Campbell v Hamilton

[2018] NSWSC 806

Supreme Court

New South Wales

Medium Neutral Citation:

Campbell v Hamilton & Ors [2018] NSWSC 806

Hearing dates:

26 & 27 February 2018

Date of orders:

04 June 2018

Decision date:

04 June 2018

Jurisdiction:

Equity

Before:

Slattery J

Decision:

Declaration made that plaintiff and defendants agreed that the plaintiff would grant an easement over the plaintiff’s land in favour of the defendants. Plaintiff will be ordered to pay the defendants’ costs of the proceedings, subject to any special costs orders.

Catchwords:

REAL PROPERTY – Easements – construction of agreement – plaintiff and defendants make agreement during a mediation – parties agree for consideration payable by the defendants to the plaintiff for the grant to the defendants of certain rights of access over the plaintiff’s land – easement registered burdening the plaintiff’s land – whether the mediation agreement grants an easement over plaintiff’s land or whether it confers a mere personal right of access over the land to the defendants but not to the defendants’ successors in title – whether the mediation agreement has been specifically performed and carried into effect through the recording of the easement on the Register – whether the recording of the easement on the Register over the plaintiff’s land should now be cancelled.

Legislation Cited:

Civil Procedure Act 2005, s 73
Conveyancing Act 1919, s 88K
Real Property Act 1900, ss 31B, 42,118, 138

Cases Cited:

Batey v Gifford (1997) 42 NSWLR 710
Campbell v Baigent [2010] NSWSC 1348
Cowen v Truefitt Limited [1899] 2 Ch 309
Daniels v Pynbland Pty Ltd (Nos 1 and 2) (1985) 4 BPR 97,319
Eastwood v Ashton [1915] AC 900
Electricity Generation Corporation v Woodside Energy Ltd (2014) 251 CLR 640
Flight v Booth [1834] 131 ER 1160
Goodwin v Papadopoulos (Court of Appeal (NSW), Mahoney JA, 31 May 1985, unrep)
Magee v Lavell (1874) LR 9 CP 107
Morrell v Fisher [1849] 154 ER 1350
Mortlock v Buller [1803] All ER Rep. 22
Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd (2015) 256 CLR 104
Papadopoulos v Goodwin [1982] 1 NSWLR 413
Story v Advance Bank Australia Ltd (1993) 31 NSWLR 722
Torr v Harpur (1940) SR (NSW) 585

Texts Cited:

JD Heydon, MJ Leeming and PG Turner, Meagher, Gummow & Lehane’s Equity: Doctrines & Remedies (5th ed, 2014, LexisNexis Butterworths)

Category:

Principal judgment

Parties:

Plaintiff: Robert Campbell
First Defendant: Colin Stewart Hamilton
Second Defendant: Penney Louise Hamilton
Third Defendant: Registrar

Representation:

Counsel:

 

Plaintiff: T. Alexis SC; R. Notley
First & Second Defendants: M. Cashion SC; J. Stephenson

 

Solicitor:

  Plaintiff: Jason Brian Hones, Hones Lawyers
First & Second Defendants: Brian Lachlan Maker, Elliot Tuthill Solicitors

File Number(s):

(2017/156313)

Publication restriction:

No

Judgment

1. The first and second defendants, Mr Colin Stewart Hamilton and Mrs Penney Louise Hamilton, signed heads of agreement with the plaintiff, Mr Robert Campbell, at the conclusion of a mediation held on 17 November 2015 (“the 2015 Heads”). The mediation related to a claim the Hamiltons had made in the Equity Division of this Court under Conveyancing Act 1919, s 88K for the grant to them of an easement over Mr Campbell’s land in Ellesmere Road in the suburb of Gymea Bay. The parties later took steps to perfect the 2015 Heads in a deed made between them on 14 November 2016 (“the 2016 Deed”). The parties are now in contest about the meaning and effect of both the 2015 Heads and the 2016 Deed.

2. The Hamiltons contend that both the 2015 Heads and the 2016 Deed granted them an easement over Mr Campbell’s land for the benefit of their adjacent land. But Mr Campbell contests their claim, contending that the 2015 Heads and the 2016 Deed only grant rights of personal access over his land to the defendants. The Hamiltons paid consideration of $275,000 to Mr Campbell for the rights in question, whether they be rights constituting an easement or only rights of personal access.

3. Since the making of the November 2016 Deed, the third defendant, the Registrar General, registered an easement over the plaintiff’s land under Real Property Act 1900 for the benefit of the Hamiltons’ land. The Registrar General did not take an active role in the proceedings.

4. Mr Campbell now seeks orders to remove the notation of the easement from his Real Property Act title. The Hamiltons seek to maintain the easement on the Register. They say that the 2016 Deed has been performed through the Registrar General’s registration of the easement on Mr Campbell’s title in accordance with what, they allege, are its terms.

5. These reasons resolve this dispute in favour of the Hamiltons’ contentions and order Mr Campbell to pay the Hamiltons’ costs of the proceedings, subject to any special costs orders.

6. The proceedings were concluded in the course of one and a half days on 26 and 27 February 2018. Mr T. Alexis SC and Mr R Notley of counsel appeared for the plaintiff instructed by Mr Jason Hones of Hones Lawyers. Mr M Cashion SC and Mr J Stephenson of counsel instructed by Mr Brian Maker of Elliot Tuthill Solicitors appeared for the defendants. Particularly as these are the second set of proceedings contested between these same parties within only four years, the Court appreciated the objective and efficient approach that counsel and solicitors on both sides brought to bear in refining and presenting the legal issues for determination at the hearing.

7. These reasons first provide a narrative of the uncontested and contested facts. The differences between the parties in relation to the contested facts did not ultimately prove to be decisive in the resolution of their dispute.

A Land Access Dispute at Ellesmere Road, Gymea Bay

8. Mr Campbell is the registered proprietor of a property in Ellesmere Road, Gymea Bay (being Folio Identifier 4/14551, which is referred to for convenience as “Lot 4” in these reasons). The Hamiltons were at all relevant times the registered proprietors of another property in Ellesmere Road, Gymea Bay (being all the land in Folio Identifier 1153/601960, which is referred to as “Lot 1153” in these reasons). The street addresses of these properties are not referred to in these reasons.

9. After the making of the November 2016 Deed, Lot 1153 was subdivided in March 2017 into two lots, being Folio Identifier 1150/1181245 (“Lot 1150”), and Folio Identifier 1151/1181245 (“Lot 1151”). The Hamiltons have since sold Lot 1151 but they remain the registered proprietors of Lot 1150.

10. This Court has previously explained the history of the development of this part of Ellesmere Road, Gymea in Campbell v Baigent [2010] NSWSC 1348 at [8] – [23], another case concerning Lot 4. Reference is made to that judgment should a wider history of the area be required.

11. The relative positions of these parcels of land may be briefly stated. Ellesmere Road runs in a north-south direction in the suburb of Gymea. Ellesmere Road follows the easternmost ridgeline of Gymea just before the land falls steeply down towards Gymea Bay. The eastern face of this escarpment has spectacular views east across to the Royal National Park.

12. Mr Campbell and Mr and Mrs Hamilton are near neighbours on this east-facing escarpment. Their land is between Ellesmere Road and Gymea Bay. Mr Campbell’s Lot 4 lies to the North of Lot 1153. But the two parcels of land are not contiguous.

13. Lot 1152, which is owned by a third party, lies immediately adjacent to and to the south of Lot 4. Lot 1153 lies immediately adjacent to and to the south of Lot 1152. No dispute exists between the Hamiltons and the owners of Lot 1152. Lots 1152 and 1153 (and a Lot 1154) were created at the same time in 1979 in DP601960, a copy of which appears below in Figure 1.

Figure 1

14. On its western boundary, Mr Campbell’s Lot 4 has a frontage to Ellesmere Road. Its eastern boundary lies about half way down the escarpment. At its eastern boundary, Lot 4 is subject to a number of easements in favour of neighbours who own properties below and further to the east of Lot 4 with frontages to Gymea Bay. As my earlier decision Campbell v Baigent explains, these easements give access to these waterfront neighbours over the same strip of Lot 4. The easements allow these neighbours to travel in a generally northerly direction on a common driveway up to Ellesmere Road, as is illustrated in Figure 2.

Figure 2

15. Lot 1153 lies immediately to the south of the land shown in Figure 1. The contested right of access in these proceedings would give part of Lot 1153 (the part that ultimately became Lot 1150) a right of access to the north, over its boundary with Lot 4, and then along the same driveway strip at the eastern boundary of Lot 4. The question in these proceedings is whether the right of access so conferred was an easement or only a personal licence to the Hamiltons.

16. In December 2014, the Hamiltons commenced earlier proceedings against Mr Campbell, seeking pursuant to Conveyancing Act, s 88K the creation of an easement over Lot 4 for vehicular and pedestrian access for the benefit of the as-then-unsubdivided Lot 1153 (“the 2014 proceedings”).

The 2015 Heads

17. On 17 November 2015, the parties mediated the 2014 proceedings. They concluded the mediation that day by signing the 2015 Heads. In the 2015 Heads, Mr Campbell is described as “the defendant” and the Hamiltons as “the plaintiff”, as that was their designation in the 2014 proceedings. The 2015 Heads provided in full as follows:

“Heads of Agreement

1.   This Agreement is immediately binding but it is the intention of the parties to enter into a Deed of Settlement incorporating these terms as soon as practicable.

