Adverse possession — Human rights — Section 15 of Limitation Act 1980 — Section 75 of Land Registration Act 1925 — House of Lords deciding squatters acquiring land by adverse possession — Registered proprietors losing title in consequence of legislation — Whether law on adverse possession breaching European Convention rights — Article 1 of First Protocol — Whether Article 1 engaged — Whether applicants deprived of possessions — Whether legislation proportional — Whether violation of Article 1
The second applicant was the registered proprietor of some 23ha of agricultural land. The first applicant was its predecessor in title. Until 31 December 1983, Mr and Mrs G occupied the land under a grazing agreement. They were then required to vacate the land, although, in 1984, they were granted a licence to cut hay. A request for a further licence in 1985 was unanswered. Between 1986 and 1999, Mr and Mrs G continued to use the disputed land for grazing and to maintain and fertilise it. In the Chancery Division, Neuberger J held that Mr and Mrs G had established the requisite intention to possess, their possession becoming adverse from 1 September 1984 for the purposes of the Limitation Act 1980; therefore they were entitled to be registered as proprietors under the Land Registration Act 1925. Allowing an appeal by the applicants, the Court of Appeal decided that Mr and Mrs G did not have the required intention to possess the disputed land. Mummery and Keene LJJ concluded that the right for the protection of property in Article 1 of the First Protocol to the Convention for the Protection of Human Rights and Fundamental Freedoms did not impinge upon the relevant provisions of the 1980 Act. In allowing an appeal by Mr and Mrs G, the House of Lords restored the order of Neuberger J; the question of any incompatibility with the Convention was not further pursued since it was considered that the Human Rights Act 1998 did not have retrospective effect. The applicants applied to the European Court of Human Rights alleging that the United Kingdom law on adverse possession, by which they lost land with development potential to a neighbour, in their case operated in violation of Article 1 of the First Protocol to the Convention.
Held: There was a violation of Article 1 of the First Protocol to the Convention. As registered freeholders, the applicants’ title to the land was absolute and not subject to any restriction, qualification or limitation. It was the operation of section 75 of the 1925 Act and section 15 of the 1980 Act that brought to an end the applicants’ title, not any defect or limitation in that title. The provisions of the 1925 and 1980 Acts could not be regarded as limiting or qualifying the freehold property right of the applicants at the moment of acquisition. Article 1 of the First Protocol was engaged. An application of section 15 of the 1980 Act, when read with section 75 of the 1925 Act, clearly had an effect upon the applicants’ property rights in that they were deprived of their beneficial interest in the land, which was to be held in trust for Mr and Mrs G. The legislative provisions, not the adverse possession, deprived the applicants of their property and engaged the responsibility of the State under Article 1 of the First Protocol. The legislation effectively deprived title to land; it did not involve the control of the use to which land could be put. The applicants were therefore “deprived of [their] possessions” by the contested legislation. Because of the lack of any compensation provision, the application of the relevant statutory provisions, in depriving the applicants of their title to the registered land, imposed an individual and excessive burden and upset the fair balance between the demands of the public interest, on the one hand, and the applicants’ right to the peaceful enjoyment of their possessions, on the other.
Judges Maruste, Garlicki and Borrego Borrego dissenting: The applicants have not had to bear an excessive or individual burden. They lost their land as a result of the foreseeable operation of legislation on the limitation of actions; they could have stopped time running against them by taking minimal steps to protect their interests. The deprivation was compatible with Article 1 even in the absence of compensation.The following cases are referred to in this report.
AGOSI v United Kingdom A/108 (1987) 9 EHRR 1
Bahia Nova v Spain 50924/99
Beaulane Properties Ltd v Palmer [2005] EWHC 817 (Ch); [2005] 3 WLR 554; [2005] 4 All ER 461; [2005] 3 EGLR 85
Beyeler v Italy (No 1) 33202/96 (2001) 33 EHRR 52, ECtHR
Bruncrona v Finland 41673/98 (2005) 41 EHRR 28, ECtHR
Gasus Dosier und Fördertechnik GmbH v Netherlands A/306-B (1995) 20 EHRR 403, ECtHR
Gudmundsson v Iceland 23285/94 (1996) 21 EHRR CD89
Håkansson v Sweden A/171; sub nom Sturesson v Sweden A/171; Håkansson v Sweden 11855/85 (1991) 13 EHRR 1
JA Pye (Oxford) Ltd v Graham [2002] UKHL 30; [2003] 1 AC 419; [2002] 3 WLR 221; [2002] 3 All ER 865; [2003] 1 P&CR 10; [2001] EWCA Civ 117; [2001] Ch 804; [2001] 2 WLR 1293; [2001] 2 EGLR 69; [2001] 18 EG 176; [2000] Ch 676; [2000] 3 WLR 242; (2001) 81 P&CR 15; [2000] 2 EGLR 137, Ch
Jahn v Germany 46720/99; 72203/01; 72552/01 unreported 30 June 2005
James v United Kingdom A/98(1986) 8 EHRR 123, ECtHR
Jokela v Finland 28856/95 (2003) 37 EHRR 26, ECtHR
JS v Netherlands (14561/89) (1995) 20 EHRR CD41
King of Greece (former) v Greece 25701/94 (2001) 33 EHRR 21, ECtHR
Papachelas v Greece 31423/96 (2000) 30 EHRR 923, ECtHR
Stran Greek Refineries v Greece A/301-B (1995) 19 EHRR 293, ECtHR
Stubbings v United Kingdom 22083/93(1996) 23 EHRR 213, ECtHR
Wilson v First County Trust Ltd (No 2); sub nom Wilson v Secretary of State for Trade and Industry [2003] UKHL 40; [2004]1 AC 816; [2003] 3 WLR 568; [2003] 4 All ER 97
Zacher v Germany 27026/95; 30032/96 (1996) 22 EHRR CD 136 |page:2|
This was the hearing of an application by JA Pye (Oxford) Ltd and JA Pye (Oxford) Land Ltd, under Article 34 of the Convention for the Protection of Human Rights and Fundamental Freedoms, against the United Kingdom government alleging that United Kingdom law on adverse possession, by which they had lost land, operated in violation of Article 1 of the First Protocol to the Convention.
David Pannick QC (instructed by Darbys, of Oxford) appeared for the applicants; Jonathan Crow (instructed by the Foreign and Commonwealth Office) appeared for the defendant.
The following is the judgment of the court:
Procedure
[1] The case originated in an application (no 44302/02) against the United Kingdom of Great Britain and Northern Ireland lodged with the court under Article 34 of the Convention for the Protection of Human Rights and Fundamental Freedoms (the Convention) by JA Pye (Oxford) Ltd and JA Pye (Oxford) Land Ltd, companies incorporated in the United Kingdom (the applicants), on 17 December 2002.
