Farmers win land worth £10m under squatters' rights

A family of farmers won land worth a potential £10myesterday when the House of Lords ruled that they had acquired squatters' rights.

Caroline Graham and her father, Charles Denton, have been battling in the courts for five years for the 57-acre plot, which borders their farm at Henwick Manor, Thatcham, Berkshire. The court was told the property developer J A Pye (Oxford) Ltd had let the family to use the land from 1984 while it negotiated with local planners to build homes there.

In 1997 Mrs Graham's husband, Michael Graham, who died in a shooting accident in 1998, registered interests over the ownership of the land, worth an estimated £10m with planning permission, at the Land Registry, saying he had obtained it by the law of adverse possession – squatting. Under the law, a squatter must show that for at least 12 years the owner of the disputed land or property had done nothing to assert ownership.

In 2000 Mr Justice Neuberger, in a judgment delivered in the High Court, upheld the claim. But he added: "This is a conclusion which I arrive at with no enthusiasm. It seems to me that it is a result which does not accord with justice."

Lord Bingham of Cornhill, the senior law lord, said yesterday their lordships shared Mr Justice Neuberger's lack of enthusiasm for such an outcome. But Lord Bingham added: "The Grahams have acted honourably throughout. They sought rights to graze or cut grass on the land after the summer of 1984, and were quite prepared to pay. When Pye failed to respond they did what any other farmer in their position would have done; they continued to farm the land."

He said because of Pye's inaction, the family had enjoyed the use of the land free for 12 years. "As if that were not gain enough, they are then rewarded without any obligation to compensate the former owner in any way at all."

Lord Bingham said it was difficult to see any justification for a legal rule that compels "such an apparently unjust result". He said it was "even harder to see why the party gaining title should not be required to pay some compensation to the party losing it". Lord Bingham said the Government was looking at the problem of a registered owner losing his title through neglect, but the main provisions of the Land Registration Act 2002 were not yet in force and would not be retrospective.

West Berkshire Council says the site is not earmarked for development under local planning policy.

The case follows a series of similar rulings in urban areas where courts have awarded squatters ownership of houses and flats under the 12-year rule. In 2000 a handful of squatters defeated an attempt by Lambeth Borough Council to evict them from a £6m block of flats overlooking the Oval cricket ground in south London. Lambeth recently succeeded in evicting another 32 squatters who could not prove they had lived there for 12 years without the council asserting its right of ownership.