The English law has long recognised the unauthorised taking of someone else’s land by adverse possession. What would be considered as ‘stealing’ is rationalised as an upholding of established and peaceful possession of land where an occupier has ‘used’ the land and invested resources to developing or maintaining the land which would have otherwise been ‘neglected’. Once adverse possession is established there is no compensation payable for the loss and damage suffered. In 1979, the New South Wales government legislated to allow adverse possession of Torrens Title land. While there is no unified approach to adverse possession in Australia, the states and territories have adopted different approaches permitting adverse possession of land.
A more technical definition of adverse possession is that it is the means by which a person can become the owner of land and force registration of that ownership after being in occupation, continuously and exclusively, for a period of at least 12 years adverse to a private documentary owner (‘registered proprietor’) of land.
Also known as ‘squatter’s rights’, an alternate view is that it acts as a ‘bar’ to a registered proprietorcommencing legal action or proceedings that successfully reclaims dispossessed land after continuous and exclusive occupation by a trespasser for a period of at least 12 years.
In New South Wales, the law of adverse possession is governed by common law principles, the Limitation Act 1969 and the Real Property Act 1900.
Adverse possession giving rise to interest in land can continue to exist without ever being registered with the Land Registry Services in New South Wales. To acquire registered title to land through adverse possession, the adverse owner needs to register the acquired interest with the Land Registry Services by way of an application with extensive supporting documentation, including statutory declarations from uninterested persons attesting to the nature and extent of the continuous occupation, a survey plan of the acquired land and evidence of payment of Council rates, maintenance, improvements and utilities. Once the application is processed by the registry, if possessory title is approved, the registry issues the adverse owner with a certificate of possessory title.
Unregistered adverse possession can result in a situation where the Land Registry Services incorrectly retains title records noting the dispossessed registered proprietor after that title has been extinguished by adverse possession. This point is illustrated by a New South Wales case involving a registered title to part of a land being extinguished prior to and unknown to the person selling and the person purchasing the land title. In Hardy v Sidoti  NSWSC 1057 Mr Sidoti, who in 2018 became the registered owner of a right of way “dunny” laneway in Redfern called “Yellow Land”, was unsuccessful in claiming ownership of the Yellow Land against his neighbour, Mr Hardy, the adverse owner. This was because, among other things, the statutory period of 12 years to reclaim the dispossessed land had expired in 2017, a year before Mr Sidoti had purchased the land title with the Yellow Land inclusive. Judgment was delivered by Justice Kunc on 12 August 2020, but Mr Sidoti may appeal the decision, so watch this space!
The doctrine of adverse possession requires the adverse owner to establish actual possession of the land and an intention to possess the land to the exclusion of the world at large including the registered proprietor of land.
Actual possession can be established by overt uninterrupted period of possession without the use of force and without permission of the registered proprietor of land. In the Hardy v Sidoti Mr Hardy had undertaken improvements to the Yellow Lane over a period of time to create a Japanese-styled garden. It was argued by Mr Sidoti that those improvements were motivated by aesthetic and privacy considerations rather than any intentional or factual possession and that the acts of possession were incremental over time and were of a make-shift and non-permanent nature. Justice Kunc held that realistically, beautification and possession were inseparable. The fact that Mr Hardy had to possess the Yellow Land in order to beautify it was a demonstration of his possession. Other key indicative factors of a ‘definitive and public act of possession’ was Mr Hardy’s removal of paling fence and the Yellow Land not being accessed by Mr Sidoti or his predecessor on title or previous tenants as the Yellow Road was inaccessible from Mr Sidoti’s property due to overgrown vegetation which blocked access entry to the Yellow Land.
An intention to possess land can be established despite a mistaken belief by the adverse occupier that the land belonged to the adverse occupier or the failure of the adverse owner to be aware that occupation was trespass on another’s land.
The importance of this, being aware as a registered proprietor or purchaser of property, is that adverse possession operates in practice as an exception to the Torrens Title system of land ownership, whereby the register is supposed to show all interests. Accordingly, it is important to inspect land prior to property dealings and periodically during ownership so as to be satisfied that there is no “squatter” whose rights may defeat those of the registered proprietor.