Lolakis & Anor v Konitsas

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION EQUITY LIST

4646/01 LUCAS LOLAKIS & ANOR v MICHAEL KONITSAS JUDGMENT 1 HIS HONOUR: This is a dispute between neighbours about a right of way. Mr and Mrs Lolakis are the plaintiffs. They have, endorsed on the certificate of title of their Real Property Act land, a right of way over some land of the defendant, Mr Konitsas. That right of way has not been used at all since 1974, and even before then its full area was not used. The plaintiffs now seek to enforce a right to use it. The defendant, for his part, seeks, by a cross-claim, an order that the right of way be extinguished. The Lie of the Land, and Creation of the Easement 2 The plaintiffs are the registered proprietors of the land in Folio Identifier 19/5/937. That Folio Identifier was formerly Volume 3939 folio 32. The Certificate of Title of the plaintiffs shows that their land has the benefit of the easement in question in this litigation. The defendant is the registered proprietor of the land comprised in Folio Identifier 20/5/937. The defendant's land was formerly Certificate of Title Volume 764 Folio 149. The Certificate of Title of the defendant's land shows that it is burdened by the easement which is the subject of this litigation. 3 The plaintiffs' land is known as No 84 King Street Mascot. The defendant's land is No 86 King Street Mascot. Each of those lots is a rectangular lot, 40 feet wide and 132 feet deep. The blocks are aligned in a north-south direction, such that each of them has a 40-foot frontage to King Street. King Street lies to the north of each of the blocks. The plaintiffs' block lies to the east of the block of the defendant. Each of the blocks has a suburban house erected on it. 4 The easement in question was created by a Memorandum of Transfer registered K445071 made on 8 September 1966. By that document, the then proprietor of the defendant's land, (called the "transferor") " DO HEREBY TRANSFER AND GRANT to the transferee out of all such my estate and interest in the land mentioned in the schedule following:- County Parish Reference to Title Cumberland Botany Whole Volume 764 Folio 149

