Bridges v Bridges

[2010] NSWSC 1287

CITATION:	BRIDGES v BRIDGES [2010] NSWSC 1287
HEARING DATE(S):	11-13 October 2010
JUDGMENT DATE :	8 November 2010
JUDGMENT OF:	Tamberlin AJ at 1
DECISION:	1. Declare that the cause of action of Harold Rodney George Bridges to recover the land and buildings comprised in Lot 126 in Deposited Plan 750568 located at 480 Chakola Road, Chakola, in the State of New South Wales has been extinguished as against David Barry Bridges and his successors pursuant to s 65(1) of the Limitation Act 1969. 2. The amended first cross-claim is allowed with costs to be paid by the second cross-defendant. 3. The second cross-claim is dismissed with costs to be paid by the second cross-claimant. 4. Liberty to apply on two days’ notice.
CATCHWORDS:	LIMITATION OF ACTION – Old System Title – adverse possession – whether possession for twelve year period – nature of possession – use as family home – acts of possession – intent to possess – entry into possession with consent of documentary owner – whether consent revoked – date of accrual of documentary owner’s cause of action – effect of party in possession obtaining valuations to fix a purchase price for the premises
LEGISLATION CITED:	Limitation Act 1969 (NSW), ss 27, 28, 65
CATEGORY:	Principal judgment
CASES CITED:	Ace Property Holdings Pty Ltd v Australian Postal Corporation [2010] QCA 55 Bayport Industries Pty Ltd v Watson (2006) V Conv R 54-709 Brisbane South Regional Health Authority v Taylor [1996] [HCA] 25; 186 CLR 541 Buckingham Shire County Council v Moran [1990] Ch 623; [1989] All ER 225 Clement v Jones (1909) 8 CLR 133 Edington v Clark [1964] 1 QB 367 Hagee Ltd v A B Erikson and Larson [1976] 1 QB 209 J A Pye (Oxford) Ltd v Graham [2002] UKHL, 30 [2003] 1 AC 419 Mulcahy v Curramore Pty Ltd [1974] 2 NSWLR 464 Murnane v Findlay [1926] VLR 80 Phillips v Marrickville Municipal Council [2002] NSWSC 396 Ramnarace v Lutchman [2001] 1 WLR 1651 South Maitland Railways Pty Ltd v Satellite Centres Pty Ltd [2009] NSWSC 716 Whittlesea City Council v Abbatangelo (2009) 259 ALR 56
TEXTS CITED:	Professor Peter Butt, Land Law, (6th Edition) 2010; [22.02]–[22.25]; [22.31]–[22.34] Case Note, “When Does a Tenant ‘Part with Possession’ in Breach of the Lease”, Peter Butt, (2010) 84 ALJ 522
PARTIES:	John Ronald Bridges (First Plaintiff, First Cross-Defendant) Harold Rodney George Bridges (Second Plaintiff, Second Cross-Defendant) David Barry Bridges (Defendant; Cross-Claimant)
FILE NUMBER(S):	SC 2005/259329
COUNSEL:	M Bradford – First and Second Plaintiffs; First and Second Cross-Defendants S B Docker – Defendant, Cross-Claimant
SOLICITORS:	Blaxland Mawson & Rose - First and Second Plaintiffs; First and Second Cross-Defendants Capital Lawyers – Defendant; Cross-Claimant

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

TAMBERLIN AJ

8 NOVEMBER 2010

DAVID BARRY BRIDGES v JOHN RONALD BRIDGES

JUDGMENT

1 HIS HONOUR: These reasons relate to the Amended Cross-Claim filed in this proceeding on 12 August 2010 made by David Barry Bridges (Barry) against John Ronald Bridges (John) and Harold Rodney George Bridges (Rodney) and also to a Second Cross-Claim brought by Rodney Bridges against Barry Bridges.

2 Barry Bridges claims an order that by reason of his adverse possession and the lapse of time, he has acquired title to land under Old System Title as described in Book 2869 No. 898, being Lot 126 in Deposited Plan No. 750568 located at 480 Chakola Road, Chakola, New South Wales and improvements thereon (Acacia Grove). He claims that his possessory title is good against the whole world including the Second Cross-defendant, Rodney Bridges who is his older brother and is the documentary owner.

