Encroachment of Buildings Act 1922

The Act’s reach is determined by the definitions in s 2. "Owner" is expansively defined as any person entitled to an estate of freehold in possession, whether in fee simple or for life or otherwise, at law or in equity, absolutely or by way of mortgage. It expressly includes a mortgagee under a registered mortgage of a freehold estate in possession under the Real Property Act 1900. Consequently mortgagees, life tenants, equitable owners under uncompleted contracts, and trustees all have standing.

The "encroaching owner" is the owner of the land from which the building projects beyond the boundary. The "adjacent owner" is the owner of the land onto which it projects. Both terms therefore inherit the broad meaning of "owner." A mortgagee in possession of the encroaching land could, for example, bring an application under s 3(1) without joining the mortgagor if the Court so orders under s 12.

Because the Act applies to encroachments made either before or after commencement (s 3(5) and s 9(4)), it affects owners of long-standing improvements as well as new constructions. Developers, builders and their insurers are indirectly affected because an encroachment discovered after practical completion can trigger an application that may result in land transfer or a substantial compensation liability.

Local councils and other consent authorities are not directly bound, yet the existence of an unresolved encroachment may complicate development applications or certificates of occupancy. Surveyors and valuers are expressly contemplated as referees under ss 3(4) and 9(3), so the legislation shapes their professional obligations when retained in such disputes.

Because orders can affect title, the Act is relevant to conveyancers, solicitors acting on purchases or refinances, and title insurers. A purchaser’s solicitor who fails to identify a registered order or caveat under s 13 may expose their client (and their professional indemnity insurer) to loss.

Finally, the Land and Environment Court itself and the Registrar-General are statutory actors whose procedures are engaged. The broad definition of "Court" in s 2 as the Land and Environment Court, substituted by later amendment, means that Class 3 jurisdiction is invoked.

The Act creates few positive duties but confers significant rights. The primary right is the standing conferred by s 3(1) on both adjacent and encroaching owners to seek relief. Once an application is made, both parties have the right to have the Court consider the mandatory and permissive factors in ss 3(3) and 4(2). An encroaching owner who can prove the encroachment was neither intentional nor negligent has a statutory right to limit compensation to the unmultiplied land value (s 4(1)).

An adjacent owner has the right to have any compensation order registered as a charge with statutory priority (s 5(1)), subject only to the Court directing otherwise. Both parties have the right to request referral of technical questions to a registered land surveyor or valuer (s 3(4)).

Section 9 gives either owner the right to obtain a binding judicial (or Registrar-General) determination of the boundary where uncertainty exists, even in the absence of an actual encroachment. This is a valuable pre-emptive right for owners planning new construction.

The Court’s power under s 12 to order notice to, or joinder of, any person interested gives interested third parties (mortgagees, caveators, beneficiaries) a right to be heard before their interests are affected. The costs discretion in s 14, which expressly permits regard to offers of settlement, creates a right to protect one’s costs position by making a reasonable Calderbank-style offer.

There are no criminal duties. The Act is purely civil. However, an owner who ignores a final order for removal or for execution of a conveyance may face contempt proceedings or enforcement by writ of execution, although the Act itself does not spell out the enforcement machinery.

The Act contains no criminal penalties. Its enforcement mechanisms are civil. The principal sanction is the tripling of minimum compensation under s 4(1) where the encroachment was intentional or negligent. This operates as a statutory aggravated damages regime.

An order for payment of compensation becomes, on registration, a charge on the encroaching owner’s land with priority over subsequent charges created by the owner or predecessor (s 5(1)). This charge can be enforced by sale in the same manner as a judgment debt or mortgage.

Where the Court makes a vesting order under s 8 or an order for conveyance, non-compliance can be addressed by the Court’s inherent contempt powers or by specific performance. Because s 10 permits the Supreme Court to exercise the Land and Environment Court’s powers, enforcement can be pursued in either forum.

Costs orders under s 14 can be used punitively; the Court’s ability to have regard to settlement offers means that an unreasonable refusal of an offer can sound in indemnity costs. Registration under s 13 ensures that orders bind successors in title, giving the successful party security against subsequent dispositions.

