Ben-Pelech v Royle
[2020] WASCA 168
•2 OCTOBER 2020
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
TITLE OF COURT : THE COURT OF APPEAL (WA)
CITATION: BEN-PELECH -v- ROYLE [2020] WASCA 168
CORAM: MURPHY JA
BEECH JA
VAUGHAN JA
HEARD: 16 SEPTEMBER 2020
DELIVERED : 2 OCTOBER 2020
FILE NO/S: CACV 106 of 2019
BETWEEN: BOAZ BEN-PELECH
First Appellant
HANNAH JESSIE BEN-PELECH
Second Appellant
AND
GLENN CHARLES ROYLE
First Respondent
ROSEMARY ANNE ROYLE
Second Respondent
REGISTRAR OF TITLES
Third Respondent
ON APPEAL FROM:
Jurisdiction : SUPREME COURT OF WESTERN AUSTRALIA
Coram: KENNETH MARTIN J
Citation: BEN-PELECH -v- ROYLE [2019] WASC 297
File Number : CIV 1444 of 2018
Catchwords:
Real property - Adverse possession claim over boundary strip between adjacent residential properties - Where parties orally contracted to build a new fence on the cadastral boundary between their properties - Where, unknown to the parties, the new fence was not built on the cadastral boundary such that a strip of one party's land was on the other party's side of the fence - Whether the occupier's possession of the disputed boundary strip was with the registered owner's consent - Whether parties' oral contract to build the new fence on the cadastral boundary contained a term implied in fact that, to the extent the new fence was not built on the cadastral boundary, the parties consent to each party's possession of the land on their own side of the fence
Statutory construction - Transfer of Land Act 1893 (WA), s 160 ‑ s 166 - Whether s 160 ‑ s 165 form an interlocking scheme such that s 163 applies only to schemes of subdivision created by the Commissioner of Titles pursuant to s 160
Legislation:
Limitation Act 1935 (WA), s 4, s 30
Transfer of Land Act 1893 (WA), s 160, s 161, s 162, s 163, s 164, s 165, s 166
Result:
Appeal dismissed
Category: B
Representation:
Counsel:
| First Appellant | : | S K Shepherd |
| Second Appellant | : | S K Shepherd |
| First Respondent | : | S R Sirett |
| Second Respondent | : | S R Sirett |
| Third Respondent | : | No appearance |
Solicitors:
| First Appellant | : | Feinauer Commercial Lawyers |
| Second Appellant | : | Feinauer Commercial Lawyers |
| First Respondent | : | Thomson Geer - Perth |
| Second Respondent | : | Thomson Geer - Perth |
| Third Respondent | : | No appearance |
Case(s) referred to in decision(s):
Bridges v Bridges [2010] NSWSC 1287
Byrne v Australian Airlines Ltd (1995) 185 CLR 410
Cowell v Rosehill Racecourse Co Ltd (1937) 56 CLR 605
Dalton v Henry Angus & Co (1881) 6 App Cas 740
Executive Seminars Pty Ltd v Peck [2001] WASC 229
Ghilarducci v Ghilarducci (WASC, Library No 920365, 15 July 1992)
Hampton v BHP Billiton Minerals Pty Ltd [No 2] [2012] WASC 285
Kuru v The State of New South Wales [2008] HCA 26; (2008) 236 CLR 1
Maio v City of Stirling [No 2] [2016] WASCA 45
Malter v Procopets [2000] VSCA 11; [2000] V ConvR 54‑624
Mulcahy v Curramore Pty Ltd [1974] 2 NSWLR 464
Petkov v Lucerne Nominees Pty Ltd (1992) 7 WAR 163
Plenty v Dillon (1991) 171 CLR 635
Radonic v Radonic [1999] WASC 165
Secretary, Department of Health and Community Services v B (1992) 175 CLR 218 (Marion's Case)
Southage Pty Ltd v Beijing Garden Resort Pty Ltd [2013] VSC 272
Sturges v Bridgman (1879) 11 Ch D 852
Whittlesea City Council v Abbatangelo [2009] VSCA 188; (2009) 259 ALR 56
JUDGMENT OF THE COURT:
Introduction
This appeal concerns a successful claim for adverse possession between neighbours, arising from a wrongly aligned boundary fence.
The appellants (the Ben‑Pelechs) and the first and second respondents (the Royles)[1] are the owners of adjacent lots in City Beach. The Ben‑Pelechs own lot 200 (formerly lot 238, before the appellants subdivided lot 238) and the Royles own lot 239. They have been neighbours since 1993.
[1] At trial, the third respondent, the Registrar of Titles, filed a notice to abide the decision of the court and took no further part in the proceedings. Consistently with that, and with usual practice, the third respondent is not taking part in this appeal.
In late 1993 or early 1994, the appellants and the Royles replaced the existing fence (which they knew to be misaligned) between their lots (the old fence) with a new fence (the replacement fence). The replacement fence runs from the rear adjoining corner of the two lots and continues for approximately two‑thirds of the assumed boundary between the lots. At the end of the replacement fence that is closer to the street, there is a side gate on the Royles' side of the fence. When closed, the gate effectively joins to the Royles' house and seals off the rear of their property. The remaining one‑third of the boundary between the parties' lots (the area beyond the gate, towards the street) has never been fenced.
The parties' intention was to build the replacement fence on the true boundary line between their lots. But, as the parties discovered in 2017, the replacement fence was misaligned by approximately 0.5 m. It was built entirely on the Ben‑Pelechs' lot.
At trial, the Ben‑Pelechs sought a declaration that the boundary between the lots conforms to the boundary on the certificates of title and orders permitting them to remove the replacement fence and build another fence on the true boundary line. By their counterclaim, the Royles claimed relief on the ground that they had adversely possessed the area (the disputed area) on their side of the replacement fence (and on their side of an imaginary line running from the end of the fence to the street) which ‑ according to the certificates of title ‑ was actually part of the Ben‑Pelechs' lot 200 (formerly lot 238).
The trial judge found that the Ben‑Pelechs had adversely possessed the rear part of the disputed area ‑ the part enclosed by the side gate and the replacement fence (the rear area). However, his Honour found, the Ben‑Pelechs had not adversely possessed the remainder of the disputed area ‑ the part, at the front of the lots, which has never been fenced (the front area). There is no challenge on appeal to this latter finding ‑ the appeal is concerned only with the rear area.
The judge rejected the Ben‑Pelechs' arguments advanced in response to the claim of adverse possession over the rear area. One of those arguments was that the Royles' possession was consensual, so that no claim of adverse possession could be made out. Another argument, based on s 163 of the Transfer of Land Act 1893 (WA) (TLA), was that there was a verified plan of subdivision of lot 238 (among other lots), which extinguished any interests in that lot that were not noted on the plan of subdivision ‑ including the Royles' adverse possession rights over the rear area.
On appeal, the Ben‑Pelechs re‑agitate these two arguments. They challenge the judge's finding of adverse possession over the rear area, contending that the Royles' possession of that area was consensual (ground 2). They also challenge the judge's rejection of their argument based on s 163 of the TLA (ground 1). The Royles filed a notice of contention by which they argue that s 163 of the TLA applies only in the specific circumstances set out in s 160 of the TLA and thus s 163 does not apply in this case.
For the reasons that follow, both grounds of appeal are entirely without merit. Further, for related reasons, the notice of contention should be upheld. Consequently, the appeal must be dismissed.
