Previous Section Back to Table of Contents Lords Hansard Home Page

Baroness Buscombe: My Lords, I thank the Minister for his full response to the various amendments that we have tabled. He should make no apology for the length of his response given the importance of the various issues which have been raised. Interestingly, the Minister referred to the Oxford English Dictionary. When considering the word "obvious", I looked at a different version, namely the Pocket Oxford English Dictionary. That dictionary refers to something that is seen or realised at first glance. Our concern is that if something is not seen at first glance the occupier will lose all his rights, whereas if something is reasonably disclosed--in other words, second glance--the occupier's rights are safe. We wonder whether this matter may see the light of day in the courts given that we are looking at similar dictionaries with different interpretations.

I hear what the Minister says in relation to the issue of settled land which is dealt with in Amendments Nos. 18A and 20A. I hope that the Minister is right that there is no need to be concerned about the type of person to whom I referred, for example the widow who is entitled to a life interest in the former matrimonial home. Under her husband's will she is entitled to protection if in actual occupation only if the property is subject to a trust of sale. We shall read with considerable care the Minister's response in Hansard before deciding whether to return to this matter or to regard it as another issue that we may raise with the Minister after this evening. On that basis, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Bassam of Brighton moved Amendment No. 19:

On Question, amendment agreed to.

5 p.m.

Lord Lester of Herne Hill moved Amendment No. 20:

    Page 47, line 7, at end insert--

"15 A right acquired under the Limitation Act 1980 (c. 58) before the coming into force of this Schedule."

30 Oct 2001 : Column 1330

The noble Lord said: My Lords, in moving Amendment No. 20 I should like to speak also to Amendments Nos. 46 and 119 which are consequential. The Bill as it stands will in some circumstances divest the title of those who have already acquired an indefeasible title by adverse possession. We believe that that is wrong. My noble friend Lord Goodhart raised this issue in Committee on 17th July (at cols. 1398 to 1399 of Hansard). Having heard the response of the noble Baroness, my noble friend indicated that he might wish to return to the subject at Report stage.

My noble friend raised two issues on that occasion: first, the effect of the Bill's provisions on those who have already acquired title to land through adverse possession; and, secondly, whether the Bill is compatible with the right to peaceful enjoyment of property which is protected by Article 1 of the first protocol to the European Convention on Human Rights and, in British law, by the Human Rights Act 1998. That intervention was particularly important because on the face of the Bill the noble and learned Lord the Lord Chancellor had, as the noble and learned Lord was obliged to, signed a compatibility statement under Section 19 of the Human Rights Act. We very much hope that the Minister will clarify those two issues in her reply.

As explained by my noble friend Lord Goodhart, under present law, adverse possession extinguishes the title of a previous owner after 12 years; that is, it extinguishes the title and the original owner no longer has any title to the land.

My noble friend also explained that we do not object to the new procedure in Part 9 and Schedule 6 for acquiring title by adverse possession when adverse possession has lasted for fewer than 12 years after the date at which the Bill comes into force. As my noble friend said, that is in line with the well-established principle that limitation periods can be changed without being treated as retrospective alteration of existing rights.

But what of the situation where the existing 12-year period for acquiring title by adverse possession has already been completed when the Bill comes into force? The adverse possessor will have acquired an indefeasible title; that is, a right to the enjoyment of the property.

Under Clause 11(4)(c), adverse possession binds the estate on first registration only if the freehold proprietor--the person with the paper title or the person acquiring the title--has notice. That requirement for notice is new. In the absence of notice, the indefeasible property right of an adverse possessor will be overridden by operation of the Bill. Perhaps the Minister can confirm that that is the position.

Paragraph 7 of Schedule 12 to the Bill, read with Clause 131(2), deals with this issue. It gives three years' grace for someone who claims to have acquired a title which extinguishes that of the first registered proprietor to protect his rights by registration.

30 Oct 2001 : Column 1331

Under existing law, Section 15 of the Limitation Act contains a 12-year limitation period for actions to recover land, including rights acquired by adverse possession. Therefore, under present law someone who believes that he or she has acquired title by 12 years of adverse possession is given 12 years to vindicate that property right.

In response to the noble Baroness, Lady Buscombe, the Minister explained that:

    "Under the Bill a squatter's rights will override first registration only if the squatter is in actual occupation. Squatters who are no longer in actual occupation will therefore no longer fall within the protected category when the new law comes into force. That could involve some unfairness. Paragraph 7 therefore provides for the existing regime to continue for three years. That will allow sufficient time for squatters who have extinguished the title of the paper owner but who are no longer in actual occupation to make application for registration of title".--[Official Report, 17/07/01; col. 1400.]

In answer to my noble friend Lord Goodhart, the Minister explained that a three-year grace period for someone who claims to have acquired a title by adverse possession is,

    "not a particularly onerous price to pay".--[Official Report, 17/07/01; col. 1401.]

The problem is that the three-year grace period is rigid and inflexible. It cannot be extended to allow for special cases of hardship, such as mistake or disability. Perhaps the Minister can confirm that there is no flexibility.

The heading before paragraph 7 of Schedule 12 refers to what are described as "Former overriding interests". The Bill seeks to convert existing indefeasible property rights into precarious rights. The rights are dependent on an uncertain application to the registrar within a fixed time limit of only three years. Perhaps the Minister can also confirm that that is correct.

There may well be cases of individual hardship where because of the complexity of the law of adverse possession and the lack of sufficient publicity about the effect of the Bill in this area, or for any other reasons, individual property rights will be taken away unfairly. The Government plainly cannot devote the kind of resources needed to warn squatters who acquire indefeasible title by adverse possession and are therefore no longer squatters but true owners. Unless the Bill is modified, either in the way proposed by the amendment, or, if that is too radical, in some other way designed to deal with the problem, to allow some exceptional discretion for hardship cases, it will become the courts' duty under the Human Rights Act to read safeguards into the Bill after costly and protracted litigation. Surely it would be preferable for Parliament to include sufficient safeguards against the unfair taking of property which could, and I think will, arise in some exceptional cases.

Therefore, we ask the Minister to deal with these points, which were raised both under the convention and generally in Committee, either in her reply today,

30 Oct 2001 : Column 1332

or, if that is not feasible, in writing in sufficient time for us to consider the matter at Third Reading. I beg to move.

Baroness Scotland of Asthal: My Lords, I straightaway welcome the noble Lord, Lord Lester, to the fray in relation to this issue. In Committee I tried to touch the heart of the noble Lord, Lord Goodhart, by some heart-rending examples, but I see that, by the fact that this issue has returned, I left his heart totally unmoved.

In the debate on the Bill so far, I have rarely found myself wholly out of sympathy with any of the amendments and improvements suggested by the noble Lord, Lord Goodhart. Notwithstanding the eloquence and poignancy of the comments made by the noble Lord, Lord Lester, I find that, on this occasion, I am most unusually out of sympathy. Although I understand the concerns that have given rise to the present amendments, this is one of the areas where we think that the current balance struck by the Bill is preferable to the suggested changes. Our interpretation is that the Bill merely removes protection if the title is not asserted within three years.

The difference in our respective positions can be shortly put. The noble Lord, Lord Goodhart, is anxious to give greater protection to squatters who have acquired rights under the existing law to apply to be registered as proprietors of land. The noble Lord thinks that possibly failure to do so might be at some risk of challenge under the Human Rights Act.

We, however, think that the greater protection which the Bill gives to registered owners is wholly appropriate in the context of a system of registered land where the title to land depends on registration rather than occupation. We also think that the changes we propose to the existing law are entirely proportionate to the issues involved, and therefore consistent with the convention rights, and, in accordance with that, we have been able to sign the certificate pursuant to Section 19.

On this occasion we make no apology for wanting to strengthen the position of registered owners. Each year the Land Registry receives over 20,000 applications for registration based in whole or in part on adverse possession. In about three-quarters--15,000--of those cases, the applicant is successful in supplanting the previous owner. Many cases are disputed and are the subject of court proceedings or hearings before the Solicitor to the Land Registry or one of his deputies. Around three-quarters of Land Registry hearings involve squatting, and in around 60 per cent of cases, the squatter succeeds in whole or in part. I need hardly remind the House of the time, money and anxiety which those disputes will have cost the former owner, as well as the loss of the land itself. The Bill offers the opportunity to reduce those figures very substantially, and I respectfully suggest that it would be a serious matter if that opportunity were to be lost.

The three amendments seek to enhance the position of a squatter who, before the Bill comes into force, has already acquired title to unregistered land by adverse

30 Oct 2001 : Column 1333

possession or who is entitled to be registered as the owner of registered land of which he or she has been in adverse possession. Perhaps I may refer to such a squatter as one with an acquired right.

Under the amendments, an owner on first registration or one who was registered as a result of a registrable disposition--such as a transfer--for valuable consideration would take subject to the acquired right of a squatter without any time limitation. In order to show that we consider that the Bill in its present form provides a fairer balance between the rights of a squatter with an acquired right and a registered owner, I propose to explain the provisions of the Bill and to compare them with the position if the Bill were amended as sought by the noble Lord, Lord Goodhart.

Under the Bill, there will be transitional provisions that protect a squatter with an acquired right and permanent provisions that may provide protection. The transitional provisions differ depending on whether the land is registered when Schedules 1 and 3 come into force. If the land is not then registered, but becomes registered within three years, the squatter's acquired right will override the registration, whether or not the proprietor has notice of it and whether or not the squatter is in actual occupation.

If the land is registered after the three-year period then the permanent provisions apply and the first proprietor will only take subject to the squatter's acquired right if he or she has notice of it or if the squatter is in actual occupation. If the land is already registered when Schedule 3 comes into force, then the squatter's acquired right will override any disposition registered during the three-year period, whether or not the squatter is in actual occupation.

After the three-year period, or during it if the acquired right-affected land was first registered during the three-year period, a disposition for valuable consideration when registered will be overridden by the squatter's acquired right if the squatter is in actual occupation so that paragraph 2 of Schedule 3 applies. In general, the difference is that after the three-year period a squatter with an acquired right will, under the Bill, have his or her right protected if he or she is in actual occupation or, additionally, in the case of first registration, if the registered owner has notice of the right. Under the amendments, however, he or she will have his right protected, even if he is not in actual occupation; and protected indefinitely. That would be the effect of the proposed amendments.

Although we have listened with care to the argument put forward by the noble Lord, Lord Lester, in amplification of the argument put by the noble Lord, Lord Goodhart, on this point, we continue to think that the amendments would give excessive and unjustified protection to a "disappearing squatter"; that is, a squatter who has been in adverse possession, has then ceased to occupy the land and has also failed to apply for registration as proprietor while protected under the transitional provisions. A disappearing squatter would indeed have continuing rights over the land within the existing law.

30 Oct 2001 : Column 1334

But the current law rests on wholly different principles from the ones which the Bill seeks to introduce. Under it, a possible title to land is derived from occupation of whatever length. The current law allows both concurrent and competing claims to arise through occupation. There is plenty of scope for dispute as to which claim is the best, and plenty of scope for litigation. That is bad enough, but the current position also gives rise to a situation in which a new owner can suddenly become aware that his or her right has been undermined by a claim of which he or she knew nothing, arising from someone with no discernible connection to the land. It is perfectly possible that a person who has no notice of the squatter's acquired right may have been registered and, out of the blue, becomes aware that he or she is subject to the squatter's claim.

As I said in Committee when similar amendments were debated, in our view, the Bill strikes a fairer balance than that which would be effected by these amendments between those with an acquired right and registered owners. It does so by substituting a new and far clearer set of principles. Under the Bill, where the land has been registered, the register will be the primary determinant of who owns the land, subject only to the special circumstances dealt with in Part 9 and Schedule 6 of the Bill.

We believe that the amendments would shift two careful balances in the Bill. First, they would reduce significantly the protection that the Bill gives to the rights of registered owners. Secondly, squatters who have acquired rights will have the benefit of the transitional arrangements to be found in Schedule 12, whether or not they are in actual occupation of the land. The rights of anyone in actual occupation of the land will form a permanent feature of the Bill and will override both first registration and subsequent registered dispositions of the land under Schedules 1 and 3.

Those who have once squatted on land but have subsequently left will not be permanently protected. This is only in part because of a wish to preserve the rights of registered owners. It is fundamental to the Bill that the register should give the clearest possible picture of the rights and obligations to which the land is subject. Undoubtedly that will facilitate e-conveyancing. Rights should have overriding status only when it is impracticable or impossible that they should be registered. The transitional provisions will give a period of grace during which it will be possible for a squatter with an acquired right to protect his or her right by registration. We suggest that it is not a particularly onerous price to pay for that protection.

In the debate in Committee the noble Lord, Lord Goodhart, raised the issue of the limit on such acquired rights not being ECHR compliant. Noble Lords will appreciate that when the transitional periods no longer apply, squatters' acquired rights will not come to an end; they will continue. It is the protection as an interest which of itself overrides first registration or a registered disposition for valuable consideration which will come to an end. Even then, the acquired right will become protected only in the

30 Oct 2001 : Column 1335

rare cases where the squatter is no longer in actual occupation and/or--in the case of first registration--the registered owner does not have notice of the right. We believe that these provisions are a proportionate remedy which must be balanced against the interests of a prospective buyer.

However, the permanent continuation of the transitional protection suggested by the amendment would create very significant practical problems for buyers. They would run the risk of finding themselves bound by the rights of squatters, where the squatter is no longer in actual occupation. The chances of ascertaining that someone had acquired a permanent right, hidden from the register, from past occupation would, in many cases, diminish to nothing. I suggest, therefore, that the noble Lord's proposal would in fact significantly damage the structure of the Bill. In the future it would put prospective buyers under a burden of risk that is unreasonable.

In the light of that explanation, I hope that the noble Lord, Lord Lester, on behalf of the noble Lord, Lord Goodhart, will feel able to withdraw his amendment.

5.15 p.m.

Lord Lester of Herne Hill: My Lords, before the Minister sits down, perhaps she could clarify one matter after her very helpful response. Does she accept that having a rigid three-year time limit for registration during the so-called "grace period" could lead to extreme and rare cases of injustice, whether through mistake, lack of capacity or otherwise, because of the inflexibility of the three-year period? Does she accept that there could be such cases, or is that a false point?

Next Section Back to Table of Contents Lords Hansard Home Page