Armishaw v Denby Horton

Armishaw v Denby Horton - [2010] NSWSC 1321 - NSWSC 2010 case summary — Zoe

[15]

7 The easement served an important need in 1929. It was originally created to allow people living in the village of Rosedale to gain access to the nearest public road ("the old road"), which ran in a north - south direction and was located on a ridge line just west of the property. Curiously, the old road is only described in the evidence in these proceedings by the name "Road 100 Wide" and nothing more. The old road seems in the early twentieth century to have been an important means of travelling north and south by vehicle to get to and from Rosedale. However the old road's course was an inconvenient distance from Rosedale village. In the early twentieth century the old road would not have been quickly accessible to residents of Rosedale village without their seeking the permission of the property's owners to transit across the property. In the 1920's no other direct pedestrian or vehicular access existed from the old road to the village. There were probably more circuitous routes between the old road and the village at the time. What these may have been is no longer very clear on the evidence. Parts of the old road became Bevian Road, which continued to provide a route for some traffic between Malua Bay and Tomakin. The easement was used for both pedestrian and vehicular traffic until before the mid 1970's when such usage stopped. Changes to the local built environment account for the cessation of usage at this time. 8 George Bass Drive is now the major north-south highway in the Rosedale area. George Bass Drive was constructed between 1969 and 1975 east of the property and runs along the coast but between the property and Rosedale village. George Bass Drive does not make use of the route of the old road west of the property. Positioning George Bass Drive west of the village but east of the property meant that the Rosedale community and its visitors used the more convenient George Bass Drive not the less convenient easement for road access to and from the village. Pedestrian and vehicular access to the old road was no longer necessary.

[26]

16 The Rosedale valley includes portions 11,12, 32, 81, 98, 122, 213, 214 and 215 in the Parish of Bateman, County of St Vincent. These portions of about 40 acres each were set-aside during early European settlement, based on an administrative theory that a 40-acre parcel was an adequate living area for farming. Some of them can be seen in the rough sketch Figure 1 at the end of these reasons. The property, which was and still is known in the district as "Rosedale Farm" comprising portions 11 and 12 (now Lots 1 and 12) has been occupied for farming purposes, together with other adjacent lands, since about the 1870's. Amongst the many early pioneers of the area James and Wilhelmina Sebbens cleared the property and established on it a substantial and efficient farming, dairying and highly-regarded cheese-making operation from about 1870. James and Wilhelmina Sebbens left the area in 1908. The property was farmed by a number of subsequent owners until World War I. But they were less successful as the limitations of European farming methods on the poor clay and shale-based soils in the area became evident. 17 Prior to World War I travel to Rosedale had been by boat and bullock and horse drawn vehicles. The invention of the motorcar and the forming of local roads of reasonable quality opened up the Rosedale district to more visitors by the early 1920's. Nearby Broulee was being promoted as a popular seaside destination by the end of World War I. Rosedale attracted incidental tourist attention as a result. In the 1920's families travelled to Broulee by car for holidays both from Sydney and from Goulburn and the southern tablelands. Some of them camped, fished and holidayed at Rosedale. This early tourism to the area became well established and led to the emergence of an investor, Horace Benjamin O'Neil, who foresaw the possibility of future subdivision in the district. He purchased the property in October 1921 and leased it to tenants who continued to operate it as a dairy farm. He and group of Goulburn businessmen became the first subdividers of the property in 1929. Their subdivision seems to have been organised out of Goulburn as the solicitors who acted upon it practised in Goulburn. When the 1929 subdivision occurred it would be fair to describe the Rosedale district as a farming area visited by a few casual holidaymakers.

