It is not often that the law of property is disturbed by new expositions of its guiding principles. However, the recent decision of Kenneth Martin J in the Supreme Court of Western Australia in Ben-Pelech v Royle  WASC 297 is one of the most significant cases on the law of adverse possession to have been decided in this State.
His Honour’s decision highlights the peculiar status of possessory title obtained through adverse possession and its relationship to a body of other legislative provisions in this jurisdiction. Several legal principles have been expounded for the first time and others have been clarified.
Despite the simple nature of this boundary dispute between the plaintiffs and the primary defendants, the case threw up a complex array of issues under the property law in the Western Australian context.
Bad Fences Make Bad Neighbours
The genesis of the dispute was rather straightforward, although unusual. The parties had acquired their respective adjoining lots from a common vendor. The vendor sold the lots on the express understanding that the existing fence on those lots was not erected on the cadastral boundary between them. The vendor provided each of the purchasers with a survey she had obtained, which purported to show the proper location of the cadastral boundary. Each of the purchasers agreed that a new fence would be erected upon the boundary indicated by the survey and a new fence was erected on part of that line. It was subsequently discovered, when the plaintiffs subdivided their land and other land contiguous to theirs, that the vendor’s survey was incorrect by reason that an original survey peg had been misplaced. Discussions broke down between the neighbouring parties with the defendants claiming adverse possession of the area enclosed by the fence and a contiguous portion extending to the front boundary of their lot and the plaintiffs challenging the defendants’ possessory title and seeking relief under section 123 of the Property Law Act 1969 (WA) and by reference to a contended legal effect of section 163 of the Transfer of Land Act 1893 (WA).
The plaintiffs claimed that because the fence had been erected in accordance with an agreement, adverse possession could not arise by reason that the possession of the fenced land was consensual. The plaintiffs further disputed the claim to the contiguous and unfenced portion of the land claimed by the defendants. The defendants in turn, claimed that the unfenced portion of the land was a natural continuation of that part fenced by reference to the installation of garden beds and the planting of a row of olive trees, which by the time of trial were of substantial height and which, they argued, provided a de facto delineation of the boundary.
The Decision – Adverse Possession
Little needs to be said about the claim respecting the front portion of the disputed land. His Honour found on the facts that the claimed acts of possession were insufficient to support a claim for possessory title.
The further arguments with respect to the rear portion of land were more complex. His Honour surveyed the place of the law of adverse possession in Western Australia, noting that it had a peculiar status as an exception to the paramountcy of registered title by operation of the provisions of the applicable limitation acts and section 68 (1A) of the Transfer of Land Act.
His Honour also made short work of the submission that the land enclosed by the fence had been possessed on a consensual basis. His Honour effectively found that each party intended to occupy land delineated by the fence and that in the absence of prior knowledge of the mistake concerning the location of the fence, there could be no consent in the sense required as an exception to the principle of adverse possession. His Honour found that the fenced portion of land was adversely possessed by the defendants.
Relief for Mistake
The plaintiffs’ claim under section 123 (1) of the Property Law Act was described by His Honour as being invoked as a shield to adverse possession.
Sections 122 and 123 of the Property Law Act are designed to assist landowners where buildings have, mistakenly been constructed on land that is not owned by the party that has constructed the building. They are remedial provisions. Section 122 deals with the situation where part of a building encroaches upon a neighbour’s land and section 123 deals with buildings that have been wholly constructed upon a stranger’s land.
Building is defined for the purposes of section 122 to include any structure, but is not defined at all in section 123.
Section 123 is, as described by His Honour in his reasons, grammatically confronting. It is a densely drafted statutory provision. The plaintiffs claimed that this provision permitted them, as the owners or former owners of the affected land on which the fence had been erected, to seek relief, where it was just to do so, against the effects of adverse possession.
His Honour, having considered the legislative history of section 123 from its New Zealand origins to its adoption into the Western Australian Property Law Act made a number of significant findings and statements of the law under that provision; these were:
- a fence is not a building for the purposes of section 123(1) of the Property Law Act and its mistaken location gives no rise to a right to claim relief under that section;
- adverse possession vests title in the possessed land in the party that has adversely possessed that land after 12 years from the commencement of the possession by operation of the relevant legislation;
- once adverse possession is established, the registered title holder of the land possessed no longer has standing to seek relief under section 123(1) of the Property Law Act to extinguish the possessory title (in other words, they are not a person having an interest in the affected Land).
It followed from His Honour’s findings because the defendants had established title through adverse possession of the portion of the land enclosed by the fence, the plaintiffs had no standing to bring a claim for relief under section 123(1) of the Property Law Act, but even had that been the case, the fence was not a building for the purpose of the section and statutory relief would not have been available with respect to it.
As a matter of completeness, His Honour found that had he determined that section 123 of the Property Law Act did apply to the fence and that the plaintiffs had standing to seek relief, he would have found in favour of the defendants on a just and equitable evaluation of their respective rights. His Honour’s findings on that point related to the relative hardship and risks associated with the redevelopment of the affected land as proposed by the plaintiffs.
In passing, His Honour referred to the scant Parliamentary consideration of the significance of sections 122 and 123 of the Property Law Act when those provisions were imported into this state from New Zealand. It is worth noting that New Zealand’s property law does not perfectly reflect the property law of Western Australia and that the legislature did not appear to give any express consideration to the significance of section 68 (1A) of the Transfer of Land Act and the provisions of the local limitation acts in that context.
Subdivision and Possessory Title
The plaintiffs also raised a novel and previously unconsidered point of law pursuant to section 163 of the Transfer of Land Act. The plaintiffs said that as they had subdivided land including the affected land under a registered subdivision plan, the provisions of that new title now governed the lot and that the only relief available to the defendants with respect to the land adversely possessed lay under section 207 of the Transfer of Land Act, being an application to the Registrar of Titles for compensation. Put simply, the defendants contended that the registration of a new subdivision title had the effect of extinguishing any unregistered possessory title.
His Honour accepted that there was no authority to direct his consideration of the plaintiff’s argument and that the matter needed to be determined as a matter of principle. However, His Honour drew on the decision of Murray J in Petkov v Lucerne Nominees Pty Ltd (1992) 7 WAR 163 (a case involving strata title and adverse possession) to find that the provisions of section 163 of the Transfer of Land Act did not interfere with the exception to paramountcy established by section 68(1A) of the same Act.
This case highlights the continuing significance of adverse possession in the property law of Western Australia. His Honour has restated the established law relating to the acquisition and status of adverse possession and has clarified the application of section 123 of the Property Law Act in this context and rejected the adventurous proposition that adverse possession can be extinguished by subdivision of the registered title which includes an adversely possessed portion of land.
The key point of significance for property lawyers and developers is that a claim to possessory title of a part of the land that has been subdivided will survive the subdivision. Further, establishment of adverse possession will preclude recourse by the former owner of the affected land to the remedial provisions under section 123 (and arguably section 122) of the Property Law Act.
* The defendants were represented by LSV Borrello lawyers, now the Perth office of Thomson Geer lawyers.
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