The Act is not a code; it is expressly designed to sit beside the Real Property Act 1900. The definition of "owner" picks up the Torrens mortgagee. Section 9 channels boundary applications through Part 14A of the Real Property Act 1900 where possible, only permitting a Court application if that route is unavailable or refused. Registration of orders on Torrens land occurs by caveat for applications and by registration of the order itself (s 13(2)). On old-system land the order may be registered in the register of causes, writs and orders.

The Land and Environment Court is the designated forum (definition of "Court" in s 2, as amended). Section 10 gives the Supreme Court a supervisory and alternative jurisdiction, allowing it to stay its own proceedings or exercise the statutory powers. This creates a dual-track system that practitioners must navigate carefully.

References in ss 3(4) and 9(3) to a "registered land surveyor (within the meaning of the Surveying and Spatial Information Act 2002)" import the accreditation and disciplinary regime of that Act. Valuers are not further defined but would be expected to hold appropriate professional qualifications.

The Act’s compensation and land-transfer orders engage the law of stamp duty and capital-gains tax. A compulsory transfer ordered under s 3(2)(b) is still a dutiable transaction, although the duty is calculated on the Court-determined compensation. GST implications may also arise on taxable supplies of real property.

Interaction with the Conveyancing Act 1919 arises where easements or restrictions on the use of land are granted under s 3(2)(b); the formalities for creation of easements must still be observed. The Act does not override planning law; a Court order transferring land does not automatically authorise a use that would otherwise require development consent.

The text records a series of amendments that have modernised but not fundamentally altered the 1922 scheme. The 1989 amendments (No 171) were the most significant. They substituted the definition of "Court" so that the Land and Environment Court rather than the Supreme Court became the primary forum (reflected in the current s 2 and s 10). They inserted s 9’s boundary-determination provisions and the interaction with Part 14A of the Real Property Act 1900, inserted the savings and transitional Schedule 1, and made consequential changes to ss 13 and 15. These changes reflected a policy decision to concentrate specialist land and environment jurisdiction in one court and to provide a clearer statutory pathway for boundary fixation before construction rather than after dispute.

The 2002 amendment (No 83) updated the reference to the Surveying and Spatial Information Act 2002 in ss 3(4) and 9(3) to reflect new surveyor registration legislation. The 2008 and 2009 amendments made further minor updates to court and valuer references. The 2015 amendment (No 48) updated the Schedule 1 regulation-making power and added clause 1A, giving future Parliaments a flexible mechanism to deal with transitional issues without primary legislation. The 1981 amendment (No 119) had earlier refined the compensation provisions in s 4.

Each change was designed to improve procedural efficiency, align the Act with contemporary land administration statutes, and ensure that the discretionary regime remains workable as land title and court systems evolve. The core discretionary test in s 3(3) has remained untouched since 1922, showing legislative satisfaction with the original equitable framework.

The Act itself does not record specific litigation, but its structure generates predictable points of contention. The breadth of the discretion in s 3(3) ("amongst other matters") has led to arguments about the weight to be given to each factor. An encroaching owner who applies promptly may contend that the Court should place heavy weight on the fact that it, rather than the adjacent owner, brought the application. Conversely, an adjacent owner may argue that the character of the encroaching building (for example, a commercial warehouse on what was intended to be residential land) should weigh against any transfer of title.

The interpretation of "not intentional and did not arise from negligence" in s 4(1) is fertile ground. Courts must decide whether a builder’s failure to obtain a current survey constitutes negligence even if the client owner was unaware. The tripled compensation floor can transform a modest boundary strip into a six-figure liability.

The interaction between s 9 and Part 14A of the Real Property Act 1900 has produced disputes about when the Registrar-General’s jurisdiction is exhausted and when the Court may step in. Questions also arise whether a boundary determination under s 9 is conclusive for all purposes or only for the purposes of the encroachment dispute.

The priority charge in s 5(1) can conflict with existing equitable interests or later registered mortgages where the Court has not expressly excluded priority. Mortgagees have argued that they should not be bound by a charge arising from an encroachment of which they had no notice.