2.   Upon execution of a Deed of Settlement, the Defendant grants to the Plaintiff an easement for service and carriageway of 3m width from the Eastern Boundary of Lot 4 DP 14551 (Lot 4), known as 188 Ellesmere Road, Gymea Bay (the Right of Way) but such grant is not to be registered by the Plaintiff for 12 months from the date of the execution of the Deed of Settlement or such lesser time as the Defendant agrees.

3.   The parties agree to terms being filed on 11 December 2015 in proceedings no. 2014/361075 to the following effect:

a.   Proceedings dismissed; and

b.   No order as to costs.

4.   The Plaintiff is to pay the Defendant an overall amount of $275,000 for compensation for the grant of the Right of Way and for the Defendant’s costs of the proceedings in the following manner:

a.   The Plaintiff will pay the Defendant $150,000 within 2 months from the date of the execution of the Deed of Settlement; and

b.   The Plaintiff will pay the Defendant $125,000 on production of the title deeds 12 months from the date of the execution of the Deed of Settlement.

5.   The Plaintiff agrees that a development application for the subdivision of 198 Ellesmere Road Gymea Bay, described as Lot 1153 in DP 601960 (Lot 1153), or part thereof shall not be lodged within 12 months from the date of the execution of a Deed of Settlement or such lesser time as the Defendant agrees.

6.   The Plaintiff agrees not to object to the Defendant’s development application for the subdivision of Lot 4.

7.   The Defendant agrees not to object to the Plaintiff’s development application for a subdivision of Lot 1153 or part thereof.

8.   The Defendant grants the Plaintiff a licence for vehicular access over the Right of Way for a period of 12 months from the date of execution of the Deed of Settlement.

9.   The terms of this agreement are confidential.”

18. The 2014 proceedings were dismissed by agreement with no order as to costs on 11 December 2015 upon the parties’ apparent common assumption that they had indeed settled as a result of the execution of the 2015 Heads.

19. But importantly, at the time of the 2015 Heads, Lot 1153 had not been subdivided. The 2015 Heads deferred the Hamiltons’ capacity to lodge a plan for that subdivision but nevertheless secured for them protection against Mr Campbell later objecting to it. The 2015 Heads did not deal with issues of access over Lot 4 after subdivision: those issues had not yet clearly emerged.

20. On 18 May 2016, the solicitors for the Hamiltons sought to enforce the 2015 Heads. To progress this objective, they addressed the access issue by requesting a Real Property Act 1900 Transfer granting an easement over Lot 4. But Mr Campbell did not provide such a Transfer. So under Civil Procedure Act2005, s 73 the Hamiltons filed a Notice of Motion in the 2014 proceedings seeking enforcement of the 2015 Heads through the more formal Deed of Settlement that the 2015 Heads contemplated. This action ultimately led to the negotiation and execution of the 2016 Deed, which did deal with the question of access after the subdivision of Lot 1153.

The 2016 Deed

21. On 14 November 2016, Mr Campbell and Mr Hamilton (on his own behalf and on behalf of Mrs Hamilton) executed the November 2016 Deed. Schedule B to the 2016 Deed contains the draft Transfer Granting Easement which the Registrar General later rejected. The whole 2016 Deed is important but special focus is required upon Schedule B.

22. The 2016 Deed achieved two main objectives. First, it formalised the settlement of the 2014 proceedings. But by November 2016 the Hamiltons were closer to subdividing Lot 1153. So the 2016 Deed also sought to deal with the issues of access that would arise from subdivision and the creation of the new Lot 1150.

23. As can be seen from Figure 1, Lot 1153 ran in an approximately east-west direction from Gymea Bay at its eastern boundary, up to about the middle of the escarpment. It was to be subdivided into a lower and larger lot to the east with a waterfront (Lot 1150) and a smaller and higher lot to the west of Lot 1150 (Lot 1151). The subdivision did not occur until after the 2016 Deed, and is referred to later in these reasons. One of the issues with which the drafters of the 2016 Deed were grappling was how to express their agreement before Lot 1153 was subdivided.

24. But the subdivision required the issue of access to each of the subdivided lots to be resolved. The new and higher Lot 1151 had separate access to Ellesmere Road over other properties unrelated to the parties to these proceedings. The Hamiltons sought to meet the new and lower Lot 1150’s needs for access to Ellesmere Road by obtaining further rights over the same strip of Lot 4 over which its other neighbours already had access.

25. Recitals E, F, G, H and I to the 2016 Deed referred to the 2015 Heads and the Hamiltons’ attempts to enforce the 2015 Heads as follows:

"E.   On 8 December 2014 [the Hamiltons] commenced proceedings by way of summons filed in the Supreme Court of New South Wales, matter number 2014/361075 (the "Proceedings") against [Mr Campbell].

F. In the Proceedings [the Hamiltons] sought an order pursuant to s 88K of the Conveyancing Act 1919 imposing an easement over Lot 4 in favour of Lot 1153.

G.   On 18 November 2015 the parties executed a Heads of Agreement (‘the Heads of Agreement’).

H.   On 18 May 2016 [the Hamiltons] filed a Notice of Motion in the Proceedings seeking to enforce the Heads of Agreement (‘the Notice of Motion’).

I.   Without making admissions as to liability and on terms not to be disclosed, the Parties have reached an agreement to settle the Proceedings and the Notice Motion as described in the Recitals A to H above on the terms contained in this deed od settlement and release (‘Deed’)”.

26. The 2016 Deed, clause 1.2 contained the following relevant definitions:

"Easement (Transfer Granting Easement) means the document as set out at Schedule B of this Deed and capable of registration (at the expense of [the Hamiltons] at the Land & Property Information Office, granting [the Hamiltons] an easement for services and carriageway three (3) metres in width from the eastern boundary of Lot 4.

…

Settlement Sum means the amount of $275,000.00 inclusive of GST (if applicable) payable by [the Hamiltons] to HONES Trust Account, the details of which are to be provided in writing, by way of electronic funds transfer (EFT), bank cheque or money order, payable by [the Hamiltons].”

27. The 2016 Deed, clause 2 provided a mechanism for the payment to Mr Campbell of the $275,000 contemplated by the 2015 Heads in exchange for his release from claims and for the production of the title deeds to Lot 4 to enable registration of a Transfer Granting Easement. Clause 2 relevantly provided as follows:

“2.1   [The Hamiltons] agree to pay to [Mr Campbell] the Settlement Sum on production of title deeds for Lot 4 by [Mr Campbell].

2.2   Should [the Hamiltons] fail to pay the Settlement Sum in accordance with clause 2.1, then the Settlement Sum will become due and payable by [the Hamiltons] immediately and [the Hamiltons] will consent to [Mr Campbell] commencing proceedings to recover the outstanding amount.

2.3   [Mr Campbell] agrees to produce the title deeds for Lot 4, for registration of the Transfer Granting Easement, by 15 February 2017 or such other date as may be agreed upon between the parties.

2.4   Should [Mr Campbell] fail to produce the title deeds for Lot 4 in accordance with clause 2.3, then [Mr Campbell] will consent to [the Hamiltons] commencing proceedings to compel him to do so at no cost to [the Hamiltons].

2.5   On the Execution Date of this Deed the parties will execute and exchange Consent Orders as set out in Schedule A of this Deed.

2.6   On the Execution Date of this Deed, [Mr Campbell] will give to [the Hamiltons] a signed Transfer Granting Easement for services and carriageway of three (3) metres in width from the eastern boundary of Lot 4 (as set out at Schedule B of this Deed).

2.7   The Transfer Granting Easement referred to in clause 2.6 is to be held in escrow by [the Hamiltons] and is not to be registered before 15 February 2017, or such lesser time as [Mr Campbell] agrees in writing.

2.8   Upon receipt of payment in full of the Settlement Sum, [Mr Campbell] will release [the Hamiltons] from all Claims (whether at common law, in equity or under any statute) [Mr Campbell] could, would or might have against [the Hamiltons] In respect of any act done or omitted to be done by [the Hamiltons] up to the date of this Deed including:

(a)    any Claims arising directly or indirectly out of the Proceedings;

(b)    Made or referred to in the Proceedings;

(c)    Referred to in any of the Recitals;

(d)    Arising directly or indirectly from any matters referred to in any of the Recitals; and

(e)    Otherwise arising before the execution of this Deed, other than any claim arising out of this Deed.

2.9   Upon receipt of payment in full of the Settlement Sum, [Mr Campbell] will indemnify and keep indemnified [the Hamiltons] in respect of all Claims whether known or unknown, which [Mr Campbell] could, would or might at anytime in the future have upon or against [the Hamiltons] in respect of the subject matter of this Deed.

2.10   On the Execution Date of this Deed, [the Hamiltons] release [Mr Campbell] from all Claims (whether at common law, in equity or under any statute) [the Hamiltons] could, would or might have against [Mr Campbell] in respect of any act done or omitted to be done by [Mr Campbell] up to the date of this Deed including:

(a)    any Claims arising directly or indirectly out of the Proceedings;

(b)    Made or referred to in the Proceedings;

(c)    Referred to in any of the Recitals;

(d)    Arising directly or indirectly from any matters referred to in any of the Recitals; and

(e)    Otherwise arising before the execution of this Deed, other than any claim arising out of this Deed.

