Clarence City Council v Howlin - [2019] TASFC 1

[2019] TASFC 1

COURT: SUPREME COURT OF TASMANIA (FULL COURT)

CITATION: Clarence City Council v Howlin [2019] TASFC 1

PARTIES:  CLARENCE CITY COUNCIL
  v
  HOWLIN, Darryl Robert

QIN, Lihua
SHI, Xiaomin

FILE NO: FCA 3837/2016
JUDGMENT

APPEALED FROM: Clarence City Council v Howlin [2016] TASSC 61

DELIVERED ON:  30 January 2019
DELIVERED AT:  Hobart
HEARING DATE:  6 March 2018
JUDGMENT OF:  Blow CJ, Brett J, Marshall AJ

CATCHWORDS:

Conveyancing – Matters arising after completion – Merger – Contracts requiring vendor to grant rights of way over his adjacent land – Rights of way created by registered transfers – Easements not recorded on certificate of title of servient land – Whether doctrine of merger applies to Torrens title land – Whether obligations as to granting of rights of way merged on registration of transfers of dominant land.
Real Property Act 1862 (Tas), s 35(4).
Land Titles Act 1980 (Tas), s 48(7)

Knight Sugar Co Ltd v Alberta Railway and Irrigation Co [1938] 1 All ER 266; Svanosio v McNamara (1956) 96 CLR 186; West v Read (1913) 13 SR (NSW) 575; Hawkins v Gaden (1925) 37 CLR 183; Pallos v Munro (1970) 72 SR (NSW) 507; Montgomery v Continental Bags (NZ) Ltd [1972] NZLR 884; Pascon Pty Ltd v San Marco in Lammis Cooperative Social Club Ltd [1991] 2 VR 227; Pearce v Hood [1980] Tas R 159, referred to.

Aust Dig Conveyancing [1181]
Real Property – Torrens title – Indefeasibility of title – Exceptions to indefeasibility – Omitted or misdescribed easement – Generally – Easements created by transfers under Real Property Act 1862 (Tas) – Whether easements "created by deed" before the servient tenement became subject to that Act or the Land Titles Act 1980 (Tas) – Whether equitable easements by virtue of promises to grant easements in contracts of sale.

Land Titles Act 1980 (Tas), ss 40(3)(e)(ia), 40(3)(e)(ii).
Aust Dig Real Property [1254]

REPRESENTATION:

Counsel:
             Appellant:  S B McElwaine SC
             First respondent:  In person
             Other respondents:  No appearance
Solicitors:
             Appellant:  Shaun McElwaine + Associates

Judgment Number: [2019] TASFC 1
Number of paragraphs: 105

Serial No 1/2019
File No FCA 38/37/2016

CLARENCE CITY COUNCIL v DARRYL ROBERT HOWLIN,
LIHUA QIN and XIAOMIN SHI

REASONS FOR JUDGMENT FULL COURT

BLOW CJ
BRETT J
MARSHALL AJ
30 January 2019

Orders of the Court

Appeal allowed.

Judgment dismissing action 823/2014 set aside.

Action remitted to trial judge for further hearing and determination according to law, and in accordance with the findings of fact made upon the determination of the appeal.

Serial No 1/2019
File No FCA 38/37/2016

CLARENCE CITY COUNCIL v DARRYL ROBERT HOWLIN,
LIHUA QIN and XIAOMIN SHI

REASONS FOR JUDGMENT FULL COURT

BLOW CJ
BRETT J
MARSHALL AJ
30 January 2019

This appeal concerns the consequences of some shambolic conveyancing work in the years from 1945 to 1952 in relation to the subdivision of certain land at Opossum Bay. The primary issue is whether unregistered rights of way exist over a piece of land that lies between the subdivided land and a public road.
In 1942 a Mr Brown acquired a parcel of land at Opossum Bay with an area of 2 acres, 2 roods and 3 perches. He decided to subdivide part of that land. As a result, a surveyor prepared a survey diagram showing nine proposed new residential lots in the northern part of Mr Brown's property. That diagram was registered with the Recorder of Titles as Diagram 62456. The new lots were shown on the survey diagram as Lots 1 to 9 inclusive. Mr Brown subsequently sold each of those nine lots. As a result of each sale, a new certificate of title was issued for the lot sold following the registration of a memorandum of transfer, and the lot sold was excised from the land in Mr Brown's certificate of title.
The survey diagram showed a strip of land linking each of the nine lots with a public road at some distance to the west of the subdivision. That road is now known as Spitfarm Road. The strip of land was shown on the survey diagram as "PROPOSED ROADWAY". It is not a public highway, and never has been. It is a strip of privately owned Torrens title land. It has become known as Marsh Street. In the proceedings at first instance, the western part of Marsh Street was referred to as Lot A, and the eastern part as Lot B.
It is clear that rights of way were intended to be created for the benefit of Lots 1 to 9 inclusive over Lots A and B. However no rights of way appurtenant to any of those nine lots have ever been recorded on the documents of title relating to Lot A. A dispute arose as to whether any unregistered rights of way benefiting Lots 1 to 9 inclusive were enforceable against the registered proprietors of Lot A.
Two actions were instituted in relation to that issue. One was commenced by the Clarence City Council. The land in question is in its municipal area. The other action was instituted by the registered proprietors of Lots 1, 2, 4, 5, 6, 8 and 9. The actions were tried together by Pearce J. His Honour concluded that the title of the registered proprietors of Lot A was indefeasible, and that no subsisting rights of way over Lot A benefiting any of Lots 1 to 9 were enforceable: Clarence City Council v Howlin [2016] TASSC 61. The Council's action was dismissed on that basis.
This is an appeal by the Council from that judgment. The first respondent, Darryl Howlin, was a registered proprietor of Lot A from 2003 until 2014, initially together with his former wife, and subsequently on his own. The other respondents, Lihua Qin and Xiaomin Shi, are the present registered proprietors of Lot A. They are respectively Mr Howlin's present wife and her daughter. Mr Howlin transferred Lot A to them by a transfer that was registered on 16 July 2014.
In a little more detail, the relevant conclusions of the learned trial judge can be summarised as follows:
·     At [38], [41], [43] and [52], he concluded that easements appurtenant to Lots 2, 4, 5 and 9 had been created over Lot A when the original transfers of those lots were registered, even though none of those easements had been recorded on the certificate of title relating to Lot A.
·     At [62], he concluded that no easement appurtenant to Lot 6 was ever created over Lot A.
· His Honour held that, prior to its repeal, s 26 of the Real Property Act 1886 gave the registered proprietors of Lots 1, 2, 4, 5, 8 and 9 rights that prevailed as against the registered proprietors of Lot A. Section 26 provided that "Whenever any certificate of title … shall contain any statement to the effect that the person named in the certificate is entitled to any easement therein specified, such statement shall be conclusive evidence that he is so entitled."
·     At [64], his Honour concluded that, prior to the repeal of the Real Property Act 1862, s 40(b) of that Act created an exception to indefeasibility that operated for the benefit of the registered proprietors of Lots 1, 2, 4, 5, 8 and 9. Section 40 was a provision to the effect that the registered proprietor of any land held it free from any unregistered interests, subject to certain exceptions. Section 40(b) contained an exception "so far as regards the omission … of any … right of way … created in or existing upon any land".
·     The 1862 Act and the 1886 Act were repealed by the Land Titles Act 1980. Neither s 40(b) of the 1862 Act nor s 26 of the 1886 Act was replicated in the Land TitlesAct. At [77] his Honour concluded that s 16(1)(c) of the Acts Interpretation Act 1931 did not operate to preserve the statutory rights of the registered proprietors of the dominant land. His Honour accepted that those registered proprietors had accrued rights prior to the repeal of the 1862 and 1886 Acts, but concluded that the Land Titles Act extinguished those rights.
·     The Land Titles Act was amended in 1997 to insert a new s 40(3)(e)(ia), which created an exception to the indefeasibility of the title of a registered proprietor in respect of "an easement created by deed before the servient tenement became subject to this Act or the repealed Act [the 1862 Act]". By a further amendment in 2012, a new s 40(3)(e)(ia) was substituted, providing for an exception to indefeasibility in relation to "an easement created by deed but unintentionally omitted from the folio of the Register for the servient land when that servient land was brought under this Act or the repealed Act". At [83] his Honour concluded that the transfers that created easements over Lot A were not deeds for the purposes of s 40(3)(e)(ia). At [84] his Honour interpreted the words "brought under this Act or the repealed Act" as referring to the bringing of the servient land under the Torrens system. Accordingly he concluded at [85] that s 40(3)(e)(ia) had no application.
·     From the commencement of the Land Titles Act, s 40(3)(e)(ii) thereof created an exception to the indefeasibility of the title of a registered proprietor "so far as regards ... an equitable easement, except as against a bona fide purchaser for value without notice of the easement who has lodged a transfer for registration". At [101-[103], his Honour rejected a submission that the registered proprietors of some lots were entitled to equitable easements within the meaning of that provision. His Honour held that, although it might be inferred that each person who took a transfer from Mr Brown had a contractual entitlement to an easement over Lot A, any such right was a personal equity, and the benefit of such equities did not pass to the transferees' successors in title.
· In relation to the action instituted by the registered proprietors of Lots 1, 2, 4, 5, 6, 8 and 9, his Honour decided, at [109]-[121], that he would make orders creating statutory easements pursuant to s 84J of the Conveyancing and Law of Property Act 1884.
·     In relation to the same action, his Honour decided, at [128], that it would be appropriate to grant an injunction requiring the removal of a gate and part of a fence that were restricting access across Lot A.
·     At [131], he concluded that the Council was not entitled to declaratory or injunctive relief because, in the light of his findings as to the claimed rights of way, its action could not succeed. He therefore reached no conclusion as to the standing of the Council to bring its action.
In this appeal, the Council accepts that no right of way appurtenant to Lot 6 was ever created over Lot A. It contends that the rights of way over Lot A appurtenant to each of the other eight lots were created and exist today despite the Land Titles Act having repealed the 1862 and 1886 Acts. Its principal contentions can be summarised as follows:
· It contends that s 16(1)(c) of the Acts Interpretation Act operates to preserve the rights of way that existed over Lot A under s 40(b) of the 1862 Act before that Act was repealed. (The Council did not advance a similar contention as to s 26 of the 1886 Act.)
· It contends that s 40(3)(e)(ia) of the Land Titles Act in its original form, which was introduced in 1997 but replaced in 2012, created an exception to indefeasibility in relation to the relevant easements. That provision created an exception to the title of a registered proprietor so far as regards "an easement created by deed before the servient tenement became subject to" the Land Titles Act or the 1862 Act.
· It contends that by reason of the current s 40(3)(e)(ia) of the Land Titles Act, introduced in 2012, the title of the registered proprietors of Lot A is not indefeasible so far as regards the easements that were granted over Lot A, and that rights of way appurtenant to some of the relevant lots have therefore survived the repeal of the 1862 Act and are enforceable. That subparagraph creates an exception to indefeasibility so far as regards "an easement created by deed but unintentionally omitted from the folio of the Register for the servient land when that servient land was brought under" the Land Titles Act or the 1862 Act.
· It contends that s 40(3)(e)(ii) of the Land Titles Act created an exception to indefeasibility in relation to the relevant easements. That subparagraph creates an exception to indefeasibility in relation to "an equitable easement, except as against a bona fide purchaser for value without notice of the easement who has lodged a transfer for registration".

