Plumpton Park Developments Pty Ltd v SAS Trustee Corporation - [2018] NSWSC 461 - NSWSC 2018 case summary — Zoe

NSWNSWSC

Plumpton Park Developments Pty Ltd v SAS Trustee Corporation

[2018] NSWSC 461

Supreme Court of NSW|2018-04-06|Before: Mr P

View original source

At a glance

Source facts

Court

Supreme Court of NSW

Decision date

2018-04-06

Before

Mr P

Catchwords

[1971] HCA 70 Gallagher v Rainbow (1994) 179 CLR 624

Source

Original judgment source is linked above.

Catchwords

[1971] HCA 70 Gallagher v Rainbow (1994) 179 CLR 624

Judgment (19 paragraphs)

[1]

Solicitors: Mills Oakey (Plaintiff) Addisons Lawyers (Defendant) File Number(s): 2017/287116

[2]

Judgment

SACKVILLE AJA: The principal issue in this case can be stated in simplified form as follows.
As easement of carriageway is created over Torrens system land by the registration of a deposited plan. The instrument creating the easement identifies the lot burdened by the easement as Lot A and the lot benefited by the easement as Lot B. The easement is appurtenant to each and every part of Lot B.
Lot B is subsequently consolidated with other land (Lot C). Prior to the consolidation, Lot C does not enjoy the benefit of the easement. The result of the consolidation is a new and larger lot, Lot D, which includes Lot C. Is the easement now appurtenant to each and every part of Lot D, including the former Lot C?
The proprietor of Lot D acknowledges that there is nothing in the register to indicate that the benefit of the easement is now appurtenant to each and every part of Lot D. Nonetheless the proprietor of Lot D argues that since Lot B has ceased to exist as a separate lot, the benefit of the easement must be appurtenant to each and every part of the new lot (Lot D) constituted by the former Lots B and C. On this analysis, the land consisting of the former Lot C (now part of the consolidated Lot D) has the benefit of the easement even though the original instrument did not identify the land in the former Lot C as benefiting from the easement.

[3]

Legislation

Section 88(1) of the Conveyancing Act states the requirements for an instrument creating an easement. The requirements include a clear indication of the land to which the benefit of the easement is appurtenant and of the land which is subject to the burden of the easement (s 88(1)(a), (b)). Section 88 applies to land under the provisions of the RP Act (s 88(3)). Division 3 of Part 23 of the Conveyancing Act 1919 (NSW) (Conveyancing Act) provides for the preparation and lodgement for registration of a plan showing the site of an easement. Such a plan must be prepared in the manner required by the regulations and rules under the Real Property Act 1900 (NSW) (RP Act) and must contain all the particulars required by those regulations and rules (s 195C(1)(a), (b)).
Section 88B(2) of the Conveyancing Act relevantly provides that a plan is not to be lodged for registration under Div 3 of Part 23 unless it indicates, in the prescribed manner, the easement that is intended to be created appurtenant to or burdening land comprised in the plan (s 88B(2)(c)). The plan is also not to be lodged unless it indicates in the prescribed manner what positive covenants, if any, are intended to be created benefiting or burdening land comprised in the plan (s 88B(2)(d)).
Section 88B(3) of the Conveyancing Act, as in force in 1997, relevantly provided as follows: "(3) On registration or recording under Division 3 of Part 23 of a plan upon which any easement … or positive covenant is indicated in accordance with paragraph (a), (b), (c) or (d) of subsection (2) then, subject to compliance with the provisions of this Division: … (c) any other easement … so indicated as intended to be created shall: (i) be created, (ii) without any further assurance and by virtue of such registration or recording and of this Act, vest in the owner of the land benefited by the easement … (iii) …"
Section 181A of the Conveyancing Act relevantly provides as follows: "(1) In an instrument executed or made after 1 January 1931 … and purporting to create a right-of-way the expressions right of carriage way and right of footway have the same effect as if there had been inserted in lieu thereof respectively the words contained in Part 1 or Part 2 of Schedule 8."
Part 1 of Schedule 8 to the Conveyancing Act is as follows: "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."

