Plaintiffs v Defendant

2 It is common ground that the defendant, Michael Lagona, is and has for some time been in occupation of the property and has improved the property. Relying on that occupation, combined with a continuity of occupation of others before him, the defendant counterclaims for the following relief, in summary, first that he has acquired title to the property by way of adverse possession and second, if that claim be unsuccessful, that in one or more of several alternative ways he is entitled to relief appropriate to his betterment of the property. The prior occupiers on whose occupation the defendant relies to establish continuous adverse possession were Gloria Clare Hearse ("Gloria"), Anthony Cerra ("Cerra"), Gloria's children and squatters.

3 On 12 June 1924 Wallace Roy ("Mr Roy") was registered as the proprietor of the property subject to two registered mortgages. At the time Mr Roy was married to Eileen Roy. They lived at the property. They had one child, Wallace John Roy.

4 Mr Roy died intestate on 28 February 1928. Letters of administration of his estate were granted to his widow, Eileen Roy, on 21 March 1928. She continued to live at the property.

5 Mr Roy's next of kin for intestacy purposes were his widow and son. In the ordinary course of administration of the estate the property would have been registered in their name. But that did not happen. The property remained registered in Mr Roy's name. Julie McKay (a daughter of Gloria Hearse) gave evidence that Eileen told her that following Mr Roy's death she "paid off the house" by payments "to a solicitor [who] absconded with the title". Whether that be correct does not now matter for whatever steps Eileen may have taken, the fact is that she never got on title. Thus, Eileen never completed administration of Mr Roy's estate.

6 Wallace John Roy married Corelia Isabella Roy. They lived in Queensland and had six children, two of whom are the plaintiffs. They divorced on 10 April 1967.

7 Wallace John Roy died intestate on 21 October 1973.

8 Eileen Roy died intestate on 19 August 1983 aged 87 years. She had lived continuously at the property until moving to a nursing home some months before her death.

9 Eileen was survived by her six grandchildren. Pursuant to the intestacy provisions in the Administration and Probate Act 1958 they are entitled to the property. That is, of course, subject to the defendant's claim.

10 Since Eileen's death none of her grandchildren has lived at the property.

11 On 21 December 2004 the plaintiffs obtained letters of administration of the estate of Wallace John Roy, deceased. Thereafter, on 22 April 2005 the plaintiffs obtained letters of administration of the unadministered estate of Mr Roy.

12 On 5 May 2005 the plaintiffs became registered as the proprietors of the property as the legal personal representatives of Mr Roy. The registration is not subject to any registered mortgage. On 15 February 2006 the plaintiffs wrote to the defendant demanding possession of the property.

13 It is thus seen that the plaintiffs bring this proceeding as legal owners of the property and subject only to the claim of the defendant are in a position to proceed to complete the administration of Mr Roy's estate.

14 At this point it is convenient to refer to the pleadings and, in doing so, to identify the issues raised for determination.

15 The defendant, who was born on 22 January 1973, lived with his family in the Housing Commission flats on the corner of Nicholson Street and Clauscen Street, North Fitzroy. The defendant put it more simply, saying that his family lived at 18 Clauscen Street, and referred to his family and Eileen and Gloria living at number 38 Clauscen Street as "neighbours" from the 1970s until his father died in 1975 when the Lagona family moved. The defendant was one of six children who were then brought up by their mother Paula.

16 The defendant deposed that Gloria and Paula became close friends and that the friendship continued after 1975. He said that he regularly stayed at 38 Clauscen Street, that Gloria cared for him and some of his siblings a few times a week when he was a child, and that they regularly stayed overnight. Gloria treated them like grandchildren, bought them birthday and Christmas presents, and many Christmases were spent with Eileen and Gloria. I note that Philip Hearse deposed to being friendly with an older brother of the defendant; he also remembered the Lagona children running errands for Gloria.

17 The defendant deposed that as he grew older, and especially after Eileen died, he felt a responsibility to care for Gloria. He and his mother tried to help Gloria maintain the house, made sure she had what she needed and spent time with her. He referred to items of work he carried out at the property between 1985 and 1992. He said that Gloria's sons Michael and Philip rarely visited her or offered help, and that over those years between 1985 and 1992 Gloria told him he "should stay on after she passed and fix the place up ... and that I should raise my family in that house".

18 I should say at once that in my view the defendant's evidence on this matter, as on other matters, suffered from embellishment and invention. In particular, I reject the evidence that Gloria's sons rarely visited her or offered help.

19 I accept Philip's evidence that he, Michael and their sister Gloria visited their mother every couple of weeks or so. I accept that their mother was a chronic alcoholic, and that the house was very run down and not such as to have a social gathering in. In cross-examination Philip said that he saw Gloria on a regular basis and, as to whether his family had a very close relationship with his mother, stated:

"Considering the circumstances we still had a very strong bond. It was a dysfunctional family, there was mitigation of circumstances with my mother with her health, with her mental stability and with her drinking. But considering those circumstances there was still a bond there."

20 I accept Philip's evidence that while Gloria and Paula were friends, he never saw the defendant at the property after he stopped living there. I note Philip's denial that the defendant had performed the works he alleged; while I accept that the defendant performed work it is difficult to know the exact truth as to the extent of the work and I reach no conclusion upon it; it is unnecessary to do so.

21 Julie McKay also gave evidence on these matters. After she ceased living at the property she regularly returned to visit. She had not seen her mother as often in the last couple of years as she had in previous years, but denied a suggestion that over the years going back to the death of Eileen her siblings had not had much contact with their mother.

22 On the matter of Gloria's sons offering help, Hübl deposed that Michael and Philip installed a gas hot water service in the outside bathroom and, towards the end of Gloria's life, a new outside toilet.

23 While the proceeding was commenced by originating motion pleadings were ordered and thus identify the issues. I refer to the essential points.

24 Concentrating on that which is contentious, the statement of claim alleges that at some time during 2000 the defendant entered into possession of the property as trespasser and, despite demand of the plaintiffs to vacate made on or about 15 February 2006, had remained in possession as trespasser.

25 As mentioned earlier, the plaintiffs claimed damages or mesne profits. These have been particularised as follows:

(a) Rental payable from the date the defendant went into occupation to the delivery up of possession. An amount is specified as the reasonable weekly rental for the property in its condition at the relevant time in each year 1997 to 2009 inclusive.

(b) Interest is claimed on such rental under the Penalty Interest Rates Act 1983.

(c) $35,000 as the cost of demolition of an extension to the rear of the property, built by the defendant without a building permit.

26 The defendant responded with a further amended defence dated 13 November 2006 ("the defence") to which the plaintiffs filed a further amended reply ("the reply"). The defendant also filed a counterclaim dated 25 October 2007 to which the plaintiffs filed a defence ("the defence to counterclaim").

(a) Admitting the defendant is in possession, any claim in trespass is barred by s 5(1)(a) of the Limitation of Actions Act 1958, the cause of action having accrued more than six years prior to the filing of the originating motion.

(b) There was a line of possession of the property through Gloria until her death on 11 October 1992, Cerra until 1994 when he took up a Housing Commission unit, followed shortly after in or about 1994 and until 1997 by a series of squatters each of whom took possession from the other (Cerra attending the property and continuing in possession until the first squatters took possession), and the defendant since in or about 1997 when he took sole possession from the last of the squatters.

(c) That line of possession established that the plaintiffs' right of action to recover the property accrued more than 15 years before the proceeding was commenced, and was thus barred by ss 8 and 14, and the plaintiffs' title to the property was extinguished by s 18, of the Limitation of Actions Act.

(d) That between 1997 and 16 September 2000 the defendant carried out extensive repairs to and expended money on the property (called "the earlier expenditure"), particulars of which are set out.

(e) It is alleged that the earlier expenditure was incurred by the defendant under a mistake of fact and/or law (called "the mistake") in that he was labouring under the belief that:

(i) no person had any legal or equitable interest in the property;

(ii) any persons who had an interest in the property were not intending to pursue their rights (if any) to take possession of the property;

(iii) improvements made to the property would be to the defendant's benefit and not for the financial gain of others;

(iv) the defendant might peaceably enjoy the property for so long as he desired.

(f) That between Eileen's death and the first plaintiff[2] making a "representation" to the defendant on or about 16 September 2000 (as to which representation see (i) below) the plaintiffs and persons through whom they claim:

(i) did not take any steps or enter into possession of the property;

(ii) did not take any steps to have themselves registered as proprietors to the property;

(iii) did not take any responsibility for the upkeep of the property or the payment of rates, taxes, charges and other like outgoings;

(iv) permitted the property to fall into decay and ruin.

This conduct - called "the conduct" - is alleged to have "contributed to the mistake".

• deteriorating to such a ruinous condition that its restoration would not have been feasible;

• demolition by the City of Yarra as a public hazard;

(ii) the property was protected from sale by the City of Yarra for non- payment of outstanding rates;

and the plaintiffs received an incontrovertible benefit.

(h) In the premises, if the plaintiffs' legal title has not been extinguished, it is subject to an equitable charge or lien and/or constructive trust and/or resulting trust in the defendant's favour for the purpose of reimbursing him for monies expended on the property between 1997 and September 2000 on the basis that it would be unconscionable for the plaintiffs to obtain a financial benefit therefrom. Alternatively, the defendant was entitled to set off the earlier expenditure against the plaintiffs' claim.

(i) Further or in the alternative, on or about 16 September 2000 the first plaintiff[3] attended at the property and represented to the defendant that:

(i) the defendant's presence at the property was not a problem;

(ii) the defendant should continue his good work in restoring the property and his hard work would be rewarded;

(iii) the defendant's occupation of the property would not be interfered with.

This was called "the representation". The representation was alleged to have been made on behalf also of the other plaintiff and those for whom they claim, and when they knew or ought to have known the defendant might, relying upon it, incur further expenditure in restoring the property. It is alleged that induced by the representation the defendant expended further monies on the property (called "the further expenditure") in the reasonable belief that he would acquire a beneficial interest in the property. Particulars are provided which conclude with the following statement of total expenditure:

"From until 1997 until the present time the defendant has spent approximately $114,000 on materials for renovating the house. He has also had work done by other tradesmen and repaid them by his own labour as a bricklayer. He estimates that the value of his own labour on those occasions amounts to approximately $60,000."

(j) That the representation was misleading or deceptive or likely to mislead or deceive or was false or untrue in that:

(i) the plaintiffs and those for whom they claim had no intention of:

• permitting the defendant to remain in the property;

(ii) the plaintiffs and those for whom they claim intended to interfere with the defendant's occupation of the property.

(k) That by reason of the earlier and further expenditure, alternatively the further expenditure:

• deteriorating to such a ruinous condition that its restoration would not have been feasible;

• demolition by the City of Yarra as a public hazard;

(ii) the property was protected from sale by the City of Yarra for non- payment of outstanding rates;

(iv) the value of the property was increased from a market value of approximately $125,000 in 1999 to a present market value of approximately $320,000;

and the plaintiffs received an incontrovertible benefit.

(l) That in the premises, if the plaintiffs' legal title had not been extinguished:

(i) the defendant was entitled in equity to a moiety or upwards of the property based on his financial contributions either from 1997 to the present or 16 September 2000 to the present, and the plaintiff should only recover possession subject to his equitable interest.

(ii) Alternatively, the plaintiffs' legal title is subject to the defendant's entitlement to reside rent free for life at the property.

(iii) Alternatively, the plaintiffs' legal title is subject to an equitable charge and/or constructive trust and/or resulting trust in his favour for the purpose of reimbursing him for monies expended by him on or in relation to the property between 16 September 2000 and judgment on the basis that it would otherwise be unconscionable for the plaintiffs to obtain a financial benefit therefrom.

(m) Further or in the alternative, the defendant is entitled to set off the further expenditure against the plaintiffs' claim.

28 In addition to denials the reply includes the following points:

(a) Following Eileen's death, Gloria resided at the property in accordance with Eileen's presumed wish that Gloria do so as long as she wished, and there was no person who could, prior to 11 October 2002, lawfully revoke such licence, permission or consent. Accordingly, Gloria's residence was referrable to a lawful title or consent and did not amount to a trespass.

(b) Cerra's occupation after Gloria's death was for a number of weeks.

(c) The proceeding was commenced within 15 years of persons having been unlawfully in possession of the property.

(d) Any repairs to the property carried out by the defendant were carried out at his risk and not in the reasonable expectation that he would acquire a beneficial interest in the property.

(e) The plaintiffs did not induce the "mistake" alleged by the defendant.

(f) They admit that between 19 August 1983 and 16 September 2000 they did not enter into possession of the property and were not registered as proprietors, and did not take steps to either end.

29 While not identical, in essence the counterclaim repeated the defence. It did not include a plea of set off, doubtless because that is a matter of defence. The relief sought includes:

(a) a declaration that the plaintiffs' right and title to sue did not first accrue within 15 years before the commencement of the proceeding and had been extinguished by virtue of s 18.

(b) An order that the plaintiffs provide an executed transfer of the property to the defendant.

(i) the defendant is entitled in equity to a moiety or upwards of the property based on his financial contributions over the period from 1997 to the present time alternatively from 16 September 2000 to the present time;

(ii) the plaintiffs may only recover possession subject to the equitable interest of the defendant.

(d) Alternatively to (c), a declaration that the defendant is entitled to reside rent free for life at the property;

(e) Alternatively to (d), a declaration that the plaintiffs hold their legal title to the property subject to an equitable charge, lien and/or constructive trust and/or a resulting trust in favour of the defendant for the purpose of reimbursing him for monies expended by him on or in relation to the property between -

(f) Alternatively, an order for the sale of the property to satisfy any equitable entitlement of the defendant.

30 This followed the reply and needs no further reference.

31 Before referring to the facts it is convenient to identify the principles concerning the acquisition of title by possession of land.

32 In this consideration one commences with the Limitation of Actions Act 1958 ("the Limitation Act") s 8 of which provides that no action shall be brought by any person to recover any land after the expiration of fifteen years from the date on which the right of action accrued. Upon the expiration of that period the title of any such person shall be extinguished: s 18. But the question is, when did the plaintiffs' right of action accrue? This might ordinarily be answered by the deeming provision in s 9(2) which would have the right of action accruing on the death of Mr Roy. But the person then in possession was his widow who was administratrix of Mr Roy's estate and a trustee for the purpose of the Limitation Act[4]. Counsel for the defendant accepted that Eileen's occupation of the property until her death was thus not adverse to the estate of Mr Roy. Hence, the plaintiffs' right of action did not accrue prior to Eileen's death. This conclusion is, in fact, the effect in this case of s 14(1) of the Limitation Act. Section 14 provides:

"14 Right of action not to accrue or continue unless there is adverse possession

(1) No right of action to recover land shall be deemed to accrue unless the land is in the possession of some person in whose favour the period of limitation can run (hereafter in this section referred to as "adverse possession"); and where under the foregoing provisions of this Act any such right of action is deemed to accrue on a certain date and no person is in adverse possession on that date the right of action shall not be deemed to accrue until adverse possession is taken of the land.

(2) Where a right of action to recover the land has accrued and thereafter before the right is barred the land ceases to be in adverse possession, the right of action shall no longer be deemed to have accrued and no fresh right of action be deemed to accrue until the land is again taken into adverse possession."

33 It is important to note the requirement in s 14(1) that the land be in the possession of a person in whose favour the period of limitation can run; unless that be so, no right of action will accrue. I refer below to the circumstances that may constitute "adverse possession". It is then important to note the reference in s 14(2) to the situation in which land ceases to be in adverse possession before the right is barred. Each is relevant in this case. For not only must there be adverse possession in fact but, as was acknowledged by counsel for the defendant, it "must be continuous", even through a line of successive adverse possessors. This was the case in Mulcahy v Curramore Pty Ltd[5] in which Bowen CJ in Eq, in whose reasons Moffitt P and Hope JA agreed, after referring to the requirement that "the adverse possession must be continuous" for the statutory period (in Victoria, of fifteen years under s 8) stated that[6]:

"If a person, A, is in adverse possession for a period of less than twenty years, say, ten years, and then abandons the property, he leaves no cloud on the true owner's title, which is then restored to its pristine force, and another person, B, who later enters into adverse possession of the property, cannot add the period of A's possession to his own so as to extinguish the title of the true owner when the period of twenty years from A's first entry into possession is reached: Trustees Executors and Agency Co Ltd v Short (1888) 13 App Cas 793, at pp 798, 799; Allen v Roughley [1955] HCA 62; (1955) 94 CLR 98, at pp 114, 115, 131; cf Solling v Broughton [1893] AC 556; (1893) 14 LR (NSW) 412.

When a person enters into adverse possession, and so long as he continues in possession before the expiry of the statutory period, he has title to the land in the nature of a fee simple, good against all the world except the true owner, and his title may be conveyed or devised to, or devolve upon, another person: Asher v Whitlock (1865) LR 1 QB 1; Perry v Clissold [1906] UKPCHCA 5; [1907] AC 73; (1907) 4 CLR 374; Wheeler v Baldwin [1955] HCA 62; (1955) 94 CLR 98, at pp 108, 130 et seq; Allen v Roughley [1955] HCA 62; (1955) 94 CLR 98. Where there has been a series of persons in adverse possession by virtue of successive transmissions of the inchoate possessory title for a total period of twenty years or any extended period required by the Act, s 34 will operate to extinguish the true owner's title. At that point of time the last successor being then in possession will acquire a title in fee simple to the land good against all the world including the true owner: Allen v Roughley [1955] HCA 62; (1955) 94 CLR 98; see generally Lightwood, The Time Limit on Actions (1909) p 118, Voumard, The Sale of Land, 2nd ed., p 431.

Where there is a series of trespassers, not deriving title from each other, who have been in adverse possession for a continuous period of twenty years or any extended period required by the Act, s 34 will operate to extinguish the true owner's title: Willis v Earl Howe (1893) 2 Ch 545, at pp 553, 554; Allen v Roughley [1955] HCA 62; (1955) 94 CLR 98; Salter v Clarke (1904) 4 SR (NSW) 280; 21 WN 71. It is emphasised that possession by successive trespassers must be continuous to have this effect. An abandonment by one adverse possessor followed by a break in time when the land is not in possession of some person adversely to the true owner will, as we have seen, restore the true owner's title to its pristine force.

Upon the extinguishment of the true owner's title by successive trespassers, say A, B, C, D and E, who have been in adverse possession continuously for the necessary period, the question arises as to the person in whom the title in fee simple exists at that time. The better view appears to be that it exists in the first of the successive trespassers, A: see Allen v Roughley [1955] HCA 62; (1955) 94 CLR 98, at pp 131, 132; and see generally Halsbury's Laws of England, 3rd ed., vol 24, p 255; Lightwood, op. cit., at pp 125-126. E, the final trespasser, who is in possession at the time when the true owner's title is extinguished, would, by virtue of his possession, have a title in fee simple good against all the world except A, B, C and D.

The last statement needs qualification. If A brought proceedings to eject E, and E could prove that A had abandoned possession, then, in my view, E could successfully resist A. On the same ground he might be able to resist B, C and D. Accordingly, if the departure of A, B, C and D in each case took place in circumstances constituting an abandonment by each of them, E would indeed have a title in fee simple good against all the world: see Allen v Roughley [1955] HCA 62; (1955) 94 CLR 98, at pp 114, 115, 131; and see generally Voumard, op. cit., at pp 431-431. It is, perhaps, unlikely this would occur without a break in possession, which would restore the true owner's title and prevent aggregation.

To determine the matter in a particular case of successive trespassers it is necessary to know whether a succeeding trespasser is in possession wrongfully as against his predecessor, in which case his predecessor will retain a higher right than the successor, or whether, on the other hand, the succeeding trespasser has entered immediately following an abandonment by his predecessor."

34 These principles were referred to in Shelmerdine v Ringen Pty Ltd[7], a decision of the Appeal Division of this Court. In rejecting an argument that periods of possession of successive occupiers could be aggregated only if there had been express assignments of their possessory rights, Brooking J stated that:

"Adverse possession for the necessary period cannot be established by means of successive occupiers if there is any gap in their possession. But if there is no gap their periods of possession may be aggregated, although there has been no assignment of their possessory rights."[8]

Brooking J referred to earlier Victorian authorities which had determined the issue, and to the decisions at trial and on appeal in Mulcahy v Curramore Pty Ltd[9].

35 In this case the defendant relies on an alleged continuity of adverse possession. While I address the facts below, the immediate question is - what satisfies the requirement of continuous possession? In Mulcahy Bowen CJ in Eq referred to "a break in time", to a succeeding trespasser entering "immediately following an abandonment by his predecessor", while in Shelmerdine Brooking J referred to "a gap". Whether possession has been abandoned, or whether one possession has ceased and been followed by another "immediately" or with no "gap" will depend on the relevant facts and circumstances. It may be held that a person not presently in actual physical occupation of the land has yet not abandoned possession of it. I considered this issue in Kierford Ridge Pty Ltd v Ward[10] in the course of which I found that in the circumstances there had been "no appreciable gap in occupancy", in the sense that as a matter of fact, there had not been a break in possession that indicated a disconnection with the land or abandonment of the intention to possess it, such as to break the continuity of the adverse possession.

