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Adverse possession – problems of title in registered land

Published online by Cambridge University Press:  02 January 2018

Elizabeth. Cooke*
Affiliation:
University of Reading

Extract

It has been said that ‘the law of limitation is a subject which peculiarly involves an enquiry into first principles.’ That is particularly true in registered land. Section 75 of the Land Registration Act 1925 grafted into registered land a concept inimical to it, namely the possibility of defeat by adverse possession of a flawless documentary title. That endeavour has on the whole been successful; but there remain problems, concerning such fundamental concepts as trusts, the nature of legal estates after 1925, and ‘title absolute.’ This article seeks to explore those problems; at the same time, the opportunity will be taken to look again at the decision in Spectrum Investment Co v Holmes and to suggest that it need no longer be regarded as a major source of difficulty.

Type
Research Article
Copyright
Copyright © Society of Legal Scholars 1994

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References

1. Hayes Introduction to Conveyancing, (5th edn, 1840) at 224.

2. [1981] 1 WLR 221.

3. See FW Taylor, (1956) 106 LJ 167.

4. Limitation Act 1980, s 17; subject, of course, to the modification concerning trust property in s 18. Per Farwell J in Lewis v Plunketl [1937] Ch 306 (‘the estate, whether it he legal or equitable or both … is put to an end once and for all’).

5. (1841) 10 LJ Ch 354. Thus in Bridges v Mces [1957] 2 All ER 577, the squatter claimed against the purchaser a declaration, and rectification of the register or alternatively a transfer of the land to him. An order was made for rectification of the register.

6. See n 57, below and associated text.

7. S 70(1)(1) of the Land Registration Act 1925.

8. As suggested by Taylor, op cit.; he would obviously have to elect to take one or the other, rather than both.

9. Usually he will prefer to keep the land, as in Chowood v Lyall [1930] Ch 156 and Bridges v Mces (above).

10. Cf Lake v Bayliss [1974] 1 WLR 1073, where it was held that when a vendor of land has sold it to another in breach of contract, the original intended purchaser could trace the proceeds even though in those circumstances the vendor is only a ‘qualified trustee.’ See JE Martin Modern Equity (Stevens & Sons, 1989) p 64.

11. See n 43, below.

14. On the general principle that a trustee must account to the beneficiaries for profits he has made as a result of his position, and a fortiori out of the trust property itself, see Martin, op cit, ch 20 passim.

13. They are too well-known and too numerous tocite fully. Eucs v Eucs [1975] 1 WLR 1338 is an earlier one; H v M (Property: Beneficial Entitlement) [1992] 1 FLR 229 is a recent instance.

14. Entities are not to be multiplied without necessity.

15. Mellor J in Ashcr v Whitlock (1865) 1 LR QB 1. See also Lcach v Juy (1878) 9 Ch D 42; Pcny v Clissold [1907] AC 73; Mount Caml Investments Ltd v Peter Thurlow Ltd [1988] 1 WLR 1078.

16. As pointed out by Nugee, (1981) 131 NLJ 774.

17. (1964) 80 LQR. 63, Ruoffand Roper Registered Conveyancing (1991, as updated), paras 29–42, state without discussion that the fee simple is equitable. Nugee, op cit, on the other hand, states without discussion that the fee simple is legal.

18. Law of Property Act 1925, s 1.

19. Megarry and Wade nevertheless state that S's fee simple is absolute; The Low of Real Property (5th edition) ch V, p 1051.

20. For example, s 4(3) of the Law of property Act 1925 refers to ‘rights of entry affecting a legal estate which are exercisable on condition’, that is, express rights of entry, and this is what one would suppose to be meant by those words in s 7.

21. He can do so, of course, before expiry, but it would be unwise to do so where the dispossessed owner's title is registered because the Registry would send him notice of the application. See AJ Pain Adverse Possession - a Conveyancer's Guide, (Fourmat Publishing, 1992) p 16. The author is District Land Registrar at the Plymouth District Land Registry.

