Supreme Court of WA|2009-12-17|Before: Mr J, Jenkins J

KITCHING -v- PHILLIPS [2009] WASC 396 (17 December 2009)

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA

CITATION : KITCHING -v- PHILLIPS [2009] WASC 396

Conveyancing - Land titles under Torrens System - Easements - Alleged easement for training and exercising dogs - Implied easement - Express easement

Codelfa Construction Pty Ltd v State Rail Authority (NSW) [1982] HCA 24; (1982) 149 CLR 337

Cory v Davies [1923] 2 Ch 95

Crabb v Arun District Council [1976] Ch 179

Jones v Sutherland Shire Council [1979] 2 NSWLR 206

McBride v Sandland [1918] HCA 32; (1918) 25 CLR 69

McDonald v Peddle (1923) 42 NZLR 987

Muschinski v Dodds [1985] HCA 78; (1986) 160 CLR 583

Owners of East Fremantle Shopping Centre West Strata Plan 8618 v Action Supermarkets Pty Ltd [2008] WASCA 180; (2008) 37 WAR 498

Powell v Whyte [1968] Qd R 255

Pwllbach Colliery Co Ltd v Woodman [1915] AC 634

Walton Stores (Interstate) Ltd v Maher [1988] HCA 7; (1988) 164 CLR 387

Walton v The Queen [1989] HCA 9; (1989) 166 CLR 283

Wheeldon v Burrows (1879) 48 LJ Ch 853

Wilcox v Richardson (1997) 43 NSWLR 4

1 JENKINS J: In 1988 Mr and Mrs Kitching purchased a block of land in a subdivision south of Perth. They were particularly attracted to the block because it was advertised as being suitable for dog owners who wanted space to train and exercise their dogs. They bought the block in the belief that the subdivision of which it was part contained a lot which would be permanently available to them to use for these purposes (the open space lot). Some years after Mr and Mrs Kitching's purchase, the open space lot was sold to Mr and Mrs Hodgson. In 2003 fences were erected around the open space lot, effectively preventing Mr and Mrs Kitching from using it. Then Mr and Mrs Hodgson subdivided the open space lot into two lots and sold one lot to Mr and Mrs Phillips.

2 Mr and Mrs Kitching claim a declaration that they have the benefit of an easement over the two lots which were originally the open space lot. They also claim damages. Mr and Mrs Kitching say that the easement arises from the initial conditions of subdivision and their subsequent use of the open space lot. Mr and Mrs Phillips and Mr and Mrs Hodgson deny that there is any such easement.

3 In order to determine whether there is an easement I have to decide whether the developer expressly or impliedly granted Mr and Mrs Kitching an easement when they purchased their block of land in the subdivision.

4 The Lakes Road Pastoral Co Pty Ltd owned a large parcel of land in Nambeelup. The land was described as Lot 91A in Location Cockburn Sound 16 on Plan 741 and being all the land comprised in Certificate of Title Vol 1142 Folio 13 (Lot 91A). In 1988 Lakes Road offered Lot 91A for sale in subdivided lots.

5 At that time John and Pauline Kitching, who owned three large dogs, were looking for a property to purchase where they could ultimately live and keep more than three dogs. They wanted the property to be close to facilities which they could use to train their dogs.

6 They asked a real estate agent to locate such a property. The agent told Mr Kitching that he had located lot 91A. Mr Kitching contacted the Lakes Road representative, Mr Ian McNally, and arranged to inspect lot 91A.

7 On or about 16 December 1988 Mr and Mrs Kitching drove to lot 91A. At its entrance they saw a large advertising sign which displayed a plan of the proposed subdivision. The plan showed large lots surrounding an area for public use.

8 Mr McNally gave Mr and Mrs Kitching a copy of the subdivision approval for lot 91A (dated 19 April 1987), a diagram showing the proposed subdivision (similar to that which Mr and Mrs Kitching had seen on driving in) and a pamphlet headed 'Nambeelup Park - Kennel Zone'.

9 The diagram of the subdivision showed 30 lots, each having an area of approximately 2 ha, offered for sale with a larger lot, having an area of approximately 4.4 ha, in the middle of the subdivision. This was marked as lot 81 and it had a notation of 'P O S' within its boundaries. 'POS' stands for public open space.

10 The subdivision approval from the Western Australian Planning Commission (WAPC) contained condition 7 which required that within two years from the date of the letter the proposed lot 81 shown on the plan of subdivision as open space and which 'may include a communal training area', had to be transferred free of cost to the Local Authority. The Local Authority was the Shire of Murray.

11 The letter said that the WAPC imposed condition 7 on the basis that lot 81 was to be leased back to Lakes Road for the use and management of the land by the lot owners as a communal training and obedience area.

12 The pamphlet stated that the estate zoning catered for 'all types of canine interests' and that the lots had been specifically designed to cater for the domestic requirements of the greyhound enthusiast. The blurb in the pamphlet continued:

Although each lot will individually provide ample exercising areas an area has been set aside for communal use in the 'training and obedience areas'. Walkways have been located so that easy and safe access is gained to the communal area by occupiers of all lots.

13 I accept that Mr McNally told Mr and Mrs Kitching that lot 81 would remain open space for all lot owners to use for the purpose of a communal training and obedience area.