2.11   On the execution date of this Deed, [the Hamiltons] will indemnify and keep indemnified [Mr Campbell] in respect of all Claims whether known or unknown, which [the Hamiltons] could, would or might at any time in the future have upon or against [Mr Campbell] in respect of the subject matter of this Deed.

2.12   In consideration of the provision of the Transfer Granting Easement, [the Hamiltons] agree not to lodge any development application for Lot 1153 before 15 February 2017, or such lesser time as [Mr Campbell] agrees in writing.

2.13   [Mr Campbell] agrees not to object to any development application by [the Hamiltons] for the subdivision of Lot 1153.

2.14[The Hamiltons] agree not to object to any development application by [Mr Campbell] for the subdivision of Lot 4.”

28. Much of the balance of the 2016 Deed does not need to be reproduced. After clause 2, the 2016 Deed contains a covenant not to sue (clause 3), obligations as to confidentiality (clause 4), obligations as to non-disparagement (clause 5), plea and bar provisions (clause 6) and provisions about the service of notices (clause 7).

29. In clause 8 of the 2016 Deed, the parties acknowledge that they have “had the opportunity to obtain independent legal advice in respect of this Deed” and that they intend the terms of the 2016 Deed to be “in full and final settlement of each and every right which exists now or in the future with respect to any of the matters referred to in the Deed” notwithstanding that they may discover new facts in the future.

30. The 2016 Deed then contains a series of provisions as to severability (clause 9), variation only by deed (clause 10), non-exercise of powers not operating as a waiver (clause 11), attorneys (clause 12) and liability of multiple parties (clause 13).

31. Finally, the 2016 Deed provides for Further Assurances, Assignment and the Binding of Successors, as follows:

"14.1   Each party must do, sign, execute and deliver and must procure that each of its employees and agents does, signs, executes and delivers all deed, documents, instruments and acts reasonably required of it or them by notice from another party to carry out and given full effect to this Deed and the rights and obligations of the parties under it.

15.1   No party to this Deed may assign any of its rights, title or interest under this Deed without the consent of each of the other parties.

16.1   Notwithstanding the provisions expressed in clause 15.1 to this Deed, this Deed binds the parties and any executor, administrator, transferee, assignee, liquidator or trustee in bankruptcy appointed in respect of it.”

32. The 2016 Deed is governed by the laws of New South Wales (clause 17), may be executed in any number of counter parts (clause 18), is the entire agreement of the parties (clause 19) and each party agrees to bear its own costs of preparation of the 2016 Deed (clause 20).

33. Schedule A to the 2016 Deed comprises the agreed consent orders dismissing the 2014 proceedings.

Schedule B to the 2016 Deed

34. Schedule B to the 2016 Deed comprises a draft Land and Property Information (LPI) dealing that was apt for registration under the Real Property Act. On 1 December 2017 LPI was renamed “NSW Land Registry Services”, but for convenience, it will continue to be referred to in these reasons as the “LPI”. That dealing will be described for convenience in these reasons as “the Schedule B dealing”. The Schedule B dealing referred to a proposed servient tenement as being “Part of 4/14551" and a proposed dominant tenement as being "Part of 1153/601960”.

35. The “Description of Easement” in the Schedule B dealing provided for an "Easement for services and carriageway 3 [metres] wide as shown in plan annexed hereto and marked ‘A’ and as described in document annexed hereto and marked ‘B’”.

36. The Schedule B dealing in turn had four annexures being respectively Annexure ‘A’, which was a plan of the location of the proposed easement, and Annexure ‘B’, which sought (controversially, as it turned out) to describe the part of the lot benefitted and the other terms of the easement. Somewhat confusingly, the text of Annexure B (and not the Schedule B dealing itself) introduces two further annexures, being Annexure ‘C’ and Annexure ‘D’. These will be dealt with later in these reasons.

37. Annexure A to the Schedule B Dealing. Annexure A to the Schedule B dealing is the plan set out in Figure 3 below. It shows the proposed right of carriageway and easement for services three metres wide as (A). That proposed right of carriageway coincides with an existing right of carriageway of variable width (B). It shows the proposed right of carriageway traversing Lot 1152. It does not show full Deposited Plan number for the proposed burdened Lot 4 very clearly; it only appears by the number “4”.

Figure 3

38. Annexure B to the Schedule B Dealing. Clauses 1 to 3 of Annexure B to the Schedule B dealing are in the following terms, under the heading “Lot benefited”:

"1.   This easement only benefits the lower part of Lot 1153 in Deposited Plan 601960 (Lot 1153) being that part of Lot 1153 that is approximately 3,649 square metres and, subject to minor boundary adjustments, shown as lot 1150 on the annexed plan marked "C".

2.   This easement does not benefit the upper part of Lot 1153, being that part of Lot 1153 that is approximately 1,000 square metres and, subject to minor boundary adjustments, shown as Lot 1151 on the annexed plan marked "C".

3.   This easement does not benefit or will no longer continue to benefit:

a.   the area identified as "PARCEL OF LAND TO BE TRANSFERRED" that is approximately 149.9 square metres and identified on the annexed plan marked "D" if some or all of that area is transferred to the registered proprietor of Lot 1152 in Deposited Plan 601960 (Lot 1152)(or the registered proprietor of any subdivision of Lot 1152); and/or

b.   any part of Lot 1153 that is smaller in area than the minimum lot size for subdivision of Lot 1153 and is transferred to the registered proprietor of an adjacent or adjoining lot."

39. Annexure B to the Schedule B Dealing under the headings “Services” and “Carriageway”, and “Disputes” sets out other terms of the easement for services and carriageway.

40. Annexure C to the Schedule B Dealing. Annexure C to the Schedule B dealing is a proposed plan of subdivision. It is entitled “Plan of Subdivision of Lot 1153 in DP601960”. An important feature of Annexure C is its bisection of Lot 1153 by lines that are fixed: (a) in length (measured in metres, respectively 16.24 metres and 23.265 metres; and (b) in minutes and seconds (respectively 134º35’45” and 214º32’20”). The bisection of Lot 1153 by lines so measured is a unique bisection, from which areas of the resultant subdivided parcels of Lots 1151 and 1150 can be derived.

41. On the plan in Annexure C to the Schedule B dealing, the proposed Lots 1151 and 1150 are clearly marked. Beneath the description “Lot 1151” are the words “1,000m²”. And beneath the description “Lot 1150” are the words “3557m² BY DED’N”.

42. The relevant parts of Annexure C to the Schedule B dealing are set out below in Figure 4:

Figure 4

43. Annexure D to the Schedule B Dealing. Annexure D to the Schedule B dealing is not the subject of contention between the parties. It relates to a small rhomboid shaped parcel of 149.9m² of the land in Lot 1153 at the boundary of Lots 1153 and 1152. Before the 2016 Deed, the rhomboid shaped land had been carved from Lot 1152, near the waterfront of Gymea Bay. The 2016 Deed in clause 3 and Annexure D contemplated the returning of this rhomboid parcel to Lot 1152. It is not necessary here to reproduce the Annexure D plan.

Lodging the Transfer Granting Easement – December 2016 to March 2017

44. On 12 December 2016, Mr Campbell provided the Hamiltons with an executed Transfer Granting Easement. This was said to be in conformity with the Schedule B dealing attached to the 2016 Deed.

45. On or about 30 January 2017, an agent for the Hamiltons’ solicitor, Mr Jordan, attended the LPI to seek advice as to whether the proposed Schedule B dealing was indeed in registrable form. Mr Jordan organised this visit to attempt to smooth over any obstacles that the LPI might have to its registration. An officer at the LPI subsequently endorsed the dealing with the words, "Form is acceptable for lodgement DRD 331/1".

46. But this endorsement was a little optimistic. After the Hamiltons became apprised of this endorsement of the lodged dealing, on 15 February 2017 they paid the solicitors for Mr Campbell the sum of $275,000, the sum required under the 2016 Deed. This payment was made at that time because Mr Campbell had by then produced the Certificate of Title for Lot 4 to the LPI.

47. On 15 February 2017, Mr Jordan emailed Mr Campbell requesting the production receipt number for Mr Campbell’s Certificate of Title for Lot 4, to identify it for registration purposes. But Mr Campbell did not provide the receipt number to Mr Jordan in response to this request.

48. On 15 February 2017, the Transfer Granting Easement was lodged for registration with the LPI. Lodgement of the Transfer Granting Easement was only possible if the Certificate of Title had also been produced to the LPI. Despite the non-response to Mr Campbell’s 15 February request, Mr Campbell's production receipt number for the Certificate of Title had in fact been provided to a member of Mr Jordan's staff during the course of an enquiry on 7 February 2017.

49. But the LPI was not sufficiently satisfied with the form in which the Transfer Granting Easement was lodged to register it. On 24 February 2017, the LPI issued requisitions about the Transfer Granting Easement. Meanwhile, its registration was delayed. These requisitions were as follows:

“1.   AM160015 TG

Requisition Item 14.24

The easement description at marginal note (E) must be consistent with the description at the designation (A) on the plan and in the heading of the plan.

2.   AM160015 TG

The western boundary of the easement site must be shown as a broken line on the plan.

