Lord Justice Sales:
Introduction
- The issue on this appeal is whether an
application
for a person to be
registered
under the
Land
Registration
Act 2002 ("LRA") as the proprietor of a
registered
estate in
land
by
reason
of a period of adverse possession is
valid,
where part of the
relevant
period of possession consisted of the occupation of a
residential
building in circumstances constituting the commission of a criminal offence under section 144 of the Legal Aid, Sentencing and Punishment of Offenders Act 2012 ("LASPOA").
- Section 144 created a criminal offence of squatting (that is to say, trespassing) in certain circumstances in
relation
to a
residential
building. It was brought into effect on 1 September 2012. It provides as follows:
"(1) A person commits an offence if—
(a) the person is in a
residential
building as a trespasser having entered it as a trespasser,
(b) the person knows or ought to know that he or she is a trespasser, and
(c) the person is living in the building or intends to live there for any period.
(2) The offence is not committed by a person holding over after the end of a lease or licence (even if the person leaves and
re-enters
the building).
(3) For the purposes of this section—
(a) "building" includes any structure or part of a structure (including a temporary or moveable structure), and
(b) a building is "
residential"
if it is designed or adapted, before the time of entry, for use as a place to live.
(4) For the purposes of this section the fact that a person derives title from a trespasser, or has the permission of a trespasser, does not prevent the person from being a trespasser.
(5) A person convicted of an offence under this section is liable on summary conviction to imprisonment for a term not exceeding 51 weeks or a fine not exceeding level 5 on the standard scale (or both).
(6) In
relation
to an offence committed before the commencement of section 281(5) of the Criminal Justice Act 2003, the
reference
in subsection (5) to 51 weeks is to be
read
as a
reference
to 6 months.
(7) For the purposes of subsection (1)(a) it is irrelevant whether the person entered the building as a trespasser before or after the commencement of this section".
- Section 144 was introduced after a consultation exercise conducted by the Government. It criminalises conduct - trespassing on
land
in certain circumstances - which previously had merely been unlawful in civil law, as a tort. It goes beyond another provision, section 7 of the Criminal Law Act 1977, which criminalises trespassing on
land
where a
residential
occupier asks the trespasser to leave.
- Up to the coming into force of section 144, it was long established that title to
land
could be acquired by a trespasser by a long period of adverse possession. For unregistered
land,
that effect was and is still produced by the law of limitation as applied in
relation
to the tort committed by the trespasser taking possession of the
land.
- The current
relevant
provision in
relation
to unregistered
land
is section 15 of the Limitation Act 1980, which provides for a limitation period of twelve years. Section 17 provides that at the expiration of this period, the title of a person with a claim to the
land
"shall be extinguished." Schedule 1 to the 1980 Act makes provision
regarding
the start of the limitation period, which is tied to the date on which adverse possession is taken of the
land
by a trespasser (paragraph 8(1) of Schedule 1).
- The LRA transposes a similar
rule
into the
registered
land
system, with certain modifications. A person who can show that he has had adverse possession of
land
for the
relevant
period can apply to be
registered
as the proprietor of that
land,
with full legal title. Paragraph 1(1) of Schedule 6 to the LRA provides that a person may apply to be
registered
as the proprietor of a
registered
estate in
land
"if he has been in adverse possession of the estate for the period of ten years ending on the date of the
application."
- The question we have to decide is whether the criminalisation of certain acts of trespassory occupation of
land
by section 144 of LASPOA means that a trespasser claiming to have established title to
registered
land
in the form of a
residential
property by
virtue
of adverse possession including by way of acts of criminal occupation of the property during the
relevant
period, in contravention of section 144, cannot acquire title to that
land.
The Appellant ("the
Registrar")
maintains that this is the true
view
of the position, since otherwise the trespasser will improperly gain a benefit from his criminal conduct.
- In a careful and
very
thorough judgment below ([2014] EWHC 1370 (Admin)), Ouseley J held that section 144 does not have this effect. He held that conduct of a kind which contravenes section 144 can still be
relied
upon, as it could have been before section 144 came into force, to establish a period of adverse possession of property so as to acquire title to it. With permission granted by Ouseley J, the
Registrar
now appeals to this Court.
The Facts
- The case
relates
to a house at 35 Church
Road,
Newbury Park ("the house"). It is a "
residential
building", within the meaning of section 144 of LASPOA. The freehold title is
registered
at HM
Land
Registry.
The
registered
proprietor is Doris May Curtis. Mrs Curtis died some time ago. We were told that her son has
recently
been appointed as her personal
representative.
- On 27 November 2012, the First
Respondent
("Mr
Best")
made an
application
to the
Registrar
to be entered on the
Register
as the
registered
proprietor of the house. This was on the basis that he had been in adverse possession of it for the period of ten years ending on the date of the
application,
as
required
by paragraph 1 of Schedule 6 to the LRA. (In fact, on the
application
form, Mr
Best
ticked the wrong box,
referring
to paragraph 6 of Schedule 6
rather
than paragraph 1; but there was never any doubt about the nature of the claim he was making and the
Registrar
appreciated that it fell to be considered as a claim under paragraph 1).
- The
application
was accompanied by a statutory declaration by Mr
Best,
in which he explained the basis of his claim to have himself entered on the
register
as the owner of the house. Mr
Best
stated that in 1997 he had been working on a nearby property when he noticed the then empty and
vandalised
house at 35 Church
Road.
The owner of the property on which he was working told him that the owner, Mrs Curtis, had died and that her son had not been seen since 1996.
- Mr
Best
entered the house and did work to it. He
repaired
the
roof
in 2000. He has taken other steps to make the house weatherproof and has cleared the garden. As time went on, he
replaced
ceilings, skirting boards, electric and heating fitments, doors and windows. He plastered and painted walls. He maintained the boundary fences. He did all this with a
view
to making the house his permanent
residence.
- Mr
Best
said that he had treated the house as his own since 2001. Although it is not entirely clear what position Mr
Best
was adopting in
relation
to the period between 1997 and 2001 (and it does not matter for present purposes), as I
read
his statutory declaration, his claim to have been in adverse possession of the house, asserting his
right
of possession against the world, dates from 2001. He had occupied the house without anyone's consent, as a trespasser (although Mr
Best
did not use that term). There had been no disputes
relating
to his possession of the house. The period in which he claimed to have been in adverse possession of the house exceeded the ten years
required
under paragraph 1 of Schedule 6 to the LRA.
- It was only at the end of January 2012 that Mr
Best
eventually moved into the house, to live in it as his home. On the
Registrar's
case, this was an unfortunate thing for him to have done, since it was by
virtue
of his trespassory occupation of the house to live in it that, as from 1 September 2012, he committed criminal offences under section 144 of LASPOA in such a way as to prevent his possession of the house from qualifying as adverse possession for the purposes of his claim to acquire title under the LRA.
- The
Registrar
says that from 1 September 2012, for the last part of the period before Mr
Best
made his
application
on 27 November 2012, he had committed offences contrary to section 144 of LASPOA. Since it is
relevant
to the discussion below, it should be noted here that his possession of the house after 1 September 2012 did not constitute one continuing offence from that time until the date of his
application
and beyond.
Rather,
he only committed an offence in each period when he was "in" the house itself (see section 144(1)(a)). He was not in contravention of section 144 during times when he was in possession of the house for the purposes of the civil law, but was not physically in the building. Whenever he left the house, for example to go to work or out to the shops, his adverse possession continued, but he did not commit an offence under section 144 at such times.
- The
Registrar
considered Mr
Best's
application,
but decided that it should be
rejected,
by
reason
of the contravention of section 144 by Mr
Best.
In a letter dated 10 December 2012, the
Registrar
stated, "It is not possible to
rely
on an act which is itself a criminal offence … as evidence of adverse possession", and
referred
Mr
Best
to the judgment of HHJ Pelling QC in
R
(Smith)
v
Land
Registry
[2009] EWHC 328 (Admin), which I discuss below. There was correspondence about this between the
Registrar
and the solicitors acting for Mr
Best,
but the
Registrar
maintained his position in a final decision letter dated 11 February 2013, and by letter dated 19 February 2013 informed Mr
Best
that his
application
had been cancelled.
- The
Registrar's
position was not unreasonable, particularly in
view
of the authority cited by him. However, the question we have to consider is whether the
Registrar's
position is correct in law.
The
Land
Registration
Act 2002
- The LRA effected a major overhaul of the system of
registration
for legal title to
land.
The LRA was enacted following a joint Law Commission and HM
Land
Registry
review
and consultation paper, "
Land
Registration
for the Twenty-First Century" (Law Com 254). In the course of the
review
and consultation, careful consideration was given to the question whether under the proposed new system it should
remain
possible for title to
land
to be acquired by adverse possession, as is the case in
respect
of unregistered
land.
- In the joint consultation paper, the Law Commission and HM
Land
Registry
said this (footnote
references
omitted):
"What is the justification for adverse possession?
10.5 It is of course,
remarkable
that the law is prepared to legitimise such "possession of wrong" which, at least in some cases, is tantamount to sanctioning a theft of
land.
So sweeping a doctrine
requires
strong justification. Of the
reasons
that are often given for it, four are particularly cogent, and of these the fourth is the most compelling.
10.6 First, because adverse possession is an aspect of the law of limitation, it is of course customary to account for it, in part at least, in terms of the policy of limitation statutes generally, namely to protect defendants from stale claims and to encourage plaintiffs 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 a title by his possession and the indirect operation of the [Limitation] Act and he can convey a fee simple". This can only be justified by factors over and above those which explain the law on limitation. In this context it should be noted that a
landowner
may be barred even where he or she is quite blameless. As we have explained above, adverse possession can take place without it being
readily
detectable. In any event, this particular justification has much greater force in
relation
to unregistered
land
than it does for
land
with
registered
title. Unregistered title ultimately depends upon possession. It therefore behoves a
landowner
to be
vigilant
to protect that possession and not to sleep on his or her
rights.
We explain below why the position is different where title is
registered.
10.7 Secondly, if
land
ownership and the
reality
of possession are completely out of kilter, the
land
in question is
rendered
unmarketable if there is no mechanism by which the squatter can acquire title. This situation can easily happen, as for example where—
- the true owner has disappeared and the squatter has assumed
rights
of ownership for a substantial period; or
- there have been dealings with
registered
land
"off the
register",
so that the
register
no longer
reflects
the "true" ownership of the
land.
10.8 Thirdly, in cases of mistake, the law of adverse possession can prevent hardship. For example, a squatter may have innocently entered
land,
mistakenly believing that he or she owned it, perhaps due to uncertainty as to the boundaries. He or she may have incurred expenditure under the mistaken belief of ownership. Although in some cases the squatter may have a claim based upon principles of proprietary estoppel, because the true owner knew of the acquiesced in the squatter's mistake, that will not always be true.
10.9 Fourthly, title to unregistered
land
is
relative
and depends ultimately upon possession. The person
best
entitled to
land
is the person with the
best
right
to possession of it. The fact that adverse possession can extinguish earlier
rights
to possess facilitates and cheapens the investigation of title to unregistered
land.