14 There is an issue between the parties as to the weight to be given to this representation made by McNally. Neither Mr McNally nor any authorised officer of Lakes Road was called to give evidence. Neither was any evidence led to explain why such witnesses were not called.

15 Mr and Mrs Kitching submit that Mr McNally's representation is relevant to the issue as to whether Lakes Road and/or Mr and Mrs Kitching intended that the proprietors of lot 61, the lot purchased by them, would be able to use lot 81 for the purpose of training and exercising their dogs. They also submit that the evidence is relevant to prove that Lakes Road and Mr and Mrs Kitching omitted to turn their minds to how the proprietors of lot 61 could enforce the intended right of the proprietors of lot 61 and also omitted to make explicit in their contract and transfer for the sale of lot 61 a method of making the right enforceable.

16 I accept that the evidence may be relevant to the question of whether Lakes Road and/or Mr and Mrs Kitching intended that the proprietors of lot 61 would be able to use lot 81 for the purpose of training and exercising their dogs.

17 However, in order for the evidence to be admissible to prove Lakes Road's intention there must be evidence that Mr McNally was authorised to speak on behalf Lakes Road in respect of this issue.

18 I do not accept that the representation of Mr McNally is admissible to prove that Lakes Road and Mr and Mrs Kitching omitted to turn their minds to how the proprietors of lot 61 could enforce the alleged intended right. The fact that the representation was made, even if it was authorised, does not shed any light on whether Lakes Road or Mr and Mrs Kitching turned their minds to whether the representation of intention would be enforceable or not.

19 Neither is the representation admissible to prove that the parties to the contract for sale of lot 61 omitted to make explicit in their contract and transfer a method of making the right enforceable. First, there is an assumption in that submission that the representation of intention resulted in the creation of a legally enforceable right. That is disputed by the defendants. Secondly, the contract and transfer speak for themselves. They do not refer to any legal or equitable easement as contended for by Mr and Mrs Kitching. Consequently, they do not refer to any means of enforcement of such an interest.

20 Mr and Mrs Kitching submit that the representation is original evidence to prove the author's intentions, those intentions being a fact in issue or a fact relevant to a fact in issue: Walton v The Queen [1989] HCA 9; (1989) 166 CLR 283, 288 - 289 (Mason CJ). The majority in Walton (Wilson, Dawson and Toohey JJ) at 302 - 303 said:

Whilst it may be well established that statements will found an inference concerning a state of mind, there are relatively few reported cases on the subject and its limits have not been fully explored: see generally Cross on Evidence 6th ed, (Cross and Tapper, 1985), pp 465-475. It may be true in some cases to say that statements made by a person indicating his state of mind involve no element of hearsay. For example, in Hughes v National Trustees, Executors and Agency Co of Australasia Ltd [1979] HCA 2; (1979) 143 CLR 134 evidence of statements by a testatrix about her son's misconduct was held to be admissible to prove her state of mind when making her will, but not to prove that the misconduct actually occurred because:

'Such statements are not evidence of the facts they assert: they provide evidence only of the subjective attitude or beliefs of the testator or testatrix (per Barwick CJ at 137).'

But in other cases a person's statement about his state of mind will only have probative value if they are truthful and accurate and to rely upon them is to rely to some extent upon the truth of any assertion or implied assertion contained in them. To that extent an element of hearsay may be said to be present. This case is an example. But the element of hearsay need not necessarily preclude evidence of that kind being treated as conduct from which an inference can be drawn rather than as an assertion which is put forward to prove the truth of the facts asserted. The distinction between the two approaches is one which can be fine, but it is one which in principle ought to be drawn.

21 Bearing in mind these principles I accept the following propositions asserted by Mr and Mrs Kitching:

The representation of Mr McNally is admissible evidence in respect of proof of Mr and Mrs Kitching's state of mind when they purchased lot 61. That is, the representation may assist to prove that they formed their decision to purchase lot 61 in the belief that they would be able to use lot 81 to train and exercise their dogs;
The representation is admissible evidence in respect of Mr McNally's state of mind when he made it;
If there is acceptable evidence that Mr McNally had authority to make the representation on behalf of Lakes Road, the representation is admissible evidence relevant to Lakes Road's intention (to the extent that a corporation may be said to have an intention) when Mr McNally made it; and
If there is acceptable evidence that Mr McNally had authority to make the representation on behalf of Lakes Road, the representation will be admissible evidence relevant to whether or not, at the time of transfer of lot 61 to Mr and Mrs Kitching, Lakes Road intended to create an easement. However, evidence of events both before and after the representation was made will also be relevant to this issue.

22 Mr and Mrs Kitching assert that the representation is also direct evidence against the defendants on the basis that the defendants are bound by the statements made by their predecessors in title to lots 500 and 501. They submit that the evidence is admissible in this respect regardless of my ultimate decision as to whether the alleged easement was an interest in lot 81 or is an interest in lots 500 and 501. I disagree with that proposition. The statement of a predecessor in title is admissible against a party provided the statement relates to the title: Jones v Sutherland Shire Council [1979] 2 NSWLR 206 at 212. I have yet to determine that the representation relates to the title to lot 61 or lot 81; let alone to lots 500 and 501.

