Zhang v Streeter [2024] VSC 816

1 The parties are the registered proprietors of adjacent properties located at 3 and 5 Durward Road, Malvern East. The first and second appellants, Jie Zhang and Lixia Cao Zhang, who are husband and wife, and to whom I will refer as the Zhangs, are the registered proprietors of 5 Durward Road, having acquired the property on 5 January 2005. The first and second respondents, John Streeter and Ada Streeter, who are husband and wife and to whom I will refer as the Streeters, are the registered proprietors of 3 Durward Road, having acquired that property on 8 July 1997.

2 The fence dividing the properties, with the possible exception of 7.5 metres at its Durward Road end, was in its current position at the time the Streeters acquired their property in 1997. It is not built along the paper title boundary but encroaches onto the Streeters' land. That encroachment, which is the disputed land, is a triangular strip of approximately 29cm wide at its widest ('the strip of land' or 'disputed land').

3 The Streeters commenced a proceeding in the Magistrates' Court, seeking orders that a new fence be erected on the title boundaries. The proceeding was brought under the Fences Act 1968 and in trespass. In response, the Zhangs commenced their own proceeding claiming adverse possession of the disputed land.

4 The issues in the appeals include the Zhangs' adverse possession claims of the disputed land. The Magistrate decided that the Zhangs had not discharged the onus of proving that they had had adverse possession of the disputed land for 15 years as required by statute. His Honour accepted the Streeters' contentions that any adverse possession had been abandoned and that the Zhangs had acknowledged their title.

5 The Zhangs filed notices of appeal pursuant to s 109 of the Magistrates' Court Act 1989, from the Magistrates' orders dated 13 December 2023 in the two Magistrates' Court proceedings commenced by the Streeters and the Zhangs. Such appeals are limited to questions of law.

6 The Magistrate's orders required the Zhangs and the Streeters to demolish the boundary fence separating their properties, and rebuild it along the title boundary. The Magistrate dismissed a claim by the Zhangs for a declaration that they had acquired title by adverse possession of the disputed land within the Streeters' property.

7 In their notices of appeal, the Zhangs allege that the Magistrate erred in finding that the strip of land had not been continuously adversely possessed for a period of 15 years, and in finding that they had acknowledged the Streeters' title to that land. They seek orders from this Court that the Magistrates' Court orders be set aside, and that orders be made in their favour.

8 I have decided that the Zhangs have established adverse possession of the disputed land, with the exception of an additional encroachment caused by the rebuilding of part of the boundary fence in 2011. I consider that the Magistrate erred in concluding that the Zhangs had not established their adverse possession claims, with the exception of the additional encroachment in 2011. I propose to allow the Zhangs' appeals, set aside the Magistrate's orders and make orders generally in accordance with the proposed orders that I discuss at the end of this judgment, but after first hearing the parties about those proposed orders and about costs.

9 The Streeters have resided in and been the registered proprietors of 3 Durward Road ('No 3') since 8 July 1997. The Zhangs have been the registered proprietors of 5 Durward Road ('No 5') since 5 January 2005. Soon after they rented the property to tenants until late 2011 when they began residing in it.

10 Prior to the Zhangs' purchase, No 5 was owned and occupied by Ms Clare Plunkett who died on 6 July 2004. She left the property to her niece, Ms Kathleen Jay, who became registered as sole proprietor on 26 October 2004. On 21 September 2004, Ms Jay had entered into a contract to sell No 5 to the Zhangs.

11 The dispute between the Zhangs and Streeters concerns the location of a paling fence which separates their properties.[1] The fence runs the length of both properties, being 39.62 metres in length, save for a span towards the rear where the properties are delineated by the external wall of a garage located on the Streeters' property.

12 The parties agreed that the boundary fence between No 3 and No 5 has been in place since at least 8 July 1997, when the Streeters became registered proprietors of No 3. The fence is in a dilapidated and unstable condition and a section at the front of the properties was rebuilt in 2011.[2]

13 The boundary fence encroaches onto No 3, the Streeters' property, by a width of approximately 7cm at the rear of the properties increasing in length in a non-linear fashion to a width of approximately 29cm at the Durward Road front of the properties.[3] The encroachment of the fence at the front of the properties was approximately 26cm prior to the fence rebuilding in 2011 which increased it by approximately 3cm.[4] The length of the fence rebuilt in 2011 was approximately 7.5m.[5] The rebuilt part of the fence encroached approximately 29cm onto the Streeters' paper title boundary between No 3 and No 5.[6]

14 On 4 October 2016, the Zhangs lodged a planning permit application for a proposed subdivision of their property and construction of two townhouses ('the first planning application').[7] The Streeters objected to the application, but it was approved by the Stonnington City Council ('Council'). In March 2017, Mr Streeter received a re-establishment survey of No 3 and together with Ms Streeter realised the amount of their land that was on the other side of the fence.[8]

15 On 22 May 2017, the Streeters altered a north facing window in their house so that ResCode Standard B20 would apply to any future planning application for No 5 and require the Zhangs to set back any building opposite the window by one metre from the lot boundary.

16 On 23 April 2018, the Victorian Civil and Administrative Tribunal ('VCAT'), set aside the Council's approval and refused the Zhangs' application for a planning permit because it considered that a greater rear setback was required.[9]

17 In late 2018, the Zhangs lodged a second planning permit application accompanied by architectural plans. The Council refused the application. The Zhangs reviewed the Council's decision by application to VCAT.

18 On 24 October 2019, prior to the second VCAT hearing, the Zhangs' town planner, Ms C Glossop, served amended building plans on which the planning permit was later granted to them.[10] In those plans, the boundary shown between No 3 and No 5 is the paper title boundary and a brick wall was set back one metre from the physical boundary, standing wholly on the Zhangs' land.

19 On 16 January 2020, VCAT directed that the Zhangs be granted a permit for the construction of two double storey dwellings on No 5.[11]

20 The Zhangs have not commenced construction of the two dwellings.

21 On 21 May 2021, the Streeters served a fencing notice on the Zhangs, proposing the replacement of the fence along the boundary line in the paper title, as set out in a survey of their property conducted by BT Surveys Pty Ltd ('the BTS Survey').[12] They sought an order to replace the fence as soon as practicable and that the Zhangs contribute half the costs of the replacement. The Zhangs, in their response to the fencing notice, disagreed with the proposed works, due to demolition and construction works on their property being imminent and the risk that a new fence might be damaged were it replaced first.[13]

22 The Streeters filed a Magistrates' Court complaint on 28 September 2021, proceeding No. M12064366, ('the first Magistrates' Court proceeding'), which was later amended. The complaint alleged that the fence was in such poor condition that unattached palings could no longer be nailed or fastened to the rotted nails. The Streeters contended that the front section of the fence had been destroyed by the dog of a tenant living in No 5 in 2011 and that the Zhangs had replaced it. They alleged that that new part of the fence was constructed 29cm inside their land. Given that the Zhangs had acknowledged the Streeters' title by relying on the title boundaries for planning approval and their fence reconstruction in 2011 on the Streeters' land, they sought an order for the construction of a replacement fence on the title boundary as identified by the BT Survey in accordance with the scope of works contained in a fencer's quotation. They also sought an injunction requiring the Zhangs to deliver up possession of the encroached land to them and sought damages.

23 In their amended defence, the Zhangs denied that the Streeters had any rights to claim the disputed land. They pleaded that the fence had been in place since 8 July 1997 and that the Streeters' entitlement to make any claim in relation to the land had been extinguished from 8 July 2012 pursuant to the Limitation of Actions Act 1958 ('LAA').

24 On 2 February 2022, the Zhangs filed their own Magistrates' Court complaint, proceeding No. N10221855, ('the second Magistrates' Court proceeding'), seeking a declaration that they had acquired adverse possession in the disputed land delineated by red lines on the BT Survey and that the Streeters' title had been extinguished. They sought orders that the fence be rebuilt along the existing fence line.

25 The Streeters, in their amended defence, denied that the Zhangs had been in occupation of the disputed land for longer than 11 years and also contended that the Zhangs had acknowledged their title. They amended their complaint in the first Magistrates' Court proceeding to raise these contentions. As a result, the issues in the two Magistrates' Court proceedings overlapped.

26 Both the Zhangs and the Streeters were represented by counsel at the one day Magistrates' Court hearing. Two witnesses gave evidence: Ms Lixia (Lisa) Zhang, and Mr John Streeter. Mr Streeter did not dispute that the fence had been in the same configuration since 1997 when he and Ms Streeter purchased No 3, save for the front portion rebuilt in 2011.[14]

27 The Streeters contended that the Zhangs had acknowledged their possessory title in 2019 during the second planning application. They emphasised that a week before the hearing, the Zhangs had amended their defence to meet their plea of acknowledgment by relying on an adverse possession claim commencing in 1997, which, if successful, would have gained them adverse possession of the disputed land in 2012. Alternatively, the Zhangs relied on the 15 year period between 2005, when they became registered proprietors of No 5, and 2020.

