Handley v Gunner

Adsetts v Hives (1863) 33 Beav 52; 55 ER 286 Berry v Elyard (1864) 3 SCR (NSW) Eq 67 Gallagher v Rainbow (1994) 179 CLR 624 Geraghty v Russell (1874) 5 AJR 89 Greene v West Cheshire Railway Co (1871) LR 13 Eq 44 Hammersmith and Fulham London Borough Council v Monk [1992] 1 AC 478 Jones v King (1815) 4 M & S 188; 105 ER 804 CASES CITED : Keysen v Gregg (1932) 32 SR (NSW) 288 King v Jones (1814) 5 Taunt 418; 128 ER 751 Maynard v Goode (1926) 37 CLR 529 Opera House Investments Pty Ltd v Devon Buildings Pty Ltd (1936) 55 CLR 110 Pallos v Munro (1970) 72 SR (NSW) 507 Re Longlands Farm [1968] 3 All ER 552 Ryde Joinery Pty Ltd v Zisti (1997) 7 BPR 15,233 Short v Patrial Holdings Pty Ltd (1994) 6 BPR 13,996 Spencer v Hanson Pastoral Co Pty Ltd (1979) 2 BPR 9151

Neil Charles Handley (P1) PARTIES : Mary Muriel Handley (P2) Norman Henry Gunner (D)

COUNSEL : G A Rich (P) T G R Parker SC (D)

SOLICITORS : Manion McCosker (P) Beswick Solicitors (D)

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION

3498/06 - HANDLEY v GUNNER JUDGMENT 1 HIS HONOUR: These proceedings are said to be for specific performance, but essentially are for a mandatory injunction to compel compliance with what might be called a covenant for further assurance in a deed by which the defendant promised to grant an easement. 2 The parties are adjoining landowners of land in Beecroft north east of the northern railway. 3 In 1992, there were discussions between the parties as to the possibilities of developing their respective properties and these discussions included an adjoining property then owned by Mr and Mrs Brooks. It would appear that the basic problem with the redevelopment was access to a public road. 4 In an attempt to deal with this problem, a deed was entered into between the parties on 28 February 1994 to which I will refer simply as "the Deed". 5 Prior to the Deed, there was a private road off the nearest public road (Malton Road) known as Jona's Road. Jona's Road was then owned in fee simple by Jona Holdings Pty Ltd. Mr and Mrs Brown, who owned some adjoining land, had filed a caveat claiming an interest in Jona's Road. The Deed envisaged that the defendant would transfer a triangle of his land to the Browns and would receive in return the fee simple in Jona's Road. This in fact was done. 6 The Deed then provided in s 5 which was headed "Creation of Rights of Way and Easements over Gunner's Land in favour of Brooks" the following: "5.1 Handley may by notice in writing require Gunner to do all things necessary to create the rights of way and easement over Gunner's Land for the benefit of Brooks' Land substantially in the same form as the Transfer comprised in Schedule Five hereto ('the Brooks Transfer'). 5.1.2 Prior to the transfer of Jona's Road to Gunner and the Triangle to Brown Gunner must deliver the Brooks Transfer to Handley in registrable form. 5.1.3 Should the Brooks Transfer be lost or destroyed or for any other reason Handley may by notice in writing require Gunner to deliver to Handley within a reasonable time a transfer identical to and in substitution for the Brooks Transfer in registrable form. 5.2 Gunner's obligations under Clause 5.1 include, without limitation: (a) the signing of all documents and plans and instruments; (b) complying with any requisition raised by the Land Titles Office and Office of State Revenue with respect to the Brooks Transfer or any substitute Transfer … ". 7 It is a trifle difficult to describe the land in words. It would appear that because of the difference in levels it is difficult to gain access to Malton Road from the plaintiffs' land save and except by using Jona's Road which seems to terminate on a 1.966 hectare block owned by the defendant. However, the proposed right of way extends across Gunner's land to its boundary with Brooks' land. Brooks' land then occupies a slab of territory to the west of the right of way and to the west again is Handleys' land. It would appear that the parties thought, in 1994, that although Mr and Mrs Brooks were unwilling to be involved in any subdivision at that time, they might change their minds and be prepared to extend the easement through their land to benefit Handleys' land, or that Mr and Mrs Brooks might sell their land to someone who would be willing to do so. 8 The so-called "Brooks Transfer" was duly delivered. Furthermore, a s 88B instrument was prepared and in due course, registered. This created an easement 11 metres wide and variable by way of right of way over the Gunner land in favour of the Handley land even though the Handley land did not physically adjoin the Gunner land. 9 Since 1994 Mrs Brooks has died. She held as joint tenant with her husband, who became registered proprietor of the whole of the Brooks' land by notice of death. The prescribed forms under the Real Property Act 1900 have also changed and the form that was executed by Mr Gunner in 1994 as the Brooks Transfer cannot now be registered, at least without some dispensation from the Registrar General and there is no evidence that the Registrar General is willing to provide such dispensation. Furthermore, the Brooks land has since been subdivided. 10 There is no doubt that the plaintiffs or their solicitors made a demand on Mr Gunner to execute the replacement transfer, which is a term I will continue to use with reference to the document, a photostat of which is at pages 21 and following of Mr Sandel's affidavit of 24 July 2006. 11 The hearing took place before me on 1 May 2007. Mr G A Rich appeared for the plaintiffs, and Mr T G R Parker SC appeared for the defendant. 12 I asked Mr Parker to nominate his defences and I can summarise what he said as follows:

(1) There was never any deed duly executed by Mr Gunner.

(2) The request to execute the extra transfer in 2006 was invalid.

(3) The obligation under clause 3 of the Deed was spent when the s 88B instrument was registered on 28 March 1995.

(4) The Deed was spent as soon as Brooks' land was subdivided.

(5) The request for a substitute transfer must take place within a reasonable time of 1994.

(6) The substitute transfer must be identical with the Brooks Transfer and the one proffered was not in that category. 13 I will deal with these matters in turn and then, under head 7, set out the result of the case. 14 (1) Mr Parker cross-examined Mr Handley as to whether, when the Deed was signed by Mr Gunner, it contained all the pages that are currently in the document tendered as the Deed. The cross-examination was excited because:

(a) whilst the signatures of Mr Gunner as well as Mr and Mrs Handley appear on almost every sheet of the Deed, Mr Gunner's signature does not appear on Schedule 3 which is the plan of subdivision;

(b) only three pages of the six of the s 88B instrument are annexed to the Deed;

(c) the staple impressions on the Deed show that it had been reassembled;

(d) when originally tendered, the Exhibit had a couple of pages which were acknowledged not to be part of the Deed as executed. 15 I would certainly agree with Mr Parker's submissions in so far as they put that there must be great suspicion as to whether Schedules 3 and 4 were completed when the Deed was signed, sealed and delivered. However, it does not appear to me that a decision on this issue can affect the result of the case. 16 Classically, if a person wished to say that what was relied on by his opponent was not the deed as executed, a plea had to be put on of non est factum and that issue would be tried by the witnesses to the deed giving evidence as to what was contained in the document when they attested it. 17 It hardly ever happens in the 21st century, nor indeed in the late 20th century, that a deed is strictly proved, especially in equity litigation. Once a deed is tendered without objection or read as part of an affidavit without objection, and no witnesses to the deed are called, it is virtually impossible to rule on the question as to which pages were in the deed when it was signed, sealed and delivered. 18 Furthermore, it would not seem that an alteration to a deed by adding pages which everyone contemplated would be added, would be sufficient to void the deed if it is already executed and the additions are made only for the purpose of completing the expression of the intention of the parties to the deed already apparent on the face of it. The deed as completed would usually be held to be good; see Norton on Deeds, 2nd ed (Sweet & Maxwell, London, 1928) p 40. This proposition is supported by Adsetts v Hives (1863) 33 Beav 52; 55 ER 286 and more recently by the New South Wales Court of Appeal in Ryde Joinery Pty Ltd v Zisti (1997) 7 BPR 15,233 and see also Keysen v Gregg (1932) 32 SR (NSW) 288. 19 Thus, even if technical problems about how one keeps out of evidence a deed which has been altered were overcome, the additions in this case would not, to my mind, be material so that they would not have any effect on the enforceability of the main promises in the Deed. 20 There are two other answers to any problem in this area. 21 The first is that equity is particularly tender towards people who have done all that they promised to do under a contract or deed but are complaining that they have not received back what they expected; see eg Greene v West Cheshire Railway Co (1871) LR 13 Eq 44. The second is that, as Mr and Mrs Handley have given consideration for Mr Gunner's promise, it does not matter whether the document being sued on is a deed or not. 22 (2) It would seem quite clear that prior to December 2005, Mr and Mrs Handley requested Mr Gunner to sign the replacement transfer though the actual request does not appear to be in evidence. On 7 April 2006, the present solicitors for the plaintiffs did indeed make a formal demand. 