The length of title that a
vendor
is
required
to deduce is and always has been closely linked to the limitation period. Indeed, the principal
reason
for having limitation statutes in
relation
to
real
property appears to have been to facilitate conveyancing.
10.10 This fourth
reason
is undoubtedly the strongest justification for adverse possession. However, it can normally have no
application
to
registered
land.
Where title is
registered,
adverse possession facilitates deduction of title only in
relation
to those matters on which the
register
is not conclusive. These are explained below. …
10.19 We therefore provisionally
recommend
that—
(1) the law of adverse possession as it applies to
registered
land
should be
recast
to
reflect
the principles of title
registration;
and
(2) its
application
should be
restricted
to those cases where it is essential to ensure the marketability of
land
or to prevent unfairness."
- The
reference
to adverse possession securing the marketability of
land
covers a
range
of considerations, such as encouraging investment in the development of
land
for better use of the
land
(
rather
than directly for the purposes of selling it). The public interest in the marketability of
land
promoted by the law of adverse possession can be said to be the public interest in securing its economic utility more widely,
rather
than allowing it to be sterilised through abandonment or non-use by an owner who has no interest in it or who may have disappeared: see paragraph 2.72 of the Law Commission
report
on the
Land
Registration
Bill (Law Com No. 271, of July 2001) ("
Land
is a precious
resource
and should be kept in use and in commerce").
- Having considered the
responses
to the consultation, the Law Commission issued its
recommendations
for
reform
of the
land
registration
system in its
report,
Law Com No. 271. The Law Commission confirmed its provisional
recommendation
to
retain
the possibility of acquisition of title by adverse possession, with suitable adaptation to take account of the new
regime
for
registered
land.
This
recommendation
was followed in the LRA.
- In its
report,
the Law Commission noted that adverse possession
runs
counter to the "fundamental concept of indefeasibility of title that is a feature of
registered
title" (para. 14.3).
Registration
itself therefore protected the
registered
proprietor of
land
against adverse possession. The aim of its proposals for legislation was to "
reflect
the logic of title
registration
and to strike a more appropriate balance between
landowner
and squatter" (para. 14.4). The need for a change in that balance in
relation
to
registered
land
reflected
judicial concern that it favoured the adverse possessor too much. The Law Commission commented on its summary of its proposals that: "It will be apparent from this summary that one of the essential features of the scheme is that it must produce a decisive
result.
Either the squatter is evicted or otherwise ceases to be in adverse possession, or he or she is
registered
as proprietor of the
land"
(para. 14.6).
- Section 97 of and Schedule 6 to the LRA were adopted in the same form as proposed by the Law Commission.
- Neither the consultation paper nor the Law Commission
report
commented on what the position would be if acts of adverse possession
relied
upon were in contravention of the criminal law.
- In the court below, Ouseley J provided a helpful summary of the effect of the LRA as
relevant
to these proceedings, the substance of which I gratefully incorporate into this judgment, as follows.
- By section 58 of the LRA, which came into operation on 13 October 2003, the
register
of title, which it is the
Registrar's
duty to keep, is conclusive as to title subject to the power to
rectify
mistakes. Subsection (1) provides:
"(1) If, on the entry of a person in the
register
as the proprietor of a legal estate, the legal estate would not otherwise be
vested
in him, it shall be deemed to be
vested
in him as a
result
of the
registration."
Thus the
register
and not possession is the
root
of title to
registered
land.
- Adverse possession is dealt with in section 96 by the disapplication of limitation periods:
"(1) No period of limitation under section 15 of the Limitation Act 1980 (c. 58) (time limits in
relation
to
recovery
of
land)
shall
run
against any person, other than a chargee, in
relation
to an estate in
land
or
rent
charge the title to which is
registered.
…
(3) Accordingly, section 17 of that Act (extinction of title on expiry of time limit) does not operate to extinguish the title of any person where, by
virtue
of this section, a period of limitation does not
run
against him".
The Limitation Act time limits only operate now in
relation
to unregistered estates in
land
(or where the adverse possessor was in possession of
registered
land
prior to the coming into operation of the LRA: see the transitional provisions in paragraph 18 of Schedule 12 to the LRA).
- By section 97, it is Schedule 6, and not section 17 of the Limitation Act 1980, which makes provision for title by adverse possession, and it does so by allowing for
registration
of an adverse possessor as proprietor of the
land
in question. Paragraph 1 of Schedule 6 enables a person to apply for
registration
as proprietor of a
registered
estate "if he has been in adverse possession of the estate for the period of ten years ending on the date of the
application".
This provision is central to the arguments here. "Adverse possession" is defined in paragraph 11, so far as material, as possession in the circumstances in which time would be
running
under section 15 of the Limitation Act 1980 had it not been disapplied by section 96 of the LRA.
- A person may also apply if, in the six months before the
application,
he had been entitled to make the
application
but had ceased to be in adverse possession because he had been evicted by the
registered
proprietor
rather
than evicted pursuant to a court order, but not if proceedings for possession were under way against him, or if judgment had been given against him in an action for possession of the
land
in the last two years. Those latter provisions do not apply, but are
relevant
to Mr
Best's
submissions about the care and comprehensiveness with which the LRA dealt with title by adverse possession of
registered
land.
- Section 98 is also material to the general operation of the LRA, though not to the specific circumstances here. It provides, among other circumstances, a defence to an action for possession where, immediately preceding the bringing of the possession action, the defendant was entitled to make an
application
under paragraph 1 of Schedule 6, and for judgments for possession to cease to be enforceable after two years, if the
applicant
is by then entitled to make an
application
under Schedule 6 to be
registered
as the proprietor.
- Once an
application
is
received,
the
Registrar
has to give notice of it under paragraph 2 of Schedule 6 to named categories of person, including the
registered
proprietor of the estate, or of any charge, or to someone
registered
under the
rules
as entitled to be notified. The provision enabling others to be specified by
rules
has not been utilised. There is no obligation directly to give notice to personal
representatives
as such. A person given notice may
require
that the
application
be dealt with under paragraph 5. If there is no such
response
to the notice - and that issue did not arise here – then by paragraph 4: "the
applicant
is entitled to be entered in the
register
as the new proprietor of the estate." As Ouseley J
remarked,
"It is as simple as that." By paragraph 9,
registration
pursuant to a Schedule 6
application
extinguishes the unregistered possessory title which the
applicant
had at the time of
application.
Paragraph 10 provides for the circumstances in which a squatter may be
registered
as the proprietor free of a charge.
- If, however, there is an objection set out in a counter-notice from a person entitled to be notified, the paragraph 5 procedure has to be followed, and one of the three conditions it specifies has to be met for the
applicant
to succeed: (1) that equitable estoppel makes it unconscionable for the
registered
proprietor to seek to dispossess the
applicant
and he ought to be
registered
as the proprietor instead in the circumstances; (2) that the
applicant
is entitled for some other
reason,
such as a
void
unregistered disposition, to be
registered
as the proprietor; (3) that the
land
in question is adjacent to other
land
of the
applicant,
no exact boundary has been determined, and the
applicant
has
reasonably
believed it to be his for ten years. Where there is a counter-notice and no condition is satisfied, the adverse possessor cannot be
registered,
and title
remains
unchanged on the
register.
Again, these conditions do not apply here, but are
relevant
to Mr
Best's
contentions about the nature of the statutory provision for the
registration
of title to
registered
land
in adverse possession cases. But there is no entitlement to be
registered
as proprietor simply because of ten years' adverse possession.
- By section 73(7) of the LRA, where an objection is made under section 73(1) (in addition to or instead of serving a counter-notice), is not
rejected
as groundless by the
Registrar,
and is not
resolved
by negotiation, it must be
referred
to the Adjudicator. Disputes over issues within their
remit
now go to the First-Tier Tribunal. But decisions of the
Registrar
cancelling, i.e.
rejecting,
an
application
as substantially defective are only judicially
reviewable,
as in this case.
- By paragraph 6 of Schedule 6, a person whose
application
is
rejected
may make a further
application
if he
remains
in adverse possession for the two years following the
rejection.
The
application
procedure, the evidence
required,
and the questions which can be asked of the
applicant,
are
regulated
by the
Land
Registration
Rules
2003 (SI 2003 No. 1417).
- The present case depends on the interaction of the LRA and section 144 of LASPOA, and in particular on the balance of the public policies of which each of them is the expression. I therefore now turn to consider the object of section 144.
Section 144 of LASPOA
- Section 144 was introduced as the
result
of public concern
regarding
the difficulty for
landowners,
in particular the owners of
residential
property, in securing the assistance of the police to
remove
squatters who are occupying their property.
- In July 2011, the Government issued a consultation paper on its proposal to criminalise squatting: Options for Dealing with Squatting (Consultation Paper CP12/2011). The consultation paper did not suggest that a desire to change the law of adverse possession, either in
relation
to
registered
or unregistered
land,
played any part in the proposal. In its
response,
however, the
Land
Registry
drew attention to the possibility of a knock-on effect upon the law of adverse possession. No other consultee mentioned this.
- In the Government's
Response
to Consultation, published on 26 October 2011, the
Land
Registry's
response
was summarised as follows:
"Question 8: How should the term 'occupation' be defined? Should it cover those who occupy a building for a short period (e.g. a couple of hours)?
…
The
Land
Registry
recognised
that a new offence of squatting covering all buildings may have an impact on the law of adverse possession. They thought that one effect of a new offence of squatting in empty buildings would be to prevent squatters acquiring ownership through their long-term possession. They queried whether the offence should only extend to "buildings, or parts of buildings, where it ought to be apparent that they are still occupied by the owner, and not those buildings, or parts of buildings that appear to have been abandoned."
- The Government's
Response
to Consultation explained that the Government proposed to introduce a new criminal offence in
relation
to squatting, but limited to
residential
property. In the foreword, the
relevant
Minister (Crispin Blunt, Parliamentary Under-Secretary of State for Justice) said this:
"Ministerial colleagues and I are
very
concerned about the harm that squatters can cause. I have been contacted time and time again by MPs and constituents about the appalling impact that squatting can have on their homes, businesses and local communities. This is not media hype. It can and does
really
happen; and when it does it can be highly stressful for the owner or lawful occupier of the property concerned.
It is not only the cost and length of time it takes to evict squatters that angers property owners; it is also the cost of the cleaning and
repair
bill which follows eviction. While the property owner might literally be left picking up the pieces, the squatters have gone on their way, possibly to squat in someone else's property.
I accept that the law already provides a degree of protection for both commercial and
residential
property owners as offences such as criminal damage and burglary may apply in certain circumstances. There is also an offence under section 7 of the Criminal Law Act 1977 that applies where a trespasser fails to leave
residential
premises on being
required
to do so by or on behalf of a "displaced
residential
occupier" or a "protected intending occupier". This offence means that people who have effectively been made homeless as a
result
of occupation of their properties by squatters can already call the police to
report
an offence.
But there are many
residential
property owners, including
landlords,
local authorities and second home owners who cannot be classified as 'displaced
residential
occupiers' or 'protected intending occupiers'. There are also many commercial property owners, whose businesses may be seriously affected by squatters, who
report
that they generally have to
rely
on civil procedures to get squatters to leave.
