Article by the Wolters Kluwer Property Law Editors
In the words of Justice Kunc, the adverse possession claim proceedings in Hardy v Sidoti  NSWSC 1057 "concerned two very Australian phenomena: the "dunny" and dedication to home improvement."
The plaintiff, Mr Hardy bought his terrace house situated in Redfern, NSW in 1998. His backyard abutted a part of a right of way, being the remnant of a “dunny lane”. The 3.81 m long and 88 cms wide part of the dunny lane was referred to in the judgement as the “Yellow Land”.
Dunny lanes were developed at the end of the nineteenth century prior to the introduction of sewerage systems, to enable waste to be collected from brick outhouses at the rear of properties.
By the time Mr Hardy acquired his property, the dunny lane was no longer used or usable as a right of way and had been blocked off at various points. Initially the Yellow Land had an old paling fence on it which separated Mr Hardy’s backyard from the Yellow Land and an adjoining part of the dunny lane (referred to in the judgement as the Green Land).
In 2002, Mr Hardy took down the paling fence to extend his backyard into the Yellow Land. He then proceeded to make improvements to his extended backyard over a 3 year period.
The second and third defendants purchased their property (referred to in the judgement as the Sidoti Property) in 2018. The property had been converted from old system to limited title in 2005.
The defendants’ backyard backed onto the opposite side of the dunny lane. The Yellow Land was included on the title as part of the defendants’ property, although there was a corrugated iron fence with a gate in it, separating the defendants’ property from the Yellow Land. In 2005 Mr Hardy had installed a reed matting screen on the side of the corrugated iron fence facing the Yellow Land which effectively closed off access to the Yellow Land from the defendants’ property.
When the defendants proceeded to undertake renovations to their property, which included removing the corrugated iron fence to extent their backyard onto the Yellow Land to create a courtyard space, Mr Hardy made an adverse possession claim on the basis that the defendants or the previous owners of the defendants’ property, had failed to reclaim the Yellow Land within the 12 year period set out in s 27(2) of the Limitation Act 1969.
The defendants countered that Mr Hardy had failed to prove that the limitation period in s 27(2) had been reached in circumstances where the alleged acts of possession occurred incrementally over time, were of a makeshift and non-permanent nature and were for the purpose of improving the amenity of his own land.
The defendants also submitted that even if Mr Hardy’s claim of common law adverse possession was made out, he was precluded from making an application for possessory title against the defendants due to the operation of s 45D(4) of the Real Property Act 1900 (i.e. on the basis thatthe whole of the limitation period had not run against the defendants).
Relying on s 45D(4), the defendants submitted that once they became registered as the proprietors of their property in 2018, time on Mr Hardy’s adverse possession of the Yellow Land started to run afresh. As such, Mr Hardy could receive no credit under the Act for any prior periods of possession.
Justice Kunc noted that if Mr Hardy’s rights were confined to s 45D, his claim would fail for reasons that included that the whole of the limitation period had not run against the defendants. However s 45C(2) of the Act preserves the right of an adverse possessor to acquire possessory title to land which has been brought under the Act in a limited folio “by reason of possession of the land for any length of time commencing before the creation of the folio”.
The essential factual and legal issue was therefore whether Mr Hardy had been in possession of the Yellow Land for any length of time commencing before the creation of the limited folio over the Sidoti Property in 2005 for the purposes of s 45C(2).
Justice Kunc found that Mr Hardy had been in possession of the Yellow Land prior to the creation of the limited folio over the Sidoti Property. The definitive and public act of possession of the Yellow Land done animo possidendi occurred when Mr Hardy removed the paling fence in 2002 which separated his backyard from the Yellow and Green Land. Any reasonable observer seeing that conduct, would have understood that to be the point at which Mr Hardy incorporated the Yellow Land and the Green Land animo possidendi into his back garden. The limitation period in which the previous owners of the Sidoti Property had to reclaim the Yellow Land was therefore 2014.
Even if the removal of the paling fence in and of itself might have been considered insufficient for the claiming of possession and the demonstration of animus possidendi, Justice Kunc found that landscaping of the back garden over a 3 year period until 2005 clearly demonstrated both possession of the Yellow Land and that the possession was undertaken animo possidendi.
Consequently Mr Hardy was entitled to a declaration of his ownership of the Yellow Land and to orders that the defendants bring their trespass to an end by, at their expense, removing the structures which they erected on the Yellow Land and building a new fence where the old corrugated iron fence had stood.