State of NSW v Scharer

LOWER COURT Land & Environment Court JURISDICTION : LOWER COURT L&E 40019/02 FILE NUMBER(S) : LOWER COURT Pearlman J JUDICIAL OFFICER :

IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 40277/03 L&E 40019/02

SHELLER JA IPPJA TOBIAS JA

Monday 15 December 2003 STATE OF NEW SOUTH WALES v GEOFFREY FRANCIS SCHARER Judgment 1 SHELLER JA: I agree with Tobias JA. 2 IPP JA: I agree with Tobias JA. 3 TOBIAS JA: This is an appeal from a decision of Pearlman J, Chief Judge of the Land and Environment Court, whereby her Honour ordered on 19 March 2003 that Geoffrey Francis Scharer (the respondent) was entitled, subject to certain conditions, to a perpetual and general right of way for the benefit of himself, his invitees and successors over the road known as W11E (the road), located upon Crown land within the Nattai National Park. The State of New South Wales (the appellant), the owner of the Crown land upon which the road is located, appeals that decision.

The facts 4 The respondent is the registered proprietor of land (the property), which comprises an area of approximately 1150 acres and adjoins the Nattai River. The property is wholly surrounded by the Nattai National Park, which is and was at all material times Crown land. On 8 July 1955, the Crown land in question was proclaimed as the Warragamba Catchment Area (the catchment area) under s56A of the Metropolitan Water Sewerage & Drainage Act 1924 (the MWS&D Act). The only current means of vehicular access is the road the subject of the present dispute. 5 In order to determine the issues presently before this Court it is necessary to examine in some detail the history of the road in the context of the Crown land through which it passes. 6 The respondent's predecessor in title, Mr Miller, acquired the property in 1957. He began to construct a means of access thereto from the northeast. However, in or about 1959, the flooding of the valley in which the property was situated cut off that means of access. This was, according to the primary Judge, due to the construction of the Warragamba Dam. Mr Miller then determined that an alternative means of access could be obtained over Crown land located to the southeast of the property, giving access to Wattle Ridge Road and thence to the village of Hilltop. The total distance from the southeastern boundary of the property known as "Wattle Ridge" was approximately 10km "as the crow flies", but approximately twice that when regard was given to the actual length of the road to be constructed to take account of the steepness of the terrain. 7 After having surveyed the area and assessed the appropriate location for a road, Mr Miller had two or three meetings with an officer of the Water Board (the Board) at Parramatta to explain his proposal to a construct a new road over Crown land within the catchment area. The Board had the care and management of the Crown land within the catchment area in accordance with the statutory provisions to which I shall later refer. However, it is sufficient for present purposes to note that the Crown land was not vested in the Board for an estate in fee simple or any other estate: it remained Crown land administered by the Department of Lands (the Department).

8 On 2 January 1962, Mr Miller wrote to the Board indicating that he had found a suitable location for the proposed road and seeking advice as to whether there was any objection to its construction. A sketch of the proposed location of the road was enclosed. The request was referred internally to the Board's Resident Engineer Headworks, who noted in a report dated 12 February 1962 that a detailed contour plan of the land traversed by the road had been prepared by his office and that Mr Miller had marked upon this the location of the proposed road. The report proceeded as follows: "Mr Miller proposes to construct a road capable of being traversed by a conventional drive truck and he should have no difficulty in doing this at a reasonable price. The second marked "difficult" on the plan is the only part which will require the use of explosives. ….. Construction of the road will give access to unauthorised persons to the catchment but this can be overcome by the provision of a gate on the western side of the Nattai River ie where the road enters the proclaimed catchment. It is considered that the Board should raise no objection to the construction of the road."

9 On 19 February 1962, the Board's Chief Maintenance Engineer reported that the Board would offer no objection to the construction of the road as proposed by Mr Miller, provided that a gate was erected and kept locked to prevent unauthorised access to the catchment. The gate was to be provided and erected by the Board and a key was to be provided to Miller. 10 Accordingly, the Board wrote to Mr Miller on 20 March 1962, stating: "The Board will have no objections to your constructing a road in accordance with the sketch submitted to provide access to your property on the Allam River within the Board's Warragamba Catchment Area, provided access to the inner Catchment Area is controlled by a gate on the western bank of the Nattai River. The Board will provide and erect the gate on the understanding that you will ensure it is kept locked. It is regretted that the Board is unable to assist in any way in the construction of the road."

