Campbell v Hamilton

BEAZLEY P: I have had the advantage of reading in draft the reasons of White JA. I agree with his Honour’s reasons and proposed orders.

GLEESON JA: I agree with White JA.

WHITE JA: The issue in this appeal is whether the appellant (Mr Campbell) agreed to grant an easement for services and carriageway over a part of his land that would bind his successors in title. The easement he agreed to grant was in favour of the respondents (“the Hamiltons”) and afforded access from part of the Hamiltons’ land to Ellesmere Road, Gymea. Mr Campbell accepts that the rights he granted enure for the benefit of the Hamiltons’ successors in title, but denies that they bind his successors in title. He contends that this is because the instrument creating the easement he signed did not clearly indicate the land to which the easement was appurtenant and is unenforceable against his successors in title by reason of s 88(1)(a) of the Conveyancing Act 1919 (NSW). Section 88(1)(a) provides:

The issue turns upon the proper construction of a deed called a Deed of Settlement and Release (“the Deed”) entered into on 14 November 2016 between Mr Campbell and the Hamiltons. The terms of the Deed are referred to in more detail below. One of the terms was:

Clause 14.1 provided:

Mr Campbell did provide a signed Transfer Granting Easement in the form of the document in Schedule B to the Deed.

The Transfer Granting Easement in the form signed by Mr Campbell was lodged by the Hamiltons for registration. Land and Property Information (“LPI”) raised requisitions. As he was required to do under the Deed, Mr Campbell had produced his certificate of title to enable the Transfer Granting Easement to be registered. After discussions between officers of the LPI, Mr Hamilton and the Hamiltons’ solicitor, Mr David Jordan, alterations were made by hand to the instrument and the instrument as so altered was registered. Mr Campbell did not participate in those discussions and did not consent to the making of alterations to the form of instrument that he signed. He sought an order pursuant to s 138 of the Real Property Act 1900 (NSW) cancelling the recording of that dealing in the register. He accepts that the form of Transfer Granting Easement in the form in which it was registered is effective to bind not only himself, but his successors in title.

The Registrar-General was joined as a defendant to the proceedings, and filed a submitting appearance.

If, on the proper construction of the Deed, Mr Campbell had agreed to provide an easement that would bind his successors in title, then, even if the dealing that was registered were ordered to be removed, the Hamiltons would be entitled either to a declaration and an order that the instrument in the form it was in when signed by Mr Campbell did comply with the requirements of s 88 of the Conveyancing Act and should be registered, or the Hamiltons would be entitled to an order for specific performance of the Deed that would require Mr Campbell to execute a dealing that both operated in favour of the Hamiltons’ successors in title and bound his successors in title. By their cross-claim the Hamiltons sought such orders.

At the hearing before the primary judge Mr Campbell accepted that if he failed on his contention as to the proper construction of the Deed, the appropriate course would be for the primary judge in his discretion not to make an order pursuant to s 138 cancelling the recording of the Transfer Granting Easement on the register, notwithstanding that he had not signed the instrument in the form in which it was registered.

The primary judge held that the Transfer Granting Easement in the form of Schedule B to the Deed of Settlement and Release did comply with s 88(1)(a) of the Conveyancing Act, and, in any event if it did not, the Hamiltons would be entitled to a decree of specific performance to require the execution of an instrument in a form that did clearly identify the part of the land which had the benefit of the easement so as to bind Mr Campbell’s successors in title. (Judgment [104] and [113]-[114])

For the reasons which follow the primary judge was correct in both conclusions.

Mr Campbell submitted that it is erroneous to look for the intention or contemplation of the parties outside of what was manifested by the terms of the instrument in Schedule B to the Deed. He submitted that because the parties intended to register the Transfer Granting Easement, the only matters to which regard could be had in construing the terms of the instrument are those to which regard could be had if the instrument were registered. This did not include extrinsic material which might establish facts or circumstances existing at the time of the creation of the registered dealing, including the objective background to the entry into the Deed (Westfield Management Limited v Perpetual Trustee Company Ltd (2007) 233 CLR 528; [2007] HCA 45 at 531 [5]; 539 [39]) (“Westfield Management”).

I do not agree. The principles in Westfield Management are confined to the construction of easements that have been registered. The form of Transfer Granting Easement in Schedule B to the Deed has not been registered. The Deed contained the covenant for further assurance quoted at [5]. To determine objectively the parties’ intention as to the nature of the rights agreed to be granted over Mr Campbell’s land, the Deed, including Schedule B, is to be construed having regard to the objective facts known to both parties which provide the context in which it was entered into and its object or commercial purpose.

