Petersson, Sandra --- "Adverse Possession" [2003] ALRCRefJl 29; (2003) 83 Australian Law Reform Commission Reform Journal 64

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Reform Issue 83 Spring 2003

This article appeared on pages 64 – 65 of the original journal.

Adverse possession

By Sandra Petersson*

Clothed in a ragged patchwork of common law principles and lumbering along between the twin pillars of land titles and limitations legislation, adverse possession has been a problem child for law reform.

Judged by some to be an unmanageable delinquent in the modern world, adverse possession has been banished from numerous jurisdictions. In others, it has been shuffled from one reform project to another—though thought to be a source of mischief, there were graver threats on the horizon and adverse possession would wait for another day.

It may not signal that we have reached a benchmark in the quest to perfect the law but several jurisdictions have recently taken on the insidious issue of adverse possession (aka squatters’ rights). England, Ireland, and the Australian states of Queensland and Tasmania have all issued recent reports.¹ The Canadian province of Alberta adds to this body of work with its 89th report: Limitations Act Adverse Possession and Lasting Improvement (2003).

In addressing the issue of adverse possession, the Alberta report offers a different perspective on the relationship between land titles and limitations principles. As disputes arising from the ownership and use of land are inevitable, the law needs to provide an efficient and appropriate mechanism to resolve them, not only to determine the parties’ interests in a current dispute but also to prevent the dispute from troubling future owners. Protecting future ownership implies that land can be transferred. Consequently, transferability is a further objective the law must ensure. The report adopts these objectives of protecting future ownership and ensuring transferability. While these two objectives are well served by land titles legislation, the report also recognises that sole reliance on the register is an arbitrary approach to dispute resolution. Competing claims are neither assessed on their merit nor according to the limitations principle that appropriate resolution should be timely resolution. Therefore, the report adopts a third objective of preventing stale claims.

With these three objectives in mind, the report considers three closely related claims that arise between an owner of land and certain persons in possession of the owner’s land. The first claim is the owner’s right to recover possession. The second claim arises when the owner fails to bring a claim to recover possession within the prescribed limitation period. This second claim allows the person in possession to quiet title in his or her own name on the basis of rights acquired by adverse possession. The third claim is a statutory one. Where adverse possession is not made out but allowing the owner to recover possession would carry an element of unjust enrichment, the Alberta legislation offers relief for some improvements made under mistaken belief in ownership. This third type of claim is not discussed further in this article.

The report examines the law’s development in Alberta. The adoption of a Torrens land registration system raises two questions. First, is registered land subject to adverse possession? Alberta courts held that, regardless of Torrens registration, an owner’s claim to recover possession remains subject to limitations legislation. Second, what is the effect on adverse possession of an indefeasible transfer? Although registered land was subject to adverse possession, Alberta courts protected the Torrens touchstone of indefeasibility. If land is transferred in circumstances conveying indefeasible title, any period of adverse possession will be wiped out. From a limitations perspective, the effect of indefeasibility is to allow the new owner a new limitation period.

This logical balancing of land titles and limitations principles was upset by the coming into force of a new Limitations Act in 1999 (the ‘new Act’). While the absence of a provision to automatically extinguish an owner’s rights when the limitation period expires has attracted considerable attention, this change ultimately raises little cause for concern. The cancellation of former rights is covered by land titles legislation; amendments are recommended to address the concept of acknowledgment and to prevent the mischief of late re-entry by the owner. However, the report identifies a more serious problem in determining when the limitation period to recover possession of land begins. Under the new Act, claims based on a continuing course of conduct do not arise until the course of conduct ends. As adverse possession is based on continuing trespass, the owner’s claim to recover possession is postponed until the adverse possessor leaves the land. Consequently, the owner may claim to recover possession at any time, contrary to the intent that such claims would remain subject to a 10-year limitation period.

While other Torrens jurisdictions within Canada allow this result, the Alberta report questions whether exempting landowners from a limitation period is justified. The report concludes that there is no sound policy basis to distinguish landowners from other classes of claimants and recommends that claims to recover possession of land should be subject to a limitation period that runs from when the owner is dispossessed. This is not to suggest that land is readily vulnerable to adverse possession in Alberta. On the contrary, the law provides landowners with several layers of protection. Firstly, indefeasibility under land titles legislation protects an owner against prior claims. Secondly, limitations legislation affords an owner 10 years to bring a claim if dispossessed. Thirdly, as the common law has evolved in Alberta, the test for dispossession is very high and there are relatively simple means for the owner to reassert title. Planning law also offers a further level of protection by making subdivision approval a pre-requisite to registering title. If approval cannot be obtained, the interest acquired by adverse possession cannot be registered or caveated, leaving title with the owner. Only in the rare circumstances where the owner falls outside these many layers of protection, is there scope for an adverse possessor to successfully quiet title.

*Sandra Petersson, Counsel, Alberta Law Reform Institute.

The report Limitations Act: Adverse Possession and Lasting Improvements (Final Report No 89) is available online at < www.law.ualberta.ca/alri/>.

Endnotes

1. Ireland, Law Reform Commission, Title by Adverse Possession of Land (2002); UK, Law Commission, Land Registration for the Twenty-First Century: A Conveyancing Revolution (2001) and Limitation of Actions (2001); Queensland Law Reform Commission, Review of the Limitation of Actions Act 1974 (Qld) (1998); Law Reform Commissioner of Tasmania, Report on Adverse Possession and Other Possessory Claims to Land (1995).