Horseshoe Pastoral Co Pty Ltd v Rixon [2018] NSWCA 121 | Case summary

Horseshoe Pastoral Co Pty Ltd v Rixon [2018] NSWCA 121 | Case summary | Zoe

Judgment

THE COURT: This is a purported appeal or alternatively an application for leave to appeal from a declaration and orders made on 26 September 2017 in the Equity Division (Brereton J). The primary judge declared that the respondent ("Mrs Rixon") is entitled to an equitable right of carriageway over the applicant's ("Horseshoe Pastoral's") land. His Honour ordered Horseshoe Pastoral to do all things necessary to provide Mrs Rixon with an easement in registrable form over the land (Rixon v Horseshoe Pastoral Co. Pty Ltd [2017] NSWSC 1293).
On 22 December 2017 Horseshoe Pastoral filed, purportedly as of right, a notice of appeal from the declaration and orders made. It does not dispute that the easement in issue has a value of less than $100,000. The primary judge recorded (Judgment [112]) that it was accepted that there could be no serious dispute that if an easement were granted pursuant to s 88K of the Conveyancing Act 1919 (NSW) along the track over which the easement was declared to exist, compensation of $30,000 would be allowed.
The applicant submitted that leave to appeal was not required because the appeal involved a question respecting property amounting to or of the value of $100,000 or more (Supreme Court Act 1970 (NSW), s 101(2)(r)(ii)). It is common ground that the value of the servient tenement over which the primary judge held that Mrs Rixon was entitled to an equitable easement is more than $100,000. That is not the question. The question is whether the right or property in issue on the appeal is of more than that value (Oertel v Crocker (1947) 75 CLR 261; Ebert v Union Trustee Co of Australia Ltd (1957) 98 CLR 172 at 175; Hooper v Rowley [2004] NSWCA 398; Pegela Pty Ltd v Oates [2010] NSWCA 186 at [63]); Pawlowska v Zajglic [2011] NSWCA 118; Starr v Ryan (NSW Court of Appeal, 22 February 2006) no medium neutral citation); Stolyar v Towers [2018] NSWCA 6 at [83]). Milne v James (1910) 13 CLR 165 on which the applicant relied was not followed in Oertel v Crocker.
Generally it is appropriate only to grant leave to appeal in cases that involve issues of principle, or questions of public importance, or where it is reasonably clear that an error has been made, going beyond what is merely arguable, that occasions an injustice (Be Financial Pty Ltd as trustee for the Financial Operations Trust v Das [2012] NSWCA 164 at [32]-[38]); The Age Co Ltd v Liu (2013) 82 NSWLR 268; [2013] NSWCA 26 at [13]). Appellate review will be warranted if there is an "error of principle which, if uncorrected, will result in substantial injustice" (Collier v Lancer (No. 2) [2013] NSWCA 186 at [1]). The disproportion between the amount of costs incurred in the litigation and the amount in dispute can itself be a reason for refusing leave, particularly having regard to case management principles and the appropriate allocation of court resources (Carolan v AMF Bowling Pty Ltd (t/as Bennetts Green Bowl) [1995] NSWCA 69; Gibson v Drumm [2016] NSWCA 206 at [19]-[20]).
This Court has heard full argument as on appeal. The appeal does not raise any question of general public importance, nor any issue of principle. Even if error were established, it would not lead to injustice.
In 1981 Horseshoe Pastoral and its directors and shareholders owned land located south of the village of Mogo lying between the Princes Highway to the west and the Tomakin Road to the east.
