REAL PROPERTY - Easements - Easement by prescription arising from long use - Whether owner of servient tenement consented to use - Whether easement can arise based on 20 or more years of use despite change in ownership of servient tenement - 'Tacking' periods of use at common law - Interaction between easement recognised at common law and indefeasibility of title under Torrens system - 'Tacking' periods of use under Transfer of Land Act 1958.

STATUTORY INTERPRETATION - Transfer of Land Act 1958 - Indefeasibility of title under s 42(1) - Exception in s 42(2)(d) for 'any easements howsoever acquired subsisting over or upon or affecting the land'- Whether an emerging or inchoate easement is an 'encumbrance' for the purposes of the Transfer of Land Act - Whether an easement by prescription arising from long use extinguished by registration of new proprietor - When easement 'subsists' - Legislative history of s 42 - Section 42 an ambulatory provision describing estate of registered proprietor from time to time, not only at point of registration - Registered proprietor holds land free of encumbrances not recorded on the register except 'paramount interests' in s 42(2).

Transfer of Land Act 1958, ss 3(1), 42.

Delohery v Permanent Trustee Co of New South Wales [1904] HCA 10; (1904) 1 CLR 283; Auckran v Pakuranga Hunt Club (1904) 24 NZLR 235; Nelson v Hughes [1946] VicLawRp 76; [1947] VLR 227; Dobbie v Davidson (1991) 32 NSWLR 625; Golding v Tanner [1991] SASC 3013; (1991) 56 SASR 482; Leros Pty Ltd v Terara Pty Ltd [1992] HCA 22; (1992) 174 CLR 407; Sunshine Retail Investments Pty Ltd v Wulff [1999] VSC 415; Laming v Jennings [2018] VSCA 335; Hampshire Automotive Centre Pty Ltd v Centre Com (Sunshine) Pty Ltd (2020) 60 VR 579, considered.

1. On 4 October 2021, the applicants became the registered proprietors of land at 31 Ivanhoe Street, Sorrento in Victoria, which is a battle-axe shaped block of about 12,826 square metres of vacant land. It is the largest of seven lots in Plan of Subdivision LP75564, and is Lot 7 in the plan shown below.

1. On 9 October 1996, Delma Valmorbida and her husband Terry, since deceased, became the registered proprietors of 33 Ivanhoe Street, which is Lot 4 in Plan of Subdivision LP75564. Mrs Valmorbida is now the sole registered proprietor of 33 Ivanhoe Street. Her property abuts the strip of land that is the 'handle' of the battle-axe of the 31 Ivanhoe Street block and is known - no-one knows why - as Stevens Court.
2. Mrs Valmorbida and her visitors have always accessed 33 Ivanhoe Street from Stevens Court. There is a fence running roughly along the boundary between the two properties, with a pedestrian gate towards the front of 33 Ivanhoe Street and another gate providing vehicle access towards the rear.
3. The applicants and Mrs Valmorbida are in dispute about whether she has a right to use Stevens Court to access her property. In May 2022, Mrs Valmorbida commenced a proceeding in the Trial Division, seeking declaratory and other relief to enable her to continue to use Stevens Court and to prevent the applicants blocking her access. She alleged that Stevens Court was a public highway and road, or alternatively that an easement of way in favour of 33 Ivanhoe Street exists over Stevens Court. The applicants denied Mrs Valmorbida's claims, and counterclaimed for a declaration that she is not entitled to enter or use Stevens Court and an injunction restraining her from doing so.
4. On 23 November 2023, a judge in the Trial Division gave judgment in the proceeding,[1] finding that the applicants hold 31 Ivanhoe Street subject to an unregistered, common law easement of way in favour of 33 Ivanhoe Street over the land known as Stevens Court. The judge found that Stevens Court was not a public highway.
5. On 21 February 2024, the judge made orders to give effect to his findings, declaring:

The land marked 'A' in the plan annexed to these orders,[[2]] being part of the land described in Certificate of Title Volume 8655 Folio 413 [31 Ivanhoe Street], is encumbered, for the benefit of the land described in Certificate of Title Volume 8655 Folio 410 [33 Ivanhoe Street] by:

(a) a right of carriageway from Ivanhoe Street to the location of the present front and rear gates on the boundary of the land marked 'A' and the land described in Certificate of Title Volume 8655 Folio 410; and

(b) a right to park vehicles on that land.

The judge also dismissed the applicant's counterclaim and the balance of Mrs Valmorbida's claim, and ordered the applicants to pay two-thirds of Mrs Valmorbida's costs of the proceeding.

1. The applicants seek leave to appeal from the judge's declaration and orders, and seek instead an order dismissing Mrs Valmorbida's claim, a declaration that she is not entitled to enter or use 31 Ivanhoe Street, and an injunction restraining her from doing so. For her part, Mrs Valmorbida contends that the judge's declaration and orders should be affirmed on a ground that was wrongly decided, and another that was not decided.
2. For the reasons that follow, leave to appeal should be granted, but the appeal must be dismissed.

1. Plan of Subdivision LP75564 was registered on 2 February 1967, subdividing the land into seven lots, and a separate parcel of land noted as 'Abbotsford Street'. The seven lots included:

(a) 33 Ivanhoe Street (Lot 4);

(b) 31 Ivanhoe Street (Lot 7); and

(c) 27-29 Ivanhoe Street (Lots 2 and 3).

1. As noted, Mrs Valmorbida has owned 33 Ivanhoe Street since 9 October 1996.
2. The registered owners of 31 Ivanhoe Street at relevant times were:

(a) from on or about 17 May 1984 to 10 April 2015, Wistari Pty Ltd ('Wistari');

(b) from on or about 10 April 2015 to 4 October 2021, Les Denny Pty Ltd (ACN 156 618 825), now named ACN 156 618 825 Pty Ltd (in liq) ('Les Denny (Old)');

(c) from on or about 4 October 2021, the applicants: Les Denny Pty Ltd (ACN 652 661 955), Evie Pitard Pty Ltd (ACN 652 661 679), Chloe Pitard Pty Ltd (ACN 652 661 651) and Hunter Pitard Pty Ltd (ACN 652 661 795).

1. The applicants are all associated with members of the Pitard family, each being the trustee of a discretionary trust for the benefit of members of the family.
2. Les Denny (Old) was also associated with the Pitard family. Skye Pitard was the sole director of Les Denny (Old), which the judge found was controlled by her husband Simon Pitard. The company was placed into external administration on 13 December 2019, and the liquidator sold 31 Ivanhoe Street to the applicants in October 2021.
3. While Mrs Pitard is the sole director and shareholder of each of the applicants, Mr Pitard appears to have had the carriage of this litigation on their behalf.
4. Relevantly, the land on the other side of Stevens Court, at 27-29 Ivanhoe Street, has been owned by:

(a) Wistari between 20 January 1978 and 25 July 1989; and

(b) Kevin and Eunice McDonald from 25 July 1989 to 6 December 2018; and

(c) Magold Investments Pty Ltd since 6 December 2018.

1. At all relevant times, Jennifer McKendry was a director of Wistari.

1. Most of the judge's reasons concerned Mrs Valmorbida's primary contention that Stevens Court was a public highway. There is no appeal from the judge's conclusion that it was not, and therefore no need to follow his Honour's path of reasoning to that conclusion.
2. In relation to Mrs Valmorbida's alternative claim of an easement by prescription over Stevens Court in favour of her property, the judge outlined the principles by which such an easement is established:

[A]s a matter of logic, any proprietary right, for it to be a right rather than a claimed right, must have had a lawful beginning. In the case of an ordinary easement, there must have been, at some stage, an express or implied agreement to create it. If use has been since time immemorial, or for as long as anyone alive can remember, then it may be assumed that, at some stage, there has been such an agreement, even if the details of the agreement cannot now be established. This makes sense in circumstances where the use has been since time immemorial or for as long as anyone alive can remember and the use is not otherwise able to be explained. But, in order to promote the interest of stability in the usages of land, and following the introduction of statutory limitation periods in the United Kingdom in the 19th century, a different method of establishing an easement developed. Instead of the use having to be since time immemorial or for as long as anyone alive could remember, the law now provides that 20 years is sufficient. This is the doctrine of 'the lost modern grant'. Although initially it was a question of fact as to whether or not the existence of a lost grant could be inferred, the inference has since [become] unassailable; if the necessary use is established, the claim cannot be defeated by evidence that no grant was ever in fact made. Consequently, the notion that there had been a grant that had been lost was recognised as a legal fiction.

The criteria for the emergence of an easement from 20 years' use of a neighbour's property are otherwise expressed in different ways. It is said that the use must have been 'nec vi, nec clam, nec precario' - that is, without violence, without stealth and without permission. It is also said that the use must have been 'as of right', and have been with the knowledge of, but without the consent of, the neighbour. These requirements overlap, and must be understood in the context of the underlying rationale and reasoning processes for which the law recognises the emergence of an easement in these circumstances.

As noted above, the rationale for the development of the fiction was to promote certainty of peoples' interests in land. But the finding of an easement places a burden on the servient tenement. Accordingly, if it is to be just, there must be something in the conduct of the registered proprietors of the servient tenement that makes it appropriate to burden that property with an easement that the proprietors never in fact agreed to grant and for which they received no consideration. That gives rise to the notion of 'acquiescence'; if a person had notice of the use, and did nothing to prevent it for 20 years, then, just as if there were a statutory limitation period, they could no longer be permitted to complain if the use were to become permanent. A 'lapse of time accompanied by inaction, where action ought to be taken', may confer a right not previously possessed. 'The paper owner would be expected to resist the assertion of right or face the consequences of an easement by prescription arising if it fails to do so.' Indeed, it is this fundamental notion of acquiescence that informs the questions as to whether a particular use has been open and without force, as of right, and whether the owner of the servient tenement had notice. This area of law rests upon acquiescence of the owner. Each of the criteria are, in my view, really ways of considering whether or not there has been the necessary acquiescence. I will develop these connections further below when the individual criteria are considered.

A right may also arise in circumstances where the owner was not aware of the use of the land at all, but 'ought' to have been aware of that use. In those circumstances, notice will be imputed. The rationale for imposing an easement in these circumstances of 'constructive' notice is the expectation that land owners will with reasonable diligence inform themselves of actions taken in respect of their land. They will be held to have notice of that which, with reasonable diligence, they would have observed. Expressed in the negative, 'the prescription cannot arise where the acts would not be known to an owner reasonably diligent in protecting its rights'. Although the distinction is not always made clear, one cannot in fact acquiesce to something of which one is unaware, and so this is, conceptually, an extension from the notion of acquiescence in fact to a form of ascribed acquiescence. It is difficult to see how this extension sits comfortably with the basal concept that the easement arises in circumstances where the conduct of the parties gives rise to an assumption that there must have been at some time in the past an actual grant. Nonetheless, these are the balances that have been struck between the public benefit in promoting certainty in land use and the rights of individual land owners.[3]

1. After making some observations about the distinction between a proprietor's acquiescence in the use by another of the proprietor's land and dedication of that land as a public highway,[4] the judge identified an issue about the role of indefeasibility of title under the Transfer of Land Act 1958. He explained that the 20-year period required for an easement to arise under the doctrine of lost modern grant ended on a date in 2016, 20 years after Mrs Valmorbida become the owner of 33 Ivanhoe Street. However, Les Denny (Old) became the registered proprietor of 31 Ivanhoe Street on 10 April 2015, before the end of the 20-year period. The applicants submitted that, by reason of the operation of s 42(1) of the Transfer of Land Act, their title as registered proprietors of 31 Ivanhoe Street could not be defeated by an unregistered easement over the land.[5]
2. The judge made the following findings relevant to Mrs Valmorbida's claimed easement over Stevens Court:

