Mulcahy v. Curramore Pty. Ltd.

2 NSWLR 464

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(Judgment by: Moffitt P.)

Mulcahy
v Curramore Pty. Ltd.

Court:

Judges: Hardie, Hope and Bowen JJ.A.

Moffitt P.Hope J.A.
Bowen C.J. in Eq.

Subject References:
Real Property
Limitation of action
Old system land
Possessory title
Continuous actual adverse possession for statutory period by two parties in succession, second not claiming title through first
Documentary title of true owner extinguished
Contract between second adverse possessor and third party to sell former's rights under possessory title
Rights of third party against successor in title to former true owner.

Case References:
Allen v. Roughley - (1955) 94 C.L.R. 98
Asher v. Whitlock - (1865) L.R. 1 Q.B. 1
Birchal v. Birch, Crisp & Co. - [1913] 2 Ch. 375
Fairweather v. St. Marylebone Property Co. Ltd. - [1963] A.C. 510
Harmer v. Armstrong - [1934] 1 Ch. 65
Kirby v. Cowderoy - [1912] A.C. 599
Lord Advocate v. Lord Lovat - (1880) 5 App. Cas. 273
Mulcahy v. Curramore Pty. Ltd. - [1973] 1 N.S.W.L.R. 737
Neeta (Epping) Pty. Ltd. v. Phillips - (1974) 48 A.L.J.R. 204
Nicholas v. Andrew - (1920) 20 S.R. (N.S.W.) 178; 37 W.N. 36
Perry v. Clissold - [1907] A.C. 73; (1907) 4 C.L.R. 374
Riley and the Real Property Act, Re - (1964) 82 W.N. (Pt. 1) (N.S.W.) 373
Salter v. Clarke - (1904) 4 S.R. (N.S.W.) 280; 21 W.N. 71
Solling v. Broughton - (1891) 12 L.R. (N.S.W.) 189; 10 W.N. 99; affirmed; [1893] A.C.556; (1893) 14 L.R. (N.S.W.) 412
Trustees, Executors, and Agency Co. Ltd. v. Short - (1888) 13 App. Cas. 793.
Wallis's Cayton Bay Holiday Camp Ltd. v. Shell-Mex & B.P. Ltd. - [1974] 3 W.L.R. 387
Willis v. Earl Howe - [1893] 2 Ch. 545

Hearing date: June 19, 20, 1974; Nov. 12, 25 1974;
Judgment date: 9 December 1974

New South Wales

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Judgment by:
Moffitt P.

These proceedings have had an unfortunate history. The subject matter is a dispute concerning title to a small area of rural land (1 acre, 3 roods, 24 perches). The appellant claims a documentary title and the respondent under a possessory title. As the learned trial judge indicated, the land itself appears to be of little value. The proceedings at first instance occupied five days: Mulcahy v. Curramore Pty. Ltd ^[F1] . The appeal was originally heard by this Court constituted by the late Hardie J.A., who presided, and Hope J.A. and Bowen J.A., as he then was. The hearing occupied four days and the decision was reserved. The learned judge who presided died soon after judgment had been reserved, but had composed a draft judgment. In the circumstances it became necessary for the appeal to be reheard by a freshly constituted Court. In the circumstances counsel sensibly agreed to the appeal being reheard by their affirming the written submissions and the oral but recorded submissions made at the earlier hearing of the appeal. Counsel were invited, if they wished, to add to these submissions by any further submissions, but the only matter debated related to questions raised by the Court concerning the non-joinder of the legal owner of the possessory title and the form of relief granted by the learned trial judge. There had been some argument upon this matter upon the first hearing of the appeal.

Having considered the appeal myself I find I am in agreement with the draft judgment of Hardie J.A. and I adopt it as my judgment and set it out hereunder. He did not have the opportunity, as do I, of considering the judgment of Bowen C.J. in Eq. I agree with its terms. At many points it deals in detail with conclusions indicated in the judgment of Hardie J.A.

In adopting the draft judgment of Hardie J.A. I am conscious that the alter- nate view, which he also expressed in support of the conclusion in favour of the respondent, involves, as its basis, a different conclusion upon the facts in respect of the period from 1964 to 1968 to that of the learned trial judge.

Adopting this view is somewhat easier because it depends upon the proper inferences to be drawn from the primary facts. My reluctance to interfere with even such a finding is overcome by the clear view I have that there was error in making a finding of no continuance of possession, in effect a cessation of possession, following upon the long course of adverse possession and in the face of some conduct which, although slight, was not untypical of that of many owners in possession of their land, continuing in possession of various parts thereof not required for direct and obvious use, but within boundary fences decrepit though they be allowed to become. In aid of inferences from some conduct and acts of user and from the retention of the fences, the user of the access road by the respondent in the 1964 to 1968 period found by the learned trial judge, has relevance to the use and possession of the disputed land over which it passed and cannot be dismissed, following the earlier possession of the whole, as relevant only to whether a right of way was acquired: see and compare Wallis's Cayton Bay Holiday Camp Ltd. v. Shell-Mex & B.P. Ltd. ^[F2] .

As earlier stated, questions were raised upon the present hearing of the appeal concerning the relief granted. A problem exists in that the appellantis in possession of the disputed land and in that the mere declaration made by the learned trial judge that the respondent is entitled in equity to an estate in fee simple in such disputed land does not appear to meet the requirements of s. 63 of the Supreme Court Act, 1970: Neeta (Epping) Pty. Ltd. v. Phillips ^[F3] .

No order has been made which will put the respondent in possession of the land. Proceedings for such an order would appear to depend upon the respondent having or compelling the legal owner of the possessory title take the proceedings. Not being a party to the present proceedings, the parties to ejectment proceedings would not be bound by the declaration made.

The requirement of s. 63 of the Supreme Court Act, 1970 and the long- standing practice in equity made it, at the very least, desirable for the trial judge to have had the legal owner of the possessory title made a party to the proceedings. Injunctive relief was granted in relation to bringing the land under the Real Property Act, 1900. At least for this reason, it cannot be said that to make the declaration was erroneous to the extent that it should be set aside. However, if, in the absence of the legal owner of the possessory title, it can be said the declaration made was defective and ought not be allowed to stand, this defect, or any disadvantage not amounting to a critical defect, should be remedied by this Court, if it has power so to do at this stage of the proceedings and can do so without injustice to any relevant party. Counsel for the respondent, following an adjournment, applied for leave to join as a second defendant Raymond John Hurley, the legal owner of the possessory title, and that the summons be amended by substituting a prayer for a further declaration: "3A. That it may be declared that the second defendant holds his right title and interest (if any) in the land referred to in paragraph one hereof on trust for the plaintiff."

Hurley appeared before us by his solicitor, subject to the usual under taking given on his behalf to file an appearance and indicated consent to being joined as a defendant and to there being made a declaration in terms of cl. 3A, if added to the summons, and to any consequential orders. Counsel for the appellant raised various objections to the requested amendments. We reserved judgment upon his submissions in support of these objections to the intent they be dealt with in conjunction with our reserved judgment upon the appeal. All parties expressly indicated they raised no objection to our so dealing with these submissions and the appearance of Hurley without further appearance on his behalf.

In my view we have the power to permit the joinder of Hurley as a de- fendant and should do so, if no injustice is caused to the appellant by his being joined at this stage of the proceedings. Authority for this course is to be found in Harmer v. Armstrong ^[F4] , aided by the Supreme Court Act,1970, s. 44; Fourth Schedule, Pt. 8, rr. 7-8.

It was contended that it would be unjust to the appellant to allow a further defendant to be now joined, even if he raised no objection. It was submitted that the appellant would have been denied the opportunity of having dis- covery and interrogatives against his co-defendant: Birchal v. Birch, Crisp & Co. ^[F5] . However some time before the trial an affidavit made by Hurley was filed and served upon the appellant. It set out the basic facts concerning his use of the disputed land. He was called as a witness and was extensively cross-examined. No interrogatories of the respondent, even by way of particu- lars concerning Hurley's possession, were sought. Upon consideration of this material it appears the evidence and knowledge of Hurley was fully and fairly tested. No particular disadvantage could be pointed to. Any disadvantage was theoretical rather than real. The factual issue litigated was Hurley,' asserted adverse possession. His joinder as a party adds no new factual issue. I do not think that any injustice will be done to the appellant by adding the second defendant.

The declaration 3A now sought will define the title of the respondent, and the second defendant concedes it should be made. The injunction of s. 63 and the wisdom of the long-standing practice calls for it to be made. No valid objection to it has been demonstrated on behalf of the appellant.

The appellant, in my view, is entitled to the costs of and occasioned by the addition of the second defendant and the consequential amendments, including the addition of the prayer for declaration 3A, but not otherwise.

Accordingly I propose that leave be granted to the respondent to add as a defendant Raymond John Hurley and to amend the summons in terms of the document tendered by the respondent and initialled by me and, subject to the filing of such amended summons and an appearance on behalf of the second defendant, that the order of Helsham J. be supplemented by a declaration as follows: "That the second defendant holds all his right title and interest in the land described in the first schedule in trust for the plaintiff."; that the respondent pay the appellant's costs of and occasioned by the addition of the second defendant and consequential amendments and that otherwise the appeal be dismissed with costs.

