Maloney v Putu Pty Ltd

Supreme Court of NSW|2023-08-28|Before: Peden J

Judgment

The plaintiff, Kim Gardner Maloney, claims an easement by prescription over an access road to his rural property in Ebenezer, NSW.
It is not in dispute that there has been continuous use of the access road by the plaintiff and his father and their invitees for more than twenty years. The primary issue to be determined in these proceedings is whether that use of the access road was with the permission of the registered proprietor of the burdened land. No prescriptive right can validly be asserted if use of the access road was by permission.

The access road

The plaintiff is the registered proprietor of land contained in three folio identifiers, collectively known as "Portland Head Farm": 1. A/161016 (Lot A); 2. B/161016 (Lot B); and 3. 12/1140762 (Lot 12).
The plaintiff became the registered proprietor of Lot A and Lot B in December 2015 by way of transfer from the estate of his late father, Mr Cyril Maloney. Mr Maloney acquired Lot A and Lot B in 1963 and became the registered proprietor on conversion to Torrens title in about 2000. Lot 12 adjoins Lot A and Lot B. On 23 April 2023, the plaintiff was granted possessory title of Lot 12.
The access road starts at Portland Head Road, which is a public road. It traverses land contained in the following three folio identifiers, until it eventually passes over the boundary between Lot 12 and Lot B: 1. 5/622478 (Lot 5); 2. 118/1151762 (Lot 118); and 3. 119/151819 (Lot 119).

Registered proprietors of the affected land

The owner of Lot 5 is Hawkesbury City Council (Council), which does not object to the plaintiff using the access road. Further, the Council has indicated an intention to gazette Lot 5 as a public road.
Therefore, the plaintiff only seeks a declaration that he is entitled to a prescriptive easement over Lots 118 and 119. However, Mr Free, senior counsel for the plaintiff, accepted that there may be some difficulty in obtaining an order burdening Lot 118, because the registered proprietors were not parties to the proceedings.
Lot 118 is a small sliver of land running parallel with the boundary of Lot 119. The registered proprietors of Lot 118 have not been found by the plaintiff. There is some evidence from the Council that Lot 118 ought to have been consolidated to another neighbouring lot.
Lot 119 was previously owned by the first defendant, Putu Pty Ltd (Putu), which sold that land to El Rihani Family Pty Limited (El Rihani), the third defendant on 3 February 2022. The plaintiff's proceedings, which had already been commenced against Putu, were then discontinued. However, El Rihani relies on evidence of Ms Stavroula Sarian, the director of Putu, that she gave the plaintiff oral permission to use the access way in about 1978, asserting that such permission defeats the plaintiff's claim.
The second defendant is the Registrar General of NSW, who has filed a submitting appearance.

