Traykof v Shanco Holdings Pty Ltd [2001] VSCA 56

2. I agree with Ormiston, J.A. that, for the reasons which he assigns, this appeal should be allowed and that the matter should be remitted to the County Court for a new trial.

5. It is regrettable, in my view, that this Court cannot finally resolve this dispute between the parties but, as the reasons of Ormiston, J.A. show, that cannot be achieved simply by modifying the facts to take account of what this Court perceives to be erroneous findings of critical facts which the trial judge has made. Her Honour's findings that:

(a) the disputed strip was "open to Abbotsford Street" in 1969; and

(b) was closed off with the leave and licence of the respondent's governing director Nash, given to the occupiers of the appellants' land at some time after the construction of the respondent's warehouse in or about 1973/4;

were findings which, in my opinion, appear to be contrary to the incontrovertible objective evidence which her Honour had before her in the form of the aerial photographs produced and interpreted by the expert photogrammetrist Watts. So much seems to have been conceded to the trial judge by the respondent's counsel in his written final submissions where it was put that the 1969 aerial photograph "tends to support" (inter alia) the fact that:

"the yard [that is, to the appellants' land] and the Disputed Land were enclosed by a fence to Abbotsford Street. This photograph contradicts Mr. Nash's evidence about the state of the fence and openings therein in the late 1960's and early 1970's."

That concession was repeated before this Court. Of course, if that fact is accepted, it must also be accepted that Nash's evidence that the disputed strip was only "closed off" to Abbotsford Street with his permission in or about 1973/4 could not prevail.

13. Critical as those findings are to the issue whether the appellants and their predecessors were adversely possessing the disputed strip to the exclusion of the title owner as early as 1967 or 1969, their significance will need to be assessed in the context of all the other evidence which was directed to the ultimate issues including whether, even if the appellants were in adverse possession of the disputed strip in 1967 or 1969, that possession continued uninterrupted for the statutory period of 15 years. The trial judge had little to say about this issue, at least in terms of the evidence and relevant authorities, presumably because she had come so firmly to the conclusion, on the facts which she found, that the appellants and/or their predecessors had never been in adverse possession of the disputed strip until 1992.

16. I think I should also say that the value of this small strip of land to the parties (intrinsic or otherwise) is in danger of being outweighed by the costs of the litigation. For this I attribute no blame to counsel who clearly sought to contain the costs of the trial and who, ever mindful of escalating costs, were keen to have this Court finally determine the issues. We were told that the appellants wish to use the disputed strip for the storage of stock and other paraphernalia associated with their shop business; whilst the respondent wishes to use it to gain access to the steel ladder which is affixed to the northern wall of the warehouse; access which is needed 3 to 4 times per year to service the air-conditioning and plumbing plant on the roof of the premises. It was one of the ironies of the evidence given at trial that, presumably because these had been the respective uses long made of the disputed strip, the appellants believed - contrary to the fact - that they were the owners of the disputed strip, and the respondent believed - again contrary to the fact - that it had rights of way over the strip to gain access to the ladder. Because the ladder protrudes some 6 inches or so into the air-space above the disputed strip, the appellants' counsel, Mr. O'Bryan, was - as I understood him - content to accept that, even if his clients were to establish a possessory title in the disputed strip, they would be obligated to recognize that their title would not include the superincumbent cubical air-space occupied by the ladder above the strip and would also be obliged to recognize rights of access in the respondent necessary for the proper enjoyment of the ladder. Mr. O'Bryan accepted that the judgment of Sholl, J. in Syme v. Pitt[1], and the

authorities referred to therein, would operate to secure the continuation of those rights in the respondent. It was these circumstances and concessions which led this Court to inquire of the parties whether their respective rights would not be more effectively resolved by agreement between them; but nothing came of that inquiry. It is a matter which, in my own view, they would do well to pursue.

