My House, Your Castle?

While the quarter acre dream may not be a realistic vision any more for all, the ability of  land owners to sit back, and cast a proprietorial eye over their dominion in some cases remains the stuff of dreams. 

To learn that a structure thought to be on or within the boundary is in fact wrongly placed can be the stuff of nightmares.

For a land owner to discover that they don’t own all the land they thought they did is bad.  To discover that the true boundary runs through a building or other structure such as a house, garage, or driveway, is worse.

Possession is not nine tenths of the law

The boundaries of a property are determined by land transfer survey, guaranteed by statute in terms of the title instrument that is issued under the Land Transfer Act 1952 . The boundaries are never determined by the physical  placement of a fence on any property, or the physical location where the parties have regarded the boundaries as being, even over an extended period of time.

Relief For Encroaching Buildings And Structures

Fortunately, the law will in some cases provide relief for boundary intrusions.  The Property Law Act 2007 recognises the injustice that could result where a part or whole of a building or other structure has been erected because of a mistake as to any boundary or to the identity of the original piece of land, and the Act contains remedial provisions enabling a party to seek relief where such an encroachment exists.

The new Property Law Act 2007 came into effect on 1 January 2008, replacing the Property Law Act 1952.  Irrespective of when an encroachment occurred, the provisions of the 2007 Act will now apply.

When determining whether or not relief is available the three questions identified by Wild J in Anchorage Holidays Limited v Stevenson & Ors, (2006) 5 NZ ConvC 194,304 are still relevant under the new Act:

a. Does the court have jurisdiction to grant relief?

b. If yes to (a), should the court exercise its jurisdiction in the circumstances of the case here?

c. If the answer to (b) is yes, what form should the relief granted take?

Jurisdiction

Section 322 permits an application for relief to be made by the owner, occupier, mortgagee or holder of any other encumbrance over either:

• the land where the “wrongly placed structure” is placed; or 
• the owner of the land where the wrongly placed structure was intended to be put; or 
• any person who has an interest in that wrongly placed structure.

The jurisdiction to grant relief for a “wrongly placed structure” under the new Act is wider than the 1952 legislation which was limited to relief for a wrongly placed “building”, building being undefined under the 1952 legislation.  Conversely, the new Act provides a definition of “structure” which includes any building, driveway, path, retaining wall, fence, plantation, or any other improvements.

Just And Equitable

Whether or not relief should be granted is an exercise of judicial discretion.  The test provided for in the Act is whether it will be “just and equitable” to grant relief.

However the Act provides that where the wrongly placed structure is a fence, then no relief can be granted if the dispute can be resolved under the jurisdiction given by the Fencing Act 1978.  The result may be that where this is in doubt, a prudent litigator will make an application under both acts.

The Fencing Act sets out the rights and responsibilities of adjoining occupiers in respect of fencing, and provides a statutory mechanism for resolution of disputes including ( amongst others) what constitutes an adequate fence, the line of a fence, who is to do work, and apportionment of costs.

Cases decided in the courts under the previous legislation indicate that relief under the Property Law Act will almost always be granted where the encroachment is part of a house, or is in some other way integral to the structure or usability of a building.

Despite the wider jurisdiction under the 2007 Act, it is suggested that position is unlikely to change.  The fact that there may be jurisdiction to grant relief in respect of a “plantation” or any other structure should not be taken to assume that the courts will be more willing to interfere with a person’s title for any encroachment.

One of the concerns under the old law was that a narrow interpretation of “building” could result in cases deserving of relief, missing out.  The new legislation perhaps better reflects the view that any interference with inroads into the principle of guaranteed title to land is better controlled through the exercise of the court’s discretion to grant relief, rather than unduly hindering by statute the ability of the courts to do justice in a particular case.

Relief

The relief that may be sought or ordered by the court can take many forms, including:

• vesting the encroaching land in the applicant;
• granting an easement over the land to one or other party;
• grant a right to possession to the land or part of the land for a certain period of time with or without conditions posed by the court;
• direct that the encroaching structure be removed.

In addition the court may also order that reasonable compensation be paid by one party to the other.

Ignorance Is Not Bliss

An encroaching structure will have implications when the property is sold.  Obviously also there are implications if you have purchased a property where there is an encroachment; even if you have owned and occupied the same property for a number of years.

Note in particular that if you sell a property where there is an encroachment, you are very likely to have a duty to point this out to the purchaser in the course of the sale.  Failure to do so could provide grounds for cancellation of the agreement for sale and purchase, or result in a  claim for damages being made against you if the encroachment is discovered post settlement.

What you don’t know, can hurt you.  See your Lawlink lawyer for information on how this might affect you.

This article was first published in the Autumn 2008 issue of Lawlink's Connect Magazine.

© Langley Twigg

Email stacey.fraser@langleytwigg.co.nz
Website www.langleytwigg.co.nz

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