The draft judgment of the late Hardie J.A., which I adopt as my own and publish, is as follows:

"In this suit the plaintiff claimed a declaration against the defendant to the effect that he was the owner of the estate in fee simple of a small parcel of land at the back of Wollongong. He also claimed, in the alternative, a right of way over part of it. For reasons which will become apparent later it will not be necessary for me to deal with the right of way claim. "It is convenient to start at the point at which the plaintiff purchased from one Hurley an area of land near Wollongong described as lot 98. This was a fairly large oblong block containing approximately 32 acres. Lot 98 had a common boundary for some distance with a lot to the east of it known as lot 8. It was triangular in shape and had an apex where O'Brien's Road and the eastern boundary of lot 98 joined. It was a small area consisting of 1 acre, 3 roods, 24 perches. It was described in the judgment under appeal ^[F6] as '... an area of land between the eastern boundary of the oblong and the western side of O'Brien's Road, narrowing to a point where the road and boundary meet, that is to say at the point where the road intersects this bound- ary. It is this area between the road and the eastern boundary of the oblong that the fight is about, an area roughly in the shape of a triangle, having its apex at the point where the road and boundary intersect, with sides approxi- mately 800 feet in length and a base of about 200 feet.'"

"Special condition 3 stated ^[F7] :

'The vendor and at least one of his pre decessors in title have occupied and enjoyed possession of the land secondlyand only approximately described in the description herein. The Vendor will furnish details as precise as possible of such occupation possession and will sign all documents reasonably required by the Purchaser in that regard and will endeavour to obtain corroborating evidence in support of same and generally will use his best endeavours to assist the Purchaser to prove a possessory title to the said land. However, this Contract is not subject to such a possessory title being proved to the satisfaction of the Purchaser the Registrar General or any other person.'

"Then followed a description, a description of metes and bounds of portion 98 of the land. It is not clear on the document whether or not it was contemplated that the purchaser would take a conveyance of the vendor,' right, title and interest in the area of land referred to in the special condition

3. Probably the purchaser would have been entitled to have had that in- cluded in a separate portion of the conveyance or in a separate coveyance. However, he did not obtain any such conveyance. For reasons which would appear later and which appealed to his Honour this did not matter, as the contract itself was sufficient to convey to the purchaser an equitable title in this land, if the vendor had such a title.

"The critical question for decision in the suit was whether or not R.J. Hurley as at the date of the contract, 22nd April 1970, had a good possessory title effective against the defendant, who in or about the year 1968 had taken a conveyance from the estate of the late Hugh Harnan who many years earlier had acquired the documentary title to the disputed strip.

"The judge below reviewed the lengthy oral and documentary evidence presented before him. He came to the conclusion that Hurley was not able to establish 20 years' uninterrupted possession of the subject land. Although Hurley had purchased the land in 1948, and did not sell it until 1970, his Honour was not satisfied that Hurley had remained in continuous possession of the land for the whole of that period. Although his Honour appears to have found that Hurley had possession of it from the date of his purchase in 1948 onwards until 1964 he was of the opinion that, on the evidence before him, Hurley had ceased to use it or occupy it to any substantial degree or extent as from 1964 and, accordingly, that he, Hurley, was not able to show continuous adverse possession for the requisite statutory period.

"Having come to that conclusion, it was necessary for his Honour to address his mind to the question as to whether Hurley's occupation for a period of something less than 20 years could be built up into a period of 20 years, or more, by adding to it the period during which his predecessors in title of lot 98 had in fact occupied and enjoyed and had been in possession of the disputed area. His Honour came to the conclusion that the predecessors in title of Hurley and, in particular one Whyte and one Gilroy, had been in occupation continuously and that the period of their respective occupations could be aggregated with that of Hurley and in that way the full twenty years' adverse possession had been established.

"Counsel for the defendant pressed before the Court below and before this Court the submission that in a case such as the present it was not competent for the periods of possession of Hurley, Gilroy and Whyte to be aggregated. He submitted that, on the better view of the authorities, it would have been necessary for the inchoate rights accruing to the various parties in earlier possession to have been formally or informally conveyed or assigned to the next successive occupier. He based this submission to a large extent upon the law expressed by the Supreme Court in 1891: Solling v. Broughton ^[F8] and by the Privy Council in the same litigation ^[F9] . His Honour held ^[F10] , after a consideration of those authorities and particularly the decision of the Court of Appeal (Kay L.J. and Lindley L.J.) in Willis v. Earl Howe ^[F11] and the subsequent decision of the Supreme Court in Salter v. Clarke ^[F12] that the law did not require any formal or informal con- veyance or assignment of the inchoate possessory rights, and that, if during the period in question there was continuous occupation to the exclusion of the owner of the documentary title, that sufficed for the purpose of bringing into existence a possessory title. In my view his Honour, on this branch of the law, was clearly right. It is true that around about 1890 or thereabouts there was a view expressed that it was necessary for the inchoate rights to be conveyed or in some way transmitted, that mere succession to adverse possession was not sufficient. In my opinion this view is not sound and I agree with the law as stated in the Court below.