11 There was a file note written on 26 March 1962 by the Board's Real Estate Officer, Mr Anderson, which is significant to the respondent's case based on proprietary estoppel. It recorded the following: "Mr Miller called and saw me today re the access road to his property in the Upper Nattai Area. He is at present negotiating with the Department of Lands re the necessary authority to traverse the Crown lands concerned and will advise the Board when arrangements have been made." 12 The Board's documents do not reveal what, if any, arrangements were made between Mr Miller and the Department: nor do they record any advice from Mr Miller to the Board as to what arrangements, if any, were made. Although Mr Miller swore an affidavit, which was read in evidence, he did not refer therein to any such negotiations with the Department and he was not available to be cross-examined as he had died shortly after he had sworn the affidavit (and well before the hearing at first instance). I shall, however, return to this file note later. 13 After gaining the Board's approval, Mr Miller commenced construction of the proposed road, which was not completed until 1971. It appears that there was a great deal of effort and expense involved in the construction of the road. In an affidavit sworn on 20 March 1999, Mr Miller stated: "The task took me many years. I did the work with a 1952 Fiat bulldozer and a Blitz truck which I owned…In order to build the road it was necessary to construct culverts and carry out other engineering. There was a great deal of rock present in parts and I blasted the rock away with nitro glycerine where necessary." In the final stages of construction, Mr Miller erected a gate, known hence as "Miller's Gate". He retained a key to the gate, giving a duplicate to the Board at its request. After this time, the Board gave the road a formal number, " road W11E ", and from time to time used the road for its own purposes, including the collection of water samples from the Allam and Nattai Rivers and the carrying out of management activities with respect to fire fighting, hazard reduction and pest control within the catchment area.

14 Mr Miller used this road until he sold the property to the respondent in 1973. At the completion of the sale, Mr Miller provided him with a key to Miller's Gate. He made the respondent aware of the fact that the Board had agreed to his construction of the road and that he had utilised it since its completion. He also made the respondent aware that the Board held a copy of the key to the gate. 15 The respondent utilised the road without challenge between 1973 and 1991. During this time, he carried out maintenance on the road with earthmoving machinery in order to ensure that it remained accessible to vehicles and to repair damage occasioned by landslides, tree falls and heavy washouts. In 1991, he replaced the original Miller's Gate in conjunction with a Mr Bolger, the owner of nearby land, who also used the road in order to access his property. The only persons with a key to the gate were himself, Mr Bolger and the Board. It appears that the Board replaced the lock from time to time, ensuring on each occasion that the respondent was provided with a copy of the new key.

16 As regards the Board's involvement with the road, it appears that it was aware that the respondent was undertaking maintenance in order to ensure that the road remained usable. On 21 May 1990, a Board employee, Mr Ashton, met with the respondent and inspected the road. A letter was subsequently sent by the Board to the respondent requiring the latter to undertake certain remedial works. The Board further inspected the property on 27 October 1990 in order to ensure that its requests had been complied with.

17 On 1 April 1990, Mr Ashton raised questions as to the legal status of the road. He recorded in his diary on 15 November 1990 having spoken to someone from the Department, who advised him that the respondent had no legal access to the road, but that it would not deny access, provided that the road was kept in order.

18 On 13 December 1991, the control of the area of Crown land, including the catchment area, passed to the National Parks and Wildlife Service (the NWPS) on the proclamation of the Nattai National Park & Wilderness Area. At some time in 1994, the NWPS erected a second gate on the road, approximately 500m from the boundary of the property known as "Wattle Ridge". Initially this gate was kept unlocked.

19 During 1997, there were extensive bushfires in the area and the road was consequently damaged. The new Miller's Gate was removed in order for emergency services to access the area. The NPWS then engaged contractors to repair the road and constructed a new gate at the site of the original Miller's Gate. These works were finished at some time in 1998. At this time, both Miller's Gate and the second gate were locked. The respondent was not provided with keys for either of these gates. He subsequently contacted the NPWS, who told him that he was able to request a copy of the key when he wished to visit the property, but that he had to return the key after each visit.

20 On 31 October 1998, the respondent discovered that part of the road had been damaged such that vehicular access had become impossible. He contacted the contractors and was informed that the road had been damaged deliberately so as to permanently prevent its use for vehicular access.

21 In response to a letter of complaint faxed by the respondent to the NPWS on 1 November 1998, the obstructions to the road were temporarily removed. The NPWS informed the respondent that he could have temporary access until such time as the legal status of the road was determined. This temporary access was granted on the following conditions: that he give prior notice to the NPWS in relation to his use of the road; that he indemnify the NPWS in relation to his use of the road; that he would use the road only for driving to the property; and that a key would be issued and returned after each visit to the property.

22 The respondent found this position unsatisfactory. Accordingly, he commenced proceeding in the Supreme Court on 29 September 1998. On 25 October 2000, Santow J ordered that the proceedings be transferred to the Land and Environment Court. The respondent appealed this decision, but the Court of Appeal upheld it on 10 October 2001. The proceedings in the Land and Environment Court 23 In the proceedings before Pearlman J, the respondent sought the following: firstly, a declaration that he was entitled to a perpetual and general right of way over the part of the road that comprises Crown land; secondly, an order that the appellant, the State of New South Wales, be restrained from obstructing that right of way; thirdly, an order that the appellant furnish him with a key to the locks securing the two gates within seven days; and fourthly, an order that the appellant pay an amount of damages to be determined.

