Adverse Possession PDF

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Detailed textbook notes on adverse possession for property law...

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Adverse Possession Definition In our system, possession of land is protected, and earlier possession is superior to later possession. Possession of land itself is seen to be worthy of protection, even against the “true” owner.  It allows the possessor’s interest to be protected after a certain amount of time against even the original owner.  While it used to have a technical meaning, it now simply means that a person is in actual possession of the land without consent of the title owner 

Rationale  Some find the doctrine a form of legalised theft, while others believe it is necessary to identify who can actually deal with the land. There are a range of policy considerations for the doctrine’s existence  Sleeping on their rights o The doctrine encourages landowners to exploit the land and use it to its fullest potential. o Some argue that it does not achieve this, however, as until the 12year limitation period expires there is little encouragement for the owner to do anything o The idea of the land needing to be exploited has also lost some of its strength, as the current political and social climate leans more towards sustainability than full exploitation  The law’s acknowledgement of the actual situation o The law has more power when it is truthful, and so it is argued that when someone has possession of land, the law should recognise it. This also encourages stability o While this argument holds clout with old system title, it is weaker regarding Torrens title land, as interests outside the Register would actually seek to undermine stability o In NSW, however, the adverse possessor cannot bar the owner’s title until the Register is altered under s 45C of the Real Property Act 1900 (NSW). This means that the law could in fact operate in a way that allows adverse possession and keeps the integrity of the Register.

 Hardship o This argument asserts that if a possessor has been in possession for years, paying rates and improving the land, they should reap the benefits of actual ownership and have their rights protected. o However, it is also argued that the owner suffers hardship when his rights are barred by statute, and that the possibility of acquiring land freely can encourage ‘bad faith’ squatting.  McHugh J summarised relevant policy considerations in Brisbane South Regional Health Authority v Taylor as: o The general loss of evidence as time goes by after an event o It is oppressive and cruel to allow plaintiffs to bring action against a defendant long after the event has occurred o People should be able to organise their affairs on the basis that action cannot be brought against them o There is a public interest in disputes being settled as quickly as possible

Sources of Adverse Possession Rights  Adverse possession rights come from both CL and statute o CL creates the actual right of adverse possession and the concept of possessory title o Statute determines the limitation period after which the original title is barred (Limitation Act 1969 (NSW) ss 27, 28, 38(1)) – the limitation periods, the cause of action on dispossession and discontinuation, and adverse possession taken by another respectively  More than one party may have a legal fee simple interest in the same property and that fee simple may be created through possession (Asher v Whitlock)  The limitation period is 12 years in NSW (Limitation Act s 27(2)) while Crown title cannot be barred until 30 years of adverse possession have elapsed (s 27(1))

Adverse Possession and the Crown  Crown title to land cannot be barred through adverse possession in a number of circumstances (Crown Lands Act 1989 (NSW) s 170).

o It also prevents adverse possession relating to certain Crown land, which has been held to include those lands dedicated/reserved for public purposes (Townsend v Waverly Council (2001))  Claiming adverse possession against the Crown is different to claiming it against a private citizen or company. One reason is the Crown has many land holdings and it would be hard to keep track of all of them, esp. in the case of Crown land that has never been used or alienated. However, much of Crown land is used by govt depts, and so it is likely not that onerous after all to expect the land to be kept track of.  Another reason for preventing people from claiming adverse possession of Crown land is that enough State land is already privately owned that no more should be permitted to be privatised, as public land is a valuable public asset.  The principle does not go the other way, however, with the court finding in Roberts v Swangrove Estates Ltd that there is no principle stopping the Crown from claiming adverse possession of private land. The appellant’s argument that the Crown cannot commit a wrong against one of its citizens (the wrong is the basis of adverse possession claims) was dismissed. o It is important to note that there is not Australian case on this (the above case is UK) and the statutes do not seem to deal with this possibility

When Does a Limitation Period Start?  The time period starts when the documentary title owner has their land possessed by another – i.e. when their cause of action begins to accrue