"It does not matter, in my view, whether this is right or wrong. Hurley was in possession from 1948 and, the subject disputed area being fenced in with the balance of Hurley's land, he did, in my view, continue in his legal possession from 1964 onto the date on which he entered into his agreement for sale of the property to the plaintiff in this action. It continued to be fenced in with lot 98; it continued to be part of that property; it was in effect an adjunct or an appendage to that property; and the fact that Hurley did not, during the period from 1964 to 1970, continue to reside on it permanently or to use it to any extent does not, in my view, affect the position. It belonged to and had become part and parcel of the property and Hurley's possession, clearly established in the period prior to 1964, continued on, in my view, until the time of his contract to sell the property to the plaintiff. In this connection it is to be observed that the contract of sale vested the right to possession in the plaintiff, as from its date and that the conveyance of lot 98 was not executed until May 1971.

"The evidence given in the defendant's case as to the state of the fences and the neglect of the property, taken in conjunction with the undisputed evidence given in the plaintiff's case, does not, in my view, establish any termination of, or throw any doubt upon, the occupation and possession of the subject property by Hurley from 1964 onwards. What it does indicate is that from 1964 onwards, when Hurley went to live in Newcastle and the property or some of it was from time to time occupied by various tenants, Hurley went to it and visited it. It was, during this period, obviously allowed to run down and was neglected and was not used to any substantial extent; however, I do not see any justification for the view that the legal possessionof the property by Hurley came to an end. This being so it is clear, in my view, that Hurley had adverse and continuous possession of the subject disputed area from the time he purchased it in 1948 on until 1968 and beyond, and, therefore, that the plaintiff has established possessory title in the person of Hurley from whom he purchased.

"During the course of argument a number of interesting questions were argued as to the respective rights of successive adverse possessors where there has been no formal or informal conveyance or assignment by one to the other. It does not, for the purpose of this case, matter what the law is here; however, it is reasonably clear in the instant case that no problem arises as between the various successive adverse possessors, as in each case the previous possessor sold the property, to which the small strip was an adjunct, to the new person who went into occupation of the whole property.

"For the reasons indicated above I am of the opinion that Hurley had a title by adverse possession at the time he sold to the purchaser. The pur- chaser became entitled to that title by reason of the contract. It is true the purchaser has not obtained a formal conveyance or any conveyance from Hurley of that interest. In my view that matters not. The purchase price was paid and Hurley is, in my view, a trustee for the plaintiff in respect of his title in the subject disputed area. That title, an equitable one, is quite sufficient to enable the plaintiff to maintain this suit and obtain the declaration he seeks and the consequential injunctive relief. It was contended the rights of the plaintiff under the contract to the disputed area were not established. It was put on two grounds. Firstly it was said the description of the subject area was not sufficiently precise. In my view although the description is, of necessity, somewhat vague, that lack of precision was satisfied by the evidence of the surveyor, and in this connexion it is to be noted that the description by metes and bounds of the disputed area as set out in the decree is that given by the surveyor, who was able to fix the position of the two fences, that is to say the fence on the boundary of the disputed area and O'Brien's Road and the fence at the southern boundary of the disputed area.

"It was also contended that, in the instant case, the plaintiff had no rights at all because the rights he acquired under the contract merged in the con- veyance and the conveyance was silent on the subject land. In my view there is no substance in this submission; the conveyance was obviously confined to the land to which the vendor had a clear documentary title. The purchaser did not take a conveyance from Hurley of the subject area; however he obtained an equitable interest in its under the contract, he has paid his purchase price and clearly, in my view, he has an equitable title. That equit able title did not come to an end; it was not affected by the fact that the purchaser did not obtain any conveyance from Hurley of his possessory title to this area.

"For the reasons indicated above I am of the opinion that the decision of the Equity Court in favour of the plaintiff was soundly based and that no grounds have been established for disturbing it."

Hardie J.A. then concluded that, for the reasons he had indicated, he was of the opinion that the appeal should be dismissed with costs, a conclusion which I adopt, subject to the additions earlier referred to by me.

I should add that the costs of the appeal payable by the appellant include the costs of the prior hearing of the appeal. It appears that the case is properto be dealt with by the appropriate authority under s. 6A (1) (a) of the Suitor.' Fund Act, 1951.

In aid of the discretion there existing I recommend that the costs of each party of and relating to the rehearing of the appeal (other than those relating to the addition of the second defendant and the consequential amendments) be met from the Fund as the measure of the costs occasioned by the death of the learned judge who presided at the first hearing of the appeal.