Facts
The evidence at trial
At trial, there was substantially no dispute as to the facts. The evidence of witnesses was adduced by affidavits on which there was no cross‑examination.[2] A trial bundle comprising maps, images, diagrams and correspondence was also tendered by consent.[3]
The parties' acquisition of the lots and the old fence
[2] Primary reasons [17].
[3] Primary reasons [18].
In early 1993, Mrs Jean Freeth was the owner of, and sought to sell, two adjacent lots on Hesperia Avenue, City Beach ‑ lots 238 and 239.[4] Lot 238 was located to the north‑east, and on the landward side, of lot 239.[5] A diagram of the lots appears at [26] of the primary reasons.
[4] Primary reasons [20].
[5] Primary reasons [21].
In March 1993, the Ben‑Pelechs, with their son (Mr Sharon Ben‑Pelech), purchased lot 238 as joint tenants. Mr Sharon Ben‑Pelech resided at lot 238 between 1993 and 1998, before selling his one‑third joint tenancy interest back to his parents.[6] The Royles purchased lot 239 in April 1993.[7]
[6] Primary reasons [23], [25].
[7] Primary reasons [24], [25].
Thus, the Ben‑Pelechs and the Royles have been neighbours, owning adjoining properties, since April 1993.[8]
[8] Primary reasons [25].
In early 1993, when the parties bought their respective lots, there was a dividing fence (the old fence) between lots 238 and 239. That fence was built in the wrong position. It was built entirely within lot 238, rather than on the dividing boundary line between the two lots.[9]
[9] Primary reasons [31].
When Mrs Freeth sold the lots, she made the purchasers of both lots aware of the issue with the position of the old fence.[10] Both contracts contained special conditions which stipulated that the purchasers were on notice of the issue and that they were excluded from complaining about it to Mrs Freeth in the future.[11]
The construction of the replacement fence
[10] Primary reasons [31], [33]. Mrs Freeth also made the parties aware of other boundary issues, not relevant to the present appeal; see primary reasons [32] ‑ [33].
[11] Primary reasons [33].
In the latter half of 1993, Mr Sharon Ben‑Pelech, on behalf of all the owners of lot 238, and the Royles reached a verbal agreement to remove the old fence and to build a new fence (the replacement fence) along the true boundary line between the lots.[12] At trial, the parties' evidence about this agreement was materially the same.[13]
[12] Primary reasons [36].
[13] Primary reasons [38].
The judge set out the following evidence of Mrs Royle, which his Honour accepted:[14]
[14] Primary reasons [39].
31.During this subsequent discussion, I agreed with Sharon that:
31.1Glenn [(Mr Royle)] and I would arrange for part of the Original Fence located in the front of Lot 238 and Lot 239 to be removed …;
31.2Sharon would arrange for the rest of the Original Fence, being a side boundary fence on Lot 238 that was attached to the front of the Original Fence, to be removed with the assistance of his friends at a later date;
31.3a new fence would be erected on the boundary between Lot 238 and Lot 239 established by Sorensen, as shown in the Sorensen survey and by the survey pegs placed by Sorensen (New Fence);
31.4the New Fence would:
(a)run from the rear of Lot 238 and Lot 239 to approximately in line with the corner of Sharon's house; and
(b)be made from timber, part of which would sit on 3 small limestone retaining walls due to the slope of the ground;
31.5the 3 small retaining walls that were part of the timber fence would sit on, would also be erected along the boundary to encase our future garden;
31.6I would obtain a quotation from a fencing contractor for the erection of the timber portion of the New Fence for Sharon and the [Ben‑Pelechs'] approval;
31.7Glenn and I would organise and pay the costs of erecting the 3 small retaining walls and, subject to their approval of the fencing contractor's quotation, Sharon and the [Ben‑Pelechs] would split the costs of the timber portion of the New Fence with Glenn and me;
31.8Sharon would provide Glenn and me and the fencing contractor with access to the Lot 238 driveway to take limestone blocks to the back of Lot 238 and then on to Lot 239 from our back yard landscaping;
31.9Glenn and I and Sharon would jointly supervise the fencing contractor's erection of the timber portion of the New Fence, with me supervising during the day because I did not work full days and Sharon and Glenn inspecting the New Fence when they arrived home from work each day.
The agreement was implemented and the replacement fence was built by the end of 1993 or, at the latest, by 31 January 1994.[15] At the time of the trial, the replacement fence was still in place and it had remained unaltered since it was constructed.[16]
[15] Primary reasons [40].
[16] Primary reasons [41] ‑ [42].
The replacement fence extends from the rear (the south end) of the two adjoining lots and runs, towards Hesperia Avenue, along approximately two‑thirds of the assumed boundary line between the lots.[17] Towards the end of the replacement fence (that is, the end of the fence closest to Hesperia Avenue), there is a gate on the Royles' side of the fence. When the gate is closed, it joins with a section of timber that is attached to, and juts out at a right angle from, the side of the Royles' house. Thus, when the gate is closed, the gate and the timber attachment close off and secure the rear part of the Royles' premises, creating a fenced off rear area on that side of the house.[18]
The misalignment of the replacement fence
[17] It was later discovered, in circumstances explained below, that the assumed boundary line was not the true boundary line between the lots.
[18] Primary reasons [43].
As explained above, Mr Sharon Ben‑Pelech and the Royles intended for the replacement fence to be built on the true boundary line between lots 238 and 239. However, like the old fence before it, the replacement fence was not built on the cadastral boundary line.[19] This arose as follows.
[19] Primary reasons [48].
Prior to settlement of lot 239, Mrs Freeth's real estate agent provided the Royles (but not the Ben‑Pelechs) with a copy of her surveyor's report and diagram. The report and diagram were prepared in 1992 by licensed surveyors, Sorensen Short & Associates (Sorensen). The diagram (the Sorensen diagram) was based on a survey undertaken by Sorensen on 26 October 1992 and showed the true boundary line between lots 238 and 239.[20]
[20] Primary reasons [49].
The Sorensen diagram depicted two survey pegs, which were both positioned along the front boundaries of the lots (along Hesperia Avenue). One survey peg is depicted on the diagram at the intersecting front corner of lots 238 and 239 (the front corner survey peg). The other survey peg is depicted at a slight 'bend' or 'kink' in the front boundary line of lot 238 along Hesperia Avenue (the kink point survey peg). On the diagram, the front corner survey peg is depicted 7.56 m west of the kink point survey peg.[21]
[21] Primary reasons [50].
In reality, however, the actual placement of the physical survey pegs did not conform to the Sorensen diagram. In 1992, when Sorensen conducted the survey, the surveyor incorrectly placed the front corner survey peg only 7.03 m to the west of the kink point survey peg, despite the Sorensen diagram (correctly) depicting the former peg 7.56 m to the west of the latter peg. This meant that the frontage width for lot 238 (the Ben‑Pelechs' lot) was too narrow and, correspondingly, the frontage width for lot 239 (the Royles' lot) was increased.[22]
[22] Primary reasons [51] ‑ [52].
In 1993 ‑ 1994, the replacement fence was built on the assumptions that the Sorensen diagram and that the placement of the physical survey pegs were correct.[23] The judge accepted the following parts of Mrs Royle's affidavit:[24]
Shortly after the removal of part of the Original Fence … and, in or around June or July 1993, I observed that the fencing contractor attended Lot 238 and Lot 239 twice and set up a string line running from the Sorensen survey pegs at the front and rear of Lot 238 and Lot 239.
I recall looking at the Sorensen survey pegs and the fencing contractor's plans for the New Fence with Sharon on at least one occasion in June or July 1993 and Sharon confirming he was satisfied with the location and line for the New Fence.
