November 2018 | Kieran Kelly

Justice Darke was recently asked to decide the unusual case of McFarland v Gertos [2018] NSWSC 1629 involving a property at 6 Malleny Street, Ashbury.

Henry Thompson Downie, the owner of the property, died in 1947, seemingly without leaving a will.

Mrs Grimes, a tenant living at the property at the time of Mr Downie’s death, remained there until a short time before her death in April 1998.

That same year, Bill Gertos, a property developer, found the property unoccupied and in a dilapidated state.

At about this time, Mr Gertos obtained legal advice that to establish adverse possession he would need to occupy the property, pay the bills, and look after it as if it was his own for at least 12 years, or perhaps up to 14 years.

Mr Gertos told the Court that he took possession of the property in the second half of 1998 and spent approximately $35,000 on repairs.

He then commenced to rent the property, pay water and council rates and land tax. In 2014 Mr Gertos spent a further $108,000 on repairs.

In early 2017, Mr Gertos made his application under s 45D of the Real Property Act to be registered as the owner of the property.

This led to a daughter and two grandchildren of Mr Downie commencing proceedings against Mr Gertos and seeking orders that they, not Mr Gertos, were the beneficial owners of the property.

The Court’s findings

Mr Gertos was cross-examined about various matters, including a lack of documentary evidence of his alleged occupation of the property from 1998 and matters related to tax returns.

Mr Gertos’ position was supported by Ms Alha, an employee of his, who gave evidence that her responsibilities included managing the property for Mr Gertos.

Critically, the evidence of Mr Gertos was largely accepted.

Justice Darke found that upon the death of Mr Downie his property vested in the Public Trustee and that Mrs Grimes’ tenancy ended upon her death. It was found that from about late 1998 Mr Gertos was in “factual possesion” of the property. It was also found that Mr Gertos’ actions, in paying rates and taxes and carrying out repairs, provided further support for the proposition that Mr Gertos took possession to the exclusion of all others.

On this basis, Justice Darke found that Mr Gertos’ possession was “open, not secret; peaceful, not by force; and adverse, not by consent of the true owner”. An argument run by the plaintiffs relating to the absence of a legal personal representative of Mr Downie’s estate, which meant that the estate could not take action against a trespasser such as Mr Gertos, was ultimately dismissed.

Following this, Justice Darke held there was nothing preventing the Registrar from registering Mr Gertos as the proprietor of the land.

Conclusion

Although adverse possession claims are rare, the decision does highlight how land can be lost if it is ignored.

It provides a warning to executors of deceased estates to be aware that land that is disregarded may ultimately be lost to a shrewd squatter such as Mr Gertos.

If you require further information contact me on 9231 2466 or email kkelly@hflawyers.com.au.

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