21. This appeal arises out of a dispute over a thin strip of land in North Melbourne 3 ft 2 ins by 24 ft 6 ins (as the titles still describe the dimensions)[2] between a shop premises to its north owned by the appellants and a warehouse to its south owned by the respondent. The disputed strip was originally a right of way over land registered in the name of the predecessor in title of the respondent and was granted in favour of the registered proprietors of the appellants' land. After a trial which extended over three days, which was supplemented by extensive written submissions, the learned County Court judge in a detailed and learned judgment declined to declare that, by reason of the application of the doctrine of adverse possession, the strip was now owned by the appellants. It was declared that the respondent remains the owner of the strip and certain supplemental orders were made designed to ensure that it was restored to a condition consistent with its being merely a right of way.[3]

24. Having regard to the conclusions which I have reached, it is not necessary to set out the facts in elaborate detail[4]. The disputed strip of land runs east and west and abuts on Abbotsford Street, North Melbourne, with the appellants' shop

premises and land immediately to the north, also facing Abbotsford Street, and the undisputed part of the respondent's land, now covered by a warehouse, immediately to the south with frontages on the corner of Abbotsford Street and Queensberry Street. Before about 1916 all the land was on the one title. There is now a locked gate at the eastern end of the disputed strip, which leads directly to Abbotsford Street and which forms part of a metal fence extending from the respondent's warehouse to the appellants' shop, but before about 1974, and at least for five if not seven years before that, there was, so it would seem (at least on the appellants' version), a paling fence on the east side between the shop now owned by the appellants and the rear, north fence on the undisputed part of the land owned by the respondent, but there was no gate at the end of the disputed strip, the only entry from the street being through a gate a few yards north on what is now the appellants' land. Thus, for most practical purposes, it was necessary during that period and indeed up to about 1992 to cross the appellants' land to get onto the disputed strip if one entered from Abbotsford Street.[5]

The land now registered in the name of the appellants which is immediately to the north of the strip has, during all relevant times, contained a retail food shop, which has covered most of the land on the title, but there is an open area perhaps six or so feet wide, to the south of the shop and between the shop and the fence line of the disputed strip. To the south of that strip there lies the balance of the land[6] registered in the name of the respondent which is now fully covered by a two-storey warehouse building built in 1972 to 1974. Its north wall, immediately next to the disputed strip, is brick with no entrance leading on to that strip but, hanging over the side of the building, there has been since its construction a metal ladder extending over the disputed strip by six or so inches and twelve to fifteen feet high, extending from the roof to a point some ten or twelve feet from the ground, used by plumbers and air-conditioning maintenance staff to reach certain air-conditioning and plumbing equipment installed on the warehouse roof.

30. As is necessary in cases of this kind, some history of the holding of the titles is required. The appellants bought their shop property in late 1991 and became registered on the title in 1997. The previous title holder, Noel Holdings Pty. Ltd., had bought the land and become registered in 1967. Its managing director, Mr Flinkier, was the principal witness for the appellants in that his company owned the land over the critical period for the purpose of this dispute. For the purpose of this appeal it is not necessary to trace that title further back, other than to say that the original right of way over the disputed strip, and an extension to the strip which it is not necessary here to discuss further, was granted on 29 September 1916 to the then registered proprietor of the appellants' land. For practical purposes it is unnecessary to trace either title further back than 1916 as there was no direct evidence or other useful objective evidence of what occurred before 1967[7].

33. Ownership of the respondent's land was a little more complicated. Of course, the title shows the land as comprehending the disputed strip and therefore is directly to the south of the appellants' land. The respondent's land was from about 1916 divided into two titles. The western part of the land, which included the disputed strip, was first bought by the respondent's principal director, Mr Nash, and his wife in 1969 but by 1971 they had transferred the land to the respondent company which in the same year bought the eastern part of the land then held on a separate title. In consequence, eastern and western parts of the respondent's land were consolidated onto a single title in February 1972, since which time there has been no change in ownership, unless that has been affected by the appellants' claim for adverse possession of the disputed strip. Broadly, the consolidation coincided with the commencement of the building by the respondent of the warehouse which concluded in about 1974. Before that time, according to the oral evidence and, more importantly, several aerial photographs, the eastern and western parts of the respondent's land had been occupied by two derelict semi-detached houses, each of which had large unkempt yards behind them backing onto the disputed strip. One might also infer that the western dwelling was unoccupied from at least 1966 until 1969 and most likely until it was pulled down in 1972 when the warehouse was built, by reason of the fact that the former registered proprietor, one Mrs Madsen, had died in 1966 and her interest had vested in her two sons as executors and trustees, in whose names the title was registered in 1968 and who sold to the respondent in 1969. The title to the western part of the respondent's land had always included the disputed strip. It had thus been the servient tenement, so far as the easement rights of the holder of the title to the appellants' land was concerned. There was also, to this time, at least one other dominant tenement in this respect, for the registered proprietor of the eastern part of the respondent's land was likewise registered as entitled to exercise a right of way over the disputed strip. However, on consolidation of the respondent's two titles in 1972 the latter easement right merged in the registered proprietor's title over the whole of the land. Thus, from that time onwards the registered proprietor of the appellants' land became the only person entitled to a right of way over the disputed strip.