Mrs Royle further deposed, and the judge accepted, that she and Mr Royle have always regarded the position of the front corner survey peg as the correct corner point between lots 238 and 239.[25] The result was that the replacement fence was incorrectly built entirely on the Ben‑Pelechs' lot.[26]
[23] Primary reasons [56].
[24] Primary reasons [54]; Exhibit 1.4, Affidavit of Rosemary Anne Royle (14 February 2019) [39] ‑ [40].
[25] Primary reasons [55].
[26] Primary reasons [6].
The judge found that '[t]hat status quo positioning of the replacement fence for 25 continuous years or so has physically signalled to all the dividing line between these two adjoining lots at along two‑thirds of their adjoining boundary, since February 1994'.[27]
The Ben‑Pelechs' subdivision activity and the discovery of the misalignment of the replacement fence
[27] Primary reasons [58].
Since 1993, the Ben‑Pelechs have purchased other adjoining lots to lot 238, their intention being to demolish the existing homes and subdivide the lots.[28] In approximately 2014, the Ben‑Pelechs began the process of subdividing their four adjoining lots (one of which was lot 238) into seven new lots.[29] In early November 2017, an approved plan of subdivision was issued in respect of these seven lots. As a result, lot 238 was cancelled and the adjoining lot to the north‑east of lot 239 (the Royles' lot) instead became lot 200.[30]
[28] Primary reasons [27].
[29] Primary reasons [27].
[30] Primary reasons [29].
The misalignment of the replacement fence came to light in August 2017 in the course of the Ben‑Pelechs' subdivisional activities.[31] Mr Mark Zimoch, a licensed surveyor of Sorensen, investigated the problem for the Royles.[32] Mr Zimoch conceded that the replacement fence is misaligned because Sorensen misplaced the survey pegs during the survey in 1992.[33]
[31] Primary reasons [9], [59], [82].
[32] Primary reasons [59].
[33] Primary reasons [60] ‑ [62].
In light of Mr Zimoch's explanation, the judge found that neither the Royles nor the Ben‑Pelechs were at fault for the replacement fence's misalignment.[34] His Honour concluded that both sides 'acted under an honest mistake over the issue, due to an unknown problem, arising from a misplacement of the front corner survey peg in 1992 and its ensuing consequences towards the misalignment of the replacement fence'.[35]
[34] Primary reasons [63].
[35] Primary reasons [63].
The parties' positions at trial
The Ben‑Pelechs sought a declaration that the boundary between lots 239 and 200 conforms to the boundary on the certificate of title. They also sought the court's permission to tear down the replacement fence and erect a new fence (including retaining walls) on the correct boundary line.[36]
[36] Primary reasons [7].
The Royles resisted this relief. Further, by their counterclaim, they claimed title, by way of adverse possession, over the disputed area: the area, on their side of the replacement fence and on their side of an imaginary line extending from the replacement fence to Hesperia Avenue, which ‑ according to the certificates of title ‑ was part of lot 238/lot 200.[37] They asserted continuous use and possession of the disputed area since early 1994.[38]
[37] For a diagram depicting the disputed area, see primary reasons [97].
[38] Primary reasons [8].
The Ben‑Pelechs challenged the Royles' adverse possession claim. They also advanced two arguments, in the alternative, in response to any potential finding of adverse possession. Those arguments were based on s 163 of the TLA and s 123 of the Property Law Act 1969 (WA) (PLA).[39]
[39] Primary reasons [12].
The decision of the primary judge
Overview
For the purposes of the Royles' adverse possession claim, the judge divided the disputed land into two areas: (a) the rear area ‑ the part of the disputed area that is enclosed by the gate and the timber structure attached to the Royles' house; and (b) the front area ‑ the remaining part of the disputed area (approximately one‑third), proceeding towards Hesperia Avenue, which has never been fenced.[40] His Honour concluded that the Royles had adversely possessed the rear area only.
[40] Primary reasons [4].
The judge then considered, with respect to the rear area, the Ben‑Pelechs' arguments based on s 163 of the TLA and s 123 of the PLA. The judge rejected both arguments.
Adverse possession
The judge set out legal principles on adverse possession in terms which are not challenged and which need not be outlined.[41]
The rear area
[41] Primary reasons [66] ‑ [77].
The judge found that the Royles had adversely possessed the rear area. His Honour found that the gate at the end of the replacement fence, when closed, seals off and secures the rear area, preventing general access to the side and rear of lot 239.[42] This provided the Royles with exclusive, continuous and uninterrupted possession of the rear area.[43] Accordingly, the Royles used the rear area as if it were their own.[44]
[42] Primary reasons [79].
[43] Primary reasons [80], [82].
[44] Primary reasons [80].
The Royles enjoyed this possession for more than 12 years (indeed, they enjoyed this possession for some 23 years), before the misalignment of the fence was discovered in 2017.[45] Thus, their claim to adverse possession of the rear area was made out.[46]
The front area
[45] Primary reasons [82].
[46] Primary reasons [83].
However, the judge concluded, the Royles had not adversely possessed the front area. As this conclusion is not challenged, it is not necessary to detail his Honour's reasons for so concluding.
In essence, the judge found that, because the front area is not and has never been fenced,[47] the Royles had failed to demonstrate exclusive use of that area.[48]
Consent
[47] Primary reasons [85] ‑ [86], [99] ‑ [100], [103].
[48] Primary reasons [92], [104], [106], [108] ‑ [109].
At trial, the Ben‑Pelechs submitted that adverse possession cannot be made out where possession is consensual. Accordingly, adverse possession could not be made out over any part of the disputed area. The judge accepted the first proposition as a matter of law.[49] However, his Honour said that it did not apply to the present case, as both parties were simply mistaken as to the alignment of the replacement fence. The position would have been otherwise 'had there been some consensual occupation by agreement about an area of lot 238 by the Royles ‑ with knowledge and consent given to that occupation by the Ben‑Pelechs'.[50]
[49] Primary reasons [110].
[50] Primary reasons [111] ‑ [113].
The Ben‑Pelechs challenge this conclusion by ground 2 of their appeal.
The Ben‑Pelechs' arguments in response to the finding of adverse possession
The judge was required to consider the Ben‑Pelechs' arguments, made in the alternative, in response to his Honour's finding that the Royles had adversely possessed the rear area.
The judge first considered the Ben‑Pelechs' argument that was premised on s 163 of the TLA. The Ben‑Pelechs contended that the effect of that section is that, in 2017, when new titles were issued pursuant to their registered plan of subdivision, this ended, as a matter of law, any adverse possession rights that the Royles may have had over the disputed area.[51] The judge noted that the Ben‑Pelechs' submissions on s 163 consisted of confident assertions that support their view of the effect of that section.[52]
[51] Primary reasons [118].
[52] Primary reasons [126].
The Royles asserted that s 163 does not have the effect suggested by the Ben‑Pelechs.[53]
[53] Primary reasons [128].
The judge rejected the Ben‑Pelechs' argument based on s 163 of the TLA.[54] His Honour reasoned that no local case authority supports the Ben‑Pelechs' construction of s 163.[55] Further, the Ben‑Pelechs' construction is contrary to the principles on the 'recognised and statutorily preserved right to claim adverse possession over land, notwithstanding the state of a registered title'.[56] There is no reason, the judge said, not to apply those principles to a plan of subdivision. If s 163 were to operate in the way suggested by the Ben‑Pelechs, namely to terminate any existing adverse possession rights upon verification of a plan of subdivision, the legislation would have stated this much more clearly.[57]
[54] Primary reasons [138].