[2] The applicants were represented by Mr Paul Lowe, a lawyer practising in Oxford with Darbys Solicitors. The United Kingdom government (the government) was represented by its agent, Ms Emily Willmot, of the Foreign and Commonwealth Office, London.
[3] The applicants alleged that the United Kingdom law on adverse possession, by which they lost land with development potential to a neighbour, operated in violation of Article 1 of the First Protocol to the Convention in their case.
[4] The application was allocated to the former section IV of the court: see para 1 of r 52 of the rules of court. Within that section, the Chamber that would consider the case (see para 1 of Article 27 of the Convention) was constituted as provided in para 1 of r 26.
[5] By a decision of 8 June 2004, following a hearing on admissibility and the merits (see para 3 of r 54), the court declared the application admissible.
[6] The applicants and the government each filed observations on the merits: see para 1 of r 59.
[7] On 1 November 2004, the court changed the composition of its sections (see para 1 of r 25), but this case remained with the Chamber constituted within former Section IV.
[8] A hearing took place in public in the Human Rights Building, Strasbourg, on 8 June 2004: see para 3 of r 59.
The court heard addresses by Mr Jonathan Crow and Mr David Pannick QC.
Facts
I. Circumstances of the case
[9] The second applicant company is the registered owner of a plot of 23ha of agricultural land in Berkshire. The first applicant company was its predecessor in title. The owners of a property adjacent to the land, Mr and Mrs Graham (the Grahams) occupied the land under a grazing agreement until 31 December 1983. On 30 December 1983, a chartered surveyor acting for the applicants wrote to the Grahams noting that the grazing agreement was about to expire and requiring them to vacate the land. In January 1984, the applicants refused a request for a further grazing agreement for 1984 because they anticipated seeking planning permission for the development of all or part of the land and considered that continued grazing might damage the prospects of obtaining such permission.
[10] Notwithstanding the requirement to vacate the land at the expiry of the 1983 agreement, the Grahams remained in occupation at all times, continuing to use it for grazing. No request to vacate the land or to pay for the grazing that was taking place was made. If it had been, the evidence was that the Grahams would happily have paid.
[11] In June 1984, an agreement was reached whereby the applicants agreed to sell to the Grahams the standing crop of grass on the land for £1,100. The cut was completed by 31 August 1984. In December 1984, an inquiry was made of the applicants as to whether the Grahams could take another cut of hay or be granted a further grazing agreement. No reply to this letter or to subsequent letters sent in May 1985 was received from the applicants and thereafter the Grahams made no further attempt to contact the applicants. From September 1984 onwards until 1999, the Grahams continued to use the entirety of the disputed land for farming without the permission of the applicants.
[12] In 1997, Mr Graham registered cautions at the Land Registry against the applicant companies’ title on the ground that he had obtained title by adverse possession.
[13] On 30 April 1998, the applicant companies issued an originating summons in the High Court seeking cancellation of the cautions. On 20 January 1999, the applicant companies issued further proceedings seeking possession of the disputed land.
[14] The Grahams challenged the applicant companies’ claims under the Limitation Act 1980 (the 1980 Act), which provides that a person cannot bring an action to recover any land after the expiry of 12 years of adverse possession by another. They also relied upon the Land Registration Act 1925, which applied at the relevant time and which provided that, after the expiry of the 12-year period, the registered proprietor was deemed to hold the land in trust for the squatter.
[15] Judgment was given in favour of the Grahams on 4 February 2000: see JA Pye (Oxford) Ltd v Graham [2000] Ch 676*. Neuberger J held that since the Grahams enjoyed factual possession of the land from January 1984, and adverse possession took effect from September 1984, the applicant companies’ title was extinguished pursuant to the 1980 Act, and the Grahams were entitled to be registered as proprietors of the land. At the conclusion of his 30-page judgment, Neuberger J remarked that the result that he had reached did not accord with justice and could not be justified by practical considerations: the justification advanced for the right to acquire title to land by adverse possession, namely the avoidance of uncertainty had, in his view, little relevance to the use of registered land where the owner was readily identifiable by inspecting the register of the relevant title at the Land Registry. The fact that an owner who had sat on his rights for 12 years should be deprived of the land was, in his view, “illogical and disproportionate”: as he expressed the point, “it does seem draconian to the owner and a windfall for the squatter that, just because the owner has taken no step to evict a squatter for 12 years, the owner should lose 25 hectares of land to the squatter with no compensation whatsoever”.
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* Editor’s note: Also reported at [2000] 2 EGLR 137
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[16] The applicant companies appealed and, on 6 February 2001, the Court of Appeal reversed the High Court decision on the ground that the Grahams did not have the necessary intention to possess the land, and the applicant companies were therefore not “dispossessed” of it within the meaning of the 1980 Act: see [2001] EWCA Civ 117; [2001] Ch 804*. Although this conclusion was sufficient to dispose of the appeal, two members of the Court of Appeal went on to address the question of whether the applicants’ loss of title to the land could also have given rise to a violation of Article 1 of the First Protocol as applied in domestic law by the Human Rights Act 1998 (the HRA).
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* Editor’s note: Also reported at [2001] 2 EGLR 69
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[17] Mummery LJ held that Article 1 did not impinge upon the relevant provisions of the 1980 Act, which did not deprive a person of his possessions or interfere with his peaceful enjoyment of them but deprived a person only of his right of access to the courts for the purpose of recovering property if he had delayed the institution of his legal proceedings for 12 years or more after being dispossessed by another. The extinction of the applicants’ title was not, in his view, a deprivation of possessions nor a confiscatory measure for which payment of compensation would be appropriate, but simply a logical and pragmatic consequence of the barring of the right to bring an action after the expiration of the limitation period. In the alternative, Mummery LJ found that any deprivation was justified in the public interest, the conditions laid down in the 1980 Act being reasonably required to avoid the risk of injustice in the adjudication of stale claims and as ensuring certainty of title: those conditions were not disproportionate, the period of 12 years being reasonable and not imposing an excessively difficult burden upon the landowner. |page:3|
[18] Keene LJ took as his starting point that limitation periods were, in principle, not incompatible with the Convention and that the process whereby a person would be barred from enforcing rights by the passage of time was clearly acknowledged by the Convention. This position obtained, in his view, even though limitation periods both limited the right of access to the courts and, in some circumstances, had the effect of depriving persons of property rights, whether real or personal, or of damages: there was thus nothing inherently incompatible as between the 1980 Act and Article 1 of the Protocol.
[19] The Grahams appealed to the House of Lords, which, on 4 July 2002, allowed their appeal and restored the order of the High Court: see [2002] UKHL 30; [2002] 3 All ER 865. Lord Browne-Wilkinson, with whom Lord Mackay of Clashfern and Lord Hutton agreed, held that the Grahams did have “possession” of the land in the ordinary sense of the word, and therefore the applicant companies had been “dispossessed” of it within the meaning of the 1980 Act. There was no inconsistency between a squatter being willing to pay the paper owner if asked and his being in possession in the meantime. Lord Browne-Wilkinson referred to the European Convention on Human Rights only to note that there was no ambiguity in the 1980 Act that called for resolution.