(a) Since at least 1996, but probably for many years before that, Stevens Court had the appearance of a wooded, vacant block with a sand or dirt track from Ivanhoe Street through to the balance of 31 Ivanhoe Street. There was no fence where Stevens Court joined Ivanhoe Street, nor any signs indicating that Stevens Court was private land or that members of the public were not entitled to enter onto it. Members of the public, including neighbours, had unrestricted access from Ivanhoe Street to Stevens Court.[6]

(b) For as long as Mrs Valmorbida had owned 33 Ivanhoe Street, there had been gates in the fence along the border between her property and Stevens Court: one giving vehicular access at the rear, and another towards the front providing pedestrian access. Since at least 1996, and probably earlier, there had been a retaining wall and densely planted trees along the boundary of the property and Ivanhoe Street. The Valmorbidas and those visiting them had always used Stevens Court to access their property at 33 Ivanhoe Street. Since at least the time the house on 33 Ivanhoe Street was built, inhabitants and visitors had used Stevens Court to access the property at 33 Ivanhoe Street. That would have been obvious to anyone who cared to look.[7]

(c) The inhabitants of and visitors to 27-29 Ivanhoe Street have also used Stevens Court to access or to leave that property from at least the time that the house on 27-29 Ivanhoe Street was built. Again, that would have been obvious to anyone who cared to look.[8]

(d) Jillian Fearon had lived on one of the properties adjoining the rear of 31 Ivanhoe Street since November 1994, and there was a gate in the fence between the two properties. Mrs Fearon walked across the main part of 31 Ivanhoe Street to get to the beach and to visit Mrs McDonald at 27-29 Ivanhoe Street. She did so with the express permission of the owner of 31 Ivanhoe Street - initially the McKendrys on behalf of Wistari, and later Mr Pitard.[9]

(e) Members of the general public also used Stevens Court used it as if they had the right to do so, although the use by members of the public who were not neighbours was probably quite small.[10]

(f) Mrs Fearon also used Stevens Court 'as of right', rather than as a trespasser. There was no mention of it in the requests for or grants of permission to walk across the block behind her property; she assumed that Stevens Court was a public road and did not consider that she required permission to use it.[11]

(g) Mrs McKendry, or Wistari as the registered proprietor of 31 Ivanhoe Street, considered Stevens Court to be private property and only able to be used by members of the public with their permission.[12]

(h) That was not necessarily the case with the occupiers and visitors to 27-29 and 33 Ivanhoe Street.[13] In particular, the Valmorbidas were openly using Stevens Court to access their property and to park their cars. Mrs McKendry (and thus also Wistari Pty Ltd) knew of this, was content for them to do so, and did not give them permission.[14]

(i) During 2003 and 2004, considerable work was done in relation to a proposal to renovate the property at 33 Ivanhoe Street, in the course of which the question whether the Valmorbidas had a legal right to use Stevens Court to access their property was considered.[15] Mr Valmorbida, and probably also Mrs Valmorbida, were aware from at least 2003 that Stevens Court formed part of 31 Ivanhoe Street, was in private hands, was not a road like other roads in the area, and knew that their right to use it to access their property was at least questionable, in the sense that they may well have had no established legal right to do so.[16]

(j) In 2010, Mrs McKendry had 31 Ivanhoe Street surveyed. On behalf of Wistari, she sent a copy of the survey to Mrs Valmorbida, under cover of a letter pointing out that the existing fences on the northern and eastern boundaries of 33 Ivanhoe Street did not agree with the title boundaries. Mrs Valmorbida understood when she received this letter that Wistari was claiming ownership of all the land within the marked boundaries of 31 Ivanhoe Street, including Stevens Court.[17]

(k) In 2014, Wistari put 31 Ivanhoe Street on the market. A sign put up on the corner of Stevens Court and Ivanhoe Street directly in front of the Valmorbidas' property clearly identified the outline of the property in a way that included Stevens Court. The Valmorbidas saw the sign, although Mrs Valmorbida had forgotten having done so.[18]

(l) The negotiations for the sale of 31 Ivanhoe Street in 2014 make it clear that Wistari was well aware that the occupiers of 27-29 and 33 Ivanhoe Street used Stevens Court and might have legal rights to continue to do so. The special conditions in the contract of sale signed by Mr Pitard included an acknowledgement that the land was purchased subject to registered and implied easements, 'including without limitation any implied easement of way that may exist in favour of adjoining owners of land'. At least by the time of the sale, Mr Pitard was or should have been aware that the occupiers of 27-29 and 33 Ivanhoe Street may well have an easement over Stevens Court obtained from their long use.[19]

(m) Mr Pitard did not give the Valmorbidas any permission to use Stevens Court in a way that would break the 20-year period of use as of right rather than with the owner's permission.[20] It was not until 2018, after the 20-year period had elapsed, that Mr Pitard took any steps to interfere with the Valmorbidas' use of Stevens Court.[21]

1. The judge's consideration of whether Mrs Valmorbida had established the requirements for an easement over Stevens Court proceeded from his finding that the Valmorbidas did not believe they had a legal right to use Stevens Court. Rather, they used it because they could - indeed, they had to in light of the configuration of their property - and they intended to continue to do so, at least until someone tried to prevent them.[22] The judge observed that it was the nature of the use that informed whether the owner, by tolerating that use, had 'acquiesced in it in a manner that, after 20 years, gave rise to a legally enforceable right by the use of the legal fiction of the lost modern grant'.[23]
2. The judge's conclusions about the nature of the Valmorbidas' use of Stevens Court were as follows:

Here, the Valmorbidas' use of Stevens Court was open, without force, without permission and therefore as of right. Their use was open because it was regular and visible to anyone who cared to look. The physical layout of their property made it obvious that Stevens Court was being used by them and, were there any doubt, as I concluded ... above, Wistari Pty Ltd, through Mrs McKendry at least, was in fact aware that the Valmorbidas were using the land now known as Stevens Court in the way they were. Their use was without force because they did not have to overcome any barriers, whether physical, oral or implied by circumstance, to their so using it.

Their use was as of right because they used Stevens Court without obtaining permission from Wistari Pty Ltd or any other proprietors exactly the same as if they had the legal right to use it. I have not overlooked the fact that ... in 2010 Wistari Pty Ltd had its land surveyed and drew to the Valmorbidas' attention the fact that their fence encroached into the land now known as Stevens Court. However, asserting the existence of a boundary line is not inconsistent with the existence of an easement which, by definition, involves use of another's property. Had Wistari Pty Ltd 'given permission' to the Valmorbidas to use its land in a way that negated the possibility of their having an easement, I would have expected that to have been noted in that letter. I contrast this with the manner in which Mrs McKendry gave permission to Mrs Fearon to use the gate along the fencing of lot 7.

In the circumstances, and in particular given my finding that Mrs McKendry did not discuss the use with Mrs Valmorbida, the better characterisation is that Wistari Pty Ltd acquiesced in the Valmorbidas' use of the land now known as Stevens Court, rather than that it permitted the Valmorbidas to use that land. Or, looked at another way, Wistari Pty Ltd's allowing of the Valmorbidas to use the land, which was never the subject of any actual discussion between Wistari Pty Ltd and the Valmorbidas, amounted to acquiescence.[24]

1. As to the duration of the use, the judge noted that Mrs Valmorbida had claimed for the period of her use commencing in October 1996, and that the 20-year period finished in October 2016. The judge was satisfied that Mrs Valmorbida and her family regularly used Stevens Court in the way just described from October 1996, and that it was not until 2018 that Mr Pitard took any steps to interfere with that use.[25]
2. Noting that the ownership of Stevens Court had changed before the end of the 20-year period, the judge held:

Under the fiction of the lost modern grant as it has been understood, it is not necessary to establish 20 years of use as against a single owner. In one sense this is counterintuitive. But the easement is a legal right, not an equitable right that arises because it would be in some way unconscionable for the current owner of the burdened tenement to deny its existence. The ability to 'tack' periods of use against successive owners makes sense when it is recalled that the fiction commenced with the notion that the use has been since 'time immemorial', and it could not be assumed that there has been for that duration only one owner of the burdened tenement. The requirement that the use be 'open' reduces the potential unfairness to a recent purchaser of the burdened tenement (and of course, in this case, as I have outlined in Part D above, the purchaser was expressly put on notice by the vendor and purchased the property with actual knowledge that the Valmorbidas were and had been for some time using the land now known as Stevens Court to access their property). Open use, as of right, by the owners of the dominant tenement of their neighbour's land for 20 years can justify the (fictional) inference that the use has all along been pursuant to a granted easement, even if there has been a change of ownership of the burdened tenement during that time. Indeed, ongoing use despite a change of ownership of the burdened tenement may be an indication of use as of right, rather than by permission. The defendants did not submit that the common law principles did not permit the claimant to 'tack' periods of use of land across a change of ownership of the burdened tenement.

Further, I am satisfied that there was no change in the nature of the use by the Valmorbidas after lot 7 was sold, and that they continued to use it without any permission from but with the acquiescence of the subsequent registered proprietor, Les Denny (Old) Pty Ltd, who knew or ought to have known of their use.[26]

1. As a result, the judge was satisfied that the Valmorbidas had used the land now known as Stevens Court in a way that engaged the legal fiction of a lost modern grant, from 1996 for more than 20 years.[27]
2. The next question that arose was whether indefeasibility of title under the Transfer of Land Act operated to deny the creation of the easement or prevent it from being enforceable against the applicants, as the registered proprietors of Stevens Court.[28] The judge observed that, while other States had taken a different approach, in Victoria the Torrens system of title by registration had not ousted the doctrine of lost modern grant.[29] Whether the doctrine leads to an enforceable easement therefore depended on the terms of the Victorian legislation, specifically s 42 of the Transfer of Land Act, and the exception in s 42(2)(d) for 'any easements howsoever acquired subsisting over or upon or affecting the land'.[30]
3. The judge did not accept the applicants' argument that, because the easement had not been 'acquired' when Les Denny (Old) took ownership of the land in 2015, the requirement for 20 years use had not been satisfied by that time:

With respect, I find the argument focused on the word 'acquired' unpersuasive. Both s 42(2)(b) and (d) of the Transfer of Land Act 1958 (Vic) use the word 'subsisting' as qualifying the adverse possessory rights and easements that fall within the proviso, which does convey that the adverse possessory rights or the easement must in fact already exist. In my view, the phrase 'howsoever acquired' does not add a further time element but is instead a broad phrase intended simply to ensure that the exception to indefeasibility applies regardless of how the easement came to be.[31]

1. The judge found support for that conclusion in the statutory history of s 42, which indicated that the phrase 'howsoever acquired' was a simple replacement for the phrase 'acquired by enjoyment or user' found in earlier iterations of the Transfer of Land Act.[32]
2. The more difficult question was whether the same result should flow from the language more generally, including the use of the word 'subsisting'. The judge accepted that word conveys that the exception only applies if the easement already exists.
3. In relation to the exception in s 42(2)(b) for 'any rights subsisting under any adverse possession of land', the judge referred to commentary to the effect that the exception applies even when the property has been transferred during the period necessary to establish a claim in adverse possession.[33] However, that only provided indirect assistance for Mrs Valmorbida's position:

The apparent acceptance that claims to adverse possession are not defeated by a change of registered proprietor during the relevant period is broadly of assistance to the Valmorbidas because it assumes a system whereby a newly registered proprietor may find their title affected by an unregistered interest shortly after purchase. It removes the suggestion that s 42 of the Transfer of Land Act 1958 (Vic) is designed to ensure that a registered proprietor is never affected by developing claims in relation to land that are not recorded on the register at the time of purchase. Possibly, the defendants focused on the word 'acquired' in order to provide a textual reason for drawing a distinction between the exception for claims for adverse possession and claims for easements by lost modern grant, because both exceptions use the word 'subsisting'. But, ultimately, I consider that theoretical underpinning of claims based on adverse possession and the language used in its exception are sufficiently different from the theoretical underpinning of claims based on the lost modern grant and the language used in the exception for easements that the cases that consider the exception for adverse possession are of little assistance in determining the scope of the exception for easements obtained by lost modern grant.[34]

1. Turning to the application of s 42 to easements established by the fiction of lost modern grant, the judge noted that the applicants' submission rested on the premise that s 42 of the Transfer of Land Act is directed to protecting a registered proprietor from any 'developing' interests not on the register at the time of purchase. The question was whether the premise was correct in the case of interests arising at common law as a result of prolonged use, which are possible exceptions to the principle of indefeasibility of title:

Section 43 of the Transfer of Land Act 1958 (Vic) can certainly protect a purchaser from equitable claims that might otherwise be made, but it is not clear how it would apply to the situation where an easement interest arises at law if there is open use for the necessary period without any additional requirement, in terms, that the registered proprietor otherwise have notice and where it cannot be said, prior to the effluxion of the necessary period, that there is 'an unregistered interest'.

