His Lordship gave examples at 535-536.
All these kinds of property, however, all these holdings, are well known to the law and familiarly dealt with by its principles. But it must not therefore be supposed that incidents of a novel kind can be devised and attached to property at the fancy or caprice of any owner. It is clearly inconvenient both to the science of the law and to the public weal that such a latitude should be given. There can be no harm in allowing the fullest latitude to men in binding themselves and their representatives, that is, their assets real and personal, to answer in damages for breach of their obligations. This tends to no mischief, and is a reasonable liberty to bestow; but great detriment would arise and much confusion of rights if parties were allowed to invent new modes of holding and enjoying real property, and to impress upon their lands and tenements a peculiar character, which should follow them into all hands, however remote. Every close, every messuage, might thus be held in a several fashion; and it would hardly be possible to know what rights the acquisition of any parcel conferred, or what obligations it imposed. The right of way or of common is of a public as well as of a simple nature, and no one who sees the premises can be ignorant of what all the vicinage knows. But if one man may bind his messuage and land to take lime from a particular kiln, another may bind his to take coals from a certain pit, while a third may load his property with further obligations to employ one blacksmith's forge, or the members of one corporate body, in various operations upon the premises, besides many other restraints as infinite in variety as the imagination can conceive; for there can be no reason whatever in support of the covenant in question, which would not extend to every covenant that can be devised.
30 The Common Law and its courts maintain public policy controls over the kinds of easements which may be created.
31 At 536-537 Lord Brougham LC went on to distinguish between restrictions imposed on freehold land and restrictions imposed under leases, which bind assignees of leases if they touch and concern the land; his Lordship gave several formulations of this test, which itself is not precise, and illustrated by reference to case law that the limits upon the restrictions which may be imposed on freehold land are narrower than the limits for leases. This distinction has become an established aspect of the law of easements, as later cases have not applied to freehold land the test relating to touching and concerning the land, or other formulations of the law relating to covenants which run with leases. His Lordship made an extensive review of ancient and recent case law, leasehold and freehold, and stated (at 546) that examination of the authorities confirmed the view which he had taken on principle, and that whether or not there was privity of estate, the covenant was not enforceable against an assignee. His Lordship also considered and rejected an argument which appears to have been a precursor of Tulk v. Moxhay (1848) 2 Phillips 774, 41 ER 1143.
32 Ackroyd v. Smith [1850] 10 CB 164, 138 ER 68 was referred to in Ellenborough Park at 170 as authority for the second condition relating to accommodation of the dominant tenement. A right to use a road over the grantor's land had been granted by a deed of conveyance of a parcel of land, but the right to use the road was not restricted to purposes connected with the occupation and enjoyment of the land conveyed but extended to using the road for purposes not connected for the enjoyment of that land. The Court of Common Pleas, relying principally on Keppell v. Bailey, held that the benefit of the right to use the road did not pass to a later assignee of the land conveyed. At 187 Cresswell J speaking for the Court referred to Keppell v. Bailey at 537 and Lord Brougham LC's statement of the test for covenants in leases to run with land and said (at 187-188):
Upon the same principle, it appears to us that such a right, unconnected with the enjoyment or occupation of the land, cannot be annexed as an incident to it: nor can a way appendant to a house or land be granted away, or made in gross; for, no one can have such a way but he who has the land to which it is appendant … It is not in the power of a vendor to create any rights not connected with the use or enjoyment of the land, and annex them to it: nor can the owner of land render it subject to a new species of burthen, so as to bind it in the hands of an assignee. "Incidents of a novel kind cannot be devised, and attached to property, at the fancy or caprice of any owner:" per Lord Brougham C in Keppell v. Bailey . This principle is sufficient to dispose of the present case. It would be a novel incident annexed to land, that the owner and occupier should, for purposes wholly unconnected with that land, and merely because he is owner and occupier, have a right of road over other land. And it seems to us that a grant of such a privilege or easement can no more be annexed, so as to pass with the land, than a covenant for any collateral matter.
33 In Hill v. Tupper [1863] 2 Hurlstone & Coltman 121, 159 ER 51 (cited in Ellenborough Park: see my para.[21]) the Court of Exchequer decided against the validity of an easement granting the sole and exclusive right of putting and using pleasure boats for hire on a canal. The servient tenement was the canal. The plaintiff held a lease for seven years from the canal proprietor of a parcel of land adjoining the canal wharf containing 19 poles, a little under one-eighth of an acre or about 480 square metres, with a wooden cottage, boat house and other structures, and the lease also gave him sole and exclusive rights to put boats on the canal and let them for hire for pleasure. The defendant, an innkeeper, kept pleasure boats, used them on the canal and allowed inn customers to use them for fishing and bathing, to his pecuniary advantage. The plaintiff sued the defendant, it would seem for trespass; the canal proprietors were not parties. The Court of Exchequer held that the lease did not create such an estate or interest in the plaintiff as to enable him to maintain an action. Pollock C.B. at 127-128 said: "… I do not think it necessary to assign any other reason for our decision, than that the case of Ackroyd v. Smith 10 CB 164 expressly decided that it is not competent to create rights unconnected with the use and enjoyment of land, and annex them to it so as to constitute a property in the grantee …. A new species of incorporeal hereditaments cannot be created at the will and pleasure of the owner of property; but he must be content to accept the estate and a right to dispose of it subject to the law as settled by decisions or controlled by act of Parliament." Martin B said at 128: "To admit the right would lead to the creation of an infinite variety of interests in land, and an indefinite increase of possible estates" and referred to Ackroyd v. Smith and Keppell v. Bailey. In Ellenborough Park this decision was treated as a decision under the second condition: see 175, and the words of Pollock C.B. which were referred to seem to show the view that the rights to let out pleasure boats on the canal were unconnected with the use and enjoyment of the land leased. Pollock C.B. and Martin B also referred to novelty and the inadmissibility of new interests in land, which seem to direct attention to the fourth condition.
34 The citation of authorities by counsel for the plaintiff before me was very numerous. The citations included Manning v. Wasdale (1836) 5 Adolphus & Ellis 758, 111 ER 1353, which is an instance of an easement by prescription to take water from a pond; the decision relates to the effect of disuse. In Moody v. Steggles (1879) 12 ChD 261 Fry J decided that an easement acquired by prescription to hang a sign board on the wall of the defendant's house advertising a public house accessible down a narrow side street was effective. Moody v. Steggles should be seen as accepting that a commercial use to which the dominant owner's land is put can be relevant to the second condition and to accommodating the dominant land. Fry J rejected the contention that the easement was ineffective because it related not to the tenement but to the business of the occupants of the tenement; see 266. Fry J did not refer to Hill v. Tupper, although counsel had done so. His Lordship referred to several earlier decisions in which easements had related to trade or commercial use of the dominant tenement.
35 Counsel referred me to other cases on easements which benefit trade, including Clapman v. Edwards [1938] 2 All ER 507; I do not see this case as in point because it related to the terms not the existence of the easements. Counsel also referred to Frater v. Finlay [1968] 91 WN (NSW) 730 at 736; this decision relates to an easement for water for pastoral purposes; such easements have been recognised for many centuries and its citation was not helpful. Copeland v. Greenhalf [1952] 1 Ch 488 relates principally to the fourth condition but included a ruling by Upjohn J at 497-498 rejecting the submission that an easement must be for the benefit of land and not of a business and following Moody v. Steggles.
36 In my opinion it is established that the use to which the dominant land is put when the easement is created is relevant to the second condition and to accommodating the dominant tenement. However it has not been established that any facilitation of any business or commercial use in which the dominant land is involved is sufficient. I do not think it is a correct view of Hill v. Tupper that it was decided on the basis that uses involving a commercial element cannot be relevant to the accommodation of the dominant tenement, or are less readily seen as doing so than some other class of uses. Expressions in Ellenborough Park at 175 provide a clearer explanation for the decision in Hill v. Tupper than readily appears from its short judgments; that explanation is that there was no normal connection between a monopoly in pleasure boat business on the canal and the ordinary use of the small piece of land on its bank. It would have been wrong on the facts to see the boating business and its exclusivity as accommodating the leasehold of the land which was a minor part of the activities and events. The right granted in Hill v. Tupper was novel in respect of its lack of real connection with the land leased. The novelty, in the law of easements, of an exclusive right to let out pleasure boats is not a true expression of the difficulty. In Moody v. Steggles the perception that the inn sign accommodated the inn was, I would have thought, quite irresistible.
37 R v. Registrar of Titles; Ex Parte Waddington [1917] VLR 603 can in my opinion best be understood as relating to the second condition and the accommodation of the dominant land. A developer created a private street over land which he developed and sold; he provided each of his transferees with a right of way over another private street over which it was necessary for them to pass to reach a public street. To do this he used a conveyancing device; each of his transferees also received from him a small lot which was part of a strip of land which separated the private streets and was entitled to a right of way over the other private street. The strip was one link wide and 76 links long; each transferee from him received title to one square link and a right of way over the remaining 75 square links in the strip, and also obtained the benefit of the existing right of way over the other private street. His transferees thus had a right of way over the other private street, but for each transferee the dominant land was not his land in the new subdivision, but a tiny part of the strip. A link is 7.92 inches and a square link is 62.7264 sq inches or 0.040458 square metres. It is now practically impossible to use this strange conveyancing device because of statutory controls over subdivisions. Its effectiveness was not disputed by the owner of the servient land but by the Registrar of Titles. Hood J said to the effect that the transaction was not forbidden or illegal, and that it was perfectly honest. His decision turned on this sentence at 606: "In the present case I cannot say that this roadway must be used for purposes wholly unconnected with the land." (By "the land" he meant the one square link part of the strip.) His Honour also said at 607 "So long as it does not appear that the right claimed is wholly unconnected with the beneficial use of the land in question, that it is in no way connected with the enjoyment of the dominant tenement, it is, in my opinion a valid easement." His Honour's decision on the question of accommodation gave effect to a conveyancing device, convenient to the parties and harmless to nobody, and there was no novelty about the kind of easement he considered, which was a right of way.