3.   AM160015 TG

The north point must be shown on the plan.

4.   AM160015 TG

Requisition Item 14.2

The plan of survey annexed to the dealing (Annexure ‘C’) is unacceptable. A plan of survey must be lodged as a Deposited Plan. The dealing must then be amended to refer to the new plan.”

50. The Hamiltons did not inform Mr Campbell of the LPI’s requisitions. From the prior conduct of Mr Campbell in resisting enforcement of the 2015 Heads, it may be inferred that the Hamiltons anticipated difficulties if Mr Campbell were informed of the Hamiltons’ need to deal with these requisitions. The Hamiltons uplifted the Transfer Granting Easement from the LPI without informing Mr Campbell.

The Amended Transfer Granting Easement – 6 March 2017

51. On 6 March 2017, Mr Hamilton personally attended the LPI to address the issues raised by the requisitions. He had with him a plan prepared by his surveyor, a Mr Bentley. As a result of exchanges between Mr Hamilton and the three LPI staff on this occasion, a number of handwritten amendments were made to the Transfer Granting Easement. I accept Mr Hamilton’s evidence about his dealings with the LPI.

52. Those amendments are set out in detail below. They were made by LPI staff. Mr Hamilton placed his initials beside two of the amendments after speaking to Mr Jordan. The amendments were all satisfactory to the LPI officers and dealt with the LPI requisitions. Mr Hamilton initialled the amendments because he believed he had authority to do so. The Transfer Granting Easement so-amended (described in these reasons as the “Amended Transfer Granting Easement”) then proceeded to registration and was registered by the LPI as dealing AM160015N. To the extent that these reasons also refer from time to time to the “registered easement”, they are referring to the form of the Amended Transfer Granting Easement, which attained registration. The Amended Transfer Granting Easement that became the registered easement is a document of nine pages and each page is marked as a number “of 9”. For convenience its pages are referred to the same way in these reasons.

53. The central change, as could be expected from the LPI requisitions, was to the description of the Lot benefitted in Annexure B to the Schedule B dealing. The amendments to clauses 1 and 2 (reproduced here in italics) were as follows:

“Lot benefited

1.   This easement only benefits the lower part of Lot 1153 in Deposited Plan 601960 (Lot 1153) [being part designated (x) on Plan attached] being that part of Lot 1153 that is approximately 3,649 square metres and, subject to minor boundary adjustments, shown as lot 1150 on the annexed plan marked "C".

2.   This easement does not benefit the upper part of Lot 1153, being that part of Lot 1153 that is approximately 1,000 square metres and, subject to minor boundary adjustments, shown as Lot 1151 on the annexed plan marked "C".”

54. Also in handwriting on the right hand margin between paragraphs 1 and 2 was Mr Hamilton’s initials and the following words (also reproduced here in italics), “Colin Hamilton. I am authorised to amend dealing 6/3/17”. The rest of Annexure B is not reproduced. It has not changed from the original.

55. A corresponding change was made to the first page of the Schedule B dealing, amending the “Dominant Tenement” box by crossing out certain handwritten words which read “now being 1150/1181245”. That box was amended to read as follows: “Part of 1153/601960 shown as (X) on plan annexed”. Mr Hamilton signed against this change, “I am authorised to amend dealing. 6/3/17”.

56. The “plan attached” specified in clause 1 of Annexure B was now on page 7 of the 9 pages comprising the registered easement and was headed “Plan Showing the Part of Lot 1153 DP601960 Benefitted by Easement for Services and Carriageway 3 Wide”. That plan is figure 5 below:

Figure 5

57. Thus in three places (the “Dominant Tenement” box on the first page of Schedule B; Annexure B, clause 1; and the plan on page 7 of 9) the registered easement identified with interlocking descriptions the land benefitted by the easement, as being the land marked “(X)”. Other changes effected in the registered easement are mentioned below, but these are less significant and generally only responsive to the LPI’s formal requisitions.

The Subdivision of Lot 1153 – 13 March 2017

58. On 13 March 2017, by DP1181245, Lot 1153 was finally sub-divided into two lots: Lot 1151 and Lot 1150. The Hamiltons are no longer the registered proprietors of Lot 1151. The registered easement AM160015N is no longer recorded on the folio of Lot 1151 as benefitting that lot. Relevant parts of the final plan of subdivision, DP1181245, appears in Figure 6 below.

Figure 6

Contrasting the Schedule B Dealing and the Registered Easement

59. The registered easement differs from the Schedule B dealing in ways that featured in the arguments between the parties. The important differences have been mentioned earlier. For completeness, before analysis commences, these differences are set out in this section.

60. There is some overlap in this section with changes that have already been identified. Here are the differences:

1. The words "shown as (x) on the plan annexed" have been added to the description of the dominant tenement on page 1 of 9.

2. The words "being the part designated (x) on plan attached" have been added to clause 1 of Annexure B of the Schedule B dealing at page 4 of 9 of the registered easement.

3. A plan on which part is shown as marked with an "(X)” has been added as page 7 of 9. This plan was previously prepared by Mr Hamilton’s surveyor. Its preparation followed communications between the surveyor and the LPI.

4. Clause 2 of Annexure B of the Schedule B dealing at page 4 of 9 has been deleted. Once the new plan at page 7 of 9 of the registered easement and the additional words are included at pages 1 and 4 of 9 of the registered easement (see Figure 5 above), the part of Lot 1153 not benefitted is more obvious. So Annexure B of the Schedule B dealing clause 2 was probably no longer necessary.

5. The plan which appears at page 2 of 9 of the registered easement has been substituted for the plan that is Annexure A in the Schedule B dealing.

6. The words "this page is for signature only" have been added to each of the plans at pages 3 of 9, 8 of 9 and 9 of 9 of the registered easement.

61. The Hamiltons contend that the amendments in (1) to (4) merely restate in a different form the effect of the Schedule B dealing, Annexure B, clause 2. But that is the point in issue in the proceeding. Amendments (5) and (6) have no significance for the argument in these proceedings.

62. The Hamiltons suggest that there may be a typographical error in the area of the dominant tenement stated as approximately “3,649 square metres” in Schedule B, Annexure B, clause 1 and in the registered easement. This issue is dealt with later in these reasons. If there is a typographical error, it exists in both the Schedule B dealing and in the registered easement.

63. There were other differences of lesser significance identified in (5) and (6) above. The plan which has been included in Annexure A of the Schedule B dealing at page 2 differs from the plan which appears at page 3 of 9 of the registered easement. In the registered easement, the plan is headed “Plan of Easement For Services and Carriageway” rather than using the terms " Plan of Proposed Right of Carriageway" and "Easement for Services" from Conveyancing Act, Schedule 8. The word "proposed" has been deleted. This makes sense as the registered easement (at pages 4 and 5 of 9) defines the terms of the easements in Annexure B, clauses 4 to 12. Also, the plan on page 2 of 9 of the registered easement contains an unbroken line on the western side of the easement, as had been requested by the LPI.

64. The plan which has been included at page 2 of 9 of the registered easement includes a north marking which was not present on the plan which appears at page 3 of 9 of the registered easement and which was also Annexure A (page 2) of the Schedule B dealing. The four relevant deposited plans have also been included in the plan which appears at page 3 of 9 of the registered easement and both boundaries of the easement have been shown with broken lines. These amendments in the plan at page 2 of 9 of the registered easement are consistent with the LPI’s 24 February 2017 requisitions.

65. The addition of the words "this page is for signature only" at pages 3, 8 and 9 of 9 of the registered easement are mere formalities and do not change the Schedule B dealing.

The Post Registration Correspondence

66. At all relevant times up until the commencement of these proceedings, Mr David Jordan of Elliot Tuthill Solicitors acted for the Hamiltons and Mr Jason Hones of Hones Lawyers acted for Mr Campbell. Mr Brian Maker of Elliot Tuthill Solicitors undertook the conduct of these proceedings on behalf of the Hamiltons. Mr Hones continued to act for Mr Campbell.

67. On 20 March 2017, Mr Jordan received a letter from Mr Hones dated 20 March 2017, complaining about the Hamiltons’ lodgement of the Amended Transfer Granting Easement, the dealing giving rise to the registered easement. Mr Hones complained that the dealing that had been lodged differed from what had been agreed. His 20 March letter relevantly stated:

“We refer to the above proceedings (Proceedings) and confirm we have instructions to act for Mr Robert Campbell.

We note that the Proceedings were settled and a deed reflecting the terms of settlement entered into between the parties on 14 November 2016 (Deed).

The Deed had annexed to it a transfer granting easement (Transfer). As you are aware, the Transfer was drafted in a specific manner to reflect certain limitations.

On 7 March 2017, our client received notice of the recording of the Transfer over his property (Amended Transfer). The Amended Transfer contains deletions and amended terms to that of the Transfer, none of which our client was aware of or consented to.

Concerningly, the Amended Transfer contains a hand written notation purporting to be that of your client in which an assertion is made that the amended terms of the Amended Transfer were "authorised". Clearly from we have set out above, that is not the case.

