MLL327 Study Guide - Final Guide: Adverse Possession, Life Estate, The Possession
24 May 2018
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TOPIC THREE
• appreciate the distinction between possessory and proprietary title
POSSESSORY TITLE
Possessory title is purely factual: based on the fact of possession rather than documentary proof of title
as is the case with proprietary title.
• understand the nature of adverse possession
MEANING OF ADVERSE POSSESSION
Adverse possession is a particular type of possession which incorporates both the physical act of
possession and the intention to occupy the land in a manner akin to that of the paper title owner.
Adverse possession must endure for the limitation period at which point the paper title owner will be
precluded from enforcing their title on the basis of the limitations legislation. Adverse possession, once
established, is only enforceable against the documentary owner who was entitled to possession but
who has not exercised possessory rights for a sufficient period of time. Where effectively raised,
adverse possession will preclude the documentary title holder from enforcing their title and in this sense
operates as an absolute defence.
• The limitation period will not begin to run against a future interest holder until possession
vests and the interest becomes a full estate (right of action accrues upon vesting of
possession):
– Life estate (A): future interest (remainder or reversion) vest in possession of holder of
remainder/reversion (B) when the holder of the life estate dies
– Leasehold: reversionary interest will vest in possession when the lease expires and the
title is revested in possession in the landlord (see example CB 166)
– If a future interest is subject to a contingency, it must be satisfied before title and
possession can vest and any adverse period can commence
• Adverse possession is a defence and it only penalises a paper title holder who actually holds
possession
• Rationale: adverse possession is only enforceable against a paper title holder who is vested
in possession but has chosen not to enforce possession rather than those that are unable to
do so
• The adverse possession period against future title holder can, however, be expedited by
legislature:
– S 10(2) of the Limitations of Action Act 1958 (Vic) gives the future interest holder 15
years from when the time of adverse possession starts running against the preceding
life estate holder or six years from the date which possession vest, whichever is the
longer, to act
find more resources at oneclass.com
find more resources at oneclass.com
• Above rule only apply when possession of land is taken between creation of future interest and
vesting of possession
• Adverse possession is possible against a lesser interest, such as a lease (against the tenant)
• Time does not run against landlord during lease but runs against the tenant
• Landlord has no right of possession and no right to recover possession from adverse
possessor
• Time does run against tenant who will loose right to recover possession unless possession is
recovered in time
• Tenant still bound by lease agreement with landlord
• Adverse possessor is free to retain possession of land until lease is terminated
• Adverse possession of a leasehold interest can, however, be defeated by:
– Landlord forfeiting the lease for breach of covenant
– Surrender of the lease by tenant upon cancellation by agreement
LIMITATION OF ACTIONS ACT 1958,s 7B
• Owner’s title is only barred if an uninterrupted period of adverse possession has been
established
• Certain acts will result in interruptions of continuous possession:
– Assertion of title by the owner
• Time will cease to accrue if the true owner asserts title to land by bringing an
action to recover possession of land
• The issue and service of summons for possession, along with an intention to
obtain an order for possession, would suffice to interrupt adverse possession
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find more resources at oneclass.com
• Time will also cease to accrue if the owner makes a peaceable but effective
physical entry into land (turning out the possessor)
• Must be a retaking of possession
– Acknowledgment by adverse possessor of superior title of owner
• Merely realising that someone else owns the land does not constitute an
acknowledgement of the rights of owner
• If the adverse possessor acknowledges the title of the true owner, time will
also stop running against the documentary owner
• Acknowledgement must be made in writing and signed by the person making
acknowledgement
• If: (a) a squatter is willing to pay rent to a paper title owner, if requested; or (b)
a mere admission of title by the squatter it is not inconsistent with the squatter
being in possession in the meantime (JA Pye (Oxford) Ltd v Graham)
• Acknowledgement after expiry of limitation period is not effective: no revival of
proprietary title
– Abandonment of possession by adverse possessor
• If an adverse possessor abandons land, time ceases to run against the
documentary owner; owner free to recover land as if there had never been
adverse possession
JA PYE V GRAHAM
FACTS
• The Grahams took possession of valuable
grazing land under a grazing licence with
came to and end in 1983
• They unsuccessfully tried to negotiate a
new licence
• They were requested to vacate the land
• Continued on the land running cattle and
cutting hay for the relevant statutory
period but did not pay rent
• Fertilised the land with dung, over wintered
cattle and grew yearlings in a shed which
was contrary to old licence
• Owner intended to apply for governmental
approval to develop land and thought its
application might stand a better chance of
success if not used for grazing land
ISSUE
• did the possession of the Grahams amount
to adverse possession?
HELD
Held: Grahams used the land as their own for the
relevant period between 1984 and 1997 and during
that time the appellant did nothing on the land and
was excluded from it
• Grahams, therefore, met the requirements
of adverse possession
find more resources at oneclass.com
find more resources at oneclass.com
Document Summary
Topic three: appreciate the distinction between possessory and proprietary title. Possessory title is purely factual: based on the fact of possession rather than documentary proof of title as is the case with proprietary title: understand the nature of adverse possession. Adverse possession is a particular type of possession which incorporates both the physical act of possession and the intention to occupy the land in a manner akin to that of the paper title owner. Adverse possession must endure for the limitation period at which point the paper title owner will be precluded from enforcing their title on the basis of the limitations legislation. Adverse possession, once established, is only enforceable against the documentary owner who was entitled to possession but who has not exercised possessory rights for a sufficient period of time. Life estate (a): future interest (remainder or reversion) vest in possession of holder of remainder/reversion (b) when the holder of the life estate dies.