28 In response, the Streeters argued that any adverse possession of the disputed land had not been continuous as Ms Jay had never taken up occupation of it or of No 5.

29 After the hearing, the parties filed written submissions. They primarily concentrated on whether gaps in the continuity of the adverse possession of the disputed land had occurred and whether the Zhangs had acknowledged the Streeters' by filing the amended plans title in the second planning application.

30 The issues raised by those submissions were also the principal matters argued before me on 10 May 2024.

31 On 8 December 2023, the Magistrate delivered judgment finding that Zhangs had not satisfied the onus of proving adverse possession by establishing that they and their predecessors were in possession of the disputed land for a continuous period of 15 years.[15] The Magistrate found that:

(a) between Ms Plunkett's death in 2004 and the Zhangs' purchase of No 5 in January 2005, Ms Jay, who had inherited the land from her aunt, Ms Plunkett, had 'abandoned any possessory title against the Streeters'. His Honour considered that the evidence of Ms Jay's dealings with the disputed land was 'slight' and that he did not 'agree that the giving of instructions to an agent to sell a property signifies possession'. Nor did he agree that an agent showing prospective buyers through a house was evidence of possession. He noted that Ms Jay never took up residence in the property and Mr Streeter never saw her visit it.

(b) the Zhangs' actions in connection with their second planning permit application, which referred to the title boundaries, constituted an acknowledgement of the Streeters' title to the disputed land for the purposes of s 24(1) of the LAA.[16]

32 Ms Zhang said that before she and Mr Zhang purchased the property, they inspected it in the company of a real estate agent. The Magistrate stated that there was no evidence of with whom, and in what circumstances, Ms Jay took steps to sell the property, other than that the Zhangs' inspection of the property occurred with an agent of Ms Jay's in attendance.[17]

I do not agree that the giving of instructions to an agent to sell a property signifies possession, nor do I agree that an agent showing prospective buyers through a house is evidence of possession.

There was no evidence that the agent showed the Zhang's the disputed land, only the house itself. In these circumstances, the only inference that can be drawn is that Ms Jay's intention was to sell the property as soon as possible. There was no evidence from the Zhangs [that] the sale was anything other than the sale of the title [to the] property.

There was no evidence that Ms Jay sought to sell, or that the Zhangs sought to buy any possessory title that Ms Jay may have held. If Ms Jay intended to continue the adverse possession of her mother against the Streeters, one might have thought that she would likely have sought to realise its value by seeking to have it transferred to the Zhangs along with ... .

If anything, on these facts, the inference to be drawn is that Ms Jay abandoned any possessory title against the Streeters. Whilst the decided cases to which I have referred, including those relied upon by ...the question of possession and abandonment is [one] of fact deciding in each case.[18]

34 The Magistrate stated that he thought it possible, if not likely, that Ms Jay never took up possession of the disputed property, but he declined to make that declaration since she was not a party to the proceedings and there was a deficiency of evidence in that regard.[19]

35 The Magistrate found that the Zhangs took possession as owners and landlords of No 5 on 5 January 2005 when they became its registered proprietors and remained in possession.[20]

36 Accordingly, his Honour stated that, if the Zhangs could show continuous adverse possession up to 5 January 2020, they would succeed in their claim. However, they had acknowledged the Streeters' title in 2019 in their planning application. The plans showed that the Zhangs sought permission to build new townhouses with measurements taken from the title boundary. The plans clearly showed the title boundary and some structure, probably a gate, connected with it. This could only be viewed as an intention to connect the gate to a wall or fence that ran along the title boundary. The acknowledgment of title was in writing and signed by the Zhangs' agent, Ms C Glossop. The Magistrate concluded that the acknowledgement signified that the Zhangs lacked an intention to possess the disputed land.[21] His Honour found that, on 24 October 2019, by the second planning application, the Zhangs made an acknowledgment of the Streeters' title for the purposes of s 24 of the LAA.[22]

37 The Magistrate considered that that he was not required to decide issues about the additional encroachment of part of the fence following the 2011 reconstruction, because those issues fell away following his finding that the Zhangs had not adversely possessed the disputed land.[23]

38 In the Streeters' proceeding, No.M12064366, the Magistrate ordered that the Zhangs deliver up possession of the land contained in the disputed strip to the Streeters and that, pursuant to s 30C of the Fences Act 1968, as soon as reasonably practicable, the existing fence be demolished and replaced with a new fence on the title boundary as established by the BT Survey, with the rails and framing of the new fence constructed facing the Zhangs' land. The fence builder was to be jointly engaged with costs paid shared equally and the Zhangs were to pay the costs of the proceeding.

39 In the Zhangs' proceeding against the Streeters, proceeding No.M10221855, the Magistrate ordered that the complaint filed by Jie Zhang be dismissed and that the Zhangs pay the Streeters' costs of the proceeding. The order appears to have inadvertently omitted the name of the second plaintiff, Li Xia Cao Zhang.

40 On 20 December 2023, the Zhangs filed notices of appeal to this Court pursuant to s 109 of the Magistrates' Court Act against the judgment and final orders of the Magistrate, dated 13 December 2023, in the two Magistrates' Court proceedings, M12064366 and N10221855. They thereby commenced two Supreme Court proceedings S ECI 2023 06110 and S ECI 2023 06122.

The orders granting the Zhangs leave to amend their notices of appeal and the Streeters' applications to the Court of Appeal for leave to appeal those orders

41 I heard the appeals on 10 May 2024, during which it became apparent that the Zhangs' notices of appeal may not contain the questions of law that they sought to argue. They sought leave to amend their notices of appeal and I adjourned the proceeding to 31 May 2024 to enable that application to be made and for the Streeters to respond to it. After hearing submissions on that day, I granted the Zhangs leave to amend their Notices of Appeal. The Streeters applied to the Court of Appeal for leave to appeal my orders granting the Zhangs leave to amend. On 19 July 2024, the Court of Appeal refused them leave,[24] and in doing so stated:[25]

It is important, in this context, that the facts were not in dispute and the critical questions that were ventilated at the hearing concerned whether, on those facts, the magistrate was correct to find that there had been a break in possession and that Ms Jay had abandoned 'any possessory title' against the applicants.

Whether, on the facts found, the conduct of Ms Jay was inconsistent with continuing possession or amounted to abandonment was the subject of argument and the grant of leave to amend the notices of appeal afforded the respondents the opportunity to frame the questions of law to capture the arguments that they had put. Similarly, the arguments concerning acknowledgement had, at their heart, a legal question as to whether the making of the planning application amounted to an acknowledgement of the applicants' title.

42 On 2 August 2024, I heard the parties' further submissions arising from the Zhangs' amended notices of appeal and reserved judgment.

43 I will set out the details of the appeals taken from the notice of appeal in proceeding SECI 2023 06110. While the notice of appeal in proceeding S ECI 2023 06122 contains some differences, they are not material.

QUESTIONS OF LAW:

1. Did the Magistrate err in law in concluding that the appellants' predecessor in title, Ms Jay, had abandoned possession of the disputed strip at any time between 6 July 2004 (when Claire Plunkett passed away) and 5 January 2005 (when the appellants became the registered proprietors of the property at 5 Durward Ave, Malvern East)?

2. Did the Magistrate err in law in concluding that on or around 24 October 2019 the appellants acknowledged the respondents' title to the disputed strip in documents relating to an amendment to planning permit plans in VCAT proceeding P1184/2019?

3. If the answer to either question 1 or 2 is yes, is the further encroachment into the Respondents' land which arises from reconstruction of a portion of the fence in 2011 a de minimis encroachment such that there should be no order for that section of the fence to be demolished?