A right of carriageway as appurtenant to the land contained in certificate of title volume 3939 folio 32 over all that piece of land shown as "Site of Right-of-Way" on the plan annexed hereto and marked "A". AND IN CONSIDERATION of the premises the transferee for herself and her personal representatives and her and their assigns DOTH HEREBY COVENANT with the transferor and her personal representatives and her and their assigns (i) that she shall forthwith erect or cause to be erected along the western boundary of the said piece of land shown as "Site of Right-of-Way" on the said plan and shall at all times maintain in a proper state of repair a paling fence or such other type of fence as shall be mutually agreed upon from time to time by and between the transferee and the transferor or other the registered proprietor for the time being of the land contained in the said certificate of title volume 764 folio 149; (ii) that in the event of the transferor or her personal representatives or her or their assigns at any time or from time to time failing to maintain the said fence in a proper state of repair the transferor or her personal representatives or her or their assigns shall be at liberty to repair the same and to recover the cost of such repair from the transferor or as the case may be from her personal representatives or her or their assigns; (iii) that the transferor and her personal representatives and her and their assigns shall not be bound to make or pay and shall be exempt from all liability to make or pay any contribution to the cost of the erection maintenance or repair of any dividing fence along the western boundary of the said piece of land shown as "Site of Right-of-Way" on the said plan or of any other dividing fence between the lands contained in the said certificate of title volume 764 folio 149 and volume 3939 folio 32 AND IT IS HEREBY AGREED AND DECLARED (a) that the land to which the benefit of the foregoing covenants shall be appurtenant is the land contained in the said certificate of title volume 764 folio 149 (b) that the land which is subject to the burden of the said covenants is the land contained in the said certificate of title volume 3939 folio 32 and (c) that the person having the right to release vary or modify the said covenants or any of them shall be the registered proprietor for the time being of the land contained in the said certificate of title volume 764 folio 149 and the same shall not be released varied or modified without the consent of such registered proprietor. ENCUMBRANCES, &c. REFERRED TO NIL" 5 The plan annexed to that dealing showed the "site of right of way" as a thin slice of land lying just inside the eastern boundary of No 86, and extending part of the length of that eastern boundary. Subsequent survey has identified its dimensions. Without being fully precise, the site of the right of way can be identified by starting at the north-eastern corner of the defendant's land, proceeding 0.305 metres in a westerly direction, then proceeding in a southerly direction for about half the length of the boundary between No 84 and 86, then veering slightly to the east so that one meets the boundary between No 84 and 86 at a point very approximately two thirds of the distance along that boundary from King Street, and then returning in a northerly direction, along the boundary, to the point of commencement. (The evidence establishes the boundaries more precisely than I have just described them, but the description gives a general idea of where the site of the easement lies.) 6 Mr Konitsas became the registered proprietor of No 86 on 12 June 1968, and took up residence in No 86 at that time. His wife began living there with him in 1972. They continued to live there until 1985, when they moved to another home. Since 1985, No 86 has been occupied by tenants. 7 In the summer of 1974, part of the fence dividing No 84 and No 86 had fallen over. That fence had been the dividing fence between No 84 and No 86 ever since Mr Konitsas had owned No 86, and from its appearance it could well have been erected there prior to 1968. I find that no fence had ever been erected on the site of the fence contemplated by the instrument which created the right of way. 8 A survey which Mr Konitsas commissioned in November 1973 showed that the dividing fence between No 84 and No 86 was slightly off the boundary -- it was three inches outside the boundary of No 86 at the front of the house, crossed the boundary a short distance from the street frontage (but well in front of the front of the house erected on No 86), stood up to 8 inches inside the boundary for the length of the house erected on No 86, but stood on the correct boundary for the remainder of its length. When the fence fell over, Mr Konitsas spoke with one of the then owners of No 84, Mr Nicholas Kipriotis (who with his wife was registered proprietor of No 84). Mr Konitsas showed him the November 1973 survey, and suggested that they should replace the existing fence, and put it straight, as shown by the survey. Mr Kipriotis agreed. They agreed that they should share the labour equally, and share the cost of materials equally. In the summer of 1974 a wooden paling fence was erected by Mr Konitsas, Mr Konitsas' father-in-law, Mr Kipriotis, and a friend of Mr Kipriotis. Mr and Mrs Kipriotis contributed half the cost of the materials required to erect the new paling fence. As they had discussed, it was build on the boundary line between No 84 and No 86. That fence has been the dividing fence between No 84 and No 86 ever since. 9 Mr and Mrs Lolakis became registered proprietors of No 84 in early 1985. At the time of acquisition they received a survey which a surveyor, Mr Fuller, had performed in February 1985. Mr Fuller reported that the land had on it a cottage which was erected about 1926, and that the western wall of that cottage stood from 1.98 to 1.99 m inside the boundary. He also reported: "A Right of Carriageway created by K445071 appurtenant to subject land is shown in blue upon sketch hereon. I report that this right is not presently utilised however if the existing fence was moved to the western boundary of the right it would provide wider access down the side of subject cottage to the garage at the rear." 10 Soon after Mr and Mrs Lolakis purchased No 84, they met Mr Konitsas. Mr Lolakis told Mr Konitsas that he had a survey of the property, which said he could use about one foot of his land. Mr Lolakis showed Mr Konitsas a piece of paper (which I infer was the survey) which showed this. Mr Konitsas said "No you can't. It's mine." Mr Lolakis says that to avoid an argument he terminated the conversation. 11 Mr Konitsas denies in evidence that this conversation occurred, but it seems to me more likely than not that Mr Lolakis' evidence is correct in this respect. There is no doubt that Mr Lolakis had a survey which showed that he had the benefit of the right of way. It is not in the slightest unusual that a new purchaser of property, which was supposed to have the benefit of a right of way, would try to actually obtain the benefit of that right of way. While Mr Lolakis cannot read English, and says that his affidavit was not read over to him in Greek before he swore it, he attended conferences with his solicitor and was accompanied by his wife, who can read English. Further, the essential elements of his affidavit evidence in chief on this topic were confirmed in cross-examination, which was conducted through a Greek interpreter. The effect of Mr Konitsas' denials of the conversation having occurred is seriously undermined by the fact that, in the course of his cross-examination, he denied some propositions which were clearly correct. Having seen Mr Konitsas in the witness box, I find it quite credible that his reaction to a suggestion that he should give up some of his property would be such as to make the person raising the suggestion decide it was prudent not to pursue the matter. 12 When Mr and Mrs Lolakis first purchased No 84 they had a Ford Cortina car. Though it was a tight fit, they were able to drive the car down the driveway at the western side of No 84, to reach a garage which was located towards the rear of the property. When Mr and Mrs Lolakis first purchased No 84 the driveway on the western side of No 84 consisted of two concrete strips, with grass in between. Mr Lolakis concreted the entire width of the driveway, from the western side of the house up to the existing fence. He constructed some gates across the driveway, so that one side of the gates abutted his house, and the other side of the gates abutted the existing fence. 13 In about 1988 or 1989, when Mr Lolakis was repairing the driveway of No 84, he said to Mr Konitsas, "Now that I am repairing the driveway, why don't we move the fence to allow me to use the easement?" Mr Konitsas replied "No. Don't you dare touch the fence!" Mr Konitsas denied that this conversation also had occurred. For similar reasons as I gave concerning the conversation in 1985 when Mr Lolakis first raised the question of having access to the right of way, I prefer the evidence of Mr Lolakis on this topic. 