36. The nature of the easement right over the disputed strip was described on the titles as a "right of carriageway", although the narrowness of the way led to speculation that the only "carriage" likely to have been used on it was some form of night cart. It is of no great consequence that the grant was as late as 1916, perhaps reflecting a use of the land on the original title which included both the appellants' land and the respondent's land, including of course the disputed strip. Nevertheless its use was doubtful in that, even before the warehouse was built, it had been divided off from the rest of the respondent's land, in particular from the two backyards, by what appeared to be a continuous fence, although Mr Nash gave evidence that there was one gateway through it from the western part of that land. During the relevant period, nevertheless, it was of little practical use to the occupants of the respondent's land not merely because it was cut off in that way, but also because the whole of the strip was subject to the easement in favour of the appellants' land. It led from nowhere to nowhere inasmuch as there was no obvious need then to obtain access along, or egress from, the strip. If the photographs be accepted as reflecting the fact that there was a fence across the entrance to Abbotsford Street, by 1969 one could neither enter nor leave the land except by crossing the appellants' property and using the gate at the north end of the street fence.

39. Likewise the disputed strip was of not much more practical use to the occupants of the appellants' land by this time, if their use was confined to that to which the occupant was entitled, namely a right to pass and re-pass. The tenants did not need access along such a narrow lane for they already had such access along the part of the appellants' land immediately to the north of the strip but upon which no part of the shop had been built. Even the leaving on a temporary basis of bottles, crates, boxes and the like was strictly not in conformity with their rights, although on one view it was hardly likely to provoke protest, unless it extended to a more permanent use of a kind likely to block the path down the strip. Before the warehouse was built the only use to which the respondent put the land was an occasional visit by a plumber to ensure that the sewer entrance on the north-east corner of the strip was maintained and then after 1974 the respondent had a need, despite the brick wall which shut off the strip, to enable people engaged in maintaining the air-conditioning and plumbing systems on the warehouse roof, access to which was gained by climbing onto the metal ladder attached to the north wall of the factory. Indeed it was that use, together with the shop tenant's use of the disputed strip as a dumping place for more and more bottles, cartons, crates and the like, as well as rubbish, which ultimately led to this long expensive and regrettable dispute.

42. The primary issue at the trial, therefore, was whether the registered proprietors over the years of the appellants' land (or persons claiming through them) had obtained and exercised such exclusive occupation and physical control of the disputed strip, with the intention to exclude all others, including the registered proprietors and persons claiming through them, in an unequivocal way for a continuous period of 15 years or more, so as to amount to the acquiring of adverse possession of the strip by the owner of the appellants' land. As subsidiary issues the appellants also raised the questions, first, whether the respondent and its predecessors in title had discontinued possession, especially in the period when the respondent's property appeared to have been disused and before Mr Nash purchased and used the land, and secondly, whether, notwithstanding that there might be held sufficient acts as would constitute adverse possession by the registered proprietor of the appellants' land, nevertheless thereafter the respondent had resumed possession so as to terminate the period of adverse possession so denying the appellants the rights they now claim. The latter issue depended almost exclusively on the characterisation of the acts of the respondent's contractors, in particular of the plumber Mr Arceri, who had maintained the sewerage trap and then installed a new sewerage system and line seven feet below the surface, and of those people engaged to maintain the air-conditioning unit on the roof of the warehouse, in the course of which they went along the disputed strip, erected ladders and did certain ancillary work at ground level every quarter or thereabouts.