Effect of repeal of the 1862 Act

At all material times prior to its repeal, s 40 of the 1862 Act provided as follows:
"Notwithstanding the existence in any other person of any estate or interest, whether derived by grant from the Crown or otherwise, which, but for this Act, might be held to be paramount, or to have priority, the registered proprietor of land, or of any estate or interest in land under the provisions of this Act, shall, except in the case of fraud, hold the same subject to such incumbrances, liens, estates, or interests, as may be notified on the folium of the register book, constituted by the grant or certificate of title of such land, but absolutely free from all other incumbrances, liens, estates, or interests whatsoever, except —
(a)...
(b)so far as regards the omission or mis-description ... of any public or other right of way or other easement created in or existing upon any land; and
(c)...".
The transfers of Lots 1 and 8 executed by Mr Brown created rights of carriageway over servient land shown on plans endorsed on those transfers. In each case, the servient land shown on the plan comprised Lot B and did not include Lot A. Those two transfers did not create, or purport to create, easements over Lot A. Section 40(b) therefore did not operate to create an exception to the indefeasibility of the title of the registered proprietor of Lot A in relation to rights of way appurtenant to Lot 1 and Lot 8. However each of the transfers relating to Lots 2, 3, 4, 5, 7 and 9 included a right of carriageway or right of way over servient land that was described so as to include Lot A. The exception to indefeasibility created by s 40(b) therefore applied in relation to the easements over Lot A appurtenant to those six lots while s 40(b) remained in force. The learned trial judge made findings accordingly in relation to the eight lots.
As we have said, the 1862 Act and 1886 Act were both repealed by the Land Titles Act. The learned trial judge held that the rights and liabilities created by those provisions were extinguished as a result of the repeals. He concluded that those rights and liabilities were not preserved by the operation of s 16(1)(c) of the Acts Interpretation Act.
Section 16(1)(c) of that Act provides as follows:
"(1) Where an Act repeals any other enactment then, unless the contrary is expressly provided, such repeal shall not —
...
(c) affect any right, privilege, obligation, or liability acquired, accrued, or incurred under any enactment so repealed ...".
In his reasons at [67]-[70], the learned primary judge considered the issue as to s 16(1)(c), and concluded that the registered proprietors of the dominant land had rights, within the meaning of that provision, as a result of the operation of s 40(b) of the 1862 Act and s 26 of the 1886 Act. His reasoning was as follows:
"[67]     Provisions such as s 16(1) exist to protect substantive rights. Many cases discuss whether rights to bring an action or application, for example for compensation or an allowance, constitute an accrued right: see for example rights to compensation in Hamilton Gell v White [1922] 2 KB 422 and Resort Management Services Ltd v Noosa Shire Council [1997] 2 Qd R 291, the right to the hardship allowance in Chief Adjudication Officer v Maguire [1999] EWCA Civ 1060, 1 WLR 1778, or the land rights claim in New South Wales Aboriginal Land Council v Minister Administering the Crown Lands (Consolidation) Act and the Western Lands Act (1988) 14 NSWLR 685. In that context, what is spoken of is an ascertainable right or entitlement defined by reference to past events. An analysis of the authorities was undertaken by the Court of Appeal of Western Australia in Barminco Investments Pty Ltd v O'Brien [2006] WASCA 88, by the Court of Appeal in New South Wales in BE Australia WD Pty Ltd (subject to a Deed of Company Arrangement) v Sutton [2011] NSWCA 414, 82 NSWLR 336, and very recently by Brereton J in In the matter of Rocha Pty Limited (No 2) [2016] NSWSC 1172. None of the cases are particularly analogous to the circumstances of this case, and only general principles may be extracted. Something is required beyond a mere abstract right to take advantage of a section of an Act: Abbott v Minister for Lands [1895] AC 425 at 431. It is likely to be insufficient if the right exists for the public at large unless the person has taken some step to assert the right by the time of the repeal: Barminco at [20]. For that reason, the right to apply for rectification of titles is not an accrued right because no step had been taken to assert it.
[68]     I have concluded that the right to take advantage of an easement over Lot A, confined as it is to the particular owners of the titles with the benefitting registered easement created under the RPA 1862 and existing prior to its repeal, is a right within the operation of the Acts Interpretation Act. So far as it becomes necessary to establish, the evidence unequivocally shows that each of the owners actually exercised the right prior to repeal. The owners were entitled to enjoy the benefit of the right of way and were protected from an action in trespass brought by the registered proprietor of the servient tenement.
[69]     Counsel for the Recorder submitted that the right did not survive beyond the original transferees in whose favour the right was created. I have concluded that the submission should not be accepted. The right is not confined to the original transferees. It does not subsist pursuant to any personal right granted to the original transferee, but benefits the registered proprietors from time to time by force of the registration of the easement on the title to the dominant owners combined with the exception to indefeasibility under the RPA 1862, s 40(b). Refer also to the terms of the right described in the RPA 1886, Form II which refers to the registered proprietors for the time being, and the CLPA [Conveyancing and Law of Property Act], Sch 8, which refers to every person who is at any time entitled to an estate or interest in the dominant tenement. Accordingly, reliance on the CLPA, s 6(1), is unnecessary. That section provides that the conveyance of any land is 'deemed to include and shall by virtue of this Act operate to convey, with the land, all … easements, rights, and advantages whatsoever appertaining or reputed to appertain to the land, or any part thereof, or at the time of conveyance demised, occupied, or enjoyed with, or reputed or known as part or parcel of or appurtenant to the land or any part thereof'. The right to enjoyment of the easement exists not because the right is transferred. It is not a right personal to the transferee, but attaches to the title of the registered proprietor and operates as an exception to the indefeasibility of the servient tenement.
[70]     It follows that the accrued right which subsisted in the owners of each of the dominant tenements, except Lot 6, immediately prior to the repeal of the RPA 1862 is protected by s 16(1)(c) unless 'the contrary is expressly provided' by the repeal provision."
We agree with that reasoning. His Honour went on to conclude that, because of provisions in the Land Titles Act, s 16(1)(c) did not apply, and that the rights of the registered proprietors under the repealed Acts were extinguished by the repeals. The Council contends that he thereby erred in law. Because of the opening words of s 16(1)(c), his Honour was obliged to hold that the rights of the registered proprietors of the transferred lots were not affected by the repeals "unless the contrary is expressly provided".