[55] Primary reasons [138].
[56] Primary reasons [139].
[57] Primary reasons [139].
The Ben‑Pelechs challenge this part of the judge's reasons by ground 1 of their appeal.
The judge then considered, and rejected, the Ben‑Pelechs' second argument, which was based on s 123 of the PLA. As this part of the judge's reasons is not challenged on appeal, it is unnecessary to outline it.
Grounds of appeal
The Ben‑Pelechs advance two grounds of appeal:
1.The trial judge erred in law in finding:
1.1an interest in land arising as a consequence of a claim for adverse possession was not an 'estate or interest' in land for the purposes of [s 163(1) of the TLA]; and
1.2[s 163(1) of the TLA] did not apply to the interest in part of lot 200 claimed by the [Royles] [(primary reasons at [131])].
2.The trial judge erred in law in finding:
2.1the [Royles'] alleged possession of part of lot 200 was 'adverse' in the sense required to support a claim for adverse possession; and
2.2the [Royles] were the unregistered proprietors of part of lot 200;
in circumstances where the [Ben‑Pelechs] had consented and contributed to the erection of a fence not located on the cadastral boundary as a consequence of the negligence of a qualified surveyor [(primary reasons at [113])].
Notice of contention
The Royles say that, in addition to the reasons given by the judge, it was open to his Honour to find that s 163 did not apply to the Ben‑Pelechs' subdivision application and the relevant certificates of title on the grounds that:
1.The provisions of s 163(1) apply only to an application brought within s 160 of the [TLA] for approval of a plan prepared by the Commissioner of Titles in the case of:
a.a block of land that has been subdivided and the whole or part thereof sold; and
b.the block is altogether or in part unoccupied; and
c.by reason of errors of survey or misdescription in the muniments of title the boundaries and positions of such subdivisional allotments:
i.are incapable of being ascertained with certainty; or
ii.are found to be inconsistent with the scheme of subdivision; and
iii.where the original external survey boundaries of such block can be determined and sufficient evidence is available to satisfy the Commissioner of Titles as to the governing features of the original scheme the number and relative positions and relative dimensions of the subdivisional allotments roads streets and ways.
2.By reason of the provisions of s 160 of the [TLA], the estates or interests referred to in s 163(1A) [of the] TLA refer to existing subdivisional allotments and not to unregistered possessory title.
3.Section 162 and s 163(1) do not apply to an application to register a subdivision plan lodged under s 166 of the [TLA] and pursuant to s 145 and s 146(1) of the Planning and Development Act 2005 (WA) [(PDA)].
4.The [Ben‑Pelechs'] application was an application brought under s 166 of the [TLA] and pursuant to s 145 and s 146(1) of the [PDA].
It is convenient to deal with ground 2 of the appeal, before turning to ground 1 and the notice of contention. Ground 2 challenges the judge's finding of adverse possession, whereas ground 1 is premised on that finding. Ground 1 and the notice of contention can be dealt with together as they both concern the proper construction and application of s 163 of the TLA.
Ground 2 of the appeal
The Ben‑Pelechs' submissions
The Ben‑Pelechs submit that the judge erred in finding that the Royles' possession of the rear area was adverse for the purposes of an adverse possession claim.[58] The Ben‑Pelechs point to the fact that they (the Ben‑Pelechs) agreed, and contributed, to the replacement fence being built in the place in which it was built.[59] The Royles' possession is said to have been consensual notwithstanding that the Ben‑Pelechs were mistaken about the physical location of the cadastral boundary between the lots.[60] In effect, the Ben‑Pelechs submit that the agreement as to the building of the fence in the location where it was built carried with it a consent to the occupation of the land behind it.[61]
[58] Appellants' submissions [42], [51].
[59] Appellants' submissions [37], [42], [49].
[60] Appellants' submissions [50].
[61] Appellants' submissions [49].
In oral submissions, the Ben‑Pelechs similarly submit that, in making their agreement as to the construction and location of the fence, the parties impliedly agreed ‑ the implication arising as a matter of fact ‑ that to the extent that the fence was not located on the boundary, each party consented to the other party's use of the land behind the fence that belonged to the consenting party.[62] In this respect, counsel emphasised that the parties knew, before they made the agreement as to the replacement fence, that the original fence had been misaligned.[63]
[62] Appeal ts 11 ‑ 12, 13, 15, 18.
[63] Appeal ts 8, 10, 11, 13 ‑ 14.
The Ben‑Pelechs also submit that the judge erred in finding that the replacement fence was built on the same (assumed and incorrect) boundary line as the old fence.[64]
Disposition
[64] Appellants' submissions [41], citing primary reasons [112].
A right of adverse possession arises because, and when, the owner's right to bring an action to eject the party in possession has been barred by the expiry of the applicable limitation period. Under the Limitation Act 1935 (WA),[65] the combined effect of s 4 and s 30 is that upon the expiry of the 12 year limitation period, the erstwhile owner's title is extinguished.[66]
[65] The Limitation Act 2005 (WA) does not apply, as the Ben‑Pelechs' cause of action accrued before November 2005, when the Limitation Act 2005 commenced: see Limitation Act 2005, s 2, s 4.
[66] Petkov v Lucerne Nominees Pty Ltd (1992) 7 WAR 163, 166.
It has long been recognised that in order to create rights of adverse possession, the claimant's possession must be 'open, not secret; peaceful, not by force; and adverse, not by consent of the true owner'.[67] Thus, for example, possession cannot be adverse if the occupier is in the premises with a licence from the true owner.[68]
[67] Mulcahy v Curramore Pty Ltd [1974] 2 NSWLR 464, 475; see also Whittlesea City Council v Abbatangelo [2009] VSCA 188; (2009) 259 ALR 56 [6(a)]; Bridges v Bridges [2010] NSWSC 1287 [14(vi)]; Southage Pty Ltd v Beijing Garden Resort Pty Ltd [2013] VSC 272 [88] ‑ [91].
[68] Ghilarducci v Ghilarducci (WASC, Library No 920365, 15 July 1992) 5 (Malcolm CJ), 21 - 23 (Franklyn J); Radonic v Radonic [1999] WASC 165 [145] and cases there cited; Executive Seminars Pty Ltd v Peck [2001] WASC 229 [201].
Adverse possession means possession of a person (or persons) against whom the true owner has (or is deemed to have) an accrued right of action.[69]
[69] Ghilarducci v Ghilarducci (5) (Malcolm CJ), (21) (Franklyn J).
The owner's consent to possession by a claimant defeats a claim founded on adverse possession because it means that time did not start to run against the owner ‑ a person who consents to another occupying or possessing land they own has no claim to eject the other, unless and until they withdraw the consent.[70]
[70] Cowell v Rosehill Racecourse Co Ltd (1937) 56 CLR 605, 630 ‑ 631; Kuru v The State of New South Wales [2008] HCA 26; (2008) 236 CLR 1 [43].
Conversely, a person who occupies or is in possession of land owned by another is trespassing unless they can show they entered with the owner's consent or otherwise with lawful authority.[71]
[71] Plenty v Dillon (1991) 171 CLR 635, 647; Secretary, Department of Health and Community Services v B (1992) 175 CLR 218 (Marion's Case), 310 ‑ 311; Kuru [43].
Thus, subject to an immaterial exception,[72] where one person enters or occupies land owned by another, the owner's consent to the other's entry or occupation and the accrual of a cause of action in favour of the owner are opposite sides of the same coin. If consent exists there is no cause of action; if consent does not exist, the owner has a cause of action. As Edelman J has observed in the closely related context of trespass, 'consent is the very antithesis of trespass'.[73]
[72] Entry with lawful authority not derived from the owner's consent.