[4]

The proceedings

The Defendant is the registered proprietor of Lot 2 in DP 841205 (Defendant's Land). The Defendant's Land is occupied by the operators of a supermarket and includes a large car park.
There is no dispute that the Defendant's Land is burdened by a right of carriageway created in 1997 by the registration of a plan of easement (DP 267539). The instrument setting out the terms of the right of carriageway (s 88B Instrument) identified the land benefiting from the right of carriageway as Lot 17 in DP 747932 (Lot 17) and Lot 107 in DP 713976 (Lot 107). The s 88B Instrument also created a positive covenant imposing obligations relating to the maintenance of the carriageway and the cost thereof.
The Plaintiff is the registered proprietor of Lot 201 in DP 1181255 (Plaintiff's Land). The Plaintiff's Land adjoins the Defendant's Land to the east. By virtue of the registration of plans of subdivision after 1997, the Plaintiff's Land includes the whole of Lot 17 and part of Lot 107. It also includes land other than the former Lots 17 and 107. The principal issue in dispute is whether the right of carriageway created in 1997 now benefits each and every part of the Plaintiff's Land, including those parts of the Plaintiff's Land which did not originally benefit from the creation of the right of carriageway. I was informed that the issue is significant for the Plaintiff because its development plans would be assisted if all parts of the Plaintiff's Land could benefit from the right of carriageway over the Defendant's Land.
The Plaintiff seeks the following declarations: "1 Declarations that: a. the right of carriageway of variable width (Right of Carriageway) firstly referred to in dealing number DP267539 benefits the whole of the land comprised in Lot 201 in Deposited Plan 1181255 (Plaintiff's Land) and burdens the land comprised in Lot 2 in Deposited Plan 841205 (Defendant's Land); b. the terms of positive covenant (Terms of Positive Covenant) secondly referred to in dealing number DP267539 benefits and burdens the Plaintiff's Land and the Defendant's Land according to its terms. 2 A declaration pursuant to section 181A (1A) and Part 1 of Schedule 8 of the Conveyancing Act 1919 (NSW) that the Right of Carriageway has the following effect: Full and free right for every person who is at any time entitled to an estate or interest in possession in the Plaintiff's Land 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."
The Defendant says that the Plaintiff's claims are unsound and that the right of carriageway benefits only that part of the Plaintiff's Land comprising the former Lots 17 and 107 (that is, the land identified as the dominant tenements in the s 88B Instrument). The Defendant's case is essentially that the creation of the lot constituting the Plaintiff's Land could not alter the identity or boundaries of the land identified in the s 88B Instrument as benefiting from the right of carriageway.

[9]

PART 1 Full Name and Address of proprietor of the land: Ladbroke Pty Ltd ACN 008 216 886 …

Identity of easement firstly referred to in abovementioned plan Right of carriageway variable width Schedule of Lots Affected Lot burdened Lots benefited Lot 2 DP 841205 Lot 17 DP 747932 Lot 107 DP 713976
Identity of positive covenant secondly referred to in abovementioned plan Positive Covenant Schedule of Lots Affected Lot burdened Lots benefited Lot 17 DP 747932 Lot 2 DP 841205 Lot 107 DP 713976 Lot 2 DP 841205 Lot 17 DP 747932 Lot 107 DP 713976

[12]