The 1862 Act was repealed by s 173(1) of the Land Titles Act. The full text of s 173 was as follows:
"(1) The Acts specified in Schedule 2 are repealed.
(2) All lands, estates, and interests which at the proclaimed date are subject to any of the Acts repealed by subsection (1) shall be subject to this Act."
The Land Titles Act as originally enacted did not include an exception to indefeasibility in the same terms as s 40(b) of the 1862 Act. In s 40(3), it set out a new list of exceptions to indefeasibility. The relevant provisions in s 40, as originally enacted, read as follows:
"(1) For the purposes of this section indefeasible, in relation to the title of a registered proprietor of land, means subject only to such estates and interests as are recorded on the folio of the Register or registered dealing evidencing title to the land.
(2) Subject to subsections (3) and (4), the title of a registered proprietor of land is indefeasible.
(3) The title of a registered proprietor of land is not indefeasible —
(a) ...
(b) ...
(c) so far as regards the omission or misdescription of any reservations, exceptions, conditions, and powers contained in the Crown grant of the land, or of any right to the use and flow of water in a river, stream, watercourse, lake, pond, or marsh, or of any public right of way;
(d) ...
(e) so far as regards —
(i)an easement arising by implication or under a statute which would have given rise to a legal interest if the servient land had not been registered land; and
(ii)an equitable easement, except as against a bona fide purchaser for value without notice of the easement who has lodged a transfer for registration;
…
(4) ...
(5) In every case, other than those mentioned in subsections (2), (3), and (4), the title of a registered proprietor of land prevails, notwithstanding —
(a) the existence in any other person of any estate or interest, whether derived by grant from the Crown or otherwise, which, but for this Act might be held to be paramount, or to have priority; and
(b) ...
(6) In this section 'interest' means —
(a) any interest, mortgage, encumbrance, charge, reservation or right in respect of land;
...
whether at law or in equity."
In his reasons at [73], the learned trial judge noted that the exceptions in s 40(3)(e), like the other exceptions in s 40(3), "have application not only to future events but also an existing state of affairs arising from past events". He went on to say that the exception that previously existed under s 40(b) of the 1862 Act no longer exists; that a registered proprietor of a dominant tenement subject to the Land Titles Act is "no longer entitled to the benefit of an exception in those terms"; and that to hold otherwise would "substantially undermine the purpose of the Torrens system".
At [75] his Honour pointed out that if the rights created under the repealed legislation continued after the repeals, then the title of a registered proprietor could be subject not only to registered interests and the types of exceptions listed in s 40(3) of the Land Titles Act, but also to other exceptions arising prior to the commencement of that Act. Anyone investigating the title of a registered proprietor would have to consider the possibility that an exception to indefeasibility existed by virtue of the provisions of the 1862 Act.
The Council contends that that reasoning was erroneous. Its counsel submitted that his Honour should not have construed the legislation as interfering with vested interests.
In Clissold v Perry (1904) 1 CLR 363, a land resumption case, Griffiths CJ, with whom Barton and O'Connor JJ concurred, said at 373:
"In considering this matter it is necessary to bear in mind that it is a general rule to be followed in the construction of Statutes such as that with which we are now dealing, that they are not to be construed as interfering with vested interests unless that intention is manifest."
In Fazzolari v Parramatta City Council [2009] HCA 12, 237 CLR 603 at [43], French CJ said:
"... where a statute is capable of more than one construction, that construction will be chosen which interferes least with private property rights. That approach resembles and may even be seen asan aspect of the general principle that statutes are construed, where constructional choices are open, so that they do not encroach upon fundamental rights and freedoms at common law."
Sections 173(2) and 40(5) of the Land Titles Act were express provisions that affected the rights of the individuals who, immediately before the repeal of the 1862 Act, had easements over Lot A as a result of the operation of s 40(b) of the 1862 Act. The provisions of ss 173(2) and 40(5) were not capable of more than one construction. There was therefore no scope for the application of the principle requiring the adoption of a construction that did not interfere with private property rights. The operation of s 16(1)(c) was ousted by those provisions, and the learned trial judge was correct when he reached that conclusion.

Section 40(3)(e)(ia) of the Land Titles Act, as enacted in 1997 and as substituted in 2012

