Destri Enterprises Pty Ltd & Ors v Donald James Maxwell

Supreme Court of NSW|2011-11-23|Before: Slattery J

Judgment 1In 1808, the novelist, playwright and poet, Sir Walter Scott, published his poem about the romantic knight, Lochinvar. Scott's work had contemporary influence in Australia. In 1823 Leslie Duguid, one of the founding directors of the Commercial Bank of Sydney, received a land grant of 2000 acres in the lower Hunter Valley. The grant was bounded by the Hunter River in the north and straddled what is now the New England Highway. Duguid called the estate and its village "Lochinvar", between Branxton and Maitland. By 1840 Duguid had constructed the first major residence in the area, "Lochinvar House", situated north-west of the village of Lochinvar, but south of the Hunter River. That same year, 1840 Duguid subdivided and sold his 2000 acres into smaller lots. Lochinvar House stands on one of these original subdivided lots, Lot 1, which was not further subdivided for another 132 years, until 1972. 2In these proceedings the plaintiffs, Destri Enterprises Pty Limited ("Destri") and others, seek under Conveyancing Act 1919, s 89(1), the extinguishment or modification of one of the two rights of carriageway appurtenant to the land upon which Lochinvar House stands, an easement running east from the land and joining Luskintyre Road ("the Luskintyre Easement"). The defendant, Mr Donald James Maxwell, who owns Lochinvar House and its surrounding estate, opposes the application and, contrary to the plaintiffs' contentions, says that the Luskintyre easement is not obsolete, has not been abandoned and its proposed extinguishment would cause him substantial injury. These are the issues for decision.

The Early Subdivisions - 1972 to 1977 10There were three subdivisions between 1972 and 1977: one in October 1972 (DP244489), another in December 1972 (DP244680) and the last in 1977 (DP2553378). 11October 1972. The October 1972 subdivision (DP244489) created 8 lots along the New England Highway, carved out of Lochinvar House's original pre-1972 land holding: see Figure 1 below. These eight lots were on the southern boundary of the original holding and abutted the New England Highway on its northern side. They ran west from Windermere Road, where it intersects with the northern side of the New England Highway, to a point close to the entrance from the New England Highway into Oswald's Lane. 12Lochinvar House is a late Georgian, early Victorian style country residence, which accrued architectural additions and outbuildings throughout the nineteenth century. The residence was built on a small knoll above Kaludah Creek, close to the western boundary of the original pre-1972 estate, so as to take advantage of the aspect over Loch Katrine. This western boundary was the only boundary of the estate that did not alter throughout the various subdivisions of 1972 - 1977, 1984 and 2005. Kaludah Creek bisects the Kaludah Estate in a north-south direction, and flows into Loch Katrine not far to the east of Lochinvar House. On the other side of Kaludah Creek, on its eastern side, the land rises steeply and higher than on the western side. 13Vehicle access to Lochinvar House has always been via the New England Highway. The driveway from the New England Highway to Lochinvar House follows almost a straight line drawn south from the residence to the highway. In the nineteenth century this access, the main access, was used by carriages and carts and is now used by cars and trucks. This access was preserved through all the various subdivisions of the Kaludah Estate. 14The October 1972 subdivision retained the main access from the New England Highway to Lochinvar House through a 20 metre wide right of carriageway ("the Highway easement"). After the eight lots abutting the New England Highway were subtracted from the original pre 1972 Kaludah Estate, Lochinvar House stood on a remaining parcel of 138 hectares, lot 10 of DP244489. But only two months later, in December 1972, lot 10 itself was more intensively subdivided. 15December 1972. In December 1972 the 138 hectare property on which Lochinvar House then stood (lot 10 in DP244489) was subdivided at its westernmost end to create a further 22 lots: see Figure 2 below. As a result, Lochinvar House was left on the much reduced area of 18.02 hectares. The December 1972 subdivision also created the Luskintyre easement. The new lots numbers 10 to 19 abutted the western side of Windemere Road and the south-western side of Luskintyre Road. These new lots ranged in size between approximately 2 and 4.5 hectares. The balance of lot 10 in the October 1972 subdivision was also itself further sub-divided into three large rural lots, lot 20, lot 21 and lot 22. Lochinvar House was built on lot 22. Figure 2 below is the layout of DP 244680, showing this December 1972 subdivision. Figure 1: 16 17The December 1972 subdivision (DP244680) also created the Luskintyre easement, as a right of carriageway, 20 metres wide extending from the eastern end of the newly created lot 22, travelling east and then turning further to the north to meet Luskintyre Road at the boundary of the newly created lots 15 and 16 on the southwestern side of Luskintyre Road, as depicted in Figure 2 below. The Luskintyre easement was bounded on its northern side by the 61 hectare lot 20 and on its southern side by lots 4 to 8 of the October 1972 subdivision. The easement was 1.1 kilometres in length and although its course has not changed since the December 1972 subdivision, it was shortened slightly in 1977. Just before its entry into Luskintyre Road, the Luskintyre easement passes over lot 16 at lot 16's boundary with lot 15 in DP 244680. 18The 1977 Subdivision. The 1977 subdivision (DP255378) only made minor adjustments to the October and December 1972 subdivisions. It varied the boundaries between lot 22 and the adjoining lots in DP 244680 and made some inconsequential adjustments to the course of both the main access of the right of carriageway, the Highway easement, and the Luskintyre Road right of carriageway. At the same time, the 1977 subdivision reduced lot 22 in DP 244680 to an area of 17.29 hectares. 19The 1977 subdivision (DP 255378) left Lochinvar House standing on an even smaller and irregularly shaped 17.29 hectares of land. The Kaludah Estate, lot 22, formed a kind of arrowhead shape pointing almost due east. The point of the arrowhead opened into the western end of the right of carriageway which was also slightly modified by this subdivision. The 1977 subdivision extinguished and re-created most of the Luskintyre easement, apart from that portion which had originally traversed lot 16 in DP244680 near Luskintyre Road. 20 Figure 2: 21The extinguishment and re-creation of the right of carriageway was a step in a substantial re-working of the shape of lot 22, the land on which Luskintyre House stood prior to the 1977 subdivision. As a result of the December 1972 subdivision the 18.02 hectares of lot 22 was left in the shape of a trapezium, with an arrowhead shape pointing north. The 1977 subdivision DP255378 effectively transferred that arrowhead shaped land from the northern side of Kaludah Estate to its eastern side. On the ground that meant that Lochinvar House remained disconnected from Loch Katrine and the southern bank of the Hunter River. But the transferred arrowhead reconnected lot 22 into the western end of the Luskintyre easement. 22The Luskintyre easement created by the December 1972 subdivision then extended as far west as lot 3 of the lots on the New England Highway created by that subdivision. But once lot 22 was re-shaped by the 1977 subdivision, the re-created right of carriageway commenced abutting the more easterly lot 5 of the New England Highway lots. This is clear from an examination of Figure 3, DP705960. That was the final course of the right of way with which the Court is now concerned. 23As a result of the 1977 subdivision therefore, the course of the Luskintyre easement from the easternmost end of lot 22 through to Luskintyre Road was actually composed of two easements: (1) being that part of the original easement created in the December 1972 subdivision (DP244680) traversing over lot 16 in that subdivision; and, (2) the balance of the right of way created in the 1977 subdivision (DP255378) and burdening lot 20 in that subdivision. Thus the course of the right of way is comprised so that a traveller over the final course of the Luskintyre easement from end to end, passes over one easement then another, but both favour lot 22.

The 1984 Amalgamation Further subdivision of the Kaludah Estate did not alter either the Luskintyre easement or the Highway easement. The 1984 subdivision (DP705960) adjusted the boundary between lot 22 and lot 21 and renamed those lots respectively lots 122 and 121 in the 1984 DP705960, thereby changing the shape and amenity of the land in which Lochinvar House stands. The effect of this adjustment was to take land from lot 21 and approximately to double the area of the original lot 22 to 35.61 hectares. The new boundary between lot 22 and lot 21 was drawn deep into lot 21, to restore the Kaludah Estate's (lot 22's) frontage to the Hunter River and to reabsorb part of Loch Katrine into the estate. Thus with a river frontage and part of Loch Katrine the 1984 amalgamation improved the attractiveness of the old lot 22, now lot 122. Set out in Figure 3 below is the relevant part of DP705960 showing the change to the boundary between lots 122 and 121. Figure 3: 24The Lochinvar House lot, lot 122 in DP705960, has remained unaltered since December 1984. But further development has taken place on the pre-1972 estate to the east to create about 50 home sites.

Further Subdivision Near Luskintyre Road - 1984 to date 25Closer land development has taken place from the line of the Luskintyre easement north to the Hunter River, and close to what was the original Lochill House. The plaintiff, Destri, itself was responsible for part of this development. The development adjacent to the right of way and of principal relevance to these proceedings was a 2005 subdivision. Mr and Mrs Noonan, the owners of Lochill, sold lot 20 to Destri for subdivision purposes. Mr Reilly, on behalf of Destri, with the assistance of Mr Noonan, husbanded the subdivision through the Maitland City Council. In the course of the application process Mr Noonan and Destri had communications with Mr Maxwell that are in contest between the parties. But the form of the 2005 subdivision is not controversial. 26The 2005 subdivision became DP1122901 and created a local network of roads, Lochill Close, Lochill Katrine Drive and Stockyard Close, which all opened onto Luskintyre Road through Katrine Drive. The broad acres of Lot 20 burdened by the Luskintyre easement, were subdivided in 2005 into four similarly burdened lots, which moving from east to west along the Luskintyre easement were respectively lots 104, 105, 106 and 107. These lots together with the rest of the 2005 subdivision are now depicted in Figure 4. 27 Figure 4: 28There has been other development in the area since 2005. In October 2010 Mr Delforce subdivided lot 16, which had been created in the October 1972 subdivision. He subdivided it into three lots, named lots 161, 162 and 163 as is also depicted in Figure 4 above. The adjacent block, lot 15 in the December 1972 subdivision, immediately to the south of lot 16, remains unsubdivided. The subdivision of lot 16 creates two lots abutting Luskintyre Road and a battleaxe block, the handle of which substantially coincides with the course of the Luskintyre easement, just before it joins Luskintyre Road. 29This completes the account of the changes to the Luskintyre easement between 1972 and 2010. Some account is now needed of the parties and witnesses who gave oral evidence. 30The plaintiffs, Destri, Mr and Mrs Noonan and Mr and Mrs George and Mr Delforce all own properties burdened by the Luskintyre easement, as depicted in Figure 4. The properties each owns is furtheridentified below.

The Parties and Other Witnesses 31The witnesses on all sides of this case seemed to the Court to be doing their best to tell the truth. But the evidence of some of them was more reliable and more expert than that of others. Here is a short account of the Court's assessment of the parties and other witnesses.

Mr Noonan 32Mr Noonan (the old Lot 20 in DP255378, now Lot 4 in DP 1107096) gave believable evidence about the use of the right of way. But by reason of special condition 28 of the Destri - Noonan Contract he was still owed approximately $400,000, when he swore his first affidavit. He had a financial interest in the outcome of these proceedings. Despite this, I accept that Mr Noonan was not influenced by financial considerations to alter his evidence. He said, and I accept, that he has not seen the Luskintyre easement being used. That observed lack of use and a concern for about 20 years that the right of way would have an adverse impact on the sub-divisibility of his land was his motivation for joining in this proceeding. Surprisingly, in 2001 Mr Noonan fenced off the right of way, knowing it was a right of way. He did not tell Mr Maxwell of the fencing until 2004.

Mr Enright Mr Enright ran a wholesale nursery on Lot 124 until he retired about 3 years ago. When he was active in the nursery he had a good daily view of the right of way. 33Mr Enright was firm about what he saw on Lots 107, 106 and 105. He just cannot see Lots 16 and 17. But Mr Enright frankly conceded that he could not see the right of way all the time and that it was possible it was used when he did not notice. Mr Enright's evidence is not inconsistent with the Court's later findings in these reasons that there was some limited use of the Luskintyre easement. He was not always in a position to observe its limited use.

Mr Delforce 34Mr Delforce, another neighbour along the Luskintyre easement (see Lot 163 in Figure 4), and a plaintiff was a direct and helpful witness, whose evidence can be relied on. He was prepared to concede that people could have used the Luskintyre easement without him knowing of that. But he thought that was unlikely because he said in the country one can infer people have been present on land, through tracks in the grass or dogs barking. But the use of the Luskintyre easement, was so rare that it is hardly surprising that Mr Delforce did not notice that from time to time persons set out from Lochinvar House, such as Mr Wickham.

Mr Reilly 35Mr Desmond Reilly is a principal of Destri, the owner of lots 105, 106 and 107 in DP1122901. Through Destri he was the moving force behind the 2005 subdivision and development. He was a capable businessman. He was aware of his options to lodge an alternative subdivision plan that did not have lots on the right of way. He was equally aware of his ability to negotiate with Mr Maxwell before seeking subdivision approval on behalf of Destri so as to try and buy out Mr Maxwell's interest in the right of way. But he was not able to achieve that. 36Mr Reilly was an honest witness who gave credible, consistent and reasonable evidence. He was a developer seeking to advance a development. He was clearly frustrated by Mr Maxwell's refusal to treat with him to agree to extinguish the Luskintyre easement. But Mr Maxwell did not want to do that because he thought the Luskintyre easement was still of value to him as the registered proprietor of the Kaludah Estate lands, lot 122.

Mr Wickham 37Mr Wickham was an excellent horseman and stockman. His expertise was not in issue. He was engaged by Mr Maxwell to manage the livestock on the Kaludah Estate. He was both practical and knowledgeable about the handling of cattle. He was very familiar with Mr Maxwell's property. He was a most impressive witness who had a natural feel for stock, for stock management and for the use of stock in different kinds of terrain. 38Mr Wickham's evidence, which I wholly accept, resolved a number of the most contentious issues in the proceedings. In several areas he gave explanations that made sense of the incomplete evidence from other witnesses. The important parts of that evidence, all of which I accept, are conveniently summarised here. The evidence and my findings upon it are taken up in the Court's later analysis in these reasons. 39First, he made clear that the Highway easement was unsuitable for evacuating stock in times of flood. His evidence made clear just how unsuited the Highway easement was for that purpose. Approximately 20,000 cars a day pass along the New England Highway at Lochinvar. The median strip has recently been divided with heavy duty steel cables to reduce the number of motor vehicle accident deaths in the area. He explained that driving cattle down the Highway easement onto the New England Highway was not a practical option. The cattle could not be managed with such high volumes of traffic. 40Secondly, Mr Wickham convincingly explained that the Highway easement is potentially physically inaccessible during times of higher flood. Mr Wickham remembered that the area between Lochinvar House and the New England Highway, which is relatively low lying compared to the land on the eastern side of Kaludah Creek, did flood in 2007. Cattle loading yards are situated on the Kaludah Estate close to where the Highway easement enters the Estate. Mr Wickham points out, and I accept, the cattle yards are a flood prone area, on which Mr Wickham bogged his own cattle truck only 3 months ago, as he explained. Tight manoeuvring is needed to place a cattle truck into a loading position. And it is easy to get bogged in the process. Mr Wickham concluded and I accept that "no one can load in that yard when it's wet". This loading problem will arise on the Highway easement even after only two or three inches of rain. This is because, as Mr Wickham explained, "its black soil country and it just gets wet and you go straight down and you just slip". 41Thirdly, I also accept Mr Wickham's evidence that he rode along the Luskintyre easement in 2007. Curiously he had not told the defendants' lawyers that he had done this. As a result it did not appear in his affidavit. But I infer that he was not asked about this and it just did not get mentioned when he was preparing his affidavit. This evidence, which I accept, was an answer to the plaintiff's contention that the easement had not been used until after the proceedings were commenced. Mr Wickham says he specifically rode along the Luskintyre easement in 2007 to see whether or not it was suitable to "get cattle out" of the property in times of flood. He was a careful stock-sensitive horseman, who could be expected to have done just this. On his ride he assessed how many gateways there were across the Luskintyre easement and what obstacles he would encounter if he were to shift cattle by that route when flood threatened. His motivation for doing this in 2007 was, and I find, that he experienced "18 or 20 inches of rain in 2 to 3 days which is quite substantial". He reasoned that if he was not in a position to move cattle "pretty quick" they would be caught in a flood area on only one piece of high ground, the high ground on the Kaludah Estate, Lot 122, at the western end of the Luskintyre easement. 42As a result of this 2007 assessment Mr Wickham reached the view that the use of the Luskintyre easement actually was feasible as an escape route for cattle, if it remained 20 metres in width. He said:- "If I was bringing cattle up there I would get away with it. But if it is narrower you wouldn't get cattle up there, they would spook, they'd go through the fences, you'd have to force' em. Then you'd have litigation on your hands about some horse goin' mad because cattle broke into their paddocks". 43The strong impression Mr Wickham gave to the Court is that an easement width of 20 metres would be enough to ensure that domestic animals in the more heavily built up area along the Luskintyre easement did not frighten the cattle moving along the easement and cause them to stampede through fences. Mr Wickham thought that a more narrow easement would significantly increase that risk. I accept that Mr Wickham knows "the disadvantages and advantages of handling stock on busy roads, and where you can put stock and where you can't". Driving stock past the backyards of the Lochill estate subdivision was something of a challenge. But I accept it is a feasible option. Mr Wickham in his careful way has thought through just what he would do with the stock when he took them that way. He says that an easement width of 20 metres was required for that purpose to avoid erratic stock behaviour. 44Fourthly, Mr Wickham had a clear and practical plan as to how the Luskintyre easement could be used in time of flood. Though informal, it was a well thought out set of ideas. He had identified a number of properties between the Luskintyre easement and the Luskintyre bridge to the north, where he believed that co-operative neighbours would allow him to use their cattle yards, on their high ground as a platform to truck the Kaludah Estate cattle out in time of flood. Mr Wickham's plan was to drive them along then out of the Luskintyre easement and turn north up Luskintyre Road to these other properties, mainly on the right hand side of Luskintyre Road. Mr Wickham thought he could readily make advance arrangements with the owners of these properties for them to temporarily take the Kaludah Estate cattle there, so the cattle could then be loaded and taken elsewhere. 45Mr Wickham had thought through a number of other alternative options for managing cattle on the Kaludah Estate in times of flood. One of them was to leave the cattle locked within the right of carriageway without trucking them away. But that solution did not take proper account of the terms of the Luskintyre easement. The right of carriageway allows a right to pass and repass. It does not confer a general right to graze cattle. No doubt cattle might consume some of the pasture while moving along the Luskintyre easement, that would be an incidental to, and necessary for, the enjoyment of the right to pass and repass (Jones v Pritchard [1908] 1 Ch 630 at 638 per Parker J; Bulstrode v Lambert [1953] 1 WLR 1064 per Upjohn J; The Owners of SP 48754 v Anderson [1999] NSWSC 580 at [27] - [28] per Young J). In Bulstrode v Lambert, Upjohn J held that an easement, which provided access to a yard, included the right to park, load and unload vehicles. Upjohn J held that the right to park, load and unload vehicles was an incident of easement and described it "as ancillary to the easement, because without the right he (the plaintiff) cannot substantially enjoy that which has been reserved to him". Similarly, the right to pass and repass cattle along the Luskintyre easement must include the right for cattle to consume some pasture while moving along the easement. But that right would not extend to grazing cattle on the Luskintyre easement. Moreover, Mr Wickham also thought that because the easement was unfenced the cattle might be able to stray onto Mr Noonan's property, Lochill. But that also would not be permissible: there is a basic rule that the grantee of a right of way has no right of deviation onto another part of the servient tenement (Bullard v Harrison (1815) 105 ER 877 (KB) per Lord Ellenborough CJ; Mantec Thoroughbreds Pty Ltd (2009) 25 VR 507 at [118] per Habersberger J; Campbell v Baigent (2010) 15 BPR 28,959 at [111]. 46Despite those options not being feasible, Mr Wickham's original idea of driving the cattle along the Luskintyre easement onto the Luskintyre Road and loading them by truck from a nearby property was well thought out and showed a practical use for the Luskintyre easement in times of emergency. Mr Wickham did point out that his idea was limited to droving the cattle along the easement, not trucking them out along the easement itself in vehicles. He accepted that because the Luskintyre easement was comprised of black soil that moving a laden cattle truck along the easement would not be feasible in times of heavy rain. 47Fifthly, Mr Wickham also solved another contentious evidentiary puzzle. The accessibility of the Luskintyre easement itself, despite the fact that it too was prone to flooding at its low points, was an issue in the proceedings. His evidence was useful in several respects on this issue: first, he gave an account based on direct experience of being able to traverse the Luskintyre easement in times of flood; and secondly, his evidence reconciled well with the survey evidence mentioned later in these reasons; it explained that the accessibility problems suggested by the survey evidence were not overwhelming. Mr Wickham was confronted by counsel for the plaintiff with the possibility that the lowest section of the Luskintyre easement could flood to a depth of 2.8 metres during a one in one hundred year flood event, making the Luskintyre easement impassible in such circumstances. The point being made was that if Mr Maxwell was propounding the Luskintyre easement as an escape route for cattle in times of flood, that argument would be entirely defeated if the easement was impassable to cattle in times of flood. Mr Wickham responded to this attack: he had actually gone through the easement during the 2007 floods; he had found that at the Luskintyre easement's low point the water was then only a foot deep; and cattle could still be driven through the easement even with that depth of water over it. 48Mr Wickham gave an account, which I accept, of what happened during the 2007 floods. He then was working for Mr Maxwell. But when the 2007 floods struck he was attending to stock for another employer in Coonamble. When he heard about the rain he returned to the Kaludah estate and found Mr Maxwell's cattle gathered on the high ground in the arrowhead area just west of the western entrance to the Luskintyre easement. He then walked along the easement and found in the next gully, the lowest point, that there was only three hundred millimetres of water across the easement. He kept an eye on the water to see whether or not it was going to rise any further. If it did he appreciated he had the option of removing the cattle to safety further east along the Luskintyre easement. But the water did not rise and in the result he left them on the property. 49Mr Wickham's assessment was that the Luskintyre easement gave him the advantage of options about shifting cattle in rising flood waters, which he would not have without the easement. 50Mr Wickham was confident, and I accept, that although the easement is unfenced on its northern side that cattle can be driven up the easement within its 20 metre width by experienced cattle dogs. But he baulked at the idea that his cattle dogs would be able to keep the cattle within a narrower space of a modified easement of only 6 metres. He explained that in his oral evidence the following way:- "Q. So would your dogs do it if it was 6 metres? A. No, because you have to force. Just my experience with cattle, you have to force cattle up a narrow way and they spook especially when you've got animals or motor bikes, not so much motor bikes, with horses with their rugs flapping, or dogs come up to the fence, they just go through the fence. They put their head down and go straight through the fence. HIS HONOUR Q. The cattle put their heads down and go straight through, is that right? A. Yes. When you're forced into an area they won't go, they don't want to go, they go straight through. They're different, cattle. They like to see a width where they think it's safe. They go where they think it's safe. The same with the stockyards. Some are poorly designed. They approach the stockyard and up hill they just won't go. You have an awful time to get them into the stockyards. It's the same with cattle. Cattle like to go places where they think it's safer. But the narrower you are the more trouble you have." 51The effect of Mr Wickham's evidence was that when the Kaludah Estate faced rising floodwaters, backing up from Loch Katrine south along the course of the Kaludah Creek and cutting the property in two, the Luskintyre easement gives the property owner important options for the removal of cattle. If the herd is split, the cattle on the eastern side of Kaludah Creek can be gathered on the high ground at the arrowhead and removed out through the Luskintyre easement. If early warning is given, all the cattle can be moved to this higher ground. But even if early warning is not possible, use of the Luskintyre easement means that fewer cattle will face flooding and the hazards of traffic prone evacuation through the Highway easement. The conclusion to be drawn from Mr Wickham's evidence is that the Luskintyre easement, combined with good animal husbandry, managed with foresight in times of wet weather, is an extremely useful option for Mr Maxwell's property. 52Counsel for the plaintiffs raised with Mr Wickham the possibility that cattle could simply be left at the arrowhead during the flood. Mr Wickham explained that was not an option because of the risks to the health of the cattle in rising water. To Mr Wickham who had an obvious sensitivity to the well being of the beasts under his charge, this was the real logic behind the existence of the Luskintyre easement. His evidence was highly persuasive on this matter. This is what he said:- "A. I couldn't imagine it, but you have to do some emergency thing. Cattle can only stay in the water for, after 24 hours they get pneumonia. They deteriorate pretty quick. So you have to get out of the water. You put feed in them to get them warm because of cattle maintenance. As soon as their body gets cold they go down, especially they stand in water and it was only recent up in Queensland they lost thousands of herd standing in water. But getting back to your question there, I don't know what you would do. When I saw an easement up there I thought that must have been years ago. There's a way out for stock and a way in for stock in emergency because this is a flood area. So I thought there was a reason there for that, that easement because of that reason. " 53I accept that leaving cattle to face rising floodwaters on the high ground at the eastern end of Lot 122, is not a feasible option. It would expose the cattle to health risks. Even worse, if the floodwaters were to rise high enough the cattle may be carried away.