24 Having referred to the meetings between Mr Miller and the officers of the Board, the respondent pleaded his case in a Statement of Claim filed on 26 June 2000 as follows: "7. In the course of those meetings: (a) Mr Miller sought and obtained permission to construct an access road through the Crown land surrounding the plaintiff's land; (b) it was represented to Mr Miller on behalf of the Crown that if he proceeded to construct an access road then Mr Miller would thereafter have access to his land over that road. 8. Acting upon the faith of the representations and permission identified in paragraph 7 above, for a number of years up to 1973, Mr Miller: (a) carried out work in construction of an access road; and (b) used the road which he had constructed as a means of access to the plaintiff's land. 9. As at 24 August 1973, Mr Miller had an enforceable right against the Crown in right of New South Wales to use the road which he had constructed over surrounding Crown land freely for the purposes of entry to and exit from the plaintiff's land. 10. The transfers dated 24 August 1973 from Mr Miller to the plaintiff were, by virtue of s.68 of the Conveyancing Act 1919 effectual to pass to the plaintiff the right title and interest of Mr Miller to enforce against the Crown a right of way over the said access road." 25 The respondent does not rely on any independent representation or conduct of the Department (on behalf of the Crown), but as [7(b)] of the Statement of Claim indicates, he asserts that the representation referred to by the Board was made on behalf of the Crown. Equally, it was not suggested that the permission referred to in [7(a)] of the Statement of Claim was that of the Department. Accordingly, it was critical for the success of the respondent's case that he establish either as a matter of fact or statute that the Board was acting as the agent of the Crown in representing to Mr Miller that he would be entitled to a proprietary right in the nature of an easement or right of way if he proceeded with the construction of the road. 26 The respondent submitted before the primary Judge that he was entitled to a perpetual and general right of way over that part of the Crown land comprising the road. It was submitted that the conversations between Mr Miller and relevant officers of the Board, including the correspondence between them as to the construction of the road, gave rise to a proprietary estoppel in favour of Mr Miller which was binding upon the Crown. That estoppel, so it was contended, prevented the Crown from unconscionably insisting on its strict legal right to impede access over the road. Such an estoppel was said to have arisen because the Board led Mr Miller to believe that he had a right to construct the road and to use it for permanent access to the property, thereby encouraging him to undertake substantial work at his own expense. An equity is therefore vested in Mr Miller which passed to the respondent upon the transfer of the property by virtue of the operation of s 68(1) of the Conveyancing Act 1919. As a consequence of the proprietary estoppel, he was entitled to an easement or right of way which was preserved and continued in force by operation of s 153(3) of the National Parks & Wildlife Act 1974 (the NPW Act). The statutory provisions

27 I have already made reference in [2] above to s56A if the MWS&D Act whereby the Governor proclaimed the Warragamba Catchment Area within which lay the relevant Crown lands. The effect of the proclamation was to enliven the provisions of s 55(4) of the MWS&D Act which relevantly provided as follows: "…(4) It shall not be lawful - (a) (i) to make any conditional or other sales under the Crown Lands Consolidation Act, 1913, as amended by subsequent Acts, of any Crown lands within any catchment area other than Crown lands within a city, town or village; (ii) to make any conditional or other sales under the said Act, as so amended, of any Crown lands within a city, town or village within any catchment area unless the board has approved thereof; (b) except with the concurrence of the board and subject to such conditions as the board may determine - (i) to grant any lease, license or permit under the said Act, as so amended, of any Crown lands within any catchment area; The concurrence of the board shall not be given under paragraph (b) of this subsection unless the board considers that such concurrence may be given without any danger of pollution of the catchment area or the water supply." 28 Section 6 of the Crown Lands Consolidation Act 1913 (the CLC Act) deals with the disposal of Crown lands or any interest therein. It provides that: "6. Crown lands shall not be sold leased dedicated reserved or dealt with except under and subject to the provisions of this Act. The Governor on behalf of His Majesty may grant lease or make any other disposition of Crown lands in any case where he is hereby authorised so to do, but only for some estate interest or purpose authorised by this Act and subject in every case to its provisions. The Minister on behalf of His Majesty may lease dedicate reserve or make any other disposition of Crown lands in any case where he is hereby authorised so to do, but only for some estate interest or purpose authorised by this Act and subject in every case to its provisions: Provided always that this section shall be read subject to the provisions of sections two and four hereof." 29 By virtue of the proviso to s 6 of the CLC Act, the prohibition in the first paragraph of s 6 and the powers of the Governor and the Minister in the second and third paragraphs, are required to be read subject to s 55(4) of the MWS&D Act. This is because the proviso requires s 6 to be read subject to the provisions of s 4 of the CLC Act, which relevantly provides that: "4. This Act shall not be construed so as to affect (except where the contrary is expressly provided) the operation of any provision contained in - … ...any Act not hereinbefore mentioned or referred to, whereby special provision is made in respect of any particular kind of Crown land or authorising Crown lands to be disposed of or dealt with in any manner inconsistent with the Crown lands Acts."