Section 40(3) of the Land Titles Act was amended by the Land Titles Amendment (General Law Easements and Records) Act 1997 by inserting a new s 40(3)(e)(ia) that created a new exception to the indefeasibility of the title of a registered proprietor so far as regards an easement described as follows:
"(ia) an easement created by deed before the servient tenement became subject to this Act or the repealed Act".
The 1997 Act also inserted a retrospective transitional provision as s 40(3A) of the Land Titles Act, reading as follows:
"(3A) The application of subsection (3)(e)(ia) extends to any land that was brought under this Act or the repealed Act before the commencement of the Land Titles Amendment (General Law Easements and Records) Act 1997."
The Council contends that the easements over Lot A created by the transfers of Lots 2, 3, 4, 5, 7 and 9 executed by Mr Brown were easements "created by deed for the purposes of s 40(3)(e)(ia)". It contends that, as a result of the 1997 amendment, the title of the registered proprietors of Lot A became subject to an exception to indefeasibility under that provision in respect of those easements because they were created before Lot A, "the servient tenement", became subject to the Land Titles Act.
We reject those submissions. They have no merit at all. Each of the easements to which those submissions relate was not created by a deed but by a memorandum of transfer in accordance with the provisions of the 1862 Act. However, counsel for the Council submitted that each of the relevant transfers constituted a deed by virtue of provisions in both the 1862 Act and the Land Titles Act.
Each of the relevant transfers was a registered instrument to which s 35(4) of the 1862 Act applied. That subsection read as follows:
"So soon as registered, every instrument drawn in any of the several forms provided in the first schedule, or in any form which for the same purpose may be authorized, in conformity with the provisions of this Act, shall, for the purposes of this Act, be deemed to be embodied in the register book as part and parcel thereof, and such instrument, when so constructively embodied, and stamped with the seal of the Recorder, shall have the effect of a deed duly executed by the parties signing the same."
Similarly, s 48(7) of the Land Titles Act provides as follows:
"(7) When registered, a dealing shall have the effect of a deed duly executed by the parties who signed it."
Neither of those provisions deems anything that is not a deed to be a deed. Each of them provides that certain instruments that are not deeds have effect as if they were deeds. When the title to land is held under the general law, easements are created by deed in accordance with s 60 of the Conveyancing and Law of Property Act 1884. There were provisions in the 1862 Act for the bringing of general law land under that Act, ie under the Torrens system. Section 15 listed what had to be done by every "applicant to bring land under this Act". Section 20 empowered the Recorder of Titles to "bring the land described in such application under the provisions of this Act". There are similar provisions in the Land Titles Act. Part III of that Act is entitled "BRINGING LAND UNDER THIS ACT". Throughout that Part, the process of converting land from general law title to Torrens title is referred to using the expressions "bringing land under this Act" and "brought under this Act". The reference in s 40(3A) to "land that was brought under this Act or the repealed Act" must have been a reference to the bringing of land under the Torrens system. If the construction of that subsection and the original s 40(3)(e)(ia) contended for by the Council is correct, there would have been no need to refer to "the repealed Act" in either of those provisions. The only possible interpretation of the original s 40(3)(e)(ia) is one confining its application to easements over general law land that were literally created by deed before that land was brought under the Torrens system. His Honour reached that conclusion at [84]-[85]. He was plainly correct.
The Land Titles Amendment Act 2012 amended s 40(3) by omitting the original s 40(3)(e)(ia) and replacing that subparagraph with two new subparagraphs. The new s 40(3)(e)(ia) and (ib) read as follows:
"(ia)an easement created by deed but unintentionally omitted from the folio of the Register for the servient land when that servient land was brought under this Act or the repealed Act;
(ib)an easement that has been created under this Act but unintentionally omitted from the folio of the Register for the servient land ...".
The transitional provision in s 40(3A) was not amended by the 2012 Act. It has remained unchanged since 1997.
Once again, and for the same reasons, the only reasonable interpretation of the current s 40(3)(e)(ia) is one confining its application to easements over general law land that were literally created by deed before that land was brought under the Torrens system.
The Council relied heavily on the legislative history and the purpose of the amendments to s 40(3)(e) made in 1997 and 2012. In particular, it was submitted that when the amended provisions are read in the context of the clear legislative purpose, informed to some extent by the second reading speech relevant to each amendment, then the phrases "before the servient tenement became subject to this Act or the repealed Act", and "when that servient land was brought under this Act or the repealed Act", do not refer, as the learned trial judge found, only to the time when the title to the servient tenement was converted from general law to Torrens title, but rather refer to the time when the Land Titles Act commenced or first applied to the land in question.
Contrary to the submissions of the appellant's counsel, it seems to us that the second reading speech in relation to the 1997 amendment supports the interpretation adopted by the learned trial judge. In his speech, the then Minister for Environment and Land Management, the Hon Peter Hodgman MP, explained the reason for the amendment as follows:
"Usually the chain of deeds for land which has the benefit of an easement will reveal the existence of that easement. So when the Recorder of Titles converts that land to Torrens title he is able to record the easement on that title.
Unfortunately this is not the case with land which is subject to the easement, due to the way the general law system works. In many cases when land subject to an easement is being converted from the general law system, the deeds available for the land do not disclose that the land is subject to an easement. There is no simple solution. For the foreseeable future it would not be possible to develop a computer program to track those easements.
Until 1981 when the present Land Titles Act 1980 became law, easements of this nature were protected by legislation, which was then the Real Property Act 1862. Following a decision of the Supreme Court made in 1981 (Pearce v the City of Hobart (1981) Tas SR 334) it was thought that these easements were also protected by the Land Titles Act 1980 which repealed the Real Property Act 1862.
Late in 1995 in the decision of Parremore v Duggan (1996) 70 ALJR 1 the High Court specifically overruled the decision in Pearce's case. This now means that easements of this nature which were converted to Torrens title after 1981 are not now protected in Tasmania. Clauses 6, 7 and 8 of the bill will introduce remedial legislation designed to overcome these problems."
This passage confirms that the purpose of the introduction of the intended amendment was to rectify an apparent consequence of the High Court's decision in Parramore v Duggan (1995) 183 CLR 633, which was seen to stand in the way of the relevant exception to indefeasibility having application in circumstances where an easement has been created under general law, but was not registered on the folio relevant to the servient land at the time of conversion from the general law system to the Torrens title system.
This understanding of the legislative purpose is consistent with what took place in 2012. The amending Act in that year added subpar (ib) which related specifically to an easement created after the servient land had come under the Land Titles Act, but was either then or later unintentionally omitted from the folio of the Register for that land. In the second reading speech and clause notes, it was explained that such an omission might occur "for example when a new folio of the Register is issued". It was explained that the amendment to deal with this circumstance, not one relevant to this case, is an amendment which "rightfully protects the interests of a person who has the benefit of a legally created easement which through no fault of their own has been omitted from the folio of the Register". There was no explanation or reference to the amendment to subpar (ia). It is a reasonable conclusion that the amendment to subpar (ia) was an amendment of form, intended to better express the original legislative intention of that subparagraph, but not change its effect. The changed form makes two things clear. Firstly, the unintentional omission referred to in that subparagraph is one which occurs when the servient land "was brought under this Act or the repealed Act". This links the omission to a specific event. This could arguably have been the construction of the 1997 version of the subparagraph, but it was less than clear. The second change was to clarify that the event in question is when the servient land is "brought under this Act or the repealed Act". This puts beyond doubt the meaning of the provision. We agree with the reasoning of the learned trial judge that the bringing of land under the Act has a specific meaning, which is consistent with the use of these terms throughout the Act and is fundamental to its operation, that is, the conversion of the title of land from the general law system to the Torrens system.
If there is a divergence between what could be thought to be the legislative intention and the wording of the Act, it arises, in our view, in subpar (ib). As already discussed, it seems clear from the second reading speech and clause notes relevant to the 2012 amendment that the purpose of the insertion of subpar (ib) was to catch situations like the one in this case, that is where the easement has been created after the land has been brought under the Torrens system, irrespective of the legislation applicable at the time, but unintentionally omitted from the title to the servient land. If this was the intention, then it is not reflected in the clear unequivocal words of the provision, which relates subpar (ib) only to "an easement that has been created under this Act". The provision is not retrospective and there is no reference to an easement created under the 1862 Act. Although it might be suspected that this results from a drafting oversight, the plain words of the provision must prevail. As Brennan J (as he then was) made clear in Parramore v Duggan (above):
"... A registered proprietor of a dominant tenement has an indefeasible title to the land to which the easement is appurtenant but the easement is not indefeasible. Similarly, where the servient tenement is land to which a registered proprietor has title under the Act, that title is indefeasible. Unless the easement is registered on the certificate of that title, or unless the easement falls within one of the exceptions contained in s 40(3), the unencumbered title of the registered proprietor of the servient tenement is not subject to the easement: see s 40(1). In other words, the registered proprietor of land to which an easement is appurtenant has an indefeasible title to that land but not to the easement, so that the easement cannot be enforced unless the certificate of title of the registered proprietor of the servient tenement states that that title is subject to the easement or unless the easement falls within s 40(3)(e) of the Act."
It must follow that the introduction of the first s 40(3)(e)(ia) in 1997 and the current s 40(3)(e)(ia) and (ib) in 2012 made no relevant difference to the effect of the repeal of the 1862 Act by the Land Titles Act. The grounds of appeal relating to s 40(3)(e)(ia) must therefore fail.

Equitable easements

From the commencement of the Land Titles Act, s 40(3)(e)(ii) of that Act, which is set out above, created an exception to the indefeasibility of the title of a registered proprietor so far as regards "an equitable easement, except as against a bona fide purchaser for value without notice of the easement who has lodged a transfer for registration". The Council contends that the individuals who took transfers from Mr Brown had contractual entitlements to easements over all of Marsh Street, including Lot A, and that the rights that they acquired were equitable interests in land that passed to their successors in title.
The Council's contentions relating to equitable easements can be summarised as follows:
·     That the individuals who took transfers from Mr Brown of the eight relevant lots (Lots 1 to 9, excluding Lot 6) each had a contractual right against him to a right of carriageway over Lot A.
·     That, as a result, each of those individuals acquired an easement over Lot A that was enforceable in equity, and constituted an equitable interest in land.
·     That, in relation to each of the eight lots, the appurtenant easement over Lot A passed to the successors in title of the original transferees with each change of ownership of any of the eight lots.
·     That the easements appurtenant to each of the eight lots were binding upon Mr Brown's successors in title – the owners of the servient land, Lot A – except for any successor in title who was a bona fide purchaser of Lot A for value without notice of the relevant easements.
·     That all of Mr Brown's successors in title who acquired Lot A had constructive notice of the easements because Lot A was being used as a roadway at all material times.
·     That the Council had standing to bring its action.

Contracts for sales by Mr Brown

No contracts of sale entered into by Mr Brown or any of the original purchasers were tendered at the trial. However we infer that Mr Brown and the original purchasers entered into written contracts of sale in respect of each of the nine lots. For decades it has been routine conveyancing practice for the parties to a sale of land to execute a written contract of sale, and for an executed conveyance or transfer to be handed over to the purchaser or the purchaser's solicitor on settlement of the purchase. This practice was recognised in the Stamp Duties Act 1931, which was in force at the time of the transfers. Ad valorem duty was payable upon any sale of real property pursuant to Item 9 of the Second Schedule to that Act. By virtue of cl 5(a) of the Fourth Schedule to that Act, when such a transaction was effected by more instruments than one, ad valorem duty was payable only upon the principal instrument – normally the contract of sale – and the stamp duty applicable to collateral instruments was payable on any other instruments. The transfers relating to Lots 2 to 7 inclusive and Lot 9 each bear duty stamps that indicate that for stamp duty purposes they were not the principal instrument. It follows that Mr Brown must have done what vendors have traditionally done, executing contracts of sale first, and handing over an executed memorandum of transfer on the settlement of each sale.

For reasons that we do not understand, the memorandum of transfer relating to Lot 8 was not stamped as a collateral instrument, but bears duty stamps to a total value of £4.2s.6d. That may have something to do with the fact that the transfer was expressed to be subject to a mortgage. There is no reason to think that Mr Brown did not first enter into a contract of sale with the original purchasers of Lot 8. .

