Conveyancing - Land titles under the Torrens system - Indefeasibility of title: certificate as evidence - Exceptions - Adverse possession of others - After certificate - Tasmania - Interrelationship of Limitation Act and Land Titles Act - Survival of right arising under Limitation Act.

Limitation Act 1974 (Tas), s10(2), 11(1), 12(5) and 21.

Land Titles Act 1980 (Tas), s40(3)(h), 138T, 138U, 138V and 138W.

Woodward v Wesley Hazell Pty Ltd B8/1994; Natural Forests Pty Ltd v Turner [2004] TASSC 34, referred to.

Torts - Trespass - Trespass to land and rights to real property - Right to relief - Possession - Generally - What amounts to right sufficient to support action.

Perry v Clissold [1906] UKPCHCA 5; [1906] 4 CLR 374; Malter v Procopets [2000] VSCA 11, Mabo and Others v The State of Queensland No 2 [1991 - [1992] HCA 23; 1992] 175 CLR 1; Newington v Windeyer (1985) 3 NSWLR 555, referred to.

Judgment Number: [2007] TASSC 65

1 The plaintiffs commenced two actions, one on 2 February 2005 and one on 15 November 2006. By consent it was ordered they be heard together. The defendants in each action are the same, being in effect the registered proprietor of land which adjoins that owned by the plaintiffs at Lady Bay Road, Southport.

2 By action number 33/2005, the relief sought by the plaintiffs was as follows:

"(a) An injunction to restrain the defendants whether by himself or itself or his or its agents or otherwise howsoever from entering upon the plaintiffs land or the plaintiffs' land in possession.

3 By action number 467/2006, the relief sought was as follows:

"(a) An injunction to restrain the defendants whether by himself or itself or his or its agents or otherwise howsoever from entering upon the plaintiffs land or the plaintiffs' land in possession, and from damaging or removing the boundary fence.

4 The actions arise out of a dispute as to possession and/or ownership of a strip of land between 4 and 5 metres wide on the boundary between property owned by each party.

5 In 1981, the male plaintiff, who I will refer to as "Q" for ease of reference, purchased land at Southport from persons by the name of Hay. The contract of sale was dated 9 February 1981 and listed the pieces of land which were to be the subject of the sale in the First Schedule. Relevantly one piece was described as follows:

"Part 14B C/T 3108/99 (Part) Approx. Area 5a 2r 32p"

Some remarks appeared beside this description which the agreement provided did not form part of it.

6 Clause 7 in the contract of sale provided:

"The Vendors shall not be required to fence. These words shall have the meaning expressed by the Conveyancing and Law of Property Act. Prior to completion the Vendors will erect at their own cost upon that portion of the land identified in the First Schedule by the number 14B which is marked 'XY' on the plan annexed hereto a five strand post and wire fence."

No plan was attached to the contract. The contract provided for completion on 1 July 1981.

7 Certificate of Title Volume 3108 Folio 99 related to three areas of land, one of which was an area of 10 acres 1 rood and 25.3 perches bordering on Dover Street (now known as Lady Bay Road) in the north and a road described as "Esplanade" in the west. That area was divided into Lots 1 and 2, which were defined on diagram of survey number 362/13D which became plan number 80157. Lot 1, according to that survey diagram, had an area of 5 acres 2 roods 21.3 perches. The area agreed to be sold to Q was not defined by reference to Lot 1 in the contract, but by reference to an approximate area.

8 In March 1981, at Hay's request, a Mr Anthony Peacock, a surveyor, did a repeg survey of the boundaries of Lot 1 for the purpose of verifying the title and to confirm boundaries so it could be fenced. He placed a line peg for that purpose. The boundaries he determined were almost identical to those shown in diagram 362/13D. On that repeg survey, he noted the existence of a post and wire fence on Lot 2 which he estimated had been there at that time for about 20 years.

9 Q and his wife moved into the property in February 1981 prior to settlement. At some point, in the absence of the plan referred to in the contract of sale, Q and the vendor Hay agreed between themselves where the fence provided for in clause 7 of the contract between the parties would be. Q did not obtain any survey to check that the southern boundary of the property to which he was to take title was in fact on the fence line he agreed with Hay. Hay retained ownership of the land to the south of that purchased by Q. Initially no fence was built on the line to which Q and Hay agreed. Hereafter in these reasons I will refer to the block purchased by Q as "the northern block" and that retained by Hay as "the southern block".

10 Early in 1982, Q took title to the northern block. The documentary title to that block is now reflected in Folio of the Register Volume 139705 Folio 1. The plan attached to that title is plan number 139705 which shows the block, described in that title as Lot 1, with an area of 2.280 hectares. Plan number 139705 refers to the original survey for the block as being 362/13D. The documentary title to the southern block is now reflected in Folio of the Register Volume 242728 Folio 1 which has an area of 1.932 hectares.

11 In November 1981, Hay decided to sell the southern block. He approached Q and asked him to build a fence between the two blocks, but on another line further north from that they had initially discussed. Q constructed a fence on that second line, again not obtaining any survey, in mid-November 1981. The southern lot was sold to a person by the name of Ransom. There was no precise evidence as to the date. However I infer from Q's affidavit that it was late 1981 or early 1982. There were no discussions between Q and Ransom about the boundary line between the two blocks. Ransom sold his block in September 1992 to people by the name of Norris, who in turn sold to the second named defendant in 2003.

12 In about April 2003 a surveyor, Mr Tony Carrick, was asked to survey the southern block at the request of the then owner, Norris. He did so and established a boundary line between the two blocks. He also noticed a fence. He determined that the fence was encroaching on the southern block by about 4 to 5 metres. He looked at the survey which had been done by Mr Peacock in 1981 and noted that no such fence existed at the time Mr Peacock did his survey. The fence Mr Carrick found was not on the boundary line between the original lots 1 and 2 as found by Mr Peacock. While he was at the property, Mr Carrick said he was approached by Q, who told him the fence was the boundary and he was not to put any pegs north of that line. He did not do so for that reason.

13 By the date of Mr Carrick's survey, Mrs Norris had already entered into a contract to sell the southern block to the second named defendant. That contract was subject to an identification survey. At some stage in June 2003 the solicitors for the second named defendant became aware of the existence of Mr Carrick's survey and that the fence he referred to was encroaching on the southern block. They asked questions about the matter. The issue was not resolved in any way and the defendants settled the purchase on 16 July 2003 knowing the fence was apparently not on the title boundary.

14 By a letter dated 23 August 2003, Q wrote to the defendants. The letter sought to enter into an agreement for him to use the southern block to graze his cattle. There is no mention at all about any possible dispute about the boundary line. Coincidentally, by letter dated 26 August 2003 solicitors for the defendants wrote to Q about the boundary. I say "coincidentally" because it is unlikely that the defendants had already received Q's letter to them of 23 August. The letter written by those solicitors was in the following terms:

"RE: BOUNDARY FENCE

I advise that I act for QASAIR Investments, who have purchased the property adjacent to your property on the esplanade in Southport.

I enclose* a copy of the title plans of your property and my clients property together with a surveyors certificate.

My client wishes to erect a fence along the boundary and it appears to be an appropriate time for the old stock fence that is internal to the boundary to be removed and a proper boundary fence to be erected.

I would be pleased if you could confirm your agreement to the above. My client is content to pay for the erection of the fence given that previously no boundary fence has been required, and the existing stock fence was suitable in respect to stock and other movement.

I look forward to your advice at your earliest convenience."

15 It seems there was then correspondence between the parties and/or their solicitors which culminated in two letters. The first was from Q's solicitors to the defendant's solicitors dated 13 February 2004, which read as follows:

"RE: QUARMBY AND QASAIR INVESTMENTS - BOUNDARY FENCE

Thank you for your letter of the 11th February 2004.

We have taken instructions from our client.

Our client's instructions are that he does not believe that your client will be successful with their claim and as a consequence can see no further benefit in continuing with this mutual correspondence. He therefore invites your client to make the appropriate application if it considers it has sufficient grounds to do so. Please note however that any attempt to interfere with our client's present boundary fence without the benefit of an appropriate Court order, will result in an application for a restraint order and/or injunction against your client.

Should your client decide to institute proceedings against our client in relation to this matter, we don't presently have instructions to accept service of proceedings and we would need to obtain those."

In reply, the defendant's solicitors wrote on 25 February:

"RE: QUARMBY & QASAIR INVESTMENTS

Thank you for your letter of 13th February 2004.

I advise there is no appropriate application where it is regarded by everyone including the Surveyor General and your clients previous owners own survey as to where the boundary is.

My client will allow your client to remove his fence within the next 30 days or he will regard himself as being entitled to remove it himself if he so desires.

Clearly your client cannot take out an injunction to restrain my client from doing something on his own property."

16 At this point in time, there had been no overt step taken by Q to, for example, obtain title by adverse possession to the area of land which appeared to have been fenced by him but was part of the documentary title to the southern block ("the disputed area"). He had not lodged any caveat claiming an interest in the area.

17 In this climate, three incidents occurred which form the basis for the relief now sought by the plaintiffs.

18 At about 2am on 15 May 2004, the plaintiffs found 10 of their cattle on Lady Bay Road outside their house. They herded the cattle back into the paddock, checked the gate and the fence near it, which was all they could see in the dark, and went back to bed. Later that morning the cattle were seen to be grazing in the paddock and so no check of fences was done. Just before dusk the same day, the plaintiffs again found some of their cattle on the road. They herded them back. The following morning a check of their boundary fences revealed that a 215 metre length of fence between their property and the defendants' property had been destroyed. The fence had been pushed into three heaps. Q said he assumed it had been done with a four-wheel drive vehicle or tractor, but could see no tyre marks. He repaired the fence.

19 On 1 June 2004, Q wrote to the defendants accusing them of destroying the fence and claiming the cost of repairs, advising the fence had been replaced. Solicitors for the defendants replied by letter dated 21 June 2004 in the following terms:

"RE: BOUNDARY FENCE

As you are aware, I act for the new owners of your adjacent property at Lot 2, The Esplanade, namely, Qasair Investments. I am advised that you have replaced the fence that was previously removed and which is located on my client's property.

I enclose* a copy of the letter from the Surveyor General which confirms that there is no argument about where the boundary of this property lies. Please take notice that should you endeavour to replace the fence again after it has been removed then my client shall be requesting the following damages:

Please note that any further attendance by you upon my client's property shall be treated as a trespass and you shall be prosecuted.

Your previous solicitors, Murdoch Clarke, have advised they are unsure as to whether they have instructions from you in this regard. It is patently clear that you realise you do not have a right to the property in question and that this was known from the time when you initially purchased the property.

Please do not hesitate to contact the writer if you have any queries in respect to the above or alternatively take notice that the fence will be removed and you will be prosecuted if you attempt to attend to replace it on my client's property."

20 Some weeks later on 13 July 2004, Q applied for and obtained an ex parte interim restraint order against the first defendant. It was in the following terms:

"1 keep the peace towards Dr AIan Quarmby, Barbara Jean Quarmby

2 not go within 2 metres of the boundary of the premises at 96 Lady Bay Road SOUTHPORT in Tasmania (or the boundary of any premises) where the said Dr Alan Quarmby and Barbara Jean Quarmby may be staying or living from time to time

3 not damage any personal or other property of Dr Alan Quarmby and Barbara Jean Quarmby"

That order was vacated by consent in January 2005 on condition, amongst others, that Q commence proceedings in this Court to settle the dispute. The first writ was filed on 2 February 2005.

21 On about 13 February 2006, Q found the fence he had replaced had been damaged again. Some strands of wire had been cut and star pickets bent over. He repaired the damage.

22 On or about 18 February 2006, the first named defendant came to the southern block and was seen by Q to cut the wire fence in a number of places. Q approached him. Each time he did, the first named defendant got into his car and moved to a different place in the fence. The first named defendant cut the wire in between 15 and 20 places, but did no damage to any posts. There was a confrontation between the two men. The first named defendant left.

23 Q repaired the fence. He then applied again to the Magistrates Court for a restraint order against the first named defendant. One was made on 1 March 2006, which I infer was by consent, in the following terms:

"1 keep the peace towards Dr Alan Quarmby, Barbara Jean Quarmby

2 not damage the fence line marked on the attached plan with a blue line and crosses.

3 not damage the fence line.

4 not to cross over it onto land occupied or owned by the applicant until Supreme Court action 33/05 is determined.

THIS ORDER WILL REMAIN IN FORCE UNTIL THE DETERMINATION OF SUPREME COURT ACTION 33/05."

The second writ was not filed until November 2006.

24 In essence, the plaintiffs seek damages for trespass and an indefinite injunction to prevent the defendants re-entering the disputed area. There are other claims, but these are the substantive ones. The plaintiffs' claim that they have a documentary title to the disputed area. In the alternative, if that is found not to be so, they assert that they have possessory title protected by the Limitation Act 1974.

25 The plaintiffs put no direct evidence before the Court to support this contention. Their counsel vigorously cross-examined Mr Peacock and Mr Carrick, who were both called by the defendants, but, with respect, to no avail. Both surveyors, when questioned, maintained that the boundary of the lot held by Q was as per their respective surveys and there was no room for doubt about that. They were also both of the opinion that the lot described in the documentary title held by Q was Lot 1 as defined by their surveys.

26 Mr Carrick was clearly of the opinion that the fence erected by Q in 1981 was erected on what is now the property of the defendants, and that the disputed area was wholly within the defendants' documentary title.

27 There is, in my view, no doubt that Q's documentary title does not include the disputed area.

Claim to possessory title sufficient to give rise to claim in trespass

28 The plaintiffs claim that they are entitled to possession of the disputed area as against the defendants such as to be able to bar the defendants from the area and mount a case in trespass. Counsel for the plaintiffs, in the opening words of his closing address said "Trespass ... is a cause of action which is designed to protect a possession. It is not designed to protect a title." Having said that, the following submissions wove the two concepts of possession and title together inextricably.

29 There was undisputed evidence that the plaintiffs erected the original fence to the south of the disputed area in the middle of November 1981, thus enclosing that area effectively within their own property. Since then they have grazed sheep and cattle on the area, they have slashed the grass and other growth there, they have parked vehicles and machinery there periodically and they have maintained the fence. They have effectively treated the disputed area as their own. There was no evidence anyone challenged that de facto possession in any way until 2003.