Relevant principles concerning easements by prescription

To create an easement by prescription, the person claiming the easement must establish that the enjoyment has been "as of right" for an uninterrupted period of at least twenty years. This "right" is acquired through the fictitious presumption that a continuous right to enjoyment was conferred by express grant on the party claiming the easement, such grant having subsequently been lost (the doctrine of "lost modern grant"): see Williams v State Transit Authority of NSW (2004) 60 NSWLR 286 at [84]; [2004] NSWCA 179 per Mason P (Sheller and Tobias JJA agreeing) (Williams), citing Gardner v Hodgson's Kingston Brewery Co Ltd [1903] AC 229 at 239. The plaintiff accepts that an easement by prescription is not established if the twenty-years' use has been by force, secretly, surreptitiously or with permission of the owner of the servient land: Williams at [80]. This is on the basis that such acts rebut the presumption that use of the servient land is "as of right".
As White JA explained in Arcidiacono v The Owners - Strata Plan No 17719; Arcidiacono v The Owners - Strata Plan No 61233 [2020] NSWCA 269 (Arcidiacono) at [142]: … the law as to ancient lights [sic] was rooted in prescription. The peaceable enjoyment of rights over or in respect of the adjoining landowner's land for a period of 20 years or more gave title by prescription to an easement in the same way as adverse possession gives title to the land itself. The doctrine of lost modern grant was nothing more than an artificial and subsidiary rule designed for the purpose of giving effect to a substantial right. Because an easement could only lie in grant, it was thought necessary to imply a grant, and for this purpose to imply a consent (for which read acquiescence, as use of land by permission would not give rise to a title by prescription). But the implication of a grant was artificial, and the right depended upon the nature and length of use or enjoyment.
The critical issue is "[w]hether the servient owner has consented to the use or merely tolerated it": Arcidiacono at [145] (White JA). Toleration of use as a matter of "good neighbourliness" is not inconsistent with an easement by prescription: see Mills v Silver [1991] Ch 271 at 279-280 (Dillon LJ). Whether use is by permission or as of right is a question of fact.
The plaintiff relied on the Court of Appeal's decision in Dobbie v Davidson (1991) 23 NSWLR 625 (Dobbie), for a statement of factors relevant to the determination of whether use has been "by permission" or as conduct "as of right". Kirby P stated at 627-9: 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; (iv) 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 forbit, limit or control the use of the right-of-way by the owners of the dominant tenement and those having dealings with them. All of the foregoing features were present in the facts of this case. The only significant evidence to rebut the conclusion that the continuous user had been as of right was a letter of 1988 written by the solicitors for the [dominant tenement owners] … That letter refers, in terms, to the "permission" given by the former occupier of [the servient tenement] for access to the [dominant tenement]. …it was open to the trial judge (Waddell CJ in Equity) to view this letter as an attempt by the solicitors to do nothing more than to formalise written proof a right-of-way already acquired by prescription. It would certainly appear true that the use of the right-of-way began as a matter of "permission". But its uninterrupted use for so long, by so many people, without hindrance, check or control converted the licence to a right. It was a right acquired, in due course, by the [dominant tenement owner]. It is notable that the [servient tenement owners] did not claim that they had purchased their land in ignorance of that right.
In that case, the trial judge found, as a matter of fact, that original use of a right of way was by "permission", but it changed to use by right at some unidentified time. The facts found were, as explained by Priestly JA at 640: …over many years the only practicable means by which people could get to [the dominant tenement] was by the access road; the access road, at least from 1905, was the only road into and out of [the dominant tenement]; the owners of [the dominant tenement], their family, their employees, their guests, anyone having business with them, carriers of their stores, their goods, their wool, hay and other produce, and their visitors came to and went from [the dominant tenement] by the access route on a daily basis for about sixty years before [the servient tenement] was brought under the Act and another twenty-five years after that; all these people used to the access road without ever seeking the permission of any person; there was never any attempt by any owner of [the servient tenement] to prevent or interfere with such use; and there was never any assertion by any person that this constant use of the access road was by permission only.
El Rihani submits that Dobbie applies to cases of with "neighbourly indulgence", in the sense of "implied permission", and is therefore not relevant here, where express permission was granted. Alternatively, it submits the factors cannot be satisfied.
There is no dispute that an easement by prescription may arise consistently with Torrens title and the operation of the Real Property Act 1900 (NSW) (Real Property Act). Section 42(1)(a1) Real Property Act contains an exception to "indefeasibility" for "omitted" easements. As stated by Professor Brendan Edgeworth in Butt's Land Law (7th ed, 2017, Thomson Reuters) at [12.770], the consequence of this exception to indefeasibility is that: [I]f the prescriptive easement arose when the servient land was under old system title, but was not carried forward to the folio of the register on conversion to Torrens title, then it is "omitted" and is enforceable against the registered proprietor from time to time of the servient land.
If an easement by prescription was in the course of being acquired when the land was brought under the Real Property Act or arose prior to that time, the easement can still be registered: Arcidiacono at [15] (Macfarlan JA, McCallum JA agreeing).

Issues for determination

The parties submit that the only issue to be determined is: Whether the use of the access road identified in the plan annexed to the Further Amended Summons filed 28 July 2022 ("access road") was by permission such that a prescriptive easement over the access road is not established.
The parties accept that as the plaintiff has proved use for the requisite twenty-year period, El Rihani has the "evidentiary onus" to prove use was by "permission", rather than as of right: see Arcidiacono at [16], [47] (Macfarlan JA, McCallum JA agreeing).
El Rihani's primary position is that use of the access road was by express permission, or that there is insufficient evidence to conclude use was as of right.
In light of the above, I consider there are two issues that need to be resolved: 1. The first issue is whether permission was in fact expressly granted to the plaintiff to use the access road by reason of the conversation which took place between Mr Maloney and Ms Sarian in 1978. 2. The second issue is, if express permission was not granted, whether use of the access road was a neighbourly indulgence, which, over time, came to bear the stamp of legal right.

Was there express permission?

The parties agreed that the factual question of whether permission was granted in 1978 must be determined objectively, rather than through reliance on the subjective intentions of the parties.
To demonstrate use was by permission, El Rihani relies on the evidence of Ms Sarian, the director of Putu, concerning two conversations she had with Mr Maloney in 1978 and 1979. Mr Maloney has since passed away and did not give evidence. Mr Pesman, senior counsel for El Rihani, puts it: Ms Sarian … on behalf of [Putu] granted permission in that conversation, because it was sought and it was granted and that's where matters were left for the next 40 odd years… It's not a question of whether being multiple occasions on which the permission could be repeated or withdrawn. … the permission just continued. … … the permission would be - is taken to be the registered proprietor, his servants and his agents.
When Putu purchased Lot 119 in 1978, Ms Sarian was not aware of who the neighbours were, nor that Mr Maloney had been using the access way since 1963. Her affidavit evidence was that in the first year of Putu's ownership she had a conversation with Mr Maloney when he drove or was driven along the access way. The alleged conversation was: Maloney: I own some hotels in Sydney and in Bondi. I own the adjoining land to yours, and I have over 300 acres there. I use this trail about once a month to access my property. You don't mind if I use this trail to get to our property? Sarian: Of course you can use the trail. It's not a worry.
Her evidence continued: I agreed to him using the Dirt Track as my husband and I were hardly going to be at the Property and I am a firm believer of helping out your neighbour. We then asked [Mr Maloney] whether he would mind if we moved the trail … He said that wouldn't be a problem and that he would be happy to pay for half of the costs. … I was willing to allow Mr Maloney to use it because we were new to the area and I did not want any trouble with my neighbours.
Ms Sarian gave evidence of one other conversation with Mr Maloney in about 1979 when he was driving along the access way: I asked him again whether it would be okay to move this part of the Dirt Track as I thought it was too close to the sandstone cottage. I was also concerned because we had young children at the time. [Mr Maloney] said words to the effect: I don't mind if the trail is moved as long as I can continue to access my property. I then said to [Mr Maloney] words to the effect: Yes of course you can continue to use the trail. [Mr Maloney] thanked us and got back into his car and continued along the trail to his property.
Ms Sarian accepted that she did not have an accurate recollection of the exact words used almost forty-five years ago. She was adamant that he was driven in a "flash car", but the plaintiff's evidence was that he was never driven and always drove himself. While it unnecessary to resolve that factual question, it does raise a slight doubt as to her memory, when there is no reason why the plaintiff would not know whether this father was chauffeur driven.
Further, Ms Sarian's memory on other matters was vague or appeared inaccurate. For example, her evidence was that the plaintiff's farm manager asked to graze friends' horses on Putu's land in about 2009-2010. She did not refer in her reply affidavit to the contrary evidence of the farm manager's wife about a council grant given to landowners to eradicate noxious weeds. The farm manager's wife's unchallenged evidence was that the council grant was only available for landowners with stock and for that reason alone horses from Portland Head Farm were grazed on Lot 119. In cross-examination, Ms Sarian accepted that there was a grant for the removal of weeds, but was adamant that the horses were not grazing on the property because of that work. Yet having attached email reports and photos about the grant work Ms Sarian said: No… I don't know. I don't know about that. No, I don't know about that. I'm sorry, I don't know about that.
The fact that her evidence concerning events in 2009-2010 was unpersuasive and apparently inaccurate supports at least a doubt that her evidence about conversations in 1978 and 1979 may not be precise.
However, the plaintiff submits that even taken at their highest, the conversations deposed to by Ms Sarian cannot be read as Mr Maloney seeking permission to use the access way and such permission being granted. Instead, he submits that read in the context of the uncontested evidence about Mr Maloney's character, the conversation amounted to Mr Maloney politely informing Ms Sarian that he used the access way and intended to use the access way. It is said he was asking for acknowledgement of that fact, rather than asking permission. The plaintiff submits that the proper construction of that part of the conversation when Ms Sarian raised the issue of moving the access way with Mr Maloney, is that Ms Sarian wanted Mr Maloney to agree to her moving the access way, and Mr Maloney was prepared to compromise his legal entitlement to use the existing access way, but only by varying its location.
I accept the plaintiff's submission as to the most likely sense of the conversation. I also consider that Ms Sarian's choice of language in her affidavit, written approximately forty-five years after the events described, is imprecise. At no time did she assert that she had any basis to prevent Mr Maloney and his invitees using the access way; factually she never prevented them. While she used the word "permission" in the witness box, her evidence primarily concerned good neighbourliness. For example, in cross-examination Ms Sarian gave this evidence about her first conversation with Mr Maloney: Q: In terms of how he described his use of the road, the effect of what he was saying to you was, "I come up once a month or so. This is the road I used to get to my property"? A: Yeah. Q. He was, effectively, telling you that's what he was doing and you said to that effectively "No worries, of course, that's fine"? A: That's right. That's right. I did. I did. He was quite happy. He left and he was quite - and we were happy, too, knowing that we were neighbours, that we got along. Q: It didn't even occur to you at the time to say, "No, you can't keep doing that"? A: Why would I say that to the man? We put a gate there that someone took away. Why would - I mean, he was willing to share the cost of the - a new track. We we're neighbours. If I was in his position, I'd be happy as well to do the same thing.
In relation to her desire to move the track because of its location next to a proposed building, Ms Sarian accepted in cross-examination that during the second conversation what Mr Maloney was conveying to her was that he was content with the access way being moved, provided he still had access. She was happy that: He was going to cooperate and we were - he was actually very happy. He was - he was a lovely man … and we really appreciated that about Mr Maloney.
She also accepted that she raised his agreement to move the track again in 1979 because she "wanted reassurance that he was on to it". This is not, in my view, conduct of a registered proprietor who considered herself entitled to restrict access across her land.
Further, in my view, had Mr Maloney not understood that he was entitled to use the access way as of right, and instead believed that it was precarious, then, being a successful businessman, it would have been likely that he would have sought out Ms Sarian when she purchased Lot 119 to negotiate a continuing right to use that access way. He may well have sought something in writing and raised it with her regularly. I do not accept that he would have been so blasé in his approach to something as important as the access way that he had been using since 1963, had he not understood that he had a certain continuing right to use it.
I also accept the plaintiff's submission that the other objective evidence is more consistent with use as of right.
First, Mr Maloney spoke to others during his lifetime as having "a right to use the road". None of the plaintiff's witnesses were cross-examined. I consider that evidence demonstrates Mr Maloney understood he had a legal entitlement to use the access road without permission. I do not accept El Rihani's submission that Mr Maloney's statements to others are consistent with him expressing a right to use the access way by reason of permission rather than prescription.
Secondly, the access road has been used by a large number of people: the Maloney family, the plaintiff, as well as "guests, farm managers, tradies, suppliers, livestock transportation and critical service providers including Integral Energy, ambulance, RFS and SES". El Rihani submitted that Ms Sarian was not put on inquiry about Mr Maloney's increased use of the access road, because she gave permission in 1978 and therefore was content with any use. However, here the issue is not knowledge of use, as it is accepted that Ms Sarian was aware that Mr Maloney was using the access road. Ms Sarian's actual or constructive knowledge of the frequency of Mr Maloney's use is irrelevant. Further, El Rihani submits that permission was given to Mr Maloney and all his invitees. However, Ms Sarian's evidence is not that she gave permission for a vast variety of persons to use the access route, but only Mr Maloney, who asserted he used it "once a month".
Thirdly, Mr Maloney instructed the farm managers to grade and maintain the road regularly. I do not accept, as submitted by El Rihani, that regular maintenance work was consistent with a licence to use, when maintenance was never discussed by the parties, and Ms Sarian used part of the access road and gave no evidence of maintaining any of it.
Fourthly, before Ms Sarian met Mr Maloney, and when Putu first purchased Lot 119, she placed what she described as a gate over the entrance to the property on the access road. The gate was removed by Mr Maloney's farm manager and never replaced by Ms Sarian after her conversations with Mr Maloney, because it would "cost money". The inference is that she did not intend to prevent access and having heard Mr Maloney asserted a right to use the access way she did not put another gate up. I do not accept that Ms Sarian would have done nothing about an expensive gate being removed, if she considered she could prevent Mr Maloney using the access road. Instead, later in 2008, the farm managers organised a gate and informed Ms Sarian. I consider that another indication of an asserted right to use the access road.
Fifthly, Ms Sarian told her real estate agent: There's a private road which runs through our property. The road is an access road and has always been used by the owners of Portland Head Farm.
I consider the language "private road" conveys an entitlement of use as of right, rather than by permission. Further, Ms Sarian acknowledged that the access road has "always" been used by the owners of Portland Head Farm. That does not convey any ability on her part to prevent that use. Further, there would have been no reason to tell the real estate agent if she did not consider it important that potential purchasers were made aware of the plaintiff's right to use that access way.
Consistently with those instructions, Ms Sarian's real estate agent told the plaintiff and prospective purchasers that there was an "access road" on Lot 119 for the benefit of the plaintiff.
Finally, there is evidence that there has been an access road to Lot B since about 1803, based on an old map in evidence.
I do not accept El Rihani's submissions to the contrary. El Rihani submits that throughout the lawyers' correspondence during Putu's sale to El Rihani there is an absence of any reference to Mr Maloney's use of the access road. From this, El Rihani submits an inference ought be drawn that Ms Sarian had not told her solicitors that there was any such easement or right over the property. I do not accept that the absence of reference to this issue demonstrates that Mr Maloney in fact had no legal right to use the access way. Furthermore, Ms Sarian, who was a witness for El Rihani, did not give evidence about her instructions to her lawyers.
On balance, as a matter of fact, I do not accept that Ms Sarian granted permission to Mr Maloney to use the access way, such that no prescriptive right can be found despite the admitted use for over twenty years.

Did use become by right through neighbourly indulgence?

To the extent that use was by way of neighbourly indulgence or implied permission, I accept that it became by way of right at least twenty years ago, and consider the factual findings above satisfy many of the Dobbie factors. This is particularly so with reference to the considerable length of time over which use of the access road has been peacefully permitted, the variety of people who have used the access road, the absence of physical obstruction to use the access road, and the failure of Putu over many years to limit or otherwise attempt to control use of the access road.
For completeness, El Rihani also submits that there is a factual reason why Dobbie could be distinguished, namely that here there was another access route in the form of the fire trail, whereas in Dobbie there was not. I do not accept that submission. The plaintiff's unchallenged evidence was that there was an undeveloped fire trail that was not used and could only be used by some vehicles, but not if there was flooding. The plaintiff's farm manager and his wife gave uncontradicted evidence that the access way "has been the only means of vehicular access" to the plaintiff's land. Further, in Dobbie, there was also another access route that would require money to make it useable. I do not accept there is a relevant factual distinction here. I also do not consider that even if there was such a factual distinction it would be relevant to the real issue, which is whether Putu granted express "permission" for Mr Maloney to use the access way, or whether it was used as of right.

Conclusion

For the reasons above, I consider it appropriate to make an order affecting Lot 119. However, I do not consider it appropriate to make any order affecting Lot 118, when the registered proprietors have not been joined as parties.
El Rihani has not made any submission as to why the usual costs order ought not be made. I consider the defendant ought pay the plaintiffs costs of the proceedings as agreed or assessed.

Orders

The appropriate orders are: 1. The parties are to confer and provide agreed orders including any necessary survey plans giving effect to these reasons to the Associate to Peden J within seven days of this judgment. 2. Should agreement not be possible, competing short minutes, any evidence, and submissions of no more than three pages are to be provided to the Associate to Peden J within ten days of this judgment.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 22 September 2023

Real Property Act 1900(NSW)s 42(1)(a1)

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