What Needs to Occur for the Cause of Action to Accrue?  It will begin to accrue: o When there is:  Dispossession (the adverse possessor driving the owner off the land); or  Discontinuance (documentary title holder goes out of possession and adverse comes into possession, i.e. abandonment of the property); and o When some other person takes adverse possession  Practically, most cases are of discontinuance

 If the documentary owner assigns their interest to another before the 12-year period ends, the interest will be subject to the adverse possessor’s interest, as the assignee cannot be put into a better position than the assignor (Limitation Act ss 27(2), 11(2)(a)) o With land subject to interest in remainder, the cause of action doesn’t accrue until the remainder falls into possession (Limitation Act s 31) – e.g. if a life tenant is adversely dispossessed for 12 years, their estate in the property is extinguished. If, however, they die after this time period, then whoever the property passes to has the right to claim possession as their cause of action only began to accrue once the life tenant died o This is similar to a lease, where a tenant is adversely dispossessed. When this happens, the dispossessor cannot defeat the lessor in a claim until 12 years after the lease has expired. If the lease is for longer than 12 years, it may therefore take 24 years of possession to win a claim (Ace Property Pty Ltd v Aust. Postal Corp)

Criteria for Adverse Possession  Possession is comprised of: o Factual possession – requisite level of physical control o The requisite animus possidendi – intent to possess  Must be without consent  Elements are dealt with on a case-by-case basis with regard to context by the courts  Factual Possession o Requires possession in the ordinary sense of the word – adverse possessor must merely go into possession for the period without the owner’s consent (JA Pye (Oxford) Pty Ltd v Graham) o The adverse possessor must be able to demonstrate factual possession and mere not conduct that is less than or different to this (Kierford Ridge Pty Ltd v Ward) o No requirement for possession to be confrontational (JA Pye v Graham) o Possession should occur in a manner that they documentary owner would notice it (Re Riley and the Real Property Act) – it must be open, peaceful and without consent (Mulcahy v Curramore Pty Ltd)

 However, in Rains v Buxton, the dispossessor lived in the owner’s cellar for 60 years without the owner knowing, and this satisfied the requirements despite not being open.  It was also found that some force can in fact be used (Harnett v Green (No 2)) – the fact that the period can start through discontinuance or dispossession allows for this – dispossession means the original owner has been drawn out. If force can be used to start the dispossession, surely it can be used to maintain it, however if the owner is so intimated by the force that he doesn’t want to enforce his rights then the dispossession may not be regarded as peaceful (Bartlett v Ryan)  Adverse possession cannot happen with permission (Hughes v Griffin), and whether or not permission is granted can become murky in family situations where agreements are often verbal (Smith v Lawson; Richardson v Greentree).  The general rule is that possession by a person in a family relationship with the owner will be possession done ‘with permission’ (despite the contrary view taken in Roy v Lagona)  In some cases, permission is given but then revoked later. In these cases, possession can only be adverse once the permission ceases (such as a contract of sale which allows possession ceasing to bind the parties – Lakshmijit v Faiz Sherani). The adverse possessor must be able to prove the rescission of permission in order for the time period to begin (Sandhu v Farooqui).  If permission is given after possession is adversely taken, then the time period that has accrued ceases (BP Properties v Buckler).  Ordinarily, a contract of sale from the adverse possessor to the documentary owner would affirm his title and stop the time period accruing, however in cases where the contract is ‘without prejudice’ the court cannot take it into account (Ofulue v Bossert).