THE GROUNDS RELIED UPON ARE:

Ground 1

In relation to abandonment, the Magistrate wrongly concluded that the appellants had failed on their defence under s 18 of the Limitation of Actions Act 1958 in that they had not discharged a burden of proving that possession was continuous for a period of 15 years to 8 July 2012. In so concluding, his Honour:

a) erroneously integrated factors relating to "actual knowledge" in his analysis of the evidence in relation to abandonment despite no such proposition being put by the parties:

1. in finding against the Appellants that there was no evidence the selling agent for Ms Jay showed them the disputed strip (but only showed them the house itself), the Magistrate erroneously required actual knowledge on the part of the agent that land outside the paper title boundary was within the fence line of 5 Durward Avenue;

2. in concluding that Ms Jay only intended to sell the paper title to 5 Durward Avenue and finding against the Appellants that they had not called evidence to prove that the property sold to them included the disputed strip, the Magistrate erroneously required actual knowledge on the part of Ms Jay as vendor and the Appellants as purchasers, that land outside the paper title boundary was within the fence line of 5 Durward Avenue;

3. in speculating that if Ms Jay intended to continue adverse possession of the disputed strip she would have sought to realise its value by seeking to have it transferred to the Appellants, the Magistrate erroneously incorporated into his analysis a requirement for actual knowledge on the part of Ms Jay that she was selling land outside the paper title property;

b) erred by finding against the Appellants that they had not proven the disputed strip had been sold to them whether by express assignment or otherwise;

c) in concluding that there was no evidence that Ms Jay ever occupied or went to 5 Durward Avenue, misconstrued the terms "factual possession" and "occupancy" by equating them with physical attendance, or residence at 5 Durward Avenue, rather than applying a legal concept involving physical custody and control

d) erred in concluding that the steps taken by Ms Jay as executrix of the estate were not indicia of her treating the property as an owner in possession;

e) in declining to declare that Ms Jay took possession of 5 Durward Avenue on the basis that the appellants had failed to call evidence to prove actual knowledge, or physical attendance at the property, his Honour wrongly concluded that there was a deficiency in the evidence such that it was not open to him to infer that Ms Jay took legal possession of the disputed strip.

f) in stating that he did not place reliance on the decision in Re Johnson (2002) 2 Qd R 502 because he "did not think that death had any special significance", continued to apply the law of factual possession in relation to the possession exercised by an executor erroneously and did not grasp that the case was not relevant to the facts because it considered the death of the true owner, not the adverse possessor.

Ground 2

The Magistrate wrongly concluded that the appellants defence failed because they had acknowledged the respondents' title to the disputed strip for the purposes of s 24 of the Limitation of Actions Act 1958 because his Honour:

a) misapplied Bottos v CityLink Melbourne Ltd [2021] VSC 585 which considered whether acknowledgment had occurred over land which was the subject matter of the planning application, in circumstances where the subject matter of VCAT proceeding P1184/2019 was only the paper title land for 5 Durward Avenue;

b) rightly concluded that the architectural plans were in accordance with the paper title in the context of there being no dispute between the parties that the Council required the planning scheme provisions to be calculated from the paper title boundary, not the disputed title boundary, for the purposes of the planning permit application;

c) erroneously concluded that acknowledgement of the possessory status of land outside the scope or subject matter of the permit application had occurred in plans amended for the purposes of the VCAT proceeding;

d) inferred, contrary to the evidence, an intention on the part of the appellants to connect the proposed gate at the eastern boundary of the proposed development to a paling fence which would be constructed on the paper title boundary:

1. the evidence of Mrs Zhang was that if the development proceeded, the paling fence was to be removed and re-constructed on the disputed boundary line, not the paper title line.

2. the evidence of Mr Streeter as to what was stated at a conciliation conference on behalf of the appellants as to the location of the paling fence after construction was evidence of a statement made on a without prejudice basis.

e) applied the inference as to the location of the fence post-development to support a conclusion that there was an intention by the appellants not to possess the disputed strip.

Ground 3

The Magistrate found that he was not required to decide whether the additional encroachment of the portion of the fence constructed in 2011 was minor, and indicated that he would have decided the issue on the basis of PCH Melbourne Pty Ltd v Break Fast Investments Pty Ltd [2007] VSC 87. The appeal court is invited to confirm that the encroachment is minor on the basis of the evidence and findings below, and not to remit the question:

a) The additional encroachment is a maximum of 3 centimetres at the eastern-most point, gradually reducing along the fence line to the west.

b) The additional encroachment is within acceptable tolerance limits, or within an acceptable margin of error having regard to the lean of the fence prior to reconstruction in 2011.

c) The expense to demolish and reconstruct that portion of the fence is disproportionate to the extent of the further encroachment.

44 The scheme of the relevant provisions of the LAA is as follows. Section 8 provides that no action shall be brought by any person to recover any land after the expiration of fifteen years from the date on which the right of action accrued. Section 18 provides that at the expiration of that period, the person's title to that land shall be extinguished. As to when the right of action accrues, s 9(1) refers to the date upon which the person whose title stands to be extinguished 'has ... been dispossessed or discontinued his possession', whilst s 14(1) provides that '[n]o right of action to recover land shall be deemed to accrue unless the land is in possession of some person in whose favour the period of limitation can run (hereinafter in this section referred to as "adverse possession").'[26]

45 Section 24 of the LAA applies in circumstances where the adverse possession is continuing, but the dispossessed person's title is acknowledged.[27] If the person in possession of the disputed land acknowledges the title of the paper title owner, the right to recover the disputed land is deemed to accrue at the date of the acknowledgement. An acknowledgement must be in writing and signed by the person making it or their agent, and it must be made to the paper title holder or their agent.[28]

46 The onus of proving the acquisition of title by adverse possession lies on the factual possessor. Adverse possession requires proof of two matters. First, factual possession by way of physical custody and control of the land, and second, an intention to exercise that custody and control for the benefit of the factual possessor.[29]

47 In proceeding S ECI 2023 06110, the Zhangs seek orders that the Magistrate's orders in the Streeters' proceeding (M12064366) be set aside and that the Streeters pay their costs of that proceeding. In proceeding S ECI 2023 06122, the Zhangs seek orders that the Magistrate's orders in the Zhangs' proceeding, N10221855, be set aside and that the Court grant declarations that the Zhangs have acquired title by adverse possession of the disputed land and grant ancillary orders and declarations and orders that the current dividing paling fence be replaced by a new dividing paling fence to be constructed on the current fence line, with the parties contributing equally to its costs and that the Streeters pay their costs of the Magistrates' Court proceeding and the appeal.

48 The Streeters sought orders dismissing the appeals, including on grounds that the notices of appeal did not contain questions of law and therefore did not engage the Court's jurisdiction under s 109 of the Magistrates' Court Act. I next consider that issue.

Preliminary issue-whether notices of appeal raise questions of law

49 An initial issue requires determination. The Streeters contended that the Zhangs had not identified any question of law in their notices of appeal. They also argued that most, if not all, of the Zhangs' grounds of appeal were not raised in the Magistrates' Court proceedings. They argued that many of the Zhangs' grounds of appeal contained bare and unparticularised assertions. They contended that both appeals should be dismissed because they were vexatious or because the Zhangs had not established that the Magistrates' findings and orders were not open to him.

50 The Zhangs submitted that their Notices of Appeal raised questions of law as to how the law was applied to the facts found. They contended that the grounds on which they relied had been raised in the Magistrates' Court or were a response to findings made by the Magistrate.

51 I do not accept the Streeters' submissions that the Zhangs' amended notices of appeal do not contain questions of law. I accept that the issues of whether the adverse possessor has had continuous possession of the disputed land, or has acknowledged the title of the paper title holder, are ultimately matters of fact. But the test to be applied to the facts found is one of law. That test concerns the meaning of words in the LAA_,_ particularly in ss 14 and 24.

52 In Vetter v Lake Macquarie City Council,[30] Gleeson CJ, Gummow and Callinan JJ stated that whether facts as found answer a statutory description or satisfy statutory criteria will very frequently be exclusively a question of law. To similar effect, Nettle JA in R v ACR Roofing Pty Ltd[31] stated that in very few cases, the question of whether the facts as found come within a statutory provision is purely a question of fact. He referred to Mason J's statement in Hope v Bathurst City Council ('Hope')[32] that many authorities establish that whether the facts fully found fall within the provisions of a statutory enactment, properly construed, is a question of law. Nettle JA stated that it is only in cases of statutes which involve very simple words permitting of only one ordinary meaning that the problem is purely factual.[33]

53 The Zhangs argued that Magistrate took into account irrelevant matters of law, or misconstrued the applicable elements of the statutory provisions, which in turn infected his findings, thus causing the errors of law which were the basis of their appeals.

54 I consider that the Zhangs' questions of law one and two raise questions of law that give the Court jurisdiction to hear the appeals under s 109 of the Magistrates' Court Act. They raise questions about the meaning of the words 'adverse possession' and 'acknowledgment'. I also consider that question of law three raises a question of law as it concerns how a court will determine whether an encroachment on another person's land is minor and within accepted tolerances and the legal effect of such a determination.

55 I do not consider that the Zhangs' amended questions of law and grounds of appeal cannot be relied on because they should have been, but were not, argued in the Magistrates' Court. My overarching reason is that I decided on 31 May 2024 that it was appropriate to grant leave to the Zhangs for those questions and grounds to be included in amended notices of appeal. The Court of Appeal refused the Streeters leave to appeal my orders. The Court of Appeal's orders ended the dispute as to whether the Zhangs should be allowed to rely on the questions and grounds.

56 I also accept the Zhangs' submissions about additional reasons why they should be permitted to rely on the questions of law and grounds in their amended notices of appeal. The subject matters of the first and second questions of law were raised in argument before the Magistrate and in written submissions. Issues relating to the third question of law were raised in the written submissions in the Magistrates' Court. The grounds that are connected to the questions of law include contentions about how the Magistrate erred in dealing with the issues of abandonment of possession and acknowledgment. For example, ground 1 (a)(i)(ii)(iii), (b) and (e) were matters upon which the Magistrate based his decision, although they had not been raised in any detail by the parties. Grounds 1(c) and (d) were raised by the Zhangs in their written submissions.[34] Ground 1(f) concerns the decision in Re Johnson,[35] upon which the Streeters had relied in written submissions. A somewhat similar position exists with the grounds connected to question of law two dealing with acknowledgement of title which were the subject of written submissions in the Magistrates' Court.[36]

57 Ground 3 is in a different position because the Magistrate did not decide the issues that it raises, although they were mentioned in written submissions, as were most of the other grounds that are now contained in the amended notices of appeal.[37] Ground 3 was also raised in submissions made at the hearing on 10 May 2024[38] and was contained in the Zhangs' proposed amended notices of appeal which I gave leave to file. Most of the grounds now in the Zhangs' amended notices of appeal were the subject of written submissions in this Court, in particular in the Zhangs' written submissions of 15 April 2024.[39]

Question of law one and ground one - The Zhangs' adverse possession claim and whether there was a break in continuity of adverse possession

58 The Zhangs described the essence of their case as being whether a person who becomes the registered proprietor of land as an executor, but does not physically move into the property, has abandoned possession of land adversely possessed.[40] Applied to this case, the question is: did Ms Jay undertake sufficient acts of control over the disputed land, although she did not physically reside in the house on the land, but on another property some distance away? The Zhangs submitted that Ms Jay had undertaken sufficient acts and that Ms Jay had dealt with the land and controlled it as an owner would, although she did not physically attend it.

59 The Zhangs argued that an intent to possess involves an intention to exercise physical custody and control for one's own benefit and to the exclusion of the world at large, including the paper title owner. That intent does not require a conscious intention to exclude the true owner, it is sufficient that the adverse possessor believes themselves to be the true owner.[41] Enclosure of disputed land, for example by a fence, itself prima facie indicates the requisite intention because it is the strongest possible evidence of adverse possession.[42]

60 The Magistrate considered two 15-year periods of potential relevance to the Zhangs' adverse possession claims. The first was the period of 8 July 1997, when the Streeters became the registered proprietors of No 3, to 8 July 2012. The second period commenced on 5 January 2005 when the Zhangs became registered proprietors of No 5 and ended on 6 January 2020.

61 The Magistrate held that the Zhangs' claim for the first period did not succeed because the adverse possession had been abandoned, as Ms Jay, their predecessor as registered proprietor, did not take possession of No 5. The Zhangs submitted that this conclusion was in error. They argued that the Magistrate took into account irrelevant matters of law, or misconstrued the applicable legal requirements and this in turn infected his findings, thus causing the errors of law, which were the basis of their appeals.

62 First, the Magistrate erroneously imported a requirement for actual knowledge on the part of Ms Jay and the Zhangs, that the fence and the disputed land were not within the paper title of No 5. His Honour placed importance on the lack of evidence that Ms Jay's agent showed the Zhangs the disputed strip or that the agent knew that land outside the paper title of No 5 was the subject of a possessory title.

63 Secondly, the Magistrate erred in his conclusion that Ms Jay only intended to sell the paper title to No 5 and considered that the Zhangs should have called evidence to prove that the property sold to them included the disputed land. The Magistrate erred in speculating that, if Ms Jay intended to continue adverse possession of the disputed land, she would have sought to realise its value by seeking to have it transferred to the Zhangs. However, in my opinion, the imposition of a requirement that the Zhangs prove that the fence and disputed land had been sold to them was contrary to the principle that adverse possession claim does not require an express assignment of the possessory right to the next occupier before the aggregation of adverse occupation periods can occur. They relied on Shelmerdine v Ringen Pty Ltd,[43] in which Brooking J stated:

Adverse possession for the necessary period cannot be established cannot be established by means of successive occupiers if there is any gap in possession. But if there is no gap, their periods of possession may be aggregated, although there has been no assignment of their possessory rights. [44]

64 Thirdly, the Magistrate erred in equating 'possession' with occupancy, meaning physical residence or attendance at the property. This led his Honour to ask the wrong question about the alleged break in continuous adverse possession and to conclude that Ms Jay, in not attending or moving into the property, abandoned any possessory title she might otherwise have held against the Streeters. The Zhangs contended that the relevant issue was 'did Ms Jay abandon possession of the disputed strip in the sense of abandoning physical control of the land?' They contended that she did not.

65 The Zhangs submitted that the relevant question was whether a period of non-attendance at, or use of the property, indicated a disconnection with the disputed land or abandonment of the intention to possess it so as to break the continuity of the adverse possession for the purposes of s 14(2) of the LAA. The Zhangs referred to the High Court decision in BA v R ('BA')[45] for the proposition that occupation requires the exercise of physical control. They contended that physical control does not require physical attendance at the property, or residence there, but treating the property as an owner would.

66 Fourthly, the Magistrate erred in concluding that the steps taken by Ms Jay in connection with No 5, as personal representative of Ms Plunkett's estate, were not indicia of her treating the property as an owner in possession. His Honour failed to take into account actions that were 'contra-indications of abandonment', such as the continued existence of the fence, the short time that Ms Jay took to obtain probate, her clearing out, cleaning and preparing the property for sale and then achieving a sale. These actions were evidence of Ms Jay dealing with the property, including the disputed strip, as an owner in possession and not as an owner who intended to abandon the property. It was not disputed below that Ms Jay had taken the steps ordinarily taken by an executrix who wanted to sell land which was an estate asset. She, of course, was not only the personal representative, but also the beneficiary of the estate.

67 Fifthly, the Magistrate erred in asking the wrong question and concluding that the only inference open on the facts was that Ms Jay abandoned any possessory title against the Streeters, although he would not make a declaration to that effect. The Magistrate thereby misdirected himself as to the status of the finding required to establish continuous possession on the balance of probabilities. The Magistrate erred in declining to declare that Ms Jay took legal possession of No 5 on the basis that the Zhangs had failed to call evidence to prove actual knowledge of the disputed land, or physical attendance at the property and wrongly concluded that, as a result, he could not infer that Ms Jay took legal possession of the disputed land.

68 Finally, the Magistrate misunderstood that the decision in Re Johnson[46] considered the death of the true owner, not of the adverse possessor.

The Streeters' submissions on question of law one and ground one

69 The Streeters emphasised that the Magistrate's ultimate finding was that the Zhangs had not discharged their onus of proving that they had adversely possessed the disputed land for 15 years. That was a finding of fact, which could not be disturbed even if the Zhangs succeeded on question of law one. The Magistrate found that no evidence had been led that supported the Zhangs' claim of continuous, exclusive adverse possession of the disputed land from July 1997 until July 2012. The Zhangs had not established any error in that finding or that that finding was not open on the evidence.

70 The Zhangs' submissions sought to have the Court find facts and review the merits of decisions made by the Magistrate. An assertion that a Magistrate erred in a finding, does not itself raise a question of law. Findings of fact can only be challenged as an error of law if there is no probative evidence to support them and the Zhangs had not established such a ground.[47]

71 The Streeters submitted that ground one invited the Court to accept mere assertions without evidence. Most of the Zhangs' other grounds were assertions about findings of fact that that had not been raised in the Magistrates' Court.

72 The Streeters contended that the Zhangs relied on terms such as the 'broader legal concept of possession', 'the legal concept of occupation', 'the legal sense of custody and control', and 'legal factual possession'. Those terms were not found in the authorities, but were constructs relied on by the Zhangs in the absence of evidence that Ms Jay ever occupied or took physical control of the disputed land.

73 The Streeters submitted that the Magistrate correctly found that the words 'possession' and 'abandon' were to be given their ordinary meanings where they appear in the LAA and did not raise any question of law. They relied on the High Court's judgment in Hope[48] for that proposition.

74 The Streeters submitted that the question of whether the Zhangs had established continuous possession of the disputed land was a question of fact and that the Zhangs must prove that their circumstances did not fall within s 14 of the LAA, being that the land had ceased to be in adverse possession_._

75 The Streeters also submitted that the transaction between Ms Jay and the Zhangs was only the transfer of the paper title and not of any possessory title to the disputed land. As there was no evidence of Ms Jay taking possession of No 5, she could not rely on Ms Plunkett's prior possession to add to her possession. Ms Jay could not take possession of the disputed strip simply by inheriting it. She never occupied the property, and her real estate agent only showed the Zhangs through the house once. In selling the property, Ms Jay was not taking possession of it, in fact she lived in her own home some distance away. The Zhangs did not call Ms Jay as a witness and no evidence was provided that she had taken possession of the disputed land with intent to possess it. There was no evidence of locked gates to exclude the Streeters, or the rest of the world, from the disputed land.