Title history

DP 713976 was a plan of subdivision registered on 20 June 1985. It created Lot 107, Lot 105 in DP 713796 (Lot 105) and Lot 106 in DP 713976 (Lot 106).
DP 747932 was a plan of subdivision registered on 14 July 1987. The effect was to subdivide Lot 106 into two lots, namely Lot 16 in DP 747932 (Lot 16) and Lot 17. Lot 16 had an area of 3,249 m2 while Lot 17 had an area of 1.79 hectares.
The registration on 5 July 1994 of DP 841205 created Lot 2 in DP 841205 (that is, the Defendant's Land). The Defendant's Land corresponded closely to the previous Lot 105, but was slightly smaller in area (5.823 hectares).
As has been seen, DP 267539 was registered on 18 April 1997. The s 88B Instrument identified the land benefited by the right of carriageway as Lots 17 and 107. Lot 16 existed on 18 April 1997, but was not identified in the s 88B Instrument as land which was intended to benefit from the right of carriageway.
DP 1077484 was registered on 14 January 2005. This was a plan of subdivision which subdivided and consolidated Lots 16, 17 and 107 so as to create Lot 101 in DP 1077484 (Lot 101). Lot 101 comprised the whole of the land in Lots 16 and 17 together with part of the land in Lot 107. Lot 101 was 2.345 hectares in area.
DP 1077484 designated with the letter "(D)" those parts of Lot 101 which were "BENEFITED BY RIGHT OF CARRIAGEWAY VAR - DP 267539" and which were affected by "COVENANT - DP267539". The designation "(D)" was applied to the whole of the land previously comprised in Lots 17 and 107, but not to any of the land previously comprised in Lot 16. As the Defendant submitted, DP 1077484 did not purport to change or extend the boundaries of the land benefiting from the right of carriageway identified in the s 88B Instrument. Instead DP 1077484 specified the parts of the newly created Lot 101 that did and did not benefit from the right of carriageway.
DP 1181255 was registered on 17 January 2013. This plan of subdivision created the Plaintiff's Land (Lot 201 in DP 1181255), comprising the former Lot 101 and certain other land. The area of the Plaintiff's Land is 3.685 hectares. It will be recalled that Lot 101 included the whole of the land comprised in the former Lots 16 and 17, as well as part of the land comprised in the former Lot 107. It was in this way that the land formerly comprised in Lots 16, 17 and (part of) 107 came to be included in the Plaintiff's Land.
The significance of the designations "(L)" and "(P)" in DP 1181255 has already been explained. [2]

[13]

Plaintiff's Submissions

Mr Newton accepted that the s 88B Instrument identified only the land then in Lots 17 and 107 as the land intended to benefit by the easement. He therefore accepted that at the time the right of carriageway was created, the dominant tenements comprised Lots 17 and 107.
Mr Newton also accepted that a current search of the titles to the Plaintiff's Land and the Defendant's Land would take the searcher to DP 267539 and to the s 88B Instrument. The searcher would discover from the register that the s 88B Instrument identified Lots 17 and 107 as the dominant tenements intended to benefit from the right of carriageway. The searcher would also ascertain from DP 1181255 (which created the Plaintiff's Land) that the Plaintiff's Land comprised the former Lot 17 and part of the former Lot 107, together with other land. The searcher would be able to ascertain that the other land now within the Plaintiff's Land included the former Lot 16 comprising 3,249 m2.
Notwithstanding his acceptance of these propositions, Mr Newton submitted that the benefit of the right of carriageway created by registration of the plan is appurtenant to each and every part of the Plaintiff's Land. Mr Newton contended that this rather surprising result came about because the dominant tenements identified in the s 88B Instrument no longer exist, having been absorbed into the Plaintiff's Land by the consolidation effected by DP 1077484 and DP 1181255. On this analysis, the only lot to which the right of carriageway could be appurtenant is the Plaintiff's Land.
Mr Newton acknowledged that the consequence of his argument is that land which was not identified in the s 88B Instrument as part of the dominant tenement would obtain the benefit of the right of carriageway by virtue of the consolidation which took place some years after the right of carriageway was created. He submitted that any difficulties that might result from increased use of the right of carriageway could be dealt with by invoking the principle that excessive use of the carriageway by the dominant owner can be restrained at the suit of the servient owner.

