Ben-Pelech v Royle - [2019] WASC 297

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CIVIL

CITATION:   BEN-PELECH -v- ROYLE [2019] WASC 297
CORAM:   KENNETH MARTIN J
HEARD:   25 & 26 JUNE 2019
DELIVERED          :   16 AUGUST 2019
FILE NO/S:   CIV 1444 of 2018
BETWEEN:   BOAZ BEN-PELECH
First Plaintiff
HANNAH JESSIE BEN-PELECH
Second Plaintiff
AND
GLENN CHARLES ROYLE
First Defendant
ROSEMARY ANNE ROYLE
Second Defendant
REGISTRAR OF TITLES
Third Defendant

Catchwords:

Real property - Boundary dispute between neighbours - Boundary fence wrongly placed for 23 years along part of boundary leading to 27 sqm disputed area - Misalignment of boundary fence due to surveyor's error - No error on the part of the parties - Claim for adverse possession made over disputed area - Separate portions of disputed area comprising a rear enclosed area and a front open area - Defences to adverse possession - Subdivision defence made pursuant to s 163 Transfer of Land Act -Whether issuing of new titles pursuant to subdivision plans extinguishes adverse possession rights - Mistake as to boundaries or identity of land defence made pursuant to s 123 Property Law Act - s 123 Property Law Act not a 'shield' to meritorious adverse possession claim

Legislation:

Dividing Fences Act 1961 (WA)
Limitation Act 1935 (WA)
Limitation Act 2005 (WA)
New Zealand Property Law Act 1952-1963 (NZ)
Property Law Act 1969 (WA)
Strata Titles Act 1966 (WA)
Transfer of Land Act 1893 (WA)

Result:

First and second defendants successful on claim for adverse possession in rear area only

Plaintiffs' claim for orders pursuant to s 123 of the Property Law Act 1969 (WA) dismissed

Category: B

Representation:

Counsel:

First Plaintiff	:	Mr S K Shepherd
Second Plaintiff	:	Mr S K Shepherd
First Defendant	:	Mr S R Sirett
Second Defendant	:	Mr S R Sirett
Third Defendant	:	No appearance

Solicitors:

First Plaintiff	:	Feinauer Commercial Lawyers
Second Plaintiff	:	Feinauer Commercial Lawyers
First Defendant	:	LSV Borrello Lawyers
Second Defendant	:	LSV Borrello Lawyers
Third Defendant	:	No appearance

Case(s) referred to in decision(s):

Blackburn v Gemmell (1981) 1 NZCPR 389
Bowman v Tremaine [2016] WASC 294
Construction Industry Long Service Leave Payments Board v Precision Corporation Pty Ltd (Unreported, WASC, Library No 920130, 4 March 1992)
Executive Seminars Pty Ltd v Peck [2001] WASC 229
Norris v Weal [1984] NZHC 198
Petkov v Lucerne Nominees Pty Ltd (1992) 7 WAR 163
R & R Fazzolari Pty Ltd v Parramatta City Council [2009] HCA 12; (2009) 237 CLR 603
Refina Pty Ltd v Binnie [2009] NSWSC 914
Registrar of Titles v Spencer [1909] HCA 69; (1909) 9 CLR 641
Sproxton v Laufoot Holdings Pty Ltd and Niewkerk (Unreported, WASC, Library No 4666, 1 October 1982)

KENNETH MARTIN J:

Introduction

Despite their sandy nature, the soils in the Perth coastal suburb of City Beach have managed to provide a fertile ground for this dispute arising between suburban neighbours. This trial showcases what, in essence, is a boundary dispute between the neighbours over a narrow at best (yet contested) 27 sqm rectangular strip of border land lying between the neighbours' respective lots (the disputed area).
The disputing parties have been neighbouring residential land (lot) owners in Hesperia Avenue, City Beach since 1993. Mr and Mrs Ben‑Pelech, who are the plaintiffs, acquired lot 238 in 1993 but which, as a result of subdivision activities I will discuss later, is now lot 200. Mr and Mrs Royle, the first and second defendants, own lot 239. In these reasons I will, with no disrespect intended, refer at times to the parties as the Ben-Pelechs and the Royles.
Given the relief sought by the plaintiffs, the Registrar of Titles (the Registrar) is the third defendant to the proceedings. However, as is customary, the Registrar submitted, in effect, a notice to abide on terms the decision of the court. As such, the Registrar took no further part in the proceedings. Therefore, when referring to the 'defendants' in these reasons, I only refer to the Royles, without the Registrar.
A sizable proportion of the disputed area lies on the defendants' side of the timber framed fence that was erected between the two adjoining lots in early 1994. I refer to this fence as the 'replacement fence'. The position of the fence has not altered since early 1994. The replacement fence ran from the rear adjoining corners of lots 238 (now lot 200) and 239 down to a point two‑thirds of the way along the boundary - ending at a side gate. When closed, the side gate effectively shuts off the rear area of lot 239, at a point between the residential dwelling's wall on the north side of lot 239 and the replacement fence. I refer to this section of the disputed area as the 'rear area'. The remaining portion (roughly a third) of the border as between these adjoining lots proceeding towards their road verges with Hesperia Avenue is not and has not been fenced. I refer to this section of the disputed area as the 'front area'.
A view of the replacement fence can be seen from the below photo taken in February 2018 (affidavit of Rosemary Anne Royle sworn 14 February 2019, page 36, RR6). This photo shows the replacement fence as seen when standing on lot 238 looking westward towards lot 239:
There is now no dispute as between the parties that the position of the replacement fence (and on which it currently stands) was erected somewhat off a true alignment with the lines of the boundary dividing the adjoining lots (the misalignment of the replacement fence). The misalignment of the replacement fence arises out of an error made in 1992 by the engaged surveyors for the then common owner of the two adjoining lots. A surveyor's corner peg (which was placed to identify the corner frontage boundary between the two adjoining lots) was in fact misplaced some 0.53 m short at the verge instead of where it should have been correctly positioned. The replacement fence has recently been ascertained to be constructed entirely on the plaintiffs' lot 238 (now lot 200). This error effectively rendered the marked area of the plaintiffs' lot 238 as too small, and correspondingly, the defendants' lot 239 as too large.

The competing claims in this action

In this action, the plaintiffs seek a declaration that the boundary between the two adjoining lots conform to that on the certificates of title. They seek permission from the court to, first, tear down the replacement fence and, second, to erect a new fence (including retaining walls) on the correct boundary line separating the two adjoining lots.
The defendants resist this relief. Further to that resistance, by their counterclaim, the defendants now claim to enjoy a promissory title over the disputed area, by way of adverse possession. This claim is based on their asserted continuous use and possession of the disputed area since early 1994 to the time when the misalignment of the replacement fence was recently discovered.
The misalignment of the replacement fence was realised during mid‑2017. This was when broader subdivisional activities were then being pursued by the plaintiffs, across lot 238 but also over some other adjoining properties which they had acquired after 1993. During these subdivisional pursuits the misalignment of the replacement fence came to everyone's attention.
Needless to say, the parties have been unable to resolve their boundary dispute consensually.
To resolve the various trial issues I need first to determine, other things being equal, whether the defendants can make good their claim for an acquired promissory title over the disputed area by way of adverse possession. As I later explain, an affirmative finding of adverse possession in favour of the defendants would extinguish the plaintiffs' title to facilitate the defendants' recognition as the owners of any part(s) of the disputed area assessed to have been adversely possessed by them.
Although the plaintiffs generally challenge the defendants' claim to adverse possession, they go further to advance two further and alternate arguments under the Transfer of Land Act 1983 (WA) (TLA) and Property Law Act 1969 (WA) (PLA), which they put against any potential affirmative finding of adverse possession favouring the defendants. I examine these two unique resistance arguments of the plaintiffs in the subsequent parts of these reasons.
Before I turn to some further background underlying this dispute, I should briefly outline the body of evidence put before the court at the trial.

Evidence before the court

Affidavit evidence

The evidence in this matter was provided primarily through affidavits. To that end each side tendered various affidavit evidence.
The plaintiffs read and tendered the affidavits of:
(a)Boaz Ben‑Pelech sworn 27 November 2018 (exhibit 1.1);
(b)Boaz Ben‑Pelech sworn 20 June 2019 (exhibit 1.1A); and
(c)Sharon Ben‑Pelech sworn 27 November 2018 (exhibit 1.2).
The defendants read and tendered the affidavits of:
(a)Glenn Charles Royle sworn 14 February 2019 (exhibit 1.3); and
(b)Rosemary Anne Royle sworn 14 February 2019 (exhibit 1.4). Mrs Royle's affidavit was amended by an excision of certain paragraphs following objections from the plaintiff.
The trial proceeded on the basis that neither side sought to cross‑examine the other over any of the affidavit evidence. Allowing for the usual small divergences in perspectives, the affidavit evidence submitted between the rival parties was essentially uniform and factually uncontroversial.

