Encroachment of Buildings Act 1982

Encroachment is defined in section 3 as encroachment by a building, including encroachment by overhang of any part as well as encroachment by intrusion of any part in, under or upon the soil. This means that cantilevers, eaves, balconies, foundations and subterranean structures all count, not merely walls sitting on the boundary.

Building is defined as a substantial building of a permanent character and includes a wall. Small or temporary structures may fall outside the Act, forcing the parties to rely on common law remedies such as trespass or nuisance. The term “substantial” gives the Court some interpretive room; a garden shed on a concrete slab may or may not qualify depending on the circumstances.

Boundary means the boundary line between contiguous parcels of land. The Act does not redefine boundaries; it relies on the registered title dimensions. Where a boundary is disputed, section 11 allows either owner of contiguous parcels to apply to the Court for a determination of the true boundary, and the Court may then make orders for marking and recording it.

Owner is defined in section 3 to include a registered proprietor under the Land Title Act 2000, a mortgagee in possession of land under a registered mortgage of a freehold estate, the Territory if the land is held by the Crown in right of the Territory or forms part of a road (as defined in the Control of Roads Act 1953), and the Commonwealth if the land is held by the Crown in right of the Commonwealth. This is not the same as the beneficial owner; it is the person with legal title. A tenant or licensee is not an owner for the purposes of the Act unless that tenant holds as a registered proprietor (unlikely).

Subject land is that part of the land over which the encroachment extends (section 3). This is the physical area intruded upon, not the whole lot.

Unimproved capital value is defined by reference to the Valuation of Land Act 1963 (NT). This value is used as the baseline for minimum compensation in Part II.

Adjacent owner is the owner of land over which an encroachment extends. Encroaching owner is the owner of land contiguous to the boundary beyond which the encroachment extends.

Genuine but mistaken belief under Part III (section 13) is a requirement that the person erecting the building did so in the genuine but mistaken belief that either the land was his or her own property, or that it was the property of the person on whose behalf the building was erected or intended to be erected. This is an objective test: a mere assertion of mistake is insufficient; the Court must be satisfied that the belief was genuinely held and that it was a mistake of fact, not law. The Act does not define “genuine” further, leaving it to judicial interpretation.

Minimum compensation under Part II (section 7(1)) is the unimproved capital value of the subject land if the encroaching owner proves the encroachment was not intentional and did not arise from negligence; otherwise it is three times that value. This is a punitive multiplier intended to deter deliberate or careless boundary violations. The Court may award more than the minimum based on factors in section 7(2): the value of the subject land to the adjacent owner, the loss and damage incurred through the encroachment and the proposed order, and the circumstances in which the encroachment was made.

Adjacent owners are directly affected because their land is being physically used or occupied without their consent. They are entitled to apply for relief under Part II (section 5(1)) or to be the respondent if the encroaching owner applies. Their primary concern is whether they will receive compensation or whether the encroachment will be ordered removed.

Encroaching owners face the risk of having to remove a building or pay compensation, potentially at the three-times multiple if they cannot prove no intention or negligence. They have the incentive to apply proactively to the Court to regularise the situation, particularly if they want to keep the building in place.

Mortgagees are affected in two ways. Under section 3, a mortgagee in possession is treated as an owner and can bring or respond to applications. Even if not in possession, a mortgage may be varied under Part III orders (section 14(2)(b)). Section 9 allows the Court to determine who pays compensation in the first instance and who ultimately bears it where the encroaching owner is not the beneficial fee simple owner (i.e. where there are mortgages or other interests). This means a mortgagee could face a reduction in security value if the Court orders a transfer of part of the land without full compensation.

Lessees (tenants) are not owners under the Act unless they are a registered proprietor, which is unusual. However, a lessee may be a person interested under section 12 or section 15. The Court may require notice to be given to any person who appears to be interested, and may make that person a party. In Part III, a lessee of the land on which the building was intended to be erected may apply for relief (section 15(1)(d)). A lease itself may be varied by a Part III order (section 14(2)(b)).

The Crown is bound by the Act as a landowner (section 4). This means that the Territory or Commonwealth may be an adjacent owner or encroaching owner and subject to the same remedies as a private owner, except where the Crown’s land is held on behalf of the public and special considerations might apply (though the Act does not carve out exceptions).