[15]

General principles

The law of easements has its origins in Roman law, but was developed in response to the novel problems presented by the Industrial Revolution in Britain in the eighteenth and nineteenth centuries. [3] In modern times, the common law principles relating to easements continue to apply [4] but have been substantially modified by legislation. In Australia, many of the statutory modifications have come about because of the need to accommodate the law of easements to the requirements of the Torrens system of "title by registration". [5]
Under the general law, for example, it was not necessary for an instrument creating an easement to identify the dominant tenement. A failure to do so involved a risk that the instrument would be construed as creating no more than an "easement in gross" which was regarded as a mere personal licence. [6] But if as a matter of construction the instrument was intended to create an easement over the servient tenement for the benefit of other land, extrinsic evidence was admissible to identify the dominant tenement. [7] This principle was applied to Torrens system land. [8]
In New South Wales, the common law has been altered by statute. Section 88(1) of the Conveyancing Act now provides that, subject to certain limited exceptions, an easement expressed to be created by an instrument is not enforceable against a successor in title to the owner of the servient tenement unless the instrument clearly indicates the land to which the benefit of the easement is appurtenant and the land which is subject to the burden of the easement. [9]
Common law principles have also been modified by judicial decisions which have taken into account the need to protect the integrity of the register under the Torrens system. Prior to the decision of the High Court in Westfield, [10] the conventional view was that instruments creating easements should be construed in conformity with the principles governing the construction of contracts. Thus the court could take into account the circumstances known to the parties at the time the easement was created.
In Westfield the High Court stressed the importance of the principle of indefeasibility when construing easements affecting Torrens system land. [11] The Court observed that: [12] "Together with the information appearing on the relevant folio, the registration of dealings manifests the scheme of the Torrens system to provide third parties with the information necessary to comprehend the extent or state of the registered title to the land in question."
Accordingly the Court held that the general principles governing the construction of contracts do not apply in the same way to the construction of easements registered under the Torrens system. Their Honours pointed out that: [13] "The third party who inspects the Register cannot be expected, consistently with the scheme of the Torrens system, to look further for extrinsic material which might establish facts or circumstances existing at the time of the creation of the registered dealing and placing the third party (or any court later seized of a dispute) in the situation of the grantee." It follows that the construction of a registered easement is ordinarily to be determined by the language of the easement itself, without reference to extrinsic circumstances that can be taken into account in construing a contract.

[16]