The defendants' argument is that time must 'begin again' every time there is a change of ownership. They would accept that if they (or the predecessor related company) had become registered proprietors two years later, the Valmorbidas would have an easement that was enforceable against them notwithstanding that it was not recorded on the register. They necessarily draw a distinction between the situation where they (or the predecessor related company) became registered at the 18-year mark and thereafter acquiesced in a further two years' of ongoing use, and a situation where they (or the predecessor related company) became registered after the 20-year period had already expired. Their argument would accept that an enforceable easement arises in the latter situation, but denies that an enforceable easement arises in the former situation. As a matter of broad policy, it is difficult to justify the existence or not of a common law right arising out of open use of land, even one based on a statutory fiction, depending on such accidents of timing. And here, of course, the purchasers were well aware that the use was long-standing and ongoing and allowed that use to continue until the 20-year period was met.

There are, in my view, three problems with the defendants' argument. The first is that it fails adequately to acknowledge the fact that, in Victoria, the legislation has deliberately removed easement interests, of all types, from the purchaser's ability to rely on the Register as a complete record of legal interests in the property at the time of purchase. Quite simply, in Victoria, easements are an exception to the principle of indefeasibility of title. The possibility that a registered proprietor may be bound by an easement that is not recorded on the title is an inevitable consequence of the existence of that exception.

The second is that it treats s 42 of the Transfer of Land Act 1958 (Vic) as if its purpose were to establish the legal situation as at the time of a transfer of land rather than establishing the situation at all times including the time at which a dispute arises. Section 42 of the Transfer of Land Act 1958 (Vic) does not forever fix the registered proprietor's rights as at the date of purchase. It does not say, for example, that a newly-registered proprietor holds the land thereafter free from any encumbrances not recorded on the register as at its moment of registration as proprietor. Rather, in my view s 42 is an ambulatory provision, in the sense that it states the legal situation at any particular time: a registered proprietor holds land free of any encumbrances not recorded on the Register except for, among other things, any easements howsoever acquired affecting that land. It is correct to say that, as at the time of transfer, Les Denny (Old) Pty Ltd acquired the registered interest free of any easements, because, at that time, there were no subsisting easements. But once it is accepted that time can continue to run at common law for the purpose of a claim for an easement under the principle of the lost modern grant against a purchaser of a property, and that the principles of that doctrine continue to apply in Victoria, and easements are an exception to indefeasibility of title, there is no reason to freeze the legal position as between the parties as at the time of sale or to 'reset' the years back to zero.

The third is that it fails adequately to accommodate the legal fiction that, when the criteria are satisfied, it is assumed that an easement was granted more than 20 years previously.[35]

1. The judge contrasted the Victorian position, where easements 'howsoever acquired' are an exception to indefeasibility, with the situation in New South Wales, Queensland, and Tasmania, where the exception has been removed or substantially narrowed.[36] Those three examples highlighted 'how broad and openly-expressed the exception to indefeasibility is for easements in Victoria'.[37] The judge considered it significant that Victorian legislation had not expressly removed or altered the law for the acquisition of easements by what is known as the doctrine of lost modern grant, nor had it limited the exception for easements, as had occurred in New South Wales and Queensland.[38]
2. In conclusion, the judge said:

In my view, the issue in dispute should be expressed in terms of the position now, rather than the position at the time of transfer: can the defendants, now, rely on s 42 of the Transfer of Land Act 1958 (Vic) to defeat the Valmorbidas' claim to an easement arising from 20 years of open use? In my view they cannot. Once the 20-year period ended in 2016, there emerged, at common law, an easement 'subsisting' over the land now known as Stevens Court. Accordingly, from that time, there has been a subsisting easement, and so the exception to indefeasibility has been engaged. Indeed, under the legal fiction, as at today, there has always been [a] subsisting easement.

For these reasons, I conclude that the defendants now hold lot 7 subject to an easement of way in favour of lot 4 over the land now known as Stevens Court that is enforceable against the defendants notwithstanding that it is not recorded on the Register because it is a common law easement that has been acquired and that is subsisting over that land and thus falls within the exception to indefeasibility of title contained in s 42(2)(d) of the Transfer of Land Act 1958 (Vic).

If there is unfairness to the defendants, it is unfairness that arises from the deliberate choice of the legislature to exempt from the principle of indefeasibility of title easements obtained under the legal fiction of the lost modern grant.[39]

1. The orders made to give effect to these conclusions are described at [6] above.
2. The applicants seek leave to appeal from those orders on three bases:

(a) Proposed grounds 1 to 3 challenge the judge's finding that Wistari did not give Mrs Valmorbida permission to use Stevens Court. The applicants contend that the finding was wrong, that the judge overlooked evidence given by Mrs McKendry in re-examination, and that when that evidence is taken into account the correct finding is that permission was given.

(b) Proposed ground 4 is that the judge erred in concluding that s 42(2)(d) of the Transfer of Land Act permitted, as an exception to the indefeasibility of title of a registered proprietor created by s 42(1), a prescriptive easement that arose from 'tacking' user that had occurred before and after the registration of the interest of the registered proprietor.

(c) Proposed ground 5 is that the judge erred in concluding that, at general law, a prescriptive easement could arise from 'tacking' user that had occurred during the ownership of different owners of the servient tenement.

Grounds 1-3 - Did Wistari give permission to use Stevens Court?

1. As noted, the judge found that Mrs McKendry, and thus Wistari, did not give the Valmorbidas permission for their open use of Stevens Court to access their property and park their cars.[40] Had they used the property with the permission of the owner, their use would not have been 'without violence, without stealth, and without permission'.[41] The finding was therefore critical to the judge's ultimate conclusion that Mrs Valmorbida had acquired an easement over Stevens Court.
2. Mrs McKendry gave conflicting evidence on this issue, which the judge resolved as follows:

She was aware that the Valmorbidas were using Stevens Court as their driveway and to park their car. When asked whether the Valmorbidas had ever asked her for permission to do so, Mrs McKendry first said she could not recall them doing so and that 'they didn't need to'. She then qualified her assertion that people should have sought permission to use Stevens Court as applying only if those people 'had no right to be there', and gave, as an example by way of contrast, tradespeople that were working at 27-29 or 33 Ivanhoe Street who would be 'in a different category' to 'members of the public'. Later in her cross-examination, however, she agreed that although she could not recall doing so, it was likely that she gave the Valmorbidas permission to use Stevens Court.

Having heard and watched Mrs McKendry giving her evidence, I consider that it was more probable than not that she did not give the Valmorbidas express permission to use Stevens Court. The concession she made was made with what I perceived as some uncertainty and contrasted with the confidence with which she gave her earlier evidence that, although members of the public should have sought permission, the Valmorbidas 'did not need to'. Also, she could recall having a conversation with Mrs Fearon about permission to use lot 7, but could not recall any discussion with the Valmorbidas. The impression I had is that Mrs McKendry knew that the Valmorbidas were using Stevens Court, was content for them to continue to do so because they occupied the block immediately adjacent to it, and felt no need to have any discussion with them about it. In all these circumstances, I conclude that the Valmorbidas were openly using Stevens Court to access their property and to park their cars, that Mrs McKendry (and thus also Wistari Pty Ltd) knew of this, that she was content for them to do so, and that she did not give them permission to do so.[42]

1. The applicants challenged the correctness of this finding, placing particular emphasis on answers given by Mrs McKendry during re-examination, which were not specifically mentioned in the judge's reasons. They submitted that the judge had overlooked that critical evidence, or alternatively had not adequately explained why it was rejected.
2. As the applicants acknowledged, the task of this Court is to conduct a 'real review' of the evidence given at first instance and the judge's reasons, in order to determine whether the judge erred in fact or law.[43] They submitted that the correct result was apparent on the face of the record and there was no need to resort to demeanour or other advantages of the trial judge.[44] On the other hand, Mrs Valmorbida urged the Court to be cognisant of the position of the trial judge, who resolved the conflicts in Mrs McKendry's evidence on the basis of his observations and impressions of her as she gave her evidence.

1. Mrs Valmorbida's evidence was that she had never met Mrs McKendry, while Mrs McKendry said that she had met Mrs Valmorbida on a small number of occasions. The judge preferred Mrs McKendry's evidence on that point, because she was able to give an accurate description of Mrs Valmorbida.[45] There is no challenge to that finding.
2. In her evidence in chief, Mrs McKendry said that she was aware from 1984 that the owners of the land at 33 Ivanhoe Street used Stevens Court to get access to their property, and that their driveway was accessed from Stevens Court. In respect of the period from 1996 to 2015, Mrs McKendry gave the following evidence:

And to your knowledge - do you have any knowledge of how Delma Valmorbida and Terry Valmorbida have accessed their property?---No - well, they used their driveway.

Did they ever ask you for permission to use their driveway?---Not that I can (indistinct words). No, they didn't. They didn't need to.

They didn't need to. When I'm referring there to 'their driveway', I'm referring to Stevens Court. Is that consistent with your understanding of my question?---I think so, yes.

1. In cross-examination, Mrs McKendry confirmed that she was aware that the occupants of 33 Ivanhoe Street were accessing their property in and out of Stevens Court, and that they and their visitors routinely parked in Stevens Court. She was then questioned about her memory of conversations with the Valmorbidas about their use of Stevens Court:

I'm just asking you whether one of the conversations you had with the Valmorbidas might have been about that access?---Look, I can't recall one particular conversation.

Do you think it's likely you would have had a conversation?---It might have been likely but I can't recall that particular conversation.

Now, you - can I - just forgive me, Mrs McKendry. Your husband might have had a conversation - he did have conversations, I think it's right, with the Valmorbidas from time to time, as far as you know?---Yes, he did have conversations, yes.

Do you think it's possible that he had a conversation about their use of Stevens Court?---It's possible.

Do you think it's likely, in the circumstances?---Let's put it this way: it's possible.

Because your evidence earlier was you did seem to - where the opportunity came up, you had a conversation with Ms Fearon about her use of the property; is that right?---Yes.

And it would have been a sensible thing to have a discussion with them about using Stevens Court. Do you agree with that?---Mrs Fearon?

Yes - sorry, pardon me. With Mrs Valmorbida. I apologise (indistinct)?---What did you ask? You asked if it was a likelihood. Look, I'm not - yes, it's a likelihood.

Likely you would have had that conversation?---Yes, but I can't recall a particular conversation.

I understand. I'm just trying to test what you can recall - - -?---Yes.

- - - and what evidence you can assist His Honour with in light of that. You think it was probably likely that you had such a conversation but you can't recall it?---No, that's right.

You can't recall the day and the date?---No.

And was that conversation, do you think, similar to the conversations you'd had with other people who were accessing Wistari's land, saying - sort of giving them permission to do it?---Well, there are really only two people that we ever talked about with it - that we ever really needed to talk to about it. We didn't have anything to do - we didn't really see the McDonalds, so it was only those two people.