38 Observations of Pollock CB in Hill v. Tupper appear to show that new classes of easements cannot be created. This is not the law; it was not the law when Hill v. Tupper was decided. In Attorney General of Southern Nigeria v. John Holt & Co. (Liverpool) Ltd [1915] AC 599 at 617 Lord Shaw for the Privy Council said "The law must adapt itself to the conditions of modern society and trade, and there is nothing in the purposes for which the easement is claimed inconsistent in principle with a right of easement as such. This principle is of general application, and was so treated in the House of Lords in Dyce v. Hay (1852) Macqueen 305 by Lord St Leonards LC who observed: 'The category of servitudes and easements must alter and expand with the changes that take place in the circumstances of mankind'". Lord Shaw spoke in relation to an easement to store goods involved in sea carriage on waterfront land; not a change in the circumstances of mankind, but a continuation of thousands of years of practice.
39 Novelty has been referred to in some cases which did not relate to activities which were in any way new. Novelty comes under consideration for the second condition, and also for the fourth condition and second question. Rights to store goods have been variously upheld - Attorney General of Southern Nigeria v. John Holt & Co. (Liverpool) Ltd [1915] AC 599 and Wright v. Macadam [1949] 2 KB 744 and held invalid - Grigsby v. Melville [1972] 1 WLR 1355 (affirmed on other grounds [1974] 1 WLR 80). Rights to park motor vehicles have been upheld in London and Blenheim Estates Ltd v. Ladbroke Retail Parks Ltd [1992] 1 WLR 1278 and held invalid in Copeland v. Greenhalf [1952] Ch 488. Parking vehicles and storing goods are probably older activities than creating easements. In my view these cases were well explained by Judge Paul Baker QC in the Chancery Division in London and Blenheim Estates. (Judge Baker's views were not disapproved when his decision was affirmed on other grounds [1994] 1 WLR 31). Judge Baker dealt with the right to use a car park at 1284-1288 and in doing so reviewed case law on storage of goods and car parking. Of Copeland v. Greehalf his Honour said at 1286 "The matter must be one of degree. A small coal shed in a large property is one thing. The exclusive use of a large part of the alleged servient tenement is another." At 1288 his Honour said: "That leaves the main point under this head, whether the right to park cars can exist at all as an easement … the essential question is one of degree. If the right granted in relation to the area over which it is to be exercisable is such that it would leave the servient owner without any reasonable use of his land, whether for parking or anything else, it could not be an easement though it might be some larger or different grant. The rights sought in the present case do not appear to approach anywhere near that degree of invasion of the servient land. If that is so … I would regard the right claimed as a valid easement." The validity of easements for storing goods or parking vehicles depends on the nature and circumstances of the servient tenement, the operation in detail of the purported easements and their effect on the servient tenement.
40 In the Commonwealth v. The Registrar of Titles for Victoria (1918) 24 CLR 348 Griffiths CJ referred to Dyce v. Hay and Attorney General of Southern Nigeria v. John Holt in the context of novelty in an easement. His Honour said at 354 "In the course of argument I referred to several possible easements novel in kind. For instance, an easement or servitude for the passage of aeroplanes through the superjacent air of the servient tenement to a landing place, for the passage of electric current through suspended wires passing through that air, for the free passage of the flash from a heliograph station." These observations illustrate that novelty has several aspects. An easement may be novel in that it accommodates the dominant land in a way which only became possible or useful because of some relatively recent invention; and the easements for electricity supply and telecommunications services furnish ready examples. Easements for services of kinds which arise from new technology are novel in the sense that technology is new and until it was invented land was not accommodated by it, but if the dominant land is accommodated and the servient land is burdened in ways analogous to the operation of easements which were earlier known novelty could not be an obstacle to the validity of the easement. Another aspect of novelty is novelty in respect of the manner and degree of intervention in the rights of the servient owner. Evaluation of the degree of intervention will be required. Novelty presents difficulty for the validity of an easement when the intervention with the servient tenement differs from interventions which are already known, and does so markedly as to bring under consideration the question whether it creates an interest of a new kind outside the known concept of an easement. What cannot be done is to create new kinds of interests in land. This cannot be done because it conflicts with the principle referred to by Lord Brougham LC in Keppel v. Bailey in the passages I have cited at para[29].
41 In appraising the degree of intervention in the servient owners' opportunity to use the land attention must be directed to restrictions other than the Fourteenth Restriction, including the easement for recreation and maintenance which entitles the dominant owner to enter Part B, cut and remove timber, landscape the land and build riding trails and picnic areas, structures, works and facilities for recreation. In terms of reality the servient owner has no opportunity to do anything which is related to farming, except in a way which is altogether subordinated to and does not interfere with the rights of the dominant owner. The servient owners' opportunity for recreational activity, whether it is enjoyment of rustic tranquillity or anything more active, is merely nominal having regard to the dominant owner's entitlement to carry out vineyard establishment works, plant and replant grapevines and crops, plant harvest slash and spray crops, and carry out vineyard maintenance and harvesting. It is true that the owner will not be a trespasser provided that he keeps out of the dominant owner's way, but his rights are no more than a shadow of ownership and possession of a freehold and do not have any reality beyond the opportunity to experience a sense of proprietorship and the opportunity to receive and pay bills for municipal rates.
42 The plaintiff's written submissions included the following at paras.19.2 and 19.3:
19.2 In the present case, while the Easement for Vineyard may confer upon the farm manager the right to enter upon part B of each Clos Farm, it leaves to the farmer the benefit of the crop, subject to deduction of the costs of farm maintenance and harvesting. The grapevines remain the property of the Farmer. Thus the Easement for Vineyard does not leave the servient owner without any reasonable use of part B of the servient land; it leaves to the servient owner the ownership and benefit of the crops which grow upon part B, and additionally the ability to enter upon and enjoy part B for recreational purposes.
19.3 Accordingly, although the Easement for Vineyard gives CFE considerable rights in respect of the servient tenement, it does not give exclusive and unrestricted use amounting to joint possession of it, and is not invalid for that reason.
43 It will be seen how little it was contended that servient owners actually could do on their Part B. They can enter on and enjoy Part B for recreational purposes; but that is not an opportunity which appears to me to have any realistic utility, as the land is not recreational land. Part B is farming land, available to use for production of crops in addition to grapevines, and subject to the exercise by the dominant owner when and as the dominant owner thinks right of all the rights referred to in the Fourteenth Restriction, not only in relation to grape vines but also any summer crops or other crops which may be sown between the vines or elsewhere on Part B. Material in Exhibit E illustrates the prospect that cropping in addition to viticulture will be carried out. Opportunities for recreation are severely limited by the primacy of viticulture and cropping, and the need to refrain from any acts which interfere with them. The defendants as owners of Lot 27 do not in reality have any opportunity to carry out viticulture or other cropping activities on Part B, because they would have to desist from anything they were doing if it conflicted with any activity under the Fourteenth Restriction, and the plaintiff would be entitled to override anything the defendants did while exercising those rights.
44 In Ellenborough Park passages in the judgment of the Court of Appeal at 175-176 clearly show the view of the Court that a right is incapable of forming the subject matter of an easement, and is invalid as an easement, if it is inconsistent with the proprietorship or possession of the servient owners, and that if the right conferred amounted to a joint occupation with the owners, or excluded the proprietorship or possession of the owners it would be so inconsistent. In illustration of this the plaintiff's counsel referred to the passage in the judgment in Lopes LJ in Reilly v. Booth [1889] 44 ChD 12 at 26 which was approved by Lord Ashbourne in the House of Lords in Metropolitan Railway Co. v. Fowler [1893] AC 416 at 428. The Metropolitan Railway case turned on statutory construction and on whether the rights conferred on the railway company in respect of a tunnel under a highway in the City of London made the tunnel a hereditament for the purpose of a statute imposing land tax. The actual holding of the House of Lords is not of wide import, although in an oblique way it supports the view that a statutory right to exclusive possession of land including a stratum of land creates a freehold interest in the land. At 428 Lord Ashbourne said:
I concur with Cave J. and the three judges of the Court of Appeal that the railway company took more than an easement; they took an interest in land - taking a practically perpetual right of exclusive possession in the tunnel. The case of Reilly v. Booth 44 Ch. D.26 supports this view - the words of Lopes L.J. there are in point: "The exclusive or unrestricted use of a piece of land,' "beyond all question passes the property or ownership in that land, and there is no easement known to law which gives exclusive and unrestricted use of a piece of land."
45 It appears from Evershed MR's observations in Ellenborough Park at 168 that an intervention less extreme than an exclusive and unrestricted use of a piece of land can invalidate a supposed easement.
46 At several points in his submissions the plaintiff's counsel put contentions of fact relating to the use of Lot 86 and its place in the functioning of the easement which were not supported by evidence. At one point he described Lot 86 as the place from which the plaintiff as dominant owner conducts its business of farm management; at another point he said that the easement accommodates the business of farm management carried out by the plaintiff from Lot 86 and at another point he said that Lot 86 was created for the specific purpose of enabling its owner to manage the Clos farms. At a further point he said that the Fourteenth Restriction makes Lot 86 a more convenient property for the farm manager. The evidence did not warrant these submissions. The most that can be said is that there are buildings on Lot 86 which it would be convenient to use in the conduct and management of farming operations over the estate. The evidence does not, for example, establish that there is any business or farm management operation conducted on Lot 86 which can be drawn into example for a comparison with the inn and the inn sign in Moody v. Steggles.