The MWS&D Act is one to which s 4 refers and it was common ground that s 55(4) made " special provision " with respect to Crown land within the catchment area. 30 Crown lands could be sold by public auction pursuant s 63 of the CLC Act and by tender pursuant to s 64B. The effect of s 55(4) of the MWS&D Act was to prohibit the exercise of those powers insofar as the Crown lands were within any catchment area other than a city, town or village. 31 The CLC Act also contained provisions providing for the grant of leases and licences over Crown lands in limited circumstances: see, for instance, s 226. Section 136K empowered the Minister to grant a permissive occupancy. However, a consideration of the provisions of the CLC Act in force in 1971 (when construction of the road was completed by Miller) does not reveal any power of the Crown or the Minister to grant a licence or permit to use Crown lands for the purpose of a road; nor did it provide for the grant of an easement or right of way. As s 6 of the CLC Act states, Crown land shall not be "dealt with" except under and subject to the provisions of that Act. As there are no provisions of the CLC Act that contemplate the granting of easements or rights of way over Crown land, it makes it impossible for the Court, in the face of s 6, to grant that which the Crown itself could not grant in respect of Crown land. I shall return to this point later in these reasons. 32 The respondent placed particular reliance upon s 56(4) of the MWS&D Act which, relevantly, was in the following terms: "(4) The board may, upon Crown lands, …assume all the rights, powers, obligations, privileges and immunities as are conferred or imposed upon trustees by…the Crown Lands Consolidation Act, 1913 and shall require no further warrant than this Act so to do." 33 Section 26(1) of the CLC Act provided for the appointment by the Minister of trustees of Crown lands who were "to be charged with the care and management" thereof. Section 26(2) relevantly provided that the trustees appointed under s 26(1): "may make rules and regulations for and with respect to - (a) the care, control and management of the land of which they are trustees; (b) the regulation of the use and enjoyment of such land." 34 The respondent's submission was that the effect of the combined operation of s 56(4) of the MWS&D Act and s 26(2)(a) and (b) of the CLC Act was to vest in the Board the care, control and management of the Crown lands within the catchment area and the regulation of the use and enjoyment thereof. It was submitted that the Board was thus empowered to permit the permanent use of Crown lands within the catchment area for the purpose of a road and, in effect, to grant or promise the grant (enforceable by the Court) of an easement or right of way to give effect to that use. However, the respondent eschewed reliance on any conduct of the Board giving rise only to a licence for such an interest would not have been served by s 153(3) of the NPW Act and would not otherwise avail the respondent notwithstanding the provisions of s 39 of that Act.

The reasoning of the primary Judge 35 The respondent's case, as understood by the primary Judge and as repeated before this Court, was that a proprietary estoppel arose in the nature of that formulated by Lord Kingsdown in his dissenting speech in Ramsden v Dyson [1866] LR 1 HL 129 at 170 in these terms: "If a man, under a verbal agreement with a landlord for a certain interest in land, or, what amounts to the same thing, under an expectation, created or encouraged by the landlord, that he shall have a certain interest, takes possession of such land, with the consent of the landlord, and upon the face of such promise or expectation, with the knowledge of the landlord, and without objection by him, lays out money upon the land, a Court of Equity will compel the landlord to give effect to such promise or expectation." 36 A more modern formulation of the principle is to be found in the joint judgment of Mason CJ and Wilson J in Waltons Stores (Interstate) Limited v Maher (1988) 164 CLR 387 at 404, where the Court stated that the decision of the Court of Appeal in Crabb v Arun District Council [1976] 1 Ch. 179 was consistent with the principle of proprietary estoppel applied in Ramsden v Dyson. Their Honours articulated that principle thus: "Under that principle a person whose conduct creates or lends force to an assumption by another that he will obtain an interest in the first person's land and on the basis of that expectation the other person alters his position or acts to his detriment, may bring into existence an equity in favour of that other person, the nature and extent of the equity depending on the circumstances. And it should be noted that in Crabb , as in Ramsden v Dyson , although equity acted by way of recognising a proprietary interest in the plaintiff, that proprietary interest came into existence as the only appropriate means by which the defendants could be effectively estopped from exercising their existing legal rights."