 In order to determine if the land is factually possessed, the court will need to have regard to the nature of the land and the manner it is usually enjoyed in, and the same degree of possession to sue in trespass is needed for adverse possession (Powell v McFarlane). It means that the land must be used in a way the owner would expect himself exclusively to use it  FURTHER EXAMPLES ON TEXT PAGE 236  It is not required that the adverse possessor shows possession of every part of land, and acts done on part may evidence possession of the whole (South Maitland Railways Pty Ltd v Satellite Centres Australia Pty Ltd). Further evidence of possession (regarding the context) includes:  Building on the property (Mulcahy v Curramore)  Occupying the property by living there ( above)  Paying rates and taxes (Newington v Windeyer)  Fencing the property (Mulcahy v Curramore)  Maintaining trees and gardens (Newington v Windeyer)  Blocking access to others (above)  Allowing cattle to graze for a fee on the land (Mulcahy v Curramore)  The onus is always on the possessor to prove that their possession was adverse on the balance of probabilities (Wogama Pty Ltd v Harris; Cawthorne v Thomas)  For a time, the law required the use of the property by the adverse possessor to be inconsistent with the owner’s intended use (Leigh v Jack). This meant that in cases where the owner simply held the land for future use, there could be no adverse possession (West Bank Estates Ltd v Arthur). This view was disregarded in Buckinghamshire County Council v Moran  The possibility of such a defence to adverse possession was entertained in JA Pye v Graham, where the court held that if the adverse possessor knows of some special use the owner is reserving for the land, and their use is not

inconsistent with that, then it may be shown that they did not intend to possess the property. This proposition is, however, quite improbable.  This position has been followed in Australia (Monash City Council v Melville; Whittlesea City Council v Abbatangelo )  Animus Possidendi or Intent to Possess o Where acts of possession are equivocal, it may be hard to show both factual possession and intent to possess (Riley v Penttila), and in these cases the subjective intent of the adverse possessor may be relevant (Buckinghamshire County Council v Moran). If the intention is open to more than one interpretation, it will generally not satisfy the animus possidendi (Cervi v Letcher) o The court may rely on a possessor’s statement on intention, but only when coupled with other evidence and in careful consideration of the context (Whittlesea City Council v Abbatangelo) o The relevant intention is always that of the adverse possessor; they must demonstrate an intention to use the land as their own (Powell v McFarlane) o Not an intention to own or acquire ownership, but an intention to possess (Moran v Buckinghamshire County Council). It does not necessarily include a conscious intent to exclude the original owner (Kieford Ridge Pty Ltd v Ward, quoting Bayport v Watson) o There must be an intent to possess exclusively, which is different from an intention to own; the payment of rates will not always destroy an adverse possessor’s claim, and neither will statements that they do not own the property (Whittlesea City Council v Abbatangelo) o While factual possession and animus possidendi are distinct, the same circumstances will often satisfy both.

Suspending the Statutory Period  If the documentary owner has a disability, then the period will be suspended. In NSW, a person under the age of 18 is regarded as being under a disability (Limitation Act s 11(3)(a)). A disability is something that affects you for a continuous period of 28 days, and impedes your ability to manage your affairs, such as

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o Disease/impairment of physical or mental nature (s 11(3)(b)(i)) o Imprisonment (s 11(3)(b)(ii)) o War or warlike operations (s 11(3)(b)(iii)) The disability may exist before the adverse possession or may arise while the adverse possession is taking place. It suspends the period for the duration of the disability. There is a limit, in that no cause of action can be brought more than 30 years from the date it accrued ( s 51) If the period expires within 3 years of the owner recovering from the disability, then the owner will have 3 extra years to assert their title (s 52(e)) The period may also be delayed if the adverse possessor conceals their identity or their cause of action through fraud. The time period will only begin when the owner discovers the fraud, or when they should’ve discovered it through due diligence (s 55). The relevant fraud, while not as narrow as CL fraud, still requires a consciousness of wrongfulness (Seymour v Seymour)

Adding Consecutive Periods of Adverse Possession Together  Separate consecutive periods of adverse possession may be added together to amount to the statutory period (Mulcahy v Curramore)  If each possessor takes through the previous possessor, then after 12 years the adverse possessor at the time will be able to bar the documentary owner’s title. This is because the original adverse possessor has a title against all the world (Asher v Whitlock), which may be devised or conveyed (Allen v Roughley)  If the adverse possessors take title against each other, then once the 12 years is done it will be the first possessor who can bar the title, not the last (Shaw v Garbutt; Mulcahy v Curramore)  It is required that the chain of adverse possession is maintained continuously. If a possessor abandons the property, it may be taken into adverse possession by another immediately, which keeps the chain of possession alive. At the end of the period, the first adverse possessor would not be able to bar the owner’s title, however, as the succeeding possessor has the better right to the property following the first possessor’s qualified abandonment.

