Duncan v Cliftonville Estates Pty Ltd

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION

1840 of 2001 YOUNG CJ in EQ

Wednesday 17 October 2001 DUNCAN & ANOR v CLIFTONVILLE ESTATES PTY LTD

Judgment 1 His Honour: This is a strange suit which has come into the short notice list and has probably suffered because of inadequate preparation before the time when the two counsel who appeared before me took over the suit. They have done the very best they could have done on the material available but, because of inadequate preparation earlier, some evidentiary material which one would have thought would have been before the Court was not before the Court 2 Whilst dealing with this preliminary matter I should make the point that when the Court makes directions for the filing of affidavits before a certain time, it means what it says, even in consent orders. Ordinarily, if material is not provided within the time limited by order, the Court just does not consider it. There are occasions when the material can be received by consent, or where it would be appropriate to grant an adjournment with orders as to indemnity costs for the defaulter, but in many cases the rights and interests of the parties are only able to be dealt with by dealing with the matter at the trial in the light of the evidence which has been filed in accordance with the directions. 3 There is one submission that was made by senior counsel for the defendant about these procedural matters which, with respect, I cannot accept. That is that if a direction is made that all affidavits by the defendant are to be filed by a certain time, the defendant only needs to file the affidavits and does not need to annex or exhibit the documents on which it intends to rely. Unless some differentiation is made in the actual order, it would seem to me that an order for affidavits means an order for providing all the evidence, including the documents which have to be tendered at the trial. 4 Having relieved myself of those matters, let me turn to the present dispute. The parties are the proprietors of contiguous parcels of land at Darling Point. The actual title holdings are a little complex but, essentially, the plaintiffs are tenants in common of a property that may be called Lot 4. Adjoining is the defendant's land, Lot 3. The height of the plaintiffs' building has been regulated by covenants over it which have been in force for many years. 5 The defendant has recently built on its land and it was thought necessary to rearrange the covenants and the restrictions on the land. A right of way the plaintiffs had which connected their property to Thornton Street also entered into those considerations. For years, the plaintiffs have had vehicular access to Thornton Street via a right of way which involved a rather tight curve. When the restrictions were being renegotiated, they negotiated out an adjustment of the right of way which would ease that curve. That adjustment was of a twofold nature:

(a) There would be a grant of part of Lot 3 as an addition to the right of way; and