Mr Maxwell 54Mr Maxwell, the defendant and owner of Lot 122 (see Figuer 4), was also a credible witness. He can only recall traversing the Luskintyre easment once in 2010. He explained, and I accept, that he did not use the Luskintyre easement before then, because the tenants on the property, when he first purchased it, agisted their cattle there. 55I accept that, as he says, when Mr Maxwell took his 2010 riding trip over the easement he found it to be exhilarating. He explained, and I accept, that the reason he had not travelled over the right of way before that was because he had been told that it was fenced and impassable. I accept that Mr Maxwell now has genuine plans to use the right of way for horse riding activities.

Some Events From Mid 2004 56From about mid 2004 relevant communications among the parties to these proceedings became more frequent. Mr Maxwell did press for access to the right of way in correspondence. He wrote to Mr Delforce on 31 October 2004 in the following terms:- "I am writing to you after speaking with out mutual neighbour Mr Brian Noonan of 'Lochill' about the 20 metre wide right of carriageway running from my property to Lochintyre Road (sic) (see attached plan). I advised Brian that I wish to retain this entitlement and that would like to be able to make use of it indefinitely. However, I understand that this is not possible at present due to fencing etc which presents or restricts access. I would appreciate your advice about how the carriageway can be made accessible. As I will be away for the next 4 weeks, we could perhaps discuss the matter in December." 57Mr Maxwell copied this letter to Mr Noonan. In December 2004 Mr Noonan gained access to Mr Delforce's legal advice about the possible extinguishment of the right of way. CE Chapman and Co. advised Mr and Mrs Delforce on 24 November 2004 to the following effect. "Our advice to you is to learn to work with the owner of Lot 22 so as to make the use of the right of way as convenient as practical to you. At this stage we do not see any value in you arguing with the owner of Lot 22 as we to not believe you will win. We would reconsider that view if you were able to show that the use of the right of way had become much different to what was originally contemplated". 58They both followed the advice. Acting on it took a little longer. Mr Delforce and Mr Noonan discussed re-erecting a gate on the right of way. Mr Noonan carried out the work. After their discussion, and in order to keep Mr Maxwell happy, Mr Noonan wrote to Mr Maxwell on 10 December 2004 in the following terms:- "Mr Noel Deforce has asked me to respond jointly to your recent letter regarding the right of way. Both Noel and myself will be having some time off work in late January or early February 2005 at which time we shall construct a gate on our common boundary in the right of way area. Best wishes for the festive season." 59The gates were re-erected in the first quarter of 2005. Then Destri commenced the process of pushing through the 2005 subdivision. Other events after this period are identified late in these reasons.

