England and Wales High Court (Chancery Division) Decisions

IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION

		Royal Courts of Justice Strand, London, WC2A 2LL
		24 May 2013

Mr Justice Roth :

Introduction

1. This Part 8 claim raises a short but interesting point of construction of sect 15 of the Land Registration Act 2002 (the "LRA").^[1]
2. The facts are simple and for the purpose of these proceedings were not in dispute. The claimant, Mr Turner, is, to use his own description in his Particulars of Claim, a gypsy. He says that he meets the definition of gypsies in sect 24(8) of the Caravan Sites and Control of Development Act 1960 as a person "of nomadic habit of life".
3. Since October 2007, he has resided in his caravan as a squatter in adverse possession of land adjacent to 141 Kingston Road, Leatherhead, Surrey KT22 7NT ("the Land"). The Land is currently unregistered.
4. On 3 October 2012, he was granted, by his successful appeal against the decision of the planning authority, planning permission permitting the use of the Land as a private gypsy and traveller site. The Land is in a residential area and it is worth recording that his planning application attracted considerable support from local residents. The decision of the planning inspector notes that he submitted for his appeal a petition with 149 signatories, the majority of them occupiers of nearby properties.
5. Prior to his successful planning appeal, Mr Turner had applied, on 9 May 2011, to the defendant ("the Registrar") to register a caution against first registration in respect of the Land under sect 15. That application was refused by letter dated 26 May 2011. The issue in this case is whether Mr Turner is entitled under the LRA to lodge a caution against first registration by virtue of his interest in the Land. Mr Turner seeks a declaration to that effect.

The legislation

6. The provisions about first registration of title are set out in Part 2 of the LRA. Chapter 1 deals with first registration itself.
7. Sect 3(2) provides:

"Subject to the following provisions, a person may apply to the Registrar to be registered as proprietor of an unregistered legal estate to which this section applies if -

(a) the estate is vested in him, or

(b) he is entitled to require the estate to be vested in him."

8. The effect of first registration of freehold estates is addressed in sect 11. In particular, sect 11(4) provides:

"(4) The estate is vested in the proprietor subject only to the following interests affecting the estate at the time of registration—

(a) interests which are the subject of an entry in the register in relation to the estate,

(b) unregistered interests which fall within any of the paragraphs of Schedule 1, and

(c) interests acquired under the Limitation Act 1980 (c. 58) of which the proprietor has notice."

The unregistered interests set out in Schedule 1 are commonly referred to as overriding interests. The one relevant for present purposes is in para 2, "interests of persons in actual occupation", set out as follows:

"An interest belonging to a person in actual occupation, so far as relating to land of which he is in actual occupation,…"

9. Cautions against first registration, with which this case is directly concerned, are set out in Chapter 2. Sects 15 to 16 provide, insofar as material:

"15 Right to lodge

(1) Subject to subsection (3), a person may lodge a caution against the registration of title to an unregistered legal estate if he claims to be—

(a) the owner of a qualifying estate, or

(b) entitled to an interest affecting a qualifying estate.

(2) For the purposes of subsection (1), a qualifying estate is a legal estate which—

(a) relates to land to which the caution relates, and

(b) is an interest of any of the following kinds-

(i) an estate in land,

(ii) a rentcharge,

(iii) a franchise, and

(iv) a profit a prendre in gross.

(3) No caution may be lodged under subsection (1)—

(a) in the case of paragraph (a), by virtue of ownership of-

(i) a freehold estate in land, or

(ii) a leasehold estate in land granted for a term of which more than seven years are unexpired;

(b) in the case of paragraph (b), by virtue of entitlement to such a leasehold estate as is mentioned in paragraph (a)(ii) of this subsection.

(4) The right under subsection (1) is exercisable by application to the Registrar.

16 Effect

(1) Where an application for registration under this Part relates to a legal estate which is the subject of a caution against first registration, the Registrar must give the cautioner notice of the application and of his right to object to it.

(2) The Registrar may not determine an application to which subsection (1) applies before the end of such period as rules may provide, unless the cautioner has exercised his right to object to the application or given the Registrar notice that he does not intend to do so.

(3) Except as provided by this section, a caution against first registration has no effect and, in particular, has no effect on the validity or priority of any interest of the cautioner in the legal estate to which the caution relates."

10. The position regarding legal estates in English land law was reformed by the Law of Property Act 1925 ("LPA"). Sect 1(1) LPA provides:

"The only estates in land which are capable of subsisting or of being conveyed or created at law are-

(a) an estate in fee simple absolute in possession;

(b) a term of years absolute."