23 The point that appears to be being made is that under clause 5.1 the Handleys may, by notice in writing, require Mr Gunner to do things once and once only and that because the initial attempts were irregular, it was too late for a formal notice to be given in April 2006. 24 I do not accept this submission. It seems to me that if the earlier notices were invalid, then there was no bar to giving the April 2006 notice, and likewise, if the earlier notices were valid, there was no need to give the April 2006 notice. Indeed, it seemed to me that this point was really just made by way of background rather than as a serious reason why the Handleys should not be given relief. 25 (3) Mr Parker puts that the Deed is in the form of an agreement before conveyance. He puts that the essential obligations are in clause 3 of the Deed, they are that Mr Gunner must do all things necessary to enable the plan of subdivision to be registered and create the easements and right of way set out in the draft s 88B instrument. 26 Assuming that the whole of the s 88B instrument is meant, then the easement fourthly referred to in the s 88B instrument is a right of way 11 metres wide and variable which burdens Lot 2 in DP 847605, ie Mr Gunner's land, in favour of Lot 2 in DP 703067 which is Mr and Mrs Handley's land. 27 I cannot, with respect, see how this argument can be correct. The registered easement was over the relevant part of Mr Gunner's land in favour of Mr and Mrs Handley's land. However, the disputed easement is over Mr and Mrs Brooks' land. Section 5 of the Deed, to my mind, was to lock Brooks in so that there would be no way that Brooks could get access to Malton Road unless he entered into an agreement with Mr Gunner and that Mr Gunner covenanted not to agree with Brooks contrary to the Deed. 28 I cannot see, with respect, how the registration of the s 88B instrument affected this scheme. However, Mr Parker points out that the s 88B instrument notes that the cost of maintenance, repair and restoration of the driveway and associated drainage works on the right of way was to be borne by Mr Gunner as to 48%, Mr and Mrs Handley as to 26% and there was 26% not accounted for. Mr Parker says that when one reads all of the documents, the other 26% was to be borne by Mr Brooks as appears from the annexure A to the Brooks Transfer. 29 I see that this is so, but I do not see how the argument is made out because this is so. 30 Mr Parker says that it would follow from his submission that the transaction has been completed by the s 88B instrument and that, in all the circumstances, the promises in the Deed have merged in the registration of the plan of subdivision and the grant of easements in the s 88B instrument; cf Pallos v Munro (1970) 72 SR (NSW) 507. However, because I do not accept Mr Parker's principal submission, it is not necessary to deal with this sub-submission in any detail except to say that I would have found it difficult to hold that the parties intended that there be a merger. 31 Mr Parker also draws attention to clause 8 of the Deed which says that notwithstanding anything else, Mr and Mrs Handley have no obligation to contribute to the cost of the maintenance, repair or restoration of the works unless and until the Brooks Transfer or any substitute transfer pursuant to clause 5 is registered at the Land Titles Office. 32 Again, I cannot see how this affects this particular question. Indeed, it would be further material to tell against there being a merger. 33 (4) This argument is that the obligation was to give an easement in favour of the Brooks' land. At the time the obligation was incurred the Brooks' land was owned by Mr and Mrs Brooks. Mrs Brooks has now died so that it is no longer possible to give the easement in favour of the land owned by Mr and Mrs Brooks. 34 The other point involved is that Brooks' land was identified in the original Deed as the land in Certificate of Title Volume 7075 Folio 202 being Lot 6 in Deposited Plan 25800. However, part of the Brooks' land has now been conveyed, it would seem, to Hornsby Shire Council and the Brooks' land is a smaller parcel of land, Lot 2 in DP 883724. 