State Transit Authority of NSW v Australian Jockey Club

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION

3409/03 - STATE TRANSIT AUTHORITY OF NEW SOUTH WALES v AUSTRALIAN JOCKEY CLUB

JUDGMENT 1 HIS HONOUR: These proceedings were commenced on 23 June 2003 by the plaintiff filing a summons seeking the withdrawal of certain caveats over its land in Randwick. The summons was later amended on 31 July 2003 so that four caveats were sought to be removed. 2 The answer to the plaintiff's claim was made by an amended cross claim whose details I will abstract shortly. 3 The matter was fixed for urgent final hearing before me and that oral hearing commenced and concluded on 31 July 2003. Mr B A Coles QC and Mr L J Aitken appeared for the plaintiff, Mr J Sackar QC and Mr R McHugh for the chairman of the Australian Jockey Club, and Mr I M Khan of counsel for the second cross defendant, Anson City Developments (Australia) Pty Ltd, to which I will refer as "Anson". 4 It is necessary to set out the background facts before dealing with the issues. For many years there has been situated at Randwick near the intersection of Alison Road and Doncaster Avenue, the Royal Randwick Racecourse. For many years before the motor car was as popular as it is at present, a large number of patrons of the Royal Randwick Racecourse, travelled to that racecourse by public transport, initially tram and later motor omnibus. In 1911, the predecessor of the plaintiff resumed part of the western edge of the racecourse and constructed initially tram lines and later a Busway for vehicles serving the racecourse. 5 It would now appear that the plaintiff no longer considers that that is a good use for the resumed land (which I will call "the Busway") and it has evinced a desire to sell it. 6 The proposed sale was to be by tender. However, the Minister for Transport authorised the plaintiff to conduct negotiations with the Australian Jockey Club ("the AJC") on condition that the AJC would continue to use the Busway for racecourse purposes. There was argument about this condition and in the end no deal was done. The plaintiff then agreed to sell the Busway to Anson who was the highest tenderer. The AJC placed various caveats on the title and the plaintiff wishes these removed so it can complete the transfer to Anson. 7 At present, it would seem that on race days the plaintiff's buses come on to the Busway from Doncaster Avenue across some land belonging to the Centennial Park Trust onto the Busway, deposit their loads near the entrance gate to the racecourse and then continue to proceed in a southerly direction exiting the Busway so that the buses move on to Ascot Street. However, there is now also provision for taxis to move on to the Busway and an awning of some plastic material has been erected adjacent to the entrance gates where taxis may load and unload. These movements currently occupy only a small part of the Busway. 8 It would seem that in years past public transport used the Busway either for transit or for parking buses and trams that were being laid over during race meetings. Some older plans in evidence show some seven sets of tramlines through the Busway, five tramway platforms, two overhead bridges and various ramps. At present and for some time past, a large part of the Busway is covered with bitumen and other parts of it are covered in grass. The grassed areas are used for car parking. 9 Apart from the transit (and perhaps parking) of the plaintiff's buses, the AJC and people associated with it use the Busway, so they say, for access purposes to the racecourse. There are a series of properties facing Doncaster Avenue, some of which would appear to be owned by the AJC. In particular Lot 53 Doncaster Avenue which is now vacant land and which is a prolongation of Carlton Street gives access on to a block of land which is owned by the AJC or its associates on which there are buildings used by AJC employees. These employees and also on race days, members of the media who have special parking spots on that side of the racecourse, would move across the Busway by a series of possible paths. However, the principal paths are up some steps across the Busway adjacent to the entrance gates to the racecourse, or alternatively across a bitumen road which commences west of the Busway and continues east of the Busway and then cuts back on to the Busway near reserved parking spot 79. The employees and others on regular occasions enter the Busway from Ascot Street and move to the entrance gates. Furthermore, there are some sewerage inspection holes and sewerage pipes on or under the Busway. 10 The cross claim in its final form claims a series of rights over the Busway or against the plaintiff personally. I will note these in the order in which they appear in the amended cross claim.

(1) The AJC alleges that there was a contract between it and the plaintiff of about 1 May 2003 whereby there was a multifaceted contract between the plaintiff on the one part and various tenderers of the other part that the plaintiff would conduct its tender evaluation fairly, deal fairly and in good faith with each tenderer and would not vary the tender conditions. However, it is alleged that the plaintiff told the AJC that it would not deal with it unless it submitted to a condition that (a) a public transport facility be retained on the Busway or elsewhere within the grounds of the racecourse; (b) that the Busway be used for racecourse purposes; and (c) that those conditions be secured by a covenant or other appropriate legal instrument, yet it did not impose such a condition on any other tenderer.

(2) That there was a breach of the Fair Trading Act 1987 alleging much the same mattes of fact.

For both counts (1) and (2) the AJC claims damages.

(3) That there was a lease dated 11 September 1984 under which the AJC was granted a yearly tenancy over a portion of the Busway which lease has not been terminated. The lease was called between the parties an "agreement to let or take". (This lease covered a small portion of land commencing at the Ascot Street end of the Busway and providing a footpath for about 300 metres from Ascot Street towards the entrance to the racecourse).

(4) That the AJC had a right of footway over the Busway for access to the racecourse land by prescription. This is called in evidence "the claim to the right of way".

(5) The AJC by prescription had a sewerage easement, a right to drain sewerage and also to inspect the sewerage pits.

(6) That there is an unrevoked licence to use the Busway for the purpose of taxis etc. 11 The prayers in the cross claim seek damages for the first and second count, and also an injunction restraining the plaintiff and Anson from completing the sale of the Busway because of the breach of the tender process contract, a declaration the lease is still on foot, an order for specific performance of the grant of a right of way and sewerage easement and a declaration that the licence cannot be revoked without at least 12 months' notice. This twelve month period does not appear in any document, but seems to be the time alleged to be necessary to make alternative transport arrangements. 12 Before dealing with those six issues in turn, I should draw attention to some of the problems brought about because of the organisation of the AJC. 13 The Australian Jockey Club Act 1873, strictly speaking a private Act of Parliament, has as its long title "An Act to extend the period for which the Trustees of the Randwick Racecourse are enabled to grant leases thereof and to enable the members of the 'Australian Jockey Club' to sue and be sued in the name of the Chairman for the time being of the Committee of the said Club and for other purposes." 14 Section 4 allows the Trustees of the racecourse to grant leases to the said Australian Jockey Club. Section 4 provides that all actions, suits and proceedings at law or in equity may be commenced and carried on on behalf of the Club by the Chairman of the Committee and by s 5 there is always to be a memorial of the names of the Chairman and members of the Committee kept in the Supreme Court. Section 8 enables the Chairman to hold lands or to accept a lease of land from the Trustees for the purposes of the Act and s 9 vests all the AJC's lands and personal property whether acquired before or after 1873 in the Chairman as if he were a corporation sole. 15 By amendment, Dr Treve Williams, who is the current Chairman of the AJC was added as a second defendant. However, the amended cross claim was made in the name of "The Chairman of the Australian Jockey Club". This would appear not to be the appropriate way of suing, but no counsel appeared at all perturbed by it. Finally, a formal amended cross claim was filed in the name of Dr Williams. 16 This 19th century method of recognising the AJC has caused me some extra thought. However, in the end result, it does not affect the case. Updating to the 21st century method of incorporation would appear however to have advantages. 17 I have mentioned four caveats. Caveat 9676713K lodged on 5 June 2003 purports to have been lodged by the Australian Jockey Club ABN 80 493 996 472 and claims (a) a right of footway for access to adjoining lands; and (b) a licence to use the land on public race days for taxi facilities by virtue of a continuous period of use for at least 20 years, and as to the licence, correspondence between the parties. Caveat 9684363Q which does not appear to be registered, has the same caveator and claims a leasehold estate under the agreement to let or take of 11 September 1984. Caveat 933264 of 29 July 2003 is in the same form as 9676713K save that Dr Treve Williams is the caveator and Caveat 9833265 is in the same form as 9684363Q, again with Dr Treve Williams as the caveator. 18 I will now consider in detail the six claims made by the AJC using the identifying numbers I have already set out.

