Dickson v Petrie

[2025] NSWCA 110

Court of Appeal

Supreme Court

New South Wales

• Amendment notes

Medium Neutral Citation:

Dickson v Petrie [2025] NSWCA 110

Hearing dates:

20 February 2025

Date of orders:

23 May 2025

Decision date:

23 May 2025

Before:

Stern JA at [1];
Ball JA at [14];
Griffiths AJA at [15]

Decision:

(1) The appeal be allowed in part.

(2) The cross-appeal be dismissed.

(3) Orders 1, 2 and 3 dated 29 August 2024 be set aside and in lieu thereof:

Declare that, upon its proper construction, the Easement provided for in the s 88B Instrument registered on 16 December 2003 is valid and enforceable and provides the owners of the dominant tenement with sole use and enjoyment of:

(a) Area X marked on DP 1062948 for the purposes of gardening, paving and landscaping and storage of equipment as provided for in cl 1 of that Instrument; and

(b) the garden shed which has been built within Area X, for the purposes of storage and laundry use as provided for in cll 2, 3 and 4 of the Instrument,

subject to the limitations in the Easement.

(4) The orders dated 23 October 2024 be set aside and in lieu thereof there be no order as to the costs of the proceedings below.

(5) Order the respondent to pay 50% of the appellants’ costs of the appeal and the cross-appellant to pay 50% of the cross-respondents’ costs of the cross-appeal.

(6) The notice of objection to competency filed 10 October 2024 be dismissed, with no order as to costs.

Catchwords:

LAND LAW — easements — construction of easements — general principles of construction — relevance of concept of “reasonable use” to task of construction — whether easement confers on dominant owners exclusive rights to use subject land for stated purposes — consideration of extent of rights retained by servient owner

LAND LAW — easements — validity of easements — whether easement capable of forming subject matter of grant — where easement confers on dominant owners exclusive rights to use land for stated purposes — whether dominant owners’ rights inconsistent with servient owner’s possession and proprietorship of servient tenement

Legislation Cited:

Conveyancing Act 1919 (NSW), ss 88B, 89

Supreme Court Act 1970 (NSW), s 101

Uniform Civil Procedure Rules 2005 (NSW), r 51.41

Cases Cited:

Aussie Skips Recycling Pty Ltd v Strathfield Municipal Council (2020) 103 NSWLR 834; [2020] NSWCA 292

Barter v Theunissen [2024] NSWSC 326; 21 BPR 44,697

Batchelor v Marlow [2003] 1 WLR 764

Clos Farming Estates Pty Ltd v Easton [2001] NSWSC 525; 10 BPR 18,845

Clos Farming Estates Pty Ltd v Easton [2002] NSWCA 389; 11 BPR 20,605

Copeland v Greenhalf [1952] Ch 488

CurrumbinInvestments Pty Ltd v Body Corp Mitchell Park Cts [2012] 2 Qd R 511; [2012] QCA 9

Gallagher v Rainbow (1994) 179 CLR 624; [1994] HCA 24

Harada v Registrar of Titles [1981] VR 743

Hare v van Brugge (2013) 84 NSWLR 41; [2013] NSWCA 74

Inre Ellenborough Park [1956] Ch 131

Ippin Textiles Pty Ltd v Winau Aust Pty Ltd [2021] NSWCA 9; 386 ALR 286

Keppell v Bailey (1834) 2 M&K 517; 39 ER 1042

Laming v Jennings [2018] VSCA 335

London & Blenheim Estates Ltd v Ladbroke Retail Parks Ltd [1992] 1 WLR 1278

Moncrieff v Jamieson [2007] 1 WLR 2620

Owners Corporation Strata Plan 533 v Random Primer Pty Ltd [2025] NSWCA 8

Perpetual Trustee Co Ltd v Westfield Management Ltd [2006] NSWCA 337; (2007) 12 BPR 23,793

Petrie v Dickson [2024] NSWSC 972

Petrie v Dickson (No 2) [2024] NSWSC 1337

Phoenix Commercial Enterprises v City of Canada Bay Council [2010] NSWCA 64

Registrar-General of New South Wales v Jea Holdings (Aust) Pty Ltd (2015) 88 NSWLR 321; [2015] NSWCA 74

Stolyar v Towers [2018] NSWCA 6; 19 BPR 38,287

Theunissen v Barter [2025] NSWCA 50

Towers v Stolyar [2017] NSWSC 526; 18 BPR 36,963

Westfield Management Ltd v Perpetual Trustee Company Ltd (2007) 233 CLR 528; [2007] HCA 45

Wright v Macadam [1949] 2 KB 744

Zenere v Leate (1980) 1 BPR 9300

Texts Cited:

Brendan Edgeworth, Butt’s Land Law (7th ed, 2017, Lawbook Co)

Kevin Gray and Susan Francis Gray, Elements of Land Law (5th ed, 2008, Oxford University Press)

Category:

Principal judgment

Parties:

Graeme Dickson (First Appellant and First Cross-Respondent)
Denise Carmel Dickson (Second Appellant and Second Cross-Respondent)
Janet Marie Petrie (Respondent and Cross-Appellant)

Representation:

Counsel:
P Tomasetti SC and D Robertson (Appellants and Cross-Respondents)
T Alexis SC and C Winnett (Respondent and Cross-Appellant)

Solicitors:
Ristevski & Associates (Appellants and Cross-Respondents)
Hones Lawyers Pty Ltd (Respondent and Cross-Appellant)

File Number(s):

2024/0339682; 2024/00402826

Publication restriction:

Nil

 Decision under appeal 

Court or tribunal:

Supreme Court

Jurisdiction:

Equity – Real Property List

Citation:

[2024] NSWSC 972

Date of Decision:

09 August 2024

Before:

Parker J

File Number(s):

2023/173361

HEADNOTE

[This headnote is not to be read as part of the judgment]

The appellants own Lot 1 and the respondent owns Lot 2 in the same deposited plan, which comprises a duplex residential building in Palm Beach. In December 2003, three easements were created by the registration of an instrument and accompanying plan under s 88B of the Conveyancing Act 1919 (NSW). The easements benefit Lot 1 (the dominant tenement) and burden Lot 2 (the servient tenement). The first easement, described as an “Easement for Garden Use”, is the subject of the dispute (Easement). The Easement relates to a trapezoidal-shaped area of 63.3 m² at the southern tip of Lot 2. It has two parts. The first part grants the dominant owners rights in relation to gardening, paving and landscaping, and the storage of related equipment and materials. The second part grants the dominant owners rights to erect a building and use it for storage and/or domestic laundry activities. The terms of the Easement refer to Council approved plans for the construction of a shed on the site of the Easement. However, the plan accompanying the Easement does not depict a shed and the shed in fact constructed differs from that depicted in the Council plans.

In dispute was the extent of the rights granted to the dominant owners by the Easement, properly construed, and the validity of the Easement. The primary judge held that the rights granted by both parts of the Easement were exclusive and that the Easement failed to satisfy the fourth characteristic of validity in In re Ellenborough Park [1956] Ch 131. The appellants appealed from the decision. The respondent filed a notice of motion objecting to the competency of the appeal. The appellants filed a summons seeking leave to appeal. The respondent filed a summons seeking leave to cross-appeal. The primary issues on appeal were as follows (noting that leave to appeal and cross-appeal were granted to the extent necessary during the hearing):

1. whether the primary judge erred in holding that, properly construed, the Easement grants the dominant owners exclusive rights over the subject area; and

2. whether the primary judge erred in holding that the Easement was invalid for failing to meet the fourth characteristic of validity in In re Ellenborough Park [1956] Ch 131.

The Court held (Griffiths AJA, Stern JA concurring at [1], Ball JA agreeing at [14]) allowing the appeal in part and dismissing the cross-appeal:

As to construction of the Easement – Griffiths AJA

1. The concept of “reasonable use” does not inform the task of construction and arises only once the terms of an easement have been construed: [109]-[112].

Hare v van Brugge (2013) 84 NSWLR 41 [2013] NSWCA 74, considered.

2. The dominant owners’ right to use the servient tenement for gardening, paving and landscaping and the storage of related equipment and materials is exclusive for those purposes. This is supported by the nature and character of those uses of the subject area, viewed in conjunction with the possibility that the entirety of the subject area may be given over to those uses: [108]-[112], [114]-[116]. It is supported by the dominant owners’ right to store equipment, implements and materials connected with gardening, paving and landscaping activities: [118]. It is also supported by the dominant owners’ obligation to keep the subject area in a neat and tidy condition: [119]. However, the servient owner retains a right to access her land for purposes other than gardening, paving and landscaping and the storage of related equipment and materials: [113].

Theunissen v Barter [2025] NSWCA 50, referred to.

In re Ellenborough Park [1956] Ch 131, distinguished.

3. The dominant owners’ rights in relation to the building, including to use it for storage and/or domestic laundry activities, are exclusive for those purposes. This is supported by the dominant owners’ right to install, maintain and replace water and electricity supply from Lot 1 to any such building, as well as their obligation to maintain any such building in a neat and tidy condition and to bear the cost of items associated with construction, maintenance and servicing: [121]-[123]. However, the servient owner retains rights in relation to the shed, including rights to access the shed to monitor the dominant owners’ use of it and to install devices on its roof, including solar panels, a television antenna or a weather vane: [125]. The servient owner’s right to install such devices is not defeated by the dominant owners’ right to demolish and replace the shed: [126].

Wright v Macadam [1949] 2 KB 744, distinguished.

Theunissen v Barter [2025] NSWCA 50, considered.

4. The plans approved by the Council and referred to in the Easement are relevant extrinsic aids to the task of construction: [64]-[65], [128]. But they do not assist in circumstances where there are inconsistencies between the shed depicted in the Council plans, the deposited plan accompanying the Easement (which does not depict a shed) and the shed as actually constructed: [128].

Westfield Management Ltd v Perpetual Trustee Company Ltd (2007) 233 CLR 528; [2007] HCA 45, considered.

As to construction of the Easement – Stern JA concurring

5. The Easement does not confer on the dominant owners an exclusive right to use the subject area for general recreational purposes: [3]. It would undermine certainty to construe the Easement as conferring recreational rights beyond those expressly conferred or ancillary to such rights: [5]. Such rights could have been expressly included had this been intended: [6]. Nor is a right to recreate reasonably necessary for the exercise of the right to garden, pave and landscape (and for that purpose to store equipment etc): [7]. That the site of the Easement is the natural continuation of the respondent’s back yard is also a relevant physical characteristic: [8].

Zenere v Leate (1980) 1 BPR 9300; Owners Corporation Strata Plan 533 v Random Primer Pty Ltd [2025] NSWCA 8, referred to.

As to validity – Griffiths AJA

6. Properly understood, the Easement does not infringe the fourth characteristic of validity in In re Ellenborough Park [1956] Ch 131: [129]-[148]. Several considerations support this conclusion. First, the dominant owners’ rights are exclusive for the stated purposes, but not for all purposes: [149]. Secondly, the servient owner retains significant positive rights, including to use the area for the purpose of recreation: [150]. Thirdly, the servient owner retains significant negative rights, including the right to enter upon the subject area to ascertain whether it is being used by the dominant owners only for permitted purposes: [151]. Fourthly, the subject area is relatively small and the Easement does not have a major impact on the servient owner’s enjoyment of the servient tenement: [152]-[153].