76 Possession comprises two main subcomponents: physical occupation and an intention to possess. Factual possession always involves occupation. The form of occupation required varies depending on the type of property and its use. For a suburban home, physical occupation required moving into and living in the house and property. Possession of land is not established by selling it, but otherwise having nothing to do with it. That is to assert ownership of the land, but not to possess it. A fence of itself does not bestow or infer intention on a third party who makes no claim to possession or intention.

77 The Streeters relied on a sentence in Re Johnson,[49] a decision of the Supreme Court of Queensland, which considered the inability of the claimant in possession to identify the true owner of the land. Wilson J stated:

If the owner abandons possession, or if he dies and the next person entitled (eg as devisee or remainderman) does not take possession, time will begin to run as soon as adverse possession is taken by another.[50]

78 The Magistrate stated that he did not decide the case on the basis of that decision because he considered it did not have 'anything in it' concerning the issue of whether possession was continuous.[51]

79 In Gianchino v Gianchino ('Gianchino'),[52] the Court of Appeal relied on the statement of the High Court in BA,[53] that in law, 'occupation is a term of art used to mean the exercise of physical control over land'. The Court of Appeal referred to the judgment of Powell v McFarlane ('Powell')[54] in which Slade J stated:

Factual possession signifies an appropriate degree of physical control. It must be a single and [exclusive] possession, though there can be a single possession exercised by and on behalf of several persons jointly. Thus an owner of land and a person intruding on that land without his consent cannot both be in possession of the land at the same time. The question what acts constitute a sufficient degree of exclusive physical possession must depend on the circumstances, in particular the nature of the land and the manner in which land of that nature is commonly used or enjoyed... Everything must depend on the particular circumstances, but broadly, I think what must be shown as constituting factual possession is that the alleged possessor has been dealing with the land in question as an occupying owner might have been expected to deal with it and that no-one else has done so.

80 In JA Pye (Oxford) Ltd v Graham,[55] Lord Browne-Wilkinson adopted Slade J's formulation of the necessary intention required to establish adverse possession:

intention, in one's own name and on one's own behalf, to exclude the world at large, including the owner with the paper title if he be not himself the possessor, so far as is reasonably practicable and so far as the processes of the law will allow.

81 That intention will be established if the actions of the occupier make it clear that he or she is using the land in a way in which a full owner would and in a way that excludes the owner.[56]

82 The question is whether the actions of the adverse possessor were indicative of control and exclusive possession.[57] The adverse possessor must have, and must manifest, an intention to possess exclusively, not an intention to own.[58] Where the acts of possession point unequivocally to an assertion of possession to the exclusion of all others, then the subjective intent behind it need not be inquired into.[59]

83 The act of erecting and maintaining fences around the land in question is usually strong evidence of occupation with the intent to exclude all others. A fence has been described as 'a sign to all who see it not to enter'.[60] But each case must be decided on its own particular facts.[61]

84 Ashley J in Bayport Industries Pty Ltd v Watson ('Bayport')[62] referred to passages in Powell and observed that, to the principles there stated, 'should be added and/or highlighted the following':

When the law speaks of an intention to exclude the world at large, including the true owner, it does not mean that there must be a conscious intention to exclude the true owner. What is required is an intention to exercise exclusive control: See Ocean Estates v Pinder. And on that basis an intention to control the land, the adverse possessor actually believing himself or herself to be the true owner, is quite sufficient: See Bligh v Martin. As a number of authorities indicate, enclosure by itself, prima facie indicates the requisite animus possidendi. As Cockburn CJ said in Seddon v Smith: 'Enclosure is the strongest possible evidence of adverse possession'. Russell LJ in George Wimpey & Co Ltd v Sohn, similarly observed: 'Ordinarily, of course, enclosure is the most cogent evidence of adverse possession and of dispossession of the true owner. It is well established that it is no use for an alleged adverse possessor to rely on acts which are equivocal as regard an intention to exclude the true owner: see for example Tecbild Ltd v Chamberlain per Sachs LJ.(Citations omitted).

85 In Bottos v CityLink Melbourne Ltd,[63] Gorton J stated that the adverse possessor's intention to possess may be deduced from the physical acts of possession themselves and that:[64]

It is the existence of an intention to possess that matters, not whether the possessor was aware of the fact that the land was on another's title. As was observed by Brooking JA in Malter v Procopets, most adverse possessions take place inadvertently. It is hard to see why accidental dispossessors ought to be treated less favourably than deliberate dispossessors.

86 An application for leave to appeal from his Honour's judgment was dismissed.[65]

87 Time ceases to run against the paper title owner if the adverse possessor abandons possession. Whether that has occurred is a question of fact. However, possession is not necessarily abandoned because a gap of several months occurs between the going out and coming in attendance of the adverse possessor or their representatives.[66] In appropriate circumstances, adverse possession may continue despite intervals, and sometimes long intervals, between acts of use.[67] An inability to prove that the land or building was occupied continuously may not indicate abandonment of possession.[68]

88 Possessors can claim through each other, and when that occurs, each of their separate adverse possessions, being for less than the statutory period, can be aggregated so that a cumulative period of adverse possession exceeding the statutory period can be established. In those circumstances, the possessory title will be acquired by the person in possession when the statutory period expires.[69]

89 The law does not require any formal or informal conveyance or assignment of inchoate possessory rights. If, during the period in question, there was a continuous adverse occupation of land to the exclusion of the owner of the documentary title, that suffices for the purpose of bringing into existence a possessory title.[70]

90 In my opinion, the Magistrate erred in law in finding that Ms Jay had abandoned possession of the disputed land between 6 July 2004, upon the death of Ms Plunkett, and 5 January 2005, when the Zhangs became the registered proprietors of No 5.

91 With respect, in my opinion, by the Magistrates' approach to the concept of possession, his Honour incorrectly determined that the Zhangs had not satisfied the onus of proving adverse possession for the 15 year period required. The Magistrate's conclusion that adverse possession had not been proved was based on his conclusions about the abandonment of possession and acknowledgment issues. It was not a stand-alone finding based on the application of the onus of proof. His Honour found, in effect, that the Zhangs had not satisfied the onus of proof because Ms Jay had not taken possession of No 5 and the disputed land, or had abandoned the possession of the disputed land to which Ms Plunkett had possessory title.

92 The authorities mentioned previously, required the Magistrate to decide whether Ms Jay had dealt with the disputed land between July 2004 and January 2005, as an occupying owner might have been expected to deal with it and that no-one else had done so. It did not matter whether or not Ms Jay believed that she owned the disputed land.[71]

93 Ms Jay obtained probate of Ms Plunkett's will and became registered proprietor by transmission on 26 October 2004, as the personal representative of Ms Plunkett's estate. Ms Jay prepared the property for sale, engaged an agent and enabled prospective purchasers to inspect the property. She had entered into a contract to sell the land to the Zhangs in September 2004. The contract of sale was settled on 5 January 2005. She acted as any occupying owner wishing to sell their property might act. Preparing a property for sale and entering into a contract for its sale and then completing the contract are not an abandonment of possession. A person who has inherited a property and wishes to sell it immediately is unlikely to move into it, or even attend it frequently, after it has been readied for sale. In addition, the existence of the fence was strong evidence of an intention to exclude all others.

94 Other examples of properties remaining empty, but possession not being abandoned, might include an owner deciding to lease their property where time may elapse while tenants are found, but possession is not abandoned. Such a case was Nicholas v Andrews,[72] where the claimant for the possessory title relied upon the adverse possession of the land in question by previous occupiers who had leased the land to tenants. There were times, the longest being two to three months, when the cottages and paddock that included the subject land were not actually occupied by any person between the time when one tenant went out and one tenant went in. The land in dispute remained fenced in with the land of the adverse occupiers.[73] The Full Court held that no inference was to be drawn that there was any abandonment of possession. Gordon J stated:

...in our opinion it is a question of fact in each case whether a trespasser has in fact abandoned his possession, and that question is not conclusively answered by showing that he may for a short period of time have ceased to be in actual physical occupation of the land. We do not think that mere non-user of land for a time is conclusive evidence of abandonment of possession.[74]

95 By application of the same principle, an adverse possessor did not abandon possession when he ceased to reside in the subject land, but members of his family returned to it frequently.[75] Nor did an adverse possessor abandon possession of land during a year long trip around Australia as the land remained effectively enclosed by the gates from the whole world.[76]

96 The Magistrate described Ms Jay's dealings with the land as slight, that she never took up residence in the property and that Mr Streeter never saw her visit there. But in my opinion, Ms Jay acted as an occupying owner might who had inherited the property from the previous owner and wished to sell it immediately by taking the steps that I have mentioned.