[73] Hampton v BHP Billiton Minerals Pty Ltd [No 2] [2012] WASC 285 [279].
It is only where the true owner knowingly permits the putative adverse possessor to occupy or exercise rights over land the owner knows to belong to him or her, and not to the possessor, that the owner has consented so as to preclude an action for ejectment by the owner. In other words, in this context, knowledge is an element of consent. The same is true in the analogous context of acquisition of an easement by prescription: see Maio v City of Stirling [No 2].[74] More generally, consent ordinarily requires knowledge because it involves an informed choice by the consenting party.
[74] Maio v City of Stirling [No 2] [2016] WASCA 45 [77] ‑ [78], citing Dalton v Henry Angus & Co (1881) 6 App Cas 740, 773 ‑ 775 and Sturges v Bridgman (1879) 11 Ch D 852, 863 ‑ 864.
In the present case, the Ben‑Pelechs, as owners, did not know of the misalignment of the fence and, consequently, did not know that the Royles were in occupation of the disputed area of the lot owned by the Ben‑Pelechs. Unknown to the Ben‑Pelechs, the Royles were exercising rights of exclusive possession of land encompassed within lot 238 ‑ namely the rear area on the Royles' side of the fence. In those circumstances, it cannot be said that they consented to the Royles' possession of the rear area.
The Ben‑Pelechs did not cite any case in which a claim for adverse possession failed on the ground of consent in circumstances where the parties were unaware that the owner's property was, or was proposed to be, in the possession of the other party.
The parties did not expressly agree that they could each occupy land owned by the other party. In the course of argument, the Ben‑Pelechs ultimately accepted that, in order to establish their case of consent, it was necessary that they demonstrate that the parties' agreement as to the construction of the replacement fence contained an implied term that, in the event that the fence was not built on the boundary, the parties consented to each party occupying the land on their own side of the fence.[75]
[75] Appeal ts 24, 27.
There is, at the least, a real question as to whether at trial the Ben‑Pelechs ran a case that the agreement had an implied term to this effect. No such case was pleaded in terms[76] or clearly articulated in submissions[77] and the judge evidently did not understand such a case to have been put. It is unnecessary to resolve whether the Ben‑Pelechs ran such a case at trial because that case fails on its merits.
[76] Statement of claim [18] ‑ [19]; reply and defence to counterclaim [3].
[77] Compare ts 116, 131.
A term could be implied only if it were shown to be 'necessary for the reasonable or effective operation of a contract of that nature in the circumstances of the case'.[78] That test is not satisfied.
[78] Byrne v Australian Airlines Ltd (1995) 185 CLR 410, 422, 442.
The parties intended that the replacement fence would be on the true boundary between their properties. Their contract was an agreement for this to occur. There is no basis to suppose that they contemplated that part of the land belonging to one party would be on the other party's side of the replacement fence. In these circumstances, in arranging for the replacement fence to be constructed and in agreeing as to its location, the parties were not purporting to say anything as to their own, or the other party's, rights over the land they each owned. Given that each party believed the replacement fence would be on the boundary, there was no occasion to do so.
Consequently, the alleged implied term was not necessary for the reasonable or effective operation of the parties' contract; the alleged implied term relates to a topic ‑ namely, each party's rights over the other party's land in the scenario in which the replacement fence is not built on the true boundary ‑ beyond the ambit of the subject matter and scope of the agreement made by the parties. The parties' agreement as to the construction and location of the replacement fence operates effectively according to its terms within its ambit of intended operation, without the need for the alleged implied term.
The fact, emphasised by the Ben‑Pelechs, that the parties knew that the original fence had been misaligned does not detract from these conclusions.
It is a corollary of the Ben‑Pelechs' argument as to consent that they did not have a cause of action against the Royles in 1994 or thereafter. We do not accept that this was so. To the contrary, in the circumstances of this case and having regard to what we have said in [59] ‑ [66] above, it is, in our view, clear that the Ben‑Pelechs had an action to eject the Royles from the time the Royles began occupying land owned by the Ben‑Pelechs. Thus, as soon as the Royles occupied the land owned by the Ben‑Pelechs after the fence was built, time began to run against them (the Ben‑Pelechs).
In Malter v Procopets, Brooking JA said as follows:[79]
The most common case in which a possessory title is asserted in Victoria is, in my experience, one like the present, in which the fence dividing two residential allotments departs slightly from the title boundary and the adjoining owners have for many years assumed that there was no encroachment; in such a case it has never, so far as I am aware, been suggested that it is an answer to the possessory claim that the persons said to have been in adverse possession believed themselves to be the owners of the strip of land. (emphasis added)
[79] Malter v Procopets [2000] VSCA 11; [2000] V ConvR 54‑624 [5].
Similarly, an owner's mistaken belief that a fence is on the title boundary of the property is not to be treated as a consent to another person possessing that part of the owner's property as is, unknown to the parties, on the other person's side of the fence.
The submission in [52] above goes nowhere ‑ if established it would not sustain a contrary conclusion on the question of whether the Royles had acquired ownership by adverse possession. In any event, the submission involves a misreading of the judge's reasons. In observing that, ironically, the original misalignment came to be replicated in the replacement fence, the judge evidently meant no more than that, like the original fence, the replacement fence was misaligned. His Honour was not suggesting that the misalignments of the two fences were identical.
For these reasons, the Ben‑Pelechs did not consent in any relevant sense to the Royles' occupation of their land. Consequently, ground 2 fails.
Ground 1 of the appeal and the notice of contention
The Ben‑Pelechs' submissions
The Ben‑Pelechs reiterate the argument based on s 163 of the TLA that they put forward at trial:
(1)The effect of s 163 is that, upon verification of a plan of subdivision, any estate or interest in the land the subject of that plan which is not noted on that plan is determined.[80]
(2)Any person, having an estate or interest in land that is injured by the operation of s 163, is entitled to compensation in the form of damages only.[81]
(3)The Ben‑Pelechs' plan of subdivision was verified on 1 November 2017. That plan included their new subdivided lot 200.[82]
(4)At that date, the Royles' interest in lot 200, claimed by way of adverse possession, was determined.[83]
[80] Appellants' submissions [1.1].
[81] Appellants' submissions [1.2].
[82] Appellants' submissions [2].
[83] Appellants' submissions [3] ‑ [4].
In response to the Royles' case, on the notice of contention, that s 163 had no application, the Ben‑Pelechs submit that neither the text of s 163, nor its context, limit the application of s 163(1) to schemes of subdivision made under s 160 of the TLA.[84] Similarly, they submit, s 163 may apply both to plans of subdivision finalised pursuant to s 160 ‑ 162 of the TLA and those pursuant to s 135 ‑ 146 of the PDA;[85] there is said to be nothing in the text of s 163 that prevents this.[86]
[84] Appellants' submissions (notice of contention) [9].
[85] Appellants' submissions (notice of contention) [15].
[86] Appellants' submissions (notice of contention) [21.3]; appeal ts 29, 31.
The Ben‑Pelechs submit that there is nothing in the text of the section that limits its application to any other section of the TLA.[87] Further, had Parliament intended that s 163 apply only to schemes of subdivision prepared pursuant to s 160, it would have expressly limited s 163 in this way, as it did for s 161, s 162 and s 165 of the TLA.[88]
[87] Appellants' submissions (notice of contention) [21.1]; appeal ts 29, 31.
