A number of points may be made about this material. Evidence of Mr Glavinic's belief would not be admissible at any trial of the matter. If the only basis for his stated belief in paragraph 5 was what he had been told by Mr Mienelenwicz, he had no basis for his belief. That gentlemen apparently could not state which fence was built. His evidence was insufficient, in my view, to support an adverse possession claim and provided no basis, let alone a reasonable basis, on which to assert a right to the property by adverse possession.
29 The first defendant also faced a further problem in any event, namely the effect of the alleged agreements by him from 1997 to 2001 that the fence be moved to the title boundary. If in that period he had abandoned his adverse possession, then to prove that the fence was built in 1983 would not assist him. There was the further issue of the effect on the limitation period of the plaintiffs' action in issuing the Magistrates Court proceeding.
30 The making of the application for a vesting order was the act which brought the issue to a head and resulted directly in the issuing of a writ by the plaintiffs. At the time he made the application, Mr Glavinic had no sound basis for making a claim for adverse possession. The plaintiffs on the other hand were the registered proprietors and appeared to have a reasonable case. They acted reasonably in trying to defend their title by issuing the writ against Mr Glavinic. Mr Glavinic acted unreasonably in initiating his vesting application. To describe his conduct as opportunistic, as the Master did, is being generous.
31 In forming this view, I have rejected arguments advanced on behalf of Mr Glavinic. His counsel submitted that the plaintiffs acted unreasonably in rejecting the proposal to settle the matter advanced to them by the correspondence of 27 May 2003. This letter of offer arose out of the suggested re-establishment survey. Apparently, the point at issue was whether the original survey of the blocks of land had been conducted from the appropriate survey point. The re-establishment survey proposed by Mr Rickard would have had the effect of moving the boundary between the two properties a short distance to the south with the result that, if implemented, the land the subject to the adverse possession application was reduced in width to the point that the amount in dispute was approximately 5.5 inches wide and totalled approximately 5 square metres. Counsel for Mr Glavinic submitted that the refusal was unreasonable because if the proposal had been accepted, the palings on the fence would essentially have been on the suggested new title boundary.
32 This argument, I suggest, is disingenuous. The particular re-establishment survey was a proposal from Mr Glavinic. Its precise state and status were (and are) unclear. Whether owners of adjoining properties would need to be involved is not clear. What it did was suggest moving the common boundary closer to the location of the paling fence. It presumably would have involved a reduction of the total area of the plaintiffs' land unless their southern boundary might also have been the subject of a re-establishment survey. The proposal was not a compromise proposal but effectively gave the first defendant what he was seeking. It was a proposal requiring analysis by the plaintiffs' surveyor and lawyers and consideration of its implications generally. The important issue of costs was not dealt with in the letter. There was in reality nothing that could be accepted at that time. The defendant was still maintaining his case of adverse possession but had revealed little or no information about the facts relied upon to support the claim for adverse possession beyond the assertion that the fence was erected in 1983. The defendant also had the problem of the possible legal effect of the earlier agreements. In all the circumstances it cannot be said that the plaintiffs acted unreasonably in rejecting the proposal. The issues had become more complex, however, and settlement of the dispute even more desirable.
33 Counsel for the first defendant also submitted that the plaintiffs acted unreasonably in issuing the writ because they knew that the first defendant was only seeking a small area, some 5 square metres and this was commercially absurd as the plaintiffs have said. In addition it was going to make little difference to the enjoyment of the property. If those propositions are correct, they apply equally to Mr Glavinic. I note that the area in dispute was in fact more than 5 square metres but still a small area.
34 The first defendant had given no indication of a desire to compromise and the plaintiffs had no option but to issue the proceedings if they wished to protect their rights.
Conduct of the Supreme Court proceedings
35 As noted above, the writ of the plaintiffs was issued on 20 October 2003. A directions hearing took place before Master Bruce on 5 Feb 2004. Orders were made setting a time table for interlocutory steps following which an unsworn affidavit of documents dated 6 May 2004 was supplied by Mr Glavinic to the plaintiffs on 7 May 2004 and on 11 August 2004 the plaintiffs swore an affidavit of documents.
