Members of the rural communities’ strike to have harmonious relations with their neighbours, but often inevitably and from time-to-time disputes arise. The management and resolution of these disputes often fall into the hands of the solicitors of the respective parties.

These disputes can often result in tortious conduct and/or breaches of contract.

This paper will outline adverse possession claims, fire damage claims, water damage claims, pure economic loss claims, solar farm lease arrangements, property rights, dealings with indigenous neighbours and finally promises made to family members, workers and/or lovers.

Adverse Possession

Adverse possession often expressed as ‘squatters rights’ is a legal doctrine whereby a person who occupies land to the exclusion of the true owner can acquire title to that land after meeting certain criteria and occupying it for specified period.

It is an unusual law in that it states that if you trespass for long enough the court for long enough the court will punish you by giving you the land that you trespassed on.

Adverse Possession varies from state to state and particularly between Victoria and NSW

In Victoria, the Limitation of Actions Act 1958 (Vic) states that a right to recover land does not accrue unless the land is in the possession of someone in whose favour the period of limitation can run, referred to as adverse possession. If adverse possession ceases before the right is barred, a fresh right of action does not accrue until the land is again taken into adverse possession.

In New South Wales, the Limitation Act 1969 (NSW) similarly postpones the accrual of a cause of action until the land is first in adverse possession. However, the Real Property Act 1900 (NSW), notably allows applications for title by possession, provided certain conditions are met, such as the land being a whole parcel and the registered proprietor’s title being extinguished. The Supreme Court case of Cooper v McLennan [2023] NSWSC 1385 clarifies that subsequent occupiers benefit from the adverse possession of a predecessor, provided that the chain of adverse possession is unbroken.

What is the test for adverse possession?

In Victoria, the test for adverse possession is governed by the Limitation of Actions Act 1958 (Vic). Section 8 of the Act specifies that no action shall be brought to recover any land after the expiration of 15 years from the date on which the right of action accrued and section 18 of the Act states that at the expiration of that period, the person’s title to the land shall be extinguished.

The critical question is whether the putative adverse possessor has dispossessed the paper owner by going into possession of the land, for the requisite period without the consent of the paper owner. Whether the paper owner realises that dispossession has taken place is irrelevant.

Adverse possession can also be established through successive occupiers if there is no gap in their possession. This allows the periods of possession to be aggregated, even if there has been no assignment of possessory rights.

The key elements for establishing adverse possession include:

• Continuous and uninterrupted possession for a period of at least 15 years.
• Possession that is without the consent of the paper owner.
•  Successive occupiers’ possession periods can be aggregated if there is no gap.

Limitation period is no longer in Victoria

The limitation periods for adverse possession differ between Victoria and New South Wales.

In Victoria, the Limitation of Actions Act 1958 (Vic) specifies that no action shall be brought to recover any land after the expiration of 15 years from the date on which the right of action accrued. Upon expiration of this period, the title to the land is extinguished. This is supported by various case law including Whittlesea City Council v Abbatangelo [2009] VSCA 188 and Gibson v Allard [2017] VSC 788.

In New South Wales, the Limitation Act 1969 (NSW) outlines that the limitation period for maintaining a cause of action to recover land is 12 years for individuals, and 30 years for the Crown.

Therefore, the period required for adverse possession is longer in Victoria (15 years) compared to New South Wales (12 years).

In Victoria, title to land is extinguished following a continuous period of adverse possession of 15 years, as stipulated by the Limitation of Actions Act 1958 (Vic). According to section 18 of the Limitation of Actions Act 1958 (Vic), once the prescribed period for bringing an action to recover the land expires, the title of the person to the land is extinguished and section 8 of the same Act specifies that no action shall be brought to recover land after the expiration of 15 years from the date the right of action accrued.

Conversely, in New South Wales, Section 65 and Schedule 4 of the Limitation Act 1969 (NSW) provide that the title to land is extinguished upon the expiration of the limitation period, which is 12 years.

In summary:

Victoria: Title is extinguished after 15 years of continuous adverse possession as per the Limitation of Actions Act 1958 (Vic).

New South Wales: Title is extinguished after 12 years of continuous adverse possession according to the Limitation Act 1969 (NSW).

Fire damage claims

If a property owner allows fire to escape from his or her land which causes damage to the property of a neighbour, he or she is responsible. This has been the law since McInnes v Wardle (1931) 45 CLR 548.

The below cases and legislation collectively support the principle that property owners are responsible for preventing the escape of fire from their land and can be held liable for any damage caused to neighbouring properties.