Theunissen v Barter [2025] NSWCA 50; Registrar-General of New South Wales v Jea Holdings (Aust) Pty Ltd (2015) 88 NSWLR 321; [2015] NSWCA 74; Clos Farming Estates Pty Ltd v Easton [2001] NSWSC 525; 10 BPR 18,845; Clos Farming Estates Pty Ltd v Easton [2002] NSWCA 389; 11 BPR 20,605; Towers v Stolyar [2017] NSWSC 526; 18 BPR 36,963; Stolyar v Towers [2018] NSWCA 6; 19 BPR 38,287, considered

Copeland v Greenhalf [1952] Ch 488; Harada v Registrar of Titles [1981] VR 743; Keppell v Bailey (1834) 2 M&K 517; 39 ER 1042, referred to

As to validity – Stern JA concurring

7. The overarching issue is whether the rights are inconsistent with beneficial ownership of the servient tenement by the servient owner: [11]. This is a question of fact and degree, but relevant factors include the extent of interference with the servient owner’s rights and the extent of the rights retained by the servient owner: [12]. The rights conferred by the Easement are compatible with the continued beneficial ownership of the servient tenement by the respondent, who retains real and substantial positive rights to use the subject land, as well as negative rights: [13].

Clos Farming Estates Pty Ltd v Easton [2001] NSWSC 525; 10 BPR 18,845; Clos Farming Estates Pty Ltd v Easton [2002] NSWCA 389; 11 BPR 20,605; Registrar-General of New South Wales v Jea Holdings (Aust) Pty Ltd (2015) 88 NSWLR 321; [2015] NSWCA 74; Stolyar v Towers [2018] NSWCA 6; 19 BPR 38,287; Aussie Skips Recycling Pty Ltd v Strathfield Municipal Council (2020) 103 NSWLR 834; [2020] NSWCA 292; Theunissen v Barter [2025] NSWCA 50; Harada v Registrar of Titles [1981] VR 743, considered.

JUDGMENT

1. STERN JA: I gratefully adopt the summary of background matters set out by Griffiths AJA. I agree with his Honour’s judgment and with the orders proposed. My additional observations as to the key issues that arise should not be read as detracting from anything said by Griffiths AJA.

2. For my part, the appeal resolved into essentially three issues. First, the proper construction of the easement for garden use (the Easement) in the s 88B instrument registered on 16 December 2003 (the Registered Instrument). Second, the proper approach to determining whether the rights conferred by the Easement amount to a right of joint occupation or substantially deprive the servient tenement holder of proprietorship or legal possession such that they are not capable of forming the subject matter of an easement: the second question to be asked for the purpose of the fourth condition for the validity of an easement established in In re Ellenborough Park [1956] Ch 131 at 164 (Evershed MR), which has been consistently applied in Australia, most recently in Theunissen v Barter [2025] NSWCA 50 at [140] (Kirk JA, Mitchelmore JA and Griffiths AJA agreeing). For convenience, I will refer to this condition of validity as the “ouster principle”. Third, whether the Easement is invalid as falling foul of the ouster principle.

3. As to the first issue, construction, I agree with Griffiths AJA that the question of construction is anterior to that of “reasonable use”, as that question depends upon the proper construction of the Easement. Like Griffiths AJA, I would find that the primary judge erred in construing the Easement as conferring a right upon the appellants, as dominant tenement holders, to use the area of the Easement for general recreational purposes such as entertaining. As set out in the Registered Instrument at cl 1, the Easement undoubtedly confers upon them an exclusive right to garden (including to undertake the activities of growing grass, plants, shrubs and trees together with any work associated with establishing, maintaining and replacing such vegetation), to undertake activities of paving and landscaping and, for those purposes, to store equipment, implements and materials. However, the Easement does not in its terms go beyond that. Whilst the Easement would clearly confer an ancillary right upon the appellants to go onto the land for the purpose of exercising the rights expressly conferred, and the right to garden (as set out above) could itself be described as a right to use the area for one form of recreation, being gardening, it is a step too far to say that this includes an exclusive right to use the area of the easement for other recreational purposes.

4. There are three textual considerations which support this conclusion.

5. First, the Easement does not, in its terms, confer any right upon the appellants to use the land the subject of the Easement as their garden or for general recreational use. Rather, it expressly confers a right upon the appellants to undertake particular activities upon the land. It would undermine certainty to construe the Easement as conferring a plethora of recreational rights going beyond those expressly conferred or ancillary to such rights.

6. Second, the Easement says nothing about recreational rights over the land beyond the rights described above. Had it been the intention of the parties to confer a general right of recreation upon the appellants, they could readily (and presumably would) have said so.

7. Third, a right to recreate generally is not reasonably necessary for the exercise of the right to garden, pave and landscape (and for that purpose to store equipment etc) expressly conferred by the Easement: as to the test for the implication of ancillary rights see Zenere v Leate (1980) 1 BPR 9300 at 9305 (McLelland J), recently applied by Kirk JA (Gleeson and Mitchelmore JJA agreeing) in Owners Corporation Strata Plan 533 v Random Primer Pty Ltd [2025] NSWCA 8 at [34]; see also B Edgeworth, Butt’s Land Law (7^th ed, 2017, Lawbook Co) at 9.680.

8. The physical characteristics of the land at the time of the grant may be used for the purpose of construction: Theunissen v Barter at [93] (Kirk JA, Mitchelmore JA and Griffiths AJA agreeing). As is apparent from the photographs in evidence before the primary judge, the area of the Easement is the natural continuation of the respondent’s backyard, albeit that the area continues around the sides and the back of the shed. It would not be expected, in the absence of clear words (or indeed any words) that the parties would have intended that an exclusive right to recreate on this land would be conferred upon the appellants.

9. Consistent with this, the respondent retained a right, subject of course to the rights conferred upon the appellants under the Easement, to use the area of the Easement for recreational purposes.

10. Turning to consider matters particular to the shed, I agree with Griffiths AJA that the storage permitted was not limited to storage for gardening use. I also agree that the appellants were given an exclusive right to use the shed for storage, and that if they did so, the respondent would have very limited, if any, practical use of the interior of the shed. In circumstances where the appellants were given a right to replace the shed, I would not regard the respondent as having any practical right to build a second story, or additional storage space, on top of the shed. Nor would I regard the respondent’s right to use the area under the shed as one of any practical utility. Subject to the appellants’ rights under the Easement, the respondent did, however, retain a right to use the area under the awning of the shed (which was a considerable area as is clear from the plan approved by DA 854/99) including for recreational purposes and storage, and to use the external walls and roof of the shed, including, had they wished, to build a shower or for a satellite dish or solar panels.

11. As to the proper approach to the ouster principle, the overarching issue is whether the rights conferred by the Easement are inconsistent with the beneficial ownership of the servient tenement by the servient tenement holder or, as sometimes phrased, inconsistent with the servient tenement holder’s possession and proprietorship of the servient tenement. That is consistent with the approach taken by Bryson J in Clos Farming Estates Pty Ltd v Easton [2001] NSWSC 525, upheld by this Court in Clos Farming Estates Pty Ltd v Easton [2002] NSWCA 389 at [36] and [46] (Santow JA, Mason P and Beazley JA agreeing), and with the judgments of this Court in Registrar-General of New South Wales v Jea Holdings (Aust) Pty Ltd (2015) 88 NSWLR 321; [2015] NSWCA 74 at [63]-[64] (Bathurst CJ and Beazley P), Stolyar v Towers [2018] NSWCA 6 at [55], [70]-[71] (Gleeson JA, Simpson and White JJA agreeing) and Aussie Skips Recycling Pty Ltd v Strathfield Municipal Council (2020) 103 NSWLR 834; [2020] NSWCA 292 at [23] (Basten JA, Gleeson JA and Preston CJ of LEC agreeing) and Theunissen v Barter at [140].

1. As the cases referred to above make clear, some interference with rights of beneficial ownership will likely be inherent in the conferral of rights under an easement. Further, an easement can validly confer rights to exclusive possession or use of the land (or part of the land) subject to the easement for a particular purpose: see, most recently, Theunissen v Barter at [140]. Ultimately, whether the nature or extent of the rights conferred are inconsistent with the right to beneficial ownership is a question of fact and degree. One factor which is relevant to (and may be decisive on) that question is the extent of the interference with the servient tenement holder’s rights over the land subject to the easement: Jea Holdings at [64]; Stolyar at [70]. Relatedly, the extent of the rights over the servient land retained by the servient tenement holder may be relevant: Harada v Registrar of Titles [1981] VR 743.

2. As to whether the ouster principle was infringed in the present case, I agree with Griffiths AJA that it was not. The respondent retained real and substantial positive rights to use the area of land the subject of the Easement, including the area under the awning and on the roof and walls of the shed. They also retained negative rights, to restrict what the appellants were able to do in the affected area: see as to the significance of negative rights, Theunissen v Barter at [141] and [143]. The rights of both the appellants and the respondent are constrained by the principle of reasonable use: Harev van Brugge (2013) 84 NSWLR 41; [2013] NSWCA 74 at [25]. Having regard to these matters, and also for the reasons given by Griffiths AJA, the rights conferred by the Easement were compatible with the continued beneficial ownership of the servient tenement by the respondent.

3. BALL JA: I agree with Griffiths AJA.

4. GRIFFITHS AJA: These proceedings relate to a judgment and orders concerning a dispute between next door neighbours regarding an easement which is registered in a s 88B instrument made under the Conveyancing Act 1919 (NSW) (s 88B Instrument). The primary judgment, by Parker J, is reported as Petrie v Dickson [2024] NSWSC 972 (PJ). Orders were subsequently made on 29 August 2024, giving effect to the primary judgment, including a declaratory order that the easement is invalid. Orders as to costs were subsequently made on 23 October 2024 and entered on 25 October 2024 (see Petrie v Dickson (No 2) [2024] NSWSC 1337).

5. To the extent necessary, leave to appeal and leave to cross-appeal were granted during the course of the hearing. For the reasons which follow, I propose that:

1. the appeal be allowed in part; and

2. the cross-appeal be dismissed.

Some background matters

17. The dispute concerns Lots 1 and 2 in the same Deposited Plan (DP 1062948). The properties are located at 1 and 1A Waratah Road, Palm Beach respectively. They comprise a duplex residential building.

18. Lot 1 is owned and occupied by Mr and Mrs Dickson (the Dicksons). The total area of Lot 1 is 412.4 m². Lot 2 is owned by Ms Janet Petrie (Ms Petrie), who occupies the property with her husband. The total area of Lot 2 is 518.3 m².

19. The Deposited Plan which created Lots 1 and 2 was registered in September 1998 (after the duplex had been built) and is now reproduced:

20. The then owners of Lots 1 and 2 were Mr Jeff Conen and Ms Phillipa King. Subsequently, in 1999, they (together) made a further development application which proposed the construction of a garden shed at the rear of Lot 2 and a carport on Lot 1. Development approval of DA 854/99 was granted on 28 March 2000. The DA contains the following relevant notation at A(ii):

The development is to be carried out generally in accordance with plans numbered 1-3, dated August 1999, prepared by Jeff Conan [sic], as amended in red or as modified by any condition of this consent.

21. Plan No 1 dated August 1999, prepared by Jeff Conen, is as follows:

22. The following features of this plan should be noted (about which more will be said later):

1. It bears a Pittwater Council stamp in the top right-hand corner, which is dated 28 March 2000.

2. It relates to both the then proposed garden shed and the carport and shows the location of the existing duplex residential building.

3. The “Relevant Data” set out on the right-hand side of the plan is as follows:

Site area 935.8 m²

landscaped area serviced by garden shed:

Main site 715 m²

R.T.A. reserve 312 m²

Beach + Waratah Rd reserves 228 m²

TOTAL landscaped area req [requiring] maintenance 1270 m²

Site landscaped area resulting from proposal 65.0%

Req [required] area 60%

4. In the bottom left-hand corner of the approved plan is a detailed drawing (which is set out in magnified form immediately below) which shows the southern point of the land, outlined in red. The notation reads: “Area marked in red: easement for storage & right of use created & registered on file by private treaty between Lot 1 & Lot 1A under sect 88b instrument”. This language suggests that an easement had already been registered. In fact that was not the case – the notation must have been intended to refer to the servient tenement under a proposed easement. It should also be noted that the reference to “Lot 1 & Lot 1A” is inaccurate and reflects the street addresses of Lots 1 and 2 respectively.

5. The drawing shows the perimeter of the proposed shed being located overwhelmingly on Lot 2, with only a small part encroaching on Lot 1 as shown by the dotted line which protrudes above the red line underneath the figure “5400”.

23. This plan envisaged that the garden shed would service a wide area, including an area described as the “main site” totalling 715 m², which presumably refers to the whole or majority of Lots 1 and 2, apart from the duplex houses and the proposed carport. The plan also indicates that it was envisaged that the garden shed would be used to service areas beyond Lots 1 and 2, being the RTA reserve (presumably on Barrenjoey Road) and reserves at Beach and Waratah Roads, which are both located to the north of Lots 1 and 2.

24. The s 88B Instrument was not registered until 16 December 2003.

25. The plan which accompanied the s 88B Instrument, DP 1062948, is different from the plan referred to in DA 854/99. This is reflected in the following reproduction:

26. As the primary judge noted at PJ[30], the servient area depicted in DP 1062948 is a trapezoidal shape, in contrast with the smaller six-sided shape in the plan approved as part of the development application in March 2000. This meant that part of the servient tenement covered virtually the entirety of the floor area of the garden shed (see the survey plan at PJ[34]). The evidence leaves unclear why this occurred. It should also be noted that the shed did not appear at all on the plan in DP 1062948. The shed on the Council approved plan shows the boundary of the Easement running through the middle of the shed, which the respondent claims shows an intended joint use.

27. In the s 88B Instrument, Pt 2 sets out the terms of three registered easements. The first is described as an “Easement for Garden Use Variable Width Firstly Referred to in the Abovementioned Plan” (Easement). The “Abovementioned Plan” is that which is reproduced at [25] above. The terms of the Easement, as recorded in the s 88B Instrument, are as follows (without alteration) (noting that the building approved by Council under DA 854/99 in cl 2(a) is a reference to the plans described at [20]-[22] above):

PART 2

Terms of Easement for Garden Use Variable Width Firstly Referred to in the Abovementioned Plan

1) The owner of the lot benefited may use that part of the lot burdened by the site of this easement for:

a. gardening which may include, but is not limited to, the growing of grass, plants, shrubs and trees together with any work associated with establishing, maintaining and replacing such vegetation.

b. paving and landscaping

c. storage of equipment, implements and materials consistent with carrying out the activities referred to in paragraphs 1a & 1b.

2) The owner of the lot benefited may:

a. construct and maintain on the lot burdened the building approved by Council under D.A. 854/99.

b. replace in whole or part any building erected pursuant to paragraph 2a.

c. install, maintain and replace any pipes or conduit providing water and electricity from the benefited lot to any building erected pursuant to paragraph 2a or 2b.

3) In carrying out an activity related to paragraphs 2a, 2b and 2c above the owner of the lot benefited must:

a. ensure all work is done properly

b. cause as little inconvenience as is practicable to the owner or occupier of the lot burdened, and

c. make good any collateral damage.

4) In respect of any building erected pursuant to paragraphs 2a or 2b above, the owner of the lot benefited may:

a. use that building for the purposes of storage of materials and equipment and such materials shall exclude any dangerous goods but may include any fuels and chemicals normally used for domestic gardening purposes.

b. use that building for any purpose consistent with domestic laundry activities including the placement and use of such appliances as is necessary for those purposes.

5) In exercising his rights the owner of the lot benefited must:

a. keep the site of this easement in a neat and tidy condition

b. maintain any building erected pursuant to paragraphs 2a or 2b above in a neat and tidy condition

c. meet at his own cost all items associated with construction, maintenance and servicing of any building erected pursuant to paragraphs 2a, 2b and 2c above.

28. The second easement in the s 88B Instrument is for provision of telephone services. It is not in dispute and nothing more needs to be said about it.

29. The third easement in the s 88B Instrument is a “RESTRICTION AS TO USER” as described in DP 1062948. The terms of this easement are set out in the s 88B Instrument as follows:

Terms of Restriction as to User Thirdly Referred to in the Abovementioned Plan

No fence may be erected on the common boundary of Lot 1 & Lot 2 D.P.879968 other than by the mutual consent of the owners of the said lots.

30. This restriction on user suggests that the parties to the s 88B Instrument intended that, unless both lot owners agreed, there would be no physical barrier by way of a fence to free access between Lots 1 and 2.

31. Returning to the first easement in the s 88B Instrument, it should be noted that it relates to gardening and to the construction, maintenance and replacement of “the building approved by Council under D.A. 854/99” (see cl 2(a)). The parties both contended that the Easement comprises two separate easements, one for gardening and the other for building for the purposes of storage and domestic laundry activities. But this sits uncomfortably with the express terms of Pt 2 and the heading thereto, which refers to “Terms of Easement for Garden Use … ”. The matters that are then described in the balance of Pt 2 are clearly related and are not separate. The grants should be read together. They appear in the same instrument and are described as a single easement. The rights granted are in respect of the same land, being the land marked “X” on DP 1062948 (Area X or servient area). It is physically impossible to exercise both sets of rights simultaneously, in the sense that construction of the shed will necessarily prevent gardening in that particular area. It is natural, in these circumstances, to read the rights together.

32. Although cl 2 is expressed in terms which indicate that the dominant owner had a choice or discretion whether or not to build a garden shed, it seems clear that there was a strong expectation that this would in fact occur, as is reflected in the approval granted in DA 854/99 to the garden shed being constructed.

33. The area of servient land to which the Easement relates is 63.3 m², representing 12.2% of the total area of Lot 2. The footprint of the shed, not including the awnings, is 17.7 m². That footprint represents 28% of the servient area (not taking into account the fact that the footprint of the shed encroaches slightly onto Lot 1).

34. The primary judge described the shed at PJ[36] as “a substantial structure”, with approximately 4.2 m long walls which appear to be constructed with rendered brick. The roof is made of terracotta tiles. Now reproduced is a photograph of the shed’s northern and eastern facing sides:

35. At PJ[37], the primary judge found that the shed is equipped with storage shelving, laundry machines and also a tiled benchtop and basin fixture. It was used by the Dicksons as a laundry and also as a storage area for personal, household and gardening items.

36. Following registration of the s 88B Instrument, the three easements were separately registered on the certificates of title to Lots 1 and 2 and were described respectively as “EASEMENT FOR GARDEN USE VARIABLE WIDTH APPURTENANT TO THE LAND ABOVE DESCRIBED” (being Lots 1 or 2 respectively); “EASEMENT FOR TELEPHONE SERVICES OVER EXISTING LINE OF PIPES (APPROXIMATE POSITION) APPURTENANT TO THE LAND ABOVE DESCRIBED”; and “RESTRICTION(S) ON THE USE OF THE LAND”.

37. As noted at PJ[32], the shed was presumably built after the construction certificate for the development was issued in late 2000 or 2001. It is unclear whether the garden shed was constructed before or after the s 88B Instrument was registered in December 2003.

Primary judge’s reasons summarised

38. At PJ[43], the primary judge said that the two questions requiring determination were:

1. the extent of the rights created by the first grant in the s 88B Instrument, as a matter of interpretation; and

2. the validity of the Easement.

39. His Honour added that it was convenient to address the interpretation issues first because the validity of the Easement could only be determined in the light of the rights it actually granted. Neither party challenged that approach.

40. The primary judge’s reasons for judgment are lengthy. This may be partly explicable by the way in which the parties conducted their cases below. The primary judge noted several times that the parties ultimately adopted positions relating to the central issues which were notably different from their respective initial positions (see, in particular, PJ[72]-[73]).

41. After conducting an extensive analysis of many cases on easements in both Australia and England, the primary judge concluded that both aspects of the Easement (i.e. those relating to gardening and the shed) were invalid because they failed to satisfy the fourth characteristic for validity identified in Inre Ellenborough Park [1956] Ch 131. The four characteristics are as follows:

1. there must be a dominant and a servient tenement;

2. the easement must accommodate the dominant tenement;

3. the same person must not own and occupy the dominant and servient tenements; and

4. the right claimed as an easement must be capable of forming the subject matter of a grant.

42. The primary judge’s construction of the Easement and reasons for concluding that the Easement was invalid may be summarised as follows.

43. First, accepting the appellants’ position, the primary judge found that the dominant owners’ right to store goods in the shed extends to the storage of any goods which answer the description of “materials and equipment” (provided that they are not “dangerous goods”). This was contrary to the respondent’s contention that the right of storage was confined to storage of goods used for domestic gardening purposes (PJ[52]). His Honour considered that there is no limit on the type or quantity of goods which may be stored in the shed by the dominant owners. Therefore, it is impossible for the servient owners to identify, at any given time, any particular part of the shed which is available for them to use as storage for their own goods without interfering with the dominant owners’ rights (PJ[110]). The primary judge distinguished Wright v Macadam [1949] 2 KB 744, where the right to use the coal shed was limited to the amount of coal reasonably necessary for heating by the owner of the dominant tenement. The primary judge found that the terms of the Easement do not provide for any form of joint usage of the shed for storage purposes. Rather, the dominant owners’ rights take up the whole internal space of the shed (PJ[112]).

44. Secondly, his Honour considered that the dominant owners’ right to use the servient area for gardening encompasses the selection, planting and removal of trees and shrubs, as well as the right to undertake paving and landscaping works (PJ[84]). The dominant owners are also entitled to the produce of the garden (PJ[85]) and to use the garden for recreational purposes (PJ[86]). The primary judge posed the relevant question as: “to what extent are these rights of the dominant owners rights which are shared, or to be exercised in common, with the servient owners” (PJ[87]). He concluded that the dominant owners’ right to use the servient area to create and maintain a garden is not a right which, of its nature, could be shared between, or be common to, both the dominant and servient owners (PJ[90]). The dominant owners’ right to maintain a garden in the servient area would extend to the right to erect a hedge or wall along the boundary of the servient area, although the dominant owners “may not, of course, completely prevent access to the servient area by the servient owners, but such access could be provided by means of a gate or door” (PJ[92]-[93]).