36 After issuing the writ, the solicitors for the plaintiffs wrote on 5 August 2004 to the first defendant's solicitors referring back to the letter of 27 May 2003 and seeking information and elaboration of the propositions made in that letter - in particular an explanation of the proposition that there was now a small area affected by adverse possession which could be eradicated by placing the upright palings on Mr Glavinic's side of the fence. Notes and diagrams were sought. The letter suggested that this material would be good material to discuss at a mediation to be held on 26 August 2004. The letter also requested the provision of a number of documents including statutory declarations of G Mienelenwicz sworn 30 May 2003 (together with exhibits), P. Archer sworn 13 June 2004, Mr Glavinic sworn 2 June 2003[16] D Scobarrs sworn 11 July 2003 and Bruce Granger dated 12 August 2003.
37 The first plaintiff, Mr Patsios, deposes that during the mediation it became clear to him that because of the enormous cost of legal representation and the fact that he would not be able to recover more than half of his legal costs even if the court found in his favour, the continued conduct of the proceeding was "impractical and uncommercial and accordingly futile". He went on to depose that the disputed land according to his surveys was, at its widest point, approximately 21 centimetres wide. Its effect on the value of his property was, therefore, minimal. It had no impact on the enjoyment of his property. Having formed that view, he then sought to negotiate a settlement with the first defendant. In particular, he proposed that the first defendant be permitted to obtain that part of the land subject to the adverse possession claim, that the proceedings be discontinued, that the plaintiffs and first defendant each pay half the costs of the erection of a new fence to a height of 1.9 metres and that each of the parties bear their own costs. A series of without prejudice communications passed between him and the first defendant following the mediation. The negotiations, however, were unsuccessful.
38 On 16 December 2004, Mr Patsios attended a directions hearing before Master Bruce. He informed Master Bruce that the plaintiffs did not wish to proceed against the first defendant and that they wanted to end the matter on the basis that each of the parties to the proceeding bore their own costs. The first defendant indicated to the Master that he was not willing to settle on that basis and that he required that the plaintiffs pay his costs. The Master urged the parties to negotiate a settlement before the next directions hearing on 3 February 2005.
39 At the next directions hearing, the parties' positions had not changed and the Master suggested that the first defendant provide the plaintiff with a bill of costs in taxable form. At the hearing on 3 March 2005, again the positions of the parties had not changed. The first defendant advised the Master that he was yet to provide the plaintiffs with a bill of costs in taxable form.
40 On 6 April 2005 the plaintiffs' solicitor sent a letter to the first defendant re-stating the terms of the previous offers of settlement. On 7 April 2005 the wife of Mr Glavinic contacted Mr Moss, the solicitor for the plaintiffs, to advise that the first defendant was not prepared to settle on the basis of the terms in the letter. Mr Moss then requested the first defendant to provide the plaintiffs with a counter offer for consideration and the provision of a bill of costs in taxable form. On 8 April 2005, the solicitor for the first defendant spoke to Mr Moss repeating the first defendant's rejection of the offer of settlement. In that conversation, Mr Moss repeated the request that the first defendant make a counter offer and provide the plaintiffs with a bill of costs in taxable form. There was a further conversation between solicitors on that day in the course of which the solicitor for the first defendant repeated that his client was only willing to settle on terms that the plaintiffs pay his costs but said that they would have to be paid on an indemnity basis.
41 On 12 April 2005, the Listing Master made orders setting the proceedings down for trial. On 6 May 2005, the plaintiffs' solicitor wrote to the solicitor for the first defendant noting that despite numerous requests the first defendant had not provided a bill of costs in taxable form stating that if it was not provided the plaintiffs would be applying for leave to discontinue the proceedings and for an order that each party bear their own costs. The solicitors for the first defendant having failed to provide a response, on 23 May 2005, the plaintiffs instructed their solicitors to file a summons seeking orders that the plaintiffs be granted leave to discontinue the proceedings and that the plaintiffs be awarded costs of the application and that otherwise there be no order as to costs. It was in those proceeding on 31 May 2005 that Master Evans made the orders from which the appeal is brought.
Assessment of conduct under the litigation
42 The steps taken by the parties to advance the proceedings up to and including the mediation were reasonable in all the circumstances and neither party should be criticized for them. Criticism, however, may be made about the conduct of the first defendant at or after the mediation.
43 Looking at the state of the parties' cases, some changes occurred in the evidence available to the parties subsequent to the lodging by Mr Glavinic of his vesting order application on 20 December 2002.
44 It is apparent from the discovered documents of Mr Glavinic that, at about the time of and shortly after the offer made by the first defendant in May 2003, he had been obtaining information and statutory declarations from various persons about the construction of a fence on the southern boundary of his land. Initially, his application had proceeded on the basis that the fence in question was built in 1983. The statutory declarations included the following: