Sheppard v Smith

1. [1]

   GLEESON JA: I agree with Beech-Jones JA.

2. [2]

   BEECH-JONES JA: This is an appeal from a judgment of Parker J dismissing an application for an order under s 89(1) of the Conveyancing Act 1919 (NSW) (the “CA”) for the extinguishment of an easement.

3. [3]

   The Appellants, Dean Frederick Sheppard and Meredith Jane Chapman, are the registered proprietors of one of two adjoining properties in inner Sydney (“Number 6”). The Respondents, Dean Clayton Smith and Emma Jane Munro, are the registered proprietors of the other property (“Number 8”). Number 8 has the benefit of a right of way over a strip of land at the rear and side of the land that now forms part of Number 6 (the “L-shaped strip”) as follows:

4. [4]

   The origins and nature of the various items and objects depicted in this diagram are described below.

5. [5]

   After disputation arose in relation to attempts by the Respondents to use the easement, the Appellants commenced proceedings in this Court seeking an order for its extinguishment under s 89(1) of the CA. The relevant terms of s 89 are set out below but at this point it suffices to note that the Appellants relied on all three limbs of s 89(1) that give rise to the power to make such an order, namely, that: the easement is obsolete or unreasonably impedes their use of their land (s 89(1)(a)); that the easement was abandoned (s 89(1)(b)); or that its extinguishment will not substantially injure the Respondents (s 89(1)(c)).

6. [6]

   After a three-day hearing, Parker J published a comprehensive judgment dismissing the application: Sheppard v Smith [2021] NSWSC 1207 (“Sheppard”). His Honour noted that a cross-claim filed by Mr Smith and Ms Munro seeking to have various obstructions constructed over the easement removed was discontinued, although there was “no real dispute” that, if Mr Sheppard and Ms Chapman’s application failed, the obstructions would have to be removed. [1]

7. [7]

   A number of grounds of appeal were pressed on behalf of the Appellants but in essence they contended that, in rejecting their case on abandonment, his Honour placed too much emphasis on the actions of the Respondents in having the right of way noted on the title in 2010 and attached too little weight to their conduct in taking various steps afterwards that hindered access to the right of way. For the reasons that follow, I consider that the primary judge did not so err and was otherwise correct in rejecting each of the bases for extinguishment put forward by the Appellants.

Title to Number 6, Number 8 and the L-Shaped Strip

1. [8]

   Number 6 and Number 8 originally formed part of an adjoining group of six terraces built in the late nineteenth century. [2] Number 6 and Number 8 were built on Lot 3 and numbers 10, 12, 14 and 16 were built on Lots 1 and 2. In January 1883, the owner of the lots, Thomas O’Toole, sold Lot 3 to Bridget Tubridy but retained Lots 1 and 2. Ms Tubridy constructed a pair of terrace houses on Number 6 and Number 8 with a common “party wall”. Behind each terrace was a (small) backyard. [3]

2. [9]

   The six terraces were (originally) surrounded on three sides by a lane way that was 1.045m wide. The laneway ran from the street along the southern edge of Number 6, then along the western edges of numbers 6 to 16 and then back along the northern edge of number 16. The primary judge noted that it was agreed that the “original purpose of the laneway would have been, or at least would have included, the removal from the outhouses of what is quaintly and euphemistically called ‘nightsoil’”. The lane was “[c]olloquially, … known as a ‘dunny lane’.” [4]

3. [10]

   Ms Tubridy subdivided Lot 3 and sold the two lots in October 1885. Of some significance to the appeal is that the “L-shaped strip did not form part of Number 6 but was instead retained by Ms Tubridy. The conveyance reserved a right of way over that land in favour of Number 8, [5] expressed as “a right of way over a passage along the western and southern boundaries of the remaining part of Lot three”.

4. [11]

   Title to the two lots passed between different owners during the twentieth century. Ownership of Number 6 passed to Patrick McMahon in July 1956. He sold Number 6 to Mathew and Rowena Morgan in July 2006. [6] The Appellants completed the purchase of Number 6 from them in January 2012. [7] Number 8 was purchased by Jean McJannet in November 1956. She sold it to the Respondents in 2008.

5. [12]

   As noted by the primary judge, both properties were still under old system title when acquired by Mr McMahon and Ms McJannet. [8] In 1995, Number 6 was brought under the Real Property Act 1900 (NSW) (“RPA”) with the lodgement of a Deposited Plan. However, the title created was limited; that is, the boundaries would not become indefeasible until a plan of delimitation was lodged (RPA, ss 28U and 28V). Similarly, at some point prior to 2008, Ms McJannet brought Number 8 under the RPA. When she sold it in 2008, the title was also limited. [9] At that time, the right of way over the L-shaped strip was not noted in the title. [10] However, after they purchased Number 8, in June 2010, the Respondents lodged a delimitation plan which was subsequently registered with the limitation on title cancelled (RPA, s 28V(1)). It is of significance to this appeal, as explained below, that they took steps to ensure that the right of way was recorded on the title. [11]

6. [13]

   Thus, by 2012 both Number 6 and Number 8 were brought under the RPA in unqualified terms and Number 8 had a right of way noted on title over the L-shaped strip. However, despite the use that had been made of that land by the various proprietors of Number 6 explained below, the L-shaped strip was not part of Number 6. Ownership of the L-shaped block was retained by Ms Tubridy and presumably had passed to her successors.

7. [14]

   In August 2017, the Appellants lodged an application for possessory title over the L-shaped strip. This required that it be brought under the RPA and incorporated into the title for Number 6. [12] A new development plan incorporating the L-shaped strip which noted the right of way was registered in late March 2019. [13] The primary judge queried whether the notation of the easement on Number 8’s RPA title in December 2010, when Number 6 was still old system land, gave rise to an indefeasible interest. However, his Honour found that any doubt about that dissipated upon the registration of the L-shaped strip under the RPA in March 2019 along with the easement, at which time “[N]umber 8’s interest clearly became indefeasible”. [14] There was no challenge to that conclusion.

8. [15]

   The fact that the L-shaped strip did not become part of Number 6 until 2019 is of significance in considering the events that are said to give rise to an abandonment. Until that time the owners of Number 6 were not the owners of the servient tenement.

Dealings with and Use of the L-Shaped Strip

1. [16]

   As noted, there is no doubt that at least one of the purposes of the right of way in respect of the L-shaped strip was to facilitate the collection of “nightsoil”. The primary judge found that sewer lines servicing the terraces were built in 1908 and in the “decades” afterwards “traffic along the laneway ceased and much of it fell into disuse”. [15] The fences between Number 6 and Number 8 and between Number 8 and number 10 were extended to the rear fence. [16] The portion of the laneway behind Number 8 was not subject to any rights of way and was incorporated into its back yard. [17]

2. [17]

   With Number 6, a gate was constructed at the entrance to the laneway and the back of the laneway was subsumed into its rear garden. Along the southern wall a raised garden bed was built which, according to the primary judge, “extended for most, if not all, of the width of the former laneway” which was 65cm to 75cm above the ground level. [18] A small garden bed was constructed at the rear in the area of the former laneway. In the middle it was 50cm wide, but it extended further at both ends such that, at the southwestern end, it covered the full width of the laneway. It did not extend to the fence with number 4 as there was a sewer manhole in that corner. [19]

3. [18]

   The primary judge accepted the evidence of a witness who lived in the street from when he was born in 1952 until 2006 that there was a fence between Number 6 and Number 8. [20] His Honour found that “[i]t seems likely that by [2006] there had, for decades, been no regular access to the rear of [N]umber 8 from the former laneway”. [21] The primary judge found that at the time the Respondents purchased Number 8 in 2008 the fence between them was “not only dilapidated but was heavily overgrown with ivy”. [22]

4. [19]

   As to Number 6, at sometime between 2006 and 2012, Mr and Mrs Morgan constructed a fishpond at the eastern end of the raised garden bed and replaced the pergola at the rear with a larger version. They extended that roof on a single-storey extension across the laneway to the boundary with number 4. [23]

5. [20]

   In 2013, the Respondents undertook renovations at Number 8. By this time, title to Number 8 had been brought under the RPA and included the right of way as a notation.

6. [21]

   The Appellants had no title to the L-shaped strip which was still under the old system title although they clearly occupied it. The Respondents replaced the fence between Number 6 and Number 8 with a new wooden paling fence built entirely on Number 8. On the Number 6 side of the fence, but still on Number 8’s property, they placed a metal fence post in the former laneway. They also constructed a knee-high concrete wall against the rear fence to Number 8 that extended to the boundary with Number 6 (the “knee wall”). [24]

7. [22]

   In November 2015, the Respondents built a garden shed in their backyard “close” to the new fence built by the appellants. [25] His Honour noted that “[a]ccording to Mr Smith, the clearance on the southern side was about 60 cm.” [26]

8. [23]

   In October and November 2014, the Appellants replaced the garden bed and fishpond on the southern side of the rear to Number 6 with a brick wall about waist high along the boundary with number 4. In December 2016 and January 2017, they enclosed the area that Mr and Mrs Morgan had created when they extended the roof to the boundary with number 4. They laid a concrete floor including on the laneway and placed bifold doors at one end and a glass door at the other. [27] The result of those works is that a room of the dwelling on Number 6 effectively spread across the right of way to the fence as shown below:

9. [24]

   This photograph is taken from the rear of Number 6 looking down the right of way to the street. The tape measure shows the width of the right of way. The view from this point to the rear of Number 6 is pictured below:

10. [25]

    Again, the tape measure shows the width of the laneway. The brick wall to the left is the wall described at [21]. At the far end of this photograph is the southwest corner of the site where the sewer manhole is located. The Appellants rebuilt an area next to that as a smaller garden bed using rough sandstone blocks. [28]

11. [26]

    According to the primary judge, in 2019 the local council took “formal action” against the Appellants over the unauthorised work at Number 6. In particular, they were required to “demolish and remove all structures and extension installed to” the right of way. However, enforcement was “put on hold pending the outcome of these proceedings”. [29] His Honour found that the sewer manhole is “still a functioning part of the sewerage system and, as such, must be kept available for access by Sydney Water when required.” [30]

The Notation of the Right of Way on the Respondents’ Title

1. [27]

   The primary judge accepted the evidence of Ms Munro that she was aware of the existence of the right of way from the time that Number 8 was purchased in 2008. [31] His Honour also found that, at least from 2010 onwards, the Respondents “were aware that the L-shaped [strip] did not belong to [N]umber 6 and they … took active steps to have their right of way registered on [N]umber 8’s title.” [32]

2. [28]

   Senior Counsel for the Appellants, Mr Sirtes SC, contended that the notation of the right of way on the unqualified title to Number 8 in 2010 was just a by-product of the process of registering a delimitation plan. However, the evidence clearly supports the primary judge’s finding. The delimitation plan that was lodged in June 2010 specifically identified the right of way including its source. The accompanying surveyor’s report that was lodged with the plan stated that the “subject parcel has a valid appurtenant right of way over the land shown as Right of Way” and that “[n]o evidence could be found as to the release of the Right of Way or the extinguishment of the Right of Way through common ownership”.

3. [29]

   On 1 July 2010, the Respondents received a “lodging party requisition” from the Department of Lands, making reference to the right of way and noting that the consent of the adjoining owners in relation to the common boundary was required. The Respondents’ solicitors passed on the requisition to the Respondents. Ms Munro responded to the solicitors in an email that stated, inter alia:

4. [30]

   The primary judge accepted Mr Smith’s evidence to the effect that on a “handful of occasions” he accessed the backyard to Number 6 while it was owned by Mr and Mrs Morgan but that they “may not have even been aware of it”. [33] His Honour accepted that they granted permission for access by a surveyor, although “there [was] little evidence that once registration of the right of way was obtained the [Respondents] made any real attempt to exercise it” [34] which was “hardly surprising” given that it was not “readily trafficable”. [35]

Abandonment – s 89(1)(b)

1. [31]

   In relation to abandonment, s 89 of the CA relevantly provides:

2. [32]

   Section 89(1A) was introduced into the CA by the Real Property and Conveyancing Legislation Amendment Act 2009 (NSW).

3. [33]

   The primary judge’s reasoning for rejecting the Appellants’ case on abandonment can be summarised by reference to seven points.

4. [34]

   First, his Honour noted the difficulty in inferring abandonment based upon non-user by the owner of the dominant tenement, concluding that “[n]on-user must almost always be explicable on the basis that the dominant owner has no present need to use the easement, but nevertheless wishes to retain the benefit of it for the future”. [36]

5. [35]

   Second, his Honour rejected a contention raised on behalf of the Appellants that the effect of s 89(1A) was that “non-user for a period of twenty years in effect operated as a separate ground for extinguishment alongside the common law principles traditionally applied under s 89(1)(b)”. [37] Instead, his Honour concluded that its effect is that “where there is no user of an easement for twenty years, and no other evidence to negate the intention of the person benefiting from the easement to abandon it, the condition for extinguishment is established” but that “[i]t does not otherwise affect the application of the traditional common law approach to abandonment”. [38]

6. [36]

   Third, the primary judge found that the power conferred by s 89(1) is applicable to property registered under the RPA. The primary judge addressed whether s 89(1)(b) of the CA empowers the Court to extinguish an easement by reason of the conduct of previous owners of the dominant tenement engaged in prior to the Respondents acquiring title, notwithstanding the indefeasibility of that title. His Honour found that he was “inclined” to conclude that he was bound by the decision of this Court in Pieper v Edwards [1982] 1 NSWLR 336 (“Pieper”) to find that s 89(1)(b) had that effect. [39] However, his Honour concluded that it was not necessary to finally determine that issue presumably because, based on the facts his Honour found, no such abandonment could be inferred. No notice of contention was filed in this Court on behalf of the Respondents. Both parties proceeded on the basis that the power conferred by s 89(1)(b) of the CA could be engaged by reason of the acts of predecessors in title to the dominant tenement.

7. [37]

   Fourth, consistent with the third point, the primary judge addressed whether the conduct of the previous owners of Number 8, specifically Ms McJannet, demonstrated an intention to abandon the right of way. His Honour accepted that there was no evidence that Ms McJannet ever used the right of way or asserted an entitlement to do so. However, his Honour also noted it was “impossible to say” whether she was aware of the right of way and that all that was “established during her period of ownership is non-user and no intention to abandon the right of way should be inferred on that account.” [40]

8. [38]

   Further, his Honour did not accept that there were any other features of the land from which an inference of abandonment by Ms McJannet could be drawn. By reference to the facts and reasoning in Treweeke v 36 Wolseley Road Pty Ltd (1973) 128 CLR 274; [1973] HCA 27; “Treweeke”) his Honour concluded that, whether the fence between the properties was built by Ms McJannet or one of her predecessors in title, the construction and presence of the fence did not give rise to an inference of abandonment. [41] With the various obstacles to the exercise of the right of way built by the proprietors of Number 6, his Honour found that there was no evidence of any objection to them by Ms McJannet, nor encouragement by her either, and that otherwise “[t]he fact that the dominant owner does not, for the time being, expend the money required to make an easement useable does not of itself lead to an inference of abandonment”. [42] His Honour ultimately concluded: [43]

9. [39]

   Fifth, the primary judge then addressed the conduct of the Respondents since they acquired Number 8 in 2008. The relevant portion of his Honour’s judgment was as follows:

10. [40]

    Sixth, His Honour addressed the operation of s 89(1A). His Honour noted that s 89(1A) required a period of at least 20 years of non-user before the application for extinguishment was “made” although it was not clear if the application was “made” when it was filed or only when it was heard. [44] However, his Honour concluded that it did not matter:

11. [41]

    The reference to “December 2010” is to the filing of the delimitation plan which led to the notation of the right of way on title. The reference to December 2018 onwards is to the period from when the Respondents were notified of the Appellants’ application for possessory title in that from that time the Appellants expressly asserted their wish to retain the right of way. [45]

12. [42]

    Seventh, based on Pieper, the primary judge concluded that the power conferred by s 89(1) is discretionary. In circumstances where the Respondents acquired Number 8 and “had the easement noted on their title, long before the [Appellants] acquired title to the servient land”, his Honour found that even if s 89(1)(b) had been satisfied then he would have declined to exercise the discretion to extinguish the right of way. [46]

13. [43]

    The first five of the seven grounds of appeal concern abandonment. They provide:

14. [44]

    The Appellants’ submissions stated that ground 1 was subsumed under grounds 2 to 5. Grounds 2 to 4 are concerned with the conduct of the Respondents. Ground 5 is directed towards the primary judge’s findings in respect of the conduct of Ms McJannet (and the conduct of the Respondents). It is premised on the correctness of the third point noted above. Although the Appellants’ submissions discussed s 89(1A) of the CA, they did not contend that the primary judge’s construction of that provision was wrong.

15. [45]

    A conclusion that the owner of the dominant tenement has abandoned an easement over the servient tenement is a finding of fact (Treweeke at 282 per McTiernan J; at 302 per Mason J). The ultimate issue is whether an inference of abandonment should be drawn “taking into account all the matters of fact which may tend towards or against a conclusion that the easement may reasonably be considered to have been abandoned” (Treweeke at 287 per Walsh J).

16. [46]

    It has been said that “a firm intention [on the part of the owner of the dominant tenement] that neither he nor any successor in title of his should thereafter make use of the easement” is required and that “[a]bandonment is not … to be lightly inferred” (Gotobed v Pridmore (Court of Appeal (UK), 16 December 1970, unrep); as later cited in Williams v Usherwood (1983) 45 P & CR 235 at 256; “Williams”). Thus, a right of way will not necessarily be extinguished by non-user alone (Treweeke at 284 per McTiernan J; at 302 per Mason J). However, acquiescence in, and failure to object to, the placing by the owner of the servient tenement of obstructions on the right of way which are inconsistent with its exercise may lead to an inference that the owner of the dominant tenement intended to abandon it (Treweeke at 303 per Mason J).

17. [47]

    The potential for disagreement over the essentially factual inquiry into abandonment is best illustrated by Treweeke. The right of way that was said to be abandoned was granted in 1927 over a three-feet-wide strip of land on the servient tenement so as to allow access by the owners of the dominant tenement to the beach at Double Bay. The strip was impassable by reason of vertical cliff faces and from 1928 because of a bamboo plantation. In 1956, a pool was constructed over part of the right of way near the waterfront and a fence across the right of way was erected in 1958. A chain wire fence was erected across the right of way on the dominant tenement in 1933 and then again in 1967 and both times that was done at the cost of the owner of the dominant tenement and the servient tenement. The occupants of the dominant tenement accessed the beach through another property, but that route became unavailable in 1967.

18. [48]

    Both McTiernan and Mason JJ held that it had not been shown that the right of way was abandoned. Justice Walsh dissented.

19. [49]

    Justice McTiernan concluded that “the non-user of the total length of the [right of] way can reasonably be put down to its precipitous condition at places” and noted that “it is not reasonable to attribute non-user to renunciation of such a pleasant amenity as a path to the beach”. His Honour referred to instances of the assertion of a right of way including the undertaking of a survey (as occurred here) and the respondent's agent advising incoming purchasers of units on the dominant tenant of the existence of the right of way (at 285). His Honour described the gate constructed on the dominant tenement as “not expensive” and “movable” (at 283) and noted that the owners of the dominant tenement complained about the pool when they learned of the existence of the right of way (at 285).

20. [50]

    Justice Mason concluded that the non-user and other acts and omissions of the Respondent “were equally consistent with the existence of an intention not to use the right of way whilst an alternative means of access [to the beach] remained available” (at 303-304) especially as the right of way “could not be effectively used until it was made suitable for pedestrian use by appropriate expenditure.” Justice Walsh, in dissent, drew an inference of abandonment from the long period of non-user “coupled with acquiescence in acts which where adverse to the user of the right of way” (at 293).

21. [51]

    In this Court, the Appellants’ written submissions placed great emphasis on the following passage from the speech of Viscount Cave LC in Swan v Sinclair [1925] AC 227 (“Swan”) (at 237):

22. [52]

    This statement needs to be treated with caution. In Swan, the origin of the alleged easement was various agreements entered into in 1871 to create an easement, which were held not to have been given effect. At the time those agreements were entered into, the easement was not trafficable due to a substantial garden wall dividing the lots. Lord Wrenbury described the position as follows (at 243 to 244):

23. [53]

    His Lordship later described Swan as a case that did not involve abandonment of an easement by acquiescence “but a case of acquiescence in the non-performance of acts … necessary to be done before the right can possibly be exercisable” (at 245).