Horseshoe Pastoral owned and still owns land called Lot 130 that abuts the Princes Highway to the west. Mr and Mrs Brown and their son Raymond Brown who were the shareholders and directors of Horseshoe Pastoral owned adjacent land to the east. In 1981 either they or Horseshoe Pastoral (the identity of the vendor does not matter owing to concessions made by Horseshoe Pastoral) sold land adjacent to Lot 130 to Mrs Rixon and her then husband. That land was known as Lot 5. The primary judge recorded that the respondent is now the sole proprietor of that lot pursuant to a property settlement made with her former husband. At the time of sale the only vehicular access to Lot 5 was across Lot 130, including by means of a formed track over Lot 130 to the Princes Highway. When the respondent, Mrs Rixon was considering purchasing the lot she was met at a gate on Lot 130 where it abutted the Princes Highway. She said that she met Mr Brown junior. He said Mrs Rixon must have dealt with his father. The primary judge recorded (at [17]) that Mr Brown and Mrs Rixon in their respective vehicles crossed Lot 130 on what Mrs Rixon described as an old track to a higher vantage point on Lot 5. The primary judge accepted that Mrs Rixon was shown Lot 5 on behalf of the vendor by one or other of the Mr Browns from the high vantage point which was accessed via the Princes Highway gate and the track (at [19]).
After exchange but before settlement Mrs Rixon sourced a removable home to be placed on Lot 5. She asked Mr Brown whether she could put it on the property, saying that the house would come in two sections. She obtained permission. When asked how she would get it in Mr Brown said "You can access the land through the front gate along the track. I will unlock the gate." The house was installed. Thereafter the gate remained unlocked.
It must be assumed that contract for sale and purchase did not include provision for the grant of an easement or the grant of a licence to enable the purchasers to obtain access to the property. The only other access that did not involve crossing either Lot 130 or other land owned either by the Crown or third parties, was where the north east corner of Lot 5 abutted Tomakin Road. At that point there was what the primary judge called a rudimentary Queensland gate or "cocky's gate", being a fence, one panel of which could be moved. Tomakin Creek ran roughly along, but inside, the northern and eastern boundary of Lot 5 and separates that entry point from the main part of Lot 5. There was no track or bridge over the creek at the time of the purchase (or subsequently) (Judgment [13]). That area was liable to flood.
It is Horseshoe Pastoral's case that it sold land to Mrs Rixon and her husband in 1981 to which the only means of vehicular access was along a track that crossed Lot 130, which was the track that was used to show Mrs Rixon the land to be purchased, but because the contract did not include a reservation of rights to use that access, and notwithstanding that between 1981 and 2014 that route was used without complaint, it was entitled to block that route and deny her access across Lot 130. The primary judge found (at [98]) that: "Lot 130 was (and remains) vacant and unimproved; use of the track would not foreseeably (at the time of the purchase) and does not now occasion inconvenience to any occupant or user of Lot 130."
If there were any error in the primary judge's reasoning that error would not occasion any serious injustice.
The applicant contended that the primary judge erred in his assessment of the evidence. If that submission were made good, it would not justify a grant of leave to appeal. In any event, it is not made good. The primary judge accepted Mrs Rixon as a thoroughly credible witness. The applicant contends that her evidence on crucial points was either plainly wrong or internally inconsistent. The first matter relied upon was that Mrs Rixon said that at the time of her inspection a defined track extended to the full width of Lot 130 and reached Lot 5. The primary judge found that it was not possible from the poor-quality photo reproductions in evidence to be certain of where the track then ended, but that it made sense that the track ended at the power lines (at [55]). The primary judge accepted that the evidence did not establish that the track extended beyond the power lines let alone to the boundary between Lot 130 and Lot 5 with sufficient definition to a continuous and apparent easement so as to amount to a Wheeldon v Burrows (1879) 12 Ch D 31 easement. He accepted that Mrs Rixon was taken via the track and then across country to inspect the property (Judgment at [55]). This question was fully dealt with by the primary judge. It did not affect his Honour's assessment of Mrs Rixon's credibility and provides no reason for interfering with his Honour's credibility finding.
