City Developments Pty Ltd v Registrar General NT & Ors [2000] NTSC 33

Riley v Penttila [1974] VicRp 67; (1974) VR 547; applied.

Re Ellenborough Park [1955] EWCA Civ 4; [1955] 3 All ER 667; Municipal District of Concord v Coles [1905] HCA 35; (1906) 3 CLR 96; A-G v Cooma Municipal Council [1962] NSWR 663; Todrick v Western National Omnibus Company Limited [1934] 1 Ch 561, referred to.

1st Defendant: Solicitor for the Northern Territory

City Developments P/L & Anor v The Registrar General of the NT & Others [2000] NTSC 33

THE REGISTRAR GENERAL OF THE NORTHERN TERRITORY

[1] This matter proceeded to hearing on a preliminary point. The preliminary point as stated by Mr Waters QC on behalf of the plaintiff is as follows:

[2]

Is the purported grant of an easement by Nazime Pty Ltd in favour of the land now owned by all save the first defendant over Section 152 Chinner Road, Lake Bennett (Section 152 Hundred of Howard) an easement?

[3]

The preliminary point as posed by Mr Lee on behalf of the second defendant is as follows:

[4]

Is the registered easement by Nazime Pty Ltd granted in favour of all the land owned by all the defendants excepting the first defendant over Section 152 (presently subdivided and known as Section 244 and Section 245) Hundred of Howard a legally valid and enforceable easement?

[5]

I have taken this to be the same preliminary point slightly differently worded.

[6]

The area of land which is the subject of the dispute is part of the Lake Bennett Resort. The history of the land involved and the easement is as follows:

[7]

The lake and foreshore strip surrounding it were once part of Section 69 Hundred of Howard. Section 69 Hundred of Howard was subdivided in or about 1983 into three separate areas described in the parties agreed list of documents as follows:

1. Agreed document 23 is Land Titles Office (LTO) Plan N° 82/41A. This shows section 69 was subdivided into the following: Sections 85, 87 - 89, 111 - 113 and 116 - 117. This was noted as passed on 15 February 1983.

2. Agreed document 24 is LTO 82/41B. This shows section 69 was subdivided into sections 90 - 92, 98 and 118. This is noted on the document as being passed on 15 February 1983.

3. Agreed document 25 is LTO 82/41C. This shows the subdivision of section 69 into sections 93 - 97 and 99 - 110. This subdivision is shown as having been passed on 15 February 1983.

Agreed document 22 supersedes part of Plan 82/41B (which is agreed document 24) and shows that on 10 June 1983 a subdivision of section 118 was passed. Section 118 was subdivided into sections 152 - 155 inclusive.

[8]

In the agreed document N° 22 which is LTO Plan 83/38 section 152 is the area of Lake Bennett and the surrounding foreshore land.

[9]

Document N° 11 in the parties Agreed List of Documents is a copy of Certificate of Title Volume 432 Folio 158 which shows that the fourth defendants, Andre and Rinaldo Scarton, acquired Section 92 Hundred of Howard from plan LTO 82/041B. This dealing was registered on 25 August 1995.

[10]

Document N° 7 in the parties Agreed List of Documents is a Grant of Easement registered on 18 December 1996 in respect of Section 92 Hundred of Howard. The land receiving the benefit of the easement is described more fully therein as being contained in Certificate of Title Volume 432 Folio 158 Section 92 Hundred of Howard Plan 82/041B owned by the fourth defendant, Andre and Rinaldo Scarton. The land burdened by the easement is described as being land in CT Vol 292 Folio 176 Section 152 Hundred of Howard 83/38. The condition of the Grant of Easement are set out there as follows:

1. The owner of the land receiving the benefit of the easement (hereinafter called "the Grantee") and all bona fide non paying guests of the Grantee from time to time authorised by him shall have the right to enter upon and use the land burdened by the easement (hereinafter called "the Grantor's land") for private recreational purposes PROVIDED THAT the lake situated on the Grantor's land (hereinafter called "the lake") shall be used only for such recreational purposes as are permitted by the terms of the Waterworks Licence No. 363 issued under the control of the Water Act reserving nevertheless to the Grantor its employees agents and all persons from time to time authorised by it in common with the Grantee and all bona fide non paying guests of the Grantee from time to time authorised by him and all other persons having the like right free and uninterrupted passage across and use of the Grantor's land.

