Owners Corporation - Strata Plan No. 8450 v Owners Corpor

DECISION: 1. Appeal allowed. 2. Orders below set aside, and in lieu thereof order that the summons be dismissed with costs. 3. Respondent to pay the appellant's costs of the appeal.

CATCHWORDS: REAL PROPERTY - EASEMENTS - Construction and effect - Contemplation of parties as to use of easement - Not to be considered separately from construction of the easement having regard to the circumstances relevant to that construction - Not otherwise to be the subject of extrinsic evidence - Factors relevant to the construction of easements, including the requirement that the easement be for the benefit of the dominant tenement.

Alvis v. Harrison (1991) 62 P&CR 10 Attorney-General v. Horner (No.2) [1913] 2 Ch. 140 Auburn Municipal Council v. Szabo (1971) 67 LGRA 427 Bracewell v. Appleby [1975] Ch. 418 British Railways Board v. Glass [1965] 1 Ch. 538 Cannon v. Villars (1878) 8 Ch.D. Codelfa Constructions Pty. Limited v. State Rail Authority of NSW (1982) 149 CLR 337 Gallagher v. Rainbow (1994) 179 CLR 624 Harris v. Flower (1904) 74 LJ Ch 127 House of Peace Pty. Limited v. Bankstown City Council [2000] NSWCA 44, (2000) 48 NSWLR 498 Jelbert v. Davis [1968] 1 WLR 589; [1968] 1 All ER 1182 National Trust v. White [1987] 1 WLR 907 Nickerson v. Barraclough [1980] Ch. 325 Owners Corporation - Strata Plan No. 8450 v Owners Corporation - Strata Plan No. 54547 [2002] NSWSC 780 CASES CITED: Paterson & Barr Limited v. University of Otago [1925] NZLR 191 Peacock v. Custins [2001] 2 All ER 827 Re Ellenborough Park [1956] Ch 131 Robinson v. Bailey [1948] 2 All ER 791 Shean Pty. Limited v. Owners of Corinne Court [2001] WASCA 311 Simpson v. Mayor Of Godmanchester (1897] AC 696 Skull v. Glenister 33 LJCP 185; 16 CB (NS) 81 South Eastern Railway Company v. Cooper [1924] 1 Ch. 211 Strata Plan No.8450 [2002] NSWSC 780 The Shannon Limited v. Venner Limited [1965] I Ch. 682 Todrick v. Western National Omnibus Co. Limited [1934] 1 Ch. 561 Toll (FGCT) Pty. Limited v. Alphapharm Pty. Limited [2004] HCA 52, (2004) 219 CLR 165 United Land Company v. Great Eastern Railway Company (1875) 10 Ch.App. 586 Waterpark v. Fennell (1859) 7 HLC 650 White v. Grand Hotel Eastbourne Limited (1913) 1 Ch. 113 William v. James (1867) LR 2 CP 577

PARTIES: Perpetual Trustee Company Limited - appellant Westfield Management Limited - respondent

COUNSEL: Mr. N.C. Hutley SC with Mr. S. Flanigan for appellant Mr. B.W. Walker SC with Mr. R.G. McHugh SC and Mr. N.J. Owens for the respondent

SOLICITORS: Deacons, Sydney for appellant Speed & Stracey, Sydney for respondent

LOWER COURT JURISDICTION: Supreme Court - Equity Division

LOWER COURT MEDIUM NEUTRAL CITATION: [2006] NSWSC 716

IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA40496/06 SC 6454/05

BEAZLEY JA HODGSON JA TOBIAS JA

Friday 1 December 2006 PERPETUAL TRUSTEE COMPANY LTD. V. WESTFIELD MANAGEMENT LIMITED Headnote

FACTS By an instrument registered on 26 April 1988, the then owner of Glasshouse (now owned by Perpetual) granted an easement burdening its property and benefiting the then owner of Skygarden (now owned by Westfield). Westfield subsequently acquired two other properties known as Imperial Arcade and Centrepoint. All four properties are adjoining and face Pitt Street Pall, Sydney. In the Supreme Court Equity Division, Westfield successfully sought a declaration that, on the proper construction of the right of way, persons and vehicles authorised by Skygarden may use the right of way over Glasshouse for the purpose of travelling through Skygarden to access Imperial Arcade and Centrepoint. The primary issue on appeal was the proper construction of the easement and the admissibility of certain evidence to aid in its construction.

HELD (Allowing the appeal) (1) While a court will not construe an easement in a way that would enable it to be used in a manner that goes beyond the use intended by the parties at the time of the grant, consideration of what is intended by the parties is not a separate exercise from construing the grant, and investigation of what is so intended cannot be pursued in any way beyond the appropriate method for construing the grant. Dicta of McHugh J in Gallagher v. Rainbow (1994) 179 CLR 624 at 639-641 considered.

(2) For a grant of an easement to bind the servient tenement rather than merely to operate as between the parties, the use authorised must be such as to benefit the dominant tenement: Attorney-General v. Horner (No.2) [1913] 2 Ch 140 at 196; Todrick v. Western National Omnibus Co. Limited [1934] 1 Ch 651 at 579-80 and 591.

(3) In construing an easement, regard may be had to surrounding circumstances, including the physical circumstances of the dominant tenement and servient tenement and the use actually being made of them at the time of the grant, and possibly including communications between the parties prior to the grant, but not including evidence going only to the subjective ideas and purposes of the grantor: The Shannon Limited v. Venner Limited [1965] 1 Ch 682.

(4) A grant of an easement may, on its true construction, permit use of the easement for new or additional purposes of the dominant tenement: United Land Company v. Great Eastern Railway Company (1875) 10 Ch Apps 586; South Eastern Railway Company v. Cooper [1924] 1 Ch 211; British Railways Board v. Glass [1955] 1 Ch 538; White v. Grand Hotel Eastbourne Limited [1913] 1 Ch 113; Robinson v. Bailey [1948] 2 All ER 791. Dictum of McHugh J in Gallagher v. Rainbow (1994) 179 CLR 624 at 640 doubted.

(5) It is not a universal rule that a right of way granted for enjoyment of one piece of land cannot be used for the purpose of passing over that land to another piece of land: Shean Pty. Limited v. Owners of Corinne Court [2001] WASCA 311; Owners Corporation - Strata Plan No.8450 v. Owners Corporation - Strata Plan No. 54547 [2002] NSWSC 780. Harris v. Flower (1904) 74 LJ Ch 127 and Nickerson v. Barraclough [1980] Ch 325 considered.

(6) In the present case, the grant on its true construction did not entitle the owner of Skygarden to authorise persons to use the easement over Glasshouse for the purpose of going across Skygarden for access to Imperial Arcade and Centrepoint. **********

IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA40496/06 SC 6454/05

BEAZLEY JA HODGSON JA TOBIAS JA

Friday 1 December 2006 PERPETUAL TRUSTEE COMPANY LTD. V. WESTFIELD MANAGEMENT LIMITED Judgment 1 BEAZLEY JA: I agree with Hodgson JA. 2 HODGSON JA: On 17 July 2006, Brereton J in the Equity Division made the following orders in proceedings brought by the respondent Westfield against the appellant Perpetual: 1. Declare that on the proper construction of the right of way referred to in Deposited Plan 641047 burdening the land now comprised in Folio Identifier 152/792149 (situate at and known as "The Glasshouse", 146-156A Pitt Street and 131-139 King Street, Sydney), and benefiting the land now comprised in Folio Identifier 10/775619 (situate at and known as "Skygarden", 77-83A Castlereagh Street and 162-166A Pitt Street), persons with vehicles authorised by the registered proprietor of Skygarden may use the right of way for the purpose of entering on to Skygarden and proceeding from it to the driveways, parking spaces and/or loading docks to be built on the land comprised in Folio Identifier B/107798 (situate at and known as "Imperial Arcade", 168-174 Pitt Street) and/or the land comprised in Folio Identifiers 1/736678 and 1/1029020 (situate at and known as "Centrepoint", 184-190 Pitt Street) substantially in accordance with the plans number SC/DA 301 to SC/DA 305 contained in the development application of the plaintiff Westfield Management Limited lodged with the City of Sydney Council on 7 December 2005, where the buildings upon 168-174 Pitt Street and 184-190 Pitt Street to be serviced by such driveways, parking spaces and loading docks are when constructed substantially the buildings described in the plans and specifications contained in that development application.