3 More specifically, the Amended Cross-Claim alleges that in about 1968 Rodney Bridges acquired legal title to Acacia Grove and that in about 1969 Barry Bridges and his then wife Gloria went into occupation with the agreement of Rodney Bridges on the basis that Barry would continue in occupation of the whole of the land as his home until Rodney decided otherwise or until a purchase price could be agreed. He has remained in occupation of Acacia Grove and used it openly and exclusively as his home for the past 42 years. By reason of his occupation with the knowledge of Rodney, Barry Bridges says he has had possession of Acacia Grove. Rodney’s initial permission for Barry to occupy the land he says was terminated by Rodney in about 1972/1973 when Rodney first demanded that Barry and his family leave Acacia Grove.

4 Barry alleges that because the revocation of Rodney’s permission for him to occupy the property first occurred in 1972/3 and because this demand has been repeated at various times since that date, Barry’s possession of Acacia Grove became adverse to that of Rodney, who at all times has been and remains the documentary owner. Barry has remained in occupation of Acacia Grove without any interruption since 1969, notwithstanding withdrawal by Rodney as early as 1973 of permission to occupy.

5 Barry says that he continued to occupy the house as his home and that of his family to the exclusion of all others except those he invited or permitted to enter. He says that he has used and occupied the land surrounding the house as his residence to the exclusion of all others except his invitees. He claims that he has also at all relevant times used and occupied adjacent land to Acacia Grove which he bought in his own right in 1972 and on which was situated on old railway pump house which Barry has used for the purpose of pumping water from the river to his home on Acacia Grove for the needs of himself and his family.

6 He claims to have carried out work and made many improvements to the building and land during the 41 year period and these include erecting a new fence, laying concrete paths, installing a water pump and tanks on the property, maintaining the house and the premises, and paying some rates in the initial period to about 1983.

7 In brief, his case is that he has been in exclusive possession continuously since 1969 and that after 1972 his possession has been adverse to that of Rodney by reason of the repeated demands by Rodney for him to get off the property. He claims he has acquired title because more than twelve years has elapsed from the date on which Barry’s possession of the property became adverse and Rodney’s cause of action to recover possession first accrued and he says that Rodney’s claim has now been extinguished. The twelve year period provided by s 27(2) of the Limitation Act 1969 (NSW) (the Act) expired before Rodney began any proceedings to remove Barry and his family from the property.

8 The property, which has an area of 2378m² is described and its value assessed in a Valuation by John Mooney & Co of Cooma, a registered valuer, which was commissioned by Barry Bridges on 3 November 1992, in the following terms:

LOCATION :
The property is situated at Chakola about 20km north of Cooma and fronts the Numeralla River. It was originally railway land the residence of the Chakola stationmaster. The road which crosses the old railway passes the lot giving access to the properties over the river.
DESCRIPTION :
Erected on the land is a very old home which is about 100 years old. The main section of the building is constructed with double brick and is still in good condition despite its age. It contains four large rooms 12’ by 12’, plus hallway.
The back part of the building is of timber construction and is in a very poor state of repair therefore has little value. The kitchen has been improved in recent years and is functional. Other rooms include an old fashioned bathroom, storeroom and back porch with laundry.
A timber verandah is attached to the front and northern sides but needs replacing due to age and termite damage.
Electricity is connected to the home, which is also connected to a septic system. Water is pumped from the river for household use.
VALUATION :
Having taken into consideration the location, access, topography, area, river frontage, the age, size construction and condition of the home, alone with recent sales of small rural blocks in the district, I consider the current market value of the lot described herein as at the 3 ^rd November 1992, to be forty five thousand dollars ($45,000).

9 Since the date of this valuation the evidence indicates a number of improvements have been made to the house and surroundings by Barry Bridges or at his expense.

THE ISSUE

10 The issue is whether any claim by Rodney to recover Acacia Grove has been extinguished by reason of the expiration of the twelve year limitation period fixed by s 27(2) of the Limitation Act in accordance with s 65(1) of the Act.

Section 27 General

(2) Subject to subsection (3) an action on a cause of action to recover land is not maintainable by a person other than the Crown if brought after the expiration of a limitation period of twelve years running from the date on which the cause of action first accrues to the plaintiff or to a person through whom the plaintiff claims.

Section 28 Accrual – dispossession or discontinuance

Where the plaintiff in an action on a cause of action to recover land or a person through whom the plaintiff claims:
(a) has been in possession of the land, and
(b) while entitled to the land, is dispossessed or discontinues his or her possession,
the cause of action accrues on the date of dispossession or discontinuance.

Section 65 Property

(1) Subject to subsection (2), on the expiration of a limitation period fixed by or under this Act for a cause of action specified in column 1 of Schedule 4, the title of a person formerly having the cause of action to the property specified opposite the cause of action in column 2 of that Schedule is, as against the person against whom the cause of action formerly lay and as against the persons’ successors, extinguished . (Emphasis added.)

12 The underlying rationale for imposing a limitation period was explained by McHugh J in Brisbane South Regional Health Authority v Taylor [1996] [HCA] 25; 186 CLR 541 at 552-3 in the following terms:

The effect of delay on the quality of justice is no doubt one of the most important influences motivating a legislature to enact limitation periods for commencing actions. But it is not the only one. Courts and commentators have perceived four broad rationales for the enactment of limitation periods. First, as time goes by, relevant evidence is likely to be lost. Second, it is oppressive, even “cruel”, to a defendant to allow an action to be brought long after the circumstances which gave rise to it have passed. Third, people should be able to arrange their affairs and utilise their resources on the basis that claims can no longer be made against them. Insurers, public institutions and businesses, particularly limited liability companies, have a significant interest in knowing that they have no liabilities beyond a definite period.
…
In enacting limitation periods, legislatures have regard to all these rationales. A limitation period should not be seen therefore as an arbitrary cut off point unrelated to the demands of justice or the general welfare of society. It represents the legislature’s judgment that the welfare of society is best served by causes of action being litigated within the limitation period, notwithstanding that the enactment of that period may often result in a good cause of action being defeated.

13 These remarks are particularly apposite in the present case where Barry Bridges and his family have openly occupied Acacia Grove as their only home for 41 years, 37 of which have elapsed since Rodney first demanded they leave the premises.

14 The relevant legal principles relating to extinguishment of title by adverse possession were considered by the Victorian Court of Appeal in Whittlesea City Council v Abbatangelo (2009) 259 ALR 56 at [4]-[6]. For present purposes the relevant principles can be summarised as follows:

(i) For a person to acquire possessory title he or she must be shown to have had both factual possession and a requisite intention to possess the land.
(ii) Factual possession signifies an appropriate degree of physical control and it must be single and exclusive possession and this is a question of fact dependent on particular circumstances such as the nature of the land and the manner in which such land is commonly used or enjoyed. There is no universally applicable principle to resolve this question.
(iii) The intent to possess is that of the claimant to title by possession and involves an intention in relation to the whole world, including the owner with the paper title.
(iv) There must be clear and affirmative evidence that the claimant has acquired possession . Equivocal acts will normally not suffice.
(v) The acts must be indicative of the requisite intention to possess .
(vi) The concept of adverse possession in the Act is to possession by a person in whose favour time can run and not to the nature of the possession. The question is whether the claimant adverse possessor has dispossessed the paper owner by having possession without the consent of the owner.
(vii) The intention required by the law is not an intention to own or even an intention to acquire ownership of the land, but an intention to possess it. The claimant, although in adverse possession, need not subjectively believe that he or she is the owner of the land.
(viii) A statement of intention by a claimant adverse possessor must be treated cautiously as it may be self serving, but it may be relevant with other evidence to support the inference of an intention to possess.
(ix) Use falling short of possession will not suffice. For example, a use of land may amount to enjoyment of a special benefit of the land by casual, cursory or occasional acts of trespass and this may not suffice to establish factual possession nor demonstrate the requisite intention.
(x) There is no requirement that the use to which the land is put by the claimant adverse possessor must be inconsistent with the paper owner’s present or future use of the land.