[20] Lord Bingham of Cornhill, agreeing with Lord Browne-Wilkinson, made the following statement in the course of his judgment, at p867:
[The Grahams] sought rights to graze or cut grass on the land after the summer of 1984, and were quite prepared to pay. When Pye failed to respond they did what any other farmer in their position would have done: they continued to farm the land. They were not at fault. But the result of Pye’s inaction was that they enjoyed the full use of the land without payment for 12 years. As if that were not gain enough, they are then rewarded by obtaining title to this considerable area of valuable land without any obligation to compensate the former owner in any way at all. In the case of unregistered land, and in the days before registration became the norm, such a result could no doubt be justified as avoiding protracted uncertainty where the title to land lay. But where land is registered it is difficult to see any justification for a legal rule which compels such an apparently unjust result, and even harder to see why the party gaining title should not be required to pay some compensation at least to the party losing it. It is reassuring to learn that the Land Registration Act 2002 has addressed the risk that a registered owner may lose his title through inadvertence. But the main provisions of that Act have not yet been brought into effect, and even if they had it would not assist Pye, whose title had been lost before the passing of the Act. While I am satisfied that the appeal must be allowed for the reasons given by my noble and learned friend, this is a conclusion which I (like the judge [Neuberger J]…) “arrive at with no enthusiasm”.
[21] The question of whether the result was incompatible with the applicants’ rights under Article 1 of the First Protocol to the Convention was not pursued before the House of Lords, it being conceded that the HRA had no retrospective effect. However, in his judgment, Lord Hope of Craighead, who also agreed with Lord Browne-Wilkinson on the reasons for dismissing the appeal, observed that the question under the Convention, at p886G:
is not an easy one, as one would have expected the law – in the context of a statutory regime where compensation is not available – to lean in favour of the protection of a registered proprietor against the actions of persons who cannot show a competing title on the register. Fortunately… a much more rigorous regime has now been enacted in Schedule 6 to the 2002 Act. Its effect will be to make it much harder for a squatter who is in possession of registered land to obtain title against the wishes of the proprietor. The unfairness in the old regime which this case has demonstrated lies not in the absence of compensation, although that is an important factor, but in the lack of safeguards against oversight or inadvertence on the part of the registered proprietor.
II. Relevant domestic law and practice
[22] Section 15 of the Limitation Act 1980, a consolidating Act, provides:
(1) No action shall be brought by any person to recover any land after the expiration of twelve years from the date on which the right of action accrued to him or, if it first accrued to some person through whom he claims, to that person…
…
(6) Part I of Schedule 1 to this Act contains provisions for determining the date of accrual of rights of action to recover land in the cases there mentioned.
[23] Paragraph 1 of Schedule 1 provides:
Where the person bringing an action to recover land, or some person through whom he claims, has been in possession of the land, and has while entitled to the land been dispossessed or discontinued his possession, the right of action shall be treated as having accrued on the date of the dispossession or discontinuance.
[24] In the case of unregistered land, section 17 of the 1980 Act provides that, upon the expiry of the limitation period regulating the recovery of land, the title of the paper owner is extinguished. In the case of registered land, section 75(1) of the 1925 Act provides that, upon the expiry of the limitation period, the title is not extinguished but the registered proprietor is deemed to hold the land thereafter in trust for the squatter.
[25] The Law Reform Committee considered the law on limitation periods in its report of 1977 (Cmnd 6923). It commented negatively upon the courts’ practice of granting an implied licence to the would-be adverse possessor that had the effect of stopping time running against the owner, and proposed no change to the existing limitation periods, and agreed that the expiry of the limitation period should serve to extinguish the claimant’s title.
[26] A Law Commission consultation paper on limitation of actions in 1988 (Law Com 151) gave a number of general policy aims of the law on limitations. The consultation paper noted that defendants have a legitimate interest in having cases brought to court reasonably promptly since evidence may not be available indefinitely, and because defendants should be able to rely upon their assumed entitlement to enjoy an unchallenged right. The state, too, has an interest in ensuring that claims are made and determined within a reasonable time in order to deliver a fair trial, and as guarantor of legal certainty. Finally, limitation periods were seen to have a salutary effect upon plaintiffs in encouraging them to bring claims reasonably promptly.
[27] A separate Law Commission consultative document on land registration in 1998 (prepared with the Land Registry: Law Com 254) noted that although the original intention of the system of land registration was to apply the principles of unregistered land to a registered format, there were certain areas where this was not entirely true. One example given was the position of the rights of adverse possessors (section 75(1) of the 1925 Act was referred to). The consultative document set out and commented upon four particularly cogent reasons often given for the law on adverse possession:
(i) Because it is part of the law on limitation of actions. It noted:
because adverse possession is an aspect of the law of limitation, it is of course customary to account for it, at least in part, in terms of the policy of limitation statutes generally, namely to prevent defendants from stale claims and to encourage defendants not to sleep on their rights. However, adverse possession does not merely bar claims. Its effect is positive: “a squatter does in the end get title by his possession and the indirect operation of the Limitation Act…”. This can only be justified by factors over and above those which explain the law on limitation… this particular justification has much greater force in relation to unregistered land than it does for land with registered title. Unregistered title ultimately depends on possession. It therefore behoves a landowner to be vigilant to protect that possession and not to sleep on his or her rights. … where title is registered… the basis of title is primarily the fact of registration rather than possession. Registration confers title because the registration of a person as proprietor of land of itself vests in him or her the relevant legal estate…
(ii) Because if land and its ownership are out of kilter, the land may become unmarketable. Where the registered owner has disappeared, and cannot be traced, and a squatter takes possession, the doctrine of adverse possession “does at least ensure that in such cases land remains in commerce and is not rendered sterile”. Where there have been dealings “off the register”, such as where a farmer agrees to a land swap with a neighbour under a “gentleman’s agreement” but does not register the change, “adverse possession fulfils a useful function”. |page:4|
(iii) Because, in case of mistake, the innocent but mistaken squatter of land might have incurred expenditure. In such circumstances, adverse possession can be justified on grounds of hardship, and there are parallels with the principles of proprietary estoppel.
(iv) Because it facilitates and cheapens investigation of title to land. The Law Commission accepted this last reason as being very strong for unregistered land, but considered that for registered land, where title depends upon the contents of the register rather than possession, it was not applicable.
[28] The Law Commission proposed, provisionally, that the system of adverse possession as it applied to registered land should be recast to reflect the principles of title registration, and that it should be limited to very few, exceptional cases.
[29] Two reports, on limitation of actions (Law Com 270) and on registered land (Law Com 271), followed the consultation papers, and were published in July 2001.
[30] The Law Commission report on limitation of actions recommended that the general limitation period for actions in respect of land should be 10 years. It added that were the proposals made on registered land in Law Com 254 accepted, the proposal would relate only to interests in unregistered land (and unregistrable interests in registered land*).
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* Future interests, such as the reversion of a lease, in respect of which the limitation period began to run only when the interest fell into possession.
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[31] The report on registered land (Law Com 271) proposed that a squatter should be able to apply to be registered as proprietor after 10 years’ adverse possession, and that the registered proprietor should be notified of that application. If the proprietor objected to the registration, the application by the adverse possessor for registration would be rejected. The registered proprietor would then be required to regularise the position (for example by evicting the squatter) within two years, failing which the squatter would be entitled to be registered as proprietor.
[32] The Land Registration Act 2002, which does not have retroactive effect, implemented the proposals in Law Com 271.
[33] On 23 March 2005, Deputy Judge Strauss in the Chancery Division gave judgment in the case of Beaulane Properties Ltd v Palmer [2005] EWHC 817 (Ch); Times Law Reports, 13 April 2005*. The case concerned a licensee who had remained in possession of registered land for more than 12 years after the expiry of his licence. Applying the judgment of the House of Lords in the present case, the judge found that under English law, as it stood up to the entry into force of the HRA, the registered owner of the land lost all claim to it. However, on analysing the facts on a Convention basis, he found that there was no real public or general interest in the law on adverse possession in the case of registered land, and that the adverse consequences for the landowner were disproportionate. By reinterpreting the relevant legislation in accordance with section 3 of the HRA, the judge found that the claim by the former licensee to have acquired the disputed land failed.
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* Editor’s note: Also reported at [2005] 3 EGLR 85
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Law
I. Alleged violation of Article 1 of First Protocol
[34] The applicants submitted that they had been deprived of their land by the operation of the domestic rules on adverse possession in a manner incompatible with Article 1 of the First Protocol. That provision reads as follows:
Every natural or legal person is entitled to the peaceful enjoyment of his possessions. No one shall be deprived of his possessions except in the public interest and subject to the conditions provided for by law and by the general principles of international law.
The preceding provisions shall not, however, in any way impair the right of a State to enforce such laws as it deems necessary to control the use of property in accordance with the general interest or to secure the payment of taxes or other contributions or penalties.
A. Submissions of parties
[35] The government noted that the applicant companies bought the land in question between 1975 and 1977, when there was no doubt as to the content of the law of adverse possession. The applicant companies thus acquired their interest in the land subject to the pre-existing legal regime, which included the risk of losing it after 12 years’ adverse possession by another. The application of that law in the present case was no more than the due operation of the pre-existing national legal regime, and not such as to engage Article 1 of the First Protocol. It was contended that the applicant companies’ interest in the land was equivalent to a defeasible interest: from the moment upon which they acquired the property, their property right was subject to restrictions, qualifications or limitations imposed by the pre-existing legal requirements of the 1980 Act and their rights ceased to exist once those restrictions, qualifications or limitations took effect, after 12 years of adverse possession by another. The case represented nothing more than the due operation of a pre-existing legal regime under which the applicant companies’ interest in the land was ultimately defeated pursuant to its own inherent defeasibility and was not such as to engage Article 1 of the First Protocol. It would be an unwarranted extension of the scope of Article 1 to permit a person in the applicants’ position to argue that their rights were engaged, since this would involve an attempt to convert a defeasible property right into an indefeasible one: this would offend against the clear principle that Article 1 protected existing rights and did not entitle a person to acquire new property rights.
[36] The government continued that, even if Article 1 of the First Protocol had been engaged, it had not been violated. It first underlined that the interference with the applicant companies’ peaceful enjoyment of the land was not encouraged or discouraged by the state – it resulted from the Grahams’ action and the applicant companies’ inaction. The applicant companies’ attempt to end the interference was met with a defence based upon the 1980 Act, and the operation of the Act was a limitation of the applicant companies’ rights of access to court, not an interference with their property rights. The present case should therefore be considered in the context of Article 6 of the Convention, rather than Article 1 of the First Protocol.
[37] In any event, the government further submitted that since the interference with the applicant companies’ peaceful enjoyment of their possessions was the result of the Grahams’ actions, and not the state’s, there could be no question of a breach of primary, negative obligations by the state. At most, the state’s positive obligations were at issue. However, the state was not required to protect a professional property developer from the entirely avoidable consequences of its failing to enter into contractual arrangements (in this case, for example, a discontinuous series of grazing agreements with the Grahams).
[38] Assuming Article 1 of the First Protocol to be engaged, the government submitted that broadly the same test should be applied for the compatibility with the Convention of limitation periods under that provision as under Article 6. In the application of such a test, the government contended that the limitations pursued a legitimate objective, namely the public interest in preventing stale claims being brought before the courts, and in ensuring that the reality of unopposed occupation of land and its legal ownership coincided. The government further claimed that a wide margin of appreciation was allowed to the state in determining the proportionality of a measure, and in that context it noted that: at 12 years, the limitation period was long; the applicant companies could have brought an action against the Grahams at any time during that period; the limitation period would have been stopped had the applicant companies obtained a written acknowledgement of their ownership from the Grahams; the applicant companies had failed to respond to correspondence from the Grahams and had failed to take any steps whatever to assert their ownership for well over 12 years; and the applicant companies must have been aware of the general effect of section 15 of the 1980 Act. The government also noted that a substantial amount of time and study had been devoted to achieving the right balance in matters of limitation periods, and the mere fact that the 2002 Act modified the position did not render the previous legislation |page:5| incompatible with Article 1 of the First Protocol. As to the relevance of compensation, the government repeated that it had not benefited from the operation of the law on limitation periods in the present case, adding that even where an interference involved the complete loss of a person’s economic interest in an asset for the benefit of the state, an absence of compensation might still be compatible with Article 1: see Gasus Dosier und Fördertechnik GmbH v Netherlands A-306-B* 23 February 1995, in paras 66 to 74.
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* Editor’s note: Reported at (1995) 20 EHRR 403
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[39] Finally, the government noted that title could be obtained by adverse possession in a number of other jurisdictions, and that in no case was compensation paid to the displaced former owner. It referred specifically to the Northern Irish, Scottish, Irish, Hungarian, Polish, Swedish, Dutch, Spanish, German and French jurisdictions.
[40] The applicant companies contended that Article 1 of the First Protocol clearly applied to the present case. It underlined that the cumulative effect of the 1980 Act and the 1925 Act was to extinguish the title of the owner of the land in favour of the person who had established adverse possession: the legislation did not merely limit the right of access to court. As to the government’s contention that the applicant companies held the land subject to the operation of the Limitation Acts, the applicant companies did not accept that a state should be able to apply a law that provided for the taking of property and handing it over to another, free from the fair balance test of Article 1 of the First Protocol, simply because the law had been in existence when the property was acquired.