Because the Act applies to overhangs, controversy can arise over whether a cantilevered structure that does not touch the soil but projects across the vertical plane of the boundary is an "encroachment by overhang of any part." The inclusive definition in s 2 supports a wide reading, yet title boundaries are traditionally surface-based.

Most practitioners assume that a small encroachment will always be resolved by a modest payment, but s 4(1) can produce a tripled award that exceeds the value of the entire building if the Court finds negligence. A common oversight is failing to obtain an early survey; once the Court finds that a reasonably prudent owner would have surveyed, the tripled minimum applies.

The definition of "owner" catches mortgagees. A bank that has registered a mortgage over the encroaching land can find itself joined and potentially liable to contribute to compensation under s 6 even though it did not cause the encroachment. Conversely, an adjacent owner who is merely a life tenant may discover that compensation is paid to the remainderman.

Section 5’s charge arises "upon registration" of the order. If the adjacent owner delays registration, a subsequent mortgagee may take priority, yet the Act does not prescribe a time limit for registration. The interaction with the Real Property Act 1900 caveat regime in s 13(2) is often mishandled; a caveat lodged only in respect of the "application" lapses if the final order is not itself registered.

The power in s 8 to make a vesting order "in default of compliance" with an earlier order is rarely pleaded but extremely powerful. It allows the Court to transfer title without further execution by the adjacent owner, yet many consent orders omit this machinery.

Finally, the savings provision in Schedule 1, clause 1 means that proceedings pending in the Supreme Court before the 1989 amendments continue under the old regime. Title searches that reveal old Supreme Court proceedings must be carefully reviewed to determine which statutory test applies.

Compliance begins at the design stage. Any owner or builder contemplating construction within one metre of a boundary should commission a current identification survey by a registered land surveyor. If any doubt exists, an application under s 9 should be made before footings are poured.

If an encroachment is discovered after construction, the encroaching owner should move promptly under s 3(1) rather than wait to be sued; the Court is expressly permitted to consider which party brought the application (s 3(3)(a)). Before filing, obtain a valuation of the subject land on both an unimproved and improved basis and an expert report on the cost of removal versus retention. These will be essential to address the factors in ss 3(3) and 4(2).

When drafting the originating summons (still the default method under s 11), particularise the precise relief sought and identify all interested persons so that orders under s 12 can be anticipated. If the adjacent owner is a trustee or mortgagee, address the apportionment issues in ss 6 and 7 at the outset.

At the first directions hearing, seek referral under s 3(4) to a surveyor and valuer if the boundary or quantum is contested; early expert conclaves narrow the issues and improve prospects of settlement. Any without-prejudice offer of compensation should be framed as a formal offer under s 14 so that it can be taken into account on costs.

If negotiating a consent order, include an express direction under s 5(1) if the statutory charge is not desired, and consider requesting a vesting order under s 8 to avoid execution problems. Ensure the order addresses registration under s 13 and any necessary stamping and lodgment with the Registrar-General.

For the adjacent owner, the key compliance step is to respond to any application promptly and to quantify loss and damage with supporting evidence. If the encroachment is minor and the building of value, consider making a counter-offer that accepts a transfer on appropriate terms rather than insisting on removal; the Court will penalise unreasonable intransigence on costs.

After orders are made, both parties must attend to registration. The charge under s 5 and any transfer or easement must be promptly lodged to bind successors. Failure to register can leave the adjacent owner unsecured against a subsequent mortgage or sale.

Ongoing compliance for landowners includes maintaining accurate title searches when buying or lending. A search of the register of causes, writs and orders (for old-system land) or of caveats and registered orders (for Torrens land) should be standard. Where an order under the Act is discovered, obtain a copy of the full Court file to understand the exact limitations and conditions imposed.

In summary, compliance is achieved by early survey, prompt resort to the Court’s discretionary jurisdiction, careful attention to the statutory minimum compensation rules, and meticulous registration of any orders made. The Act rewards the party who acts reasonably and with full awareness of the discretionary factors; it punishes the party who proceeds in ignorance or with culpable disregard for the true boundary.