45. Thirdly, it is also relevant to note what the primary judge said regarding the principles in Westfield Management Ltd v Perpetual Trustee Company Ltd (2007) 233 CLR 528; [2007] HCA 45 and their implications for the issue whether the Council’s development approval documents were relevant to the task of construction. His Honour noted at PJ[97] that cl 2(a) of the s 88B Instrument referred to the Council approval for the construction of the shed and, indirectly, to the approved plan. His Honour then added, however, that the Westfield Management principles had to be applied consistently with their purpose, such that (at PJ[97]):

… The idea is that interests in Torrens title land can be discerned, and their nature identified, by a person searching the Register. In the present case, neither the approval nor the plan could actually have been found by searching the Register. The plan is now more than 20 years old and the fact that it was available to the parties in the present litigation is merely fortuitous. An ordinary person searching the Register could only hope to obtain the approval and the plan by requesting copies from the local council (if the council was prepared to provide them).

His Honour then said that, even if it were legitimate to refer to the approved plan as an aid to interpretation, he agreed with the Dicksons’ submission that “reference to the plan could only be for the purpose for which the instrument refers to it, namely to define the physical characteristics of the building for which authorisation is granted under cl 2” and not to characterise the nature of the easement granted in cl 1. In support of that position, the primary judge said at PJ[99] that the description in the plan referred to a prospective easement over a servient area which in fact was different from that which was ultimately the subject of the grant (referring to changes in the shape of the servient area as noted by the primary judge at PJ[30]).

46. Fourthly, the primary judge did not regard the concept of “reasonable use” as limiting the exercise of the dominant owners’ rights to plant and landscape the servient area as they wish, nor did the dominant owners have an obligation to leave that field clear for the servient owner (PJ[107]). The servient owner retained the right to go into the servient area, but that is not a right of joint recreation (PJ[108]).

47. The primary judge distinguished the circumstances in Barter v Theunissen [2024] NSWSC 326; 21 BPR 44,697 at first instance, where joint usage of the rooftop for recreation was clearly intended. In contrast here, the dominant owners, when using the garden for recreation, would have the right to exclude the servient owner from the servient area (PJ[108]).

46. It should be emphasised that the analysis of this Court in Theunissen v Barter [2025] NSWCA 50 was not available to the primary judge. As will be developed below, that judgment is inconsistent with parts of the primary judge’s reasoning.

47. Fifthly, the Easement in the present case is “novel” because “no-one, it seems, has previously tried to create an easement of the present type” (PJ[271]).

48. Sixthly, the primary judge concluded that the Easement is invalid because it fails to satisfy the fourth characteristic for a valid easement identified in Ellenborough Park, which he later described as “the ouster principle” (see PJ[286]).

49. Seventhly, after analysing Lord Scott’s judgment in Moncrieff v Jamieson [2007] 1 WLR 2620 concerning the ouster principle, the primary judge said at PJ[292] that Lord Scott’s formulation of the ouster principle is different from the formulation in the Clos Farming litigation. His Honour described the latter formulation as involving “a practical test which looks to the extent to which the owner of land may actually use it. It is not a test which fastens only on legal concepts of ownership, position or control”. The primary judge said that he was bound to apply this Court’s decision in the Clos Farming litigation. His Honour reasoned at PJ[294]-[295]:

But Clos Farming does not merely define, in general terms, the test for application of the ouster principle. I think the case, in its facts, is, out of all of the cases to which I have referred, the closest to the present. As in Clos Farming, the servient owners in the present case can enjoy the servient area, but only in a passive way, and only by keeping out of the way of the dominant owners. The servient owners are, in practice, deprived of any control over how that area may be used or developed. Their ownership of it is effectively sterile and nominal.

In these circumstances, I consider myself bound by the decision in the Clos Farming case to conclude that the gardening easement in the present case infringes the ouster principle, considered by reference to the servient area. Even if I thought that Laming or Ryan v Sutherland were authority to the contrary, Court of Appeal authority, binding on me, would have to prevail.

52. It is appropriate to interpolate at this stage that I respectfully disagree with the primary judge’s analysis of the Clos Farming litigation. By referring to the Clos Farming litigation, I am referring to Bryson J’s judgment at first instance in Clos Farming Estates Pty Ltd v Easton [2001] NSWSC 525; 10 BPR 18,845 (Clos Farming SC) and the appeal therefrom, which is reported as Clos Farming Estates Pty Ltd v Easton [2002] NSWCA 389; 11 BPR 20,605 (Clos Farming CA). I will return to the Clos Farming litigation below.

53. Returning to the summary of the primary judge’s reasoning, it is also necessary to note what was said at PJ[312]-[315], where the primary judge addressed the significance of the relative size of the servient area and the potential question of partial validity if the Easement was regarded as having two severable elements, one relating to gardening and the other relating to the shed:

In the present case, the servient area accounts for 12% of the surface area of Lot 2 as a whole. But for reasons I have given, the effective exclusion of the servient owners from the area, including the airspace above it and the subsurface below, is virtually total. In effect, the easement cuts off the garden area in the tail of Lot 2 and gives occupation of it to Lot 1. As the construction of the shed shows, the shape and dimensions of the area are such as to allow for the construction of a substantial, and potentially habitable, building. The land is located in a suburb where property is highly sought-after for residential purposes. In my view, the effective loss of control over the area has a significant impact on the amenity of Lot 2 as a whole. Presumably, it would have a similar degree of impact on the lot’s value.

There is no authority which requires the servient area to exceed 50% (or any other percentage) of the servient lot as a whole. I see no reason in principle why there should be. The public policy behind the ouster principle would not justify any such restriction: it is concerned with maximising the use and value of land generally.

In this context, Lord Scott’s point [in Moncrieff] that an easement cannot be valid when initially granted over part of a large area but become invalid if the servient land is subdivided off is difficult to refute. In saying this, I do not suggest that the point turns on whether formal subdivision is currently, or may foreseeably be, available. Part of a parcel of land may be exploited, for instance by way of lease or licence, without necessarily undertaking a formal subdivision.

In my view, the easement amounts to the effective appropriation of a substantial piece of land belonging to the servient owners, and this is sufficient to invalidate it under the ouster principle. It is not necessary to consider the question of partial validity.

(a) The appeal in Theunissen v Barter

54. As noted above, the primary judge engaged in a detailed consideration of caselaw relating to the construction of an easement and the related issues of validity and reasonable use. In the main, it is unnecessary to repeat that exercise. That is because many of the relevant legal principles were recently identified and applied by the Court in Theunissen. Justice Kirk gave the leading judgment, with which Mitchelmore JA and I agreed. For convenience I will refer collectively to the Court’s judgment in Theunissen.

55. Theunissen involved the proper construction of an easement “for the purposes of recreation and enjoyment and as a balcony, terrace or garden”. The easement affected a flat rooftop terrace area on the top of the servient tenement. The rooftop area was immediately in front of the dwelling on the dominant tenement, which dwelling looked over the top of the dwelling on the servient tenement below and provided impressive views towards Middle Harbour. The central issue was whether the easement gave the dominant tenement owners an exclusive right to use the rooftop terrace for the stated purposes or whether the servient owner was entitled also to use the area for those purposes.

56. The primary judge held that, on its proper construction, the easement did not grant the dominant owners exclusive rights. It was therefore unnecessary for the primary judge to address the servient owner’s claim that the easement would be invalid if it was construed as granting such exclusive rights.

57. The parties in the present appeal took advantage of the opportunity to provide supplementary written submissions regarding the significance of the appeal in Theunissen.

58. It is desirable to summarise at some length the approach and analysis in Theunissen, before addressing the parties’ submissions in the present proceeding.

59. Before doing so, it is important to emphasise that although Theunissen contains a helpful statement of some relevant principles relating to both construction and validity, every easement needs to be construed having regard to its own terms and relevant contextual matters, including surrounding facts and circumstances. A formulaic “tick the box” approach risks leading to error.

60. The Court in Theunissen considered that it was necessary first to construe the relevant easement before considering its validity. The principles affecting construction may be summarised as follows:

1. Construction of a written instrument granting an easement requires an objective determination of the intention of the party or parties in the light of the text, context and purpose of the written instrument, assessed from the perspective of a reasonable person and in the light of admissible evidence (at [27]).

2. Noting that the appellants sought to rely not only on the terms of both the easement and the Deposited Plan there, but also on certain physical characteristics of the site, the Court said it was appropriate first to consider the terms of the easement before then addressing the relevance to the task of construction of physical characteristics (at [28]).

61. After a detailed analysis of the terms, nature and character of the rights given to the dominant owner in respect of the rooftop area, as well as considering the terms of the provisos to those rights, the Court concluded that there were many factors which pointed to the exclusive character of the right given to the dominant owner to use and enjoy the area for the purposes of recreation and enjoyment and as a balcony, terrace or garden. The only factor supporting the contrary argument was what Kirk JA described as “the not insignificant point” that the right is not expressed as being exclusive, which could easily have been done. Viewed as whole, the Court concluded at [51] that a reasonable person in the position of the parties would conclude that the easement granted the dominant owner the exclusive use and enjoyment of the servient tenement for the purposes of the right. Subject to addressing the validity of the easement, that was sufficient to uphold ground 1 of the appeal.

62. The Court proceeded, however, to address the question of whether and how the physical characteristics of the subject land were relevant to the task of construction, including the time at which those physical characteristics existed. Two physical characteristics of the tenements were relied upon by the appellants. The first was that the servient owner had no means of accessing the rooftop terrace at the time the easement was created. The second was that the rooftop looked directly into the ground floor living room of the house on the dominant tenement.

63. Theunissen contains a detailed analysis of the relevance to the task of construction of the physical characteristics of the subject land, including whether such characteristics are limited to those which existed at the time of the grant alone or extended to physical characteristics at the time of the hearing. This involved the Court analysing Westfield Management and subsequent cases. That analysis may be summarised as follows.

64. First, Westfield Management establishes that, when dealing with Torrens Title land, different principles of construction apply to those which are relevant to the grant of an easement at common law (or the construction of a contract). At [39] of Westfield Management, the Court described as “too widely expressed” McHugh J's statement in Gallagher v Rainbow (1994) 179 CLR 624 at 639-640; [1994] HCA 24, where his Honour had said that the principles of construction of the grant of an easement at common law are equally applicable to the grant of an easement under the Torrens System. The High Court said in Westfield Management that a third party who inspects the register under the Torrens System cannot be expected, consistently with that system, to look further for extrinsic material which might establish facts or circumstances existing at the time of the creation of the registered dealing so as to place the third party (or the Court) in the situation of the grantee.

65. The High Court appeared to accept at [40] that it was permissible in construing an easement under the Torrens System to look “to the circumstances surrounding the execution of the instrument, including the nature of the surface over which the grant applied”. The High Court also accepted at [44] that evidence may be admissible to make sense of terms or expressions used in the register, such as surveying terms and abbreviations which appeared on the plan which formed part of the registered instrument in that case (see also Phoenix Commercial Enterprises v City of Canada Bay Council [2010] NSWCA 64 at [157]ff per Campbell JA and contrast Ippin Textiles Pty Ltd v Winau Aust Pty Ltd [2021] NSWCA 9; 386 ALR 286 at [64]ff per Leeming JA, with whom Brereton JA agreed).

66. The Court in Theunissen emphasised that the High Court was not seeking exhaustively to list permissible materials and it appeared that the Court accepted that the “nature of the surface” could be relevant to the construction of at least “the bare grant of a right of way”, which was the view taken below by Hodgson JA in Perpetual Trustee Co Ltd v Westfield Management Ltd [2006] NSWCA 337; (2007) 12 BPR 23,793.