Applicable Principles of Law 60The principles that apply to the exercise of the power conferred by Conveyancing Act s 89(1) to modify or extinguish an easement are clear. The power conferred in Conveyancing Act s 89(1) creates an important statutory qualification to the common law rights of the owner of an easement. Section 89(1) and (1A) relevantly provide: "89 Power of Court to modify or extinguish easements, profits à prendre and certain covenants (1) Where land is subject to an easement or a profit à prendre or to a restriction or an obligation arising under covenant or otherwise as to the user thereof, the Court may from time to time, on the application of any person interested in the land, by order modify or wholly or partially extinguish the easement, profit à prendre, restriction or obligation upon being satisfied: (a) that by reason of change in the user of any land having the benefit of the easement, profit à prendre, restriction or obligation, or in the character of the neighbourhood or other circumstances of the case which the Court may deem material, the easement, profit à prendre, restriction or obligation ought to be deemed obsolete, or that the continued existence thereof would impede the reasonable user of the land subject to the easement, profit à prendre, restriction or obligation without securing practical benefit to the persons entitled to the easement or profit à prendre or to the benefit of the restriction or obligation, or would, unless modified, so impede such user, or (b) that the persons of the age of eighteen years or upwards and of full capacity for the time being or from time to time entitled to the easement or profit à prendre or to the benefit of the restriction, whether in respect of estates in fee simple or any lesser estates or interests in the land to which the easement, the profit à prendre or the benefit of the restriction is annexed, have agreed to the easement, profit à prendre, restriction or obligation being modified or wholly or partially extinguished, or by their acts or omissions may reasonably be considered to have abandoned the easement or profit à prendre wholly or in part or waived the benefit of the restriction wholly or in part, (b1) in the case of an obligation: (i) that the prescribed authority entitled to the benefit of the obligation has agreed to the obligation's being modified or wholly or partially extinguished or by its acts or omissions may reasonably be considered to have waived the benefit of the obligation wholly or in part, or (ii) that the obligation has become unreasonably expensive or unreasonably onerous to perform when compared with the benefit of its performance to the authority, or (c) that the proposed modification or extinguishment will not substantially injure the persons entitled to the easement or profit à prendre, or to the benefit of the restriction or obligation. (1A) For the purposes of subsection (1) (b), an easement may be treated as abandoned if the Court is satisfied that the easement has not been used for at least 20 years before the application under subsection (1) is made. " 61Conveyancing Act s 89(1) is to be applied according to its terms, read fairly and without disregarding the conventional approach to legislation affecting common law property rights. The starting point for the Court's consideration is the easement itself, its terms and its objects derived from construing those terms in context and bearing in mind that the easement was created for an indefinite future and destined to endure in a changing environment: Armishaw v Denby Horton (NZ) Ltd [1984] 1 NZLR 44 at [47]; Durian (Holdings) Pty Ltd v Cavacourt Pty Ltd [2000] 10 BPR 18,099; [2000] NSWCA 28 per Mason P at [4]. 62The power to modify or extinguish an easement conferred by s 89 (1) requires proof of one or more circumstances to the satisfaction of the Court coupled with the favourable exercise of judicial discretion: Durian (Holdings) Pty Ltd v Cavacourt Pty Ltd [2000] 10 BPR 18,099; [2000] NSWCA 28 per Mason P at [2]. The circumstances required to be proved are set out in Conveyancing Act s 89(1).

Extinguishment Pursuant to s 89(1)(a) 63Conveyancing Act s 89(1)(a) grounds the exercise of the power to extinguish an easement on two independent bases connected with changing circumstances. The first basis is that by reason of the change in use of the land having the benefit of the easement or in the character of the neighbourhood, the easement ought to be deemed obsolete. The second is that the continued existence of the easement would impede the reasonable user of the land subject to the easement without securing any practical benefit to the persons entitled to the easement. 64In relation to the first basis, to determine whether there has been a change in the neighbourhood, the Court identifies what the neighbourhood is in any given case and then analyses the evidence to see if there has been change between the date of grant and the date of the application: Cavacourt Pty Ltd v Durian (Holdings) Pty Ltd (1998) 9 BPR 16,833; [2000] ANZ ConvR 22; (1999) NSW ConvR 55-891 per Young J. 65The term "obsolete" has explained in a number of authorities. Indeed obsolescence: (a) can be established in the sense that the original purpose of the easement can no longer be served: In re Truman, Hanbury, Buxton & Company Ltd's Application [1956] 1 QB 261 at [272]; and (b) can also mean that the object of the easement is incapable of fulfilment any longer or perhaps serves no presently useful purpose: Re Mason and the Conveyancing Act (1960) 78 WN (NSW) 925 at [927]; Durian (Holdings) Pty Ltd v Cavacourt Pty Ltd [2000] 10 BPR 18,099; [2000] NSWCA 28 at [3]-[6]. 66The second basis involves an assessment of whether or not the continued existence of the easement would impede the reasonable user of the servient tenement without securing practical benefit to the persons entitled. 67To establish that a covenant impedes the reasonable user of the servient land, it must be shown that no reasonable use of the land is possible unless the easement is modified or extinguished: Frasers Lorne Pty Ltd v Joyce Goldsworthy Burke & Ors [2008] NSWSC 743 per Brereton J at [14]. 68It is insufficient for a Conveyancing Act s 89(1) applicant to establish that its own proposal is a reasonable use of the servient land. The applicant must show that no reasonable use of the land is possible unless the easement is extinguished or modified: Heaton v Loblay (1960) SR (NSW) 332, at 335 per Myers J. The applicant must also show that the continuance of the easement unmodified "hinders, to a real and sensible degree, the land being reasonably used, having due regard to the situation it occupies, to the surrounding property, and the purpose of the [easement]": Re Ghey & Galton's Application [1957] 2 QB 650 at 663. The question as to whether the continued existence of the right of way secures a practical benefit to the beneficiaries is one that does not require extensive analysis. But what is a "practical benefit" is capable of ready assessment. 69Finally, Conveyancing Act s 89(1)(a) allows the Court to take into account such "other circumstances of the case which the Court may deem material". These words permit the Court to take into account "the widest field of evidentiary material": Re Roseblade; Re Foenander [1964 -5] NSWR 2044 at [2046] and Markos v OR Autor Pty Ltd [2007] NSWSC 810 per Austin J at [90].

Extinguishment Pursuant to s 89 (1)(b) - Abandonment 70Both the dominant and servient tenements of the Luskintyre easement are Torrens title land. It is clear that rights of way created by registered easements over Torrens system land can be abandoned so as to attract the jurisdiction of the Court under Conveyancing Act s 89(1): Grill v Hockey (1991) 5 BPR 11,421; Chiu v Healey (2003) 11 BPR 21,241; (2003) NSWSC 857 at [36]; Bradbrook & Neave "Easements and Restrictive Covenants In Australia" Butterworths 2nd Ed, 2000 at [19.27] and following. Conveyancing Act s 89 is applicable to land under the Real Property Act 1900: Conveyancing Act s 89(8). The mere circumstance that an easement was noted on the register when land under the Real Property Act passed to a new registered proprietor would not furnish a reason for refusing as a matter of discretion to make an order under s 89(1) or s 89(3): Treweeke v 36 Wolseley Road Pty Ltd (1973) 128 CLR 274. The relevant principles in relation to abandonment of easements in relation to the exercise of Conveyancing Act s 89 jurisdiction are the following: (a)abandonment occurs both at common law and under the Conveyancing Act when the dominant owner has made it clear that neither he nor his successors in title will make any use of the easement, though it is not to be lightly inferred: Grill v Hockey (1991) 5 BPR 11,421 and Williams v Usherwood (1981) 45 P & Cr 235, 256; (b)one must look for evidence that there has been an implied (or lost) modern deed of release of the easement - long non-use would be good evidence but would not necessarily be sufficient to establish abandonment: Swan v Sinclair [1925] AC 227, Treweeke v 36 Wolseley Road Pty Ltd (1973) 128 CLR 274 and Proprietors Strata Plan No 9,968 v Proprietors Strata Plan No 11,173 [1979] 2 NSWLR 605; and, (c)the longer the period of non-user the more readily the conclusion will be reached that the beneficiaries of the rights of way may be deemed to have abandoned it: Treweeke v 36 Wolseley Road Pty Ltd (1973) 128 CLR 274, per Walsh J at 288.

s 89(1)(c) - Lack of Substantial Injury to Beneficiaries 71The power to extinguish an easement is also conferred by Conveyancing Act s 89(1) on the basis that the proposed modification or extinguishment will not substantially injure the persons entitled to the easement. The plaintiffs claim that the Court can exercise the power to extinguish in the present case based upon this ground. As with the other heads of power to extinguish, judicial exposition has assisted in explaining how this power should be exercised. The relevant principles in relation to Conveyancing Act s 89(1)(c), are the following: (a)a "substantial injury" is one that has real and present substance but need not be large or considerable: Re Mason and the Conveyancing Act (1961) 78 WN (NSW) 925 & (1962) NSWR 762 and Tujilo v Watts (2005) 12 BPR 23,257, especially at [37]; Frasers Lorne Pty Ltd v Joyce Goldsworthy Burke & Ors (2008) 14 BPR 26,131 at [24]; (b)a wide variety of tangible and intangible potential injuries are encompassed by the expression "substantial injury" in s 89(1)(c): Webster v Bradac (1993) 5 BPR 12,032; Frasers Lorne Pty Ltd v Joyce Goldsworthy Burke & Ors (2008) 14 BPR 26,131 at [27]; and (c)there must be an injury of "real and present substance" and examples of how this the statutory language has been applied with this concept in mind are usefully summarised by Young CJ in Eq, (as His Honour then was) in Castagna v Great Wall Resources Pty Ltd (2005) 12 BPR 23,363 at [42]-[43].