[28]

19 Five dealings created easements connecting the five different parcels of land, Lots 1,2,3,4, and 7, which lots constitute the dominant tenement for the southern rights of way. Transfers all dated 11 November 1929 created the easements from Horace Benjamin O'Neil to various persons from Sydney and Goulburn. The transfers were transfer B914851 (Lot 1) to Percival Reeve Holme, a retired engineer of Randwick, transfer B914852 (Lot 7) to John Edward Knowlman, a storekeeper of Goulburn, transfer B914853 (Lot 3) to Thomas Richmond Mallet a schoolmaster of Sydney, transfer B914854 (Lot 4) to Percy William Browne salesman of Sydney and transfer B914857 (Lot 2) to Andrew McDougall Watson a schoolmaster of Sydney. The northern Lots 5 and 6 were sold to a secretary and an architect from Goulburn. All the lots referred to are lots in DP16191, which is further described in the transfers as consisting of parts of Certificate of Title volume 1849 folio 109 and Certificate of Title 1886 folio 63. 20 After World War 2, in 1946 a Kathleen Wilhemina Jolly became the registered proprietor of the property and other lands all then known as Rosedale Farm. She began to further subdivide it through transfers in 1949 that created more rights of way in favour of new subdivided parcels of land. These new rights of way ran adjacent to the course of the original 1929 rights of way across her land. On 21 October 1949 by transfer F116322 she transferred more land out of the original Rosedale Farm, which by then had become the land comprised in Certificate of Title volume 4427 folio 57. The land she transferred was Lots 2 and 3 in DP21641 and was transferred to Margaret Friend. 21 At the same time in 1949 Kathleen Wilhemina Jolly transferred by transfer F58442 other subdivided land being another part of Certificate of Title volume 4427 folio 57 to Leslie Harold Stewart and Eileen Beatrice Stewart. The land so transferred was a substantial part of the original Portion 11, Portion 12 and Portion 122 plus other lands. In this same transfer F58442 she also reserved for the benefit of the residue of the land described in Certificate of Title volume 4427 folio 57 a right of way adjacent to and parallel with the right of way created in the earlier transfers B914851, B914852, B914583, B914855, B914584, B914857 and F116322 so as to be become part of the rights of way collectively referred to as "the southern rights of way" or "the easement". Subdivision of the Dominant Tenement and the Building of George Bass Drive 22 The five parcels of land that Horace O'Neil transferred in 1929 together with the land Kathleen Wilhemina Jolly transferred in 1949 to Margaret Friend and the residue of the land in respect of which she reserved rights of way over the property have all been subdivided many times in the last sixty years as South Rosedale developed as a holiday destination. The larger properties within the dominant tenement have been sub-divided extensively since 1929. This subdivision accelerated after George Bass Drive opened up South Rosedale.

[30]

24 A brief summary of the course of that further subdivision of the dominant tenement shows how substantial the subdivision has been and how many of the resulting certificates of title do not refer to the easement. The summary also shows the difficulty that the plaintiff would have encountered in trying to find and contact each one of the registered proprietors of the subdivided dominant tenement. 25 It is convenient to analyse the parcels of land derived from each of the lots that Horace O'Neil transferred in 1929 and that Kathleen Jolly transferred or reserved in 1949. These subdivisions can be seen from a cadastral plan of the area. There have also been amalgamations of land with other parcels, which makes anything more than a summary description of these subdivisions impossible. First the land Horace O'Neil transferred was subdivided. Lot 1 in DP 16191 has now become 5 parcels in separate ownership. Lot 7 has now become 2 parcels in separate ownership. Lot 3 has been partly amalgamated with other land and the southern rights of way have been released in respect of the remaining parcel. Lot 4 has also been the subject of amalgamation and has become one parcel. Lot 2 has now become two parcels. The plaintiff's evidence shows that there are now 14 registered proprietors and 2 mortgagees of land originally transferred by Horace O'Neil. 26 But the great mass of subdivision occurs in relation to the land that Kathleen Jolly either transferred or reserved in 1949. The land transferred in transfer F116322 has now become two parcels in separate ownership. After transfer F58442 a further 15 transfers of subdivided land from Certificate of Title Volume 4427 Folio 57 occurred. These were all part of the residue of the land, which had the benefit of the adjacent and parallel rights of way in transfer F58442. The land transferred in these 15 transfers has itself now been subdivided and all the derivative titles would have the benefit of the southern rights of way. There are many of these. The plaintiff's research has found 79 of these allotments. After Certificate of Title Volume 4427 Folio 57 was cancelled and replaced by Certificate of Title Volume 6987 Folio 231 more land was subdivided and transferred that would have the benefit of the southern rights of way by reason of the original reservation in F58442. Because of the quantity of these further transfers the plaintiff has not undertaken a search to ascertain all the derivative titles. However the plaintiff estimates that there are more giving a total quantity of no less than 116 and possibly many more than that number. Given the volume of titles that emerged from this search process the plaintiff applied to Barrett J and myself to advertise notice of the application rather than individually serve these registered proprietors.

