BETWEEN : THE OWNERS OF EAST FREMANTLE SHOPPING CENTRE WEST STRATA PLAN 8618

CHAN'S BROTHERS & COMPANY PTY LTD (ACN 009 247 438)

THE OWNERS OF EAST FREMANTLE SHOPPING CENTRE EAST STRATA PLAN 8619

Practice and procedure - Application to strike out statement of claim - Claim seeking to have easement on title removed because agreement pursuant to which easement registered null and void - Turns on own facts

Burton & Ors v Arcus & Anor [2006] WASCA 71

The Owners of Corinne Court 290 Stirling Street Perth Strata Plan 12821 v Shean Pty Ltd [2000] WASC 181

1 MASTER SANDERSON: This is the second defendant's application to strike out the statement of claim. The facts giving rise to the application can be shortly stated.

2 The plaintiff is the owner of certain property in East Fremantle. The second defendant is the owner of adjoining property. There is an easement over the plaintiff's property in favour of the property held by the second defendant. By this action, the plaintiff seeks an order removing the easement as an encumbrance from its property.

3 The easement was registered consequent upon an agreement entered into in August 1987 between the plaintiff, the third defendant and two other companies. At the time the deed was entered into, these two other companies owned the property now owned by the second defendant. The plaintiff contends either that the agreement is a grant of a lease or licence for a term in excess of 10 years or that it falls foul of the Strata Titles Act 1985 (WA). In either case, the plaintiff says that agreement is illegal and void and of no force and effect. On that basis, it is said that the easement ought be removed.

4 The statement of claim then raises two questions. First, did the agreement, properly construed, amount to a grant of a lease or a licence such that the agreement was void under either or both of the Town Planning and Development Act 1928 (WA) or the Strata Titles Act? Second, if the deed is void, is it open to the Court to order removal of the easement from the title?

5 It was the second defendant's submission that both of these issues could be canvassed on a strike out application, and that the plaintiff's claim failed in each case. I indicated during the course of the argument that I was not satisfied it was appropriate on a strike out application to attempt to interpret the agreement. It may be that after detailed consideration the agreement is not found to be ambiguous and precisely what interest in the plaintiff's land was created by it will emerge clearly from its terms. But even taking that best case scenario, the position is arguable. It is not a matter which should be determined on a pleading summons.

6 That being so, the state of affairs most favourable to the plaintiff must be assumed for the purposes of dealing with this application. That means I am to assume that the agreement did create a lease or licence over part of the plaintiff's land and that the agreement was therefore void. The remaining question, then, is whether on those assumed facts it is open to the Court to order the removal of the easement.

7 This very question was considered by Hasluck J in The Owners of Corinne Court 290 Stirling Street Perth Strata Plan 12821 v Shean Pty Ltd [2000] WASC 181. The facts of that case are not relevant for present purposes. His Honour summarised one of the questions he faced in the following terms (par 31):

"It [the plaintiff] placed considerable reliance upon the various provisions of the Transfer of Land Act concerning indefeasibility of title as a basis for saying that it was not now open to the plaintiff to challenge the validity of the easement or otherwise to rely upon the facts and matters encompassed by the registration issue as a basis for extinguishing the easement or to obtain a ruling that the right of way could no longer be enjoyed by the owner of the dominant tenement."

8 His Honour then examined in some detail the indefeasibility provisions of the Transfer of Land Act 1893 (WA). He then went on (par 75):

"The certificates of title are conclusive evidence that the estates or interests are as depicted on those titles. ... The evidence clearly shows that [the respondent company] was a bona fide purchaser for valuable consideration that purchased the land upon the basis of what was disclosed upon the register. This being so, s 134 of the Transfer of Land Act clearly establishes that the title of the respondent company, including its entitlement to the benefit of the easement in question, cannot now be impugned. Accordingly, as to this aspect of the matter - the registration issue - I find in favour of the first defendant with the result that there is no basis for extinguishing the easement upon the grounds contended for by counsel for the plaintiff."

9 Counsel for the plaintiff had two submissions with respect to the Corinne Court case. First, it was said that the reasoning relied upon by the second defendant did not constitute the ratio of the case. With respect, that seems to me to be wrong. His Honour was confronted with a very clear issue - if the process leading to the registration of an easement was improper, was it open to the Court to order the easement be removed? His Honour determined that question. It may be that the ultimate outcome of the case was determined on other grounds, but there can be no doubt that his Honour determined the issue.

10 Second, it was submitted that the decision ought not be followed. Again, with respect, I would not presume to differ from his Honour's conclusion. His Honour has examined all the authorities carefully and counsel was unable to demonstrate any flaw in the reasoning. In my view, it is entirely applicable to this case.

11 Counsel for the plaintiff did make the point that there are certain circumstances where the so-called indefeasibility of title can be impinged. This may occur when legislation makes it plain that indefeasibility can be overcome by the clear words of another statute. Burton & Ors v Arcus & Anor [2006] WASCA 71 provides an example of such a situation. It was submitted by counsel that the Town Planning and Development Act and the Strata Titles Act both being enacted subsequently to the Transfer of Land Act could qualify or override the operation of the principles of indefeasibility found in the Transfer of Land Act.

12 I am not satisfied that is the case. In Burton (supra), the Court was dealing with a managed investment scheme and the power of the Court to order winding up under s 601EE of the Corporations Act 2001 (Cth). The Court held because of the specific nature of the Corporations Act principles, indefeasibility could be overcome. Here, the provisions of both the Town Planning and Development Act and the Strata Titles Act are far more general. In my view, the position is as it was in the Corinne Court case. The second defendant's right to the easement is indefeasible and the plaintiff's claim cannot succeed.

13 Accordingly, I would enter judgment for the second defendant. I will hear the parties as to the precise form of orders and as to costs.