97 With respect, in my opinion, the Magistrate erred in placing importance on the fact that there was no evidence that the agent showed the Zhangs the disputed land, only the house itself. The effect of the Court of Appeal's decision in Malter v Procopets ('Malter')[77] is that lack of knowledge by Ms Jay, or Ms Plunkett, that the fence encroached onto No 3, did not prevent them having factual possession of the disputed land.

98 Also with respect, in my opinion, the Magistrate erred in placing importance on the lack of evidence that the Zhangs sought to buy any possessory title that Ms Jay may have held. His Honour erred in attaching significance to the following:[78]

If Ms Jay intended to continue the adverse possession of her mother [aunt] against the Streeters, one might've thought that she would likely have sought to realise its value by seeking to have it transfer[red] to the Zhangs along with...

99 The law does not require a new adversary possessor to purchase the vendor's possessory title. In Mulcahy v Curramore Pty Ltd ('Mulcahy')[79] Moffitt P accepted that:

[the] law did not require any formal or informal conveyance or assignment of the inchoate possessory rights, and that, if during the period in question there was a continuous occupation to the exclusion of the owner of the documentary title, that sufficed for the purpose of bringing into existence a possessory title.[80]

100 In Shelmerdine,[81] Brooking J rejected the suggestion that the periods of successive occupiers could be aggregated only if there had been express assignment of the possessory rights.

101 The Streeters relied on the fact that the Zhangs had not called Ms Jay as a witness and that she might have provided evidence of whether she took possession of the property or visited it or performed other acts of ownership. The Court, in appropriate circumstances, may infer that evidence of a witness not called by a party would not have assisted that party.[82] I do not consider that this point assists the Streeters, even if I assume that it might have been expected that the Zhangs, rather than the Streeters, would have called Ms Jay. The Zhangs based their case on Ms Jay's actions in being appointed personal representative of the estate, preparing the property for sale, appointing an agent and entering into a contract to sell the property to the Zhangs. I have decided the case on the basis of those actions. The possibility that Ms Jay's evidence would not have assisted the Zhangs' case does not detract from the weight the Court can give to her actions that I have described.

102 The Zhangs have established grounds 1(a),(b), (c),(d) and (e), which are connected to question of law one. Those grounds identify errors of law.

Question of law two and ground two - acknowledgement of title

103 The 'acknowledgment of title' ground concerns the alternative period of the Zhangs' adverse possession claim from 5 January 2005 to 6 January 2020. It may have assumed particular relevance if I had found that Ms Jay had abandoned adverse possession, or had not entered into possession, of the disputed land between 6 July 2004 and 5 January 2005. The Zhangs contended that they had not acknowledged the Streeters' title to the disputed land so as to attract the operation of s 24 of the LAA and that the Magistrate erred in law in finding that they had.

The Zhangs' submissions on the acknowledgement of title ground

104 The Zhangs contended that their planning permit application was not an acknowledgment of title. They relied on Gorton J's judgment in Bottos[83] holding that an adjoining owner's decision not to object to the paper title owners' application for a planning permit over their title land, but seeking unsuccessfully a planning permit condition that affected a small part of the land, did not amount to an acknowledgment of title. The facts were that CityLink had built a noise wall along the Tullamarine Freeway that encroached onto the plaintiffs' land. When the plaintiffs sought a planning permit to build units on their land, VicRoads, the adjoining owner, unsuccessfully sought a planning permit condition that 'the northern fence line [be] set back by 1.0 metre from the existing noise wall columns for maintenance purposes'. CityLink contended that by reason of the long presence of the noise wall, it had adversely possessed the land that the wall took up and that accordingly it was not liable to the paper title owners in their claim for trespass. The paper title owners contended that VicRoads, as agent for CityLink, had acknowledged their title by seeking the planning permit condition. The plaintiffs had sued CityLink in trespass and sought an order that it remove the noise wall structure to the extent that it encroached on their land. Gorton J held that only spillage found on parts of the land resulting from the installation of a noise wall pole constituted an actionable trespass. CityLink had adversely possessed the land occupied by the poles and their supporting structures.

105 The Zhangs argued that the Magistrate had misapplied Gorton J's judgment and erroneously concluded that they had acknowledged the possessory status of land outside the scope or subject matter of the permit application by providing the amended plans to the Streeters during the second VCAT proceeding. His Honour had wrongly found that the Zhangs intended to connect the gate at the eastern boundary of the proposed development to a paling fence which was to be constructed on the paper title boundary and erred in his conclusion that they did not intend to possess the disputed land. Ms Zhangs' evidence was that, if the development proceeded, the paling fence was to be removed and re-constructed on the disputed boundary line, not the paper title line. Mr Streeter's evidence as to what was stated at a conciliation conference on behalf of the Zhangs was inadmissible as being made on a without prejudice basis. In any event, B20 any offer made on their behalf was rejected and did not resolve the dispute. No acknowledgment of title thereby occurred.

106 Provisions in Victorian planning schemes, such as ResCode B20,which the Streeters relied on, referred to measurements to 'the boundary', meaning the paper title boundary shown. Council requires all of the setbacks to be measured from the paper title boundaries, as too does VCAT, and will not approve a development outside a title boundary without the owner's consent. The Zhangs contended that their planning permit application did not affect rights over land outside its scope and did not affect rights over the disputed land. The making or amending of a planning permit application in accordance with the statutory procedures did not amount to a bargaining away of a statutory right, or an agreement not to rely upon a benefit given by the LAA. Accordingly, the Zhangs had not acknowledged the Streeters' title by using the paper title boundaries in the plans submitted to Council. The proposed dwellings were to be constructed entirely within the Zhangs' paper title boundary and, therefore, the disputed land was irrelevant to the planning permit application. A planning permit is merely permission to do something otherwise prohibited under the Planning and Environment Act 1987 and says nothing about who owns the land or proprietary rights.

The Streeter' submissions on acknowledgement of title

107 The Streeters contended that whether the Zhangs had acknowledged their title was essentially a question of fact. They submitted that the Zhangs had not raised their response to the Streeters' acknowledgment of title argument in their opening submissions, or in examination of witnesses, but in closing submissions.

108 The Streeters submitted that, as the Zhangs relied on the title boundary in their applications to Stonnington Council and VCAT, they thereby acknowledged their title.[84] The Streeters also relied on the following submissions.

109 First, the Streeters relied on their alteration of a window in their home facing north onto the boundary wall, by building it closer to the boundary. In response, in order to comply with the planning standard ResCode B20, the Zhangs amended their building plans by moving a proposed wall, which was to be built on the boundary, behind the title boundary. They submitted that thereby, the Streeters had asserted their proprietary rights over the disputed land and the Zhangs had acknowledged those rights. The Zhangs intended that the Council and VCAT would rely on the title boundary as the paramount boundary in their amended planning scheme. The acknowledgement contained in the amended plans was in writing and signed by the Zhangs' agent.

110 Secondly, a planning permit application can be an acknowledgement of title, as the amenities of adjacent properties are relevant to the determination of the permit application. Such planning applications are not merely limited to the subject land. While a planning permit does not automatically constitute an acknowledgement of title, it did in this instance, as it demonstrated that the Zhangs were not enforcing their rights beyond the paper boundary.

111 Thirdly, whether the Zhangs intended to acknowledge title by providing the amended planning drawings was irrelevant as that question was to be decided objectively, by determining what a reasonable person would interpret the documents or conduct to mean.[85]

Analysis of question of law two and ground two acknowledgment of title

112 In Bottos, Gorton J considered s 24(1) of the LAA Act dealing with acknowledgment of title. That section applies in circumstances where the adverse possession was continuing, but the dispossessed person's 'title' was acknowledged. His Honour considered that s 24 required an acknowledgment of the dispossessed person's right to possess the land in question and that a person may acknowledge title without intending to do so, or without realising that they were doing so and by so doing that they were bringing an end to a period of possession.[86] His Honour stated:

Section 24 of the Limitations Act applies in circumstances where the adverse possession is continuing, but the dispossessed person's 'title' is acknowledged. The word 'title' is not defined. It cannot be limited to a certificate of title, as the person being dispossessed may only have a leasehold interest. Given that the legislation is concerned with rights to possession, it seems to me that what is required is an acknowledgment of the dispossessed person's right to possess the land in question. Of course, a broader acknowledgment of general ownership of the land in question would ordinarily include an acknowledgement of the right to possess that land. Further, an unqualified acknowledgment of another's ownership of land as described in a certificate of title could carry with it an acknowledgment of that person's associated right to possess that land.