[36]

35 Direction hearings were held before Barrett J on 18 and 27 May 2009 to determine the appropriate form of public notice of this application. Neither Barrett J, nor I in the later directions hearings, ordered that notice be given to individual registered proprietors of the benefited land. Possibly several hundred such notices would have been required. All persons living in South Rosedale were affected in much the same way, if they were affected at all, by a successful application. Directions were made for the giving of notice to persons resident in or identifying with South Rosedale who might appear to oppose the application. Barrett J made orders for the notification of the Eurobodalla Shire Council and advertising of the application in two local newspapers. 36 The Council was notified and the notices were published in two local newspapers, published by Rural Press, The Bay Post Moruya Examiner and the Independent in accordance with Barrett J's orders. These orders required publication of the advertisements on two occasions at weekly intervals in a period of four weeks and in a reasonably prominent position. The advertisements contained a copy of the rough sketch Figure 1 attached to these reasons. These advertisements were in substantially the same form as the later advertisement of the 7 December hearing which appears later in these reasons. 37 A further procedural hearing took place on 28 August 2009 to determine what further notice should be given to persons possibly affected by the proposed orders. At the conclusion of the 28 August hearing the matter was adjourned on the basis that Rosedale Farm could re-list the matter once it had undertaken further investigation of the Rosedale Association Inc and made further inquiries of the Council. A final directions hearing took place on 5 November 2009. The plaintiff's investigations with the Council and the Rosedale Association before that time were important in allowing the matter to be fixed for hearing after a final round of advertising. Notice to Eurobodalla Shire Council. 38 Rosedale Farm also gave notice to the Eurobodalla Shire Council. This notice was required in Barrett J's original orders on 27 May. The Council quickly indicated a position that supported the extinguishment. On 22 June 2009 the Council wrote to Rosedale Farm's solicitors advising that "Council has no objection to the extinguishment of these rights of way". The Council's position was subject to it receiving a dedication of part of Rosedale Farm's property on which George Bass Drive was encroaching. This was to resolve an unrelated issue that existed between the Council and the plaintiff. Rosedale Farm agreed with this condition. 39 The Council also commented by letter about the changes effected by the building of George Bass Drive. The Council stated that, "The construction of George Bass Drive negated the requirements for the subject rights of way." This statement from a local government authority representing the local community supports the inference that is to be drawn from the other evidence that the original purpose of the easement has now been entirely displaced by George Bass Drive. 40 The Council has been contacted since the letter of 22 June 2009. Its support for the application has not changed. The Rosedale Association 41 The Rosedale Association Inc ("the Association") was another important means of bringing these proceedings to the notice of potentially interested persons. The Association's existence was identified early. At the 28 August directions hearing the Court gave directions for the plaintiff to file further evidence about its contacting the Association to ascertain whether the Association was interested in appearing in the proceedings and taking a position in relation to Rosedale Farm's application. Pursuant to these directions Rosedale Farm filed two affidavits that offered more information about the Association and its awareness of these proceedings.

[69]

(ii) that the obligation has become unreasonably expensive or unreasonably onerous to perform when compared with the benefit of its performance to the authority, or (c) that the proposed modification or extinguishment will not substantially injure the persons entitled to the easement or profit à prendre, or to the benefit of the restriction or obligation. " 58 Conveyancing Act s 89(1) is to be applied according to its terms, read fairly and without disregarding the conventional approach to legislation affecting the common law property rights. The starting point for the Court's consideration is the easement itself, its terms and its objects derived from construing those terms in context and bearing in mind that the easement was created for an indefinite future and destined to endure in a changing environment: Armishaw v Denby Horton (NZ) Ltd [1984] 1 NZLR 44 at [47]; Durian (Holdings) Pty Ltd v Cavacourt Pty Ltd [2000] 10 BPR 18, 099; [2000] NSWCA 28 per Mason P at [4]. 59 The power to modify or extinguish an easement conferred by s 89 (1) requires proof of one or more circumstances to the satisfaction of the Court coupled with the favourable exercise of judicial discretion: Durian (Holdings) Pty Ltd v Cavacourt Pty Ltd [2000] 10 BPR 18, 099; [2000] NSWCA 28 per Mason P at [2]. The circumstances required to be proved are set out in Conveyancing Act s 89(1). Extinguishment Pursuant to s 89(1)(a) 60 Conveyancing Act s 89(1)(a) grounds the exercise of the power to extinguish an easement on two independent bases connected with changing circumstances. The first basis is that by reason of the change in use of the land having the benefit of the easement or in the character of the neighbourhood, the easement ought to be deemed obsolete. The second is that the continued existence of the easement would impede the reasonable user of the land subject to the easement without securing any practical benefit to the persons entitled to the easement. 61 In relation to the first basis, to determine whether there has been a change in the neighbourhood, the Court identifies what the neighbourhood is in any given case and then analyses the evidence to see if there has been change between the date of grant and the date of the application: Cavacourt Pty Ltd v Durian (Holdings) Pty Ltd (1998) 9 BPR 16,833; [2000] ANZ ConvR 22; (1999) NSW ConvR 55-891 per Young J. 62 The term "obsolete" has explained in a number of authorities. Indeed obsolescence:

[71]

(b) can also mean that the object of the easement is incapable of fulfilment any longer or perhaps serves no presently useful purpose: Re Mason and the Conveyancing Act (1960) 78 WN (NSW) 925 at [927]; Durian (Holdings) Pty Ltd v Cavacourt Pty Ltd [2000] 10 BPR 18,099; [2000] NSWCA 28 at [3]-[6]. 63 The second basis involves an assessment of whether or not the continued existence of the easement would impede the reasonable user of the servient tenement without securing practical benefit to the persons entitled. 64 To establish that a covenant impedes the reasonable user of the servient land, it must be shown that no reasonable use of the land is possible unless the easement is modified or extinguished: Frasers Lorne Pty Ltd v Joyce Goldsworthy Burke & Ors [2008] NSWSC 743 per Brereton J at [14]. 65 It is insufficient for a Conveyancing Act s 89(1) applicant to establish that its own proposal is a reasonable use of the servient land. The applicant must show that no reasonable use of the land is possible unless the easement is extinguished or modified: Heaton v Loblay (1960) SR (NSW) 332, at 335 per Myers J. The applicant must also show that the continuance of the easement unmodified "hinders, to a real and sensible degree, the land being reasonably used, having due regard to the situation it occupies, to the surrounding property, and the purpose of the [easement]": Re Ghey & Galton's Application [1957] 2 QB 650 at 663. The question as to whether the continued existence of the right of way secures a practical benefit to the beneficiaries is one that does not require extensive analysis. But what is a "practical benefit" is capable of ready assessment. 66 Finally, Conveyancing Act s 89(1)(a) allows the Court to take into account such "other circumstances of the case which the Court may deem material". These words permit the Court to take into account "the widest field of evidentiary material": Re Roseblade; Re Foenander [1964 -5] NSWR 2044 at [2046] and Markos v OR Autor Pty Ltd [2007] NSWSC 810 per Austin J at [90]. Extinguishment Pursuant to s 89 (1)(b) - Abandonment 67 Lots 1 and 12 of the property are Torrens title land. It is clear that rights of way created by registered easements over Torrens system land can be abandoned so as to attract the jurisdiction of the Court under Conveyancing Act s 89(1): Grill v Hockey (1991) 5 BPR 11,421; Chiu v Healey (2003) 11 BPR 21,241; (2003) NSWSC 857 at [36]; Bradbrook & Neave "Easements and Restrictive Covenants In Australia" Butterworths 2nd Ed, 2000 at [19.27] and following. Conveyancing Act s 89 is applicable to land under the Real Property Act 1900: Conveyancing Act s 89(8). The mere circumstance that an easement was noted on the register when land under the Real Property Act passed to a new registered proprietor would not furnish a reason for refusing as a matter of discretion to make an order under s 89(1) or s 89(3): Treweeke v 36 Wolseley Road Pty Ltd (1973) 128 CLR 274. The relevant principles in relation to abandonment of easements in relation to the exercise of Conveyancing Act s 89 jurisdiction are the following:

[79]

74 Extinguishment of the easement in this case is justified on the first basis for the exercise of the power in Conveyancing Act s 89 (1) (a) (change in user of the dominant tenement) but not on the second basis (impeding the reasonable user of the servient tenement). 75 In the Rosedale area there has been a "change in user of" the land having the benefit of the easement and a change in "the character of the neighbourhood" of the easement and "other circumstances" that will justify extinguishment under the first basis in Conveyancing Act, s 89 (1) (a) as the easement "ought be deemed obsolete". The facts establish each of these statutory preconditions for the exercise of this Conveyancing Act, s 89 (1)(a) power. At the time of the grant of the southern rights of way in 1929, the neighbourhood was sparsely populated farming land surrounded by bush land with an adjacent coastal hamlet. There have been significant changes in the use of the dominant tenement and in the character of the neighbourhood between the time of the grant of easement and the date of the Rosedale Farm's application. Public and private development has changed the Rosedale area during that period. These several changes to the neighbourhood are identified below. 76 First, perhaps the most significant change to the "character of the neighbourhood" during this period has been the construction of George Bass Drive. This major public work created direct vehicle access between the public highway system of New South Wales and Rosedale village for the first time in 1975. George Bass Drive gave public vehicular and pedestrian access for travellers to and from North and South Rosedale. It substitutes a public and convenient connection to the highway system for what was previously only foot and limited vehicle access over the much longer southern rights of way. George Bass Drive, not the old road, is now the main coastal traffic route north and south from Rosedale. Now that George Bass Drive exists there is no practical reason for anyone to use the easement, which has become a non-functional access from Rosedale to the old road, a road that is itself no longer used to travel to and from Rosedale. The circumstances identified in this paragraph would justify the conclusion that the easement was "obsolete" because the easement serves no presently useful purpose: Re Mason and the Conveyancing Act (1960) 78 WN (NSW) 925 at [927].

[84]

83 The evidence establishes that the registered proprietors of the land derived from the dominant tenement have abandoned the southern rights of way. Features of the evidence before the Court on this subject are: a lengthy, at least 35 year period of non-use, Treweeke v 36 Wolseley Road Pty Limited (1973) 128 CLR 274, at 288 per Walsh J, and clear indications that the dominant owner will not make use of the easement, Grill v Hockey (1991) 5 BPR 11,421. This evidence comes from three sources, from the circumstances and form of the construction of George Bass Drive, from the failure of any dominant owner to claim any right to use the easement, and from the actual lack of use of the rights of way. These are now each dealt with in turn. 84 The physical construction of George Bass Drive is evidence of abandonment. The substantial earthworks of George Bass Drive completely cover the course of the southern rights of way at their eastern end. The former course of the easement in this area is now buried under many cubic metres of landfill and road base. After the construction of George Bass Drive pedestrians would encounter personal safety hazards in using the southern rights of way in trying to get on and off the traffic pavement of George Bass Drive itself. The owners of the dominant tenement must have acquiesced in the interruption of the southern rights of way for the extensive period of the planning, construction and use of George Bass Drive for public purposes. The construction of George Bass Drive approached the Rosedale area between 1969 and 1975. There is no evidence before the Court that the approaching construction inspired anybody from Rosedale South to seek that the easement be preserved through, for example, the construction of a tunnel under the planned earthworks. On the contrary the arrival of George Bass Drive was welcomed. 85 Further, the owners of the dominant tenement have not sought to assert their rights as dominant owners for at least 35 years. The evidence of that is strong. There is direct oral evidence as to the behaviour of these persons, including residents of the Rosedale area, confirming their lack of objection.

[85]

86 The dominant owners have allowed other practical impediments to the use of the easement. The witnesses Mr Sellick and Mr Beasley identified these. They include fencing across the easement west of George Bass Drive, a lack of discernable vehicle tracks over much of the right of way and topography that would present a significant challenge to ordinary vehicle access over most of the course of the easement. Even at its eastern end the easement is paved over in South Rosedale and not discernable. The development of the various impediments over time further supports the inference of abandonment that arises from the failure to claim the right to use the easement. 87 Finally, the easement has not been used for at least 35 years. The Rosedale historian Mr Harrison and the witnesses Mr Sellick and Mrs James and Mr Murray have powerfully chronicled the long period of the easement's non-use. Their evidence compels the conclusion that no attempt to use the easement has occurred during that period. The current dominant owners use George Bass Drive to enter and exit the Rosedale area rather than the easement. This is further evidence of abandonment. There is some doubt with respect to Torrens title system land, where title is acquired by registration, whether the Court can have regard to the evidence of the dominant tenement holder's predecessors in title: Ashoil Holdings Pty Limited v Athanasia Fassoulas & Ors [2005] NSWCA 80, per Handley JA at [5]. That is not a difficulty in this case because the current registered proprietors of the dominant tenement are continuing even now to make the daily choice of using George Bass Drive rather than the easement for travel to and from Rosedale village. Extinguishment Pursuant to Conveyancing Act s 89(1)(c) - No Substantial Injury 88 The evidence already analysed also makes out the Conveyancing Act s 89(1)(c) ground that "the proposed…extinguishment will not substantially injure the persons entitled to the easement". There is no injury demonstrated here which has "real and present substance": Castagna v Great Wall Resources Pty Limited (2005) 12 BPR 23,363 at [42] - [43]. The analysis above in respect of both Conveyancing Act s89 (1) (a) and (b) equally compels the conclusion that there will be no substantial injury arising from the extinguishment to the persons entitled to the easement. Exercising the Discretion 89 The plaintiff submits and I accept, that this case does not exhibit the usual features of cases in which the discretion has been refused. The prevalent factors here that call for the exercise of the discretion requested by the plaintiff are numerous. It is not easy to identify any factors that would weigh against its exercise. However great caution is required in acceding to an application for extinguishment of an easement which after all is a proprietary right: Frasers Lorne Pty Ltd v Joyce Goldsworthy Burke and Ors [2008] NSWSC 743 at [29] per Brereton J and Tomara Holdings Pty Ltd v Pongrass [2002] NSWSC 332 at [20] per Hamilton J. 90 Three general considerations favouring the exercise should be mentioned. First, the Court made directions on a number of occasions for the advertising of the plaintiff's application and the notification of potentially affected parties. Those directions resulted in communications with the local council, advertising in the local press, notification to the local progress association and communication with residents of the area affected. Despite this wide publicity and the extensive range of communication attempts, no objectors to the plaintiff's application have emerged. 91 Second, the local Council supports the plaintiff's application subject to conditions. The Council's conditions include specific road dedications. The plaintiff has agreed to these conditions. The Council's consent can be taken as a valuable expression of local public interest in favour of this application. 92 Third, the easement no longer serves any useful purpose. The purpose of the easement, which can be inferred from the historical record, was for persons wishing to gain access to the southern bank of Rosedale Creek from a road on the western side of the plaintiff's property. The construction of George Bass Drive means that no resident of the area has any motivation to use the rights of way to access the road on the western side of the plaintiff's property rather than using the far more convenient George Bass Drive. All the residents on the southern side of Rosedale Creek could reasonably be expected to use George Bass Drive for access to their homes. The evidence supports that this is just what they now do on a daily basis.

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