30 The plaintiffs asserted that at all times they believed the disputed area was within their documentary title and that the fence represented the boundary of that title. That belief was not, in my view, reasonably open to them on the evidence and, if held, could only be recklessly so. There was no evidence the plaintiffs ever obtained a survey to check the boundaries of the northern block, the fence line was an arbitrary one agreed with the person who sold the land to them, a survey in March 1981 after they were in occupation clearly represented the southern boundary as other than on the fence line, and the survey by Mr Carrick in 2003 showed the same thing. Q was aware of that from his discussion with Mr Carrick. This degree of recklessness is inconsistent with Q's litigious history in relation to boundary fences and I infer at least Q was well aware the southern boundary of his documentary title was not as represented by the fence.

31 An area of dispute at the hearing was who had paid the rates in respect of the disputed area. The rates notices put before the Court show that the plaintiffs were paying rates in respect of an area of land of 2.280 hectares identified by the local council by property identifier number 5270560. The defendants were paying rates in respect of an area of land of 1.932 hectares identified by the local council by reference to property identifier number 2226900. Counsel for the plaintiffs suggested that by reference to the evidence of Mr Mason and Mr Norman, it was open to me to find that the rates paid by the plaintiffs were assessed by reference to the size of their property from a visual inspection by a valuer and not by reference to the size disclosed by the title. The evidence of those witnesses did not support that contention and I do not accept it. It is plain rates were levied by reference to the area shown on the title as recorded in property records.

32 It might have been suggested that the plaintiffs actually paid rates assessed against Ransom or Norris in respect of the disputed area. Neither plaintiff gave evidence to that effect. The only inference to be drawn is that rates in respect of the disputed area were assessed against the holder of the registered title from time to time to that area and that those persons paid those rates. From late 1981 or early 1982, the registered title holder was Ransom, then Norris, and then the second named defendant. There was no evidence rates remained unpaid for any significant period between 1981 and 2007. The only conclusion which can therefore be drawn is the plaintiffs have never paid rates in respect of the disputed area. The only inference which flows is that the registered proprietor from time to time did so.

Interrelationship between Limitation Act 1974 and Land Titles Act 1980

33 Both counsels' submissions focussed on provisions of the Land Titles Act 1980 ("the LTA") and the Limitation Act 1974 ("the LA"). It is necessary to set out the various relevant provisions. The LA, ss10(2) and 21, provide:

"10 (2) No action, not being an action to which subsection (1) applies, shall be brought by any person to recover any land after the expiration of 12 years from the date on which that right of action accrued to him or, if it accrued to some person through whom he claims, to that person."

"21 Subject to section 13, at the expiration of the period prescribed by this Act for any person to bring an action to recover land (including a redemption action or an action to compel discharge of a mortgage) the title of that person to the land shall be extinguished."

34 The LTA was enacted in 1980 with effect from 1 October 1981. The object of the Act was stated to be "An Act to consolidate and amend the law relating to the registration of title to land, easements and possessory titles". The provisions relating to adverse possession in that Act, prior to 12 April 2001, were set out in Pt VI Div 12. That division relevantly contained ss117, 118 and 119, which provided as follows:

"117 (1) Subject to this section, the Limitation Act 1974 applies to the title of a registered proprietor of an estate in registered land in the same manner and to the same extent as that Act applies to the title of a proprietor of land which is not registered land.

(2) The estate of a registered proprietor of registered land is not extinguished by the Limitation Act 1974, but where the estate would have been extinguished had the land not been registered land, the registered proprietor of the estate shall be deemed to hold that estate in trust for the person who, by virtue of that Act, would have acquired title to that estate had that land not been registered land, but without prejudice to the estate or interest of any other person in the land which would not have been extinguished by that person's possession, had that land not been registered land.

(3) A person who claims that the registered proprietor of an estate in registered land holds that estate in trust for him by virtue of subsection (2) may apply to the Recorder in an approved form for an order vesting in him the legal estate which he would have acquired had the land not been registered land.

(4) The right of a person to apply under subsection (3) is not affected -

(a) by the bringing of the land in respect of which that person applies under this Act or the repealed Act, or by the making of a vesting order in respect of the land under section 123 of this Act or section 14 of the Real Property Act 1893 or under the Real Property (Special Vesting Orders) Act 1973, during the period of that person's possession of the land;

(b) by the registration of any dealing by, or the registration of the transmission of the title of, a registered proprietor of the land in respect of which that person applies; or

(c) by the re-certification by the Recorder in the course of the administration of this Act or the repealed Act of the estate in the land in respect of which that person applies -

except, in the case of paragraphs (b) and (c), where that person's possession ceased on or before 31st October 1974.

(5) An application under subsection (3) shall, unless the Recorder in any particular case otherwise determines, be supported by a plan of survey (with field notes) of the land certified as correct by a surveyor registered and certificated under the Land Surveyors Act 1909.

(6) The Recorder may -

(a) reject an application under subsection (3) altogether or in part; or

(b) make such requisitions as to the title claimed to be acquired, or as to any other matter relating to the application, as he thinks fit.

(7) If the Recorder does not reject an application under subsection (3), he shall direct that notice of the application in such form as he directs be advertised in such newspaper as he directs and be given to any person named by him.

(8) A notice referred to in subsection (7) shall be given to every person appearing by the Register to have any estate or interest in the land, or in any mortgage or encumbrance recorded on the folio of the Register relating to that land.