Benefit of the right of carriageway

As has been noted, the Plaintiff does not rely on the terms of the RP Act or the Conveyancing Act to support its contention that the right of carriageway identified in the s 88B Instrument benefited each and every part of the Plaintiff's Land. It was not and could not be suggested that a third party searching the titles to the Plaintiff's Land or the Defendant's Land would be unable to locate the s 88B Instrument which created the right of carriageway. Nor was it suggested that a third party would be unable, by a search of the register, to identify the dominant tenements indicated in the s 88B Instrument and to ascertain what portions of the Plaintiff's Land correspond to the dominant tenements (that is, Lots 17 and 107).
The unstated assumption underlying the Plaintiff's submissions appears to be that under the general law the dominant tenement must comprise an entire lot and not part of a lot. As a matter of principle it is difficult to see why this should be so.
One of the essential requirements for an easement under the general law is that it must accommodate the dominant land. The rights conferred must be more than a mere personal advantage to the owner for the time being of the dominant tenement. [14] It is quite possible for an easement, for example a right of carriageway or a drainage easement, to be capable of benefiting part only of a particular lot. There would seem to be no reason in principle why the instrument creating such an easement should not identify the dominant tenement as the defined area within the lot that is capable of benefiting from the easement.
The authorities support this proposition. In Westfield the High Court referred with apparent approval to the decision of Mellish LJ in Thorpe v Brumfitt. [15] In that case a small triangular piece of land was conveyed to the owner of an inn as part of an adjustment of boundaries between neighbouring lots. The conveyance included a right of way "for all purposes" along a passage between the piece of land conveyed (which then formed part of the larger lot) and a public street.
The issue was whether the right of way was a right in gross or appurtenant to the land on which the inn stood. Mellish LJ construed the right of way as "appendant to the piece of ground which is conveyed" and the words "for all purposes" as meaning "for all purposes which make it necessary to pass between that piece of ground and the street". [16] The High Court in Westfield regarded Mellish LJ's decision as emphasising that an easement must confer a benefit on the dominant tenement by making it a "better and more convenient property". [17] On Mellish LJ's approach the dominant tenement was clearly a small portion of a much larger lot.
A decision to the same effect is Henning v Burnet. [18] A conveyance of land comprising a dwelling house and field included a right of way over a road to the dwelling house and subsidiary buildings. The Court held that the grant was of a way to the dwelling house and other buildings only and not to the field. [19]
It follows that unless statute otherwise provides, a right of carriageway may be construed as appurtenant to part of a lot rather than to the whole of the lot. A fortiori there can be no objection to a right of carriageway being expressly made appurtenant to a defined portion of a particular lot provided the right of way accommodates that portion of the lot and otherwise meets the requirements for a valid easement.
In the present case the s 88B Instrument identified two separate lots (Lots 17 and 107) as the dominant tenements benefiting from the right of carriageway over the Defendant's Land. These Lots subsequently were consolidated with other land to form the Plaintiff's Land. When asked why the consolidation resulted in the other land receiving the benefit of the right of carriageway, Mr Newton's answer was that the Lots no longer existed.
It is true but irrelevant that Lots 17 and 107 ceased to be separate lots identified in a current plan of subdivision once DP 1077484 and DP 1181255 were registered. The fact of the consolidation did not alter the identity or dimensions of the land which the s 88B Instrument identified as benefiting from the right of carriageway. Just as a right of carriageway can be expressed to benefit part of an existing lot, so the consolidation of the dominant tenement with other land does not convert the dominant tenement into the whole of the consolidated lot.
The position would no doubt be different if legislation required the benefit of an easement to be appurtenant to a lot identified in a registered plan. Mr Newton did not identify any legislation to this effect. Section 88(1) of the Conveyancing Act, for example, requires only that an instrument creating an easement clearly indicate (relevantly) the land to which the benefit of the easement is appurtenant. The provision does not say that the benefited land, either at the outset or at any later stage, must comprise a discrete lot in a registered plan. Nor is there anything in s 88B indicating that an easement can be appurtenant only to a discrete lot.
I should add that if the Plaintiff's argument were to be accepted the consequences would be very surprising. The land benefiting from a registered easement would vary from time to time depending on subsequent dealings with the dominant tenement over which the servient owner would have no control. If, for example, the benefit of a right of carriageway is appurtenant to each and every part of a small lot, the consolidation of that lot with a much larger lot would result in the benefit of the easement being appurtenant to each and every part of the much larger consolidated lot. Presumably the process would be repeated if the larger lot itself is later consolidated with a third lot. Mr Newton's submissions did not make clear how the concept of excessive user of the easement could be satisfactorily applied in these circumstances. To determine whether user is excessive would presumably require reference to the circumstances at the time the easement was created (including ascertaining the extent of the original dominant tenement), a process that would be inconsistent with the objectives of the Torrens system as outline in Westfield.

[17]

Other authorities

Mr Newton cited Gallagher v Rainbow in support of the Plaintiff's argument. [20] In that case, the High Court held that where the dominant tenement was subdivided, the benefit of an easement of way appurtenant to each and every part of the dominant tenement attached to each part of the subdivided land. The majority applied the principle that to the extent that any part of the dominant land may benefit from an easement, the easement will be enforceable for the benefit of that part of the land unless, as a matter of construction, the easement is intended only to benefit the dominant land in its original form. [21] If anything, this statement of principle suggests that an easement can be created for the benefit of only part of an existing lot.
In any event, Gallagher v Rainbow is plainly distinguishable from the present case. The subdivision of the lots did not increase the size of the dominant tenement or attach the benefit of the easement to land not previously part of the dominant tenement.
In Re Eddowes [22] an application pursuant to s 181 of the Property Law Act 1974 (Qld) was made to extinguish an easement. Ambrose J of the Supreme Court of Queensland noted that the Registrar of Titles had taken the view that upon the amalgamation of two lots, an easement of way appurtenant to one lot enured for the benefit of that part of the amalgamated lot (and only that part) which corresponded to the previous dominant tenement. Although the parties did not dispute the Registrar's approach, Ambrose J considered that it was correct because: [23] "one must notionally subdivide the amalgamated lot into its former parts and consider the extent to which user relates only to part of that land which was the former dominant tenement". While Re Eddowes does not decide the point at issue in the present case, his Honour's observations are inconsistent with the Plaintiff's argument.
Owners Corp - Strata Plan No 8450 v Owners Corp - Strata Plan No 54547 [24] was also a case involving an application to extinguish an easement of carriageway. The dominant tenement had been consolidated with other land but Bergin J did not find it necessary to determine the precise effect of the consolidation on the land entitled to the benefit of the easement. However, her Honour cited with apparent approval a comment by Professor Butt in his text, Land Law. [25] The comment cited by her Honour appears in the most recent edition of the text in somewhat less tentative language, as follows: [26] "If instead of being subdivided, the dominant tenement is consolidated with other land, the easement does not benefit the whole of the consolidated land. Rather, the easement continues to benefit only that part of the larger whole that was the (former) dominant tenement. [27] Bergin J's approach mirrors that of Ambrose J in Re Eddoes.