The Exercise of the Conveyancing Act s 89(1) Discretion 72The grant of relief established under s 89 grounds is discretionary: Pieper v Edwards [1982] 1 NSWLR 336. The facts relevant to the exercise of this discretion include matters such as the history of the property, the conduct of the owners of both the dominant and servient tenements, the acts of a prior registered proprietor and the state of the register. No one factor is decisive: Pieper v Edwards (1982) 1 NSWLR 336 at 340D-E. 73The question of who has the burden of showing that the discretion ought be exercised once jurisdiction is established will itself depend upon the circumstances. This is explained by Hutley JA in Pieper v Edwards (1982) 1 NSWLR 336 at 340 as follows:- "the burden may not always be on one side or the other. Where the acts of abandonment relied on are those of the dominant owner the burden of showing the order should not be made could reasonably be laid on him. Whereas here, the acts relied on are of a predecessor in title of the applicant, of which the respondent had no notice, the burden could well be thrown on the applicant." 74Destri and the other plaintiffs accept in the circumstances of this case that as the owner of the servient tenement, they have the burden of showing that the discretion ought be exercised in their favour. 75The Court will normally exercise caution in acceding to an application for the extinguishment or modification of an easement, which is a proprietary right: Frasers Lorne Pty Ltd v Joyce Goldsworthy Burke & Ors [2008] NSWSC 743 per Brereton J at [29].

A Note on Conveyancing Act, s 89(1)(b)(b1) 76In the course of oral submissions a little time was spent by the parties arguing the applicability of Conveyancing Act, s 89(1)(b)(b1), which has been reproduced above. Ultimately, the plaintiff's submissions on s 89(1)(b)(b1) were not pressed. But s 89(1)(b)(b1) does not apply in this case, because the plaintiff's do not fall within the meaning of "prescribed authority". 77The words "prescribed authority" are not defined for the purposes of s 89. However, the words "prescribed authority" are separately defined in s 88A, s 88D and s 88E, where "prescribed authority" is given the same definition. There "prescribed authority" means: (a)the Crown, or (b)public or local authority constituted by an Act, or (c)a corporation prescribed by the regulations for the purposes of this section. 78The Conveyancing (General) Regulation 2008 (NSW), regs 53, 54 and 55 prescribe certain corporations as a "prescribed authority" for each of s 88A, s 88D and s 88E. While the list of entities that may be a "prescribed authority" for each of s 88D and s 88E is the same (regs 54 and 55), the list of "prescribed authority" entities for s 88A is different and includes more corporations (reg 53). However, none of the plaintiffs are prescribed as a "prescribed authority" for either s 88A, s 88D and s 88E. 79Moreover, by reason of the words in (b1) "in the case of an obligation" (emphasis added) the provision may only apply to covenants, not easements. Argument was not developed on these issues.

Application of These Principles to the Facts 80The Court will not extinguish the Luskintyre easement under the powers conferred by Conveyancing Act, s 89(1)(a), (b) or (c). The circumstances of this case do not engage these powers.