(1) The claim in contract 19 The AJC submits that there was an enforceable agreement governing the tender process which the plaintiff had initiated. Its counsel submit that the question whether the tender process arrangements may be the subject of binding contractual agreements is ultimately one which will turn on the facts: Hughes Aircraft Systems International v Air Services Australia (1997) 76 FCR 151 at 183-7. See also Evans Deakin Pty Ltd v Sebel Furniture Ltd [2003] FCA 71 at [512]. 20 Counsel puts that there is little room for doubt that the tender conditions were intended to have contractual force upon execution. In particular they point to the irrevocable offer in clause 6.1. 21 I should turn to the tender conditions. Clause 6.1 notes that "Each tender lodged will constitute an offer to purchase the Property for the consideration set forth in the form of tender and subject in all respects to these tender conditions. The tender will be irrevocable and open for acceptance by the vendor at any time after the closing date and on or before 5 pm on the acceptance date". 22 Clause 6.2 states "The tenderer acknowledges and agrees that no legal rights or obligations will be deemed to have arisen between the vendor and the tenderer until a tender is, if at all, accepted." 23 Clause 6.5 permits the vendor to consider and accept a non-conforming tender and says that in that event any unsuccessful tenderer will not be entitled to any redress whatsoever. Clause 6.6 gives the vendor the right in its discretion to accept or reject any tender including the highest tender, to extend the closing date, to nominate a new acceptance date, to discuss or deal with any tenderer at any time before or after the closing date, to call for new tenders or to exercise its rights under 6.5. 24 The plaintiff submits that in the light of clause 6, no contractual rights of the type alleged by the AJC exist. 25 In my view, in the light of clause 6 read as a whole, the plaintiff's submissions must be correct. In particular clause 6.5 and 6.6 make it abundantly clear that the plaintiff was the master of the situation and was entitled to deal with individual tenderers differently and was under no obligation to follow any particular process. 26 In any event it must be noted that the AJC was being dealt with in a special way by the STA. It was offered the land at a discount provided that it would enter into a covenant to use the land for racecourse purposes. This it was unwilling to do, at least in the form in which the plaintiff wanted the covenant. However, the AJC says that where it was discriminated against was that it was made quite clear that even if it were the highest bidder, it would not win the contract because the plaintiff and the Minister were of the view that unless the covenant was given, the AJC would not be sold the land. There was some basis for that belief, but whether it was a matter that was true in fact or not, will never be known. 27 As noted by Finn J, the most comprehensive analysis of the law relating to tenders is provided by Seddon in his Government Contracts (Federation Press, Sydney, 1999), 2nd edition, commencing on p 222. The starting point is the judgment of Gallen J in Pratt Contractors Ltd v Palmerstone North City Council [1995] 1 NZLR 469, 478 where his Honour said: "Authority makes it clear that the starting point is that a simple uncomplicated request for bids will generally be no more than an invitation to treat, not giving rise to contractual obligations, although it may give rise to obligations to act fairly. On the other hand, it is obviously open to persons to enter into a preliminary contract with the expectation that it will lead in defined circumstances to a second or principal contract …. . Whether or not the particular case falls into one category or the other will depend upon a consideration of the circumstances and the obligations expressly or impliedly accepted." 28 In Transit New Zealand v Pratt Contractors Ltd [2002] 2 NZLR 313 at 332-3, the New Zealand Court of Appeal said: "Whether a request for tenders gives rise to a process contract, once a conforming tender is submitted, is in all cases a question of whether all the elements of contractual formation are made out at that point. Analysis of the terms of the invitation to tender is the starting point. Where the request makes no express commitment concerning the manner in which tenders received will be addressed, that may indicate the invitation was no more than an offer to receive them. On the other hand as Blackpool and Fylde Aero Club Ltd v Blackpool BC [1990] 1 WLR 1195 indicates, the rigorous and comprehensive expression of requirements to be complied with by tenderers may give rise to an implied promise by the invitor to consider a conforming tender if others are considered. The law does not, however, have a policy which inclines towards enforcement of implied promises by invitors, even if they are public bodies, and whether there has been a binding promise as to process is to be ascertained by applying general principles of contract law concerning contract creation and implied terms." 29 The present situation is one of relative simplicity. There is no evidence that the persons tendering had to go to great expense in submitting their tender. In the light of clause 6 of the tender itself and reinforced by these factors, in my view it was a mere invitation to treat. 30 Accordingly, I find against the AJC on the first matter.

(2) The Fair Trading Act 31 The plaintiff says that the Fair Trading Act does not bind it because it represents the Crown. 32 I need to digress to trace the lineage of the plaintiff from the time when its predecessor resumed the Busway in 1911 to the present. 33 The evidence and statutory material presented to the Court disclose that under the Government Railways Act 1901 s 4, there were three Commissioners who constituted a body corporate by the name "The Railway Commissioners of New South Wales". They had authority over all railways and tramways in the State. By the Government Railways Act 1912 the Chief Commissioner was instead made the corporation sole. The Ministry of Transport Act 1932 replaced this arrangement with a Board of Commissioners being a body corporate named "The Transport Commissioners of New South Wales". However, in the same year by the Transport (Division of Functions) Act 1932 matters were reorganised again and the Commissioner for Railways became a body corporate under the name "The Commissioner for Railways" and the Commissioner for Road Transport and Tramways became a body corporate under the name "The Commissioner for Road Transport and Tramways". It would seem that at this time the tramways which were previously part of the railways now became separately administered together with buses by the Commissioner for Road Transport and Tramways. By the Transport (Division of Functions) Amendment Act 1952 there was a further reorganisation and the Commissioner for Government Tram and Omnibus Services who was constituted a body corporate under that name and deemed to be a statutory body representing the Crown took over tram and bus services. 34 By Act No 53 of 1972, the previous Commissioners were abolished and a Public Transport Commission was instituted and by s 13 all the real and personal property of the former Commissioners was vested in the Commission. The Commission was constituted a corporation. 35 However, by Act No 103 of 1980 the Public Transport Commission was dissolved and replaced, so far as trams and buses are concerned, by a corporation named "Urban Transit Authority of New South Wales". The Act, by its schedule 8, appears to vest the property of the former Public Transport Commission in the State Rail Authority and not in the Urban Transit Authority. This matters very little in the instant case as the registered proprietor of the relevant land is acknowledged by all to be the State Transit Authority of New South Wales. 36 Finally, by the Transport Administration Act 1988 the Urban Transit Authority was renamed the State Transit Authority and by s 20 of the Act it was created a corporation and by s 22(b) "is, for the purposes of any Act, a statutory body representing the Crown." 37 Section 3 of the Fair Trading Act 1987, so far as is relevant provides: "This Act binds the Crown in the right of the State in so far as the Crown in the right of the State carries on a business, whether directly or by an authority of the State."