Cases:

In Woodhouse v Fitzgerald [2021] 104 NSWLR 475, the New South Wales Court of Appeal held that a landowner has a non-delegable duty to prevent the escape of fire resulting from the activities of an independent contractor. Controlled burns on rural land, while generally for public benefit, must be managed to prevent fire spread and consequent damage.

The Rural Fires Act 1997 (NSW) stipulates that a person who, without lawful authority, sets fire or causes fire to be set to the land or property of another person, or permits a fire to escape from their land causing injury or damage, is guilty of an offence, with penalties including fines and imprisonment. The severity of penalties increases if the offence occurs during a total fire ban.

In Frost v Northern Beaches Council, the Supreme Court of New South Wales referenced the Privy Council decision in Goldman v Hargrave, which established a general duty of care for landowners to remove or reduce hazards, including fire, to prevent harm to neighbours. This duty is based on knowledge of the hazard, foreseeability of the consequences, and the ability to abate it, considering what is reasonable for the occupier in their circumstances.

In Edwards v Blue Mountains City Council, it was held that there could be prima facie liability under the general law of nuisance for conducting operations authorised by statute (such as lighting a fire) in a way that results in harm to neighbours, unless it was inevitable, or all proper means were used to prevent harm.

Burnie Port Authority v General Jones Pty Ltd confirms that any special rule relating to the liability of an occupier for fire escaping from his premises has been absorbed into general negligence principles. This means that the standard of care may require greater precautions depending on the nature of the risk.

In Smith v Badenoch, the Supreme Court of South Australia held that a farmer who negligently allowed a fire to escape from his land was responsible for the damage caused to a neighbour’s property. The farmer was apportioned 85% of the liability due to his negligence in failing to check the area sufficiently at night.

As a matter of public policy authorities such as the Rural Fire Service have considerable protection against liability. However, that procession is not absolute, see s128(1) of the Rural Fires Act 1997 (NSW) which stipulates a requirement of good faith. Justice Jagot discussed good faith in Electro Optic Systems Pty Ltd v State on New South Wales; West & anor v State of New South Wales [2024] ACTA 45.

The management of these matters requires a careful analysis of the facts combined by a careful review of the current law.

Water damage claims

As in the case of damage by fire, damage caused by water flows might be regarded as a nuisance and the party that caused the nuisance would be liable in damages. Works conducted on a property can interfere with the flow of water onto a neighbouring property causing damage. The issue will be whether the flow of water is a natural water cause attracting the rule in Gartner v Kidman [ 1962] HCA 27 (1962) 108 CLR 12.

The Water Act 1989 (Vic) establishes liability for damage caused by the flow of water. If there is an unreasonable flow of water from one person’s land to another, resulting in injury, property damage, or economic loss, the person who caused the flow is liable for damages. Additionally, liability can extend to the current occupier of the land if they fail to take reasonable steps to prevent the flow.

In Burnett v Barings Holdings Pty Ltd (Real Property): The Victorian Civil and Administrative Tribunal considered a claim under section 16(2) of the Water Act 1989 (Vic), which applies when a respondent interferes with a reasonable flow of water by negligent conduct. If such interference causes damage to another person’s property, the respondent is liable for damages. Section 20 of the Act outlines the factors to consider in determining whether the flow of water is reasonable.

Pure Economic loss claims

Case: Mallonland Pty Ltd v Advanta Seeds Pty Ltd [2024] HCA 25 (7 August 2024) (“Mallonland”)

This case reaffirms the law in relation to pure economic loss claims where there is a disclaimer of liability. A seed producer was found to not owe a duty of care to a seed grower in circumstances where the warning to the purchaser was clear that there were risks associated with using the seeds.

Case: Perre v Apand Pty Ltd (1999) CLR 180 (“Perre”)

The Mallonland case is to contrasted with the Perre case where the High Court held that the SA supplier of infected seed potatoes to a potato grower in his vicinity was responsible for the loss suffered by his neighbour in circumstances where legislation in WA imposed an embargo on the importation from interstate of any potatoes grown on a property within 20 kms of any outbreak of bacterial wilt in the previous 5 years . The neighbour had a market for his potties in WA.

To manage such disputes a careful review of any disclaimer is advisable and a clear understanding of who our neighbours are as discussed in the Perre decision.

Promises made to family, workers or lovers

Case: Sidhu v Van Dyke [2014] HCA 19

Ms Van Dyke relied on a promise made to her by her lover Mr Sidhu that he would give her the cottage she was living in on the property owned by him and his wife that was 100 metres from the main homestead. In reliance, among other things, she refrained from pursuing the property. In a family law settlement with her husband in her divorce from him. It was held that she should receive the value of the cottage.

Case: Kramer v Stone [2024] HCA 48

Dame Leoni Kramer promised her farm worker that a rural property on the outskirts of Sydney would be his on her death. The High Court found that her estate should be held to the promise.