Local government councils and the consent authority under the Planning Act 1999 have standing to apply for relief under Part III (section 15(1)(e)(f)). This is unusual: they can invoke the Act if a building is unlawfully on land, even if the adjacent owner does not object. The inclusion suggests the legislature intended the Act to be used to resolve planning or zoning issues, not merely private boundary disputes.

The Supreme Court is the sole court with jurisdiction. The Act does not confer jurisdiction on the Local Court (the 2016 amendments to section 16 refer to “other proceedings” but do not lower the court level). The Court may also exercise its powers under the Act in any proceeding before it, however originated, and may stay any common law action if it thinks the matter more conveniently dealt with under the Act (section 16). This affects any litigant who brings a trespass or nuisance claim concerning a building encroachment: the Court can force the matter into this statutory framework.

Right to apply: Both the adjacent owner and the encroaching owner have a right to apply to the Supreme Court for relief under Part II (section 5(1)). No precondition of good faith or lack of fault is required; even a deliberate encroacher may apply. The Court can still refuse relief or impose punitive compensation.

Right to seek boundary determination: Under section 11, either owner of contiguous parcels may apply for a determination of the true boundary where a question arises as to whether an existing building encroaches or a proposed building will encroach. This is a proactive right that can be exercised before building begins, avoiding future disputes.

Court’s duty to consider factors: When exercising its discretion under Part II, the Court is directed to consider the matters in section 6(2)(a)-(f). This is a mandatory, though not exhaustive, list. The Court does not have an unfettered discretion; it must weigh the identified factors.

Right to compensation: The adjacent owner has a right to at least the minimum compensation under section 7(1) if the Court makes an order for conveyance, transfer, lease or grant of an interest in the subject land to the encroaching owner. However, this minimum compensation is not an automatic entitlement; it only arises if the Court actually makes such an order in favour of the encroaching owner. If the Court orders removal of the encroachment, the adjacent owner receives no compensation (but also recovers full use of the land). The Act does not grant a right to compensation for the encroachment itself; it is a remedy that the Court may award.

Right to a vesting order: Under section 10, the Court may make a vesting order in place of, in addition to, or in default of compliance with an order. This is a powerful enforcement right: if an encroaching owner refuses to comply with a compensation order, the Court can directly transfer title without further action.

Part III broader rights: For buildings erected under mistake of title, the Court can vest land, order removal, award compensation, require possession, or vary any instrument (section 14(1)-(2)). The Court can also direct a survey (section 14(2)(e)) and order production of title deeds (section 14(2)(d)). The rights of the applicant under Part III are broader than those under Part II, extending to vesting of surrounding land, not merely the subject land.

Duty to disclose interests: Under sections 12 and 15(2), the Court may require notice to be given to persons interested and may order that they be made parties. This protects third parties but also imposes a duty on the applicant to identify all potentially affected persons.

Right to restrain common law action: Section 16(2) gives the Court the power to grant an injunction restraining a person from taking or continuing an action at law if the Court considers the matter could more conveniently be dealt with under the Act. This effectively allows the Court to override a plaintiff’s choice of forum and impose the statutory regime.

The Act does not create criminal penalties. Enforcement is entirely through civil orders of the Supreme Court. The primary coercive mechanism is the charge on land under section 8. An order for payment of compensation may be lodged with the Registrar-General and, once received, operates as an overriding statutory charge within the meaning of the Land Title Act 2000 on the encroaching owner’s land (the parcel contiguous to the boundary). This charge secures the compensation debt against the land, binding third parties. The Court may direct that the charge not operate, but otherwise it is automatic upon lodgement.

Vesting order (section 10) is another enforcement tool: if an order under Part II is not complied with, the Court can make a vesting order that transfers title directly, bypassing the need for a conveyance or transfer. This is quick and avoids reliance on the recalcitrant party.

Costs (section 17): The Court has full discretion to order payment of costs, charges and expenses as it thinks fit. It may take into consideration any offer of settlement made by either party. This means a party who refuses a reasonable settlement offer may be penalised in costs, even if they eventually obtain relief. The costs jurisdiction is broad and unfettered.