35 It is submitted that because of these two alterations to the Brooks' land, the obligation to grant the easement is spent. 36 I do not accept the first of these submissions. Where a person is a joint tenant with another, then that person has the whole ownership of the land. When his co-joint tenant dies, the interest of the surviving tenant is, in theory, not increased, even though the survivor is no longer subject to the possibility of his co-joint tenant severing the joint tenancy or making an application under s 66G of the Conveyancing Act 1919. See Megarry & Wade, Law of Real Property, 6th ed (Sweet & Maxwell, London, 2000) page 475, an identical passage in an earlier edition being adopted by Lord Browne-Wilkinson in the House of Lords in Hammersmith and Fulham London Borough Council v Monk [1992] 1 AC 478, 492. As Mr Brooks has the same interest as he had as at the date of the Deed, I cannot see how this point assists Mr Gunner. 37 The second point is in a different situation. 38 I should observe here that PX02 and the so-called "Brooks Transfer" as part of the Deed, does not include the Torrens Title reference to the dominant tenement, nor is the dealing accepted by the proposed transferee. However, there is in evidence, in a couple of places, another document in the same form as PX02 which notes the dominant tenement as Folio Identifier 6/25800, inserts a consideration of $1 and is again signed by Mr Gunner. Exactly where this came from is unclear. 39 It would at least seem that Mr Gunner has already executed one substitute transfer. Putting this aside, the obligation was to create a right of way over Gunner's land for the benefit of Brooks' land. The current proposed transfer is only in favour of part of Brooks' land as defined in the Deed. Is there an obligation on Mr Gunner to grant the easement on the basis that the part is a lesser obligation than the obligation to create the easement in favour of the whole? 40 The problem was considered by the High Court in Gallagher v Rainbow (1994) 179 CLR 624. By a 3-2 majority (the majority being Brennan, Dawson and Toohey JJ; the minority Gaudron and McHugh JJ) the High Court held that an easement is attached to the dominant land and will be enforced for the benefit of any part of the dominant land unless on its proper construction it is to benefit the dominant land only in its original form. 41 In Short v Patrial Holdings Pty Ltd (1994) 6 BPR 13,996, the Court of Appeal applied that method of construction and held that unless it appeared from the document that the intention of the parties was otherwise, an easement is for the benefit of each and every part of the dominant land. Authority is, accordingly, against Mr Parker's proposition. 42 (5) No time is stipulated in the document for a request for a duplicate transfer to be made. Time is not of the essence. Accordingly, one would need to construe the obligation as an obligation to comply if a notice to execute an identical document were made within a reasonable time. What is a reasonable time is a matter of fact in every case. Whilst 15 years may often be an unreasonable time, it is not necessarily so. 43 Mr Gunner says that there is no explanation for the delay since 1995 save that Mr and Mrs Handley have chosen to delay proceeding with the works. It was never ever contemplated that the obligation under the Deed would last forever. 44 In a letter written on Mr Gunner's behalf to the plaintiffs' solicitors of 3 July 2006, it was stated that: "As he has previously stated … he does not object to Mr Brooks having a right of carriageway but the problem lies in determining where the road for the subdivision will be located under the new rules from Council because of the Bush Fire Act and a change in Council policy. It is unreasonable on behalf of Mr Handley to firstly file a summons in the Supreme Court after 14 years and secondly, more importantly, not determine the location of the future road for the subdivision."