And it's likely that you had the conversation and you gave them permission because they were doing it, isn't it?---It is likely, yes.

And you can't tell His Honour with any precision when that conversation happened?---No, I can't.

But it would have been at some stage after the Valmorbidas arrived in 1996?---Yes.

1. Mrs McKendry was re-examined on the issue of permission, as follows:

MR TOWNSEND: The second question I've got is, in answers to questions from me, initially, your evidence-in-chief, you stated that you had not given the Valmorbidas permission to use Stevens Court for access and parking. Do you remember that?---I don't remember it but yes.

But in answer to a question from my friend you said - I must confess I didn't hear the question that was put to you - you said - it was put to you in terms of you would have given permission. Now, do you have any recollection of being asked for permission by the Valmorbidas to use Stevens Court for access or parking?

MR STRAHAN: Your Honour, I'm not sure that this is - this is not clarifying evidence. This is just having another go.

HIS HONOUR: No, I think it arises out of cross-examination, doesn't it, to ask whether she gave permission, as a recollection?

MR TOWNSEND: I'll ask that question again, Mrs McKendry. Do you have any recollection of being asked for permission by the Valmorbidas to use Stevens Court for access or parking?---At any time?

At any time?---I can't specify a time in my memory.

Do you have any recollection of giving the Valmorbidas permission to use Stevens Court for parking?---I'm sure we did, but again I can't recall a special time.

1. Mrs McKendry's initial evidence was that she did not recall the Valmorbidas asking permission to use Stevens Court to access their property, and that they did not need to. In cross-examination she agreed that it was likely she had a conversation with them about using Stevens Court, although she couldn't remember a particular conversation. Having agreed it was likely that she had a conversation, she also agreed with the proposition put to her that 'you gave them permission because they were doing it'. Mrs McKendry's evidence in re-examination also conflicted. She first affirmed her evidence in chief that she had not given the Valmorbidas permission to use Stevens Court for access and parking, but then said that, while she couldn't remember a specific conversation in which the McKendrys gave permission, she was sure they had.
2. In resolving this conflict in Mrs McKendry's evidence, the judge plainly used the advantage of having seen and heard her give that evidence at trial. As the judge explained, he perceived that her concession was given with some uncertainty, in contrast with the confidence with which she had said that the Valmorbidas 'did not need to' seek permission to use Stevens Court. He relied on his overall impression of Mrs McKendry's evidence in reaching his conclusion that she did not give permission.[46]
3. Having not enjoyed the same advantage as the judge, this Court should not interfere with the judge's finding unless it was 'glaringly improbable' or 'contrary to compelling inferences'.[47] The finding was neither of those things, being based on evidence given by Mrs McKendry.
4. Indeed, other evidence indicated that the finding was the more probable of the two that were open. As the judge noted, Mrs McKendry's uncertainty about whether she had discussed permission with the Valmorbidas contrasted with her clear recall of a specific conversation in which she gave permission to another neighbour, Mrs Fearon, to use 31 Ivanhoe Street. This contrast supported the finding that permission was not given to the Valmorbidas.[48] The finding was also consistent with the fact that there was no mention of permission in the letter Mrs McKendry wrote to Mrs Valmorbida in September 2010, providing a copy of the recent survey of 31 Ivanhoe Street and pointing out that the fences and title boundaries between their properties did not agree. Had permission been given to use Stevens Court, one would expect it to have been noted in the letter.[49]
5. There was no error in the judge's finding that Mrs McKendry, and hence Wistari, did not give the Valmorbidas permission to use Stevens Court for access and parking. Grounds 1 to 3 are not made out.

1. By their fourth and fifth grounds, the applicants challenge the judge's conclusion that an easement can arise as a result of prolonged use of land, notwithstanding that ownership of the land has changed during the period of use. In the context of prescriptive easements, the word 'tacking' is often used to describe continuous use over successive periods of ownership. It is logical to consider tacking at general law first, before dealing with questions concerning indefeasibility of title under the Transfer of Land Act.
2. The applicants acknowledged that they did not contend at trial that 'common law principles did not permit the claimant to 'tack' periods of use of land across a change of ownership of the burdened tenement'.[50] They submitted that they should be permitted to raise the question on appeal, characterising it as a pure legal point, which could not have been met by further evidence at trial.
3. Mrs Valmorbida resisted that submission, arguing that if tacking at general law had been in issue, she would have sought to amend her claim to allege use prior to 1996, and led evidence of 20 years of continuous use of Stevens Court before 31 Ivanhoe Street was transferred from Wistari to Les Denny (Old) in April 2015.
4. While it would have been preferable for this point to have been raised at trial, we accept the applicants' submission that it is a pure question of law that could not have been met with further evidence at trial.[51] In her pleading, Mrs Valmorbida alleged use of Stevens Court for access and parking from 'at least October 1996', and not earlier. In their defence, the applicants squarely raised the changes of ownership in April 2015 and October 2021. However, Mrs Valmorbida proceeded to trial without seeking to amend her claim to rely on use of Stevens Court before October 1996. As a result, argument about the significance of changes of ownership during the 20-year period only arose at the end of the trial, after both parties had closed their cases, when it was too late for Mrs Valmorbida to expand her claim to include pre-1996 use.
5. Moving to the substance of the argument, the applicants noted this Court's observation in Laming v Jennings that consideration should be given to 'case law to the effect that an owner of the servient tenement is bound by the acquiescence of his or her predecessors in title'.[52] They submitted that the position was not settled at general law, the Australian case law lacks analysis of the doctrinal basis for the proposition, and the better view is that tacking is not permitted.
6. According to the applicants, the law of prescription has long rested upon the acquiescence of the owner of the servient tenement.[53] They submitted that the legal fiction of grant prior to the use, binding on subsequent holders of the estate, had never been part of the law of Australia.[54] In any event, they argued that if acquiescence of the owner is the touchstone, it is difficult to justify the proposition that successive owners are bound by the acquiescence of their predecessors in title.

1. In Delohery v Permanent Trustee Co of New South Wales ('Delohery'), the High Court accepted that the law of prescription was part of the common law of England received into the colony of New South Wales upon settlement or by the Statute 9 Geo. IV c 83 in 1828.[55] While deprecating the fiction of the lost grant as an 'artificial rule of pleading',[56] the Court accepted that prescriptive rights over the land of another could be acquired by long, continual, and peaceable use or possession for a period of 20 years or more.[57] The law was adopted 'on grounds of public policy, in order that the right of property in these things might not be forever uncertain', and it was 'assumed that the origin of the title thus recognized by the law was itself lawful and not unlawful'.[58] Since an easement over the land of another could only be created by consent, the law implied that consent had been given. This was the substance of the law, as distinct from the pleading practice developed in conjunction with it.[59]
2. The High Court in Delohery distinguished the substantive law of prescription, which implies the grant of an easement to explain 20 or more years of use, from the practice of pleading a lost modern grant of an easement. Consistently with that approach, we will refer hereafter in these reasons to the law of prescription, rather than to the doctrine of lost modern grant, although the two are often used interchangeably.
3. In Dobbie v Davidson,[60] the New South Wales Court of Appeal found an easement by prescription to have arisen over an access road across a property where 'there was never any attempt by any owner' to prevent or interfere with the use.[61] Kirby P observed:

The purpose of the rule by which a prescriptive right is upheld by the law is ultimately to guard the peaceful enjoyment of the use of land where that use has endured for more than twenty years, as of right.[62]

1. The President acknowledged that it is sometimes hard to draw the line between conduct by permission and conduct as of right, and what begins as an act of neighbourly indulgence may come, in time, to bear the stamp of legal right:

The indicia of a claim of right will be found in the circumstances. Relevant to assigning conduct to one category rather than the other will be: (i) the time during which the conduct has been peacefully followed; (ii) the persistence of the conduct, despite supervening sale and the acquisition of new owners by the dominant and servient tenements; (iii) the unlimited variety of the persons who have utilised the alleged right-of-way; (vi) the absence of physical impediments or obstructions to that use; and (v) the knowledge of the use by the owners of the servient tenement yet their failure to attempt to forbid, limit or control the use of the right-of-way by the owners of the dominant tenement and those having dealings with them.[63]

1. In Victoria, easements acquired by long use have been found to exist in Nelson v Hughes[64] and Sunshine Retail Investments Pty Ltd v Wulff ('Sunshine Retail').[65]
2. In Hampshire Automotive Centre Pty Ptd v Centre Com (Sunshine) Pty Ltd ('Hampshire Automotive'),[66] this Court set out the following principles in relation to easements by prescription:

In Victoria, it has been established that an easement by prescription can arise where there has been an open and uninterrupted enjoyment of land for at least 20 years that is not explained by an express grant of an easement or permission to use the land. ...

The underlying premise is that, where there has been a long period of uninterrupted user amounting to an assertion of right and a corresponding acquiescence by the owner of the servient tenement in a position to prevent that user, there is a presumption that the use was pursuant to the conferral of a lawful title, thus the fiction of lost modern grant. The legal fiction is that the paper owner of the servient tenement has conferred a right by grant but the grant has been lost.[67]

1. In relation to the fiction of lost modern grant, the Court explained:

The fiction is not based on any actual or implied agreement, but reflects a legal construct manufactured to explain what would otherwise be an inexplicable use of land. The essence of the principle upon which a modern lost grant is presumed, is that the state of affairs is otherwise unexplained. The court presumes a lawful origin for the right in question. The fictional nature of the grant, and its basis in use rather than legal title, does not provide any sound basis for imposing a requirement that the dominant tenement must consent to the use and to the enforcement of the right once created.[68]

1. As the Court observed in Laming v Jennings, consideration must be given to case law to the effect that an owner of the servient tenement is bound by the acquiescence of previous owners.[69] The question did not arise in Hampshire Automotive, but is squarely raised for consideration and determination in this case.
2. The case law begins with a 1904 decision of the New Zealand Supreme Court, Auckran v The Pakuranga Hunt Club,[70] a claim for remedies for private nuisance comprising noise from hounds and unpleasant smells from boiling down carcasses on the defendants' land. The defendants' predecessors in title had been keeping hounds on the land and boiling down carcasses for their food for more than 20 years, and the defendants claimed to have a prescriptive right to continue those uses. The plaintiff contended that the defendants could not rely on prescriptive rights due to changes in ownership of both the plaintiff's and the defendants' land. The Supreme Court rejected that contention, saying:

The theory of the presumption of a lost grant, in the case of the enjoyment of an easement for twenty years, is that the grant has been made prior to the commencement of the enjoyment ... It follows that the owner of the dominant tenement may take advantage of the enjoyment of his predecessor, and that the owner of the servient tenement is bound by the acquiescence of those who have preceded him.[71]

1. This statement of principle has been applied in two decisions of the Supreme Court of Western Australia, Pekel v Humich ('Pekel')[72] and Wayella Nominees Pty Ltd v Cowden Ltd ('Wayella'),[73] in relation to successive owners of the servient tenement. The Supreme Court of Victoria applied it in Sunshine Retail, to hold that 'the owner of the dominant tenement may add to his own period of use any period of use by a predecessor in title'.[74] It is the case, as the applicants submitted, that none of these decisions provided an analysis of the doctrinal basis for the principle that was applied.
2. That analysis was provided by the High Court in Delohery, by Kirby P of the New South Wales Court of Appeal in Dobbie v Davidson, and by this Court in Hampshire Automotive.[75] The law of prescription provides a certain legal basis for what would otherwise be an inexplicable state of affairs. It does so by implying the grant of an easement to explain the fact that, for 20 years or more, the owners of the servient tenement have acquiesced in the open, as-of-right use of their land by the owners of the dominant tenement. This does not require 20 years of acquiescence without any change in the ownership of the servient tenement. Rather, it requires a pattern of prolonged use with the acquiescence of the owners from time to time of the servient tenement, as though an easement had been granted before the use began.
3. The implied grant of an easement acquired by long use is to be distinguished from the personal claim made against the defendant in Golding v Tanner,[76] a decision of the Full Court of the Supreme Court of South Australia. The right of way claimed in that case fell outside the limited exception for unregistered easements in s 69(d) of the Real Property Act 1886 (SA). Under that Act, indefeasibility of title precluded an easement arising by prescription where the use had occurred over a period during which there had been successive registered proprietors of the servient land. However, it did not preclude an easement arising by prescription where the acts or omissions on which the claim was based were those of the registered proprietor against whom the prescriptive right is claimed.[77] In the course of his reasons, Debelle J (with whom the other members of the Full Court agreed) tacitly accepted that, but for the indefeasibility provisions of the Real Property Act 1886 (SA), a prescriptive easement could arise based on adverse use during successive periods of ownership of the servient tenement.[78]
4. Ground 5 is therefore not made out. At general law, an easement can arise based on 20 or more years of use, despite changes in ownership of the relevant land during the period of use.