67. Secondly, it is uncontroversial that the Deposited Plan is a relevant aid to construction, but it is necessary “to seek to balance the imperatives of the importance of considering context in construction whilst seeking certainty and stability of registered title” in determining what extrinsic material may also be taken into account (see at [90]).

68. Thirdly, the High Court’s reference in Westfield Management at [43] to the possibility of subsequent changes in physical circumstances being addressed by applications under s 89 of the Conveyancing Act 1919 (NSW) is consistent with potentially taking into account the physical circumstances as at the time of grant, with subsequent changes capable of being addressed in another way (at [66]).

69. Fourthly, after considering more closely what Hodgson JA said in Perpetual Trustee, the Court noted at [72] that Westfield Management created some uncertainty as to whether physical circumstances of the subject land could be taken into account when construing a registered lease. In particular, the Court made the following observations directed to this aspect of Westfield Management:

… the Court did not address the issue in terms, that not being the relevant focus of the appeal; the Court appeared to accept that the nature of the surface could be referred to at least with respect to a “bare grant” of a right of way; the Court itself may have taken some physical circumstances not apparent on the face of the registered instruments into account; and the decision does not seem to rule out taking account of physical circumstances.

70. Fifthly, after considering various other intermediate appellate decisions and decisions at first instance, the Court identified as a core issue the need to seek a balance between the imperatives of the importance of considering context in construction while also seeking certainty and stability of registered title. A spectrum of possible responses in relation to the potential relevance of physical characteristics were identified at [90]:

… At one end of the spectrum it could be said no account should be taken. This approach maximises simplicity and certainty but runs into the danger of acontextual literalism, as illustrated by the sort of problem raised by Cannon v Villars with respect to rights of way which might or might not be limited to walking. The High Court’s reference to that type of case suggests that it did not endorse such a hard rule. The respondent here did not argue that such an approach should be adopted. Taking account of physical circumstances is different in kind to considering what intentions the parties to the instrument may have had. It refers to an objective reality not subjective hopes and plans.

71. Sixthly, the Court concluded at [92] that intermediate appellate decisions supported the proposition that reference can legitimately be made to physical characteristics without going so far as to allow reference to any such circumstances.

72. Seventhly, the Court then turned to address the related question whether or not the only physical circumstances which are relevant to the task of construction are circumstances which existed at the time of the grant. It was concluded at [93] that such circumstances at the time of the grant will always be relevant simply because it is inherent in the task of legal construction that the Court is seeking to determine the intention of the party or parties, objectively assessed. The Court disagreed with “the tentative suggestion” by Fryberg J in CurrumbinInvestments Pty Ltd v Body Corp Mitchell Park Cts [2012] 2 Qd R 511; [2012] QCA 9 at [49] that “it may be that the scope for consideration of extrinsic evidence is reduced over time”.

73. Eighthly, after a detailed discussion which highlighted the complexity of the issue, the following conclusion was stated at [108] regarding the “as to when question” when taking account of physical characteristics:

… When construing a registered easement it is permissible to take into account relevant physical characteristics of the servient and dominant tenements, and the surrounding land, at the time of the grant which were reasonably ascertainable by a third party at that time. The significance (if any) of those characteristics will depend upon the particular case. The characteristics which may be considered are the broad and reasonably enduring characteristics, not fine details of the land or of its fixtures. Relevant sources generally would include, for example, what can be observed from outside the properties along with publicly available maps. It would not include material that could have been ascertained by searches under freedom of information laws. It is not necessary to determine whether in some exceptional cases features not visible from the boundary may be taken into account.

74. On the issue of validity, the following principles were identified by Theunissen.

75. First, after noting that the legal test to be applied was not the subject of any significant attention from the parties in Theunissen (the same may also be said here), the key principle to be drawn from Ellenborough Park was that identified by Bryson J at first instance in Clos Farming SC at [44]. The relevant question is whether the right “is inconsistent with the proprietorship or possession of the servient owners, and … if the right conferred amounted to a joint occupation with the owners, or excluded the proprietorship or possession of the owners it would be so inconsistent”. Bryson J’s approach was upheld on appeal in Clos Farming CA, where it was noted at [46] that the rights conferred by the easement there so vastly interfered with the servient owners’ rights, if they were exercised, as to preclude them from constituting an easement.

76. Secondly, in Moncrieff, Lord Scott considered that, in assessing validity, the relevant focus should be on the land over which the servitude or easement is enjoyed, as opposed to the totality of the surrounding land owned by the servient owner and the test is “whether the servient owner retains possession and, subject to the reasonable exercise of the right in question, control of the servient land” (Moncrieff at [59]). I will have something further to say regarding Moncrieff in due course.

77. Thirdly, after considering previous authorities of this Court and other courts, including Registrar-General of New South Wales v Jea Holdings (Aust) Pty Ltd (2015) 88 NSWLR 321; [2015] NSWCA 74, Stolyar v Towers [2018] NSWCA 6; 19 BPR 38,287, Laming v Jennings [2018] VSCA 335 and Aussie Skips Recycling Pty Ltd v Strathfield Municipal Council (2020) 103 NSWLR 834; [2020] NSWCA 292, the Court in Theunissen at [140] described the aggregated principles regarding validity as follows:

… Every easement prevents some ordinary use of the servient tenement, perhaps to a very significant extent. The question is whether a putative easement substantially deprives the servient owner of proprietorship or legal possession to such an extent as to be inconsistent with ownership. That assessment is a matter of fact and degree. That assessment involves considering the physical area affected by the putative easement by reference to the servient tenement as a whole. The greater the proportionate area affected, the more likely that the restriction cannot be characterised as an easement. The assessment also involves considering the effect of the easement on the rights of the servient owner with respect to the burdened land. Those rights are positive: what the servient owner may do on and with the land. They are also negative: what the servient owner may require the dominant owner not to do on the easement area; or, put conversely, the extent of the positive rights held by the dominant owner. If there is a complete transfer of the servient owner’s rights, as in Bursill Enterprises, the instrument cannot be an easement. Anything less than that is a question of degree. That the instrument grants a sole right to the dominant owner to use the subject area for some particular purpose (as opposed to having exclusive possession for all purposes) does not of itself establish that the easement is invalid.

(b) The parties’ submissions summarised

78. I will outline the parties’ respective submissions on the appeal and cross-appeal, as elaborated upon in oral addresses, before summarising the post-hearing supplementary submissions on the significance of the judgment on appeal in Theunissen.

(i) The appellants’ submissions

79. The notice of appeal raises the following three grounds of appeal:

1 The primary judge erred in finding that the easement “for garden use” recorded in an instrument made under s 88B of the Conveyancing Act 1919 and registered in 2003 pursuant to the Real Property Act 1900 as part of Deposited Plan 1062948 (Easement) was invalid because the rights conferred on the dominant owners by the Easement were not capable of forming the subject matter of a grant of easement: Re Ellenborough Park [1956] Ch 131.

See judgment at [265]-[316], particularly at [268] and [315].

2 The primary judge erred in not considering whether the Easement:

(a) was valid to the extent that it conferred on the Appellants as the dominant owners the right to use the easement site for gardening purposes, pursuant to clause 1 of the Easement (gardening easement); and/or

(b) was valid to the extent that it conferred on the Appellants as the dominant owners the right to erect and maintain a shed with the easement site and use that shed for storage and/or laundry purposes, as described in clauses 2, 3 and 4 of the Easement (storage easement).

See judgment at [315].

3 The primary judge erred in finding that, in the reasonable exercise of their rights to use the land for the purposes stated in the Easement, the Appellants as the dominant owners could exclude the servient owners altogether from the easement site and shed.

See judgment at [101]-[112] and [312].

80. Grounds 1 and 3 relate to the correctness of the primary judge’s construction of the Easement. The appellants claim that the primary judge erred by construing the rights conferred on the dominant owners by the Easement “as broadly as possible” and without regard to the obligation of the dominant owners to act reasonably at all times, which underpinned his conclusion that the Easement was invalid. They claimed that the primary judge erred in finding that the Easement conferred on the dominant owners the right wholly to exclude the servient owner from the servient area, which resulted in his Honour’s conclusion that the servient owner’s rights over the servient area were merely “passive”, “sterile” and “nominal”.

81. The appellants submitted that the respondent retains various rights, including to use the garden area as she wishes subject only to the appellants’ rights conferred by the terms of the Easement. For example, she could hang out her washing to dry, store gardening tools and equipment and use the land for other activities as long as she does not unreasonably interfere with the appellants’ rights. As to the garden shed, the appellants contended that the respondent remains free to use the shed as she wishes, again subject to the rights expressly conferred on the appellants by the Easement. The appellants acknowledged that the respondent could not unreasonably interfere with their rights to use the internal part of the shed for storage and laundry purposes, but she remains free to use the shed for other purposes or activities, such as placing solar panels on the roof or providing seating under the awnings of the shed.

82. On the issue of validity, the appellants submitted that the primary judge erred in not acknowledging that a valid easement could subsist notwithstanding that it involved the exclusive occupation of a shed or other piece of the servient tenement, citing Aussie Skips at [23] per Basten JA. The appellants emphasised that the issue was one of degree.

83. As to ground 2, the appellants submitted that the Easement conferred separate and distinct rights on the dominant owners in respect of the easement for gardening purposes (see cl 1 of the Easement) and a separate easement for storage and laundry purposes (see cll 2, 3 and 4 of the Easement). They submitted that the primary judge’s failure to appreciate that there were in fact two separate easements meant that his Honour failed to address the issue of severance in the event that only a part of the Easement was invalid, an issue which was raised by the parties.

84. In oral address on the appeal, senior counsel for the appellants took issue with the primary judge’s view that the appellants had changed their case in the course of the proceedings below. Although it appeared from parts of the transcript that he had argued that the right to garden conferred an exclusive right on the dominant owners, he submitted that those statements should be read in the context of him responding to an assumption that the rights were exclusive, arising from exchanges with the primary judge. Senior counsel’s attention was drawn to various parts of the transcript below relating to the easements concerning gardening and the shed which strongly suggested that in fact he had contended that the rights were exclusive.

(ii) The appellants’ supplementary submissions

85. The appellants emphasised the importance of the Court’s statement of aggregated principles in Theunissen at [140] (see at [77] above).

86. The appellants contended that their position in the present appeal was consistent with the reasoning in Theunissen. First, applying Theunissen at [140], they contended that the Easement is valid and satisfied the fourth characteristic of validity identified in Ellenborough Park. In particular:

1. The appellants’ rights over Area X are expressly proscribed and limited by the terms of the Easement, which does not grant exclusive possession to them for all purposes.

2. As servient owner, the respondent has all the rights of an owner of the land and can use it as she likes subject to the limitations set out in the Easement. The respondent retains significant positive and negative rights in respect of the area affected by the Easement. Her positive rights include the right to have access to Area X to store chattels upon it (such as garden furniture or a barbeque), to erect amenities on the roof of the shed (such as solar cells, a satellite dish or aerial) and to pass and re-pass over her land to access the adjacent public road. The appellants submitted that these positive rights exist as long as the respondent does not unreasonably interfere with the appellants’ rights as the dominant owners. As to negative rights, the appellants submitted that the respondent could ensure that the dominant owners use Area X only for the permitted purposes and that the evidence demonstrated that those negative rights have been successfully exercised. Thus, the appellants were prevented from maintaining and using an outdoor shower on the wall of the shed and had to refrain from storing in or around the shed non-gardening related chattels, such as surfboards, towels and wetsuits.

3. The respondent has not been substantially deprived of proprietorship or legal possession of Area X so as to justify a finding that her rights are nominal or sterile. The total area of Area X represents 12.2% of the total area of Lot 2. The footprint of the shed (excluding the awning) represents 28% of the total area of Area X. The appellants emphasise that the Easement has no effect at all on the respondent’s possession, control or reasonable use of the balance of the servient tenement beyond the 63.3 m² servient area.

87. For all these reasons, the appellants contended that the primary judge erred in concluding that the Easement failed to comply with the fourth characteristic of validity in Ellenborough Park.

88. Secondly, the appellants emphasised that the reasoning in Theunissen confirmed that an easement can be valid even if it confers rights of exclusive or sole use of the easement area on the dominant owner. Thus, the appellants submitted that the Court should find that the appellants had the following exclusive use rights over Area X:

1. By its terms, the Easement conferred on the appellants as dominant owners the sole or exclusive right to carry out gardening activities on Area X to the exclusion of the respondent. There is no obligation on the appellants to consult with the respondent before carrying out any gardening activity and the Court should not find that the gardening activities could be shared between the parties. The appellants acknowledged that “they must exercise those rights reasonably in all the circumstances of the case”.

2. As to the storage easement, the appellants submitted that, by its terms and also applying common sense, the Court should find that the Easement conferred on them the sole or exclusive use of the inside area of the shed for storage and laundry purposes. Thus, there was no shared right between the parties concerning use of the inside area of the shed. They emphasised that it was significant that the water and electricity for the shed were supplied and paid for by them. If it be the case that the practical effect of the appellants’ use of the shed for storage and laundry purposes excluded the respondent from making any realistic alternative use of the internal area of the shed, that practical outcome was simply the natural consequence of the Easement as granted.

89. As to the issue of the relevance to the task of construction of the plans and diagrams relating to the development consent, the appellants submitted that those documents could not be taken into account, citing Theunissen at [106].

90. Finally, on the issue of whether leave to appeal was required and costs relating to that matter, the appellants urged the Court to apply the same approach as in Theunissen at [7]-[13]. Thus, they contended that they were never required to seek leave to appeal and did so only after the respondent persisted with the challenge to competency, even after the appellants produced valuation evidence which supported that the value of the Easement to them was significantly more than $100,000.

(iii) The respondent’s submissions

91. The respondent contended that it appeared that the appellants now accepted that the concept of reasonable use limits both the construction and the exercise of their rights under the Easement, consistently with Hare v van Brugge (2013) 84 NSWLR 41; [2013] NSWCA 74 at [25]. The respondent defended the primary judge’s reasoning that the very nature of an easement for gardening and landscaping meant that the appellants could erect and maintain any type of garden and oust Ms Petrie from the physical area.

92. Alternatively, as raised by her cross-appeal, the respondent submitted that the primary judge erred in not adopting her construction that the appellants’ use of the shed and garden curtilage was not absolute and accommodated a shared use. Instead of adopting that construction, the primary judge concluded that the rights conferred by the Easement amounted to ownership of the servient area and invalidated the Easement.

(iv) The respondent’s supplementary submissions

93. The respondent emphasised that the application of the principles identified in Theunissen at [140] raises matters of fact and degree. Accordingly, they urged caution in viewing the outcome in any particular case as dictating the result in another case. They submitted that there were “very significant differences” between the rooftop easement in Theunissen and the gardening and storage easements here.

94. Acknowledging that the proper construction of easements should be undertaken before considering any issue of validity, the respondent submitted that the appellants had yet again changed their position regarding the issue of exclusivity of rights. They contended that although the appellants had initially argued that the rights concerning gardening and the use of the shed were not exclusive, they now submit that they have sole or exclusive rights in respect of both the gardening activities in Area X and the use of the inside of the shed for storage and laundry purposes. They contended that this was inconsistent with oral submissions made by the appellants’ senior counsel during oral address in the appeal.

95. The respondent contended that the factors which underpinned the Court’s conclusion in Theunissen that the easement there granted the dominant owners exclusive use of the rooftop for the stated purposes are not present here. They pointed to the following matters:

1. The respondent said that “the most important consideration” in Theunissen was the fact that the servient owner had no ready means of access to the rooftop terrace, which is to be contrasted with the position here because the respondent had access to Area X simply by walking across Lot 2.

2. Significantly, the rooftop easement in Theunissen granted the dominant owners a “right of recreation and enjoyment” and, while it was acknowledged that people might possibly recreate in an area at the same time, there were practical considerations as to why the rooftop could not be jointly enjoyed as recreational space, a matter which the Court considered was supported by privacy implications for the appellants in Theunissen if the respondent used the rooftop for recreation.

3. The respondent submitted that the “gardening” rights prescribed by cl 1(a) and (b) of the s 88B Instrument contemplated something far more extensive in character than a pure right of recreation; the nature of the rooftop area in Theunissen explained why the Court considered that gardening in a confined garden area was not the kind of activity which could readily be shared, whereas Area X was not a confined garden area.

4. In contrast with the position in Theunissen, there was no provision in the terms of the Easement which expressly required the dominant tenant to permit the servient tenant to access the roof for maintenance and repairs (implying that otherwise there was no such right of access).

5. In contrast with the position in Theunissen, there was admissible extrinsic evidence here that weighs against an interpretation of the gardening and storage easements as being for the sole or exclusive use of the dominant owners. The whole of Area X is subject to the gardening easement, including the shed. It is relevant to have regard to the plans dated August 1999, prepared by Jeff Conen, which clearly depict a shared shed and contemplate that the shed will service gardening, landscaping and maintenance across both Lots 1 and 2 without distinction. The respondent contended that cl 2 provided the immediate context for cll 1 and 4 in the s 88B Instrument because cl 2 incorporated concepts from the Council’s approval of DA 854/99, and this should be given weight in construing the Easement. The respondent was critical of the appellants’ submission that these materials were not relevant to the task of construction because of what the Court found in Theunissen at [106]. In particular, the respondent submitted that DA 854/99 and the approved plan were admissible to make sense of the references in the s 88B Instrument when it authorised the dominant tenants to “construct and maintain”, in the area covered by the gardening easement, “the building approved by Council under DA 854/99”, and to use that building for storage.

96. On the issue of invalidity, the respondent submitted that this issue does not arise if her preferred construction of the Easement was accepted. If, however, the Court accepted the appellants’ latest position regarding the exclusivity of the rights granted by the Easement, the respondent contended that the Easement is invalid in failing to meet the fourth characteristic of validity in Ellenborough Park. This was because, insofar as gardening is concerned, the dominant owners would enjoy exclusive possession for all purposes and be entitled to exclude the respondent from the area. In substance, on the appellants’ construction, the respondent was left only with “sterile and nominal” ownership.

97. The respondent’s right to use the airspace over Area X would be meaningless if the appellants planted tall trees and she had no right to airspace below the Easement area (in contrast with the position in Theunissen). The respondent added that if the shed were removed by the appellants there would be no structure on which she could erect solar panels or a satellite dish, nor would she have any right under cl 1 of the s 88B Instrument to enter or access any part of Area X if that was incompatible with the garden created by the appellants.

98. For all these reasons, the respondent submitted that the degree of restriction on her rights, on the appellants’ construction, is extreme. Moreover, she submitted that if the appellants’ rights to garden and store things in the shed are exclusive, the concept of “reasonable use” does not operate to preserve the validity of the Easement. That is because, on the appellants’ construction, the appellants’ rights under the Easement are not informed by the concept of “reasonable use”.

99. Finally, on the issue of leave to appeal and costs, the respondent made the following submissions:

1. The facts and circumstances here are “materially different” from those in Theunissen, having regard to the chronology of events which included the respondent properly raising her objection to competency which led to subsequent procedural steps, including the appellants filing a summons seeking leave to appeal and serving valuation evidence.

2. The respondent emphasised that the area affected by the Easement here was relatively small and it was far from plain that the appeal would change the appellants’ wealth by more than $100,000. The respondent also relied upon the fact that the appellants’ valuer frankly acknowledged that it was difficult to undertake a robust assessment of value because of the dearth of directly comparable sales evidence.

3. The Court’s decision in Owners Corporation Strata Plan 533 v Random Primer Pty Ltd [2025] NSWCA 8, which was referred to and applied in Theunissen, was not delivered until 12 February 2025.

4. The respondent should not have to bear the costs of the application for leave to appeal in circumstances where the appellants caused duplicative steps to be taken, particularly the filing of further written submissions separately from the summary of argument and response relating to the application for leave to appeal.

Consideration and determination

(a) Leave to appeal and cross-appeal

100. The respondent filed a notice of objection to competency dated 10 October 2024, contending that leave to appeal was required under s 101(2)(r) of the Supreme Court Act 1970 (NSW) because the value of the right at issue did not amount to $100,000 or more. In response, the appellants filed an affidavit dated 29 October 2024 by Lupco Ristevski, their instructing solicitor, who disputed the respondent’s position. Mr Ristevski annexed to his affidavit a valuation report dated 29 October 2024 by Paul Dale, valuer, who opined that the market value of the Easement to the Dicksons was significantly more than $100,000.

101. At the outset of the hearing, the Court indicated that it considered that the appeal raised a clear issue of principle and that, if required, leave to appeal would be granted. The parties were given an opportunity to make submissions on the proper order for costs relating to the competency objection. I will return below to address that matter.

102. The appellants did not oppose the respondent’s application for leave to cross-appeal. Leave was granted in order that all relevant issues may be determined in the proceeding.

(b) Construction of the Easement

103. Applying the principles in Theunissen to the particular facts and circumstances here, I respectfully agree with the primary judge that, properly construed, both parts of the Easement confer certain exclusive or sole rights on the dominant owners for the stated purposes. I respectfully disagree, however, that this means that either part of the Easement is invalid. In particular, I consider that the nature and extent of the servient owner’s retained rights in respect of Area X affected by both parts of the Easement are such that it is not open to conclude that the exclusive or sole rights of the dominant owners are inconsistent with her proprietorship or possession of the affected area.

129. The critical issue, as identified in the Clos Farming litigation, is whether the rights so conferred amount to a joint occupation with the servient owner, or exclude the proprietorship or possession of the servient owner. This is tied to a policy which limits the kind of interests in land, including easements, which the law permits to be created, as noted by Bryson J at first instance in Clos Farming SC at [44], referring to what Lord Brougham LC said in Keppell v Bailey (1834) 2 M&K 517 at 536; 39 ER 1042 at 1049.

130. As noted above, the primary judge considered that the facts in the Clos Farming litigation were the closest to the present facts and circumstances (see PJ[294]). In particular, his Honour found that the servient owner here can enjoy the servient area “but only in a passive way, and only by keeping out of the way of the dominant owners”, such that, in practice, the servient owner is “deprived of any control over how that area may be used or developed”. His Honour concluded that this ownership was “effectively sterile and nominal”.

131. In Clos Farming CA, Santow JA said (at [45]) that, in considering the fourth characteristic in Ellenborough Park, it was necessary to assess the degree to which the rights conferred by the purported easement interfere with the servient owner’s exclusive possession of the land. His Honour added at [46] that the fact that the rights claimed by the dominant tenement only touch part of the land does not necessarily preclude a finding that the rights asserted by the dominant tenement so vastly interfere with the rights of the servient tenement as to preclude them from constituting an easement.