Other evidence

The parties tendered, by consent, a trial bundle containing various documents including maps, images, diagrams and correspondence. The trial bundle (TB) became exhibit 1. The index to the TB became exhibit 2. An agreed chronology filed on 21 June 2019 was also tendered. It became exhibit 3.
Throughout these reasons, as already seen, I will incorporate various maps, diagrams and images to hopefully assist a clearer understanding of the issues in dispute in this trial.

Background

The acquisitions of lots 238 and 239

In early 1993, a Mrs Jean Freeth was seeking to sell her two adjoining City Beach properties on Hesperia Avenue. These were the side by side residential dwellings on lots 238 and 239. Mrs Freeth resided in the larger lot 239.
Lot 238 (41 Hesperia Avenue) is located to the north-east of and on the landward side of lot 239 (43 Hesperia Avenue). The terrain on both lots is several metres higher at their rear than at their frontages. Both lots fall away several metres in slope as they descend from the rear of each lot towards their road verge with Hesperia Avenue. That road itself, from a point of its north-eastern intersection with Kingsland Avenue, gradually snakes and curves its way downwards to the south‑west, before terminating at West Coast Highway.
Mrs Freeth was successful in selling off both of her adjoining City Beach properties in 1993.
Lot 238 was sold to the plaintiffs, the Ben‑Pelechs, along with their son, Sharon, as joint tenants. Lot 238 was purchased as a proposed residence for Sharon. His parents resided elsewhere in City Beach. Sharon then duly resided at lot 238 for about five years between 1993 and 1998, before selling his one‑third joint tenancy interest back to his parents at that time.
Lot 239 was sold by Mrs Freeth to the defendants, the Royles. The defendants have resided on lot 239 continuously with their children since their joint acquisition of lot 239 in March 1993. They renovated the front part of the house at some point around 2008. They have been 'empty-nesters' since their children moved away from home some time around 2008.
Hence, the plaintiffs and the defendants have been adjoining neighbours at City Beach since their respective acquisitions of lot 238 and lot 239 in March and April 1993, over 26 years ago.
Lots 238 and 239 as they were in 1992 can be seen in the below diagram (affidavit of Sharon Ben‑Pelech, page 11), with Hesperia Avenue at the top of the diagram and lot 238 on the right and lot 239 on the left:

The plaintiffs' subdivision activities

Over the ensuing years since 1993 the Ben-Pelechs have purchased, as investments, more adjoining land to lot 238, being further adjoining residential and corner properties extending back up Hesperia Avenue and around the corner up into Kingsland Avenue. These acquisitions, as matters transpire, were made with a view to longer term demolitions of all the existing homes and an ultimate residential subdivision. Around 2014, the Ben‑Pelechs actively initiated the process of subdivision across all this acquired land, seeking to create seven new lots out of the four original adjoining lots (which included lot 238).
All the existing dwellings across the Ben‑Pelech acquired Hesperia Avenue/Kingsland Avenue land have since been demolished and cleared to facilitate subdivision. New housing works are progressing across various subdivided lots, but the adjoining area to lot 239 has not yet been built upon.
In early November 2017 an approved plan of subdivision was issued for seven new lots to the Ben‑Pelechs. In the process, the former lot 238 (once of an area of 1,232 sqm) was cancelled. The new and smaller lot 200 (of 837 sqm) was created to become the bordering lot, now adjoining the Royles' lot 239.
The Ben‑Pelechs say that it is their intention that the adjoining and smaller lot 200 (currently cleared and vacant) be built upon, to provide them personally with a newly constructed three‑storey residence - to where they hope to relocate and reside, alongside the six newly subdivided adjoining lots they created across the adjoining subdivision neighbouring lots.

The misalignment of the replacement fence

The old fence

When Mrs Freeth sold off her lot 238 to the Ben‑Pelechs (and their son) and her lot 239 to the Royles in March and April 1993 respectively, she had made both purchaser parties fully aware that there was a problem with the erected position of the then existing boundary fence erected between those two lots. I refer to the boundary fence that had existed in 1993, at the time the lots were acquired, as 'the old fence'. The old fence had been built in (slightly) the wrong position. It had been erected entirely within the bounds of lot 238, rather than on the correct border position of the dividing boundary line between lots 238 and 239.
An incorrect positioning of the old fence had not been a practical problem for Mrs Freeth - as the common owner of both lots up to 1993. At the time the adjoining lots were sold off there was also a gazebo built at the rear of the two lots (on the higher rear ground). The gazebo had straddled the boundary between the two adjoining lots. The gazebo can be seen marked on the diagram at [26]. The issue regarding the gazebo was also disclosed to the purchasing parties at that time.
Due to the misalignment of the old fence and a problematic positioning of the gazebo, plus the fact that the bore on lot 239 had linked pipes reticulating both of the adjoining lots at that time, the real estate agent then acting for Mrs Freeth had properly made the prospective purchasers aware of these boundary issues. The offer and acceptance purchase contracts signed by the Ben-Pelechs and the Royles each displayed special conditions, rendering it explicit to those purchasers that they were on notice of the boundary issues and were specifically excluded from complaining about them in the future towards their common vendor, Mrs Freeth. (See the affidavit of Boaz Ben‑Pelech sworn 27 November 2018, annexures BBP1 and BBP3 (exhibit 1.1)).
Mrs Freeth had also reserved the right, under the offer and acceptance special conditions, as against both new purchasers, to replace the misaligned old fence before settlement on each sale. But notwithstanding that special condition, she did not. As things turned out, Mrs Freeth simply left it to the new purchasers to sort out as between themselves the boundary issues arising out of the misalignment of the old fence between the two lots.
None of the problems disclosed in 1993 deterred either the Ben-Pelechs or the Royles from proceeding to purchase lots 238 and 239, respectively. Settlements duly proceeded. Essentially, the Ben‑Pelechs and the Royles became neighbours, from April 1993. It then took a further six months or so after settlement before the sitting tenants who had been occupying the house on lot 238 moved out, to enable Sharon to then take up personal residence there.

The replacement fence

There appears to have been cordial neighbourly relations between Sharon and the Royles. At a time in the latter half of 1993, soon after the previous tenants had moved out and Sharon took up personally residing at lot 238, Sharon reached a verbal agreement with the Royles to demolish the old fence and to erect a new fence on and along the true boundary between the two adjoining lots (ie, the replacement fence).
At par 37 of his affidavit, Sharon identifies six key points of that 1993 verbal agreement. Mrs Royle also recounts the agreement in her affidavit.
There is no real dispute of substance between Sharon's version and Mrs Royle's more detailed account of the verbal agreement. Since Mrs Royle presents a more comprehensive version of the accepted 1993 verbal agreement, I set out verbatim below her account of what was then agreed with Sharon which, of course, I accept.
At par 31 of her affidavit, Mrs Royle relates the culmination of discussions with Sharon in around May or June 1993, in the following terms (no objection being taken to a conclusionary preface as regards the legal event of that agreement - which is accepted):
31.During this subsequent discussion, I agreed with Sharon that:
31.1Glenn and I would arrange for part of the Original Fence located in the front of Lot 238 and Lot 239 to be removed and for the removal of the Gazebo;
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 Sorenson, as shown in the Sorenson survey and by the survey pegs placed by Sorenson (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 First and Second Plaintiffs' 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 First and Second Plaintiff 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.
Mrs Royle's evidence is that the replacement fence arrangements were then implemented, accordingly. A replacement fence was duly completed. She also says at par 49 of her affidavit (and I also accept) that a finished replacement fence was in situ:
... by the end of 1993, but in any event by 31 January 1994 at the latest.

Finally, Mrs Royle says that at no time since that replacement fence was finished has she or her husband ever caused it to be replaced, or its alignment altered (par 53). There is no dispute over that.
The position then is that the replacement fence was erected and finished by the end of January 1994. It has remained in that same position ever since. Indeed, it remains there today. I have already briefly outlined how the replacement fence stands, but I need to provide some greater details.
As constructed, the replacement fence extends from the higher rear area (ie, south end) of the two adjoining lots to run downwards along only about two‑thirds of the (assumed) boundary between the two adjoining lots, and sloping downwards towards Hesperia Avenue. But at a point close to where the replacement fence ends, there was a gate affixed to the fence on the Royles' lot 239 side. That gate then adjoins (when closed) a section of jutting timber that is attached at right angles to the northern side wall of the Royles' residence. The timber attachment to the wall and the gate, when closed, effectively closes off and secures the rear of the lot 239 premises - creating a fenced off rear area on that side of the house.
The side gate can be seen in closed position viewed from Hesperia Avenue in the photograph below (page 44 of Mrs Royle's affidavit):
The gate in open position viewed from Hesperia Avenue can be seen in the next photograph (page 53 of Mr Royle's affidavit):
A corresponding view of the gate again in an open position, but now viewed looking from the rear of lot 239 looking down towards Hesperia Avenue, can be seen in the photograph below, and which also shows an area at beyond the end of the replacement fence - a front garden area that extends down to the Hesperia Avenue road range (page 52 of Mr Royle's affidavit):
The above photo also shows the north side of the Royles' front garden, with planted olive trees visible. The (five) olive trees' vertical trunks are seen growing at approximately half a metre inside (ie, west) of an imagined line extending from the end of the replacement fence down to meet the road verge at Hesperia Avenue.
Despite the parties' mutual intentions in 1993 to build a dividing fence on the correct boundary, this did not occur. The replacement fence was once again built on an incorrect boundary line dividing the two properties. I will now turn to examine the relevant history as to how this phenomenon could be repeated.