Ground 4 - Tacking under the Transfer of Land Act

1. By their fourth ground, the applicants contend that the judge erred in concluding that s 42(2)(d) of the Transfer of Land Act permitted, as an exception to the indefeasibility of title of a registered proprietor created by s 42(1), a prescriptive easement that arose from 'tacking' user that had occurred before and after the registration of the interest of the registered proprietor. The judge's reasoning in relation to that conclusion is set out at [31] to [33] above.
2. This ground raises the issues of statutory interpretation foreshadowed in Laming v Jennings,[79] concerning the interaction between an unregistered easement recognised by the general law and indefeasibility of title under the Torrens system of title provided for in the Transfer of Land Act. It is convenient to begin with the relevant provisions of the Transfer of Land Act.

Transfer of Land Act - Relevant provisions

1. The long title of the Transfer of Land Act is 'An Act to consolidate the Law relating to the Simplification of the Title to and Dealing with Estates and Interests in Land'.
2. Section 3 provides for the application of other laws. Relevantly, s 3(1) provides:

Except so far as is expressly enacted to the contrary no Act or rule of law, so far as inconsistent with this Act, shall apply or be deemed to apply to land under the operation of this Act; but save as aforesaid any Act or rule of law relating to land, unless otherwise expressly or by necessary implication provided by this or any other Act, shall apply to land under the operation of this Act whether expressed so to apply or not.

1. Part III of the Transfer of Land Act provides for the Register of land under the operation of the Act, which must be kept by the Registrar of Titles.[80]
2. At the end of pt III is a series of provisions dealing with the effect of registration. Section 40 provides that instruments are not effectual until registered, and s 41 provides that a folio of the Register is 'conclusive evidence that the person named in the folio as the proprietor of, or having any estate or interest in ... the land described in the folio is seised or possessed of that estate or interest'.
3. Section 42 provides that the registered proprietor of land has indefeasible title, in the following terms:

Estate of registered proprietor paramount

(1) Notwithstanding the existence in any other person of any estate or interest (whether derived by grant from His Majesty or otherwise) which but for this Act might be held to be paramount or to have priority, the registered proprietor of land shall, except in case of fraud, hold such land subject to such encumbrances as are recorded on the relevant folio of the Register but absolutely free from all other encumbrances whatsoever, except -

(a) the estate or interest of a proprietor claiming the same land under a prior folio of the Register;

(b) as regards any portion of the land that by wrong description of parcels or boundaries is included in the folio of the Register or instrument evidencing the title of such proprietor not being a purchaser for valuable consideration or deriving from or through such a purchaser.

(2) Notwithstanding anything in the foregoing the land which is included in any folio of the Register or registered instrument shall be subject to -

(a) the reservations exceptions conditions and powers (if any) contained in the Crown grant of the land;

(b) any rights subsisting under any adverse possession of the land;

(c) any public rights of way;

(d) any easements howsoever acquired subsisting over or upon or affecting the land;

(e) the interest (but excluding any option to purchase) of a tenant in possession of the land;

(f) any unpaid land tax, and also any unpaid rates and other charges which can be discovered from a certificate issued under section 121 of the Local Government Act 2020, section 158 of the Water Act 1989 or any other enactment specified for the purposes of this paragraph by proclamation of the Governor in Council published in the Government Gazette -

notwithstanding the same respectively are not specially recorded as encumbrances on the relevant folio of the Register.

1. The 'encumbrances' referred to in s 42(1) are defined in s 4(1), as follows:

encumbrance in respect of any land includes any estate interest mortgage charge right claim or demand which is or may be had made or set up in to upon or in respect of the land;

1. Section 43 provides:

Persons dealing with registered proprietor not affected by notice

Except in the case of fraud no person contracting or dealing with or taking or proposing to take a transfer from the registered proprietor of any land shall be required or in any manner concerned to inquire or ascertain the circumstances under or the consideration for which such proprietor or any previous proprietor thereof was registered, or to see to the application of any purchase or consideration money, or shall be affected by notice actual or constructive of any trust or unregistered interest, any rule of law or equity to the contrary notwithstanding; and the knowledge that any such trust or unregistered interest is in existence shall not of itself be imputed as fraud.

1. Section 44(1) provides that any folio of or amendment to the Register procured by fraud is void as against a person defrauded. However, s 44(2) insulates the interest of a registered proprietor of land who was a bona fide purchaser for valuable consideration of the land from any claim that an earlier proprietor was registered through fraud or error.

1. The applicants focused on the indefeasibility of title provided in s 42(1) and the exception for easements in s 42(2)(d) of the Transfer of Land Act. They submitted that the judge's reasoning failed to engage with the proper issue, which was whether Mrs Valmorbida had 'acquired' an easement that was 'subsisting', so that the easement encumbered the titled of the new registered proprietor by reason of the exception in s 42(2)(d). They argued that the finding that s 42 was an 'ambulatory provision' was made without reference to extensive binding authority and tended to undermine the doctrine of indefeasibility and the purpose of the Torrens system. In the applicants' submission, construing s 42 so as to accommodate the common law was wrong as a matter of doctrine.
2. According to the applicants, the correct approach was to ask whether s 42(2)(d) created an exception to the indefeasibility provided by s 42(1) by allowing an easement to encumber a registered estate, notwithstanding that the easement:

(a) did not exist at the time the registered proprietor became registered; and

(b) depended on aggregating periods of acquiescence by the existing and former registered proprietors.

1. The effect and significance of registration under the Torrens system was central to the applicants' argument. They referred to the authorities describing the Torrens system as one of title by registration, as distinct from registration of title, and emphasised that each act of registration creates a new, indefeasible title and extinguishes the old interest.[81] The applicants argued that, if the new title is not subject to an easement, because the easement did not then exist at the time of registration, nothing in the text of s 42 suggests that an easement under the general law can be permitted to encumber the title at later time when the easement 'emerges'. For that reason, the applicants said, s 42 does not accommodate 'tacking' the acquiescence of former owners to the acquiescence of a new owner after registration.
2. The applicants submitted that this construction of s 42 would further the purpose of the Transfer of Land Act, the first principle of which is the creation of independent titles that remove the need for retrospective investigations.[82] They said that it would erode that principle to construe s 42(2)(d) as applying to prescriptive easements acquired partly by use before registration of the current proprietor. It would have that effect because a purchaser would not be able to rely on the accuracy of the Register, but would have to undertake their own investigations of the historical use of the land and arrangements between people using it.
3. By way of context, the applicants referred to s 32C of the Sale of Land Act 1962, which does not require a vendor to give a purchaser notice of any use of the land to which the vendor has acquiesced, which may later give rise to an easement. They submitted that, on the judge's construction of s 42(2)(d) of the Transfer of Land Act, the absence of this important information from a s 32 statement leaves a purchaser exposed. The applicants said that this outcome would undermine the reliability and efficiency of the transfer of land regime in Victoria and would be inconsistent with the Transfer of Land Act.
4. In oral submissions, the applicants characterised an emerging or inchoate easement, where the period of use is less than 20 years, as an 'encumbrance' for the purposes of the Transfer of Land Act, including s 42. They submitted that the potential for long use to give rise to an easement is a 'claim or demand which is or may be had made or set up in to upon or in respect of the land', even before 20 years of use has elapsed. In the applicants' submission, the definition of 'encumbrance' in s 4(1) was broad enough to extend to an inchoate interest of this kind. In support of this argument, the applicants referred to Leros Pty Ltd v Terara Pty Ltd ('Leros'), in which the High Court held that an assignee's interest under an option to renew a lease was extinguished upon registration of a new owner as proprietor.[83]
5. The applicants submitted that the judge was wrong to treat s 42 as an ambulatory provision, in the sense that it states the legal situation at a particular time. They argued that this was contrary to the established principle that registration is a re-grant of title to the new registered proprietor, which extinguishes any unregistered encumbrances other than those specified in s 42(2).

1. The applicants' contention that an emerging easement is an 'encumbrance' for the purposes of the Transfer of Land Act finds no support in the general law. The English courts gave short shrift to early attempts to protect or enforce an accruing right to use another's land, before the end of the period after which a grant of an easement would be implied.
2. In Bonner v Great Western Railway Company,[84] the plaintiff had owned a house overlooking railway land for 16 years. The plaintiff sought an injunction to restrain the railway company from interfering with his light and air, by placing a screen opposite the windows of the house. The Court of Appeal refused to grant the injunction, on the basis that the plaintiff had 'no rights at all'.[85] Lord Justice Baggallay held:

It is admitted that the windows through which the Plaintiff has derived light and air for a certain number of years past, have not been enjoyed for a sufficient length of time to give him a right to that light. It appears that for sixteen years he has had the enjoyment of these windows, and the view taken by the Vice-Chancellor was apparently this, that he had an accruing right to the enjoyment of this light, which, supposing there was no interruption on the part of the railway company, he might enjoy until the whole twenty years had expired, and that the Defendants ought to be restrained from interfering with the acquisition of the easement by the Plaintiff. But it seems to be contrary to every principle on which the Court acts in cases of this kind that a person who has no right should obtain an injunction to restrain a railway company or anybody else from doing that which will interfere with his acquiring a right, by reason of his being unmolested for a certain length of time.[86]

1. Similarly, in Greenhalgh v Brindley it was held that 'the so-called potentiality of the acquisition of an easement within less than twenty years is not an interest in land or easement known to the law'.[87] That was because:

There is either an easement of light or there is not. If there is not, there is no intermediate stage which has any legal existence; and the vendor does not fail to possess the fee simple free from incumbrances of a house because he has not got the easement of light over the adjoining property, nor because the time necessary for acquiring that easement has not commenced to run.[88]

1. Applying that principle to this case, before Mrs Valmorbida had accrued 20 years of use of Stevens Court, she had no 'claim or demand which is or may be had made or set up in to upon or in respect of the land'. On becoming the registered proprietor of 31 Ivanhoe Street in April 2015, Les Denny (Old) could have asserted its ownership by granting permission for the continued use of Stevens Court, or it could have blocked access altogether. In either case, Mrs Valmorbida would have had 'no rights at all'.
2. The High Court's decision in Leros does not support the proposition that a potential easement is an encumbrance for the purposes of the Transfer of Land Act. That case involved an unregistered lease, and arose under the Transfer of Land Act 1893 (WA). Section 68 of that Act provided for indefeasibility of title with different exceptions from those found in s 42 of the Victorian Transfer of Land Act. Specifically, it provided an exception for a tenant in possession under an unregistered lease, with the proviso that no option of purchase or renewal in any lease would be valid against a subsequent registered interest unless the lease was registered or protected by caveat. The tenant in possession sought to enforce an option to renew the lease. However, the original lessor had transferred its interest in the land to another registered proprietor, at a time when the lease was neither registered nor protected by a caveat. The High Court held that the lessee's interest under the option to renew was extinguished upon registration of the new owner, and could not be asserted against a later successor in title.[89]
3. The resolution of the dispute in Leros did not turn on whether the option was an 'encumbrance'; indeed, the tenant accepted that it was.[90] Rather, it turned on the scope of the exception for unregistered leases in s 68 of the Transfer of Land Act 1893 (WA). As the majority explained:

