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Cite as: [2010] ECHR 2014

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FOURTH SECTION

DECISION

AS TO THE ADMISSIBILITY OF

Application no. 52512/09
by Agnes OFULUE
against the United Kingdom

The European Court of Human Rights (Fourth Section), sitting on 23 November 2010 as a Chamber composed of:

Lech Garlicki, President,
Nicolas Bratza,
Ljiljana Mijović,
Ján Šikuta,
Mihai Poalelungi,
Nebojša Vučinić,
Vincent Anthony de Gaetano, judges,
and Lawrence Early, Registrar,

Having regard to the application lodged on 10 September 2009,

Having deliberated, decides as follows:

THE FACTS

The applicant, Mrs Agnes Ofulue, is a Nigerian national who was born in 1939 and lives in Middlesex. She was represented before the Court by Mr J. Kunwardia of Hodge Jones & Allen, a lawyer practising in London.

A. The circumstances of the case

The facts of the case, as submitted by the applicant, may be summarised as follows.

The applicant and her husband became the registered owners of a dwelling house in London (“the property”) in 1976. The current value of the property is GBP 550,000.

The applicant and her husband let the property to tenants and in 1979 they moved to Nigeria. In 1981 one of the tenants permitted a Mr B and his daughter to occupy the property. In 1983 the applicant’s husband visited the property and discovered the Bs living there.

On 15 June 1989 the applicant and her husband began possession proceedings against the Bs in the High Court. In their Statement of Claim they asserted that they were the owners and were entitled to possession of the property. In their Defence and Counterclaim, served on 18 July 1990, the Bs admitted the Ofulues’ title to the property but submitted that they were entitled to a fourteen-year lease. In a letter dated 14 January 1992, headed “without prejudice”, the Bs offered to buy the freehold of the property for GBP 35,000. The applicant and her husband rejected the offer but took no further action. On 26 April 2000 the proceedings were automatically stayed under the provisions of the Civil Procedure Rules.

On 30 September 2003 the applicant and her husband issued fresh proceedings against Ms B in the County Court for possession of the property. Ms B challenged the claim under the Limitation Act 1980 (“the 1980 Act”), which provided that a person could not bring an action to recover land after the expiration of twelve years of adverse possession by another. In October 2005 the County Court judge held that the applicant and her husband were statute-barred from bringing an action for recovery of the property. He found that since 1987 Ms B had been in factual possession of the property, she had the requisite intention to possess, and the applicant and her husband had known that she was in possession and yet the steps taken to remove her had been “slight in the extreme”. Consequently, the court held that the applicant and her husband’s title to the property had been extinguished in 1999 or at least before 2 October 2000, which was the date on which the Human Rights Act 1998 came into force.

The applicant and her husband appealed to the Court of Appeal. The Court of Appeal followed the recent judgment in J.A. Pye (Oxford) Ltd v. the United Kingdom, no. 44302/02, 15 November 2005, in which the Grand Chamber held that the limitation period in the case of adverse possession was compatible with Article 1 of Protocol No. 1. The Court of Appeal found no “special circumstances” in the applicant’s case to justify departing from Pye. In particular, it held that the admission of title in the Defence in the earlier proceedings did not constitute an acknowledgment of title for the purposes of section 29 of the 1980 Act (see paragraph 13 below) or, alternatively, if the admission did constitute an acknowledgement of title, it did not defeat the adverse possession claim as it was served more than twelve years before the later claim was brought. The Court of Appeal further held that although the letter of 14 January 1992 was made less than twelve years before the date on which the later possession proceedings had been initiated, and amounted to an effective acknowledgement of title for the purposes of section 29 of the 1980 Act, it could not be relied on in evidence as it had been written “without prejudice” with a view to settling the earlier proceedings.

The applicant was granted leave to appeal to the House of Lords. The House of Lords (with Lord Scott of Foscote dissenting) held that the admission of title in the Defence and the letter of 14 January 1992 were both capable of amounting to acknowledgements of title for the purposes of section 29 of the 1980 Act. However, the House of Lords agreed with the Court of Appeal that the Defence could not assist the applicant as it was served more than twelve years before the later claim was introduced. Moreover, it also agreed that the letter of 14 January 1992 could not be admitted in evidence as it had been written “without prejudice”.