Extinguishment or Modification under Conveyancing Act, s 89(1)(a) - Easement Obsolete 81The plaintiffs have not established that the easement should be extinguished or modified in the exercise of the Court's Conveyancing Act, s 89(1)(a) power either on the first basis of obsolescence (due to changes the user of the dominant tenement or changes in the neighbourhood) or the second basis (due to its impeding the reasonable user of the servient tenement). 82Obsolescence - User of the Dominant Tenement. There has been no relevant change of user of the dominant tenement. The Kaludah Estate, Lot 122, has been used as a cattle grazing property since the time the easement was created in December 1972, and indeed for a long time before that. The alluvial soil adjacent to the Hunter River, makes it well suited for that purpose. The owners of the Kaludah Estate have also used Lochinvar House as either a residence or for a bed and breakfast business since about the time the Luskintyre easement was created. That combined agricultural and residential use has not changed over the forty years since 1972. The Luskintyre easement was always suitable as an alternative route for the egress of stock from the Kaludah Estate to higher ground in times of flood. The continued use of the Kaludah Estate for livestock grazing means that the Luskintyre easement is still useful for this purpose, even though it may rarely be used, and only in times of emergency. Mr Maxwell's case propounded the continued usefulness of the Luskintyre easement to the Kaludah Estate in three main ways: (1) as an emergency stock evacuation route; (2) as a horse riding course; and, (3) as a means of embracing the heritage value of Lochinvar House. These reasons will now deal with each of these in turn. 83Emergency Stock Evacuation Route. About forty head of cattle can be accommodated on the Kaludah Estate. Kaludah Creek does flood from time to time, so the need to evacuate cattle from lot 122 in flood emergency, is a risk that it is reasonable for the owner of lot 122 to avoid. Destri somewhat faintly suggested that Mr Maxwell did not need to plan for a one in one hundred year flood. I do not accept that contention. The town planning and land survey experts prefer to speak in terms of a 1 per cent probability flood, emphasising that it may occur more frequently than once every hundred years. Indeed, for reasons which will be explained below, the Luskintyre easement is especially useful for floods of even greater frequency than 1 per cent. 84On the Luskintyre easement as a flood evacuation route, the parties' contest took place in two areas: (1) whether the Luskintyre easement route was really needed; and, (2) whether the Luskintyre easement route was actually usable in time of flood. 85Destri first argued that the Luskintyre easement was obsolete because it was not needed due to the existence of the alternative access route, the Highway easement. This argument encountered several problems. I have accepted Mr Wickham's evidence that the Highway easement was impractical for loading cattle into trucks in wet conditions. Cattle could not be driven out onto a part of the New England Highway on which 20,000 cars a day travel at up to 90 kilometres per hour. In contrast, Luskintyre Road, the eastern end of the Luskintyre easement is a less busy road with access to nearby loading races to transport cattle away. Destri emphasised that the Highway easement was a formed road and therefore should be easy for driving cattle. But this submissions ignored the impracticalities of that access that Mr Wickham clearly identified. 86But there was another problem with denying the Luskintyre easement to the Kaludah Estate in times of flood emergency. When in major flood Kaludah Creek may bisect the property. Cattle at the eastern side of Kaludah Creek may be trapped and unable to use the Highway easement in such an event. Destri suggested that if this were to occur Mr Maxwell could seek the permission of neighbours to evacuate the cattle to the south, towards the New England Highway. But the difficulty with this solution is that cattle would still end up on the dangerous New England Highway. And it was not established that all necessary neighbours in that area would co-operate to have their land used in this way. In my view, on this first issue Mr Maxwell well established the usefulness of the Luskintyre easement to evacuate cattle in times of emergency. 87But Destri also argued that the Luskintyre easement is useless in time of flood because it was itself prone to flood. Destri's argument arose out of the expert evidence. Mr Smith, the registered land surveyor called by Mr Maxwell, undertook a survey of the height of the Luskintyre easement above the Australian Height of Datum (AHD). His expert evidence was that a 1 per cent flood event had a level of 27 metres AHD. The Luskintyre easement would probably be impassable in such a flood. This is because the dip in the course of the easement towards its western end near the Kaludah Estate, has a low point of approximately 24.2 metres AHD. Thus, in a 1 per cent flood event that point of the easement could be under water by up to 3 metres. 88But the Luskintyre easement was still useful in lesser floods. In particular, its greatest use is during flood events between 19 and approximately 24 metres AHD. When flood waters in the area rise to approximately 19 metres AHD, access is cut off to the Highway easement for the egress of cattle from large parts of the property. Thus the Luksintyre easement may become the only point of practical access for flood events in excess of 19 metres AHD. As flood waters rise further, the Luskintyre easement is still passible by cattle up to 24.2 metres AHD. Indeed Mr Wickham said, and I accept, that cattle can be driven through some small depths of water. So the practical passibility of the Luskintyre easement may well exceed flooding to 24.2 metres AHD. As flood events less than 24.2 metres AHD are more probable than those of more than 27 metres AHD, the Luskintyre easement is demonstrated to be useful for the removal of cattle in some situations, where the Highway easement is in accessible. In my view, the expert survey evidence compels the opposite conclusion to the one that Destri advances. 89Destri put forward photographic evidence and anecdotal evidence of difficulties in traversing the Luskintyre easement in times of flood. But I prefer the expert evidence on this subject. And I accept Mr Wickham's sanguine view that the dip in the Luskintyre easement would not be a problem in most floods. Indeed, it was not a problem for him in the 2007 flood that he observed directly. 90Destri also relied upon evidence of Mr Noonan and Mr Reilly that the right of way was impassable given the terrain, especially during wet weather. But I prefer Mr Wickham's evidence to that of Mr Noonan and Mr Reilly on this subject. Destri also contended that Mr Maxwell admitted in cross-examination that the Luskintyre easement was impassable. But all Mr Maxwell said was he had received information from previous owners that the Luskintyre easement was impassable. Indeed it had been impassable until Mr Maxwell asked Mr Noonan to remove the fence that he had erected. 91Horse Riding Activities. Mr Maxwell, who conceded he was a relatively inexperienced horse rider, described his August 2010 experience of riding the length of the Luskintyre easement as "easy riding" and that it was an experience of which he has "very pleasant memory" and "the view was fantastic", indeed "it was just spectacular". On this Augsut 2010 occasion he accompanied Mr Wickham, a more experienced rider. I accept Mr Maxwell's evidence of the pleasure of this occasion and that the Luskintyre easement is useful as a horse riding route. 92Destri pressed the point as to why the Luskintyre easement had not been used more often as a horse riding route, if it truly was the exhilarating experience that Mr Maxwell described. But the answer to this was a combination of factors: Mr Maxwell himself is not a particularly good rider; he did not own any horses; he was reliant upon Mr Wickham to provide him with a mount and for company; and, he was a little tentative. But I accept both his and Mr Wickham's evidence that the route is useful for that purpose. The amenity to the Kaludah Estate of the Luskintyre easement as a horse riding route is increased because Lochinvar House is now used as a bed and breakfast facility. Mr Maxwell says, and I accept, that offering horse riding activities as part of the bed and breakfast experience is open. I accept this notwithstanding the fact that no such activities are presently being conducted from Lochinvar House. 93One of the puzzles of this case is the absence of any evidence about the reasons for the creation of the Luskintyre easement in December 1972. But the width of the easement is a clue to its probable purpose. Mr Wickham's evidence supports the conclusion that an easement 20 metres wide is well designed to accommodate the passage of livestock. It is probable in my view that the easement was created with the width that it was, at least partly with the intention of using it for the movement of horses and cattle. 94The Luskintyre easement is not obsolete in the sense that the original purpose of the easement can no longer be served. Nor can it be said that the object of the easement is now incapable of fulfilment or serves no presently useful purpose. At times Destri's submissions appeared not to focus on the correct legal test for obsolescence: they tended to weigh the risks versus the benefits of extinguishing the easement. Moreover, Destri's obsolescence case was not able to show that any changes to the use of the Kaludah Estate or to the character of the neighbourhood produced relevant obsolescence. Indeed, the increase in density of development of the eastern end of the easement does not impair its usefulness as a stock evacuation route or as a horse riding route. 95Obsolescence - Heritage Issues. A final basis upon which Mr Maxwell suggested the Luskintyre easement had continuing usefulness was its enhancement of the heritage value of the Kaludah estate. In light of the Court's findings that the Luksintyre easement is useful as an emergency evacuation route for cattle in times of flood and for horse riding purposes, it is not necessary to consider this contention in any detail. 96In any event, it is a consideration of lesser significance. Mr Maxwell commissioned a "Conservation Management Plan" for Lochinvar House in April 2005. Part of that Plan suggested that the existing access along the Highway easement to Lochinvar House from the New England Highway was a very unattractive way to approach the residence. As the report said, "in short the driveway does little to generate a sense of arrival". The Conservation Management Plan suggested one option for remedying this deficiency was to utilise the Luskintyre easement. But according to the Conservation Management Plan, even that solution did not properly salute Lochinvar House's history in which the original driveway had run from another part of the New England Highway and not along the 1972 created Luskintyre easement. Mr Maxwell has not taken any active steps to implement this part of the Conservation Management Plan. In my view it is not of great moment in determining issues about the obsolescence of the Luskintyre easement. 97Obsolescence - Change in Character of Neighbourhood. There has been a change in the character of the neighbourhood since the easement has been created. Progressive subdivision has occurred east of the Kaludah Estate, close to Luskintyre Road. But this change in character of the neighbourhood justifies neither extinguishment nor modification of the easement. The development of the land near Luskintyre Road does not affect the important but rare use of the Luskintyre easement as an emergency stock route. The owners of the Kaludah Estate will still need the Luskintyre easement as a stock access route to higher ground in times of flood, whether the Luskintyre Road area is more intensively developed or not. 98Impeding Reasonable User Without Practical Benefit. In my view, the same evidence which shows that the Luskintyre easement serves a presently useful purpose also establishes that it secures a "practical benefit" to the owner of Lot 122, Mr Maxwell. Thus, Destri cannot make out the second basis for the exercise for the power to extinguish an easement due to changed circumstances pursuant to Conveyancing Act, s 89(1)(a). The easement cannot be extinguished because it secures a practical benefit. It is therefore strictly unnecessary to consider the question of whether the Luskintyre easement impedes the reasonable user of the various servient lands. 99But this basis for relief was of special relevance to Destri's alternative case, that the Luskintyre easement should be modified from the width of 20 metres to a width of 6 metres. The plaintiffs' contention was that an easement 20 metres in width would impede the reasonable user of the servient tenements in a way that an easement 6 metres in width would not cause impedance. The issue debated between the parties was whether the Luskintyre easement needed to be 20 metres wide rather than 6 metres wide in order to secure the "practical benefit" to lot 122. On this issue I find that the additional 14 metres in width does secure a practical benefit to lot 122. That practical benefit is the capacity to use the easement for driving cattle; something that cannot be readily done in an easement 6 metres in width. 100I accept Mr Maxwell's case that the extra 14 metres is necessary to drive cattle down the Luskintyre easement. Mr Wickham's evidence supports this conclusion. He said, and I accept, that if the width of the Luskintyre easement were any narrower than 20 metres "they [the cattle] could spook, they'd go through the fences". Counsel for Destri suggested that the fact that there were gates narrower than 20 metres wide along the easement was inconsistent with Mr Wickham's view that a 20 metre width would be necessary to drive cattle along the easement. But this was not clearly put to Mr Wickham and does not cause the Court to doubt the correctness of his evidence on this subject. 101The change in character in the neighbourhood also argues strongly against any modification of the easement by reducing its width. I accept Mr Wickham's evidence that the easement needs to be 20 metres wide to permit the efficient passage of livestock through it because cattle shy away from being driven into narrow spaces. Development close to the eastern end of the easement actually increases the numbers of horses, dogs, people, vehicles and noises which are likely to startle stock within the Luskintyre easement. Were the easement to be narrowed through its length to only 6 metres, the increase in these distracting factors would intensify. Narrowing the easement down to 6 metres would be unsuitable for the purpose of cattle egress in time of flood. 102There is no other circumstance from which the Court should infer that the easement should be deemed obsolete. 103Nor can it be said that the continuance of the easement in its unmodified form would impede the reasonable user of the land subject to the easement without securing a practical benefit to the Kaludah Estate. The easement does not impede the reasonable user of the burdened land. The lots in the Lochill estate affected by the easement can still be developed. Mr George, the owner of Lot 104 (see Figure 4), gave evidence that is a good example of this continued development capacity. He has been able to build a family home on Lot 104. The only restriction that the Luskintyre easement imposes upon his use of the land is that he is not able to place sheds or other outbuildings on the surface of the easement at the southern end of the Lot. Mr George and his family can use their house property on some 5 acres of land as a domestic residence with a large curtilage. He can construct outbuildings on most of the property. The part his property affected by the easement is only about 15 per cent of the total land area. It can still otherwise be used for family recreation, hobby agriculture and the grazing of any domestic animals held on the property. Although Mr George would prefer the easement not to be there, as he explained, its presence does not impede the reasonable user of the land. I infer that the owners of the other residential lots adjacent to lot 104 have a similar capacity to use their land, despite the existence of the Luskintyre easement.

Extinguishment or Modification under Conveyancing Act, s 89(1)(b) - Abandonment 104The evidence does not establish that the present or previous owners of the Kaludah estate have abandoned the Luskintyre easement. Far from abandoning the easement, I accept Mr Maxwell's evidence that he has asserted his right to the easement and has acted inconsistently with an inference that he has abandoned it. He has done this in two principal ways: (1) he insisted on the restoration of gates in the easement when he found out that Mr Noonan had dismantled them; and, (2) he corresponded with Council and with Mr Noonan, to assert the continued existence of the right of way. 105In the correspondence with Mr Delforce and Mr Noonan, in late 2004 Mr Maxwell pressed the exercise of his rights over the Luskintyre easement so gates could be put through the fences that had been erected across the easement in 2001. Mr Maxwell's letter to Mr Delforce on 31 October 2004, which was copied to Mr Noonan, followed by Mr Noonan's response of 10 December 2004 and the erection of the gates makes any abandonment case impossible. Long before proceedings commenced, Mr Maxwell was pressing his rights and making his intention to assert them clear to Mr Noonan and Mr Delforce. 106Mr Maxwell was making similar assertions to the Council when asked to comment on a draft Local Environmental Plan and Development Application for the 2005 subdivision, Mr Maxwell wrote to the Maitland City Council on 28 July 2005 and described the Luskintyre easement as "a legal entitlement which would be defended if necessary, so as not to compromise existing heritage significance and future uses of 'Kaludah Estate'". It is unclear on the evidence to what extent this correspondence came to the attention of the plaintiffs but it was entirely consistent with Mr Maxwell's position in the discussions in October 2004 between himself and Mr Noonan about surrendering the Luskintyre easement. 107Evidence of the actual use of the Luskintyre easement in the last 10 years supports the same conclusion. I accept Mr Wickham's evidence that he rode the length of the Luskintyre easement no later than 2007. I accept Mr Wickham's evidence and Mr Maxwell's evidence that they rode together the length of the easement in August 2010. 108Mr Maxwell has not made clear that neither he nor his successors in title will make use of the Luskintyre easement. No inference of abandonment can be drawn from non user, as there has been use in the last 10 years. Conveyancing Act, s 89(1A) is not engaged in this case.

Extinguishment or Modification under Conveyancing Act, s 89(1)(c) - No Substantial Injury 109Nor is Conveyancing Act, s 89(1)(c) ground established. The proposed extinguishment or modification would substantially injure the person entitled to the easement, Mr Maxwell, the registered proprietor of lot 122. There is an injury demonstrated here that has "real and present substance": Castagna v Great Wall Resources Pty Ltd (2005) 12 BPR 23,363 at [42] - [43]. The analysis above in respect of Conveyancing Act, s 89(1)(a) and (b) equally compels the conclusion that there will be a substantial injury to the owners of the Kaludah estate arising from an extinguishment or from a modification of the Luskintyre easement.

Exercising the Discretion 110The issue of the exercise of the discretion under the Act does not arise here because the jurisdiction for the Court to act under Conveyancing Act, s 89(1) is not otherwise established. But many factors would have weighed against the exercise of the discretion in any event. When Destri pursued the 2005 subdivision, in my view its principal Mr Reilly, consciously took the risk that he may not be able successfully to negotiate with Mr Maxwell the easement's removal at a later point of time. He accepted the risk of failing in that endeavour. As it turned out Mr Maxwell stood his ground in the later negotiations and did not agree to extinguish the easement. He did so, not because his motive was to take an artificial position so as to thwart Destri. Rather I find he genuinely then believed and now believes that the Luskintyre easement is useful to the Kaludah Estate. The case is one in my view where even if the Court's jurisdiction were otherwise made out, the Court would be cautious in granting Destri relief from the adverse consequences of his conscious decision to proceed with the 2005 subdivision accepting the risk that the Luskintyre easement may continue in its present form.

Conclusions and Orders 111In the result therefore the plaintiffs have failed to establish any basis for exercising the Court's powers under Conveyancing Act, s 89 to extinguish the Luskintyre easement. The evidence establishes that the easement does serve a useful purpose: it provides an alternative means of access to the owners of the Kaludah Estate to remove livestock from Lot 122 in the event of flooding. This potential use of the easement is rare. But it is nevertheless of real importance in time of flood so as to remove livestock from the Kaludah Estate to high ground, when the principal means of egress from the Kaludah Estate to the New England Highway for stock by truck is not reliable in . 112There is also no basis established to exercise the Court's powers under Conveyancing Act, s 89(1) to modify the easement to reduce it to a width of 6 metres. Contracting the width of the easement by 14 metres would substantially negative its principal purpose of providing a route for livestock. I accept the evidence of Mr Wickham that a stock route of only 6 metres in width would be too narrow for the efficient passage of stock. 113Accordingly, the Court will not exercise its powers under Conveyancing Act, s 89 either to extinguish or modify the easement. In the result the Summons is dismissed. The parties have foreshadowed the potential for special costs orders. So I will direct the parties to file any written submissions on costs by 4.00pm, 2 April 2012 and list the proceedings for short argument on costs at 9.30am on 3 April 2012.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 30 March 2012

Conveyancing (General) Regulation 2008(NSW)

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