Eddy Gross v Graham Leslie Greer & Anor

These proceedings concern adjoining properties in Coffs Harbour – one known as Lot 21 (also known as 266 Shepherd’s Lane) and the other known as Lot 63 (also known as 266A Shepherd’s Lane). The Plaintiff, Mr Eddy Gross, owns Lot 21 and Mr and Mrs Greer, the Defendants, own Lot 63. The Plaintiff purchased Lot 21 in 2002 and the Defendants purchased Lot 63 in 2006.

The Plaintiff (for whom Mr P. O'Loughlin of Counsel appears) claims that Lot 63 is burdened, and Lot 21 benefited, by an easement approximately 20 metres wide being a right of carriageway (“ROC”). He contends that, without the easement, he is not able to access Lot 21 other than by dint of favours granted to him by the owners of Lot 20, which adjoins his property to the east. The Defendants (for whom Mr C. Cassimatis of Counsel appears) resist the Plaintiff’s claim. I shall detail the issues for determination in more detail below, but first I will set out the history of the two lots.

Originally, the subdivision consisted of six Lots – Lots 1, 2, 3, 4, 5 and 6. The Lots are so described in DP239525. That deposited plan (“DP”) shows a ROC bordering Lots 1, 6, 2, 3, 4 and 5 and passing through Lot 2. The DP lodged in 1971 bears the following notation:

Instrument M243988 sets out a table of which Lots are burdened and benefited:

In 1979 a new DP was lodged, DP605703. It subdivided Lot 6 into Lots 61 and 62. It contained no details in the right-hand panel beneath the words, ‘Panel for use only for statements of intention to dedicate public roads or to create public reserves, easements or restrictions as to under.’ DP605703 did, however, contain a clearly marked ROC in the same form as the previous DP (DP239525).

In 1983 a new DP was lodged, DP628407. It showed that Lot 62 had become Lots 63 and 64. It also showed the ROC.

In 1991 a new DP was lodged, DP811472. It showed that Lot 61 was subdivided into Lots 21 and 20. It is described by the parties to be a ‘Boundary Adjustment’, and it showed the ROC in the same form as previously.

The ‘Boundary Adjustment’ relates to a very small triangle of land at the north-western corner of Lot 20, which was transferred to Lot 21 (“the Triangle Transfer”). The Triangle Transfer has some significance to a secondary argument of the Plaintiff, which I will elucidate later.

It will be seen from the above history that:

Exhibit E is a bundle consisting of copies of Certificates of Title. I set out the relevant contents of the Second Schedule in the Certificate of Title (“CT”) for each Lot:

The Defendants accept that, as at 1977, Lot 1 was burdened by the ROC in favour of Lot 6 and that Lot 6 was burdened by the ROC in favour of Lots 2, 3, 4 and 5. What they assert, however, is that Lot 62 was never burdened by the ROC in favour of Lot 61 and that Lot 63 (created from Lot 62) was never burdened by the ROC in favour of Lot 21 (created from Lot 61). No ROC, it was asserted, was ever created to benefit Lot 61 or Lot 21.

The CT for Lot 21, contained in the Court Book (“CB”) at p 41, states that there is an easement in favour of Lot 21, namely the easement described in DP239525.

I set out the presently relevant terms of ss 3, 42 and 51 of the Real Property Act 1900 (NSW) (“Real Property Act”) and ss 88, 88B, 89, 181A of the Conveyancing Act 1919 (NSW) (“Conveyancing Act”), which bear upon the questions now before this Court:

Mr O'Loughlin pointed to the fact that the ROC referred to in DP239525 and M243988 has never been released, varied or modified by any subsequent DP or memorandum. He also pointed out that if an easement is registered on the servient title, it is indefeasible: see Chiu v Healey (2003) 11 BPR 21,241 at [24] per Young J (as his Honour then was); see also Parramore v Duggan (1995) 183 CLR 633 at 636 per Brennan J (as his Honour then was).

Reference was made in submissions to two High Court easement cases, Gallagher v Rainbow & Ors (1994) 179 CLR 624 (“Gallagher”) and Westfield Management Ltd v Perpetual Trustee Company Ltd (2007) 233 CLR 528 (“Westfield”).

In Gallagher, the Appellant was the owner of a lot in a subdivision (Lot 14) which had the benefit of an easement from her property to a public road. The other lots, Lots 15, 16 and 17, had the same benefit and this was achieved by each lot owner owning one quarter of the private road and granting an easement to each of the other owners over that one quarter. The owners of Lots 16 and 17 decided to subdivide their land into three lots, with the intention of the newly created lots using the easement. Ms Gallagher contended that the owners of the newly created lots could not use the easement previously created. The trial judge relevantly held that the respondents were entitled to use the right of way only for the undivided properties comprising of Lots 16 and 17. The Queensland Court of Appeal held that the benefit of the easement would attach to the dominant tenements in their subdivided form. That is, the newly created lots, which were created as a result of the subdivision of Lots 16 and 17, could benefit from the easement. The majority, Brennan, Dawson and Toohey JJ, held that the Court of Appeal was correct. Gaudron and McHugh JJ dissented.

In Gallagher, the form of the easement described the right of way as being “for all purposes ordinarily incidental to or connected with domestic use and enjoyment of the dominant tenement or any part thereof” (emphasis added). The word ‘grantee’ used in the instrument creating the easement was defined to include “the transferees and assigns and as well as the occupier or occupiers for the time being of the dominant tenement.”

The majority in the High Court agreed with the view taken by the Queensland Court of Appeal (per Thomas J, with whom Pincus JA and McPherson J agreed) and noted that the terms of the easement were consistent with the prospect of subdivision. They also noted that the easement contained no prohibition against transfer of a subdivided lot and said (at 632-633):

The present case is quite different to Gallagher. Here, the easement crossed through the undivided lot (i.e. Lot 6). When Lot 6 was divided into Lots 61 and 62, Lot 6 would, on the authority of Gallagher, still have the benefit of the ROC vis-a-vis Lot 1, and Lot 61 would continue to have the burden of the ROC vis-a-vis Lots 2, 3, 4, and 5. Gallagher is not a case where a new lot was created, which new lot required an easement over another new lot to reach a road or an existing easement. Here, the question is whether Lot 63 will have the burden vis-à-vis Lot 21 and whether Lot 21 will have the benefit vis-à-vis Lot 63 (these being the relevant Lots following subdivision, firstly of Lot 6 and then subsequently of Lots 61 and 62).

In Westfield, Westfield owned a commercial multi-storey property known as ‘Skygarden’ and Perpetual Trustee owned a similar property known as ‘Glasshouse’. Glasshouse fronted King Street and a pedestrian mall in the heart of the Sydney CBD. Skygarden abutted the mall but did not have vehicle access. Skygarden had the benefit of an easement in the form of a vehicular ramp across and beneath Glasshouse to the boundary of the Skygarden land. Westfield purchased two properties next to Skygarden known as ‘Centrepoint’ and ‘Imperial Arcade’, and it wanted to be able to use the easement for vehicular access to a new shopping centre to be created using Centrepoint and Imperial Arcade.

The High Court in Westfield (Gleeson CJ, Gummow, Kirby, Hayne and Heydon JJ) held that the easement, properly construed, did not permit Westfield to go beneath Glasshouse and beyond Skygarden in order to reach Centrepoint and Imperial Arcade. This was on the basis that the terms of the instrument did not provide for travel across the dominant tenement to land owned by Westfield beyond Skygarden. That, it was held, would impose a burden greater than that which the servient tenement owner had agreed to accept. The High Court also indicated that recourse to extrinsic material to establish the intention or contemplation of the parties to the instrument creating the easement was not admissible and contrary to the principles of the Torrens System, relevantly stating (at [5], p 531):

It follows from Westfield that what was said by the Coffs Harbour Shire Council (“the Council”) (see CB, p 322) and what was within the mind of the surveyor or Mr Lockett, who prepared the DP, are not relevant in determining whether or not an easement burdening Lot 63 was created in favour of Lot 21.

Section 181A of the Conveyancing Act provides for the use of what Butt’s Land Law (B. Edgeworth, Thomson Reuters, 7th ed, 2017) at [9.260] refers to as ‘short form easements’, whereby standard terms of an easement are incorporated by virtue of Schedule 8 of the Conveyancing Act. The imported words for a ROC are:

Section 88(1) of the Conveyancing Act requires that the instrument creating the easement must clearly indicate:

In Papadopoulos v Goodwin [1982] 1 NSWLR 413 (“Papadopoulos”) at 416-418, it was held that there would be sufficient indication of these matters if the instrument creating the easement referred to another document containing that information. Wootten J explained that the purpose of the requirements in s 88(1) of the Conveyancing Act was to protect purchasers from notice of easements unless certain conditions were complied with. These conditions were designed to require a clear statement as to where the various rights and obligations arising out of the easement lay so as not to include matters that do not clearly appear from the instrument itself (or some other document by express reference). The Court of Appeal in Goodwin v Papadolpulos (1985) NSW ConvR 55-256 (“Goodwin”) reversed the decision at first instance and took the view that the transfer did not satisfy the requirements of s 88(1) (per Samuels JA, Mahoney JA and Priestley JA). Mahoney JA, at 56,417, said he agreed with Wootten J’s construction of the meaning of ‘clearly’, which was put by Wootten J in the following terms (Papadopoulos at 417 para [B]-[C]):

The Court of Appeal in Goodwin expressly left open the question of whether reference in an instrument to another document which did comply with s 88(1) was sufficient (per Priestley JA at 56,418-56,419, with whom Samuels JA concurred). I shall proceed on the basis that reference to another identified DP or memorandum of dealing which clearly indicates the land benefited and land burdened, in accordance with s 88(1) of the Conveyancing Act, is sufficient.

A third party looking at DP239525, which created the easement, when read with M243988, to which DP239525 refers, would be in no doubt as to which lots referred to therein were benefited and burdened. The problem is that Lots 21 and 63 are not mentioned in either the DP or the memorandum of dealing creating the ROC because, at the time of the lodgement, those Lots had not been created. Neither DP239525 nor any of the other DPs provide that Lot 62 (or Lot 63) is burdened with an easement in favour of Lot 61 (or Lot 21).

The CT for Lot 21, when read with DP239525, to which it refers, makes it clear that Lot 21 has the benefit of an ROC because the Second Schedule refers to an easement appurtenant to Lot 21 and to DP239525 and it is clear that the ROC must be the ROC shown on the DP next to the southern boundary of Lot 21. I think it is clear that Lot 63 is burdened by an ROC and examination of DP239525 will reveal that Lots 2, 3, 4 and 5 benefit from that ROC, but what is not at all clear is that Lot 21 (or previously Lot 62) is to benefit from the ROC. As Gale on Easements (Sweet & Maxwell, 20th ed, 2017) points out at [1-10]:

I do not think it would be clear to a third party examining the CT for Lot 63 (even having regard to DP239525 and M243988) that Lot 21 is to benefit from the ROC depicted in DP239525. Therefore, DP239525 does not meet the criteria for validity imposed by s 88(1) of the Conveyancing Act in so far as Lot 63 is concerned. None of the other DPs change that position because they do not by their terms seek to create an easement expressly or by reference to another document. I accept Mr Cassimatis’ submission that, in order for that new benefit and burden to be granted and imposed, a new instrument creating an easement between the two new lots was required.

Essentially, the Plaintiff contends that because Mr Borsato, the owner of Lot 20, in 1991 effected the Triangle Transfer to Mr Ferguson, the predecessor in title to the Plaintiff, this gave to the Plaintiff the right to use the ROC and to do so from any point of his property.

The Plaintiff relies on Gallagher for the principle that the ROC was for the benefit of all points of Lot 20, and when the triangle was transferred to Mr Ferguson that gave the owner of Lot 21 the right to access the ROC.

The ROC, if it was transferred, was the right to pass along the ROC from a point on Lot 20, not from a point to the north of what was Lot 20. As Mr Cassimatis contended, there is a real question about whether the ROC could be viewed as continuing to benefit the transferred portion of Lot 21 (and see Re Maiorana and the Conveyancing Act [1970] 1 NSWR 627 at 634). However, I think the more direct answer to the Plaintiff’s contention is that there is no instrument which records the benefiting of Lot 21 by the ROC or the burdening of Lot 63 as a consequence of the Triangle Transfer, with the consequence that the transfer (if it was an instrument creating an easement in favour of Lot 21) did not meet the requirements of s 88(1) of the Conveyancing Act.

Mr O’Loughlin contended that, if there was an easement benefiting the Plaintiff by virtue of the Triangle Transfer, the Court could, by virtue of s 89 of the Conveyancing Act, modify the easement to permit access from the southern boundary of Lot 21, rather than its north-eastern boundary. Given my conclusion that no easement in favour of Lot 21 was granted burdening Lot 63, s 89 cannot assist the Plaintiff.

Section 51 of the Real Property Act has the effect that when the previous owner sold Lot 21 to the Plaintiff all of that owner’s rights were assigned to the Plaintiff. However, given that the previous owner of Lot 21 did not have the benefit of an easement, the assignment did not create such an interest in the Plaintiff or pass with the land.

The Plaintiff contended that if he did not have the benefit of the ROC by reason of the Register, the Court should find that the Defendants were estopped from asserting that the Plaintiff could not use the ROC because he had been doing so since 2006. In making this submission, the Plaintiff conceded that any such right did not travel with the land but had become a right inter partes: see T35.50-36.04. The estoppel claim was based on the following elements:

In relation to [35(5)], I should note that even in 2008 there had been unpleasant confrontation between the parties over clearing and earthworks on the ROC, which was said to impact on the Plaintiff’s land. A mediation subsequently took place, the rather inconclusive result of which is found at CB, p 61. In 2017, confrontation resumed with the Defendants seeking to prevent the Plaintiff from using the ROC. The Plaintiff gave no evidence that the result of the mediation in 2008 led him to believe that he had the right to use the ROC and the agreement recorded at CB p 61 does not refer to the use (past, present or future) of the ROC by the Plaintiff.

Mr O'Loughlin relies on the enunciation of the elements required for equitable proprietary estoppel in Rixon v Horseshoe Pastoral Co Pty Ltd [2017] NSWSC 1293 at [57]-[59] per Brereton J (as his Honour then was) (see also Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387 at 423, 428-429 per Brennan J):

The Defendants do not dispute, or at least do not seek to challenge [35(1)], [35(2)] and [35(4)]. In relation to [35(3)], Mr Greer’s evidence was that he did not see the Plaintiff using the ROC – the ROC is not visible from the Defendants’ home – but he did accept (contrary to his denial at T71.27-71.32) that he knew the Plaintiff was using the ROC in 2006-2008: see T73.41-74.01. In relation to [35(5)], it does appear that the Plaintiff’s complaint to the Council was part of the reason for the Defendants’ change of position. However, the Defendants also received legal advice informing them of their rights in relation to the ROC (see [39(3)] below).

The Plaintiff’s estoppel claim must, in my view, fail for the following reasons:

Whilst it is possible that the conduct of the owner of a servient tenant might give rise to a proprietary estoppel precluding that owner from denying the existence of an easement burdening the servient tenement, cases of that kind involve circumstances of a very different character to those here: see Bradbrook & Neave’s Easements and Restrictive Covenants (A. J Bradbrook & S. V MacCallum, LexisNexis Butterworths, 3rd ed, 2011) at [2.4]-[2.12]; Crabb v Arun District Council [1976] Ch 179 (sale of block of land on the express assurance that the remaining block would have access to the easement available to the first block); McDonald v Peddle (1923) 42 NZLR 987 (“Peddle”). In Peddle, the defendant, the owner of the servient tenement, raised no objection to the assignment to the plaintiff of rights in connection with an easement. The defendant was aware that the plaintiff intended to, and did, firstly, expend money on a new mill on his land and, secondly, lay down a tramway on his land that would connect to the tramway on the defendant’s land over which his assignor had had an easement benefiting the assignor’s land. The defendant was held estopped from asserting three years later that the assignment was not a good and valid transfer to the plaintiff. Indeed, Reed J held (at 1007-1008) that the assignment had created an “equitable interest” in the plaintiff’s favour and that on the facts the defendant had acquiesced in the assignment.

The Plaintiff had originally sought to promote an alternative case for a statutory easement, pursuant to s 88K of the Conveyancing Act. However, Mr O'Loughlin expressly abandoned this claim when opening his case: see T1.49-2.04.

The Plaintiff had also pleaded a claim in nuisance, but this was not pressed at the hearing.

It follows from the above that the Plaintiff has failed to establish a right to use the ROC. There should be judgment for the Defendants and the Plaintiff should pay the Defendants’ costs of the proceedings.