2. The Grantee shall have the right to leave a catamaran and canoes on the said lake for use by the Grantee and such bona fide non paying guests of the Grantee as may be authorised by him.

3. The Grantee for himself and his successors in title covenants with the Grantor and its successors in title that the Grantee and his successors in title will not do or suffer anything to be done upon the Grantor's land whereby the lake and its retaining wall may be damaged or polluted or the use of the lake either by the Grantor its employees agents and all persons from time to time authorised by it or by any other person with a like right to use the lake may be prejudicially interfered with.

4. Should the Grantee at any time subdivide Section 92 Chinner Road, Lake Bennett then the easement shall be extinguished on all save one of the subdivided lots. The Grantee may nominate the lot to which the easement shall continue to attach."

[11]

The Deed of the Grant of Easement dated 12 December 1996 between Nazime Pty Ltd and the fourth defendants is Document N° 8 in the Agreed List of Documents. The grant of easement was made for consideration details of which are set out in the documents.

[12]

Document N° 17 in the parties Agreed List of Documents is Grant of Easement registered on 22 April 1993. The land receiving the benefit of the easement is Section 93 Hundred of Howard Plan 82/41C owned by the fourth defendants, Andre and Rinaldo Scarton. The land burdened by the easement is described as being CT Volume 292 Folio 176 Section 152 Hundred of Howard Plan 82/41C. The conditions of this Grant of Easement are as follows:

"Conditions

1. The owner of the land receiving the benefit of the easement (hereinafter called "the purchaser") and all persons from time to time authorised by him shall have the right to enter upon and use the land burdened by the easement (hereinafter called "the Vendor's land") for recreational purposes PROVIDED THAT the lake situated on the Vendor's land (hereinafter called "the lake") shall be used only for such recreational purposes as are permitted by the terms of the Waterworks Licence No. 363 issued under the control of the Waters Act reserving nevertheless to the Vendor its employees agents and all persons from time to time authorised by it in common with the Purchaser and all persons from time to time authorised by him and all other persons having the like right free and uninterrupted passage across and use of the Vendor's land.

2. The Purchaser shall have the right to leave a boat on the said lake for use by the Purchaser and such persons as may be authorised by him.

3. The Purchaser for himself and his successors in title covenants with the Vendor and its successors in title that the Purchaser and his successors in title will not do or suffer anything to be done upon the Vendor's land whereby the lake and its retaining wall may be damaged or polluted or the use of the lake either by the Vendor its employees agents and all persons from time to time authorised by it or by any other person with a like right to use the lake may be prejudicially interfered with."

[13]

Document N° 5 in the parties Agreed List of Documents shows that Section 152 Hundred of Howard was further subdivided by LTO 96/124 into Section 244 and 245. This appears to have been registered in or about January 1997. Section 244 is the ring of foreshore land surrounding the north part of the lake. Section 245 is the lake itself and the ring of foreshore land surrounding the south part of the lake.

[14]

Agreed document N° 15 is the Grant of Easement registered on 27 May 1993 in favour of Section 102 Hundred of Howard, Plan 82/41C Certificate of Title Volume 71 Folio 130 owned by the third defendant, Trevor Lindsay Sullivan. The land burdened with the easement is Section 152 Hundred of Howard Plan 82/41C, Certificate of Title Volume 292 Folio 172. The conditions of this Grant of Easement are the same as for Section 93 Hundred of Howard which have already been set out.

[15]

Agreed document N° 16 in the agreed list of documents is the Grant of Easement in respect of Section 106 Hundred of Howard Plan 82/41C, Certificate of Title, Volume 306 Folio 130, owned by Edward Arthur Field the second defendant. The land burdened with this easement is Section 152 Hundred of Howard Plan 82/41C, Certificate of Title, Volume 292 Folio 176. The conditions of the Grant of Easement are the same as for Section 93 Hundred of Howard which have already been set out.

