Boat sheds around Melbourne’s Port Phillip Bay are prime real estate. Here’s an extract from a recent Victorian Supreme Court case.
On the northern bank of the Kororoit Creek in Altona is an area known as the Kororoit Creek Fishing Village. The Fishing Village was established during the nineteen-twenties when the land was privately owned by a Mr Knowles. Various rudimentary structures described as fishing huts or boatsheds formed part of the Village. Mr Knowles made them available for use for a modest annual fee.
The Hobsons Bay Council brought this proceeding against the current occupiers of the boat sheds, seeking declarations that the twelve were trespassers, and mandatory injunctions requiring them to vacate the sites and to remove their improvements and property from the sites.
The Defendants assert that they have an irrevocable licence over the land in question, on equitable principles. They rely in particular on the principles of proprietary estoppel. They say that they are entitled to remain in occupation of their sites indefinitely, subject to payment of reasonable licence fees and Council rates, and to transfer their rights to others as they see fit.
The Council contends that the Defendants merely had revocable licences which had all come to an end before the commencement of this proceeding. Further, it contends that any estoppels that might otherwise have arisen have been prevented from arising by statutory provisions relating to local government in force in Victoria from time to time during the periods in question. On the other hand, during the hearing of this case, the Council made an open offer of settlement to the Defendants under which, subject to the defendants paying the Council’s costs of the proceeding, each claimant would be granted a fresh licence with a term of 5 years, which is now the standard term applicable to the other boatshed holders at the Village. The offer was not accepted.
The Court referred to the principles stated by Fry J in Willmott v Barber, were well settled:
(1) The person infringing the rights of the owner must be mistaken about his rights;
(2) The owner must know his rights are being infringed;
(3) He must know that the infringer is mistaken;
(4) The owner must fail to warn the infringer or assert his rights;
(5) The owner’s silence must induce the infringer to continue in his mistaken belief;
(6) The infringer must have altered his position on the faith of his mistaken belief by spending money or doing work on the property.
A heritage study done on behalf of the Council in 2004 noted that “R. Baker’s hut 17 had beds, sink and a TV with a clothes line full of washing at the back”.
Mrs Gibbon is a retired widow. In 1993 she and her late husband paid $25,000 to the prior holder of site 3, Mrs Thompson, for a transfer. Mrs Thompson was herself a widow at that time. She and her husband had been living there for many years “with the Council’s permission or ignorance”. Mr Thompson had been a fisherman. The two husbands had known each other. The price of $25,000 accorded with the Council valuation of site 3 at the time. In 1993 the “boatshed” had had a couple of bedrooms, a lounge, kitchen area, shower, toilet, hand basin and sink, ie facilities that had enabled the Thompsons to live there. It had running water and electricity. Its condition was “pretty ordinary”. There was no boat in it. The Gibbons intended to use it mainly as a weekender and as a place to be with their children and grandchildren. They made no inquiries of the Council before they acquired it. The parties informed the Council shortly afterwards that there had been a “change of ownership” and requested that all rates, levies and taxes be thereafter charged to Mr and Mrs Gibbon. The charges were then duly paid until the outbreak of the recent dispute. As far as Mrs Gibbon knows, despite contact between the Gibbons and the Council from time to time over the years, nothing was said to either of them by the Council about the terms of their occupation until the recent dispute broke out. When the Gibbons acquired the place Mrs Gibbon did not think that there was any limit on how long they could stay there. However Mrs Gibbon could not give a reason why she thought that they could retain the place indefinitely. “I just – I presumed I suppose inadvertently apparently”.
Until about October 2006 Mr Waters had had no connection with the Village. At about that time a friend told him that a boatshed was for sale at the Village. It was Mr Ken Kilby’s boatshed on site 11. Mr Waters made contact with Mr Kilby. He was shown the boatshed. It had been divided into numerous rooms, with sleeping accommodation for up to 10 people. The back area was on a concrete slab. The shed was in very bad shape. It was messy, smelly and damp and the electrical wiring was dangerous. Mr Kilby told Mr Waters that there was a “permissive lease”. Mr Waters understood that to mean that there was a “[k]ind of verbal arrangement of a year to year thing”.
The Court found in favour of the Council.