There is a definition of "business" in s 4, but it does not assist in the present context. 38 There is, of course, a similar provision in the Trade Practices Act 1974 (Comm), but the Fair Trading Act does not include s 2C of that Act which maps out activities that are not business. 39 There is no doubt at all that the State Transit Authority carries on the business of operating bus and ferry services in New South Wales. However, the way in which the corresponding provision in the Commonwealth Act has been treated is that the purpose of the legislation is that persons dealing with the Government in relation to the actual conduct of a business will have the same protection as when dealing with private traders, but will not be protected by the Act when entering into other dealings with the Government; see eg J S McMillan Pty Ltd v Commonwealth (1997) 77 FCR 337. Thus, when the Government is inviting tenders for purchase of assets it is not here so acting in business and the Act does not apply. See also Corrections Corporation of Australia Pty Ltd v Commonwealth of Australia (2000) 104 FCR 448 and N T Power Generation Pty Ltd v Power & Water Authority (2001) 184 ALR 481. 40 The current transaction was thus not in business. 41 The formula used in s 22(b) of the Transport Administration Act 1988 shows that the plaintiff must be treated as the Crown. 42 Thus the claim under the Fair Trading Act must fail.

(3) The Lease (Let and Take Agreement) 43 The AJC argues that its interests under the let and take agreement is undoubtedly that of a lease as opposed to a licence. It points to the fact that the agreement is expressed in terms of tenancy. It said that under the agreement the AJC has a right of exclusive possession. Whilst the lease is terminable on three months' notice there is a precondition, and that is, that STA holds the opinion that the leased land is required for its or any other purpose. 44 As I mentioned earlier, the land the subject of the let and take agreement is a small pedestrian walkway between Ascot Street and the former tramway starters' cabin. It only affects a very small part of the land. 45 The plaintiff says that the agreement is not a lease but merely a personal licence and confers no interest in the land at all. 46 It is clear that merely because the word "rent" or the word "tenancy" is used in a document conferring a right to occupy that the court does not necessarily infer that there is a tenancy, though it may do so: Pearch v Gyucha (1953) 71 WN (NSW) 123. However, looking at the document as a whole, apart from the heading "Agreement to Let and Take", the rights conferred have all the incidents of a tenancy. In my view, the interest granted is a lease. 47 The plaintiff issued a notice to quit on 11 June 2003, giving three months' notice to vacate. 48 The let and take agreement provided that the lease was a yearly tenancy terminable if the Authority reached an opinion by three months' notice. I would have thought that in the absence of countervailing evidence, the fact that the Authority had already agreed to sell the property to Anson would be sufficient to show that it had the opinion that the land was needed for another purpose. 49 As the lease is a yearly lease, it is not for a term of years exceeding three years and so does not require registration under s 53 of the Real Property Act 1900. However, a periodic lease is a lease for the purpose of s 42(1)(d) of that Act, see United Starr-Bowkett Co-operative Building Society (No 11) Ltd v Clyne (1967) 68 SR (NSW) 331, 347. It is not clear whether such a lease is a "short term tenancy" within the meaning of that section, though probably it is. 50 As the lease has come to the notice of Anson before it has paid its money and obtained its registrable transfer, it will take subject to the lease. 51 Mr Khan, for Anson, put forward an argument that his client did not have notice of the lease. However, the evidence from Mr Hu, the Property Manager of Anson, was to the effect that he had never at any stage inspected the land. Accordingly, Anson is affixed with notice of what it might have seen on the ground had it taken the trouble to inspect it; see Woodman, Law of Real Property in NSW (Law Book Co, Sydney, 1980) page 96. 52 No argument was put to me to the effect that the notice to quit had to expire on any particular day. Accordingly, the lease will come to an end on 11 September 2003. 53 Accordingly, the two caveats referring to the lease properly claim an interest in land. The proper order is that caveat 9833265 dated 29 July 2003 remain on the relevant Folio Identifier until 11 September 2003.

(4) The Alleged Rights of Way 54 The map appended to Mr King's affidavit shows at least 11 paths across the Busway. Moving from left to right, the principal paths are:

(a) across what I have called the bitumen road at the northern end of the Busway;

(c) moving from Doncaster Avenue at the prolongation of Abbottford Street to the entrance building;

(d) moving through Lot 53 and across the grassed parking area belonging to the racecourse across the Busway to the lawn or (e) to the entrance building;

(f) crossing the Busway from the northern end of the ramp to the entrance building;

(g) moving up the steps at the end of the ramp across to the entrance building;

(i) moving from Ascot Street to the entrance building;