The applicant relied also on evidence given by Mrs Rixon as to when she first saw the property. Her evidence in effect was that she had a stickybeak at the property before meeting Mr Brown at the gate on the Princes Highway. She said that she climbed through a fence at Tomakin Road. Her evidence was entirely consistent with her assuming that she would be entitled to a right of way along the track from the Princes Highway. The applicant submitted that her evidence demonstrated that she knew prior to her meeting with Mr Brown that there was access to the property from Tomakin Road. But that access in any practical sense was prevented by the creek. The primary judge accepted her evidence that there was no track or bridge across the creek. She was taken to inspect the property with Mr Brown via the track. Her evidence about her inspection from the cocky's gate at Tomakin Road was somewhat confused. The primary judge found that the explanation for the confusion was that Mrs Rixon misapprehended the question when it was first asked (Judgment at [18]).
The primary judge found that Mrs Rixon assumed that she was entitled as of right to use the track to access Lot 5 (Judgment at [62]-[65]). That finding was plainly open to the primary judge. The applicant submitted that there were "reasons to doubt" that Mrs Rixon ever believed that she had a lawful right of access across Lot 130 as a result of the initial inspection of Lot 5. But there is no such reason. The primary judge's findings were open to him. They make common sense. It would be extraordinary for anyone buying the lot not to assume that they could obtain vehicular access to the land that they were buying from the only means of access available. In support of its submission the applicant pointed to the fact that Mrs Rixon sought its approval before moving her house onto the lot. She obtained that permission. But that approval was sought and obtained before settlement. This was fully addressed by the primary judge.
Inconsistently with its written submission (para 3.20) the applicant submitted that the primary judge's conclusions in respect of the depositing of the house on Lot 5 between contract and settlement were irrelevant to any rights which might have accrued to Mrs Rixon. Two things are relevant. First, the fact that permission was sought is explained by the fact that settlement had not taken place. Secondly, there is no reason to doubt the primary judge's conclusion that the movement of the house was an act of detrimental reliance on the assumption that the track provided lawful access to the property, permission being required only because settlement had not yet taken place.
Horseshoe Pastoral submitted that where Mrs Rixon knew at the outset that there were other methods to access Lot 5 other than across Lot 130 it was not reasonable for her to form the view that she had legal access across Lot 130 without making further enquiry.
This submission was based upon the fact that Mrs Rixon knew that Lot 5 abutted Tomakin Road and that access could be obtained to the property on foot by climbing through a fence and crossing a creek over which there was no track or bridge.
Access from the cocky's gate at Tomakin Road was never a realistic form of access to Lot 5. The difficulties with that method of access only support the primary judge's finding that Mrs Rixon assumed that she had a legal right of access along the track across Lot 130, and that that assumption was reasonable.
The applicant submitted that the estoppel case found by the primary judge was not the case that was pleaded.
Mrs Rixon pleaded that she purchased Lot 5 for the purpose of a residential dwelling and the grazing of horses. This was admitted. She pleaded that Horseshoe Pastoral by its director, Mr Brown junior, knew of the purpose. This was admitted. She pleaded that Horseshoe Pastoral by its director, Mr Brown junior, knew that she required access across Lot 130 to give effect to the purpose. This was denied. But plainly it was in issue whether Mrs Rixon did require access across Lot 130 to use Lot 5 for the purpose of a residential dwelling and the grazing of horses, and whether the Mr Brown with whom she dealt knew that.
Mrs Rixon pleaded that Mr Brown junior made an express oral representation on behalf of Horseshoe Pastoral that the plaintiff could use the track to access Lot 5. Her evidence was that that representation was made after exchange and before settlement. The primary judge accepted Mrs Rixon's evidence that Mr Brown agreed to her request that a demountable house in two sections could be put on the property and told her that she could access the land through the front gate along the track and he would unlock the gate. The lock and chain were removed and not replaced. The house was moved onto Lot 5 and the purchase was completed soon afterwards (Judgment [20 and [21]).