2. Order that the defendant pay the plaintiff's costs. 3 The appellant appeals to this Court from those orders.

CIRCUMSTANCES 4 The proceedings related to four adjoining properties in the Sydney Central Business District, in the block bounded by King Street, Castlereagh Street, Market Street and Pitt Street, namely Glasshouse (146-156A Pitt Street), Skygarden (162-166A Pitt Street), Imperial Arcade (168-174 Pitt Street) and Centrepoint (184-190 Pitt Street). Glasshouse is owned by Perpetual, and other three properties are now owned by Westfield, although at the time of the creation of the relevant easement, all four properties had different owners. 5 The primary judge set out some of the background circumstances in the following paragraphs, which are not disputed on appeal. 26 In 1971, the Council of the City of Sydney had adopted its "Development Control and Floor Space Ratio Code", Policy 8 of which referred to the creation of "an integrated city-wide pedestrian movement system". The code provided for a series of floor space bonus elements, of which one - bonus element number 7, "Elective Pedestrian Circulation Improvements" - provided for the award of bonus floor space to encourage developers to undertake the provision of elements of the pedestrian network which could not be referenced directly to or identified with specific sites. In September 1974, the Council issued its "City of Sydney Pedestrian Network - Action Plan No. 6", which explained that the pedestrian network was planned "as a system of walkways threading through buildings, under and over roads, linking together malls, plazas, parks, minor street closures. Its aim is to provide for the people of Sydney traffic free, convenient, and pleasant ways to walk through the city". The action plan recommended the creation of the Pitt Street Mall as the spine of the proposed pedestrian network, and stated "One of the most significant tools for implementing the system is through the floor space ratio control code. A development is granted a floor space bonus in excess of the floor space ratio if it provides those public facilities which offset the undesirable effects of greater intensity of development on the existing transportation systems, pedestrian movement, street congestion and the environment". In 1983, the Council approved a plan to close Pitt Street between King and Market Streets to traffic, and on 4 July 1983 granted consent on its own application to create the Pitt Street Mall.

27 In November 1984, the then owner of the Glasshouse site lodged a development application. A second development application, prepared by the same architects who had prepared the first, Donald Crone & Associates, was lodged in February 1985. On 27 May 1985, the Council approved the first development application for the Glasshouse site, imposing a condition "That provision shall be made, to the satisfaction of the City Planner, for the connection of the basement service parking levels with the Imperial Arcade and Centrepoint". The second development application was granted on 24 February 1986, and the same condition became condition 19 in the second development consent.

28 The architectural plans for the Glasshouse development were amended to comply with condition 19. The vehicle ramp from King Street was enlarged to two lanes, and designed to accommodate delivery vehicles, service vehicles and cars travelling back and forth from King Street to the loading docks, car park and service areas of the Glasshouse, Centrepoint, Imperial Arcade and any new development between the Glasshouse and Imperial Arcade. On 11 November 1985, Donald Crone & Associates explained this to the Council: Vehicular access and egress ramps from King Street have been designed to accommodate maximum head room of 3.6 metres with sufficient width to accommodate large vehicles to goods loading area at level 2 and to provide possible vehicular connection to adjoining properties along the southern boundary. 6 I interpolate here that plainly the reference to Centrepoint and Imperial Arcade in par.[28] was not meant to suggest that access could be provided to those properties by just the physical provision being discussed, but rather that this provision was adequate to provide that access so far as the Glasshouse site was concerned, if appropriate further physical provision and appropriate arrangements were made in relation to those other properties in the future. 7 The primary judge continued as follows in pars.[30], [31] and [32]: 30 By late 1986, it seemed to the developers of the Glasshouse that they might exceed the permissible floor space ratio. On 14 October 1986, New World Oil & Developments Pty Limited (along with Jamino, a member of the Carringbush Group of Companies which was developing the Glasshouse site) acquired 3535sqm of transferable floor space for use on Carringbush Group projects, including if necessary the Glasshouse site. On 12 December 1986, Donald Crone & Associates wrote to the Council, acknowledging a shortfall in the floor space ratio of the Glasshouse development, and stating an intention to use 0.85 FSR of transferable floor space to make up the shortfall, but reserving the right in the future to seek bonus floor space from the Council in lieu of the transferable floor space being purchased. On 4 June 1987, the Council notified Donald Crone & Associates that the development consent for the Glasshouse had been modified, by providing for execution of a deed between the owners of the site and the owners of the transferable areas for the transfer of 2601 sqm of bonus floor space to the site, to achieve a FSR of 12.5:1, failing which the FSR would be reduced to 11.5:1. On 18 June 1987, the developer informed Council that 2601 sqm of transferable floor space had been allocated to the Glasshouse.

31 Construction of the Pitt Street pedestrian mall commenced in early 1987. Vehicular access to the Imperial Arcade and Centrepoint remained via ramps from Pitt Street. …

32 In February 1987, the then owner of the Skygarden site lodged a development application. Their architects were also Donald Crone & Associates. The initial plans for Skygarden, which Council approved on 18 June 1987, provided for vehicular access via Castlereagh Street, and did not provide for use of the Glasshouse ramp, nor involve any link through to Imperial Arcade or Centrepoint. 8 As noted in par.[34] of the primary judge's judgment, the Glasshouse developers then approached the owner of Skygarden and proposed that access to Skygarden be via the Glasshouse ramp; and negotiations ensued which resulted in Skygarden obtaining an easement over the Glasshouse property. 9 A deed dated 26 February 1988 was entered into between the owner of Glasshouse (Jamino) and the owner of Skygarden (Mastwood). 10 The recitals to this deed were as follows: A. Mastwood is or is entitled to become the registered proprietor of the Mastwood Land (as herein defined).

B. Jamino is the registered proprietor of the Jamino Land (as herein defined).

C. Mastwood proposes to construct a mixed commercial and retail development on the Mastwood Land.

D. Jamino is in the process of constructing a mixed commercial and retail development on the Jamino Land with vehicular access from King Street across the Jamino Land to the boundary of the Mastwood Land.

E. Jamino has agreed in consideration of the payment of $100,000.00 to grant to Mastwood a Right of Carriageway over the said Jamino Land on the terms and conditions herein contained. 11 Clauses 2.1 and 3.1 of the deed were as follows: 2.1 Jamino in consideration of the sum of $100,000.00 payable by Mastwood in accordance with Clause 2.2 hereof hereby covenants to execute the Instrument and the Plan and to do all things necessary to effect registration of the Instrument and the Plan so as to create the rights expressed therein.

3.1 The parties agree that the Carriageway shall be available for use by the parties, their servants and agents when in the opinion of the Architect the Mastwood Development is within twelve weeks of Practical Completion. 12 The deed contained the following definitions of "Instrument" and "Plan": "Instrument" means the instrument setting out the terms of Right of Way pursuant to Section 88B of the Conveyancing Act 1919, annexed to and forming part of this Deed.