The amendments that have been made to the Amended Transfer, and which Mr Hamilton was not authorised to make (despite the assertion to the contrary), are as follows:

1.   Adding to part (A) of the Transfer the following description "Shown as (x) on plan annexed";

2.   Deleting paragraph 2 from the Transfer;

3.   Adding Annexure A with the remark "For signatures see page 3";

4.   Adding the remark on the subsequent plan bearing the title Annexure A; and

5.   Adding the plan on page 7 of the Transfer.

Our client instructs us that the amendments your client has unilaterally, and without approval, made to the Transfer are materially changed that which he agreed to. Our client requires your client to take immediate steps to either:

(a)   Release the easement; or

(b)   Amend the terms of the easement to reflect the term of the Transfer.

Should we not receive your confirmation of the above by 4:0Opm today, our client will take such steps as are necessary to ensure the easement reflects the terms set out in the Deed.”

68. On 21 March 2017, Mr Jordan sent a letter in reply to Mr Hones disputing that the amendments in the Amended Transfer Granting Easement changed what had been agreed. That letter stated:

“We refer to your letter dated 21 March 2017 and advise that we have compared the amended Transfer with the Transfer attached to the Deed of Settlement and Release.

It seems that the amendments made as noted in items 1 & 2 of your said letter do not vary the agreement between the parties in that the area shown as ‘(x)’ is only Lot 1150.

Therefore, the Easement does not benefit the area on which the house is erected, being the area of approximately 1,000 square metres.

Please advise how the amendments materially change the agreement reached between our respective clients.

We received instructions this morning that a caveat has been lodged by your client on the lot on which the house is situated (1151) as well is the lot (1150) benefited by the registration of the Transfer Granting Easement. We request the caveat be withdrawn within 24 hours in relation to Lot 1151 failing which a lapsing notice will be served or action will be commenced without further notice to your or your client. In such action, our client will seek costs and damages.

Our client will further consider the caveat on Lot 1150 after you advise in relation to the fourth paragraph this letter.”

69. On 23 March 2017, Mr Jordan received a letter from Mr Hones dated 23 March 2017. That letter stated:

"We refer to your letter of 21 March 2017.

At the time that the deed was entered into between the parties with the form of the Transfer annexed to it, including the terms (which had been pressed you in that form), the Transfer failed to clearly indicate the land to which the benefit of the easement was appurtenant. So much is clear by the fact that the LPI required the Transfer to be amended an additional plans appended to it, making that point clear.

The transfer in that form and which was submitted was therefore an easement that was not enforceable against future owners of our client's land. This arises because of the operation of s 88(1)(a) of the Conveyancing Act.

The easement however that has now been registered addresses that fundamental problem with the Transfer (which problem our client was aware of at the time that the deed was entered into). That is, the easement which has been registered will now be enforceable against future owners of our client's land in circumstances where previously it would not have. That materially changes the effect of the Transfer and that which our client bargained for.

We are instructed to provide your client with an additional 48 hours in which to consider the contents of this letter and confirm that they will take all such steps as are necessary to have either the easement amended to reflect that which was previously lodged with the LPI or alternatively, to extinguish the easement.

As for the matters relating to the caveat we will reply to you concerning those matters once we have instructions."

70. On 27 March 2017, Mr Jordan replied to Mr Hones’ letter dated 27 March 2017. His letter stated that his clients maintained that they had not obtained anything more than what was envisaged in the 2016 Deed and at the November 2015 mediation. The letter proceeded as follows:

“Pursuant to the deed of settlement, each party must comply with clause 14.1 and do all things necessary to give full effect to the deed.

The mediation and the deed of settlement came about by reason of a s 88K application. The result of this application was to culminate in the registration of a transfer granting easement. Please advise if your client is claiming that the parties were only negotiating a personal right to our clients.

We refer you to Handley v Gunner [2007] NSWSC 601, with particular reference to paragraphs 18-21. The issues raised in these paragraphs have been affirmed by the President of the Court of Appeal.

Nothing in either the mediation agreement or the November agreement gives your client an interest in our clients’ land. This top lot does not benefit by the right of carriageway and easement. Whilst the lower lot does benefit by the right of carriageway and easement, your client has no caveatable interest that lot either. Our clients intend to sell the top lot on which the house is situated. Your client is required to immediately withdraw his caveat over both lots.”

71. These proceedings were commenced shortly after this letter. On 24 May 2017, Mr Campbell filed the Summons. The Statement of Claim was filed on 3 July 2017, and the Amended Statement of Claim on 14 September 2017. On 25 July 2017, the defendants/cross-claimants filed their Defence and Cross-claim. A further Cross-claim was filed on 14 August 2017, which appears to be in the same terms as the Cross-claim. On 14 September 2017, the plaintiff/cross-defendant filed its Defence to Cross-claim.

72. The Court did not order the parties to mediate. As the present dispute arises out of a mediation to settle the 2014 proceedings, its resolution by traditional curial methods is indicated.

The Relief Sought by Mr Campbell and the Hamiltons

73. Mr Campbell’s Summons seeks a declaration that the Amended Transfer Granting Easement (dealing AM160015) is void, and an order pursuant to Real Property Act 1900, s 138 that the Registrar General cancel the recording of dealing AM160015N in folio for Lot 1150 and in any other folio in which dealing AM160015N is recorded.

74. In the alternative, Mr Campbell’s Summons seeks a declaration that the Amended Transfer Granting Easement does not benefit any part of the folio for Lot 1151 or any other folio.

75. In their Cross-claim, the Hamiltons seek various declarations: a declaration that the 2016 Deed, on its true construction, transfers rights as set out in the Amended Transfer Granting Easement; a declaration that on its true construction the 2016 Deed binds the plaintiff’s/cross-defendant’s successors in title; and a declaration that the Amended Transfer Granting Easement is valid and enforceable.

76. The Hamiltons’ Cross Summons seeks relief in the alternative. The Hamiltons seek orders that, in the event that the Court were to make an order under Real Property Act, s 138, the Registrar General should cancel dealing number AM160015N in any other folio in which it is recorded, and an order that Mr Campbell specifically perform and carry into effect the 2016 Deed by executing an Amended Transfer Granting Easement, namely in the form registered as AM160015N.

77. The Hamiltons seek various other forms of alternative relief for which it was not ultimately necessary for them to press. They seek: an order that the 2016 Deed be rectified by the addition of the handwritten alterations that appear on the Amended Transfer Granting Easement; an order that the cross-defendant specifically perform the 2016 Deed, as so rectified, by delivering a transfer granting easement in conformity with it; and an order under Conveyancing Act, s 88K imposing an easement in the terms of Amended Transfer Granting Easement for the benefit of Lot 1150. But this last alternative claim was abandoned just before the hearing.

78. If none of this relief is to be granted, the Hamiltons seek that Mr Campbell pay them restitutionary damages and/or equitable compensation of $275,000, representing the consideration they had paid under the 2016 Deed.

79. Mr Campbell resists all the relief sought by the Hamiltons on the Cross-claim. He says the Hamiltons are not entitled to rely on the 2016 Deed to support the relief claimed on the current pleading.

80. On this history, Mr Campbell contends: that the Amended Transfer Granting Easement confers far more than the rights of access that he says were agreed in the 2016 Deed; that it also contained false representations that meant that it was never drawn to his attention; that the Hamiltons were aware of this; and that he did not authorise its lodgement with the LPI.

81. The Hamiltons respond contending that: the Amended Transfer Granting Easement gave full and proper effect to the 2016 Deed and did not contain false representations; that there was no need for the precise terms of the Amended Transfer Granting Easement to be specifically approved by Mr Campbell as the 2016 Deed, read with the 2015 Heads, itself authorised its lodgement in the form that it was lodged and provided the necessary consent by Mr Campbell.

Analysis

Applicable Legal Principles

82. The 2016 Deed is an arms-length agreement negotiated through lawyers and it contains many technical terms. Though dealing with a domestic situation, it has many of the features of a commercial agreement. There are many appellate pronouncements as to how courts should construe commercial contracts. I am guided by one of the most recent of these, the High Court’s decision in Electricity Generation Corporation v Woodside Energy Ltd (2014) 251 CLR 640; [2014] HCA 7 at [35] (“Woodside”) where the majority (French CJ, Hayne, Crennan, and Kiefel JJ) described the approach to the construction of a commercial contract in the following way (omitting footnotes):

“The meaning of the terms of a commercial contract is to be determined by what a reasonable businessperson would have understood those terms to mean. That approach is not unfamiliar. As reaffirmed, it will require consideration of the language used by the parties, the surrounding circumstances known to them and the commercial purpose or objects to be secured by the contract. Appreciation of the commercial purpose or objects is facilitated by an understanding “of the genesis of the transaction, the background, the context [and] the market in which the parties are operating”, unless a contrary intention is indicated, a court is entitled to approach the task of giving a commercial contract a businesslike interpretation on the assumption “that the parties … intended to produce a commercial result”. A commercial contract is to be construed so as to avoid it “making commercial nonsense or working commercial inconvenience”.

83. In his Honour’s dissenting judgment in Woodside, Gageler J compactly expressed the same idea at [53], as follows:

“Commercial parties contracting at arm’s length are free to agree on terms each considers to be to its own commercial advantage. The terms of their agreement, however, are construed by a court to mean what reasonable commercial parties in their position can be taken together to have meant.”

84. These principles were further restated in Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd (2015) 256 CLR 104; [2015] HCA 37 at [46]-[52].

85. This judgment does not call for any further discussion of the principles of the construction of such contracts. The 2016 Deed is a reasonably well-crafted document. Despite the present dispute, its provisions are drafted in a way that conveys clear meaning and, as these reasons show, can be construed in a way that clearly defines the obligations of each party.

Construction of the 2016 Deed

86. Mr Campbell contends the 2016 Deed only created a personal right of access over Lot 4. He submits that the registered easement went beyond the conferral of a personal right and created an interest that runs with the land. But the Hamiltons contend that, on the proper construction of the 2016 Deed, the parties did intend to create an easement which runs with the land and they achieved that in the registered easement. They submit that granting a mere personal right would not give effect to the 2016 Deed. These reasons first consider Mr Campbell’s case.

Mr Campbell’s Contentions

87. Mr Campbell’s case may be shortly summarised. Mr Campbell submits that there is one issue to be decided. That issue is whether, on the proper construction of the 2016 Deed, and particularly the Schedule B dealing, the easement granted by Mr Campbell to the Hamiltons was intended to be enforceable against Mr Campbell’s successors in title. The Hamiltons largely accept this statement of the point at issue and their submissions were addressed to the same question of construction, the matter to which the Court now turns.

88. Mr Campbell’s central contention on the construction of the 2016 Deed is that the Schedule B dealing did not clearly indicate the land to which the benefit of the described easement was appurtenant, as was required by Conveyancing Act, s 88. He submits that the parties were, when drafting the 2016 Deed, presumed to know the law and specifically Conveyancing Act, s 88 and that the non-compliance of the Schedule B dealing with Conveyancing Act, s 88 is a strong indicator that the parties did not intend to create an easement over Lot 4.

89. Conveyancing Act, s 88 applies to Torrens Title land. The Amended Transfer Granting Easement must satisfy s 88 in order for the creation of a valid easement. Conveyancing Act, s 88 provides as follows:

“88   Requirements for easements and restrictions on use of land

(1)   Except to the extent that this Division otherwise provides, an easement expressed to be created by an instrument coming into operation after the commencement of the Conveyancing (Amendment) Act 1930, and a restriction arising under covenant or otherwise as to the user of any land the benefit of which is intended to be annexed to other land, contained in an instrument coming into operation after such commencement, shall not be enforceable against a person interested in the land claimed to be subject to the easement or restriction, and not being a party to its creation unless the instrument clearly indicates:

(a)   the land to which the benefit of the easement or restriction is appurtenant,

(b)   the land which is subject to the burden of the easement or restriction:

Provided that it shall not be necessary to indicate the sites of easements intended to be created in respect of existing tunnels, pipes, conduits, wires, or other similar objects which are underground or which are within or beneath an existing building otherwise than by indicating on a plan of the land traversed by the easement the approximate position of such easement,

(c)   the persons (if any) having the right to release, vary, or modify the restriction, other than the persons having, in the absence of agreement to the contrary, the right by law to release, vary, or modify the restriction, and

(d)   the persons (if any) whose consent to a release, variation, or modification of the easement or restriction is stipulated for.

(1A)   Land (including the site of an easement) is clearly indicated for the purposes of this section if it is shown:

(a)   in the manner prescribed by regulations made under this Act or the Real Property Act 1900, or

(a1)   in the manner required by the lodgment rules under the Real Property Act 1900, or

(b)   in any other manner satisfactory to the Registrar-General in the particular case or class of cases concerned.

This subsection does not limit other ways in which land may be clearly indicated.”

90. Mr Campbell’s argument is that this lack of clear indication of the land to which the benefit of the described easement was appurtenant, is a basis here to infer that the 2016 Deed was not intended to create an easement that would benefit future owners of Lot 1150 and burden future owners of Lot 4, but was more the nature of a personal licence not binding successive owners of Lot 4. Mr Campbell’s submissions accept that the amendments made to the Schedule B dealing transforming it into the Amended Transfer Granting Easement, which was registered in due course, had the effect of indicating “clearly” the land to which the benefit of the easement is appurtenant. But he says that those amendments are not authorised by the 2016 Deed. The Court’s analysis starts with a more detailed statement of Mr Campbell’s argument, which the Court has ultimately not found persuasive, largely for the reasons that the Hamiltons have advanced.

91. The Schedule B dealing, Mr Campbell contends, did not “clearly indicate” the land to which the benefit of the easement that it describes is appurtenant. As a result, whatever the 2016 the deed did, it did not create an easement benefiting any land owned by the Hamiltons and burden any land owned by Mr Campbell.

92. The words “clearly indicates” in Conveyancing Act, s 88 have been judicially interpreted in Papadopoulos v Goodwin [1982] 1 NSWLR 413 (“Papadopoulos”), where Wootten J said (at 417B – 417F):

“In enacting this section the legislature has imposed a strict standard on draftsmen. The words “clearly indicate” suggest an intention to impose a higher standard than that the dominant tenement is capable of being ascertained by ordinary processes of construction, which processes include the use of extrinsic evidence to identify the dominant tenement when its identity does not clearly appear from the instrument: Gale on Easements, 14th ed (1972), pp 8, 9. I cannot agree with writers who say that the section has made little difference to the law: Stuckey, The Conveyancing Act, 2nd ed (1970), p 188; Woodman, The Law of Real Property in New South Wales (1980), vol 1, p 339.

The word “indicate” on its own would not necessarily impose a very stringent standard. The relevant meaning given by the Shorter Oxford Dictionary is “to point out, point to, make known, show (more or less distinctly)”.  

The adddition of the word “clearly” however greatly reduces the range of meaning. The Shorter Oxford Dictionary gives as meanings of “clear”: “distinct, free from confusion” and “evident, plain”. Wests, Words and Phrases, vol 7, p 635 et seq shows that the word “clearly” has been frequently used in United States legislation in a variety of contexts, including “clearly appear”, “clearly ascertainable”, “clearly establish” and “clearly expressed”. Again and again the courts have gone back to Webster's definition, viz: “in a clear manner; without entanglement or confusion; without uncertainty.”

I was referred to only one case on the words in s 88 (1), Kerridge v Foley (1964) 82 WN (Pt 1) (NSW) 293, where Jacobs J held that a conveyance did not clearly indicate the land to which the benefit of a restriction was appurtenant when it included in its description of such land one lot to which the restriction could not validly be made appurtenant. This is consistent with Webster's meaning “without entanglement or confusion””.

93. Papadopoulos went on appeal: Goodwin v Papadopoulos (Court of Appeal (NSW), Mahoney JA, 31 May 1985, unrep). On appeal, the judges did not agree upon one set of reasons about Conveyancing Act, s 88. But in a passage which is not inconsistent with the reasoning of the other judges, Mahoney JA said (at 11):

“The words "clearly indicates" have not been the subject of judicial consideration otherwise than by Wootten J. in the present case. His Honour pointed out that the words replace "clearly defines", which appeared in the corresponding provision in s89 of the Conveyancing Act as it was before the 1930 amendments. His Honour took the word "indicate" to mean "to point out, point to, make known, show (more or less distinctly)". However, he saw the addition of the word "clearly" as imposing "a higher standard than that the dominant tenement is capable of being ascertained by ordinary processes of construction, which processes include the use of extrinsic evidence to identify the dominant tenement which its identity does not clearly appear from the instrument ...". His Honour referred to phrases such as "in a clear manner; without entanglement or confusion; without uncertainty". I agree in general that this is the effect of the phrase.”

94. Mr Campbell alleges that the Schedule B dealing fails to “clearly indicate” the land to which the benefit of the easement is appurtenant for four main reasons.

95. First, the Torrens Title reference to the “dominant tenement” in the form of the Transfer Granting Easement comprising the Schedule B dealing is merely described as “Part of 1153/601960.” This description of the dominant tenement does not identify with precision which “part of” Lot 1153 is to be the dominant tenement.

96. Second, the Schedule B dealing’s “Description of Easement” box refers to two other connecting factors that themselves provide no greater precision: “the plan annexed A” and “as described in document annexed hereto and marked B”.

97. Third, Annexure B to the Schedule B dealing describes (in clause 1) the lot benefitted in vague terms, the criticised parts of which are reproduced in italics here: “the lower part of Lot 1153”; “that part of Lot 1153 that is approximately 3649 m²; and “subject to minor boundary adjustments, is shown as Lot 1150 on the annexed plan marked C”. Mr Campbell contends that these emphasised words make plain that this clause 1 description is not one that “clearly indicates” the land to which the benefit of the easement is appurtenant.

98. Moreover, Mr Campbell argues Annexure C (the proposed subdivision of Lot 1153) indicates that the area of proposed Lot 1150 is 3557m² not the approximate 3649 m² referred to in clause 1 (a difference of 92 m²). Mr Campbell argues that a discrepancy in areas of about 92 m² in the description of the Hamiltons’ land is hardly something to be described as “minor boundary adjustments”.

99. Fourth, clause 2 of Annexure B to the Schedule B dealing furthers the imprecision created by clause 1, by describing the upper part of Lot 1153 as “approximately 1000 m²”, and describing such land as “subject to minor boundary adjustments”, and also referring to the plan marked as Annexure C, which plan adds no precision to the description.