47 In my opinion there is no reality in the perception that the Easement for Vineyard created by the Fourteenth Restriction accommodates Lot 86. This is so whether or not some structures associated with viticulture and cropping stand on Lot 86. There is nothing in the Agreed Facts which ties the activities under the Fourteenth Restriction to the ownership of Lot 86 or to any activity which takes place there, or which shows any accommodation, advantage or enhancement in respect of Lot 86. If Lot 86 is considered as a piece of land, the use of Lot 86 is not enhanced and Lot 86 is not accommodated in any way by the fact that the owner of Lot 86 has a right to take vehicles, implements and machinery onto Lot 27 and carry out works there, or to take the harvest, still less by the right to sell the produce of the harvest and deduct some costs therefrom. Lot 86 could be a convenient incident to action under the Fourteenth Restriction: but that is not enough. The fact that the owner of Lot 86 is also the owner of the rights over Lot 27 is not an accommodation of Lot 86; it is only a coincidence that both sets of rights have the same owner. There is no analogy with the accommodation of the site of the inn in Moody v. Steggles by the sign board at the end of the alley. Lot 86 is a peg on which to hang dominant ownership and steer the Section 88B Instrument through the registration process.
48 When the course of argument required the plaintiff's counsel to tabulate the advantages of ownership which remain to the servient owners he submitted in written reply:
It cannot be said that this leaves the servient owner with no reasonable user. That is more strongly the case given that when the Easement was created, it was with the purpose of facilitating the conduct of a Clos Farm by a single manager for the benefit of all the farmers. Nothing in the easement excludes the servient owner from using Part B. It must be remembered that, by the contract of purchase the servient owner contracted to purchase, the vines and have them installed on Part B.
49 This submission illustrates the sterility and nominal character of what remains to the servient owners; ownership of vines which are to be cultivated and harvested by someone else, produce of vines which they cannot take and cannot sell, the right to use Part B for other purposes when they cannot use it for the agricultural purpose for which it is suited, and the right to exclude other persons when few could have any inducement to be there, apart from persons drawn by the exercise of other rights of the plaintiff relating to recreational usage. The production of profits of use of land is something over which the servient owners are deprived of all control. Except when the bill for rates arrives, their proprietorship is no more than a historical relic.
50 On an overall view the Fourteenth Restriction is the keystone of a structure of restrictions which creates an estate in which lots are nominally held under freehold title but actually held subject to seigneurial rights which put all opportunities to carry out viticultural and agricultural activities in the hands of the dominant owner, for all the farming land in the estate, and leave the freehold owners in a servile powerless condition. This is a novel scheme of ownership with rights of ownership not known to the law. It is a re-invention, and an imposition on freehold title, of the substance of the scheme of manorial and copyhold title which existed in England centuries ago and has been abolished there, but was never introduced into Australia. In my opinion the law of easements cannot be used to change the nature of freehold ownership in this way and to create a substantially different kind of land title. The freeholders are neutralised and powerless, unable to control or in truth to influence what is to happen on their agricultural land. Putting the land to its highest and best use is impeded, to the detriment of the public interest as well as the interests of the freeholders. The scheme including the Fourteenth Restriction is radically novel and, goes beyond what the law of easements can achieve. The Fourteenth Restriction is invalid because it fails both the second condition and the fourth condition and second question referred to in Ellenborough Park.
51 In my opinion the Fourteenth Restriction does not create a valid easement, or any other interest in the defendants' land.
52 The dominant owner is entitled according to the Fourteenth Restriction to harvest grapes and crops, sell the produce, deduct the costs and (by implication) is obliged to pay the un-deducted balance of the proceeds of sale to the servient owner. The dominant owner is to harvest the grapes and crops and sell them, and this conveys the implication that after harvesting them the dominant owner will own them so as to be entitled to sell them and pass ownership to the buyer. There is no attempt to create an agency relationship and the exercise of the right to harvest under the Fourteenth Restriction would not depend on any authority conferred by the servient owner or on any agency relationship and would be independent of any consent of the servient owner such as it could create an agency relationship. The dominant owner has no discernible motivation to carry on operations under the Fourteenth Restriction in a way which would produce or maximise a balance payable to the servient owner; the dominant owner has no economic interest in the amount of money paid to the servient owner as the balance, and has no discernible strong motivation to carry on operations at all on a basis on which it is paid only the costs which are incurred. Any economic motivation the dominant owner had could only be indirect, relating to the opportunity to choose the buyer to which and the price at which it would sell the produce, and the opportunity to employ itself, at cost, in tasks of farm maintenance, harvesting, packaging and so forth. There are no express terms of the Fourteenth Restriction binding the dominant owner to carry out operations subject to reasonable restraints or limits. It is left altogether to the dominant owner to decide how much vineyard establishment works or other works will be carried out, what costs will be incurred for them, and similarly for all other costs. The only control which incorporates any reasonable limit relates to administration costs associated with harvesting and the sale of harvest; otherwise there is no requirement that the works or the costs be subject to reasonable limits. If costs wholly use up the proceeds of sale as a result of management decisions of the dominant owner and this continues year by year, the servient owner has no grounds for complaint. The plaintiffs have contended that if the costs exceed the proceeds of sale, they are entitled to carry forward the unpaid balance of costs and deduct it from the proceeds of the sale of a later harvest. Whether or not this is correct, the position of the servient owners as owners of agricultural land is reduced to a nominal relation with their property; there is no economic reality or other reality about their relationship with Part B.
53 The acts which the dominant owner may carry out from time to time form, for each time of exercise, a related cycle of sales of produce and deduction of costs. Association of costs with "such harvesting" and the sale of "such harvest" in the words used is inconsistent with relating the produce of a harvest back to costs associated with some earlier harvest which could not be deducted from the proceeds of that earlier harvest but exceeded them. It is from - "therefrom" - the produce of a harvest that the costs "associated with such harvesting and the sale of such harvest" may be deducted, not from the produce of any other harvest. The right referred to in the phrases of the Fourteenth Restriction relating to selling produce is a right to be exercised from time to time and the right to make deductions is related by the words used to deductions out of the produce of a particular harvest produced by the exercise of the right from time to time. In my opinion the Fourteenth Restriction according to its meaning and effect does not create a right to carry forward undeducted losses and charge them against the proceeds of a later harvest.
54 Interest in the nature of a profit a prendre. The plaintiff's counsel submitted that the Fourteenth Restriction is an interest in land in the nature of a licence coupled with a grant, of a kind called an interest in the nature of a profit a prendre or an irrevocable licence coupled with an interest; not being a true profit a prendre but a quasi profit. In illustrating this submission counsel referred to statements in case law which assist understanding what is meant by a profit a prendre. A modern statement was made by Winn LJ in Alfred F. Beckett Ltd v. Lyons [1967] 1 Ch 449 at 481-482: "The subject matter of a profit a prendre must be something which is capable of ownership, for otherwise the right would amount to a mere easement. With regard to the distinction between easements and profits, Halsbury's Laws of England, 3rd ed., Vol 12 (1955), p522, para.1129, states that an easement only confers a right to utilise the servient tenement in a particular manner, or to prevent the commission of some act on that tenement, whereas a profit a prendre confers a right to take from the servient tenement some part of the soil of that tenement or minerals under it or some of its natural produce, or the animals ferae naturae existing upon it."
55 In Bettison v. Langton [2000] Ch 54 at 60-61 Robert Walker LJ adopted a description of a profit a prendre as "a right to take something off another person's land", and cited authorities and a passage in Megarry & Wade, The Law of Real Property, 5th ed. (1984) at 834. His Lordship's judgment was affirmed, with approval, in the House of Lords in its unreported decision of 17 May 2001 [2001] UKHL24: see Lord Scott of Foscote at [36]. The nature and definition of a profit a prendre was not, however, the central question in that case.
56 The plaintiff's counsel said, apparently as a concession, that the present case is not a true profit because it is implicit in the concept of a profit that the thing taken should become the property of the person having the profit, and the Fourteenth Restriction does not give the plaintiff the right to take the harvest for its own use and benefit. I do not accept this because in my view the effect of the Fourteenth Restriction is that the dominant owner owns the grapes or other harvest when harvested; the dominant owner must own them if it is to sell them effectually and pass title, and does not have the authority of the servient owners to pass title to purchasers but acts as of its own right.
57 There are complexities about identifying what is meant in this context by natural produce. It has been established that water in a spring or pond is not natural produce for this purpose. In National Executors & Trustees Co. of Tasmania Ltd v. Edwards [1957] Tas SR 182 (which related to mineral ores) Morris CJ at first instance said at 187: " … one of the characteristics of a profit a prendre is that it must be something taken out of the soil …" and referred to Nineteenth Century authorities dealing with water including Race v. Ward (1855) 4 Ellis & Blackburn 702, 119 E.R 259, per Lord Campbell CJ at 709, 262 who said of water "This is no part of the soil, like sand, or clay, or stones; nor the produce of the soil, like grass or turves or trees. A right to take these by custom, claimed by all the inhabitants of a district, would clearly be bad; for they all come under the category of profit a prendre, being part of the soil or the produce of the soil …".
58 Plaintiff's counsel made submissions on whether grapes and other crops are the subject of a profit a prendre. Some plant products are part of the soil and natural produce of the soil and can be the subject of a profit a prendre; some are the product of cultivation and are not the subject of a profit a prendre. The distinction is marked by the terms fructus naturales for those which are subject to a profit a prendre and fructus industriales for those which are not.
59 It is in the nature of a profit a prendre that it cannot relate to any right to carry out a process of cultivation on the servient land and of harvesting the produce of cultivation. A profit a prendre cannot go beyond a right to go on another's land and take part of the land which is naturally there or which naturally grew on it, or animals ferae naturae. A right to go on to servient land, cultivate it, produce some crop and remove it is outside the concept. There are difficulties in stating the boundary between what is produced by such activity and the products of natural growth, and the difficulty is illustrated by forest timber, which may originally have been planted but requires a long period to mature. References in judgments in the High Court of Australia to profits a prendre were collected by Young J in Ellison v. Vukicevic (1986) 7 NSWLR 104 at 113. Some light is also thrown on the nature of a profit a prendre by his Honour's consideration at 116 of the distinction between a profit a prendre and a sale of goods, for the purpose of which his Honour referred to a text which identified profits a prendre as relating only to fructus naturales whereas agreements for sale of goods might refer to fructus naturales or fructus industriales. While contending for the importance of the division between fructus industriales and fructus naturales the plaintiff's counsel referred to this passage of Young J's judgment in Ellison v. Vukecivic; however to my reading this passage and the passage in the text there cited were directed to another matter, the distinction between a profit a prendre and an agreement for the sale of goods. In Permanent Trustee Australia Ltd v. Shand (1992) 27 NSWLR 426 at 434-5 Young J's consideration again throws some light on the nature of a profit a prendre.
60 In Corporate Affairs Commission v. ASC Timbers Pty Ltd (1989) 18 NSWLR 577 at 586-591 Powell J made an examination in terms of first principles of the distinction between the grant of a profit a prendre and a contract for the sale of standing timber coupled with a licence to enter, fell and remove the timber, with references to judgments in Marshall v. Greene (1875) LR 1 CPD 35 which expounded the intersection between an agreement conferring an interest in land, the law relating to sale of goods and the significance in this context of processes of growth. I stated what in my view is the effect of the law shortly in Myola Enterprises Pty Ltd v. Pearlman, (SC NSW Bryson J unreported 3 September 1993) in these terms:
Produce of the soil grown in an annual or other recurring cycle as crops is not the subject of profits a prendre. The law on this subject was stated in and appears by the judgment in Corporate Affairs Commission -v- ASC Timber Pty Ltd (Powell J.) (1989) 18 NSWLR 577, particularly at 586 to 592. See too Permanent Trustee Ltd -v- Shand (1992) 27 NSWLR 426 at 434 and 435 (Young J.) In this branch of the law authority establishes that cultivated crops produced by human labour, referred to as fructus industriales , are not the subject of profits a prendre; they are contrasted with fructus naturales which are not produced by human labour, although timber produced in a long cycle would appear to fall outside the classification of fructus industriales .
61 That case related to a deed of licence which referred to the thing removed using the word "crop", and that word also appears in the Fourteenth Restriction.
62 It seems from observations of Mason J in Australian Softwood Forests Pty Ltd v. Attorney General of NSW and Corporate Affairs Commission (1981) 148 CLR 121 at 132-133 that his Honour was prepared to regard the interest in pine trees under the contractual arrangements there in question as "…something in the nature of a profit a prendre, if not a profit a prendre in the strict sense". The effect of the arrangement in that case was, in Mason J's view, that property in the trees passed to the grower before planting, their growth in the ground was for his benefit, he had an interest in land and a licence to enter the land in order to take possession of the fruits of his interest, and he had an obligation rather than a right to cut and move them at maturity. At first instance in Australian Softwood Forests Helsham CJ in Eq [1978] 1 NSWLR 150 was of the view that there was no profit a prendre.
63 It seems that literal translation does not establish the exact distinction between fructus naturales and fructus industriales. The exposition given by Campbell CJ in Race v. Ward & Ors (1855) 4 Ellis & Blackburn 702, 119 ER 259 at 709, 262 was not apparently an attempt at an exhaustive statement but it is of some use; his Lordship said, while distinguishing claims of a right in respect of water in a river and open running stream or in a spring: "This is no part of the soil, like sand, or clay, or stones; nor the produce of the soil, like grass, or turves, or trees. … they all come under the category of profit a prendre, being part of the soil or the produce of the soil: …". It seems unlikely that his Lordship was referring to trees produced as a process of plantation and cultivation. In Lowe (Inspector of Taxes) v. J.W. Ashmore Ltd [1971] 1 Ch 545 Megarry J, whose reputation in land law is very high, said at 557 "As for the definition of a profit as a right to take something off the land of another, it is clear that this, indeed, it is. But the converse does not hold: not all such rights are profits. To be a profit, the right must be a right to take part of the land or the creatures on it; what is taken must, when taken, be susceptible of ownership; and the right must be created by a transaction capable of creating an interest in land. A profit in the soil, giving the right to take sand, gravel and so on, is a well-known form of profit, and so is a profit of turbary, giving the right to dig and take turf or peat for fuel."
64 Although the use of Latin does not, in this instance, facilitate understanding, the concept that a tree or the fruit of a plant growing wild is a natural product of the soil or fructus naturalis, while a cultivated tree or plant or its fruit or product is not, relates fairly readily to the classic concept referred to in Race v. Ward and Lowe v. Ashmore.
65 In Commissioner of Corporate Affairs v. Nut Farms of Australia Pty Ltd [1980] ACLC 34,260 Brinsden J dealt with a marketing scheme which involved plantations of nut trees, some of which were grown to produce annual crops of nuts and some of which were grown to produce annual crops of nuts and also timber from the trees. At 34,266-7 Brinsden J appears to have assumed that identifying an agreement for sale as an agreement for sale of fructus naturales and not fructus industriales established that the agreement was not an agreement for sale of goods; and his Honour proceeded to conclude that it was a sale of an interest in land, in a context which suggests that the interest his Honour had in view was a profit a prendre. His Honour's consideration was directed to case law and statute law relating to the sale of goods, in which the distinction between fructus naturales and fructus industriales has been used for some centuries. His Honour did not, to my reading, state reasons for regarding the distinction as significant for identification of a profit a prendre.
66 The facts in Nut Farms related to an investment scheme which was not well conceived, as to the nature of the interests created for investors and as to whether there were agreements for the sale to them of interests in land. An investor was given a number of documents but the principal arrangements were oral; the effect is given by Brinsden J at 34262 and is very confusing. The investor was told that he would be the owner of nut trees, 60 established nut trees on the equivalent of one acre of land, but not an identified acre out of a large plantation, and was told that as an investor he would be like a lessee of the land, and at another point told that the relationship involved was similar to a share farming agreement for a wheat farm. The investor was also told that he could if he wished manage harvesting the trees and marketing the produce himself.
67 Any approach to the meaning of words in which fruit or nuts produced annually from trees which have been planted and cultivated are fructus naturales and not fructus industriales is very difficult to understand or apply; in reality, production of fruit or nuts requires continuing industry year by year if the trees are to remain productive. Still more clearly, the annual production of grapes even from vines which were established long ago, it may be decades ago, requires continuing work and labour, year by year and throughout the year, if it is to succeed. References to an untended vineyard as unproductive are familiar to the point of being proverbial. Any system of characterisation which regarded cultivation of vines and the production of grapes as a natural process as distinct from a process of industry would be unrealistic and incomprehensible. In my view while in Nut Farms it was significant to address the law of sale of goods in order to decide whether the agreement was a sale of goods, and in doing so to address and apply the concepts of fructus naturales and fructus industriales, close address to what those terms may mean and their application of the facts is not essential for determining whether a right is a profit a prendre; in the words of Megarry J "To be a profit, the right must be a right to take part of the land or the creatures on it …" [1971] 1 Ch 545 at 557. This is not a description which could possibly be applied to a right to carry out vineyard establishment works, plant and replant grapevines and crops, plant and harvest crops, including grapes and other crops. A right to carry out this process and take what is produced by it cannot be seen as a right to take part of the land.
68 In my opinion grapes on cultivated vines which are harvested annually are not the subject of profits a prendre, just as other crops which might also be sown annually on Part B and harvested annually are not, and the interest conferred by the Fourteenth Restriction is altogether outside the realm of profits a prendre because of the nature of the product which is cultivated and harvested, and also because of the nature of the other acts authorised by the easement, which could not on any view be seen as a right to take part of the land.
69 The ultimate contention by the plaintiff's counsel's written submission was that while it was accepted that the Fourteenth Restriction does not create a profit a prendre "… the right is sufficiently analogous with a profit a prendre to an amount to an interest in land. It is, in effect, a licence coupled with a grant. Unlike in Shand the instrument was plainly intended to create an interest in land. While not a "true" profit a prendre, the Easement for Vineyard creates an interest in land by conferring upon the dominant owner a licence, coupled with a grant." (at 20.5)
70 In my view the interest in land which it was intended to create by the Fourteenth Restriction can be understood fully and clearly from its terms and its place in a Section 88B Instrument; these establish clearly that the interest intended to be created was a legal interest, an easement over land. It was not an equitable interest, and it was not a licence. According to its terms the interest created was not a profit a prendre, and the rights which it created are not rights which would exist under a profit a prendre. The rights created are not analogous with a profit a prendre at all. They are quite different and an interpretation to the effect that, if they did not have effect as an easement, they were intended to have effect as a profit a prendre or a quasi profit a prendre would not be supported by their terms. The Fourteenth Restriction and the nature of an easement as a legal interest in land establish that the interest was not a licence; no licence, consent, action or intention of the servient owner is relevant to the exercise of rights under the Fourteenth Restriction, and there is no evidence of any licence. The servient owner's express prohibition would have no effect. Any characterisation of the rights created as a licence coupled with a grant fails because of the absence of the basis for viewing the arrangement as a licence.
71 Caveat. The plaintiff's Caveat 0362655 lodged on 6 July 1995 asserted that the plaintiff had entered on Lot 27 and carried out farm maintenance and was entitled to sell the produce and to make deductions, in terms echoing the Fourteenth Restriction.