14 At a time not well identified by the evidence, Mr and Mrs Lolakis built an extension at the rear of their house. The western wall of this extension did not continue in a straight line with the western wall of the original part of the house, but rather stood a little to the east of a prolongation of the western wall of the original part of the house. Mr Lolakis explained that he built the wall this way so that the extension would not block vehicular access to the garage. 15 Seven or eight years ago, Mr Lolakis purchased a different car. This was a Holden Commodore, a car wider than the Ford Cortina, and it was not realistically possible to drive it down the driveway. The garage at No 84 came to be used for storage, and Mr Lolakis parked his car on the street. The driveway was used for storage of Mr Lolakis' boat, and sometimes for storage of his trailer. 16 In 1975 Botany Municipal Council approved a development application lodged by Mr Konitsas, which enabled him to build an extension at the rear of his house, and the addition at the rear of a second storey. Mr Konitsas built some footings and walls shortly thereafter, but at that time built nothing more of the proposed extension. In March 2000 he resumed the building work. Mr and Mrs Lolakis were most upset to find that building work of a fairly substantial kind was going on next door, particularly when they had received no notification from the Council that there was any proposal for such building work. This building work was the catalyst for Mr and Mrs Lolakis to take action to enforce the right of way. In September 2000 they instructed solicitors to write to Mr Konitsas seeking his co-operation in carrying out the realignment of the fence which will be necessary to use the right of way. Mr Konitsas apparently did not receive that letter, but he received a copy of it which was sent him on 18 October 2000. This prompted the making of an application to the Registrar General, on Mr Konitsas' behalf, for the cancellation of the easement on the ground that it was abandoned. Notification that the application had been made prompted, in turn, Mr and Mrs Lolakis to file a caveat against the title to No 86, seeking to protect their rights under the easement. 17 On 14 February 2001 Mr Lolakis engaged a builder to construct a fence on the site of the fence contemplated by the transfer granting the right of way. There was an unpleasant scene, with some threats of violence against the builder made by Mr Konitsas and his son. The police were called. Following this incident, there could be no room for doubt that Mr and Mrs Lolakis were actively seeking to enforce a right to use the easement, and that their right to do so was being actively opposed by Mr Konitsas. 18 Mr and Mrs Lolakis have a simple case in chief. They say that they have a registered easement, and that unless that easement is held invalid, extinguished or modified, they are entitled to a court order confirming that they have the benefit of it. As this is a case where the defendant did not rely upon any equitable discretionary defences, I accept that submission. I therefore turn to consider the grounds upon which the defendant seeks to have the easement held invalid, extinguished or modified. Ground of Invalidity -- Not an Easement Because Exclusive Possession is Granted 19 The defendant contends that, in substance, the memorandum of transfer did not create an easement, but rather a transfer of more extensive rights in the area of land over which it purported to grant an easement. 20 It is clearly established that if an instrument creates exclusive and unrestricted use of a piece of land, that instrument does not create an easement. In Reilly v Booth (1890) 44 ChD 12 at 26 Lopes LJ said: "The exclusive or unrestricted use of a piece of land, I take it, beyond all question passes the property or ownership in that land, and there is no easement known to the law which gives exclusive and unrestricted use of a piece of land. It is not an easement in such a case; it is property that passes." 21 The first sentence in this quotation was expressly approved by Lord Ashbourne in Metropolitan Railway Co v Fowler [1893] AC 416 at 428. In Copeland v Greenhalf [1952] 1 Ch 488 Upjohn J held that a right for the defendant to leave as many lorries as he liked on a particular strip of the plaintiff's land, for as long as he liked, and to repair lorries there, was not an easement. "It is virtually a claim to possession of the servient tenement, if necessary to the exclusion of the owner; or at any rate, to a joint user, and no authority has been cited to me which would justify the conclusion that a right of this wide and undefined nature can be the proper subject matter of an easement." (at 498) 22 In In Re Ellenborough Park [1956] 1 Ch 131 at 163 Evershed MR (delivering the judgment of the English Court of Appeal) adopted, at 163, Cheshire's four characteristics of an easement, namely: "(1) There must be a dominant and a servient tenement: (2) an easement must "accommodate" the dominant tenement: (3) dominant and servient owners must be different persons, and (4) a right over land cannot amount to an easement, unless it is capable of forming the subject matter of a grant." 23 Concerning the fourth of these requirements, Evershed MR said, at 164: "The exact significance of this fourth and last condition is, at first sight perhaps, not entirely clear. As between the original parties to the "grant" it is not in doubt that rights of this kind would be capable of taking effect by way of contract or license. But for the purposes of the present case, as the arguments made clear, the cognate questions involved under this condition are: whether the rights purported to be given are expressed in terms of too wide and vague a character; whether, if and so far as effective, such rights would amount to rights of joint occupation or would substantially deprive the park owners of proprietorship or legal possession; whether, if and so far as effective, such rights constitute mere rights of recreation, possessing no quality of utility or benefit; and on such grounds cannot qualify as easements." (emphasis added) 24 His Lordship referred, at 176-177, to the decision in Copeland v Greenhalf and at 177 referred to the conclusion of Upjohn J as one which he had "very justifiably (if we may say so)" arrived at. See also Thomas W Ward Ltd v Alexander Bruce (Grays) Ltd [1959] 2 Lloyd's Rep 472 at 477, Grigsby v Melville [1972] 1 WLR 1355 at 1364, where Brightman J expressed, obiter the view that a claim to an "easement of storage" over a cellar lying beneath the plaintiff's premises, and as a matter of construction of the conveyance to the plaintiff falling within the plaintiff's premises, failed because it "would give, to all practical intents and purposes, an exclusive right of user over the whole of the confined space representing the servient tenement." 25 It has been suggested (in argument in Grigsby v Melville, and also in Bradbrook & Neave, Easements and Restrictive Covenants in Australia, 2nd edition, paragraph 1.9), that there is an inconsistency between the decision in Copeland v Greenhalf and the earlier decision of the English Court of Appeal in Wright v Macadam [1949] 2 KB 744. I am not persuaded that there is any inconsistency. Wright v Macadam had held that the right of a tenant to store coal in a shed on the landlord's land, for use in the demised premises, could exist as an easement for the benefit of the demised premises. The argument in the case concerned whether the permission which the tenant had been given to store coal in the shed, was a mere personal license, and too uncertain or precarious a right to amount to an easement. The nature and extent of occupancy of the coal shed (including whether the tenant stored coal in the shed all year round) was not established by the evidence, and the court had no occasion to consider whether the nature and extent of occupancy was, by reason of depriving the defendant of possession of the land, incapable of being an easement. 26 Australian law has likewise recognised that conferring a right of occupation or use, to the exclusion of the owner of the land, is inconsistent with the concept of an easement. In Bursill Enterprises Pty Ltd v Berger Bros Trading Co Pty Ltd (1971) 124 CLR 73 the plaintiff and the defendant occupied adjoining lots of land in George Street Sydney. Those lots had originally been part of a single Crown grant. The grantee conveyed the plaintiff's lot to a predecessor in title of the plaintiff, also granting a right of way to the plaintiff over a strip of land which abutted the common border between the lots, but reserving the right to build buildings at a height of 12 feet from the ground over the site of that right of way. That reservation was acted on, and buildings were erected over the site of the right of way. Then a predecessor in title of the defendant granted, to a predecessor in title of the plaintiff, "all buildings at present erected on the said road … at a height of not less than 12 feet from the ground above such road …". Windeyer J said, at 91: "… when [the defendant's predecessor in title], as registered proprietor for an estate in fee simple, granted and transferred the buildings that were then erected to [the plaintiff's predecessor in title], he conveyed a part of his land, something very different from an easement. The transfer of a building without any reservation of a right by the transferor amounts, I consider, to a conveyance of the exclusive ownership of the building. That is inconsistent with the concept of easement."

Barwick CJ agreed with Windeyer J in this respect - see page 76. 27 Evanel Pty Ltd v Nelson (1995) 39 NSWLR 209 concerned a grant of a right of footway which contained a proviso on the part of a transferor, "… that she will not traverse or otherwise use the land, the subject of the said right of footway or interfere with the use thereof by the Transferee, his executors, administrators or assign at any time otherwise than on the 30th day of June in each and every year." 28 Brownie J rejected the proposition that the right thereby created was too extensive to be an easement. He said, at 212: "The covenant in the proviso prevents the registered proprietor of lot 2 from using the land except one day a year but that provision itself demonstrates that the registered proprietor of lot 1 was not given exclusive use of the land, as was the position contended for by the unsuccessful plaintiff in Copeland v Greenhalf . Further, the description of the right granted to the registered proprietor of lot 1, that is as a right of footway, limits the use which might properly be made by that person in a way which is significantly different to the rights in question in Copeland v Greenhalf . That is, while the registered proprietor of the dominant tenement can in a practical sense have what amounts to an exclusive use of the affected land, that person can himself or herself only use it in a quite limited way, defined by reference to schedule 8 of the Conveyancing Act . It may be that the correct characterisation of the right granted is that it is an easement, but it is not an easement of the kind commonly called a right of way." 29 In Pennant Hills Golf Club Ltd v Roads and Traffic Authority of New South Wales (1999) 9 BPR [97771] the Court of Appeal considered a situation where there had been a compulsory acquisition of rights within a volume of land below the surface of the appellant's Golf Club. The compulsory acquisition was for the purposes of a new road, which was to run in a cutting alongside the Golf Club. The rights acquired included:

(a) the right to have the soil within the servient tenement remain undisturbed

(b) the right to enter into the servient tenement to place and leave there rock anchors

(c) for that purpose, to open up and remove soil to such an extent as might be necessary. 30 Whether compensation was payable for the resumption depended upon whether the rights acquired consisted only of an easement or right to use land under the surface. Stein JA (with whom Handley and Giles JJA agreed) accepted Lord Evershed MR's explanation of the fourth requirement for the validity of an easement in In Re Ellenborough Park [1956] Ch 131 at 164, namely that the rights not be such as would "amount to … joint occupation or would substantially deprive the … owners of proprietorship or legal possession". His Honour said, at [20] ff: "It is not obvious to me that the grant wholly deprives the appellant of its property rights in the land. As mentioned by leading counsel for the respondent, the appellant is entitled to the right to support the surface and that right is unaffected by the grant. It is in fact often an ordinary consequence of many utility easements that there be a constraint upon disturbance of the soil within the easement, either expressly or by implication. A ready example is a drainage easement where the owner of the servient tenement is denied the capacity to interfere with the soil within the easement which may support the walls and bed of the channel or disturb the soil around a pipe in the easement. This is not very different from the instant case. Although the subject grant undoubtedly affects the right of the appellant to use the land in the easement, it does not altogether extinguish it. It must be kept steadily in mind that the respondent enjoys no positive right to use the land within the easement other than for the purpose of constructing or maintaining works. The right acquired by the respondent by reason of the grant does not deprive the appellant of its legal ownership or its de facto possession of the land. Neither is purported to be transferred, nor does the respondent assert or purport to exercise ownership or possession. The respondent's right is limited to installing the rock anchors and maintaining them and no more." 31 In the present case, the grant was not in terms expressly giving exclusive rights over the site of the easement. Rather, the grantee was given "a right of carriageway". Pursuant to section 181A of the Conveyancing Act 1919, and schedule 8, part 1 of the Conveyancing Act 1919, that means: "Full and free right for every person who is at any time entitled to an estate or interest in possession in the land herein indicated as the dominant tenement or any part thereof with which the right shall be capable of enjoyment, and every person authorised by that person, to go, pass and re-pass at all times and for all purposes with or without animals or vehicles or both to and from the said dominant tenement or any such part thereof." 32 Nor is there a de facto situation created, in consequence of the grant, which has the effect in practice of excluding the servient owner from all rights in connection with the land. Even if a fence were to be built in the location provided for by the instrument which created the easement, there is no prohibition on the servient owner walking on the site of the easement, or indeed carrying out any other activity on the site of the easement which does not interfere with the reasonable use on the site of the easement by the dominant owner for the purpose of a right of carriageway. It is true that to get to the site of the easement the servient owner would need to either scale the fence, or enter from the footpath - however, those practical difficulties of access do not amount to the dominant owner having exclusive use and occupation of the site of the easement. 33 It is true that the Memorandum of Transfer contemplates that there will be a fence permanently erected on the western boundary of the site of the right of way. However, that fence comes to be erected pursuant to a covenant given by the transferee. Erecting the fence is the price of obtaining the easement - it is not part of the rights which amount to the easement. The transferee has an obligation to erect the fence, not a right to erect the fence. Thus, even though the fence will permanently occupy a part of the land, it is not doing so pursuant to any rights created by the easement. I reject the submission that the rights conveyed by the Memorandum of Transfer are too extensive to amount, in law, to an easement. Section 27 of the Limitation Act 34 Section 27 of the Limitation Act 1969 says: "(2) subject to sub-section (3) an action on a cause of action to recover land is not maintainable by a person other than the Crown if brought after the expiration of a limitation period of 12 years running from the date on which the cause of action first accrues to the plaintiff or to a person through whom the plaintiff claims." 35 The defendant says that the Lolakis' have been out of possession of the site of the easement for more than 12 years, and so are statute barred. 36 The definition of "land" in section 11 of the Limitation Act 1969 is: " Land includes: (a) corporeal hereditaments and rent charges and any estate or interest therein whether freehold or leasehold and whether at law or in equity, and … but does not include easements …" 37 The defendant accepts that its success on this argument depends on establishing that the rights created by the 1966 Memorandum of Transfer are, in truth, not an easement. As I have rejected the submission that the rights created are not an easement, this submission based on the Limitation Act must also fail. Ground of Invalidity - Failure to Erect the Fence 38 The reader will recall that the Memorandum of Transfer which granted the easement, contained a covenant by the transferee, "that she will forthwith erect or cause to be erected … and shall at all times maintain in a proper state of repair" a fence along the western boundary of the site of the easement. No such fence has ever been erected. The defendant submits that, in consequence, there has been a total failure of consideration for the grant of the easement, and that the grant of easement therefore fails. 39 The first answer to this submission is that the covenant to erect and maintain the fence is not the totality of the consideration for the grant of the easement. Rather, there are four separate items of consideration. There is the sum of four dollars, and there are the three covenants numbered (i), (ii), and (iii) in the Memorandum of Transfer. Next, the Memorandum of Transfer has been registered under the Real Property Act. Section 36(11) of the Real Property Act therefore gives it the effect of a deed duly executed by the parties who signed it. The covenant of the transferee, contained in the dealing, to erect a fence and maintain it in repair, is not expressed to be a condition precedent to the grant of the easement, nor is it expressed to be a condition subsequent non-performance of which will cause the grant to become ineffective. While it will be necessary to consider, later, the significance of the grantee's failure to erect the fence as part of considering whether the easement has been abandoned, I do not regard the failure to erect the fence as providing a basis on which it could be concluded that the grant of the easement was ineffective by reason of a total failure of consideration. I note that usually "total failure of consideration" is a basis on which money which has been paid, on a consideration which has failed, can be recovered (see eg Roxborough v Rothmans of Pall Mall Australia Limited [2001] HCA 68; (2001) 76 ALJR 203.) No argument was put explaining how the concept of "total failure of consideration" has any application outside recovering of money. In the circumstance where no argument has been put, I will not consider this particular topic further. Section 89 of the Conveyancing Act 40 Section 89 of the Conveyancing Act 1919 says: "(1) Where land is subject to an easement … the Court may from time to time, on the application of any person interested in the land, by order modify or wholly or partially extinguish the easement … upon being satisfied - (a) that by reason of change in the user of any land having the benefit of the easement … or in the character of the neighbourhood or other circumstances of the case which the Court may deem material, the easement … ought to be deemed obsolete, or that the continued existence thereof would impede the reasonable user of the land subject to the easement … without securing practical benefit to the persons entitled to the easement …, or would, unless modified, so impede such user; or (b) that the persons of the age of 18 years or upwards and of full capacity for the time being or from time to time entitled to the easement … whether in respect of estates in fee simple or any lesser estates or interests in the land in which the easement … is annexed, have agreed to the easement … being modified or wholly or partially extinguished, or by their acts or omissions may reasonably be considered to have abandoned the easement … wholly or in part; (c) that the proposed modification or extinguishment will not substantially injure the persons entitled to the easement …" 41 The defendant argues that this easement should be extinguished under the first limb of section 89(1)(a) (ie, that the easement should be deemed obsolete), under the second limb of section 89(1)(a) (ie, that the continued existence of the easement would impede the reasonable user of the land subject to the easement, without securing practical benefit to the persons entitled to the easement), under section 89(1)(b) (for the reason that the easement may reasonably be considered to have been abandoned), and under section 89(1)(c). I will consider these submissions in turn. Ought the Easement be Deemed Obsolete? 42 In Cavacourt Pty Ltd v Durian (Holdings) Pty Ltd (1998) 9 BPR [97761], at 16,836 Young J collected the authorities concerning the meaning of "obsolete" in section 89(1)(a). His Honour said: "In Re Truman, Hanbury Buxton & Co Ltd's Application [1956] 1 QB 261, 272, C Romer LJ said in respect of a restrictive covenant, that "obsolete" was used in the section in the sense that the original purpose of the covenant can no longer be served. This approach has been adopted in subsequent cases; see eg Re Miscamble's Application [1966] VR 596, 601 and Re Robinson [1972] VR 278, 281. In C Hunton Ltd v Swire [1969] NZLR 232, 234, Wilson J said that "obsolete" means "no longer relevant to the circumstances presently obtaining". In Re Mason (1960) 78 WN (NSW) 925, 927; [1962] NSWR 762, 764, Jacobs J said in this court, "I consider that the word 'obsolete' can be taken to mean that the object of the covenant is now incapable of fulfilment or perhaps that it serves no present useful purpose."

As Jacobs J said in Re Mason immediately after the passage I have quoted, that means that one must look to see the object of the easement. However, when doing this, one takes into account not only the use contemplated at the time of grant, but also permitted uses which were not necessarily so contemplated; see Armishaw v Denby Horton (NZ) Ltd [1984] 1 NZLR 44, 47, where Eichelbaum J considered that this proposition was correct in principle, but did not have to decide it. However, it follows from what Jacobs J said in Re Mason that the easement or covenant is not to be narrowly construed which, in turn, flows from the principle that the grant is construed most strongly against the grantor: Williams v James (1867) LR 2 CP 577, 581. Again, one must always remember that easements are granted for the long term and modern authorities tend "towards a more liberal construction of grants which, by their nature as a species are immutable in content but create rights of indefinite duration and are destined to enure in a changing environment": Grinskis v Lahood [1971] NZLR 502, 509. Because of the introductory words to s89(1)(a), it is necessary to inquire as to whether there have been changes in the character of the neighbourhood which have brought about the situation that it is no longer possible to achieve the purpose of the easement or restrictive covenant: Re Miscamble (supra) at 601. The court also has regard to "other circumstances of the case which the Court may deem material". Under this head, the court is entitled to take into account a wide range of considerations: Re Roseblade [1964-1965] NSWLR 2044, 2046 and Re Robinson (supra), but not the personal circumstances of the applicant: Cresswell v Proctor [1968] 2 All ER 682, 684." 43 Though that decision was reversed on appeal (Durian (Holdings) Pty Ltd v Cavacourt Pty Ltd [2000] NSWCA 28; (2000) 10 BPR [97830]), that reversal was on the facts, not by reference to any question of principle. The passage I have set out remains an accurate statement of the law. 44 In the present case, no relevant change in the user of land having the benefit of the easement has occurred. Both at the date of grant of the easement, and now, that user is as a suburban house. Nor has there been any change in the character of the neighbourhood, so far as the evidence discloses. The purpose of the easement, when originally granted, included facilitating vehicular access down the driveway of No 84. The easement, if now enforced, would still be capable of fulfilling that objective. 45 Mr Lolakis works in the building industry, mainly as a painter. At present he stores materials connected with his work in the garage at the rear of No 84, parks his vehicle in the street in front of the house, and carries material that he needs for a day's work down the driveway to the vehicle. If he had the extra width of driveway available, from the easeway site, he would not have to carry material so far, but rather could drive the vehicle down the driveway to near the garage, and load it there. As well, on occasions, Mr Lolakis keeps a boat on a trailer in the driveway of No 84. When he wants to use the boat, he manhandles the trailer down the driveway, until he can attach the trailer to the towbar of his car. Again, if the easement were in use, he would not need to go to so much trouble, but could back his car down the driveway to meet the trailer. Any other owner of No 84, while not necessarily deriving benefit in exactly the same way as Mr and Mrs Lolakis derive benefit from the extra width of driveway which the easement effectively gives to No 84, would be able to derive benefit from the improved access to the garage and the rear of the house on No 84. In these circumstances, it cannot be said that the easement "serves no present useful purpose". I reject the submission that the easement is obsolete. Does the Easement Impede the Reasonable User of the Land Subject to the Easement, Without Securing Practical Benefit to Mr and Mrs Lolakis? 46 As a matter of construction of section 89(1)(a) the words, "by reason of change in the user of any land having the benefit of the easement … or in the character of the neighbourhood or other circumstances of the case which the court may deem material" apply only to the first limb of section 89(1)(a). That is to say, it is not a precondition of success under the second limb of section 89(1)(a) that an applicant establish that it is by reason of those matters (or indeed any other matters) that continued existence of the easement would impede reasonable user of the land without practical benefit to the persons entitled to the easement: Re R K Roseblade and V M Roseblade and the Conveyancing Act [1964-5] NSWR 2044 at 2046 per Else-Mitchell J; Re Alexandra [1980] VR 55 at 57-58 per Menhemmitt J; T Z Developments Pty Ltd v Rickman Pty Ltd (1993) 7 BPR [97582] at 14,610. 47 A path presently runs down the side of the house erected on No 86, on the side which is close to No 84. As part of the recently constructed extensions at No 86, a laundry has been built at the rear of the premises. That laundry is intended to service the tenants who occupy the ground floor of No 86. The only access to the laundry is along this pathway. If the easement is not cancelled or removed, and a fence is built on the site, as required by the 1966 Memorandum of Transfer, access to the laundry will be reduced to 0.6195m, less the width of the fence which would have to be erected pursuant to the terms of the easement. Mr Konitsas put the width of a paling fence as being 15cm. Thus, assuming the fence was erected to encroach equally on both sides of the line dividing the easement site from the rest of the servient tenement, the width of the path for access would be about 0.5445m. Having to obtain access to the laundry along a path as narrow as this would not make the use of the laundry absolutely impossible, but it would be a very serious inconvenience. 48 As well, at present the ground floor occupancy at No 86 stores its mobile garbage bin (or "wheely bin") down the side pathway. If a fence were to be built on the site provided for by the Memorandum of Transfer, there would not be room to keep the mobile garbage bin there, and it would be necessary for it to be put in the front garden area. 49 When I quoted section 89 of the Conveyancing Act 1919 (in paragraph 40 above) I quoted those portions which relate to modification or extinguishment of an easement. Section 89 also permits, by words which I omitted from that quotation, the modification or extinguishment of restrictive covenants. Most of the case law concerning construction of section 89 has been developed in connection with applications to extinguish or modify restrictive covenants, rather than easements. The corresponding English section (section 84 of the Law of Property Act 1925) permits only the extinction or modification of restrictive covenants, and it is only in consequence of a new section 89 being inserted in the Conveyancing Act 1919 by legislation in 1930 that the New South Wales legislation came to permit modification or extinguishment of both easements and restrictive covenants. 50 The English section corresponding to section 89 has been interpreted so that "the continued existence thereof would impede the reasonable user of the land subject to the … restriction" only if no reasonable user of the land is possible, while the covenant remains in existence, or in its present form. It is recognised that, for the parcel of land burdened by a covenant, various different uses might be possible, each of which is a reasonable use. That the covenant prevents some of those uses of the land is not a reason for extinguishing or modifying it, if some other reasonable use of the land, consistent with the covenant, is also possible. If some other use of the land, consistent with the covenant, is possible, it does not matter that the prohibited uses might be significantly more profitable to the owner of the land burdened than the permitted one, or that the prohibited uses might be seen by a town planner to be ones which are a preferable use for the land in question: In Re Henderson's Conveyance [1940] Ch 835 at 846; Truman Hanbury, Buxton and Co Limited's Application [1956] 1 QB 261 at 270; In Re Ghey and Galton's Application [1957] 2 QB 650 at 659-660, 663. That approach to the construction of the section has been adopted in New South Wales: Heaton v Loblay (1960) SR (NSW) 332 at 335 per Myers J; Application of Magney (1981) 2 BPR [97117] at 9363 per Master Cohen; Post Investments Pty Ltd v Wilson (1990) 26 NSWLR 598 at 642 per Powell J; Webster v Bradac (1993) 5 BPR [97430] at 12,035 per McLelland CJ in Eq; Coles Myer NSW Ltd v Dymocks Book Arcade Ltd (1996) 9 BPR [97767] per Simos J at 16,955-16,958; Application of Peter Cardigan Wolfe (1997) 8 BPR [15,669] at 15,671 per Master McLaughlin; Durack v De Winton (1998) 9 BPR [97721] at 16,441-16,444 per Einstein J; Pink v Cummings [2000] NSWSC 1114; (2001) NSW ConvR ¶ 55-959 at 57,846-57,847 per Master Macready. 51 This same approach to construction has been taken in Victoria; In Re Miscamble's Application [1966] VR 596, and in the Privy Council on appeal from Jamaica: Stannard v Issa [1987] 1 AC 175. 52 There may be some reason to doubt whether as restrictive an approach as this to the circumstances in which the second limb of section 89(1)(a) could be used was intended by the original draftsman of the legislation - see Morpath Pty Ltd v ACT Youth Accommodation Group Inc (1987) 16 FCR 325 at 338-340 per Beaumont J. In Guth v Robinson (1977) 1 BPR at 9216 Powell J approached with some caution whether the restrictive construction was the appropriate one. In T Z Developments Pty Ltd v Rickman Pty Ltd (1993) 7 BPR [97582] the Court of Appeal left open the question of whether the correct construction was the restrictive construction which I have outlined, or whether it was sufficient for the appellant to show that there was a reasonable user of the land prohibited by the restriction. 53 While the Court of Appeal has not since resolved that question, the appropriate course for a single judge to follow is to adopt the restrictive approach, which has been applied so many times at first instance in this State. 54 Of the cases I have mentioned, concerning the second limb of section 89(1)(a), only Guth v Robinson (1977) 1 BPR [97017] related to a claim to extinguish an easement. There, however, Powell J said, at 9215: "… since s 89 of the Conveyancing Act 1919 applies to both easements and restrictive covenants, there seems to be no reason in principle why the approach adopted by the courts in relation to restrictive covenants should not be applied in relation to easements."