36 As mentioned earlier, the defendant relied upon possession of the property by Gloria, Cerra, Gloria's children, squatters and the defendant. Dealing first with Gloria, it was said that her occupation of the property during Eileen's lifetime was that of a licensee pursuant to permission of Eileen to live at the property. However, being a bare licence, the licence terminated on Eileen's death; see Megarry & Wade, The Law of Real Property, 6th ed, 17-003; Terunnanse v Terunnanse[11]. The defendant submitted that Gloria's subsequent occupation was that of a trespasser or squatter. Then, following Gloria's death Cerra continued to occupy the property until the commencement of occupation by squatters, which occupation continued until the defendant took possession.

37 This is how the defendant argues the case. In each case the trespasser or squatter had gone into possession without the consent of the paper owner and, overall, for the requisite period. The defendant also relied on Gloria's children having, for a period after her death, asserted rights in relation to the property.

38 But, the defendant submits, it is he who has acquired title. That was because the preceding possessors abandoned their possession of the property. As to Cerra, he left the property to reside elsewhere, he has died and his estate makes no claim. As far as Gloria was concerned her estate had abandoned any right or claim to title to the property. That was made clear by the evidence of her children, Julie McKay and Philip Hearse. Then there are the various squatters, the last of whom abandoned the property. That left the defendant who seeks to count in his favour the period of possession of the preceding occupiers.

39 In the course of their submissions counsel referred to a number of authorities and texts that deal with the applicable principles. Counsel for the defendant referred in particular to the judgment of Lord Browne-Wilkinson in J A Pye (Oxford) Ltd v Graham[12] Among other references counsel for the plaintiffs referred to Sunny Corporation Pty Ltd v Elkayess Nominees Pty Ltd[13].

40 More recently, in Whittlesea City Council v Abbatangelo[14] the Court of Appeal referred with approval to the statement of principles by Slade J in Powell v McFarlane[15], and stated:

"The law is clear enough. A number of the basic principles were summarised by Slade J in Powell v McFarlane. Thus, pertinently:

'It will be convenient to begin by restating a few basic principles relating to the concept of possession under English law:

(1) In the absence of evidence to the contrary, the owner of land with the paper title is deemed to be in possession of the land, as being the person with the prima facie right to possession. The law will thus, without reluctance, ascribe possession either to the paper owner or to persons who can establish a title as claiming through the paper owner.

(2) If the law is to attribute possession of land to a person who can establish no paper title to possession, he must be shown to have both factual possession and the requisite intention to possess (animus possidendi).

(3) Factual possession signifies an appropriate degree of physical control. It must be a single and [exclusive] possession, ... The question what acts constitute a sufficient degree of exclusive physical control must depend on the circumstances, in particular the nature of the land and the manner in which land of that nature is commonly used or enjoyed ... It is impossible to generalise with any precision as to what acts will or will not suffice to evidence factual possession ... Everything must depend on the particular circumstances, but broadly, I think what must be shown as constituting factual possession is that the alleged possessor has been dealing with the land in question as an occupying owner might have been expected to deal with it and that no-one else has done so.

(4) The animus possidendi, which is also necessary to constitute possession, ... involves the intention, in one's own name and on one's own behalf, to exclude the world at large, including the owner with the paper title if he be not himself the possessor, so far as is reasonably practicable and so far as the processes of the law will allow ... the courts will, in my judgment, require clear and affirmative evidence that the trespasser, claiming that he has acquired possession, not only had the requisite intention to possess, but made such intention clear to the world. If his acts are open to more than one interpretation and he has not made it perfectly plain to the world at large by his actions or words that he has intended to exclude the owner as best he can, the courts will treat him as not having had the [requisite] animus possidendi and consequently as not having dispossessed the owner'."[16]

41 Insofar as the defendant's pleadings raise matters of law additional to the above principles concerning adverse possession, consideration of them may be deferred until I have dealt with the facts. I do not overlook, and indeed have regard to all of the defendant's case and all that counsel submitted, in the discussion and findings that follow. But otherwise those aspects of the submissions, which rest on the factual findings, may be referred to later.

42 With the single exception of Julie McKay the witnesses gave evidence by affidavit or witness statement supplemented as necessary and they were cross-examined. As will be seen by the description following, the witnesses fell into different categories.

(a) the plaintiffs, Norman Roy and Wallace Roy, each of whom resides in Queensland.

(b) Philip Anthony Hearse (who I will refer to as Philip Hearse or Philip) and Julie McKay, who as mentioned are two of Gloria's children.

(c) Charles George Angeli, a Housing Officer in the Department of Human Services who gave evidence of an application by Cerra to the then Department of Planning and Housing for rental accommodation dated 26 October 1992, and of a tenancy agreement dated 19 November 1992 whereby Cerra rented premises at 166/530 Lygon Street, Carlton. The lease commenced on 22 November 1992. During his evidence the certificate of Laura Donley, an officer in the Department of Human Services, was tendered under the Evidence Act 1958. The certificate attached a statement of account of rental charged and paid by Cerra as tenant of the premises at 166/530 Lygon Street during the period 19 November 1992 to 20 March 2000.

(d) Joseph Grundy who purchased the adjoining property at 36 Clauscen Street in 1993 and where he lived until July or August 1994. He gave evidence of his observations and knowledge of and concerning the property down to 2001.

(e) Ernest Daniel Williams, a registered valuer who valued the property at 15 February 2007 and 11 June 2008, and assessed the weekly and annual rent that would be payable by a hypothetical occupier of the property from 1997 until 1 April 2009.

(f) Robert Adrian Lorich, a registered building practitioner who gave evidence as to the state of the property, the works carried out and required to be carried out and as to matters of cost, and compliance with town planning and building permit requirements.

(b) Barbara Joana Hübl, who has resided at 48 Clauscen Street since 1978 and who gave evidence of her knowledge and observations as to occupation and use of the property.

(c) Desmond Amos who has resided at 50 Clauscen Street since 1986.

(d) David Craig Doyle, who between February 1998 and January 2003 rented premises at 40 Clauscen Street and gave evidence of his observations as to the property and its occupation.

(e) Rosemary Finn who, as a friend of Hübl, visited the street and observed the property, and who gave evidence of its published use as a "squat".

(f) Rudolf Theodore Pieter Arends, a registered architect and building consultant who gave evidence as to the works carried out and their cost.

45 In assessing the credit and reliability of the witnesses for the purpose of fact finding I have regard to the difficulty in accurately recollecting statements and events that occurred years ago. There is, with "the passage of time ... a natural dimming of recollection and memory".[17] It is trite but true that human memory is fallible. It may fade with time, and may be affected by recollection partially true, or innocent but inaccurate reconstruction of what is thought to have been said or observed. Sometimes, also, understanding and recollection may be affected by the interest of the person giving evidence, even quite innocently. The judicial task in these circumstances is difficult, yet must be undertaken by the court in order to resolve the parties' dispute. Steadily bearing in mind considerations of this nature, and having carefully read the transcript, and clearly recalling the witnesses, I have concluded as follows concerning the credit and reliability of the witnesses.

46 Each plaintiff impressed me as a witness of truth. I found each to be honest and reliable. In his closing address counsel for the defendant made the following criticisms of the plaintiffs. I reject them as possessing no substance.

47 First, in relation to Wallace Roy, counsel submitted that his evidence that, apart from certain matters, in 2002, the house looked the same as it did in 1972, indicated hostility towards the defendant in refusing to recognise the work the defendant had carried out. I find that Wallace Roy did not manifest hostility to the defendant, far from it. He gave evidence in a balanced way from his best recollection. Having observed the evidence being given, the submission was bizarre.

48 Secondly, he submitted that the plaintiffs were either confused or not telling the truth in relation to the issue whether a letter had been sent to Norman Roy by Philip Hearse. Philip gave evidence that he did not think he had written to the Roys, and he did not know that any member of his family had. The defendant pointed out that no such letter had been discovered. I accept Norman Roy's evidence and find that he did receive a letter as he stated. I make that finding not merely because I find Norman to be an honest witness, but also because it is likely that a letter was sent. Moreover, there was no need for Norman Roy to make up the fact of a letter.

49 Thirdly, basing himself on evidence of the plaintiffs, "without any apparent justification", that Gloria only lived at the property for some eighteen months before Eileen died, counsel submitted that the plaintiffs "go in tandem and there is not the always at least the disclosed basis for what they say". In fact, however, Norman Roy deposed that he was so advised by his mother, which counsel accepted when I drew the evidence to his attention. In his turn Wallace Roy said that that was his understanding, that Gloria had only lived there permanently for eighteen months prior to Eileen's death. He did not know of his personal knowledge. The likelihood is that Wallace Roy's "understanding" was similarly based as Norman's. But, however that may be, there was nothing of substance in counsel's point. The evidence was hearsay, as was a deal of other evidence in the case. However, relevance was not counsel's point, he used it to attack the plaintiffs' credit and reliability. The attack fails because it is groundless and because I accept that in this respect (and generally) the evidence was given honestly, and not falsely. Indeed, the point does not matter because Gloria's occupation of the property prior to Eileen's death could not, as counsel conceded, constitute adverse possession.

50 I mention these specific attacks on the plaintiffs without overlooking other differences in their evidence and that of the defendant. I refer to these matters, and make findings thereon, below. The findings that I make further evidence my acceptance of the plaintiffs' evidence, and the reasons why I accept their evidence.

51 I also found Julie McKay and Philip Hearse to be honest witnesses. They stood to gain nothing from the outcome of the case. They impressed me as honest and decent people. Rehearsal was not evident in their evidence, indeed the contrary for there were some differences of recollection between them. At times there appeared some uncertainty or confusion as to dates, which I understood as a reflection of honesty and impartiality in evidence, and which matters I resolve in the fact finding process.

52 It is to be noted that Michael Hearse did not give evidence. As appears below, following Gloria's death he attended at the property and could have given evidence as to its state and occupation. There was no explanation as to why he did not give evidence. It was not stated that he was for any reason unable to do so. Counsel for the defendant submitted that the inference should be drawn that if he had been called his evidence would not have assisted the plaintiffs' case. In the circumstances I draw that inference.

53 Angeli was evidently an honest witness. I accept his evidence and find that the documents he produced, along with the Donley certificate, truly record the arrangements with Cerra.

54 Grundy was an honest witness. He no longer owned the adjoining property or lived in Clauscen Street and, quite clearly, had no axe to grind one way or the other in the result of the case. There was, as might be expected, some vagueness in his evidence, but he clearly gave evidence from his best recollection, and reasonably. He impressed me as careful and considered. His ready acceptance that it was "possible" that squatters were in the property "closer to May 1993" I considered reflected an awareness of the difficulty in possessing a precise memory rather than that his earlier evidence was not correct, and in no way reflected upon him adversely as a witness.

55 Williams, Lorich and Arends I deal with where I consider their evidence.

56 That brings me to the defendant who, I find, was neither honest nor reliable. He was artful, alert to the issues, and at times was untruthful. At times, when it suited, he was vague. At times he engaged in exaggeration and embellishment including in respect of when he and others occupied the property and the timing and cost of the works he carried out at the property. In short, he tailored his evidence to suit his case.

57 Hübl was an unsatisfactory witness and I find that to a significant degree she was an unreliable witness. Observing her I considered that the quality of her evidence was affected by her friendship with, and sympathy for, the defendant. She sought to support his case. Her evidence as to Cerra living at the property for approximately one year or so, and to finally moving into a Housing Commission flat, was wrong, both on the objective facts and the weight of the evidence I accept. That she had over sworn was evident in cross-examination. Her evidence in other respects reflected vagueness in memory.

58 As to Amos, it was evident from his affidavit that he had sympathy for the defendant, but relevantly, in giving evidence of matters in his personal knowledge, I considered he did so to his best recollection.

59 Doyle was an honest witness. I accept his evidence which essentially was that, as an adjoining occupier he observed the defendant move into occupation of the property in May 1998.

60 Finn's evidence I regard with some circumspection. Her evident concern at the lack of accommodation for the homeless, and thus the value of squats, affected her approach and thus her evidence, I considered. Certainly I considered that her evidence as to the property being a squat in 1993 took her memory too far. That is not, however, to say that I reject her evidence generally for I do not.

Occupation of the property by Gloria Clare Hearse and her relationship to Eileen Roy

61 In March 1926 Mr Roy and Eileen Roy fostered a child Gloria Clare McDougall who was born on 8 November 1924. She was brought up as though she was Eileen's daughter, and regarded Eileen as her mother, but she was never adopted.

62 Gloria lived at the property until her marriage to George Wallace Hearse. They had four children, Gloria, Julie, Michael and Philip. They separated when Gloria was expecting Philip.

63 At some time or times subsequently, Gloria returned to live at the property with her children. It does not matter exactly when. I merely note Norman Roy's evidence, based on what his mother had told him, that at various times Gloria returned to live with Eileen and that she was living there some 18 months before Eileen died. He further deposed that he had visited Eileen at the property in 1969, and in 1972 with his brother Wallace; on each occasion Eileen was living alone. He deposed that he first met Gloria in 1969/1970. He last visited the property in 1972. As to this, the defendant deposed that Gloria lived with Eileen from at least 1975.

64 The ultimate resolution of the case does not turn on how long Gloria lived with Eileen. At least from time to time and certainly for a time before Eileen's death Gloria, who was a chronic alcoholic, lived at the property as though she was Eileen's daughter, and with Eileen's consent.

65 Julie McKay gave evidence that she lived at the property with Eileen (who she understood to be her grandmother), her mother (who she understood to be a natural child of Eileen), and brothers from her birth in 1953 until she was 15 when she went to live with another family. She thought that subsequently Gloria moved out for a period of "maybe six months at some stage" although she could not say when. However, she could say that her mother had been living at the property for years before Eileen died in 1983.

66 Philip Hearse said in evidence that he was born in 1958 and that from time to time when he was aged between 2 and 9 he and his mother lived for short periods at Ballarat. Otherwise he believed she lived at the property until her death; that is, from 1967. He lived at the property until 1976 when he left home, aged 17, leaving his mother and Eileen in occupation.

67 Following Eileen's death, Gloria Hearse continued to live at the property until she went to hospital several weeks before she died on 11 October 1992, aged 67 years.

68 Gloria's children had been brought up believing that Gloria was Eileen's birth daughter, and regarded Eileen as their blood grandmother accordingly. It was not until after Gloria's death that her children ascertained that rather than being a natural child of Eileen, Gloria had been a foster child, and had not been adopted.

69 As mentioned above, the defendant relied on Gloria's continuing occupation of the property from Eileen's death until her death on 11 October 1992. That was a period of a little under nine years and two months. It was submitted that during this time Gloria's occupation was in the nature of a trespasser or squatter.

70 Denying this proposition, counsel for the plaintiffs submitted as follows. Acknowledging that a bare licence is revoked by the death of the licensor, counsel submitted that prior to Eileen's death Gloria's occupation of the property must have been more than pursuant to simply a bare licence, having regard to the long-standing, close "family" relationship with Eileen. Why, therefore, counsel asked, should Gloria's status have changed to that of a trespasser on the death of Eileen? Counsel submitted that it was open to find that Gloria had "more than simply a bare licence". The circumstances suggested that Gloria had the right to stay in the house for as long as she wanted to do so. At the very least, she was entitled to reasonable notice to vacate from any person with a superior right to possession of the property. It was said that the law has recognised circumstances within family arrangements where the court is not prepared to hold a person to be a trespasser: Morris v Tarrant[18].

71 Assuming that such an approach was applicable in the circumstances, until a grant of administration of Eileen's estate there was no-one who could require Gloria to vacate. For until a grant was made the estate was "notionally" vested in the State Trustees pursuant to s 19 of the Administration and Probate Act 1958. It was implicit in this submission that State Trustees did not have power to give notice to vacate or to otherwise seek possession, but no such submission was addressed. Consequently, it was submitted, Gloria's consensual possession continued. It was to be assumed that Eileen would not, if she had been asked, have wanted Gloria put out on the street. Thus, until such time as Eileen's estate told her to leave the property, she had the right to continue to live there. That right was not determined in her life time.

72 Hence, it was submitted, Gloria was never in adverse possession. If that was so the plaintiffs must succeed because the 15 year period had not elapsed prior to the proceeding being commenced.

73 In my view the defendant is correct on this point. The plaintiffs' submission is that it was open to find, and should be found, that Gloria had more than a bare licence. I do not agree.

74 While Gloria lived at the property with Eileen she clearly did so with Eileen's approval and consent. It is evident that there was a long friendship in which there was mutual support and comfort. But that does not transpose to an interest in the property. Clearly, there was no legal interest and there was no evidence that could found a right enforceable in equity in relation to ongoing occupation of the property. The case of Morris v Tarrant was concerned, as Lane J made clear in his judgment, with the situation between husband and wife in which after separation the wife continues in occupation of the matrimonial home subject to an order of the court. It is not relevant to this case. Nevertheless, as Lane J observed in his judgment:

"To establish that an occupier of land is a trespasser it must be shown that he has no right, legal, equitable or personal, to be there."

75 In my view Gloria's right of occupation never rose above that of a licensee which licence was revoked on Eileen's death. Eileen left no will or other instrument which conferred on Gloria any right of occupation. The consequence is that Gloria's occupation was as a trespasser. As such, in my view, it constituted possession that was adverse to the right of the paper owner and those who claimed in the line of inheritance from his estate.

76 In this situation it is unnecessary to consider the plaintiffs' submission as to the power of State Trustees to give notice to vacate. Consideration of the submission would have required reference to authorities including Andrews v Hogan[19] and Fred Long & Sons Ltd v Burgess[20], on which neither counsel addressed a submission, making it more undesirable to consider the issue.

77 The question that now arises is whether the property was held in adverse possession continuously for the statutory period of 15 years from the death of Eileen. That would be until 19 August 1998. This would require Gloria's period of possession to be aggregated with possession by Cerra, Gloria's children, squatters and the defendant.

(a) from approximately 1987 to Gloria's death Anthony (Tony) Cerra also resided at the property;

(b) he continued to reside there until approximately 1994 when he took up residence at a Housing Commission unit in Carlton;

(d) between taking up residence in Carlton and when squatters first took possession of the property, Cerra "continued to attend the property and was in possession of it".

(e) In the alternative, at all times between the death of Gloria and when squatters took possession in or about 1994 Cerra, or alternatively the estate of Gloria and Cerra, was in possession of the property;

(f) in or about 1994 a series of squatters took possession of the property from the estate of Gloria and/or Cerra.

79 In their pleadings the plaintiffs admitted that Cerra occupied the property with Gloria up to her death and for "a number of weeks thereafter" but otherwise denied the allegations.

80 I now refer to the evidence pertaining to the matter of Cerra's occupation of the property. The first thing to note is that Cerra did not give evidence. He died on 17 January 2005.

81 I commence with the evidence of Charles George Angeli and Laura Donley (by way of her certificate under the Evidence Act) that:

(a) By an application dated 26 October 1992 Cerra applied to the Department of Planning and Housing for rental accommodation. The application gave his date of birth as 31 November 1934, his address as 38 Clauscen Street, North Fitzroy, stated that he had arrived in Australia in 1954, that he had a disability, received a pension and had no assets. Further information provided with the application, which information appeared clearly to have been written by another person for him, stated that Cerra had been living at 38 Clauscen Street "for near twenty years taking care of Mrs Gloria Hearse or her Mother. Now both have passed away he has only two or one weeks to vacate house. Mrs Hearse family told him they are going to sell the home. Mr Cerra is only on a pension and has nowhere to go. ...". I note that the person who wrote that note did not give evidence, and the correctness of the statements in it was not established by evidence. I refer below to evidence of Julie McKay and Philip Hearse on these matters.

(b) By letter to Cerra dated 6 November 1992 the department requested a social security statement and income statement in order to determine eligibility for rental accommodation.

(c) The next step would normally have been to write to the applicant advising that the application for accommodation had been approved and that they were on the waiting list. Such a letter was not on the file available to Angeli but there was a letter to Cerra dated 16 November 1992 which indicated that that step had been undertaken. That is because the letter of 16 November advised Cerra that a property had become available for him to inspect and he was requested to arrange to view the property.

(d) On 19 November 1992 Cerra made a declaration before Angeli by which he applied for a rebate of rent, the purpose of the application being to obtain information and documentation required to assess a tenant's eligibility for a rebate. Then, by letter dated 19 November 1992 the Department advised Cerra that his application for a rebate of rent was approved, the consequence being a weekly rent of $34.25 from 22 November 1992.

(e) By a written agreement stated as being made on 19 November 1992 the Department let to Cerra the premises known as 166/530 Lygon Street, Carlton, the agreement and rental commencing on 22 November 1992 and continuing from week to week until terminated.

(f) Angeli also referred to a letter from the Department of Planning and Development (as it then was) to Cerra dated 2 August 1995 requesting Cerra to reapply for a rental rebate. Angeli explained that such a letter was sent to all tenants at that time and that annual application was required. The purpose was to obtain documents and information from the tenant so that the department could assess their eligibility for a rebate of rent.

82 Wallace Roy deposed (in his affidavit) to being in Melbourne on 18 and 19 September 1993 to attend a meeting. On 19 September he visited the property as he wanted to see the house where his father had grown up. When he got to the property he noticed that the small roof over the front landing had collapsed and other signs that the building was neglected and not lived in. He wanted to look inside the property but the front door was not open. He was told by the next door neighbour that the house was empty and no-one had lived in it since "the old lady" had died. He walked around the back of the property via the access road and entered the house by the back door. The inside of the property was dusty and had a stale smell, and letters were lying over the floor inside the front door. He stated that the property was definitely unoccupied. He next visited the property on 26 July 2002 when he was again in Melbourne for a conference. I refer to this occasion below, merely mentioning at the moment that he then found the defendant in residence.

