MATTER : Section 129C of the Transfer of Land Act 1893

BETWEEN : OLEANDER NOMINEES PTY LTD (ACN 008 816 162)

Real property - Easements - Right of way - Application to extinguish easement - Dedicated road being used in substitution for right of way - No further need for right of way - Application for extinguishment of easement allowed

Transfer of Land Act 1893, s 129C

Kort Pty Ltd v Shaw [1983] WAR 113

Re Application of Gale [1994] ANZ ConvR 264

Re Ghey & Galton's Application [1957] 2 QB 650

1 HASLUCK J: This is an application by the owners of certain land at Mandurah for orders pursuant to s 129C of the Transfer of Land Act 1893 extinguishing an easement affecting their land.

2 The defendant entered an appearance in response to the originating summons served upon it by the plaintiffs but was not represented by counsel at the hearing.

3 I understand that the papers lodged in support of the plaintiffs' application including various affidavits were served upon the defendant. In satisfying myself that the defendant had adequate notice of the hearing I took account of the affidavit of service of Gary John Barrow sworn 24 October 2002.

4 I should also mention that a message from the solicitor for the defendant reached me on the day before the hearing which indicated that he was aware that the hearing would take place the following day. In the event, there was no appearance.

5 In these circumstances, I must assume that the defendant is content to abide the ruling of the Court, notwithstanding that the orders sought, if granted, will divest the defendant of a benefit presently attaching to the defendant's land.

6 The lack of any appearance on the defendant's side, should not be thought to dispose of the matter. I am of the view that the plaintiff is required to make out its case and to satisfy the Court upon the basis of the evidentiary materials presented to the Court that the criteria described in s 129C of the Transfer of Land Act have been satisfied.

7 Accordingly, I must begin by looking at the background to the application and the relevant legal principles.

8 It appears from the affidavit of Paul Benedict McCormick sworn 3 July 2002 that the plaintiffs are the registered proprietors as tenants in common in equal shares of all that piece of land commonly known as 2 Shannon Road, Mandurah, being more particularly described as Lot 8 on Diagram 97613 and being the whole of the land comprised in Certificate of Title Volume 2166 Folio 178.

9 The land in question is subject to the burden of a right of way created in 1957. The relevant document is a form of transfer dated 31 July 1957 being Transfer 14349/1957. For ease of reference I will call the subject land "Lot 8" and the right of way defined by the Transfer document as the "right of way".

10 The right of way relevantly provides for the registered proprietors for the time being of all that parcel of land being Lot 16 on Diagram 18625 and being that part of the land formerly comprised in Certificate of Title Volume 1184 Folio 890 to pass and repass for all purposes either with or without carts or carriages over and along the servient land.

11 The subsequent history of the dominant land and the servient tenement (Lot 8) is dealt with at some length in the principal supporting affidavit. Suffice it to say that the dominant land, which is now owned by the owners of Lakeside Villas Strata Plan 14025, being the defendant in these proceedings, has been subdivided in order to meet the requirements of a residential housing scheme comprising the 62 residential lots depicted on Strata Plan 14025.

12 The dominant land and Lot 8 as the servient tenement affected by the right of way are in close proximity to each other but not contiguous.

13 It appears from the evidentiary materials before me that when the right of way was first created it was intended to provide the registered proprietor of the dominant land and his successors with access to a nearby residential street called Aileen Street.

14 There is scant evidence before me as to what extent, if any, the successive proprietors of the dominant land exercised their entitlement to use the right of way and pass over Lot 8.

15 However, it is now clear from the evidentiary materials that, with the passage of time, the right of way has ceased to serve any practical purpose, for Shannon Road has been constructed between the dominant land and Aileen Street, and has been dedicated as a public road.

16 For most of its length, Shannon Road follows the line of the right of way. However, in the vicinity of Lot 8 a slight diversion occurs with the result that users of the road bypass Lot 8. It appears that there is no practical necessity for any use to be made of the right of way.

17 It follows from this that the owner of the dominant tenement, and likewise the residents of the scheme area, are at liberty to move freely along Shannon Road to reach Aileen Street and have no need to use the right of way.

18 I understand from the evidence before that in these circumstances no use is in fact made of the right of way. This probably explains the absence of any opposition to the orders sought.

19 Against this background, the affidavit of Mr McCormick puts the case in support of the present application at par 15 - par 19 inclusive in these terms:

"15. I respectfully submit by reason of the construction of Shannon Road and its dedication as a public road, those portions of the right of way comprised therein have been extinguished. Further, the means of access to and from the dominant land and the servient land have been severed by Shannon Road so that the right of way is thereby extinguished.

16. Further, I respectfully submit by reason of the subdivision of the dominant land by the registration of the scheme and the development thereon of 62 residential lots since the grant of the right of way, there has been such a change in the character of the property the subject of the right of way as to constitute an abandonment of the right of way.

17. The Plaintiffs intend to develop Lot 8 by the construction of eight residential apartments and then subdivide Lot 8 by the registration of a strata plan of subdivision. Lot 8 cannot be so subdivided so long as the right of way remains as an encumbrance. Consequently, I respectfully submit that the continued existence of the right of way would impede the reasonable user of Lot 8 without securing practical benefits for other persons within the meaning of Section 129C of the Transfer of Land Act.

18. The proposed extinguishment of the right of way in respect of Lot 8 would not substantially injure any persons entitled to the benefit of or affected by the right of way as there is an alternative means of access to and from the dominant land to Aileen Street, namely over and along the public way known as Shannon Road.

19. By reason of the matters aforesaid I verily believe that the Plaintiffs are entitle pursuant to Section 129C of the Transfer of Land Act 1893 to the extinguishment of the right of way in respect of Lot 8."

20 For the sake of completeness, I note that the orders sought on the plaintiff's originating summons are in these terms:

"(a) the Easement contained in Transfer 14349 of 1957 in respect of all that piece of land being Lot 8 on Diagram 97613, the whole of the land in Certificate of Title Volume 2166 Folio 178 be wholly extinguished;

(b) in the alternative, the said Easement be partially extinguished in respect of that portion to which Lot 8 on Diagram 97613, the whole of the land in Certificate of Title Volume 2166 Folio 178 encroaches on the said Easement."

21 An easement is essentially a right to make use of another's property, as in the case of the right of way to pass over another's land. It follows from this that there must be a dominant tenement, the owner of which is entitled to the benefit of the easement, and a servient tenement that is subjected to the burden of the easement. The corollary is that the owners of the dominant and servient tenements must be differing persons.

22 It is readily apparent in the circumstances of the present case that these requirements are satisfied and that the defendant corporation on behalf of the residents of Lakeside Villas has, with the passage of time, become the party entitled to the benefit of the easement affecting Lot 8.

23 At common law, the meaning and effect of an easement conferred by a Deed of Grant is determined by reference to the language of the grant, construed in the light of the circumstances existing at the time of the execution of the Deed. Evidence is admissible to establish the nature of those circumstances.

24 An easement over Torrens system land is not created by Deed. But a document registered under that system, such as the transfer in the present case is deemed to be a Deed. The principles of construction that have been adopted in respect of the grant of an easement at common law, therefore, are equally applicable to the grant of an easement in respect of land under the Transfer of Land Act.

25 It is apparent from the reasoning of the High Court in Gallagher v Rainbow [1994] HCA 24; (1994) 179 CLR 624 that a court will not construe the grant in a way that would enable an easement to be used in a manner that goes beyond the use contemplated by the parties at the time of the grant.

26 This brings me to s 129C of the Transfer of Land Act, for this provision allows for orders to be made with a view to ameliorating the effect of changed circumstances.

27 Section 129C(1) reads as follows:

129C. Judge may vary restriction or easement

(1) Subject to subsection (1a), where land under this Act is subject to an easement or to any restriction arising under covenant or otherwise as to the user thereof or the right of building thereon, the court or a Judge may from time to time on the application of any person interested in the land burdened or benefited, or any local government or public authority benefited, by the easement or restriction, by order wholly or partially extinguish, discharge or modify the easement or restriction upon being satisfied --

(a) that by reason of any change in the user of any land to which the easement or the benefit of the restriction is annexed, or of changes in the character of the property or the neighbourhood or other circumstances of the case which the court or a Judge may deem material the easement or restriction ought to be deemed to have been abandoned or to be obsolete or that the continued existence thereof would impede the reasonable user of the land without securing practical benefits to other persons or (as the case may be) would unless modified so impede such user; or

(b) that the persons of full age and capacity for the time being or from time to time entitled to the easement or to the benefit of the restriction whether in respect of estates in fee simple of any lesser estates or interests in the land to which the easement or the benefit of the restriction is annexed have agreed to the same being wholly or partially extinguished, discharged or modified or by their acts or omissions may reasonably be considered to have abandoned the easement or to have waived the benefit of the restriction wholly or in part; or

(c) that the proposed extinguishment, discharge or modification will not substantially injure the persons entitled to the easement or to the benefit of the restriction.

(1a) An application under subsection (1)(a) or (c) to extinguish, discharge or modify a single dwelling covenant that benefits more than 10 lots shall be accompanied by --

(a) the applicant's affidavit to the effect that the registered proprietor of each lot that is --

(i) wholly or partially within the prescribed area; and

(ii) benefited by the covenant the subject of the application or any other single dwelling covenant,

has been given written notice, the form and content of which has been approved by the Registrar, of the proposed application; and

(b) the written consent of the registered proprietors (at the time the application is made) of the majority of the lots referred to in paragraph (a) to the extinguishment, discharge or the modification of the covenant as proposed.

(1b) For the purposes of subsection (1a)(b), the written consent of the registered proprietor of a lot that has 2 or more registered proprietors is taken to have been given if consent has been given by --

(a) in the case of proprietors who are joint tenants, the majority of those proprietors; or

(b) in the case of proprietors who are tenants in common, a proprietor who is, or 2 or more proprietors who between them are, entitled to the majority of undivided shares in the lot.

(1c) If a lot is subject to a mortgage or charge, the written consent of the registered proprietor of that lot is not to be taken into account for the purposes of subsection (1a)(b) unless it is accompanied by the written consent of the mortgagee or chargee of the mortgage or charge that is first in order of priority.

(1d) In subsection (1a), (1b) and (1c) --

"lot" means a parcel of land that is shown on a plan (as defined in section 136A) as a lot, other than a common property lot on a survey-strata plan;

"single dwelling covenant" means a restrictive covenant that prohibits the construction of more than one dwelling on the lot burdened by the covenant."

28 Section 129C(3)(aa) provides that the court or a judge may, on the application of any person interested, make an order declaring what is the nature and extent of the easement and whether the same is enforceable and, if so, by whom.

29 The decided cases provide a useful point of reference in determining the effect of these provisions. It is clear that the onus of proving an allegation of abandonment or that the easement should be deemed to be obsolete rests upon the party making such an allegation. Barrett v RSE Holdings Pty Ltd [1999] WASC 128.

30 It is apparent, however, that the Court will be slow to arrive at such a conclusion. In Smith v Australian Real Estate & Investment Co Ltd [1964] WAR 163 Negus J had this to say at p 167:

"Speaking generally, I feel sure Parliament did not, when enacting s 129C intend the court to allow what is in effect the expropriation of private property, namely, the right of a land owner to the benefit of a restrictive covenant, without compensation, unless completely satisfied that the benefit is valueless to such owner from a practical standpoint and does not secure him any practical benefit."

31 I am also obliged to take account of Kort Pty Ltd v Shaw (1983) WAR 113. In that case, a developer contracted to purchase a block of land in an established residential area which was subject to a covenant restricting that development to a single residence. The developer sought removal or modification of the covenant so as to allow an amalgamation of two blocks and the construction of five residential units thereon, principally upon the basis that the development was permitted by the local town planning scheme and had been approved by the local council.

32 In dismissing the application, Burt CJ held that the jurisdiction conferred under s 129C is not conditioned by anything to be found in a town planning scheme. The statutory provisions are essentially concerned with property rights. The covenant in the case in question was thought to secure practical benefits to the residents living nearby. Burt CJ noted that unless a plaintiff could bring himself within one or other of the subsections of 129C the Court had no power to make the order sought.

33 In Bradbrook & Neave, Easements and Restricted Covenants in Australia (2nd ed) at R19.110 the learned authors suggest that it is not sufficient to show that the covenant or easement impedes reasonable user. It must also be shown that user is impeded without securing practical benefits to the persons with the benefit of the covenant or easement. In other words, the main purpose of the section is to ensure the preservation of property rights, not to facilitate the use of land in the best interests of the community.

34 In regard to the exercise of the Court's discretion in granting an order I must also take account of Dunham & Anor v The Registrar of Titles & Ors, unreported; SCt of WA; Library No 5406; 22 June 1984. That case suggests that an application under s 129(1) should be refused where it is made for no specific purpose, or no apparent present purpose beyond the general concept of making the plaintiff's land more valuable by its being freed from the burden of the easement.

35 Against this background, let me now draw together the relevant considerations in the present case, bearing in mind that service of the relevant documents has been effected and the owner of the dominant land has not appeared to object.

36 The plaintiffs carry on business in partnership in the acquisition and redevelopment of properties. It seems that they acquired Lot 8 on or about 15 July 1999 and are now minded to subdivide Lot 8 and construct upon the subject land eight residential apartments.

37 Lot 8 is a corner block bordered on one side by Lola Place, and on another by Shannon Road. The right of way originally provided to the registered proprietor of the dominant land access from the dominant tenement to Aileen Street, along a portion of land which was 221.5 metres in length, and 10.06 metres in width.

38 Since the right of way was granted, a permanent public road, namely, Shannon Road, has been constructed between the dominant tenement and Aileen Street. For almost all its length, Shannon Road follows the line of the original right of way until it reaches Lot 8 where it follows the outer boundary of Lot 8 until reaching the intersection of Shannon Road and Lola Place.

39 The path taken by Shannon Road, and its deviation at Lot 8 are depicted on the annotated copy of Diagram 97613 which appears at p 81 and p 82 of Mr McCormick's affidavit. On that diagram Shannon Road is marked in green, while that portion of Lot 8 over which the right of way is still registered is marked in yellow.

40 I am satisfied that all vehicular and other traffic moving from the defendant's land Aileen Street now travels along Shannon Road. No traffic uses that portion of the right of way on Lot 8 by reason of the public road.

41 I understand that the plaintiffs plan to construct eight residential apartments on Lot 8 and thereafter subdivide the same by the registration of a strata plan of subdivision means that at least two of the proposed apartments are within that portion of Lot 8 which is currently encumbered by the right of way. Consequently, while the right of way remains registered as an encumbrance over Lot 8, the plaintiffs' proposed development and subdivision of Lot 8 cannot proceed.

42 It emerges from my review of the decided cases that in exercising its jurisdiction under s 129C(1)(a) the court must be satisfied that the continued existence of the right of way would impede the reasonable user of the land without securing practical benefits to other persons.

43 To found the Court's jurisdiction under s 129C(1)(c) the Court must be satisfied that the proposed extinguishment, discharge or modification will not substantially injure any person entitled to the benefit of the easement.

44 Even if the plaintiffs are successful in bring themselves within these provisions, thus founding the Court's jurisdiction to make an order, it seems that the making of the order remains discretionary. Kort Pty Ltd v Shaw (supra).

45 I am satisfied that the plaintiffs have standing to make this application as the owners of the servient tenement. I am satisfied also that the continued encumbrance of Lot 8 by the right of way impedes the plaintiffs in the reasonable use of Lot 8 in that while the right of way remains the plaintiffs will be unable to implement their proposal to develop and subdivide Lot 8. Alternatively, if the right of way remains as an encumbrance, the plaintiffs will be required to alter their current plans substantially at considerable expense and inconvenience.

46 I pause to say that these matters serve to distinguish the present situation from that which was before the Court in Dunham's case (supra) in that the plaintiffs in the present case have a specific purpose which they wish to implement.

47 The practical benefit that was derived by the defendant from the right of way was the ability to pass along it in order to access Aileen Street. It follows from my description of the evidence that the defendant is now able to do this by virtue of the dedicated public road. This function has replaced that of the right of way. Thus, it may be said that while the easement represents an impediment to the plaintiffs in their reasonable use of Lot 8, it secures no practical benefit to the defendant. I am therefore satisfied that the requirements of s 129C(1)(a) have been made out.

48 When I turn to the requirements of s 129C(1)(c) I am of the view that the proposed extinguishment of the right of way would not substantially injure the defendant.

49 The decided cases suggest that that substantially injure means not a theoretical injury but something which is real and has a present substance. The injury need not be of an economical kind such as a reduction in value of the land benefited nor merely of a physical kind such as subjection to noise or traffic but can be of an intangible kind arising from intrusion upon privacy or alteration to character or ambience of the vicinity. Webster v Bradac [1994] ANZ ConvR 260 at 262.

50 In the circumstances of the present case no injury of an economic, physical or intangible kind has been demonstrated and nor would it seem to be likely in the event of the right of way being extinguished having regard to the evidentiary materials before me. It seems that an order of the kind sought would in fact reflect the realities of the situation, that is to say, that the right of way has been abandoned since the construction of the public road and all vehicular and other traffic moving from the defendant's land to Aileen Street does so along Shannon Road. If there were to be any substantial injury arising out of the proposed extinguishment of the right of way then such an injury would presumably have become apparent by now.

51 It follows from this analysis that I am satisfied the criteria enunciated in s 129C(1)(a) and (c) have been complied with and that there is no basis upon which the Court should refrain from making the orders sought in the exercise of its discretionary power.

52 In summary, then, the application will be allowed. I will make an order in the terms sought in the first paragraph of the originating summons, that is to say, that the easement contained in Transfer 14349 of 1957 in respect of all that piece of land being Lot 8 on Diagram 97613, and being the whole of the land in Certificate of Title Volume 2166 Folio 178 be wholly extinguished. I note that by s 129C(8) the costs of and incidental to an application shall not be awarded against the defendant in any event. Accordingly, there will be no order as to costs.