Amatek Ltd v Googoorewon Pty Ltd

[1993] HCA 16

HIGH COURT OF AUSTRALIA

MASON CJ, BRENNAN, DAWSON, GAUDRON AND McHUGH JJ

AMATEK LIMITED v. GOOGOOREWON PTY. LIMITED

(1993) 176 CLR 471

18 March 1993

Real Property (N.S.W.)

Real Property (N.S.W.)—Boundaries—Encroachment of buildings—Structures mistakenly entered wholy on adjoining land—Statutory remedy—Whether available only where building encroaches across boundary—"Encroachment"—Encroachment of Buildings Act 1922 (N.S.W.), ss. 2, 3.

Decision

MASON C.J., BRENNAN, DAWSON, GAUDRON AND McHUGH JJ. In 1985 the respondent plaintiff, Googoorewon Pty. Ltd., purchased Lot 18 of a subdivision then owned by Compton Park Pty. Limited. To the west of Lot 18 lies the contiguous Lot 17. The southern boundary of both lots abuts onto Compton Park Road. Googoorewon bought Lot 18 with the intention of establishing a nursery for the commercial raising of trees. No survey was taken of the boundary between Lot 18 and Lot 17. Finding an area of land which was suitable for the growing of young trees, Googoorewon erected a timber building comprising an office, shed and amenities. The building covers an area of 160 square metres. This building was connected to the electricity supply and a track was constructed linking the building with Compton Park Road. A concrete water tank was constructed and connected by a 50mm polythene underground pipe to a dam which was some distance away on Googoorewon's property. A second pipe from the dam carried water to an area nearby where sprays were installed. In addition to the building already mentioned, Googoorewon erected a timber shed enclosing a water pump, a power pole, a potting bin mounted on a large concrete base and a fuel tank supported by posts set in concrete foundations. The cost of these structures was $55,000.

2. In 1987 Compton Park Pty. Limited sold most of the balance of its subdivision including Lot 17 to Amatek Limited, which was interested in quarrying. It was subsequently discovered that the improvements which Googoorewon had erected in fact stood on Lot 17. The closest point of any of the improvements effected by Googoorewon to the boundary between Lot 17 and Lot 18 is approximately 40 metres. The two underground 50mm polythene pipes traverse the boundary. Googoorewon applied on summons to the Supreme Court of New South Wales for an order that Amatek transfer to it a triangular parcel of land being part of Lot 17 adjacent to the common boundary of Lots 17 and 18 and including the area on which the improvements stand. The application was made in purported pursuance of the Encroachment of Buildings Act 1922 (N.S.W.) ("the Act").

3. The application came before Cohen J. who held that the Act was "intended to apply only to an owner whose building was meant to be on his own land but which, although partly on that land, extends across to the adjoining land". His Honour did not consider that it was "intended to nor does it provide for buildings that had inadvertently been erected wholly on neighbouring land nor was it intended to provide for the compulsory transfer of large tracts of land because of that inadvertence". His Honour held that the Court did not have jurisdiction to make an order under the Act. On appeal ((1) Googoorewon Pty. Ltd. v. Amatek Ltd. (1991) 25 NSWLR 330), the Court of Appeal held that there was jurisdiction to make the order and remitted the matter to the Equity Division to proceed accordingly.

4. The scope of the relief available under the Act and of the court's jurisdiction to grant it are to be collected, of course, from the terms of the Act. The relief available and the jurisdiction to grant it are provided for in s.3 of the Act, the meaning of the key terms used in that section being defined in s.2. The relevant provisions read as follows:
"2. In this Act, unless the context or subject-matter

otherwise indicates or requires - 'Adjacent owner' means the owner of land over which an encroachment extends. 'Boundary' means the boundary line between contiguous parcels of land. 'Building' means a substantial building of a permanent character and includes a wall. 'Court' means the Supreme Court in its equitable jurisdiction or such other court outside the county of Cumberland as is proclaimed by the Governor. 'Encroaching owner' means the owner of land contiguous to the boundary beyond which an encroachment extends. 'Encroachment' means encroachment by a building, and includes encroachment by overhang of any part as well as encroachment by intrusion of any part in or upon the soil. 'Owner' means any person entitled to an estate of freehold in possession - (a) whether in fee simple or for life or otherwise; (b) whether at law or in equity; (c) whether absolutely or by way of mortgage; and includes a mortgagee under a registered mortgage of a freehold estate in possession in land under the Real Property Act, 1900. 'Subject land' means that part of the land over which an encroachment extends. 3. (1) Either an adjacent owner or an encroaching owner
may apply to the court for relief under this Act in respect of any encroachment. (2) On the application the court may make such orders as it may deem just with respect to - (a) the payment of compensation to the adjacent owner; (b) the conveyance transfer or lease of the subject land to the encroaching owner, or the grant to him of any estate or interest therein or any easement right or privilege in relation thereto;

(c) the removal of the encroachment."