Mrs Rixon also pleaded: "8 Further and alternatively after the purchase, the Defendant allowed, permitted or alternatively acquiesced to the Plaintiff (and her invitees) to go, pass and repass on foot at all times and for all purposes with or without animals or vehicles or both using the Track for the purpose and continued to do so from the date of purchase. ('the conduct'). ... 13 As a result of the representation and/or the conduct ... the Plaintiff assumed or expected that she (and her invitees) would have the benefit of access to Lot 5 via the track ('the assumption and expectation'). 14 On the basis of and relying on the assumption and expectation the Plaintiff did not seek alternative access to Lot 5 and it would in all the circumstances be unconscionable for the Defendant to depart from the assumption and expectation. 14A Further and alternatively, in reliance on the assumption and expectation the Plaintiff acted to her detriment by: (a) Locating the installation of her home by reference to the path of the track. (b) Making any necessary construction or extension of the track such that the path of the track would lead to her home. (c) Slashing, grading and maintaining the track. (d) Installing a 'cattle grid' at the entrance of the track from the Princes Highway."
The reference to the conduct of the defendant that induced the relevant assumption was not confined to conduct after the purchase as the words "and alternatively" in para 13 make plain.
The primary judge found: "79 Moreover, the defendant must have known, or at least ought to have known, that the plaintiff would not likely have purchased the property, or placed a house on it via the track, if she were not entitled to access over the track. In those circumstances, the defendant could not, knowing that she was proposing first to purchase the property, and then to locate the house on it, stand by, allowing the plaintiff to act on the basis of her assumption, and later deny its truth. At the least, the defendant acquiesced in the plaintiff's assumption when, in conscience, any objection ought to have been stated. 80 By using the track to show the plaintiff the property for the pre-purchase inspection, and indicating to her that she should use the track to install her house, without stipulating that the track was not legal access or that there was any restriction or limitation on its use, the defendant is so implicated in the plaintiff's purchase of the property and installation of the house on it reliant on her assumption that she was entitled as of right to use the track, as to render it unconscionable now for it to deny the truth of that assumption, given the detrimental consequences of such a denial."
Horseshoe Pastoral submitted that the primary judge's finding that the plaintiff acted to her detriment by buying Lot 5 on the basis of her assumption that she was entitled to access over the track, which assumption was known, or ought to have been known to it, was not within the pleadings or the evidence or submissions. Mrs Rixon did not give evidence that had she known that she did not have the right to access Lot 5 using the track over Lot 130, she would not have bought the property.
His Honour's findings were within the scope of the pleadings. In particular in paragraphs 4 and 5 of the Further Amended Statement of Claim Mrs Rixon pleaded that the defendant knew she required access over Lot 130 to give effect to her purpose in purchasing the property. She pleaded in para 13 that she assumed she would have the benefit of access to Lot 5 over the track.
Mrs Rixon pleaded that at the time of the purchase Mr Raymond Brown on behalf of the applicant had represented to her that she could use the track to access Lot 5 and that that representation was express and made orally (para 7). Mr Raymond Brown was Mr Brown junior. He claimed that he had no involvement in Mrs Rixon's purchase of the property. The primary judge doubted that evidence (Judgment at [18]). The primary judge did not find that Mrs Rixon was induced to make the assumption that she had the legal right to use the track on the basis of an express oral representation made by Mr Raymond Brown. His Honour found that she was induced to make the assumption that she had a legal right to use the track as a means of access to the Princes Highway by the fact that she and her then husband were shown the property by being taken over the track to it (Judgment at [77]), that they moved their house onto the property using the track with the applicant's permission, and that inherent in this was that the applicant must, or at the very least ought to, have known that Mrs Rixon and her husband were acting on the assumption that on completion of the purchase they would be entitled to use the track. As noted above at [24] his Honour found (at [79]) that: "... the defendant could not, knowing that she was proposing first to purchase the property, and then to locate the house on it, stand by, allowing the plaintiff to act on the basis of her assumption, and later deny its truth. At least the defendant acquiesced in the plaintiff's assumption when in conscience any objection ought to have been stated."
This was a case that was fought at trial.
There were also other acts of detrimental reliance to which it is not necessary to refer.
