Facts
- J A Pye (Oxford) Ltd (“C”) owned a plot of land retained for potential development after selling a farmhouse and associated land in 1977.
- An annual grazing agreement was made with the farmhouse purchaser, later taken over by Mr Graham (“D”) in 1982 when D purchased the farmhouse.
- D paid £2,000 per year for grazing rights under the agreement.
- In 1983, C refused to renew the agreement, intending unused land would ease future planning permission.
- D was asked to vacate but continued to occupy the fully enclosed land, controlled via a padlocked gate for which only D held the key.
- D continued exclusive use of the land without further communication or agreement from C.
- C never implemented its development plans and, in 1999, sought to recover possession.
- The core issue was whether D’s post-agreement occupation amounted to adverse possession sufficient to extinguish C's title.
Issues
- Whether D’s occupation after expiry of the licence amounted to adverse possession under the Limitation Act 1980.
- What constituted sufficient factual possession and intention to possess for adverse possession claims.
- Whether the requirement of dispossession necessitated overt hostility or exclusion of the paper title owner.
- Whether the application of adverse possession under UK law violated property rights protected by Article 1 of Protocol No 1 of the ECHR.
Decision
- The House of Lords held that D had acquired title by adverse possession, satisfying both factual possession and intention to possess.
- Factual possession was established by D’s control and exclusive use, including enclosing the land and maintaining the only access.
- Intention to possess was demonstrated by D’s treatment of the land as their own, regardless of knowledge of C’s development intentions or possible willingness to pay.
- Dispossession did not require active hostility or confrontation toward the paper title owner.
- The House of Lords set aside previous interpretations that required possession inconsistent with the owner’s intentions.
- On appeal to the ECHR, it was held the application of adverse possession under English law did not breach Article 1 of Protocol No 1, as limitation periods help provide legal certainty and are within the UK’s margin of appreciation.
Legal Principles
- Adverse possession comprises two distinct requirements: factual possession (physical control and exclusion of others) and intention to possess.
- The manner of physical possession depends on the nature and use of the land.
- Possession need not be hostile; suffices if the squatter occupies and excludes others, including the owner, as far as reasonably practicable.
- Previous case law requiring inconsistent use with the owner’s intentions was rejected.
- Under the ECHR, the existence of limitation periods and the effect of adverse possession are legitimate aspects of social and economic policy and do not violate property rights.
Conclusion
Pye (Oxford) Ltd v Graham clarified the requirements for adverse possession, emphasizing both factual possession and intention to possess. The House of Lords’ approach, affirmed at the ECHR, established that control and intent—rather than hostility—are central, and held that UK adverse possession law is compatible with property rights under the ECHR.