See also, Cheney & Anor v Solienta Pty Ltd & Ors [2000] NSWCA 248 at [46-49], [165-168]. 37 In applying this principle, her Honour held [42]: "that the conduct of the Water Board and the relationship between it and Mr Miller established an equity in favour of Mr Miller against which it would be unconscionable to assert strict legal rights. The equity consisted of the right to enter upon the Crown land, to construct a road upon the Crown land roadway, to maintain the road, and to use it as a means of permanent access to the property." 38 The primary Judge then considered the position of the Crown, and the question as to whether the Department had knowledge of Mr Miller's construction of the road. Her Honour referred to the file note (to which I have referred in [8] above) and its relevance to the position of the Crown, stating: "45. The only evidence about the involvement of the then Department of Lands is a note dated 26 March 1962 signed by the real estate officer of the Water Board. I have referred to it in par 12. It states that Mr Miller had called in and seen the real estate officer, and it contains the statement, referring to Mr Miller, that " [h]e is at present negotiating with the Department of Lands re the necessary authority to traverse the Crown lands concerned and will advise the Board when arrangements have been made. " This does not prove any relevant fact. It does not prove and the Court cannot infer that Mr Miller actually negotiated with the Department of Lands about the proposal to construct and use the road; or that the Department knew of that proposal, or that, if it did, what action or non-action it took in regard to it. On the obverse side, it does not prove that the Department of Lands denied any authority to construct and use the road." 39 The primary Judge noted at [44] that no question would have arisen as to the position of the Crown had it encouraged by its own conduct the construction and use of the road and Mr Miller had proceeded upon the faith of the Crown's involvement as well as that of the Board. Her Honour observed that endeavours had been made to obtain the relevant records of the Department (now the Department of Land & Water Conservation) but to no avail. In a letter of 10 January 2000 to the NPWS, the Department had stated, "unfortunately, early records in relation to the construction of this track are not available from this Office". This was not a particularly helpful or satisfactory response, given that no reason was proffered for the unavailability of the Department's records. 40 The primary Judge therefore held that on the evidence available she could not conclude that there was any relevant direct involvement of the Crown through the Department with Mr Miller. Having referred to ss 55(4) and 56(4) of the MWS&D Act and to s 26(2)(a) and (b) of the CLC Act, her Honour concluded as follows: "54. In my opinion, the provisions of both Acts which I have outlined make it clear that the Water Board represented the Crown in relation to Crown lands within the catchment area. It had the powers of a trustee in relation to the Crown land; and had the care, control and management of the Crown land, including the power to regulate the use and enjoyment of the Crown land. …… 56. I conclude from this analysis that, although the Water Board was not itself the Crown, it represented the Crown, and, in the circumstances of its power and exercise of control over the Crown lands in the catchment area, an equity in favour of Mr Miller was capable of being established against which it would be unconscionable for the Crown to insist on its strict legal rights." 41 The primary Judge then dealt with a submission on behalf of the appellant that s 6 of the CLC Act operated to prohibit the grant of any interest over the site of the road by the Board and hence no equitable interest could arise in favour of Mr Miller. Reliance was placed by the appellant on the following passage in the judgment of Bryson J in Fensom & Anor v Cootamundra Racecourse Reserve Trust & Ors [2000] NSW SC 1072 (5): "Under s 26 (of the CLC Act) trustees could be appointed, and were charged with the care and management of the land…All dealings in reserved lands and other Crown lands were subject to the overriding control of s 6 of the CLCA which had the effect that all dealings with Crown land including leases must be made in accordance with statutory authority. This should be regarded as a constitutional principle for New South Wales". 42 The appellant had also made reference to the decision of the Privy Council in Chalmers v Pardoe [1963] 1 WLR 677, an appeal from the Fiji Court of Appeal. The case concerned s 12 of the Native Land Trust Ordinance of Fiji (the Ordinance), which provided as follows: "(1)…it shall not be lawful for any lessee under this Ordinance to alienate or deal with the land comprised in his lease or any part thereof, whether by sale, transfer or sublease or in any other manner whatsoever without the consent of the Board as lessor…and any sale…or other unlawful alienation or dealing effected without such consent shall be null and void."