[19]

Endnotes

The s 88B Instrument has several handwritten amendments duly attested by the initials of the signatories. The terms reproduced below set out the terms as amended.
See at [18]-[19] above.
AJ Bradbrook and SV MacCallum, Bradbrook and Neave's Easements and Restrictive Covenants, Lexis Nexis Butterworths, 3rd ed 2011, at [1.1].
Thus in Gallagher v Rainbow (1994) 179 CLR 624; [1994] HCA 24, the High Court applied general law principles in holding that the owners of subdivided lots of the dominant tenement were entitled to the benefit of an easement: see at 632-633 (Brennan, Dawson and Toohey JJ).
Breskvar v Wall (1971) 126 CLR 376; [1971] HCA 70 at 385-386 (Barwick CJ, Owen J agreeing).
Gapes v Fish [1927] VLR 88.
Gas & Fuel Corporation of Victoria v Barba [1976] VR 755 at 764 (Crockett J) citing Johnstone v Holdway [1963] 1 QB 601 at 612 per curiam; and The Shannon Ltd v Venner Ltd [1965] Ch 682. See also Re Maiorana and the Conveyancing Act [1970] 1 NSWR 627 at 630-633 (Hope J).
Gas & Fuel Corporation v Barba; Re Maiorana and the Conveyancing Act.
Conveyancing Act s 88(1)(a), (b), referred to at [6] above. Section 88 applies to land under the RP Act: s 88(3). See Westfield Management Ltd v Perpetual Trustee Co Ltd (2007) 233 CLR 528; [2007] HCA 45 at [21] (Westfield), stressing the significance of this statutory requirement.
(2007) 233 CLR 528; [2007] HCA 45.
Westfield at [38].
Westfield at [5].
Westfield at [39].
Westfield at [21].
(1873) LR 8 Ch App 650.
Thorpe v Brumfitt at 657-658. The other member of the Court, James LJ, construed the right of way as appurtenant to the whole of the land on which the inn stood: at 656.
Westfield at [21].
(1852) 8 Exch 187.
Henning v Burnet at 193 (Pollock CB); at 194 (Parke B).
Gallagher v Rainbow (Brennan, Dawson and Toohey JJ; Gaudron and McHugh JJ dissenting).
Gallagher v Rainbow at 633.
[1991] 2 Qd 381.
Re Eddowes at 383.
[2002] NSWSC 780.
[2002] NSWSC 780 at [39], citing P Butt Land Law, Lawbook Co Ltd, 4th ed 2001, at [1614].
B Edgeworth, Butt's Land Law, Lawbook Co, 7th ed 2017, at [9.130]. See also J Gaunt and P Morgan, Gale on Easements, Thomson Reuters, 20th ed 2017, at [1.16]-[1.17].
Re Eddowes at 383. DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 18 April 2018

Plumpton Park Developments Pty Ltd v SAS Trustee Corporation

At a glance

Court

Decision date

Before

Catchwords

Source

Catchwords

Judgment (19 paragraphs)

Parties

Legislation Cited (3)

Cases Cited (7)

Cited By (1)