The background and effect of the legal rule
In earlier blogs in this series, we discussed the legal rule against adverse possession over your property. These blogs should be required reading for any property owners (either present or future). Your property can be negatively affected by the rule, whether you own a small city apartment or a large country farm.
The rule has an insidious effect. It can deprive you of a small part of your property. Indeed, the rule can deprive you of all of it (depending upon the extent of encroachment by a neighbour or a squatter).
Even an innocuous building or structure (such as a fence, a wall, a shed, or garage) which extends over the boundary of your property, can trigger the operation of the rule.
On the positive side, you have a legal right to recover the possession of any part of your property which is held by an adverse occupier (who we shall label the 'Occupier').
On the negative side, however, the Owner's legal right to recover possession has a time-limit. In order to successfully enforce your legal rights, you must do so within 12 years from the date when the Occupier’s act of adverse possession first occurred.
And remember, the first act of adverse possession can be as innocent as the building of a fence or a shed over the boundary of your property. Even if the Occupier was not aware that the fence or shed was actually located on part of your property, the 12 year time-period for you to recover possession of that piece of land has started 'ticking'!
So, what are some of the legal ways in which the clock can be stopped from 'ticking '?
In this blog, we have identified 4 primary grounds of defence to an Occupier’s claim.
1. Enforcing your right to recover the possession of your property
The most obvious method of terminating an Occupier's possession over part of your land is to commence a legal action to recover it.
As long as the legal action is commenced before the expiry of the 12 year time-period, then the commencement of the legal action is sufficient to 'stop the clock'.
Other actions taken by an Owner are also capable of stopping the clock. For instance, if the Owner enters back onto the property, the resumption of possession may have that desired effect.
But the exercise of this type of self-help remedy can be risky. The Occupier might be prepared to use force to retain their occupation of the property. And assistance from the local police might not be forthcoming where the civil rights are uncertain. Without a Court order as to possession, it can be difficult to objectively determine who has the present right of possession of land or property.
Where part of the Owner's property has been adversely occupied by a neighbour's fence or a shed, any steps to take down or remove them are also likely to raise legal complications with the local Council or Shire.
A number of other steps taken by (or on behalf of) Owners in the past have proven to be unsuccessful. For instance, it is generally considered by the Courts that neither the service of a lawyer's notice of demand, or the lodgement of a caveat, are effective to terminate the Occupier's right to continue possession.
The added danger of taking such ineffectual steps is that you may not realise (until it is too late) that you have not stopped the clock from ticking. Once the 12 year period has actually expired, it is usually too late!
2. Written acknowledgement of the Owner's title by the Occupier
In order for this defence to be relied upon by an Owner, the Occupier's acknowledgement ordinarily needs to be in writing. The written document may be sufficient if it either expresses or implies that the Occupier is not the true owner of the property.
Examples of a sufficient acknowledgement of the Owner's title would include:
a) An offer to purchase the land signed by the Occupier, or
b) An affidavit sworn to that effect by an Occupier in Court proceedings.
A sufficient acknowledgement of title by the Occupier can also take place by their action of making a payment to the Owner for the use of the property.
3. Disability of the Owner of the property
The description of this type of defence is somewhat misleading. It refers to the 'disability' of the Owner of property as a ground for extending the 12 year time-limit for the recovery of its possession.
However, the meaning and scope of the word 'disability' is greatly restricted in the Limitations Act WA. For instance, it is not intended to cover cases where the person is either physically disabled, visually impaired, or senile.
There are only two forms of disability that are capable of being relied upon under the legislation:
a) Mental disability; and
b) Under-aged disability (i.e. when the Owner is under 18 years of age).
These narrow categories are based upon historical categories of disability that were recognized by the earlier common law.
For the purposes of adverse possession claims, legal questions about the state of disability of the Owner are determined at either:
a) The time when the action for recovery of possession first accrues, or
b) At a later date when the disability arises (but not after the date when the 12 year period has expired).