"Plan" - means the Plan of Right of Way annexed to and forming part of this Deed. 13 The easement itself was registered on 26 April 1988. It identified the Glasshouse property as the lots burdened, and the Skygarden property as the lots benefited. Part 2 of the document, setting out the terms of the easement, was as follows: 1. Terms of Right of Way firstly referred to in abovementioned plan Full and free right of carriageway for the grantee its successors in title and registered proprietors for the time being of an estate or interest in possession of the land herein indicated as the lots benefited or any part thereof with which the rights shall be capable of enjoyment and every person authorised by it, to go, pass and repass at all times and for all purposes with vehicles to and from the said lots benefited or any such part thereof across the lots burdened and this right of carriageway shall include the right to erect illuminated signage above the site of the right of carriageway by affixing to or suspension from the structure or structures erected upon the lots burdened SUBJECT NEVERTHELESS to the right of the grantor its successors in title and registered proprietors for the time being of an estate or interest in possession of the land herein indicated as the lots burdened the right at all times hereafter or at any time or times to erect renew and maintain a security door across the site of the carriageway at a distance of not more than five metres from the King street alignment shown in the above mentioned plan with all necessary fittings and fixtures but so that the same shall not be so erected operated or maintained as to impede or obstruct free use and enjoyment of the right of carriageway at all times AND PROVIDED HOWEVER that no signage shall be placed or positioned above the site of the right of carriageway at a height of less than 3.6 metres or within 4.5 metres of the King Street alignment shown on the above mentioned plan. The grantor and the grantee covenant and it is a condition of this right of carriageway that:- (1) The site of the right of carriageway shall be constructed at the cost and expense of the grantor. (2) The grantor will maintain and keep the site of the right of carriageway in a proper state of repair and condition. (3) Subject to Clause (4) the cost of routine maintenance and repair to the site of the carriageway shall be borne equally between the grantor and grantee. (4) The cost of repair of damage caused to the site of the carriageway (including all structures, equipment, fixtures and fittings erected or positioned on or over the boundaries of the carriageway which boundaries are shown in the abovementioned plan) by the grantor or grantee, their respective servants or agents shall be borne by such grantor or grantee PROVIDED HOWEVER that in any other case the cost of repair shall be borne equally between the grantor and grantee. (5) The illuminated signage shall be erected maintained and illuminated by the grantee. (6) The cost of providing fire separation doors or such other fire restraint as may be required by the relevant authorities from time to time at that part of the site of the right of carriageway immediately adjoining the lots benefited shall be borne equally between the grantor and grantee. (7) The grantor and grantee shall at their own cost separately insure and keep insured at all times during the life of the right of carriageway the structure of the carriageway and all associated fixtures and fittings (including but not limited to signage) for loss or damage thereto arising as a direct result of their respective use of the carriageway. (8) The grantor and grantee shall at their own cost separately effect and maintain at all times during the life of the right of the carriageway public risk insurance covering their respective legal liability to third parties (including the other party) for property damage and bodily injury arising out of their respective use of the carriageway. (9) The grantee shall indemnify and keep indemnified the grantor against all actions, claims, suits, demands and losses arising from any default act or omission of the grantee its servants or agents in the use of the right of carriageway. (10) In the event of the redevelopment of the buildings erected upon the lots herein indicated as the lots burdened the grantee shall surrender this right of carriageway PROVIDED HOWEVER that at the time of such surrender the grantor will provide at no cost and expense to the grantee an alternative right of carriageway by the shortest practicable route and on the same terms as hereinbefore contained from the King Street alignment to that part of the site of this carriageway immediately adjoining the lots benefited (sic). (11) If there is any dispute between the grantor and the grantee arising from any covenant herein contained, such dispute shall be determined by a single Arbitrator appointed under the Commercial Arbitration Act, 1984 and the grantor and the grantee hereby reserve their rights to legal representation thereto. Name of person empowered to release, vary or modify the terms of the right of way referred to in the abovementioned plan.

Mastwood Pty Limited its successors or assigns. 14 The following matters were recorded in pars.[36] and [40] of the primary judge's judgment: 36 Following the agreement to create the easement, Donald Crone & Associates redesigned the Skygarden development to incorporate vehicular access over the Glasshouse ramp, and to facilitate vehicular access to Imperial Arcade and Centrepoint, by constructing the wall of the Skygarden building in the loading area adjacent to Imperial Arcade of concrete block brickwork - as opposed to the reinforced concrete which was used elsewhere - in order to permit easy construction of a vehicular connection from Skygarden to Imperial Arcade, as part of the proposed future underground vehicle link from the Glasshouse to Centrepoint. …

40 The amended Skygarden development application was approved on 14 July 1988.

DECISION OF PRIMARY JUDGE 15 The issue before the primary judge was whether Westfield, now the owner of Skygarden, Imperial Arcade and Centrepoint, was entitled to use the easement to provide access through Skygarden to Imperial Arcade and Centrepoint. Westfield contended that, as the owner of Skygarden and thus entitled to the benefit of the easement, it could authorise the use of the easement for the purpose of access to Imperial Arcade and Centrepoint. 16 The primary judge held that the meaning of the easement was to be ascertained by reference to its language, having regard to the circumstances in which the grant was made. He admitted evidence of these circumstances, including evidence of contemporaneous statements and actions of each party, as throwing light on the circumstances, the facts known to that party, the purposes of that party and the use of the dominant tenement which was then contemplated. 17 The primary judge admitted some evidence over the objection of Perpetual, which Perpetual claims on appeal to have been inadmissible. Perhaps the most significant evidence in this category was evidence given by Mr. Frazer, who was the general manager of the Carringbush Group, of which Jamino was a member. This evidence was dealt with in par.[50] of the primary judge's judgment: 50 Secondly, there is the evidence of Mr Frazer, who was General Manager of the Carringbush Group, the developers of the Glasshouse. It was his idea that it might be possible to obtain bonus FSR if the Council could be satisfied that everything that could be done was done to enable vehicles to travel via the vehicle ramp to Imperial Arcade and Centrepoint. He proposed to the Managing Director of Carringbush, Mr Denoon, that the developers of Skygarden should be offered an easement over the ramp. In the course of his conversation with Mr Denoon, he said: We have no say over what happens on the Skygarden site but if we do everything we can do to comply with Council's condition, then it might award some bonus floor space. … It is a matter for the owner of Skygarden to agree whether or not it continues the link to Imperial Arcade. When Imperial Arcade and Centrepoint are redeveloped they can use the Glasshouse vehicle ramp to access and leave those properties provided the owner of the Skygarden site agrees. 18 Other significant pieces of evidence the subject of complaint by Perpetual were referred to in pars.[37], [38], [41] and [42] of the judgment below: 37 On 16 March 1988, the developer of Skygarden wrote to the Council, in connection with its amended development application, pointing out the benefits of the revisions to the design and in particular that it would facilitate a connection with Imperial Arcade and Centrepoint: These we are certain will be seen by Council as a significant benefit to the city as it not only eliminates the traffic access ramp from Castlereagh Street but also facilitates future connection to the Imperial Arcade and Centrepoint. This presents the prospect of a significant opportunity to eliminate unwarranted disruptive service traffic from Pitt Street mall.