Removal order: For an encroachment that the Court orders removed, the encroaching owner must physically demolish or relocate the building at its own expense. Failure to comply would expose the encroaching owner to contempt proceedings, further costs, and potentially an order for possession in favour of the adjacent owner.

No limitation period: The Act does not impose a statutory time limit for bringing an application. An adjacent owner could theoretically apply decades after the encroachment occurred. However, the Court’s discretion under section 6(2) includes consideration of the circumstances in which the encroachment was made, which would include delay. Acquiescence or laches might reduce the weight given to the adjacent owner’s claim.

Part III enforcement: Under Part III, the Court can make orders requiring a person to execute any instrument in registrable form (section 14(2)(c)). If the person refuses, the Supreme Court can issue orders in personam or appoint a person to execute the instrument. The Court can also vary existing mortgages, leases or easements (section 14(2)(b)) without the consent of the parties to those instruments.

Land Title Act 2000 (NT): The Encroachment of Buildings Act interacts directly with the Torrens system. The definition of “owner” in section 3 includes a registered proprietor under the Land Title Act. The overriding statutory charge under section 8 is expressly given the status of an overriding statutory charge under the Land Title Act, meaning it binds the land even if not recorded on the certificate of title. Section 9 of the Encroachment Act allows the Court to determine who is to convey or transfer the subject land, which may require dealing with the Registrar-General under the Land Title Act. Any order vesting, conveying or transferring land under Part II or III must be registered under the Land Title Act to take effect in law (the Act does not override the requirement for registration; it relies on it).

Valuation of Land Act 1963 (NT): The unimproved capital value used for minimum compensation under section 7(1) is defined by reference to section 9 of the Valuation of Land Act. This creates a reliance on official valuations. If no valuation exists for the subject land, the Court may need to order a valuation or use an alternative measure, but the Act does not provide a fallback.

Planning Act 1999 (NT): The consent authority under the Planning Act has standing to apply for relief under Part III (section 15(1)(e)). This suggests that the Act can be used to resolve building code or planning issues arising from mistakenly built structures. However, the Planning Act’s own enforcement mechanisms (such as enforcement orders) remain available concurrently; the Encroachment Act provides an alternative route.

Control of Roads Act 1953 (NT): Land forming part of a road as defined under that Act is treated as land held by the Territory (section 3 definition of “owner”, paragraph (c)). This means encroachments onto public roads are actionable by the Territory as adjacent owner, but also that a road owner (the Territory) may be the encroaching owner if a building extends across a road boundary.

Local Government Act: Local government councils have standing under Part III (section 15(1)(f)). They may apply to the Court if a building is on land without proper title, even if the actual owners do not object. This is a public-interest standing provision.

Common law remedies: The Act does not abolish common law rights of action in trespass, nuisance or ejectment. However, section 16(2)-(3) gives the Court power to restrain or stay any such common law proceeding if it considers the matter could more conveniently be dealt with under the Act. This means a plaintiff who commences a trespass action regarding a building encroachment risks having the action stayed and being forced into the statutory scheme. The Court’s discretion is broad; the decision to stay may be challenged on appeal, but the Act clearly intends the statutory regime to be the preferred forum.

Crown immunity: Section 4 binds the Crown in right of the Territory and, so far as legislative power permits, the Crown in right of the Commonwealth. This means the Crown cannot claim immunity from the Act’s provisions, but the qualification “so far as the legislative power of the Legislative Assembly permits” recognises the constitutional limitation on the NT’s power to bind the Commonwealth. In practice, the Commonwealth is likely treated as an ordinary owner, but a dispute involving Commonwealth land may involve federal issues.

Interpretation Legislation Amendment Act 2018: Formal or procedural amendments were made to sections 1, 3, 8 and 15 (see endnotes). These are general updating amendments that do not change substance.

The Act received assent on 8 October 1982 as Act No. 66 of 1982 and commenced on 10 December 1982 (Gazette G49, 10 December 1982, p 5). The endnotes list the following amending legislation:

• Statute Law Revision Act 1989 (No. 60, 1989): Assented 2 October 1989, commenced same day. Made formal amendments to section 3 and section 8.
• Local Government (Consequential Amendments) Act 1993 (No. 84, 1993): Assented 13 December 1993, commenced 1 June 1994. Amended section 3, likely updating references to local government bodies.
• Planning (Consequential Amendments) Act 1999 (No. 56, 1999): Assented 14 December 1999, commenced 12 April 2000. Amended section 15, adding the consent authority under the Planning Act as a person who may apply for relief under Part III.
• Land Title (Consequential Amendments) Act 2000 (No. 45, 2000): Assented 12 September 2000, commenced 1 December 2000. Amended sections 3 and 8 to update references to the Land Title Act 2000 (which replaced the Real Property Act).
• Local Government (Consequential Amendments) Act 2008 (No. 28, 2008): Assented 14 November 2008, commenced 1 July 2008 (backdated commencement). Amended section 3 again.
• Local Government Amendment Act 2014 (No. 19, 2014): Assented 2 June 2014, with section 16 commencing 1 July 2014 and section 18 on 1 December 2014. Amended section 15, updating references to local government councils.
• Local Court (Related Amendments) Act 2016 (No. 8, 2016): Assented 6 April 2016, commenced 1 May 2016. Amended section 16, likely to reflect the creation of the Local Court and its relationship with the Supreme Court in other proceedings.

Additionally, Interpretation Legislation Amendment Act 2018 (No. 22, 2018) made general formal amendments to sections 1, 3, 8 and 15 (noted in the endnotes as general amendments of a formal nature). These do not appear in the principal table of amendments but are referenced separately.

The Act has not been repealed or substantially rewritten. Its structure remains as originally enacted. The amendments have been largely consequential to changes in other NT legislation (land title, local government, planning, courts). No change has been made to the core discretionary powers or the compensation formula.

The text of the Act as provided does not include any case citations. As a Northern Territory Act with a limited jurisdictional reach, reported case law is sparse. The Supreme Court of the Northern Territory is the sole court with jurisdiction (section 3 definition of “Court”). There are no known landmark decisions that have interpreted the Act extensively in the public domain, though some unreported decisions may exist.

Key interpretive questions that have likely arisen include the meaning of “substantial building of a permanent character”, the standard of proof for “not intentional and did not arise from negligence” under section 7(1)(a), and the breadth of the Court’s discretion under section 6(2). The compensation multiplier of three times unimproved capital value has a punitive character that may be challenged as disproportionate in some cases, but the Court retains power to award less than the minimum if no order for conveyance/transfer/lease is made; the minimum only applies when such an order is made.

In Part III, the requirement of “genuine but mistaken belief” has likely been litigated in relation to the boundary between mistake of fact and mistake of law. The Act does not extend to a mistake of law, so a builder who wrongly believed they had legal authority to build (relying on a planning officer’s advice, for example) may not qualify.

Section 16’s power to restrain or stay common law proceedings may have been invoked to force litigants into the statutory scheme. The interaction between the Encroachment Act and the general law of easements, profits, and adverse possession is also a potential area of litigation.

No federal or High Court appeals are known, as the Act applies only in the NT and the amounts in dispute are usually modest relative to the cost of High Court litigation.

Minimum compensation applies only if conveyance/transfer/lease ordered: The three-times or one-times minimum compensation in section 7(1) only applies to an order under section 6(1)(b) (conveyance, transfer, lease or grant of an interest to the encroaching owner). If the Court orders removal of the encroachment (section 6(1)(c)), no compensation is mandated. The adjacent owner may end up with no compensation for the past trespass, only the right to have the land restored. This perverse incentive means an adjacent owner might push for removal rather than compensation if the encroaching owner is impecunious, but the Court can refuse removal and order compensation instead.

Blind reliance on “not intentional and did not arise from negligence”: The encroaching owner bears the burden of proving both absence of intention and absence of negligence. This is a difficult evidentiary hurdle. A failure to engage a surveyor before building likely constitutes negligence. A mistake in reading a plan may be carelessness. The Court has wide discretion to disbelieve a claim of honest mistake. Many encroaching owners will be caught by the three-times multiplier.

“Owner” excludes tenants and bare licensees: A tenant who builds an encroachment is not an “owner” under the Act and cannot apply for relief in their own name. The registered proprietor must apply. This can create a gap if the tenant has erected the building but the registered proprietor (landlord) has no interest in regularising the encroachment. The adjacent owner may then have to sue the tenant at common law.