Sub-section (3) of s.3 provides that the court may grant or refuse the relief or any part thereof as it deems proper in the circumstances of the case and prescribes a number of matters which the court may consider in the exercise of this jurisdiction.

5. As a matter of ordinary language, "encroachment" is a term appropriate to describe either the action of a person who intrudes upon land or rights to which he has no title or the intrusion by some inanimate thing on an area broader than the area properly or previously occupied by it. The term is used in the former sense in a line of cases in which Kingsmill v. Millard ((2) (1855) 11 Ex 313 (156 ER 849)) is the leading authority. The basic principle on which these cases proceed is that, as between a landlord and a tenant who has encroached during his term on land not held under the tenancy, the area encroached upon is presumed to be part of the holding to be rendered up at the end of the term ((3) The presumption and its limitations are discussed by Pennycuick V.-C. in Smirk v. Lyndale Developments (1975) Ch 317, at pp 323-332, whose judgment on this aspect of the case was approved by the Court of Appeal: see at pp 337, 340, 341. See Woodfall's Law of Landlord and Tenant, 28th ed., vol.1, pars 19.007, 19.008.). These cases are founded on a kind of estoppel as between the landlord and the tenant which precludes the tenant from denying the landlord's title not only to the land demised but also to land of which the tenant got possession "by virtue of being tenant of the demised premises, and (which) he occupied ... as part of these premises" ((4) per Lord Campbell C.J. in Andrews v. Hailes (1853) 2 El and Bl.349, at p 354 (118 ER 797, at p 799); see also Tabor v. Godfrey (1895) 64 LJQB (N.S.) 245, at p 247.). The principle affects only the relationship between the landlord and the tenant; per se, it does not affect the proprietary rights of the owner of the land encroached upon ((5) As Lord Campbell C.J. said in Andrews v. Hailes (1853) 2 El. and Bl., at p 353 (118 ER, at p 799):

"I do not adopt the doctrine that the tenant steals for his landlord, and that therefore the landlord, at the end of the demise, is entitled to claim the stolen property".

See also per Lord Campbell C.J., arguendo, in Doe v. Massey (1851) 17 QB 373, at p 377 (117 ER 1322, at p 1324).). That being the nature of the principle, it is not surprising that the principle extends to land which, though adjacent to the holding, is not strictly contiguous with it ((6) Earl of Lisburne v. Davies (1866) LR 1 CP 259.).

6. In construing the Act and defining its purpose, the Court of Appeal assumed that there is some analogy between encroachments to which the principle of these cases applies and encroachments for the purposes of the Act. The Court, allowing the appeal from Cohen J., held that relief might be given under the Act to the owner of a parcel of land who had "encroached" on his neighbour's land not by constructing a building which straddled the boundary but by erecting a building standing wholly on his neighbour's land at a distance from the common boundary ((7) (1991) 25 NSWLR, per Mahoney J.A. at pp 333, 335; per Clarke J.A. at pp 340-341.). Clarke J.A., with whose judgment Kirby P. agreed, held that "encroachment" in the Act was a term wide enough to include a case where the land encroached upon was not contiguous with the land of the person encroaching. Accordingly, he held that there is jurisdiction to grant relief to a person who has erected a free-standing building on a neighbour's land and that further relief might be granted by way of easement in order to allow access to the land on which that building stands, though his Honour acknowledged that the prejudice to the neighbour would be an important factor in determining the order to be made. Mahoney J.A. thought that -
"There is ... nothing in the purpose or the policy of the
Act which would require the exclusion from the ordinary meaning of 'encroachment' of a free-standing encroachment and limit the meaning of the term merely to cross-boundary encroachment." However, he added, "(t)he term 'encroachment' involves that there be a particular relationship between the free-standing building and the contiguous land of the person who has erected it". There is, however, no valid analogy between an "encroachment" as that term is understood for the purpose of regulating the relationship of landlord and tenant and an "encroachment" as defined by an Act which authorizes the expropriation of a person's land by his neighbour.