83 Wallace Roy swore an affidavit in reply to an affidavit of the defendant. He repeated the above evidence as to his visit to the property on 19 September 1993. He added that the mail he found on the floor near the front door was addressed to Gloria Hearse.

84 In cross-examination Wallace Roy said that he knew Gloria had died prior to him visiting the property in 1993. The next door neighbour who he spoke to was at number 36. His evidence as to the house not being lived in since Gloria died was based on what he said and on his own observations when he went into the house. There was furniture and some belongings in the house, a few things in the kitchen, a bed in the second bedroom, a couple of chairs and a lounge chair in the front room. And there were letters on the floor. There were no newspapers. The presence of a bed did not possibly indicate there was someone using it from time to time as "it was all covered by dust".

85 I now refer to the evidence of Julie McKay that bears on Cerra's occupation of the property. She deposed that she went to the property with her brother Michael the day after Gloria died. She was asked if Cerra was living at the property when Gloria died. She believed that he was, but that when she went there the day after Gloria died "he was gone and his possessions were gone". She went to collect her mother's personal papers (including her will) and things like that, it being her mother's express wish that she collect all her personal papers. She said that her mother had her own items of furniture, some of which were "noticeably missing"; those that remained Michael took to the opportunity shop. Later (in cross-examination), as to the condition of the property on the day following Gloria's death, she said that "things had been taken and there wasn't a lot there, nothing much left. It was a frugal household". As to whether the house was in a liveable condition, she said that she would not want to have lived there.

86 Julie McKay deposed that she and Michael cleared out the house in stages, not all in one day. We "did it in stages ... we went up a few times. We certainly went up the day after she died and another time in the first week and then another stage about three months later and maybe we went up again but I can't really put a date to that, whether it was six or nine months later". She was asked if they had literally emptied out the contents of the house; she said that she could not remember exactly what was left behind; she sorted out her mother's clothes and the smaller things and Michael took care of the bigger things and at some point he said he would take the large furniture to the Salvos. To the question whether during the time she and Michael were clearing out the house anybody was living there, she answered:

"No, definitely not. It wasn't really all that liveable."

She added that when she left the property the doors were locked.

87 As to whether there came a time when she stopped going to the property, she said that eventually she heard that squatters had got in and she was not interested in being involved in anything like that and stopped going. She could not put a date or time to that, it was possibly about a year or so later.

88 As far as she knew the last time she went inside the property no-one was living there; that could have been nine months, six months or eighteen months after her mother died, there was a point where they went up and heard that squatters had got in and then she stopped going.

89 In the cross-examination that followed Julie McKay was questioned about Cerra. She was aware of him. She did not know how long he had lived at the property, it was "on and off over a period of time ... he would come and go". She added: "there were long periods when he wasn't there. He certainly wasn't there all the time, he would come and go. Sometimes he would be there for three or six months and then he'd be gone and then, you know, maybe a year later he would turn up again". He and his possessions had gone when she went to the property the day after her mother had died. As to what possessions he had, she said there were no clothes or those sorts of things. The furniture that was missing was not his. More specifically she said that:

"When I went up there, there wasn't anything of Tony's, being personal possessions, like clothes, shaving things, all that, there and he was there at that time because my mother said he was there before she died. And then when I went up the day after she died, like she asked me to, his things - there was nothing of his there and there was furniture that had been in the house ever since I can remember from a child that was missing."

90 Julie McKay further deposed that she disagreed with evidence of Philip Hearse that Cerra left the premises some weeks after the death of their mother, stating that there "was no-one there when I went up the day after she died". It was not only that no-one was physically in the house, there was "no presence of Tony Cerra". She said that she and Michael "were cleaning out the house, so we were packing up her clothes and things and whatever there was to send to the opportunity shop. So we did go through all cupboards and drawers and all those sorts of things that you do". They did it over a period of time, they looked everywhere "and sorted it into stacks". They went a couple of times in the first week, and then she went back once in the first three to six months and maybe once after that. On none of those occasions did she see any sign that would indicate that Cerra had resumed occupation at the property.

91 McKay said that they locked the house. She vaguely remembered her brother saying in relation to the lock on the back door - which was not very strong - that he would take care of it. They locked the house as you would lock a normal house, the intention being to keep people out unless they had a key to the premises. As to whether the premises were boarded up, she did not know if her brother had done that.

92 Later in cross-examination Julie McKay was asked about the statement in Cerra's application for a Department of Housing flat that he had been given two or one weeks to vacate the house. She did not know about that. Nor did she know about it being the intention of her family or any member of the Hearse family to sell the property. She said that was not true.

94 In his affidavit he stated that Cerra remained in occupation of the property "for a matter of some weeks" after Gloria died. He stated that when Cerra left the property, it was "simply left with its contents remaining which weren't of any real value". Those items of sentimental value were retrieved by his brother Michael and sister Julie, otherwise the remaining contents were abandoned. In cross-examination Philip stated that the reference to Cerra remaining in occupation for a matter of "some weeks" was only an estimate because he had not gone to the property after his mother died, he "just presumed that [Cerra] was still in residence there because he was in residence there prior to her dying". That is, his statement as to occupation for "some weeks" was not based on his personal knowledge. He was then asked what it was based on and answered:

"Just I presumed it would have taken him a week - I presumed the time that my mother was in hospital was the time that he had left, in that period that she was in hospital, because after she died he was not there."

95 Philip added that he had not required Cerra to leave by a particular time. He added that since the death of his mother he had not been inside the property, but he had driven past the property on numerous occasions. He had no knowledge whether Cerra, after leaving the property, went back from time to time.

96 Philip was also referred to Cerra's application to the Department of Housing for a flat and said that the Hearse family did not intend to sell the property, in fact they had no idea what they were going to do concerning it. He had not spoken to Cerra "from way before my mother died and I have never given any threats or told him to leave or anything like that. I have not had a conversation with this man prior to my mother's death. And when he was in the presence of my mother I would never talk to him". He did not like Cerra. Indeed, earlier in his evidence he had referred to Cerra freeloading in living at the property. He had not spoken to Cerra since his mother's death.

97 Joseph Grundy gave evidence for the plaintiff. He purchased the property at 36 Clauscen Street with his former partner in or about early 1993 and lived there from May 1993 until July or August 1994 when he commenced living in Sydney. He deposed that when he moved into number 36 the adjoining property (number 38) "was definitely unoccupied and empty" and that for most of the time that he lived at number 36, number 38 "remained empty and unoccupied", although he recalled that possibly nearer the time he left for Sydney there could have been people or "squatters" in the property. While in Sydney he rented his property and recalled receiving complaints about squatters who occupied the property (number 38). He recalled that in the period between 1994 and 1998 the porch roof on number 38 collapsed and remained in that state for many months and that whoever occupied that property caused damage to it and left rubbish. In 1998 he resumed living at number 36 and moved out again in late 1999. Grundy could not recall whether number 38 was empty and unoccupied at this time. In 2000-2001 he observed a man making repairs to and cleaning up the property. He recalled meeting the defendant at some time in the period 2000-2001 when they had brief discussions about sharing the cost of removing creepers that had overgrown the back of number 38 and number 36 and the defendant's progress with repairs. He sold his property in 2001.

98 In cross-examination Grundy said he did not go into the property in 1993. He did walk through the property before going back to Sydney but could not remember the year. He said he was vague about dates. He said it was possible that it could have been closer to May 1993, when he first moved into number 36, that squatters were at number 38. In re-examination Grundy said that before going to Sydney in 1994 on one occasion he walked through number 38, he could not remember the year but he went through the house and it seemed deserted. The reason for going in was that his house had a rising damp problem and having made a number of attempts to get hold of somebody at number 38 he eventually went and pushed on the front door and it was open and he went and had a look at the problem from that side to see if it was a joint problem or just something that he needed to have repaired on his side. He did not wander through the rooms, he was only looking at the hallways. But no-one was in the house at the time and he had the impression it was deserted.

99 I now refer to evidence given by the defendant and witnesses called by him that bears on the matter of Cerra's occupation of the property.

100 In his affidavit the defendant stated that Cerra was a friend of Gloria, that Cerra moved into the property in 1987 and stayed on after Gloria died until 1994 when he moved out "... as the house had reached the point where it was just too rundown for him to live in. During the time he lived there, I would call past once a week to say 'hello' and see whether he was okay as he was an elderly gentleman". The defendant deposed that "a very short time after" Cerra moved out in 1994 he (the defendant) found that squatters had started staying at the house.

101 The defendant was cross-examined upon this evidence. He was asked if it was correct that Cerra had moved out in 1994. He answered:

"Well, I used to see him there at the property in those stages, so I believe, yes, he was still there."

102 The defendant was asked if he accepted that Cerra had leased a flat from the Department of Housing in Carlton from mid to late November 1992. He answered:

"I do accept that but I do know too that he would go past 38 Clauscen Street and he would go there to the property and he would spend time there.

He started to live in Lygon Street, Carlton from about mid to late November 1992, didn't he? - - - Yes, but he would come back to 38 Clauscen Street to visit maybe the neighbourhood friends that he would have created through the years.

Who would he come back to 38 Clauscen Street to visit? - - - I'm not saying he visited anyone at 38, but he would have gone to maybe adjoining neighbours that he may have known. So he'd come back to the property."

The defendant was then referred to the evidence of Julie McKay (and to which I refer below) that Cerra left the property virtually immediately after Gloria died and that over 12 months she and Michael Hearse emptied out and cleaned up the property, and gave the following evidence:

"Do you accept that for the 12 month period or so after Gloria Hearse died nobody lived at 38 Clauscen Street? - - - Tony was thereabouts from time to time and I would see him there at the property.

He wasn't sleeping there was he after Gloria died? - - - Well, I wouldn't go there after certain times of a night because I'd be in bed myself, so I wouldn't be able to witness him sleep there but I know he'd be there from time to time.

You heard Wallace Roy give evidence that in about September 1993 he came to visit the property and he says the property was unoccupied? - - - Right.

Do you agree with that? - - - No.

You say the property was occupied in September 1993? - - - To my belief it was, yes.

Who was occupying it? - - - If Tony wasn't there on a daily basis or from time to time it may have been times where the squatters may have got into the property.

HIS HONOUR: Is that speculation on your part or actual observation of yourself? - - - That's an observation.

You are saying that you actually saw squatters there in the period that Mr Phillips has just asked you about? - - - I've seen people walking around the property, yes.

When you say walking around it, it's brick fence to fence or side to side, what do you mean? - - - Well, from what it appeared there were belongings and things out the front of the property and people that may have been going through it.

I just want precision about times and I've got to decide the case on what people can state of their own personal knowledge.

MR PHILLIPS: I'm confining myself at the moment to the 12 month period after Gloria Hearse died, so we're talking about up to about October 1993. You yourself did not go inside 38 Clauscen Street in that one year period, did you? - - - No, but I went around the back and went through the back to see the extent of the property and see how the nature was, how it all was.

You heard the evidence of Mr Joseph Grundy, do you remember him? - - - Yes.

Who lived next door at number 40 I think it was? - - - He was in number 36.

He said he moved in around mid 1993 and 38 Clauscen Street was unoccupied at that time? - - - Right.

You agree with that, do you? - - - No.

You disagree? - - - Yes.

He says on one occasion, he wasn't entirely sure when, but he went inside because there was a rising damp problem and as far as he was concerned no one was living at 38 Clauscen Street, remember him saying that? - - - I do recall him saying that but at the time of his visit to the property there may have been no one there at that certain stage. So they may have gone out, who knows where, down the street - - -

HIS HONUR: I'm sorry. I'm [not] being critical of Mr Lagona but I can't have a witness saying - giving evidence in this way. It's premised on something that hasn't been stated in evidence. It's no good saying, someone may have gone somewhere, I don't know if they were ever there.

MR PHILLIPS: You are just guessing, aren't you, Mr Lagona? - - - No, I'm not.

You've got absolutely no idea whether anyone was living in this property for 12 months after Gloria Hearse died or not? - - - I wasn't living there myself, no.

As far as you know, no one else was living there? - - - I believe Tony was staying there occasionally.

The fact of the matter is, Mr Lagona, that for that 12 month period the property was unoccupied and nobody lived there, do you agree with that? - - - No.

But you can't point to any evidence other than what you think may have been the case to suggest otherwise, is that right? - - - I believe Tony stayed there occasionally."

103 Later it was put to the defendant that he could not say categorically that from the time Gloria died until he took possession of the property it was continuously occupied, to which he answered:

"I can say Tony was there for a period of time. Maybe not living there as a permanent resident but he would go back to the property and then to my understanding is he only left and stopped coming around indefinite once the squatters were there and he found that he couldn't go there no more because he was scared.

How do you know that? - - - He told me that."

104 Barbara Joana Hübl has lived at 48 Clauscen Street since 1978. She knew Eileen and Gloria, and that they lived at the property. She understood Gloria to be Eileen's daughter. Cerra also lived at the property. She was a friend of Eileen and Gloria. She also met Paula Lagona who was a close friend of Gloria's and some of her sons including the defendant who was then a child. After Gloria's death, Tony continued to live at the property for approximately one year or so, but moved out at the request of Gloria's son Philip. Tony finally moved to his own Ministry of Housing flat in the Lygon Street high-rise. Tony would visit number 38 Clauscen Street frequently for a period of time afterwards to check on the property but discontinued this after being threatened by squatters on the property. Tony advised her of the threats and she had no reason to doubt him as she also was threatened by the squatters. She said that many of Gloria's belongings were still on the premises. Squatters moved in, in about late 1993, after Tony had moved out. After Tony moved out Michael, Gloria's son, asked her to keep an eye on the property. She did this for a while but discontinued after she felt threatened by squatters in the place. As new squatters moved in she kept Michael informed of this.

105 Hübl deposed that following Cerra's departure a succession of people squatted at the property. She described the conduct of these people and the deterioration of the property, which it is not necessary to relate. Nor is it necessary to set out the balance of her affidavit which deals with the defendant moving into the property in late 1997 and works performed by him.

106 In cross-examination Hübl was referred to her statement as to Cerra living at the property for approximately one year, and said that she could not "be sure exactly how many months he did stay", her recollection was that he was there for a number of months. To the suggestion that Cerra left pretty soon after Gloria died, the next day or within a matter of four or five weeks, she said that her "recollection is that he needed to find alternative accommodation and he needed to apply to the Ministry of Housing and that that took some time and as to the exact day he moved out I may be unclear because he continued to come up to the property every day for quite some time and I met him there frequently, so the exact date he moved out I can't tell you but I know he was there for a considerable amount of time into '93".

107 Hübl was then asked whether if Cerra started renting a Housing Commission flat from mid to late November 1992 that jogged her memory about whether he was still at the property, and she answered:

"As I said, your Honour, the exact date he moved his bed out of there I can't be sure. But I do know that he was returning - if he wasn't living there he was returning there every day."

108 Hübl said that she went inside the house shortly after Gloria died and described its condition in this way:

"Shortly after Gloria died it was clean but - well, the furniture in it that she had and then that was removed, so there was running hot water. I believe the electricity might have still been on immediately after she left and the water might have been on but they were cut off at some point."

109 Hübl was then asked whether, once Cerra started living at the Housing Commission flat he stopped sleeping at the property, to which she answered:

"I'm not 100 percent sure that he didn't sometimes still stay there and that's out of sentimental reasons and trying to keep the place okay. So, if and when he moved to - well, he did move to the Ministry of Housing. Whether he stayed overnight there after that, I can't say, but I do know he was there often during the day."

110 Hübl said that in the twelve months or so after Gloria died she did not recall seeing Julie McKay at the property but did see Michael Hearse there and met him a number of times and he asked her to keep an eye on the place.

111 Hübl said that her recollection was that "not long after Tony stopped being there for a substantial part of the day that squatters started coming there at night". She could not put a day or week timeframe on what she meant by "not long".

112 As to Grundy's evidence as to the property not being occupied Hübl said "He's entitled to give his evidence".

113 As to whether she had any specific recollection of precise dates or times and whether she was trying to reconstruct in her mind what might have happened, Hübl said that she did not make a record of dates and times, that she had a recollection based on her strong sense of what happened.

114 Hübl was then asked on what she based her evidence as to the times when people were at the property overnight. She answered that she had been asked by Michael Hearse to keep an eye on the property, which she did. She believed that some time in 1993 the back gate was pushed in. She lived less than twenty metres away from the property. Also, with the distance from the property you could hear people going up the lane and "hear them go in somewhere up there and I would check that was the only gate that was open". So she made it her business to see what was going on there "but even if I wasn't particularly keeping an eye on it I could hear people going up and down the lane at night".

115 Hübl was asked whether in 1994, 1995 and 1996 she took less interest in the property, and answered that she stopped going inside the property after there were squatters and she told Michael Hearse that there were people there and he needed to do something about it. She could not categorically say that throughout 1994 there was somebody in occupation of the property. Nor could she say categorically that in 1995 there was someone in occupation day by day, but there were people living there. Nor could she categorically say that someone was in occupation of the property every day throughout 1996 or 1997. Finally, she met Michael Lagona and in late 1997 became aware that he was sleeping at the property in early 1998. She had developed a friendship with the defendant.

116 Hübl said that after Gloria died and Cerra left, she went inside the house four times. I understand her evidence to be that these visits occurred in 1993. On three occasions she went on her own, twice to collect mail (when no-one was at the property) and on the third occasion she came across a squatter who indicated she should get out. On the fourth (and subsequent) occasion she went with Cerra "because he'd also been threatened by people". On that occasion she noticed belongings that were not Gloria's lying around; later in her evidence she referred to having seen a sleeping bag that was not Gloria's.

117 From when she became aware of people living at the property she could not tell whether "for that first period of time ... someone [was] there every night". After the initial time there were people living there day and night for continuous periods of time, but in the first year 1993, she did not know if there was someone there every night. Hübl denied that the squatters started during 1994, stating that "they started earlier than that".

118 Desmond John Amos has lived at 50 Clauscen Street since 1986. In his affidavit he stated that he became acquainted with Gloria Hearse in or about 1988 and enjoyed a pleasant neighbourly friendship with her and Cerra who lived with Gloria. Gloria invited him inside on a few occasions for a chat. Following her death Cerra remained at 38 Clauscen Street "for a while and then left". After Cerra left "the house became abandoned". In about 1992/1993 he was informed by his housemate that squatters had moved into the property. For a number of years he and his housemate, and other residents, endured a collection of squatters at the property. He recalled that in or about 1997 two young women moved in with a child; they used the tap at the front of his house for water. Also, the toilet at the property had been destroyed and the previous squatters had removed the copper piping. A few months later the two women moved out and new squatters moved in. He recalled that this last set of squatters moved out in or about late 1997 and the defendant "then moved in" to the property.

119 In cross-examination Amos said that the first time he went inside the property was when the defendant asked him in. This was just after the squatters had left and it was in a "horrible state". He was asked if to the best of his recollection that was around the middle of May to June of 1998 and answered that that sounded correct. He agreed that it was at least five years after Gloria had died. He knew Cerra was living at the property but he was not sure when that was. He thought it was months. But whenever Cerra did leave the property it became abandoned. He observed that the house was empty and unoccupied for a period of time after Cerra left. Amos was then advised of the evidence that Cerra took a tenancy of a Housing Commission flat from about 19 November 1992 and whether it accorded with his recollection that Cerra stopped living at the property at about that time, to which Amos said "I think that does sound to be correct". He then stated that the house was abandoned for in excess of twelve months. He then agreed that it was in the mid 1990s that there were undesirable people living at the property, like drug addicts or whatever, as he had referred to in his evidence. Finally, while he could not say that one group of squatters would be followed by another group moving in the same day there did not seem to be much time when it was empty between squatters.

120 David Craig Doyle rented 40 Clauscen Street from February 1998 to January 2003. His evidence concerned the occupation of the property from February 1998. At that time two squatters were living there. In May 1998 those squatters moved out of the property and the defendant moved in. There was then no power connected to the property so Doyle allowed the defendant to access power from the premises he was renting. This continued until the defendant had power connected in the second half of 2000.

121 In cross-examination Doyle said that the defendant moved in within a week of the squatters leaving. It was "pretty much" at the same time. It was about May 1998 that he first met the defendant. At that same time he went into the house which was a complete "mess and wreck".

122 The final witness relevant to the issue concerning Cerra was Rosemary Finn who did not live in Clauscen Street and did not know Eileen, Gloria or Cerra, but who met Hübl in 1995 in the course of work. Finn was employed as a Youth Housing Officer for Bulla Youth Housing stationed at Broadmeadows/Craigieburn Community Health Services in Craigieburn. She was located in the Community Health Centre. From some time in late 1993/early 1994 she repeatedly saw the property at 38 Clauscen Street listed as a functional stable squat on the list of known squats circulated by Shelter Victoria Inc and also received telephone updates from Shelter Victoria of its status as a squat. It transpired that in conversation Hübl informed Finn where she lived and complained of squatters. Finn told Hübl she knew of the property as a squat. Hübl and Finn became friends and Finn visited Hübl. Finn stated that on occasions when she visited Hübl she noticed that the property was used by squatters. On occasions when she inspected the property from the exterior she noted it was vacant and at other times there were people living there.

123 In cross-examination Finn said that she first "went" to the property probably around 1993 when it appeared on the Shelter Victoria list. That was before she met Hübl. She then said that she first saw the property towards the end of 1992. She had an awareness of the property but it was not listed as a squat until 1993. She said that the first time she looked at the property seriously was after she had met Hübl. She had probably driven past it at other times and that it "came into focus" because Hübl lived in the same street and talked about it. She had a different opinion on squatting to Hübl, "so they had debates on that". When she referred to having driven past the property, she agreed that she had just driven past the house, having a quick look.

124 The question for determination is whether Cerra was in possession of the property subsequent to Gloria's death and, if so, when? This question must be considered in the context of the defendant's pleaded case. The pleaded case is that Cerra was in possession continuously from Gloria's death until squatters took possession of the property. There is an alternative case that the squatters took possession from Cerra and/or Gloria's estate. In this section I am concerned with Cerra. I deal later with the alleged possession of Gloria's estate.

125 It is plain that several evidentiary difficulties lie in the path of the defendant's case.

126 In the first place there is the objective evidence that Cerra's lease from the Housing Commission commenced on 22 November 1992 and was still running in 1995. As I have already said, I accept that evidence. Then there is a deal of other evidence which if accepted contradicts the pleaded case as to Cerra's possession.

127 It was with this in mind that in his final address I asked the defendant's counsel what he said about Cerra and his occupation of the property. Doing my best to summarise counsel's response, which went over several pages, he said that:

(a) I should find that Cerra was actually at the premises for at least a couple of months. He noted that the defendant and Hübl had stated the period was longer but did not seek a finding in accordance with their evidence.

(b) Cerra slept at the property until he organised the Housing Commission accommodation. I should accept that Cerra stayed there for at least a month or two. It made no sense to suggest Cerra was not there immediately after Gloria's death because there was no other known place for him to be.

(c) I should accept that Cerra continued to go back to the premises on a regular basis. As to why he would, counsel said -

(i) out of a sense of affinity with the place he had lived in;

(ii) to talk to people he knew;

(iii) it was likely he had a sense of obligation to the memory of Gloria, and did not want to see the house destroyed by squatters;

(iv) Cerra was not trying to claim or preserve anything on his own behalf but, if anything, for the Hearse family on the basis of the memory of Gloria.

(d) When Cerra stayed at the property his possession was adverse to the plaintiffs; subsequently "his role is of use in that it shows a desire to exclude squatters by attending on a regular basis or from time to time and that role is a role also adopted at the same time by the Hearses for their own reasons. But the effect on the Roys is still the same ... physical occupation and ... some attempt to exclude by Cerra and that can be relied upon. But in the same period we have the Hearses endeavouring by their own method to secure the property and to keep people out".

128 Counsel submitted that the adverse possession of Julie McKay and Philip Hearse overlapped Cerra's occupation. If that submission was not accepted, counsel relied on Cerra's occupation which "would encompass not only his period of actual occupation for the few months afterwards at least but the fact of his going back to the premises on a regular basis ... up to the date when the true squatters came in". Even if that was just keeping an eye on the place it was sufficient, it was consistent with someone wishing to exclude and to possess.

129 I now refer to the submissions of the plaintiffs' counsel. Referring to the "independent evidence" from the Housing Commission, he submitted that I could be satisfied that by mid to late November 1992 Cerra was living at his Housing Commission flat in Lygon Street, Carlton, he having commenced to pay rent from that time. Counsel submitted that it was overwhelmingly probable that Cerra would not have been living at the property while he was living in the Housing Commission flat.

130 What was more surprising, counsel submitted, was the defendant's attempt to suggest that Cerra had religiously come back to the property after he had left. The notion that the property had become "a sort of shrine to the memory of Gloria" was nonsense. Cerra may have come back to visit friends but there was no reliable evidence he ever slept at the property after he had the Housing Commission flat, and no probable or convincing reason why he would have done so.

131 It is significant that in his submissions counsel for the defendant did not seek to rely on the evidence of the defendant that Cerra stayed living at the property until he moved out in 1994, or Hübl's evidence that Cerra continued to live at the property for about one year or so after Gloria died and then finally moved to his Housing Commission flat. Counsel was merely being realistic. The subsequent evidence of the defendant and Hübl made it apparent, and I so find, that their initial evidence was either false or a gross exaggeration. The defendant's evidence became vaguer and vaguer, and the longer it went it became apparent, and I so find, that he was either making up a story or seeking to make something out of nothing. Under questioning the truth was approached when he stated that in the twelve months after Gloria died he believed Cerra "was staying there occasionally". And, finally, in his evidence quoted above, he fell back on what he stated Cerra had told him. As for Hübl, under questioning her evidence became less certain and more vague.

132 Counsel's judgment was sound in not relying on the evidence of the defendant and Hübl. Apart from the unsatisfactory features of their evidence, it could hardly stand in the light of the independent objective evidence of the lease of the Housing Commission unit. It is reasonable to infer from that evidence, and I do infer from the fact of the lease, the payment of rent and the obvious inference that Cerra took up possession of the Housing Commission unit that Cerra did in fact move into the Housing Commission flat on or about 22 November 1992. That accords with the probability, objectively considered. It is also supported by or consistent with other evidence. Moreover it is hardly likely that Cerra would have been permitted to be in effect an absentee tenant in public housing.

133 I find too that having thus ceased living at the property Cerra did not thereafter live there again. This finding accords with the probability that having established himself in the Housing Commission flat it was probable that he would not thereafter stay at the property. Why would he go back to living in such poor conditions when he had arranged other accommodation for which he was paying rent? The evidence provides no cogent reason for doing so. That he did not do so is supported by or consistent with Julie McKay's evidence that Cerra had left the property, that "he was gone and his possessions were gone". While she gave that as her observation on the day after Gloria died, and I do not necessarily find that she was wrong in that respect, for remembering that Gloria had been in hospital for several weeks before she died it is possible that Cerra may have been relocating himself, and it is also possible, having regard to the elapse of time, that she was describing what she observed on a not much later visit.

134 The above finding is also supported by and consistent with Wallace Roy's evidence that the property was unoccupied in September 1993, Grundy's evidence to the same effect (I accept as his evidence that the property was unoccupied and empty until near the time he left for Sydney), and Amos's evidence that after Cerra left, the property was abandoned, empty and unoccupied for in excess of twelve months.

135 In short then I have found that Cerra left the property at or about 22 November 1992 when he took up residence at his Housing Commission flat. It was submitted by the defendant that until then Cerra was in adverse possession of the property. Counsel for the plaintiffs did not submit to the contrary. On the facts, and on inferences reasonably to be drawn, the conclusion may have been open, on Julie McKay's evidence and having regard to Cerra's 26 October 1992 application to the Housing Commission for accommodation, that Cerra had abandoned possession by the time of Gloria's death. But no such submission was made, the plaintiffs being content to submit for abandonment from on or about 22 November 1992.

136 That leaves for consideration the defendant's submission that Cerra subsequently returned to the property and retook (or continued in) possession of the property. I reject the submission. It is unnecessary that I repeat my adverse views of the defendant and his evidence or of Hübl's evidence; insofar as their evidence stated or suggested that Cerra subsequently stayed at the property I reject it as a mixture of the false and speculative.

137 I am prepared to accept that from time to time Cerra returned to Clauscen Street to visit friends and that on occasions he visited the property. It is one thing to have visited the property, which he may have done out of curiosity or a measure of concern for its security. But I do not accept that he ever again physically stayed at the property; indeed I find he did not.

138 The evidence, which I accept, of Wallace Roy, Julie McKay, Grundy, Amos and Doyle tells to the contrary. The defendant's submission depends on an acceptance of evidence of the defendant and Hübl, but particularly of the defendant, as to Cerra staying at and attending at the property. To the extent that the defendant and Hübl actually deposed to Cerra staying overnight at the property, I reject it. I put it that way to distinguish such evidence from their speculative and hearsay evidence or evidence that was so vague, or based merely on belief, as to have no or little weight. Then, too, as to attendance at the property I find a measure of exaggeration. At the same time, as mentioned I accept because it is likely, the property being vacant, that on occasions when Cerra came to the street he went to the property and looked around. But in doing so Cerra did not resume possession of the property in the sense of being in adverse possession as understood by the law. That is so even if his interest was to see that the property was safe from squatters. I find that his occasional attendance at the property in 1992, 1993 and 1994 was never with the intention of taking possession of it and that he never did retake possession after leaving the property on or about 22 November 1992. His occasional attendances were quite passive and neutral in that sense; he never acted as an owner or positively asserted control of the property. I further reject the submission that he acted to claim or preserve the property for the Hearse family. It follows, in summary, that Cerra vacated, or abandoned, the property on or about 22 November 1992, and never resumed possession.

139 That conclusion renders critical the defendant's submission that Julie McKay and Philip Hearse were in possession of the property from the death of Gloria until squatters moved in, which I find was in 1994. Unless the defendant is correct in that submission his claim of adverse possession must fail because of the gap in possession that occurred when Cerra abandoned the property.

140 It is further to be noted that in fact the evidence did not establish continuous possession of the property from the death of Gloria until the defendant moved in in 1998. That is, even with the squatters I find continuous possession was not established.

The Hearse family and their attitude to having an interest in the property

141 One aspect under this heading which was pursued by counsel for the defendant is the understanding that Gloria's children had that Gloria was the birth child of Eileen.

142 As mentioned at [68] above, it was only after Gloria died that her children ascertained the truth. Upon going through Gloria's papers it was ascertained that she had been fostered and, as a result of searches and inquiries made over some time, that she had not been adopted.

143 In cross-examination, Julie McKay was asked if she had assumed, before and after Gloria died, that Gloria was entitled to the properly. She answered:

"We were never sure about that because of all the legal complications with my grandmother who when her husband died and she paid off the house, she paid it to a solicitor and he absconded with the title. So my grandmother was always under the impression that the house was not in her name and thought that she had no legal, you know, support with that. So I never assumed that my mother would get the house, I had no idea where that stood, I don't think it was my business to.

You're saying that your grandmother, Eileen Roy, had some doubt as to her entitlement because she had never been registered on title, is that right"? - - - That's right but her husband was."

144 Julie said that her grandmother (Eileen) always spoke about it and referred to there being letters from lawyers and receipts for payments in Gloria's papers.

145 To further questions Julie said that "we thought it was a possibility" that Gloria, as a daughter of Eileen, would be entitled to a share in Eileen's estate. But as to whether she and her siblings believed, when Gloria died, that they would be entitled to a share of the house, she said:

"I thought it could be a possibility. I didn't think it was definite. I thought that the whole thing with what happened with my grandmother and everything, I mean I actually never wanted really anything - I left home when I was 15, I didn't really want anything to do with any of that. So that as for assuming that we would be entitled to it, no. If it was possible well then, you know, that would've been okay. I didn't think we ever were."

146 Further on in cross-examination it was suggested to Julie McKay that the reason why she and Michael locked the doors when they left the property was that the Hearse family considered that the house was theirs or should be theirs, to which she answered "We didn't know, we had no idea". She was then asked whether at that point "you wanted to make sure that it would remain a possibility that the Hearse family would get the house", and she answered "We didn't have a ... plan of any description, we were just securing the property and left".

147 She said that she did not contact any child of Wallace John Roy to advise them of the house or its condition. She did not know them or even if they were alive. She had left the house when she was 15, did not want very much to do with them, and did not make it her business to chase these people "that had nothing in my life". Her brother Philip contacted them.

148 She said that in 1998 she and Philip saw solicitors, Secombs. Secombs wrote to them on 4 August 1998 referring to an attendance on 30 July 1998 and confirming that Secombs considered they did not have a legal right to claim ownership of the Clauscen Street property. The letter advised that if they were to arrange payment of the outstanding rates to the municipal council they would have the right to be noted in the rate books as owner of the property. I interpolate that this was a reference to a letter to Philip from the City of Yarra dated 9 July 1998 which advised that the Council was undertaking rate recovery action which may result in the sale of 38 Clauscen Street, and enclosed a statement showing a balance of $12,771.03 owing as arrears of rates, interest and legal fees. The letter from Secombs further noted that payment of rates would not give a legal entitlement to evict the present squatters, that there was a danger the descendants of Wallace John Roy may still have a legal claim to ownership of the property, and that they (the Hearses) would be obliged to occupy the premises adversely to the rights of the legal owner (if any) for a period of 15 years uninterrupted and exclusively to have a right to apply for a title by adverse possession. McKay said that she had understood the letter and that she did not want to act on the suggestion of occupying the premises adversely for 15 years to establish a right to the property. She was not interested in it and did not really discuss it a lot with her family. She did not know if her family contacted the Roys.

149 McKay said that she went with Philip to another solicitor, Brian J Weyman & Co, in or about September 2000 and who obtained advice from counsel, dated 15 September 2000, on the question whether they had enforceable rights to the property by adverse possession. She did not think they could make such a claim and was not really interested. The advice from counsel did not prompt her to take any step to enforce any Hearse rights against the property. She went with her brother to support him because he felt that they would have a good chance. She personally did not care either way. Finally, counsel asked whether from the death of Gloria in 1992 the family decided that they would make no attempt to contact the Roy family in relation to the property. McKay answered that they did not do very much about it at all. It was not that they did not make a deliberate decision not to contact the Roys, it was just that they did not do anything about it. They did not hope that with the passing of time the Hearses might gain rights in relation to the property, "we just wanted it to go away really".

150 I now refer to relevant evidence of Philip Hearse. In his affidavit he referred to meeting the defendant in Clauscen Street in September 2000 and to it becoming apparent that the defendant had moved into the property. The defendant asked him for $5,000 for cleaning the house up and forcing the squatters out. Philip said that he refused and told him to leave the house. Philip corrected this evidence in cross-examination: he said that he did not ask the defendant to leave, he told him that what he was doing was wrong, he was not welcome (at the property) trying "to grab onto something that wasn't rightfully his".

151 Philip said that that conversation prompted him to obtain legal advice to find out what rights the Hearse family had. As a result of the advice he took no further action. I interpolate that that would have been the advice from Brian Weyman & Co. However it was then that he decided to trace Eileen's relatives, for Weyman had told him that the property would pass down the blood line. He was aware of some relatives who lived in Queensland and he eventually made contact with Norman Roy.

152 Turning to the property itself, until he became aware of squatters being in the premises about a year or maybe a year and a half after his mother died, the property had been secured as far as he was concerned. The intention of securing it was to keep people out. He was asked whether the reason for keeping people out was because he and his family considered at that time that they had rights to the property. He agreed, and said that they presumed they should have some form of rights, particularly because of the belief that he was an actual grandson of Eileen. In 1992 he was of the view that his mother had probably been adopted. He said that the family did not actually actively start looking for legal rights until probably four to five years after their mother died, and it was probably mid or end of 1997 when he received phone calls from the local council and Yarra Valley Water chasing unpaid rates and bills that they then sought legal advice.

153 Philip said that they presumed that if they were blood relatives they had rights, but when they discovered they were not blood relatives they did not know what their rights were. He agreed that within a few months he knew that their mother was not a natural child of Eileen but he still had the view that she was probably an adopted child and that he had rights or potential rights because of that fact. He was asked whether that was the reason why his brother and sister secured the property, because he did not want anyone else taking possession of it and interfering with their rights, and answered:

"You could say that, yes. That wasn't - it wouldn't have been in their mind, it would be they wanted to make the place secure, so that's what would have been in their mind at the time."

He added that it would not have been a monetary thing, they would not be thinking of that as a monetary thing or anything like that. He understood that all members of the Hearse family at that time had a similar view to himself, that the family probably had rights in relation to the property. The family did discuss the issue, although meagrely at the time, it took a while for their mother's death to settle down because it dragged out all sorts of emotion in the siblings.

154 Then, after squatters moved in Philip referred to still driving past the property and stated:

"What it became is we kind of thought of mum's disposition in her life for whom we thought of the individuals that were staying in the property had nowhere else to go, had drug habits, and we thought if mum, she was up above looking down, that, you know, who are we to go there and throw someone in that position out, and it wasn't out of fear or anything like that, it was probably more out of sympathy than anything."

But even when the squatters moved in he still thought of it as a Hearse property or potential property. He made no attempt to get rid of the squatters.

155 Philip referred to receiving the letter of 9 July 1998 from the Council and to seeing Secombs with his sister. The advice received in July 1998 was that their only right would be taking up their mother's right because she was the one that was in occupation for a long period of time. The four siblings ultimately met and discussed what they would do, but they did not know how to sort it out. The squatters were still in the property, there were complaints from the residents, and they felt for the residents and the squatters. It was a mess that they did not know how to sort out.

156 Philip stated that the defendant was not in the premises when they went to Secombs. He was in the premises when they went to Brian Weyman.

157 By November 1998 Philip said that they knew that their mother was a foster child as distinct from an adopted child. He then sought to locate the Roys in Queensland and for this purpose wrote to the Registry of Births, Deaths and Marriages in Queensland for information with respect to the death of Wallace John Roy. Brian Weyman had advised to find the Queensland relatives as the property would pass on the bloodline, but the Queensland Registry would not provide information for privacy reasons. Philip said that it was weeks or maybe months before November 1998 that the defendant had gone into residence at the property. He based that on driving past the property and seeing the defendant's vehicle which was there virtually every night of the week. He did not see the defendant personally. A local shop keeper confirmed to him that the defendant was in residence at the property.

158 Philip was then asked some questions as to whether the Hearse family had intended to sell the property. He was referred to the statement in the document attached to Cerra's application for rental accommodation to the effect that the Hearse family were going to sell the home, and he denied saying that. The family did not have that in mind. He was asked whether in 1999 he had an intention of selling the property, and denied that, saying they still had not cleaned up the mess and did not know how to clean it up. He was asked whether he intended to retain the property to protect their rights and answered that they "had no idea what we were going to do". In the first place there was the emotional issue to worry about, they all had small children who they were concerned about and they were focused on working. The property was not their whole focus. Philip added in reference to the application for Housing Commission accommodation that he had not spoken to Cerra from way before his mother died and had never made any threats or told him to leave or anything like that. He had not had a conversation with Cerra prior to his mother's death, and when he was in the presence of his mother he would never talk to him. He did not like him. And he had not spoken to him since his mother's death.

159 Philip stated that it was "never a hope" that the Hearse family might be able to establish an entitlement to the property. The property was "never something that we hoped to obtain. We weren't looking for a monetary reward out of that. It was to clean up the mess that was in - the house was a mess. [They never] ... wanted the property for money, or anything like that".

160 He ultimately went to Brisbane and contacted Wallace Roy by going through the phone book and ringing the right number.

161 In re-examination Philip said that the defendant was not in occupation of the property when he saw Secombs. He first got in touch with Weyman in about early September 2000 which was approximately six weeks after he spoke to the defendant on the footpath.

162 Further, he did not do anything to act on the advice from Secombs. He did not make any payments of rates to the Council. The only thing he did after obtaining advice from Weyman was, as Weyman suggested, to locate the Roy relatives in Queensland as the property would follow the bloodline.

163 I have referred above (in dealing with Cerra's occupation) to the defendant having submitted that the Hearse family, or Julie McKay and Philip Hearse, possessed the property. Counsel developed the submission as follows.

164 When Gloria died her estate, meaning her children or some of them, commenced to adversely possess the property. To establish this counsel relied on the following matters. First, Philip's understanding that the property was secured immediately after Gloria's death. That was based on Philip's hearsay evidence that Michael had boarded up the back door and the front door was locked in the normal way, the purpose of which was to ensure that people did not get in unless they had a key. (Of course, Julie McKay deposed of her own knowledge as to locking the front door).

165 Secondly, Julie McKay's evidence that she had thought Gloria was adopted.

166 Thirdly, Philip's belief that squatters moved in about a year or a year and a half after Gloria died. Until then, as far as he was concerned the property had been secured, the intention being to keep people out, the reason being because his family presumed they had some form of rights in relation to the property.

167 Counsel submitted that in his evidence Philip was franker than Julie who conceded once she thought it a possibility that they would be entitled to a share but twice said she did not know or care. Counsel submitted that it was unlikely they had no idea as they initially thought Gloria was a natural child, then that she was adopted, and Philip at least presumed she would have had rights. The extent of their knowledge of rights on intestacy was not known but in part Philip based his view on Gloria being adopted. So, believing she was an adopted child and therefore might have rights "was the reason for them to board up the premises, exclude people from it, go in occasionally to move other things out or to check on the place but carry out the sort of approach which, in my submission, any absent landlord, particularly of premises of that condition would do: namely, keep an eye on it from time to time, board it up so that people can't easily get in because 'we're protecting what may turn out to be our rights in relation to it'".

168 Counsel acknowledged Philip's evidence that they allowed squatters to be there because of what he thought would have been his mother's view as to their presence.

169 Counsel submitted that Philip generally tried to tell the truth, but he was confused over dates and was confused as to the date and content about a conversation with the defendant. He further submitted that Philip had a negative disposition to the defendant which clouded his recollection. Counsel stated that in fairness he could only say that of Gloria's children, Julie McKay and Philip adversely possessed the property; there was only evidence from them and the rest was hearsay.

170 Finally, counsel submitted that Julie and Philip adversely possessed the property until such time as they lost physical control by the squatters taking over.

171 In response, counsel for the plaintiffs submitted that the "possession", the physical act of securing the house being that of Julie and Michael, was not adverse in the sense required by the law. What was missing, but what was required, was occupation of the property. The act of securing the property was not sufficient. What Julie and Michael did was perhaps the neighbourly thing, in removing their mother's possessions and securing the house. But they never intended to live there or let the property, they just left it. This was not how an occupying owner would be expected to have dealt with the property. Hence, following Cerra's abandonment and until squatters moved in there was no person in adverse possession of the property.