(9) An applicant under subsection (3) shall cause a copy of the notice to be posted in a conspicuous place on the land or at such place as the Recorder directs and to be kept so posted for not less than one month prior to the granting of the application.

(10) A notice under subsection (7) shall appoint a time, being not less than one month from the advertisement or service of the notice at or after the expiration of which the Recorder, unless a caveat is lodged forbidding it, may make a vesting order as provided in section 119.

(11) At any time prior to making a vesting order, the Recorder in his discretion, notwithstanding any direction previously given by him as to the application under subsection (3), may reject the application altogether or in part if the applicant fails to comply to his satisfaction with any requisition made or direction given by him within such time as to him seems reasonable.

118 (1) A person claiming an estate or interest in the land in respect of which an application under section 117 is made may, before the Recorder makes a vesting order pursuant to the application, lodge a caveat with the Recorder forbidding the granting of the application.

(2) A caveat lodged pursuant to subsection (1) shall be in an approved form, and shall in all other respects have the same effect with respect to the application against which it is lodged as a caveat against bringing land under this Act.

119 (1) Subject to sections 117 and 118, after the expiration of the time appointed, the Recorder may make an order vesting in the applicant under section 117 the legal estate which the applicant would have acquired had the land not been registered land, free from -

(a) all estates and interests recorded on the folio of the Register or registered dealing evidencing title to the land which would have been determined or extinguished by the applicant's possession of the land;

(b) any mortgage or encumbrance which could be discharged under section 91; and

(c) any registered easement or profit à prendre (not being an easement or profit à prendre created by a plan sealed under Part 3 of the Local Government (Building and Miscellaneous Provisions) Act 1993) which has been proved to the Recorder's satisfaction to have been abandoned -

but subject to any restrictive covenant notified on that folio or registered dealing.

(2) For the purposes of subsection (1), the Recorder may treat evidence of non-user of an easement or a profit à prendre for a period of not less than 20 years as evidence that the easement or profit à prendre has been abandoned.

(3) On making a vesting order under this section, the Recorder shall make such recordings and cancellations in the Register as he deems necessary to give effect to the vesting order and to register the person in whom the order vests the land as proprietor of the land, and may call in certificates of title, grants, and duplicate registered dealings for the making of the like recordings and cancellations.

(4) Where the registered proprietor whose registration is to be cancelled pursuant to subsection (3) is -

(a) a legal owner referred to in section 13 (2) of the Limitation Act 1974; or

(b) a trustee referred to in section 13 (3) or 13 (4) of that Act -

his right to recover the land is not extinguished, notwithstanding the registration as proprietor of the applicant under section 117 or any person deriving title under him otherwise than as a purchaser in good faith for value, so long as any other person has a right under section 13 of that Act to recover the land.

(5) The Recorder may, if he thinks fit, by reason of the imperfect nature of the evidence of title or otherwise, make a vesting order under this section subject to the condition that the title vested shall be a qualified title as mentioned in Division 4 of Part III."

35 The LTA, s117, enacted after the LA, s21, modified the law insofar as it related to registered land. The title of a registered proprietor of land under the LTA could not be extinguished as a consequence of the operation of the LA, ss10(2) and 21. At best, a claimant to title by adverse possession obtained the benefit of the LTA, s117(2), and the right to make an application to vest a registered title, subject of course to their being able to satisfy the Recorder as to their claim to adverse possession.

36 That was therefore the position as at November 1993, at which time the plaintiffs assert they had had possession adverse to the documentary title holder of the disputed area for 12 years. The plaintiffs, however, took no step to "perfect" any title to the area, that is, convert it from whatever rights they had to a documentary title.

37 The Land Titles Amendment (Law Reform) Act 2001, took effect on 12 April 2001. By that Act, Div 12 of Pt VI of the LTA was repealed and replaced by Pt IXB. Of particular relevance to this case are the provisions of Div 5 of Pt IXB, being ss138T to 138Y inclusive. Sections 138T and 138U provide:

"138T A person who has been in possession of land owned by another person may acquire title to that land in accordance with this Division but not otherwise.

138U (1) For the purposes of an application to acquire title to any land by possession, any period during which council rates have been or are paid by or on behalf of the owner is to be disregarded.

(2) This section does not apply to an application if the relevant council has certified in writing that it is unclear who has paid, or is paying, the relevant council rates."

38 Section 138V sets out the matters to be considered by the Recorder of Titles "in determining an application for title based on possession". Section 138W is headed "Registered proprietor to hold land on trust". Section 138W(1) is in identical terms to s117(1) of the repealed provisions. Section 138W(2) is, to all intents and purposes, the same provision as s117(2). Section 138W(4) provides:

"138W (4) A person who claims that the registered proprietor of an estate in registered land holds that estate in trust for him or her under subsection (2) may apply to the Recorder in an approved form for an order vesting in him or her the legal estate which he or she would have acquired if the land had not been registered land."