The cause of the misalignment of the replacement fence

At a point prior to settlement on the acquisition of lot 239 by the Royles, Mrs Freeth's real estate agent provided to the Royles (but not, it would seem, to the Ben‑Pelechs), a copy of her surveyor's report and diagram, prepared in 1992 for Mrs Freeth by licensed surveyors Sorenson Short & Associates. The diagram showed the results of a survey as had been undertaken by Sorenson Short & Associates on 26 October 1992 - showing the true boundary position between lots 238 and 239 ('the Sorenson survey diagram'). The Sorenson survey diagram may be seen at [26] of these reasons.
The Sorenson survey diagram showed at the Hesperia Avenue frontage end of the boundary the positioning of a surveyor's corner peg at the intersecting front corner of the two adjoining lots ('the front corner survey peg'). The survey diagram showed the position of that peg being placed some 7.56 m westward of another peg which, as regards the frontage of lot 238, depicted a slight 'bend' or 'kink' in the frontage boundary line of lot 238 at its road verge frontage with Hesperia Avenue ('the kink point survey peg').
It came to light in about mid‑2017 that the front corner survey peg, albeit shown on the Sorenson survey diagram as being located 7.56 m to the west of the kink point survey peg on lot 238, in fact, had been wrongly placed by the surveyor (in 1992) at only 7.03 m to the west of the kink point survey peg (ie, a placement error of some 0.53 m -resulting in too little frontage width for lot 238 and a corresponding increase for lot 239).
Hence, although the 1992 Sorenson survey diagram presents on paper as being correctly drawn, the actual physical placement of the front corner survey peg, in attempting to show and mark the corner point dividing the Hesperia Avenue frontage boundary between the two adjoining lots, was actually placed in error by some 0.53 m at some time around October 1992.
Mrs Royle, by her affidavit, says that in 1993 Mrs Freeth's real estate agent had visually pointed out to Mr Royle and herself, the in situ position of these frontage survey pegs at the time.
Mrs Royle explained in her affidavit, at pars 39 and 40 (and I accept):
Shortly after the removal of part of the Original Fence and the gazebo 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 Sorenson survey pegs at the front and rear of Lot 238 and Lot 239.
I recall looking at the Sorenson 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 of the New Fence.
Mrs Royle deposes that since then (ie, 1993 - 1994) she and her husband have always regarded the front corner survey peg's position as the dividing corner point as between the Hesperia Avenue frontages of the two adjoining lots.
So, as seen, under the agreed arrangements made around the works leading to the construction of a replacement fence back in 1993, the Ben‑Pelechs and Royles had then mutually proceeded on the basis that the replacement fence would be newly erected on the correct boundary line dividing the two lots, correcting the former misalignment issue. The replacement fence work was to be carried out in 1993 - 1994 on the assumptions that the 1992 Sorenson survey diagram but, more importantly, that survey as placed boundary pegs had been placed in the correct positions.
The overwhelming and essential conclusion of fact arising from this uncontroversial evidence is that extending over a period from the end of January 1994 and right up until the present day, the replacement fence has stood at its presently seen erected location.
That 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.

Discovery of the misalignment of the replacement fence

To explain how the misalignment of the replacement fence was discovered in early August 2017 (after about 23 years), some candid evidence from Mr Mark Zimoch, a licensed surveyor from Sorenson Short & Associates (who investigated the problem for the Royles in August 2017), is revealing. As mentioned, Sorenson Short & Associates had been acting for Mrs Freeth as her surveyors back in October 1992.
As to what had happened in 1992, I refer to two emails from Mr Zimoch to Mrs Royle of 15 and 18 August 2017, respectively. Mr Zimoch explained the position to the Royles as follows, on 15 August 2017 (TB vol 2, page 413):
As you are aware, your lot was previously repegged in 1992 and the (old) front pegs are still in place. Unfortunately, it is now evident that the repeg survey performed in 1992 was in error. I do not have any field records of that survey and cannot check it further but based on the evidence (old pegs found) the pegs were misplaced approx 0.5m. I was not involved with that survey in 1992 however on behalf of SAS Surveyors I sincerely apologise for the poor workmanship and the errors caused. This has evidently resulted in new walls/fences being constructed incorrectly on the north boundary. Please refer to the drawing attached which demonstrates the displacement of the various structures and the positions of new marks placed (some on offsets).
The plan referred to was, of course, Mr Zimoch's plan of 11 August 2017, to which I will later refer: see TB vol 2, page 415.
Mr Zimoch's next email to Mrs Royle of 18 August 2017 (TB vol 2, page 417) was equally frank. It concluded:
However, after seeing for myself and considering all the evidence - the only conclusion is that our repeg survey (1992) was made in error. I acknowledge the fact and there was never any intention to mislead you in any way. I sincerely apologise on behalf of the company for the error made and the consequences.
Given that explanation from Mr Zimoch, neither the plaintiffs nor the defendants are to be assessed as being in any way at fault over what has happened over the misalignment of the replacement fence. They both would present as having 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.
I now turn briefly to the legal principles of adverse possession to evaluate whether the Royles have established adverse possession over any part of the disputed area as contended by their counterclaim in this action.

Adverse possession - legal principles

At the trial there was no disagreement as between the parties concerning adverse possession legal principles.
It is helpful to begin by revisiting the cornerstone of the Torrens system, that is, indefeasibility of registered title embodied within s 68 of the TLA. To that end, I mention first s 68(1), which manifests under the heading 'Estate of registered proprietor paramount'. Section 68(1) reads:
Notwithstanding the existence in any other person of any estate or interest whether derived by grant or transfer of the fee simple from the Crown or otherwise which but for this Act might be held to be paramount or to have priority the proprietor of land or of any estate or interest in land under the operation of this Act shall except in case of fraud hold the same subject to such encumbrances as may be notified on the registered certificate of title for the land; but absolutely free from all other encumbrances whatsoever except the estate or interest of a proprietor claiming the same land under a prior registered certificate of title and except as regards any portion of land that may by a wrong description of parcels or boundaries be included in the certificate of title or instrument evidencing the title of such proprietor not being a purchaser for valuable consideration or deriving from or through such a purchaser.
But s 68(1A) of the TLA then qualifies the preceding s 68(1) in important respects. It is only necessary to refer to the introductory part of s 68(1A) in the following terms:
Despite subsection (1), the land which shall be included in any certificate of title or registered instrument shall be deemed to be subject to the reservations exceptions conditions and powers (if any) contained in the grant thereof or transfer of the fee simple or otherwise and to any rights subsisting under any adverse possession of such land … (my emphasis in bold)
The term 'adverse possession' as regards 'any rights subsisting' must be understood in the context of the adverse possession principles which are entrenched under the current (and former) Limitation Acts of this State. See first s 4 and s 30 of the former Limitation Act 1935 (WA), which had specified 12 years as the requisite period which must have elapsed in order to bar a landowner's action to recover land that has been adversely possessed. Sections 4, s 19(1) and s 75 of the current Limitation Act 2005 (WA) essentially re‑embody the same criteria.
In Petkov v Lucerne Nominees Pty Ltd (1992) 7 WAR 163, 166, Murray J discussed s 30 of the former Limitation Act 1935 as the (then) applicable statutory provision.
Section 30 of the Limitation Act 1935 had then provided:
At the determination of the period limited by this Act [ie, 12 years] to any person for making an entry or distress, or bringing any action or suit, the right and title of such person to land or rent, for the recovery whereof such entry, distress, action, or suit respectively might have been made or brought within such period, shall be extinguished. (my emphasis in bold)
The force of the concluding words 'shall be extinguished' seen used within s 30 of the former Limitation Act 1935 is pivotal, as regards the terminated right and title of a person to land or rent, and must be recognised. Those express words stand by some contrast to the more usual work of a limitation of action statute, by generally barring the remedy, not the underlying cause of action of a plaintiff. However, the express reference seen made within s 30 to an extinguishment of rights goes further than the usual. It expressly ends the former land owner's rights, once the stipulated time has run for the adverse possession.
Like terminology as to the person's (owner's) right and title to land being 'extinguished' is seen repeated by s 75 of the current Limitation Act 2005.
Towards the legal effect of s 30 of the former Limitation Act 1935, Murray J observed in Petkov, at page 166:
That provision, of course, makes it abundantly clear how the acquisition of title by adverse possession may continue to operate as an exception to indefeasibility of title conferred by a registration under the Transfer of Land Act. Not only is the right of action barred, but the title to the land is lost. (emphasis added)
In short, it may be seen that the principle of adverse possession over land for Western Australia has received express recognition and paramountcy under s 68(1A) of the TLA, once it is established as against the position of a registered indefeasible title of a registered proprietor of land. In other words, notwithstanding the policy force of the indefeasibility of registered title over land arising from the Torrens system in Western Australia, the phenomenon of adverse possession (to be established across a period of 12 years) has long been and continues to be recognised and preserved as a significant statutory exception to the otherwise generally indefeasible rights of the registered proprietor of land that might otherwise manifest by reference merely to the state of a registered instrument of title held over land.
Given all that, it is enough for me to simply refer to an exposition of adverse possession principles for this State, under decisions of Murray J in Petkov to which I have already referred, particularly at pages 166 - 168, by Hasluck J in Executive Seminars Pty Ltd v Peck [2001] WASC 229 [195] - [200], and to a recent discussion of adverse possession principles by Allanson J undertaken in Bowman v Tremaine [2016] WASC 294 at [29] - [43].
In the course of the reasons in Executive Seminars, Hasluck J had observed:
[197]In Petkov & Ors v Lucerne Nominees Pty Ltd (1992) 7 WAR 163 Murray J noted that adverse possession is an exception to the indefeasibility of title under s 68 of the Transfer of Land Act. He held that the 12‑year limit imposed upon the registered proprietor under s 4 of the Limitation Act 1935 on a right of action against an adverse possessor is not limited to the period of possession of the party asserting adverse title, that is, it included that of predecessors in title.
[198]He said further that the party asserting adverse possession must show a possession in fact that has been continuous and exclusive. This must be accomplished by a conscious intention to possess the land to the exclusion of all other parties. The facts of each case would be decisive.
...
[200]Put shortly, then, the Transfer of Land Act and the principles of indefeasibility envisage that a registered proprietor will hold the title to this land free of all encumbrances save those noted on the register. However, as one of the exceptions to indefeasibility allowed by s 68, if a neighbour trespasses upon the land in question and takes possession of it by building in a manner which encroaches upon the adjoining land, then, at the expiration of 12 years, the effect of the Limitation Act 1935 is that the true owner loses his right to complain of the trespass. Thus even though the encroacher's title is imperfect in the abstract (because he obtained the land by a wrongful act), at the end of 12 years he is able to defeat any competing claim and is deemed to be the owner.
[201]It is apparent, however, that time will not begin to run until someone is in 'adverse possession', that is to say, the possession must be adverse and not by consent of the true owner. Possession is not 'adverse' where it is by permission of the owner as, for example, where possession of land is taken pursuant to a lease or licence.
Therefore, for Western Australia, adverse possession, by force of s 68(1A) of the TLA, remains enshrined by statute as one of the few recognised exceptions against the indefeasibility of title of a registered owner of land under the Torrens title registration system.
Given the physical differences in the enclosure features of the front and rear areas of the adjoining lots which I have already alluded to, I propose to evaluate each area separately to determine whether the claims for adverse possession can be made out by the Royles as they contend by their counterclaim.

Adverse possession of the disputed area

The rear area

The side gate that has been attached at the Hesperia Avenue end of the replacement fence, when closed (see the photograph at [44] of these reasons), effectively seals off and secures that rear area of lot 239, against a general access to the side and rear of that lot.
The rear area of lot 239 extends up to the rear adjoining (south) corner, as the commencing point of the replacement fence. Since February 1994, the defendants have enjoyed exclusive and continuous possession of this rear area. They have used the area accordingly on that basis as theirs.
There is a side garden and paved pool area around the rear area of lot 239. Alongside parts of the fence upon the defendants' side are trees shading the pool area at the rear. Since 1993, the defendants have added limestone blocks, garden beds and reticulation pipes. Some shady palm trees are visible at the rear corner of lot 239.

Conclusion – the rear area

As regards the rear area of the disputed area, at 2019, I am left with no doubt that the replacement fence as constructed delivered (for the most part) approximately an extra 0.5 m of width held to the continuous, uninterrupted and exclusive advantage of the defendants in the rear area of lot 239, but to the corresponding disadvantage of the plaintiffs' lot 238 (and now, lot 200). The doctrine of adverse possession is thereby engaged. By early February in 2006, the minimum 12‑year period that is necessary for adverse possession to be proven had run its course. In fact, the misalignment of the replacement fence was not discovered factually until August 2017 (after some 23 years). The misalignment of the fence issues was only realised then, in a context of the plaintiffs' larger scale subdivisional activities across all their acquired lands in this area of City Beach.
As such, I am satisfied that the defendants have made good their claim to adverse possession over the rear area.
However, their adverse possession claim position is less clear towards the front area, to where the fence did not extend.

The front area

As mentioned, the replacement fence had terminated at the position of the affixed side gate on lot 239. Hence, the fence did not run over the remaining (roughly one‑third) boundary to reach the Hesperia Avenue road verge.
At the front area of the adjoining lots, at beyond the point of the side gate, there is not now and has never been any erected dividing boundary fence.
Instead, there has been at this area at various times since early 1994 only open areas of dirt or lawn and grass, sand, olive trees and a garden bed on lot 239 - in an otherwise open and unenclosed front area. Since the defendants carried out the renovations at the front of their dwelling in about 1998, it seems a garden bed in this area was established around some of the planted olive trees.

The front area can be clearly seen in a photograph taken at some time during 2017, referred to at page 61 of Mr Royle's affidavit. It shows a view of lots 238 (on the left) and 239 (on the right), but with the open side gate visible in the centre of the photograph, past some temporary fencing:

A further view of the front area is seen in the photograph below from page 60 of Mr Royle's affidavit. It shows the (five) existing olive trees planted in a line and the garden bed on the right‑hand side of the olive trees:
Mrs Royle's affidavit, commencing at par 112 and extending to par 135, speaks of a dirt pathway situated along the adjoining side of their house, on the area she refers to as 'possessed land' (which I have referred to as the disputed area), which she and her husband say they used regularly when 'passing back and forth between our front yard and back yard' (par 127). Mrs Royle says further at pars 127 and 128:
The dirt pathway we use turns in at the corner of our house and the olive trees situated in the front area that start at the end [of] the dirt path we use act as a natural fence separating Lot 200 (formerly Lot 238) from our front yard.
This dirt pathway used to be grassed prior to the demolition of the house on Lot 200 (formerly Lot 238) in 2017. However, the dust from the demolition of the house on Lot 238 and foot traffic was constantly clogging our reticulation in this area and the grass died after Glenn and I disconnected our reticulation temporarily.
The balance of paragraphs to par 135 sees Mrs Royle speaking of works carried out by her husband and herself in the front area, such as regularly pruning the planted olive trees and by their use of the front area to access their house.
Mrs Royle speaks of the front area as being used by herself and her husband to the exclusion of all others (see par 133 - 135). But a base difficulty I have with that contention regarding the front area is that, unlike for the rear area beyond the gate, this more open front area was never fenced off and it was not physically enclosed.
Beyond the last olive tree seen growing closest to the Hesperia Avenue road verge, there is seen extending (south) back towards the side gate, essentially, what is an open space area of lawn extending down to the kerb of Hesperia Avenue comprising the front area. Without making and marking out a precise measurement, it would not be possible for passers‑by to see or ascertain where a dividing border line as between the two adjoining lots is at this front area. As things have turned out, by extrapolating an imaginary straight line, say, from the end of the replacement fence down to Hesperia Avenue - that process would see the imaginary extended line ending at approximately 0.5 m to the east (ie, back onto lot 200) of another straight line showing the extrapolated alignment from the vertical trunks of the five olive trees planted in line at this front area by the Royles.
Surveys in 2017 by the plaintiffs' licensed surveyor, Veris (as successor to Whelans), revealed that the true border boundary line as between the new lot 200 (part of former lot 238) with lot 239, would see that line of the true border almost perfectly bisect the middle of the vertical trunks of the last two olive trees currently growing in line closest to Hesperia Avenue (TB vol 2, page 434) (the Veris survey).
The Veris survey can be seen below:
I refer as well to the corrected survey work undertaken by Sorenson Short & Associates' licensed surveyor, Mr Zimoch, of 11 August 2017 (the Zimoch survey) (TB vol 2, page 415). The Zimoch Survey also identifies the trunks of the last two olive trees now growing closest to Hesperia Avenue as being positioned right on the line of the true boundary between the two lots.
A further survey prepared for the defendants was done by Mr Ross McLoughlin, consulting surveyor, and of 17 January 2018 (the McLoughlin survey - TB vol 12, page 439). The McLoughlin survey shows an area in yellow as the defendants' adverse possession claim area (for both the front area and rear area) of 27 sqm against lot 200:

Conclusion - the front area

I can now draw some conclusions concerning the front area, as also claimed to be adversely possessed by the defendants.
It is apparent that the replacement fence that has separated the two adjoining lots since early 1994 does not and did not ever extend all the way to reach the Hesperia Avenue road verge. It terminated at a point about two‑thirds of the way, at a place near the attached side gate, hung between the replacement fence and the north‑eastern wall at about halfway along the eastern side dwelling house wall on lot 239.
Beyond the gate there was and is no dividing fence ever erected over what was basically left as an open garden frontage space area. There was at times sand, mowed lawn grass and at later times a garden bed that looked to be cultivated in the open area as from about the time the (five) olive trees were planted at the time of renovations to the defendants' dwelling house around 1998.
The line of the trunks of the olive trees planted in this area presents as having been planted by the defendants at places at about 0.5 of a metre inside of (ie, towards the defendants' lot 239) an imagined straight line extending the line of the replacement fence down to the Hesperia Avenue road verge.
That alignment is well illustrated by the photograph found in the affidavit of Mr Royle at page 52 (and included at [44] above), which shows a view of the front area seen looking down towards Hesperia Avenue.
Nevertheless, this front area was never enclosed, unlike for the rear area. The line drawn between the olive trees' vertical trunks looks roughly to see them growing at a point about a half a metre to the west (ie, ocean side) on the Royles' lot 239 side of an imagined extension of a straight line drawn from the end of the replacement fence running down to Hesperia Avenue - visualised as extending beyond the gate down to the Hesperia Avenue road verge.
By contrast to the affirmative position I earlier ascertained as regards my finding of adverse possession as firmly established for the rear area, I am unable to reach the same conclusion in relation to this unenclosed front area. Had, say, an (imagined) line of the five olive trees' vertical trunks shown them as being planted on the same alignment as an extended line of the replacement fence, then my adverse possession assessment task may have been made more difficult. But the Royles' olive trees were planted well inside (by about 0.5 m) that imagined line of the replacement fence, within lot 239. The open nature of the front area connecting, as it does, to a partly grassed section of open road verge on both sides of two adjoining lots, before the kerb and bitumen of Hesperia Avenue, leads me to my end view that the defendants' claim over the front area does not demonstrate the same high level evidencing proof of adverse and exclusive continuous use at the front as for the enclosed rear area.
In advancing their arguments towards adverse possession over the front area, the defendants helpfully collected all the evidence factually relied upon in a table of evidence - handed up during the course of argument. For convenience purposes, I will identify the first and second defendants' table of evidence relating to their asserted acts of adverse possession and damage/reduced amenity as MFI 1. The first part of that table identified some 13 components as asserted evidence of use and possession of front area by the defendants, in reference to various pages of the two volume TB (mostly photographs). There were further references to statements in the affidavits by the defendants to the effect that they had watered, tended, mulched, mowed, edged and generally maintained the front area. They also say that they altered the reticulation, replanted gardens and planted olive trees in this area. As I already outlined, they refer to regularly using the dirt path when passing back and forth between the front and rear areas of lot 239.
I have weighed and assessed all this evidence. Nevertheless, in my view, it is simply not persuasive enough to show the convincing evidence of exclusive use. For adverse possession, the standard to be met is high - to establish clear and unequivocal adverse possession. This front area is an unfenced, essentially open area joining to the open road verge of Hesperia Avenue on both sides of each lot. Critically, the line of the planted olive trees, on my assessment, is not an extension of an imaginary line extending the line of the replacement fence down to Hesperia Avenue. The plans and surveys to which I have now referred show the planted olive trees are (0.5 m) on the Royles' lot (ocean) side of such a line. In the dirt area at their base there is either some lawn grass or a garden bed.
But none of this is unequivocal enough evidence to match the clarity of what is required to establish adverse possession. That standard of evidence may be contrasted to the rear area evidence - where the physically observable to third parties, continuous enclosure evidence was more strongly established by the fixed in situ position of the replacement fence and the capacity to close off of the rear area by use of the gate at the end of the replacement fence in a closed position.
Nor does a use of a path across sand in the front area around or between the front olive trees approaching the gate by the defendants over time alter that negative assessment towards this front area adverse possession claim.
At the end, given the physical openness of the front area, even taking into account a mowed lawn ridge line at times on the grass divide, the cultivated garden bed around the olive trees and assembled evidence in MFI 1 (but without any other feature marking the claimed extra frontage area), I am left unpersuaded at the civil standard upon the adverse possession claim over the front area. Accordingly, that part of the claim must fail.

Plaintiffs' arguments against adverse possession - agreement between the parties

During closing submissions, counsel for the plaintiffs sought to advance an argument to the effect the defendants' claim to adverse possession was not made out (anywhere) because adverse possession could not be established in circumstances where possession is essentially consensual, rather than adverse. That proposition, of course, so far as the law of adverse possession is concerned is correct.
However, the position here is that from February 1994 until 2017, both neighbours thought that the replacement fence had been erected on the true boundary line, dividing the two adjoining lots. This was an honest mistake on both sides. It was a result of a misplacement in 1992 of the front corner survey peg at the wrong place, erroneously marking from then a dividing frontage corner as between the two adjoining lots at Hesperia Avenue.
Somewhat ironically, an original misalignment in the old fence as regards the border came to be replicated in the replacement fence.
But the scenario of this honest mistake made on both sides does not to any degree engage with the proposition that the plaintiffs (by Sharon) had, in 1993, given a consensual permission to the defendants from then to occupy and use some part of their lot 238, by the capturing of an area portion on the lot 239 side of the replacement fence. Because of the mutual mistake, neither party realised the true position with the realignment fence as erected from 1994. They were not disabused of the fence position error until about August 2017. The evidence is clear that they both thought that the replacement fence was being and had been erected on the true boundary line and were both from then mistaken. Such facts provide no basis at all for an engagement of legal principles that would be otherwise applicable 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. That argument must fail. Adverse possession is, as I have found, established but only as regards the rear area.
As I have also now found, the defendants fail in respect of their adverse possession contentions as regards the front area. There was no fence in this area. The area was not enclosed.
Nevertheless, the plaintiffs still press two further defence arguments they put alternatively against an adverse possession outcome over the rear area.
I turn to examine each of these further arguments put against adverse possession in turn.

The plaintiffs' plenary response - s 163 TLA

The major argument raised on behalf of the plaintiffs at the trial was put on the assumption that the defendants can make good their adverse possession claims in respect of some, or all, of the disputed area.
Making that adverse possession assumption in favour of the defendants, the plaintiffs nevertheless contend that the event of a subdivision of all their adjoining lots in City Beach (including the former lot 238) has led to an issuing of new titles pursuant to the registered plan of subdivision, effective as at 1 or 2 November 2017 (which created the new lot 200). That event, they argue, has ended as a matter of law any adverse possession rights as may have once been held by the defendants in 2017.
To evaluate that legal argument, it is first necessary to see the terms of s 163 of the TLA.
Section 163 is found within pt VIII of the TLA, which is headed 'Surveys, plans, parcels and boundaries'.
Section 163 manifests under the heading 'Finalised subdivision, verification and effect of plan of'. Relevantly, s 163(1) says:
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 subdivision or any portion thereof.
Next, s 163(1A) says:
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.
Then, s 163(2) says:
In subsection (1) -
inspector of plans and surveys means the person who, for the purposes of section 18 of the Licenced Surveyors Act 1909, is appointed by the Governor to approve plans of authorised surveys within the meaning of that Act.
Although the plaintiffs heavily rely on s 163 of the TLA against the defendants, no case authority decided in this State is pointed to which supports the suggested 'cleansing' effect of s 163(1). In particular, no authority is relied upon to support a circumstances where s 163(1) will, upon a subdivision, effectively terminate all underlying or surrounding acquired adverse possession rights. Hence, the issue was addressed purely as a question of principle. For this case, it may be approached on the basis that the pre-requisites of s 163(1) as regards verification of the plan embodying the subdivision, signatures, markings and retention by the Registrar as an approved lodged map of subdivision, are all met by the plaintiffs, as at 1 or 2 November 2017.
It is necessary then to closely review the parties' respective submissions concerning the suggested terminating effect of s 163 as regards what are otherwise the fully accrued adverse possession rights of the defendants over the rear area.