Analysis of the 2016 Deed and the Hamiltons’ Arguments

100. Any analysis of the 2016 Deed requires Annexure B and Annexure C to be read together. And the starting point for that analysis is the observation that the land to which the easement (that the 2016 Deed is seeking to define) is appurtenant is described both by the words in Annexure B and by the plan in Annexure C. Both are drafted to indicate the land benefitted and must be read together. And they must be read in the light of the parties’ mutual knowledge that at the time of the 2016 Deed there was no approved plan of subdivision of Lot 1153.

101. Annexure B, clause 1 says, “the easement only benefits the lower part of Lot 1153 DP601960”. This description immediately directs attention to the Annexure C plan, which is entitled “Plan of Subdivision of Lot 1153 In DP601960”, which divides Lot 1153 with unbroken lines at only one point, creating two parts to Lot 1153. And the length and compass direction of these lines is inferable directly from the Annexure C plan. Identifying the “lower part” of the two subdivided parts of Lot 1153 is not difficult. It may be inferred from the indisputable physical topography of the land represented in Lot 1153 that the part of Lot 1153 marked as “1150” and “3557m² BY DEDN”, and whose eastern boundary is Gymea Bay, is the “lower part” of Lot 1153.

102. That conclusion is reinforced by Annexure B, clause 2 which provides that the “easement does not benefit” the other or “upper part of Lot 1153” and which is also described as “that part of Lot 1153 that is approximately 1,000 square metres”. The designation of these two approximate areas is yet another means of identifying which part of Lot 1153 is benefitted by the easement and which part is not.

103. Clauses 1 and 2 then take a similar course: they both make direct reference to Annexure C, and in the context of two land areas described as being “approximately” of a certain size, they both mention the possibility of “minor boundary adjustments” being required. It may readily be inferred that as the proposed subdivision of Lot 1153 had not yet taken place at the time of the 2016 Deed, that these “minor boundary adjustments” may have been expected to be necessary to give effect to that subdivision.

104. So in summary, three indicators consistently agree in pointing out which part of Lot 1153 is intended to be benefitted by the easement. Two of these indicate clearly, and the other acts as an indicator only imperfectly. Here are the three: (1) the Lot markings “1150” and “1151” are clear; (2) the “upper” and “lower” descriptions are clear; and (3) the approximate square meterage of one of the lots as “1,000” is clear from, and is marked on, the Annexure C plan. But there is an imperfection in the other square meterage indication “approximately 3649 square metres” in Annexure B, clause 1. This becomes “3557m²” on the Annexure C plan, a discrepancy of 92m². This discrepancy is dealt with below. But in my view, the overall consistency in the description of the part of Lot 1153 to be benefitted through the use of these three factors is strong. Indeed, it is so strong in my view that it wholly defeats at the outset Mr Campbell’s principal argument – that the Schedule B dealing is non-compliant with Conveyancing Act, s 88(1).

105. Annexure B, clause 3 merely excludes certain land from the proposed dominant tenement. This exclusion throws no doubt upon the land to be benefitted. All clause 3 does is to immediately (clause 3(a)) and then prospectively (clause 3(b)) subtract certain land from the land otherwise identified in the Annexure C plan as benefiting from the easement. It only seems directed at the proposed Lot 1150, which would otherwise be benefitted by the easement: clause 3 says, “the easement does not benefit, or will no longer continue to benefit”. Clause 3(a) clearly identifies a parcel of land of “approximately 149.9 square metres” marked “PARCEL OF LAND TO BE TRANSFERRED” and so described in Annexure D as to be transferred to the owner of Lot 1152. Clause 3(b) is somewhat more vague as to what and when other land may be subtracted from the land benefitted by the easement. But all clause 3(b) does is foreshadow that if, in the future, subdivision of Lot 1150 subtracts other land that is too small to be a lot, that land may be transferred to adjacent properties.

106. And Mr Campbell’s argument that the missing 92m² indicates how unreliably Annexures B and C describe the land benefitted by the easement is not persuasive. The application of a long-standing principle of construction of deeds allows the apparent uncertainty about the 92m² to be resolved. The 92m² can be accounted for as a simple error that is obvious when it is pointed out. After that, any uncertainty relied upon due to this discrepancy disappears.

107. How did the discrepancy of 92m² arise? Annexure B, clause 1 describes the “lower part of Lot 1153” as “approximately 3,649m²”. But the Annexure C plan refers to an area of “3557m²”. Which is the right figure? Some elementary arithmetic gives the answer. DP601960 to which the 2016 Deed makes reference shows Lot 1153 as 4557m². And on Annexure C, the description of the area of Lot 1150 as “3557 m² BY DED’N” (meaning “by deduction”) indicates this is a derived figure. Its derivation is the deduction of the area of 1000m² from the total area of Lot 1153, giving the balance of 3557m² for Lot 1150. This means that the figure mentioned in clause 1 is a typographical or transcription error. The words “BY DED’N” are unlikely to be a mistake. And there is only one possible total area of Lot 1153 from which the deduction can occur and only one other area (of 1,000 m²) to be deducted. The 3649 m² must be a mistake.

108. The problem of mistakes in deeds is as old as the use of deeds. The courts have long had to deal with drafting or transcription errors that have crept into the deed making process. One tool the courts have used is the application of the falsa demonstratio principle. This principle is the abbreviated form of a longer Latin maxim, falsa demonstratio non nocet cum de corpore constat. Translated it means “a false description does not vitiate, when there is no doubt which person is meant”. The maxim is commonly expressed in the words falsa demonstratio non nocet but to do the maxim justice, it should be expressed in full: Eastwood v Ashton [1915] AC 900 at 914 (Lord Sumner).

109. Judicial statements have illuminated the principle. In Morrell v Fisher [1849] 154 ER 1350, Alderson B summarised the rule thus: “The… rule means that if there be an adequate and sufficient description, with convenient certainty of what was meant to pass, a subsequent erroneous addition will not vitiate it.” Alderson B continued, explaining the logic of the principle, “the characteristic of cases within the rule is, that the description so far as it is false, applies to no subject at all; and so far as it is true applies to one only.”

110. But the error or mistake does not have to follow the correct description. The maxim does not only apply where there is some incorrect statement at the end of a sentence or where the false part of the description follows the true: Cowen v Truefitt Limited [1899] 2 Ch 309.

111. For the maxim to be applied, there must be an adequate and sufficient description of the subject in the absence of the rejected words, and if the words sought to be rejected are themselves part of the essential description of the subject, the Court cannot apply the maxim: Magee v Lavell (1874) LR 9 CP 107. Where there are conflicting descriptions, the Court must choose between them and the maxim does not assist in that choice. Lord Parker in Eastwood v Ashton said (at 912): “This maxim is useless until the court has made up its mind as to which of the two conflicting descriptions ought under the circumstances to be considered the true description. When this is done the false description may, of course, be discarded, and the maxim merely calls attention to this obvious result”.

112. What follows from this reasoning? As earlier discussed, there are enough indicators in the 2016 Deed for the Court to infer that the correct area to be derived for the proposed Lot 1150 in the proposed subdivision is 3557m², not 3649m². Any reference to 3649m² in Annexure B, clause 1 can be ignored as a mistake.

113. The issue can now readily be approached by asking the question whether, immediately before the Amended Transfer Granting Easement was registered, the Hamilton’s could have obtained specific performance of the 2016 Deed to give effect to the Schedule B dealing and what the result would have been.

114. The answer, in my view, is clear. A decree of specific performance of the 2016 Deed to give effect to the Schedule B dealing was potentially available and the result would have been something like the Amended Transfer Granting Easement itself. Specific performance is possible even though the vendor misdescribes the land, for example, by stating a dimension to be larger than it is, which will not necessarily render the contract to be unenforceable: JD Heydon, MJ Leeming and PG Turner, Meagher, Gummow & Lehane’s Equity: Doctrines & Remedies (5th ed, 2014, LexisNexis Butterworths), [20–235].

115. Specific performance will be available to a vendor unless the deficiency or misdescription is “in a material and substantial point, so far affecting the subject matter of the contract that it may reasonably be supposed, that, but for such misdescription, the purchaser might never have entered into the contract all”: Flight v Booth [1834] 1 Bing NC 370 at 377; [1834] 131 ER 1160 at 1162; Torr v Harpur (1940) SR (NSW) 585; and Batey v Gifford (1997) 42 NSWLR 710 at 717 – 719. If specific performance is sought at the suit of the purchaser, and the misdescription or deficiency is substantial but the purchaser is prepared to accept it, the vendor may be obliged to perform the contract, convey what he can, and compensate the purchaser for any remaining deficiency through adjusting compensation: Mortlock v Buller (1804) 10 Ves 292; [1803] All ER Rep 22. And here, the contract contains a further assurances clause (clause 14.1). It too may be specifically performed so as to vest in the purchaser what had been promised: Daniels v Pynbland Pty Ltd (Nos 1 and 2) (1985) 4 BPR 97,319 (Young J).

116. Mr Alexis SC submits that the Hamiltons must have known that Conveyancing Act, s 88 was not complied with by Annexure B to the Schedule B dealing. Even if that were correct, that may only indicate that the parties’ inferred intention that the further assurance clauses would cure any non-compliance.

