacant land, the question of an owner's future intentions to develop or otherwise make use of the land has created some confusion.
In Leigh v Jack (1879) 5 Ex D 264, where the landowner intended to use a strip of land to build a road, it was said (at 273):
"in order to defeat a title by dispossessing the former owner, acts must be done which are inconsistent with his enjoyment of the soil for the purposes for which he intended to use it"
However, the Court of Appeal in Buckinghamshire County Council v Moran [1989] 3 WLR 152 disapproved of this suggestion that the owner's future intentions are so important. They are only relevant to the extent that they may effect the intentions of the squatter. Title is after all, acquired as a result of the squatter's possession and not because of any implied grant by the owner. It is thus the intentions of the squatter that are paramount, not those of the owner.
In Wallis Cayton Bay Holiday Camp Ltd v Shell Mex & BP Ltd [1975]1 QB 94, where the owners were intending to build a petrol station on the disputed land, Lord Denning sought to establish a general doctrine that where an owner intended to use land in the future, he granted an implied licence to squatters to use the land in a manner that was not inconsistent with his future intended use. Thus the squatters possession could not be adverse. The development of this implied licence doctrine was cut short however by the passing of paragraph 8(4) of Schedule 1 to the Limitation Act 1980, which prohibits any presumption that those occupying land are not in adverse possession of it, merely because their occupation is not inconsistent with the true owner's present or future enjoyment of the land.
The Meaning of Adverse Possession
Adverse possession comprises two elements:
1. factual possession; and
2. an intention to possess, or 'animus possidendi'.
Factual possession must be 'open not secret; peaceful, not by force; and adverse, not by consent of the true owner'. (Mulcahy v Curramore Pty Ltd [1974] 2 NSWLR 464 at 475)
It must involve 'an appropriate degree of physical control...[which] must depend on the circumstances, in particular the nature of the land and the manner in which land of that nature is commonly used or enjoyed'. (Powell v McFarlane (1979) 38 P&CR 452, at 470)
Animus Possidendi
Physical possession is not the whole story. The court is also concerned with the squatter's intention, ie:
"The intention, in one's own name and on one's own behalf, to exclude the world at large, including the owner with the paper title if he be not himself the possessor, so far as is reasonably practicable and so far as the processes of the law will allow". (Powell v McFarlane (1979) 38 P&CR 452 at 471).
The court will be guided largely by the squatter's action and the intention with which they were done in ascertaining their animus possidendi. Obviously, statements of intention made at the possession hearing could merely be self justifying and are given little weight. Where the squatter's actions are themselves unequivocal, ie they themselves demonstrate the necessary animus possidendi, little or no further evidence of intention will be necessary. Where the actions are more equivocal, ie they may or may not demonstrate the necessary animus possidendi, then the courts will be much more concerned to ascertain the intention with which they were done.
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