SVN upgrade working copy

You have to upgrade your subversion client to at least 1.7.

With the command line client, you have to manually upgrade your working copy format by issuing the command svn upgrade:

Upgrading the Working Copy

Subversion 1.7 introduces substantial changes to the working copy
format. In previous releases of Subversion, Subversion would
automatically update the working copy to the new format when a write
operation was performed. Subversion 1.7, however, will make this a
manual step. Before using Subversion 1.7 with their working copies,
users will be required to run a new command, svn upgrade to update the
metadata to the new format. This command may take a while, and for
some users, it may be more practical to simply checkout a new working
copy.
Subversion 1.7 Release Notes

TortoiseSVN will perform the working copy upgrade with the next write operation:

Upgrading the Working Copy

Subversion 1.7 introduces substantial changes to the working copy
format. In previous releases, Subversion would automatically update
the working copy to the new format when a write operation was
performed. Subversion 1.7, however, will make this a manual step.

Before you can use an existing working copy with TortoiseSVN 1.7, you
have to upgrade the format first. If you right-click on an old working
copy, TortoiseSVN only shows you one command in the context menu:
Upgrade working copy.
TortoiseSVN 1.7 Release notes

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