Mr Pardoe had a lease of certain land in Fiji and entered into an arrangement with Mr Chalmers whereby the latter would erect buildings on part of that land upon the basis that Mr Pardoe would either sublease that part to Mr Chalmers or surrender it so that Mr Chalmers could himself obtain a lease of it. When the parties fell into disagreement, Mr Chalmers claimed an equitable charge on the relevant part of the land for the cost of the buildings he had erected. Sir Terence Donovan, who delivered their Lordships' judgment, said (at 681): "There can be no doubt upon the authorities that where an owner of land has invited or expressly encouraged another to expend money on part of his land upon the faith of an assurance or promise that that part of the land will be made over to the person so expending his money, a Court of Equity will prima facie require the owner by appropriate conveyance to fulfil his obligation…It was said in Plummer v Wellington Corp that the court must look at the circumstances in each case to decide in what way the equity can be satisfied." 43 His Lordship then held that the arrangement between the parties was a dealing with the land within the terms of s 12 of the Ordinance and that since the consent of the Board had not been obtained, the dealing was unlawful. In these circumstances, and notwithstanding the principle referred to in the preceding paragraph, it was held that "equity cannot not lend its aid to Chalmers". 44 The primary Judge distinguished Fensom and Chalmers upon the basis that in the present case there was nothing akin to a sale, lease, dedication or reservation of the Crown land, but merely the establishment of an equitable interest in the nature of a right of way. She then relied upon the approach taken by the Full Court of the Supreme Court of Queensland in Wood v Browne [1984] 2 Qd R 593, where it was held that the particular provisions of the Land Act 1962 did not prevent an interest or equity of the Ramsden v Dyson type from being created in the circumstances of that case. The Court considered the relevant statutory provisions and concluded that although they prescribed the way in which a sub-leasehold interest may be created, they did not have the effect of prohibiting the equitable creation of such an interest otherwise than in accordance with that prescription. Accordingly, her Honour was of the view that there was nothing in s 6 of the CLC Act that prevented the creation of the equitable interest in question. 45 As an alternative finding, the primary Judge held that the Board's conduct in acquiescing to Mr Miller making and using the road was not unlawful and that accordingly, in terms of s 6 of the CLC Act, the road was made and used "under and subject to the provisions of…" that Act. Her Honour came to this conclusion on the basis of s 56(4) of the MWS&D Act and the conferral thereby upon the Board of the power under s 26(2)(b) of the CLC Act to make rules and regulations for the use and enjoyment of Crown land within the catchment area. Having noted that s 26(2) did not, in terms, confer upon trustees any power to grant an interest in Crown land, her Honour concluded in the following terms [64]: "However, the Water Board was acting with respect to the care and management of the Crown land, by raising no objection to the road and by requiring, as a condition of its acquiescence, the locking of a gate and, thereafter, the maintenance of the roadway. I accept Mr Ireland's submission that s 26(1) and (2) gave the Water Board a statutory warrant to act as it did, and its actions were not, therefore, unlawful."

It seems implicit in this statement that the primary Judge was contemplating a statutory warrant on the part of the Water Board to grant an equitable easement. The submissions on appeal 46 In essence, the appellant submitted that:

(a) there was no basis for the primary Judge's finding that the Board represented the Crown in the exercise of its care and management over the Crown lands in the catchment area, including the regulation of their use and enjoyment;

(b) although the Board had the powers referred to in s 26(2)(a) and (b) of the CLC Act, those powers did not extend to authorising the Board to grant any proprietary interest in the Crown lands under their care and management; such a proprietary interest could only be granted under the CLC Act, albeit with the concurrence of the Board, in the case of a lease, licence or permit: see MWS&D Act, s 55(4)(b)(i);

(c) if the Board did not have the power to grant a proprietary interest in the nature of that claimed, then it clearly could not, by its conduct, bind the Crown to grant such an interest;

(d) the principle adumbrated by Bryson J in Fensom and by the Privy Council in Chalmers should apply, the decision in Wood v Browne being distinguishable;

(e) accordingly, an equitable interest in the nature of an easement or a right of way could not be created which was otherwise prohibited by s 6 of the CLC Act: nor could a court of equity create such an interest as there could be no estoppel against the clear words of the statute; the creation of an equitable interest in the nature of an easement or right of way was clearly a 'dealing with' Crown land and as that 'dealing' was not 'under and subject to the provisions of' the CLC Act, its purported creation, whether in law or in equity, was unlawful .

(a) the facts created a classic Ramsden v Dyson proprietary estoppel case against the Crown, as it had knowledge of Mr Miller's proposal to construct and use the road and of the fact that he had done so without the Board's objection;

(b) the Crown was therefore estopped from denying an expectation engendered by it on the part of Mr Miller that he would be entitled to permanent use of the road for the benefit of himself and his successors in title;

(c) the Board was the agent of the Crown in the exercise of its powers under the combined operation of s 26(4) of the MWS&D Act and s 26(2)(a)(b) of the CLC Act which were sufficiently wide to authorise the creation of the interest claimed.