38 On 17 March 1988, Donald Crone & Associates submitted the amended Skygarden development application to the Council, under cover of a letter which plainly contemplated future use of Skygarden as a means of access to Imperial Arcade and Centrepoint: … a vehicle connection has been established with the 135 King Street development to provide car and vehicular access from King Street. The vehicular access from King Street is based upon the 135 King Street development (DA 44/85/0257 Condition 19) for future connection to Imperial Arcade and Centrepoint. …

41 Following the creation of the easement, the then owner of the Glasshouse applied to the Council for a grant of bonus floor space under Element 7. In a letter dated 27 May 1988, the owner of the Glasshouse explained to the Council that the ramp would allow access to Skygarden, and in turn to Imperial Arcade and Centrepoint: As explained at our meeting the revised development application submitted by Mastwood Pty Limited was a result of this company advising that company access to the basement of their development was able to be secured over our property. This in turn will allow access to Imperial Arcade and Centrepoint basements at some future dates thus ensuring all vehicular traffic being removed from Pitt Street mall. … In consideration of our efforts we requested an additional floor space bonus for the creation of the right of carriageway and now seek an early decision from Council. 42 On 8 August 1988, the owner of the Glasshouse wrote to the owners of each of Imperial Arcade and Centrepoint, as follows (emphasis added): A condition of the development consent for the 135 King Street project was the construction of an access corridor to allow goods deliveries to be made via King Street to all properties north of Centrepoint. The location of the right of carriageway created is the carpark entry ramp running on the southeast access along the eastern boundary of the 135 King Street development. Clearance and width are designed and constructed to accept all goods deliveries to all properties requested by the Council. The adjoining owner Mastwood Pty Ltd (Haysons/Merlin Group) have now established right of carriage over 135 King Street. The access facility will be available to AMP and the head lessee of the Imperial Arcade when construction of Skygarden and 135 King Street projects are completed in the latter half of 1989. This will obviously be subject to agreement between these two owners regarding security, maintenance and other appropriate matters. The buildings which Council desired to see use the carriageway are the following: All owners are being notified concurrently. 1. 135 King Street - Jamino Pty Ltd 2. Skygarden - Mastwood Pty Ltd (Merlin/Hayson Group) 3. Imperial Arcade - AMP Society (head lessee/Stockland Property Trust) 4. Centrepoint - AMP Society. 19 The primary judge held that the case of Harris v. Flower (1904) 74 LJ Ch 127 did not establish a general rule that, if a right of way is granted for access to certain land, the grantee cannot use the way for passing over that land to adjacent land of the grantee; but was no more than an application of the general principle that the use of an easement cannot be extended beyond the scope of the grant, to impose a burden greater than that which the servient owner agreed to accept at the time of the grant. 20 The primary judge held that the parties to the grant of the easement did contemplate that the dominant land would be used for access to the remoter properties, albeit not necessarily immediately; and he held that, against the background circumstances, the wording of the easement was appropriate to give effect to that intention.

ISSUES ON APPEAL 21 On appeal, Perpetual submitted that the primary judge had erred in admitting the evidence referred to above, in his conclusions concerning the surrounding circumstances and the intention of the parties, in the way he dealt with Harris v. Flower, and in his construction of the easement itself. All these issues are inter-related, and it will be convenient to consider them together. 22 In short, Mr. Hutley SC for Perpetual submitted that the primary judge erred in considering what was the grantor's purpose for the structures that had been erected on its land, rather than considering what was the contemplated purpose of the easement. There was in fact no evidence that the purpose of Skygarden was to use the easement for the purpose of providing access to Imperial Arcade and/or Centrepoint. There was no admissible evidence that the parties contemplated a purpose for the easement beyond that expressed in the document itself. In particular, in so far as the evidence referred to in par.[50] of the primary judge's judgment was relied on as evidence of the purpose intended by the parties for the easement, it was inadmissible, at least because there was no evidence that this was communicated between the owners of the respective properties. Mr. Hutley referred to The Shannon Limited v. Venner Limited [1965] I Ch. 682 as illustrating the point that facts and circumstances to be relied on in construing a document such as an easement must be facts and circumstances as commonly understood and/or communicated between the parties. 23 On the other hand, Mr. Walker SC for Westfield submitted that, in construing a document such as an easement, the Court could have regard to surrounding circumstances "known to the parties", and that explicit communication between the parties was not crucial: see Codelfa Constructions Pty. Limited v. State Rail Authority of NSW (1982) 149 CLR 337 at 352, Toll (FGCT) Pty. Limited v. Alphapharm Pty. Limited [2004] HCA 52, (2004) 219 CLR 165 at [38]-[40]. The evidence relied on by the primary judge showed that it was known to both parties that Glasshouse was seeking planning advantages from the Council by providing access to Imperial Arcade and Centrepoint and ensuring the removal of traffic from Pitt Street Mall. That purpose would not be achieved merely by having a physical possibility, in relation to which Glasshouse retained a legal veto. The wording of the easement, referring to "all purposes" confirmed that this was the intention of the parties in creating the easement.