The balance of s138W deals with various aspects of an application for a vesting order made pursuant to s138W(4), while s138X deals with the powers of the Recorder of Titles to make a vesting order.

39 Division 5 generally deals with applications by persons who seek to be registered as proprietors of land, then registered in someone else's name, based on their possession of it. Section 138T provides that, if a person seeks to acquire title in this way, that is a registered title based on such a claim, they may only do so in accordance with Div 5. The plaintiffs have made no application at all pursuant to Div 5. Counsel for the defendants submitted they had not done so because they knew that they would fail, primarily as a consequence of s138U.

40 Section 138U did not appear in the repealed Pt VI Div 12. It was an entirely new section introduced to meet what seems to have been perceived as an unjust result in the matter of Woodward v Wesley Hazell Pty Ltd (B8/1994, 21 February 1994). When introducing the amendment to Parliament, the Minister said in the Second Reading Speech on 23 November 2000:

"The Government has approved an amendment to the law to safeguard an owner paying rates from being dispossessed. The onus of proving acquisition of title by adverse possession lies on the possessor. However, with the introduction of the bill, prior to making an application to the Recorder of Titles, an adverse possessor will have to have made requisite searches for the registered proprietor, determined who has been paying the rates and advertised of the intention of making such application. If the registered proprietor is paying rates and has been for the statutory period, the adverse possessor is precluded from making an application to the Recorder. This amendment will prevent circumstances similar to that of the Hazell case occurring again. If it is uncertain who is and has been paying rates, for example, because of imperfect council records, then an application will be at the discretion of the Recorder."

41 In Natural Forests Pty Ltd v Turner [2004] TASSC 34, Underwood J (as he then was) dealt with the question of whether s138U operated retrospectively. He determined that it did and, with respect, I agree with his conclusion. The case he was there dealing with was somewhat different from the present in that the person claiming adverse possession had made no application to the Recorder of Titles to vest land, but had simply lodged a caveat. The registered owner sought to have the caveat removed. Underwood J ordered the caveat be removed, concluding that by reference to s138U the caveator could never succeed in an application to be registered as proprietor.

42 I have already found that the plaintiffs have not paid rates in respect of the disputed area since at least late 1981 or early 1982 when Ransom purchased the southern block. Even if I am wrong as to that, there can be no doubt they did not do so from September 1992 when Norris bought that property. The consequence of this is that the plaintiffs would be precluded by operation of the LTA, s138U, from succeeding in a claim pursuant to the LTA to be registered as proprietors of the disputed area.

43 The plaintiffs submit that there is nothing in the LTA which obliges them to apply to be registered as proprietors pursuant to Div 5, and that they have acquired rights by virtue of the LA, s10(2), which are sufficient to ground their claims in trespass without being so registered. If this argument is correct, it will create a somewhat unusual situation whereby the plaintiffs will be able to assert a right to possession of the disputed area to the exclusion of the defendants without ever being able to obtain title to the area.

44 The impact of the LTA, s40, was also canvassed. Counsel for the defendants submits that his clients' title to the disputed area is indefeasible by reason of this section because s40(3)(h) does not assist the plaintiffs. He also submits that the LA, s10(2), has no application to this matter. The LTA, s40(3)(h), provided in 1993, and continues to do so, that:

"The title of a registered proprietor is not indefeasible ... subject to section 117, so far as regards rights acquired, or in the course of being acquired under a statute of limitations."

It is accepted that, by virtue of the Acts Interpretation Act 1931, s17, s117 should now be read as s138W.

45 The LTA, s40(3)(h), recognises that rights in land may be acquired pursuant to the LA which may ultimately defeat the title of a registered proprietor of land. Counsel for the plaintiffs argues that they have passively acquired such rights by virtue of the LA, and that therefore the defendants' title is not indefeasible as a consequence of s40(3)(h). Counsel for the defendants, on the other hand, says that the only means by which the plaintiffs can obtain "rights" within the meaning of the LTA to the disputed area sufficient to defeat the title of the registered proprietors, is to make an application under Div 5.

46 With respect, the submissions of counsel for the plaintiffs disregard the opening words of subs(h), "subject to s117 [s138W]", and assume they are not there. Were they not there, his argument may have some force. The effect of the LT, s10(2), is to give a claimant a right to possession of land. In respect of unregistered land, that person obtained "title". The owner, or his predecessors in title, from whom possession had been taken, could not then seek to recover the land. In respect of registered land, however, the situation was modified by the LTA. The claimant could still, by virtue of the LA, s10(2), obtain a right to possession and the registered owner could not apply to the courts to re-take possession. However, the claimant had to take steps under the LTA if he wished to elevate it to a title which, in law, extinguished that of the registered proprietor. A claimant's right therefore remained one of claimed possession, at best an equitable interest in any disputed land. The registered proprietor retained his registered title, indefeasible as to that title in the absence of a successful application under s138W(4).