22. This famous phrase originated with Parke B in Doc d Jukes v Sumner (1845) 14 M & W 39 at 42. The concept is discredited: see in particular Tichborne, V Weir (1892) 67 LT 735.

23. Thus Kenny, [1982] Conv 201, discussing the meaning of ‘thereof’, states that it means ‘of the registered estate to which the squatter has acquired title’, being a registered estate which is subject to any rights adverse to the first proprietor (s 11 of the Land Registration Act 1925). He appears to take the view that it is not the same estate as the dispossessed proprietor's. The writer agrees; but Kenny does not explain how that is possible if the squatter in leasehold land gets a registered leasehold estate, as occurred in Spectrum Investment Go v Holmes (above).

24. Above.

25. Tichborne v Weir (above), Tickner v Buzzacott [1965] 1 All ER 131. S may however become estopped from denying that he is a tenant; see O'Connor v Folv [1906] 1 IR 20, and Ash v Hogan [1920] 1 IR 159.

26. See Wade, (1962) 78 LQR 541 at 544.

27. Limitation Act 1980 Sch 1, Para 4, and see Taylor v Twinbcrrow [1930] 2 KB 16.

28. It is well established that the landlord does not lose his right to forfeit in these circumstances. ‘It is not the act of a stranger that can deprive the lessor of the advantage of that condition which he annexed to the lessee's estate when he parted with possession of the land,’ Humphrey v Damion (1603) Cro Jac 300.

29. [1963] AC 510.

30. In particular those of wade, (1962) 78LQR541; see also Wylie, (1965) 16 NILQ 467. The Law Reform Committee in its 21 st Report, (1977) Cmnd 6923, could not agree on the merits of the decision and made no recommendation on it.

31. Criticisms of it rest on the maxim nemo dat quod non habet', as Lord Morris of Borth-y-Gest said in his dissenting speech. If the tenant has lost his right to possession, how can he give any such right to the landlord? Lord Radcliffe quoted the maxim in his judgment, and stated that it was not relevant; the tenant was not giving the landlord a right of possession, he was merely removing an obstacle to the landlord's own right to possession. ‘The tenant surrenders the incumbrance on the fee simple in possession which was represented by the term of years…. It was that incumbrance and nothing else which prevented the fee simple owner from asserting a claim to possession.’ The tenant no longer has a key to the door; but he can stand out of the way so that the landlord can use his own key.

32. Above at 542.

33. Above.

34. An expression coined by Rudden, op cit.

35. [1981] 1 WLR 221, at 228; emphasis added. 36. Luc czt.

37. Smith, (1981) 131 NLJ 718.

38. Smith, op cit, suggests that it was through caution that Browne-Wilkinson J restricted the ratio of his decision to this narrow point.

39. As has been suggested by Kenny, op cit.

40. Browne-Wilkinson J regretted the inconsistency, but noted that the House of Lords in Williams & Glynn's Bunk Ltd v Bolund [1980] 3 WLR 138 had stated that ‘if the words of the Land Registration Act 1925 are clear, they are to be given their natural meaning and not distorted so as to seek to produce uniformity in the substantive law as between registered and unregistered land.’

41. Thus it is submitted that Smith, op cit, is correct on the basis of Spectrum to say that ‘The squatter with a registered title has no new estate’ (by which the writer understands him to mean that the squatter with a registered estate after rectification is registered with title to the dispossessed proprietor's estate). Nugee, op cit, is equally right to point out that the squatter must originally have had two estates, ‘his own legal estate, acquired by adverse possession, and the equitable title to the estate of which [the dispossessed tenant] is still the registered proprietor.’ He then implies that it is the squatter's fee simple that is registered; whereas in Spectrum (the subject of his note) the squatter took a leasehold title on registration.

42. Pain, op cit, p 85.

43. In the simple case of dispossession of a freeholder it is usual for the Land Registry initially to give a squatter a possessory title only, because his evidence may, without any deliberate concealment, be incomplete. The dispossessed proprietor may, for example, have been a trustee, and there might be an unbarred beneficiary in the background.

