Milne v James [1910] HCA 55

Milne v James [1910] HCA 55 - HCA 1910 case summary — Zoe

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fronting the north side of Murray Street in a central part of the City of Perth, having acquired them in January 1904 and March 1904 respectively. The appellant's land lies to the east and the respondent's to the west. The frontages are 72 links and 68 links respectively, with a depth of 305 links, In the year 1896, when Perth was a very small town in comparison with what it has now become, there was upon the plaintiff's land a two-story building of brick and stone, the western wall of which was sup- posed to stand upon the margin of the land. The respondent's predecessors in title, Messrs. Bickford, being minded to erect a building upon their land, entered into an agreement under seal with the appellant's predecessors in title, a company called McLean Brothers and Rigg, dated 18th September 1896, whereby, after reciting that the parties were owners of adjoining blocks of land, that on the boundary of the company's land there stood a wall belonging to the company, that Messrs. Bickford were about to build a wall upon the boundary of their land and to excavate for its foundations, and in the course of such excavations might bring down the company's wall, and that they had requested the company to allow them to do such underpinning and work on the foundations of the company's wall as might be necessary to pre- vent it from falling down, it was agreed that the company should give leave to Messrs. Bickford to enter on the company's land an] underpin, shore up and do such work as might be neces- sary to prevent the wall from falling, and it was further agreed that no right of lateral support should be acquired by the wall to be erected or by the owners of it at any time, any positive law or prescription notwithstanding, and that the wall to be erected should not nor should the company's wall "in any sense be or be considered to be a party wall between the lands and premises" of the parties. Messrs. Bickford proceeded to erect a two-story building which was higher than the company's building, and which faced Murray Street, standing about a chain and a half back from it. The intention evidenced by the deed of 18th September was, however, not carried out, and that agreement seems to have been abandoned. Instead of erecting a separate wall on the eastern side of their allotment they supported the beams of the first floor of their building upon the company's wall,

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ment to grant an easement of support in perpetuity. In my opinion, having regard to the circumstances existing in the City of Perth in the year 1896, which was then in a state of transition from a small town to a large city, it is at least equally probable that an easement in perpetuity was not in the contemplation of either party, but that they took into consideration the probability that the company might not desire to pull down their wall for a considerable, though uncertain, time, and thought that it was worth while, until altered circumstances should make it reason- able to replace the old building on the company's land by a new one, to allow the wall to be used in the meantime for the common support of the old building and the new one. In this view the grant would be conditional, and terminable by a reasonable notice, i.e., a notice sufficient to enable Messrs. Bickford to sub- stitute other means of support resting on their own land, (Cf. Iundale v. Menzies (1)). This view is strongly supported by the evidence of Eyers that the wall was in no sense to be regarded asa party wall, and that the company were to be at liberty to do what they liked with it, which seems to me to negative the idea of a perpetual easement. The point may be tested by supposing an action brought by Messrs. Bickford against the company for an injunction to restrain a threatened interference with the ease- ment of support after it had been discovered that their premises encroached by 2 ft. 6 in. upon the company's land. Such an action would have been, in effect, an action for specific perform- ance, and in my judgment there would have been two independ- ent answers to it; (1) that the asserted agreement was indefinite and uncertain as to its duration, the only agreement which could be inferred with any degree of certainty being an agreement to grant an easement of support terminable at the will of the grantor, analogous to an agreement for a tenancy at will, of which specific performance will not be granted; and (2) that the relief claimed would go beyond the agreement, since it would compel the grantors to grant, in addition to the easement of support, a right to the perpetual possession of a portion of land as to which there was manifestly a mutual mistake of fact. As I have

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On this I observe that in the present case it is admittted that the "visible state of things," ie., visible from the outside, did not include the fact of the defendant's beams resting on the plaintiff's wall. Moreover, the plaintiff had reason to believe from the deed of September 1896 that the defendant's building was in fact, as it was represented in the surveyor's diagram to be, complete in itself, and that its eastern wall was separate from the plaintiff's western wall. The principle laid down by the Court of Appeal in Union Lighterage Co. v. London Graving Dock Co. (1) seems to be very pertinent to the facts of the present case. In that case the question was whether an easement of support had been acquired by length of enjoyment. All the Court agreed that if the enjoyment had been clam it had not been acquired. Vaughan Williams LJ. thought that if the owner of the allegedly servient tenement had means of knowledge it was sufficient. But Romer LJ. said (2) : - " Now, on principle, it appears to me that a pre- seriptive right to an easement over a man's land should only be acquired when the enjoyment has been open - that is to say, of such a character that an ordinary owner of the land, diligent in the protection of his interests, would have, or must be taken to have, a reasonable opportunity of becoming aware of that enjoyment. And I think on the balance of authority that this principle has been recognized as the law, and ought to be followed by us. In support of this statement I do not think it necessary to do more than refer to those parts, which deal with this point, of the speeches made by Lord Selborne and Lord Penzance in the House of Lords in Dalton v. Angus (3), and I gather that their views as there expressed on this point were not dissented from by the other members of the House who took part in the hearing of that case, and, indeed, Lord Blackburn said (4) that no prescriptive right 'can be acquired where there is any concealment, and probably none where the enjoyment has not been open.'" And Stirling L.J. said (5): "I think that Dalton v. Angus (3) establishes that there must be

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perhaps only to be revoked with such reasonable notice as to enable the Bickfords to provide against undue damage; for if there were anything more than a licence, how could the right to do as they liked with their wall be preserved to the owners of it ? This evidence creates at least very great uncertainty as to the real nature of any arrangement that was made, and whether it was permanent or temporary. If it was terminable upon notice, the Court would probably not enforce it specifically, as its decree could be forthwith rendered nugatory by the giving of the neces- sary notice. The respondent's counsel endeavoured to account for the expression "the wall never was to be considered in any sense a party wall" by pointing to its use in the agreement under seal of 18th September in the same year, presently to be discussed, and suggesting that the witness was merely quoting from that document. But that is at the best conjecture, and does not clear up the statement, "We were to do as we liked with our wall." Moreover, I think the suggested explanation was afterwards disclaimed by leading counsel for the respondent. The evidence without explanation is most damaging to the respondent's case. It is a further important consideration that neither of the prede- cessors seem to have known, as we know now, that the wall on Lot 6 was not built up to the boundary. Nothing was'said to show that either of the parties suspected this, or that the one side thought that they were obtaining the use of more land than they owned, or the other that they were sacrificing any. In fact the conversation appears to have occurred within three months of the execution between them of the agreement under seal already mentioned, in which it is recited that the wall of Lot 6 stands on the boundary ; and it is throughout the deed treated as standing there. Thus the building that the Bickfords were about to put up would not, so far as either side then knew, encroach on Lot 6. But we know now that the arrangement to let the Bick- fords build up to the wall could not have been carried out with- out encroachment. It cannot be assumed that the appellant's predecessors would have assented to any arrangement at all which involved an encroachment, had they then known the true boundary. Such a thing, indeed, is highly improbable. The

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LJ. plainly showed his opinion that the doctrine of constructive notice had already (1879) gone far enough. He said (1) - "T am of opinion that the decision of the Vice-Chancellor cannot be sustained on the ground on which he put it, and that it would be very dangerous to carry the doctrine of constructive notice to this length. That doctrine, as applied by the Vice-Chancellor, would come to this, that a purchaser is to be held to have construc- tive notice of every agreement relating to any structure which he sees on the adjoining ground." (It seems to me that if we adopt the argument of the respondent we shall carry the doctrine to the length which his Lordship thought dangerous.) Brett LJ., in the same case, said (2): "The doctrine of constructive notice ought to be narrowly watched and not enlarged. Indeed, anything 'constructive' ought to be narrowly watched, because it depends on a fiction. We are, however, bound by the authorities, and I conceive that when a person purchases property where a visible state of things exists which could not legally exist without the property being subject to some burden, he is taken to have notice of the extent and nature of that burden. But it seems that the rule goes further, and that when a state of circumstances exists which is very unlikely to exist without a burden, he is affected with notice." As the same Judge, when Master of the Rolls, declared thirteen years later in Hnglish and Scottish Mercuntile Investment Co. v. Brunton (3), "In a series of cases Lords Cottenham, Lyndhurst and Cranworth, Lord Justice Turner and the late Master of the Rolls, Sir George Jessel, have said that the doctrine ought not to be extended one bit farther; all the Judges seem to have agreed upon that. In Allen v. Seckham (4) I pointed out that the doctrine was a dangerous one. It is contrary to the truth. It is wholly founded on the assumption that a man does not know the facts, and yet it is said that constructively he does know them." It would seem that the statement of the law made by Brett L.J. in Allen y. Seckham (4) indicates the limit beyond which the highest authorities were not prepared to carry the doctrine; an impression

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addition to that he must show that the respondent purchased with notice of the agreement. Both these branches of the defence were argued by counsel. But I do not think it neces- sary to express any opinion upon the first branch having regard to the view I take of the facts relied on in support of the second branch. If the respondent fails to establish notice to the appel- lant he can have no justification as against him, however com- plete his answer might have been if the original party to the agreement had been the party complaining. It was not sug- gested that there was actual notice of the agreement, but the respondent relied on facts which he contends constitute construe- tive notice to the appellant. In investigating facts relied on to establish constructive notice, it is well to bear in mind some observations of Lord Esher M.R. in English and Scottish Mercantile Investment Co. v. Brunton (1), he says : - -" Con- structive notice or knowledge, as I have said, is an equitable doctrine wholly ; it is a doctrine not known to the common law, but it must now be dealt with and acknowledged by the Courts which administer the common law. It is, therefore, necessary for us to see how far the doctrine extends and is to be carried out, and to consider its nature and limits as laid down by the Judges who invented and have applied it. Of late years, after the doctrine had been invented and put into form, the Chancery Judges saw that it was being carried much further than had been intended, and they declined to carry it further. In a series of cases Lords Cottenham, Lyndharst, and Cranworth, Lord Justice Turner, and the late Master of the Rolls, Sir George Jessel, have said that the doctrine ought not to be extended one bit farther ; all the Judges seem to have agreed upon that. In Allen v. Seckham (2) I pointed out that the doctrine is a dangerous one. It is contrary to the truth. It is wholly founded on the assump- tion that a man does not know the facts; and yet it is said that constructively he does know them."

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against the McLean Brothers and Rigg's wall, encroached substan- tially on McLean Brothers and Rigg's land. That fact would not in itself indicate to an intending purchaser that there was only one wall supporting the two buildings. But Mr. Pilkington contends that knowledge of the encroachment imposed on tlie appellant the duty of inquiry as to the extent and manner of the encroachment, and that, if he had made the inquiry, he must have acquired knowledge of the agreement. In dealing with the bearing of facts of that kind on the question of constructive notice, another aspect of the circumstances must be taken into account. Where no inference of the existence of the burden could be directly drawn from certain facts, yet they are such as ought to put a purchaser upon an inquiry, in the course of which he would, with ordinary care, obtain knowledge of other facts from which the reasonable inference of a burden on the land might directly be drawn, then the statement of Lord Esher last quoted, if it is to be taken as a guide, must be supplemented by the considerations adverted to by Lord Crunworth in Ware y. Lord Egmont (1) in the following passage : - * Where a person has actual notice of any matter of fact, there can be no danger of doing injustice if he is held to be bound by all the consequences of that which he knows to exist. But where he has not actual notice, he ought not to be treated as if he had notice, unless the circumstances are such as enable the Court to say, not only that he might have acquired, but also, that he ought to have acquired, the notice with which it is sought to affect him - that he would have acquired it but for his gross negligence in the couduct of the business in question. The question, when it is sought to affect a purchaser with constructive notice, is not whether he had the means of obtaining, and might by prudent caution have obtained, the knowledge in question, but whether the not obtaining it was an act of gross or culpable negligence."

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dealing, regard must be had to the usual course of business ; and a purchaser who wilfully departs from it in order to avoid aequir- ing a knowledge of his vendor's title is not allowed to derive any advantage from his wilful ignorance of defects which would have come to his knowledge if he had transacted his business in the ordinary way." Under guidance of the principles laid down in these judgments, I now come to the consideration of the facts upon which the respondent relies, and which must of course be viewed in connection with all the circumstances surrounding the making of the purchase. At the outset, I make the preliminary assumption that the respondent has established the existence of an agreement, such as he alleges, between his own and the appellant's predecessors in title. I take it also to be proved that the appellant, when he purchased the property, had no actual knowledge of the agreement, and was not aware that the wall was in fact used as a wall of Bickford's building adjoining, or that it bore the weight of the upper wall, and of the joists and rafters of that building. Under these circumstances, the appel- lant's position was that of a purchaser who has contracted to buy a piece of land, having on it an old building, against a wall of Which the neighbour on the west side has erected his building, there being nothing in the appearance of the buildings, where they join, to indicate a common wall between them. Looking at the title deed he finds that the land is under the Transfer of Land Act, and that no easement is shown either upon the register or upon the deeds. There is, however, handed over to him about the same time as the title deeds (and this correction of the evidence agreed to by the parties must fairly I think be made) the agreement under seal of 18th September 1896. There is no evidence that the respondent was informed that the agreement had not been carried out. Upon these facts either of two assumptions might reasonably be made by the appellant. He might assume that the agreement embodied in the document had not been carried out: in that case the document would tell him nothing. Or, he might assume that it had been carried out; in that case the document would indicate that the Bickfords had underpinned the wall of McLean Brothers and Rigg's building,

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but had erected their own wall to carry their own building. On that assumption, which the appellant would be quite justitied in making, he would naturally take it for granted that each building was supported by its own independent wall. Before completing the purchase the respondent took the usual course of having an identification survey made. The state of things ascertained by the survey appears in the surveyor's report of 9th January 1904. It shows that most of the allotment was covered by an old building. On the West side its wall was not on the boundary, there being a space between the wall and the boundary on that side of from 8.6 links at the lower end, to.4 of a link on the upper or Murray Street end. But on the eastern side the old building encroached over the boundary on to the adjoining allotment. 'The overlap on that side being 2.7 links at the lower end, 2.2 links about the middle of the line, and 3 links at the upper or Murray Street end. The plan and report also show that Bickford's building, about a chain in depth, encroached on the western side so as to abut against the wall of the old building, an encroachment of from 3.6 links to 3 links over the boundary as shown in the appellant's title deeds. Mr. Stefanoni who made the survey points out in his evidence that his plan shows two walls adjoining on the western side, in other words, indicates that Bickford's building rested entirely on its own independent walls. He assumed that that was so, admitting at the same time that there was nothing in the appearance of the buildings as they stood adjoining to indicate whether there was one wall or two. Upon the fact of this encroachment, brought. to the appel- lant's knowledge under these circumstances, the respondent relies, and he puts his case in this way : - The intending pur- chaser of an allotment upon which such an encroachment was apparent might, he says, have been reasonably expected to inquire by what right the Bickford building had been extended over the boundary and had occupied so substantial a portion of the McLean Brothers & Rigg's allotment. 'That inquiry must have led him to a knowledge of the agreement. Having failed to make the inquiry, Equity will not permit him now to deny the knowledge he could have thus acquired. Applying to that con- tention the rule laid down by Lord Cranworth in Ware v. Lord

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Judgment (112 paragraphs)