There was, however, no evidence of any such difficulty. 45 When considering what is a reasonable time, the authorities say that one must look to the nature of the transaction, the intention of the parties and see what the parties would have considered to be reasonable in all the circumstances of the case. A factor which is only relevant to the personal circumstances of one of the parties, is ordinarily not a factor to be taken into account; see Opera House Investment Pty Ltd v Devon Buildings Pty Ltd (1936) 55 CLR 110, 116. 46 In Maynard v Goode (1926) 37 CLR 529, 538-39, Isaacs J said: "The question of what is 'reasonable time' is always relative; that is, it means 'a reasonable time under the circumstances' … . There is no difference as to this in law or equity. The consequence of a departure from compliance may have very different results in the different jurisdictions. The conduct of one of the parties may render it unfair for him to profit by the failure of the other to adhere to the requirement of the contract as to time, whether definitely fixed or indefinitely stated as 'reasonable' … . But that does not affect the question of whether or not the requirement is complied with in point of fact or law. … Construction of the contract is not affected by circumstances subsequent, but only by those which are contemporaneous with its creation. … The fact that the stipulation was left indefinite in point of time strongly indicates the absence of special importance being attached to time." 47 In Spencer v Hanson Pastoral Co Pty Ltd (1979) 2 BPR 9151 at 9153, McLelland J said (omitting reference to authorities): "In determining what is denoted by a reasonable time in any particular instance, the actual circumstances of the case are to be considered including: (a) matters which were, or ought reasonably to have been, in the mutual contemplation of the parties at the time of the contract, and (b) causes of delay arising after the contract to the extent to which they could not reasonably have been avoided or overcome by the party bound … . When an obligation is to be performed within a reasonable time, there is in general no breach unless it can properly be said that an unreasonably long period elapsed during which the obligation remained unperformed." 48 In the present case it seems to me that as the plaintiffs are seeking relief they need to establish that their request was made within a reasonable time. Although Mr Parker submits that the only actual demand was that of April 2006, I will, for present purposes, assume that the first indication of a demand in 2005 was the operative date. 49 In favour of the demand being made within a reasonable time, even though 11 years after the document, are that there does not appear to be any prejudice to the defendant and that the defendant has already received full consideration. 50 However, going the other way are the important factors that, if one asked as at 1994 in a situation where everything else that was required to be done under the Deed was done by the middle of 1995, whether a demand under the Deed can still be made in 2005, one would be very tempted to answer "No". 51 The factor which might operate to alter this answer would be that at the time of the Deed it would seem that Mr and Mrs Brooks were not willing to have their land involved in the subdivision. 52 Accordingly, both parties contemplated that there would be some time that would have to elapse before the Brooks Transfer could operate, and accordingly, before there could be any possibility of a substitute transfer being possibly necessary. 53 It would seem to me that the document referred to in the Deed as the Brooks Transfer was never signed on behalf of Brooks and it would have been necessary for that to have occurred before it could be registered. Both parties were probably aware of that fact, indeed, even today there is no evidence to suggest that Mr Brooks would be prepared to sign the transfer. 54 I have examined some of the cases on orders to enforce covenants for further assurance such as King v Jones (1814) 5 Taunt 418; 128 ER 751, on appeal Jones v King (1815) 4 M & S 188; 105 ER 804 and Geraghty v Russell (1874) 5 AJR 89. I have also considered the decision of the Full Court in this State in Berry v Elyard (1864) 3 SCR (NSW) Eq 67, though that was really a specific performance suit. In particular, the decision of Molesworth J in Victoria in Geraghty makes it clear that despite the fact that a further assurance may not be required for some years, the promise to provide a further assurance does not enure forever; certainly after the limitation period has expired the Court will be reluctant to give specific performance or a mandatory injunction to compel performance of the covenant for further assurance. 