(j) and (k) moving from Ascot Street to the St Ledger car park. 55 A right of way must be over a defined path, though there is some authority that it is sufficient if it is left to either the grantor or the grantee to define the path; see South Eastern Railway Co v Associated Portland Cement Manufacturers (1900) Ltd [1910] 1 Ch 12, 19; Talga Investments Pty Ltd v Tweed Canal Estates Pty Ltd (1974) 1 BPR 9675 and also the decision of Hope J in Maurice Toltz Pty Ltd v Macy's Emporium Pty Ltd [1970] 1 NSWR 474, 480. 56 A series of affidavits were filed on behalf of the AJC to establish these 11 rights of way. I will not refer to all of them, but take a cross sample. Mr Holdstock was employed by the AJC between 1959 and 1997 as a carpenter. He says that throughout the period of his employment, employees constantly walked across the Busway with or without materials to gain access from the racecourse land near Doncaster Avenue to the main Randwick Racecourse usually proceeding through the entrance building or alternatively near car space 79. He said that he has also observed on many occasions horses and riders moving from Lot 68 Doncaster Avenue through the gate at Ascot Street across the Busway into a gate near the St Ledger car park. 57 There was no cross examination of Mr Holdstock, or indeed, of any other of these witnesses. However, the plan in evidence of the Busway as it existed in 1960 and the plan showing the tram tracks before about 1960 which is in evidence, makes it hard to accept this evidence in total. One plan shows that in 1960, which would have been about the time that trams gave way to buses, between the ramp and the entrance gates across which Mr Holdstock and others say they daily progressed, there were five raised tram platforms and an overhead walkway to get to the entrance gate. The evidence is not too clear as to how long this state of affairs remained, but it indicates that a person who wished to cross that area before the tram platforms were demolished, would not follow the path marked on Mr King's map, but would rather have to take a more devious route along the ground to avoid the platforms, or alternatively, would need to use the overhead walkway. 58 Mr Glover, another carpenter, worked from 1975 to the present, and he says during the entire period of his employment there was a bitumen road in place along most of the Busway, and every day tradesmen would walk across the Busway. He himself would do so about ten times a day. Mr Ashelford says that he would move from the brick building on the racecourse land, across the Busway to the entrance building. Mr Presnell, a journalist, says that the media car park is behind the brick building and he constantly has walked across from the car park to either the entrance building or the bitumen road or to a point behind car park 79 since approximately 1983. He has seen other journalists do the same. 59 Some of the evidence had the flavour that throughout the day employees passed across the Busway at will as if it was part of the racecourse. However I accept that they passed over it in more or less defined courses. It should be noted that the plaintiff has also granted various licences to others to use the Busway for various temporary purposes. 60 There is no doubt that the plaintiff was aware of the use of the Busway by people associated with the racecourse. Indeed the dangers posed by inebriated racegoers intermingling with buses on race days was such a danger that the Bus Drivers' Union banned use of the Busway. 61 However I should note that use by persons alighting from or joining buses on race days is acknowledged by everyone to have no relevance. 62 What is the effect of the evidence that persons employed by the AJC or journalists coming onto the racecourse have consistently walked across the Busway over the last 40 years? 63 In Pugh v Savage [1970] 2 QB 373, 380, Cross LJ said that a tenant could by his personal user over land of a stranger obtain a prescriptive right of way in fee for his landlord. In Hamilton v Joyce [1984] 3 NSWLR 279, 289-290, Powell J approved a passage from Megarry and Wade, Law of Real Property, a passage that currently appears in the 6th ed (Sweet &Maxwell, London, 2000) as 18-129 on p 1123 that: "Where it is the dominant tenement that is let, a tenant cannot make a claim by prescription to an easement as annexed to his limited estate; if he claims an easement on the strength of his own user, he must necessarily claim it for his landlord as well as for himself." 64 It seems to me that I can infer that the employees of the AJC who constantly walked across the Busway would be as persons under the aegis of the AJC and their user could be accounted to the AJC. The case of journalists is not quite so clear because it may be that they were invitees of other persons. However as the AJC is lessee of the racecourse this is unlikely. However, it matters very little because the user by the employees was sufficient to show that there was a lost modern grant. 65 The easement claimed is what is commonly called a prescriptive easement. That is, an easement where by legal fiction there has been a grant which has become lost. Under the general law, 20 years' user nec vi nec clam nec precario gives rise to a presumption that more than 20 years ago there must have been a grant which has become lost. Although this is a legal fiction, it is serious in the sense that if the evidence shows that at the relevant time there was not a capable grantor or a capable grantee, or that the easement could not have been the subject of a grant, then no easement exists. 66 Putting aside for the moment the question as to whether prescriptive easements can exist in New South Wales under the Real Property Act 1900, there is no doubt that at all relevant times there was a capable grantor in that the plaintiff or its predecessors had full power to grant easements. So far as there being a capable grantee is concerned, the grantee would have been the nominated Chairman of the AJC who could have taken a grant in his own name. 67 I thought for a while that if any easement were to be found it would be only an equitable easement in the AJC. However, on more mature consideration this is not so because there is no fiduciary relation between the Chairman and the AJC, the Chairman merely holds the real and personal property of the AJC pursuant to the Act. The situation is rather like an English parish under the established Church where the parson is the personification of the parish and virtually a corporation sole. Furthermore, the AJC is an unincorporated association of fluctuating membership so that it is very difficult to say that it as such could have an equitable interest. 68 Gale on Easements 15th ed (Sweet & Maxwell, London, 1986) p 308, roughly translating into modern English what was held in Albon v Dremsall (1610) 1 Brownlow 216; 123 ER 763, says: "A right of way should generally speaking have a terminus a quo and a terminus ad quem, so as to be bounded and circumscribed to a place certain."

However, the learned author then quotes Wimbledon & Putney Commons Conservators v Dixon (1875) 1 Ch D 362 and Barba v Gas & Fuel Corporation of Victoria (1976) 136 CLR 120. In that latter case at p 132, Gibbs J said: "Cases concerned with rights of way have held that where a right of way is created, but the way itself is not defined, the grantee cannot insist on going wherever he chooses, but the grantor may indicate the line by which the way is to be enjoyed. … If the owner of the servient tenement does not point out the way, the grantee must take the nearest way he can."

Stephen and Jacobs JJ agreed. 69 James LJ in the Dixon case at p 368 indicated that a right of way by prescription could be claimed from point A to point B even though, because there was no defined track, users had sometimes found their way from A to B by one track and sometimes by another. 70 Although it was not cross examined upon, I have great doubt as to whether every workman or journalist pursued an exact straight line from one side of the Busway to the other along the 11 paths noted on Mr King's map. Indeed, there is weighty material to the contrary because people have deposed that when the grass was muddy they would in fact deviate. The evidence gets very close to merely saying that people would cross from one side of the Busway to the other without let or hindrance on whatever path it pleased them to take. Such evidence is not sufficient to show a right of way from the terminus a quo to the terminus ad quem. 71 The evidence was, however, not challenged, and there is some support in the cases that so long as one has fair definition of the terminus a quo and the terminus ad quem, a prescriptive easement can be obtained even though there is some fuzziness on the tracks that were used from time to time between the two points, so long as they have at some stage been properly defined. 72 It seems to me that there is just sufficient material to show that there was user for 20 years along each of the 11 paths. 73 A principal difficulty for the AJC is to establish that prescriptive easements over Torrens system land can exist in New South Wales. 74 The high point of the argument for the AJC in this respect was the decision of the Full South Australian Supreme Court in Golding v Tanner (1991) 56 SASR 482. In that case the Full Court consisting of King CJ, Cox and Debelle JJ held that the doctrine of the lost modern grant was not inconsistent with the terms of the Real Property Act unless there had been a change in the registered proprietor of the servient land during the period of adverse user. 75 Debelle J said at 489-490: "Easements by prescription are not necessarily incompatible with the Torrens system. Easements by prescription have been upheld in some other States where land is under the Torrens system. The question whether easements by prescription can arise in respect of land under the Torrens system and in what circumstances they can arise will turn on the terms of the particular legislation to which the land is subject. Thus easements by prescription have been upheld in Victoria, Tasmania and Western Australia. … But not in New South Wales or the Northern Territory. …". 76 The NSW decisions referred to are Jobson v Nankervis (1943) 44 SR (NSW) 277; Kostis v Devitt (1979) 1 BPR 9231 and Australian Hi-Fi Publications Pty Ltd v Gehl [1979] 2 NSWLR 618. 77 In Jobson v Nankervis, there was a path clearly marked on the ground and on a plan from the plaintiff's lot, Lot 1, across Lots 4, 5 and 36 owned by the defendants. Nicholas CJ in Eq held that New Zealand decisions such as McKenzie v Waimumu Queen Gold-Dredging Co Ltd (1901) 21 NZLR 231, 234, applied in New South Wales and prohibited the acquisition of easements by user. 78 Powell J in Kostis v Devitt (1979) 1 BPR 9231, 9238-9, said that with possible exceptions, none of which are relevant here, "the scheme of the Real Property Act 1900 does not permit the creation or acquisition of easements otherwise than in manner provided by ss 46 and 47 of the Act." 79 In Australian Hi-Fi Publications Pty Ltd v Gehl Mahoney JA, with whom Reynolds and Samuels JJA agreed, said at 625 that: "It was the view of Nicholas CJ in Eq in Jobson v Nankervis that, in respect of land under the Real Property Act, easements (with exceptions not here relevant) cannot arise otherwise than by instruments executed under the Act, so as to be enforceable against a subsequent registered proprietor. The judges of this court at first instance have from time to time felt it proper to apply the view of Nicholas CJ in Eq. … I do not think that the construction of s 42(b) is governed by the decisions upon this kind of point in other jurisdictions. … It is, of course, desirable that the principles to be derived form the Torrens legislation in all jurisdictions should remain uniform. However, it has been said, and in particular in relation to easements, that there is no single pattern of legislation, to all jurisdictions and that in the end, the matter is to be determined by construing the particular Act. …". 80 The Australian Hi-Fi case was very much confined by the later decision of the Court of Appeal in Dobbie v Davidson (1991) 21 NSWLR 625, but there is nothing of value in that decision for the instant case save possibly to note the historical analysis by Priestley JA as to how the original thought of the Torrens innovators that notwithstanding registration, title should be subject to easements however created was rejected by the legislature. The Australian Hi-Fi case and Dobbie v Davidson were decided before s 42(1)(b) dealing with omission of easements was amended to take its present form. At present, what was formerly section 42(1)(b) has been remoulded as 42(1)(a)(i) to make it clear that the only exception to indefeasibility with respect to easements is with respect to those subsisting immediately before the land was brought under the Act or validly created after that time under the Real Property Act or a Commonwealth Act. The remoulded paragraph itself does not seem to me to alter the previously stated position. 81 In Woodman and Nettle Torrens System in NSW (LBC, Sydney, 2003) page 10246 (update 23), the learned authors say: "The view has been expressed in New South Wales that prescriptive easements had no place at all under the former s 42(1)(b) … . An alternative view has been suggested by a South Australian case that prescriptive easements are governed by principles analogous to those governing implied easements: see Golding v Tanner … . Under this alternative view, a prescriptive easement is enforceable as between the proprietors of the dominant and servient lands at the time the easement arose (at the end of 20 years' use) under the 'rights in personam' exception to indefeasibility of title. So long as the ownership of the servient land has not changed since then, the proprietor of the dominant land can seek a court order directing the proprietor of the servient land to do all things necessary to secure the benefit of the easement (including executing the appropriate documents and lodging them for registration). But once the servient land has been transferred to a new registered proprietor taking without fraud, the easement, not being recorded in the folio of the Register, can no longer be enforced. This alternative view has much to commend it, although its applicability to New South Wales is perhaps reduced by judicial comments in (Golding's) case at 490 and in others … but New South Wales law may differ from other States in this respect. Both views can be argued to apply to the new s 42(1)(a)(i)." 82 Professor Marcia Neave in her article "Towards a Uniform Torrens System" (1993) 1 APLJ 114, 121, says that whilst in Dobbie v Davidson prescriptive easements prior to the bringing of land onto the Torrens Register were protected, "the situation in relation to easements arising by long user subsequent to registration is not clear." In their "Easements and Restrictive Covenants in Australia" (Butterworths, Sydney, 2002) 2nd ed page 242, Bradbrooke and Neave say that whilst there are arguments in New South Wales for prescriptive easements being recognised, "In all probability prescriptive easements cannot be acquired over Torrens land in New South Wales." 83 There appears to be no reason to doubt that last proposition. However, Mr Sackar says that I should adopt the South Australian view that, provided there has been no change of registered proprietor in a 20 year period, there is nothing to prevent a court of equity compelling the registered proprietor to recognise an easement which would have been created under the old system under the doctrine of the lost modern grant. 84 The so-called "in personam" exception to indefeasibility existed before Frazer v Walker [1967] 1 AC 569, but was certainly given a boost by the decision of the Privy Council in that case. At 585, the Board said that whilst the general principle of indefeasibility must be accepted - "In doing so they wished to make clear that this principle in no way denies the right of a plaintiff to bring against a registered proprietor a claim in personam, founded in law or in equity, for such relief as a court acting in personam may grant." 85 Accordingly one must look for a personal equity or perhaps a right at law which can be asserted in an action, the result of which will be to compel the registered proprietor to grant an easement in proper form. 86 In Golding v Tanner King CJ said at 485: "The grant of or right to an easement which is established by long user must carry with it an obligation on the part of the owner of the servient land at the beginning of the requisite period of user to do what is necessary to give efficacy to the grant or right. That owner cannot be permitted to derogate from the grant by refusing to do so. The benefit of the easement runs from the dominant land and that obligation therefore enures for the benefit of successive owners of the dominant land. … The obligation to do what is necessary to make the easement efficacious includes the execution and lodgement for registration of the documents necessary to obtain registration of the easement. … ".