Part III requires “mistake of title” not “mistake of boundary”: Section 13 requires that the person erecting the building genuinely believed the land was his own property or the property of the person for whom the building was intended. If the error is purely about where the boundary runs (i.e. the builder knew who owned the land but misjudged the line), that may be a Part II encroachment, not a Part III mistake of title. The distinction matters because Part III allows much broader remedies including vesting of surrounding land.

No appeal provision: The Act does not contain a specific appeal provision. Appeals would be to the NT Court of Appeal under general appellate rules. However, the Court’s discretion under section 6 is expressed in very wide terms (“may make such order as it thinks fit”), which narrows the scope for appellate intervention. An applicant will need to show an error of law or manifest unreasonableness.

Costs risk for offers of settlement: Section 17 expressly allows the Court to consider any offer of settlement when making a costs order. A party who rejects a reasonable settlement offer and then does no better at trial may be ordered to pay the other side’s costs, even if technically successful. This can be a trap for the unwary, particularly if the adjacent owner makes an early offer of a fair compensation figure.

Section 16 power to restrain other proceedings: A litigant who starts a common law action for trespass or nuisance may find the action stayed and the dispute forced into the Encroachment Act. The Court may also grant an injunction to stop the action from being continued. This limits a plaintiff’s choice of remedy and may delay resolution if the parties are unfamiliar with the Act.

The Encroachment of Buildings Act is not a regulatory compliance statute with ongoing obligations; it is a remedial statute triggered after a dispute arises. However, prudent property owners and builders can take steps to minimise the risk of being caught by its provisions.

Before building: Engage a licensed surveyor to accurately determine the boundaries of the property. In the NT, many titles are subject to the Torrens system, but boundary dimensions can be uncertain, especially on older titles. If there is any doubt about the boundary, apply to the Supreme Court under section 11 for a determination of the true boundary before building commences. This is a proactive step that can avoid later disputes. Also obtain a current valuation of the unimproved capital value of any adjoining land that might be affected (though this is not required by the Act, it helps in negotiating a potential settlement).

During construction: If it becomes apparent that a building is encroaching or may encroach, stop work and notify the neighbouring owner in writing. Seek consent from the adjacent owner for the encroachment (preferably by a formal easement or licence). Do not rely on verbal agreements; the Act does not recognise informal permission as a defence. Document all discussions.

If an encroachment is discovered after construction: The encroaching owner should act quickly. Apply to the Supreme Court under Part II for relief (section 5(1)). The application should include evidence demonstrating that the encroachment was not intentional and did not arise from negligence. This evidence might include the surveyor’s report, proof of reliance on the title description, and any communication with the adjacent owner. The goal is to secure the one-times minimum compensation (unimproved capital value) rather than the three-times multiplier.

For the adjacent owner: Consider whether to apply for relief. Factors to weigh: the cost of removal versus the value of the subject land, the relationship with the neighbouring owner, and the strength of the evidence of intentional or negligent encroachment. If the encroaching owner is cooperative, negotiate a private settlement for compensation. If not, apply to the Court seeking removal or compensation. The Court may award costs against the encroaching owner under section 17.

For Part III (mistake of title): If a building has been erected on land owned by someone else due to a genuine mistake (e.g. misreading of a plan or misidentification of the parcel), either the builder, the landowner, the Territory, the consent authority or the local council can apply for relief. The builder should gather all evidence of the mistake: the basis for the belief, the circumstances that led to the error, and any steps taken to verify ownership. The applicant should identify all persons with an interest in the land and ensure they are notified. The Court has wide powers to reallocate land or vary existing interests, so early legal advice is critical.

General: Maintain copies of all surveys, valuations, correspondence and any offers of settlement. Section 17 gives the Court the power to take settlement offers into account when ordering costs; a reasonable offer can protect the offering party from adverse costs. Seek specialist advice from an NT property lawyer familiar with the Torrens system and the Valuation of Land Act, as the interaction between these statutes is important.

Avoiding the three-times multiplier: The best way to comply is to ensure that any building encroachment is either consented to by the adjacent owner in writing or, if discovered, addressed promptly and apologetically. The Act rewards good faith; the three-times multiplier punishes carelessness or deliberate intrusion. A denial of any awareness of the boundary is unlikely to be accepted if a simple survey would have prevented the encroachment.