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Posted by Ingrid McKellar General Property Law Wills and Estates

ADVERSE POSSESSION: WHEN DO “SQUATTER’S RIGHTS” APPLY?

Pauperis v Pauperis, a recent decision from the NSW Supreme Court has considered when a person is deemed to have taken adverse possession of a property, and, when there are competing interests, which person will have better title at law.

In the context of a dispute between brothers over their late mother’s estate, the court looked at factors indicating whether a person has possession of a property to determine:

  1. whether two properties had been possessed by the parties’ mother pursuant to Part 6A of the Real Property Act 1900; and
  2. if this possession had then been surrendered to her son prior to her death, or if the properties were to form part of her estate and be distributed in accordance with her Will.

Did the parties’ mother have possession of the properties?

The registered proprietor of both properties is a relative of the parties’ late father who had died without a will in 1969. After the proprietor’s death, the parties’ parents assumed control of the properties with the intention of looking after them until beneficiaries in the proprietor’s native Germany could be found. They never lived at either property themselves and always referred to the properties as belonging to the proprietor’s estate. Numerous efforts were made to find such beneficiaries, including a trip to Germany, but none ever came forward.

Parker J emphasised a number of factors in determining that the parties’ mother had a possessory interest in the properties that would have entitled her to apply for possessory title of them. These included that the mother and father had:

  • exercised control over the properties: they rented the Sydney house out and did not allow anyone to build on the vacant block at Sanctuary Point; and
  • accepted responsibility for the properties by naming themselves as the people liable to the local councils for rates and levies for both properties.

Had the mother retained possession right up until her death in 2012?

One of the parties argued that, because he and his wife had occupied the properties since 1988, the mother had surrendered her possession of the properties to them.

Parker J rejected this claim, stating that when this son and his wife began living in the Sydney property, they did so with permission from the parents and on the condition that they take over payment of the rates and all outgoings for both properties. The court cited the behaviour of the parents, in making such an agreement with their son and daughter-in-law but maintaining their own names on council records for the properties, as intent to continue legal possession of the properties. The son and daughter-in-law had never exercised any control or occupation of either property that was adverse to the mother – their continued payment of rates and outgoings was consistent the terms of the initial agreement with the mother and father.

As a result, it was ruled that no party had a right to apply for possessory title superior to that of the late mother and therefore the properties were to form part of her estate and be distributed in accordance with her Will.

Adverse possession requires at least 12 years’ continuous occupation of another person’s property without force, without secrecy and without permission.

 

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