I agree. 55 Applying the accepted restrictive construction of section 89(1)(a) to the present case, the matters of practical inconvenience which the defendant has shown it will suffer if the easement is enforced, are not sufficient to demonstrate that reasonable user of No 86 is not possible unless the easement is extinguished. That is a sufficient ground for rejecting the application made under the second limb of section 89(1)(a). 56 As well, however, success under the second limb of section 89(1)(a) would require the defendant to demonstrate that the continued existence of the easement would not secure practical benefit to the persons entitled to the easement. The factual matters which I have referred to earlier, at paragraphs 44 and 45 above, as showing why the easement is not obsolete, also demonstrate that the easement secures practical benefit to Mr and Mrs Lolakis or any other owner of No 84. The application to extinguish the easement based on the second limb of section 89(1)(a) fails.

Abandonment - Effect of Registrar General's Attempt at Administrative Expungement of the Easement 57 Section 49 of the Real Property Act 1900 says: "(1) The Registrar General may cancel a recording relating to an easement in the Register if the easement has been abandoned. (2) An easement may be treated as abandoned if the Registrar General is satisfied it has not been used for at least 20 years before the application for the cancellation of the recording is made to the Registrar General, whether that period commenced before, on or after the date of assent of the Property Legislation Amendment (Easements) Act 1995 … (4) Before cancelling any such recording, the Registrar General must consider any submission made, by a person having a registered estate or interest in land benefited by the easement, within the period fixed by the Registrar General, in a Notice of Intention to Cancel the Recording served personally or by post on the person. The period must be not less than one month from the date of the Notice." 58 It was under this section that Mr Konitsas endeavoured to have the Registrar General cancel the recording of the easement. However, before the Registrar General could complete any administrative action under section 49, Mr and Mrs Lolakis lodged a caveat (under section 74F(4A) Real Property Act) preventing the Registrar General from granting the application made under section 49. One of the orders sought in the defendant's cross-claim is an order for removal of this caveat. 59 Section 49 proceeds on the basis that the Registrar General is entitled to clear from a title, by administrative action, an easement which has not been used for 20 years. However, if the owner of the dominant tenement lodges a caveat, and in consequence the question of whether an easement has been abandoned comes to be decided by the Court rather than by the Registrar General, the Court treats questions of abandonment of the easement on the basis of the evidence before it, and legal principle about what, in any particular case, counts as abandonment. The 20-year period of non-use, for which section 49(2) of the Real Property Act provides, has no role to play when any such question is being decided by the Court. Whether the caveat of the plaintiffs should be removed depends on whether the plaintiffs have an arguable case that the easement has not been abandoned. That question is subsumed in the question to which I now turn, of whether the easement has actually been abandoned. Abandonment - Section 89(1)(b) 60 When the easement was first granted, the fence which was then dividing No 84 from No 86 was constructed so that part, but not all, of the site of the easement was available to be used by the dominant owner. In very rough terms, the dominant owner was entitled to use a strip of land about a foot wide, and the mislocation of the fence was such that the dominant owner could, in practice, in some parts of the site of the easement, use a strip of land which was up to two thirds of that width. That situation pertained until the new fence was erected in 1974. Since then, the site of the easement has not been used at all. In 1985, and again in 1988 or 1999, Mr Lolakis raised the question of using the easement with Mr Konitsas, as described in paragraphs 10 and 13 above, but did not persist in asserting his right to use the easement. His concreting the width of the driveway, and constructing gates (see paragraph 12 above) showed, to some extent, an acceptance of the existing situation. 61 It is not only the acts of Mr and Mrs Lolakis which are to be taken into account in deciding whether an easement has been abandoned, but also the acts of their predecessors in title: Treweeke v 36 Wolsley Road Pty Ltd (1973) 128 CLR 274; Proprietors Strata Plan No 9968 v Proprietors Strata Plan No 11173 [1979] 2 NSWLR 605 at 616. 62 The principles concerning abandonment were summarised by Needham J in Proprietors Strata Plan No 9968 v Proprietors Strata Plan No 11173 at 617: "In Tehidy Minerals Ltd v Norman [1971] 2 QB 528 at 553, the Court of Appeal said: "Abandonment of an easement or of a profit à prendre can only, we think, be treated as having taken place where the person entitled to it has demonstrated a fixed intention never at any time thereafter to assert the right himself or to attempt to transmit it to anyone else." Gale on Easements , 14th ed, p 337 says that non-user accompanied by the intention to relinquish the right can be sufficient. It is clear enough that non-user alone is insufficient: cf Cook v Bath (1868) LR 6 Eq 177; Ward v Ward (1852) 7 Exch 838; 155 ER 1189; R v Chorley (1848) 12 QB 515; 116 ER 960; Swan v Sinclair [1925] AC 227, and there are many others. In James v Stevenson [1893] AC 162 at p 168, it was said that "it is one thing not to assert an intention to use a way, and another thing to assert an intention to abandon it." Abandonment is not to be lightly inferred: Gotobed v Pridmore (1970) 115 Sol Jo 78." 63 So far as the period before construction of the fence is concerned, the non-user of part of the area of the easement does not, it seems to me, give rise to any finding that anyone had an intention never thereafter to use it. While it is true that the original grantee did not erect the fence which was a condition of the granting of the easement, the evidence casts no light whatever on why it was that she did not erect it. Failure to erect the fence is consistent with the grantee temporarily putting off erecting it, as well as with forever abandoning the right of way. The Memorandum of Transfer, by which the easement was created was signed, by both Transferor and Transferee, in very shaky handwriting. For all the evidence establishes, the failure to erect the fence might have arisen from the illness or death of the Transferee, rather than any intention to abandon the easement. 64 The circumstances of erection of the fence in 1974 are also equivocal. The survey which Mr Konitsas showed to Mr Kipriotis (referred to in paragraph 8 above) was an unusual one, in that it showed no sign of the surveyor having performed a title search of the land, and made no mention whatever of the existence of the easement. While Mr Kipriotis actively collaborated in building a fence which made the right of way unusable, there is no reason to believe that he actually knew that he had a right of way at all, let alone that he was making it unusable. While I would infer that the solicitor for Mr and Mrs Kipriotis had obtained, at the time they purchased No 84, a title search, and that that title search would have contained mention of the easement, there is no reason to believe that knowledge of the existence of the easement was actually present to the mind of Mr and Mrs Kipriotis at the time the new fence was erected. 65 The long period of inaction on the part of Mr and Mrs Lolakis, concerning enforcement of the easement, is not enough to establish that they intended to abandon it. 66 The application to extinguish the easement, based on alleged abandonment, fails. The cross-claim seeking removal of the caveat also fails. Section 89(1)(c) - Extinguishment Will Not Substantially Injure Mr and Mrs Lolakis 67 In Mogensen v Portuland Developments Pty Ltd (1983) NSW ConvR ¶55-116 at 56,856 McLelland J (as he then was) said of this ground for extinguishment: "In this context "substantially" connotes injury which has substance in the sense of being real or appreciable (re Mason (1960) 78 WN (NSW) 925 at 9 928). The kind of injury contemplated in the section is injury to the relevant person in relation to his ownership of (or interest in) the land benefited. The injury may be of an economic kind, eg reduction in the value of the land benefit, or of a physical kind, eg subjection to noise or traffic, or of an intangible kind, eg impairment of views, intrusion upon privacy, unsightliness, or alteration to the character or ambience of the neighbourhood. These arbitrary categories, while serving to illustrate the ambit of the concept of injury for the purpose of the section, are neither mutually exclusive nor necessarily exhaustive, and what I have described as injuries of a physical or intangible kind could well also affect the value of the land in question. However it is clear that a person may be "substantially injured" within the meaning of sec 89(1)(c) notwithstanding that the value of his land would be unaffected or even increased by the proposed modification (see Re Parimax SA Pty Ltd (1956) SR (NSW) 130 at p 133, Heaton v Loblay (1960) SR (NSW) 332 at pp 335-336, Re Cook (1964) VR 808 at p 810 and Re Robinson (1972) VR 278 at pp 283-284). It is also clear, particularly in the case of injuries of what I have called an intangible kind, that the subjective tastes, preferences or beliefs of particular individuals may, within limits of reasonableness, give rise to injury in the relevant sense to those individuals (see Re Parimax SA Pty Ltd (1956) SR (NSW) 130 at p 133, Heaton v Loblay (1960) SR (NSW) 332 at p 336, Re Chamberlain 90 WN (Pt 1) (NSW) 585 at pp 593-594, Re Callanan (1970) 2 NSWR 127 at p 133 and Re Robinson (1972) VR 278 at pp 283,285). If, however, particular persons do not after due notice assert any claim to injury to them on purely subjective grounds of this kind then it may be open to the Court to infer that there is no injury of that kind to those persons (see eg Re Wilson 49 SR (NSW) 276 at p 281), although the absence of objection does not remove from applicants for relief under the section the onus of establishing their case (see eg Re Cook (1964 VR 808 at p 812). 68 McLelland CJ in Eq (as he had then become) in substance repeated those views in Webster v Bradac (1993) 5 BPR [97430] at 12,035. 69 In the present case, extinguishment of the easement would deny the Lolakis' the practical benefit of being able to drive an ordinary sized car down the driveway to the garage. It will deny them, and any subsequent owner of the property, the opportunity to house their motor vehicle in a garage, rather than park it permanently on the street. These are injuries within the meaning of section 89(1)(c). 70 The onus of making out the ground for extinguishment of an easement lies on the person who seeks that extinguishment. Neither party chose to call evidence about the effect which existence of the easement would have on either the market price, or the saleability, of No 84. Given the additional use which the easement would enable an owner of No 84 to make of that property, I cannot conclude that the existence of the easement would make no difference to the value, or saleability, of it. 71 The claim to extinguish the easement under section 89(1)(c) fails. Discretion 72 Section 89(1)(a)(b) and (c) set out a series of situations which, if found to exist, confer on the Court jurisdiction to extinguish or modify an easement. If jurisdiction is found, there is then a separate question about whether the Court will, in the exercise of its discretion, actually extinguish or modify the easement: Piper v Edwards [1982] 1 NSWLR 336, Mogensen v Portuland Developments Pty Ltd (1983) NSW ConvR ¶ 55-116 at 56,856; Post Investments Pty Ltd v Wilson (1990) 26 NSWLR 598, at 639. In circumstances where the jurisdiction to extinguish or modify the easement has not been established, it is not necessary to consider further any question of discretion. 73 No discretionary considerations were put to me as being a reason for not making an order.