The application of section 15

11. Before addressing this issue, it is helpful to explain why Mr Turner regards registration of a caution as important. In any action for possession of the Land brought against him, the claimant will need to show a better title. But if the claimant is the registered owner, the legal estate will be deemed to have vested in him as a result of the registration: sect 58. He would therefore readily get a possession order in the County Court. The benefit to Mr Turner of having a registered caution is that he then would receive prior notice from the Registrar of any application for first registration and therefore be alerted to his opportunity to check the applicant's assertion of title. The fact of a registered caution would not give Mr Turner any better rights, since the effect of a caution is procedural only: sect 16(3). But Mr Turner says that it might nonetheless be significant as it would give him the chance to object to a registration which might be defective, eg founded on a false or fraudulent title. Mr Turner's solicitor gave an example in his witness statement of a case of possession proceedings brought against a gypsy who had failed to notice the registration of the land on which she was squatting, but it is unclear whether in that case there was any defect in the claimant's title and, in my view, no particular conclusions can be drawn from that evidence.
12. It is common ground that Mr Turner is only entitled to register a caution if he comes within one of the two categories in sect 15(1). Mr Turner's primary case was that he comes within para (a) as the owner of a "qualifying estate". From sect 15(2)(b), it is clear that the only qualifying estate that he could claim to own is a legal "estate in land". The Registrar accepts that Mr Turner has an estate in land but contends that it is a freehold estate and therefore registration of a caution is precluded by sect 15(3)(a)(i).
13. In my judgment, the issue is conclusively determined by sect 1(1) LPA. Only two kinds of estate in land are now capable of subsisting at law. Mr Turner clearly does not have a term of years. Nor is it suggested that he has only an equitable interest, which in any event would not qualify under sect 15. Accordingly, if he has an estate in the Land at all, it can only be an "estate in fee simple absolute in possession". In modern parlance, that is a freehold. His lodging of a caution is therefore precluded by sect 15(3)(a).
14. On behalf of Mr Turner, Mr Willers sought to argue that what Mr Turner had was not absolute since it is liable to be defeated by the paper owner. Therefore, it was submitted that although Mr Turner had a legal "estate" it was not a fee simple absolute in possession, and thus not a freehold. However, in the first place, sect 1(1) LPA makes clear that there are now only two legal estates and thus the form of estate postulated by Mr Willers does not exist. Secondly, "absolute" as used in the expression "fee simple absolute in possession" is a term of art: see Megarry & Wade, The Law of Real Property (8^th edn, 2012), para 6-013.
15. I think this line of argument confuses the concept of an estate in land with the concept of title to the estate. It is fundamental to English land law that title (at least to unregistered land) is not absolute but relative. If a squatter remains in adverse possession for 12 years, he acquires a title good against the paper owner under what is now the Limitation Act 1980, sects 15 and 17. But in the intervening period, before the expiration of the statutory 12 years, the squatter, although he may be ejected by the owner of the paper title, is himself protected by his act of possession. He can sue strangers for trespass or nuisance and can convey the land. If he dies, the land will pass under his will or intestacy. As the editors of Megarry & Wade explain at paras 4-008 to 4-009:

"S [a squatter]'s possession at once gives him all the rights and powers of ownership, at least for the purposes of the civil law. S has, in fact, a legal estate, a fee simple absolute in possession. But so also has O [the owner], until such time as his title is extinguished by limitation.

"There is thus no absurdity in speaking of two or more adverse estates in the land, for their validity is relative. If O allows his title to become barred by lapse of time, S's title becomes the better, and S then becomes "absolute owner". But if O brings his action within the time allowed, he can successfully assert his better title based on his prior possession; as against O, S's legal estate is nothing."

16. Similarly, Gray and Gray, Elements of Land Law (5^th edn, 2009) states at para 2.1.40:

"Implicit in the notion of relativity of title is also the recognition that one person's ownership of a common law freehold in no way forecloses the possibility that some other person (whether squatter or 'true owner') may have an older and better title to a fee simple estate in the land. In a context of consecutive trespasses on the same land, each successive possessor is vulnerable to the assertion of the freehold estate held by any earlier possessor or, indeed, by the 'true owner'."