7. Nevertheless, the respondent seeks to support the view of the Court of Appeal as to the scope of the court's jurisdiction under the Act, contending that the Act is concerned to adjust the boundaries between contiguous parcels of land and that the purpose of the Act can be fulfilled by construing its terms so as to permit the acquisition by one owner of part of his neighbour's land where the acquiring owner has erected a building on that land.

8. The purpose of the Act is to be ascertained from its language. So far as one may define the purpose of the Act from its long title, that purpose does not extend to the conferring of a general power to change the boundaries between contiguous parcels of land. It is an Act "to make provision for the adjustment of boundaries where buildings encroach on adjoining land; to facilitate the determination of boundaries; and for purposes connected therewith". The twin purposes of the Act are to facilitate the determination of existing boundaries (provided for by s.9) and to permit the adjustment of boundaries when, but only when, buildings encroach on adjoining land (provided for by s.3). The language of the Act shows clearly that the encroachment to which it relates is not an encroachment by a person but an encroachment by a building: the definition of "encroachment" in s.2 explicitly says so. The term is defined by extension to include "encroachment by overhang of any part" or "by intrusion of any part in or upon the soil". By the definition of "subject land", the land of the "adjacent owner" which the court may order to be conveyed, transferred or leased to the encroaching owner pursuant to s.3(2)(b) is only "that part of the (adjacent owner's) land over which an encroachment extends". The subject land is thus identified as the land vertically under the encroachment. And in s.9, which authorizes an application to the court by either of the owners of contiguous parcels of land to determine the true boundary between their parcels, the jurisdiction is limited to cases where a question arises "whether an existing building encroaches or a proposed building will encroach beyond the boundary".

9. The encroachment by a building of which the Act is speaking is a horizontal encroachment "beyond the boundary" between the land of the encroaching owner and the land of the adjoining owner. The definition of "encroaching owner" makes it clear that the encroaching building extends beyond the boundary of the encroaching owner's land. And in s.5, which provides for the creation of a charge on the land of the encroaching owner, that land is described as "the parcel of land contiguous to the boundary beyond which the encroachment extends, or such part thereof as the court may specify ...". Thus an "encroachment" under the Act is an encroachment by a building that traverses the "boundary" between the contiguous parcels of land.

10. The respondent's argument that persons, not buildings, encroach cannot withstand the clear terms of the legislation. Section 3 of the Act is remedial, but it applies only when a building encroaches from the land of the encroaching owner across the boundary on to the contiguous land of the adjacent owner. This is the view of the Act that has hitherto been taken ((8) See LDJ Investments Pty. Ltd. v. Howard (1981) 3 BPR 9614, at p 9616; Butterworth's Conveyancing Service New South Wales, par.11440; see also Bolton v. Clutterbuck (1955) SASR .253, at p 264.).

11. It follows that Cohen J. was right to hold that the Act confers no right upon the respondent to apply for the grant to it of any interest in Lot 17. There were no buildings encroaching across the boundary between Lot 18 and Lot 17 which might have enlivened the jurisdiction of the Court to make an order under s.3(2)(b). Googoorewon's appeal to the Court of Appeal should have been dismissed.

12. It seems that Amatek's cross-claim for possession of the land that has been occupied by Googoorewon was overlooked when Cohen J. gave judgment on the issues arising under the Act and, in the light of the Court of Appeal's construction of the Act, it was unnecessary for that Court to deal with the cross-appeal seeking an order of possession. It is necessary now to make an order remitting that claim to the Supreme Court for adjudication.

13. We would allow the appeal, set aside the order of the Court of Appeal and in lieu thereof dismiss Googoorewon's appeal to that Court with costs, allow Amatek's cross-appeal with costs and remit the matter of Amatek's cross-claim to the Equity Division for adjudication.

Orders

Appeal allowed with costs.

Set aside the order of the Court of Appeal of New South Wales in lieu thereof:
(i) dismiss the appeal of Googoorewon Pty. Ltd.,

the respondent in this Court, to that Court with costs;

(ii) allow the cross-appeal of Amatek Limited, the appellant in this Court, with costs; and

(iii) remit the matter of the cross-claim by Amatek Limited to the Equity Division of the Supreme Court of New South Wales for adjudication.