15 The above principles are set out in authorities including J A Pye (Oxford) Ltd v Graham [2002] UKHL, 30 [2003] 1 AC 419 at 435; Ace Property Holdings Pty Ltd v Australian Postal Corporation [2010] QCA 55 at [177]; Mulcahy v Curramore Pty Ltd [1974] 2 NSWLR 464; Clement v Jones (1909) 8 CLR 133; Buckingham Shire County Council v Moran [1990] Ch 623; [1989] All ER 225 per Slade LJ at 232; Murnane v Findlay [1926] VLR 80 at 86-88, and Bayport Industries Pty Ltd v Watson (2006) V Conv R 54-709 at [39]-[40]; South Maitland Railways Pty Ltd v Satellite Centres Pty Ltd [2009] NSWSC 716 at [16]-[22]; Case Note, “When Does a Tenant ‘Part with Possession’ in Breach of the Lease”, Peter Butt, (2010) 84 ALJ 522

16 There is a helpful discussion of the statutory provisions in the text by Professor Peter Butt, Land Law (6^th Edition) 2010 at [22.02] – [22.25] and [22.31] – [22.34]. Of some importance in the present case are the following observations in that text at [22.18] relating to permission and “adverse” possession.

Possession is not an “adverse” where it has the documentary owner’s permission. However, three situations must be distinguished,
First, time cannot begin to run in favour of a person who takes possession with the documentary owner’s permission. For example, time cannot run in favour of the person who goes into possession as a tenant, or licensee who is a bailee or caretaker. Entry in the context of a family relationship between possessor and documentary owner usually suggests that possession is by permission and is not adverse .
Secondly, if the permission under which possession began is later revoked, possession thereafter becomes adverse and time begins to run from the date of the revocation. Where a purchaser is in possession with a vendor’s permission, possession does not become adverse until the vendor either expressly withdraws it or until it becomes clear that the sale is not going to proceed – that is, until the context is rescinded or terminated or until it is abandoned.” (Emphasis added.)

17 In support of the latter proposition the author refers to the judgment of the Privy Council in Ramnarace v Lutchman [2001] 1 WLR 1651. In that case their Lordships decided that there was a tenancy at will and not a licence. There was a specific provision in the relevant ordinance applicable in that case that the right of an owner to bring an action to recover land in the case of a tenancy at will was deemed to have first accrued on the expiration of one year from the commencement of the tenancy at will. Notwithstanding this specific provision the reasoning of their Lordships affords guidance in the present circumstances where a person is let into possession pursuant to a “family” arrangement as a tenant at will and the tenancy at will is thereafter terminated. At [18] their Lordships said:

18. In the present case the appellant was allowed into occupation of the land as part of a family arrangement and at least in part as an act of generosity. But not wholly so, for the appellant testified that the intention of the parties was that she would buy the land when she could afford to do so, and the judge accepted her evidence. Her uncle was generous in that he allowed her to remain indefinitely and rent-free pending her purchase, and in that he did not press her to negotiate. But a tenancy at will commonly arises where a person is allowed into possession while the parties negotiate the terms of a lease or purchase. He has no interest in the land to which his possession can be referred, and if in exclusive and rent-free possession is a tenant at will.

EVIDENCE

18 Many of the important events in this matter go back almost 40 years and allowance must be made for differing recollections as to what happened and what was said. Having regard to the matters set out below, I prefer the evidence of the witnesses called in the case of Barry Bridges to the evidence of Rodney Bridges and his brother John.

19 Rodney Bridges clearly attempted to downplay the intensity of his hostility toward his brother Barry during the period of Barry’s occupation at Acacia Grove. The verbal and sometimes physical aggression witnessed by Gloria White up to 1982, his son David Bridges and his second wife Mary Bridges from 1985 onwards strongly supports the conclusion that from the period from 1973 onwards Rodney had withdrawn his permission for Barry to occupy Acacia Grove, although he took no formal proceedings of any kind to assert his claim for possession until he made an application to the Consumer Trade and Rental Tribunal in 2005. It appears this proceeding was discontinued and it was not until 2010 that his claim for possession was filed in this Court.

20 The assertions of Rodney Bridges in cross-examination that he was merely speaking loudly to Barry because of Barry’s deafness, is directly contrary to the clear evidence of violence, which I accept, given by Gloria which strongly supports the evidence led from Barry as to the terms on which Barry went into occupation of the premises and remained there notwithstanding repeated demands made in the strongest terms from Rodney that he “get out of” the premises. I accept the evidence of Gloria and Mary that Barry responded on a number of occasions by stating that he would not leave the premises and that he regarded it as his family home in the period from 1973 onwards. I also accept the evidence of Mary that as from 1985 onwards Rodney acted on the basis that any permission by him to occupation of the premises by Barry and his former wife Gloria was at an end and that Mary was a “squatter” since she was not party to such an arrangement. The evidence of Rodney was not significantly supported by the evidence of his brother John in relation to the dealings between Rodney and Barry concerning Acacia Grove. I regard the recollection and records kept by John as somewhat scant and of little assistance to Barry’s case.