[88] Appellants' submissions (notice of contention) [27] ‑ [36]; appeal ts 31, 33 ‑ 34.
The Ben‑Pelechs also point to the functions of the Western Australian Planning Commission (WAPC) and Landgate to support their interpretation of s 163. They say that the WAPC's function is to determine the use of land, whereas Landgate's function is to delineate land and ownership rights in land by issuing certificates of title under the TLA. Section 163 requires plans of subdivision to be verified and lodged with the Registrar of Titles before certificates of title can be issued. Section 163 is the only section in the TLA dealing with the requirements of verification and lodgement of a plan of subdivision. This, the Ben‑Pelechs submit, suggests that s 163 has a more general application because 'it makes no sense, and does not arise from the wording of the section', that plans of subdivision created pursuant to s 160 are the only plans of subdivision which must be verified and lodged with the Registrar of Titles.[89]
Disposition
[89] Appellants' submissions (notice of contention) [22] - [26].
For the following reasons, the notice of contention must be upheld and ground 1 rejected. In short, that is because s 163 has a confined sphere of operation ‑ when the Commissioner of Titles has prepared a scheme of subdivision under s 160 ‑ and this section had no application to the present case.
In order to explain why that is so, it is necessary to set out s 160 ‑ s 166 of the TLA in full:
160.Commissioner's powers where boundaries unclear in subdivision
Where a block of land has been subdivided and the whole or part thereof sold in allotments according to a plan of subdivision but such block is altogether or in part unoccupied and by reason of errors of survey or misdescription in the muniments of title the boundaries and positions of such subdivisional allotments cannot be ascertained with certainty or are found to be inconsistent with each other and with the scheme of subdivision indicated by what appears on the ground or in the muniments of title and if the original external survey boundaries of such block can be determined and sufficient evidence is available to satisfy the Commissioner as to the governing features of the original scheme the number and relative positions and relative dimensions of the subdivisional allotments roads streets and ways he may upon an application to bring any such subdivisional allotment or allotments under this Act or where such land is already under The Transfer of Land Act 1874 or this Act to have a separate certificate of title created and registered for such allotment or allotments or an existing certificate amended or for a relevant graphic to be amended or replaced cause a survey to be made and if it be found that such land or any portion thereof has been erroneously described as regards position dimensions or area or that an excess or deficiency of measurement exists he may if of opinion that such a course is necessary and expedient for the recognition or registration of titles to land comprised in the said block prepare a scheme of subdivision of the whole or any portion of such block agreeing as near as may be with the original scheme as indicated by such evidence as aforesaid and for that purpose may adjust and determine all or any of the boundary lines and the position and dimensions of the roads streets and ways and apportion any excess either in accordance with section 159 or in such other manner as he shall deem equitable and expedient for the purposes of such subdivision.
161.Plan to be made of subdivision proposed under s 160
The scheme of subdivision so prepared shall be embodied in a plan and adopted provisionally for the purposes of the notices hereinafter mentioned.
162.Subdivision proposed under s 160 to be advertised etc.
(1)After such plan has been constructed the Commissioner shall in addition to any other notices which he may think fit direct notice of the proposed subdivision to be advertised once at least in a newspaper published in Perth and in a newspaper (if any) published and circulating in the neighbourhood of the land and also to be served upon all persons appearing by the Register to be owners or proprietors of the fee simple of any portion of such land.
(2)Such notice shall state that such provisionally adopted plan can be inspected at the Authority's office and appoint a time not less than 14 days nor more than 6 months within which objections or proposals to alter the same and evidence in support of such objections or proposals will be received by the Commissioner.
(3)It shall be in the discretion of the Commissioner whether or not he will concede to any objections or adopt any alteration submitted to him upon such notice; and if he do adopt any such alteration whether or not any and what notice thereof shall be given to all or any of the persons previously notified.
163. Finalised subdivision, verification and effect of plan of
(1)After a scheme of subdivision has been finally decided upon the plan embodying it shall be verified by the Commissioner and the inspector of plans and surveys signing a statement in an approved form on the plan and the plan so verified shall be marked with a distinguishing symbol and kept by the Registrar as an approved lodged map of subdivision and shall as from the date of such verification govern the titles subsequently created and registered under this Act in respect of the block so subdivided or any portion thereof.
(1A)The remedy of any person having an estate or interest in the land subdivided or in any portion thereof who shall be injured by any certificate of title registered for the purposes of such subdivision shall lie in damages only and the same may be sued for and recovered in manner indicated by section 207.
(2)In subsection (1) —
inspector of plans and surveys means the person who, for the purposes of section 18 of the Licensed Surveyors Act 1909, is appointed by the Governor to approve plans of authorised surveys within the meaning of that Act.
164.Public notice to be given of finalised subdivision and plan
Notice of such subdivision and verification of the plan shall be published in the Government Gazette and in some newspaper circulating in the neighbourhood of the land.
165.Expense of survey ordered under s 160, how paid
The expense of any survey which the Commissioner shall cause to be made under section 160 shall in the first instance be defrayed out of the Consolidated Account but every applicant who after such subdivision shall apply to bring any portion of the land comprised in such subdivision under this Act or to have a certificate created and registered or amended or for a relevant graphic to be amended or replaced as to any such land for the first time after such subdivision shall in addition to any other moneys chargeable in such case paid to the Registrar (to be by him paid into the Consolidated Account) such amount as the Commissioner shall under his hand certify to be in his judgment an equitable share of such expense to be contributed in respect of the land comprised in such application.
166.New certificates of title on subdivision of land
(1)A proprietor of land under the operation of this Act who, after section 98 of the Transfer of Land Amendment Act 1996 comes into operation, wishes to subdivide the land shall apply, in an approved form and on payment of the prescribed fee, to the Registrar for the creation and registration of new certificates of title for the land and the application shall be made in relation to a plan or diagram of the land complying with subsection (2).
(2)Such plan or diagram shall exhibit distinctly delineated all roads streets passages thoroughfares squares or reserves appropriated or set apart for the use of the purchasers and all permanent drains and also all allotments into which the said land may be divided marked with distinct numbers or symbols and shall also show the areas and shall comply in every respect with the rules and regulations for the time being for the guidance of surveyors when practising under this Act.
(3)On an application under this section but subject to section 146(1) of the Planning and Development Act 2005, the Registrar may create and register a new certificate or certificates of title for the land the subject of the application.
(4)For the purposes of subsection (3), the Registrar may have regard to a request of the applicant in relation to when the new certificate or certificates of title are to be created and registered.
[(5)deleted]
(6)References in this section to —
(a)plans or diagrams include references to plans of survey of Crown land; and
(b)certificates of title include references to certificates of Crown land title as they apply to plans of survey of Crown land.
Section 163 is not to be read in isolation as, in effect, the Ben‑Pelechs invite. In our opinion, it is plain beyond dispute that s 160 ‑ s 165 form an interlocking scheme. Indications that that is so include the following:[90]
[90] All emphasis in the quotes in this paragraph has been added.
(1)Section 160 empowers the Commissioner to address uncertainty and inconsistencies in the boundaries and positions of subdivisional allotments in a block of land that has been subdivided and that is partly or wholly unoccupied. The Commissioner does so by preparing a 'scheme of subdivision of the whole or any portion of such block agreeing as near as may be with the original scheme'.
(2)Section 161 refers to the 'scheme of subdivision so prepared', that is, the scheme of subdivision prepared in the circumstances and for the purpose set out in s 160. Section 161 provides that the scheme of subdivision so prepared shall be 'embodied in a plan and adopted provisionally for the purposes of the notices hereinafter mentioned'.
