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Baroness Scotland of Asthal: My Lords, I shall take into account the point made by the noble Earl. However, once the noble Earl has had an opportunity to read at a more moderate pace my detailed remarks, I think he will find that the issue is covered. I shall take away the noble Earl's point. I rather doubt whether much amendment will be needed, but I undertake to look at the matter.

Baroness Buscombe: My Lords, I thank the Minister for her extremely full and clear response. I shall not begin to attempt to respond to her remarks, but I thank her for that detailed explanation. It will give all noble Lords the opportunity to consider with care what the Government have to say. This area is extremely important and, as I said at the start of my remarks, it goes to the heart of the Bill.

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I echo the concern expressed by my noble friend Lord Caithness about Amendment No. 84. I am not convinced that the point has been dealt with, but I shall read with care all that the noble Baroness has said in response. On that basis, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Baroness Scotland of Asthal moved Amendment No. 82:

    Page 33, line 23, leave out "an individual" and insert "a person"

On Question, amendment agreed to.

[Amendments Nos. 83 and 84 not moved.]

Schedule 5 [Land registry network]:

[Amendments Nos. 85 to 87 not moved.]

Clause 93 [Power to require simultaneous registration]:

[Amendments Nos. 88 and 89 not moved.]

Clause 95 [Disapplication of periods of limitation]:

Baroness Buscombe moved Amendment No. 90:

    Leave out Clause 95.

The noble Baroness said: My Lords, this amendment concerns the important issue of adverse possession. I should like to draw the attention of noble Lords to paragraphs 10.18 and 10.19 of the Law Commission consultative document, which sets out the commission's conclusions regarding the law of adverse possession. In particular I draw attention to paragraph 10.19(1) and (2) where it states that:

    "(1) A restriction had been entered on the register to freeze all dealings with the registered estate, but the circumstances which made that precaution necessary had subsequently passed;

    (2) An interest protected on the register by one entry was adequately protected by another".

We have no argument with paragraph 10.19(2). However, the proposal, as adopted in the Bill, to recast the law of adverse possession to reflect the principles of title registration causes us real concern.

The law of adverse possession is based on social and economic factors. Surely it cannot matter whether the land to which it relates is registered. Either there are valid social and economic reasons for a particular rule as regards adverse possession or there are not; and those policies, if they exist at all, should apply regardless of registration.

Surely this clause presents a case of the tail wagging the dog. We have here a system of land registration which we like, and in consequence of that the Government have now decided to amend the law on adverse possession to fit with the system. With respect, we believe that the Government ought to decide what is their policy with regard to adverse possession and then make the registration system fit into that. I beg to move.

Baroness Scotland of Asthal: My Lords, I have listened very carefully to what the noble Baroness said on the amendment. I have tried to find some way in which her approach might be said to improve the Bill. On this occasion, I have not been able to find one.

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In our submission, accepting the amendment would at best undermine, and probably simply wreck, all the provisions of Part 9. It would therefore destroy one of the major achievements of the Bill, the introduction of a new system of protection against adverse possession, founded upon the principles which govern the ownership of registered land, which gives registered owners far greater protection than ever before. In explaining why, I shall need to cover both the overall approach of this part of the Bill and the effect of the amendment in some detail. I must ask for the indulgence of the House while I do so.

Clause 95 disapplies certain provisions of the Limitation Act 1980 from registered land and registered rent charges. It does this so that a new and better scheme of acquisition of title by adverse possession can be created. The scheme will give greater protection to the registered proprietor. In doing so, it will strike a fairer balance between the squatter and the owner.

The clause lays the foundation for that by making radical changes to the role of limitation periods in determining title to registered land, which I shall need to explain. Under the current law, there is very little difference of principle between registered and unregistered land in the way in which title to land can be acquired by adverse possession. The 12-year period is, as many noble Lords will be aware, the period specified in Section 15 of the Limitation Act 1980 as the period of time after which no action can be brought in the courts to recover land. Once an action in the courts can no longer be brought, Section 17 of the 1980 Act provides that in most cases the previous paper title is extinguished.

One of the main arguments of policy in the Bill is, in effect, that this similarity of approach for both systems of conveyancing is illogical, and that the one should be clearly separated from the other.

Limitation is absolutely fundamental to the operation of unregistered conveyancing. This is because it depends on proving title by an historical investigation of a chain of ownership, going back to a point, known as a "good root of title", where the right to ownership of the land cannot be brought into question. The present requirement is for a good root of title of at least 15 years. This period has been revised from time to time, but, because title to unregistered land is ultimately based upon possession, it has always borne a close relation to the limitation period applicable to actions for recovery of land.

Indeed, there would be grave danger in any attempt to weaken the link to the limitation period since that would open the prospect of substantially lengthening the root of title that would need to be established. This would make a system which is already expensive and uncertain far more costly and risky. It would also run counter to the longstanding trend of progressive reduction in the length of title that has to be proved.

The whole point of a system of registered land, by contrast, is that title should depend on the register. The whole purpose of the Bill is to ensure that who owns a piece of land and what are their powers, rights and

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obligations in relation to it, should, as far possible, be established by the register and be immediately obvious from it.

One of the most powerful criticisms of the current registered system in England and Wales is that it does not follow this principle. In a fully developed registered system, the fundamental issue of who owns the land should be as clear as the words on the page or the screen. Because it is made dependent on possession for a specified period, it is still little clearer than it is in the unregistered system. This clause puts that right. It gives the register its proper function of determining title by removing limitation from the ownership equation.

I turn now to the detail of Clause 95. I shall be as brief and as non-technical as the material permits. Subsection (1) contains the basic provision that Section 15 of the 1980 Act will not apply to actions to recover registered estates in land and registered rent charges. It contains one exception. This applies where a charge has been created over the land and the landowner, as the person who created the charge, is in possession of the land. In these cases, the rights of the chargee to recover possession or to foreclose will remain subject to the provisions of the Limitation Act 1980. This is necessary because a charge is both a contract and an interest in land. The chargee therefore has contractual and proprietary remedies against the owner. The exception ensures that the same overall limitation period applies to both sets of remedies.

Subsection (2) of Clause 95 is even more technical. It exempts actions for redemption in relation to a registered estate or a registered rent charge from Section 16 of the Limitation Act 1980. An action for redemption is a legal action to redeem a mortgage by a landowner against a chargee who has taken possession of the land.

The disapplication of the 12-year limitation period is a significant change to the law, but the present position is anomalous. It produces the result that where a chargee has been in possession of land for 12 years or more, the owner loses his or her right to redeem the mortgage. Given the remedies available to the mortgagee, this is an unnecessary extra bonus for a mortgagee. The Bill therefore disapplies Section 16 in relation to registered estates in land or registered rent charges.

Subsection (3) of Clause 95 is a necessary concomitant to subsections (1) and (2). Its effect is that Section 17 of the Limitation Act 1980 will not operate to extinguish the title of a person against whom, under Clause 95, a period of limitation does not run.

The effect of Clause 95 will be to make ownership of registered land more attractive than ownership of unregistered land. The converse, of course, is that unregistered land has been made relatively less attractive than it is at present. Noble Lords may have therefore wondered whether the same provisions could be extended to unregistered land so as to preserve the parity and to avoid further divergence between the two systems of land ownership.

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The simple answer is that they cannot. Limitation periods are an essential part of the structure of unregistered conveyancing. Even if they were not, there is no register of owners of unregistered land, and squatters may simply not be able to discover who owns the land that is being adversely possessed. By contrast, the register provides an authoritative public record of ownership of registered land. This gives the new system both its practical and its theoretical base.

Our debates have shown that we are all agreed that the future of conveyancing and land law lies with registered land. Unregistered land has diminished and will continue to do so at an accelerating rate as a result of the Bill. Clause 95 will make an important contribution to that process. As I said, it is fundamental to the new system.

I hope that having heard that explanation--exhaustive as I have found it--the noble Baroness, Lady Buscombe, will accept that registered land is entitled to a life of its own and that the dying hand of unregistered conveyancing should not hold back the future, and so withdraw her amendment. I hope that I have satisfied her. I have fully explained the Government's intentions in relation to adverse possession and the difference between registered and unregistered land.

8 p.m.

Baroness Buscombe: My Lords, I thank the Minister for her very full response. This was in a sense a difficult amendment to respond to. We were making a broad point about adverse possession--and one which I hope the Government will take on board to some extent. We believe that the whole aspect of the social and economic reason for a particular rule as regards adverse possession should be carefully considered. That said, we shall read the Minister's remarks carefully in Hansard. On that basis, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Schedule 6 [Registration of adverse possessor]:

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