Given the level of public concern about the issue, the Government has decided as a first step to introduce a new offence of squatting in
residential
buildings. The offence would be committed where a person was in the building as a trespasser having entered as such, knew or ought to have known he or she was a trespasser, and was living or intending to live in the building.
Stopping short of criminalising squatting in non-
residential
buildings
represents
a balanced compromise. Squatters who occupy genuinely abandoned or dilapidated non-
residential
buildings will not be committing the new offence, although their actions will
rightly
continue to be treated as a civil wrong and they can still be prosecuted for such offences such as criminal damage or burglary. Neither will students who occupy academic buildings or workers who stage sit-ins to protest against an employer be caught by the offence. But the offence will provide greater protection in circumstances where the harm caused is the greatest - squatting in someone's home. This behaviour is unacceptable and must be stopped.
I
recognise
that homelessness charities may be concerned about the impact such an offence may have on
vulnerable,
homeless people who squat in
rundown
residential
properties. One of the
reasons
they
remain
in this state is that owners cannot get in to
renovate
them because squatters are present. And consultation
responses
indicated that squats can be unhygienic and dangerous places to live and are no place for genuinely
vulnerable
people. We will ensure that
reforms
in this area are handled sensitively in conjunction with the wider government initiatives to tackle the
root
cause of homelessness, to provide affordable homes and to bring more empty homes back to use."
- In the body of the
Response
to Consultation, the Government explained its proposal to introduce what became section 144 of LASPOA as follows:
"Having considered the consultation
responses,
the Government
remains
concerned about the impact squatting can have on
residential
and non-
residential
property owners. It believes that law-abiding property owners and occupiers should be able to enjoy their entitlements to their property without interference from those who have absolutely no
right
to be there.
The
responses
to the consultation document included a number of
responses
from owners of
residential
property whose houses have been occupied, thus
rendering
them impossible to live in.
Victims
included private homeowners who could not move into properties that had been occupied, local authorities who have been unable to
refurbish
social houses to make them available for priority categories, and
landlords
who had been unable to let their property as a
result
of squatting.
Consultation
responses
also showed that businesses can be weakened as a
result
of squatting in commercial premises: the squatting disrupts normal business activity and causes damage that often costs thousands of pounds to put
right.
Whilst there are civil
remedies
available to property owners and occupiers under Part 55 of the Civil Procedure
Rules,
the Government is persuaded that, given the level of harm that squatting can cause, it is
right
that the criminal law should intervene to offer a greater degree of protection. It is not convinced by arguments put forward during the consultation process that the law is the
right
place and should not be changed. Nor is it persuaded by arguments advanced primarily by supporters of the SQUASH campaign that squatting can have a beneficial effect on local communities. As a first step, the Government intends to criminalise squatting in
residential
properties. This will deal with what it considers to be the greatest mischief and the greatest distress to
victims,
that of being unable to use one's own home.
The new offence will be committed where a person is in a
residential
building as a trespasser having entered it as a trespasser, knows or ought to know that he or she is a trespasser and is living in the building or intends to live there for any period. In developing this proposal, the Government was mindful of the
views
of
respondents.
The following sections describe how specific matters
raised
by
respondents
have been considered in the development of the provisions.
Why not just criminalise squatters who fail to leave when
required
to do by the owner or lawful occupier?
Squatters who fail to leave
residential
premises when
required
to do so by a displaced
residential
occupier or a protected intending occupier are already committing a criminal offence under section 7 of the Criminal Law Act 1977. The Government considered whether to simply extend this offence to other types of owner or occupier of
residential
property, but agreed with
responses
to the consultation which argued that an offence criminalising the act of squatting in itself (
rather
than a failure to leave on
request)
would provide a more powerful deterrent to would-be squatters ..."
- The Government did not
respond
to or comment on the issue of impact of the new provision upon adverse possession,
raised
by the
Land
Registry.
- It is worth emphasising at this juncture that the proposed new provision was to be introduced principally to assist owners of
residential
buildings in a practical way, in particular in gaining
re-entry
to houses occupied by squatters,
rather
than because of a perceived wider public interest to govern the position. This is of significance for the discussion below. Also, there was no indication by the Government in either of its papers that there was any intention that the new provision should affect the operation of the carefully worked out provisions of the LRA in
respect
of acquisition of title by adverse possession.
Discussion
- In many contexts in the civil law,
rights
between persons are informed by the idea that a person should not benefit as a
result
of unlawful action taken by himself: see e.g. Alghussein Establishment
v
Eton College [1988] 1 WLR 587. There is also a narrower and more specific principle, that a person should not be able to benefit from a crime they have committed or from conduct with features similar to criminal conduct. This narrower principle underlies the law of illegality, summarised in the old maxim ex turpi causa non oritur actio (a claim cannot be founded on a wrong committed by the claimant): see Les Laboratoires Servier
v
Apotex Inc. [2014] UKSC 55; [2014] 3 WLR 1257.
- As Mr
Rainey
QC, for Mr
Best,
pointed out, the wider idea that a person should not benefit from his own wrong has not prevented the law of adverse possession from operating. Adverse possession is, of course, founded on the tort of trespass to
land.
The public interest in having
land
put to good use and in having clear
rules
to govern acquisition of title to
land
which has been abandoned has been taken to override the general concern that a person should not benefit from their unlawful actions. Since 1833, that balance of public interest has been expressed in statutory form by the law of limitation in
relation
to unregistered
land,
which is now set out in sections 15 and 17 of the Limitation Act 1980. Since 1925, the same balance of public interest has been expressed by similar provision allowing for title to
registered
land
to be acquired by adverse possession, as now set out in the
relevant
provisions of the LRA.
- The question which arises on this appeal is whether the priority given to the public interest in active use and marketability of
land,
outweighing the general concern that a person should not be able to benefit from their own wrong, should continue to be
recognised
even where aspects of a person's adverse possession of
land
involve the commission of a criminal offence, and in particular an offence or series of offences under section 144 of LASPOA.
- Mr Karas QC for the
Registrar
makes the forceful submission that the intervention of the criminal law in this area makes a critical difference to the balance of competing public interests: the public interest in ensuring that a person does not benefit from a crime committed by him is especially strong. It has also
received
statutory
reinforcement
in the form of the Proceeds of Crime Act 2002 ("POCA"), under which a court can make an order to deprive a person of property which they have acquired as a
result
of crime. Therefore, Mr Karas submits, and as intimated by the
Land
Registry
in its
response
to the Government's consultation before the enactment of section 144 of LASPOA, the enactment of section 144 has had a major impact on the law of adverse possession. Where, in the course of a period of adverse possession sought to be
relied
on in
relation
to a
residential
property, the acts of adverse possession include acts which would constitute an offence or offences under section 144 with
respect
to the property (i.e. knowingly being in the property as a trespasser for the purposes of living in it), such acts cannot qualify as adverse possession allowing title to the property to be acquired by the trespasser-offender. The
relevant
public policy now expressed in section 144 outweighs the public policy given expression in sections 15 and 17 of the Limitation Act 1980 and in paragraph 1 of Schedule 6 to the LRA. In
relation
to the LRA, the practical effect is that a person who commits an offence contrary to section 144 in the ten years before seeking to have himself
registered
as the proprietor of the
land
in question on the basis of his adverse possession of that
land
cannot show that he has the
requisite
ten years of adverse possession of the property as
required
by paragraph 1 of Schedule 6, and so will not be entitled to be entered on the
register
as proprietor of the
land.
- By
virtue
of
rule
16(3) of the
Land
Registration
Rules
2003, if an
application
to be
registered
as a proprietor of
land
appears to the
Registrar
"to be substantially defective" he may
reject
it on delivery or cancel it at any time thereafter. The
Registrar
says that under this
rule
he has
rejected
Mr
Best's
application
for
registration,
since it is "substantially defective", because it
revealed
that Mr
Best
was
relying
on conduct in contravention of section 144 as part of his claim to acquire title by adverse possession.
- Furthermore, Mr Karas submits that there is authority which supports this analysis, in the form of
R
(Smith)
v
The
Land
Registry
[2009] EWHC 328 (Admin). That case concerned an
application
by an adverse possessor of
land
which formed part of the public highway to be
registered
as the proprietor of that
land.
The
Land
Registry
refused
the
application
on grounds including that adverse title could not be claimed over a highway. A claim was brought for judicial
review.
HHJ Pelling QC (sitting as a Judge of the High Court)
rejected
the claim. He held that establishing adverse possession of a highway would inevitably involve the criminal offence of obstruction, contrary to section 137 of the Highways Act 1980, and that it was a use of the
land
which even the
relevant
highway authority which owned the highway had no authority to authorise, so that the
reasoning
in Bakewell Management Ltd
v
Brandwood [2004] UKHL 14; [2004] 2 AC 519 (which I discuss below) indicated that "it is a legal impossibility for the claimant to claim adverse possession to part of the highway by
reference
to the illegal obstruction of it for a period of 12 years prior to the making of the claim contrary to the terms of primary legislation which makes such obstruction criminally and not merely tortiously unlawful" (para. [14]). At paras. [15]-[16], the Judge
rejected
an argument for the claimant that the criminal nature of the activity said to constitute adverse possession was irrelevant to the question whether adverse possession was established, distinguishing certain cases where a background of some criminal activity of a different type had been found not to prevent adverse possession from being made out. As I
read
his judgment, this was essentially because the criminal activity in those cases was collateral to the acts of adverse possession being
relied
upon.
- The case went on appeal: [2010] EWCA Civ 200; [2010] QB 413. The Court of Appeal dismissed the appeal on the narrow ground that adverse possession could not be established over a public highway, since it could not be shown that the public entitled to a
right
of passage over the highway had been dispossessed of those
rights
by the activity of the claimant. The Court
reached
this conclusion without needing to
refer
to the argument based on Bakewell Management or the criminal nature of the activity
relied
upon by the claimant.
- In the present case, Ouseley J at first instance
rejected
Mr Karas's submissions for the
Registrar.
In my judgment, he was
right
to do so. I do not consider that the enactment of section 144 and the commission of an offence under it has any material effect on the operation of the law of adverse possession.
- In my
view,
the
best
guidance on the
relevant
analytical framework for present purposes is given in the speech of Lord Wilson JSC (speaking for the majority) in Hounga
v
Allen [2014] UKSC 47; [2014] 1 WLR 2889. In that case, an employee who had been brought from Nigeria by her employer so as to enter the United Kingdom in breach of immigration control, to take up employment here illegally, was then dismissed by the employer. The employee sought to bring a claim for unlawful
race
discrimination in
relation
to her dismissal. Her claim succeeded in the employment tribunal, but the Court of Appeal set its order aside, holding that the illegality of the contract of employment formed a material part of the claimant's complaint and that to uphold it would be to condone the illegality. The Supreme Court allowed the employee's appeal.
- In doing so, the Supreme Court confirmed the position arrived at in Tinsley
v
Milligan [1994] 1 AC 340: the law of illegality does not operate to confer a broad discretion on a court to take any illegal actions on the part of a claimant into account when deciding the extent to which such illegality has an impact upon the
relief
sought by the claimant.