47 In the present case, the plaintiffs assert that they had possession of the disputed area from November 1981 in circumstances such that the registered owner was precluded by virtue of the LA, s10(2), from applying to a court to get the land back and that, by virtue of the LTA, s138W(2), the defendants hold the disputed area in trust for them. They assert, as a consequence, that they have a better title to the disputed area than the defendants and are therefore able to mount a claim of trespass against them. Counsel for the plaintiffs submits that the plaintiffs' rights obtained by adverse possession pursuant to the LA, s10(2), stand alone and are preserved as a consequence of the LTA, s138W(1) and (2). He says there is no need to go further and apply to convert those rights to a registered title. The rights thereby preserved, which he described as "full equitable fee simple possessory title", are sufficient to ground a claim in trespass.

48 Counsel for the plaintiffs describes his clients' rights in the disputed area as a "possessory title". It should not be confused with the concept by the same name provided for in Pt IXB of the LTA. The heading of that Part is "Possessory Title". However, the two concepts are obviously different. Counsel for the plaintiffs has used the term in the context of rights in land which fall short of an actual title in registered land, whereas the LTA uses it in the context of a title to registered land able to be obtained upon application as a consequence of possession.

49 Counsel for the plaintiffs submitted that "the proposition at common law that my client obtained a possessory title good against all the world after the elapsement of the relevant period of limitation and the consequent extinguishment of the documentary title holder's equitable estate" was clearly supported by authority. He firstly made reference to Perry v Clissold [1906] UKPCHCA 5; (1906) 4 CLR 374. This was an appeal to the Privy Council from the High Court. The judgment of the court was delivered by Macnaghten LJ, and at 377 he said:

"It cannot be disputed that a person in possession of land in the assumed character of owner and exercising peaceably the ordinary rights of ownership has a perfectly good title against all the world but the rightful owner. And if the rightful owner does not come forward and assert his title by process of law within the period prescribed by the provisions of the Statute of Limitations applicable to the case, his right is for ever extinguished, and the possessory owner acquires an absolute title."

50 There can be no doubt that the principle to which Macnaghten LJ was referring was correct in the context of what he was dealing with, namely a dispute as to possession of unregistered land. In that context, it was not the "equitable" estate of the documentary title holder which was extinguished by the passage of time, but the legal title.

51 Counsel for the plaintiffs made reference to a passage in the judgment of Underwood J in Woodward v Hazell (supra) . His Honour, in that case, was dealing with a situation where a claimant to title by virtue of claimed adverse possession had applied to the Recorder of Titles for a vesting order. The registered proprietor had lodged a caveat to prevent the making of that order and made application to the court, as he was obliged to do, for a declaration that he was entitled to possession. At 3, His Honour said:

"On 2 January 1991 the defendant's predecessor in title lodged a caveat with the Recorder of Titles. The caveat claimed "an estate in fee simple in possession by virtue of exclusive uninterrupted possession by the caveator through its servants and agents for a period in excess of twelve (12) years." Notwithstanding the provisions of the Lands Titles Act 1980, s40 which confers indefeasibility of title in the case of land that has been brought under the Act, s117 provides that the provisions of the Limitation Act 1974 apply to the title of a registered proprietor of registered land in the same manner as it applies to the title of a proprietor of unregistered land. Subsection (2) saves the title from being extinguished by adverse possession and enacts where, in the case of unregistered land the title would have been so extinguished, in the case of registered land, the registered proprietor holds the land in trust for the person who has acquired the title by adverse possession. Subsection (3) enables such a person to apply to the Recorder for a vesting order. This, the defendant's predecessor did in June 1991. If the plaintiff is able to maintain proceedings to recover the disputed land, the Recorder will not grant the vesting application."

"The effect of the Limitation Act 1974, ss10(2) and 11(1) is that if the plaintiff was either dispossessed or discontinued his possession twelve years or more prior to 5 March 1992, he is not entitled to maintain an action to recover the disputed land and the declaration he seeks in this proceedings will not be made."

His Honour then made certain factual findings which resulted in a finding that the plaintiff was not entitled to possession of the relevant land. Counsel submitted that, by reference to his Honour's comments, the common law had only been amended to the extent that, rather than having his title completely extinguished, the registered owner was relegated to being a mere trustee. It should be remembered that the court was there dealing with a differently worded LTA, s117(2), a legislative regime which did not include ss138T or 138U, and exercising powers no longer available to this Court.

52 Counsel for the plaintiffs referred to Malter v Procopets [2000] VSCA 11, a case which dealt with an issue of adverse possession where the claimant had operated under a mistaken belief that the land he then claimed was his all along. The court accepted that mistaken belief would not prevent the acquisition of title by adverse possession. The court was there dealing with a situation where, by virtue of the relevant statute of limitations, the title of the registered proprietor was extinguished by the adverse possession finding and there was no saving provision similar to s138W.