Should the Defendant be Required to Remove the Existing Fence? 74 The plaintiffs seek not only a declaration that they are entitled to the easement, and an injunction restraining the defendant from interfering with their use of it or obstructing the erection of the fence required by the easement. As well, the plaintiffs seek an injunction requiring the defendant to demolish and remove the existing fence located on the boundary between No 84 and 86. 75 I see no entitlement in the plaintiffs to such an order. When the easement was granted, in 1966, there was a fence which partly obstructed the site of the right of way. It would, in my view, be implicit in the covenants contained in the Memorandum of Transfer, that the transferee would do all things necessary to enable a fence to be erected along the western boundary of the site of the right of way. That would have included removing the existing fence. I see no obligation on the defendant, now, to remove the fence which was erected in 1974. I decline to make an order requiring the defendant to demolish and remove that fence. Orders 1. Upon the plaintiffs, by their counsel, undertaking to the Court promptly to erect or cause to be erected a fence of the type and in the location referred to in paragraph (i) of Memorandum of Transfer registered No K445071.

(a) Declare that the plaintiffs are entitled as registered proprietors of the land comprised in Folio Identifier 19/5/937 (being formerly the land comprised in Volume 3939 Folio 32), and known as 84 King Street Mascot ("the dominant tenement"), to the benefit of a right of carriageway over a portion of the land comprised in Folio Identifier 20/5/937 (being land formerly known as Volume 764 Folio 149) known as 86 King Street Mascot ("the servient tenement"), created by Memorandum of Transfer No K445071, registered on or about 8 September 1966 ("the Transfer").

(b) Order that the defendant by himself, his servants and agents be restrained from:

(i) obstructing the free exercise by the plaintiffs of the said right of carriageway, and

(ii) obstructing the erection on the servient tenement of the fence referred to in paragraph (i) of the Transfer. 2. Cross-claim dismissed. 3. Defendant to pay plaintiffs' costs, including costs referable to the cross-claim. **********

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