[16]

Agreed document N° 20 in the Agreed List of Documents is the Grant of Easement in favour of Section 94 Hundred of Howard, Plan 82/41C, Certificate of Title, Volume 71 Folio 122. The registered owner of Section 94 is Robert John Nash the fifth defendant (Document N° 13) Plan 82/41C. The land burdened with the Grant of Easement is Hundred of Howard Section 152. The conditions of the Grant of Easement are the same as the conditions in respect of Hundred of Howard Section 93 which have been set out in these reasons for judgment.

[17]

The burden of the Grant of Easement in respect of Sections 92 and 93 (owned by the fourth defendants), 94 (owned by the fifth defendant), 102 (owned by the third defendant) and 106 (owned by the second defendant) are now all in respect of Hundred of Howard Sections 244 and 245.

[18]

The parties are in agreement that an easement has to have four essential criteria:

(i) There must be a dominant and subservient tenement.

(ii) An easement must accommodate the dominant tenement.

(iii) dominant and servient owners must be different persons.

(iv) a right over land cannot amount to an easement unless it is capable of forming the subject matter of a grant.

Re Ellenborough Park Re Davies (deceased) Powell and Others v Maddison and Another [1955] EWCA Civ 4; [1955] 3 All ER 667. See also Riley v Penttila [1974] VicRp 67; (1974) VR 547, Cheshire Modern Law of Real Property, 11th ed p 503.

[19]

There is no dispute on the part of the plaintiff that criteria (i) and (iii) of the essential criteria are satisfied.

[20]

With respect to criteria N° (ii), counsel for the plaintiff submits that this has not been complied with in the context of this particular easement. Mr Waters QC maintains that on a proper reading of Hill v Tupper [1863] EngR 493; [1861-73] All ER Rep 696, the person asserting the easement has to go further than the assertion and has to demonstrate the benefit to the land not just the individual.

[21]

I consider this particular easement does accommodate the dominant tenement, it does benefit the land, not just the individual and to this extent fulfills the second criteria essential to an easement (see Dukart v District of Surrey 86 DLR (3d) 609 Estey J at 616):

".... There is the requisite relationship between a dominant and servient tenement wherein the dominant tenement is accommodated, serviced or supported by the servient tenement; between them there is a connection of real benefit to the former, and which is of such a character as would ordinarily be classified as a right or condition running with the land and not merely a contractual right enuring to the benefit only of persons who are parties thereto at its inception."

[22]

The issue in respect of criteria number (iv) on the submission of Mr Waters QC, counsel for the plaintiffs, is as follows:

(a) Whether the private recreational purposes (subject to what that might mean) is such as to give rights to the dominant tenement which would amount to a right of joint occupation or which would substantially deprive the owners of the servient tenement of their proprietorship or legal possession or enjoyment of the land;

(b) whether such terms are too wide and vague in character to constitute an enforceable right

[23]

It is the plaintiff's case that both questions (a) and (b) above must be posed and answered in favour of the plaintiff and the easement struck down.

[24]

Counsel for the plaintiff contends that the words "private recreational purposes" being the condition of the Grant of Easement is far too vague to form the subject matter of a Grant of Easement.

[25]

Mr Waters QC seeks to distinguish this case from the decision of the Court of Appeal in Re Ellenborough Park (supra) because the latter case nominates specifically the activity which could be carried on, namely the right to enjoy Ellenborough Park as a garden.

[26]

I make reference to the following passage in Re Ellenborough Park at 683 - 684 in the decision of the court as read by Lord Evershed:

"As appears from what has been stated earlier the right to the full enjoyment of Ellenborough Park, which was granted by the conveyance of 1864 and other relevant conveyances, was in substance no more than a right to use the park as a garden in the way in which gardens are commonly used. In a sense, no doubt, such a right includes something of a jus spatiandi inasmuch as it involves the principle of wandering at will round each and every part of the garden except, of course, such parts as comprise flower beds, or are laid out for some other purpose, which renders walking impossible or unsuitable. We doubt, nevertheless, whether the right to use and enjoy a garden in this manner can with accuracy be said to constitute a mere jus spatiandi. Wandering at large is of the essence of such a right and constitutes the main purpose for which it exists. A private garden, on the other hand, is an attribute of the ordinary enjoyment of the residence to which it is attached, and the right of wandering in it is but one method of enjoying it. On the assumption, however, that the right now in question does constitute a jus spatiandi, or that it is analogous thereto, it becomes necessary to consider whether the right which is in question in these proceedings is, for that reason, incapable of ranking in law as an easement."