In its amended notice of appeal Horseshoe Pastoral contended that the primary judge applied an incorrect test in holding that it "ought to have known" that Mrs Rixon had adopted the assumption that she was entitled to access over the track (Judgment [79]) quoted above at [23]): cf Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387 at 428-429 (Brennan J). This ground was not addressed in written submissions but could not be dispositive of the appeal. The evidence supported the primary judge's alternative finding that Horseshoe Pastoral "must have known" that Mrs Rixon had adopted that assumption.
Finally, the applicant contended that the grant of an easement in circumstances where the property is now used for the purpose of operating a bus service vastly exceeds anything that Mrs Rixon might have expected on the strength of the one meeting in the early 1980s. It submitted that the minimum equity in the circumstances would be a licence over the applicant's property.
The applicant's submission is not consistent with Giumelli v Giumelli (1999) 196 CLR 101; [1999] HCA 10 if it is intended to convey that it is only the minimum equity necessary to avoid detriment which can be given effect to on principles of proprietary estoppel. Prima facie the remedy that should be granted would be the remedy to make good the assumption that Mrs Rixon adopted (Giumelli v Giumelli; Sidhu v Van Dyke (2014) 251 CLR 505, 530 at [85]) unless to do so would be out of all proportion to the detriment (Delaforce v Simpson-Cook (2010) 78 NSWLR 483 at [62]). In relation to this issue the primary judge said: "84. These cases indicate that the appropriate remedy is informed by the scope of the plaintiff's assumption (to the extent that it was or ought to have been known to the defendant), and the proportionality of the remedy to the detriment. Prima facie the relevant assumption defines the remedy, which need not be the minimum, [48] but if it is disproportionate some lesser remedy (such as a charge for expenditure) may be granted. 85. In this respect, this is a stronger case than Hill v Moore, in which the plaintiff 'did not have a clear view of the basis of his right' and 'was undoubtedly of the view that, in some way, whatever rights of user he had were based, at least in part, in the fact that the Council had built the road'. In the present case, although the plaintiff may not have turned her mind to it at the time in legal terms, her assumption was that she was entitled in perpetuity to use the track as of right, not as a matter of permission of the defendant - in legal terms, that she had an easement. On the faith of that assumption, as the defendant must have known, she (and her then husband) purchased Lot 5 and located the house where they did. A personal licence would leave Mrs Rixon with a property which she could not sell with a viable access, when she had purchased it on the assumption that it was entitled to such access. Mrs Rixon's assumption was to the effect that she had an easement - not a mere licence - over the track, and in those circumstances, the defendant is estopped from denying that she has such an easement; her equity would not be satisfied by a mere licence."
The primary judge addressed the issue that at the time Mrs Rixon acted to her detriment in adopting the assumption that she had a lawful right to use the track over Lot 130 to access Lot 5, the possibility of a more intensive use of that track was not in contemplation. The primary judge reasoned in essence that Mrs Rixon assumed that she would have a lawful right of carriageway without giving any more thought to the definition of that right, that a grantee of a right of carriageway may use the right of way for any lawful purpose within the terms of the grant, and that a subsequent use of the right of carriageway to accommodate the passage of buses that were stored on Lot 5 in connection with a later bus business conducted by Mrs Rixon or her husbands, was within the scope of the easement that should be granted to accommodate the assumption that Mrs Rixon was induced to make as to her lawful right to use that track.
Neither the grounds of the notice of appeal nor the applicant's submissions take issue with this reasoning.
Having heard full argument as on an appeal, we are unpersuaded that any of the alleged errors asserted in the purported notice of appeal has been established. Even if errors had been established leave to appeal should be refused having regard to the absence of injustice and the value of the right in issue.
The notice of appeal filed on 22 December 2017 should be dismissed as incompetent. The summons seeking leave to appeal should be dismissed. The applicant should pay the respondent's costs of the summons.

Horseshoe Pastoral Co Pty Ltd v Rixon

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