45. The appellants asserted that their rights began to accrue in 1967, or at the latest in 1969, their principal witness Mr Flinkier saying that the respondent's predecessors in title made no use of the strip when his company first took possession of the appellant's land in about February or March 1967. He said that the right of way was already cut off from the street by a paling fence so that any useful direct access was denied to the respondent and its predecessors in title. The only gate in that fence, which extended a few yards north to the south wall of the shop, was a locked gate on the appellants' land close to that south wall, a key for which had to be obtained from the shop tenants and, even when they did obtain the key, visitors had to walk on the appellants' land to get to the strip. He asserted that there was no gate or other access from the back of the respondent's land even before the warehouse was built. Further he said that there was no fence at that time dividing the appellants' land from the disputed strip, so that the whole of it had been used by the tenants for storage of drinks, supplies, furniture and the like and for the dumping of rubbish, or at least of unused cartons and boxes.

48. It was contended on the appellants' behalf that, even if there had been no discontinuance of possession of the disputed strip by the respondent, their predecessor in title, Noel Holdings, had effectively gained exclusive possession of the strip from the respondent's predecessors in title by 1967 or at the very latest 1969. Thereby time started to run in favour of Noel Holdings as the appellants' predecessors in title and, so it was argued, the respondent had to resume possession of the disputed strip if it was to stop time running and this it failed to do. The statutory 15 years had therefore expired by 1982 or at he latest 1984, well before the respondent had made any complaint. The appellants did concede that, at least after about 1972, from time to time, perhaps once a quarter, people engaged to service the air-conditioning and other services on the respondent's warehouse roof crossed the disputed strip and used the ladder above it (although Mr Flinkier could not remember the ladder himself) and that plumbers had serviced and on one occasion dug up a sewer in or about the boundary of the strip. In each case, so it was argued, they had been obliged to ask for the key to pass through the appellants' gate, over their land and onto the strip. Neither the respondent nor its predecessors had made any demand that the right of way be opened up or that any of the tenants' materials be removed from the strip.

51. On the other hand, evidence was given by Mr Nash that, when he first acquired the land with his wife in late 1969, and for several years thereafter, the disputed strip was open to Abbotsford Street, was paved with bluestone pitchers and that there was an adjoining paling fence dividing the strip from the appellants' land which had a gate on its north side leading to the appellants' land. According to him, at that time the lane was clear. Mr Nash said that in or about 1973 or 1974 he had eventually agreed to a request by the tenants of Noel Holdings that the lane be shut off from the street and that for that purpose a new metal fence should be built with a gate in it capable of being locked, provided that he could retain a key, but, according to him, the gate was placed at all times immediately opposite the disputed strip, not, as the appellants asserted, further north on the appellants' land. (More recently, in about 1992, a new six feet metal fence was built in the same position on the street line with a gate undoubtedly opposite the disputed strip but, even if this dealing be treated as the exercise of ownership rights on the part of the respondent, it came too late to prevent the running of time against the respondent, which must have commenced at the latest in 1969.) Although neither fence was built by the respondent, it contended that the closing of the strip could not be held against it because the tenants of the former proprietor of the appellants' land, who were not called in aid of the appellants' case, had been permitted to build the fence only on the basis that the respondent was provided with a key to the gate. One should add that, although the appellants agreed that a new fence was built in about 1992, they said that no earlier metal fence had been built and the wooden fence shown in the photographs had remained in position from at least 1969 (and according to Mr Flinkier from 1967) until the building of the new fence in about 1992.

54. The respondent's case was said also to be supported by Mr Arceri, the plumber who had serviced the sewerage drains on the respondent's land and on the disputed strip from about 1972 and had also serviced the plumbing equipment on the warehouse roof using the metal ladder. In particular, he installed a storm water and new sewerage drains, requiring the excavation of the trap at the boundary of the strip. He recalled that he had to dig several feet under an old paling fence dividing the appellants' land from the disputed strip. According to him, the strip was open to Abbotsford Street until the late 1970's and was covered with bluestone pitchers. The only gate on Abbotsford Street, used for service deliveries to the shop, was on the appellants' land and was part of an old paling fence near the shop. In the late 1970's or early 1980's a new metal fence was built extending the whole way to the respondent's warehouse. After that, in order to obtain access he had to use a key provided by the shop tenants, but he had no difficulties. On the disputed land itself he could recall crates of drinks stored by the shop tenants but his access had not been impeded.

57. Mr Nash also gave evidence that no dispute had arisen in relation to the strip and its use until after the appellants purchased their land in 1991. For the first time, in about 1994, the air-conditioning maintenance staff could not gain access through the gate. The key provided by the appellants no longer allowed access through the gate as the lock had been changed. When taxed the appellants claimed the maintenance staff had "caused a mess" by washing equipment and apparently had taken a bottle of soft drink. Mr Nash had also objected to shelving and a roof structure attached to the warehouse wall but he could not remember when he first became aware of them. The dispute grew in ways which need not be described, but it led to heated correspondence and eventually to the issue of the present proceeding on 11 February 1998.

60. The appellants' case was also supported by evidence from Mr Traykof, but as he and his wife had only purchased in 1991 and taken possession in early 1992, his evidence was of relatively little significance in relation to the critical events at an earlier period. Certainly, he said that there was no dividing fence or partition between the appellants' land and the disputed strip and that any fence had disappeared by the time the appellants took possession, but there seemed little dispute that that had occurred some time earlier, the respondent asserting that it did not occur until the 1980's. Mr Traykof also said that there was a fence on Abbotsford Street between the respondent's warehouse and the shop with the gate near the shop. He said he was responsible for building the metal fence (with the gate opposite the strip) which was higher and more secure than the old fence. This had been constructed in about 1992 shortly before the dispute over the entrance of the air-conditioning service staff, the detail of which is of no present relevance. He also conceded that it was the appellants who had erected the shelving on the strip and had built a canopy over part of it which was attached to the warehouse wall, each without seeking the consent of the respondent.

63. Finally, there was evidence from one Watts, a photogrammatrist, who was employed as the manager of Qasco Pty. Ltd., a company specialising in aerial photographs and their interpretation. His evidence was important in that he produced what might fairly be said to be the only objective evidence of the condition of the land in the years 1969 to 1972, namely, through three aerial photographs taken from directly above the property, the first dated December 1969 and the later two taken in 1970 and 1972. Mr Watts was able, also, to interpret those photographs by use of three dimensional images obtained from a series of photographs and which provided particular details with clarity. Apart from giving a valuable impression of the land of all parties and especially of the disputed strip before the respondent's warehouse was built, a number of specific matters are obvious to the eye from examining the photographs with care. Unfortunately, the learned judge did not recall two of those matters in an otherwise detailed examination of the facts in the judgment, even if she had observed them. The first fact was that the disputed strip was at the time of each photo clearly cut off from Abbotsford Street by a fence which Mr Watts believed to be a paling fence some five or so feet high. Secondly, there was no gate in the fence at the end of the strip but, if there was any gate (and Mr Watts was not certain about this), it was nearer the shop. Her Honour did note in her reasons, however, his evidence that such fence as existed between the appellants' land and the disputed strip was a "partitioning fence" which was "definitely not a solid construction ... probably wire with a rail on top". What her Honour did not note, but Mr Watts stated clearly, was that there was no gate in that partitioning fence, as Mr Nash had described it, but at best a gap close to the east end near the Abbotsford Street fence. Likewise, her Honour referred to Mr Watts' observations, which are confirmed by looking at any of the photographs, that there were containers or boxes of varying sizes stacked on both sides of the partition, again contrary to Mr Nash's and Mr Arceri's evidence.

66. For various reasons, to some of which it will be necessary to return, her Honour concluded that she preferred the evidence of Mr Nash and Mr Arceri to that of Mr Flinkier. Consequently, she accepted in general terms the respondent's account of the condition of the land and its use at the critical times, namely between 1967 and 1972, by which year counsel for the appellants conceded either time was running in favour of his clients or he could not make out a case of adverse possession based on events after that time. The conclusions which her Honour reached, therefore, was based on the essential finding that there was "no or insufficient evidence of any use of the disputed land in any sense which could be described as adverse to the true owner" (the respondent). As to the issues raised, she made the following findings:

"(a) there is no or insufficient evidence that the Plaintiff or its predecessor in title, as the registered proprietor of the land which includes the Disputed Land, was either dispossessed or discontinued possession of the disputed land prior to 1992; (b) if the Plaintiff or its predecessors in title were to be regarded as having discontinued possession for any period from 1967, then there is no or insufficient evidence so as to constitute adverse possession in favour of the owner or occupier of Abbotsford Street [the appellants]. (c) if the Plaintiff or its predecessor in title was taken to have discontinued possession or been dispossessed of the Disputed Land and if the Defendants' predecessor in title was taken to have been in adverse possession of the Disputed Land for any period from 1967 then the plaintiff both re-took possession by 1972 and thereafter maintained possession in a manner which prevented further time running or recommencing, at least until the occupation of the defendants in early 1992."

Thus, the defendant succeeded and the counterclaim of the appellants was dismissed.

71. The conclusion so reached, on the face of the matter, depended to a large degree on the learned judge's findings of fact and in turn on her assessment of the credibility of the principal witnesses. It is unnecessary here to repeat how difficult it is for an appellant to overcome findings dependent on the credibility of witnesses. The present, regrettably, is one of those few cases where the judge's findings cannot stand, not because this Court is in a position to reach specific contrary findings, but because the process of reasoning which led to the acceptance of the respondent's witnesses was, in my opinion, flawed in the following way.

74. As to the few relevant facts in the years 1967 to 1972 about which it was possible to give evidence, there was, as has been seen, a stark conflict in the witnesses' recollections. Perhaps the learned judge did not see it that way but to my way of thinking it is critical to both the findings as to credit and the ultimate conclusions at the trial. The respondent was entitled to rest on its registered title unless the appellants could show that they and their predecessors in title had successfully obtained and retained unequivocally and continuously possession, in the sense of exclusive occupation and control, of the disputed strip of land with the intention to exclude all others from possession including the respondent as registered proprietor. (It would seem difficult, on the present evidence, to conclude that the respondent and its predecessors in title had discontinued possession of a piece of land over which they could exercise minimal proprietorial rights consistent with the rights of way granted over it.) Indeed, the learned judge found that, at least before 1972, there appeared to have been "minimal activity by the [respondent] and its immediate predecessors in title with respect to the Disputed Land" and "the activity on the part of the tenants of [the appellants' land], whilst not necessarily continuous, was consistent with ownership". Moreover, she held that "the occupants of [the appellants' land] could not be said to be achieving the original purpose of the right of way by any of the activities cited [quaere `sited'] on the disputed land".

77. But the seeds of difficulty arose in the judge's observation a little later, namely, that at the relevant time "there can be little suggestion that the activities of the [appellants' land's] owner or occupants ... caused inconvenience or obstruction or in any way prevented the [respondent] or its predecessors from quiet use and enjoyment of the disputed land". Such a conclusion depended on accepting that the appellants' witnesses were not to be believed and that the respondent's were.

80. The critical finding, nevertheless, was the learned judge's rejection of the appellants' case which relied "upon the use of the shop yard and disputed land as a self contained fully fenced area accessible only by a lockable gate along Abbotsford Street and in which a succession of tenants ... treated the disputed land as part of the [appellants' land]". For this purpose her Honour explicitly refused to accept the evidence of the appellants, especially that of Mr Flinkier, as to the use of the disputed strip, which she characterised as "the lack of overt exclusion of the title owner", although she said that was at best "equivocal".

83. Of course, if Mr Flinkier's evidence was rightly rejected and that of the respondent rightly accepted, such conclusions would have been valid and unchallengeable. But these conclusions as to credibility seem to have derived essentially from conclusions as to the demeanour of the witnesses (which can be said to be relevant in a vast number of cases), but by ignoring such objective evidence as did exist as to the state of affairs and the condition of the relevant land in 1969 to 1972, namely that to be obtained from aerial photographs.

86. As to the comparative credibility of the witnesses, her Honour made some general comments, first, as to the "confident and concise manner" in which Mr Nash gave his evidence, in which he "showed no propensity to overstate his case". On the other hand, as to Mr Flinkier, her Honour found "some perplexing features" in his evidence. The latter seemed to consist of his inability to remember the steel ladder attached to the side of the warehouse and, secondly, his inability, almost perverse in the judge's eyes, to recall the right of way on his title or the state of the surrounding titles. So she said that those recollections seemed "to fly in the face of the clear entitlements recorded on the relevant titles and to be quite fanciful". Moreover, she said Mr Flinkier had no explanation for what appeared to be a dividing fence or partition on the side of the disputed strip as shown in the photographs. As these were serious deficiencies in his evidence, she found the balance of his evidence to be unreliable.

89. I should at first note that Mr Flinkier, as only a former proprietor of the land, would not appear to have the same interest in the outcome as, say, Mr Nash who remained a director of the respondent company, but that is not necessarily conclusive where questions of demeanour are said to be important. The real difficulty in these findings is that in a sense they "fly in the face" of what may be observed objectively from the photographs. Mr Flinkier's forgetfulness might well have been attributed to the passing of time and the significance of the things omitted, since they took place some 25 or years earlier, but when it came to Mr Nash, who retained an interest in the property, his forgetfulness of certain aspects of the respondent's title was excused as being a mere "particular".