132. Bryson J’s decision at first instance has been viewed as influential, not the least because his judgment was upheld on appeal. It is important to note some critical facts in the litigation. The proceedings related to land which was subdivided into 80 residential lots and 8 other lots. Lot 86 was retained by the subdivider. As Bryson J explained at [1], the Deposited Plan and related s 88B instrument “form an elaborate scheme of easements and restrictions directed towards creating and continuing an estate owned by many different proprietors but farmed for viticulture and crop farming under the control of whoever should be the registered proprietor of lot 86…”. Lot 86 was being used for the storage of farm machinery and was not a residential lot. The registered proprietors of Lot 27 were the defendants in the proceeding. Lot 27 comprised two parts, part A being 1542 m², which was a residential part. Part B comprised 1.537 ha and was described as “the farming lot”.

133. The Deposited Plan included a purported “easement for vineyard” which was expressed to benefit Lot 86 and to burden, among others, Lot 27. The fourteenth restriction referred to in that plan was as follows:

13. Terms of easement or restriction fourteenthly referred to in the abovementioned plan

Free right for every person in whose favour this easement is created and every person authorised by him and either with or without vehicles, farming implement and machinery, to enter, go, pass, repass, turn around and remain upon that part of the lot burdened marked “B” on the plan for the purpose of carrying out vineyard establishment works, the planting and replanting of grape vines and crops, the planting and harvesting of grapes and crops together with the right from time to time to sell the produce of such harvest and to deduct therefrom and retain the costs of farm maintenance, harvesting, packaging, freight, agents’ commission, marketing and reasonable administration costs associated with such harvesting and the sale of such harvest.

137. The restrictions on the rights of the servient tenement in the Clos Farming litigation were notably more extreme than the facts and circumstances here. The restrictions also affected a notably larger area of the servient tenement than is the case here. The plaintiff claimed that its right as an owner of a lot in a subdivision to plant and cultivate grape vines on the defendants’ land constituted an “easement for vineyard” and entitled the plaintiff to plant and cultivate grape vines on the servient land, to harvest the grapes, to sell or otherwise dispose of them and to otherwise retain any profits from the enterprise. Bryson J held that the right did not constitute an easement because the alleged right of the dominant owner left the servient owners with a sterile or nominal ownership only. It was regarded as particularly significant that the servient owner had no control over the production of profits and use of the servient land.

138. It is desirable to note the analysis of the Clos Farming litigation in Jea Holdings. Bathurst CJ and Beazley P emphasised at [45] that the covenant in the Clos Farming litigation affected almost 85% of the servient tenement. They noted that although Santow JA considered that to be a relevant matter, the “essentially determinant” matter in Clos Farming CA was the extent to which the right of owners to use the servient tenement was restricted. The covenant in Clos Farming CA effectively precluded the servient owners “from engaging in any real farming or agricultural type activities attendant on its possession”. The covenant operated in the context of further restrictions on the residual rights of the servient owners so as to subordinate those residual rights to “the over-arching rights of Clos Farming”. Santow JA stated at [46] that the covenant, viewed in the context of the further restrictions which applied to the servient owners’ rights in relation to the entire lot, meant that those rights “are so attenuated as no longer to meet the description of exclusive possession”.

139. Bathurst CJ and Beazley P drew an inference from Santow JA’s reference in Clos Farming CA to Copeland and its application in Australia in Harada v Registrar of Titles [1981] VR 743 that “the extent of a restriction on the use of the servient tenement may mean that no easement is created” (see Jea Holdings at [63]).

140. Their Honours then added at [64]:

Notwithstanding the reference to Copeland v Greenhalf in Santow JA’s judgment, we do not consider that Clos Farming Estates stands only for the proposition that the owner of the servient tenement must have reasonable use of the servient tenement in its entirety. That is a relevant consideration and, in a given case may be decisive, but it is also relevant to consider the extent of the interference with the rights of ownership on that part of the servient tenement actually affected by the easement. That is apparent from the bolded portion of the summary from Bryson J’s judgment to which reference is made above. It is also consistent, in our view, with the approach taken in Harada v Registrar of Titles. It may be that if the interference with possession amounts to an effective interference with ownership rights, that may be sufficient to deny the validity of an easement. However, that is not this case. In our opinion, Windeyer AJ was correct in his conclusion, at [39] and [40], that Jea Holdings “enjoyed a very substantial use of the land”. It not only has the right to use the servient tenement for parking for itself, its servants, agents and invitees, it could be added for matters such as advertising on fencing and the like, and it has the valuable right to use both the airspace above and the subterranean land below. It also follows that, as his Honour also indicated and for the reasons he gave, the Covenant would be a valid easement if the correct approach was that taken in Moncrieff v Jamieson.

141. It is also appropriate to say something more regarding this Court’s decision in Stolyar. This was an appeal from Darke J’s judgment in Towers v Stolyar [2017] NSWSC 526; 18 BPR 36,963. Darke J helpfully identified the following principles established in Jea Holdings (at [49]):

In determining the question of validity of the Easement it is necessary to consider the matters identified as relevant by the Court of Appeal in Jea Holdings (above) at [64]. It is thus necessary to consider the extent of interference with the servient owner’s rights of ownership on that part of the servient tenement actually affected by the Easement, and on the servient tenement as a whole (see also Clos Farming Estates Pty Ltd v Easton (above) at [35]–[36]). Included in that analysis is a consideration of whether the servient owner retains reasonable use of the servient tenement in its entirety, and an assessment of the degree to which the rights conferred by the Easement interfere with the servient owner’s exclusive possession of the land (see Clos Farming Estates Pty Ltd v Easton (above) at [45]–[46]). Questions of degree and evaluation are involved (see Jea Holdings (above) at [150]).

142. Darke J concluded that a right of vehicle parking and garaging constituted a valid and enforceable easement in circumstances where his Honour found that the degree of interference with either the area actually affected by the easement or the whole of the servient land did not deprive the servient owner of her rights of proprietorship or possession of either the easement area or the whole of the land to such a degree as to render the easement invalid. The easement was recorded in the Deposited Plan and in a registered instrument under s 88B of the Conveyancing Act 1999 (NSW).

143. Gleeson JA gave the leading judgment in Stolyar (Simpson and White JJA agreeing). His Honour noted at [49] that, in Jea Holdings, Bathurst CJ and Beazley P accepted that Clos Farming CA did not stand only for the proposition that the owner of the servient tenement must have reasonable use of the servient tenement in its entirety. His Honour further noted that, in the joint judgment in Jea Holdings, it was accepted that that was a relevant consideration which may be decisive in a particular case, but that “it is also relevant to consider the extent of the interference with the rights of ownership on that part of the servient tenement actually affected by the easement”.

144. Thus, Stolyar authoritatively establishes that, in applying the fourth characteristic of validity in Ellenborough Park, it is relevant to consider the extent of the interference with the rights of the servient owner not only in respect of the area the subject of the alleged easement, but also the servient tenement in its entirety.

145. Gleeson JA also explained the reference in Jea Holdings at [64] to Moncrieff, where it was held that a right to park is, in principle, capable of amounting to a valid easement. Lord Scott did not agree with the test formulated in London & Blenheim Estates Ltd v Ladbroke Retail Parks Ltd [1992] 1 WLR 1278 and in Batchelor v Marlow [2003] 1 WLR 764, which posited whether the servient owner is left with any reasonable use of their land. Instead, Lord Scott described the test as one which asks whether the servient owner retains possession and, subject to the reasonable exercise of the right in question, control of the servient land.

146. In Stolyar, Gleeson JA said at [55] that neither party suggested that the approach in Jea Holdings should not be applied. His Honour also noted at [56] that it was common ground that the appellant bore the onus of establishing the invalidity of the easement.

147. The appeal in Stolyar was dismissed for reasons set out at [70]-[73]:

The primary judge carefully evaluated the evidence concerning the degree to which the rights conferred by the right of vehicle parking and garaging interfered with Mrs Stolyar’s use of the easement strip, or the whole of the servient land (Lot A). It may be accepted that the right of vehicle parking and garaging necessarily interfered with Mrs Stolyar’s possession of the easement strip. However, contrary to ground 2, the rights granted by the easement did not amount to joint ownership of the easement strip, nor did they substantially deprive Mrs Stolyar of her proprietorship or possession of the area actually affected by the easement, for the reasons given by his Honour at [51]–[52] (extracted at [26] above).

The present case is not like Clos Farming Estates where the rights to the vineyard were inconsistent with the proprietorship and possession of the servient land by the servient owners. Nor is it like Harada v Registrar of Titles [1981] VR 743 , where the extent of the restriction on the use of the servient land not to build on the easement in favour of an overhead power line transmitting electricity over the servient land meant that the owner of the servient land was left with very few rights over that property, such that the rights claimed by the electricity company were really rights of joint user.

The Stolyars contention that the easement substantially deprives Mrs Stolyar of her proprietorship or possession of the whole of Lot A because the Stolyars are unable to use the double garage and the driveway of Mrs Stolyar’s land, is not established given the absence of evidence concerning the inability to turn motor vehicles around in the area in front of the double garage or along the driveway by making more than three turns.

In my view, there is no error in his Honour’s finding that the rights given by the easement to the dominant owner (the Towers) did not substantially deprive the servient owner (Mrs Stolyar) of her rights of proprietorship or possession in respect of the easement area. Nor is there any error in his Honour’s finding that Mrs Stolyar retained reasonable use of the servient tenement in its entirety.

148. The issue whether or not the rights conferred on the dominant owners exclude the servient owner’s proprietorship or possession is necessarily one of evaluation and degree but, for the following reasons, I respectfully disagree with the proposition that the servient owner’s ownership of the servient area is effectively sterile and nominal.

149. First, although the rights conferred on the dominant owners by the Easement are exclusive in relation to the stated purposes, that is not the same as saying that they effectively grant exclusive possession for all purposes. As emphasised above, the rights relate to the purposes or activities specified in Pt 2 of the Easement.

150. Secondly, the servient owner retains considerable positive rights in respect of the servient area. She is entitled to access the area for the purpose of recreation and to access the garden shed for the purpose inter alia of ensuring that the dominant owners’ use of the shed is in accordance with the terms of the Easement. The servient owner is also entitled to place garden furniture or a barbeque in any part of Area X which is not taken up by the dominant owners’ garden or by the building, including under the awning. There is also an entitlement to erect devices on the roof of any shed, such as a television antenna, solar cells and a satellite dish. The servient owner is also entitled to traverse the subject area for the purpose of obtaining access to Barrenjoey Road.

151. Thirdly, the servient owner also enjoys significant negative rights. They include the right to enter upon the subject area for the purpose of ascertaining whether the area is being used by the dominant owners only for permitted purposes. For what it is worth, there was evidence that Ms Petrie, and her husband, exercised such negative rights, resulting in the Dicksons ceasing to use the subject area for an outdoor shower and ceasing to store non-garden related chattels, such as surfboards, towels and wetsuits in the area.