Acquisition of equitable rights of way over the servient land

With the exception of Lot 5, all of the nine lots in the subdivision were landlocked. Each lot had a frontage onto Lot B. Each of the transfers executed by Mr Brown purported to create a right of way appurtenant to the transferred lot, though not all purported to create such rights over both Lot A and Lot B. Mr Brown was in a position to grant rights of way over both Lot A and Lot B because he was the registered proprietor of both of those lots during the years when the nine transfers were executed.
The learned trial judge concluded at [101] that it was possible to infer that "Mr Brown intended to create a right of way over Lot A in favour of the respective transferees", and that "each of the persons who took a transfer from Mr Brown had a contractual entitlement to an easement over all of Marsh Street, including Lot A". It appears that his Honour stopped short of drawing those inferences because he considered that the transferees at best acquired only personal equities, as distinct from equitable interests in land. In our view the evidence was so strong that both of those inferences should be drawn.
When a purchaser enters into a contract for the sale of land, that purchaser obtains an equitable estate or interest in the land. The basis upon which such an estate or interest is acquired was explained by Brennan J (as he then was) in Corin v Patton (1990) 169 CLR 540 at 563 as follows:
"Although a proposed transferee of land has no legal estate or interest in the land to be transferred prior to registration of the transfer, he may acquire an equitable estate or interest 'by reason of some fact or circumstance which a court of equity regards as binding the legal owner in conscience to hold the property upon trust for the [transferee]': Olsson v Dyson (1969) 120 CLR 365 at 385, per Kitto J. Section 41 [of the Real Property Act 1900 (NSW)], 'in denying effect to an instrument until registration, does not touch whatever rights are behind it': Barry v Heider (1914) 19 CLR 197, at p 216, per Isaacs J. It is for this reason that a purchaser under a contract of sale of land under the Real Property Act has an equitable estate or interest in the land corresponding with the protection which equity gives to rights acquired under the contract: Bahr v Nicolay [No 2] (1988) 164 CLR 604, at pp 612, 645-646; Chan v Cresdon Pty Ltd (1989) 168 CLR 242, at pp 256-258. he source of that estate or interest is the contract, not the transfer."
On a similar basis, when a person has a contractual right to the grant of an easement, and the owner of the servient land has a contractual obligation to grant that easement, courts of equity will regard the intended grantee as holding an estate or interest in the servient land. Thus in Dalton v Henry Angus & Co (1881) 6 App Cas 740, a case which was decided on another point, Lindley J said, in the Court of Appeal, at 765:
"The absence in fact of a grant, meaning thereby a deed under seal, cannot in my opinion be conclusive against the Plaintiff. An agreement for valuable considerable, though not under seal, is sufficient to create a right to an easement, and for the purpose of creating a lawful user is as good as a deed."
Ever since the Statute of Frauds 1677 there has been legislation that provides that conveyances of land or of any interest therein are void unless made by deed. Every Australian jurisdiction has such a provision. In Tasmania, that requirement is to be found in s 60 of the Conveyancing and Law of Property Act. That section does not apply to Torrens title land. However the principle discussed by Brennan J in the passage quoted from Corin v Patton (above), whereby a purchaser is regarded as having an equitable estate or interest in the land, extends not only to land whose title is under the general law but also to Torrens title land.
In Milne v James (1910) 13 CLR 168, in which the party asserting the creation of an easement was unsuccessful, Barton J said at 179, referring to the judgment appealed from in that case:
"As Burnside J observed in his judgment after trial, 'it is clear that at law an easement can only be created by an instrument under seal, but if there be an agreement to grant an easement for a good and substantial consideration, equity considers it, as between the parties and persons taking with notice, as granted'."
That passage and the passage we have quoted from Dalton v Henry Angus & Co (above) were relied on by Dean J in Jensen v Hawksley [1955] VLR 470 at 475. The facts of that case were as follows. A vendor named Ludlow entered into a contract for the sale of a property known as 157 Plenty Road to a purchaser named Jensen. A lane behind the premises was being used for access to that property. Ludlow had title to that lane. The contract of sale required the vendor to prepare and register a plan of subdivision so that the purchaser could obtain a separate title. Such a plan had been prepared and lodged for registration, but it had not been registered at the time of the judgment. A memorandum of transfer by the vendor to the purchaser had been lodged for registration, but was awaiting the registration of the plan. The plan showed an easement over the lane, appurtenant to 157 Plenty Road. While those documents were awaiting registration the executors of Ludlow, who had died, sold an adjoining property and the lane to a purchaser named Hawksley. The transfer to Hawksley had not been registered at the time of the judgment either. Jensen sought an injunction restraining Hawksley from interfering with his use of the lane.
Dean J held that the unregistered plan, which showed the easement over the lane, expressed the intentions of Ludlow and Jensen. At 474, his Honour also found that there was a collateral oral contract for the granting of an easement over the lane by Ludlow to Jensen. At 474-475 he said, in relation to that collateral oral contract:
"It is also clear that such an agreement, being for valuable consideration, namely that plaintiff would purchase the land, is enforceable in equity and confers on the plaintiff in equity the same rights as he would have had if the easement had been created by deed as required by law."
There are a number of other cases in which it has been held that an enforceable contract for the grant of an easement will give the intended grantee an equitable easement over the servient land: McManus v Cooke (1887) 35 Ch D 681; McDonald v Peddle [1923] NZLR 987; Goff v Albury Soldier, Sailors & Airmen's Club Ltd (1995) 6 BPR 14029 at 14036 (Hodgson J, Supreme Court of New South Wales); Drew v Asimus (1998) 9 BPR 16531 at 16550 (Santow J, Supreme Court of New South Wales). Similar principles apply to contracts for the granting of profits à prendre: Mills v Stokman (1967) 116 CLR 61; Mason v Clarke [1955] AC 778; White v Taylor (No 2) [1969] 1 Ch 160 at 181.

Successors in title – servient land

It is well established that when a purchaser acquires land from a vendor, but has notice of a subsisting equitable interest in that land, the purchaser will hold the land subject to that outstanding equitable interest. See, for example, Jared v Clements [1902] 2 Ch 399. It follows that the burden of an easement that is enforceable only in equity will pass to the successors in title of the owner of the servient land unless they are bona fide purchasers for value without notice of the easement.
In May v Belleville [1905] 2 Ch 605, the owner of some farms agreed to sell one of those farms to a purchaser, but the purchaser agreed that that farm would be subject to rights of way appurtenant to land retained by the vendor. On completion of the sale, the vendor executed a conveyance that contained a similar reservation, but the purchaser did not execute it. As a result, rights of way were not formally created over the purchaser's land. Buckley J held that the purchaser and his successors in title, who took title with notice of the rights of way, were bound to give effect to the rights of way.
In Milne v James (above), which concerned a question whether an easement for support had been created, O'Connor J said at 187-188:
"The respondent's documentary title affords him no justification, but he relies upon a verbal agreement for adequate consideration made and acted upon between the predecessors in title of both parties, whereby the land and building became subject to the burden which has been imposed upon them. As the agreement was not by deed, and the appellant was a bonâ fide purchaser for value, it is conceded that the respondent cannot succeed unless he establishes what amounts to an equitable easement binding on the respondent, that is to say, an agreement of such a nature and made under such circumstances as would justify a Court of Equity in granting specific performance. In addition to that he must show that the respondent purchased with notice of the agreement."
In Cory v Davies [1923] 2 Ch 95, P O Lawrence J held that rights of way, enforceable in equity, had been created, and that the purchaser of a lease of the servient land was bound by the rights of way as he had taken title with notice of them.
In Kitching v Phillips [2011] WASCA 19, 278 ALR 551, Murphy JA, with whom Pullin and Newnes JJA agreed, said the following at [44]:
"... equity has never insisted on a formal deed for the disposition of an interest in land and, in accordance with the principle in Walsh v Lonsdale (1882) 21 Ch D 9, an equitable easement may arise where there is a specifically enforceable agreement, for valuable consideration, to grant an easement. Equity will lend its aid by ordering that a deed be executed by the holder of the servient tenement to convey the legal interest, or by an injunction restraining the servient tenement holder from disturbing the rights of the holder of the dominant tenement. As such an interest is only enforceable in equity (until grant by deed), it does not, under the general law, bind a bona fide purchaser of the legal estate of a servient tenement for value without notice."
Those comments were obiter. The appellants in that case, who were asserting the existence of an easement, were unsuccessful for reasons that are not presently relevant. Murphy JA went on to cite Milne v James (above) and Mills v Stokman (above) as authorities supporting his comments.
In his reasons at [101], the learned trial judge, after referring to the possibility that each of the persons who took transfers from Mr Brown had a contractual entitlement to an easement over all of Marsh Street, including Lot A, continued:
"However, any equitable easement arising from those facts only operates inter-partes. Section 40(3)(e)(ii) recognises the existence of such equities as an exception to indefeasibility of the title of the registered owner. However they are personal equities; claims in personam against the registered proprietor: Frazer v Walker [1967] 1 AC 569 at 585; Barry v Heider [(1914) 19 CLR 197] at 213; Breskvar v Wall [(1971) 126 CLR 376] at 385."
The three cases cited by his Honour do not stand as authority for the proposition that equitable easements give rise only to rights in personam. They were all concerned with the distinction between equitable interests in land and mere rights in personam. Furthermore, there would be no need for s 40(3)(e)(ii) if it was intended only to protect mere rights in personam. That provision is concerned with an exception to the indefeasibility of a registered proprietor's title, and such exceptions are concerned with unregistered or unregistrable interests in land. In our view his Honour erred in law in the passage we have quoted. If the transferees of the relevant lots each had equitable easements over Lot A, those rights passed to their successors in title, subject to the possibility of extinguishment if Lot A was transferred to a bona fide purchaser for value who had no notice of the existence of the easements at the time of the transfer.