The plaintiffs' submissions

The plaintiffs' written submissions of 19 June 2019 proceed largely by way of confident assertions concerning the favourable suggested legal consequences of s 163 being engaged for them:
Effect of the Issue of a Title pursuant to a verified plan of Subdivision
26.A verified plan of subdivision, from the date of verification, governs the title subsequently created and registered under the Transfer of Land Act 1893 in respect of the block subdivided.
Section 163(1), Transfer of Land Act 1893
27.The remedy of any person having an estate or interest in land subdivided or any portion thereof, who is injured by any Certificate of Title, registered for the purposes of a subdivision lies in damages only.
Section 163(1A), Transfer of Land Act 1893
28.Consequently, upon verification of deposited plan 4120120, whatever the previous position:
28.1Lot 200 included all land up to the cadastral boundary with Lot 239, including the encroachment land; and
28.2issue of the Certificate of Title confirmed the plaintiffs as owners of all the land as described.
Rights limited to damages against the State
29.At best, the First and Second defendants have a right in damages against the State if they can show loss arising from the Subdivision or the issue of the Certificate of Title for Lot 200.
30.The Transfer of Land Act provides that any person with an estate or interest in any portion of land subdivided, who has been injured by any certificate of title registered for the purposes of the subdivision has a claim in damages only which may be sued for, and recovered, pursuant to section 207 Transfer of Land Act 1893.
Section 163(1A), Transfer of Land Act 1893
31.Where the person who claims loss or damage by the exercise of a power conferred by the Transfer of Land Act 1893, was not a party or otherwise privy to the relevant dealing (here the verification of the plan of subdivision) may bring an action against the State with the Registrar as nominal defendant for recovery of damages.
Section 207(1), Transfer of Land Act 1893
Contextually, I note that the plaintiffs say that s 207 provides the only remedy available in all the circumstances for the defendants, as regards a loss of adverse possession rights - by reason of the legal effect of the subdivision process, effective in early November 2017. Section 207(1) of the TLA appears under a heading 'Actions for damages in certain other cases'. It reads:
Any person who shall have sustained or shall thereafter sustain any loss or damage in or by the exercise by the Commissioner of any of the powers conferred on him by the Transfer of Land Act1874 or by this Act and who shall not have been party or privy to the application or dealing in connection with which such power was exercised may notwithstanding the provisions of section 201 and section 205 and without prejudice to the rights (if any) of such person thereunder in the first instance and without any obligation to pursue the remedies provided by such sections bring an action against the State with the Registrar as nominal defendant for recovery of damages.

The defendants' submissions

A first tranche of the defendants' submissions of 21 June 2019 deals with submissions towards s 163 of the TLA at between pars 28 and 32. These submissions read in the following terms (with some more relevant footnotes incorporated along the way):
28.Section 163 TLA does not operate to extinguish title by reason of the issue of a new certificate of title.
29.Section 163(1A) is the product of s 51 of the Standardisation of Formatting Act 2010 (WA) which split the former s 163(1) into s 163(1) and (1A). These provisions have been in existence since the TLA was enacted. It is therefore unusual to note that there are no decisions, as far as the defendants are aware, holding that the effect of s 163 is as contended for by the plaintiffs.
30.The Defendants contend that this provision, together with s 207 TLA, is designed to effect indefeasibility with respect to registered interests and to provide compensation to those affected by the Registrar's omission or error in transferring such interests to the new titles created by the subdivision.
(Footnote 15 to par 30 of the above submissions refers to the High Court of Australia's decision concerning s 207 of the TLA in Registrar of Titles v Spencer [1909] HCA 69; (1909) 9 CLR 641).
31.It makes no sense for the Registrar to be otherwise liable under section 207 TLA for the extinguishment of interests of which the Registrar had no means of being aware.
32.The claimed effect of the legislation would operate to abrogate the fundamental protections given to land acquired by adverse possession and its exceptional status with respect of indefeasibility under s 68(1A) TLA.
(Footnote 16 to par 32 of the above submissions refers to the potential for adverse possession rights to transfer through successive owners as discussed by Murray J in Petkov).
Such a result, effectively removing valuable property rights from the owner of the prescriptive title, would only be possible if Parliament were to use the clearest words in doing so.
(Footnote 17 of the above submission refers to a statutory presumption against interfering with proprietary interests. The defendants noted in terms of this presumption that French CJ had observed in the context of a land resumption dispute:
As a practical matter [the presumption] means that, where a statute is capable of more than one construction, that construction will be chosen which interferes least with private property rights.
See R & R Fazzolari Pty Ltd v Parramatta City Council [2009] HCA 12; (2009) 237 CLR 603 [43]).

The defendants continued at pars 33 and 34:
33.To the contrary, in Beauman v Tremaine, which was a case involving a claim for adverse possession in land which had been subdivided, Counsel for the Plaintiff in written submissions to the Court adverted to the effect of subsequent subdivision and contended that section 68(1A) protected the interest claimed there from extinguishment.
(Albeit the defendants' submissions also concede that s 163 of the TLA was not addressed at all in the arguments before the court in Beauman v Tremaine.)
The learned trial judge's decision does not expressly deal with this issue, but it may be inferred from his finding that he held that the subdivision did not affect the continuation of any existing proscriptive rights.
(Nevertheless, I must reject any invitation to engage now in an evaluation of an aspect of written submissions as were put in another case and which were not the subject of that decision.)
34.Also by analogy with the provisions of the Strata Titles legislation, there is clear authority that where the rights of a registered proprietor have lapsed by adverse possession, the subsequent strata titling of the land cannot defeat the adverse possessor's interest.
(Referring again to Murray J in Petkov, 167 – 168).
From a navigation of the trial evidence perspective, I point out that the certificate of title for lot 238 (as the predecessor lot before lot 200) can be found as part of Mr Royle's affidavit, pages 30 ‑ 32. The certificate of title for lot 239 can be found at Mr Royle's affidavit, pages 23 – 35. There seen, such records show that originally, both lot 238 and lot 239 were created by reference to the same plan, namely, to plan 5280, both being portions of Swan location 1911.
But the perfectly understandable feature that lots that ultimately become land the subject of separate registered certificates of title (which come to be created by reference to and from a common underlying plan) does not, in my view, relevantly engage against what is the character of the recognised and statutorily preserved exceptional right to claim adverse possession over land. Such a claim is the subject of a specific protection and recognition under the Torrens system of land registration, presently reflected under s 68(1A) of the TLA. That being so, is that position to be assessed differently, as the plaintiffs' argument would suggest, by reason of the legal effect of a registered plan of subdivision?

Further s 163 TLA arguments - Refina v Binnie

During the course of the plaintiffs' counsel's oral submissions, I was referred to a decision of Brereton J in New South Wales at first instance in Refina Pty Ltd v Binnie [2009] NSWSC 914. The plaintiffs essentially rely on Refina v Binnie to support their argument by reference to the contention that in that decision the claim for possessory title by adverse possession was defeated by a registration of a plan of subdivision which incorporated the disputed plan.
In Refina v Binnie the defendant obtained approval for a plan of subdivision which consolidated a disputed strip of land within the subdivision plan which came to be registered. By reference to [31] of his Honour's reasons, the cessation of the disputed strip as being a whole lot under that plan of amalgamation became uncontroversial at the trial. That was effectively a matter of concession (which his Honour observed, at [32], was correctly made).
However, by my assessment, that New South Wales decision provides no such support in this jurisdiction. It is a reflection of a different regime of laws concerning adverse possession in New South Wales. For that jurisdiction, unlike in Western Australia, it is not possible to adversely possess only a portion of a parcel of land. Therefore, Refina v Binnie does not relevantly bear upon local considerations.

Similar arguments in Petkov

Before turning to my conclusion regarding the s 163 defence, I will briefly return to Murray J's reasons in Petkov which dealt with a similar argument.
In Petkov at page 176, Murray J rejected a similarly framed argument advanced there by reference to s 4(3) of the Strata Titles Act 1966 (WA) and said:
But in my opinion that is not the effect to be given to the statutory scheme where the Limitation Act, s 30 has had its effect. Thereafter, in my opinion, the right to possession of the land is exclusively that of the adverse possessor and I would not interpret the Strata Titles Act, s 4(3) as divesting the plaintiffs of their rights.
In my view, the same sentiment applies here as regards s 163 of the TLA and acquired adverse possession rights.

Conclusion - s 163 TLA defence

On my assessment, the s 163 TLA argument cannot succeed. No local case authority supports that view.
Moreover, such argument is contrary to principle, as regards what is the recognised and statutorily preserved right to claim adverse possession over land, notwithstanding the state of a registered title. No logical reason exists not to apply the same approach to an approved plan of subdivision. If that were to be the outcome, then the loss of such long recognised possessory rights would be expected to have been a lot more clearly stated under the legislation - as regards the effect of an approved subdivision. The fact that a loss of such rights is not clearly stated indicates otherwise, in my view.

The plaintiffs' second response - s 123 PLA

In the event their primary s 163(1) TLA response should fail (as I have now concluded it does), the plaintiffs then seek to further rely on a second tier defence put against the defendants' adverse possession claims, this time invoking s 123 of the PLA as amended.