152. Fourthly, in assessing whether the dominant owners’ exclusive rights substantially deprive the servient owner of proprietorship or legal possession of the affected area so as to be inconsistent with ownership of that area, it is relevant to note that Area X is relatively small. It represents 12.2% of the total area of Lot 2. It is located at the end of the back garden to Lot 2. Moreover, the footprint of the shed (excluding the awnings) represents approximately 28% of Area X. I accept the appellants’ submission that neither part of the Easement has any effect on the possession, control or reasonable use of the balance of the servient tenement beyond the 63.3 m² servient area. The existence of the Easement does not have a major impact on the servient owner’s enjoyment of the servient land (the house and garden) or the servient owner’s ability to deal with the servient land.

153. These geographical considerations are relevant in determining the validity of an easement because the rationale for the characteristics of validity in Ellenborough Park is “to prevent the proliferation of undesirable long-term burdens which inhibit the marketability of land” (see Gray and Gray at [5.1.49]). Although those learned authors also note at [5.1.64] that Moncrieff contains a rationalisation of the case law which is more sympathetic to easements which involve substantial exclusion of the servient owner from his or her land, one element in assessing the extent of any such exclusion will be the extent of interference with the servient owner’s rights of ownership actually affected by the subject easement, as well as on the servient tenement as a whole. Necessarily, therefore, physical or geographical dimensions are relevant.

154. For all these reasons, I respectfully disagree with the primary judge’s conclusion that both parts of the Easement are invalid having regard to the fourth characteristic in Ellenborough Park. Ground 1 of the notice of appeal should be upheld.

155. In these circumstances, it is unnecessary to address difficult questions of severance in the event that it was found that one but not the other part of the Easement was invalid. It is unnecessary, therefore, to determine ground 2 of the notice of appeal.

(d) Cross-appeal

156. The cross-appeal should be dismissed for the reasons given above.

(e) Relief

157. The appellants urged the Court to make declarations as to the parties’ respective rights, so as to minimise any future disputation. I consider that, although it is appropriate to grant declaratory relief concerning the proper construction and validity of the Easement, this is not an appropriate case to grant the relief sought by the appellants. It is impossible to anticipate in advance the wide range of issues which might potentially arise concerning the parties’ obligation to act reasonably in the exercise of their respective rights. Any such relief would relate to hypothetical circumstances which are better approached on a case by case basis if and when the circumstances arise.

158. Naturally, there is nothing stopping the parties from having sensible discussions, informed by common sense and mutual respect, regarding their respective expectations as to the reasonable use of their rights. If the parties are unable to come to a sensible agreement on such matters, they might consider engaging an independent mediator to guide the exercise. Absent such a common sense approach, the parties are at risk of becoming embroiled in yet further time-consuming, stressful and expensive litigation.

159. That leaves the issue of which of the orders made by the primary judge on 29 August 2024 or 23 October 2024 should be set aside.

160. Orders 1, 2 and 3 dated 29 August 2024 should be set aside having regard to this Court’s finding that the primary judge erred in concluding that the Easement is invalid. In lieu thereof, the Court should make the following order:

Declare that, upon its proper construction, the Easement provided for in the s 88B Instrument registered on 16 December 2003 is valid and enforceable and provides the owners of the dominant tenement with sole use and enjoyment of:

1. Area X marked on DP 1062948 for the purposes of gardening, paving and landscaping and storage of equipment as provided for in cl 1 of that Instrument; and

2. the garden shed which has been built within Area X, for the purposes of storage and laundry use as provided for in cll 2, 3 and 4 of the Instrument,

subject to the limitations in the Easement.

161. The orders dated 23 October 2024 both relate to costs. Ms Petrie was ordered to pay the Dicksons’ costs of their application seeking indemnity costs. The Dicksons were ordered to pay Ms Petrie’s costs of the proceedings on an ordinary basis.

161. Both those orders should be set aside and substituted by an order that the parties each bear their own costs of the proceedings below. In proposing that order, I have taken into account the conduct of the parties in the trial below, noting in particular the primary judge’s observation that both changed their initial positions in the course of the trial, which is supported by the transcript of the trial.

(f) Costs of the appeal (including costs of the objection to competency) and costs of the cross-appeal

163. The appellants have succeeded with two of their three grounds of appeal. The cross-appeal has failed. There was considerable overlap in the parties’ respective submissions concerning the appeal and cross-appeal. Adopting a broad-brush approach, more time and resources were devoted to the appeal than to the cross-appeal. But I do not consider that this justifies an unqualified order for costs in favour of the appellants. I accept the respondent’s submission that the appellants changed their position on the issue of exclusivity of rights, as is reflected in their submissions pre and post the appeal in Theunissen. The appellants initially argued that their rights under both parts of the Easement were not exclusive, while acknowledging that the exercise of their rights might in practice shut out the respondent periodically.

164. In their written submissions on the appeal, the appellants contended that both they and the respondent were “entitled to use and enjoy the garden, even at the same time”, and that it was “difficult to conceive that the respondent may not be able to place some things in the shed herself”. That position is inconsistent with the appellants’ supplementary submissions post Theunissen (see at [88(b)] above). Senior counsel for the appellants also made an oral submission in the appeal that if the appellants left the garden area in Area X unattended, the respondent could “go in and garden”. This is also inconsistent with the appellants’ supplementary submissions post Theunissen, where they maintained that they had sole or exclusive rights under both parts of the Easement.

165. The appellants’ preparedness, at times, to embrace the notion of shared rights to use Area X for gardening etc and jointly to use the garden shed for storage is consistent with many of the grounds raised in the cross-appeal, which grounds have failed. They should not have all their costs of the cross-appeal.

166. Having regard to all these matters, I consider that the respondent should pay 50% of the appellants’ costs of the appeal and of the cross-appeal in their capacity as cross-respondents.

167. Different issues are raised by the costs of the respondent’s unsuccessful notice of objection to competency.

168. The appellants urged the Court to apply the same approach as in the Court’s recent decision in Random Primer. That case also involved a dispute concerning an easement. The respondent filed a notice of motion objecting to the competency of the appeal from orders made by Williams J. It contended that leave to appeal was required by operation of s 101(2)(r) of the Supreme Court Act 1970 (NSW). Kirk JA (Gleeson and Mitchelmore JJA agreeing) noted at [22] that the respondent’s counsel and solicitors held different views as to whether the appeal raised (directly or indirectly) a claim, demand or question amounting to the value of $100,000 or more.

169. The Court held at [23] that, while it considered that the respondent’s solicitor was probably correct in believing that leave to appeal was not required, it was unnecessary to resolve the issue. That was because the case raised issues of principle which were reasonably arguable.

170. On the question of costs of the respondent’s competency motion, the Court acknowledged at [24] that a party is entitled to raise an argument that leave to appeal is required and should not be discouraged unduly from doing so. However, the Court concluded that this was a case where “leave to appeal was always likely to be granted and the competency objection was in any event filed out of time”. Accordingly, the respondent was ordered to bear the appellant’s costs of the competency motion.

171. A notice of objection to competency was also unsuccessfully raised by the respondent in Theunissen. The appellants filed a 46 page valuation report with their notice of appeal, which valued the relevant easement in the amount of $525,000. After the respondent’s solicitor criticised this valuation, a supplementary report was obtained from the same valuer, who arrived at a valuation in the amount of at least $370,000. Despite this supplementary material, the respondent pressed its objection to competency. To protect their position, the appellants filed a summons seeking leave to appeal.

172. The Court concluded at [13] that it was clear from both the valuation evidence and a basic understanding of the practical realities of the case, including the location of the relevant dwellings in one of Sydney’s most expensive suburbs, that the appeal would change the wealth of the appellants by more than $100,000. The objection to competency was dismissed, with costs.

173. Naturally, each case depends on its own particular facts and circumstances. But, for the following reasons, I consider that the reasoning in Random Primer and Theunissen does not apply here.

174. As the respondent emphasised, it is important to have regard to the chronology of relevant events relating to the filing of the objection to competency, which may be summarised as follows:

1. On 24 September 2024, after the notice of appeal had been filed on 13 September 2024, the respondent’s solicitor raised the issue whether the value of the matters in issue amounted to $100,000 or more.

2. On 25 September 2024, the appellants’ solicitor responded, stating that leave to appeal was not required but that, in any event, the appellants would seek leave to file a summons seeking leave to appeal, which could be heard concurrently with any appeal.

3. On 9 October 2024, the Registrar made orders requiring the appellants to file a summons seeking leave to appeal and an accompanying White Book by 23 October 2024.

4. On 10 October 2024, the respondent filed its objection to competency. It was accompanied by an affidavit dated 10 October 2024, affirmed by the respondent’s solicitor, Mr Peter Clarke.

5. No valuation evidence had been prepared and/or relied upon by either party at the trial in relation to the monetary value of the Easement. Mr Clarke deposed that, having received the letter dated 25 September 2024 from the appellants’ solicitor, he expected that the appellants would be filing a summons seeking leave to appeal, which would obviate the need for the respondent to file an objection to competency. But this did not occur prior to 9 October 2024, when orders were made by the Registrar for the appellants to file a summons seeking leave to appeal by 23 October 2024.

6. Mr Clarke further deposed, and I accept, that the respondent was required by r 51.41(1) of the Uniform Civil Procedure Rules 2005 (NSW) (UCPR) to file a notice of motion objecting to competency within 28 days of being served with the notice of appeal, i.e. on or before 11 October 2024. In those circumstances, he said that he filed the motion objecting to competency on 10 October 2024 to guard against the effect of r 51.41(2) of the UCPR.

175. In the light of this chronology of events, the respondent contended that this case is significantly different from those in Random Primer and Theunissen. It was only after the notice of objection to competency was filed that the appellants filed the summons seeking leave to appeal on 20 October 2024, together with the valuation evidence. Thus, the respondent contended that she acted properly in filing the objection to competency at a time when the appellants had not adduced any evidence on value and the appellants had already been directed to file a summons seeking leave to appeal. The respondent emphasised that it was obliged to raise competency on or before 11 October 2024 if the question was open to be raised. This was the case here having regard to the early stage of the appeal proceedings and the absence of any valuation evidence.

176. I consider that there is considerable force in the respondent’s position. The competency objection should be dismissed, with no order as to costs.

Conclusion

177. For these reasons, I propose the following orders:

1. The appeal be allowed in part.

2. The cross-appeal be dismissed.

3. Orders 1, 2 and 3 dated 29 August 2024 be set aside and in lieu thereof:

Declare that, upon its proper construction, the Easement provided for in the s 88B Instrument registered on 16 December 2003 is valid and enforceable and provides the owners of the dominant tenement with sole use and enjoyment of:

1. Area X marked on DP 1062948 for the purposes of gardening, paving and landscaping and storage of equipment as provided for in cl 1 of that Instrument; and

2. the garden shed which has been built within Area X, for the purposes of storage and laundry use as provided for in cll 2, 3 and 4 of the Instrument,

subject to the limitations in the Easement.

4. The orders dated 23 October 2024 be set aside and in lieu thereof there be no order as to the costs of the proceedings below.

5. Order the respondent to pay 50% of the appellants’ costs of the appeal and the cross-appellant to pay 50% of the cross-respondents’ costs of the cross-appeal.

6. The notice of objection to competency filed 10 October 2024 be dismissed, with no order as to costs.

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Amendments

23 May 2025 - Name of counsel amended

26 May 2025 - Order (3) on coversheet and at [177] amended pursuant to slip rule to replace "2025" with "2024"

Decision last updated: 26 May 2025