[27]

The Court of Appeal subsequently held that this was in law an easement.

[28]

The matter of Riley v Penttila (supra) is an Australian authority which adopted and applied the four essential criteria of an easement as stated in Re Ellenborough Park (supra). In Riley v Penttila (supra) Gillard J held that the purpose of the grant were clearly stated in the expression "the liberty to enjoy the reserve for the purpose of recreation or a garden or a park". He further held this expression was more clearly stated than the expression "full enjoyment of a pleasure ground" which were the words used in the Grant of Easement the subject of the dispute in Re Ellenborough (supra). The Court of Appeal in Re Ellenborough Park (supra) interpreted the words "full enjoyment of a pleasure ground" to mean rights to the communal enjoyment of Ellenborough Park as a garden. Gillard J found that no such implication needed to be drawn in Riley v Penttila (supra). He stated at p 558 "The purposes of the grant are clearly stated."

[29]

With respect I adopt and apply the principle expressed by Gillard J in Riley v Penttila at 559 - 560:

"It was submitted, however, that the right conferred by Keam was so indeterminate as to defy precise definition. It was urged the enjoyment of the area for recreation was the kind of jus spatiandi which the Court of Appeal suggested in the Ellenborough Park Case could not form the subject of an easement. In my opinion, enjoyment of a defined area for recreation not given to the public, but given to a limited number of lot holders is just as certain as the rights referred to in the above cases, or the right to walk for pleasure referred to in Duncan v. Louch (1845), 6 Q.B. 904; 115 E.R. 341, which was approved in the Ellenborough Park Case by the Court of Appeal at (Ch.) pp. 184 - 5.

Having regard to the decision of the Court of Appeal on the right there granted, it seems to me that the right set out in the instrument of transfer to each of the transferees from Keam was sufficient to found an easement. It was more than a mere personal advantage to the transferee of the lot. It was capable of being the subject of a grant at law. In fact, as already noticed, it was in form a grant at law. For gracious living it has been found for a very long time, as the English authorities well illustrate, necessary to have space in areas around a house for the purposes of a garden and recreation, and even of a park. Undoubtedly, it adds to the enjoyment of the occupation of such house property. Although each block here, according to modern standards, would be regarded as a large allotment, nevertheless it would undoubtedly add to the enjoyment and occupation of each block to have the added liberty of using the contiguous large private area, closed to the public, for the purpose of recreation, garden, or a park. Accordingly, so far as it is necessary to find as a fact I am satisfied on the evidence that the grant constituted a right in the nature of an easement appurtenant to and for the enjoyment of the lots transferred. In so far as it is a matter of law, the grant, in my opinion, possessed all the four characteristics referred to by Cheshire."

[30]

Mr Waters QC submits that the easement in matter of Riley v Penttila was saved by the fact that the reservation or easement had added to it the words "recreation or garden or park". Mr Waters QC argues that there had been a finding of fact that the clear intent of the original developer was that the servient tenement was to have been a park and that the plan of the area shows it could have had no other practical use and was clearly an amenity to the adjacent lot.

[31]

Mr Waters QC points out that none of the defendant's land in the case before this Court is contiguous to Section 244 at Lake Bennett.

[32]

Counsel for the plaintiff raises the concern that in the case before this Court any form of recreation from horse riding to playing soccer or riding trail bikes, cross country running, camping and numerous other activities could come within the definition of recreation. This in the plaintiff's submission could mean that every normal use of land that one could contemplate could be interfered with or obstructed by some recreational purpose or other.

[33]

In summary the plaintiff's case is:

1. The easement for "recreational purposes" is too wide and vague and would in effect create for the second to fifth defendants rights of joint ownership with the plaintiff and also substantially deprive the owners of Section 244 of their rights of legal possession.

2. The right to leave a boat on the lake continues as before but on a balance of convenience basis the rights of the unit holders and the first defendant are grossly interfered with.

[34]

I accept the definition of easement as submitted by Mr Lee for the second defendant which is set out in the Butterworths Australian Legal Dictionary (1977 First Edition) at p 401, which defines easement as:

"A right enjoyed by a person with regard to the land of another person, the exercise of which interferes with the normal rights of the owner or occupier of the land."

See also Municipal District of Concord v Coles [1905] HCA 35; (1906) 3 CLR 96.

[35]

The parties are essentially in agreement with the definition of the word "recreation". The word "recreation" has a very broad meaning. The definition of it in the Shorter Oxford Dictionary is:

"The action of recreating (oneself or another), or fact of being recreated, by some pleasant occupation, pastime or amusement."

I apply this definition of the word recreation in the easements which are the subject of this dispute. See also A-G v Cooma Municipal Council [1962] NSWR 663 at 667 per Jacobs J.

[36]

I agree with the submission made by Mr Barr, counsel for the third, fourth and fifth defendants, that there is no reason in law why an easement cannot be granted for recreational purposes.

[37]

There were thirteen sections which received a grant of easement. Sections 92, 93, 94, 96, 101, 102, 103, 104, 105, 106, 107, 108 and 109. See LTO Plan 96/124 Agreed Document N° 5. And it included the whole of the lake and the foreshore. I agree with the submission made by Mr Barr that for the exercise of these rights between the thirteen section owners to be workable each has to accommodate his or her recreational activities to those of the others.

[38]

I also agree with the submission made by Mr Barr that the inference to be drawn is that the intentions of the grantor were to create a large recreational area, available to the owners of the many sections of land surrounding Lake Bennett, focusing on the lake itself but also on the surrounding foreshore. The whole of the former Section 152 now Section 244 and 245 was subject to the grant of easement for recreational purposes in favour of many separate landowners. The grant of such an easement would appear to be inconsistent with the development of Section 152 otherwise than in accordance with recreational purposes. Counsel for the third, fourth and fifth defendants Mr Barr and counsel for the second defendant Mr Lee have made reference to the Memorandum of Encumbrance Number 283685, agreed document N° 19 - see Second Schedule to Memorandum of Encumbrance stipulations. This Memorandum of Encumbrance affects each of the sections of land which receive the benefit of the easement except Section 92. These encumbrances also support an inference that the intention was the land involved not be subject to unfettered development. The encumbrances place restrictions on the number and type of buildings that can be erected on the various blocks of land that benefit from the easement. No profession, business trade or manufacture shall be carried on at anytime without consent of Nazime Pty Ltd, its successors or assigns. Such a restriction also applies to erection of a dwelling house or other building. The encumbrance also restricts the area of land that can be cleared of native vegetation and contains conditions to preserve the water quality of the lake to prevent accumulation of rubbish and generally to maintain a certain standard with restrictions on the use of the land compatible with the preservation of the lake and the catchment area.

[39]

The test for an easement is whether the use for recreational purposes enhances the enjoyment of adjoining properties even though separated by other land provided it confers some benefit on the dominant tenement (Todrick v Western National Omnibus Company Limited [1934] 1 Ch 561).

[40]

The easements have been registered since 22 April 1993. The present plaintiffs acquired the property on or about 11 June 1998.

[41]

I agree with the submission made by Mr Barr that the term "recreational purpose" is to be construed sensibly and reasonably in the context of rural lakeside recreation, this must include walking across and around the land surrounding the lake; swimming and boating (subject to the restriction of the waterworks licence) and recreational activities such as photography, birdwatching and other types of passive recreational activity.

[42]

I am satisfied that the fourth essential criteria for an easement has been fulfilled. On the preliminary point raised by the plaintiff, I find that the right conferred in the respective Grants of Easement are in law easements.

[43]

Leave is granted to the parties to make application on the question of costs.