Stopping Time Running  Acts done by the true owner that asserts their title, or where the adverse possessor acknowledges the owner’s superior title, will stop the time running.  Asserting title can be done in a few different ways. The owner could: o Bring an action to recover the land o Physically enter the land and turn out the possessor (Randall v Stevens), and even removing fences may be enough in some circumstances (Worssam v Vandenbrande)  A formal entry will not, however, be enough to assert their title (Limitation Act s 39)  The aim is to demonstrate possession ( Symes v Pitt) and this cannot be done by paper dealings such as a mortgage or lease (O’Neil v Hart; Simpson v North West County District Council) o Oral protests also will not do (Mount Carmel Investments Ltd v Peter Thurlow Ltd)  If the adverse possessor acknowledges the title of the owner, the time stops (Ofulue v Bossert). This must be done in writing and signed ( s 54(4)). An email is writing (McGuren v Simpson). It can be given inadvertently (Edgington v Clarke)  Realising someone else owns the land and cancelling a licence is not acknowledgement (Sze To Chun Keung v Kung Kwok Wai David), although seeking a rent exemption is (Furdson v Clogg). Admitting the owner’s title in proceedings counts (Ofulue v Bossert), and so does asking the owner to contribute to rates (Furdson v Clogg).  Offering to purchase the land may amount to acknowledgement, but not always (Edgington v Clarke: Refina Pty Ltd v Binnie)  If title is acknowledged, the acknowledgement is binding on any successor in title or any person who may dispossess the adverse possessor.

Abandonment  If the adverse possessor abandons the land, then the time period ceases to run (s 38(3)). There must be complete vacation of the land, and this will depend on the facts. For example, farmland will not be abandoned if the land become unusable due to seasonal changes (Nicholas v Andrew)

 If some tenants of the adverse possessor leave and new ones have not yet arrived, this is not abandonment (Grave v Wharton).  In cases of abandonment, the owner is free to recover the land as if no adverse possession has taken place (Mulcahy v Curramore).  If another party takes adverse possession after the first adverse possessor’s abandonment, the first time period won’t count, and the first possessor will have no right of action.  If the adverse possessor abandons after the time period is satisfied, then they don’t lose their title simply through laws of abandonment (Perry v Clissold).

What Rights does Adverse Possession Give Rise To?  While the period is ongoing, the adverse possessor has a right of possession they can enforce against the whole world except the true owner. When the period elapses, they then have a proprietary title they can enforce against the whole world including the owner – they acquire a fee simple estate or life estate of their own (for example). The owner’s title can then be extinguished (s 65(1)).  Adverse possession extinguishes rights, rather than creates them. This means that if a 3rd party has an easement interest over land, then that will be unaffected by successful adverse possession, as only the original owner’s rights have been extinguished (Quach v Marrickville Municipal Council (No 2))

Possessory Title and Torrens Land  The Torrens system requires that land rights be registered to be enforced. As such, after 1979 it became possible to make a possessory application of Torrens land under Pt 6A of the Real Property Act. This is an application to list the adverse possessor as the proprietor. The court will still play a role where there is a dispute between the adverse possessor and the owner, however (Bartlett v Ryan)  Generally, adverse possession claims will only succeed in relation to ‘whole parcels’ of land (Real Property Act s 45D(1) – confirmed in Seyffer v Adamson). There are exceptions to this o If adverse possessor claims up to an ‘occupational boundary’ (such as a river or a fence) that is within the true boundary, they can claim the whole land despite not occupying the rest of it (Real Property Act s 45D(6))

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o If the application is made by a person claiming an estate in possession in the land, then the claim can be for the whole or part of the land (s 14(2)) Possessory application cannot be made for land in the name of: o Her Majesty or a Minister of the Crown o A statutory body representing the Crown o Certain Corporations o Council or County Council within the meaning of the Local Government Act 1993 (NSW) s 45D(8) and (9) provide that the grant of a folio over Crown land will not stop the time period from running. If the land is sold, the period starts running again unless the purchaser is guilty of fra...