Merger in conveyance

As a general rule, when the parties to a contract of sale complete that contract, with the vendor delivering a conveyance or its equivalent to the purchaser at the time of completion, the contractual liabilities of the parties are discharged. Lord Russell of Killowen, speaking for the Privy Council, explained the relevant principle in Knight Sugar Co Ltd v Alberta Railway and Irrigation Co [1938] 1 All ER 266 at 269 as follows:
"But it is well settled that, where parties enter into an executory agreement which is to be carried out by a deed afterwards to be executed, the real completed contract is to be found in the deed. The contract is merged in the deed: Leggott v Barrett (1880) 15 Ch D 306. The most common instance, perhaps, of this merger is a contract for sale of land followed by conveyance on completion. All the provisions of the contract which the parties intend should be performed by the conveyance are merged in the conveyance, and all the rights of the purchaser in relation thereto are thereby satisfied. There may, no doubt, be provisions of the contract which, from their nature, or from the terms of the contract, survive after completion. An instance may be found in Palmer v Johnson (1884) 13 QBD 351, in which it was held that a purchaser could, after conveyance, rely upon a provision of the contract and obtain compensation. The foundation of this decision was that, upon the construction of the contract, the provision for compensation applied after completion. In other words, the parties did not intend it to be performed by the subsequent deed, and it was therefore not satisfied by, or merged in, that deed."
In Svanosio v McNamara (1956) 96 CLR 186, which related to a sale of general law land in Victoria, the purchaser of a hotel received on completion a conveyance of only part of the land on which the hotel stood. He sought equitable relief, including rescission, but the High Court held that he was not entitled to any relief. McTiernan, Williams and Webb JJ said, at 211-212:
"The present case on analysis falls completely within the principle that, after the contract has been completed by the execution of the conveyance and the payment of the purchase money, the purchaser, apart from rights arising from the deed of conveyance or subsisting under the contract which do not merge in the deed, has no remedy at law or in equity in respect of any defects either in the title to or in the quantity or quality of the estate: Brett v Clowser (1880) 5 CPD 376 at 386-389. The conveyance having been executed the purchaser must take all the consequences: M'Culloch v Gregory (1855) 1 K & J 286 at 291 [69 ER 466, at 468]."
In this case, there is no direct evidence of the terms of any of the contracts entered into by Mr Brown. Upon completion of each of those contracts, except the one relating to Lot 6, a memorandum of transfer in registrable form purporting to create an easement appurtenant to the land transferred was handed over on completion and subsequently registered. Because of those circumstances, it is necessary to address the question whether, upon the registration of each of those transfers, the contractual promise to grant an easement to the transferee merged in the registered transfer, so that the transferee thereafter did not have an equitable easement over the servient land.
No submissions were made about merger at the hearing of the appeal. The parties were therefore invited to make written submissions. Counsel for the Council submitted that the doctrine of merger in conveyance does not apply to Torrens title land and that, if it does, then it was the intention of the parties to each contract that the obligation to grant an easement would not merge on completion or registration, and that merger had not occurred.
The Full Court of the Supreme Court of New South Wales took the view that the doctrine of merger in conveyance applies to Torrens title land in West v Read (1913) 13 SR (NSW) 575. That case concerned a sale by the mortgagees of land held under the Real Property Act 1900 (NSW) to a purchaser. After settlement, the purchaser was unable to register the memorandum of transfer executed by the mortgagees, apparently because the mortgagor had not been in default under the mortgage. The purchaser bought the equity of redemption from the mortgagor and thereafter obtained registration of the transfer executed by the mortgagees. He then sued the mortgagees for damages for breach of the contract of sale. At 579 Cullen CJ, with whom Pring J agreed, referred to "the unquestionable rule of law that where a contract to sell has been effectuated by a conveyance, then, apart from mere collateral provisions in the contract of sale – such, for instance, as some of those which appear in the present agreement, about the adjustment of rates and taxes – the purchaser who has taken the conveyance has no remedy on the contract to sell". At 579-580, his Honour took the view that, for land held under the Real Property Act (NSW), merger did not occur until registration of a transfer, saying this:
"But under the Real Property Act there is no conveyance until a document in statutory form has been registered. Have the defendants in this case effectuated their contract to convey by furnishing a document capable of being converted into a conveyance by the act of the conveying party – I mean, through the efficacy of something done by the conveying party? Most clearly not."
At 581-582, Gordon J dissented on the basis that the purchaser's contractual rights were extinguished by merger upon the registration of the transfer.
In Hawkins v Gaden (1925) 37 CLR 183, Starke J took the view that the doctrine of merger in conveyance applies to Torrens title land. His Honour said, at 207:
"A transfer or conveyance does not extinguish the contract of sale; but when a purchaser accepts title, and pays his purchase-money and the vendor transfers or conveys the land sold to the purchaser, then the 'main duties' of the contract have been performed, and the parties are discharged in relation to them."
The other member of the majority in that case, Isaacs J (as he then was), did not refer to merger in conveyance. The case concerned a collateral agreement whereby a clerk promised on behalf of a firm of solicitors to satisfy requisitions of the Registrar-General.
Pallos v Munro (1970) 72 SR (NSW) 507 was a case in the New South Wales Court of Appeal about merger. It was held that a vendor's obligation to comply with a council notice requiring a sewerage connection did not merge on completion. However it appears from the report of that case, at 510, that it was not disputed that the doctrine of merger applied to a transfer under the Real Property Act 1900 (NSW).
In Montgomery v Continental Bags (NZ) Ltd [1972] NZLR 884, Speight J held that the doctrine of merger in conveyance applied to Torrens title land, but that it did not apply to any transaction until the registration of the transfer. At 892 he said:
"Under a Torrens system, however, vesting of legal estate does not occur until registration ... Registration is completion and not the payment of money and delivery of documents at any time prior."
His Honour went on to cite West v Read (above) with approval.
In Pascon Pty Ltd v San Marco in Lammis Cooperative Social Club Ltd [1991] 2 VR 227, Brooking J, with whom Kaye and McGarvie JJ agreed, referred without criticism, at 228, to the conclusion of a County Court judge at first instance to the effect that the effect of s 40(2) of the Transfer of Land Act 1958 (Vic) "was to put the transfer in the same position as a conveyance for the purposes of the doctrine of merger", but went on to hold that the parties had not intended the obligation of the purchaser to pay the full purchase price to merge.

Green CJ held that a purchaser's contractual right to the transfer of some Torrens title land was not extinguished by merger in Pearce v Hood [1980] Tas R 159. In that case a vendor had contracted to sell certain land, believing that none of it was Torrens title land. After delivery of a conveyance and payment of the purchase money, the purchaser discovered that the land that he had contracted to purchase included a strip of Torrens title land. At 164, his Honour said:
"There does not exist any deed in respect of the RPA [the 1862 Act] land in which the defendant's contractual obligation to transfer the RPA land could be said to have merged."
It does not appear to have been argued in that case the doctrine of merger did not apply to land under the 1862 Act. There is no reason to interpret anything said by his Honour as adopting or supporting that view.
In Knight Sugar Co Ltd v Alberta Railway and Irrigation Co (above), it was argued that the doctrine of merger in conveyance did not apply to land held under the Land Titles Act 1906 (Alberta). Lord Russell of Killowen quoted the relevant sections of that statute at 270, and continued:
"From the language used in these sections it seems clear that each of the transfers was a document prepared ... in order that, when registered, it should become operative according to the tenor and intent thereof, and should thereupon transfer the land mentioned therein. It is the transfer which, when registered, passes the estate or interest in the land, and it appears, for the purpose of the application of the doctrine in question, to differ in no relevant respect from any ordinary conveyance of unregistered land."
In Jensen v Hawksley (above), the transfers of both the dominant land and the servient land remained unregistered at the time of the judgment. The transferee of the dominant land therefore only had an equitable easement over the servient land, and there was no scope for the operation of the doctrine of merger in conveyance.
We are not aware of any reported case relating to Torrens title land in which a purchaser's claim has failed because of a finding that the doctrine of merger in conveyance applies to Torrens title land. However the cases we have referred to strongly support the proposition that, subject of course to the terms of any particular statute, the doctrine applies to Torrens title land, but does not apply until the registration of the transfer.
In this State, the terms of the relevant statutes leave no room for doubt. Section 35(4) of the 1862 Act provided, "So soon as registered, every instrument ... shall have the effect of a deed duly executed by the parties signing the same." Since the repeal of the 1862 Act, s 48(7) of the Land Titles Act has provided, "When registered, a dealing shall have the effect of a deed duly executed by the parties who signed it." The doctrine of merger in conveyance applies to deeds of conveyance that have been duly executed. A memorandum of transfer by which an easement was granted, if registered under either the 1862 Act or the Land Titles Act, had effect as if it were a deed as from the time of its registration. The doctrine of merger in conveyance therefore applied to such transfers, but did so as from the time of registration. By contrast, the doctrine applies to conveyances once they have been signed, sealed and delivered, even when they have not been registered.
In our view, however, there was no merger in relation to any of the relevant contracts because the parties did not intend the contractual provisions relating to the creation of easements to merge upon the registration of transfers of the purchased land, and because the granting of the relevant easements was not recorded on the certificate of title for the servient land, and the process of registering the easements has therefore never been completed. As Lord Russell of Killowen said in the passage we have quoted from Knight Sugar Co Ltd v Alberta Railway and Irrigation Co, "There may, no doubt, be provisions of the contract which, from their nature, or from the terms of the contract, survive after completion." For example, Cullen CJ referred to provisions about the adjustment of rates and taxes in West v Read (above) at 579, and the provision relating to a sewerage connection was held not to merge on completion in Pallos v Munro (above).
As this case illustrates, it was possible in the years when Mr Brown sold the relevant lots for a vendor to execute a single memorandum of transfer by which he transferred a parcel of land to the transferee and also granted a right of way over other land owned by him, and for the transfer of a dominant land to be registered without the easement being registered on the certificate or certificates of title for the servient land. It was also possible for the transfer of the dominant land to be registered first, and for the granting of the easement to be noted on a certificate of title in respect of the servient land at a later time, though that did not happen in this case. In those circumstances, we infer that Mr Brown's contractual obligations to grant easements, by their very nature, were terms of the contracts that survived after the registration of each transfer of the dominant land.
The 1862 Act did not expressly require the Recorder of Titles to record the granting of an easement on the certificate of title for the servient land. However, for the reasons which follow, we have concluded that the 1862 Act required the Recorder to do so.
The only express requirement as to the registration of an easement in that Act was in s 43, which relevantly provided as follows:
"Whenever any easement ... over any land under the provisions of this Act, is created for the purpose of being annexed to or used and enjoyed together with other land under the provisions of this Act, the Recorder shall enter a memorial of the instrument creating such easement ... upon the folium of the register book constituted by the existing grant or certificate of title of such other land."
In other words, the Recorder had an express obligation to record the grant of the easement on the certificate of title for the dominant land.
In our view, however, s 38(1) of the 1862 Act obliged the Recorder to enter a memorial of any instrument creating an easement on the certificate of title for the servient land. The learned primary judge suggested, at [83], that that might be the case. Section 38(1) read as follows:
"38 — (1) Whenever a memorial of any instrument has been entered in the register book, the Recorder shall record the like memorial on the duplicate grant, certificate of title, lease, or other instrument evidencing title to the estate or interest intended to be dealt with, or in any way effected [sic], unless the Recorder shall, as hereinafter provided, dispense with the production of the same."
In our view, the words, "or in any way effected" are significant. When an easement is granted over a piece of Torrens title land, the estate or interest of the registered proprietor of that servient land is affected, in that it is diminished by the granting of the easement. It follows that, each time Mr Brown transferred a piece of his land and granted an easement over Lot A, the Recorder of Titles was obliged to record the granting of the easement on Mr Brown's certificate of title in respect of Lot A.
Section 38(1) of the Real Property Act 1900 (NSW), as it read in 1964, was identical with Tasmania's s 38(1), except that it referred to that State's Registrar-General, and said "affected" rather than "effected". In Registrar-General of New South Wales v Jea Holdings (Aust) Pty Ltd [2015] NSWCA 74, 88 NSWLR 321, Bathurst CJ and Beazley P expressed support for the view that s 38 of the 1900 Act, as it stood in 1964, imposed an obligation to register an easement on the certificate of title for the servient tenement. Their Honours said the following at [139]-[141]:
"It has been suggested that s 38 of the Act, as it stood at the relevant time, imposed an obligation on the Registrar-General to register the easement on the folium of the servient tenement.
In E A Francis The Law and Practice Relating to Torrens Title in Australia (1972, Butterworths) vol 1 pp 504-505, the learned author notes that it is clear from the words of s 47 of the Act (referring to the version in existence in 1964) that '[t]he recording is required by this provision to be made only on the folio of the register evidencing title to the dominant tenement'. In relation to s 38 the author notes:
'... [w]here an easement is created pursuant to s 46 the Registrar-General has a clear duty to make a recording of the instrument creating an easement either by grant or reservation on the certificate of title of the servient land so that the combined effect of these provisions [s 47 and s 38(1)] is that the easement will be noted on the certificates to both the dominant and servient tenements.'
This commentary appears to support the conclusion that, while the Registrar-General has a duty to record the easement on the servient tenement, such recording is not necessarily a requirement for the creation of the easement. [Footnote omitted.]"
In Papadopoulos v Goodwin [1983] 2 NSWLR 113, Wootten J held, on a completely different basis, that the New South Wales legislation required an easement to be recorded on the certificate of title of the servient tenement. At 117, his Honour said:
"… it would be extraordinary if the Act required the recording of an easement on the dominant tenement and not on the servient tenement. The principal object of the Act is to save persons dealing with the registered proprietors from the trouble and expense of going behind the register in order to investigate the history of their author's title and to satisfy themselves of its validity … This being so one would expect any duty on the Registrar to relate in the first place to the servient tenement." [Case references omitted.]
In the light of those authorities, we are satisfied that s 38(1) of the 1862 Act, amongst other things, required the Recorder of Titles, whenever the granting of an easement was recorded in the register book in relation to the dominant land, also to record it on the instrument evidencing title to the servient land.
We are conscious that in the principal judgment in Parramore v Duggan (above), Toohey J said that if an easement was created over land that was under the 1862 Act, "the only obligation of the Recorder was to enter a memorial instrument creating the easement upon the folium of the register book relating to the dominant land". However that comment was obiter since that case related to an easement that was granted when the titles to both the dominant and servient tenements were under the general law.
Section 32(1) of the 1862 Act provided for the issue of certificates of title in duplicate. The registered proprietor was entitled to receive one certificate. The other was to be bound up by the Recorder in the register book pursuant to s 31(1). Unless the Recorder took the unusual step of dispensing with the production of the registered proprietor's copy of the certificate of title under s 93(1), he was obliged by s 38(1) to register each relevant dealing on both copies of the relevant certificate of title.
For the easements granted by Mr Brown to be registered on his copy of the certificate of title relating to Lot A, it would have been necessary for that document to be produced by him to the Recorder of Titles. That is to say, for the process of registering each of the relevant easements to have been completed, it would have been necessary for Mr Brown to produce that certificate of title. It must follow that Mr Brown's contractual obligations to grant each of the relevant easements, which did not merge on registration of the transfers of the dominant lots, included an obligation to produce the certificate of title for Lot A to enable the granting of each easement to be recorded thereon. Since no such recording was made, we infer that that certificate of title was never produced for that purpose by Mr Brown. To that extent, his contractual obligations in relation to the granting of the easements were not discharged.
It must follow that none of Mr Brown's contractual promises to grant easements to transferees merged in any of the registered transfers, and that the transferees continued to have equitable easements over the servient land after the registration of their transfers.