General observations - s 123 PLA

Section 123 presents within pt XIII of the PLA. It manifests as something in the character of a counterpart provision to the preceding s 122 of the PLA. Both provisions (see s 122(2) and s 123(2)) bestow a wide, just and equitable power for this court to grant relief, where appropriately engaged. In the case of s 122(2), relief may be sought by the 'encroaching owner' (or any other person) where any part of a building encroaches on a part of adjoining land. Unlike s 123, the term 'building' is expressly defined by s 122(7) to include for the purpose of that section, 'any structure'.
On the other hand, s 123(1) is directed towards situations where a person who has or had an estate or interest in any piece of land has erected a building on any other piece of land, by reason of a mistake as to any boundary or as to the identity of the original piece of land.
It is s 123, rather than s 122 of the PLA, which is presently invoked by the plaintiffs, effectively as a shield against the defendants' adverse possession claim. Correspondingly, as I read the defendants' pleaded counterclaim (see counterclaim par 41), they would also seek to invoke s 123 of the PLA themselves, in the event their adverse possession claims to the front and rear area do not succeed as adverse possession claims.
As we have now seen, however, I have concluded that the defendants' adverse possession claim in respect of the rear area must succeed.
For the defendants then, the only live question then is whether s 123(1) might assist them on their counterclaim as regards their otherwise failed adverse possession claim over the front area. To that end, however, a brief reference to the precise terms of s 123(1) will immediately indicate that such a counterclaim as regards the front area would be conceptually flawed. There has never been an erection of any 'building' over the front area - even if, say, for argument's sake, the as erected replacement fence were to be accepted as potentially being a 'building', for the purposes of s 123(1). As we have seen, the replacement fence ended at the side gate - the dividing point for the front and rear adverse possession areas.
As already now seen, the adverse possession claim of the defendants fails towards that front area. Thus, there is no need for the plaintiffs to engage s 123(1) in their favour towards the front area. Therefore, towards the front area, s 123 of the PLA cannot assist either party.
For relevant purposes then, the trial arguments concerning s 123(1) of the PLA distil to whether it can be engaged by the plaintiffs to effectively shield them against the success of the defendants' adverse possession claim over the rear area.
For the reasons that follow, I am of the view that such PLA arguments must fail. I reach that end position not least for the reason that, by my assessment, the proper function of s 123 of the PLA is such that it cannot be deployed in they way of it resisting what is otherwise a meritorious adverse possession claim. The correct position, as I would assess it, is that the section only works the other way.
In other words, for circumstances where an adverse possession claim. for whatever reason, cannot be made good as regards a 'building' that is erected in the wrong place due to a mistake as to a boundary, or the identity of the original piece of land, then in such circumstances a court might nevertheless be asked to exercise its discretionary s 123 PLA power to issue a just and equitable order and favouring the person who put the building where it is.
As I would assess the legal position, s 123 of the PLA is not meant to serve the function of being invoked as a 'shield' to defeat what otherwise are meritorious and fully accrued adverse possession rights.
Such an assessment would be consistent in policy terms with the preserved character of the exceptional adverse possession rights, recognised notwithstanding the general indefeasibility of title delivered under the Torrens system by s 68(1A) of the TLA. The result also aligns to the complete absence of any case authority to support a proposition that s 123 (or, for that matter, s 122) of the PLA can be invoked as a 'shield' against otherwise fully accrued adverse possession rights.
In Executive Seminars Hasluck J, commencing at [153], discussed both s 122 and s 123 of the PLA. At [154] his Honour observed:
I note in passing that these statutory provisions are remedial and as such are to be construed liberally.
Accepting that remedial function as a self evident given, nothing in his Honour's following observations in Executive Seminars made upon those two PLA provisions engages against the present issue - concerning whether or not s 123 might be engaged to defeat otherwise meritorious, fully accrued adverse possession rights.

Background and construction - s 123 PLA

It is convenient to turn back to the terms of s 123(1) itself. The provision presents as an unduly lengthy sentence. Rather than setting it out in its grammatically confronting entirety, I extract only what I assess to be its potentially relevant content towards present circumstances. I do that on a basis that the 'person' initially referred to as holding the estate or interest in the original piece of land, must be read as a reference under present circumstances to the defendants (the Royles) as regards the disputed area and so favouring, in the end, the defendants' lot 239 in the process.
So read, s 123(1) of the PLA relevantly provides that where:
... a person who has ... an estate or interest in any piece of land (in this section referred to as the original piece of land) has, while he had that estate or interest, erected a building on any other piece of land ..., if the building has been so erected because of a mistake as to any boundary ..., that person -
(ie, the defendants) -
or any other person for the time being ... having an estate or interest in ... the piece of land wrongly built upon -
(ie, the plaintiffs) -
may apply to the Court, whether in any action or proceeding then pending or in progress and relating to the piece of land wrongly built upon ... to make an order in accordance with this section.
There is little in the extrinsic materials concerning s 122 and s 123 of the PLA to illuminate the present issues. The Explanatory Memorandum for what was the Property Law Bill 1969 (WA) had only said:
Clauses 122 and 123 are new and are taken from the New Zealand Act [being the New Zealand Property Law Act 1952 – 1963]. Where, mistakenly, a building is erected which encroaches on a neighbour's land or is built on the wrong block, the Court is to have power to adjudicate between the owners and to make such order as is fair and equitable in the circumstances.
The reference was to the New Zealand Property Law Act 1952 – 1963 (NZ) and to s 129 and s 129A therein.
On 1 April 1969, the Hon I G Medcalf, on a resumed second reading of the Property Law Bill, addressed cl 122 and cl 123 of the Property Law Bill 1969 (Western Australia, Parliamentary Debates, Legislative Council, 1 April 1969, 2907 – 2908). Mr Medcalf spoke in general terms concerning the remedial character of both provisions. At page 2908, addressing cl 123, he observed:
Clause 123 is a very similar clause which applies in the case of a person who makes a mistake in building as to the boundaries or title to the land, but the clause is in similar terms. It is notable that both of these clauses have, in the last subclause, a stipulation that the court shall not make any such order without the prior consent of the Town Planning Board and the council or municipality in whose district the land to which the order relates lies.
As regards counterpart sections from the New Zealand Property Law Act (s 129 and s 129A), there appears to have emerged over time some debate as to whether the New Zealand equivalent to s 123 is engaged only where a building was constructed entirely on the piece of land wrongly built upon. This emerged from a judgment of Hardie Boys J in Blackburn v Gemmell (1981) 1 NZCPR 389, 393. There followed controversy in New Zealand over that issue. A subsequent decision of Gallen J, noted in Norris v Weal [1984] NZHC 198, reached the opposite conclusion. But it is unnecessary here to confront that issue within the present trial. Upon the current facts (assuming the replacement fence, for the purposes of the argument, was a 'building' under s 123(1)), the evidence shows that the entirety of the replacement fence was mistakenly erected on part of the plaintiffs' then lot 238 (now lot 200). Hence, there would be no current difficulty otherwise posed over a possible engagement of the section by reference to the necessary criteria of 'entirety', if required, as regards the land (ie, lot 238) wrongly built upon.
As regards my earlier observations concerning a non-intersection as between adverse possession and these PLA remedial provisions, I observe that the Victorian Law Reform Commission Review of the Property Law Act 1958, Discussion Paper (2010), appear to align with the view I have expressed. At par 12.40 of that discussion paper the Victorian Law Reform Commission had observed:
Western Australia is the only jurisdiction which has both a building encroachment provision and also permits acquisition of title by adverse possession. There has been little judicial consideration of the relationship between the provisions. [See footnote 383.] If the encroaching owner is found to be in adverse possession, it appears that the encroachment relief jurisdiction can be exercised only in the period from the commencement of the encroachment until the expiry of the limitation period. Once the limitation period expires, the building owner has the best title to the subject land and the building is no longer an encroachment.
Of course, observations in a discussion paper issued by a law reform commission are not at all binding. But, on my assessment, those observations correctly state the law for this area in Western Australia. [The paper's par 12.40 footnote 383 was in fact a reference to Hasluck J's decision in Executive Seminars.]

Evaluation - s 123 PLA

Scrutinising the terms of s 123(1) from a perspective of the plaintiffs as persons connected to a piece of land 'wrongly built upon' (ie, the rear area of about 0.5 m width, which was actually within their lot 238), three immediate criteria touchstones arise as regards their standing to seek relief under the section, to which I now turn.

A mistake as to boundary

The first criteria is readily met upon the facts presented at this trial. I have already found that there was a genuine mutual mistake over the correct boundary line on which the replacement fence was erected at the end of January 1994. The evidence of Mrs Royle renders that plain enough, as regards a use by the fence builder of the misplaced front corner survey peg, when the Sorenson Short & Associates' survey was done in 1992. An in‑ground placement of the front corner survey peg in 1992 was approximately half a metre shy of the correct width measurement under the survey diagram. Hence, that first criteria aspect of s 123(1) is engaged, as regards showing a relevant mistake being proved.
The second and third questions are more difficult.