The Chief Justice refers to the Australian Hi-Fi case at p 623. See also Debelle J at 489. 87 In Bahr v Nicolay (No 2) (1988) 164 CLR 604, 653, Brennan J said that the indefeasibility provisions "are designed to protect a transferee from defects in title of the transferor, not to free him from interests with which he has burdened his own title." 88 After much soul searching and having commenced with a view against Mr Sackar's proposition, I have come to the view that the proposition that an easement which flows from a lost modern grant may be enforced in an in personam action despite the land being Torrens system where there has been no change in registered proprietor during the period is correct. 89 Although it is clear from the authorities that the construction of the South Australian Real Property Act and the New South Wales Real Property Act have been radically different in many respects, the reasoning of the South Australian court in Golding v Tanner is, with respect, extremely orthodox and I have not heard any convincing argument the other way. Indeed, Mr Coles' basic submission is that you just can't have easements by prescription in Torrens system land in New South Wales. Whilst that proposition is undoubtedly correct, with respect it does not go far enough. What needs to be excluded either generally or in a particular case is an in personam action to perfect a lost modern grant by an action in equity to compel a registered transfer. 90 The final argument is with respect to s 178 of the Conveyancing Act 1919. The section reads, so far as is relevant: "No dedication or grant of a way shall be presumed or allowed to be asserted or established against: (a) the Crown; or (b) persons holding lands in trust for any public purposes, by reason only of user … ".