Was the primary Judge correct? 48 It was accepted by the respondent on the hearing of the appeal that there was no evidence of any independent representation by the Department upon which he could rely. However, by Notice of Contention, it was submitted that the primary Judge erred in so far as she found that she could not infer that Mr Miller had actually negotiated with the Department apropos his proposal to construct and use the road, or that the Department knew of that proposal. It was further submitted that the file note contained a representation by Mr Miller of a fact and was therefore admissible as proof of that fact pursuant to s 69 of the Evidence Act 1995. 49 Section 69 of the Evidence Act applies to documents which constitute business records. The file note of 26 March 1962 clearly did constitute such, as it formed part of the records of the Board for the purposes of its business and contained a "previous representation" recorded in the document in the course of that business. In those circumstances, s 69(2) provides that the hearsay rule does not apply to the document (so far as it contains the representation) if the representation was made either by a person who had, or might reasonably be supposed to have had, knowledge of the asserted fact, or is made on the basis of information directly or indirectly supplied by a person who had or might reasonably be supposed to have had that knowledge. 50 Although the appellant somewhat faintly submitted that the representation contained in the file note did not fall within s 69, in my opinion it did. The representation recorded in the document was made by Mr Miller, who clearly had personal knowledge of the facts asserted therein. In these circumstances, the primary Judge ought to have found that Miller was, as at March 1962, negotiating with the Department for the necessary authority to traverse the Crown lands with the road. 51 Furthermore, in my opinion it was open to the primary Judge to infer, and she ought to have so inferred, that the Department was aware of Mr Miller's proposal to construct the road and that the Board had approved its construction. In this respect, there is no reason to believe other than that Mr Miller would have brought to the Department's notice, in the course of negotiations, the contents of the Board's letter to him of 20 March 1962. Whether it can be inferred that the Department became aware of the actual construction of the road and its subsequent use by the respondent is moot. The highest inference that can be drawn is that the Department contemplated that the road would be constructed and used. 52 The foregoing inferences are more easily drawn when account is taken of certain correspondence between the Board and the Department in 1990, including some Departmental reports in 1991. In particular, neither the correspondence nor the reports in evidence refer to any earlier documents which may have been in the possession of the Department or which may have come into existence in 1962. Equally, there is nothing in the correspondence or reports to suggest that the existence of the road was unknown to the Department until the Board referred the question of its maintenance thereto May 1990. 53 The material referred to makes it apparent that although the Department was taking the stand that the road was unauthorised, it was not opposing its maintenance or restoration and it accepted that such matters were the responsibility of the Board as manager of the catchment area. Although this documentation, on its own, does not permit an inference that the Department was aware of the construction of the road as far back as 1962 or even 1971 when it was completed, when taken in conjunction with the facts established by Mr Anderson's file note of 26 March 1962, the inference is easily drawn that the Department had knowledge of Mr Miller's proposal to construct and use the road. Relevantly, the inference is available that the Department in all probability considered that the issue was one for the Board, as the latter had the care and management of the catchment area through which the road was to be located. 54 Although there was no evidence that the Department represented or otherwise held out to Mr Miller that he and his successors would be entitled to use the road in perpetuity or that he was otherwise entitled to some proprietary interest in the nature of an easement or right of way with respect thereto, it should nonetheless be inferred that the Department stood by and permitted Mr Miller to construct and maintain the road at his expense and to use the road for access without objection to either him or the Board. However, whether that finding assists the respondent is another matter. 55 The respondent submitted that the scale of Mr Miller's road construction project, as revealed in the documentation in evidence, was such that his expectation, in which the Board concurred, was that his use of the road would be permanent and would enure for the benefit of himself and his successors in title. However, I cannot accede to that proposition. It was no doubt contemplated by the Board that so long as the road was allowed to remain in existence and was maintained by Mr Miller and his successors in title, it could be used for the purpose of gaining access to the property. However, the file note of 26 March 1962 referred to in [8] above makes it clear that both Mr Miller and the Board's officers were fully aware that authority to traverse the road, once it was constructed, lay exclusively with the Department. As the appellant submitted, the Board understood its role as being only to indicate whether it objected to the construction and use of the road within the catchment area and that Mr Miller understood that the Board's role was so confined. 56 Given that the respondent does not seek to rely upon any independent representation by the Department on behalf of the Crown, it must follow that no expectation giving rise to the proprietary estoppel was generated by the Department's conduct. Hence there was nothing in that conduct which generated an assumption by Miller that he would obtain a proprietary interest in the Crown land within the catchment area for which the Department was responsible. 57 It is true that the Crown was bound by any exercise by the Board of its powers under s 26(2)(a) and (b) of the CLC Act. However, that is of no assistance to the respondent unless those powers extended to authorising the grant by the Board of a proprietary interest in the nature of an easement or right of way. In my opinion, those powers did not so extend. To the extent to which the primary Judge construed ss 26(1) and (2) of the CLC Act as giving the Board "a statutory warrant" to grant equitable easements, with respect, I consider that her Honour was in error. The powers in question relate only to the care and management of Crown lands within the catchment area: neither expressly nor impliedly do they empower the Board to create proprietary interests in those Crown lands. Section 55(4)(b)(i) of the MWS&D Act makes it clear, for instance, that the Board's role in the granting of any lease, licence or permit under the CLC Act with respect to Crown lands within a catchment area is a concurrence role only. Any such grant is still required to be made in accordance with the CLC Act, in particular with s 6 thereof. 58 It follows from the foregoing that the Board "represented the Crown" or was otherwise the Crown's agent only to the extent to which it exercised its powers within the confines of s 26(2) of the CLC Act. In my opinion, not only did the Board not hold out any expectation to Mr Miller that it could grant to him a proprietary interest in the road, but also neither it nor the Crown can be estopped from denying a promise (assuming there is one) to grant an interest in Crown land which neither had the power to grant in the first place. 59 Furthermore, s 6 of the CLC Act prohibits any dealing with Crown lands "except under and subject to the provisions of" that Act. That prohibition is tempered by the requirement of s 54(4)(b)(i) of the MWS&D Act that before any lease, licence or permit is granted in respect of Crown lands within a catchment area, the concurrence of the Board must be obtained. But that requirement does not subvert the prohibition on the dealing with Crown lands other than under and subject to the provisions of the CLC Act. Any purported dealing with Crown land other than in accordance with that prohibition is unlawful. Therefore, to the extent that either the Department or the Board purported to promise Miller a proprietary interest in the nature of an easement or right of way in the road, it was doing so other than in accordance with the proscription contained in s 6. This is particularly so given that the CLC Act contains no power authorising the Governor or the Minister to grant easements or rights of way over Crown land: see [31] above. Consistent with the decision of the Privy Council in Chalmers and the overriding control of s 6 referred to by Bryson J in Fensom, it thus follows that no proprietary estoppel could arise from the conduct of the Board for which a court of equity could or would provide a remedy. 60 Authority extending for a century in this State supports the foregoing conclusions, that the Crown has no power to create interests in Crown lands except under the Crown lands legislation. In Lukey v Sydney Harbour Trust Commissioner (1902) 2 SR (NSW) 152 at 165, Owen J (with whom Darley CJ agreed) rejected the trial Judge's finding that an interest in certain Crown land was created in the plaintiff and enforceable against the Crown who was estopped from denying it. He did so on the basis that the effect of such a finding would be to repeal ss 5 and 6 of the Crown Lands Act 1884 (reproduced in s 6 of the CLC Act): "for the Crown could then deal with Crown lands otherwise than under and subject to the provisions of that Act. Not only are the powers of the Crown limited by that Act, but the Crown is thereby expressly prohibited from leasing or dealing with Crown lands, except under and subject to the provisions of the Act." 61 Similarly, in Attorney-General v The Municipal Council of Sydney (1919) 20 SR(NSW) 46, the defendant council claimed an entitlement to remain in possession indefinitely of Crown land based upon a Ramsden v Dyson equity. Owen AJ held that no such equity arose on the facts, citing the principle expounded by Lord Cranworth in Ramsden v Dyson at 141. However, even if such an equity could be established, it could not be relied upon as against the Crown. After referring to Plimmer v The Mayor of Wellington (1884) 9 App Cas 699 and other cases, his Honour said (at 58): "In all these cases the Court held that, where the Crown's power of discretion was not fettered by statute, an equity somewhat similar to that claimed by the defendant council might be established as against the Crown. It seems to me, however, that in cases where the Crown only has power to alienate or dispose of Crown lands in accordance with statutory provisions, no Minister or Ministers of the Crown could by any act or acts create an interest in Crown lands in any manner which is not authorised by the law… If equities such as the defendant council relies upon could be set up with a view to creating an interest in, or right to occupy Crown lands, I think that the protection to the public which the Crown Lands Act were intended to provide, would be greatly inspired, and I can find no case where any such equity has been established in respect of Crown lands in this colony or State, since the Crown's prerogative was limited by statute." 62 Finally, in The New South Wales Trotting Club Ltd v The Council of the Municipality of Glebe (1937) 37 SR(NSW) 288, Jordan CJ (with whom Innes CJ in Eq and Davidson J (on this point) agreed), having referred to the principle expounded by Lord Kingsdown in Ramsden v Dyson to which I have referred in [40], observed (at 308-9) that that principle could not: "be applied if the interest sought to be established against the owner of the land is an interest which he has no power lawfully to create: Attorney-General v Municipal Council of Sydney. "