24. [54]

    Given this aspect of Swan, it is not surprising that in Williams (at 256) the Court of Appeal cited the following passage from the dissenting judgment of Sir Ernest Pollock MR in the Court of Appeal in Swan v Sinclair [1924] 1 Ch 254 (at 266) as a correct statement of principle concerning abandonment:

25. [55]

    This ground contends that the primary judge erred in finding that the Respondents “manifested an intention not to abandon the right of way from December 2010 onwards” (see [39] and [40] above). [47] The Appellants’ principal complaint is that his Honour erred in finding that the Respondents “went to the trouble” of having the right of way noted on their title in 2010 and that such conduct was “itself sufficient to manifest an intention to retain the benefit of the right of way, and to negative abandonment”. [48] The Appellants contended that “[t]aking steps to ensure … a Certificate of Title is accurate is not of itself sufficient to ‘manifest’ an intention not to abandon a right of way”, especially in circumstances where no further steps are taken to assert the right of way.

26. [56]

    The findings and evidence concerning the steps taken by or on behalf of the Respondents in relation to the notation of the right of way on the Certificate of Title to Number 8 are set out above. Ms Munro clearly knew of its existence from 2008 and specifically queried whether it would be noted on the Certificate of Title following the lodgement of the delimitation plan. With respect, his Honour was clearly correct to find that the Respondents “went to the trouble” of having it noted on their title. Moreover, contrary to the Appellants’ submissions, at least in this case, that act clearly did manifest an intention to retain the benefit of the right of way. In Treweeke, McTiernan J treated each of: the procuring of a survey to determine the “precise course of the right of way”; the owner’s agent informing each incoming purchaser of an apartment in the dominant tenement of the existence of the right of way; and correspondence from the registered owner complaining about the existence of the swimming pool, as evidence of intention to retain the right of way (at 285). Taking specific steps to record the existence of a right of way onto a certificate of title which is then available to anyone who searches the register is a very public form of affirmation of the existence of the right of way. The primary judge did not err in attributing significance to that act.

27. [57]

    I would reject ground 3.

28. [58]

    This ground is directed to the primary judge’s reasoning in failing to find an intention to abandon the right of way on the part of the Respondents by reason of their conduct from the time they purchased Number 8 in 2008 apart from the registration of the delimitation plan.

29. [59]

    The relevant part of the primary judge’s reasoning is set out above (at [39]). [49] The Appellants contended that that reasoning is affected by two errors. The first contention was that the authorities make it clear that the “non-user of a right of way can be highly pertinent to the issue of abandonment”. The authorities relied on by the Appellants in support of that contention include Swan, which has already been addressed, and Chiu v Healey [2003] NSWSC 857 where Young CJ in Eq (at [36]) noted that “[l]ong non-user will be good evidence, but will not necessarily be sufficient to establish abandonment” (citing Swan; Treweeke and Proprietors Strata Plan 9,968 v Proprietors Strata Plan 11,173 [1979] 2 NSWLR 605). The Appellants contended that “[c]ontrary to the [primary judge’s] findings” the Respondents non-user between 2008 and 2018 was “good evidence” of abandonment.

30. [60]

    This complaint mischaracterises the primary judge’s reasons. His Honour did not reject the contention that non-user was capable of being “good evidence” of abandonment and did not otherwise treat it as neutral on the question of abandonment. Instead, consistently with the authorities, his Honour treated it as insufficient in its own right and something that had to be considered with the other circumstances, including the positive steps taken by the Respondents in 2010 to have the right of way noted on the title to Number 8. Further, in this case, the Respondents’ non-user must be considered in a context where from the time they acquired Number 8 the right of way was not trafficable and there existed an alternative means of accessing the street, namely, through their front door (Treweeke).

31. [61]

    The second error contended for by the Appellants was said to be the failure of the primary judge to consider the combination of the Respondents’ non-user during the period from 2008 to 2018 with what the Appellants contended were “three affirmative steps” taken by the Respondents that disavowed the right of the way. Those three affirmative steps were: the replacement of the boundary fence without the installation of a gate; the installation of the knee wall against their own back wall in December 2013; and the construction of a garden shed in their own back yard that was said to be “close” to the boundary fence that would hinder access to the right of way.

32. [62]

    The primary judge found that the construction of the new paling fence was “indecisive” so far as intention to abandon was concerned (see [39]). [50] His Honour noted that the Respondents did not “regard the fence as permanent”. This was a reference to an earlier part of the judgment that recounted Mr Smith’s evidence that it was a “simple fence” built during renovations that became more expensive than anticipated and “constructed on the understanding that the question of access to the former laneway could be pursued at a later time”. [51] His Honour recounted that Mr Smith was challenged on this in cross‑examination but observed that his evidence was consistent with contemporaneous emails which were in evidence. Mr Sirtes was critical of this finding on the basis that the emails did not recount this understanding and his Honour was otherwise considering his subjective intentions rather than considering whether by his “acts or omissions [he] may reasonably be considered to have abandoned the easement”.