17. If this distinction between estate and title is borne in mind, the discussion of the nature of a squatter's right to the land as discussed in the authorities is readily understood. The court was shown a substantial number of authorities on the issue but in my view they do not assist on the question that arises in the present case. Many of the authorities are helpfully gathered in the valuable work, Jourdan and Radley-Gardner, Adverse Possession (2^nd edn, 2011): see chap 20. In Fairweather v St Marylebone Property Co Ltd [1963] AC 510,^[2] Lord Radcliffe approved the statement of Scrutton LJ in the earlier case of Taylor v Twinberrow [1930] 2 KB 16 regarding the effect of adverse possession for the limitation period:

"... the operation of the statute in giving a title is merely negative; it extinguishes the right and title of the dispossessed owner, and leaves the occupant with a title gained by the fact of possession and resting on the infirmity of the right of others to eject him."

To which Lord Radcliffe added that this:

"...needs only one qualification: 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."

In that case in the Court of Appeal, Pearson LJ said of a squatter who had acquired title by adverse possession against a tenant, that the squatter's title:

"...though becoming more valuable by reason of the extinction of the tenant's title, remained in character the same as before, viz, an independent possessory title arising solely from the fact that he had possession. It was not a title transferred by or in any way derived from the tenant.... Nothing had happened which could change the character of [the squatter's] title. Someone else's title was extinguished, but [the squatter] remained simply the person in possession."

18. More recently, in Buckinghamshire County Council v Moran [1990] Ch 623, Nourse LJ said, at 644:

"Limitation, so far from being founded on some fictional grant, extinguishes the right of the true owner to recover the land, so that the squatter's possession becomes impregnable, giving him a title superior to all others."

19. The Privy Council case of Perry v Clissold [1907] AC 73, on which Mr Willers sought to rely, is not in my view in any way inconsistent with these authorities or helpful to the matter now before the court. The case concerned an Australian statute which provided for compulsory acquisition of land by the state for public purposes with compensation to the owner. The relevant Minister refused compensation to a Mr Clissold on the basis that he had been a mere squatter in adverse possession who had not yet established a statutory title through the expiry of the relevant limitation period. The Privy Council, in an opinion delivered by Lord Macnaghten, stated:

"It cannot be disputed that a person in possession of land in the assumed character of owner and exercising peaceably the ordinary rights of ownership has a perfectly good title against all the world but the rightful owner. And if the rightful owner does not come forward and assert his title by process of law within the period prescribed by the provisions of the Statute of Limitations applicable to the case, his right is for ever extinguished, and the possessory owner acquires an absolute title."

And noting that the state had acquired not only Mr Clissold's title but also that of the rightful owner who was not in possession (and who had never claimed), Lord Macnaghten continued:

"It could hardly have been contended or contemplated that the Act [ie the Australian statute] should have had the effect of shaking titles which but for the Act would have been secure, and would in process of time have become absolute and indisputable, or that the Governor, or responsible Ministers acting under his instructions, should take advantage of the infirmity of anybody's title in order to acquire his land for nothing."

20. Perry v Clissold therefore concerned the question whether the statutory provision which entitled "the owners of the land" to compensation covered someone in the position of Mr Clissold. The Privy Council firmly rejected the Minister's contention that he was not so entitled because he was "a mere trespasser, without any estate or interest in the land". The references to the adverse possessor acquiring "an absolute title" should not be read as finding that until the expiry of the limitation period he did not hold a freehold estate, but in the same sense as the observation of Nourse LJ quoted above, i.e. that his title then becomes impregnable as the relatively stronger title of the paper owner is then extinguished.
21. The rationale of the statutory exclusion of the owner of a freehold from lodging a caution is that a caution against first registration is not intended to provide a substitute for first registration: see the Explanatory Notes to the LRA. The owner of the freehold can normally register his estate pursuant to sect 3(2) and the policy of the statute is that he should do so and not seek instead to lodge a caution against first registration. See also the Law Commission report, Land Registration for the Twenty-First Century (Law Com no 271, 2001) at para 2.14:

"The entry of a caution against first registration is not intended to be a substitute for the registration of an estate where such registration is possible."

22. Mr Turner, however, cannot be registered until 12 years have elapsed from his going into possession and he acquires a good title against the paper owner under the Limitation Act 1980: para 15 above. Thus the rationale for the exclusion is not applicable in his case. But although the LRA could therefore have allowed a person in his position to apply to lodge a caution, it has not done so.
23. Recognising the difficulties of avoiding the statutory exclusion, Mr Willers put forward in his oral submissions (although not in his written skeleton) the alternative argument that Mr Turner came within para (b) of sect 15(1). He submitted that Mr Turner is entitled to "an interest affecting a qualifying estate". The qualifying estate was said to be that of the paper owner, and Mr Turner's interest was his overriding interest under Schedule 1: see para 8 above.
24. However, in order to qualify under para (b), the interest must affect a "qualifying estate". The only qualifying estate apart from Mr Turner's own freehold is that of the paper owner. But Mr Turner's overriding interest does not affect the paper owner. Accordingly, Mr Turner clearly does not satisfy para (b).