172 Simply put, the matters relied on by the defendant do not establish the requisite factual possession and intention to possess. Gloria's children did not deal with the property as an occupying owner would. All that was done was to visit the property several times for the purpose of clearing out their mother's possessions and tidying the place up inside and on leaving to shut the door. The act of shutting the house, and in the process locking the doors, is equivocal in the sense that it is the act of an ordinary prudent person whether or not the owner or occupier. The front door had a lock and there was a suggestion the back door was boarded up but it is not established by evidence of personal knowledge that it was boarded up. It seems, however, that the premises were not maintained secure. Grundy found the front door unlocked, Hübl entered several times and so apparently did Cerra although it is not known whether he had a key. In truth, Gloria's children let the matter of the property drift without forming, or having the interest to form, a clear view, let alone assert a possessory right in relation to it.

173 I reject counsel's criticism of Julie McKay, and repeat my assessment of her. The submission that her evidence lacked frankness was bizarre and outrageous. The submission meant that she was not candid or honest.

174 Having had the benefit of observing her give evidence it was manifest that she did so with conviction, genuine sincerity and honesty. I do not doubt the genuineness of all that she said concerning her attitude to the property and as to any interest in it. The submission that her evidence lacked frankness is rejected. There was no proper basis upon which counsel could have made such an extreme submission. A submission of a lack of frankness is a very severe criticism and there was no reasonable basis for it to be made. In my view it reflected the desperate nature of counsel's position, as he apprehended it, and understandably so.

175 As to Philip Hearse and his having a view as to he and his siblings having a possible right in relation to the property, I consider that that was more in the nature of something that might be possible but the possibility of that led only to slow and desultory action in seeking advice and was not reflected in any step that he took in relation to the property, let alone taking possession of it. It is further to be remembered that the other siblings did not give evidence. In the end counsel's submission that the Hearse family, or Julie McKay and Philip Hearse, adversely possessed the property from Gloria's death until squatters took possession, depending as it did upon an acceptance of Philip's evidence and taking a particular view of it, is rejected.

176 I stated above that I find that squatters first occupied the property in 1994. I find that to be the probability on the evidence of Grundy (as to which I accept his evidence that the time was in 1994 near when he went to Sydney), Julie McKay (as to her latest visit being nine and possibly 18 months after Gloria died), and Wallace Roy (as to the property being unoccupied in September 1993). Hübl estimated about late 1993; having regard to my view of her evidence as seeking to assist the defendant I take that as an indicator consistent with the relevant year being 1994. Amos' evidence as to 1992/1993 was hearsay. I consider that while I have had regard to the evidence of all the witnesses, it is not necessary to further refer to the evidence. I am well satisfied, on balance and having regard to my findings concerning the witnesses, that squatters first occupied the property in 1994 at a time I would estimate to be around mid year.

177 I find that there was a series of squatters until shortly before the defendant commenced to occupy the property in May 1998.

178 The question that arises is whether there was a continuity in the possession of the squatters within the meaning of the authorities referred to earlier.

179 Counsel for the defendant submitted that there was "no significant interval between the various squatters" and that the defendant "took over possession of the premises in about 1997/1998 without again there being any significant gap between the squatters ... and himself coming in". He referred to Philip Hearse having described the squatting as "a rotating thing" but conceded that there was going to be a gap between one squatter and the next, that there would be "some hiatus". He submitted that the law allowed "some reasonable interval". So, regarding the matter overall, once squatters commenced occupation they were there "for all the entire period" until the defendant commenced occupation.

180 The evidence did not permit the defendant's counsel to be more precise than this. That is, it was open on the evidence that there were gaps in the occupation of squatters. Not only did the evidence not exclude that there were gaps, but on the balance of probabilities I am satisfied, as counsel conceded, that there were such gaps. No witness could positively assert the contrary. Beyond the fact of there being gaps, the extent of any gap is speculation. The conclusion in these circumstances is, and I so find, that the evidence did not establish that there was a continuity of possession from one squatter to another.

181 Hence, insofar as the possession of squatters was relied upon by the defendant, subsequent to the possession of the first squatter that continuity was broken. It is likely that the first such break or gap is likely to have been in 1994 or possibly even 1995 when the first squatter left, having regard to the nature of the occupation, but the evidence does not permit a more precise finding. And, if there was not then a gap there would have been subsequently. All I can conclude (as I have) is that there was a gap which stopped time running.

182 I referred earlier to Norman Roy having last visited the property in 1972. He deposed that his mother had advised him of Gloria's death shortly after she died. Then, in March 2004 he received a letter from Philip Hearse asking him if he was the son of Wallace John Roy and suggesting he contact him, which he did. Philip Hearse told him that he had been past their grandmother's place and spoken to Michael Lagona and asked him to leave the property as he was not entitled to be there. Lagona had requested $5,000 to move out, which Philip refused. Philip told Norman that he (Norman) should have a clear title to the property.

183 About a week or two after, and as a result of, that conversation Norman Roy contacted the plaintiffs' solicitors. Norman deposed that until the conversation with Philip Hearse it had not occurred to him that he or his family might have a legal interest in the property. He believed that his family had assumed that the Hearse family might have a legal interest in the property.

184 Subsequently, on 15 February 2006, when the plaintiffs had obtained letters of administration and become registered proprietors of the property, their solicitors wrote to the defendant demanding that he deliver up vacant possession of the property failing which proceedings for recovery would be commenced. The defendant did not respond and remained in possession.

185 As to Wallace Roy, I referred earlier (at [82]-[84]) to his evidence concerning his visit to the property in 1993, and I refer below to his evidence concerning his visit in 2002. For the moment I note that in his cross-examination Wallace Roy was asked why his family took no action to ascertain their rights in relation to the property between the death of Eileen in 1983 and 2004 when they contacted solicitors. He said that was "probably because we had the general understanding that Gloria was living there and when Gloria died we had the understanding that Michael Hearse was looking after the property". He explained that when he visited the property in 1993 it "was not being lived in and the veranda had fallen down. So I was assuming that nobody was actually living in the property and that Michael Hearse who was the person that I would have had any contact with, and I believe he was the one who contacted my mother about ... Gloria's death, would have been in control of the property". As to whether the disrepair he saw in 1993 suggested that Michael Hearse was not looking after the "fabric" of the property, he said "But that was very soon after Gloria died". In the period between 1983 and 2004 he did not contemplate that Gloria and her family might have some right to the property.

186 Finally, I note Wallace Roy's evidence that the plaintiffs did not give the defendant permission to reside at the property.

187 In this section I refer to evidence of the defendant as to his occupation of, and works he has carried out to, the property. In doing so I also refer to evidence of Wallace Roy and Philip Hearse and make findings as to differences between their evidence and that of the defendant.

188 At [100]-[103] above I refer to the defendant's evidence on the issue of Cerra's occupation of the property following Gloria's death. I continue the reference to his evidence from that point.

189 Having stated that in 1994, after Cerra moved out, squatters had started staying at the house, the defendant explained that by mid-1994 he was "calling past" the property at least twice a week, when he was working locally, which he did consistently. He referred to a young woman with an infant and a dog who was at the property for approximately six months. He told her that she should not live there with a child. The house had no services and was in an appalling condition.

190 Next, the defendant said, two men about 30 and two women in their 20s squatted in the house. Over the next few years there was a series of squatters. The defendant said that he called past the house a couple of times a week, and from time to time called in and explained who he was and tried to get the squatters to undertake to respect the house and neighbours.

191 The defendant said that in 1996 he telephoned Philip Hearse who he "thought must have the legal right to the property" and asked him to do something about the squatters. Hearse said that he could not do anything. The defendant said that he asked Philip if he could buy the house from him if he didn't care about it, but Philip replied that it could not be bought from anyone. The defendant said that he told Philip that if he would not do anything, and if he (the defendant) could not buy the property, he was going to step in and restore it. The defendant said that Philip "warned me not to, but he was very elusive as to what the situation with the property was".

192 In cross-examination on this conversation the defendant said that he believed his telephone call to Philip "was a little earlier than '99". He had queried Philip about the squatters and asked him who he would need to contact to purchase the property. He could not recall Philip saying that if he wanted to buy it, he could bid at an auction. The defendant said that his main concern was to try to get an understanding with the squatters to try to have them removed but Philip said that he could do nothing about it. He denied that the reason for contacting Philip was to see if he could buy the property. Philip, he said, may have been able to give him an understanding of what was going on.

193 It is convenient at this point to note Philip's evidence on this conversation. He denied having spoken to the defendant in 1996. Rather, he had two telephone conversations with the defendant in 1999; they were the only telephone discussions he had with the defendant concerning the property. The defendant rang him and basically asked if he could purchase the property. He told the defendant he could purchase it at auction if it was put up for sale. The defendant did not say he had been renovating the property and did not ask him to do anything about squatters.

194 In cross-examination it was put to Philip that the defendant had rung him in early 1996 and asked him to do something about the squatters. Philip answered that he had a conversation in 2000 or 1999, not 1996, and that the defendant said that "there were squatters in there and he said he wanted to purchase the property because he wanted to live where he grew up". Philip denied the defendant suggested that he (Philip) should do something about the squatters who were there, Philip answering that "he didn't suggest anything like that. His purpose ... was to ask if he could purchase the property, which he was told no". Philip denied that the defendant said that he could buy the house if he (Philip) didn't care about it and that he (Philip) replied that the property could not be bought from anyone. He said that if it went up for sale the defendant could buy it at auction. He added that the conversation was "very short"; he did not appreciate the call and he was "very blunt". He further denied that the defendant stated that if he (Philip) wouldn't do anything and he couldn't buy it, he (the defendant) was going to step in and restore it.

195 I accept Philip Hearse's evidence as to the time and content of the telephone conversation. Although Philip was cross-examined on the basis of there having been one conversation I accept that there were two conversations as Philip deposed in his affidavit. Accepting as I do that the conversations occurred in 1999 but at times I cannot more precisely determine, by 1999 the defendant had rid the property of the squatters and moved in himself. Except as an historical fact there was no reason for him to refer to the removal of squatters, whereas it was understandable and likely that the defendant - who by then was living at the property - was desirous of purchasing the property. I consider, and find, that the defendant deliberately placed the conversation back in 1996 and invented the content - in particular with its reference to squatters being "in there" and requesting assistance and his intention to move in - in an attempt to bolster his case.

196 Returning to the defendant's affidavit evidence, he said that in 1997 after three and a half years of squatters coming and going and destroying the house and neighbourhood, and no proprietor stepping in, the house became badly run down. Floors had been ripped up for firewood, the roof leaked and the ceiling gave way. He tried to repair the roof, and painted the front of the house while squatters were there because of graffiti.

197 In 1997 he told the squatters to relocate which they finally did. He then boarded up the front window and door and back veranda and commenced work cleaning up and renovating. He had a generator for power; I interpolate that (as mentioned below) he purchased the generator on 23 August 1998. He then deposed that "squatters occupied the house continuously from the time I first saw them living there until I moved in myself".

198 It is immediately to be noted that in his affidavit the defendant did not state when he "moved in". It would be reasonable to infer from the affidavit that he moved in in 1997 for the very next sentence commenced "Later in 1997". However in cross-examination the defendant said that he started staying at the property overnight and living there full-time in 1998. In 1998 he started bringing his belongings there from his flat in Thornbury. That was after the smell had been aerated from the house, "it needed much efforts of cleaning and clearing before anyone could stay there or could be fit to stay there". He deposed that when he moved in the house had very few floorboards, and no proper bathroom, kitchen, bedroom, electricity or running water. He bought a generator on 23 August 1998 which he used for power until he commenced using power from the neighbour (Doyle) at number 40; he also used the neighbour's water. I interpolate that he used Doyle's power until the electricity was re-connected in about July 2000.

199 Returning to the defendant's account in his affidavit, he said that "Later in 1997" he, and friends he paid, started removing the remaining floorboards and removing the soil and rubbish underneath. He said that the cost of timber to board up the house, new locks and rubbish removal was approximately $5,000.

200 In 1998 he continued taking up the floorboards and removing soil and commenced re-stumping, installed air vents, and removed ivy that had grown inside, at a cost of approximately $7,500. He also arranged with Doyle to have access to his power.

201 In 1999 he removed the roof from the front part of the house, which included the room he was sleeping in, the hallway and bathroom. He aerated the house and replaced the roof at the front, and commenced stripping paint and plaster from the walls and ceiling at the front. The hallway needed major damp repairs and he dug earth out for ventilation. A huge gum tree at the rear and other trees were cut down to clear the yard, and in 1999 and 2000 he replaced the rear fence with a new treated pine fence; these works cost about $3,000. He completely cleaned out the front of the house and replaced the ceiling plaster. Taking out and replacing plaster cost about $8,000 and tipping fees for the year were about $3,000.

202 Then, in mid-2000 the council warned that unless the defendant paid back rates the house could be sold for rate recovery. He agreed to repay $5,000 towards arrears and be responsible for council rates. He also had to pay back water rates of about $3,000 to have the water reconnected.

203 The defendant then deposed that on 16 September 2000 Wallace Roy came to his home, said that his grandfather had lived there, and wanted to see where his father had lived. I interpolate that the conversation to which the defendant then deposed is the conversation which constitutes the "representation" alleged by the defendant and referred to at [27](f) and (i) above. Continuing in his affidavit the defendant deposed that Wallace Roy:

" ... quizzed me to see if I was family. I said yes, in ways, but only to the Gloria Hearse side. He said he was unaware his grandmother had adopted a daughter and he had never heard of Gloria or her sons Phillip and Michael. He said he did not understand, he did not know of Gloria. I asked him who are you if you don't know Gloria? He said his family had once lived there. I told him I had paid the water rates, that had needed to be paid and council rates that the council said needed to be paid or they would sell the property. I said I had been paying bills. I quizzed him about the ownership of the property and he replied that his father grew up there. I asked who I could approach to buy the property. He said not to worry about buying the property. I could reside there as long as I wanted, indefinitely. He could see the Baltic pine floor in the hall I had repaired and the plasterboard ceiling I was starting to put up. He also said that good things take a great deal of time, don't stop the good work, feel safe, don't worry and that those who worked hard in life would be rewarded. He told me that he was just down for the weekend to see the Olympic game on 17 September 2000 and that he was staying at the Nova Sofitel Motel, that he could reward himself when he wanted as he was very well off, having a good life in Queensland with his family. I gave him my card saying he could call me anytime and he also gave me his number. I told him that I would restore Gloria's to full originality, Victorian, throughout. He told me that seeing for himself he was happy, and that he was in Melbourne from time to time and may come back. I felt I could trust him. As he boosted my feelings, I started to work harder than ever before on the house."

204 Before dealing with this evidence and making findings as to it, it is convenient, for contextual purposes, to note the defendant's evidence of the works he carried out in and from 2000 to 2005. He continued by deposing that when Wallace Roy visited in September 2000 he had replaced three sheets of tin in the front of the roof, which was visible from the street, and cleaned the front brickwork in preparation for repointing. He then deposed that:

"I did the bulk of the restoration of the house after Wallace Roy gave me the confidence to go ahead."

205 He then proceeded, in the balance of his affidavit, to describe the works he carried out following Wallace Roy's visit, until 2005. In summary, he stated:

• removed front fence and built a new fence and letter box

• removed plumbing and concrete floor from the bathroom, and cleaned the bathroom.

• organised plumbing for new bathroom/toilet, and new water main and pipes to kitchen

• converted second bedroom to bathroom with toilet, bath and shower

• new light switches in all rooms and new down lights, a heat lamp and fan for bathroom

• installed a laundry area and replaced old internal doors with new doors

• erected the front fence in the old original steel picket style, with letterbox

• installed French doors to back of house for a new rear entrance with matching windows either side and mini corrugated iron panels to seal the installation

• removed earth and constructed brick landing and steps at rear

• electrician installed electric power to house, new lighting, power points; also associated plastering work.

• plumber installed new tin roof at back of home with flashing to chimneys

206 The defendant deposed that from 1997 he had spent approximately $114,000 on materials renovating the house. Other tradesmen had done work and he had repaid them by providing his labour as a bricklayer. In his oral evidence in chief he estimated the value of his labour to be approximately $60,000.

207 Then, as to council rates, the defendant stated that in November 2005 he inquired of the council why he had not received the rates notice and was advised that his name was no longer on the rates and his payment would not be accepted. Prior to then he had made payments over the telephone, the last of which, unknown to him, being under Wallace Roy's name. By September 2005 he had paid $13,050 in rates to the City of Yarra. A letter from the council records those payments as having been made between July 2000 for $5,000 (arrears having accrued) and September 2005 for $500.

208 The defendant concluded his affidavit with the statement that:

"Over the time since I had seen Wallace Roy in September 2000 I had a strong belief that all my efforts and outlay were safe because Wallace Roy gave me the confidence to do it all understanding that it was okay for me to be here."

209 It is convenient to note that in his affidavit in reply Wallace Roy disputed a deal of the defendant's evidence as to work he carried out, based on what he observed on his visit to the property in July 2002. Wallace Roy deposed that at that time only the small front veranda roof had been repaired and the bricks on the front of the house had been repointed. The defendant told him that he had taken up a small section of the floor in the hallway because it had rotted and Wallace Roy saw this section. The rest of the floor was still there and seemed in serviceable condition. The walls and ceilings were in original condition. In cross-examination Wallace Roy said that everything he saw in the house looked the same as when he visited in 1972. Continuing with his affidavit, he denied that the "modifications and improvements" alleged to have been carried out in 1999 had been carried out when he visited in 2002, and otherwise denied the carrying out of the works alleged to the time of that visit. He added that when (in July 2002) the defendant showed him through the property, the defendant made a point of telling him what work he had done. As to the flooring taken up, in cross-examination Wallace Roy said that the defendant showed him two boards he had taken up. As to the works alleged in 2001, Wallace Roy stated that the defendant did not mention restumping or new floors or work to the internal walls or plumbing.

210 In cross-examination Wallace Roy was asked some, but not many, questions about this evidence. Regarding the matter overall, this part of his evidence takes its place in a context. Part of that is a concern for the reliability of the defendant's account. Another aspect is that when Wallace Roy visited the property in July 2002 he did not do so for the purpose of ascertaining what improvements the defendant had carried out. Further, and without doubting the genuineness of Wallace Roy's recollection and impression, the defendant may not have mentioned every item of work carried out. Moreover, the expert evidence of Lorich and Arends to which I refer below establishes the scope of the works carried out.

211 I now return to the matter of the defendant's evidence of a conversation with Wallace Roy on 16 September 2000.

212 Cross-examination of the defendant on this conversation commenced with the puttage of Wallace Roy's evidence that he was not in Melbourne on 16 September 2000, and whether the defendant accepted that as the fact. The defendant answered that it was "very hard to pinpoint the exact date" but Wallace Roy mentioned "a certain Olympic event that was happening in Melbourne, and that was his reason for being here". He believed "it was that period, the time of the Olympic year" but he "may have a ... misunderstanding on the date". He did not lie about the date. When pressed again as to specific recall of the conversation in his affidavit he said "I recall it strongly because it was the Olympic year and he was following a soccer team that was playing in Melbourne and he'd come down from Queensland to ... see that game". When asked if he had confused the conversation with the conversation he'd had with Philip Hearse (referred to below), the defendant said he had "a strong understanding that he was down in Melbourne in the Olympic Year".

213 It is to be noted that in the course of this examination the cross-examiner drew the defendant's attention to the documentary support for Wallace Roy's evidence that he was not in Melbourne in September 2000 and that he was in Melbourne in July 2002. The defendant said that he remembered he had met Wallace Roy "one time" at the property.

214 As to the content of the conversation, the defendant deposed as follows. He agreed Wallace Roy made it clear that he had come to see the ancestral home; that he (the defendant) explained his childhood contact with Gloria; that he (the defendant) said he helped the squatters move; that Wallace Roy asked who had given him permission to be in the property, and that he (the defendant) would have said that Gloria gave permission.

215 Then, as to Wallace Roy giving him encouragement to carry on with works, Wallace Roy did not say he was an owner, or part owner of the property. But he did say to keep doing the good work, one day it would be the defendant's. The following evidence was then given:

"What I suggest to you, Mr Lagona, is you're making that conversation up to substantiate part of your case now that you spent all this money on this house in return for the belief engendered by him that you would somehow acquire ownership of the property, isn't that your case or part of your case? You don't know? - - - It was hurting me to see the way the property had become and hurting not just myself, my siblings and that is the reason why I did go back there, just to see how it had become and in some aspects, too, the neighbourhood, how it had become, so just to settle things there.

What gave you the encouragement to spend money and do work on this property, Mr Lagona, was the fact that you saw your opportunity to try and grab this house and keep it for as long as possible, isn't that the reason? - - - The rightful reason is giving back a little bit of what it give to me when I was a child.

All right, well perhaps I can understand that and that's a reason why you've done what you've done, isn't it? - - - Yes.

Not because of anything that Wallace Roy has said to you, this is because you've got this deep feeling that because of what's happened in this house you feel some obligation to keep the house and maintain improvement, that's the real reason, isn't it? Is there an answer to the question? - - - The real reason? Yes.

As part of that you've seen an opportunity to acquire some land for yourself, hadn't you? - - - It wasn't an opportunity, it was just the time and place where the property needed that attention.

Come 2000 to 2002 you'd been doing some work to improve the property. You know as a fact that you are not the owner of that property, don't you? - - - Yes.