Purchasers with notice of the easements

By virtue of s 40(3)(e)(ii) of the Land Titles Act, the exception to indefeasibility of title relating to equitable easements does not apply "as against bona fide purchaser for value without notice of the easement who has lodged a transfer for registration". The evidence in this case established that the successors in title to Mr Brown in respect of Lot A were a couple named Gillies, to whom the land was transferred in 1980; then Mr Howlin and his then wife, to whom the land was transferred in 2003; and subsequently the current owners, Ms Qin and Ms Shi, to whom Mr Howlin transferred the land in 2014.
The learned trial judge reviewed the evidence as to the history of "Marsh Street", which included Lot A. In his reasons at [109]-[110], he said the following:
"I think that … the subdivision of the land around Marsh Street has proceeded from the start with the common intention that the land be used for residences, and that access across Marsh Street should facilitate that use. Since the original subdivision the owners of all of the land have proceeded in accordance with that intention. Mr McCormack, Mr Clarkson, Mr Cuppari, Mr Tapping, Mr Griggs and Mr Atkins [the present owners or part-owners of Lots 6, 8, 9, 1 & 2, 4 and 5 respectively] all gave unchallenged evidence that Marsh Street is, and has been throughout their respective ownership, the only means of access to their properties. All of the properties front onto the Geappen portion of Marsh Street [Lot B]. Mr McCormack and Mr Atkins thought, before they purchased the land, that Marsh Street was a public road. The others gave evidence that they thought they had a right of way over all of Marsh Street. Mr Clarkson's evidence was that his parents bought the property he later purchased from them in 1978. He remembers Marsh Street being used then as a road, but that not many people were living there at that stage. He said that Marsh Street has been used as access ever since. The geography of the area, as revealed by the evidence of the witnesses, the diagram and photographs, readily discloses why this is so. Without access through Marsh Street all of the properties, except for the property owned by Mr Atkins, are landlocked. None adjoin a public road and they are surrounded by privately owned land on all other sides. Marsh Street has also been used as access to the properties from Spitfarm Road [west of Lot A] for a very long time. There is a substantial and well established gravel road running in an almost straight line through the centre of Marsh Street between Spitfarm Road and the Howlin land [east of Marsh Street]. There is a grass verge between the edge of the roadway and the boundary of the properties on each side. There are houses on each property adjoining Marsh Street. The orientation of the houses and outbuildings (including garages) built on each property is consistent only with use of Marsh Street for access. The boundary between each of those lots and Marsh Street is fenced, but there are gates and driveways from Marsh Street onto each property and obvious evidence of constant vehicular traffic from the gravel road to the gates and driveways. Vehicles wishing to get to the various houses must travel over Marsh Street from Spitfarm Road. This includes not only occupants and visitors, but service vehicles such as for delivery of post and goods, collection of garbage and for construction and maintenance. The houses are serviced by septic tanks. Trucks and pumps for cleaning and maintenance of the septic tanks must travel over Marsh Street. A number of the plaintiff owners have contributed time and resources to repair and maintain the road over the years.
All of the plaintiff owners said that the services to their properties, including electric power and telephone and telecommunications and post are provided through Marsh Street. There are at least three hydro-electricity supply poles constructed on Marsh Street, which supply power to the residences. Two of the power poles carry street lighting. The telecommunications lines are underground. There has even been a street sign at the corner with Spitfarm Road which says 'Marsh Street'. The only inference that can reasonably be drawn from the evidence is that Marsh Street has been subject to uninterrupted, long-standing and continuous use as if it were a public street."
That evidence establishes that Marsh Street, including Lot A, was being used for vehicular and pedestrian access to Lots 1 to 9 inclusive at the times of the transfers of Lot A in 1980, 2003 and 2014. Each of the purchasers in and since 1980 had at least constructive notice, if not actual notice, of the rights of way over Lot A.
The doctrine of constructive notice was explained by Brett LJ in Allen v Seckham (1879) 11 Ch D 790 as follows at 795-796:
"… I conceive that when a person purchases property where a visible state of things exists which could not legally exist without the property being subject to some burden, he is taken to have notice of the extent and nature of that burden. But it seems that the rule goes further, and that when a state of circumstances exists which is very unlikely to exist without a burden, he is affected with notice."
That passage was referred to with approval in Milne v James (above) by Griffiths CJ at 176-177, by Barton J at 183, and by O'Connor J at 189.
Section 5(1) of the Conveyancing and Law of Property Act limits the operation of the doctrine of constructive notice to some degree. That subsection reads as follows:
"(1) A purchaser shall not be prejudicially affected by notice of any instrument, fact, or thing, unless —
(a)it is within his own knowledge, or would have come to his knowledge if such inquiries and inspections had been made as ought reasonably to have been made by him; or
(b)in the same transaction with respect to which a question of notice to the purchaser arises, it has come to the knowledge of his counsel, as such, or of his Australian legal practitioner, or other agent, as such, or would have come to the knowledge of his Australian legal practitioner, or other agent, as such, if such inquiries and inspections had been made as ought reasonably to have been made by the Australian legal practitioner or other agent."
The fact that Marsh Street, including Lot A, was being used for access, including vehicular access, to Lots 1 to 9 must either have been within the knowledge of the purchasers of Lot A in and after 1980 or, if not, would have come to their knowledge if they had made reasonable inspections and enquiries, either personally or through solicitors. In the words of Brett LJ, there was "a state of circumstances … which is very unlikely to exist without a burden" – in this case a burden in the nature of rights of carriageway.
It must follow that each purchaser of Lot A had notice of the easements burdening that land. It follows that the title of the current registered proprietors of Lot A, Ms Qin and Ms Shi, is not indefeasible because s 40(3)(e)(ii) of the Land Titles Act applies, and their title is subject to equitable easements appurtenant to Lots 1, 2, 3, 4, 5, 7, 8 and 9.

The Council's standing to sue

As the learned trial judge noted in his reasons at [130], there are authorities suggesting that ordinarily only a party in occupation or possession of the dominant tenement is entitled to maintain an action for interference with a right of way: Inchbald v Robinson (1869) 4 Ch App 388; Hunter v Canary Wharf Ltd [1997] AC 655.

Under s 20(1)(a) of the Local Government Act 1993, one of the functions of a council is to "provide for the health, safety and welfare of the community". Councils collect and remove garbage from residential properties. Since the evidence establishes that the dominant land is used for residential purposes, it can be inferred that there is a continuing need for garbage services and other municipal services provided by the Council. Declaratory and/or injunctive relief would be useful in order to ensure that the Council's access to the dominant land is not interfered with by the erection of a fence or otherwise. In Broadmoor Special Hospital Authority v Robinson [2000] QB 775 at [25], Lord Woolf MR, after considering the principles relating to the standing of public bodies to seek injunctions, expressed the following conclusion:
"I would therefore summarise the position by stating that if a public body is given a statutory responsibility which it is required to perform in the public interest, then, in the absence of an implication to the contrary in the statute, it has standing to apply to the court for an injunction to prevent interference with its performance of its public responsibilities …".
We agree. In our view the Council had the standing to apply for declaratory and/or injunctive relief for the purpose of preventing interference with the performance of its public responsibilities. It follows that this appeal must succeed.

Conclusion

The second and third respondents, Ms Qin and Ms Shi, took no part in these proceedings. The first respondent, Mr Howlin, provided an outline of submissions, made oral submissions at the hearing of the appeal, and sent in lengthy written submissions after the question of merger in conveyance was raised. His submissions were directed towards a contention that Marsh Street is a public highway and has been for many years. That contention has been conclusively rejected in earlier proceedings and was not one that could properly be raised in the context of this appeal: Clarence City Council v Howlin [2012] TASSC 26, 192 LGERA 360; Howlin v Clarence City Council [2013] TASFC 7; Howlin v Resource Management and Planning Appeal Tribunal [2015] TASSC 48 at [46]-[48].
Counsel for the Council submitted that, if the appeal succeeded, the matter should be remitted to the learned trial judge because he wished to adduce evidence of new facts relating to interference with the rights of way. Whilst this Court has a power to receive further evidence about matters occurring after the judgment appealed from under s 48 of the Supreme Court Civil Procedure Act, it would be more convenient, and more appropriate, for the evidence of recent events to be presented to a single judge.
For these reasons we have decided to allow the appeal, set aside the judgment dismissing the Council's action, and remit the action to the learned trial judge for further hearing and determination according to law, and in accordance with the findings of fact made in these reasons.