117. Here, the 92 m² discrepancy is readily explained away as an error or misdescription. The other minor boundary adjustments, as are required upon a decree of specific performance to define the part of Lot 1153 with the benefit of the easement, can be achieved without undue difficulty by approximating as closely as possible the square meterage described in the plan in Annexure C. The net effect that the 2016 Deed seeks to achieve is clear. I see no practical or discretionary difficulty for the Court now to take upon itself the task to define boundaries to give effect to what is really a clear contract. The LPI has taken steps by registering the Amended Transfer Granting Easement to give effect to that which the Court itself could have done. I see no reason now to disturb what the LPI has done in registering the Amended Transfer Granting Easement giving the Hamiltons what the 2016 Deed assured them that they would have.

118. Some of the other arguments raised by the Hamiltons and dealt with by Mr Campbell may now be briefly considered. Some of them add to the force of the analysis above, some do not.

119. First, Mr Campbell argues that the parties are presumed to know of Conveyancing Act, s 88 when they drafted the 2016 Deed. That is true. But the parties are also presumed to know all the relevant law, including the law with respect to further assurances and the adjustments possible when a decree of specific performance is made. The Hamiltons could perhaps have sought specific performance of the 2016 Deed when the LPI issued its requisitions in February 2017. That would have required Mr Campbell to be informed of the events at the LPI. But the result would have been the same: the registration of something like the Amended Transfer Granting Easement.

120. Second, the Hamiltons argue, and I accept as persuasive, that by the use in the 2016 Deed of the term "easement", an expression that connotes the grant of an interest which runs with the land, the 2016 Deed is indicating that something more than the conferral of a mere personal right was intended. Had the parties intended to confer a mere personal right on the Hamiltons, the language to express that result would not have been difficult to find. The 2016 Deed would not, in those circumstances, have needed even to use the word “easement” as it does.

121. And related questions should be asked. Why was an elaborate attempt made to create in the 2016 Deed a form of easement compliant with the Real Property Act, if all that was intended was a licence? There are far easier ways to create a licence. And strangely, for a licence that would be registered, there was no removal plan provided for in the 2016 Deed to take the easement off the title when Mr Campbell sold Lot 4. If it were not to run with the land, such a mechanism to remove the dealing from registration might have been expected.

122. The proper construction of the 2016 Deed is that it aimed to produce a document that would comply with the requirements of registration rather than one that would not. It clearly contemplated that registration would take place. The form of Annexure B, clauses 1 and 2, does not so much show an intention to only confer personal rights, but rather shows that the parties lacked a Deposited Plan to which they could mutually make reference and had to “make do” with the survey plan they had. The fact was that the parties did not have a registered plan to which they could make reference. The Council would not register a plan until the right of way was available. All the parties perhaps could have done beyond what they did in November 2016 was to prepare the plan for registration a little more completely than they did. That is what the Amended Transfer Granting Easement ultimately achieved.

123. Third, the 2016 Deed, clause 2.3 contemplates that the Schedule B dealing would be registered. The Schedule B dealing is in the terms of LPI form 01TG. The Schedule B dealing refers to Real Property Act, s 31B – a provision that is only consistent with contemplated future registration by the Registrar General. Real Property Act, s 31B does not encompass mere personal rights, which would not be required to be registered.

124. Fourth, the 2015 Heads distinguishes between an easement (clause 2) and a mere licence or personal right (clause 8). But this distinction was not clearly expressly re-made in favour of a licence when defining what was to be granted to the Hamiltons. Moreover, both the 2015 Heads and the 2016 deed were drafted by lawyers who could have been expected to well understand the differences between an easement and a licence that were in issue here.

125. Fifth, the Hamiltons argue that recitals E and F of the 2016 Deed make clear that it was entered into in the context of a resolution of a claim made pursuant to Conveyancing Act, s 88K which contemplates the grant of an easement running with the land. For that reason, the Hamiltons say that an easement should be inferred to follow in the 2016 Deed. Section 88K relevantly provides:

“88K   Power of Court to create easements

(1)   The Court may make an order imposing an easement over land if the easement is reasonably necessary for the effective use or development of other land that will have the benefit of the easement.

(2)   Such an order may be made only if the Court is satisfied that:

(a)   use of the land having the benefit of the easement will not be inconsistent with the public interest, and

(b)   the owner of the land to be burdened by the easement and each other person having an estate or interest in that land that is evidenced by an instrument registered in the General Register of Deeds or the Register kept under the Real Property Act 1900 can be adequately compensated for any loss or other disadvantage that will arise from imposition of the easement, and

(c)   all reasonable attempts have been made by the applicant for the order to obtain the easement or an easement having the same effect but have been unsuccessful.

(3) The Court is to specify in the order the nature and terms of the easement and such of the particulars referred to in section 88 (1) (a)–(d) as are appropriate and is to identify its site by reference to a plan that is, or is capable of being, registered or recorded under Division 3 of Part 23. The terms may limit the times at which the easement applies.”

126. But Mr Campbell well answers this argument. Merely because the parties were negotiating about creating a Conveyancing Act, s 88K easement does not mean they could not have later agreed to confer a licence rather than an easement.

127. Sixth, the 2016 Deed does not say expressly that the rights it confers run with the land. But nor does it say that they do not run with the land. Observations about the absence of reference to rights and obligations created under the Deed “running with the land” do not really assist either party’s construction. And Mr Campbell submits that clause 15 of the 2016 Deed does not obviously bind successors in title. Clause 15 does not assist either party.

128. Seventh, the Hamiltons argue that the payment of the $275,000 indicates that an easement was granted, not a licence. But little can be inferred from the payment of the $275,000 other than it is a substantial, not a nominal sum. Both parties knew in November 2016 that Lot 1150 was vacant and would take some time to develop; and that Mr Campbell could sell at any time and destroy that licence, which, if Mr Campbell is right, was only personal to him. The payment of such substantial consideration is in some tension with the construing the 2016 Deed as conferring such an evanescent personal licence. But the 2016 Deed effects other releases and indemnities, so little can be made of the payment of this sum.

126. But proposed Lot 1150 was landlocked. If only a licence was conferred, such a short term solution as a licence to a long term problem seems hardly adequate. But this may be the bargain made and it does not bear strongly on the issue of construction of the 2016 Deed.

127. In conclusion, Mr Campbell seeks an order pursuant to Real Property Act, s 138(3)(b) that the Registrar General cancel the recording of the registered easement in the folio of Lot 1150 and in any other folio in which the registered easement is recorded. Mr Campbell seeks this relief on the basis that he has a personal equity or in personam right against the Hamiltons such that the indefeasibility provisions in Real Property Act, ss 42 and 118 do not apply.

128. But the Court has found that under the 2016 Deed the Hamiltons are entitled to an easement in the terms of the Amended Transfer Granting Easement. Mr Campbell fails on his s 138 contention. The Court will not make an order under s 138.

129. Moreover, whether or not Mr Campbell has a personal equity or in personam right against the Hamiltons such that the Court should exercise its discretion pursuant to Real Property Act, s 138(3)(b) depends on whether the Hamiltons have engaged in conduct which, in all the circumstances, was unconscionable: see Story v Advance Bank Australia Ltd (1993) 31 NSWLR 722 at 738 to 741 (Mahoney JA).

130. In my view, no such conduct was engaged in here because the Hamiltons were merely pursuing with the Registrar General the rights to which the 2016 Deed already entitled them. Mr Hamilton and Mr Jordan gave evidence about their dealings with the LPI. They were highly credible witnesses and I accept all their evidence. There is no basis to attribute any bad faith or unconscionable conduct to either of them. They, at all times, thought they were entitled by the 2016 Deed to do what they did at the LPI. And the Court’s conclusion is that they were so entitled.

Conclusion and Orders

134. The Hamiltons have been substantially successful on the Claim and the Cross-claim. Subject to any applications that may be made for a special costs order, the ordinary costs result of these proceedings would be that Mr Campbell would pay the Hamiltons’ costs. Unless one or other party applies for a different costs order, that is the order which the Court would propose to make. That is provided for in the orders below.

135. It was suggested by Mr Cashion SC that the Court could deliver judgment and the parties then put submissions about the form of orders. The Court has decided to make declarations and orders but if they need to be adjusted on the application of either party that can be accomplished within the liberty to apply which is granted as part of the orders. But any application to vary the form of declarations and orders should be made before Friday, 15 June 2018.

136. For these reason the Court makes declarations, orders and directions as follows:

1. Declare that the Deed of Settlement and Release made between the plaintiff and the defendants and dated 14 November 2016 (“the 2016 Deed”), on its true construction, transfers the rights as set out in the Transfer Granting Easement registered number AM160015.

2. Declare that on its true construction the 2016 Deed binds successors in title.

3. Declare that Transfer Granting Easement registered number AM160015 is valid and enforceable.

4. Order that the Summons and Statement of Claim be dismissed.

5. Order that the Cross Summons be otherwise dismissed.

6. Grant liberty to apply until 30 June 2018 in respect of any implementation of these declarations and orders that may be required.

7. Subject to order (8) order that the plaintiff/cross-defendant pay the defendants’/cross-claimants’ costs of these proceedings.

8. The costs order provided for in order (7) above will only be made if no party files by 4.00pm on Friday, 15 June 2018 a motion to seek a special costs order.

9. Leave to file the motions provided for in order (8) is hereby given and the filing of any such motion may be effected by forwarding it to my Associate and making it returnable before me at 9.30am on Wednesday, 20 June 2018.

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Decision last updated: 06 June 2018