LEGAL PRINCIPLES 24 The submissions and issues in this case have made it necessary for me to consider with some care the principles that apply in relation to determining the extent of use permitted by the grant of an easement, and in particular the relevance to this question of what is contemplated by the parties at the time of the grant. 25 In Gallagher v. Rainbow (1994) 179 CLR 624 at 640, McHugh J stated that "the 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". I believe this proposition needs to be applied with care, because it could be taken as suggesting two related propositions that are, in my opinion, incorrect. First, it could be taken as suggesting that consideration of what is "contemplated by the parties" is a separate exercise from construing the grant, whereas in my opinion it is not; and secondly, it could be taken as suggesting that the investigation of what is contemplated by the parties can be pursued in some way beyond the appropriate method for determining what was the intention of the parties as manifested by the grant itself, considered having regard to the circumstances in which the grant was made. 26 In my opinion, there is just one question, what does the grant authorise; and that question is to be determined by construing the grant. One way of posing the question is to ask, what use was intended to be authorised by the grant; but no separate investigation into the use contemplated by the parties is either necessary or permissible. However, in determining this question, regard may be had to surrounding circumstances, including the physical circumstances of the dominant and servient tenements and the use actually being made of them at the time of the grant. 27 This in turn gives rise to the question of whether other circumstances may be taken into account, such as communications between the parties prior to the grant of the easement. One view could be that such circumstances can be taken into account, to the extent to which they can be taken into account in construing an ordinary contract: Codelfa Constructions Pty. Limited v. State Rail Authority (NSW) (1987) 149 CLR 337. Another could be that, because easements are documents of title and operate in rem, the surrounding circumstances to which regard can be had should be more limited, and in particular limited to objective circumstances readily ascertainable by the public in general: cf. House of Peace Pty. Limited v. Bankstown City Council [2000] NSWCA 44, (2000) 48 NSWLR 498 at [23] and [37]; Auburn Municipal Council v. Szabo (1971) 67 LGRA 427 at 433-4. 28 As a matter of general principle, I would have preferred the latter approach: the meaning and effect of a document of title, that binds successors in title to both dominant and servient tenements for indefinite and possibly very long periods, should not in my opinion depend on anything other than the terms of the document and ascertainable objective circumstances existing at the time of the grant. However, there is authority supporting the former approach which I believe I should follow. In The Shannon, there was a grant of an easement which did not explicitly identify the dominant tenement. The grantor had already conveyed some land to the grantee, on which the grantee had erected a factory, which was constructed so that it could readily be extended on to adjoining land. The grantor then conveyed the adjoining land to the grantee, together with a right of way "for all purposes for [the grantee] and their successors in title". The English Court of Appeal held that, because the identification of the dominant tenement was not clear, evidence was admissible of the circumstances in which the grant was made, including the grantee's communication to the grantor that it intended to extend its factory on to the land then being conveyed; and the Court concluded that the dominant tenement was the whole of the grantee's land. 29 I believe that the propositions I have stated are generally in accordance with the weight of authority. Before reviewing some of the cases, however, I will refer to three other principles that may be relevant in determining whether certain use of the servient tenement is authorised by an easement. 30 First, there is the principle that, for a grant of an easement to bind the servient tenement rather than merely to operate as between the parties, the use authorised must be such as to benefit the dominant tenement: Attorney-General v. Horner (No.2) [1913] 2 Ch. 140 at 196; Todrick v. Western National Omnibus Co. Limited [1934] 1 Ch. 561 at 579-80 and 591. 31 Second, there is the principle of the law of nuisance that unreasonable use of land causing unreasonable damage to other land is actionable nuisance; so that even though a use of the servient tenement may otherwise be within what was granted by the easement, if this use is carried out unreasonably so as to cause unreasonable damage to the servient tenement, it may be restrained as a nuisance. This was an alternative ground on which relief was granted in Todrick both at first instance and on appeal; and sometimes it is not entirely clear whether the Court is acting on this principle or acting on a construction of the grant as to what use was authorised by it. 32 Third, there is the rule that, if there is ambiguity in an instrument granting an easement, the instrument will be construed against the grantor. However, I agree with the primary judge that this rule is one of last resort: see par.[5] of his judgment. 33 Before looking at the cases most directly relevant to the present case, in particular Harris v. Flower (1904) 74 LJ Ch. 127 and Nickerson v. Barraclough [1980] Ch. 325, I will return to the judgment of McHugh J in Gallagher to consider the extent to which my views are compatible with what he says and with the cases to which he refers. At 639, McHugh J refers to the following statement by Lord Wensleydale in Waterpark v. Fennell (1859) 7 HLC 650 at 684: The construction of a deed is always for the Court; but, in order to apply the provisions, evidence is in every case admissible of all material facts existing at the time of the execution of the deed, so as to place the Court in the situation of the grantor. 34 I would not read that passage as supporting the admissibility of evidence of what is subjectively known by just the grantor, or as suggesting that the knowledge and/or intention of the grantor, as distinct from the other party to the grant, is of particular significance. The object of the exercise is to determine the intention of both parties as manifested by the grant. 35 At 640, McHugh J refers to the following statement of Jessel MR in Cannon v. Villars (1878) 8 Ch.D. at 421: Prima facie the grant of a right of way is the grant of a right of a way having regard to the nature of the road over which it is granted and the purpose for which it is intended to be used; and both those circumstances may be legitimately called in aid in determining whether it is a general right of way, or a right of way restricted to … 36 The reference here to "the purpose for which it is to be used" does not in my opinion justify the admission of evidence concerning that purpose, except to the extent that the purpose may be inferred from the words of the grant and the circumstances to which regard may be had in construing the grant. 37 Later on the same page, McHugh J says: Speaking generally, where there is an alteration in the use of the dominant tenement, the grantee has no right to use the easement for any new or additional purpose of the dominant tenement. This proposition applies to grants by prescription as well as to express grants. 38 The proposition is in my opinion correct in relation to grants by prescription; but in my opinion it is against the weight of authority in relation to express grants, as to which the question depends on the construction of the grant in question. 39 In United Land Company v. Great Eastern Railway Company (1875) 10 Ch.App. 586 at 590 Mellish LJ said this: Where a right of way is claimed by user, then, no doubt, according to the authorities, the purpose for which the way may be used is limited by the user; for we must judge from the way in which it has been used what the purposes were for which the party claiming has gained the right. But when a right of way is created by grant, or by Act of Parliament, then it must depend on the proper construction of the grant, or Act of Parliament, whether the right of way is to be used for all purposes, or for only limited purposes. 40 Other cases in which it has been held that a grant of a general right of way for all purposes may authorise use beyond that which prevailed at the time of the grant include South Eastern Railway Company v. Cooper [1924] 1 Ch. 211 and British Railways Board v. Glass [1965] 1 Ch. 538. 41 At 640-641, McHugh says that "no alternation can be made in the use or purpose of the easement that goes beyond that contemplated by the parties at the time of the grant", and he goes on to refer to Harris v. Flower, to which I will return. McHugh J then continued (at 641-2): In Bracewell v Appleby, [1975] Ch. 408 at 418 Graham J applied this dictum of Romer LJ and held that the owner of a dominant tenement was not entitled to use a right of way for the purpose of gaining access to a house that he subsequently built on adjoining land. In Jelbert v Davis [1968] 1 WLR 589; [1968] 1 All ER 1182, the defendant who owned agricultural land had a right of way to that land over land owned by the plaintiff. Subsequently the defendant converted his land to a caravan park which had more than 200 camping sites. The plaintiff objected to the use of the right of way by caravans and cars that were using the park. The English Court of Appeal held that use of the right of way for such a large number of camping sites was impermissible, as it could not have been within the contemplation of the parties upon the original grant of the easements. The underlying principle was stated by Lord Denning MR as follows: … [T]he true proposition is that no one of those entitled to the right of way must use it to an extent which is beyond anything which was contemplated at the time of the grant.

These cases may be contrasted with White v Grand Hotel Eastbourne Ltd [1913] 1 Ch. 113 and Robinson v Bailey [1948] 2 All ER 791 . In White , the conversion of a private residence on the dominant tenement to a lodging house for the drivers of cars whose owners stayed at a nearby hotel owned by the defendants was held not to subject the easement to a use not contemplated at the time of the grant in 1883. At that time, the dominant tenement had one resident with two vehicles. After the conversion it had "many residents of a shifting character with vehicles that do not belong to them". Nevertheless, the Court of Appeal held that the different use was within the terms of the grant. Hamilton LJ said: The house in the present case was used as a private dwelling-house in 1883, but with the consent of a third person it might be, as in fact it was, turned into a house which could be used for the purpose of trade. White v Grand Hotel, Eastbourne, Ltd was applied in Robinson where access to a partly completed dwelling house used for storing building materials was held to be within the terms of the grant of the easement to land even though when the grant was made it was contemplated that a dwelling house would be built for occupation on the land. Lord Greene MR applied the dictum of Hamilton LJ and held that, with the consent of a third party, the land could be used for the new purpose. However, it is not easy to reconcile these two cases with the principle that an easement cannot be used for a purpose that was not contemplated by the parties to the grant. Perhaps the two cases are to be explained on the basis that the parties contemplated that the land might be used for the purposes for which it was ultimately used. But there was no finding to this effect. 42 The cases of White v. Grand Hotel Eastbourne Limited and Robinson v. Bailey, of which McHugh J seems to disapprove, seem to me to be consistent with the cases of United Land, Cooper and Glass to which I have referred; and in my opinion the other cases referred to by McHugh J support a proposition somewhat narrower than the proposition asserted by him, limiting the use of an easement to that contemplated by the parties at the time of the grant. 43 In Bracewell v. Appleby, the primary ground of the decision was that, construed in the circumstances, the words of the grant did not have the effect of authorising any use beyond the gaining of access to the dominant tenement. And In Jelbert, although Lord Denning MR did use the words quoted by McHugh J, his subsequent discussion was directed to the interpretation of the grant in the light of the objective circumstances. There was also a suggestion in the judgment that Lord Denning was applying the principles of nuisance law to which I referred earlier. Similarly, in Todrick, the finding that the easement granted in that case did not extend to the user of the subject roadway for motor omnibuses was based not on a change of user as such, but on a construction of the words of the grant having regard to the physical circumstances of the properties. 44 Turning to the cases of Harris v. Flower and Nickerson v. Barraclough, these were discussed by the primary judge as follows: 8 In Harris v Flower , the dominant land was 80 Royal Hill, Greenwich ("the pink land"), which had the benefit of a right of way from Prior Street over the servient land. The dominant owner also owned adjoining land at 72 Royal Hill ("the white land"), which was at the rear of a public house that enjoyed its own access from Royal Hill. An earlier plan to construct assembly rooms on 72 Royal Hill, with access into the public house and 80 Royal Hill, was not approved, and there was no access from No 72 to No 80. Subsequently, a plan was proposed for the construction of a factory and warehouse, partly on No 72 and partly on No 80. Although the servient owner's contention that there had been a loss of the right of way by abandonment failed, on appeal it was held that a right of way appurtenant to No 80 could not be used for the purpose of approaching buildings erected partly on No 72 and partly on No 80. Romer LJ stated the "rule" (at 132): If a right of way be granted for the enjoyment of close A, the grantee, because he owns or acquires close B, cannot use the way in substance for passing over close A to close B.