33. [63]

    There is some force in Mr Sirtes’ criticism. In June 2013, Mr Smith sent an email to the Appellants advising them that “[d]ue to a major hole in our cash flow” the fence had a “reduced design” which “[w]e can always revisit … when you do your reno[vations].” Neither that email nor any other referred to access to the laneway. However, that does not take the matter far. On his Honour’s findings the fence was not permanent. It was a wooden paling fence which cost little to modify (or even to remove). The same applies to the steel post noted above. The fence and the post were no different in substance to the fencing considered in Treweeke which included fencing erected on the land of the owner of the dominant tenement (see also Ashoil Holdings Pty Ltd v Fassoulas (2005) 12 BPR 98195; [2005] NSWCA 80 at [54] and [57] per Tobias JA; “Ashoil”). The form of the fence that was constructed in this case was very much consistent with a lack of an immediate intention to use the right of way, something that was not surprising given that it was not trafficable. However, the construction of the fence was little, if any, evidence of a permanent intention to abandon the right of way especially as it was built so soon after the Respondents took active steps to have the right of way recorded on the title.

34. [64]

    The primary judge was dismissive of the construction of the shed as manifesting an intention to abandon the right of way. His Honour found that it was of “less significance” than the fence (see [39]). [52] His Honour found that the shed was constructed in 2015 and removed in 2019. Beyond that, there were no primary findings of fact made by the primary judge which would undermine his Honour’s conclusion and none were sought on appeal. The Appellants contended that the fence was so close to the boundary fence that it “hinder[ed] access to the right of way”. There was no finding to that effect but even if there were, it was the lack of permanence of the shed that warranted his Honour’s findings.

35. [65]

    As noted, the knee wall extends to the edge of the former laneway on Number 8’s side of the fence. At that point, its width is 41.5cm compared to a width of 1.045m for the right of way. [53] A photograph in the primary judgment suggests it impedes access to the right of way but does not preclude access. [54] When addressing obsolescence the primary judge found that it would be necessary “to install a gate and perhaps undertake further works such as removing the steel post and modifying the knee wall, so as to provide access”. [55]

36. [66]

    Overall, the Appellants relied on the passage from the judgment of Mason J in Treweeke noted above (at [45]) (even though that proposition concerned acquiescence in acts by the owner of the subservient tenement whereas in this case the Appellants did not own the L-shaped strip until 2018). The Appellants contended that this was not an instance of the owner of the dominant tenement merely consenting to the erection of a fence over the right of way but an instance where the Respondents instigated the further obstruction of the right of way through actions they carried out on their land. However, at the risk of repetition, in a context where the Respondents had relatively recently taken “active steps” to record the right of way on their title, the erection of those non‑permanent features did not manifest an intention to abandon the right of way.

37. [67]

    There was no error in the primary judge’s approach. I would reject ground 3.

38. [68]

    Ground 4 of the appeal concerns that part of the primary judge’s reasons from [187] to [191] and [194] which are set out above. The Appellants contended that the primary judge erred in “assessing the issue of abandonment by reference to the Respondents’ conduct after they were notified of the Appellants’ application for possessory title in November 2018 and their statements made in the course of the proceedings regarding their intentions for future use of the right of way”. The Appellants contended that his Honour should have addressed abandonment by reference to an objective consideration of the Respondents’ conduct from the time they purchased Number 8 “to the time of the dispute”. The submissions contended that his Honour wrongly placed weight on the Respondents’ future intentions in relation to the right of way in that his Honour had previously noted that the Respondents gave evidence of an “ongoing wish” to be able to use the former laneway as a right of way for such reasons as carrying sporting equipment, household goods and bulky items. [56]

39. [69]

    The Appellants further contended that the effect of [190] of the primary judgment was that no (contested) claim for abandonment could ever succeed because any assertion by a dominant owner that they have an intention to use an easement will be “sufficient to thwart a claim for abandonment, regardless of the fact that the assertion may have been expressed only after a dispute has arisen (or, as in the present case, in the course of evidence in the proceedings).”

40. [70]

    These contentions do not accurately reflect his Honour’s reasoning in [187] to [191] and [194] of the primary judgment. Three matters should be noted. First, while it is correct that elsewhere in his Honour’s reasons reference was made to the Respondents’ intention to use the right of way, his Honour did not consider that aspect of their evidence in this part of the reasoning. Instead, in the paragraphs of the judgment set out at [39] and [40], his Honour considered the acts and statements of the Respondents between 2018 and the commencement of the litigation.

41. [71]

    Second, although it is not entirely clear, I do not understand that [187] to [191] of Sheppard involve his Honour assuming that, leaving aside s 89(1A), if an abandonment for the purposes of s 89(1)(b) at some point prior to 2018 had been established, then the power conferred by that provision would not arise because of some acts or statements by the Respondents thereafter that positively manifested an intention to retain the right of way. If that were the basis upon which his Honour acted, then I would have strong doubts that that is the correct construction of s 89(1). I cannot discern anything in the judgment of Mason J in Treweeke which supports that approach. However, I do not understand that his Honour construed s 89(1) in that way. Instead, I understand that [187] to [191] of the primary judgment involve his Honour completing the narrative of the conduct of the Respondents from 2008 onwards. In effect his Honour found that: they took active steps in 2010 to have the right of way noted on the title; the work they did on Number 8 from that time to 2018 did not manifest an intention to abandon the right of way; and their conduct from 2018 also manifested a positive intention to retain it and exercise it.