63 For the foregoing reasons, I am of the opinion that the primary Judge erred in holding that a proprietary estoppel arose in favour of Miller, which entitled the respondent to a perpetual and general right of way over the road known as W11E within Nattai National Park. I would therefore propose the following orders:

(a) Appeal allowed; (b) Orders 1, 2, 3 and 4 made by Pearlman J on 19 March 2003 be set aside; (c) The amended Summons dated 26 June 2000 filed in the Equity Division of the Supreme Court but transferred to the Land & Environment Court on 25 October 2000, be dismissed with costs; (d) The respondent to pay the appellant's costs of the appeal but to have, if otherwise qualified, a certificate under the Suitor's Fund Act 1951. 64 Before parting with this matter, I would draw the parties' attention to s 153B(1) of the NPW Act. This provision would empower the Minister to grant a right of way or licence through or over the Nattai National Park (being land reserved under that Act) for the purposes of enabling access to the property as it is completely surrounded by the Park and is therefore landlocked. I appreciate the limits placed on the Minister's powers by s 134B(2) but the circumstances of this case (and particularly to the findings of fact I have made in [50]), based on the facts to which I have referred, seem to me to justify the Minister giving serious and sympathetic consideration to an exercise of the power under this section. I would be confident that any environmental concerns, particularly those relating to use of the road by unauthorised persons and/or by trail bikes, could be accommodated by the imposition of appropriate conditions as well as the adoption of any necessary physical safeguards. **********

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