...

MR PHILLIPS: I will rephrase the question. (To witness) You knew you weren't the owner of the property and you didn't know that Wallace Roy was not the owner of the property, did you? - - - He said his family had once lived there.

So, in carrying out this work at any time someone could have come to No. 38 Clauscen Street and said 'I am the owner', couldn't they? - - - Could have.

Could have if that happened. That was a risk you were prepared to take, wasn't it? You say on your evidence that you've spent over $114,000 on materials and upwards of $60,000 in labour to improve 38 Clauscen Street, that's all done with a purpose in mind, namely for you to create a home for yourself, do you agree with that? - - - Yes.

You were hoping, weren't you, that as more and more time passed by the chances of this property remaining your home for the rest of your life would increase, do you agree with that? - - - Maybe true."

[Then, after stating that he had moved in when the squatters moved out, the evidence continued]:

"What I'm putting to you, Mr Lagona, is that thereafter you have taken a risk that all this money you have spent on all the property and the labour you've put into it, might be wasted if the true owner came along and said, this is my house and asked you to leave. Do you agree with that? - - - Whenever you spend money it's a risk. Spending money anywhere is a risk.

Yes, but you took a gamble didn't you that whilst you were there spending this money, doing the work, the true owner would come along and ask you to leave? - - - I didn't believe there was any true owner.

Do you say you seriously believed that no one would come along and ask you to leave this property? - - - Yes.

That's the whole reason for what you were doing, wasn't it? You were taking a gamble that the longer you stayed there, the more work you did, the chances of you making this place your own home would increase.

HIS HONOUR: Was that a question or a comment, Mr Phillips.

MR PHILLIPS: I'm sorry, Your Honour, do you agree with that, Mr Lagona? - - - Yes."

216 As there is substantial dispute as to the Wallace Roy conversation it is convenient to now refer to Wallace Roy's evidence and make findings as to the conversation.

217 Wallace Roy deposed that he visited the property on 26 July 2002 when he was in Melbourne for a conference. This was his first visit to the property after his visit on 19 September 1993. Further, in an affidavit in reply he deposed that he was not in Melbourne in 2000 at all. In additional oral evidence in chief he deposed to his being in Queensland in September 2000, a fact which I accept as correct; that is, he could not have been in Melbourne when the defendant said he was. He also gave evidence as to his attendance at the conference held in Melbourne on 25 and 26 July 2002, which evidence I accept. Wallace Roy said that this time (in 2002) he:

"... noticed that the small roof over the front landing had been repaired and the brickwork had been re-pointed. When I knocked on the front door, the defendant opened the door. He was visibly shocked when I told him I was 'Wallace Roy'. I told him I had come to look at the house where my father had grown up. The defendant showed me the repairs he was doing to the hallway floor and told me that he had grown up in Clauscen Street. He said he had played in the house as a child with Gloria's children. The defendant told me that he had moved into the Property with a group of 'bikers' and that he had later persuaded them to move out but he had remained in the Property. As far as I could ascertain, only the defendant was at the Property when I visited."

Wallace Roy added that the plaintiffs had not given the defendant any permission to enter into and occupy the property.

218 Wallace Roy amplified this evidence in an affidavit he swore in reply to the defendant's affidavit. In rejecting the defendant's allegation that he was at the property on 16 September 2000 and that he was in Melbourne to see the Olympic game on 17 September 2000, Wallace Roy deposed that on his 2002 visit he attended an AFL match at the MCG to watch Brisbane play and a soccer demonstration game which involved Brazil, and that he did not come to Melbourne during the Sydney Olympics to watch a soccer match. He did attend a soccer match in Brisbane during the 2000 Olympic Games and saw Cameroon play. He continued:

"The defendant told me that, as a child, he had contact with Gloria Hearse and her children. He made a big deal out of the way he moved into the Property when the last lot of squatters were there. He said that 'bikies' or 'druggies' were squatting at the house at the time he moved in. I most certainly did not say or in any way insinuate that it was alright for the defendant to stay in the house, either for a definite period or an indefinite period. I did not discuss ownership or occupation with the house with him except when I asked him who had given him permission to live there. The defendant could not answer my question. He said that he knew Gloria Hearse and her children. I said that I had come to see the house where my father grew up and there was some small talk about social things such as the conference I was attending and the sport I was going to see whilst I was in Melbourne."

219 Further on in the affidavit in reply he deposed, in relation to his conversation with the defendant in July 2002, that when the defendant:

"... first introduced himself to me I thought he was Michael Hearse. I knew of Gloria Hearse and her children as Gloria and Michael had holidayed at my parents' house in Brisbane when I was about 10 years old. Eileen Roy kept in communication with our family over the years and had often written about Gloria Hearse and her children. Again, I state quite categorically that I did not tell the defendant he could stay at the property indefinitely and I did not suggest or say to him that he was not to worry about buying the Property."

220 He concluded his affidavit in reply with the statement that at the meeting in July 2002:

"I did not discuss the ownership of the house with him and I did not, in any way, offer or suggest to him the notion that it was alright for him to live in the house."

221 In cross-examination upon this evidence it was put to Wallace Roy that the defendant had not mentioned anything about "bikies"; Wallace Roy answered that "he definitely said bikies and druggies". As to the suggestion that he told the defendant that he was pleased with the renovation works and the defendant should continue with them and could remain there indefinitely he answered "Absolutely not". He agreed that at that time he had no knowledge of any entitlement of himself or his family to the property. He denied that he encouraged the defendant to continue the work he had been doing. He repeated that when he told the defendant who he was the defendant was shocked, he had a facial expression showing shock. Initially when the defendant opened the door and said he was Michael he thought he was Michael Hearse and that when he said he was Michael Lagona, Wallace Roy said "Oh, you're not Michael Hearse". Wallace Roy said that he had not previously heard of the Lagona family. It was within fifteen or twenty seconds of meeting the defendant that he said his name was Lagona.

222 Wallace Roy was asked if he said anything to the defendant which would discourage him from continuing with what he was doing. He answered that they chatted about football and his conference "apart from me asking him who gave him permission to live in the house". In answer to him the defendant "talked about living in the street as a child and knowing Gloria's children and was not very forthcoming".

223 Counsel for the defendant proceeded to further put the defendant's evidence of the conversation to Wallace Roy. He commenced with the defendant's evidence that Wallace Roy said he was unaware his grandmother had an adopted daughter and had never heard of Gloria or her sons Philip and Michael; in answer Wallace Roy explained that he knew Gloria because her children had been to their home in Queensland with Eileen, and knew of Gloria as his father had talked about his foster sister. Then, as to whether the defendant said he had paid the water rates and council rates or the property would be sold, Wallace Roy denied that he said that. As to whether the defendant quizzed him on ownership of the property, Wallace Roy denied this, but agreed he had said that his father grew up there. As to whether the defendant asked him who he could approach to buy the property and whether Wallace Roy said not to worry about buying the property, Wallace Roy answered that "He did not ask me that at all". Nor did he tell the defendant he could reside there as long as he wanted. As to whether he could see the Baltic pine floor in the hall the defendant had repaired and the plasterboard ceiling he was starting to put up, Wallace Roy said that the defendant showed him two boards he had pulled up in the hallway which he said were rotten. There was a hole where the boards had been pulled up; they had not been replaced. And the defendant said nothing about the ceiling. Wallace Roy said that when he looked through the house it looked the same as it did in 1972.

224 Next, as to whether he said to the defendant that good things take a great deal of time, don't stop the good work, feel safe, don't worry and those who worked hard in life would be rewarded, Wallace Roy answered that he said "None of that". Then, as to whether he told the defendant that he was down for the weekend to see the Olympic Games and was staying at the Nova Sofitel Motel, Wallace Roy denied each aspect. As to whether he said that he (Wallace Roy) could reward himself when he wanted as he was very well off, having a good life in Queensland with his family, Wallace Roy answered that he "didn't even say that and I in no way consider myself well off, I'm a teacher on a basic salary or was a teacher on a basic salary". Wallace Roy agreed that the defendant gave him his card; he could not recall if he gave him his telephone number although he may have. Then, Wallace Roy denied that the defendant said he would restore Gloria's house to full originality, Victorian, throughout. Nor did he say that seeing the defendant was happy and that he was in Melbourne from time to time he might come back.

225 I accept Wallace Roy's evidence as to the time of occurrence and content of this conversation. In my view the defendant's evidence that the conversation occurred in 2000 and as to the content (where it differs with Wallace Roy's evidence) was false, and deliberately so. In his evidence he engaged in fantasy such as inventing Wallace Roy saying that he was very well off, and that the defendant could reside at the property indefinitely, to mention two matters only. I find that he manufactured a conversation to suit his case, as he saw it. One aspect of that was to place the conversation back in September 2000 so as to place the plaintiffs' alleged "representation" at an early time in the defendant's undertaking of labour and expenditures on the house. Another aspect was to have Wallace Roy encouraging him to continue with improvements.

226 I further find that the defendant had a conversation with Philip Hearse in September 2000. Philip deposed to this conversation in his affidavit. That affidavit was sworn subsequent to the defendant's affidavit. In his affidavit the defendant had not referred to the conversation with Philip Hearse in 2000. Indeed in this context the only conversation with Philip to which he referred was that discussed above, which in his affidavit the defendant said occurred "In early 1996" and which I have found occurred in 1999. I further note that the defendant did not swear an affidavit in reply to Philip Hearse's affidavit or indeed any subsequent affidavit filed by the plaintiffs.

227 Turning then to Philip Hearse's evidence as to this conversation in his affidavit, he deposed that in about September 2000 he met the defendant for the first time in many years. This was about six months after the last of the two telephone conversations in 1999; these are referred to above. What happened was that in the course of his employment he was driving down Clauscen Street, and saw the defendant outside the property. He stopped and had a conversation with him. It became apparent to Philip that the defendant had moved into the property. The defendant asked him for $5,000 for cleaning the house up and forcing the squatters out. Philip refused and told the defendant to leave the house. This meeting prompted Philip to obtain legal advice. That, I interpolate, was from Brian Weyman. As a result of that advice he took no action. Rather, he decided to trace Eileen Roy's relatives.

228 In cross-examination on this meeting Philip deposed that he did not ask the defendant to leave the property, "I told him what he was doing was wrong". He "told him in specific terms that he's not welcome there and he's - you know, he's trying to grab onto something that wasn't rightfully his".

229 I now refer to the defendant's evidence as to this conversation. He did not refer to the conversation in his oral evidence in chief; nor, as mentioned above, did he depose to it in an affidavit. In cross-examination he agreed he spoke to Philip Hearse at the property in 2000. He said that he would not have asked for money for getting rid of the squatters, but he agreed he asked for $5,000 for cleaning the property out. As to whether Philip denied paying he said that Philip could not understand why he should be the one to pay, but he was happy to see it getting cleaned up. He would not have said he had stayed at the property for six weeks.

230 While not overlooking the difference in Philip's account as to whether he told the defendant to leave the property, although his evidence in cross-examination seems tantamount to having done so, I accept Philip's account of this conversation. The request for $5,000 is consistent with the defendant's character as I assessed it, in asserting himself in the property although he knew he had no rights in relation to it. Further, the conversation as Philip recounted accords with the likelihood of his displeasure with the defendant, and which I find was the fact.

231 In this section I deal with the scope of the works carried out by the defendant, and their cost or value. As to the defendant's evidence on these matters, I have thus far referred to his affidavit evidence. He also gave relevant evidence in oral evidence in chief and cross-examination. In the oral evidence in chief the defendant described the works, and the time or period when particular items or areas of work were carried out, by reference to photographs which depicted the property, its condition and works carried out. The photographs are included in the defendant's Court Book[21]. Lorich referred to the photographs in his evidence.

232 While I have regard to the above evidence, it is not necessary to set it out. I have the assistance of the evidence of Lorich and Arends which identifies the scope of the works carried out, respectively opines as to the cost or value thereof, and other matters.

233 I referred earlier to the defendant's evidence that the materials cost was $114,000. In his oral evidence in chief he estimated the value of his labour as $60,000, being his estimate of the overall value of the labour he provided by way of repayment to tradesmen who did work at the property; he did "a project" for a plumber and two "projects" for a carpenter. He provided no time-sheet, diary or other record that might substantiate this claim.

234 I accept that the photographs truly record what they depict but I consider that the year of taking, subsequently endorsed, is rather more approximate than precise. That is particularly so with the photographs said to have been taken in 1997/1998. That is because it was in the defendant's interest to have his possession commence at the earliest time, and the defendant's lack of credit and reliability.

235 The defendant made no application for a planning permit or a building permit in respect of the works or any part thereof. Nor, before this proceeding was commenced, had he had any plans drawn. The defendant deposed that he believed permits were not necessary "to refurbish a property cosmetically".

236 The defendant agreed that the council has served him with a notice in respect of the extension to the rear of the dwelling. I interpolate that the sequence of events was this. On 20 April 2007 the property was inspected by the building inspector of the City of Yarra. Then, on 23 April 2007 the City of Yarra sent the defendant a letter which required him to show cause why building work carried out without a permit should not be removed.

237 The defendant further agreed that in 2000 and without obtaining a permit to do so, he had built a garage façade on the rear laneway boundary (consisting of two brick piers and bricks across the top) at which he planned to install a roller door. On becoming aware of this structure the council had served on him a notice requiring demolition, and he duly demolished the structure.

238 In respect of the works performed the defendant received:

(a) two certificates of electrical compliance respectively dated 11 July 2000 (for connecting power to the house, the date of completion of work being stated to be 11 July 2000) and 19 July 2008 (for installation of lights and power points, the date of completion of work being stated to be 18 July 2008);

(b) a plumbing compliance certificate dated 26 July 2004 for sewer works, connecting hot/cold water in bathroom, and installing colorbond guttering and roofing on back of the house. By a separate letter the plumber stated that the value of those works was $15,000. The defendant deposed that he paid that by provision of his labour. The plumber did not give evidence, and no evidence was given which substantiated how the value of $15,000 was arrived at. The defendant simply asserted that "it easily comes to that amount".

These certificates and the plumber's letter were tendered in the defendant's Court Book.

239 The defendant relied upon a number of invoices for tip fees and materials in substantiation of his costs. These too are included in the defendant's Court Book. The earliest tip fee is dated 24 November 1999 and the earliest invoice for materials is dated 3 May 1998, in each case being in the form of a cash register imprint recording the payment. The defendant deposed that all of the invoices related to works at the property. He said that he had, but had lost, documents for other payments.

240 In cross-examination on these invoices the defendant stated:

(b) he was not able to comment on the suggestion that they totalled about $33,500;

(c) most of the invoices were produced by a cash register that did not identify the job or property address;

(d) some invoices were for the purchase of tools which were "needed for the property".

241 Lorich inspected the property at the request of the plaintiffs' solicitors on 15 February 2007. He was provided with the defendant's affidavit, the further amended defence and a bundle of documents discovered by the defendant in support of the alleged work and expenditure; these were the invoices referred to above. It was pointed out (in his letter of instructions) that the works were claimed to have been carried out in two stages, namely between 1997 and September 2000, and thereafter. He was asked to comment on the works carried out by the occupier of the property at some time after 1992 and to consider the works in those stages. He prepared a report dated 27 March which he updated on 24 April 2007.

242 Lorich's reports may be considered as one as the second merely added to the first.

243 The report described the house and the works carried out room by room internally, and externally, and in effect stated the scope of works performed. It stated that the works are "clearly incomplete and have been ongoing over a long period of time".

244 Lorich then disclosed that he had discussed the property with the Building Surveyor of the City of Yarra and searched the Council files for the property which showed that no Town Planning or Building Approval for the property had been issued in the last ten years. Lorich opined that this effectively meant that the rear extension "will have to be demolished and a new permitted and inspected construction be carried out in accordance with the Building Code of Australia and local Planning Laws". Lorich considered that the work carried out to the front of the dwelling in bedroom one, bathroom and hallway would more than likely be acceptable as no structural alterations had been made apart from some re-stumping which would trigger the need for permits.

245 Lorich then considered the value of the work carried out by the defendant. Dealing first with the extension at the rear, that was of no value as it will need to be demolished back to the chimney/heater area. The total area is around 19 square metres which would cost around $35,000 to demolish and replace in a workmanlike manner with all permits in place and the works completed to Certificate of Occupancy stage. He was therefore of the opinion that that amount of $35,000 should be allowed off the cost of carrying out the legitimate improvements to the front of the dwelling.

246 As to the improvements carried out to the front of the dwelling, he broke them into categories of work or trade to each of which he assigned a cost. Adding $6,000 for supervision and builder's margin (10 percent to 20 percent) of say $6,000, produced a total figure of $36,350.

247 Offsetting the amount of $35,000 from $36,350 produced $1,350 to be allowed in favour of the defendant. That is, the cost of making good the property virtually negated the cost of other work carried out to improve the property.

248 Lorich noted that he had not included the cost of rubbish removal or tip fees as he did not know the state of the premises when the defendant commenced work; he considered that an allowance of say $2,500 for labour and bin hire would be adequate.

249 Lorich then set out what appeared to him were the works carried out prior to September 2000 and subsequently to and including 2005. The expenditure in these categories was:

(a) rubbish removal, demolition and floor repair prior to September 2000 - allow $6,000;

(b) renovations post-September 2000 $36,350 plus $35,000 for the rear extensions.

250 Lorich then observed as to the invoices that there were many for Pioneer Waste Management in 2002, there are Bunnings invoices for tools including a generator and power drill, very few had a job address and many had been written out years after the actual supply of material/labour. The majority could be for any project carried out in the 1998/2005 period. In summary, the receipts did not clearly relate to the claimed works nor had a summary of expenditure been provided.

251 Lorich amplified his report in additional evidence in chief. In relation to the added kitchen, he deposed that it is the subject of a building notice from the City of Yarra the effect of which is to make it an illegal structure. His opinion, based on his experience, was that a council would not retrospectively grant a building permit for that offending structure. He explained why that was so: the Building Control Commission had told building surveyors not to do so. In his opinion it was likely that that part of the premises will have to be pulled down.

252 In amplifying his evidence Lorich was taken to the defendant's photographs of the property. He considered the workmanship was "generally poor".

253 Finally, Lorich stated that a figure of $114,000 for materials in the works he observed was "highly excessive" in that -

"If you applied the ratio of say 60/40 material/labour to a normal construction, that would mean that there would be $200,000 worth of work constructed there and that's clearly just not the case."

254 Then, as to the defendant's estimated labour costs of $60,000, which produced a total cost of $174,000, Lorich stated that a licensed builder would have done it "a lot cheaper at the time".

255 Then, as to Arends' report, which he had read, Arends' costing of the works at $68,006 "generally aligns with my figures" as his (Lorich's) figures added together produced $71,350.

256 In cross-examination Lorich was referred to the scope of works stated by Arends in his report and agreed it was conceivable that the detail was as there described. It is to be noted that Arends based himself on a list of works supplied by the defendant and his own inspection. Lorich considered that Arends list of works was generally consistent with what he saw. He added:

"His scope of works covers the entire renovation and extension whereas my scope tends to cover the renovation and not the extension, I've split it in half. When you add the two figures together we basically end up with the same dollar figures ... So we're really not apart at all apart from the odd stick of timber here and there."

257 As to the cost, Lorich agreed it would take longer and be more expensive if works were done over time rather than by employing a builder to do everything from scratch. If done piecemeal over a period of years there would be an increase (but not significant) on the estimate of $70,000.

258 Lorich disagreed with Arends' view that the work was basically well constructed. Based on his experience of owner/builder inspections for warranty insurance Lorich deposed that:

"... this wouldn't get warranty insurance in the state it's in for a sale, it's that incomplete and that poorly done in many areas. I'm not saying it's structurally unsound or anything like that but it just has the hallmark of a home handyman's sort of job."

259 Lorich agreed that within a few months of his attending at the council, the council issued the Building Notice. At this point the cross-examiner directed Lorich's attention to a report from a Mr Harding, a building consultant and building surveyor, who apparently had inspected the property for the defendant on 14 February 2008. He handed a copy of the report to Lorich and to myself and sought to ask questions about Harding's view on the prospect of the grant of a building permit for the illegal works. In the course of the discussion that ensued with me counsel stated that he had no instructions to call Harding and, as it transpired, he did not do so. Nor did counsel wish to tender Harding's report, and it was not tendered. Thus whatever it is that Harding stated in his report is not in evidence. Nevertheless, counsel asked questions on the issue of the likelihood of the council granting a building permit; Lorich repeated his opinion explaining that the issue of retrospective permits has been stopped because the professional indemnity insurers have said not to do so and the Building Control Commission "have just jumped on any surveyor doing it". It was stopped in late 2006, early 2007. Lorich said that he had "explored the avenues". He repeated his opinion that a building surveyor would not issue a retrospective permit. The council or Mr Harding might have contemplated a retrospective permit for the works but he (Lorich) did not accept that another building surveyor might be prepared to issue such a permit. He knew of no surveyor who would. It remains to note that the defendant called no evidence to the contrary of this evidence of Lorich.

260 At the request of the defendant's solicitors Arends inspected the property on 14 February 2007. He did so pursuant to instructions received the previous day, the stated purpose of the inspection being "to ascertain the value of materials and labour based on the instructions provided to you by our client and from photographs (if any) in our client's possession". The letter of instruction then set out a list of "the improvements made by our client" who had "spent approximately $114,000 on materials for renovating the house".