(3)Section 162(1) refers to steps to be taken '[a]fter such plan has been constructed'. This is, obviously, a reference to the plan referred to and required by s 161. Further, as foreshadowed by s 161, s 162(1) goes on to set out where notice of the proposed subdivision must or may be advertised.
(4)Section 162(2), adopting the language of s 161, requires the notice to state that 'such provisionally adopted plan' can be inspected at the office of the Western Australian Land Information Authority.
(5)Also pursuant to s 162(2), the notice must appoint a time within which objections or proposals to alter the provisionally adopted plan and evidence in support of such objections and proposals will be received by the Commissioner.
(6)Section 162(3) invests the Commissioner with a discretion whether to concede to any objections received and whether to adopt any alteration submitted to the Commissioner upon the notices referred to in s 162(2).
(7)Section 163(1) states that '[a]fter a scheme of subdivision has been finally decided upon the plan embodying it shall be verified'. The reference to the plan 'embodying' the scheme of subdivision is a reference back to s 161, the section that directs that the scheme of subdivision 'be embodied in a plan'.
(8)Further, as has been seen, s 162 prescribes a process by which the plan is advertised, objections may be made and alterations may be proposed, in response to which the Commissioner can concede objections or adopt alterations. In that context, the reference in the opening line of s 163(1), to the scheme of subdivision being 'finally decided upon', is a reference to the completion of the process required by s 162.
(9)Section 163(1) states that a verified plan of subdivision shall, from the date of verification, 'govern the titles subsequently created and registered under this Act in respect of the block so subdivided or any portion thereof'. The term 'block' is used in the same sense as it is used in s 160. Section 160 is framed by reference to 'a block of land [that] has been subdivided'. It empowers the Commissioner to prepare a scheme of subdivision 'of the whole or any portion of such block' to address the defects of the kind identified in s 160. The only sections in the TLA which use the term 'block' are s 160, s 159 (to which s 160 refers) and s 163.
(10)The words in s 164 ‑ 'such subdivision and verification' ‑ are an unambiguous reference to the subdivision and verification prescribed in s 163.
(11)Section 165 sets out who is to bear the expense of a survey that the Commissioner causes to be made under s 160. Further, there is correspondence between: (a) the applications upon which the Commissioner may cause a survey to be made pursuant to s 160; and (b) the applicants who, pursuant to s 165, the Commissioner may order to pay for the expense of a survey conducted under s 160.
For these reasons, when s 163 is read in the context of the sections which surround it, it is plain that its operation is confined to circumstances where the Commissioner has: (a) prepared a scheme of subdivision under s 160; (b) embodied that scheme in a provisionally adopted plan as required by s 161; (c) given notice of the provisionally adopted plan under s 162(1); (d) finally decided upon the scheme of subdivision including by exercising the discretion under s 162(3); and (e) given notice of the subdivision and verification of the plan under s 164.
By contrast with the Commissioner‑initiated process under s 160 ‑ s 165, s 166 prescribes a process for a proprietor of land who wishes to subdivide the land to apply for the creation and registration of new certificates of title for the land. That process is made expressly subject to s 146 of the PDA, which is in the following terms:
146.No certificate of title for subdivided land without approved diagram or plan of survey
(1)The Registrar of Titles is not to create or register a certificate of title under the Transfer of Land Act 1893 for land the subject of a plan of subdivision unless a diagram or plan of survey of the subdivision of that land has been endorsed with the approval of the Commission and —
(a)in the case of a diagram or plan of survey endorsed with the approval of the Commission before the coming into operation of this section, the title application was lodged with the Registrar of Titles before, or is lodged with the Registrar of Titles within 5 years after, the coming into operation of this section; and
(b)in the case of a diagram or plan of survey endorsed with the approval of the Commission on or after the coming into operation of this section, the diagram or plan of survey has been endorsed with the approval of the Commission within the 24 months preceding the lodging of a title application with the Registrar of Titles; and
(c)any conditions as to the registration or recording or continued registration or recording of an encumbrance or other document on or before the creation or registration of a certificate of title that are noted on the diagram or plan of survey have been complied with, or will be complied with at the time the certificate of title is created or registered.
(2)In subsection (1)(a) and (b) -
title application, in relation to a diagram or plan of survey, means an application for new titles to be created and registered for land the subject of the diagram or plan of survey.
(3)A plan containing one lot only is deemed a diagram or plan of survey of a subdivision provided that it is a portion of land comprised in —
(a)a certificate of title; or
(b)a registered conveyance; or
(c)a Crown grant; or
(d)a lot on a plan deposited with the Authority.
These provisions (s 166 of the TLA and s 146 of the PDA) make no reference to a scheme of subdivision, to a plan embodying the scheme or to verification of a plan, all of which terms are used in s 163 of the TLA. This reinforces the conclusion that s 163 has no application to a subdivision under s 166 of the TLA.
The subdivision relevant to the present case was initiated by the Ben‑Pelechs as proprietors of the land, under s 166 of the TLA and s 146 of the PDA. Consequently, s 163 had no application.
Further, contrary to the Ben‑Pelechs' assertion, their plan of subdivision was not 'verified' by the Commissioner on 1 November 2017, or at all. Rather, the WAPC endorsed its approval on the plan,[91] as is required by s 146(1) of the PDA. For that additional reason, s 163 had no application.
[91] GAB 6; see also GAB 1.
For these reasons, ground 1 fails and the notice of contention should be upheld.
Conclusion
For the above reasons, the appeal must be dismissed. We would hear from the parties as to costs.
I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
RC
Research Orderly to the Honourable Justice Beech
2 OCTOBER 2020
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
TITLE OF COURT : THE COURT OF APPEAL (WA)
CITATION: BEN-PELECH -v- ROYLE [2020] WASCA 168 (S)
CORAM: MURPHY JA
BEECH JA
VAUGHAN JA
HEARD: 2 OCTOBER 2020
DELIVERED : 2 OCTOBER 2020
PUBLISHED : 2 OCTOBER 2020
FILE NO/S: CACV 106 of 2019
BETWEEN: BOAZ BEN-PELECH
First Appellant
HANNAH JESSIE BEN-PELECH
Second Appellant
AND
GLENN CHARLES ROYLE
First Respondent
ROSEMARY ANNE ROYLE
Second Respondent
REGISTRAR OF TITLES
Third Respondent
ON APPEAL FROM:
Jurisdiction : SUPREME COURT OF WESTERN AUSTRALIA
Coram: KENNETH MARTIN J
Citation: BEN-PELECH -v- ROYLE [2019] WASC 297
File Number : CIV 1444 of 2018
Catchwords:
Practice and procedure - Costs - Whether appellants continued appeal in circumstances where, properly advised, they should have known that they had no chance of success
Legislation:
Nil
Result:
Costs orders made
Category: B
Representation:
Counsel:
| First Appellant | : | S K Shepherd |
| Second Appellant | : | S K Shepherd |
| First Respondent | : | S R Sirett |
| Second Respondent | : | S R Sirett |
| Third Respondent | : | No appearance |
Solicitors:
| First Appellant | : | Feinauer Commercial Lawyers |
| Second Appellant | : | Feinauer Commercial Lawyers |
| First Respondent | : | Thomson Geer - Perth |
| Second Respondent | : | Thomson Geer - Perth |
| Third Respondent | : | No appearance |
Case(s) referred to in decision(s):
Ben‑Pelech v Royle [2020] WASCA 168
Currie v Currie [No 2] [2019] WASCA 2 (S)
Huntingdale Village Pty Ltd v Korda [2015] WASCA 101 (S)
Huntsman Chemical Co Australia Ltd v International Pools Australia Ltd (1995) 36 NSWLR 242
Re Bond Corporation Holdings Ltd (1990) 1 WAR 465
Swansdale Pty Ltd v Whitcrest Pty Ltd [2010] WASCA 129 (S)
Yara Australia Pty Ltd v Oswal [2012] WASCA 264
REASONS OF THE COURT:
Introduction
Following delivery of our reasons for dismissing this appeal,[92] the parties were at issue as to the appropriate costs orders.