Just as a person may adversely possess land without realising it, it seems to me that a person may 'acknowledge title' without intending to do so, or without realising that they are doing so, or without realising that by so doing they are bringing to an end a period of adverse possession. Were it otherwise, the section would talk in terms of acknowledging another's 'right of action', or 'claim to possession', or some equivalent term, rather than simply the other's 'title'. Similarly, there is no implied requirement that the acknowledgment must take place in circumstances where it is appreciated that the acknowledger is or may be in adverse possession. It is sufficient, it seems to me, that a party perform an act that amounts, objectively speaking, to an acknowledgement of the other party's legal right to possess land that includes the land that the acknowledger is, whether they appreciate it or not, adversely possessing.[87]

113 The Court of Appeal in Bottos, in refusing leave to appeal Gorton J's orders, stated that the question to be decided was whether, on all the evidence, the respondent had established that it intended to possess the land over which the noise wall protruded into the property to the exclusion of all others.[88] The Court of Appeal stated that VicRoads, in seeking the condition on the planning permit, did not impliedly acknowledge the applicants' title to the land on which the noise wall poles and supporting structures encroached.[89]

114 The Streeters referred to cases dealing with acknowledgement of debts and part payment of debts, but I do not consider that they assist in deciding the issues raised by question of law two. However, they recognise the proposition that, whether an acknowledgement has occurred, is a question of construction of the relevant documents directed at ascertaining their meaning.[90]

115 I do not consider that anything said in the conciliation meeting in 2017 supports the Streeters' argument that the Zhangs acknowledged their title. However, assuming that the Zhangs waived the privilege protecting their agents' without prejudice communications, the statements said to have been made on their behalf amounted to an offer to settle the Streeters' objections. The offer was not accepted. There is also the question whether the formal requirements of s 25 of the LAA would have been satisfied by the statements said to have been made.

116 With respect, in my opinion, the Magistrate erred in finding that the Zhangs acknowledged the Streeters' title through seeking permission to build new dwellings on their paper title land with measurements taken from their paper title boundary. The Zhangs' amended plans acknowledged where the title showed the boundary to be and did not contain an acknowledgement of title for the purposes of s 24 of the LAA. The plans conformed with planning requirements rather than containing an acknowledgement of title for the purposes of s 24.

117 Mr Streeter gave evidence in the Magistrates' Court that, at a conciliation meeting in 2017 at the Council, in the context of measuring the distance between the north window and the fence, a Council officer informed him that its measurements were to be to the title boundary.[91] VCAT takes the same approach. The reason for this approach was explained by Senior Member Code in Mendes v Hobsons Bay City Council:[92]

1. Ms Farr's application includes plans that extend to the title boundaries of the subject land. Some fences and walls on the side boundary that is shared with Mr Mendes are not on that title boundary and are located inside the subject land. Both Mr Mendes and Ms Farr have engaged land surveyors to identify that part of the subject land occupied by Mr Mendes.
2. It suffices to record that the land occupied by Mr Mendes is a strip along the full length of the shared 51.74 metres-long side boundary. According to Mr Mendes' land surveyor, the strip is both 6 centimetres wide at the street frontage and at the rear boundary and varies along its length up to a maximum of 14 centimetres, depending on the location of fences and outbuilding walls. Both surveyors agree the area is about 4.5 square metres.
3. Mr Mendes has made an adverse possession claim to Land Victoria for title for that part of the subject land that he occupies. No decision has yet been made on that application.
4. At an earlier hearing, Mr Mendes unsuccessfully sought an adjournment of this application until his claim was decided.
5. I follow a consistent line of Tribunal decisions holding that an imminent or pending adverse possession claim for part of the land affected by a permit application under a planning scheme is irrelevant to the determination of the permit application. A permit applicant is entitled to have an application based on title determined in accordance with title if the permit applicant is the registered proprietor of the land in the title at the date the permit application is determined.
6. Nevertheless, a permit applicant is encouraged to include a survey plan showing any variation between title and occupation. Ms Farr included a survey plan with her application showing that variation.
7. The planning decision maker does not consider the rights that a person may have or may acquire over part of the relevant land within current title boundaries. If a permit is granted and a claim subsequently succeeds before the permit is acted upon, the title boundaries will change and the owner of the subject land may need to seek an amendment of the permit before acting on the permit, if the owner cannot acquire the part of the land lost through adverse possession.
8. Accordingly, I will not consider Mr Mendes' claim.

118 The Zhangs' compliance with the planning requirements to refer to the title boundary did not acknowledge the Streeters' title. The Magistrate erred in finding that it did. An acknowledgement of title will not generally occur where the adverse possessor relies on title boundaries, when required to do so in order to seek a planning permit. This is especially the case when the proposed development is to occur wholly within the adverse possessor's paper title boundaries.

119 The Zhangs have established grounds 2(a), (c) and (e) which are connected with question of law two. Those grounds identify errors of law.

Question of law 3 and ground 3 - the 2011 further encroachment

120 The third ground assumes that the Zhangs had established adverse possession of the disputed land and seeks determination of whether the further encroachment by a section of the fence reconstructed in 2011 was a de minimis encroachment so that no order should be made for that that section be demolished and replaced on the previous boundary.

121 The Magistrate accepted that the front portion of the fence was replaced in 2011 and that it encroached a further 3cm onto the Streeters' paper title. This encroachment occurred where the fence meets the eastern boundary of the Durward Road frontage, with the change in alignment reducing gradually further to the west. The approximate length of that portion of the fence was 7.5 metres.[93]

122 The Zhangs submitted that a question arose in connection with the relief sought in the appeals concerning whether the front section of the fence, constructed in 2011, ought to be demolished and moved to the position it was in from at least 1993 until 2011. The Magistrate did not decide this question because he dismissed the Zhangs' adverse possession claims.

123 The Magistrate accepted that the front section of the fence was replaced in 2011 and that the replacement fence encroached a further 3cm onto the Streeters' paper title land. Mr Streeter gave such evidence. This additional encroachment was at the point where the fence meets the eastern boundary, and the change in alignment reduces gradually further to the west, in accordance with the evidence of the surveyors.

124 The Zhangs submitted that the differences in measurements at the eastern boundary, measured by different surveyors at 26, 28 and 29cm, were within tolerance limits, or an acceptable margin of error. They submitted that the 3cm additional encroachment in 2011 was a de minimis encroachment, acceptable in its context and that the Court should decline to order the parties, or the Zhangs, to go to the expense of demolishing and reconstructing that section of the fence and should exercise its discretion to allow the fence to remain on the misalignment.

125 In the Magistrates' Court proceedings, the Zhangs submitted, that if the 2011 rebuilding of the fence led to a further encroachment of 3cm, which they denied, that was a small and de minimis variation within a tolerable margin of error and should be disregarded.[94] They referred to s 272 of the Property Law Act 1958, which is headed 'Margin of error allowed in description of boundaries'. However, in Break Fast Investments Pty Ltd v PCH Melbourne Pty Ltd,[95] to which the Streeters referred below, the Court of Appeal upheld the trial judge, Smith J's, rejection of the proposition that s 272 permitted a tolerance of up to 5cm, more or less, in determining boundaries. Smith J considered that s 272 merely introduced flexibility in the dimensions shown on title documents. It did not introduce margins for error when it referred to the actual title boundary, as found by measurement on the ground.[96]

126 The Streeters argued that question of law three raised no error of law and that the words 'de minimis' were not mentioned in the Magistrates' Court proceeding. The Magistrate did not have to decide this issue by question of law three and its grounds because he dismissed the Zhangs' adverse possession claim. The Streeters submitted that Mrs Zhang's evidence before the Magistrate was conclusive to show that the Zhangs knew the section of the fence had been replaced in 2011, although they denied that fact.

127 The front section of the boundary fence was replaced in 2011, due to damage caused by the dog of the Zhangs' tenant. The location of the pre-2011 fence is lost. The law of adverse possession includes that 'an act of possession within part of the disputed land is an act of possession on the whole of the disputed land'.[97] As the Streeters have always claimed all the allegedly adversely possessed land, the 2011 adversely possessed land is indistinguishable from the remainder of the land. The Streeters' position was that the entire fence should be replaced with a new fence on the title boundary.

128 Mr Streeter gave evidence in the Magistrates' Court that additional encroachment of the part of the fence constructed in 2011 increased the difficulty of opening the doors of cars parked in their driveway. Because of the narrowing of the driveway, they have been parking their cars on the street.[98]

129 The Zhangs have not established possessory title by adverse possession to the further 3cm encroachment that occurred in 2011, because they have not established continuous adverse possession of 15 years of that land. However, the submissions concerning question of law three and the associated grounds raise the issue of what should happen to that encroachment.

130 I do not accept that s 272 of the Property Law Act permits a margin of error of 50mm for surveys that apply to fences built on an incorrect alignment. Break Fast Investments rejects that suggestion. I accept the Magistrate's finding that the fence was replaced in 2011 and the replacement fence was built on a different alignment.