261 Arends provided a report dated 14 March 2007 which was produced as an exhibit to an affidavit in which he stated that in preparing the report he had made all the inquiries he believed desirable and appropriate.

262 In a schedule to the report headed "Summary of Comments, Maintenance Items and Building Defects" Arends set out a scope of works based on the defendant's list and his own inspection. This was more detailed than Lorich's list. Assigned to each item was a cost, the aggregate amount of which costs was $68,006. The costings were approximate and based on current prices. That represented the "cost to renovate the scope [of work] as noted in the schedule". It was in respect of all work, internal and external. He did not allow for a builder's margin as the work had been carried out by the proprietor, and to a satisfactory standard that will not require a builder to be brought in. He stated that the renovation had been "basically well constructed".

263 I now refer to Arends' evidence in cross-examination. The defendant was present at the inspection and they spoke. He accepted what the defendant said about his work. He also accepted at face value the list of items in the letter of instruction. Apart from those instructions and his inspection, he undertook no inquiries or searches, he did not check on the status of planning permits or building permits with the City of Yarra. He had no history of non-compliance with building permits. The lack of a permit would not affect his valuation of the work. If there was no permit it would be a case of applying for one: he did not know what a council may require. Demolition was possible, that depended on the council. He could not say whether the rear extension which contained the kitchen "complied with any permit". He had "no idea" whether it was built without a building permit.

264 As to Lorich's estimate of $35,000 to demolish and rebuild the rear kitchen extension, Arends said "It's probably in about the right order of cost".

265 Then, as to his estimate of $68,006, in some parts it included labour. He took his prices from Rawlinsons Cost Guide. If he had to include a builder's margin he would probably allow more than Lorich, around about 25 to 30 percent. The $68,006 was not broken into a material and labour component, because the defendant did a lot of the labour himself. The labour he had allowed was for tradesmen who would work more quickly than the defendant.

266 Arends said that he did not know of the defendant's claimed labour figure of $60,000 when he prepared his report.

267 Arends deposed that the defendant's overall claimed figure for the works was "much too high", the reasonable cost was $68,000 odd with a very small labour component. He agreed that the work carried out was not worth 170,000, $180,000.

268 Arends stated that he did not ask the defendant whether he had any relevant certificates of compliance.

269 Finally, he was questioned about some particular charges claimed by the defendant. I mention only the last being the plumber's amount of $15,000 referred to earlier. Arends considered that that "would be higher than the ... standard rates for the industry at that time [2007]".

270 As between Lorich and Arends I found Lorich the more persuasive witness. I was impressed by his thoroughness in inquiring with the council and ascertaining the absence of any permit authorising the works. By contrast Arends made no such inquiry, even of the defendant. I accept Lorich's evidence. Lorich and Arends as a matter of substance are on virtually common ground. Indeed they are essentially in the same area, the dollar differences being of no material significance when compared to the defendant's claimed costs. To be clear, and fair, Lorich and Arends were honest witnesses who did not advance a false claim in aid of the party who called them. It is just that I found Lorich somewhat more impressive and persuasive.

271 Proceeding from that basis I reject the defendant's claim that material costs were approximately $114,000 and of labour costs estimated at about $60,000. Such invoices or documents that the defendant produced go nowhere near substantiating these claims, indeed they do not approach doing so. The evidence of Lorich and Arends establishes that reasonably regarded the amounts claimed are out of all proportion in relation to the works carried out. That is one thing, and would lead at least to the conclusion that on the balance of probabilities the defendant had not established the claimed levels of cost. But in my view the appropriate finding in this case runs deeper than that for I consider, and so find, that the claims are profoundly and deliberately false, grossly exaggerated for the purpose of the case. It is not possible to know where the truth lies in the sense of what actually was incurred on the works carried out at this property. The invoices are not altogether reliable in this respect, for reasons mentioned by Lorich and in cross-examination.

272 In the circumstances the cost or value of the works is to be determined on the basis of the expert evidence. Lorich's total figure was $71,350 whereas Arends was $68,006. Lorich allowed a builder's margin of $6,000 whereas Arends allowed none for reasons he gave and which I consider are appropriate. Reducing Lorich's figure by $6,000 would put his overall estimate at $65,350 but his allowance of $2,500 for tipping would lift his overall figure to $67,850. For practical purposes Lorich and Arends should be regarded as on common ground as to total amounts. However, being reasonable to the defendant I would allow Lorich's overall figure of $71,350.

273 Then there is the matter of the status of the rear extension carried out without the required permit. I accept Lorich's evidence and am satisfied that the probability is that a retrospective permit will not be granted. It is to be recalled that the defendant's counsel elected not to call Harding, and called no other evidence, whether from the council or otherwise, to challenge Lorich's evidence and opinion on this matter. I accept as correct Lorich's evidence of $35,000 as the cost of demolition and rebuilding of the rear extension. As a cost to be incurred, as I find it will be, the extension is worthless. It follows that Lorich's analysis of an allowance of $1,350 in favour of the defendant is correct. That is, of course, if the plaintiffs succeed in establishing possession and an order for the payment of money were to be made in favour of the defendant.

274 In this section I deal with the matters of the rental value and the market value of the property. Each is relevant to the plaintiffs' claim for damages or mesne profits. The latter is relevant to the defendant's claim that his works increased the value of the property, which "betterment" was to be taken into account in determining relief in his favour.

275 Evidence on these matters was given by Williams who gave evidence for the plaintiffs. He is a registered valuer and licensed real estate agent. The defendant called no such evidence. That was notwithstanding that the defendant had obtained a report from a valuer, Mr Dunn, which was in the defendant's Court Book and to which counsel for the plaintiffs properly took Williams in his evidence in chief. However, when counsel for the defendant closed his case without having called Mr Dunn I asked about his being called and counsel replied that he "turned out to be unavailable this morning or today". Thus Mr Dunn was not called, and his report was excluded from the defendant's Court Book as finally tendered. Hence, Williams' evidence stood uncontradicted.

276 On 13 February 2007 the plaintiffs' solicitors instructed Williams to prepare a valuation of the property. He was instructed that issues to be addressed would include the following:

(a) the value of the property without improvements;

(b) the value of the property with improvements effected legally;

(d) any other circumstance considered relevant to determining value when the defendant went into possession and now.

277 Following an inspection of the property on 15 February 2007 Williams prepared a report dated 23 April 2007. For this purpose he inquired at the City of Yarra as to planning or building permits in respect of the property. He was also given Lorich's report. On 11 June 2008 he revised the first report to reflect changes in the real estate market since April 2007.

278 Williams assessed the market value ("MV") of the property as follows:

279 Williams explained how he arrived at these values. In the course of doing so he stated that many of the alterations "are in my opinion not done to a professional standard and they are only partly finished, (no functional bathroom, no functional kitchen, plaster removed from walls, exposed electrical wiring, no stove, backyard filled with building materials and rubbish, walls removed etc). He further opined that as the "works" had been done by the "occupier" without permits, he would reduce the market value to $350,000 and thus the value of the "occupiers" improvements to Nil. He considered that a potential purchaser would discount the value of works done illegally by their estimate of the cost to rectify plus the cost to renovate. He considered that as presented and on today's buyer's standards, the property was "virtually in an unliveable state". Furthermore, marketability and value was reduced by:

(c) many of the alterations done by the "occupier" are incomplete and not to a professional standard;

(d) the overall renovation and redesign of the house by the "occupier" "is an interior-cock up".

These matters had reduced value by around $40,000 or $50,000 in June 2008.

280 On the other hand, the building had been improved as stated in Lorich's report, and thus increased the value of the property by around $20,000 or $25,000 in June 2008.

281 The "occupier" had thus reduced the value of the property by a net of $20,000 or $25,000 at June 2008.

282 This is a sufficient reference to the report insofar as it concerns the value of the property. Of course I have regard to all of the report.

283 On 22 August the plaintiffs' solicitors requested Williams to assess the weekly and annual rent that would be payable by a hypothetical occupier of the property from 1997 until 1 April 2009. He was instructed that the fair rental value would be based upon the condition of the property in 1997, based on the affidavits filed in the proceeding.

284 Williams duly prepared a report dated 3 September 2008. He estimated the weekly rental and yearly rental of the property from 1997 to 2009 to be:

1997 $130.00 per week $6,760.00 per annum

1998 $140.00 per week $7,280.00 per annum

1999 $150.00 per week $7,800.00 per annum

2000 $150.00 per week $7,800.00 per annum

2001 $155.00 per week $8,060.00 per annum

2002 $160.00 per week $$8,320.00 per annum

2003 $165.00 per week $$8,580.00 per annum

2004 $170.00 per week $8,840.oo per annum

2005 $175.00 per week $9,100.00 per annum

2006 $175.00 per week $9,100.00 per annum

2007 $205.00 per week $10,660.00 per annum

2008 $220.00 per week $11,400.00 per annum

2009 $230.00 per week $11,960.00 per annum.

285 I now refer to Williams' oral evidence. As to his evidence in chief I note only the following concerning the rental value. He considered that in its condition in 1997 the property would have a rental value "but it might need to be fixed up depending if there's anything dangerous ... floorboards or whatever but you'd be surprised what people will rent, given the price". Those "sort of places" are normally rented on a year's lease. He said that "you can sometimes do an arrangement with the tenant to do certain works and reduce the rent slightly to compensate for that". If the place runs down some tenants are happy to put their time and effort in, Williams said.

286 Williams was cross-examined about the likelihood of achieving a rental value as high as his estimate. He referred to people sharing the cost and to formerly (30 years before) having rented worse premises. There were tenants who would rent the property. As to whether the starting point of $130 was "simply ridiculous" Williams said:

"I would think if you gave the tenants a little bit of free rent or you fixed it up a little bit you'd get around that rental on the basis that you got two or three students sharing."

287 Williams was also questioned upon his valuation figures. It is not necessary to refer to this evidence, although I do not overlook it. It is to be noted that a number of questions were puttage of what the other valuer, Dunn, said in his report. Not only did any of this not adversely affect Williams' evidence, but Dunn was not called.

288 I consider Williams an honest witness and I accept his evidence with one qualification concerning the rental value. Observing him and attending to his evidence carefully, and bearing in mind the condition of the property, I consider that his assessment was too high to the point of being speculative rather than realistic likelihood. I return to this later in considering the plaintiffs' claim for damages. Finally, accepting Williams' valuation evidence as I do, the fact is that the "improvements" carried out by the defendant have not added value to the property. It follows that if the plaintiffs succeed and obtain possession of the property they will not be "enriched" unjustly or otherwise.

289 The primary defence is, of course, that the defendant has acquired title by adverse possession. My above findings have dealt with that issue contrary to the defendant. Against the risk of that result, the defendant sought the relief specified in the defence and counterclaim; see at [27] (l) and (m) and [29] above. The factual basis alleged to give rise to such relief is that:

(a) between 1997 and 16 September 2000 the defendant incurred "the earlier expenditure" under a "mistake"; further or in the alternative

(b) on the inducement of Wallace Roy's "representation" made on or about 16 September 2000 the defendant incurred "the further expenditure".

It is also alleged that by reason of either or both of the earlier expenditure and further expenditure the plaintiffs had received an incontrovertible benefit; see [27](g) and (k) above.

290 I summarised the pleading of these claims at [27] (d) - (k) above.

291 In his final address counsel for the defendant made extensive submissions on the law which should be considered and applied in the resolution of these claims. Under the following headings he said:

292 Counsel referred to David Securities Pty Ltd v Commonwealth Bank of Australia[22] for the proposition that money paid under a mistake of fact or law gives rise to a prima facie obligation on the recipient to make restitution, which obligation the recipient may displace if restitution were unjust. He submitted that in circumstances where the defendant did not know who was entitled to the property, and Gloria had told him he should do up the property and live there, and he decided to do so in the hope he might be entitled to it, he should be compensated for his expenditure if his adverse possession claim failed. This was of course in the light of the circumstances alleged in the relevant part of the pleading; see at [27](d) - (g) above.

293 Of course the present case is not concerned with the mistaken provision of services or improvements to goods. Nevertheless, counsel referred to the law in this area in aid of developing his argument on restitution for his expenditures that enhanced the value of the land. He commenced with the proposition that where an owner seeks the return of goods pursuant to a conversion claim, a court will not order the defendant to return the goods unless an allowance is made for improvements made by an innocent converter; Johnson Matthey (Aust) Ltd v Dascorp Pty Ltd[23]; Greenwood v Bennett[24]; Munro v Willmott[25]. Counsel referred to the difficulty in application of this principle in the case of services rendered or improvements to chattels under a mistake, where, unless requested or accepted, services cannot be restored and a person entitled to possession should not be saddled with services or improvements which may not be to his liking or within his means to repay, as to which he referred to The Law of Restitution, Goff & Jones, 6th ed, 2002, para 6-001. But where for example, it is clear that repairs undertaken have put a car in good order with the result that its value has increased, the owner has benefited and should, prima facie, be obliged to pay the increase in value. Finally, counsel referred to Unjust Enrichment in Australia, Edelman & Bant, Oxford University Press, 171-3 where, he submitted, the authors accept that the mistaken provision of services should be considered in the same way as a mistake in payment and that the underlying rationale applies equally to both. Counsel concluded that unfortunately the authors made no reference to the position in relation to land.

294 Under this heading counsel commenced with the proposition that a mistaken improver of another's land cannot claim the benefit of the principle of incontrovertible benefit, as to which he referred to The Law of Restitution at para 6-001. It is important to note that Goff & Jones add the qualification that the land owner "has not acted unconscionably".

295 From there, counsel went to United States law and The Restatement of the Law of Restitution (American Law Institute) 1937 para 42(1) which allowed a set-off in equity for improvements to land effected by mistake. That, he stated, was consistent with English and Australian law, as to which he referred to Lord Cawdor v Lewis[26], and Sutton "What Should be Done for Mistaken Providers?" in Finn, Essays on Restitution, Law Book Co, 1990. Analogously, a tenant may meet a claim for possession for non-payment of rent by equitable set-off of the cost of repairs where the claimed set-off is so closely connected with the claim that it would be inequitable to allow the plaintiff judgment without giving credit for the cross-claim: Knockholt Pty Ltd v Graff[27]; MEK Nominees Pty Ltd v Billboard Entertainments Pty Ltd[28].

296 Counsel then referred to the statement of the Lord Chief Baron in Lord Cawdor v Lewis that:

"It is admitted to be a proper subject for equitable interference, where one party stands by and allows another to spend money upon his lands without giving him notice of his title."[29]

297 Counsel noted the statement of Edelman and Bant in Unjust Enrichment in Australia[30] that the decision in Cawdor v Lewis had been criticised for a long time and in particular in the first edition of Mayne On Damages (1856) on the basis that where the improvements may be unsuited to the plaintiff or were such that he could not have afforded them, it would be unjust to compel him to pay for them. Edelman and Bant suggest that the inquiry is an objective one as to whether the true owner desired the receipt of the benefit. They suggest this may be shown in three ways: first, that what is received is incontrovertibly beneficial (such as money or the discharge of a necessary expense); secondly, by the act of exercise of a choice to obtain the benefit; thirdly, the defendant's conduct may show that what is received was desired by him.

298 Counsel then referred to the decision of the High Court in Svenson v Payne[31] and submitted that it is the "only authority" that might be said to stand in the way of an Australian court applying "the unifying concept of unjust enrichment" so as to produce a principle that improvements made to land under a mistake may be the subject of a claim in restitution. I return below to consider Svenson, and other relevant authorities not mentioned by counsel for the defendant. For the moment I will continue with indicating the course of his submissions.

299 Counsel did, however, refer to the decision of Santow J (as his Honour then was) in Cooke v Dunn[32] which he came across during the trial and described as the only case in point he had been able to find. Perhaps he meant by that that it was the only adverse possession case he had found in which the issue of restitution for the value of improvements effected to the property by the unsuccessful adverse possessor was dealt with on the basis of incontrovertible benefit, and in which restitution was ordered.

300 In his judgment Santow J noted that the plaintiff had not addressed him on the merits of the claim for restitution or disputed in any detailed fashion the defendant's contention. It is to be noted that the judgment makes no reference to Svenson v Payne and the principles applied by the High Court in deciding that case, or Brand v Chris Building Co Pty Ltd[33]. It would seem clear that these authorities were not drawn to Santow J's attention.

301 Santow J referred to academic texts and the decision of Carruthers J in J Gadsden Pty Ltd v Strider 1 Ltd (The "AES Express")[34] concerning restitutionary relief where a party has been incontrovertibly benefited, and observed that whether or not a party can recover where it has voluntarily conferred a benefit upon another was far from settled.

302 Gadsden concerned a claim for an additional freight charge in respect of the carriage of goods by sea. The further remuneration was sought from the shipper of the cargo on the basis of restitution or unjust enrichment, the goods having been carried further by the decision of the owner than was necessary. Accepting that there was authority for the view that where a defendant has been incontrovertibly benefited he may be liable to make restitution even though he did not request or freely accept the benefit, but noting that a restitutionary claim can be defeated if the claimant has acted officiously, Carruthers J held that in the circumstances justice did not require the payment of the compensation sought because the equities in favour of that claim were not more compelling than the shipper's plea that it did not request or freely accept the services, that is, the claimant acted officiously or as a volunteer[35].

303 Santow J noted references in Carruthers J's judgment to academic texts concerning restitutionary or unjust enrichment claims and to the notion of "free acceptance" advocated by Professor Birks and which was the subject of debate. Whatever the state of the academic writings, Santow J concluded that the case before him was "an instance where, having regard to the competing equities of the case, the doctrine [of incontrovertible benefit] should be applied". An equity arose in the defendant's favour because the plaintiff was aware "that someone was living in the property and making various improvements to it. He clearly was happy to be the beneficiary of the improvements, never demurring". Accordingly restitution was ordered, the amount of which had to be ascertained. In the meantime the defendant by way of equitable lien was permitted to continue in occupation, unless the plaintiff was able to nominate another method of satisfactorily securing the defendant's rights.

304 It is thus seen that a critical element in Santow J's conclusion was the plaintiff's awareness of improvements being effected, of never demurring and wishing to have the benefit thereof. That is not the present case. Hence, even assuming that as a matter of principle restitution may be ordered on the basis of incontrovertible benefit, in the circumstances of this case no "equity" arises in the defendant's favour. To express it another way, it is not unconscionable or unjust for the plaintiffs to recover possession of the property without making restitution for the value of the improvements.

305 At this point, however, by way of concluding discussion on this aspect of counsel's submissions, it is convenient to return to Svenson and the other critical authorities which counsel ignored.

306 The facts in Svenson v Payne are instructive and it is convenient to refer to them. A life tenant, who was trustee under a will, leased a hotel to the licensee (Svenson) who, on the faith of the lease and without searching the life tenant's title, spent money on improvements. The term of the lease exceeded the period authorised by the will but the remainderman, who was the daughter of the life tenant, although aware of the negotiations, was not a party to them. After the lease was executed and before any expenditures were undertaken, the remainderman became aware of the life tenant's limited powers of leasing, but took no action believing that the life tenant, her father, was entitled to exercise complete control in his lifetime, and that there was nothing she could do. After the life tenant died the remainderman applied for a declaration that the lease was void. In a unanimous judgment (Latham CJ, Rich and Williams JJ) the High Court held that the remainderman was not estopped by her conduct, and that the lease was void and should be cancelled without compensation to the licensee. Two findings of fact of the trial judge were critical in this respect. The first was that the remainderman "did not know that [the licensee] held a mistaken view of his own rights. She had no means of knowing that the usual course of investigation undertaken in such a transaction had not been followed, and his action in spending the money was not inconsistent with knowledge of the true position because he may have been taking a deliberate risk on the duration of her father's life". The second was that "having discovered the existence of her interest in remainder before the money was expended by Svenson, [the remainderman] did nothing until after her father died not with the idea of encouraging Svenson to expend the money on the property which was ultimately to come to her, but because she believed that there was nothing which she could do".

307 The decision is Svenson v Payne was based on the well recognised principles in Ramsden v Dyson[36]. In that case, where a tenant had built on his landlord's land, the House of Lords had to consider whether the tenant was entitled to relief in equity by reason of the improvements effected and in view of the relevant arrangements. The Lord Chancellor, Lord Cranworth, stated "the principles of equity on this subject", as follows[37]:

"If a stranger begins to build on my land supposing it to be his own, and I, perceiving his mistake, abstain from setting him right, and leave him to persevere in his error, a Court of equity will not allow me afterwards to assert my title to the land on which he had expended money on the supposition that the land was his own. It considers that, when I saw the mistake into which he had fallen, it was my duty to be active and to state my adverse title; and that it would be dishonest in me to remain wilfully passive on such an occasion, in order afterwards to profit by the mistake which I might have prevented.

But it will be observed that to raise such an equity two things are required, first, that the person expending the money supposes himself to be building on his own land; and, secondly, that the real owner at the time of the expenditure knows that the land belongs to him and not to the person expending the money in the belief that he is the owner. For if a stranger builds on my land knowing it to be mine, there is no principle of equity which would prevent my claiming the land with the benefit of all the expenditure made on it. There would be nothing in my conduct, active or passive, making it inequitable in me to assert my legal rights."

308 In Svenson the High Court quoted with approval the first paragraph in the Lord Chancellor's statement. Their Honours added a reference to Willmott v Barber[38], and decided the case on the principles stated by the Lord Chancellor. The earlier case of Lord Cawdor v Lewis is not mentioned in their Lordships' speeches in Ramsden v Dyson. But that is of no moment as the Lord Chief Baron's statement quoted above is consistent with the principles stated by the Lord Chancellor. It may also be noted that the Lord Chief Baron was dealing only with an interlocutory application. In any event, the opinion of the House of Lords would prevail if there were any inconsistency.