Lord Neuberger of Abbotsbury stated that:

“it appears to me that, save perhaps where it is wholly unconnected with the issues between the parties to the proceedings, a statement in without prejudice negotiations should not be admissible in evidence, other than in exceptional circumstances such as those mentioned in Unilever [2000] 1 WLR 2436, 2444D-2445G. It is not only that the offer contained in the relevant sentence of the Letter was connected with the issue between the parties in the earlier proceedings. It is also that the title to the property was in issue in the earlier proceedings in the sense that the Ofulues claimed the unencumbered freehold, whereas the [Bs] were contending that the freehold was subject to their legal or equitable interest. Bearing in mind the point made in the passage quoted above from Robert Walker LJ [2000] 1 WLR 2436, 2448-2449, it seems to me that it would set an unfortunate precedent if your Lordships held that an admission of the claimants’ title in a without prejudice letter was sufficiently remote from the issues in a possession action relating to the same land as to be outside the rule.”

In his dissenting opinion Lord Scott of Foscote expressed his view that the result of the appeal represented a marked extension of the “without prejudice” rule that previous judicial authority did not warrant and public policy did not require. In particular, he noted that the applicant’s ownership of the property had been admitted in the earlier proceedings and the previous judicial authority could not be taken to permit the extension of the “without prejudice” rule to cover a statement of fact which, far from being an issue in the litigation, was common to the pleaded cases of both parties.

B. Relevant domestic law and practice

1. Adverse possession

At the relevant time, section 15 of the Limitation Act 1980 provided:

“(1) No action shall be brought by any person to recover any land after the expiration of twelve years from the date on which the right of action accrued to him or, if it first accrued to some person through whom he claims, to that person...

(6) Part I of Schedule 1 to this Act contains provisions for determining the date of accrual of rights of action to recover land in the cases there mentioned.”

Paragraph 1 of Schedule 1 provided:

“Where a person bringing an action to recover land, or some person through whom he claims, has been in possession of the land, and has while entitled to the land been dispossessed or discontinued his possession, the right of action shall be treated as having accrued on the date of the dispossession or discontinuence.”

Section 29 provided as follows:

“(1)Subsections (2) and (3) below apply where any right of action (including a foreclosure action) to recover land or an advowson or any right of a mortgagee of personal property to bring a foreclosure action in respect of the property has accrued.

(2)If the person in possession of the land, benefice or personal property in question acknowledges the title of the person to whom the right of action has accrued—

(a)the right shall be treated as having accrued on and not before the date of the acknowledgment; and

(b)in the case of a right of action to recover land which has accrued to a person entitled to an estate or interest taking effect on the determination of an entailed interest against whom time is running under section 27 of this Act, section 27 shall thereupon cease to apply to the land.

(3)In the case of a foreclosure or other action by a mortgagee, if the person in possession of the land, benefice or personal property in question or the person liable for the mortgage debt makes any payment in respect of the debt (whether of principal or interest) the right shall be treated as having accrued on and not before the date of the payment.”

The same limitation provisions applied to both registered and unregistered land. In the case of unregistered land, section 17 of the 1980 Act provided that, on the expiration of the limitation period regulating the recovery of land, the title of the paper owner was extinguished. In the case of registered land, section 75(1) of the Land Registration Act 1925 provided that, on the expiry of the limitation period the title was not extinguished but the registered proprietor was deemed to hold the land thereafter in trust for the squatter.

Halsbury’s Laws of England (Fourth Edition, Reissue 1998) set out the law in the following terms:

“258. When the owner of land has been out of possession, and a stranger has been in possession, for a period sufficient to bar the owner’s right to re-enter or to recover possession by action, the owner’s title is extinguished, and the stranger acquires a title which is good against all the world, including the former owner.

The Limitation Act 1980 operates negatively to bar the right and extinguish the title of the true owner, and does not effect a transfer of his estate to the stranger; the new title depends on the principle that possession gives title, coupled with the extinction of the rights of the former owner, and is subject to any easements [etc ..] which remain unextinguished.”

2. The “without prejudice” rule

In giving his opinion in the present case, Lord Neuberger of Abbotsbury described the “without prejudice” rule as follows:

“The normal rule is, of course, that statements made in negotiations entered into between parties to litigation with a view to settling that litigation are inadmissible and therefore cannot be given in evidence. In Rush & Tompkins Ltd v Greater London Council [1989] AC 1280, 1299, Lord Griffiths explained that the rule was “founded upon the public policy of encouraging litigants to settle their differences rather than litigate them to a finish". As stated by Robert Walker LJ in Unilever plc v The Procter & Gamble Co [2000] 1 WLR 2436, 2442C-D, the rule also rests on “the express or implied agreement of the parties themselves that communications in the course of their negotiations should not be admissible in evidence".

As Robert Walker LJ went on to point out at [2001] 1 WLR 2436, 2444C, “there are numerous occasions on which ... the without prejudice rule does not prevent the admission into evidence of what one or both of the parties said or wrote". At [2001] 1 WLR 2436, 2444D-2445G, he then set out and explained eight of “the most important instances". Apart from agreement (e.g. where the negotiations are “without prejudice, save as to costs”), the principal occasions he identified were where the negotiations are said to have resulted in a contract, an estoppel, or a misrepresentation, or where they are said to include an impropriety or an explanation for delay.”

COMPLAINTS

The applicant complained that the application of the “without prejudice” rule violated her rights under Article 6, Article 10 and Article 1 of Protocol No. 1 to the Convention.

With regard to the complaint under Article 10, she submitted that in finding that the “without prejudice” rule applied to the letter of 14 January 1992 the House of Lords violated her right to freedom of expression because they failed to strike a fair balance between her rights and the public policy justification for applying the rule.

The applicant also complained that her rights under Article 6 § 1 of the Convention had been violated as she was not afforded a reasonable opportunity to present her case under conditions that did not place her at a substantial disadvantage.

Finally, the applicant complained that there had been a violation of her rights under Article 1 of Protocol No. 1 as she was deprived of her property following an unforeseeable and unlawful application by the domestic courts of the “without prejudice” rule. She further complained that the application of the “without prejudice” rule did not serve a legitimate public interest. In the alternative, she complained that the interference with her rights did not strike a fair balance between the demands of the general interest of the community and the requirements of the protection of the individual’s fundamental rights.

THE LAW

A. Alleged violation of Article 6 of the Convention

The applicant complained under Article 6 § 1 of the Convention that she was not afforded an opportunity to present her case under conditions which did not place her at a substantial disadvantage. In particular, she submitted that she was prevented from adducing the only evidence that would have enabled her to retain her freehold property.

Article 6 § 1 provides as follows:

“In the determination of his civil rights and obligations ... everyone is entitled to a fair ... hearing ... by [a] ... tribunal ...”

The Court has consistently held that while Article 6 guarantees a right to a fair trial, it does not lay down any rules on the admissibility of evidence, which is primarily a matter for regulation under national law (see, for example, Schenk v. Switzerland, 12 July 1988, § 46, Series A no. 140 and Miailhe v. France (no. 2), 26 September 1996, § 43, Reports of Judgments and Decisions 1996 IV). It is not the Court’s task to substitute itself for the domestic jurisdictions. Rather, the Court’s function is to determine whether the proceedings in question, taken as a whole, were fair and whether the rights of the parties were adequately respected (Miailhe v. France, cited above, § 43).

In deciding what evidence is admissible, the domestic courts therefore enjoy a certain margin of appreciation, although the final decision as to the observance of the Convention’s requirements rests with the Court. It must be satisfied that the limitations applied do not restrict or reduce the access left to the individual in such a way or to such an extent that the very essence of the right is impaired. Furthermore, a limitation will not be compatible with Article 6 § 1 if it does not pursue a legitimate aim and if there is not a reasonable relationship of proportionality between the means employed and the aim sought to be achieved (Osman v. the United Kingdom, 28 October 1998, § 147, Reports 1998 VIII, p. 3169, § 147).

As the purpose of the “without prejudice” rule is to encourage litigants to reduce the burden on the courts by settling their differences rather than litigating them to a finish, it undoubtedly has a legitimate objective. As to the issue of proportionality, the Court must assess the contested limitation placed on the applicant’s rights under Article 6 in the light of the particular circumstances of the case.

The Court observes that in the present case the applicant had the benefit of adversarial proceedings. At the various stages of those proceedings she was represented by counsel who was able to submit the arguments he considered relevant to the applicant’s case. There is therefore no indication that the applicant was not given a fair opportunity to present her case at any stage of the proceedings.

With regard to the letter of 14 January 1992, the domestic courts fully considered the arguments put forward by the applicant. However, the majority of the House of Lords were of the opinion that carving out an exception to the “without prejudice” rule to permit the admission of the letter of 14 January 1992 would not be consistent with the public policy behind the rule. The majority were particularly concerned that creating such an exception could potentially cause huge practical difficulties while also whittling down the protection afforded to parties to litigation.

The Court does not consider that the very essence of the applicant’s right to a fair trial was impaired. While the outcome of the proceedings was unfavourable to the applicant, it is clear that both the first-instance and appellate courts carefully weighed the demands of the applicant against the demands of the general interest before concluding that the letter could not be admitted. In view of all the circumstances of the case, the Court finds that this decision did not render the proceedings as a whole unfair.

In conclusion, the Court finds the complaint under Article 6 § 1 of the Convention to be manifestly ill-founded. It should therefore be rejected under Article 35 §§ 3 and 4 of the Convention.