53 Counsel took the court to Mabo and Others v The State of Queensland No 2 [1991 - [1992] HCA 23; 1992] 175 CLR 1. He read a passage from the judgment of Toohey J at 209:

"So long as it is enjoyed, possession gives rise to rights, including the right to defend possession or to sell or to devise the interest (Asher v Whitlock; Ex parte Winder (1877) 6 Ch D 696). A defendant in possession acquires seisin even if possession is tortiously acquired. That is, a person in possession has an estate in fee simple in the land; it is this interest on which a defendant in an action for ejectment could rely. The disseisee loses seisin and acquires a right of entry in its stead (Wheeler v Baldwin [1934] HCA 58). A possessor acquires a fee simple estate because the fullest estate known to the law is presumed until a lesser estate is proved (Wheeler v Baldwin (supra) at p 632)."

54 Counsel also read from Australian Real Property Law, 4th ed, Bradbrook McCallum & Moore at 713 where the learned authors refer to the question of extinguishment of title. Counsel did not, however, include the footnote which relevantly said "As to land under the Torrens system of land registration, this is not always the case." The learned authors went on to describe the situation as modified in Tasmania at 722 which did not support counsel's contention as to extinguishment of title.

55 Counsel for the defendants referred to Newington v Windeyer (1985) 3 NSWLR 555. At point 6 in the headnote the report set out:

"(6) (By McHugh and Hope JJA, Kirby P not deciding) The principles applicable to Old System land that a person in continuous possession of land adverse to the true owner can still maintain an action for trespass against everyone except a person who has a better, because older, title even though the twelve year limitation period has not expired, are equally applicable to land under the Real Property Act 1900.

Wheeler v Baldwin [1934] HCA 58; (1934) 52 CLR 609 at 632 - 633; Allen v Roughley [1955] HCA 62; (1955) 94 CLR 98 at 108 and Perry v Clissold [1907] AC 73 at 79, considered.

Spark v Whale Three Minute Car Wash (Cremorne Junction) Pty Ltd (1970) 92 WN (NSW) 1087, approved."

It should be noted, however, that the relevant provisions in the New South Wales legislation were different, as was the regime provided for.

56 This Court has no jurisdiction to make an order vesting the registered title to the disputed area in the plaintiffs. Indeed, the plaintiffs do not seek that. What they want is a finding that any rights they may have acquired by reference to the LA are a sufficient basis for an action in trespass. Counsel for the plaintiffs submits they have acquired what he describes as a possessory title which is still recognised by the LTA as a consequence of s138W, independently of any issue of vesting of legal title by virtue of possession. Counsel for the defendants submits that any rights which may have been acquired by possession cannot ever be converted into a legal title, that the title of the registered proprietor remains indefeasible against any such rights, and hence the registered proprietor has a better title, better right to possession or simply a better right to the property than that of the plaintiffs, such that it would defeat any claim in trespass.

57 The authorities to which counsel have referred clearly establish that when considering issues of adverse possession of unregistered land, the legal title can be extinguished by reference to the appropriate statute of limitations and the passage of time. In those circumstances the person claiming possession becomes the legal owner, provided he can establish a better title. The law in Tasmania has, however, modified that position insofar as it relates to registered land and there are some important aspects of s138W which affect the present case.

58 The LTA, Pt IXB, deals with the rights of persons to acquire a registered title to land by virtue of adverse possession. It specifically provides that where a person who has been in possession of land wishes to acquire title, they may do so, but only in accordance with the Division. While the LTA, s138W(1), provides that the LA applies to the title of a registered proprietor in the same manner as it applies to a title in unregistered land, it does so "subject to this section". That is, the position provided for in subs(1) operates, not in a vacuum, but subject to the rest of the section. The first qualification to the position that the LA applies to registered land is that which appears in s138W(2), namely, the title of the registered proprietor is not extinguished but he is taken to hold his interest in trust "for the person who ... would have acquired title ..." had the land been unregistered. The next matter to which the position is subject is s138W(4), that is, any person who claims the registered proprietor holds his estate in trust may apply for the vesting of the legal estate they would have acquired had the land not been registered.

59 In my view, s138W(1) and (2) do not operate in a vacuum to preserve a right acquired at common law, described by counsel for the plaintiffs as a "possessory title", independent of any capacity to convert such right to a registered title. It cannot operate to elevate the rights of a claimant above those of a registered proprietor whose registered title, by reference to the provisions of Pt IXB Div 5, cannot be defeated. It must be remembered that we are dealing with a system which relies on registration to establish title. What the plaintiffs effectively seek to do is rely on a form of title independent of the system to defeat the rights of a registered proprietor. Such a concept would only serve to undermine the system of registration.

60 The question therefore as to whether whatever rights the plaintiff has acquired to the disputed area by reference to the LA, s10(2), can be construed as better rights than those of the defendants, such that they would support a suit in trespass, must be answered in the negative. The second named defendant remains the registered proprietor of the southern block subject to a successful application by the plaintiffs pursuant to the LTA, s138W(4). Were such an application to be successfully made, the defendants may very well have no defence to these actions. It is unnecessary, however, to determine that in view of my findings or to deal with the claims for injunctive relief and damages, which must also fail.

61 The plaintiffs' actions numbered 33/2005 and 467/2006 will be dismissed.