23 For the evidence of Mr McNally's representation to be admissible for the third and fourth purposes above, Mr McNally must have been acting as an agent for Lakes Road when he made the representation.

24 In this respect Mr and Mrs Kitching submit that I should infer that Mr McNally had authority on behalf of Lakes Road to make the representation from the following facts:

Mr McNally was the only person staffing the sales office at the subdivision at the time Mr and Mrs Kitching visited lot 91A;
The contract for sale of lot 61 was signed by Mr McNally on behalf of Lakes Road; and
Lakes Road (not Mr McNally) subsequently executed the transfer. Thus, it ratified Mr McNally's negotiations leading to the contract for the sale of lot 61.

25 The issue for me is not whether Mr McNally had the authority to enter into the contract for sale of lot 61 but whether he had the authority to represent to prospective purchasers that lot 81 would remain public open space on which they could train and exercise their dogs. It is a separate question whether from such a representation an intention to create an easement can be inferred.

26 On the balance of probabilities I am satisfied that Mr McNally had such authority. This is because up until settlement Mr McNally was acting as Lakes Road's sales agent for lot 61 and the representation he made to Mr and Mrs Kitching was not necessarily inconsistent with the subdivision approval for lot 91A (dated 19 April 1987), the diagram showing the proposed subdivision and the pamphlet headed 'Nambeelup Park - Kennel Zone'. Later in these reasons I consider in more detail the effect of the representation.

27 I find that based, in part, on the combination of representations contained in the documents I have referred to and the oral representation of Mr McNally, Mr and Mrs Kitching decided to purchase lot 61 Windfire Grove in the subdivision. Lot 61 was particularly attractive to them because it had direct access to lot 81.

28 On or about 21 December 1988 Mr and Mrs Kitching entered into a contract to purchase lot 61 for the sum of $34,000. The contract did not mention the open space lot or that it was available for their use in any manner. It was subject to a condition whereby Mr and Mrs Kitching acknowledged that the plan of subdivision had not yet been registered.

29 A plan of part of the proposed subdivision was attached to the contract. This was for the purpose of showing the location of lot 61 within the proposed subdivision. It showed only part of lot 81. The description of lot 81 was incomplete but it included the words 'open' 'space' and 'reserve'.

30 The two year period for compliance with condition 7 of the approval for subdivision expired on 19 April 1989. Condition 7 had not been complied with by that date and nor has it been complied with at any time thereafter.

31 The titles to lots 61 and 81 were issued on 2 November 1989 to Lakes Road. Settlement of lot 61 occurred on 23 November 1989 and the title to it was transferred to Mr and Mrs Kitching.

32 A subsequent report by the Ombudsman claims that, to clear the plan of subdivision for registration, the WAPC relied on advice from the Shire of Murray that condition 7 had been complied with. If that is the case, the advice was wrong.

33 The certificate of title for lot 61 does not mention lot 81 or any right of the owner of lot 61 to access or use lot 81. The title to lot 81 did not mention any rights of way or easements over it granting the public, the owners of lot 61 or other lot owners the right to exercise and train dogs on it. There were public access ways to lot 81 from public roads within the subdivision.

34 After settlement of lot 61, Mr and Mrs Kitching continued to reside elsewhere but used lot 61 and lot 81 to train and exercise their dogs on a regular basis. They eventually started to build a house on lot 61.

35 In 1996 Mr Kitching saw an advertisement for the sale of kennel lots within the subdivision. The advertisement referred to a 'communal training area for all breeds'. Mr and Mrs Kitching rely on this advertisement as proof of Lakes Road's intention to create an easement in or around the time they purchased lot 61. I do not accept that submission because there is no evidence before me as to who authorised the advertisement, which was published some seven years after Mr and Mrs Kitching purchased lot 61. Further, the reference to the communal training area is too vague to constitute proof of an intention to create an easement.

36 In early 1998 Mr and Mrs Kitching's house on lot 61 was completed and they moved into it. They have lived on lot 61 ever since. Upon moving in Mr and Mrs Kitching started to use lot 81 on a daily basis to train and exercise their dogs. For many years they had unimpeded access to lot 81.

37 The Ombudsman's report states that Lakes Road was deregistered and was only reregistered in 1998 to enable Mr McNally to obtain a money judgment against it. During this process, the Shire successfully sought to have easements for fire protection and drainage placed on lot 81. Lot 81 was then auctioned in order to meet the judgment debt. The land was passed in at auction.

38 In 2001 Lionel Hodgson negotiated with Mr McNally to purchase lot 81. During negotiations he was not told of the easement claimed by Mr and Mrs Kitching although he was aware that the lot was zoned as 'special use kennels'. On 14 September 2001 Mr Hodgson and his wife, Evelyn, entered into a contract to purchase lot 81. On 12 April 2002 they became the registered owners of lot 81. They purchased the land with the intention of building their home and housing their dogs on it. They say that lot 81 was partially fenced at the time, although there does not seem to have been a fence on the boundary between lots 61 and 81.

39 On 19 February 2002 Mr and Mrs Hodgson moved into a shed which had been recently erected on lot 81. Sometime later they built a house on what was lot 81.

40 On 27 March 2002 Mr and Mrs Hodgson applied to the WAPC for approval to subdivide lot 81 into two lots. On 8 June 2005, the lot was subdivided into lot 500 on Deposited Plan 42387, being the land comprised in Certificate of Title Vol 2597 Folio 87 and lot 501 on Deposited Plan 42387, being the land comprised in Certificate of Title Vol 2597 Folio 88. Lot 500 is 2.29 ha and lot 501 is 2.13 ha. The Hodgson's home is on lot 501. It is the furthest of the lots from lot 61 and does not have a common boundary with lot 61.

41 On the same date an easement was created granting a public access path across the narrowest part of lot 501 from the end of one access way previously described to the end of the other access way. The result is that the public are permitted to cross lot 501 from the end of one public road to access another public road.

42 There is an issue between the parties as to the extent Mr and Mrs Kitching used lot 81 prior to 2004. Mr and Mrs Kitching say that they used the lot many times each week to exercise their dogs. Whereas Mr and Mrs Hodgson say they did not see, either Mr or Mrs Kitching or their dogs on the lot.

43 In 2002 or 2003 Mr and Mrs Hodgson erected fences on lot 81. It is said that these fences were erected across the public access way thereby blocking access to lot 81. Mr Kitching says that he continued to use lot 81 by entering it from its boundary with a road which was unfenced.

44 Mrs Hodgson says that since she has been an owner of lot 81 she has only seen Mr Kitching on the lot on two occasions. One such occasion was in June 2003 when she says that she saw Mr Kitching and another man on her driveway talking to a third person. She said that she asked them what they were doing, they did not reply and she then told them to get off her property. They then left. The second occasion was in July 2003 when she saw Mr Kitching walking onto lot 81 and taking photographs of a swale drain on it. An exchange of words then took place regarding the ownership of the land. Mr Kitching acknowledges that there was an incident similar to the second incident described by Mrs Hodgson but he says that it was in 2004. He says that he has not used lot 81 since then to exercise his dogs.

45 The issue is whether Mr and Mrs Kitching regularly used lot 81 to exercise their dogs up to around 2004. I find that they did. Mr Kitching was a credible witness. I do not find it inherently incredible that he could have used lot 81 and not have been seen by Mr and Mrs Hodgson. There was a period of time when Mr and Mrs Hodgson were not living on lot 501 and when they did take up residence it seems that they were living at the end furthest away from lot 61 and the likely area Mr and Mrs Kitching exercised their dogs. There was a considerable amount of scrub on the land and it does not surprise me that Mr and Mrs Hodgson may not have seen Mr and Mrs Kitching exercising their dogs.

46 On 29 November 2005 Kevin Phillips and Sharon Phillips entered in to a contract to purchase lot 500 from Mr and Mrs Hodgson. They had no notice of the easement claimed by Mr and Mrs Kitching. Settlement took place at the end of February 2006 and they became the registered owners of lot 500 as joint tenants on 1 March 2006.

47 Mr and Mrs Kitching assert that Lakes Road expressly or impliedly granted an easement over lot 81, now lots 500 and 501, for dog training and obedience, to them and all the other registered owners of the lots in the subdivision of lot 91A (statement of claim [18]). They plead that the easement was created on or around 23 November 1989 when they settled the purchase of lot 61. They do not assert that the easement was for the benefit of the general public. Their primary contention is that the easement was created by implication. The first ground for this argument is that the easement was created because the grantor can not derogate from his grant: Wilcox v Richardson (1997) 43 NSWLR 4. The alternative ground for the creation of an easement by implication is that the parties to the sale of lot 61 had a common intention to grant to Mr and Mrs Kitching and other lot owners an easement for dog training and obedience over lot 81.

48 There was no easement of the type alleged by Mr and Mrs Kitching on the face of the title to lot 81 and there is no such easement noted on the titles to lots 500 and 501. Neither does the title to lot 61 state that it has the benefit of any such easement. That is, there is no easement of the kind alleged registered on any title. This is why Mr and Mrs Kitching say that the easement was created by implication.

49 Mr and Mrs Kitching's action, so far as it relies on an implied easement, fails because I am not satisfied that either Lakes Road or Mr and Mrs Kitching intended that an easement of the kind alleged be created.

50 The evidence proves that at the time the contract for the sale of lot 61 was signed it was probably the intention of the parties to the sale that amongst other lot owners, the proprietors of lot 61 would have unrestricted access to what was then proposed to be lot 81 to exercise and train their dogs. This right of access for the specified purpose was not to exist by way of an easement over lot 81 but by the means identified in the subdivision approval. That is, Lakes Road was to transfer lot 81 to the Shire of Murray, free of cost, and the lot was then to be leased back to Lakes Road for the use and management of the land by the lot owners within the subdivision as a communal training and obedience area. The lease would presumably have included conditions to ensure the proper management of the lot. There is nothing in the subdivision approval to indicate that the transfer of lot 81 to the Shire was to be subject of the reservation of an easement.

51 The grant of an easement over lot 81 in the terms alleged by Mr and Mrs Kitching is likely to have conflicted with the terms of the subdivision approval. That is, if Mr and Mrs Kitching had the benefit of the easement they would not have needed the lease back of lot 81 to Lakes Road and there could easily have been conflict between the rights granted under the easement and the terms of the lease.

52 Another way of looking at the problem is that if Lakes Road had granted the easement to Mr and Mrs Kitching, then any transfer of lot 81 to the Shire of Murray would have been subject to the easement. Not only does this scenario appear not to be what was envisaged by the conditions of subdivision but it would have compromised the ability of the Shire to lease back lot 81 on conditions which sought to regulate, in any way, the rights granted under the easement.

53 These considerations fortify my view that the parties to the sale intended that access to Lot 81 was not to be granted by way of an easement.

54 Regretfully for Mr and Mrs Kitching, the intention manifested in the subdivision approval never eventuated. I doubt that Lakes Road still had the intention to comply with condition 7 at the time of settlement of lot 61 given that the two year compliance period had lapsed.

55 I do not accept that the parties to the sale of Lot 61 simply intended that lot 81 was to be public open space. Mr and Mrs Kitching also accept that it was not to be public open space. This would not be consistent with the use which Mr and Mrs Kitching wanted to make of the lot and not consistent with the statements that the lot was for the use of other lot owners to train and exercise their dogs.

56 However, even if the intention of the parties was that lot 81 was to be public open space an easement would not have been created. This is because there would not have been a dominant tenement: Owners of East Fremantle Shopping Centre West Strata Plan 8618 v Action Supermarkets Pty Ltd [2008] WASCA 180; (2008) 37 WAR 498, [51].

57 Mr and Mrs Kitching submit that, in the future, condition 7 could be satisfied. This is not so. The subdivision approval has expired. Lot 81 no longer exists. Lakes Road no longer exists. Compliance with condition 7 of the subdivision approval is an impossibility for all these reasons.

58 Neither the law nor the facts enable me to impute, to Lakes Road, Mr and Mrs Kitching or the Shire of Murray, to whom lot 81 was to be transferred, an intention to create an easement at the time of settlement in the eventuality that the true intention of those parties at the time Mr and Mrs Kitching signed the contract to purchase lot 61 did not come to fruition. On the evidence before me, I am satisfied that those parties did not turn their minds to that eventuality.

59 In my view Wilcox v Richardson does not assist Mr and Mrs Kitching. Wilcox v Richardson is an application of the principle enunciated in Wheeldon v Burrows (1879) 48 LJ Ch 853. In Wheeldon v Burrows the issue was whether a vendor who sold his land in two lots, impliedly reserved an easement of light in favour of the balance of the property which was then still held by the vendor but was subsequently transferred to the defendant. It was different to this case, where the issue is whether a vendor who sold part of his land to another impliedly granted with the transfer an easement of access over another part of his land. Mr and Mrs Kitching acknowledge that Wheeldon v Burrows is not directly applicable because it concerned an easement over an existing pathway.

60 The English Court of Appeal determined that there are two rules which are founded on the maxim that a grantor shall not derogate from his grant. Using language relevant to this case, the first is that a vendor who sells part of his landholding which has a current use and enjoyment, grants to the purchaser all those continuous and apparent easements, 'or in other words all those easements which are necessary to the reasonable enjoyment of the property' purchased, and which at the time of the purchase are used by the vendor for the benefit of that part of the land which is purchased. The second rule is only applicable to the reservation of rights by the vendor, rather than the grant of rights. Consequently, it is unnecessary for me to mention it.

61 On a careful reading of the first rule and of the case as a whole, it is apparent, as Mr and Mrs Kitching acknowledge, that the facts of this case do not satisfy the rule in Wheeldon v Burrows. First, the land being sold must have a 'current use and enjoyment'. Secondly, the rule operates to imply the grant only of continuing and apparent easements which are necessary to the reasonable enjoyment of the use of the land and thirdly, the easement granted must be one which is used at the time of purchase for the benefit of that part of the land which is purchased. The rule is not met where, as in this case, the intended use of the land is quite different to its then use and where the alleged easement is not used at the time of purchase.

62 It has also been held that an alleged easement which has no physical evidence pointing to its existence is excluded by the requirement that the use be continuing and apparent: Bradbrook A, Neave M, Easements and Restrictive Covenants in Australia (2nd ed, 2000) pt 4.28 and the cases referred to. There was no apparent feature of lot 81, apart from its length, which provided physical evidence of the existence of the claimed easement.

63 However, even if these criteria were met, I am not satisfied that the easement asserted by Mr and Mrs Kitching is necessary to the reasonable enjoyment of lot 61. In this respect, I draw a distinction between an asserted implied easement which may be highly desirable for, consistent with and convenient to the (proposed) use and enjoyment of land and one which meets the criteria required by the rule in Wheeldon v Burrows.

64 In Wilcox v Richardson the New South Wales court of Appeal applied the first rule in Wheeldon v Burrows. Their Honours said that the rule required that the implied easement be necessary to the reasonable enjoyment of the property not that it be essential; the latter criterion being too stringent a test: 8 (Meagher JA) 15 (Handley JA). In every case this will be a matter of judgment, depending on the facts.

65 Mr and Mrs Kitching have failed to satisfy me that it is necessary for their reasonable enjoyment of lot 61 for them to have the right to exercise and train their dogs on what was lot 81.

66 Mr and Mrs Kitching have given evidence that they are now required to travel to other locations to exercise their dogs. Lot 61 is 2.099 ha or approximately five acres. Thus, lot 61 is a large block. I do not accept that they are unable to enjoy it, even as a kennel lot, without the ability to train and exercise their dogs on what was lot 81.

67 Mr and Mrs Kitching's alternative basis for the existence of an implied easement is that it was created by the doctrine of common intention.

68 Mr and Mrs Kitching rely on Pwllbach Colliery Co Ltd v Woodman [1915] AC 634. The issue in that case was whether a colliery company had the benefit of an easement over adjacent land which granted to it the right to deposit coal dust on its neighbour's land. Earl Loreburn found that it was unnecessary to consider details of an alleged easement because the colliery company's lease which permitted it to carry on business did not permit it to commit a nuisance (639). Lord Atkinson agreed. His Lordship found that in the absence of a finding that the nuisance was a necessary result of the business of mining the colliery company had no right to create it. Cases relied on by the colliery company were distinguished because they related to continuing uses at the time the dominant land was leased whereas the colliery commenced mining during the term of its lease. Lord Sumner thought that the right to distribute coal dust however and whenever the colliery company desired over the adjoining land was too indeterminate to be an easement proper unless the easement was created by express words, which it was not (649). Lord Parmoor held that the right to create the nuisance would only be inferred if it was 'practically impossible' to carry out the mining business without creating it. There was no evidence to this effect (652).

69 Mr and Mrs Kitching rely on Lord Parker's following observations (646 - 647) about the class of cases in which the law will imply an easement based on the common intention of the parties to a grant of real property:

The law will readily imply the grant or reservation of such easements as may be necessary to give effect to the common intention of the parties to a grant of real property, with reference to the manner or purposes in and for which the land granted or some land retained by the grantor is to be used. See Jones v Pritchard (1) and Lyttelton Times Co v Warners (2). But it is essential for this purpose that the parties should intend that the subject of the grant or the land retained by the grantor should be used in some definite and particular manner. It is not enough that the subject of the grant or the land retained should be intended to be used in a manner which may or may not involve this definite and particular use.

70 Mr and Mrs Kitching submit that the common intention of parties to a grant is sufficient of itself to create an implied easement.

71 One of the authorities they rely on to establish this is Wilcox v Richardson where Handley JA said that 'the rule in Wheeldon v Burrows is not a special rule of law of conveyancing but is only an illustration, in particular circumstances, of the operation of the ordinary rules governing implications in contracts' (14D - 14E).

72 However, his Honour's comment must be read in its context. He was seeking to justify why the New South Wales Court of Appeal should apply the rule in Wheeldon v Burrows when it had not been relied on prior to the hearing of the appeal. His Honour did not say that the ordinary rules governing implications in contracts, such as outlined in Codelfa Construction Pty Ltd v State Rail Authority (NSW) [1982] HCA 24; (1982) 149 CLR 337, 347 - 353, could or should be applied to the determination of whether an easement was implied in a conveyance without reference to the rule in Wheeldon v Burrows. To the converse, his Honour said that the court should apply the rule in Wheeldon v Burrows because it was relevant to the particular circumstances of that case. So much can be seen because his Honour proceeded to apply the criteria of the rule in Wheeldon v Burrows to the facts of that case.

73 Mr and Mrs Kitching should not be permitted to avoid the application of those criteria to their circumstances, simply by saying that their circumstances do not meet the criteria and therefore some broader test ought to apply to determine whether an easement is to be implied in their case.

74 In any event, even applying the broad test of whether at the time of settlement there was a common intention of Lakes Road on the one part and Mr and Mrs Kitching on the other, to create an easement it is my opinion that Mr and Mrs Kitching have failed to establish their claim.

75 In support of this conclusion I rely on my earlier expressed views about the intention of the parties at the time the contract for sale was signed and of Lakes Road at the time of settlement.

76 Additionally, I have a significant doubt as to whether the asserted intended use of lot 81 is definite and particular enough to meet the requirement mentioned by Lord Parker in Pwllbach. For example, when could the alleged intended right of use be exercised, who could exercise or train the dogs, how many dogs could be exercised or trained, what tools or facilities could be taken onto the lot to be used to exercise or train the dogs, what if any restraints had to be placed on the dogs, who was to pay to maintain the lot so that it was fit for the alleged intended use and who was to actually maintain it? In these regards I note that Mr and Mrs Kitching's assert that training includes keeping the dogs fit, and, if the dogs are racing dogs, training them for the purpose of racing them. The lack of specificity of the asserted easement moderates against an intention of the parties to the sale of lot 61 to create such an easement.

77 For the sake of completion I mention two other matters.

78 The first is that I have also had regard to the view mentioned by Bradbrook and Neave [4.37] that an easement implied by non-derogation from grant may provide a basis for the creation of an easement independent of the rule in Wheeldon v Burrows. I do not accept this view as it is contrary to the observation of Thesiger LJ in Wheeldon v Burrows that the two rules he identified are founded on the maxim that a grantor shall not derogate from his grant. If the maxim led to some other relevant rules from which an easement could be implied they would have been referred to in Wheeldon v Burrows.

79 However, as is mentioned in the text by Bradbrook and Neave [4.40] there are still a number of limitations on the authors' application of the maxim of non-derogation to the creation of an implied easement. These include that the asserted easement must be intended by the parties. For the reasons given earlier, I do not accept that at the time of settlement there was a common intention to create an easement. Secondly, the purpose for which the land is to be used must be mentioned in some way in the conveyance. This requirement was not satisfied in this case.

80 Consequently, the maxim that a grantor must not derogate from his grant, independent of the rule in Wheeldon v Burrows, does not assist Mr and Mrs Kitching.

81 The second matter I mention is the Transfer of Land Act 1893 (WA) s 68. It provides indefeasibility of title to a registered proprietor of land subject to amongst other things any easements existing over or upon or affecting such land. Given my finding that the alleged easement was not created it is unnecessary for me to consider the effect of s 68 on implied easements.

82 Mr and Mrs Kitching's alternative position is that the easement was created expressly by the words uttered by Mr McNally inducing them to enter into the contract for sale of Lot 61.

83 They submit that even though the easement is not enforceable at law, it is enforceable in equity on the basis of part performance, acquiescence, estoppel and/or constructive trust.

84 Mr and Mrs Kitching's particulars of claim state that the easement was expressly granted in or around the date of settlement of their purchase of lot 61 as a consequence of Lakes Road having:

obtained the subdivision approval subject to condition 7;
promoted the kennel lots on the basis that lot 81 would be available to the subsequent registered proprietors for the purposes contemplated by condition 7;
by the representation of Mr McNally, induced them to enter into the contract;
acquired the obligation, as registered proprietor of lot 81, to honour Mr McNally's representation in transferring lot 61;
entered into the contract for sale of lot 61;
subdivided lot 91A without having:

(i) sought or obtained from the WAPC any amendment to the subdivision approval;

(ii) informed the WAPC that condition 7 had not yet been fully complied with; and

(iii) informed Mr and Mrs Kitching that condition 7 had not yet been fully complied with; and

transferred lot 61 to Mr and Mrs Kitching in part performance of its obligations pursuant to the contract.

85 I accept the defendants' submissions that the alleged easement could not have been created by law as it fails to comply with the requirements of the Property Law Act 1969 (WA), s 33 and s 34. I do not accept, and Mr and Mrs Kitching do not assert, that the Property Law Act s 41(1) operated so as to imply the conveyance of the asserted easement to Mr and Mrs Kitching.

86 The next issue is whether equity will recognise the asserted easement on the basis of one of the doctrines asserted by Mr and Mrs Kitching, they being part performance, acquiescence, estoppel or a constructive trust.

87 My conclusion is that none of these doctrines assist Mr and Mrs Kitching.

88 The doctrine of part performance giving rise to an equitable easement requires that there be an unequivocal act which is referable to 'some such agreement as that alleged': McBride v Sandland [1918] HCA 32; (1918) 25 CLR 69, 78 - 79. Further, there must be a completed agreement and the act must be done under the terms of the agreement and by force of it.

89 For the reasons I have given earlier in respect of whether an implied easement was created, I do not accept that there was a completed agreement for the creation of an easement, as alleged, at the time Lakes Road and Mr and Mrs Kitching entered into the contract for sale of lot 61, nor at the time of settlement.

90 Mr and Mrs Kitching cite Cory v Davies [1923] 2 Ch 95 and Powell v Whyte [1968] Qd R 255 in support of this part of their case. Cory v Davies was a different and distinguishable factual situation. In that case the terms of the agreement were hardly in dispute and were readily found by the court. The parties had performed the agreement for over 70 years. In part performance of the agreement houses and fences had been erected in certain positions and without the benefit of the easement access could not be had by vehicle to these houses.

91 In Powell v Whyte the trial judge was able to find the existence of an executory agreement with specific terms giving rise to an easement, as opposed to a licence. I have not been able to find such an agreement on the facts of this case.

92 In respect of an equitable easement arising from acquiescence, Mr and Mrs Kitching cite Crabb v Arun District Council [1976] Ch 179.

93 Crabb is a case which relied on the existence of an agreement between the parties. The plaintiff acted to his detriment in reliance on the agreement. Given the agreement and the defendant's encouragement, by acquiescence, to the plaintiff to act to his detriment the court held that there was an equitable easement. To the extent that it may be said that Crabb relied on an assumption by the plaintiff, rather than an agreement between the parties, then it is an example of estoppel and is considered next.

94 As I have said previously, I am not satisfied that the original negotiations for the sale of lot 61 amounted to an agreement for the creation of the asserted easement. In any event, by the time settlement occurred in November 1989, condition 7 had lapsed, without compliance. Nothing was said or done by Lakes Road around that time to encourage or lead Mr and Mrs Kitching to believe that some other action would be taken in substitution for condition 7. Mr and Mrs Kitching are taken by me to have purchased lot 61 in full knowledge of these facts.

95 Alternatively, given the lapse of condition 7, for Mr and Mrs Kitching to succeed, there would have to be evidence to satisfy me that Lakes Road knew that Mr and Mrs Kitching were purchasing lot 61 in the mistaken belief that they were receiving an easement over lot 81, and that Lakes Road did not interfere to set them right. The evidence fails to satisfy me of these matters.

96 In respect of an equitable easement arising from estoppel, Mr and Mrs Kitching rely on Walton Stores (Interstate) Ltd v Maher [1988] HCA 7; (1988) 164 CLR 387. In Bradbrook and Neave's text the authors consider in some detail proprietary estoppel at [2.4] - [2.12].

97 It is said that proprietary estoppel is different from doctrines which impose equities arising from an agreement between the owners of the dominant and servient tenements. This is because the proprietary estoppel relies for its existence, not upon an agreement, but on an assumption made by the owner of the dominant tenement.

98 In Walton Stores Brennan J at 428 - 429 said:

In my opinion, to establish an equitable estoppel, it is necessary for a plaintiff to prove that (1) the plaintiff assumed that a particular legal relationship then existed between the plaintiff and the defendant or expected that a particular legal relationship would exist between them and, in the latter case, that the defendant would not be free to withdraw from the expected legal relationship; (2) the defendant has induced the plaintiff to adopt that assumption or expectation; (3) the plaintiff acts or abstains from acting in reliance on the assumption or expectation; (4) the defendant knew or intended him to do so; (5) the plaintiff's action or inaction will occasion detriment if the assumption or expectation is not fulfilled; and (6) the defendant has failed to act to avoid that detriment whether by fulfilling the assumption or expectation or otherwise.

99 Bradbrook and Neave refer to three cases where easements were held to be created by equitable estoppel.

100 One is Crabb which I have already distinguished. If the decision in that case did not depend on an agreement to create an easement, it is distinguished in any event because there was evidence that both parties acted in a way which was only consistent with the existence of an easement of access.

101 In the two other cases, McDonald v Peddle (1923) 42 NZLR 987 and Hill v AWJ Moore & Co Pty Ltd (1990) 5 BPR 11,359 the defendants had either actively assisted the plaintiff to do things to enable the exercise of the rights of easement (Hill) or had granted, expressly, a right to the plaintiff and then acquiesced to the expenditure of money and effort by the plaintiff to enable him to exercise the right of easement.

102 The facts of this case can be distinguished from those cases and be found not to meet the criteria of Brennan J in Walton Stores because Mr and Mrs Kitching assumed not that they would be granted an easement by Lakes Road but that condition 7 would be fulfilled. Condition 7 was not fulfilled and it had lapsed over six months before settlement of lot 61 took place. There is no evidence before me that Lakes Road did anything in that six months to encourage Mr and Mrs Kitching to believe that, instead of condition 7 being complied with, at the time of settlement it would grant Mr and Mrs Kitching an easement. Neither is there evidence which satisfies me that Mr and Mrs Kitching would not have purchased lot 61 but for their belief that they would gain access in perpetuity to lot 81 for the purpose of exercising or training their dogs or that the price they paid for lot 61 included any consideration for access to lot 81.

103 In these circumstances, assuming that Mr and Mrs Kitching can raise estoppel as a cause of action as opposed to a shield (Bradbrook and Neave [2.4]), I am not satisfied that it is unconscionable for the defendants to deny the existence of the asserted easement or that the asserted easement exists by way of the doctrine of equitable estoppel.

104 For the reasons given above under the heading of 'estoppel' I am not satisfied that 'equitable principle' requires a conclusion that the defendants are not entitled to retain beneficial ownership of lots 500 and 501: Muschinski v Dodds [1985] HCA 78; (1986) 160 CLR 583, 614; Seddon and Ellinghaus, Cheshire and Fifoot's Law of Contract (9th Aust ed, 2008) [16.72] - [16.76].

Conclusion as to the existence of an easement

105 For the foregoing reasons, I conclude that Mr and Mrs Kitching have failed to prove that an express or implied easement to exercise and train their dogs on what was lot 81 was created at or around 23 February 1989, the date of settlement of their purchase of lot 61.

106 Having come to this conclusion it is unnecessary for me to determine other issues between the parties. However, I will deal with the issue of damages for the sake of completion.

107 Mr and Mrs Kitching did not present any valuation evidence which enables me to assess damages in their favour.

108 Mr and Mrs Kitching presented evidence of some alleged detriment to them as a consequence of them not being able to access lots 500 and 501. They said they have to take their dogs to the Mandurah foreshore to exercise them instead. Lot 81 was approximately twice the size of lot 61 but it was covered in scrub. It is not clear to me why Mr and Mrs Kitching's dogs cannot be adequately exercised and trained on lot 61.

109 Now that lot 81 has been subdivided into two lots and has at least one house on it, it would not appear to be as desirable for exercising and training dogs. It was not, and could not, be suggested that the defendants should be prohibited from living on their properties by the asserted easement.

110 Given the paucity of evidence concerning damages and its unpersuasive character, even if Mr and Mrs Kitching had proved the existence of the asserted easement and its breach, I would have only been prepared to assess damages at a nominal level.

Codelfa Construction Pty Ltd v State Rail Authority

At a glance

Court

Decision date

Before

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Judgment (144 paragraphs)

KITCHING -v- PHILLIPS [2009] WASC 396 (17 December 2009)

Parties

Legislation Cited (2)

Cases Cited (8)