B. Alleged violation of Article 1 of Protocol No. 1 to the Convention

The applicant also complained that there had been a violation of her rights under Article 1 of Protocol No. 1 as she was deprived of her property following an unforeseeable and unlawful application by the domestic courts of the “without prejudice” rule. She further complained that the application of the “without prejudice” rule did not serve a legitimate public interest. In the alternative, she complained that the interference with her rights did not strike a fair balance between the demands of the general interest of the community and the requirements of the protection of the individual’s fundamental rights.

Article 1 of Protocol No. 1 provides as follows:

“Every natural or legal person is entitled to the peaceful enjoyment of his possessions. No one shall be deprived of his possessions except in the public interest and subject to the conditions provided for by law and by the general principles of international law.

The preceding provisions shall not, however, in any way impair the right of a State to enforce such laws as it deems necessary to control the use of property in accordance with the general interest or to secure the payment of taxes or other contributions or penalties.”

The Court recalls that in J.A. Pye (Oxford) Ltd and J.A. Pye (Oxford) Land Ltd v. the United Kingdom [GC], no. 44302/02, § 66, ECHR 2007 X, it held that the loss of title following the application of the laws on adverse possession amounted to a “control of use of land” within the meaning of the second paragraph of Article 1 of Protocol No. 1 and not a “deprivation of possessions”. The Grand Chamber accepted that the limitation period for actions for recovery of land – and the extinguishment of title at the end of the limitation period – pursued a legitimate aim in the general interest. Furthermore, it concluded that on the facts of the case before it, the fair balance required by Article 1 of Protocol No. 1 to the Convention was not upset. In particular, it observed first, that the relevant legislation had been in force for many years before the applicant acquired the land; secondly, the limitation period was relatively long and very little action on the part of the applicant would have stopped time running; thirdly, a requirement of compensation would sit uneasily alongside the very concept of limitation periods; and fourthly, that applicants in adverse possession cases were not without procedural protection as it was open to them throughout the limitation period to bring an action for possession or, on the expiry of the limitation period, to argue before the domestic courts that the occupiers of their land had not been in adverse possession.

In the present case, as in Pye, there had been a control of the use of the applicant’s land and that control of use was in pursuit of a legitimate aim, namely that of ensuring legal certainty and finality and protecting potential defendants from stale claims. The question which the Court must address is therefore whether the decision not to admit the letter of 14 January 1992 upset the fair balance found to exist in Pye between the demands of the general interest and the interest of the individuals concerned.

The Court observes that the circumstances which the Court considered relevant when assessing proportionality in Pye are equally applicable to the present case. First, it is not open to the applicant to say that she was not aware of the relevant legislation, or that she was surprised by its application in this case. In particular, the Court observes that there is no suggestion that during the twelve years prior to loss of title the applicant had been relying on the letter of 14 January 1992 to protect her interests. Secondly, the Court recalls its finding in Pye that the limitation period was relatively lengthy and very little action would have been required on the part of the applicant to have stopped time from running. Indeed, the applicant and her husband twice brought possession proceedings against the Bs so it is clear that they were aware of what was required of them.

The Court recalls that the Grand Chamber in Pye also found that applicants in adverse possession cases were not without procedural protection as it was open to them throughout the limitation period to bring an action for possession or, on the expiry of the limitation period, to argue before the domestic courts that the occupiers of their land had not been in adverse possession. In the present case it was clearly open to the applicant to bring an action for possession at any time and, as indicated above, she did so on two separate occasions. Moreover, there is no indication that the delay in bringing the second set of proceedings was due to any reliance on the letter of 14 January 1992.

It was also open to the applicant on the expiry of the limitation period to argue that the Bs had not been in adverse possession. The only restriction on this right was the domestic court’s refusal to admit in evidence the letter of 14 January 1992. However, the Court has already held that this decision did not render the proceedings as a whole unfair in violation of Article 6 § 1 of the Convention. It was for the domestic courts to balance the interests of the applicant against the interests of public policy and they did so in a carefully reasoned decision, taking full account of the arguments put forward by the applicant.

Accordingly, the Court finds the complaint under Article 1 of Protocol No. 1 to the Convention to be manifestly ill-founded. It should therefore be rejected under Article 35 §§ 3 and 4 of the Convention.

C. Alleged violation of Article 10 of the Convention

The applicant’s complaint under Article 10 of the Convention was not raised before the domestic courts and the Court therefore finds that she has failed to exhaust domestic remedies. It should therefore be rejected under Article 35 § 1 of the Convention.

For these reasons, the Court unanimously

Declares the application inadmissible.

Lawrence Early Lech Garlicki
Registrar President