9 However, the judgments suggest that the position is not so absolute as that sentence taken alone might suggest, but depends on whether use of the easement to access the remoter land (Lot B) would increase the burden of the easement on the servient land beyond the terms of the grant, without the servient owner's consent, thus directing attention to the terms and circumstances of the grant. Thus Romer LJ continued (at 133, emphasis added): Similarly, in the present case the defendant might have erected a building on the land coloured pink and used it for a contractor's business and made use of the right of way for that purpose: but what he is really doing here is, under guise of enjoyment of the dominant tenement, to try and make the right of way become a right of way for the enjoyment of both lands, the pink and the white, and using the land coloured pink as a mere continuation of passage from the pink to the white. That is not what is justified by the grant, and the plaintiff is entitled to say it is in excess of the grant …

10 Vaughan-Williams LJ also addressed the issue in terms that focus attention on whether or not use of the right of way to access Lot B would be in excess of the grant. His Lordship posed the question in the following terms (at 129): The question that is raised in this case is whether the defendant is entitled to use the right of way, which admittedly is a right of way appurtenant to the pink land, for the purpose of approaching the buildings erected partly on the part of the white land which is not used for the purposes of the public house and partly upon the pink land to which the right of way is appurtenant. 11 Then, having pointed out that the use of the land as a factory would impose a far greater burden on the servient tenement, his Lordship continued (at 132, emphasis added): I think if we look at the whole history of this case, including the cutting off of all access to the white land except by this right of way, it is impossible to say that the defendant is not using this right of way for the purpose of access to land to which the right of way is not appurtenant.

…. A right of way of this sort restricts the owner of the dominant tenement to the legitimate user of his right; and the court will not allow that which is in its nature a burthen on the owner of the servient tenement to be increased without his consent and beyond the terms of the grant. … The burthen imposed on the servient tenement must not be increased by allowing the owner of the dominant tenement to make a use of the way in excess of the grant. There can be no doubt in the present case that, if this building is used as a factory, a heavy and frequent traffic will arise which has not arisen before. This particular burthen could not have arisen without the user of the white land as well as of the pink. 12 The basis of the "rule" is illuminated by the established "exception" that it does not apply where, at the time of the grant, Lot A itself forms a means of access to Lot B, nor where, though Lot A is not actually used as such a means of access at the time of the grant, the parties to the grant intend that it will be so used. This was laid down by no less a master of real property law than Megarry VC in Nickerson v Barraclough [1980] Ch 325 (at 336): Let me take as an example a case where plot A consists of a footpath some three feet wide and a hundred yards long, running from land near a public highway up to plot B. If there is an express grant of a right of way to plot A over land which lies between plot A and the highway, it seems to me that the grant would, subject to any language to the contrary, be construed in the light of the nature and user of plot A at the time of the grant. Since that nature and user is as a footpath which constitutes a means of access to plot B, then I would have thought that the grant would be construed as authorising the dominant owner to use the way as a means of access to plot A for the purposes for which plot A is used, namely, as a means of access to plot B. In the result, the way can be used as a means of access to plot B via plot A, notwithstanding Harris v Flower . If plot A is not used as an actual means of access to plot B but as between the parties to the transaction it is intended to be used thus, I think that the same rule would apply. 13 The significance of plot A in Megarry VC's example being a footpath is that it makes its contemplated use as such objectively obvious, but if such use were contemplated, notwithstanding that it was not objectively obvious, the same result would follow. The true distinction between Harris v Flower and the example in Nickerson is that in the former there was no contemplation at the time of the grant that the dominant tenement would be used for the purpose of accessing the dominant owner's adjoining remoter property, whereas in the latter there was such contemplation. Nickerson therefore shows that the uses of Lot A contemplated by the parties at the time of the grant are an important consideration when construing the words of the grant, and that if such uses included transiting Lot A to access Lot B, it is not in excess of a right of way accommodating Lot A for it to be used to access Lot A for the purpose of transiting to Lot B - even if that use was not already in effect at the time of the grant. 45 I do not disagree with what the primary judge says there about Harris v. Flower; although I would add that in my opinion, the extracts he has quoted make it clear that the judges were not looking for any evidence of what was intended or contemplated outside their construction of the grant itself; and also that their approach to construction was informed in part by the principle that the user authorised by an easement must be for the benefit of the dominant tenement. 46 However, in relation to Nickerson, in my opinion the first sentence of par.[13] is wrong, if it is taken to suggest that the contemplated use can be proved by evidence other than that available for construction of the grant itself. It should also be noted that Megarry VC's decision was overturned on appeal, and on one view of the appeal court's judgment, there was some question raised as to the statement quoted by the primary judge: see Nickerson v. Barraclough [1981] Ch. 426 at 443 and 445. In my opinion, if the last sentence of the quote from Megarry VC is read as authorising an investigation into what is intended between the parties as to the future use of the dominant tenement, outside what can be done in construing the grant itself, then that sentence is wrong for the reasons indicated above. 47 The principle that the use authorised by the easement must be for the benefit of the dominant tenement is referred to by the primary judge in par.[7] of his judgment: 7 The basis of the rule, as advanced in the cases and by Mr Hutley, is that it is an emanation of that essential characteristic of an easement (laid down by Lord Evershed MR in Re Ellenborough Park [1956] Ch 131) that an easement must accommodate the dominant tenement. But, in my respectful opinion, that is not a satisfactory explanation for any such rule. Lord Evershed's stipulation was that an easement must accommodate the dominant tenement, but not that it must only accommodate the dominant tenement and no other. Easements have been upheld as accommodating the dominant tenement, notwithstanding that they also benefit others [ Simpson v Mayor of Godmanchester [1897] AC 696 (easement to open sluices and locks in times of flood held valid, even though it benefited other lands); Re Ellenborough Park, 172 (right of way may be valid even though it is capable of benefiting any passer-by, wholly unconnected with the dominant tenement]. 48 However, I would comment, in relation to the application of that principle to the present case, that here, in so far as the use contended for by Westfield is authorisation of persons to go across the servient tenement and then go across the dominant tenement to gain access to Imperial Arcade and Centrepoint, this use is not for the benefit of the dominant tenement, unless the owner of the dominant tenement extracts some benefit such as a toll from the persons it so authorises. I note that in Attorney-General v. Horner (No.2) at 196, it is said that the charging of a toll for using the servient tenement as authorised by the easement is not for the benefit of the dominant tenement; but in my opinion, charging a toll for the use of the dominant tenement could possibly be regarded as for the benefit of the dominant tenement. So I would agree with the primary judge that this principle does not necessarily preclude the grant extending in the way alleged by Westfield; but I think it still has some relevance to construction of the grant. 49 The primary judge discussed Harris v. Flower further at pars.[18]-[24]: 18 The view that the rule in Harris v Flower is but a manifestation of the more general rule that use of an easement cannot be extended beyond the scope of the grant, so as to impose a burden greater than that which the servient owner agreed to accept, and that what burden the servient owner agreed to accept depends on what uses of the dominant land were contemplated at the time of the grant, is supported by authority, both before and after it was decided.

19 As to cases which preceded Harris v Flower , in Williams v James (1867) LR 2 CP 577, the defendant had been found entitled to a right of way by prescription over the plaintiff's land to access field A. He used the way for the purposes of carting from field A some hay that had been stacked on field A, but had been grown partly there and party on his adjoining field B. The Court of Common Pleas (Bovill CJ, Willes and Montague-Smith JJ) held that the mere fact that some of the hay had not been grown on field A but on field B did not make the carrying of it over the plaintiff's land an excess in the user of the right of way. Willes J and Montague-Smith J explained that this was because the stacking of hay on field A (albeit in part harvested from the adjoining field B) was in the reasonable and ordinary use of field A as a field. In Harris v Flower , Vaughan-Williams LJ explained Williams v James [at 128-129] on the basis that the use of field A to store hay grown not on that field but on the adjacent field B was a legitimate use of field A, so that carting hay so stored over the right of way was a legitimate use of the right of way. This shows that one legitimate use of the dominant land (lot A) can be a use ancillary to the enjoyment of lot B. [Similarly, in my opinion, use of Lot A for the purposes of transiting to Lot be can be an ordinary and reasonable use of Lot A]. The judgments of Bovill CJ and Willes J in Williams v James also show that the essential question is whether the use ancillary to the remoter land casts an additional burden on the servient tenement beyond that contemplated when the easement was created (in that case, by prescription). And while Skull v Glenister 33 LJCP 185; 16 CB (NS) 81, held that the defendants were not entitled to use a right of way to access, via the dominant land, remoter land on which they were building a house - because use of the right of way to the dominant land was a mere colourable use of it for the purpose of getting to their own remoter land - there was no suggestion that such use was contemplated at the time of the grant.