A 'building'

The second issue is whether there has been a 'building' erected because of a mistake as to the boundary. In other words, was the replacement fence a 'building'?
If that question were being asked in reference to s 122, then s 122(7) would seem to provide a ready answer, since the term 'building' is explicitly defined there as including 'any structure'. However, there is, rather inexplicably, no such definition for 'building' provided within s 123.
One of the points the defendants make in way of their resistance to the plaintiffs' PLA based arguments is that the replacement fence is not a 'building' - to accord with the ordinary meaning of that noun. It would have been very easy for the legislature to adopt the s 122(7) definition of 'building' for s 123. So the omission to do that is telling. On my assessment, that is an argument of some merit.
As regards what is or is not in general to be assessed as a 'building', I am guided by the general observations made by Owen J in Construction Industry Long Service Leave Payments Board v Precision Corporation Pty Ltd (Unreported, WASC, Library No 920130, 4 March 1992). There, after reviewing many of the common law case authorities from other contexts, which were not directly on point, his Honour said, at pages 13 - 14:
In my view, the essential feature is that the word 'building' is to bear the meaning which it has in common parlance. The identity of the materials with which it is constructed is not particularly relevant. The existence or non-existence of a roof is not determinative of the issue. It will be necessary to look at the type of structure under consideration and ask whether it would place too great a strain on the ordinary use of the language to regard it as a building. In my opinion, there must be a degree of permanence in the structure. It must relate to occupation in some way, not limited to the concept of residence but extending to things such as use, enjoyment and storage. There must also be an element of enclosure ...
His Honour advanced to observe that a swimming pool was not a building (page 14).
Similarly, Wallace J in Sproxton v Laufoot Holdings Pty Ltd and Niewkerk (Unreported, WASC, Library No 4666, 1 October 1982), at page 4, had concluded that a bore was not a structure for the purposes of engaging against the term 'building' in reference to s 123 of the PLA.
Guided by a like understanding of the noun 'building' to the context of s 123, towards the replacement fence as was erected at the rear portion of the two adjoining lots, I am of the end view that it is not correct to characterise the replacement fence and its retaining wall footings as a 'building' for the purposes of s 123(1). The core problem, I assess, is a lack of any connection to the concept of occupation in some way. (Whether I would have reached the same conclusion as regards that fence in a context of a submission made under s 122 of the PLA, is left as an open question.)

Terminated rights

The third criteria question relevantly necessary, in terms of the plaintiffs' standing to engage s 123(1), arises out of the use of the word 'having', as regards them holding an estate or interest to the strip of what was part of their lot 238 and was mistakenly built upon in error.
Here, the argument of the defendants is that, as regards the rear area, the legal effect of the relevant sections under the applicable Limitation Acts is that all right and title of the plaintiffs over the (now) adversely possessed rear area was relevantly 'extinguished' after 12 years - ie, by February 2006: see s 30 Limitation Act 1935. Hence, upon that extinguishment by possession and by limitation, the plaintiffs no longer held standing to invoke s 123 of the PLA - on the basis that they are not now, as they approach the court for relief, persons 'having' (ie, present tense) an estate or interest in the rear portion of lot 238 (albeit wrongly built upon) - via s 123(1) of the PLA. Of course, they once did hold that estate in 1993. But the word 'had' is not used in s 123 of the PLA as regards a lost estate or interest following an adverse possession and the consequential extinguishment of rights taking effect.
The defendants' argument might at first blush appear to be technical, made in the context of remedial legislation. I am, in the end, however, persuaded that it must be accepted as correct, as a matter of law. It also provides a rational explanation for why s 123(1) of the PLA does not intrude to impact against the circumstance of vested adverse possession rights, once acquired over land - the preferred interpretation of this provision, in my view.

Relief sought - s 123 PLA

For the present case, the relief pursuant to s 123(1) sought by the plaintiffs is relief pursuant to s 123(2)(b) essentially to the end that would allow them to 'remove the building', ie, remove the replacement fence. Again, this relief is pursued on the assumption (I do not accept) that the replacement fence is a 'building' on land wrongly built upon. That fence removal permission relief is the only order which, by s 123(8), does not require the prior consent of the WA Planning Commission and the relevant local government authority.
Counter relief as sought by the defendants on their counterclaim pursuant to s 123(2)(a) would seem to require that prior consent as regards a vesting of the so-called possessed land. However, since the defendants succeed on their arguments concerning adverse possession as regards the rear area upon which the replacement fence has been wrongly built, it is unnecessary for them, in the end, to rely upon this provision, as regards the rear area. Further, as previously mentioned, the defendants' reliance on s 123(1), as regards the front area, upon the failure of their adverse possession arguments, cannot properly be founded in the absence of any relevant 'building' in the front area.

Just and equitable evaluation - s 123(2) PLA

If, contrary to all that I have written so far, s 123(2) of the PLA were assessed to have been successfully engaged by the plaintiffs, effectively as a shield against an otherwise meritorious adverse possession claim advanced by the defendants over the rear area, I then would be called upon to decide whether the relief the plaintiffs seek, namely, permission to demolish the replacement fence at the rear area, can be granted as just and equitable relief, in all the circumstances.
For completeness, I would state very briefly that on my assessment for what would then be wholly hypothetical circumstances, granting such demolition permission relief would not be just and equitable in all the circumstances, as a matter of discretion.
Essentially, the state of the trial evidence is that the newly subdivided adjoining lot 200 on which the plaintiffs propose to build a new three‑level home is now of a much reduced lot area, compared to the former lot 238, which was 1232 sqm. Lot 200 is only 838 sqm, arising from the plaintiffs' wider subdivision activities.
No doubt it would serve the future convenience of the plaintiffs to proceed to erect what looms as a three-storey structure on lot 200, by utilising every square millimetre of territory which abuts their rear side correctly surveyed boundary line with lot 239.
There were references in the trial evidence to the plaintiffs' successful application to the State Administrative Tribunal (SAT) to obtain a building permit, to erect a new residence in accordance with their submitted plans.
On the other hand, removal of the replacement fence and another replacement, including replacing all the presently underlying retaining walls by the plaintiffs, seems to carry risks of potentially causing unnecessary physical damage to the rear pool paved surrounding area of the defendants' premises. This risk appears to be under circumstances where, were that to occur, the communications passing between the parties and their respective legal representatives before trial look to indicate that the plaintiffs will accept no responsibility for such adverse outcomes to the defendants. See, for instance, Mr Ben‑Pelech's email to various recipients, including Mrs Royle, on 12 September 2017, which concludes (TB vol 2, page 405):
But any damage to pool/paving/vegetation or garden beds have to be repaired, replaced by him - [the defendants] as it is not our fault that the existing retaining wall/fence was incorrectly built/erected by your client encroaching into our property.
The attempted attribution of 'fault' to the defendants in present circumstances was wholly misplaced. There was no fault at all on either side, on my assessment. Both neighbours acted under an honest mutual mistake from 1993 - 1994 and thereafter, in terms of the erroneous positioning of the replacement fence, due to an incorrect placement in the ground in 1992 of the front corner survey peg, and then, with the replacement fence being erected by reference to that misplaced front corner survey peg.
Weighing all such hypothetical circumstances overall, I balance the end position as being more prejudicial (as regards the rear area) to the defendants, due to the potential risk of physical damage and disruption likely to be caused to them, by a removal and replacement of what on all the evidence is a still entirely suitable existing timber fence and its underlying retaining walls.
The plaintiffs, on the other hand, hold an advantage of an open, currently unbuilt upon, lot 200. They can surely instruct their architect to amend their plans to work around whatever suggested future constructional inconveniences might arise for them arising from the fact that as a result of this decision they will hold about 0.5 m less width at the lot 200 rear boundary with lot 239 than is reflected under the bounds of their certificate of title for lot 200. No persuasive evidence was put to me at trial about any pragmatic inability for the plaintiffs as regards their proposed new three storey residence to be erected within such a limitation in width at the rear boundary adjoining lot 239.

Dividing Fences Act 1961 (WA)

Although this provision is seen to be invoked under the plaintiffs' statement of claim, reliance upon it was not pressed for relief at the trial by counsel for the plaintiffs in closing submissions, and correctly so, in my view. However, had they been successful, contribution relief in that quarter as regards the contribution towards a new fence would be relief to be pursued within the summary jurisdiction of the Magistrates Court.

Conclusions

In the end then, the defendants succeed on their counterclaim by reference to the principles of adverse possession, but as regards the rear area of the disputed area only.
Correspondingly, the plaintiffs fail as regards a court ordered demolition approval relief as sought under s 123(1) of the PLA, concerning the replacement fence.
However, the defendants have not succeeded in relation to the adverse possession claim over the front area.
A future construction at the front area of a new boundary fence or wall by the plaintiffs upon the correct alignment of the border of lot 200 and lot 239, if to be pursued in that front area, would need to be a structure approved by the appropriate local authorities. On the face of it, any new fence erected at that front area would likely bisect the vertical trunks of the last three olive trees now growing closest to Hesperia Avenue - as they sit right on the line of the true boundary. The other two olive trees, planted back further towards the gate, on the other hand, would present as growing inside the boundary line, just on the lot 239 side.
I will hear from the parties concerning appropriate orders giving effect to these reasons, once they have had an opportunity to consider them.
The result at the end has delivered adverse possession success to the defendants over the rear area. The existing boundary fence and retaining walls at the rear portion of lot 200 will not be unilaterally removed by any order of the court as the plaintiffs had sought.

I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
DW
Associate to the Honourable Justice Martin
16 AUGUST 2019