42. [72]

    Third, in [194] of the primary judgment his Honour addressed s 89(1A) in the context of an earlier finding that there must be a 20-year period of uninterrupted non-user before the application is made. The Appellants did not challenge that construction of s 89(1A). Given that construction, his Honour’s finding that from 2018 there was an “unmistakeable” intention not to abandon the right of way was fatal to the Appellants’ reliance on s 89(1A).

43. [73]

    I would reject ground 4.

44. [74]

    Ground 5 is directed to the primary judge’s findings regarding the lengthy period of non-user of the right of way prior to the Respondents’ acquiring Number 8 when considered with the Respondents’ conduct after they acquired ownership. To the extent this ground concerns the Respondents’ conduct, it adopts the complaints made in relation to grounds 2, 3 and 4 which have already been rejected. The balance of the ground concerns the fourth part of the primary judge’s reasoning on abandonment summarised above (at [37] to [38]).

45. [75]

    The Appellants’ submissions referred to the primary judge’s findings that the fence between Number 6 and Number 8 was present for “decades”, that there was no evidence that Ms McJannet ever used the right of way or asserted any right to do so and the right of way was not readily trafficable due to the obstacles constructed on behalf of the owners of Number 6. Based on those findings, the Appellants contended that the primary judge erred in characterising Ms McJannet’s period of ownership as only involving non-user. In particular, the Appellants contended that the primary judge erred in:

46. [76]

    The difficulty with this contention is that it overlooks that his Honour’s characterisation of the period of ownership of Number 8 by Ms McJannet as involving non-user followed from an absence of evidence about her conduct during that period. Hence, contrary to this submission, it was not established that she “did not assert” any entitlement to use the right of way. Instead, his Honour only found that there was “no evidence” that Ms McJannet did so. [57] His Honour also found that it was “impossible to say whether [Ms] McJannet was even aware of the right of way.” [58] Similarly, his Honour found that there was “no evidence” of any objection by Ms McJannet to the obstacles that were constructed on Number 6 “but no evidence of any encouragement by her either”. [59] An absence of evidence of an assertion of an entitlement to a right of way and objection to obstacles being built on the right of way, when coupled with an absence of evidence of knowledge to the right of way does not translate to a finding of acquiescence.

47. [77]

    Otherwise, his Honour found that what was known about the fence between the two properties during the period of Ms McJannet’s ownership of Number 8 was no different to the fences considered in Treweeke. I see no error in that approach.

48. [78]

    The balance of the Appellants’ submissions on this ground contended that the long period of Ms McJannet’s non-user coupled with her acquiescence in acts adverse to the right of way justify the application of the approach stated by Viscount Cave LC in Swan. As noted, the primary judge’s findings do not support a suggestion of acquiescence and caution should be exercised in relying on that passage from Swan.

49. [79]

    I would reject ground 5.

Obsolescence

1. [80]

   Section 89(1)(a) of the CA empowers the Court to modify or wholly or partially extinguish an easement upon being satisfied:

2. [81]

   The primary judge described this provision as containing two limbs. The first is whether by change in use of any land having the benefit of the easement it “ought to be deemed obsolete”. [60] The second is whether the continued existence of the easement would impede the reasonable user of the Appellants’ land without securing any practical benefit to the Respondents. The primary judge did not accept that either limb was established. [61] The Appellants’ written submissions appear to only take issue with the finding in relation to the first limb, although the oral submissions travelled further.

3. [82]

   In relation to the first limb, the primary judge addressed and rejected a submission that the right of way became redundant when sewerage connections were built in 1908. His Honour found that it was not shown that that was the right of way’s only purpose. His Honour considered that the critical factor was the terms of the grant of the right of way which was not limited; it was a “right of way for any lawful purpose” not limited to the removal of nightsoil; it was a “general right of way”. [62] In a passage that is the subject of criticism in the Appellants’ written submissions, the primary judge observed: [63]

4. [83]

   In relation to the second limb, his Honour found that the Appellants had to demonstrate that no reasonable user of their land was possible and merely having a “‘compressed’ backyard” would not have satisfied that test. [64] His Honour was also not satisfied that there was a lack of practical benefit secured to the Respondents in maintaining the easement given that they had expressed a wish to use the right of way which his Honour found to be genuine. His Honour observed that, although the Respondents might have to pay for work to be done to make the passage trafficable, that did not mean that the right of way did not secure a practical benefit to them. [65]

5. [84]

   Ground 6 of the notice of appeal contends that the primary judge erred in finding that the easement was not obsolete.

6. [85]

   The written submissions in support of this ground contended that the primary judge’s finding on obsolescence relied on two findings in the last sentence of the extract set out above (at [82]), namely, that the fact that expenditure may be required to make a right of way readily trafficable “does not mean that it is useless” and an acceptance of the Respondents’ intention to restore the right of way to its former condition as a rear access laneway. This appears to relate to the primary judge’s findings on the first limb of s 89(1)(a) concerning obsolescence.

7. [86]

   In relation to that limb, by reference to the judgment of this Court in Durian (Holdings) Pty Ltd v Cavacourt Pty Ltd (2000) 10 BPR 18,099; [2000] NSWCA 28 (“Durian”), the Appellants contended that the primary judge ought to have concluded that the right of way was obsolete “because of changes in the user of the land having the benefit of the easement and in the character of the neighbourhood” together with the lengthy period of non-user, the physical obstructions on Number 6 and the Respondents’ so‑called “affirmative steps to disavow use of the right of way in constructing the new boundary fence, the concrete knee wall and the shed”.