92. It is, however, the learned judge's positive findings as to the reliability of the evidence of Mr Nash and Mr Arceri, and her negative findings as to the reliability of Mr Flinkier, which in my opinion fly in the face of the objective evidence, or at the least required some detailed explanation as to their apparent inconsistency. She concluded (inter alia), based on an assessment of the parties' legal rights, the demeanour of the witnesses, "some comfort" from the photographs and evidence of Mr Watts and "the inherent improbability of key aspects" of Mr Flinkier's evidence, that the disputed strip was open to Abbotsford Street, that there was a timber fence with a gate only between the strip and the shop wall, that the strip was still lined with bluestone pitchers, that the appellants' land and the strip were separated by "some form of fencing partition", that the respondent consented at some time between 1972 and 1974 to the tenants of the appellants' land closing off the strip to "provide a more secure environment" for them, but otherwise that the respondent's continued use of the strip was consistent with its ownership rights.

95. It is the first and second last of these findings which are manifestly inconsistent with the objective evidence, at least as it has been presented and explained to this Court. Each of the photographs shows clearly a fence of some height shutting off the disputed strip from general use, certainly as a right of way or a lane. There is no gate shown at the end of the disputed strip and the strip is covered with a variety of boxes, crates and the like, inconsistent not only with its regular use as a right of way but more especially with Mr Nash's and Mr Arceri's evidence of a largely open lane. These are the very matters asserted by Mr Flinkier in his evidence which, however, was treated, if not with disdain, certainly as the less reliable. Moreover the conclusion that both the shop yard and the disputed strip were secured the whole way round with a fence and locked gate to Abbotsford Street would have been, so it presently seems, the natural inference from that evidence and the objective facts observed from the photographs. It therefore makes it highly unlikely, to say the least, that the shop tenants approached Mr Nash in 1972 to 1974 to get this very area secured which was already protected by a fence and locked gate. That was, of course, what Mr Nash asserted and Mr Flinkier denied and yet Mr Nash was believed, indeed he was said not to have "overstated" his case. There may have been reasons for going behind what appeared to be the objective evidence, and, since it led to various conclusions based on credibility, that will have to be again determined, but on its face it was a conclusion which made no sense. Not only that, but the condition and use of the disputed strip at that time was essential to any findings as to the necessary ingredients of the appellants' claim to adverse possession. If the appellants' predecessors in title or their tenants had in fact approached the respondent to have the strip fenced off, as Mr Nash alleged, then the encompassing of the strip into the shop's backyard was a matter of consent, so adverse possession could not be claimed. On the other hand, if there was not, and logically could not have been, any approach along those lines, then the shutting off of the yard and strip must have taken place at some time before that period, before the warehouse was built, before Mr Nash and his wife took possession and, arguably on Mr Flinkier's evidence, as early as 1967. That would give at least a firm foundation for any conclusion that the appellants' predecessors in title and their tenants had asserted the kind of exclusive control, with the intent to exclude all others, such as would form a basis for their claim to adverse possession, and, moreover, these events would have occurred at a time before Mr Nash or the respondent was putting the disputed strip to any use, so far as can be ascertained.

98. I would add that the difference between the witnesses as to the dividing fence, upon which the learned judge placed much weight, seems to me to be of relatively little consequence if the photographs and Mr Watts' evidence be accepted. Mr Nash asserted that there was a full fence with a gate still separating the yard from the strip and Mr Flinkier said there was no fence at all. What seems on the photographs to have existed at the time was something in between - a wire and rail fence forming a limited partition. It remains to be seen what significance the partition really played, especially having regard to the boxes and the like placed on the strip. Certainly, it does not seem to have been a true dividing fence, but that is all that can be presently said and her Honour did not reach any significantly different conclusion on this issue. Its relevance to the appellants' attempt to assert exclusive occupation and control of the disputed strip is another matter. For the photographic evidence on this matter is arguably consistent with each of the parties' general version of events.