55 I have really been given very few facts on which to make this decision. It would seem that the only reason why the plaintiffs did not seek the replacement transfer earlier was because they did not consider it was the appropriate time to finalise the subdivision. Apart from the matter of probable delay to which I have already referred, this was a matter wholly within the plaintiffs' camp and would not normally be a factor which the Court would take into account when assessing what is a reasonable time. It must be remembered that Cross J said in Re Longlands Farm [1968] 3 All ER 552, 556: "[R]easonableness of the time must be determined as at the date of the contract and that what is reasonable must be judged by an objective test applicable to both parties." 56 There is some suggestion that the local government requirements have changed with respect to subdivisions over the last 11 years and although there is not substantial evidence of that, it is significant that the plaintiffs do not deny it. However, doing the best I can I must find that as a matter of fact in all the circumstances, a reasonable time had passed before 2005, and that the making of the demand was accordingly too late and ineffective. 57 (6) Whilst clause 5.1 of the Deed requires Mr Gunner to do all things necessary to create the rights of way and easement over his land for the benefit of Brooks' land substantially in the same form as the Brooks Transfer, clause 5.1.3 enables Mr and Mrs Handley, should the Brooks Transfer be lost or destroyed or for any other reason the Handleys might think appropriate, to require Mr Gunner to deliver a transfer identical to and in substitution for the Brooks Transfer in registrable form. Mr Rich relied on both rights, though prayer 3 in the summons seemed basically to focus on 5.1.3, the replacement of an identical document. 58 The word "identical" has not been, as far as my researches go, and certainly counsel did not refer me to any cases on the word, been the subject of much judicial consideration in this country or in England. 59 However, in the United States, the word has been considered on many occasions, see Volume 20 of Words and Phrases (West Publishing, St Paul, 1959). Looking at the cases digested at p 15, the word "identical" means "exactly the same", "the very same", "agreeing entirely in material, constitution, properties, qualities or meanings". It is not synonymous with "alike", nor "similar" nor "resembling". 60 In the instant document under 5.1.3, the transfer is to be a replacement transfer and that, to my mind, adds force to the quality of it being an identical transfer. 61 Accordingly, the requirement for Mr Gunner to sign the document which was proffered was not a requirement to deliver a transfer identical to and in substitution for the Brooks Transfer in registrable form. 62 In any event, Mr Gunner could not produce a transfer in registrable form unless it was able to be signed by Mr Brooks. 63 (7) Pulling all these threads together, the plaintiffs are not entitled to relief because they have waited more than a reasonable time before making their demand, and even when they did make their demand, they did not seek a replacement transfer in identical form to the Brooks Transfer. 64 As I said at the commencement of these reasons, I doubt whether this is really a specific performance suit in the strict sense of the word because there is already a Deed and there has already been a registered s 88B instrument. It is more like a suit for a mandatory injunction to compel the performance of obligations under clause 5.1 of the Deed which are in the nature of further assurance. 65 There would also, to my mind, be problems with respect to s 88 of the Conveyancing Act had I been of the view that the easement should now be granted by a transfer resembling rather than identical to the Brooks Transfer. Section 88 requires the grant of an easement to identify the persons who can release the easement and to state clearly the dominant and servient tenements. The draft does not do so. This means that the easement only would be able to be enforced against Mr and Mrs Handley and not against any assignee of the land Mr and Mrs Handley now hold. However, because of other decisions in these reasons, it is unnecessary to explore this further. 66 It is probably a shame that the parties did not explore the defendant's suggestion that a road might be granted in favour of Mr Brooks over some other part of the defendant's land, but the time for that has now passed and I am asked to decide the question between the parties. 67 Because of the view that I have taken it is not necessary to explore the question as to whether Mr Brooks should have been a party to the proceedings. It follows from the above that the proceedings must be dismissed with costs.

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