[41] The applicant companies did not accept that their inaction was responsible for the taking of the land: the land had been taken by operation of the 1980 and 1925 Acts. The courts’ decisions applying those Acts constituted the state’s interference with the applicant companies’ enjoyment of their possessions, and that interference was in breach of the negative obligation under Article 1 of the First Protocol. They referred to comments made by judges in the case and comments of the Law Commission and the Land Registry to the effect that the law should be changed. In addition, the applicant companies considered that the objectives regularly given for the limitation legislation were not satisfactory. They argued that where land was registered, there was no uncertainty of ownership and no justification for depriving somebody of his title simply because he had not objected to a third person using his land. They saw no public benefit in transferring land to persons in adverse possession in circumstances such as the present.
B. Court’s assessment
1. General principles
[42] Article 1 of the First Protocol comprises three distinct rules. The first rule, set out in the first sentence of the first paragraph, is of a general nature and enunciates the principle of the peaceful enjoyment of property. The second rule, contained in the second sentence of the same paragraph, covers deprivation of possessions and makes it subject to certain conditions. The third rule, stated in the second paragraph, recognises that contracting states are entitled, among other things, to control the use of property in accordance with the general interest. The three rules are not “distinct” in the sense of being unconnected: the second and third rules are concerned with particular instances of interference with the right to the peaceful enjoyment of property and should therefore be construed in the light of the general principle enunciated in the first rule (see, for example, Bruncrona v Finland 41673/98, 16 November 2004*, in para 65) and must comply with the principle of lawfulness and pursue a legitimate aim by means reasonably proportionate to the aim sought to be realised: see, for example, Beyeler v Italy (No 1) 33202/96, ECHR 2000-I†, in paras 108 to 114.
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* Editor’s note: Reported at (2005) 41 EHRR 28
† Editor’s note: Reported at (2001) 33 EHRR 52
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[43] The notion of “public interest” in the second sentence of the first paragraph is necessarily extensive. In particular, the decision to enact property laws will commonly involve consideration of political, economic and social issues. The taking of property in pursuance of legitimate social, economic or other policies may be in the public interest even if the community at large has no direct use or enjoyment of the property.
[44] The national authorities are, in principle, better placed than the international judge to appreciate what is in “the public interest”. The court, finding it natural that the margin of appreciation available to the legislature in implementing social and economic policies should be a wide one, will respect the legislature’s judgment as to what is in the public interest unless that judgment is manifestly without foundation.
[45] The possible existence of alternative solutions does not in itself render the contested legislation unjustified. Provided that the legislature remains within the bounds of its margin of appreciation, it is not for the court to say whether the legislation represented the best solution for dealing with the problem or whether the legislature’s discretion should have been exercised in another way: see James v United Kingdom A-98*, 21 February 1986, in para 51.
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* Editor’s note: Reported at (1986) 8 EHRR 123
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[46] An interference with the peaceful enjoyment of possessions must nevertheless strike a “fair balance” between the demands of the public or the general interest of the community and the requirements of the protection of the individual’s fundamental rights. The concern to achieve this balance is reflected in the structure of Article 1 as a whole, which is to be read in the light of the general principle enunciated in the first sentence. In particular, there must be a reasonable relationship of proportionality between the means employed and the aim sought to be realised by any measure depriving a person of his possessions or controlling their use. Compensation terms under the relevant legislation are material to the assessment of whether the contested measure respects the requisite fair balance and, notably, whether it does not impose a disproportionate burden on the applicant: see Former King of Greece v Greece 25701/94, ECHR 2000-XII*, in para 89.
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* Editor’s note: Reported at (2001) 33 EHRR 21
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[47] In this connection, the taking of property without payment of an amount reasonably related to its value will normally constitute a disproportionate interference that cannot be justified under Article 1 of the First Protocol. This provision does not, however, guarantee a right to full compensation in all circumstances, since legitimate objectives of “public interest” may call for less than reimbursement of the full market value: see, among other authorities, Papachelas v Greece 31423/96, ECHR 1999-II*, in para 48. A deprivation of property without compensation can, in certain circumstances, be compatible with Article 1: see Jahn v Germany 46720/99, 72203/01 and 72552/01, ECHR 2005†, in para 117. Where agricultural property is bought subject to the conditions of the general law, and the purchaser is subsequently obliged to re-sell the property at a substantially lower price, the court will consider the lawfulness and purpose of the deprivation, bearing in mind the state’s margin of appreciation: Håkansson v Sweden A-171, 21 February 1990‡, in paras 44 to 55.
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* Editor’s note: Reported at (2000) 30 EHRR 923
† Editor’s note: Unreported 30 June 2005
‡ Editor’s note: Reported at (1991) 13 EHRR 1
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[48] Although Article 1 of the First Protocol contains no explicit procedural requirements, the proceedings at issue must also afford the individual a reasonable opportunity of putting his or her case to the responsible authorities for the purpose of effectively challenging the measures interfering with the rights guaranteed by this provision. In ascertaining whether this condition has been satisfied, a comprehensive view must be taken of the applicable procedures: see, among other authorities, Jokela v Finland 28856/95, ECHR 2002-IV*, in para 45.
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* Editor’s note: Reported at (2003) 37 EHRR 26
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2. Applicability of Article 1 of First Protocol in present case
[49] The court notes that the applicant companies were the owners of the freehold of the land in question and were registered in the Land Register with absolute title until, by operation of the 1925 and 1980 Acts, they lost that title in consequence of the adverse possession |page:6| of the land by the Grahams. In contending that the loss of title did not engage the provisions of Article 1 of the First Protocol, the government argues that when the applicants acquired the land they did so subject to the then existing law, according to which their rights were defeasible in the event of 12 years’ adverse possession by a trespasser. Although accepting that where, as in James, a contracting state introduces legislation that compulsorily transfers property from one individual to another, such legislation is capable of giving rise to an interference with the former owner’s property rights under Article 1, the government argues that the position is different where, as in the present case, the relevant law exists at the time the property is acquired and where the operation of the law is to be seen as an incident of the property right at the time of its acquisition.
[50] The court cannot accept the government’s argument. As registered freeholders, the applicants’ title to the land was absolute and not subject to any restriction, qualification or limitation. Their property rights were, in this respect, quite different from those of the holders of a lease, licence or other defeasible or limited property interest that was liable to expire by the effluxion of time and to cease to exist as such. It was the operation of the provisions of the 1925 and 1980 Acts that brought to an end of the applicants’ title and not any inherent defect or limitation in that title.
[51] The court does not share the government’s view that the operation of the legislation is to be regarded as an incident of, or limitation on, the applicants’ property right at the time of its acquisition, such that Article 1 ceased to be engaged when the relevant provisions took effect and the property right was lost after 12 years of adverse possession. It is true that the relevant provisions of the legislation existed at the time the property was acquired by the applicants and that the consequences for the applicants’ title to the land of 12 years’ adverse possession were known. However, Article 1 does not cease to be engaged merely because a person acquires property subject to the provisions of the general law, the effect of which is in certain specified events to bring the property right to an end, and because those events have in fact occurred. Whether it does so will depend upon whether the law in question is properly to be seen as qualifying or limiting the property right at the moment of acquisition, or whether it is rather to be seen as depriving the owner of an existing right at the point when the events occur and the law takes effect. It is only in the former case that Article 1 may be held to have no application.
[52] The court finds that, in the present case, the provisions of the 1925 and 1980 Acts cannot be regarded as limiting or qualifying the freehold property right of the applicants at the moment of their acquisition. In this respect, the provisions were significantly different from those with which the Commission was concerned in the decisions relied upon by the government (see JS v Netherlands 14561/89*, Commission decision of 7 September 1995; Gudmundsson v Iceland 23285/94†, Commission decision of 17 January 1996, Zacher v Germany 27026/95 and 30032/96‡, Commission decisions of 4 September 1996), each of which related to the grant of licences that were from the outset subject to conditions imposed by law that were either never fulfilled or that ceased to be complied with. The provisions are also different from those examined by the House of Lords in Wilson v First County Trust Ltd (No 2) [2003] UKHL 40§ – also invoked by the government – in which the majority held that the relevant legislation regulating the enforceability of loan agreements “bit” at the moment upon which the transaction was concluded, and that the lender accordingly had no right to enforce repayment of the loan of which it could be deprived under Article 1. By contrast, the 1925 and 1980 Acts are, in the view of the court, to be seen as “biting” on the applicants’ property rights only at the point at which the Grahams had completed 12 years’ adverse possession of the applicants’ land and not as delimiting the right at the moment of its acquisition. Accordingly, the court rejects the government’s argument that, on this ground, Article 1 was not engaged in the present case. Since the applicants’ rights cannot therefore be regarded as defeasible rights at the moment of acquisition, the court cannot accept the government’s further submission that, to hold Article 1 to be applicable would offend against the clear principle that the Article protects existing rights only and does not entitle a person to acquire new property rights.
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* Editor’s note: Reported at (1995) 20 EHRR CD 41
† Editor’s note: Reported at (1996) 21 EHRR CD 89
‡ Editor’s note: Reported at (1996) 22 EHRR CD 136
§ Editor’s note: Reported at [2004] 1 AC 816
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3. Alleged interference with applicants’ Article 1 rights
[53] The government further contended that, even if Article 1 was in principle applicable, there was no interference with the applicants’ property rights or none for which the state can be held responsible. It is argued that the operation of the 1980 Act is to be seen as imposing a limitation upon the applicants’ rights of access to court, rather than an interference with their property rights, and that the present case should be considered in the context of Article 6 of the Convention rather than Article 1 of the First Protocol. It is further argued that, as any interference with the applicant companies’ peaceful enjoyment of their possessions was the result of the Grahams’ actions and not the state’s, there could be no question of a breach of the state’s negative obligations under the Protocol. At most, the state’s positive obligations were engaged and these obligations could not extend to protecting the applicants against the avoidable consequences of their failure to take steps within the 12 years to bring the Grahams’ adverse possession to an end.
[54] Although it is true that the application of limitation periods to bar causes of action has traditionally been examined under Article 6 of the Convention and in the context of the parties’ right to effective access to court (see, for example, Stubbings v United Kingdom 22083/93 22 October 1996*, Reports of Judgments and Decisions 1996-IV), there is no reason why the application of limitation periods should not, in an appropriate case, give rise to issues under other Convention articles and nothing in principle to preclude the examination of a claim under Article 1 of the First Protocol where the legislation in question has an effect upon the property rights of an applicant. In the present case, the court finds that application of section 15 of the 1980 Act, when read with section 75 of the 1925 Act, clearly had such an effect upon the applicants’ property rights, the effect of the provisions being to deprive the applicants of their beneficial interest in the land, which was thenceforth to be held on trust for the Grahams.
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* Editor’s note: Reported at (1996) 23 EHRR 213
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[55] The government relied upon the judgment of Mummery LJ in the Court of Appeal in the present case to the effect that the extinction of the applicants’ title (under section 75) was simply a logical and pragmatic consequence of the barring of an owner’s right to bring an action (under section 15). However, even if the provisions of section 75 are properly to be so regarded as a matter of domestic law – a point that the court notes was disputed in the judgment of Deputy Judge Strauss in Beaulane – it is clear that the relevant provisions did more than merely preclude the applicants from invoking the assistance of the courts to recover possession of the property concerned: the combined effect of the provisions was both to deprive the applicants of their substantive property rights and to preclude them from lawfully repossessing the land, the beneficial title to which they had lost.
[56] As to the government’s argument that the interference with the applicants’ peaceful enjoyment of the disputed land was brought about by the action of one party and the inaction of the other and that the state had no direct responsibility for such interference, the court accepts that it was the Grahams’ adverse possession of the land for 12 years that directly led to the applicants’ loss of their title. However, the court also observes that, but for the provisions of the 1925 and 1980 Acts, the adverse possession of the land by the Grahams would have had no effect upon the applicants’ title or upon their ability to repossess the land at any stage. It was the legislative provisions alone that deprived the applicants of their title and transferred the beneficial ownership to |page:7| the Grahams and that thereby engaged the responsibility of the state under Article 1 of the First Protocol.
[57] The court accordingly finds that Article 1 of the First Protocol was engaged and that the operation of the relevant provisions of the 1980 Act and the 1925 Act in the present case constituted an interference by the state with the applicant companies’ rights under that Article.
4. Nature of interference
[58] The government contended that the interference was in the nature of a control of use, rather than a deprivation. It considered that the state has done no more than control the circumstances in which landowners might have recourse to the courts in recovering possession and that the transfer of paper title under section 75 was merely a measure of enforcing that control.
[59] In this regard, reliance was placed upon AGOSI v United Kingdom A-108, 24 October 1986*, in which the forfeiture of the krugerrands was treated by the court as a means of enforcing the prohibition on the importation of the coins and was examined under the second paragraph of Article 1 rather than the second sentence. It was argued that the present case was a fortiori since it did not even involve any form of expropriation by the state. Reference was further made to the court’s Stran Greek judgment (see Stran Greek Refineries v Greece A-301-B†, 9 December 1994) as one in which the court treated the case as involving an interference with the peaceful enjoyment of possessions under the first sentence of Article 1 rather than as a deprivation of possessions under the second sentence of the Article.
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* Editor’s note: Reported at (1987) 9 EHRR 1
† Editor’s note: Reported at (1995) 19 EHRR 293
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[60] The court observes that the relevant provisions of the 1925 and 1980 Acts do not involve the control of the use to which land is put and are, in this respect, different in aim and effect from the provisions of, for instance, planning legislation. They are instead concerned with the entitlement to land where there has been a period of adverse possession, and their cumulative effect, where the statutory requirements are met, is to transfer beneficial ownership of the land from one individual to another. In this respect, the contested measures bear a closer similarity to those in James (cited above), in which property was transferred from one individual to another in furtherance of general social policy, than to those in AGOSI, where the forfeiture of the coins was found by the court to be a constituent element of the procedure for control of the illegal import of coins, or those in Stran
Greek that were designed to prevent the enforcement of a final arbitration award.
[61] Although, as the government emphasised, the measures in question did not involve any form of expropriation by the state, the court notes that the same was true in James, in which the court expressly rejected the applicants’ argument that the transfer of property from one person to another for the latter’s private benefit alone could never be “in the public interest” within the meaning of the second sentence. Indeed, the very fact that the contested measures involved such a transfer of property rather than a taking of the property by the state in furtherance of a system of control would appear to undermine, rather than reinforce, an argument that the case is an example of control of use falling within the para 2 of Article 1.
[62] The court accordingly considers that the applicants were “deprived of [their] possessions” by the contested legislation and that the case falls to be examined under the second sentence of Article 1. It recalls, however, that the three rules within that Article are not distinct or watertight in the sense of being unconnected and that the principles governing the question of justification are substantially the same, involving as they do the legitimacy of the aim of any interference, as well as its proportionality and the preservation of a fair balance.
5. Legitimate aim
[63] There is no suggestion in the present case that limitation periods are incompatible with the Convention, in general or with specific reference to actions to recover land. As the court noted in Stubbings, in para 51:
Limitation periods in personal injury cases are a common feature of the domestic legal systems of the Contracting States. They serve several important purposes, namely to ensure legal certainty and finality, protect potential defendants from stale claims which might be difficult to counter and prevent the injustice which might arise if courts were required to decide upon events which took place in the distant past on the basis of evidence which might have become unreliable and incomplete because of the passage of time.
[64] However, the court reiterates that the present case is concerned not merely with the effect of the provisions of the 1980 Act but also with those of the 1925 Act, which brought about the deprivation of the applicants’ title to the land. As the Law Commission’s consultative document observed, where adverse possession not only bars claims to recover possession of property but transfers title to the property, such measures can be justified only by factors over and above those that explain the law on limitation.
[65] The government argued that the contested provisions governing the adverse possession of land serve two public interests: first, as in Stubbings, they prevent uncertainty and injustice from arising from stale claims; and, second, they ensure that the reality of unopposed occupation of land and its legal ownership coincide. These aims echo two of the public interests identified by the Law Commission in its consultative document. Although the court accepts the undoubted relevance and importance of these aims in the case of unregistered land, their importance in the case of registered land is more questionable. As Neuberger J explained in his judgment in the present case, with one or two limited exceptions, the uncertainties that sometimes arise in relation to the ownership of land are very unlikely to arise in the context of a system of land ownership involving compulsory registration, where the owner of the land is readily identifiable by inspecting the proprietorship register of the relevant title at the Land Register. Similar statements appear in the report of the Law Commission on registered land and in the judgment of Lord Bingham in the House of Lords, who observed that, although, in the days before registration became the norm, a result whereby an adverse possessor of land was rewarded by obtaining title could be justified as avoiding protracted uncertainty as to where the title to land lay, where land was registered it was difficult to see any justification for a legal rule that impelled such an unjust result.
[66] The government prayed in aid the law and practice in other jurisdictions as confirming that the taking of property by adverse possession is a feature common to many legal systems. However, the court considers that the comparative material must be viewed with some caution, it being unclear whether, in all the jurisdictions referred to, the same system of compulsory registration of land is in place. In this regard, it is of relevance to note that, in the consultative document of the Law Commission and the Land Registry, it is recorded that many common law jurisdictions that had systems of title registration had either abolished the doctrine of adverse possession completely or had substantially restricted its effects.
[67] The court, however, notes that despite the major changes to the law of adverse possession made by the 2002 Act in the case of registered land, the law itself was not abolished. In these circumstances and having regard to the margin of appreciation afforded to the national authorities, the court cannot accept the applicants’ argument that the law of adverse possession in England and Wales served no continuing public interest so far as registered land was concerned.
Whether in the case of registered land this public interest was of sufficient weight for the court to be able to find the interference proportionate remains to be determined.
6. Proportionality
[68] The government, like Mummery LJ in the Court of Appeal, place reliance upon two factors in particular for contending that the system as it operated in the applicants’ case was proportionate and struck a fair balance; the reasonableness of the period of 12 years for bringing proceedings and the fact that it was neither impossible nor difficult for a landowner to prevent a squatter acquiring title by adverse possession: a mere grant to the Grahams of authority to use the land |page:8| subject to an acknowledgement of the applicants’ ownership would have been sufficient to stop time running.
[69] The court accepts that the limitation period of 12 years was relatively long and that the law of adverse possession was well-established and had not altered during the period of the applicants’ ownership of the land. It is further accepted that it is a relevant consideration that, in order to avoid losing their title, the applicants had to do no more than regularise the Grahams’ occupation of the land or issue proceedings to recover its possession within the 12-year period.
[70] The question nevertheless remains whether, even having regard to the lack of care and inadvertence on the part of the applicants and their advisers, the deprivation of their title to the registered land and the transfer of beneficial ownership to those in unauthorised possession struck a fair balance with any legitimate public interest served.
[71] The court notes in the first place that, not only were the applicants deprived of their property but they received no compensation for the loss. The result for the applicants was thus one of exceptional severity: as Neuberger J expressed the point in [2000] 2 EGLR 137, at p149A, the result was:
draconian for the owner and a windfall for the squatter that just because the owner has taken no steps to evict the squatter for 12 years the owner should lose 25 hectares of land to the squatter with no compensation whatsoever.
In the House of Lords, Lord Bingham similarly observed, at p867H:
where land is registered it is difficult to see any justification for a legal rule which compels such an apparently unjust result, and even harder to see why the party gaining title should not be required to pay some compensation at least to the party losing it…
[72] The court reiterates that the taking of property in the public interest without the payment of compensation reasonably related to its value is justified only in exceptional circumstances. As established by James, this principle is not confined to the taking of property for public purposes but is equally applicable to the compulsory transfer of property from one individual to another. The government argued that this was one of the exceptional cases where compensation was not called for, citing, in support, Gasus. However, not only was Gasus analysed by the court as a case of control of use rather than deprivation of possessions, but the court finds no sufficient similarity between the circumstances of the two cases as would justify treating the present case as an exception to the general principle.