101. It might be thought that the conclusions I have reached would entitle this Court to find positively in favour of the appellants, so as to dismiss the respondent's claim and give the appellants declaratory relief based on a possessory title. That conclusion, regrettably, cannot here be reached. What I have said merely shows that the learned judge erred in her appreciation of the objective evidence in reaching conclusions as to the principal witnesses' credibility. This Court did not see the witnesses, however, and the conclusions reached by the judge (though based on different reasoning), or a similar appreciation of the witnesses' reliability, may still be open, or, at the very least, conclusions may be open which, accepting the objective evidence, would deny other critical elements of the appellants' case. So far, however, neither the appellants nor the respondent has demonstrated that this Court must find in their favour in the action. Claims for adverse possession depend on a number of factors and, especially in the case of land comprehended by a right of way, it is not easy for a person claiming adverse possession to make out every required element and to refute every defence raised against a claim of that kind.

104. Finally, I must turn to an argument of the respondent that, whatever error be made as to the condition of the land in the years 1969 to 1972, nevertheless the judge found correctly that the respondent had resumed possession of the land in 1972 (or arguably at a later stage). I would not deny that such a defence might ultimately be made out but it is by no means clear that the facts alleged on behalf of the respondent are sufficient for that purpose. The defence depends essentially on the claim that the respondent made sufficient use of the land from 1972 onwards by directing Mr Arceri to reconstruct the sewer and then to attend to both the sewer and plumbing works on the warehouse roof by going onto the disputed strip and secondly, in requiring the air-conditioning maintenance staff likewise to use the ladder over the strip to gain access to the air-conditioning equipment on the warehouse roof. Whether a resumption of possession can be established depends on what has gone before and a precise appreciation of how the relevant rights were asserted at the time. I would not necessarily hold that the learned judge's analysis of the matter was erroneous, but in the end that seems to have depended, at least in part, on what her Honour had otherwise found. If some of the witnesses be no longer believed or only partly believed, the factual basis for the respondent's assertions may not be very strong, especially as some form of onus rests on the respondent to make out this claim in reply. For the present I cannot accept that the judge's finding and the evidence supporting it on this issue resolves the present appeal.

107. Lastly I would reiterate that it is rare that an appellate court will overturn a decision primarily based on the judge's appreciation of the credibility of witnesses. This is one such case, not because the opposite conclusion must follow, but because certain objective and critical facts were not shown to have been properly taken into account. Moreover, those objective facts here point directly to opposite conclusions on fundamental matters. Where there is objective evidence, that frequently is a reliable pointer to how the true facts should be found. Where there is direct conflict between witnesses on critical facts of this kind, it ordinarily behoves the trial judge to explain in some way why those objective facts are ignored or disregarded and a particular witness averring the contrary is believed. That is what did not occur here, so that the learned judge's findings cannot stand.

110. The appeal must be allowed and the proceeding remitted for re-hearing in the County Court. Although a new trial must in the circumstances be ordered, I would reiterate what was said during the hearing about the desirability of the parties'

resolving a dispute of this kind. I agree with what the President has said about it in his judgment.

115. I am content to say that the objective evidence of Mr Watts cannot be squared with findings on which the learned judge's ultimate conclusions clearly rested, nor is there any apparent reason why that evidence might have been rejected. It is a pity that the care her Honour obviously bestowed on this case should come to naught, but I agree with the other members of the Court that a new trial must be ordered. It will also be a pity, for the reasons the learned President gives at [4], if that trial has to take place.

[1] [1952] VicLawRp 55; [1952] V.L.R. 412 at 423-6.

[2] For consistency I shall continue to describe relevant dimensions in imperial measures.

[3] The respondent first brought proceedings for trespass and injunctive relief, to which the appellants then pleaded the respondent's loss of its title and counterclaimed for a declaration that they were entitled to be registered as proprietors of the land. The latter claim was not pursued on this appeal, the appellants seeking only a declaration against the respondent based on the Limitation of Actions Act 1958.

[4] Nor is it necessary to include a plan of the area which in other circumstances might be desirable.

[5] Again, this is what the appellants assert, as supported by their witness Mr Flinkier. Mr Nash's version was different (see below at para.[[]).

6] I.e., the whole of the respondent's land excluding the disputed strip.

[7] Some evidence of an earlier action in the Supreme Court in 1958 was forthcoming but that action was settled on unknown terms. The court file (in part put in evidence), therefore, contains mainly assertion on each side.