8. [87]

   In Durian (at [3]), Mason P adopted a statement of Jacobs J in Re Mason and the Conveyancing Act [1962] NSWR 762 at 764; (1960) 78 WN (NSW) 925 (“Re Mason”) concerning the approach to obsolescence as follows:

9. [88]

   Then in a passage cited by the primary judge, Mason P observed (at [4]):

10. [89]

    In Durian, the grant of the right of way in 1964 was by its terms limited to obtaining “reasonable access to the public highways adjoining the servient tenement” (at [20]). At the time it was granted the dominant tenement was “virtually landlocked” from accessing the public highway without the easement. In the years that followed, alternative access was made available and town planning restrictions made the use of the easement impossible (at [23]). Justice Meagher described the latter as the “greatest factor tending towards obsolescence”. His Honour also considered that the fact the easement was not used for the stated purpose and the owner of the dominant tenement constructed significant physical obstructions to the use of the easement. Even allowing for the “heaviness of the onus” borne in relation to obsolescence, Meagher JA found that the easement should be extinguished (at [27]-[29]).

11. [90]

    Both Mason P and Stein JA agreed. President Mason addressed one part of the primary judge’s reasoning in Durian as follows (at [11]):

12. [91]

    Later, in addressing the extent to which the right of way may benefit the dominant tenement Mason P observed (at [13]):

13. [92]

    Returning to the submission noted above (at [86]), Durian does not provide any assistance to the Appellant. The critical factors pointing to obsolescence in Durian were the limited nature and purpose of the right of way and that subsequent events rendered the use of the right of way unable to achieve that purpose, specifically the provision of access by other means and the imposition of planning controls that rendered it unable to be used. The non-use and construction of impediments simply confirmed that obsolescence. In this case there was nothing in the terms of the grant of the right of way or anything else that warrants any finding that the purpose of the right of way was restricted. Otherwise, leaving aside the construction of sewer lines, there has been no relevant change in the “character of the neighbourhood” as contended for by the Appellants (cf Ashoil at [63]).

14. [93]

    As noted, the Appellants also contended that the primary judge erred in relying on the Respondents’ intentions in relation to the right of way. Relying on the passage from Durian set out above (at [90]), they contended that the subjective “asserted intentions” of the owners of the dominant tenement were irrelevant. However, as the above makes clear, the relevant subjective opinion in Durian that was irrelevant was that the right of way was a “selling point”. A genuine intention to use the right of way is not irrelevant at least when accompanied by a realistic means to make the right of way trafficable (Durian at [13]). That is what his Honour found in this case.

15. [94]

    In relation to the second limb of s 89(1)(a), in oral submissions Mr Sirtes contended that, if the Court concluded that the purpose of the right of way was limited to the removal of “nightsoil”, then the continued existence of the easement would not secure any practical benefit to the Respondents. As I am not satisfied that the right of way was so limited, that contention falls away.

16. [95]

    I would reject ground 6.

Lack of Substantial Injury

1. [96]

   Section 89(1)(c) of the CA empowers the Court to order the extinguishment of an easement where “the proposed modification or extinguishment will not substantially injure the persons entitled to the easement”.

2. [97]

   The primary judge cited Jacobs J in Re Mason at 928 as authority that the word “substantial” in s 89(1)(c) means not “large or considerable, but rather … non-theoretical or having present substance.” The primary judge ultimately found: [66]

3. [98]

   Ground 7 of the Amended Notice of Appeal provides:

4. [99]

   Consistent with this ground of appeal, the Appellants’ written submissions contended that the primary judge’s approach as set out above placed too high a burden on them as the party seeking extinguishment. They contended that there was no basis in the authorities for requiring the use of the easement to be “so remote” and the financial value “so small” as to be of no present substance. I do not understand that his Honour intended those phrases to be some form of substitute for the approach stated by Jacobs J in Re Mason. In a case involving a right of way which is not trafficable and has not been used for some time, I understand that the use of the phrases was meant to convey nothing more than the necessity to undertake an evaluative exercise as to whether the extinguishment of the easement would not substantially injure the Respondents.

5. [100]

   The balance of the written submissions reiterated the length of the period of non-user and the obstructions on the right of way as somehow demonstrating a lack of substantial injury from extinguishment. In oral submissions, Mr Sirtes contended that the fencing of the easement for a number of years and the taking of steps to impede the use of the right of way “could be seen as an admission against the owners … of the dominant tenement that the easement had no substantial value, utility or advantage.” The contention that those acts constitute an “admission” is a novel one and does not appear to have been made at first instance. In any event, the contention could not travel any higher than the reliance on these acts in relation to abandonment. If the Respondents’ actions do not amount to proof of a permanent intention to abandon the right of way, then they equally do not amount to an admission that the right of way has no substantial value or utility. Even if they were admissions to that effect, they could not be binding and are inconsistent with the primary judge’s findings that the Respondents had a genuine intention to use the right of way. [67]

6. [101]

   I would reject ground 7.

Conclusion

1. [102]

   It follows that I consider the appeal must be dismissed. I propose the following orders:

2. [103]

   BASTEN AJA: I agree with Beech-Jones JA.