[73] The lack of compensation in the present case must also be viewed in the light of the lack of adequate procedural protection for the right of property within the legal system in force at the relevant time. In particular, although it was – as shown by the facts of the present case – open to the dispossessed owner of the land to argue, after the expiry of the 12th year that the land had not been adversely possessed, during the currency of that period no form of notification whatever was required to be given to the owner, which might have alerted him to the risk of losing his title. As Lord Hope observed in the House of Lords, at p886G:
the unfairness in the old regime which this case has demonstrated lies in the lack of procedural safeguards against oversight or inadvertence on the part of the registered proprietor.
[74] The government argued that the state has no duty to protect a person against its own negligence or inadvertence. The court would, however, observe that such inadvertence would have had no adverse consequences for the applicants but for the contested statutory provisions. More importantly, it is clear that parliament itself recognised the deficiencies in the procedural protection of landowners under the then current system by enacting the 2002 Act. The new Act not only puts the burden on a squatter to give formal notice of his wish to apply to be registered as the proprietor after 10 years’ adverse possession but requires special reasons to be adduced to entitle him to acquire the property where the legal owner opposes the application. The mere fact that a legal system is changed to improve the protection provided under the Convention to an individual does not necessarily mean that the previous system was inconsistent with the Convention. However, in judging the proportionality of the system as applied in the present case, the court attaches particular weight to the changes made in that system, and to the view of the Law Commission and the Land Registry as to the lack of cogent reasons to justify the system of adverse possession as it applied in the case of registered land.
[75] In these circumstances, the court concludes that the application of the provisions of the 1925 and 1980 Acts to deprive the applicant companies of their title to the registered land imposed upon them an individual and excessive burden and upset the fair balance between the demands of the public interest, on the one hand, and the applicants’ right to the peaceful enjoyment of their possessions, on the other.
[76] There has therefore been a violation of Article 1 of the First Protocol.
II. Application of Article 41 of Convention
[77] Article 41 of the Convention provides:
If the Court finds that there has been a violation of the Convention or the Protocols thereto, and if the internal law of the High Contracting Party concerned allows only partial reparation to be made, the Court shall, if necessary, afford just satisfaction to the injured party.
[78] The applicants claimed compensation for the loss caused of their land. By reference to a series of valuation reports, they assessed the pecuniary loss as being at least £10m.
[79] The government contested the claim. It submitted that, even if Article 1 of the First Protocol had been violated, it was neither necessary nor equitable to require the government to use public funds to indemnify a corporate property developer against the consequences of its own incompetence. Using a separate set of valuations and discounting the figures to reflect the applicant companies’ conduct, it considered that an appropriate figure for the applicant companies’ loss would be – depending upon the correct valuation date – £380,725 (1996), £1,225,000 (2002) or £1,151,500 (2004).
[80] The applicant companies sought reimbursement of their costs in bringing the proceedings before the court (£191,408.84), their costs in the domestic courts (£383,479.03) and the costs that they were ordered to pay to the Grahams in the domestic proceedings (£424,000).
[81] The government again contested the claim, considering that it would not be equitable to make any award for costs in the present case. The government considered that, if any award should be made, the amounts claimed by the applicant companies were excessive and in part exorbitant. It suggested that any amount awarded should be significantly lower than the amounts put forward by the applicant companies.
[82] In the circumstances of the case, the court considers that the question of the application of Article 41 is not ready for decision and reserves it, due regard being had to the possibility that an agreement will be reached between the respondent state and the applicant companies: see para 1 of r 75 of the rules of court.
For these reasons, the court:
1. Holds by four votes to three that there has been a violation of Article 1 of the First Protocol to the Convention;
2. Holds unanimously that the question of the application of Article 41 is not ready for decision and;
accordingly,
(a) reserves the said question;
(b) invites the government and the applicants to submit, within six months from the date upon which the judgment becomes final according to para 2 of Article 44 of the Convention, their written observations on the matter and, in particular, to notify the court of any agreement that they may reach;
(c) reserves the further procedure and delegates to the President of the Chamber the power to fix the same if need be. |page:9|
Joint dissenting opinion of Judges Maruste, Garlicki and Borrego Borrego
[1] We consider that the applicant companies have not had to bear an excessive or individual burden. They lost their land as a result of the foreseeable operation of legislation on limitation of actions that had recently been consolidated by the legislator, and the applicant companies could have stopped time running against them by taking minimal steps to look after their interests. We therefore take the view that the deprivation of possessions was compatible with Article 1 of the First Protocol, even in the absence of compensation.
[2] The real “fault” in this case, if there has been any, lies with the applicant companies, rather than with the government. It has to be borne in mind that the applicant companies were not a private individual or an ordinary company with, one could assume, limited knowledge of relevant real estate legislation. They were specialised professional real estate developers and such a company had or should have had full knowledge about relevant legislation and the duties involved. They should have had full access to legal advice if need be, and cannot claim to be ignorant as to the adverse effects of the limitation legislation. It should have been known to the applicants from the very beginning that their property right was subject to restrictions, qualifications or limitations imposed by the pre-existing legal requirements of the 1980 Act. The government has done no more than to continue to operate a mechanism that, at the end of a relatively long limitation period, adjusts land ownership to reflect the fact that an action for adverse possession is time-barred.
Possession (ownership) carries not only rights but also and always some duties. The purpose of the relevant legislation was to behove a landowner to be vigilant to protect the possession and not to “sleep on his or her rights”: see for example, Bahia Nova SA v Spain 50924/99, 12 December 2000, in which the applicant company’s failure to act over a substantial period substantially reduced its entitlement to compensation. The duty in this particular case – to do no more than to begin an action for repossession within 12 years – cannot be regarded as excessive or unreasonable.
[3] The Convention is intended to guarantee a minimum standard of human rights protection. It is open to the domestic authorities to provide a higher standard. The court should not be unduly influenced by developments after the facts of the case. At the same time, it leaves to the member states a margin of appreciation in determining the ways of implementation of those standards. This margin is wider in respect of the right protected under the Article 1 of the First Protocol. We accept that the 2002 Act provided additional procedural protection for negligent landowners, but that does not mean that the previous position was in violation of the Convention. We note that the United Kingdom provisions on adverse possession appear never to have been challenged before the former Commission or the court until the present case, and we fear that the majority have been swayed by the legislative changes and judicial comments, rather than trying to assess what would have been the position if, for example, the 2002 Act had not been passed.
[4] In accordance with the general practice, we voted with the majority on the question of Article 41. The Article 41 issues, which have been reserved, underline the problems inherent in a finding of a violation of Article 1 of Protocol 1 in this case: if the government is responsible for the deprivation, what is the measure of its responsibility? In any event, the loss of the land was not a deprivation of possessions or a confiscatory measure for which the payment of compensation would be appropriate. A finding that the companies were not responsible at all for the loss of their land – and that they should be compensated to the full value of the land at the taxpayers’ expense – would run contrary to most people’s notions of basic justice.
Future interests, such as the reversion of a lease, in respect of which the limitation period began to run only when the interest fell into possession.
Violation of Article 1 of the First Protocol to the Convention.