131 In PCH Melbourne Pty Ltd v Break Fast Investments,[99] Smith J, when deciding whether an encroachment into a plaintiff's air space constituted a trespass, quoted with approval from observations of Hodgson J that:[100]

I think the relevant test is not whether the incursion actually interferes with occupiers actual use of the land at the time, but rather whether it is of such a nature and a height which may interfere with the ordinary uses of the land which the occupier may see fit to undertake.

132 Smith J noted that the law places great importance on the right of the owner of freehold land to control its use.[101]

133 Mr Streeter gave evidence in the Magistrates' Court that the 2011 partial rebuild of the fence encroached a further 3cm onto their land. The Magistrate accepted that evidence. Mr Streeter also gave evidence that the narrowing of the driveway resulted in them having to park their cars on the street. Therefore, I do not consider that the further encroachment to be trifling, minor or de minimis. As the Zhangs have not established question of law three and the associated grounds, I consider that the Court should make orders to remedy the further encroachment that occurred in 2011.

134 I propose to make orders allowing the Zhangs' appeals in both proceedings and set aside the Magistrate's orders of 13 December 2023. I will hear the parties about the costs of the Magistrates' Court proceedings and the appeals. In proceeding, S ECI 2023 06122, I will grant declarations concerning the Zhangs' adverse possession of the disputed land, except for the further encroachment on the Streeters' land as a result of the new fencing constructed in 2011, and grant ancillary declarations and orders.

135 The parties all considered that a new fence is required. I consider that the Zhangs have established adverse possession of the disputed land, except for the additional encroachment in 2011. The existing fence should be demolished and a survey taken to plot a new fence line based on the existing fence line, but with adjustments for the approximate 7.5 metres of fencing constructed in 2011, to remove the further encroachment of 3cm as far as is possible. Then a new fence should be erected with the costs shared by the parties.

136 I will hear the parties as to appropriate orders to give effect to this judgment and about costs, both of the appeals and of the Magistrates' Court proceeding, and about any other orders that are required.

[1] A plan showing the fence and the disputed land is annexed to the Streeters' Amended Complaint in the Magistrates' Court proceeding, see Court Book A ('CBA') 152.

[2] Photographs of the fence for reference, including from Google Street view with timestamps, are located at CBA 349-386.

[3] Builder's plan at CBA 152; description of boundary discrepancies in Brian Watson's surveying report at CBA 189-191.

[4] Magistrate's Reasons, John Streeter v Jie Zhang, Jie Zhang v John Streeter, Magistrates' Court of Victoria, 8 December 2023 Judgment, ('Reasons') CBA 88.

[9] Streeter v Stonnington CC [2018] VCAT 628, at CBA 280-290.

[11] Zhang v Stonnington CC [2020] VCAT 54, at CBA 318-329.

[12] Fencing Notice at CBA 330-335; BT Survey at CBA 217.

[13] Response to Fencing Notice, at CBA 336-338.

[15] This section is taken from paragraphs [11]-[12] of the Court of Appeal's judgment in Streeter v Zhang [2024] VSCA 167 ('Streeter').

[17] Magistrate's Reasons, John Streeter v Jie Zhang; Jie Zhang v John Streeter, Magistrates' Court of Victoria, 8 December 2023, ('Reasons') at CBA 90.

[26] This paragraph is taken from Whittlesea City Council v Abbatangelo (2009) 259 ALR 56[4]; [2009] VSCA 188 ('Whittlesea').

[27] This sentence is taken from Bottos v CityLink Melbourne Ltd [2021] VSC 585 [76] (Gorton J).

[28] LAA, s 25.

[29] Gianchino v Gianchino (2023) 73 VR 306 [29] ('Gianchino').

[30] (2001) 202 CLR 439, 250 [24].

[31] [2004] VSCA 215; (2004) 11 VR 187 [42] ('A_CR Roofing_').

[32] [1980] HCA 16; (1980) 144 CLR 1, 7 ('Hope').

[34] The Zhangs' written submissions, in Magistrates' Court of Victoria, 29 November 2023, [20]-[24], [27]-[36]; at CBA 121-122, 122-130; and see the Zhangs' submissions in the Supreme Court of Victoria, 15 April 2024, [38]-[45] CBA 403-404.

[35] [1999] QSC 197; [2000] 2 Qd R 502 ('Re Johnson').

[36] See for instance the Zhangs' written submissions in the Magistrates' Court of Victoria, 29 November 2023, [55]-[61], at CBA 133-4. Ground 2(b) provided context for ground 2(c).

[37] The paragraphs were listed by the Zhangs' counsel at Transcript of Proceedings, Jie Zhang v John Streeter,(Supreme Court of Victoria, S ECI 2023 06110 and SECI 06122, Ginnane J, 31 May 2024, ('SCV T, 31 May 2024') 120-3.

[38] See also the Zhangs' written submissions in the Supreme Court, 15 April 2024, [64]-[68], at CBA 409-10.

[40] Transcript of Proceedings, Jie Zhang v John Streeter, (Supreme Court of Victoria, S ECI 2023 06110 & S ECI 2023 0622, Ginnane J, 10 May 2024) ('SCV T 10 May 2024') 10.

[41] Bayport Industries Pty Ltd v Watson [2002] VSC 206, [40] (Ashley J)('Bayport').

[43] [1993] VicRp 23; [1993] 1 VR 315, 341 ('Shelmerdine').

[44] Ibid 341 (Marks J and Hedigan J agreeing).

[45] (2023) 275 CLR 128 ('BA').

[47] Taleb v Rijal [2022] VSC 259.

[54] (1977) 38 P&CR 452, 470-1 ('Powell').

[55] [2002] UKHL 30; [2003] 1 AC 419, 437 [43], quoting Powell (n 54) 471-2.

[59] Peter Butt, Land Law, (Lawbook Co, Thomson Reuters, 6th ed, 2010) 903 [22 15] ('Butt') citing Buckinghamshire County Council v Moran [1990] Ch 623.

[60] Abbatangelo v Whittlesea City Council [2007] VSC 529 [20] ('Abbatangelo'), affirmed in Whittlesea (n 26) [56].

[65] Bottos v Citylink Melbourne Ltd [2022] VSCA 266.

[66] See Nicholas v Andrew [1920] NSWStRp 18; (1920) 20 SR (NSW) 178 at 184, 187 ('Nicholas').

[68] Kierford Ridge Pty Ltd v Ward {2005] VSC 215 [129] (Hansen J) ('Kieford Ridge').

[69] Mulcahy v Curramore Pty Ltd [1974] 2 NSWLR 464, 476 ('Mulcahy').

[71] Malter v Procopets (2000) V Conv R 54 [5], [2000] VSCA 11 ('Malter').

[72] Nicholas (n 66) 184. This descriptions of the case and the cases in the next paragraph are taken from and repeat the judgment of Robb J in Australian Retirement Holdings Pty Ltd v Higgins [2021] NSWSC 1158 [244]-[248], (2021) BPR 41,633.

[76] KY Enterprises Pty Ltd v Darby [2013] VSC 484 [122] (Lansdowne AsJ) and see Kierford Ridge (n 68) [129] (Hansen J).

[82] Jones v Dunkel [1959] HCA 8; (1959) 101 CLR 298.

[83] Bottos (n 27); application for leave to appeal refused, Bottos v Citylink Melbourne Ltd [2022] VSCA 266.

[84] The Streeters relied on Hepburn v McDonnell [1918] HCA 43; (1918) 25 CLR 199.

[85] Manicaros v Commercial Images (Aust) Pty Ltd (in liq) [2024] QCA 40; Hipworth v Mahar [1952] HCA 43; (1952) 87 CLR 335.

[90] Cf Australian Executor Trustees Ltd v Lokit Investments Pty Ltd [2023] VSC 141 [100] (Lyons J).

[91] Magistrates' Court of Victoria, John Streeter v Jie Zhang, Jie Zhang v John Streeter, Magistrates' Court of Victoria, Transcript ('MCV T') 61, at CBA 70.

[92] [2019] VCAT 1858, Mr Streeter referred to this decision at SCV T 10 May 2024, 95.

[94] The Zhangs' written submissions in the Magistrates' Court proceedings, 29 November 2023, [7]-[8] at CBA 118-119.

[95] [2007] VSCA 311; (2007) 20 VR 311.

[96] PCH Melbourne Pty Ltd v Break Fast Investments Pty Ltd [2007] VSC 87 [31].

[97] SCV T 10 May 2024, 66, lines 23-25.

[99] [2007] VSC 87 [33].

[100] LJP Investments Pty Ltd v Howard Chia Investments Pty Ltd (1990) 24 NSWLR 490 at 495 (italics in the original).

[101] PCH Melbourne Pty Ltd v Break Fast Investments Pty Ltd [2007] VSC 87 [49].