21 In cross-examination, Rodney adopted an aggressive approach to Counsel’s questioning. At times he made comments on the questions and his reaction during cross-examination was aggressive and non-responsive. This conduct is consistent with the evidence of the witnesses called by Barry, that Rodney, in the period from 1973 onwards, took an extremely hostile approach to Barry in the presence of Gloria, Mary and David Bridges. I accept their evidence on this behaviour by Rodney.

22 The evidence of Mary Bridges mainly related to the period from 1985 onwards and although she admitted some errors as regards improvements and their timing her evidence as to the hostile relationship between Barry and Rodney was consistent with Barry’s evidence and that of Gloria and David, whom I found to be frank witnesses with a good recollection of the dramatic events which took place on an ongoing regular basis during the seventies, and continuing into the 1980s. In my view, their evidence was reliable and accurate.

23 Accordingly, I have approached the evidence on the basis that where evidence of Rodney is in conflict with that of other witnesses, I reject it in favour of that other evidence in the absence of documentary evidence to the contrary.

REASONING

24 It is common ground that Barry entered into possession of the house and land at Acacia Grove with the permission of the documentary owner, Rodney. It is also common ground that Barry has never paid rent to Rodney or anyone else for occupation of the premises since he entered into possession in 1969 with his then wife, Gloria. Barry’s conduct in 1992 in contesting Rodney’s belated claim for arrears of rent strongly supports the conclusion this was the arrangement. Barry contends that he paid Rodney a deposit in 1969 of $40.00 on the basis that he could buy the land and house for $1,800.00 but did not produce any documentary evidence. This proposal did not proceed to sale. Barry says that his understanding at the time was that Acacia Grove was bought in 1968 on behalf of the partnership of the three brothers. This is consistent with his repeated refusals to leave the premises. The evidence is not sufficient for me to decide whether in fact the premises were bought on behalf of the brothers, but it is clear that the legal title was in the name of Rodney who is the documentary owner.

25 Rodney’s version of the entry into occupation by Barry is that he permitted Barry to enter into occupation after a discussion between the brothers wherein Barry was offered a job looking after the farm which the brothers operated, where they had installed a new state-of-the-art irrigation plant. The basis of the arrangement was that Barry could move into the house because no-one was living there and he could live there with his wife Gloria, rent free, and Rodney would keep on paying the rates. When Barry moved in Rodney says that Barry had the job of managing the partnership farming property and continued in that role throughout the 1970s although Barry put less effort into the partnership business as he bought more land for himself and spent more time on his own activities.

26 Rodney says that Barry’s occupation was permitted to continue because it served the interests of the partnership. When asked to leave he says Barry used the fact that his occupation assisted the management of partnership property as a reason why he should continue to reside there.

27 In 1983 Rodney took over the running of the farming enterprise until 1991. Rodney says that he had paid Council rates on the property and later the partnership paid the rates as a part payment to Barry for extra work Barry did for the partnership. Rodney says that he personally paid the rates from 1968 through 1970 when Barry first moved into the property but produced no documents to support this and he says that from 1971 to 2003 the rates were paid by the partnership and from 1992 to 2003 the rate payments were treated as drawings on the partnership accounts.

28 Rodney acknowledges that Barry generally maintained the property over the forty-two year period of his occupation and that has maintained the property and made improvements to it. He also says some of the improvements were made without his knowledge or permission or his awareness and that some work was ineffective and that the house was not kept in good repair or adequately maintained.

29 Although he made a claim for back payment of rent in October 1992, Rodney did not pursue his claim for payment of rent in legal proceedings at any stage.