... the effect of the registration of a subsequent dealing bringing about the registration of proprietorship of an estate or interest in land is to extinguish all prior unregistered estates or interests which, but for that registration, would have conflicted with the proprietor's estate or interest or encumbered that estate or interest, unless the prior unregistered estate or interest falls within the exceptions to indefeasibility of title mentioned in s. 68.[91]

1. In this case, Mrs Valmorbida did not have any interest in Stevens Court when Les Denny (Old) became the registered proprietor of 31 Ivanhoe Street in April 2015. Her potential easement over Stevens Court had no legal existence at that time, and was not an encumbrance that could be extinguished by the registration of a new proprietor.
2. However, Mrs Valmorbida's use of Stevens Court had matured into an easement before the applicants became the registered proprietors of 31 Ivanhoe Street in October 2021. The applicants' interest as registered proprietors is subject to that easement if it falls within the exception in s 42(2)(d) for 'any easements howsoever acquired subsisting over or upon or affecting the land'.
3. Section 3(1) of the Transfer of Land Act is significant here.[92] The original enactment of the Torrens system in Victoria in the Real Property Act 1862 provided that all laws, rules and practices relating to interests in land so far as they were inconsistent with the Act did not apply to land under the operation of the Act.[93] Section 3(1) in its current form was introduced with the enactment of the Transfer of Land Act 1954. It differed from previous iterations in declaring not only that no inconsistent laws shall apply to land under the Act, but also that any other laws relating to land not found to be inconsistent continue to apply unless otherwise provided.
4. The extrinsic materials for the Transfer of Land Bill 1954 indicate that the new s 3(1) was intended to preserve the operation of the general law in relation to land under the Act, unless inconsistent with the Act. In the second reading speech for the Bill, the Minister explained in relation to the amended s 3(1) that:

[A]dditional emphasis is given to the principle that, so far as is not inconsistent with the Bill, all general rules of law and statutory provisions relating to land and dealings therein apply equally in respect of registered and unregistered land. It cannot be too strongly stressed that the Torrens system is essentially a system of dealing in land and not a variation or alteration of the land law.[94]

1. The current version of s 3(1) supports the understanding that the Torrens system under the Transfer of Land Act 'assumes the existence of general law principles' regarding land and does not work a fundamental change to those principles.[95] As discussed, the general law recognises an easement acquired through long use, despite changes in ownership of the relevant land during the period of use.[96] Section 3(1) applies that general law principle to land under the Transfer of Land Act, unless it is inconsistent with the Act.
2. Far from being inconsistent with the Transfer of Land Act, the existence of an easement 'howsoever acquired' is accommodated by the exception in s 42(2)(d). In Nelson v Hughes, Lowe J concluded that the equivalent proviso in s 72 of the Transfer of Land Act 1928 was not limited to easements created by registrable instrument or to easements subsisting when the land was first brought under the Act.[97] In that case, a prescriptive easement was found to have arisen over land under the Act. The same conclusion was reached in Sunshine Retail.[98] The legislative history of s 42, discussed below, also indicates that prescriptive easements are accommodated by, and not inconsistent with, the Transfer of Land Act.[99]
3. In Laming v Jennings, this Court identified six matters for consideration when the question of 'tacking' under the Transfer of Land Act arose for determination:

(a) First, there is no authority on the precise issue whether, for the purposes of s 42(2)(d), an easement can be held to have been subsisting over a servient tenement at the time a person became the registered proprietor, even though the period of 20 years of uninterrupted use was completed after the time of registration;[100]

(b) Second, whether there is any significance in the use of the phrase 'any rights subsisting' in s 42(2)(b), compared to the phrase 'any easements howsoever acquired subsisting' in s 42(2)(d);[101]

(c) Third, the strong policy embedded in the Transfer of Land Act in favour of the integrity of the public register of land titles and the centrality of indefeasibility of title to that policy;[102]

(d) Fourth, the legislative history of s 42(2)(d);[103]

(e) Fifth, whether the doctrine of lost modern grant may operate more unfairly in the case of a person who becomes the registered proprietor of the servient tenement during the period of 20 years of uninterrupted use, who has less opportunity to observe the use and take steps to stop it, and case law to the effect that such a person is bound by the acquiescence of his or her predecessors in title; and[104]

(f) Sixth, whether the historical rationale of legal fictions such as the doctrine of lost modern grant has significantly diminished with the advent of modern systems for the registration of title, comprehensive planning laws and more mature land law jurisprudence.[105]

1. While there is no Victorian or High Court authority on the precise issue that has arisen in this case, there is a decision of the Supreme Court of Western Australia in which an easement was found to have arisen over a servient tenement as a result of 20 years of uninterrupted use, despite changes in the registered proprietor of the servient tenement during that period.[106] Pekel concerned land under the Transfer of Land Act 1893 (WA) and an easement acquired by long use with the acquiescence of successive owners of the servient tenement. The easement was held to fall within the exception to indefeasibility in s 68 of the Transfer of Land Act 1893 (WA) for an 'easement acquired by enjoyment or user ... affecting such land'.[107] The later decision of Wayella also appears to have concerned Torrens system land, although there is no reference to the Transfer of Land Act 1893 (WA) or indefeasibility of title.[108]
2. Pekel and perhaps Wayella are consistent with the Victorian decision of Sunshine Retail, where an easement was held to have arisen due to 20 years of use of the servient tenement by successive owners of the dominant tenement.[109]
3. As discussed, all three decisions are consistent with the public policy underpinning the law of prescription, which implies the grant of an easement to provide a certain legal basis for an established pattern of prolonged use of the servient tenement.[110] The implication rests on the acquiescence of the registered proprietors of the servient tenement from time to time during the 20 years or more of open, as-of-right use of their land. What is implied is the grant of a proprietary interest to the owners of the dominant tenement from time to time, before the use commenced. It is not a personal remedy against the owner of servient tenement at the time the use matures into an easement.[111]
4. Further, an easement does not 'subsist' over the servient tenement before the period of 20 years of use is completed. For the reasons discussed above, an owner of the dominant tenement has 'no rights at all' arising from a period of less than 20 years' use, and such a period of use is not an 'encumbrance' for the purposes of the Transfer of Land Act.[112]
5. In summary, existing authority supports a conclusion that a prescriptive easement may arise after 20 years of open use of the servient tenement by the owners of the dominant tenement, with the acquiescence of successive owners of the servient tenement.

Context - s 42(2)(b)

1. The second matter identified for consideration in Laming v Jennings was the significance of the differences in the wording of s 42(2)(b) and (d) of the Transfer of Land Act. Section 42(2)(b) excepts 'any rights subsisting under any adverse possession of the land', while the exception in s 42(2)(d) is for 'any easements howsoever acquired subsisting over or upon or affecting the land'.[113] The Court suggested that the phrase 'any rights subsisting' in s 42(2)(b) may more readily be construed as rights that are continuing to accrue. By contrast, the phrase 'any easements howsoever acquired subsisting' in s 42(2)(d) might indicate that an easement must have already crystallised at the time a person becomes the registered proprietor of the servient tenement.[114]
2. The two exceptions are worded differently because they deal with different interests in land.
3. Section 42(2)(b) provides an exception from indefeasibility of title for inchoate possessory rights, before a sufficient period has elapsed to establish a claim in adverse possession. As the applicants accepted in oral argument, possessory title has long been recognised by the law as a right, and clearly falls within the definition of 'encumbrance' in the Transfer of Land Act. By contrast, a period of less than 20 years use of the servient tenement gives rise to 'no rights at all', and is not an encumbrance for the purposes of the Transfer of Land Act.
4. The judge explained the position, in considering the relevance of the exception in s 42(2)(b) to the construction of s 42(2)(d):

[I]t seems to be accepted that this exception applies even when the property has been transferred during the period required to establish a claim in adverse possession. Moore, Grattan and Griggs in 'Australian Real Property Law' suggest that 'the better view' is that the drafters of the legislation intended that 'an adverse possessor of Torrens land should be in the same position as an adverse possessor of general law land'. They suggest that the phrase 'rights subsisting under any adverse possession of land' includes 'inchoate possessory rights' as well as 'possessory rights which have developed with the effluxion of time into the [best] interests in the world'. In this way, it can be said that (inchoate) rights are 'subsisting', even if the full time period has not yet been reached, with the result that the necessary period of possession may span a change in registered proprietor. The authors of 'Sackville & Neave: Australian Property Law' agree.[115]

1. Ultimately, the judge found the authorities considering the exception for adverse possession to be of little assistance in this case, because the 'theoretical underpinning of claims based on adverse possession and the language used in its exception are sufficiently different from the theoretical underpinning of claims based on lost modern grant and the language used in the exception for easements'.[116] We agree with that conclusion.

1. The Torrens system enacted in the Transfer of Land Act is underpinned by a strong policy that the public register of titles should provide 'the information necessary to comprehend the extent or state of the registered title to the land in question'.[117] The indefeasibility of title granted by s 42(1) is central to the achievement of that policy.
2. However, s 42(2) creates a number of exceptions to indefeasibility in respect of several 'paramount interests', including unregistered easements 'howsoever acquired'. Section 3(1) preserves the operation of the general law in relation to land under the Transfer of Land Act, so far as it is not inconsistent with the Act.
3. There is an obvious tension between the policy of certainty of registered title and the express preservation of certain unregistered interests in land. The legislative history of s 42, examined below, indicates that the Parliament of Victoria has consistently resolved that tension in favour of the paramount interests described in s 42(2).

1. As mentioned, the Torrens system was first enacted in Victoria in the Real Property Act 1862. The preamble to that Act stated that 'the inhabitants of this colony are subjected to losses heavy costs and much perplexity by reason that the laws relating to the transfer and encumbrance of freehold and other interests in land are complex cumbrous and unsuited to the requirements of the said inhabitants and it is expedient to amend the said laws'. Section 39 provided for indefeasibility of the title of the registered proprietor, in the following terms:

XXXIX. Notwithstanding the existence in any other person of any estate or interest whether derived by grant from the Crown or otherwise which but for this Act might be held to be paramount or to have priority the registered proprietor of land or of any estate or interest in land under the provisions of this Act shall except in case of fraud hold the same subject to such encumbrances liens estates or interests as may be notified on the folium of the register book constituted by the grant or certificate of title of such land but absolutely free from all other encumbrances liens estates or interests whatsoever except the estate or interest of a proprietor claiming the same land under a prior certificate of title or under a prior grant registered under the provisions of this Act and except as regards the omission or misdescription of any right of way or other easement created in or existing upon any land and except so far as regards any portion of land that may by wrong description of parcels or boundaries be included in the grant certificate of title lease or other instrument evidencing the title of such registered proprietor not being a purchaser or mortgagee thereof for value or deriving from or through a purchaser or mortgagee thereof for value. [emphasis added]

1. The Transfer of Land Statute 1866 sought to revise the system of conveyancing as set out in the Real Property Act 1862 'to give certainty to the title to estates in land, and to facilitate the proof thereof, and also to render dealings with land more simple and less expensive'.[118] Section 49 of the Transfer of Land Statute 1866 included further exceptions to indefeasibility for reservations, Crown grant conditions and powers, unpaid rates, statutory licences, and rights under adverse possession and for tenants in possession. Section 49 was divided into two sentences: the first provided for indefeasibility of title; the second 'provided always' for the listed exceptions, which came to be known as paramount interests or 'proviso' interests.[119] The side note to the second sentence read 'Certain rights and interests need not be specially mentioned as encumbrances'.
2. Section 49 of the Transfer of Land Statute 1866 provided, in full:

