Registered Proprietors and Adverse Possession
In Parshall v Hackney  EWCA Civ 1084 (an unusual case involving double registration) the Court of Appeal held that a registered proprietor cannot be in adverse possession of the property of which he is the registered proprietor. However, the recent case Mohammed Rashid v Farakh Rashid  UKUT 332 (TCC) raised an interesting question; namely, can a registered proprietor who has acquired possession unlawfully be in adverse possession of a property?
In very brief terms, Rashid v Rashid was a rectification of the register case involving three parties (Mohammed Rashid, Farakh Rashid and Farakh Rashid’s father who is also named Mohammed Rashid). However, unlike the classic A-B-C textbook scenario (i.e. where B obtains title from A by a fraudulent disposition and then transfers the land to C for consideration and both A and C are innocent parties) the First-tier Tribunal (‘FTT’) held that the case fell within section 6(2) of Schedule 4 (i.e. C has by fraud or lack of proper caused or substantially contributed to the mistake). In such circumstances, the application for rectification must be approved unless there were exceptional circumstances and this is where the case became interesting as Farakh Rashid argued that there were exceptional circumstances by virtue of adverse possession.
At first instance the FTT, applied Parshall v Hackney and, held that a registered proprietor of land cannot be in adverse possession of it. On appeal, to the Upper Tribunal, the appellant (Farakh Rashid) argued that his father’s fraud did not preclude him from being in adverse possession of the property and in support of this argument he relied on R (on application of Best) v Chief Land Registrar and The Mayor and Burgesses of the London Borough of Lambeth v Blackburn.
At first blush this may seem an audacious position to take, as it is often stated that a person should not benefit from his own wrongdoing, but one must remember that:
(1) by definition, an adverse possessor is a trespasser;
(2) in Best and Blackburn the commission of a criminal act (in Best squatting and in Blackburn breaking and entering) did not preclude them from seeking adverse possession; and
(3) the Supreme Court has recently explained that the statement, that a person should not benefit from his own wrongdoing, can lead to “the undesirable effect of tempting judges to focus on whether the plaintiff is ‘getting something’ out of the wrongdoing, rather than on the question whether allowing recovery for something which was illegal would produce inconsistency and disharmony in the law, and so cause damage to the integrity of the legal system.”
Building on the illegality point the appellant sought to distinguish the case of Parshall v Hackney on the basis that it applied to a party who had taken possession lawfully. The appellant argued that the current situation was different from Parshall v Hackney in that the mistake, in Parshall, had been caused by the Registrar. Whereas, here, the Appellant was a wrongdoer who could benefit from the expiry of the limitation period. Further, it was argued that (even if the Register was rectified) the Appellant would be able to resist possession proceedings, by relying on the transitional provisions at paragraph 18(2) of schedule 12 of the Land Registration Act 2002, and this constituted exceptional circumstances.
Although Judge Cooke accepted that adverse possession is not ruled out by squatter’s criminal behaviour, she rejected the Appellant argument for the following reasons:
- It is true that the commission of a criminal act did not preclude Mr Best from seeking adverse possession but the appeal was decided on a narrow point relating section 144 of Legal Aid Sentencing and Punishment of Offenders Act 2012 (‘LASPO’) and the Court of Appeal reserved its position in relation to other criminal offences.
- To compare the Farakh Rashid to a squatter who has changed the locks is a mischaracterisation of the situation. He was the registered proprietor of the property. Accordingly, the Respondent would be unable to take possession until the Register was rectified and, therefore, the appellant could not be compared to a squatter with a precarious possessory title.
- It is nonsense to regard the Appellant as having a possessory title in conjunction with his statutory title;
- The reasoning in Parshall v Hackney applies;
- If she is wrong about Parshall v Hackney, then applying Patel v Mizra to allow “the Appellant to retain the land would be to reward him for fraud and to give the message that fraud can be condoned after some years” and “to deny the Appellant’s claim in adverse possession would be a proportionate response to his conduct and his father’s.”
The Appellant’s argument is a clever argument but, in my opinion, it is built on a false premise as it presupposes that adverse possession can be established. The flaw in that premise is apparent when the following points are considered:
- (As Judge Cooke pointed out) the Register is morally blind. By virtue Section 58 of the LRA 2002, a registered proprietor is deemed to be vested with the legal estate even if he is not otherwise entitled to the estate. Pursuant to this, the registered proprietor has an immediate right to possession of the property and that right is good against the world. Accordingly, it is clear that (a) Farakh Rashid had a right to possession derived from his statutory title and (b) Mohammed Rashid could not bring proceedings for the recovery of land until the Register was rectified and time (i.e. for limitation purposes) could not, therefore, begin to run.
- Building on the point above, Lord Browne- Wilkinson has explained that Paragraph 8(1) of Schedule 1 of the Limitation Act 1980 is “directed not to the nature of possession but the capacity of the squatter.”
- The position of registered proprietor and a squatter irreconcilable. Prior to limitation expiring, a squatter is vulnerable to any claim for possession that a title holder or registered proprietor may bring. A registered proprietor is not; and
- If the Appellant’s argument were correct then the property would have (prior to the 13th of October 2003) been deemed to be held on trust under section 75(1) of the Land Registration Act 1925 (“Section 75(1)”). However, the Appellant’s position is at odds with the wording of Section 75(1) as the word “against” in “shall be deemed to be held by the proprietor for the time being in trust for the person who, by virtue of the said Acts, has acquired title against any proprietor….” (my emphasis added) is clearly, used in the sense that it is, in contrast to something else. Pursuant to this, Section 75(1) patently envisages two separate parties (i.e. the proprietor and the adverse possessor).
The appeal of this matter, to the Court of Appeal, (which the Justice website states is due to be heard in November 2018) has the potential to be truly fascinating but much will depend on the scope of the appeal.
If you would like to instruct Christopher in a claim relating to land registration or adverse possession then please contact his clerks on 01483 539131 or email them at email@example.com
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  UKUT 332 (TCC)
 Section 6(3) of Schedule 4
  EWCA Civ 240
  EWCA 17 Mr Best noticed an empty house, that had been vandalised, and entered the house and did various works on the property. After the relevant time period had expired, Mr Best made an application to be registered as the proprietor of a property. The Registrar rejected his application. The Registrar was of the opinion that it was not possible to rely on on act that was a criminal offence (i.e. squatting) as evidence of his adverse possession. Following a judicial review, the Chief Land Registrar appealed and the Court of Appeal had to consider whether whether Mr Best’s application to be registered as proprietor, by reason of his adverse possession of the land, was valid. After balancing the competing public policies (i.e. the public policies inherent in the LRA 2002 namely that abandoned land being put to good use and clear rules as to the acquisition of title with section 144 of Legal Aid Sentencing and Punishment of Offenders Act 2012 (‘LASPO’) (namely that squatting is a criminal offence) the Court held that the fact that the possessor’s actions constituted a criminal offence under section 144 of LAPSO did not prevent his conduct throughout from qualifying as relevant for adverse possession
  EWCA Civ 912. A case in which the Respondent’s actions of breaking a lock and replacing it with his own Yale lock was taken to demonstrate that he intended to exclude everyone (including the paper title holder) and amounted to an unequivocal demonstration of the Respondent’s intention to possess the land.
 Patel v Mirza  UKSC 42 at paragraph 100
  EWCA Civ 240
 In Parshall the Land Registry had registered a strip of land in Kensington as firstly as part of the property of 29 Milner Street and then later as part of 31 Milner Street. The registered proprietor 31 argued that they had obtained title by adverse possession
 To explain this argument in very brief terms: the rules relating to adverse possession differ depending on whether the land is unregistered. The land is registered and the limitation period expired on or before the 12th of October 2003. The land is registered and the limitation period had not expired by the 13th of October 2003. By virtue of section 75(1) of the Land Registration Act 1925, where land is registered and the limitation period expired on or before the 12th of October 2003, the registered proprietor was deemed (prior to the implementation of the Land Registration Act 2002) to hold the land on trust for the person with possessory title. However, where the registered estate was held in trust for a person by virtue of section 75(1) of the Land Registration Act 1925, prior to the 13th of October 2003, that person (by virtue of paragraph 18(1) of Schedule 12 of the LRA 2002) is entitled to be registered as the proprietor of the estate and (by virtue of paragraph 18(2) of Schedule 12 of the LRA 2002) has a defence to any claim for possession
 R (on application of Best) v Chief Land Registrar  EWCA 17 at paragraph 67
 The FFT had found, as fact, that Farakh Rashid’s father forged Mohammed Rashid’s signature on a transfer of title and registered himself as proprietor whilst Mohammed Rashid was out of the country and then called him and told him not to come back
  UKSC 42
 JA Pye (Oxford) Ltd v Graham  1AC419 at 434D
 This was repealed by the Land Registration Act 2002. However, paragraph 18 of Schedule 12 of the Land Registration Act 2002 contains a transitional provision. See footnote 10 above