Rather,
the task for the court is to identify in the specific context in question a particular
rule
which
reflects
in an appropriate way the
relevant
underlying policy in that area: see Hounga, paras. [42] et seq.; also Gray
v
Thames Trains Ltd [2009] UKHL 33; [2009] AC 1339, paras. [30]-[31] per Lord Hoffmann; Stone &
Rolls
Ltd
v
Moore Stephens [2009] UKHL 39; [2009] 1 AC 1391, paras. [20]-[25] per Lord Phillips of Worth Matravers; and now Les Laboratoires Servier
v
Apotex Inc., supra, paras. [13]-[22] per Lord Sumption JSC. Although in each case a
rule
is to be identified,
rather
than just taking a discretionary approach of a kind disapproved in Tinsley
v
Milligan, Hounga and Les Laboratoires Servier, there is not one single
rule
with blanket effect across all areas of the law. Instead, there are a number of
rules
which may be identified, each tailored to the particular context in which the illegality principle is said to apply: see Gray
v
Thames Trains Ltd (para. [30]: the ex turpi causa policy is based "on a group of
reasons,
which
vary
in different situations"; and para. [32]: as between
rules
applicable
in different contexts, "the questions of fairness and policy are different and the content of the
rule
is different. One cannot simply extrapolate
rules
applicable
to a different kind of situation") and Les Laboratoires Servier, paras. [19] and [22].
- The issue in Hounga was, "In what circumstances should the defence of illegality defeat a complaint by an employee that an employer has discriminated against him by dismissing him contrary to section 4(2)(c) of the
Race
Relations
Act 1976?" (para. [1]). In a significant
respect,
therefore, the question was similar to that before us, depending as it did on the extent to which the Supreme Court considered that the
rights
conferred by the 1976 Act should be treated as impliedly qualified so as to be subject to a defence of illegality. At paras. [42]-[44] of his judgment in Hounga, Lord Wilson said this:
"42. The defence of illegality
rests
on the foundation of public policy. "The principle of public policy is this …" said Lord Mansfield by way of preface to his classic exposition of the defence in Holman
v
Johnson (1775) 1 Cowp 341, 343. "
Rules
which
rest
on the foundation of public policy, not being
rules
which belong to the fixed or customary law, are capable, on proper occasion, of expansion or modification": Maxim Nordenfelt Guns and Ammunition Co
v
Nordenfelt [1893] 1 Ch 630, 661 (Bowen LJ). So it is necessary, first, to ask "What is the aspect of public policy which founds the defence?" and, second, to ask "But is there another aspect of public policy to which
application
of the defence would
run
counter?"
43. An answer to the first question is provided in the decision of the Canadian Supreme Court in Hall
v
Hebert [1993] 2 SCR 159. After they had been drinking heavily together, Mr Hebert, who owned a car, allowed Mr Hall to drive it, including initially to give it a
rolling
start down a
road
on one side of which there was a steep slope. The car careered down the slope and Mr Hall was seriously injured. The Supreme Court held that the illegality of his driving did not bar his claim against Mr Hebert but that he was contributorily negligent as to 50%. At the outset of her judgment on behalf of the majority, McLachlin J, at p 169, announced her conclusion about the basis of the power to bar
recovery
in tort on the ground of illegality, which later she substantiated in convincing terms by
reference
to authority. Her conclusion was as follows:
'The basis of this power, as I see it, lies in [the] duty of the courts to preserve the integrity of the legal system, and is exercisable only where this concern is in issue. This concern is in issue where a damage[s] award in a civil suit would, in effect, allow a person to profit from illegal or wrongful conduct, or would permit an evasion or
rebate
of a penalty prescribed by the criminal law. The idea common to these instances is that the law
refuses
to give by its
right
hand what it takes away by its left hand.'
44. Concern to preserve the integrity of the legal system is a helpful
rationale
of the aspect of policy which founds the defence even if the instance given by McLachlin J of where that concern is in issue may
best
be taken as an example of it
rather
than as the only conceivable instance of it. I therefore pose and answer the following questions: (a) Did the tribunal's award of compensation to Miss Hounga allow her to profit from her wrongful conduct in entering into the contract? No, it was an award of compensation for injury to feelings consequent on her dismissal, in particular the abusive nature of it. (b) Did the award permit evasion of a penalty prescribed by the criminal law? No, Miss Hounga has not been prosecuted for her entry into the contract and, even had a penalty been thus imposed on her, it would not
represent
evasion of it. (c) Did the award compromise the integrity of the legal system by appearing to encourage those in the situation of Miss Hounga to enter into illegal contracts of employment? No, the idea is fanciful. (d) Conversely, would
application
of the defence of illegality so as to defeat the award compromise the integrity of the legal system by appearing to encourage those in the situation of Mrs Allen to enter into illegal contracts of employment? Yes, possibly: it might engender a belief that they could even discriminate against such employees with impunity."
- Lord Wilson's assessment was that the considerations of public policy militating in favour of applying the ex turpi causa defence to defeat the claim were
very
slight: para. [45]. He then went on to consider the countervailing public policy considerations which were in play, in favour of allowing the claimant to
rely
on the
Race
Relations
Act and to bring her claim. He concluded that these outweighed the public policy considerations in favour of allowing an illegality defence to the claim and that therefore the claim should proceed: paras. [46]-[52]. Lord Hughes JSC (with whom Lord Carnwath JSC agreed) agreed "that the claim of statutory tort in the present case was set in the context of the claimant's unlawful immigration, but that there was not a sufficiently close connection between the illegality and the tort to bar her claim": para. [59].
- Lewisham LBC
v
Malcolm [2007] EWCA Civ 763; [2008] Ch 129 in the Court of Appeal, and [2008] UKHL 43; [2008] 1 AC 1399 in the House of Lords, provides another example of a case in which the balance of public policy considerations was found to be capable of limiting the statutory and common law
rights
of a
landowner
to gain possession of its property, if it could be shown that the
landowner
had committed an act of unlawful disability discrimination contrary to the Disability Discrimination Act 1995 in giving notice to terminate a tenancy in
respect
of the property: see paras. [61]-[65] in the judgment of Arden LJ in the Court of Appeal; and, in the House of Lords, paras. [19] (Lord Bingham), [101] and [104] (Baroness Hale) and [160] (Lord Neuberger). The House of Lords held that the argument that the
landowner
was disqualified from seeking possession of its property could not be sustained on the particular facts of the case: there had been no breach of the 1995 Act.
- In some contexts, the illegality principle applies simply by operation of the common law. Les Laboratoires Servier is a case concerned with an argument that the illegality principle, as an aspect of the common law, operated to prevent
recovery
on a cross-undertaking in damages given in
respect
of an interim injunction obtained in proceedings in England. The injunction was obtained by the owner and licensee in
relation
to a European patent to prevent the defendants from selling certain drugs in the UK which had been brought in from Canada, which were alleged to infringe the claimants' European patent. In due course, at trial, the European patent was found to be invalid and the defendants sought to bring a claim for compensation under the cross-undertaking in damages. Meanwhile, in proceedings in Canada, a company
related
to the claimants succeeded in a claim of infringement of a Canadian patent in
respect
of the manufacture and supply of the drugs which were put on sale in the UK. The claimants then sought to
rely
on the defence of illegality as completely excluding the defendants' claim for damages under the cross-undertaking. The Supreme Court held that the illegality involved in that case did not prevent the defendants from
recovering
damages under the cross-undertaking.
- Lord Sumption JSC (with whom Lord Neuberger of Abbotsbury PSC and Lord Clarke of Stone-cum-Ebony JSC agreed) gave the leading judgment, in which he made important general observations about the way in which a defence of illegality operates. Lord Sumption emphasised that the defence is based on public policy: see paras. [13], [23], [25], [28] and [30]. At para. [23] he also observed, "It is because the public has its own interest in conduct giving
rise
to the illegality defence that the judge may be bound to take the point of his own motion …".
- At para. [25], Lord Sumption said:
"The ex turpi causa principle is concerned with claims founded on acts which are contrary to the public law of the state and engage the public interest. The paradigm case is … a criminal act …"
- However, he also pointed out at para. [29] that there may be exceptional cases where even criminal or quasi-criminal acts will not constitute turpitude for the purposes of the illegality defence. That possibility is also inherent in the formulation in the first sentence of para. [25], involving as it does the use of the word "and": it is not always a sufficient condition for the defence to come into play that a criminal act has been performed in a way
relevant
to the acquisition of private law
rights.
Lord Sumption also pointed out (para. [18]) that the speeches in Tinsley
v
Milligan [1994] 1 AC 340 included statements intended to exclude the illegality defence where the consequences of an illegal act "are merely collateral to the claim".
- Mr Karas emphasised in his submissions the statement by Lord Sumption in para. [25] of his judgment that a criminal act is "the paradigm case" for
application
of the illegality defence. However, in my
view
Mr Karas was not able to explain why the qualification made by Lord Sumption to that statement should not be treated as
relevant
in the present case.
- The approach of the Supreme Court in Les Laboratoires Servier is compatible with its approach in Hounga, and in particular with the approach set out by Lord Wilson at para. [42] of his judgment in that case. For example, it seems to me that to say that criminal illegality is collateral to some civil claim is a way of saying that the public policy associated with the particular crime in issue is not centrally engaged and is outweighed by other general public policies inherent in the
relevant
civil law to be applied.
- That was also, in substance, the approach adopted in Hipperson
v
Newbury District Electoral
Registration
Officer [1985] 1 QB 1060. In that case, the Court of Appeal held that women who
resided
in an electoral district by
reason
of being illegally encamped on Greenham Common, in contravention of the criminal law, as part of a protest against nuclear weapons being held at a military base, were entitled under the
Representation
of the People Act 1983 to be entered on the electoral
register
for the local district by the
registration
officer by
virtue
of that
residence:
see 1075C-D ("We do not consider that Parliament can have intended [sc. in the 1983 Act] to cast upon an electoral
registration
officer the duty of deciding which
residential
breaches of the criminal law should disqualify an aspiring
voter
and which should not. Accordingly we
reject
the submission that the franchise is affected by the fact that the qualifying
residence
is illegal or, a fortiori, unlawful").
- The context in which we have to consider the operation of the illegality principle is materially different from that in Les Laboratoires Servier, because
rights
under statutory provisions are in issue. In the present case, Mr Karas says that the operation of a statutory provision (specifically, paragraph 1 of Schedule 6 to the LRA) is affected by the illegality principle. Since statute can override the common law, this argument depends upon paragraph 1 of Schedule 6 to the LRA being "
read
down" (i.e. having words
read
into it by implication) so as to provide - as it were, in parenthesis - that a period of adverse possession in
reliance
on behaviour which constitutes a criminal offence will not qualify to be treated as adverse possession for the purposes of the LRA. Mr Karas says that the illegality principle is so long-standing and well
recognised
that it is not difficult to infer that Parliament intended that paragraph 1 of Schedule 6 to the LRA should be
read
as subject to this implied qualification to allow for its operation.
- Mr
Rainey,
on the other hand, makes a wider and a narrower submission. On his wider submission, he says that no qualification at all can be
read
into paragraph 1 of Schedule 6 to the LRA by
reference
to criminal conduct of the person claiming title (i.e. claiming to be
registered
as proprietor). By the LRA, and following the approach in
relation
to unregistered
land
in the Limitation Act, it is clear that Parliament did not intend a wide formulation of an illegality bar to apply (since it is in the
very
nature of adverse possession that it will involve illegal action by the person claiming title by
virtue
of it, in the form of tortious trespass to
land),
and there is no good
reason
to
read
any qualification into the
relevant
provisions by
reference
to a narrower formulation of an illegality bar focusing on criminal conduct. Furthermore, he says that there is a substantial body of authority which indicates that criminally unlawful activity by a person claiming to be in adverse possession of property does not prevent his actions, including the criminal conduct, from counting as adverse possession for the purposes of acquiring title to
land.
Mr
Rainey
referred
to Lord Advocate
v
Lord Lovat (1880) 5 App Cs 273, HL(Sc) (a Scottish case on the law of prescription
applicable
in Scotland, in which the illegality of the means used to assert
rights
in
respect
of use of
river,
by using nets with an illegally small mesh to catch salmon, was held not to affect the claim of the person using those nets to have acquired thereby
rights
by prescription);
Red
House Farms (Thorndon)
v
Catchpole [1977] 2 EGLR 125, CA; Wilson
v
Martin's Executors [1993] 1 EGLR 178, CA; Mayor and Burgesses of the London Borough of Lambeth
v
Blackburn [2001] EWCA Civ 912; (2001) 82 P & CR 39 (in which the acts held to be
valid
acts of adverse possession included the criminal act of breaking the property-owner's lock: see paras. [26] and [43]-[46]); and Fowles
v
Heathrow Airport Ltd [2008] EWHC 219 (Ch). Mr
Rainey
also says that no case has been identified since the original statutory predecessor of sections 15 and 17 of the Limitation Act 1980 was introduced in 1833 which has said that criminal unlawfulness of the activity
relied
upon as constituting adverse possession has prevented that activity from qualifying as
valid
adverse possession; he says that this argument from silence is of particular weight in
view
of the obligation of a court itself to identify and take of its own motion any illegality defence which might be available: see Les Laboratoires Servier, para. [23]. Mr Karas disputes this last point,
referring
to Collis
v
Amphlett (1917) 62 The Solicitors' Journal and Weekly
Reporter
37;
R
(Smith)
v
Land
Registry
at first instance; and a decision of the Adjudicator to HM
Land
Registry
in Walton
v
Hedleyhope Parish Council,
Ref/2011/0399
and 0400, dated 25 June 2012; but I am bound to say that on any
view
such authority as he
refers
to is sparse indeed on such a significant issue.
- On his narrower submission, Mr
Rainey
accepts that some implied qualification can be
read
into paragraph 1 of Schedule 6 to the LRA by
reference
to the illegality principle,
reflecting
the public policy balancing test spelled out by Lord Wilson at para. [42] in his judgment in Hounga. But Mr
Rainey
says that on
application
of the public policy balancing test in the present context, the
relevant
balance of the competing public policies inherent in the LRA, on the one side, and in section 144 of LASPOA, on the other, indicates that activity in breach of the criminal law in the form of section 144 does not fall within the
relevant
implied qualification in the LRA. Accordingly, such criminally unlawful activity may occur, yet not prevent the actions of the person claiming to acquire title by
virtue
of his adverse possession (including by way of such criminal activity) from qualifying as
relevant
adverse possession for the purposes of the LRA. Mr
Rainey
says that similar
reasoning
would also apply in
relation
to sections 15 and 17 of the Limitation Act 1980 in
respect
of acquisition of title to unregistered
land.
- In my judgment, there is force in Mr
Rainey's
wider submission. It could be said that to leave open any scope for the illegality defence to operate in this area would undermine to an inappropriate degree the public policy benefits associated with the adverse possession
regimes
for both
registered
and unregistered
land,
and the legal certainty that those
regimes
are intended to promote in
relation
to dealings with
land.
I observe that the public policy benefits of completely excluding the operation of the illegality principle are especially strong in
relation
to unregistered
land,
for which there is no definitive
register
of title to give assurance to those entering transactions
relating
to
land
and no supervising
regulator
to police title and the operation of any illegality argument. Moreover, since the same concept of adverse possession is employed in Schedule 6 to the LRA (see para. 11 of Schedule 6), it can be argued that these points of distinction should make no difference so far as the operation of the illegality principle in
relation
to
registered
land
is concerned, so that it might be said that even in
respect
of
registered
land
it is the position in
relation
to unregistered
land
which provides the correct context for
application
of the public policy balancing test.
- However, it is on Mr
Rainey's
narrower submission that I would prefer to decide this appeal. It is not necessary to go further in this case. Although the public policy concerns underlying acquisition of title by adverse possession are
very
strong, especially in
relation
to unregistered
land,
I have some doubt whether Parliament can be taken to have intended the illegality principle to be wholly excluded from having any potential impact whatever in
relation
to the operation of paragraph 1 of Schedule 6 to the LRA. The difficulty with Mr
Rainey's
wider submission is that it covers such an extensive and protean category of conduct that it might be said to be difficult to say, in advance, of every conceivable form of criminally unlawful action bearing upon acquisition of title to
registered
land
by adverse possession that Parliament intended it should have no impact at all upon the operation of the LRA. For example, I would wish to
reserve
my opinion
regarding
a case in which a trespasser in occupation of a
residential
building bribed a police officer not to expel him in
reliance
on section 144 of LASPOA, thus procuring or participating in an offence of corruption in a public office to gain the benefit of being
registered
as the proprietor with the title to the
land;
or a case in which a trespasser murdered the true owner in order to prevent him from claiming possession of the property.
- Adoption of the approach in line with Mr
Rainey's
narrower submission appears to me to be in accordance with an appropriate general principle which it is
reasonable
to infer Parliament intended should apply by implication in the operation of the LRA. This approach allows for a properly modulated and focused weighing of the competing public policies which might come into play, whether considering legislation passed prior to the LRA or enacted after it.
- Following this approach, I accept Mr
Rainey's
submission that the
relevant
balance of public policy considerations shows clearly that the fact that a
relevant
period of adverse possession for the purposes of the LRA included times during which the possessor's actions constituted a criminal offence under section 144 of LASPOA does not prevent his conduct throughout from qualifying as
relevant
adverse possession for the purposes of the LRA.
- For these purposes, what is
required,
following the guidance given by Lord Wilson in Hounga at para. [42], is an amalgamated approach, balancing the public policy considerations which underlie and find expression in the provisions of the LRA governing acquisition of title by adverse possession against the public policy considerations which underlie and find expression in section 144 of LASPOA. Addressing that focused issue, I consider that it is clear that in enacting section 144 of LASPOA, Parliament did not intend that it should have any impact on the law of adverse possession set out in the LRA. The mischief which section 144 was intended to address and the objective it was intended to achieve had nothing to do with the operation of the law of adverse possession. (I would add that, in my opinion, each of the authorities
relied
upon by Mr
Rainey
for his wide submission is capable of being explained by
application
of the same approach).
- The object of section 144 appears both from its own terms and from the Government's stated
reasons
for seeking its enactment by Parliament, as set out in the
Response
to Consultation. Although that
response
was not in formal terms a White Paper, in substance it fulfilled the same
role
of explaining the background to a legislative proposal introduced by the Government. In my
view,
therefore, the consultation paper has similar status to a White Paper as a legitimate aid to interpretation of section 144, and in particular as a legitimate source for guidance as to the policy objective which was sought to be achieved by section 144 (cf Black Clawson International Ltd
v
Papierwerke Waldhof-Aschaffenburg AG [1975] AC 591). The stated objective of section 144 was to provide deterrence and practical, on the ground assistance for home-owners in
removing
squatters from their property. Disruption of the law of adverse possession was not mentioned as an intended effect of the provision, nor was it suggested that it was being introduced to try to
re-balance
the
rights
of property owners as against those of adverse possessors with
respect
to the entitlement to be treated as title-holder in
relation
to property.
- Although the
Response
to Consultation set out, in the summaries of
various
responses,
the point made by the
Land
Registry
regarding
possible effects on the law of adverse possession, that was not something which the Government said anything about in its own explanation why it proposed to introduce the legislation.
- The terms of section 144 make no
reference
to the adverse possession
regimes
for either
registered
land
or unregistered
land.
Had there been any policy intention to affect either of those
regimes
by passing section 144, this would have been a
very
surprising omission. Acceptance of the
Registrar's
arguments would have a profoundly disruptive effect in
relation
to what has been the long established effect of the law of adverse possession for the purposes of acquiring title for both
registered
and unregistered
land.
It is not plausible to suppose that Parliament would have been silent about the impact of a provision like section 144 on the delicate and comprehensive balance of interests set out in the Limitation Act 1980 and in Schedule 6 to the LRA, had it truly intended that section 144 should have any impact at all on those
regimes.
- Although one could identify potentially significant differences in the
relevant
balance of public policy factors as between unregistered
land
and
registered
land
– since the operation of the law of limitation and adverse possession is even more important in
relation
to unregistered
land
as the basis to show current title for the purposes of selling
land
– both counsel, for their own separate
reasons,
argued that the
Registrar's
argument would have a similar impact upon both
registered
and unregistered
land.
This would be
very
disruptive. The
Registrar's
argument, if correct, would mean that for
registered
land
no-one could be sure that the title entered on the
Register
as a
result
of adverse possession was in fact a true title; someone (e.g. the former owner) might come forward at any later date and
raise
a case that part of the period of adverse possession was in fact affected by
violation
of section 144, so that the
register
ought to be
rectified
by
reason
of a mistake of the
Registrar
in accepting the
application
for
registration
of that title. The effect of the argument would also include disruption to the operation of the defence of adverse possession to a claim for possession of
land
as set out in section 98 of the LRA, opening up what on the face of it is a
relatively
simple factual inquiry whether a
requisite
period of adverse possession has been established, into an investigation into the quality of the adverse possession and whether the acts included any
violations
of section 144. The effect of the argument would be even more disruptive in
relation
to title to unregistered
land,
where title based on adverse possession critically depends upon the operation of sections 15 and 17 of the Limitation Act 1980. Section 17, in particular, was intended to provide assurance of good title in any case where the chain of title might conceivably include a
relevant
period of adverse possession: see Megarry and Wade, The Law of
Real
Property, 8th ed. (2012) by C. Harpum, S. Bridge and M. Dixon, para. 35-001. But that assurance would be undermined if what appeared to be a period of
valid
adverse possession could be attacked on the basis of allegations of breach of section 144 on facts potentially going back many years.
- In the circumstances, I consider that the true inference is that in enacting section 144 Parliament did not intend to produce any collateral effect upon the settled law of adverse possession in
respect
of either
registered
or unregistered
land.
- That inference is further
reinforced
by the arbitrary effects that the
Registrar's
argument (if correct) would have upon the law of adverse possession. It would involve a capricious distinction between the
rules
of adverse possession affecting
residential
buildings and the
rules
affecting other forms of
real
property, with no good justification for such distinction. It would involve potentially wholly disproportionate and arbitrary impact for even
very
limited periods of breach of section 144 (perhaps lasting only a matter of days) upon periods of adverse possession lasting many years, or even decades. In fact, the
violations
of section 144 would be likely to be even more fleeting and intermittent than this, since the offence would not be committed each time the person in possession of the house left it to go to work, to go shopping or for social purposes. This arbitrariness would be especially great in transitional cases, where a person had been in
valid
adverse possession of
land
for years or decades before the coming into effect of section 144, but then might lose his underlying (albeit not yet asserted) acquired
right
to have his title to the
land
recognised
by
reason
of, say, a day's occupation of the property in contravention of section 144.
- Arbitrary distinctions would also have to be drawn depending on how the person in adverse possession of a
residential
building manifested his possession of the premises, and a yet further arbitrary distinction would arise between different parts of the premises in question. As emphasised above, section 144 criminalises only
very
specific actions (the act of being in a building as a knowing trespasser for the purposes of living there). It does not criminalise the act of taking adverse possession of a
residential
building; indeed, it does not
refer
to the concept of adverse possession at all. A person can be in possession of a property, and hence build up a period of adverse possession asserting his
rights
against the world, without living or intending to live in the property or even being in the property. Erection and maintenance of a fence around a property might be sufficient to constitute taking possession of it. The facts of the present case demonstrate the point: it was only because Mr
Best
moved into the house as his home in January 2012, at the end of a long period of adverse possession without living in the house, that he fell foul of the impact of section 144. There seems to be no justification for saying that section 144 should prevent his adverse possession from having effect under the LRA, whereas if he had been careful not to move into the house until after he had established ten years adverse possession by continued use of the other means he had been using previously he would have been entitled to be
registered
as proprietor before moving in. Indeed, to say that section 144 had that effect in his case would mean that the well-advised adverse possessor would not move into a house to use it to live in until after he had built up ten years of adverse possession by other means and had himself
registered
as proprietor under the LRA; but this would directly conflict with a primary objective of the law of adverse possession, that
land
should be put to use and not sterilised.
- This discussion of how adverse possession is established leads to a further point of arbitrariness (if the
Registrar's
argument is correct)
regarding
the particular area of
land
in
relation
to which adverse possession is established. Section 144 only criminalises the occupation, under certain conditions, of a
residential
building. If a house has a garden or a driveway, a squatter could set up a tent in the garden or on the driveway and squat there without committing a criminal offence. A person could take the entire property (both house and grounds) into his possession by, say, erecting a fence around the garden and driveway, and then, if in doubt about the effect of section 144, apply to the
Registrar
to be entered on the
register
as proprietor of the
land
constituting the grounds as well as proprietor of the separate plot of
land
constituting the house itself. There is no good
reason
for a difference in the effect of adverse possession in the two cases. In fact, the arbitrariness of the effect of section 144 in this
regard
(if the
Registrar's
argument is correct) is yet another illustration of the fundamental point that section 144 uses concepts
remote
from those which govern the operation of the law of adverse possession, and was not intended to have any effect on that law.
- Before the Judge, Mr Karas sought to meet this aspect of dissonance between the effect of section 144 (on his argument) and the operation of the LRA by saying that on the particular facts of Mr
Best's
case he had made one
application
in
respect
of the entire property (house and curtilage), and that acts done in
relation
to the curtilage should be treated as incidental to ("part and parcel of") any "living in" the building. The Judge accepted this, should he prove to be wrong in his main conclusion that section 144 did not have any effect on the operation of the law of adverse possession: see paras. [88]-[92] of the judgment. I should
register
my doubt about whether the Judge was
right
about this, since the LRA and associated
Rules
allow for the
Registrar
to
raise
requisitions
about any
application;
on the information submitted by Mr
Best
it seems it appeared that his
application
related
both to a house and its curtilage; and it is not straightforward to introduce concepts of incidentality into an exercise supposed to be focused on the objective task of drawing lines on a map to mark out ownership of property. However, the main point to be made arising out of the dissonance between section 144 and the LRA which this discussion highlights is that it
reinforces
the inference that Parliament did not intend that section 144 should have any impact on the law of adverse possession, and hence
reinforces
the conclusion that the Judge was correct in his
ruling
on the main issue in the case.
- In my judgment, the
various
arbitrary effects which section 144 would have in
relation
to the law of adverse possession if the
Registrar's
argument were correct are further strong indicators that in enacting section 144 without making any attempt to address them, Parliament did not intend that section 144 or the policy considerations which underlie it should have any bearing upon the operation of the law of adverse possession. Parliament is not lightly to be taken to have legislated with the intention of producing such capricious and arbitrary effects upon a carefully crafted and comprehensive statutory
regime
such as that contained in the LRA. Another way of putting this, having
regard
to the
very
limited circumstances in which an offence is committed under section 144 and the non-correspondence of those circumstances with the concept of adverse possession, would be to say that any offending under section 144 is collateral to the matters on which
reliance
may be placed to establish the adverse possession
required
under the LRA.
- The correctness of the Judge's conclusion on this main issue in the case is also powerfully supported by the decision of the House of Lords in Bakewell Management Ltd
v
Brandwood, supra. Before turning to that authority, it is necessary to mention the earlier decision of the House of Lords in
R
v
Oxfordshire County Council, ex p. Sunningwell Parish Council [2000] 1 AC 335, to which
reference
was made in Bakewell Management, since this assists in understanding the ambit of the
reasoning
in the later case and its significance for the present proceedings.
- The Sunningwell case concerned an
application
for
registration
of
land
as a
village
green on the basis of long use of the
land
by
villagers
"as of
right".
It was held that the
villagers
had established their entitlement to use the
land
as a
village
green through such long use by them. Lord Hoffmann (with whom the other members of the Appellate Committee agreed) made general observations, at [2000] 1 AC 335, 349D-G, about the need in any legal system for
rules
to prevent the disturbance of long-established de facto enjoyment, as follows:
"Any legal system must have
rules
of prescription which prevent the disturbance of long-established de facto enjoyment. But the principles upon which they achieve this
result
may be
very
different. In systems based on
Roman
law, prescription is
regarded
as one of the methods by which ownership can be acquired. … English law, on the other hand, has never had a consistent theory of prescription. It did not treat long enjoyment as being a method of acquiring title. Instead, it approached the question from the other end by treating the lapse of time as either barring the
remedy
of the former owner or giving
rise
to a presumption that he had done some act which conferred a lawful title upon the person in de facto possession or enjoyment. …"
- It should be noted that Lord Hoffmann gave a common underlying
rationale
for
rules
regarding
acquisition of title by prescription and those
regarding
acquisition of title through a limitation bar on the
remedy
of the former owner to
recover
the
land.
Rules
of prescription and
rules
of limitation in
relation
to
remedies
with
respect
to
land
create legal certainty where the underlying facts may be obscure and protect the
reasonable
expectations of persons entering into transactions in
relation
to
land.
- The Bakewell Management case concerned an area of common
land
with a long history of use by neighbouring
landowners
to drive their cars across it to get to the public highway. A new owner of the
land
sought to exclude them, and they claimed that they had acquired an easement on the basis of prescription under section 2 of the Prescription Act 1832 or the presumption of a lost modern grant of such an easement by
virtue
of more than 20 years of uninterrupted user. Under
applicable
legislation, the use of the
land
by the neighbouring
landowners
without the permission of its owner constituted a criminal offence. However, the House of Lords held that while a lost modern grant could not be presumed where an actual grant by the owner of the
land
would have been unlawful, there was no
requirement
of public policy that prevented the acquisition of an easement by long and uninterrupted user in breach of the statutory prohibition where it would have been lawful for the owner of the
land
to make such a grant and where such grant would have
removed
the criminality of the use of the
land.
The fact that the owner of the
land
could, if asked, have consented to its use and thereby prevented such use from being criminal did not prevent the actions of the neighbouring
landowners
in using the
land
from having in fact been criminal, since the owner was not asked and did not give his consent before they used the
land
in that way (a feature of the case emphasised by Lord Walker of Gestingthorpe at [59]). Since the owner of the
land
would have had the power to give his consent for the use in question, and would thereby have prevented criminal liability from arising, the House of Lords could not identify any public interest that would prevent the public policy underlying the doctrine of presumed lost modern grant from operating, just because that had not happened in fact: see paras. [7]-[9] per Lord Hope of Craighead (
referring
at para. [9] to Lord Hoffmann's observations in the Sunningwell case); paras. [27]-[47] per Lord Scott of Foscote (
referring
to the Sunningwell case at para. [27]); and paras. [59]-[60] per Lord Walker. This position was contrasted with situations in which a
relevant
legal prohibition would have prevented the
land-owner
himself from doing something on the
land
or giving consent for it to be done, since this could be taken to preclude the presumption or fiction that there had been a
valid
grant of an easement in the past: see the discussion by Lord Scott at paras. [31]-[39] of
various
authorities, including Glamorgan County Council
v
Carter [1963] 1 WLR 1. I think it could equally be said that the legal prohibitions in those cases were indicative of an overriding public interest being engaged such that private
rights
should not be allowed to be founded upon actions in breach of those prohibitions.
- All members of the Appellate Committee agreed with the
reasons
given by Lord Scott. In his conclusions, Lord Scott said this, at paras. [46]-[47]:
"46. My Lords, in my opinion, the decision in Hanning's case [Hanning
v
Top Deck Travel Group Ltd (1993) 68 P & CR 14, CA] and the subsequent justifications of that decision are wrong and ought not to be followed. I accept that, at the end of the day, the issue is one of public policy. It is accepted, however, that a prescriptive
right,
or a
right
under the lost modern grant fiction, can be obtained by long use that throughout was illegal in the sense of being tortious. That is how prescription operates. Public policy does not prevent conduct illegal in that sense from leading to the acquisition of property
rights.
The decision in Hanning's case can only be justified on the footing that conduct illegal in a criminal sense is, for public policy purposes, different in kind from conduct illegal in a tortious sense. Why should that necessarily be so? Why, in particular, should it be so where the conduct in question is use of
land
that is not a criminal use of
land
against which the public law sets its face in all cases? It is criminal only because it is a user of
land
for which the
landowner
has given no "lawful authority". In that
respect,
the use of
land
made criminal by section 193(4) of the 1925 Act, or by section 34(1) of the 1988 Act, has much more in common with use of
land
that is illegal because it is tortious than with use of
land
that is illegal because it is criminal.
47. In my opinion, if an easement over
land
can be lawfully granted by the
landowner
the easement can be acquired either by prescription under section 2 of the 1832 Act or by the fiction of lost modern grant whether the use
relied
on is illegal in the criminal sense or merely in the tortious sense. I can see no
valid
reason
of public policy to bar that acquisition. …"
- Two points may be made about this
reasoning.
First, it amounts in substance to the sort of balancing of public policy factors contemplated by Lord Wilson in his formulation of the
relevant
approach to be adopted, in his judgment in Hounga at para. [42]. It thus supports the
application
of the guidance given by Lord Wilson as the
relevant
analytical framework within which the issue in the present case should be addressed.
- Secondly, the fact that the owner could have prevented the conduct of the neighbouring
landowners
from being criminal by giving his consent for it (although that would also have prevented acquisition of
rights
by prescription, since they could not then have claimed to have been acting "nec precario", to use the old language of the common law) meant that there was no significant overriding public interest
reflected
in the criminalisation of what they had in fact done. The statute which created the offence did not give expression to any public policy concern which ought to disturb the balance of interests between the owner of the
land
and the neighbours
reflected
in the policy identified by Lord Hoffmann in the Sunningwell case and the doctrines of prescription and lost modern grant.
- The same point can be made in the present context. The
registered
proprietor of a house can prevent a criminal offence under section 144 of LASPOA from occurring, by giving his consent for the squatter to be in the house and thus
removing
the squatter's status as a trespasser, which is one of the ingredients of the offence specified in section 144. As in the Bakewell Management case, this indicates that there is no overriding public policy concern associated with section 144 which ought to be taken to affect the usual balance of interests between
landowner
and adverse possessor established by the law of adverse possession. Mr
Rainey
also pointed out that this is not a fanciful type of case: a trespasser may often
regularise
his occupation of a property by agreeing to pay the
landowner
in
return
for the
landowner's
consent to his occupation, by granting a licence or a lease.
- Mr Karas sought to meet the submission for Mr
Best
based on Bakewell Management by arguing that the case turned on the specific features of the doctrine of lost modern grant, whereas the law of adverse possession does not depend upon any fiction or presumption of a previous grant of
rights
by the owner, but only on the conclusion that the former owner's
remedies
to
reclaim
possession of the
land
have become time-barred. However, I am not persuaded that this is a
relevant
point of distinction. As pointed out above, the
reasoning
of the Appellate Committee included
reference
to the wide underlying principle identified by Lord Hoffmann in the Sunningwell case. Further, the main point which was made was not that the possibility of the owner of the
land
to give consent for its use meant that there was scope for the presumption of lost modern grant to apply, but
rather
that this feature of the criminal law indicated that there was no overriding public policy
reflected
in that law which "should preclude the obtaining by prescription, or by presumed grant, of an easement or
right
over
land
that it would have been lawful for the
landowner
to grant notwithstanding that the user was, absent the grant, unlawful and criminal" (para. [43], per Lord Scott; see also paras. [39] and [46]-[47], quoted above).
- The analogy with the position in Bakewell Management is a further indication that contravention of section 144 of LASPOA does not have an impact upon the usual operation of the law of adverse possession. This is not a case where the provision of the criminal law
reflects
any discrete public policy interest in disturbing the usual distribution of
rights
between
landowner
and adverse possessor in private law, as set out in the LRA. The public policy concerns balanced and given expression in the adverse possession provisions of the LRA continue to apply with full force, and there is no significant countervailing public policy factor inherent or
reflected
in section 144 which supervenes to distort the balance of
rights
set out in the LRA. The "interests of the state" and "the public interest" are not engaged in a
relevant
way so far as the operation of the LRA is concerned. The position is thus
very
different from that described by Lord Sumption in Les Laboratoires Servier at paras. [23], [25] and [28].
- In light of this discussion of Bakewell Management, I turn to consider Mr Karas's submission based on the first instance decision in
R
(Smith)
v
The
Land
Registry.
In my
view,
it is not an authority which advances the case of the
Registrar,
for two
reasons.
First, a first instance decision the
reasoning
in which was not endorsed by the Court of Appeal, which chose to determine the case by
reference
to a different analysis, is too fragile a foundation on which to base any argument that Parliament, when enacting section 144 of LASPOA, must be taken somehow positively to have endorsed the alternative
reasoning
of HHJ Pelling QC. The first instance decision in that case tells us nothing about what Parliament intended should be the effect of section 144 in
relation
to the LRA.
- Secondly, the
reasoning
of HHJ Pelling QC is not in fact inconsistent with the narrower submission advanced by Mr
Rainey.
The Judge followed the analysis in Bakewell Management, but found that he was dealing with a general provision of the criminal law which would have prevented the
land-owner
himself from using the
land
in the way the alleged adverse possessor had used it: see para. [14] of the judgment,
referring
to Lord Scott's opinion in Bakewell Management and Glamorgan County Council
v
Carter. As explained above, that is not the position in
relation
to section 144 of LASPOA.
- Similarly, I do not consider that
reference
to the Proceeds of Crime Act 2002 supports the case for the
Registrar.
Part 5 of POCA creates a
regime
whereby a public authority (the enforcement authority) can seek an order in civil proceedings to
recover
property which is, or
represents,
property obtained through unlawful conduct. Unlawful conduct is defined as conduct unlawful under the criminal law (section 241). Section 242 provides that a person obtains property through unlawful conduct "if he obtains property by or in
return
for the conduct". Property obtained through unlawful conduct is
recoverable
property under the Act (sections 243 and 304). If property is
recovered
by the state, an individual with a good claim to it may be able to claim that property from the state (section 281).
- In my judgment, Part 5 of POCA does not provide
relevant
guidance on the meaning and effect of section 144 of LASPOA, so far as concerns the intended impact of that provision on the LRA
regime
governing the
rights
of a
landowner
and an adverse possessor in private law. POCA introduces a distinct
regime
to allow for the state itself (the enforcement authority) to take steps to strip property from a wrong-doer under certain conditions and subject to certain safeguards. It would give POCA excessive effect to say that it supported an argument that someone should lose
rights
they would otherwise have by
virtue
of the LRA, in favour of another private person, without the procedural safeguards which would exist in
relation
to a POCA claim made against them. Indeed, it might be said that the existence of POCA and the possibility of a civil claim under that Act has some tendency to support the argument for Mr
Best
in the present context, since it provides a
vehicle
for
vindication
of the public interest in the upholding of the criminal law without needing to distort the operation of the LRA in a crude effort to advance that objective.
- Moreover, it is questionable whether the
requirements
of POCA have been satisfied in
relation
to the acquisition of the house by Mr
Best,
since he can argue that if he becomes proprietor of the house under the LRA on the basis of his adverse possession of it, the acts of adverse possession on which he needs to
rely
are not criminal acts in contravention of section 144 of LASPOA, but other acts of assertion of possession by him, such as maintaining the property and the boundary fence. As a
result
of the mismatch between the conduct which is criminalised by section 144 and the concept of adverse possession for the purposes of the law of property, Mr
Best
thus has a
reasonable
argument that, if
registered
as proprietor, he will not have obtained the house "through unlawful conduct." I mention this not to give a definitive
ruling
on the potential operation of POCA in the circumstances of this case - I think it would be wrong for the
Registrar
or a court applying the LRA to try to give
rulings
at the same time on the theoretical operation of POCA – but simply to highlight the fact that POCA is a separate
regime
operating according to its own, distinct concepts and with its own, distinct procedures and safeguards, and is not material to the issue before us. The illegality defence should not be imported into the scheme of the LRA in an attempt to short-circuit the POCA procedure.
- Finally, for completeness, I should mention two alternative fall-back arguments
raised
by Mr
Rainey,
in case he was not successful on the main issue in the appeal. He submitted that even though Mr
Best
appeared from time to time to have committed offences under section 144 of LASPOA in the latter period of his adverse possession of the house, he could
rely
on other acts amounting to adverse possession (either of the curtilage of the house, or of the house and curtilage combined) and so should still be entitled to be
registered
as proprietor pursuant to the LRA. It is not necessary to examine this alternative argument in detail. To my mind, the main point to be derived from
reference
to arguments of this kind is that they illustrate the unsatisfactory arbitrariness which would be introduced into the operation of the LRA if section 144 of LASPOA were given the effect for which the
Registrar
contends.
- Mr
Rainey
also sought to bolster his submissions by
reference
to section 3 of the Human
Rights
Act 1998 and what he contended were the Convention
rights
of Mr
Best
under Article 8 (
right
to
respect
for his home) and Article 1 of Protocol 1 (
right
to
respect
for his property, including
rights
under the LRA). In
view
of the conclusion to which I have come on the main issue on the appeal,
regarding
the true construction of the LRA as a matter of ordinary statutory interpretation, it is neither necessary nor appropriate to
venture
into the intricacies of argument based on Convention
rights.
Reference
to section 3 of the Human
Rights
Act for the purposes of interpretation is only necessary if the construction of a statutory provision according to ordinary domestic principles of interpretation is inconsistent with Convention
rights,
so that
recourse
to the more powerful interpretive obligation in section 3 is
required
in an effort to achieve a different construction which is compatible with Convention
rights.
In the present context, the
Registrar
did not suggest that the interpretation of the LRA which I have concluded is correct - which is simply to apply the LRA in this case in accordance with its express terms - would be inconsistent with anyone's Convention
rights.
It would be unhelpful and inappropriate to burden the legal analysis in a case like this with detailed argument and analysis of authority on Convention
rights,
when a sensible and
rights-compatible
interpretation can be arrived at without needing to do so. To a significant degree, the Convention
rights
reflect
values
and assumptions already inherent in domestic law and established principles of interpretation, and
reference
to the Convention
rights
themselves is not
required
in every case.
Conclusion
- For the
reasons
given above, I consider that the appeal should be dismissed and that the order made by Ouseley J striking down the decision of the
Registrar
in which he declined to
register
Mr
Best
as proprietor of the house should stand.
Lord Justice McCombe:
- I am most grateful to Sales and Arden LJJ for their judgments in this case, both of which I have
read
in draft. I agree that the appeal should be dismissed for the
reasons
given by Sales LJ, and for those given by Arden LJ in paragraphs [106]-[108] below.
- I would add that I entirely agree with Sales LJ that the correctness of the judge's conclusion on the main issue in this case is indeed powerfully supported by the decision of the House of Lords in Bakewell Management Ltd.
v
Brandwood Ltd., supra. For my part, I do not accept the submission of Mr Karas QC that there is, for present purposes, a material distinction between the acquisition of property
rights,
adverse to the legal title, by prescription and the barring of a previous legal title by limitation or by the analogous provisions of the LRA. The distinction, in the present context, is to my mind, unreal. The only material question in practice is whether concepts of illegality should prevent the acquisition of a legal title by a trespasser. For the
reasons
given by Sales LJ in paragraphs [89] and [90] above, I do not consider that, for these purposes, any distinction can be drawn on the basis of the different theoretical ways in which the law confers the new title upon the trespasser.
Lady Justice Arden:
- I too am grateful to Sales LJ for his clear and detailed judgment. I agree with him and McCombe LJ that the commission of an offence under section 144 of LASPOA does not bar an
application
for
registration
of adverse possession. I
reach
this conclusion purely through conventional statutory interpretation. I adopt Sales LJ's definitions.
- Legislation can take
various
approaches to the
application
of the ex turpi causa principle. Parliament is not bound to observe it. Parliament can create exceptions to the principle on an ad hoc basis. Therefore it may allow parties to
retain
benefits through the commission of a crime: see for example section 29(2) of the Forfeiture Act 1982,
recently
considered by HHJ Pelling QC in Chadwick
v
Collinson [2014] EWHC 3055 (Ch). Parliament has given the court power to make an order on an
application
tainted by an unlawful act in other cases, such as A & ors
v
SA [2013] EWHC 426 (Fam), where the court made a parental order in
respect
of a child notwithstanding payments in connection with the surrogacy arrangements under which the child was born beyond the permitted amount, which may have involved the commission of a criminal offence.
- Parliament could, therefore, have given the
Registrar
some power to
vary
the consequences of the commission of an offence under section 144 of LASPOA on an
application
for
registration
of adverse possession. However, it has not done so. So we are faced with the stark choice: the
application
cannot proceed where
reliance
is placed on the conduct involving the commission of an offence under section 144 or the
application
can proceed even though the offence has been committed.
- The subject-matter of the legislative examples that I have given is far
removed
from adverse possession, and they are cases where Parliament has made express provision. They are modern examples of the
varying
approaches to the ex turpi causa principle.
- Statutory interpretation proceeds on the basis that Parliament legislates on the basis that the general principles of the law, such as ex turpi causa, apply unless the contrary intention appears: see my judgment in this court in Lewisham LBC
v
Malcolm at [66] and following.
- Thanks to the expert analysis by the Law Commission and the
Land
Registry,
we have some of the
best
material a court could have for purposive statutory interpretation. I
refer
to the analysis by Sales LJ of the policy behind the provisions in the LRA on adverse possession to be found in
Land
Registration
for the Twenty-first Century: A Consultative Document (Law Com. No. 254) and the subsequent
report,
Land
Registration
for the Twenty-first Century: A Conveyancing
Revolution
(Law Com No 271), issued in each case jointly by the Law Commission of England and Wales and the
Land
Registry.
I was Chairman of the Law Commission when the first of those documents was published. Those
reports
were before Parliament when the LRA was enacted.
- The Consultative Document and
Report
make it crystal clear that the adverse possession provisions of the LRA serve
valuable
social and economic purposes, including that of ensuring that
land
is kept marketable and is not "sterilised" by the inaction of the true owner.
Land
is a
valuable
commodity. It provides space for homes, offices and agriculture. But, in addition to that,
land
can be used to
raise
money to create new businesses and help the economy.
- Given Parliament's purpose, what should the court conclude about the intention of Parliament in enacting section 144? In my judgment, the intention of Parliament by implication was that the commission of an offence under section 144 of LASPOA should not operate as a bar to
registration
of adverse possession for the following
reasons
taken together:
i) The provisions for
registration
of adverse possession appear in entirely different legislation (the LRA) from section 144 (LASPOA). There is no indication that section 144 should affect the operation of the adverse possession provisions. This is not of course conclusive but is of some weight, given that section 144 also deals with the occupation of
land.
Parliament has clearly left this difficult question to the courts to decide.
ii) It is neither essential nor sufficient for the
applicant
to
rely
on a breach of section 144 to make out his case of adverse possession, and thus to deprive the
applicant
of title by adverse possession may also deprive him of the benefit of conduct which has not been criminalised.
An
applicant
for
registration
of adverse possession has to show (a) factual possession and (b) an intention to possess the property to the exclusion of all other persons, including the owner with the paper title (see generally, Megarry & Wade, The Law of
Real
Property (8th ed, 2012, edited by Harpum, Bridge and Dixon at 35-017 to 35-019).
To show (a), he has to show that he has taken sufficient control of the
land.
The sufficiency of the control will
vary
according to the type of
land.
He has to exclude the true owner on a continuing basis. Living in a house without more may not be enough. The adverse possessor may have to take some step such as changing the locks or putting up fences. Living in the property to the exclusion of the true owner is something that happens in consequence of exclusion, as is exemplified by the facts of this case.
The commission of the offence under section 144 thus contributes to the case for establishing adverse possession but is not of itself enough. Since the act which entitles the
applicant
to factual possession is the antecedent act of taking exclusive possession with the
relevant
intention, and since this antecedent act is outside section 144 of LASPOA, then, if the
applicant
fails to obtain
registration,
he is deprived not merely of the benefit of having entered and lived in the property in breach of section 144 but also from acts which have not been criminalised, namely having excluded the owner at the first stage (which did not breach section 144) and from the owner failing to object at the second stage.
Again this is only a factor, but there is no
reason
why Parliament should wish to deprive the
applicant
of those latter benefits.
iii) The
Registrar's
approach is inconsistent with the statutory purposes of adverse possession and also section 144. This is of greater weight.
Section 144 has to be interpreted against the context that the law confers on persons who exclude true owners from possession
rights
to
registration
of property by adverse possession if the person entitled to the property has done nothing to make good his claim to possession for a
very
long period. If the
Registrar
rejects
an
application
for
registration
of adverse possession because of the commission of the offence under section 144, and the
applicant
continues to live in the property, without any objection from the true owner, there can never be
registration
of the title in the
applicant's
name.
If the
Registrar
is
right,
a significant change in the law will have happened by accident, or at least without any express signal. There will have been a paradigm shift in the law in favour of inactive absentee owners.
One of the objectives of section 144 is to deter squatters and bring to an end unlawful squatting. But if section 144 prevents
registration
of adverse possession, it may well in those cases have the contrary effect since it
removes
a way of
regularising
the legal position.
iv) The
Registrar's
approach deprives the law of adverse possession of the important quality of coherence by introducing strange distinctions and bizarre
results
which have no connection with Parliament's purposes in enacting the law of adverse possession. I attach weight also to this.
If the
Registrar
is
right
and the act of living in the property prevents
registration
of title by adverse possession, the owner of a
residential
property who does nothing is protected from losing his house by adverse possession if it was occupied by a squatter but the owner of
valuable
farmland who does nothing would lose his property. That distinction would be totally at odds with purposes of the adverse possession provisions of the LRA.
Moreover, on the
Registrar's
approach, there may be adverse possession of a house by taking control of it without living in it but not if the adverse possessor decides to live in it. Such a distinction has no
rationale
and promotes none of the objectives of the law of adverse possession. Moreover (though he may have to make a separate
application)
the adverse possessor may succeed in obtaining adverse possession of the grounds or garden but not the house itself. If that is correct it leads to the possibility that there could be adverse possession of parts of the house in which the squatter was not actually living – he might only have taken possession of the ground floor, but let out the upper floors.
These
results
result
in a piecemeal law of adverse possession bordering on the absurd. There is nothing to suggest that Parliament intended that section 144 of LASPOA should have this, or any, impact on the long-standing doctrine of adverse possession.
v)
In my judgment, the
Registrar's
act of
registering
the adverse possession does not condone the illegality or assist it. Its primary effect is to
regularise
the legal position for the future. Again this is an important factor.
The
Registrar
is
right
to say that the commission of any act which Parliament has made a criminal offence is a serious matter which necessarily entails condemnation by the Court and by the
Registrar.
However, the sanction for breach of section 144 is laid down in that section. The commission of an offence is not affected by the
registration
of adverse possession. Parliament's express purpose in criminalising the activity is observed. The
applicant
cannot, therefore, be said to benefit from his criminal conduct in the sense of having avoided the penalty.
vi)
Parliament has safeguarded the interests of the owner of the paper title by providing that the title to property by adverse possession cannot be
registered
unless he has had an opportunity to file an objection under section 73(1) of the LRA or to serve a counter-notice under paragraph 3 of Schedule 6 to the LRA. (In the present case, the personal
representative
has taken that opportunity. He has lodged an objection which is to be
referred
to the First Tier Tribunal.) The paper title owner's
right
to show that there has been no sufficient adverse possession is therefore fully protected. This has four important consequences which must carry considerable weight in the interpretation exercise. First, the statutory scheme signals that these provisions were to be the totality of the paper title owner's
rights
and that Parliament did not intend the paper title owner to have the further
right
of having the
application
for
registration
of the title prevented altogether by
virtue
of ex turpi causa. On conventional principles of statutory interpretation, these express provisions of the LRA
read
in their context exclude further
rights
by implication. Second, it is consistent with the policy objectives of
registration
of title by adverse possession that he should have to take this step and therefore it is a step
reasonably
required
by the LRA. Third, if he does not choose to exercise these
rights,
the clear inference is that his private interest is exhausted and the public interest in ensuring the marketability of the
land
is to take over. Fourth, the
applicant
does not profit from committing a criminal offence unless the paper title owner fails to object.
- I do not
rely
for my conclusion on Bakewell Management Ltd
v
Brandwood. As Mr Karas submits, this is a materially different case. Bakewell was about the acquisition of an easement by prescription. Prescription is different from adverse possession since it provides a different means of acquiring title (see per Lord Hoffmann in the Sunningwell case in the passage cited at paragraph 82 above). The person who acquires title does not have to
rely
on his own wrongful act to obtain title, since after 20 years the owner is presumed to have given permission for the user some time before the user commenced. By contrast, in a case such as the present, the effect of the adverse possession is not that the owner is deemed to have given permission for the user (which would indeed prevent adverse possession from continuing) but simply that the adverse possessor is in a position to apply for the
land
to be
registered
in his name. In making that
application,
he has to prove adverse possession. In a case such as the present, he will
rely
on a breach of section 144 of LASPOA.
- Bakewell is, however, helpful to this extent. It is an example of a case where the conclusion that the criminal law did not prevent the acquisition of title was arrived at by a process of conventional statutory interpretation. The House concluded that, since by section 193 of the Law of Property Act 1925 Parliament had criminalised the use of another's property without authority and not the owner's grant of authority for the user in question, the statute did not, on its true, and as I see it conventional, construction, prevent the operation of the fiction of lost modern grant (see, for example, per Lord Hope at [8] and per Lord Scott at [39]).
- Nor do I
rely
on Hounga
v
Allen. This is an important decision. However, as the judgments of the majority and minority in Hounga, and of the majority in Les Labaratoires Servier
v
Apotex, make clear, the judgment of the majority in Hounga is breaking new ground. It was
very
different case. Hounga applies and develops jurisprudence of the Supreme Court of Canada on claims for compensation for
road
traffic accidents. Adverse possession is a
very
different field of law. It may for instance
result
in the
applicant
obtaining a
very
substantial profit from his wrongful acts.
- In so far as Sales LJ
relies
on Hounga for the proposition that, where there are two conflicting statutory policies, the court may decide which is to prevail (see, for example, the first sentence of paragraph [70], above), I do not think for the
reasons
I have already given that it necessary to travel that far in this case: I am able to
reach
my conclusion by means of statutory interpretation and independently of any balancing of two conflicting policies.
- For these
reasons,
I conclude that, on the true interpretation of schedule 6 of the LRA and section 144 of LASPOA, it is the intention of Parliament that an
application
for
registration
of adverse possession should not be barred by
reliance
on acts in contravention of section 144 of LASPOA. The subject matter is sufficient to exclude ex turpi causa in this instance. The provisions of schedule 6 of the LRA must be interpreted to give effect to that intention. Section 144 and schedule 6 operate independently of each other. Parliament's decision to enact section 144 in separate legislation
reinforces
this conclusion. The
Registrar
was
right
to
raise the questions that he has done. But in my judgment, the ex turpi causa principle is excluded from schedule 6 of the LRA to the extent of any criminal conduct under section 144 of LASPOA. I would also dismiss this appeal.