Notwithstanding the existence in any other person of any estate proprietor or interest whether derived by grant from Her Majesty or otherwise which but for this Act might he held to be paramount or to have priority the proprietor of land or of any estate or interest in land under the operation of this Act shall except in case of fraud hold the same subject to such encumbrances as may be notified on the folium of the register book constituted by the grant or certificate of title but absolutely free from all other encumbrances whatsoever except the estate or interest of a proprietor claiming the same land under a prior registered grant or certificate of title and except as regards any portion of land that may by wrong description of parcels or boundaries be included in the grant certificate of title or instrument evidencing the title of such proprietor not being a purchaser for valuable consideration or deriving from or through such a purchaser. Provided always that the land which shall be included in any certificate of title or registered instrument shall be deemed to be subject to the reservations exceptions conditions and powers (if any) contained in the grant thereof and to any rights subsisting under any adverse possession of such land and to any public rights of way and to any easements acquired by enjoyment or user or subsisting over or upon or affecting such land and to any unpaid rates and to any license granted by the Board of Land and Works under the "Mining Statute 1865" and also where the possession is not adverse to the interest of any tenant of the land notwithstanding the same respectively may not be specially notified as encumbrances on such certificate or instrument. [emphasis added]

1. Contemporary commentary on s 49 noted a number of benefits for registered title holders: paramount interests were discoverable and considered to be 'easily decided upon if raised',[120] the system provided that certificate of title was conclusive evidence of ownership subject to a few exceptions,[121] and the system enabled title holders to sell, mortgage or lease land with greater efficiency.[122] As to the exception for easements:

All public rights-of-way, and all other easements acquired by user, such as the right to ways, or by enjoyment, such as the right to light subsisting over upon or affecting the land will qualify the estate of a proprietor. Amongst these negative easements may be the rights of neighbouring proprietors to the support of the soil or to an uninterrupted flow of water running over the land. Such servitudes equally affect the title to land not under the Act, and their exception is only introduced to preserve the operation of the common law in respect to them. ... It is obvious that easements gained gradually by daily use, and evidenced by no writing, are incapable of registration, but easements by express grant are to be registered.[123]

1. The second sentence in s 49 commencing 'Provided always' remained in subsequent versions of the transfer of land legislation and the proviso for 'any easements acquired by enjoyment or user or subsisting over or upon or affecting such land' remained in substantially the same form until 1954.[124]
2. The Transfer of Land Act 1954 was enacted after 90 years of operation of the Torrens system in Victoria, in response to growing dissatisfaction with the system of conveyancing which had lost 'sight of its basic principles'.[125] There was a pressing need to consolidate and update the legislation pertaining to the transfer of land.[126]
3. There were a number of iterations of the Transfer of Land Bill before the enactment of the Transfer of Land Act 1954. The versions of the Bill that came before Parliament were informed by a report of the Council of the Law Institute in 1938, which called for wholesale redrafting, and six reports of the Statute Law Revision Committee.[127] The essence of the Statute Law Revision Committee's final report was that the Bills previously submitted for consideration were a positive step towards a coherent revision of the Act, but that in some respects 'simplicity was sacrificed in an attempt to increase certainty'.[128]
4. In the second reading speech for the redrafted Bill that became the Transfer of Land Act 1954, the Minister for Public Works said:

The system aims at three principles - simplicity, certainty, and indefeasibility. But, as is always the case when there is more than one factor, there must be some give and take between the factors concerned. So the balance between simplicity, certainty, and indefeasibility is at times difficult to maintain. If all possible interests are to be notified on titles, then simplicity and ease of administration must be abandoned. Simplicity can be obtained if it is known with certainty that specified interests will always be shown on the title, that no other interests will appear on the title, and that information as to such other interests can be found elsewhere or that such interests are to be treated not as matters attached to or running with the land but as matters of personal adjustment.[129]

1. The Statute Law Revision Committee initially recommended that easements acquired by use should be capable of registration. Parliament chose not to adopt that recommendation, on the basis that it would have required an inquiry of a judicial nature by the Registrar of Titles, 'a difficult and delicate task'.[130] Instead, the registration of easements was restricted to those created by writing or by statute, or declared by a decision of the court. The Minister explained that it was felt that this was 'as far as the legislation can go without unduly overloading the Titles Office or usurping judicial functions'.[131]
2. Clause 42(2)(d) of the Bill introduced into Parliament contained an exception to indefeasibility for 'any easements acquired by enjoyment or user or subsisting over or upon or affecting the land'. This wording was intended to make it clear that easements arising by implied grant would be protected.[132]
3. During debate, the Minister moved that the words 'acquired by enjoyment or user or' be omitted and replaced with 'howsoever acquired'. No explanation of the amendment was recorded in Hansard, but it is reasonable to infer that its purpose was 'to extend the scope of the section to all easements irrespective of how they were acquired'.[133] The amendment was agreed to and adopted. It is this simplified formulation of the exception that now appears in s 42(2)(d) of the Transfer of Land Act.
4. As the judge noted, the exception for easements 'howsoever acquired' in Victoria contrasts with the position in some other Australian States, where the exception has been removed or substantially narrowed.[134] In New South Wales, the exception for easements applies only to an omitted or misdescribed easement subsisting immediately before the land was brought under the Real Property Act 1900 (NSW).[135] The easement exception in Queensland is similarly confined.[136] In Tasmania, the common law concerning the acquisition of easements has been replaced with a statutory application process.[137]
5. The broad exception for easements 'howsoever acquired' has remained in s 42(2)(d) of the Transfer of Land Act, despite two separate recommendations for reform. In 1992, the Law Reform Commission of Victoria recommended the abolition of prescriptive easements acquired by long use.[138] In 2010, the Victorian Law Reform Commission made a similar recommendation.[139] Neither recommendation was implemented, and the exception in s 42(2)(d) remains in the same broad terms that were adopted in 1954.
6. In summary, the legislative history strongly supports a conclusion that the legislature has deliberately chosen to allow prescriptive easements acquired by long use as an exception to indefeasibility of title under the Transfer of Land Act.

1. As the Court in Laming v Jennings observed, the law of prescription may operate more unfairly in the case of a person who becomes the registered proprietor of the servient tenement towards the end of the 20-year period, because that person has less opportunity to observe the use and take steps to stop it.[140] This and many other criticisms of prescription are recorded in the Victorian Law Reform Commission's 2010 report, Easements and Covenants.[141]
2. At the same time, the Commission acknowledged that the function of prescription is to give effect to expectations arising from long use of another's land.[142] While prescription has the potential to operate unfairly, and is an indiscriminate mechanism for balancing the interests of adjoining landowners, it does serve the important function of providing a legal basis for 'the peaceful enjoyment of the use of land where that use has endured for more than twenty years, as of right'.[143]
3. Unless and until Parliament amends the Transfer of Land Act to limit or remove the exception for unregistered easements in s 42(2)(d), the Court must give effect to the exception, despite the potential for it to operate unfairly. In this case, the 20-year period expired in 2016, well before the applicants became the registered proprietors of 31 Ivanhoe Street, and so questions of unfairness do not arise. The easement had been acquired by Mrs Valmorbida and subsisted when the transfer to the applicants was registered in October 2021.

1. In its 2020 report, the Victorian Law Reform Commission observed:

The development of prescription was driven by the lack of planning regulation, and particularly the unregulated private subdivision of land. The introduction of legislation that provides for the creation of express and implied subdivisional easements upon registration of a plan of subdivision has diminished the need to rely on prescription. As noted by Moses and Sherry, '[h]ighly regulated modern systems of planning greatly reduce the likelihood that land will be developed without necessary easements being created'.[144]

1. While that may be the case in relation to recently subdivided land, many lots in Victoria were created before the advent of modern planning laws - including the lots involved in this case. The historical rationale for prescriptive easements remains relevant.[145]
2. Section 6A of the Planning and Environment Act 1987 contemplates that a planning scheme may require a permit to be obtained for a person to proceed under ss 23, 24A or 36 of the Subdivision Act 1988 to create, vary or remove an easement. This is given effect in cl 52.02 of the Victorian Planning Provisions, which is included in many planning schemes. However, s 6A(3)(a)(i) precludes a planning scheme from prohibiting or restricting, among other things, the creation of easements by prescription. Thus, to the extent that Victoria's planning laws deal with the creation of easements, they expressly preserve the law of prescription.

1. The judge was correct to characterise s 42 of the Transfer of Land Act as an ambulatory provision. It describes the estate of the registered proprietor of land from time to time, not only at the point of registration. The registered proprietor holds the land free from any encumbrances not recorded on the Register, but subject to the exceptions provided in s 42(2). Those exceptions include 'any easements howsoever acquired subsisting over or upon or affecting the land'. For the reasons given, Mrs Valmorbida acquired an easement over Stevens Court in 2016, which has subsisted since that time despite not being recorded on the Register.
2. The applicants' fourth ground is not made out.

1. While none of the applicants' proposed grounds of appeal have succeeded, all of them were arguable, and so leave to appeal should be granted. However, the appeal must be dismissed. It is not necessary to determine the grounds raised in the notice of contention.

[1] Valmorbida v Les Denny Pty Ltd [2023] VSC 680 ('Reasons').

[2] Reproduced at [1] above.

[3] Reasons, [12]-[15] (citations omitted).

[29] Citing Nelson v Hughes [1946] VicLawRp 76; [1947] VLR 227, 230 (Lowe J); Laming v Jennings [2018] VSCA 335, [179] (Kyrou, McLeish and Niall JJA); cf Williams v State Transit Authority of New South Wales [2004] NSWCA 179; (2004) 60 NSWLR 286, [129]-[130] (Mason P); [2004] NSWCA 179.

[40] Reasons, [56]; see [20(h)] above.

[41] Hampshire Automotive Centre Pty Ltd v Centre Com (Sunshine) Pty Ltd (2020) 60 VR 579, 590-1 [57] (Tate, Niall and Emerton JJA); [2019] VSCA 77 ('Hampshire Automotive').

[43] Referring to Fox v Percy [2003] HCA 22; (2003) 214 CLR 118, 126-7 [25] (Gleeson CJ, Gummow and Kirby JJ); [2003] HCA 22; Robinson Helicopter Co Inc v McDermott [2016] HCA 22; (2016) 90 ALJR 679, 687 [43] (French CJ, Bell, Keane, Nettle and Gordon JJ); [2016] HCA 22; Lee v Lee [2019] HCA 28; (2019) 266 CLR 129, 148 [55] (Bell, Gageler, Nettle and Edelman JJ); [2019] HCA 28 ('Lee v Lee').

[44] Referring to Warren v Coombes [1979] HCA 9; (1979) 142 CLR 531, 551 (Gibbs ACJ, Jacobs and Murphy JJ); Fox v Percy [2003] HCA 22; (2003) 214 CLR 118, 126-7 [24]-[26] (Gleeson CJ, Gummow and Kirby JJ); [2003] HCA 22.

[47] Lee v Lee [2019] HCA 28; (2019) 266 CLR 129, 148 [55] (Bell, Gageler, Nettle and Edelman JJ); [2019] HCA 28.

[51] Coulton v Holcombe [1986] HCA 33; (1986) 162 CLR 1, 7-8 (Gibbs CJ, Wilson, Brennan and Dawson JJ); [1986] HCA 33.

[52] Laming v Jennings [2018] VSCA 335, [195] (Kyrou, McLeish and Niall JJA), citing Auckran v Pakuranga Hunt Club (1904) 24 NZLR 235, 240-1 (Edwards J) ('Auckran'); Pekel v Humich [1999] WASC 65; (1999) 21 WAR 24, 38 [135] (Templeman J); [1999] WASC 65 ('Pekel'); Wayella Nominees Pty Ltd v Cowden Ltd [2003] WASC 210, [230] (Roberts-Smith J) ('Wayella').