(b) There would be a grant through part of land that was owned by an adjoining occupier which would pass to the defendant and the defendant would then grant to the plaintiffs a right of carriageway. 6 It is with respect to (b) that the present suit is concerned. 7 The parties entered into a deed on 1 October 1999. That deed cited in recitals A to K the background to their rearrangement, and then the deed witnessed that in consideration of the plaintiffs consenting to certain releases, the defendant: "(a) will procure the registration of a grant by Whittle of a Right of Carriageway in favour of Lot 4 over the Lot 3 Area ( 'the Lot 3 Right of Carriageway') ; (b) subject to Cliftonville becoming the registered proprietor of the Additional Land, it will grant Duncan & Valkenberg a right of carriageway (in similar terms to the Lot 3 Right of Carriageway) over the Additional Land (c) in the event that Cliftonville does not become the registered proprietor of the Additional Land but obtains some other right to use the Additional Land, it will use its best endeavours to ensure that Lot 4 obtains the same rights in respect of the Additional Land as Lot 3". 8 Whittle was the previous registered proprietor of Lot 3. The "Additional Land" as defined in recital K is part of the land now occupied by a block of units known as Hopewood Gardens which is the subject of these proceedings. Cliftonville is the defendant. 9 The defendant became the registered proprietor of the "Additional Land" on 25 July 2000. All other relevant parts of the rearrangement and the deed were implemented other than the requirement of 1(b). 10 The defendant submitted to the plaintiffs a grant of right of way in the following terms: "RIGHT OF CARRIAGEWAY A right of carriageway over the part of the servient tenement for the benefit of the dominant tenement but only whilst the size and height of the current structures erected on the dominant tenement remain unaltered and comprise only two residences". 11 The plaintiffs contended, and made their contention clear to the defendant's solicitors, that they did not consider that that was compliance with the defendant's promise in clause 1(b) of the deed. 12 On 18 October 2000, a partner in the defendant's firm of solicitors faxed to the solicitor then acting for the plaintiffs, the following cryptic note: "We refer to our recent conversation and confirm that the terms of the additional right of carriageway were imposed on our client by the Owners Corporation for Hopewood Gardens. The relevant provision is contained in a Deed made between our client and the Owners Corporation, the terms of which are protected by a confidentiality provision" 13 The plaintiffs' then solicitor protested about this on 15 November 2000 and said the right of way transfer was not in similar terms to those of the Lot 3 right of carriageway and asked the defendant's solicitor why the operation of the right of carriageway on the "Additional Land" was agreed to by the defendant despite the terms of the agreement. No reply ever was received to that letter. However, on 15 February 2001, the same partner of the defendant's firm of solicitors said: "We are instructed that our client believes that it has complied with its obligations under the Deed … ". 14 At various times during the pre-trial process before the Registrar, the plaintiffs sought to have details of this alleged deed but none were forthcoming until this morning when the defendant's counsel sought to tender an affidavit and, when that was rejected, sought to tender what I assume was the deed referred to. Mr Newlinds of counsel for the plaintiffs objected to that as being unfair in the circumstances in the light of orders being made for the filing of affidavits and their constant request for details of the deed and, in the circumstances, I rejected the affidavit and the documents. 15 Mr Coles QC for the defendant, who has only come into this case very recently, valiantly sought to rely on the cryptic facsimile by his solicitor, to which I have referred, as being evidence of the fact. It is difficult to see really how far this takes anybody because knowledge as to what were the terms "imposed" on the defendant is wholly in the defendant's camp and the defendant has deliberately decided to keep this back from everybody until the last minute attempt. 16 Mr Coles QC sought to put that there was only a limited transfer of the additional land to the defendant and, accordingly, the defendant could only grant limited rights to the plaintiffs. The evidence is just not there to support that contention. It would seem - and I use that word advisedly - that there could be some equitable obligations between the defendant and Owners Corporation for Hopewood Gardens but whether those equitable obligations prevail over any equitable rights of the plaintiffs is something I cannot adjudicate for two reasons: 17 (a) Lack of evidence, and

(b) Under the rule in Tasker v Small the Owners Corporation for Hopewood Gardens is not a party to the suit. 18 The grant of the right of carriageway from Mrs Whittle to the plaintiffs in Lot 3 is in evidence. The document is in Real Property Act form of transfer granting an easement and merely says Mrs Whittle:

2. The Restriction on Use set out in Annexure 'A' hereto". 19 Annexure "A" says:

"1. RIGHT OF CARRIAGEWAY "A right of carriageway of variable width over the part of the Servient Tenement so indicated on the plan annexed hereto and marked 'B" ('the Plan').

There then follow eight subparagraphs dealing with restrictive covenants. 20 Mr Coles QC for the defendant basically makes two points:

(1) The right of the plaintiffs is to gain a right of carriageway over the additional land in accordance with the estate in that land that the defendant has. The defendant has a right less than a fee simple because of the imposition of conditions by Hopewood Gardens, ergo, it only has the obligation to grant a more limited easement. 21 It seems to me that on the evidence before the Court in the present case, I cannot accept that proposition. The defendant is the registered proprietor of the additional land so it is clause 1(b) and not clause 1(c) which is called into question in this case, as Mr Coles QC himself acknowledges. Any right in Hopewood Gardens would be an equitable right, probably only a mere equity, and unless one knows whether the equities are equal, one just does not know whether as between Hopewood Gardens and the plaintiffs some equitable relief might be granted. However, as the pre-condition of clause 1(b) was fulfilled, the obligation on the defendant was to grant a right of way without any reference to any equitable or contractual rights that might exist between it and Hopewood Gardens. The mere fact that someone has made a contract with a third party and that that person will commit a breach if it fulfils its contract with the plaintiff, or that equitable obligations have arisen in favour of the third party, is no reason for refusing to grant specific performance of the contract, at least without there being special factors; see eg Megalconomos v Metro-Goldwyn-Mayer Pty Limited (1953) 54 SR (NSW) 275 and Craney v Bugg [1971] 1 NSWLR 13. 22 Mr Coles QC says it may be that Hopewood Gardens will be in court next week seeking an interlocutory injunction. The answer to that submission is, if they ever do come, the Court will deal with the matter between the parties when and if it arises. 23 (2) The second submission was that the words "similar terms" in clause 1(b) should be construed generously and in the context meant that the type of generic development control provisions to be evinced by the grant of the easement over the additional land were to be similar in form to the control provisions in the grant over Lot 3. 24 Mr Coles QC says that when one looks at the instrument creating the right of a carriageway over Lot 3 one can see that it is conjoined with the directions of use. However, it seems to me that the Whittle instrument is a multiple instrument for two things:

(B) The creation of a covenant which may be valid in equity under the doctrine of Tulk v Moxhay . 25 It is not appropriate in my view to read into a right of carriageway the additional provisions in the restrictive covenant and somehow or other fuse the legal and equitable rights into what, in environmental law, is called developmental control plans. 26 In any event, in my view, the words in clause 1(b) "in similar terms" mean that the conditions relating to the right are to be the same. Indeed they in fact are, because each is a right of carriageway in the expanded sense that schedule 8 to the Conveyancing Act 1919 confers. 27 The real problem with the right of carriageway that is granted or purported to be granted is that it does not appear to me to be one which, as the parties obviously intended, could be a registered legal interest. 28 The law is not yet fully developed as to how one can limit the duration of an easement. This appears from discussions in books such as Hinde McMorland & Sim, Land Law in New Zealand (Butterworths, Wellington, 1997) para 6.018. Various points are clear. One is that an easement must be the subject matter of a grant; the interest that is granted must be precise; and one must be able to know at any period of time whether the legal right exists or not. With a Torrens System easement, this is reinforced by the fact that the whole philosophy of the Real Property Act 1900 is that one must be able to see from the title deeds at any time just what are the rights and interests in the land. Just as there are difficulties with caveats etc that affect part of the land where there is no proper plan so there are also difficulties if a document presented to the Registrar General for registration as an easement does not properly define the length of time for which the easement endures so things are clear. 29 Apart from this it seems to be the law as is said in Tiffany, Real Property Volume 2, 2nd ed (Callaghan and Company, Chicago, 1920) p 1333: "A right of way may, by the terms of the grant, be limited to certain seasons or persons, or even to a particular time of day. It may also be subject to interruption by reason of a particular use that may be made by the owner of the servient tenement". 30 The main authorities for this decision are Hollins v Verney (1884) 13 QBD 304 and Collins v Slade (1874) 23 WR 199. It is thus possible to create an easement in a limited form, but the grant must clearly delineate it. 31 There are also situations involving grants which are obviously created to endure only so long as a particular purpose is subserved by their exercise and that come to an end automatically when they can no longer subserve such purpose. I am quoting from Tiffany (p 1363). The authorities for the proposition are mainly American such as Cotting v Boston 87 NE 205 (1905) (Mass), but the principle would seem to apply in this country. Tiffany takes the view it is far better to deal with these matters as rights of way that only endure for a particular time rather than rights of way that exist for all time and are then abandoned. 32 I do not think it is useful to look at this rather esoteric subject any further. Whichever way one looks at it, the present grant is too uncertain. The size and height of the current structure have to be recognised. Then there are the weasel words, "remain unaltered". Does this mean completely unaltered such as not even to change by a few millimetres? And then one also gets words "comprise only two residences". Whatever the extent of the rules as to the expression of easements, this grant falls outside it. 33 Accordingly, what was proffered by the defendant does not carry out its promise under clause 1(b) of the deed. 34 The plaintiffs seek specific performance. The provisions of the deed have been wholly executed and the plaintiffs have provided everything on their side required to be provided. In such circumstances there is a very strong reason for granting specific performance rather than any other remedy; see Greene v West Cheshire Railway Co (1871) LR 13 Eq 44, 50 and Wight v Haberdan Pty Limited [1984] 2 NSWLR 280. 35 Accordingly, I should make order 1 in the summons and reserve further consideration to myself or a Master so far as the form of the grant is concerned, and order that the defendant pay the plaintiffs' costs of the proceedings to date. The exhibits are to be retained.

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