The defence operates by effectively extending the 12-year time period necessary for the Owner (or their representative) to take legal action to recover possession before the time-period expires.
For the purposes of determining if the defence applies, a property Owner is suffering a mental disability if he or she is of 'unsound mind'. An example is where the Owner is incapable of making a reasonable judgement to protect their own interest.
Several factors can affect the calculation of the time limitation period. Although the Limitation period for the recovery of land is ordinarily 12 years, it will be extended in circumstances where:
a) The Owner of the property was an under-aged minor, who had no parent or guardian to look after their interest at the time; or
b) The Occupier of the under-aged minor's property was a person who (at that time) had legal responsibility for the minor's care, welfare, or general development; or
c) The Owner of the property was mentally disabled, and had no guardian appointed to look after their interest; or
d) The Occupier of the property was someone who (at that time) had a close or influential relationship over the mentally disabled Owner of the property.
4. Fraudulent concealment by the occupier
When an Owner of property has been dispossessed by an Occupier, the Owner has a legal right to recover possession.
As you would be aware from other blogs in our series, the right of recovery relates to the particular part of the property which has been occupied. A common example is where part of the Owner's land area has been fenced off by the Occupier.
However, if the Occupier conceals the truth of his or her occupation in a fraudulent manner, the Owner can raise this fact as a defence in order to extend the time available to recover possession beyond the 12 year limit.
For instance, if an Owner was unaware they were actually legally entitled to a property, the defence would arise if the Occupier had concealed the title documents from the Owner.
In order to raise this defence against a claim of adverse possession, the Owner will usually have to establish that:
a) The Occupier was conscious of his or her own wrongdoing, but was nevertheless willing to take advantage; or
b) The conduct by the Occupier was so unconscionable that it would be inequitable to allow him or her to defeat the Owner's claim for possession.
The defence can be relied upon even if the Occupier's acts of fraudulent concealment did not actually take place until well after the 12 year limitation period had started 'ticking'.
As a general comment, the defence is quite narrow in scope. For instance, it would not assist an Owner who mistakenly believed the Occupier was not actually occupying part of the Owner's property.
Nevertheless, the provisions in the WA Limitations Act which refer to this defence are wider in scope than similar provisions in other States of Australia. Section 38 of the Limitations Act 2005 (WA) allows an Owner to commence an action to recover possession of his or her property even if the 12 year period has expired.
However, in order to be eligible, the Court must be satisfied that:
a) The Owner’s failure to commence an action for possession was attributable to ‘fraudulent or other improper conduct’ by an Occupier (or their agent);
b) The Owner could still commence the action for possession, if it is made within 3 years from the date when the action ‘ought reasonably to have been commenced’; and
c) In the circumstances, permission should be given to the Owner to commence action (even though the 12 year period has already expired).
Conclusion
To detect any of the defences we have discussed, a careful consideration of the facts and circumstances surrounding the Occupier's entry into possession is warranted.
Legal advice and assistance is recommended if your property is at risk.
Contact Us
If the issues discussed in this blog are relevant to you and/or you require legal assistance, you can contact Tony or Andrew at Irwin Legal on admin@aristei.com.au or by contacting 08 92218337.
About the Author
Anthony J Aristei ('Tony') was admitted to legal practice in Western Australia in 1985, and admitted as an independent barrister in 1996. With some 40 years of legal experience, he has represented clients in over a thousand cases, including numerous high-profile matters reported in a number of law reports such as the Western Australian Law Reports, State Reports and various Federal Reports.
Tony is an accomplished legal writer, having authored the Nutshell students' text on real property law and annotated commentaries on retail shops legislation in Western Australia. He has also written various Law Society of Western Australia and LexisNexis seminar papers on property, equity, and trusts law. Additionally, he previously served as the President of the Anglo-Australasian Lawyers Society in Western Australia. (The Society fosters professional relations between legal communities in Australia, New Zealand, and the UK).