309 In Brand v Chris Building Co Pty Ltd[39] Hudson J followed and applied Ramsden v Dyson, Willmott v Barber and Svenson v Payne. In Brand the defendant had built a dwelling on the plaintiff's land. Hudson J found that the plaintiff had not known what was going on. Hence he had not acquiesced in the defendant's building works, let alone stood by and encouraged the defendant while not asserting his rights as owner of the land. Hudson J observed that "it must be shown that the plaintiff was guilty of something in the nature of a fraud" and there was nothing of that kind and no ground that could raise an equity in favour of the defendant. By fraud Hudson J meant conduct recognised as such in equity.

310 In concluding his judgment[40] Hudson J referred to the defendant having argued that relief could be founded in the doctrine of unjust enrichment, but (Hudson J noted) counsel "was not able to point to any case where it had been applied in circumstances such as the present, and to apply it would be to fly in the face of the highest authority. It is quite impossible to apply it in the face of those authorities". With respect, I agree with Hudson J. I would add that even if the matter was to be approached on some separate basis of unjust enrichment or restitution or incontrovertible benefit the same consideration of the conduct of the parties would be involved in determining the relative equity or unconscionability or otherwise of the situation. On that basis the result would be the same as I conclude. But, however that may be, I agree with Hudson J on the law applicable to the resolution of the issue in this case.

311 Notwithstanding this line of authority, counsel bravely submitted "that arguments based upon mistake and unjust enrichment would now prevail and that Svenson does not prevent an Australian court from recognising that the law has advanced since 1945". He stated that in the same way as the English Court of Appeal in Greenwood "was prepared to extend the availability of restitutionary remedies in relation to improvements to goods, the time is ripe for recognising the availability of restitutionary remedies in relation to land". Counsel sought support in a passage in Restitution in Australia and New Zealand, Cato, Cavendish, (1997), 42-43.

312 This invitation to treat a decision of the High Court as no longer stating relevant principle, and that I should myself state what the law is, is untenable. No matter what advance there may have been in the law I am bound by a decision of the High Court. When I questioned counsel on his submission he said that "it may be possible to distinguish it [Svenson v Payne] in any case on the facts ... ". As to the underlying principle in Svenson v Payne, counsel said that "the reference to Ramsden v Dyson itself betrays the antiquity of the decision". What in essence counsel was saying was that the principles applied in Svenson v Payne and Brand Chris Building Co Pty Ltd have been overtaken by developments in the area of unjust enrichment and restitution or quantum meruit. I informed counsel that he would need to tell that to the High Court. If it is considered that the time "is ripe" for a change as counsel suggests then that change should be sought from, and made by, the High Court. Moreover, Brand v Chris Building Co Pty Ltd is a long-standing decision of a judge of this Court which applied the same principles, and I would not depart from it unless I considered that it was wrongly decided; being decided consistently with Svenson v Payne I am not of that view. Accordingly I approach the resolution of the relevant issues in this case on the basis of those principles.

313 Counsel submitted further that the amounts the defendant paid for rates should be recoverable on the following basis. The Local Government Act 1989 gave the council the right to sue the defendant as occupier of the property for unpaid rates if the owner could not be found or identified (s 156(2)), and to sell the property to recover unpaid rates (s 181). Hence the defendant paid rates - in the total amount of $13,050 between July 2000 and September 2005 - under compulsion and should be able to recover the amount he paid[41]. Further, the Local Government Act (s 181(9)) authorised the council, if following a sale of a property no person having an estate or interest in the land could be found after reasonable efforts to do so, to use any balance remaining after recouping its debt and expenses for its general purposes.

314 It was submitted that if the defendant was not entitled to affirmative relief he was able to set-off the amount paid for rates against the plaintiff's claim for mesne profits. This set-off should be permitted on the basis that unless it is the plaintiffs will unjustly have the benefit of the defendant's actions in stepping in and improving the property and saving it from compulsory sale, thus preserving it, and at an increased value for the plaintiffs. Further, if there had been a compulsory sale and the council had not been able to find the person entitled to the balance remaining the council could have applied the balance to its general purposes, in which event the amount would have been lost to the plaintiffs.

315 Counsel next addressed on the matter of incontrovertible benefit. He of course relied on Cooke v Dunn but he also referred to other authority. He referred to Monks v Poynice Pty Ltd[42] where Young J[43] referred to there being at least four circumstances in which equity, if not the common law, finds a person liable to pay a reasonable amount for services provided to it. The first was quantum meruit; the second was where the party benefited accepted or acquiesced in the provision of the service under circumstances where it must have known that the service was not being rendered gratuitously; the third was where the service provided is necessary for the protection of the defendant's property; and the fourth is where the service conferred uncontrovertible benefit on the defendant and it would be unconscionable for the defendant to keep the benefit of the service without paying a reasonable sum therefor.

316 In Peel (Regional Municipality) v Canada[44] McLachlin J (as she then was) explained the rationale for incontrovertible benefit thus:

"While the principle of freedom of choice is ordinarily important, it loses its force if the benefit is an incontrovertible benefit, because ... the defendant would not have realistically declined the enrichment."

317 In the circumstances, counsel submitted, it was incontrovertible that the defendant's expenditure was necessary for the protection, preservation, and enhancement of the value, of the property and that the plaintiffs would have incurred similar expenditure for the same reasons if the work had not already been done for them. The defendant's expenditures had almost certainly prevented the plaintiffs from entirely losing the property and its value.

318 In his written outline counsel submitted that the property was worth $130,000 in 1996 and according to Williams was worth $360,000 in June 2008 on land value alone. He submitted that the defendant's conduct saved the plaintiffs from losing that amount. It is to be noted that the figure of $130,000 is not established by evidence, and is to be disregarded. It seems from a question put to Williams in cross-examination that Dunn had valued the property in 1996 and favoured a figure of $115,000, as to which Williams was asked if he agreed. Williams could not agree because he had not valued the property as at 1996. Hence there is no evidence of value at that time. Likewise, the figures for market value of $125,000 and $320,000 in the defendant's pleadings (referred to at [29](k)(iv) above) are not established by evidence.

319 In my view none of the defendant's claims are established. Each fails on the facts.

321 The first case is that the defendant incurred the earlier expenditure under a mistake. The defence and counterclaim each set out identical particulars of the work carried out by the defendant in the years 1997 to 2000 inclusive. There is no need to again list the work allegedly done; that has been done above. Then followed what is the more critical for present purposes, that the defendant incurred the earlier expenditure under a mistake of fact and/or law. The mistake was the erroneous belief set out at [27] (e) above. It is convenient to discuss each mistaken belief in turn.

(a) No person had any interest legal or equitable in the property

322 In final address counsel for the defendant relied on the following matters to establish this belief. First, the defendant's evidence that in early 1996 he telephoned Philip Hearse who he thought must have the legal right to the property and who told him the property could not be bought from anyone; on being so advised the defendant decided to step in and restore the property. That is, he had assumed the Hearses would have an entitlement, but on a Hearse saying "it can't be bought from anyone then he is entitled to assume that no-one - at least no-one to his knowledge - is making a claim in relation to it, not knowing anything, of course, about the Roys". I refer to this evidence at [191] above. Counsel further relied on the defendant having a longstanding interest in the property and Gloria having said to him that when she died he should do the place up and move in; and he had happy family memories in relation to the property.

(b) Any persons who had an interest in the property were not intending to pursue their rights (if any) to take possession of the property

323 Counsel for the defendant said this belief was based upon Philip Hearse being unresponsive to the defendant's request to step in and do something about the squatters, other than saying he could not do anything about it. That statement, counsel submitted, indicated that the Hearses were not interested in pursuing any rights they might have had. Counsel acknowledged that Philip Hearse had warned the defendant but the defendant indicated that Philip Hearse was "not being entirely forthcoming in relation to the situation", counsel submitted. Counsel also relied on the condition of the property in 1996/1997; any person with an interest in the property would have been expected to have at least made some cosmetic changes on the outside to not give the impression that the property was simply open for anyone to come in. This absence of activity "persuaded" the defendant that he was entitled to proceed.

(c) Improvements made to the property would be to the defendant's benefit and not for the financial gain of others

324 Counsel for the defendant submitted that this "belief" was "an inference from all of the material". He referred to the conversation with Philip Hearse and the unexplained difficulty as to selling the property; the fact that no-one endeavoured to remove him from the property; that the situation was ongoing with the defendant occupying the property and spending money, and it was not plausible that he would have spent that money if he believed someone could turn up and claim an entitlement.

(d) The defendant might peaceably enjoy the property for so long as he desired

325 Counsel for the defendant submitted that this was an inference drawn from the fact that the defendant carried out improvements. Of course Philip Hearse warned him, but he also said there was no-one from whom he could buy the property and did not take action to stop the defendant doing the work.

326 It is on this basis that in final address counsel sought to establish the mistaken belief under which the defendant was alleged to have laboured in incurring "the earlier expenditure". I have regard also to the various matters alleged in the particulars to the pleading. They include the alleged occupation of Cerra and the squatters and other matters.

327 Counsel for the defendant acknowledged that his submissions were based on acceptance of the defendant's affidavit evidence which I set out at [191] above. He conceded that if on the other hand I accepted the evidence of Philip Hearse concerning this evidence then the defendant's submission must fail.

328 I dealt with the matter of this conversation at [191] - [195] above. I accepted Philip Hearse's evidence. It is unnecessary to again recount the conversation, it is sufficient to say that I agree with counsel that preferring Philip Hearse the defendant's case of mistake must fail. The fact is, I find, that in entering into the property, undertaking works and expending money (including on rates) he did not hold any of the alleged beliefs. I find that the defendant took a knowing risk that the person truly entitled to the property may one day appear and claim it, and that he may have to give up possession. He did so adventitiously, with no encouragement from any person, hoping that one day, if he were there long enough, the property would become his, but aware it may not.

329 For completeness, I reject the defendant's further allegation (referred to at [27] (f) above) that "the conduct" of the plaintiffs and those through whom they claim "contributed to the mistake". There was no mistake. What the defendant did he did on his own initiative taking advantage of the opportunity that presented itself and hoping that the longer time went by no-one would come forward and that the property would ultimately become his. Hence, and as a matter of principle, his expenditures were at his risk; see Land Law, Butt, 5th ed Law Book Co [323]; Brand v Chris Building Co Pty Ltd[45]; Svenson v Payne[46]. And he so acted without the knowledge and consent of the plaintiffs. The first and only awareness of the plaintiffs was what Wallace Roy observed on his visit in July 2002. That was very limited in terms of work he appreciated had been done. Further, Wallace Roy did not know that he and his siblings were entitled to the property by succession, but he asked the defendant who had given him permission to live there. Tellingly, in retrospect, the defendant could not answer that question; reflective, I find, of the fact that the defendant knew he was there without any lawful permission. Moreover, Wallace Roy did not discuss ownership of the house or give the defendant any indication that it was alright for him to stay at the house. Finally, it was not until March 2004 that Norman Roy was alerted that he and his siblings might have a legal interest in the property. The Roys then set about ascertaining the time position and establishing their right. It was not until 2 June 2005 that they became registered proprietors of the property and their cause of action accrued. By then the defendant had completed, or all but completed, all of his works.

330 For these reasons the claim in relation to expenditures made upon the basis of the alleged mistake and belief must fail.

331 I now discuss the second case of the further expenditure incurred on the inducement of a representation by Wallace Roy in September 2000.

332 If, counsel for the defendant submitted, it is accepted that Wallace Roy made a representation to the defendant in 2000 or 2002 to the effect alleged, and the defendant relied on that representation in carrying out further works, on traditional principles[47] the defendant was entitled to an equitable interest in the property to secure his outlay. It was submitted that a half interest would be appropriate recompense in the circumstances. Alternatively, he should have a lien on the property. That relief would also be available if the alternative basis of unjust enrichment were accepted.

333 I dealt with the evidence of and concerning the conversation between Wallace Roy and the defendant at [203], [208] and [212]-[215] above. At [2125] I stated my finding that I accepted Wallace Roy's evidence as to the time (July 2002), and content of the conversation. It is evident that the alleged "representation" depends upon acceptance of the defendant's evidence as to statements of Wallace Roy in this conversation. But I have rejected the defendant's account as deliberately false. In that situation, on Wallace Roy's evidence, there is simply no evidentiary basis for finding the alleged representation.

334 Of course the defendant spoke to Philip Hearse in about September 2000, not Wallace Roy, as to which at [230] I found that I accept Philip's account. That conversation could not support the alleged representation.

335 A further reason why the defendant's representation fails is that, even if made the representation was not misleading or deceptive or likely to mislead or deceive or was false or untrue in the respects alleged (and referred to at [27(l)] above). In neither respect did the plaintiffs in July 2002 have or not have the intention alleged.

336 For these reasons the case of further expenditure induced by the alleged representation must fail.

337 That brings me to the alternative claim of unjust enrichment.

338 I now consider the defendant's further plea of unjust enrichment referred to at [27(h) and (k) above]. The basis of this claim is that if the plaintiffs are held entitled to possession of the property they will receive it with the benefit of the improvements carried out by the defendant. This is submitted to be an incontrovertible benefit to the plaintiffs who, being unjustly enriched thereby, should compensate the defendant by way of restitution for the monies expended. Alternatively, such restitution may be by way of a set-off.

339 These claims must immediately confront the above findings which destroy the factual premises upon which the claims are pleaded. Stripped of these factual premises the situation that I find is that the defendant carried out works to the property without encouragement, approval, permission or knowledge of the plaintiffs other than the awareness of Wallace Roy in July 2002 of some improvements. But that awareness of Wallace Roy was very limited indeed. In no sense did the plaintiffs stand by knowing the defendant was expending money on improvements and letting him do so being aware that they were the true owners of the property and declining to act. They did not become aware they might be entitled to the property until some time after March 2004 by which time the great majority of the work was complete.

340 If, on the other hand, restitution were to be considered the question to be asked is - in what amount? The answer is found in the evidence considered above concerning the value of the improvements effected by the defendant and the value of the property, and accordingly, to these I now turn.

341 There are two relevant matters here, the value of the works and the value of the property. In relation to the works, by reason of the absence of the necessary building approval and the probability that the rear extension will have to be demolished and rebuilt, the net value of the defendant's works is $1,350, a relatively negligible amount. Further, the status of the rear extension and others matters referred to by Williams means that the property on an unrenovated basis has not been increased in value by the works. It is appropriate that the issue of value be regarded on that basis as the defendant seeks that account be taken of all of his works and expenditures. On that basis the answer, established by Williams, is that the defendant has not added value to the property. Accordingly, in recovering possession of the property the plaintiffs will not be "enriched". I should say that I accept the plaintiffs' submission that the correct approach to this question of enrichment is to consider whether the value of the property has been increased by the works rather than the value of the work simpliciter for (as is seen here) for some reason or other the works or part thereof may be of no value.

342 For these reasons the defendant's claim of an unjust enrichment must fail. More fundamental of course is the fact that in undertaking the works the defendant took a knowing risk in the hope that one day, if he could stay in the property long enough, he would obtain title thereto. In incurring the claimed expenditures he was under no mistake as to his position which was that of an adventitious opportunist trespassing on the property of another, and without that other being aware of what he was doing. As to this it is unnecessary to repeat the previous findings and conclusions.

The plaintiffs' claim for mesne profits/damages

343 It will be recalled that the plaintiffs seek rent from the date the defendant commenced occupation to delivery up of possession together with interest thereon, $35,000 as the cost of demolition of the rear extension, and unpaid council and water rates.

344 The claim for rent is based on the defendant's occupation as a trespasser and Williams' evidence of the rental value of the property. In his final address counsel for the plaintiffs stated that damages should be nominal in the period prior to 5 May 2005 on which date the plaintiffs were registered as proprietors of the property. Counsel for the defendant accepted this as the correct date, as that was when the plaintiffs' right of action accrued. I agree, and consider that the claim for nominal damages is not properly made. From 5 May 2005 the plaintiffs sought mesne profits based on Williams' evidence. But, counsel submitted, Williams' figures should be discounted because the property was not complete. As an alternative to that claim, counsel submitted that damages could be the amount of $35,000 to demolish and rebuild the rear extension. Alternatively, the damages could be the amount of $20,000 estimated by Williams as the difference in the value of the property with and without the necessary permits.

345 As counsel readily conceded, there are "some problems" with these claims. Beyond that observation he said little other than the following, that Williams' evidence "was based upon a market rent which would be highly unlikely in the circumstances". I agree with that observation. I find Williams' evidence as to rental value was unrealistic given the condition of the property. I do not accept the evidence provided an accurate basis on which to determine the rent reasonably likely to be achieved at any relevant time. His assessment was speculative and over-stated. I am left with no cogent basis upon which to determine the probable level of a rent reasonably achievable at the relevant time. I do not consider it appropriate to refer the matter for inquiry before an associate judge and I was not asked to do so. Counsel frankly recognised the problem and left it there for me to deal with. In my view the plaintiffs have simply failed to establish a rental figure, and accordingly, and there being no evidentiary basis on which I could otherwise determine the rental, that basis of claim fails.

346 Then there are the alternative bases of claim. Counsel developed no argument in support of either. I reject them both. It is important to bear in mind that the claims are for damages suffered by acts of the defendant as a trespasser. The considerations that obtain in this context are different from those in the restitution context.

347 It is sufficient to say of the $35,000 claim that the defendant is entitled to bring to account against it the amount of $36,350 being the value of the balance of the improvements. It is not reasonable as between the parties that the plaintiff could take the benefit of one aspect of the works for the purpose of claiming damages while not allowing the defendant the benefit of the other aspect of the works and which are in fact of benefit to the plaintiffs.

348 As to the $20,000 claim this fails because it is ill-founded conceptually. The relevant works were done prior to the plaintiffs becoming registered proprietors of the property, yet the claim seems to assume some sort of duty on the defendant towards the plaintiffs in relation to obtaining permits for the purpose of ensuring the bettering of the value of the property. Of course the defendant was legally required to have the necessary approval, but that did not create a duty enforceable in damages of the nature now sought.

349 Finally, I note that the plaintiffs' counsel did not press the claim for unpaid council and water rates. Clearly, it was abandoned and, I consider, rightly so.

350 The plaintiffs having succeeded on the issue of adverse possession are entitled to an order for possession of the property. Save for costs the balance of the claim fails.

351 The defendant has failed to establish any of the relief sought, and the counterclaim will be dismissed with costs.

352 I will hear counsel as to the form of the orders and costs.

[1] The property, and its improvements, is described in the reports of Ernest Daniel Williams (Exhibit K) and Robert Adrian Lorich (Exhibit J).

[2] The first plaintiff is Norman Roy, but in closing address counsel for the defendant said that this reference should be understood to be to the second plaintiff, Wallace Roy.

[3] In closing address counsel for the defendant said that this reference should be understood to be to the second plaintiff.

[4] Limitation of Actions Act 1958, s 3(1).

[5] [1974] 2 NSWLR 464.

[7] [1993] VicRp 23; [1993] 1 VR 315.

[8] At 341, Marks and Hedigan JJ agreeing.

[9] [1973] 1 NSWLR 737; [1974] 2 NSWLR 464.

[10] [2005] VSC 215, [129]-[130].

[11] [1968] AC 1086, 1095.

[12] [2002] UKHL 30; [2003] 1 AC 419.

[13] [2006] VSC 314.

[14] [2009] VSCA 188.

[15] (1977) 38 P & C R 452, 470-472.

[16] [2009] VSC 314, [5]. See too the balance of [5] and [6].

[17] Mihaljevic v Eiffel Tower Motors Pty Ltd [1973] VicRp 54; [1973] VR 545 at 547 per Gillard J.

[18] [1971] 2 QB 143, 149, 152, 154.

[19] [1952] HCA 37; (1952) 86 CLR 223, 250-251.

[20] [1950] 1 KB 115, 119.

[22] [1992] HCA 48; (1992) 175 CLR 353, 378-379.

[23] [2003] VSC 291; (2003) 9 VR 171, 233 at [222].

[24] [1973] QB 195.

[25] [1949] 1 KB 295.

[26] [1835] EngR 814; (1835) 1 Y & C Ex 427; (1835) 160 ER 174.

[27] [1975] Qd R 88.

[28] (1993) V Conv R 54-468 at 65, 465-65, 466.

[31] [1945] HCA 43; (1945) 71 CLR 531.

[33] [1957] VicRp 91; [1957] VR 625.

[34] (1990) 20 NSWLR 57.

[38] (1880) 15 Ch D 96.

[39] [1957] VicRp 91; [1957] VR 625, 629.

[41] See Gemmell v Brienesse (1933) 33 SR (NSW) 472; Restitution Law in Australia, Mason & Carter, 1995, para 627; Restitution in Australia & New Zealand, Cato, 1997, 49-52.

[42] (1987) 8 NSWLR 662.

[44] [1992] 3 SCR 762, 795.

[45] [1957] VicRp 91; [1957] VR 625, 629.

[46] [1945] HCA 43; (1945) 71 CLR 531.

[47] Dillwyn v Llewellyn [1862] EngR 908; (1862) 4 DeG F & J 517; Unity Joint Stock Mutual Banking Association v King [1858] EngR 303; (1858) 25 Beav 72.