Under the Limitation Act 1980, no action can be brought to recover land more than 12 years after the right of action accrued. The Land Registration Act 2002 changed the law to make it much more difficult for squatters to rely on adverse possession to obtain title to registered land. But the legislation also contains transitional provisions preserving the rights of squatters who had been in adverse possession for the requisite period before the 2002 Act came into force: see paragraph 18(1) of schedule 12.
Rashid v Nasrullah [2018] EWCA Civ 2685; [2018] PLSCS 211 concerned an application for the recovery of a registered title that had been stolen by a fraudster. Rashid had been registered as the proprietor until May 1989, when he went abroad. While he was away, a third party forged his signature on a transfer and was registered as the proprietor in his stead. The fraudster transferred the property to his son, who knew about and was associated with the fraud, and who refused to return the property to Rashid when he located papers that enabled him to apply for rectification.
The fraudster’s son argued that he had been in adverse possession of the property since 1990 and was entitled to hang on to it, thanks to paragraph 18(1) of schedule 12 of the 2002 Act. The Upper Tribunal rejected his claim that he had acquired the title through adverse possession. It took the view that to allow the fraudster’s son to retain the land would be to send a message that fraud can be condoned if sufficient time has elapsed – and followed Parshall v Hackney [2013] EWCA Civ 240; [2013] 2 EGLR 37, in which the court decided that a registered proprietor of land cannot be in adverse possession of it.
The Court of Appeal has overturned the tribunal’s decision, ruling that bad people are also entitled to the benefit of limitation periods. The court disagreed with Parshall v Hackney, which was impossible to reconcile with Pye (Oxford) Ltd v Graham [2002] UKHL 30, and could, in any event, be distinguished. Given that time undoubtedly runs in favour of a scoundrel who seizes land, fences it off and squats on it, the court found it difficult to see why time should not run in favour of a scoundrel who does all that and forges a transfer document – which can be defeated by proof of fraud.
The Supreme Court decision in Patel v Mirza [2016] UKSC 42 was of no assistance either. It concerned contracts tainted by illegality, as opposed to limitation periods. And, even if the doctrine of illegality were to invalidate the registration of the fraudster, it could not undo the fact that the fraudster and his son had been in possession of the land for more than 20 years.
Section 32 of the Limitation Act 1980 extends the limitation period in cases of fraud and deliberate concealment so that time does not begin to run until the claimant has discovered the fraud or deliberate concealment (or could with reasonable diligence have discovered it). However, Rashid had discovered the fraud by 1990. The result was undoubtedly tough. Nonetheless, correctly analysed, Rashid’s inability to recover his land was not the result of the fraud – but of his failure to take effective action to challenge the fraud within the limitation period available to him.
Allyson Colby, property law consultant