44. S 77(2) of the Land Registration Act 1925: the registrar shall upgrade a possessory title, either if he is satisfied as to the title, or if the possessory title has been registered for at least twelve years and the registrar is satisfied that the proprietor is in possession.

45. Ruoffand Roper, op cit, at para 508, say that ‘perhaps one in a hundred thousand registered titles’ are qualified.

46. See Pain, op cit, p 95.

It will be remembered that where a squatter, S, dispossesses B, the life beneficiary of a trust for sale, B's estate is extinguished after 12 years but the legal estate of the trustees (or of the tenant for life in the case of settled land) is not. When the dispossessed beneficiary dies, a cause of action accrues to the party next entitled, and so on until all potential claimants are barred (Limitation Act 1980, ss 15(2) and 18). Thus the squatter becomes vulnerable afresh each time an interest falls into possession. The better view seems to be that on dispossessing a life tenant he acquires a fee simple, not an estate pur autre vie (because it arises, as we have seen, by virtue of S's possession of the land, not by virtue of the quality of X's estate, and does not automatically come to an end on X's death). Because of this recurring vulnerability the squatter's estate has been referred to, by Holroyd Pearce LJ in St Marylebone Proper & Co Ltd v Fairweather [1962] QB 498 at 513, as a defeasible fee.

47. Browne-Wilkinson J's expectations, quoted above (see n 28 and associated text), as to the effect of registration of the squatter's title thus prove correct. Equally, Nugee's analysis of the situation, op cit, is seen to be accurate, even though it could not (it is respectfully suggested) be reconciled with Spectrum.

48. This is clear in leasehold land, where the problem is easier to see; it is therefore reasonable to suppose that the same is happening where there is no lease involved.

49. On the authority of Tichborne v Weir (1892) 67 LT 735, which of course related to unregistered land.

50. Pain, op cif, p 86.

51. See King v Smith [1950] I All ER 553; Perrot v Cohen [1951] 1 KB 705; Jaman v Hale [1899] 1 QB994.

52. He may do this either before or after his title is closed, because, it is submitted, after closure he still has an unregistered freehold with which he can deal.

53. A similar opportunity arises with trust property, where there is the possibility of the closure of the trustees' title and the grant of a qualified freehold to the squatter. Again, notification of the trustees that an application has been made may prompt them to organise the accrual of a cause of action by the surrender of a life interest.

54. Pain, op cit, pp. 86–87. Even on the facts of Spectrum he could do so after the expiry of the limitation period but while he is still registered proprietor.

55. Op cit, para 29–05.

56. As does Smith, op cit. Kenny, op cit, argues that a surrender in these circumstances would not be a breach of trust, because all that the tenant holds on trust is his title insofar as it would have been extinguished in registered land; and in unregistered land his right to surrender the estate to the landlord is unaffected by the Limitation Acts. But, with great respect, it is surely very difficult to say that someone holds an estate on trust for another, save that he has the right to destroy the trust property. And the words of s 75(1) are ‘where, if the land were not registered, the estate would be extinguished’, not ‘insofar as … it would be extinguished.’

57. See n 6, above and associated text.

58. See n 43, above.

59. As could happen if both freehold and lease were unregistered.

60. By virtue both of s 6 of the Land Registration Act 1925 (effect of registration with possessory title) and of s 82 (the right to rectify).

61. Pain, op cit, p 71, makes it clear that an absolute title can be rectified.

62. If the registrar did not exercise his discretion the dispossessed party might in these circumstances establish a claim to an indemnity under s 83, as suggested by Ruoff & Roper, op cit, para 14–08.

63. As remarked by Ruoff & Roper, op cit, para 2–03; see Cretney and Dworkin, (1986) 84 LQR 528, on the problems generated by this lack of indefeasibility.

64. Per Lord Diplock, , Ocean Estates Ltd v Pinder [1969] 2 Google Scholar AC 19 at 23.

65. P8.

66. P6.