The Human Rights Act 1998

25. Faced with these difficulties, Mr Willers argued that to deny Mr Turner the right to lodge a caution would infringe his human rights and that sect 15 should accordingly be interpreted pursuant to sect 3 of the Human Rights Act 1998 ("HRA") so as to permit him to lodge. This could be achieved by 'reading down' sect 15(3)(a)(i) so that it excluded only "a freehold estate in land capable of registration". Although this submission under the HRA was raised very late in the day (it had not been pleaded), very sensibly no objection was taken to its being advanced. Further, the Registrar realistically accepted that this would not undermine the policy of the LRA and, indeed, it would appear to be consistent with the rationale of sect 15(3), as explained by the Law Commission.
26. However, the starting point for urging such a departure from the clear and unambiguous language of the statute is that there would otherwise be an interference with Mr Turner's rights under the European Convention on Human Rights. The right relied on is that in Article 8:

"Everyone has the right to respect for his private and family life, his home and his correspondence."

(No reliance was placed on Article 1 of the First Protocol.)

27. I accept that the Land here, where Mr Turner lives for at least part of the year in his caravan, would be regarded as his home within the broad sense of the jurisprudence under Article 8: see Harrow LBC v Qazi [2003] UKHL 43, [2004] 1 AC 983. Mr Buley for the Registrar did not seek to suggest the contrary.
28. However, in Qazi, the House of Lords stressed that Article 8 gives protection to "the right to respect" for a person's home in the context of his privacy and family life: it therefore means essentially the right to protection against arbitrary interference by the public authorities with those rights: see at [50]-[51]. The editors of Lester, Pannick and Herberg, Human Rights Law and Practice (3^rd edn, 2009), after noting the various circumstances which have been held to constitute interference with Article 8 as regards the home, conclude (at para 4.8.76):

"The degree of seriousness required to trigger lack of respect for the home will depend on the circumstances, but it must be substantial."

29. As explained above, the concern expressed for Mr Turner is that without the ability to lodge a caution someone with a defective or fraudulent claim to title might persuade the Registrar to register him as the freehold owner, whereas notification to Mr Turner in advance which a caution would secure would have enabled Mr Turner to object to that application at the time. But even if Mr Turner failed to appreciate that an application to register was being made (in which case he could object: sect 73(1)), if registration were improperly granted, he could then apply to have the register altered: sect. 65 and Schedule. 4. Such alteration would constitute a rectification under the definition in Schedule 4, para 1, but neither side suggested that in the postulated circumstances the restrictions on rectification imposed by Schedule 4, para 3 would apply.
30. However, it is fundamental that a caution gives no interest in land but only a procedural safeguard. Given the circumstances here, the relatively remote risk about which Mr Turner is concerned and the remedy of rectification, I do not think that denial of Mr Turner's right to lodge a caution comes anywhere near the kind of substantial interference that is necessary to engage Mr Turner's Article 8 rights.
31. In the light of this, it is unnecessary to consider the further point on which Mr Buley, for the Registrar, sought to rely in rebutting the potential application of Art 8, namely that Mr Turner would derive protection against incorrect registration of someone purporting to be the paper owner by reason of Mr Turner having an overriding interest as under para 2 of Schedule 1 as "a person in actual occupation." That raised the question whether Mr Turner would necessarily have such an interest at the relevant time since he is accustomed, in keeping with his nomadic lifestyle, to move in his caravan to the north of England for the summer months. See the discussion of the meaning of "actual occupation" in Link Lending Ltd v Bustard [2010] EWCA Civ 424. But in my view, this is of little relevance: any such overriding interest that may be held by Mr Turner would obviously not override registration of the paper owner, and if someone other than the paper owner should through error or deception be registered as owner, Mr Turner's primary remedy would be to apply for rectification of the register. He does not need to demonstrate an overriding interest in order to have standing to seek rectification: see Megarry & Wade, para 7-139 and more recently, Paton and Paton v Todd [2012] EWHC 1248 (Ch) at [51]. Such rectification would not be to give effect to his overriding interest, but on the basis that the person registered did not truly qualify as the owner at all.

Note 1   All statutory references in this judgment are to the LRA, save as otherwise stated.     [Back]

Note 2   That decision has been strongly criticised as regards the application to surrender of a lease by a tenant, but not for these general propositions: Chung Ping Kwan v Lam Island Development Co Ltd [1997] AC 38 at 47.    [Back]