Mr Campbell owns a property in Ellesmere Road, Gymea Bay, being Folio Identifier 4/14551 and referred to in the proceedings as Lot 4. At the time of the Deed the Hamiltons owned another property in Ellesmere Road, Gymea Bay, being the land in Folio Identifier 1153/601960 and referred to in the proceedings as Lot 1153. The Hamiltons had obtained approval for the subdivision of Lot 1153. A plan of subdivision of Lot 1153 for the creation of two new lots (1150 and 1151) had been approved by the council on 19 February 2015, but had not been registered.

Both properties lie to the east of Ellesmere Road, Gymea Bay. That land slopes steeply to the bay. Lot 1153 extended to Gymea Bay.

Mr Campbell’s property was subject to a number of easements in favour of neighbours who owned properties below and further to the east of his property that have frontages to Gymea Bay (Judgment [14]). The easements allow the neighbours to travel in a generally northerly direction on a common driveway up to Ellesmere Road (Judgment [14]).

Lot 1153 was a large parcel of land, being approximately 4,550m² in area, sloping very steeply to the waterfront. The proposed Lot 1151 is located at the top of the block. There is a house on that part of the property and there is access from the house to Ellesmere Road by right of carriageway on the north-western side of the lot. Mr Campbell’s land adjoined Lot 1153 to the north-east.

Registration of the plan of subdivision of Lot 1153 was dependent on the Hamiltons’ obtaining a right of way for access to Ellesmere Road. It was not topographically feasible to provide such access via the right of carriageway to the north-west of Lot 1153 on the right of carriageway that gives access to the house at the top of the block.

In December 2014 the Hamiltons commenced proceedings against Mr Campbell seeking the creation of an easement over Lot 4 pursuant to s 88K of the Conveyancing Act for vehicular and pedestrian access for the benefit of the as-then unsubdivided Lot 1153. Following a mediation of those proceedings, on 17 November 2015 the parties entered into an agreement called a “Heads of Agreement”. It provided:

The parties intended that a Deed of Settlement should incorporate the terms of the Heads of Agreement (clause 1). Mr Campbell agreed that upon execution of the Deed of Settlement he would grant the Hamiltons “an easement” for services and carriageway. At general law, a characteristic feature of an easement is that:

In Regency Villas Title Ltd v Diamond Resorts (Europe) Ltd [2018] UKSC 57 Lord Briggs, with whom Lady Hale, Lord Kerr and Lord Sumption agreed, described an easement (at [2]) as follows:

In Brendan Edgeworth, Butt’s Land Law (7th ed, 2017, Thomson Reuters (Professional) Australia) at [9.90], it is said:

The effect of s 88 of the Conveyancing Act is that if the instrument seeking to create an easement does not comply with the requirements of s 88(1), then the easement will not be enforceable against a person interested in the land that is not a party to its creation. That provision imposes a qualification on the circumstances in which an easement will bind successors in title to a party to the creation of an easement, but it does not alter the ordinary meaning of an “easement”.

Mr Campbell cited the definition of “easement” in Adrian Bradbrook and Susan MacCallum, Bradbrook and Neave’s Easements and Restrictive Covenants (3rd ed, 2011, LexisNexis Butterworths) at [1.2]:

He submitted that this showed that it was not an essential characteristic of an easement that it bind successors in title.

The problem with this definition is that it does not distinguish between an easement and a contractual licence. In the Heads of Agreement the parties used the term “easement” in contra-distinction to a mere contractual licence.

The parties’ intention as expressed in the Heads of Agreement was that Mr Campbell would grant an easement for services and carriageway that would run with the land. The agreement was made in the context of the Hamiltons’ seeking registration of the plan of subdivision of Lot 1153.

The Heads of Agreement did not itself identify what would be the dominant and servient tenements of the easement to be created. That was to be left to be determined by the Deed of Settlement. But the parties did clearly intend that the easement to be granted would benefit the Hamiltons’ successors in title and would bind Mr Campbell’s successors in title. It could not be expected that the plan of subdivision would be registered, or if it were, someone would purchase a subdivided lot, if access to Ellesmere Road were dependent upon a right of carriageway and an easement for services across Lot 4, and those rights would lapse upon Mr Campbell’s selling Lot 4.

Clause 2.6 of the Deed, whereby Mr Campbell (RC) agreed to give Mr and Mrs Hamilton (CH and PH) a signed Transfer Granting Easement is quoted above at [4].

The expression “Easement (Transfer Granting Easement)” was defined in clause 1.2. The definition was:

Schedule B contained a prescribed form of Transfer Granting Easement. It identified the Servient Tenement as being part of 4/14551 and the Dominant Tenement as part of 1153/601960. The description of the easement was:

Annexure A to the Transfer Granting Easement was a plan of the easement over Lot 4. There is no issue about the identification of the land burdened by the easement.