[53] Referring to Dalton v Henry Angus & Co (1881) 6 AC 740, 773 (Fry J); Hamilton v Joyce (1984) 3 NSWLR 279, 287-8 (Powell J); and Brendan Edgeworth, Butt's Land Law (7th ed, 2017), 1131-2 [16.470]-[16.480].

[54] Referring to Delohery v Permanent Trustee Co of NSW [1904] HCA 10; (1904) 1 CLR 283, 313-4 (Griffith CJ, Barton and O'Connor JJ); [1904] HCA 10 ('Delohery'); Pekel [1999] WASC 65; [1999] 21 WAR 24, [43] (Templeman J); [1999] WASC 65.

[55] Delohery [1904] HCA 10; (1904) 1 CLR 283, 311; [1904] HCA 10.

[56] Delohery [1904] HCA 10; (1904) 1 CLR 283, 299; [1904] HCA 10.

[57] Delohery [1904] HCA 10; (1904) 1 CLR 283, 307-8; [1904] HCA 10.

[58] Delohery [1904] HCA 10; (1904) 1 CLR 283, 308; [1904] HCA 10.

[59] Delohery [1904] HCA 10; (1904) 1 CLR 283, 308-9, see also 313-4; [1904] HCA 10.

[61] Dobbie v Davidson (1991) 32 NSWLR 625, 640 (Priestley JA).

[62] Dobbie v Davidson (1991) 32 NSWLR 625, 627 (Kirby P).

[63] Dobbie v Davidson (1991) 32 NSWLR 625, 629 (Kirby P).

[64] [1946] VicLawRp 76; [1947] VLR 227.

[65] [1999] VSC 415 ('Sunshine Retail').

[66] (2019) 60 VR 579; [2019] VSCA 77.

[67] Hampshire Automotive [2019] VSCA 77; (2019) 60 VR 579, 589 [51]-[52] (Tate, Niall and Emerton JJA); [2019] VSCA 77 (citations omitted).

[68] Hampshire Automotive [2019] VSCA 77; (2019) 60 VR 579, 601 [107] (Tate, Niall and Emerton JJA); [2019] VSCA 77 (citations omitted).

[69] Laming v Jennings [2018] VSCA 335, [195] (Kyrou, McLeish and Niall JJA).

[70] (1904) 24 NZLR 235.

[71] Auckran (1904) 24 NZLR 235, 240-1 (Edwards J).

[72] [1999] WASC 65; (1999) 21 WAR 24, 38 [135] (Templeman J); [1999] WASC 65.

[73] [2003] WASC 210, [230] (Roberts-Smith J) ('Wayella').

[74] Sunshine Retail [1999] VSC 415, [145] (Hedigan J).

[75] Discussed at [55]-[61] above.

[76] [1991] SASC 3013; (1991) 56 SASR 482.

[77] Golding v Tanner [1991] SASC 3013; (1991) 56 SASR 482, 492 (Debelle J, King CJ and Cox J agreeing), see also 485-6 (King CJ).

[78] Golding v Tanner [1991] SASC 3013; (1991) 56 SASR 482, 488 (Debelle J, King CJ and Cox J agreeing).

[79] Laming v Jennings [2018] VSCA 335, [179]-[198] (Kyrou, McLeish and Niall JJA).

[80] Transfer of Land Act, s 27.

[81] Referring to Frazer v Walker [1967] 1 AC 569, 580 (Lord Wilberforce); Breskvar v Wall (1971) 126 CLR 376, 385 (Barwick CJ), 399-400 (Windeyer J); [1971] HCA 70; Peldan v Anderson [2006] HCA 48; (2006) 227 CLR 471, 480 [20] (Gummow A-CJ, Kirby, Hayne, Callinan and Crennan JJ); [2006] HCA 48; Mekpine Pty Ltd v Moreton Bay Regional Council [2016] 1 Qd R 148, [82] (Morrison JA); [2014] QCA 317.

[82] Referring to Robert Torrens, The South Australian System of Conveyancing by Registration of Title (Printed at the Register and Observer General Printing Offices, 1859), 34. The applicants referred to numerous authorities which emphasised the importance of being able to rely on accuracy of the Register, including Westfield Management Ltd v Perpetual Trustee Co Ltd [2007] HCA 45; (2007) 233 CLR 528, 531 [5] (Gleeson CJ, Gummow, Kirby, Hayne and Heydon JJ); [2007] HCA 45; Deguisa v Lynn [2020] HCA 39; (2020) 268 CLR 638, 644 [2], 661 [66] (Gleeson CJ, Gummow, Kirby, Hayne and Heydon JJ); [2020] HCA 39; and Mapa Pearls Pty Ltd v Haliotis Fisheries Pty Ltd [2023] VSCA 108; (2023) 71 VR 581, 597 [54] (Kyrou, McLeish and Niall JJA); [2023] VSCA 108.

[83] Leros Pty Ltd v Terara Pty Ltd [1992] HCA 22; (1992) 174 CLR 407, 418-9 (Mason CJ, Dawson and McHugh JJ) ('Leros').

[84] (1883) 24 Ch D 1 ('Bonner').

[85] Bonner (1883) 24 Ch D 1, 8 (Baggallay LJ); see also 10 (Lindley LJ), 10-11 (Fry LJ).

[86] Bonner (1883) 24 Ch D 1, 8-9 (Baggallay LJ).

[87] [1901] 2 Ch 324, 328 (Farwell J) ('Greenhalgh').

[88] Greenhalgh [1901] 2 Ch 324, 328 (Farwell J).

[89] Leros [1992] HCA 22; (1992) 174 CLR 407, 418-9 (Mason CJ, Dawson and McHugh JJ).

[90] Leros [1992] HCA 22; (1992) 174 CLR 407, 416 (Mason CJ, Dawson and McHugh JJ).

[91] Leros [1992] HCA 22; (1992) 174 CLR 407, 418 (Mason CJ, Dawson and McHugh JJ) (emphasis added).

[92] Section 3(1) is set out at [71] above.

[93] Real Property Act 1862, Preliminary cl 1. See also Transfer of Land Statute 1866, s 3; Transfer of Land Act 1890, s 3; and Transfer of Land Act 1928, s 3.

[94] Victoria, Parliamentary Debates, Legislative Assembly, 15 September 1954, 626 (Mr Merrifield, Minister of Public Works). See also Minutes of Evidence (Transfer of Land Bill 1954), 10 (Mr Garran).

[95] Hall v Hall & Ors [2018] VSC 131, [44] citing Groongal Pastoral Co Ltd (In Liq) v Falkiner (1924) 35 CLR 157; [1924] HCA 54; Fink v Robertson (1907) 4 CLR 864; [1907] HCA 7; Citibank Savings Ltd v Stergiou (1996) 66 FCR 587, 589 (Burchett, Lee and Kiefel JJ).

[96] See [55]-[67] above.

[97] Nelson v Hughes [1946] VicLawRp 76; [1947] VLR 227, 230 (Lowe J).

[98] [1999] VSC 415. See also Hampshire Automotive (2020) 60 VR 579, 591 [58] (Tate, Niall and Emerton JJA), [2019] VSCA 77.

[99] See [112]-[125] below.

[100] Laming v Jennings [2018] VSCA 335, [188] (Kyrou, McLeish and Niall JJA).

[101] Laming v Jennings [2018] VSCA 335, [189] (Kyrou, McLeish and Niall JJA).

[102] Laming v Jennings [2018] VSCA 335, [190] (Kyrou, McLeish and Niall JJA).

[103] Laming v Jennings [2018] VSCA 335, [191]-[194] (Kyrou, McLeish and Niall JJA).

[104] Laming v Jennings [2018] VSCA 335, [195] (Kyrou, McLeish and Niall JJA).

[105] Laming v Jennings [2018] VSCA 335, [196] (Kyrou, McLeish and Niall JJA).

[106] Pekel (1999) 21 WAR 24; [1999] WASC 65.

[107] Pekel [1999] WASC 65; (1999) 21 WAR 24, 38 [134] (Templeman J); [1999] WASC 65.

[108] Wayella [2003] WASC 210.

[109] See [64] above.

[110] See [65] above.

[111] Cf Golding v Tanner [1991] SASC 3013; (1991) 56 SASR 482, discussed at [66] above.

[112] See [85]-[88] above.

[113] Laming v Jennings [2018] VSCA 335, [189] (Kyrou, McLeish and Niall JJA).

[114] Laming v Jennings [2018] VSCA 335, [189] (Kyrou, McLeish and Niall JJA).

[115] Reasons, [99] (citations omitted).

[117] Westfield Management Ltd v Perpetual Trustee Co Ltd [2007] HCA 45; (2007) 233 CLR 528, 531 [5] (Gleeson CJ, Gummow, Kirby, Hayne and Heydon JJ); [2007] HCA 45; see also Deguisa v Lynn [2020] HCA 39; (2020) 268 CLR 638, 645 [4], [88] (Kiefel CJ, Gageler, Keane, Gordon and Edelman JJ); [2020] HCA 39.

[118] Transfer of Land Statute 1866 (Vic), preamble.

[119] See, eg, the discussion of proviso interests in Lisa Spagnolo, 'A Conceptual Framework: What the Forgotten History of Victorian Torrens Legislation Tells Us About Priority Disputes Involving Paramount Interests' (2022) Sydney Law Review 2, 269-271.

[120] Thomas A'Beckett, Introduction and Notes to the Transfer of Land Statute of Victoria (FF Bailliere, 1867), 3.

[124] Transfer of Land Act 1890, s 74; Transfer of Land Act 1915, s 72; Transfer of Land Act 1928, s 72.

[125] Victoria, Parliamentary Debates, Legislative Assembly, 14 September 1954, 623 (Samuel Merrifield, Minister of Public Works).

[130] Ibid 625. See also Statute Law Revision Committee, Legislative Council (Vic), 'Report on the Proposals Contained in the Transfer of Land Bill 1954, Together with Minutes and Appendices' (30 November 1954), 53; Members of the Council of the Institute, 'Transfer of Land Act' (1938) Law Institute Journal 161, 162 ('The Registrar should have no duty of scrutinising such notices as he does documents lodged for registration as instruments; and of course he should have no duty to certify to the exact extent of the interest protected as he has with a registered instrument').

[131] Victoria, Parliamentary Debates, Legislative Assembly, 14 September 1954, 625 (Samuel Merrifield, Minister of Public Works).

[132] Statute Law Revision Committee, Legislative Council (Vic), 'Report on the Proposals Contained in the Transfer of Land Bill 1954, Together with Minutes and Appendices' (30 November 1954), 53.

[133] Laming v Jennings [2018] VSCA 335, [193] (Kyrou, McLeish and Niall JJA).

[135] Real Property Act 1900 (NSW), s 42(1)(a).

[136] Land Titles Act 1994 (Qld), s 185(1)(c), (3)(a).

[137] Land Titles Act 1980 (Tas), ss 138I, 138J.

[138] Law Reform Commission of Victoria, Easements and Covenants (Report No 41, October 1992), [39].

[139] Victorian Law Reform Commission, Easements and Covenants (Final Report No 22, December 2010), [4.85], Recommendation 17.

[140] Laming v Jennings [2018] VSCA 335, [195] (Kyrou, McLeish and Niall JJA).

[141] Victorian Law Reform Commission, Easements and Covenants (Final Report No 22, December 2010), [4.60]-[4.74].

[143] Dobbie v Davidson (1991) 32 NSWLR 625, 627-8 (Kirby P).

[144] Victorian Law Reform Commission, Easements and Covenants (Final Report No 22, December 2010), [4.74] (footnotes omitted).

[145] See [127] above.