30 In his evidence in chief Rodney concedes that he may have said words to the effect of “get out of my house” in the course of arguments with Barry about maintenance of the property and partnership issues but he says that these arguments always blew over and Barry continued to live in the house with his consent. Any remarks relating to getting out of the house were made by him in the heat of the moment and were not intended to affect his legal rights in respect of the property. I do not accept this version and find that Barry intended by these words that Barry and his family should leave.

31 I find that Rodney permitted Barry to enter into the premises in 1969 for the purpose of living there for an unspecified period. It was common ground that Barry would maintain the property and that he could use the premises for all the purposes incidental to use of it as a family home and at all times it was so used. This entailed fencing around the property and full enjoyment of it to the exclusion of all other persons until such time as Rodney sought to re-enter the property and take possession. I find that exclusive possession in the legal sense was given to Barry and Gloria to live in Acacia Grove as their family home, under the terms of the arrangement thereby constituting a tenancy at will terminable at any time by Rodney and this is consistent with the course of conduct of the parties. I also find that Barry had the necessary intent to possess the property to the exclusion of Rodney after 1973.

32 I accept the evidence of Barry that he paid some rates on the property during the period he was in occupation, although it is not possible to be precise as to amounts or dates. These payments were made either directly or indirectly by him. I also accept that he worked on the property of the partnership for the period up to 1983 and throughout that period, from 1969 to 2010 he has continuously occupied Acacia Grove and used it as his residence for himself and his family. There is no suggestion of any other use in fact.

33 The fact that in 1972 he bought an adjoining property on which there was a pump station for the purpose of providing domestic water supply for his residence and he carried out the necessary works to enable this to be done is consistent with his stated intention to remain on the property and to use and possess it for an indeterminate period for his own purposes as a residence and not simply because it was convenient for management of partnership property. It is difficult to see why, otherwise he would have thought it appropriate to purchase the adjoining property if he did not intend to possess the residential premises for the indefinite future. There is no suggestion that he intended to use the pump station site for a temporary purpose.

34 In 1972 – 1973 and on many occasions after that date, I am satisfied that there were heated and at times violent confrontations between Rodney and Barry as a result of which Rodney insisted that Barry, Gloria, and David should leave the premises. However, Rodney took no action to give effect to those threats. I do not accept that the demands by Rodney were merely friendly empty threats uttered in the heat of the moment or that they were not intended to terminate Barry’s occupation of the premises. He continued to repeat such demands during and after 1985 when Mary came to live on the premises. The effect of these demands was to confirm his clear intent to withdraw permission for Barry and his family to occupy or to possess the premises and from the first time on which this occurred, which I find was in 1973, the possession which Barry and his family maintained could properly be said to be adverse to that of Rodney. The oral threats by Rodney on many subsequent occasions over the following years confirmed this position as did the demands of Rodney in his letter of 22 October 1992. Indeed this letter was sufficient in itself to trigger the accrual of the adverse possession period.

35 I do not consider that the obtaining of valuations of Acacia Grove by Barry in 1982 and 1992 with a view to negotiating the purchase of the property, in the absence of a final bargain, had any effect, by way of acknowledgement or confirmation of Rodney’s title, on the running of the relevant 12 year period Barry had made it clear that he had no intention of giving up possession and he was simply attempting to arrive at a practical solution to the dispute: cf Edington v Clark [1964] 1 QB 367 at 377; Phillips v Marrickville Municipal Council [2002] NSWSC 396 at 20; Hagee Ltd v A B Erikson and Larson [1976] 1 QB 209 at 286-7.

36 I am satisfied that for the purposes of the Act time began to accrue, for the purpose of extinguishing Rodney’s claims to possession, from about 1973 for a continuous period of over 12 years. By the time any claim was first asserted by Barry and process commenced in a tribunal or in Court proceedings to recover possession (2005 at the earliest) Barry had been in adverse possession of the premises for a period of at least 31 years.

37 Accordingly, I find that the claim of Rodney Bridges to legal title or ownership of Acacia Grove has been extinguished after the expiration of twelve years from the accrual of his cause of action, that is to say, by 1986 or independently and alternatively, by January 2005, and that David Barry Bridges has the legal title to Lot 126 in Deposited Plan 750568 located at 480 Chakola Road, Chakola, in the State of New South Wales.

38 The Amended Cross-Claim by David Barry Bridges is allowed. The Second Cross-Defendant is to pay the costs of the Cross-Claimant.

**********