Mr Coles strongly relies on this section. Mr Sackar on the other hand, says that "way" in the section means a public way in the sense of a public highway and does not affect private rights of way. 91 Commissioner Harvey's note in his report on the Conveyancing Act (see Butterworths Conveyancing Service, Vol 2, p 3519) is that "clauses 177 to 180 are pure consolidation". The section first entered our law as s 1 of the Dedication by User Limitation Act 1881 (45 Vic No 15) and was then re-enacted as s 3 of the Dedication by User Limitation Act 1902. Stuckey and Needham in their work on the Conveyancing Act, 2nd ed (Law Book Co, Sydney, 1970), p 338 say: "That Act was passed in consequence of the decision in Turner v Walsh in which it was held that long continued user of a way by the public over land whether of the Crown or of a private owner, gives rise to a presumption of dedication, in the absence of anything to rebut it."

Turner v Walsh is reported (1880) 1 LR (NSW) 83 and was affirmed by the Privy Council (1881) 6 App Cas 636. As Mr Sackar says, Turner v Walsh was a case involving dedication of a road over Crown lands. 92 Were it not for the words "or grant" in the section, Mr Sackar's argument would have a lot to commend it because the mischief intended to be remedied was the implication of a public road dedication. 93 However, I cannot see how the words "or grant" can relate to dedication of a public road: they are words which naturally refer to the implied grant of a right of way. 94 The word "way" can denote both a public and private way, without a section such as s 178 there could be a lost modern grant against the Crown; see Pekel v Humich (1999) 21 WAR 24 and cases there cited. Furthermore there would be considerable technical difficulty, at least until recently, for making an executive order against the Crown ordering it to grant an interest in land to a subject. 95 In my opinion the words "grant of a way" include grant of a private right of way. 96 It follows that the AJC's claim to an easement fails because of s 178 of the Conveyancing Act.

(5) The Easement of Sewerage 97 This was a late addition to the AJC's claim. When analysed, two rights are really claimed: (a) a right of access to inspect sewerage pits; and (b) the right to pass drainage and sewerage under the Busway. In so far as the right of access is a right of way it is barred by s 178 of the Conveyancing Act for the reasons set out above. However, the right to pass sewerage with ancillary rights is not so affected and is within a defined path and for the reasons set out in section (4) of this judgment, there could well be a prescriptive easement in respect of the sewerage line. 98 Mr Smith gave evidence that there is an internal sewerage line running from the building marked "tea rooms" and there is also an irrigation line and that he services the sewerage pits about once every four months. He says that the line has been in place at least since 1982. 99 It seems to me that all the requirements for a proper easement for sewerage are present. In my view the right to go to the inspection pits should not be classed as a right of way within the meaning of s 178 of the Conveyancing Act, but rather an ancillary right to the easement for sewerage and drainage. 100 Accordingly, in my view some orders should be made with respect to the sewerage easement. 101 The licence claim is to my mind of little weight. Mr Sackar tried valiantly to convince me that the licence agreement whereby taxis come onto the land was a licence coupled with a grant, but there is just no way on the authorities that that could be established. A licence is not an interest in land. In any event it is terminable on fairly short notice and does not give the AJC any comfort in these proceedings. 102 (6) The licence relied on was oral, though a draft exists as annexure "A" to Mr Ladner's affidavit. 103 The evidence is that in about November 2001, an agreement was reached between the plaintiff and the AJC that the plaintiff would continue to run buses to the racecourse on Saturdays and public holidays only with a small subsidy and would licence the AJC to allow taxis to enter the Busway. 104 The draft licence was to be terminable on 30 days' notice on either side. 105 The result is that most of the AJC's claim fails. The caveat lodged in the name of Dr Williams to protect the lease, Caveat 9833265, can remain on the title until 11 September. All other caveats must be removed. The claims for the 11 rights of way fail because of s 178 of the Conveyancing Act. The claim for the sewerage easement succeeds and counsel for the AJC can bring in short minutes of order as to the appropriate form of order in due course. 106 So far as Anson is concerned, the only question is whether the sewerage line is something that should not affect it because it had no notice. However, it seems to me that any prudent purchaser would have made enquiries about sewerage lines and cannot say it does not have notice if it fails to make enquiries. Accordingly its title will be affected by the equitable right to have a proper sewerage easement granted. 107 As to costs, the AJC has succeeded in only a very small part of its claim and for the most part, with respect to a claim that was added rather late. It lost on its major claims. In my view, there should be no order for costs as between the AJC and the plaintiff. As to Anson, it was unsuccessful in its submissions; on the other hand, it was a necessary party and its participation did not materially add to the costs. Again, my view would be that it should neither get nor receive costs. However, as these matters of costs have not been argued, what I have said merely indicates my present feeling and it is open to any party to have the matter argued at some convenient time. 108 Accordingly, I publish these reasons and order that Caveats 9676713K, 9684363Q and 9833264 be removed by noon on 11 August 2003. I then stand the matter over to a date that is convenient to counsel and the court for short minutes to be brought in when any argument as to the form of order and to costs can be made. I will provisionally fix Tuesday 19 August 2003 at 9.30 am, but this may be changed by consent if my Associate is notified before 4 pm on 15 August 2003.

Last Modified: 08/12/2003 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.