The aspect of the claim that the High Court grappled with was the extent to which the promissory should have knowledge of the reliance of the promise. Subject to the dissent of Justice Gleeson, the court found that ongoing knowledge was not a prerequisite to a successful claim.

Case: Coster v Coster [2024] NSWSC 1104

In this case a son claimed that his mother had promised that the family farm would be his on her death if he helped with the farming enterprise. The court found that it was improbably that a mother recently separated from her husband and not yet divorced would make such a promise to her 14-year-old son. The court also found that the son did not help his mother with the farming other than at the times he stayed there for his convenience. The son’s claim failed.

These disputes can be avoided with clear documentation as to entitlement, and if we come into dispute at the dispute point an understanding of the views taken by the courts as opposed to the emotional responses of those involved.

Solar farm lease arrangements

The Registrar General in NSW and Vic has given directions relating to solar farms. A solar farm is defined as a collection of solar photovoltaic electricity generating plants comprising a series of solar panels with associated supporting structures (either fixed or tracking) , inverters, switch yards, substations, batteries, monitoring equipment, gates and grids, fences, etc .

The power authority leases the sites of the solar panels from the property owners of the affected land. The solar panels often extend over several properties and therefore there must be separate leases.

The leases are often for 25 or 30 years. In NSW because it will not require a “current plan” within the meaning of s7A Conveyancing Act 1919, therefore will not require a subdividing consent under s23G Conveyancing Act. Easements will be required that benefit a lease affecting land not owned by the lessor

The position of every solar farm site must be defined in a plan of survey lodged as a deposited plan and headed “Plan for lease purposes of Solar Farm”.

In Victoria a Renewable Energy Zone (REZ) is declared

This order must set out the boundaries of the renewable energy zone, the preferred transmission corridor within the zone and between the zone and the declared transmission system, and the intended transmission hosting capacity within the zone.

Share farming arrangements

In Victoria

“…share farmer means an individual who, under a contract with the owner of land used substantially for primary production- is to perform work in relation to that land; and is to be remunerated in whole or in part by receiving a share of the income, whether in cash or in kind, derived from that land.…”

Workplace Injury Rehabilitation and Compensation Act 2013 (Vic) and

“…share farmer means a person who is under contract to the owner of land to perform any work in relation to land used substantially for primary production and who is to be remunerated in whole or in part by receiving a share of the income, whether in cash or in kind, derived from the land.…”

Workers Compensation Act 1958 (Vic)

In NSW, share farming agreements have been addressed in various court cases. In Stone v Kramer, the share farming agreement was noted to be a less formal arrangement aimed at enabling the owners to enjoy a farming property, with terms that were more favourable to the share farmer due to the property’s economic constraints. The case of Kiriwina Investment Company Pty Ltd v Green Lees Developments Pty Ltd highlighted that the definition of “farmer” includes a person who owns land cultivated under a share-farming agreement.

Cases:

In Mintfield Pty Ltd v Commissioner of State Revenue (Review and Regulation), the tribunal discussed the transition of a property from cattle farming to crop farming under a share farming agreement and highlighted the economic considerations and negotiation required for such agreements.

In Galea v Commissioner of State Revenue (Review and Regulation), evidence was presented describing share farming activities conducted on a handshake basis without written contracts, stressing the importance of practical knowledge and the intent to make a profit from such arrangements.

In Lotus Oaks Pty Ltd v Commissioner of State Revenue (Vic) involved a share farming arrangement for crop cultivation, where the sale proceeds were divided equally between the property owner and the neighbouring farmer engaged as a contractor.

In Downes v Maxwell Richard Rhys & Co Pty Ltd (in liq) highlighted share farming arrangements involving crop and goat farming, illustrating that such agreements can extend to various types of farming activities.

Indigenous people

If a clients’ neighbours are First Nations people regard should be had to the possibility of the existence of sacred sites. In NSW the Aboriginal Heritage Information Management Systems is a data base containing information on more than 60,000 important aboriginal sites in NSW. Landowners should be assisted in searching this database for information that might be relevant to their land.

From a practical point of view there are penalties for unlawful damage to aboriginal objects and places. In Victoria, Aboriginal sacred sites are managed and protected under various provisions outlined in the

Aboriginal Heritage Act 2006 (Vic). Under section 28, a person must not harm Aboriginal cultural heritage with penalties up to 60 penalty units for individuals and 300 penalty units for bodies corporate.

The Secretary must record details of all known Aboriginal places, objects, ancestral remains, and interments in the Register. The Register includes cultural heritage permits, management plans, agreements, and protection declarations.