20 As to cases decided after Harris v Flower , in Paterson & Barr v University of Otago , a right of way was expressed to accommodate a warehouse to be built on Lot 6, solely for the purpose of taking goods to and from the warehouse, but it became apparent that when constructed the warehouse was to be built on the adjoining Lot 5 as well as on Lot 6. Sim J, after referring to Harris v Flower , said: It seems to me, however, that, even if the grant could not be construed in the circumstances as extending to the whole warehouse, the claimant would have been entitled, at any rate, to use the right of way for the purpose of conveying goods to the part of the warehouse standing on section 6. In connection with this question reference may be made to the case of Williams v James . In that case there was a right of way in connection with a particular field. The way was used for the purpose of carting from the field some hay which had been grown partly there and partly on land adjoining. This was held not to constitute necessarily an excess of user of the right of way. The matter is not clear, … 21 In Alvis v Harrison (1991) 62 P&CR 10, 15-16, the House of Lords explained the rule in Harris v Flower in terms that the dominant owners "may not, in short, increase the scope of the right of access". In Gallagher v Rainbow (1994) 179 CLR 624, McHugh J (in a dissenting judgment, but the dissent does not affect this point) said (at 640 - 641) that Harris v Flower illustrated the rule that the use or purpose of an easement could not be altered beyond that contemplated at the time of the grant: Accordingly, no alteration can be made in the use or purpose of the easement that goes beyond that contemplated by the parties at the time of the grant. So, in Harris v Flower, Romer LJ said: If a right of way be granted for the enjoyment of Close A, the grantee, because he owns or acquires Close B, cannot use the way in substance for passing over Close A to Close B. In Bracewell v Appleby, [1975] Ch 408 at 418 Graham J applied this dictum of Romer LJ and held that the owner of a dominant tenement was not entitled to use a right of way for the purpose of gaining access to a house that he subsequently built on adjoining land. In Jelbert v Davis, the defendant who owned agricultural land had a right of way to that land over land owned by the plaintiff. Subsequently the defendant converted his land to a caravan park which had more than 200 camping sites. The plaintiff objected to the use of the right of way by caravans and cars that were using the park. The English Court of Appeal held that use of the right of way for such a large number of camping sites was impermissible, as it could not have been within the contemplation of the parties upon the original grant of the easements. The underlying principle was stated by Lord Denning MR as follows: … the true proposition is that no one of those entitled to the right of way must use it to an extent which is beyond anything which was contemplated at the time of the grant. 22 In Shean Pty Ltd v Owners of Corinne Court [[2001] WASCA 311, [46]], the Western Australian Court of Appeal held that the rule in Harris v Flower was not infringed where the conduct complained of was "within the plain meaning of the terms of the deed of easement". And in Strata Plan No 8450 [2002] NSWSC 780, Bergin J held that the rule in Harris v Flower was not applicable in circumstances where the intention of the parties at the time of the grant, as appeared from the surrounding circumstances, was that the dominant land would be consolidated with remoter land, and would then enjoy the benefits of the right of way for the purpose of accessing the remoter land. Her Honour, before referring to the absence of conduct "in excess of the grant" [77], said (at [76]): In other words, in contrast to the position in Harris v Flower , I am satisfied from the words of the grant, read in the context of the Plan and the surrounding circumstances, that it was intended that Mr and Mrs Miles were entitled to use the way for passing over Lot A to Lot 2. 23 The explanation of Harris v Flower by the Court of Appeal of England and Wales in Peacock v Custins [2001] 2 All ER 827 confirms that the true question is whether the proposed use of the right of way to access a remoter property is within the scope of the grant, having regard to the identity and purposes of the dominant tenement, and that the burden on the servient owner is not to be increased without its consent. Schiemann LJ said (at [24]-[25], emphasis added): 24. The right to use a right of way is determined by the terms of the grant, specifying the dominant tenement for the purposes of which the right is created. Trespass is whatever is not permitted by the grant. The right is not to use the way for the purposes of benefiting any property provided that the total user does not exceed some notional maximum user which the beneficiary might have been entitled to make for the purposes of the dominant tenement. If that were the test, the beneficiary might in some circumstances use the way entirely for purposes other than those of the dominant tenement. The right is to use the way for the purposes of the dominant tenement only. The grant, when made, had a notional value which would be identified by reference to those purposes and their likely impact. Use for other purposes would be likely to carry its own notional commercial value. … The court is not concerned with any comparison between the amount of use made or to be made, of the servient tenement and the amount of use made or that might lawfully be made within the scope of the grant. It is concerned with declaring the scope of the grant, having regard to its purposes and the identity of the dominant tenement. The authorities indicate that the burden on owner of the servient tenement is not to be increased without his consent. But burden in this context does not refer to the number of journeys or the weight of the vehicles. Any use of the way is, in contemplation of law, a burden, and one must ask whether the grantor agreed to the grantee making use of the way for that purpose. 24 In my opinion, therefore, the true basis of the so-called rule in Harris v Flower is no more than that use of an easement cannot be extended, beyond the scope of the grant, to impose a burden greater than that which the servient owner agreed to accept. What burden the servient owner agreed to accept depends, at least ordinarily, upon the contemplated use or uses of the dominant land at the time of the grant, because it was to accommodate the dominant land, in the light of its anticipated uses, that the easement was created. It is not in excess of the grant to use a right of way to access the dominant tenement for those purposes that were contemplated at the time of the grant. Whether the servient owner agreed to accept use of the right of way for the purpose of access not only to the dominant land, but also to transit the dominant land to gain access to the remoter properties, depends on whether at the time of the grant, it was contemplated that the dominant land would be used as a means of access to the remoter property - whether or not it was then actually so used. So in Williams v James , use of the right of way from Lot A to cart hay harvested from lot B was permissible, because the legitimate use of lot A included storage of hay harvested from lot B. In Megarry VC's example in Nickerson , use of the right of way to Lot A to gain access from lot A to Lot B was permissible, because at the time of the grant it was obvious that Lot A would be used for that purpose, or alternatively it was intended that it be used for that purpose. And in SP8450 , use of the right of way to lot A to gain access from lot A to Lot B was permissible, because at the time of the grant it was intended that it be used for that purpose. 50 My only disagreements with this discussion are (1) in so far as it suggests that the intention or contemplation of the parties is something other than the intention manifested in the grant itself, construed in the light of circumstances admissible in aid of construction of the grant; and (2) in so far as it suggests that the purpose of an easement can be other than a purpose beneficial to the dominant tenement. However, as regards the second matter, I note that the primary judge did quote the statement by the English Court of Appeal in Peacock v. Custins [2001] 2 All ER 827 at [24] that the right granted by an easement is the right "to use the way for the purposes of the dominant tenement only". 51 Two cases discussed by the primary judge which approved the use of an easement for access to land other than the dominant tenement do not fall outside the principles I have stated. 52 In Shean, the dominant tenement (Lot 19) was an office block, and the person visiting that office block by car passed over the right of way in question and parked their cars on another lot (Lot 20). The Full Court of the Western Australian Supreme Court held that this was within the grant of a right of way "for all purposes connected with the use and enjoyment of" Lot 19, because those who parked on Lot 20 did so only for the purpose of visiting Lot 19. I note that a similar result was reached in National Trust v. White [1987] 1 WLR 907. 53 In Strata Plan No.8450, the owner of Lot A and Lot B in a Miscellaneous Plan of Subdivision transferred Lot B, with a reservation of two rights of carriageway over it in favour of Lot A. Lot A was very small (107.5 sq. metres), and the Miscellaneous Plan of Subdivision referred to in the transfer stated that it was intended to consolidate Lot A with another lot (Lot 2). About two years later, the transferor transferred Lot A to the owners of Lot 2; and much later, Lot A and Lot 2 were consolidated. Because Lot A was too small to be used on its own for any purpose requiring access through the right of way, and because the Plan referred to and incorporated in the document creating the right of way showed that it was intended to consolidate Lot A and Lot 2, Bergin J held that the use of Lot A intended by the parties to be supported by the right of way was as part of, and for access to, the consolidation of Lot A and Lot 2, and thus that the right of way could be used for that purpose. Her Honour referred to the terms of the grant resulting from the application of s.181A(1) and Pt.1 of Schedule 8 of the Conveyancing Act 1919 (NSW): 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 repass 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. 54 Her Honour noted that the words "for all purposes" appeared without any qualifying words, and apparently relied on this also to support her conclusion.

ADMISSIBILITY OF EVIDENCE 55 No dispute was raised as to the admissibility and relevance of the matters set out in pars.[4]-[13] of this judgment. I would agree that these are objective circumstances that can be taken into account in construing the grant of the easement, or evidence that is of assistance in establishing and understanding what those objective circumstances were. 56 As regards the disputed matter set out in par.[16] of this judgment, in my opinion this was not relevant to the objective circumstances in the light of which the document was to be construed. This material concerned the subjective ideas of persons associated with the grantor, and communications between them. In my opinion, the subjective ideas and purposes of the grantor are irrelevant. This material does not support any inference as to communications between the grantor and grantee of the easement: in particular, it does not support an inference that it was communicated between the grantor and grantee that the easement itself was intended to subject Glasshouse to use of the servient tenement for access to Imperial Arcade and Centrepoint. 57 Accordingly, in my opinion the primary judge was in error in admitting this material. 58 Similar comments apply to pars.[37], [38] and [41] of the primary judge's judgment, referred to in par.[17] of this judgment. These are not communications between the parties; and throw little additional light on the objective circumstances. It may have been appropriate to admit them to the extent that they did assist in ascertaining and understanding the objective circumstances; but in my opinion they were not admissible for any further purpose. 59 As regards the matter in par.[42] of the primary judge's judgment, this was communicated between the parties, but well after the grant in question. Again, its only relevance could be in so far as it may assist in ascertaining and understanding the objective circumstances existing at the time of the grant. 60 These paragraphs may have been admissible on the limited basis I have indicated; but it seems to me that the primary judge did admit them and use them for a wider purpose, namely the ascertainment of what was intended or contemplated by the parties, as an exercise separate from the construction of the grant itself.

CONSTRUCTION OF THE EASEMENT 61 It is clear that the easement was given in circumstances where: (1) physical provision had been or was being made in the servient tenement which was sufficient to provide for the amount of traffic that could be expected for the purposes of Imperial Arcade and Centrepoint, or for reasonably anticipated developments of these sites; (2) the objective circumstances (including the creation of the Pitt Street Mall) supported the existence of a rational objective of achieving a result where access to Imperial Arcade and Centrepoint was provided through the servient tenement, and the policy of the Council was, if possible, to achieve this; and (3) the Skygarden development was to provide for physical arrangements appropriate for access over Skygarden to Imperial Arcade and Centrepoint. 62 The question then is, did the grant, in these circumstances, manifest an intention that Skygarden be given the right to authorise Imperial Arcade and Centrepoint and persons wishing to access Imperial Arcade and Centrepoint to use the servient tenement for the purpose of going to the dominant tenement and then going across it in order to access Imperial Arcade and Centrepoint? 63 A positive answer to the question has some support from the physical adaptation of the premises, and from the wording of the grant, including the words "for all purposes" and the words "every person authorised by it". 64 However, there are in my opinion stronger indications in favour of a negative answer. The right being granted had to be, in the words of the Court of Appeal of England in Peacock, a right "to use the way for the purposes of the dominant tenement only". There was nothing in the wording of the relevant instrument or in the circumstances to suggest any intention or contemplation that the owner of Skygarden would acquire Imperial Arcade and/or Centrepoint, in order that one of the uses it could make of Skygarden would be for access to Imperial Arcade and/or Centrepoint. There is no suggestion in the circumstances that access to Imperial Arcade and/or Centrepoint could otherwise be for the purposes of Skygarden, in the same way as access to a car park could be of benefit for a dominant tenement, as in the case of Shean. In those circumstances, the only purpose of the dominant tenement which could be served by access across it to Imperial Arcade and Centrepoint would appear to be use as a tollway, or perhaps as a means for bargaining with the Council for planning concessions. It seems unlikely to me that the parties intended that the dominant tenement have the benefit of the right of way for those purposes. 65 Although the words "to and from [the dominant tenement] or any such part thereof" do not exclude the possibility that the right should extend to going to the dominant tenement and then going across it to further land, and then returning across the dominant tenement and then going from it across the servient tenement, the words tend to suggest that it is access to and from the dominant tenement that is the purpose of the easement, and not access to further land reached only by going across the dominant tenement. Certainly, if it had been intended that the grant extend to the authorisation of others to go across the dominant tenement to further properties, the words "and across" could readily have been added. 66 Finally, there are the terms of the easement that apportion expenses, risks and responsibilities. Clause (3), providing for the cost of routine maintenance and repair to be borne equally, subject to cl.(4), would seem surprising if the servient tenement was to be used for access to four properties, not two; and particularly so if Skygarden was being authorised to get some additional benefit from its use by charging a toll or obtaining some planning benefit from the Council. 67 Clause (4), providing that the cost of repair of damage caused by either party or its respective servants or agents should be borne by that party, would be surprising if (the owner of) Skygarden was given authority to authorise Imperial Arcade and Centrepoint to use the right of way for access to those properties, since plainly Imperial Arcade and Centrepoint would not in those circumstances be regarded as servants or agents of Skygarden. The result would be that damage caused by Imperial Arcade or Centrepoint or their servants or agents would have to be borne equally by Glasshouse and Skygarden. 68 Again, if Skygarden could authorise Imperial Arcade and Centrepoint to use the right of way for access to their premises, it seems anomalous that Glasshouse should be required to submit to this where there is no requirement for Imperial Arcade and Centrepoint to maintain insurance, along the lines provided in cls.(7) and (8) of the easement. It would also be anomalous that there was no indemnity from Imperial Arcade and Centrepoint of the kind provided in cl.(9) of the easement. 69 Having regard to all these considerations, in my opinion the easement does not entitle the owner of Skygarden to authorise use of the easement for access to Imperial Arcade and Centrepoint. In my opinion, the contrary decision of the primary judge was in error, the error resulting from a preparedness to look for the intention or contemplation of the parties outside what was manifested by the grant itself, construed in the circumstances, the admission of certain evidence for that purpose, and addressing the question of the use contemplated for the site of the easement in a general sense, rather than focusing on the use intended and contemplated by the grant itself for the benefit of the dominant tenement only.

CONCLUSION 70 For those reasons, in my opinion the following orders should be made: 1. Appeal allowed. 2. Orders below set aside, and in lieu thereof order that the summons be dismissed with costs. 3. Respondent to pay the appellant's costs of the appeal. 71 TOBIAS JA: I agree with Hodgson JA. **********

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