Annexure B set out the terms of the easement. It relevantly provided:

The instrument refers at paragraphs 10-12 to “the owner of the lot burdened”. If it were intended that the burden of the rights granted should not run with the land, that language would be inapt. Nor would it be apt to describe Lot 4 as the servient tenement in Schedule B. Thus the terms of Transfer Granting Easement confirm that objectively considered the parties intended to create easements that would run with the land: both the dominant and servient tenements.

Annexure ‘C’, which is referred to in paragraphs 1 and 2 of Annexure ‘B’, is a copy of the approved plan of subdivision of Lot 1153. The plan of subdivision had been approved by the Sutherland Shire Council on 19 February 2015. It was subsequently registered on 13 March 2017. It is reproduced in the reasons of the primary judge at [42] of the judgment and is reproduced below:

Lot 1150 was shown on the plan to have “by deduction” an area of 3,557m², whereas clause 1 of Annexure B referred to the part of Lot 1153 that the easement benefited as having an area of approximately 3,649m² and was subject to minor boundary adjustments.

The deduction apparently was that according to DP601960, Lot 1153 had an area of 4,557m². Lot 1151 in the proposed subdivision of Lot 1153 (which did not have the benefit of the easement) was said to have an area of 1,000m² and hence the area of Lot 1150 was said by deduction to be 3,557m². Neither the area of Lot 1153 in DP601960, nor the areas of proposed Lots 1150 and 1151 in the proposed plan of subdivision were based on certified plans of survey. The survey certification on DP601960 was crossed out. The approved plan of subdivision of Lot 1153 was certified as being only a partial survey.

Mr Jordan asked his search agent, SAI Global, to attend at the LPI and seek advice whether the Transfer Granting Easement in the form of Schedule B to the deed was in registrable form. He received from his search agent an endorsement on the copy of the document stating that the document was in a form acceptable for lodgment followed by what appeared to be an initial. After much wrangling, Mr Campbell’s certificate of title to Lot 4 was produced to enable registration of the Transfer Granting Easement in the form of the Schedule to the Deed. On 16 February 2017 the Hamiltons paid the sum of $275,000.

On 24 February 2017 the LPI raised a number of requisitions. They included the following:

Discussions ensued between Mr Jordan and Mr Hamilton and staff of the LPI. The result of those discussions was that Mr Jordan arranged for a surveyor to prepare a plan of survey. The plan of survey did not include a calculation of the area of the part of Lot 1153 to be benefited by the easement. The survey plan identified as “(X)” the part of Lot 1153 that was to have the benefit of the easement. The orientation of the boundaries and the length of the boundaries is identical to the plan that was Annexure C to the instrument in Schedule B to the deed.

Mr Hamilton’s evidence was that he met with staff of the LPI who said what changes needed to be made to the form of the Transfer Granting Easement in order for it to be registered. He initialled the changes that were made by staff of the LPI. The relevant change to Annexure B to the Transfer Granting Easement was that after the words “Deposited Plan 601960 (Lot 1153)” there was inserted the words “being part designated (X) on plan attached” and there was attached the plan prepared by the surveyor. The plan Annexure “C” was retained. The survey plan annexed is reproduced below:

A second change was that clause 2 of Annexure B was deleted. As a staff member of the LPI told Mr Hamilton, that clause was already covered by clause 1 and was not necessary. It is not necessary for an easement to identify the land not benefited.

Mr Hamilton initialled a statement that he was authorised to amend the dealing. The Deed of Settlement and Release did not authorise Mr Hamilton to amend the form of the dealing. The primary judge found that both Mr Hamilton and Mr Jordan were highly credible witnesses whose evidence he accepted. His Honour found that there was no basis to attribute any bad faith or unconscionable conduct to either of them. His Honour found that Mr Hamilton thought that the Deed of Settlement and Release entitled him to do what he did at the LPI (Judgment [133]). That finding is not challenged.

The primary judge held that Mr Hamilton was so entitled (Judgment [133]) I do not agree, but that is of no moment, because the Hamiltons, although not authorised themselves to amend the form of the instrument, would have been entitled to an order requiring execution for registration of an instrument that granted an easement over the lower part of Lot 1153 designated (X) on the survey plan attached to the instrument.

It should be noted that the form of the Transfer Granting Easement that was registered contains the same reference to the area of the part of Lot 1153 that is benefited by the easement and the same reference to minor boundary adjustments to Lot 1150 as was contained in the form of instrument that was Schedule B to the deed. The easement that was registered includes the same Annexure “C” as was an Annexure to the instrument in Schedule B to the deed.

Mr Campbell did not identify any difference between the area identified on the survey plan attached to the instrument as registered as the area to which the benefit of the easement is appurtenant and the plan that is Annexure C to the instrument that was Schedule B to the deed.