[92] Ben‑Pelech v Royle [2020] WASCA 168 (Appeal Reasons).
The appellants (the Ben‑Pelechs) accepted that, the appeal having been dismissed, they must pay the first and second respondents' (the Royles') costs of the appeal.
The Royles sought an order that the Ben‑Pelechs pay their costs after 12 November 2019 on an indemnity basis. On that date, the Ben‑Pelechs received the Royles' submissions and their notice of contention, together with a letter. The Royles' solicitor's letter of 12 November 2019 drew the Ben‑Pelechs' attention to the notice of contention and submissions in support of it, giving notice that if ground 1 was pressed, the Royles would rely on the letter and submissions in respect of costs.
After hearing argument, we made the following orders:
(1)The appeal is dismissed.
(2)The appellants pay the first and second respondents' costs of the appeal:
(a)up to and including 19 November 2019, on a party and party basis, as agreed or to be assessed if not agreed; and
(b)after 19 November 2019, on an indemnity basis, as agreed or to be assessed if not agreed.
We said we would publish reasons for the orders later. These are our reasons.
Legal principles
The principles relevant to the grant of costs on an indemnity basis are well established and were outlined in Swansdale Pty Ltd v Whitcrest Pty Ltd,[93] Yara Australia Pty Ltd v Oswal[94] and Huntingdale Village Pty Ltd v Korda.[95]
[93] Swansdale Pty Ltd v Whitcrest Pty Ltd [2010] WASCA 129 (S) [10].
[94] Yara Australia Pty Ltd v Oswal [2012] WASCA 264 [33].
[95] Huntingdale Village Pty Ltd v Korda [2015] WASCA 101 (S) [11] - [17].
Relevantly, while the categories of cases in which an indemnity costs order may be made are not closed, one category where indemnity costs are appropriate is where the action has been commenced or continued in circumstances where the applicant, properly advised, should have known that it had no chance of success. Whether that is so is determined objectively ‑ it does not direct attention to the actual legal advice given to the party. The court should not be too quick to characterise a case as hopeless ‑ parties should not be discouraged from persisting in an action merely because success is uncertain. Whether a case was hopeless must be judged without the benefit of hindsight.
Thus, it is sufficient to enliven the discretion to award indemnity costs that, for whatever reason, a party persists in what should, on a proper consideration, have been seen to be a hopeless case.
A letter warning a party that the continued prosecution of the appeal will result in an application for a special costs order may afford an occasion for making the special order by supporting a conclusion that the party has continued the appeal in full knowledge of the risks of doing so.[96]
[96] Huntsman Chemical Co Australia Ltd v International Pools Australia Ltd (1995) 36 NSWLR 242, 249 ‑ 250.
Disposition
In our view, from no later than 19 November 2019, properly advised, the Ben‑Pelechs should have known that they had no chance of success on the appeal but, nonetheless, the Ben‑Pelechs persisted in their appeal.
The court's view of the lack of merit in the appeal is reflected in the statement in the Appeal Reasons that 'both grounds of appeal are entirely without merit' (emphasis added).[97] The use of the word 'entirely' in this passage was deliberate and served to emphasise the lack of merit in the appeal.
[97] Appeal Reasons [9].
We recognise, of course, that the assessment of the Ben‑Pelechs' conduct is to be undertaken without the benefit of hindsight.
In our view, the notice of contention and submissions made in support of it were, as the Royles' solicitor's letter of 12 November 2019 suggested, unanswerable. As we explained in the Appeal Reasons, when s 163 of the Transfer of Land Act 1893 (WA) is read, as it must be, in the context of the sections which surround it, it is plain that its operation is confined to circumstances where the Commissioner of Titles has prepared a scheme of subdivision under s 160 and where the other steps referred to in [80] of the Appeal Reasons have occurred. That point was made in clear terms by the notice of contention and its supporting submissions.
We accept, as the Ben‑Pelechs emphasise, that there were no decided cases concerning s 163 of the Transfer of Land Act. Nevertheless, the 11 features of the statutory provisions outlined in [79] of the Appeal Reasons make it, as expressed in the Appeal Reasons, 'plain beyond dispute' that s 160 ‑ s 165 form an interlocking scheme. Thus, s 163 could have no application to the present case.
Moreover, as the Royles' written submissions on the appeal pointed out, there was no evidence that the Commissioner had verified the plan of subdivision. That in itself was also fatal to the Ben‑Pelechs' reliance on s 163.
We would allow one week after receipt of the letter for the Ben‑Pelechs to have considered the position in light of the notice of contention.
For these reasons, at least from 19 November 2019, properly advised, the Ben‑Pelechs should have known that ground 1 was hopeless.
In our view, ground 2 was, from the outset, entirely without merit. The written submissions fell well short of articulating any arguable basis for a conclusion that the Ben‑Pelechs had impliedly consented to the Royles being in possession of land owned by the Ben‑Pelechs or that, on some other ground, no claim of adverse possession arose. The Ben‑Pelechs' argument faced the insuperable obstacle that it asserted consent by a party who was without any knowledge of the subject matter of the alleged consent. The hopelessness of the Ben‑Pelechs' case on ground 2 is illustrated and confirmed by their resort, in the course of oral argument, to a contention that the parties' agreement contained the implied term referred to in [62] of the Appeal Reasons. No case to that effect had been pleaded in terms or clearly articulated in submissions to the trial judge. The claim of such a term was not supported by anything more than assertion; it fell substantially short of having any realistic prospect of acceptance. No other plausible basis to impeach the finding of adverse possession was advanced in oral submissions.
The Ben‑Pelechs also pointed to the absence of evidence that the costs incurred by the Royles would not be covered by an order for party and party costs. They referred to the statement in Swansdale[98] that in such circumstances an indemnity costs order may not be appropriate.
[98] Swansdale [10](9).
However, as is also observed in Swansdale,[99] an indemnity costs order may nonetheless be an appropriate sanction to mark the court's disapproval of improper or unreasonable conduct. This is such a case. For the reasons already given, the Ben‑Pelechs' conduct in continuing with the appeal after 19 November 2019 was unreasonable, as properly advised they should have known that they had no chance of success. The making of an indemnity costs order will have the effect that the Royles will recover all of their costs except to the extent that the Ben‑Pelechs demonstrate that time spent by the Royles' solicitors or counsel after 19 November 2019 was unreasonably incurred.[100] In the circumstances of this case, for the reasons already given, it is appropriate that the Ben‑Pelechs bear such an onus.
[99] Swansdale [10](10).
[100] Re Bond Corporation Holdings Ltd (1990) 1 WAR 465, 479; Currie v Currie [No 2] [2019] WASCA 2 (S) [13].
For these reasons, in our view it was appropriate that the Ben‑Pelechs pay the Royles' costs after 19 November 2019 on an indemnity basis.
I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
RC
Research Orderly to the Honourable Justice Beech
2 OCTOBER 2020
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