In Papadopoulos v Goodwin [1982] 1 NSWLR 413 Wootten J said of s 88(1) (at 417):

On appeal (Goodwin v Papadopoulos (1985) NSW ConvR 55-256) Mahoney JA agreed “in general” that this was the effect of the phrase (at 55-256). Priestley JA (with whom Samuels JA agreed) said that:

I agree with the primary judge, substantially for the reasons his Honour gave, that the instrument that was Schedule B to the deed did clearly indicate the land to which the benefit of the easement was appurtenant. That land was clearly identified as the lower part of Lot 1153 that was shown as Lot 1150 in the plan of proposed subdivision that was Annexure C to the instrument.

Clause 2 of Annexure B in Schedule B to the Deed also refers to minor boundary adjustments to Lot 1151. That suggests that the boundary adjustments contemplated may not have been confined to adjustments by natural causes to the boundary to Lot 1150 that was the mean high watermark. The primary judge said that the land identified was subject to minor boundary adjustments to clarify that if there were any such adjustments prior to registration of the plan of subdivision it would be Lot 1150 in the plan as registered that would be entitled to the benefit of the easement (Judgment [103]).

Mr Campbell submitted that as the plan of subdivision had been approved before the time of the deed, the “minor boundary adjustments” could have nothing to do with that subdivision. I do not agree. We were not referred to any evidence of practice or statutory provision that would preclude the council from issuing a subdivision certificate (Environmental Planning and Assessment Act 1979 (NSW), then s 109C(1)(d) and s 109J) to enable registration of the plan (Conveyancing Act, s 195C(1)(e)) if there were an approved minor boundary adjustment. In that event the land benefited would still be clearly identified as Lot 1150 in the new subdivision.

The reference to the area shown as Lot 1150 on the annexed plan as having an area of approximately 3,649m² does not detract from what is otherwise a clear statement that the land to have the benefit of the easement is Lot 1150. The plan of subdivision refers to the area of Lot 1150 as being 3,557m² by deduction. The primary judge held that the reference in clause 1 to 3,649m² could be disregarded as a typographical or transcription error (Judgment [107]). His Honour applied the principle of construction of deeds that “a false description does not vitiate, when there is no doubt [what] is meant” (citing Eastwood v Ashton [1915] AC 900 at 914, Morrell v Fisher (1849) 154 ER 1350; (1849) 4 Ex. 591). Mr Campbell argued that it was not possible to say that the figure of 3,649m² was a mistake or that the figure of 3,557m² was accurate because Annexure C was only a partial survey and there was no evidence of an accurate survey to establish the area of 4,557m² for Lot 1153. The plan of subdivision showing the creation of Lot 1153 bears a notation from a surveyor dated 9 November 1978 which crossed out the certificate that the survey represented in the plan was accurate and had been made either by the surveyor himself or under his immediate supervision. The form required the striking out of either statement 1 “by me” or statement 2 “under my immediate supervision in accordance with the Survey Practice Regulations”, but the whole certificate was crossed out, although it was dated.

This submission mistakes the primary judge’s finding of a transcription error. His Honour was satisfied that the author of clause 1 intended to take the statement of area from the plan which was Annexure C but mistranscribed the area of Lot 1150 as shown on that plan. It is unnecessary to decide whether this finding was correct. It does not matter. The statement that the area was “approximately 3,649m²” was neither essential, nor material to the identification of the land benefited. That land was identified by the depiction of Lot 1150 in the annexed plan. Mr Campbell must recognise this by his acceptance that the transfer as registered clearly identifies the land benefited. That concession is correct.

For these reasons the premise of Mr Campbell’s argument fails. The form of easement in Schedule B to the deed did not fail to indicate clearly the land to which the benefit of the easement is appurtenant.

But if it had failed to do so, Mr Campbell would still not have been entitled to the relief he sought. When the deed as a whole is construed having regard to the objective matrix of facts in which it was entered into, notably the Heads of Agreement, it is clear that the parties’ intentions, as objectively indicated, was that the easement to be created should enure both for the benefit of the Hamiltons and their successors in title to Lot 1150 once created, and should bind both Mr Campbell and his successors in title. Clause 19.1 of the Deed provides that the Deed is the entire agreement of the parties and supersedes any prior understandings, negotiations or agreements. This does not mean that Heads of Agreement is not an objective fact that forms part of the surrounding circumstances which provide the context and identify the purpose of the Deed.

If the easement provided for by Schedule B were not effective to bind Mr Campbell’s successors in title, then he would be required by clause 14.1 of the Deed to sign and deliver all documents reasonably required of him by notice from the Hamiltons to carry out and give full effect to it.

The primary judge made declarations and orders that include the following:

It is not correct to say that the Deed binds successors in title (declaration (2)) as distinct from the registered instrument’s doing so. Declaration (2) should be set aside. Otherwise the appeal should be dismissed with costs. Declaration (3) covers the position.

For these reasons I propose the following orders: