Durian (Holdings) Pty Ltd v Cavacourt Pty Ltd

[2000] NSWCA 28

Reported Decision: [2000] 10 BPR 18,099
[2000] NSW ConvR 55-933

New South Wales

Court of Appeal

CITATION:	Durian (Holdings) Pty Limited v Cavacourt Pty Limited [2000] NSWCA 28
FILE NUMBER(S):	CA 40140/99
HEARING DATE(S):	10 December 1999
JUDGMENT DATE:	10 March 2000
PARTIES :	Appellant: Durian (Holdings) Pty Limited Respondent: Cavacourt Pty Limited
JUDGMENT OF:	Mason P at 1; Meagher JA at 15; Stein JA at 30

LOWER COURT JURISDICTION :	Supreme Court - Equity Division
LOWER COURT FILE NUMBER(S) :	Eq. 2905/98
LOWER COURT JUDICIAL OFFICER :	Young J

COUNSEL:	Appellant: Mr J Campbell QC Respondent: T Bathurst QC, S Donaldson
SOLICITORS:	Appellant: Gadens (Sydney) Respondent: Landerer & Company (Sydney)
CATCHWORDS:	Property law - easement granting right of way - not used by dominant tenement could seek extinguishment - establishing easement is obsolete under S89(1)(a) Conveyancing Act (NSW) 1919
LEGISLATION CITED:	Conveyancing Act (NSW) 1919
CASES CITED:	Re Truman, Hanbury, Buxton & Co's Ltd's Application [1956]]QB 261 Re Miscamble's Application [1966] VR 596 Re Martin (1998) 57 P&CR 119 C Hunton Ltd v Swire [1969] NZLR 232 Re Mason and the Conveyancing Act [1962]NSWR 762 Armishaw v Denby Horton (NZ) Ltd [1984] 1 NZLR 44 Re Henderson's Conveyance [1940] 1 Ch 835 Australian Securities and Investments Commission v D B Management Pty Ltd [2000]HCA 7
DECISION:	1. Appeal allowed; 2. Set aside the declarations and orders of Young J; 3. In lieu thereof, order that the easement for right of way Registered Book 2781 No 959 be extinguished.; 4. Order the cross-defendant to pay the cross-claiment's costs both below and on appeal, but to have a certificate under the Suitors Fund Act.

THE SUPREME COURT
OF NEW SOUTH WALES
COURT OF APPEAL

CA 40555/98

MASON P
MEAGHER JA
STEIN JA

10 MARCH 2000

DURIAN (HOLDINGS) PTY LIMITED v CAVACOURT PTY LIMITED

PROPERTY LAW-EASEMENT GRANTING RIGHT OF WAY- NOT USED BY DOMINANT TENEMENT-WHETHER SERVIENT TENEMENT COULD SEEK EXTINGUISHMENT-ESTABLISHING EASEMENT IS OBSOLETE UNDER S89(1)(a) CONVEYANCING ACT (NSW) 1919 1   Facts: A dispute arose over an easement granting a right of way. The easement was granted in 1964, but remained largely unused by the dominant tenement. In 1981 the servient tenement began using the easement as a staff car-park. Other developments followed, creating further obstructions to the easement.

2   The servient tenement appellants sought an extinguishment of the easement. This was refused at trial. The registered proprietors of the dominant tenement obtained a declaration as to the validity of the easement, as well as an injunction prohibiting the appellants from trespassing on the easement. The appellants appeal against this decision.

3   This easement originally provided street access to the dominant tenement. Planning and traffic authorities now restrict the use of the easement such that it can no longer be used as originally intended. The right of way no longer serves any practical benefit to the respondent.

4   The continued existence of the easement would impede the appellant’s use of the land, as approved by the local council.
5   The appeal should be allowed.

6   Meagher JA: The easement should be extinguished for the following reasons:
1. It has been at least twenty years since the easement had been used for the purpose it was created.
2. At the time the easement was created the dominant tenement’s property was virtually landlocked. That is no longer the case.
3. The present configuration of buildings on the dominant tenement is entirely different from that which existed at the time the easement was created.
4. Since at least 1981, there have been physical obstructions which prevented the respondent from using the easement for its intended purpose. These obstructions include a retaining wall, an elevation of the dominant tenement’s land, and the appellant using the easement as a staff car-park.
5. The local traffic authority refuses to allow the respondent to use the easement as an exit from the property.

7   Although it is a heavy onus to show an easement is now obsolete, the requirements have been met.

8   Stein JA: The evidence clearly shows that from 1964 to 1981 the easement remained substantially unused by the dominant tenement. After that time, it was used as a car-park, rather than as a means of providing access to and from the respondent’s property.
9   Significant physical changes have been made to the area since 1981. There are now also significant legal restrictions to the use of the easement, and it is therefore absolute. Its continued existence would impede the reasonable user of the servient tenement, without providing any practical benefit to the dominant tenement.

ORDERS

1. Appeal allowed. 2. Set aside the declaration and orders of Young J. 3. In lieu thereof, order that the easement for right of way Registered Book 2781 No 959 be extinguished. 4. Order the cross-defendant to pay the cross-claimant’s costs both below and on appeal, but to have a certificate under the Suitors Fund Act.22.2.00 Durian v Cavacourt THE SUPREME COURT
OF NEW SOUTH WALES
COURT OF APPEAL

CA 40140/99

MASON P
MEAGHER JA
STEIN JA

10 March 2000



DURIAN (HOLDINGS) PTY LTD v CAVACOURT PTY LTD

JUDGMENT

1 MASON P: I have had the benefit of reading the judgment of Meagher JA which sets out the facts in detail. 2 The power to modify or extinguish an easement conferred by s 89 (1) of the Conveyancing Act 1919 requires proof of one or more circumstances to the satisfaction of the court coupled with the favourable exercise of a judicial discretion. The appellant failed below because Young J was not satisfied that it had made out its primary case that (within s 89 (1) (a)), by reason of:

• change in the user of the dominant tenement;
• change in the character of the neighbourhood; and/or
• other circumstances which the Court may deem material,
the Court should be satisfied that the easement ought to be deemed obsolete, or that its continued existence would impede the reasonable user of the servient tenement without securing practical benefit to the owner of the easement.

Some general considerations

3    In Re Truman, Hanbury, Buxton & Co Ltd's Application [1956] 1 QB 261 at 272 Romer LJ explained that the word "obsolete" was used in the sense that the original purpose of the easement or covenant can no longer be served. This interpretation has been applied in later cases (see, eg Re Miscamble's Application [1966] VR 596 at 601, Re Martin (1988) 57 P & CR 119 at 125). However, a less exacting standard is suggested by Wilson J in C Hunton Ltd v Swire [1969] NZLR 232 at 234 ("no longer relevant to the circumstances presently obtaining"). In Re Masonand the Conveyancing Act [1962] NSWR 762 at 764, Jacobs J said:

I consider that the word 'obsolete' can be taken to mean that the object of the covenant is now incapable of fulfilment or perhaps that it serves no present useful purpose.

I respectfully agree with this dictum, bearing in mind the latitude encompassed in a power expressed as one of being satisfied that the easement "ought to be deemed obsolete".

4 This said, the Court's focus must remain the language of the section. Section 89 necessarily qualifies the common law rights of the owner of the easement. The section is to be applied according to its terms, read fairly and without disregarding the conventional approach to legislation affecting common law property rights. The starting point is the easement itself, its terms and its objects derived from construing those terms in context (cf Re Mason at 764) and bearing in mind that the easement was created for an indefinite future and destined to enure in a changing environment (cf Armishaw v Denby Horton(NZ) Ltd [1984] 1 NZLR 44 at 47). 5 The Court was referred to the frequently cited words of Farwell J in Re Henderson's Conveyance [1940] 1 Ch 835 at 846:

Speaking for myself, I do not view this section of the Act as designed to enable a person to expropriate the private rights of another purely for his own profit. I am not suggesting that there may not be cases where it would be right to remove or modify a restriction against the will of the person who has the benefit of that restriction, either with or without compensation, in a case where it seems necessary to do so because it prevents in some way the proper development of the neighbouring property, or for some such reason of that kind; but in my judgment this section of the Act was not designed, at any rate prima facie, to enable one owner to get a benefit by being freed from the restrictions imposed upon his property in favour of a neighbouring owner, merely because, in the view of the person who desires the restriction to go, it would make his property more enjoyable or more convenient for his own private purposes.

6    This carefully qualified language makes the obvious point that the power is not available for the purpose of expropriating private rights for profit. The converse is equally true. It is no defence to a claim otherwise falling within the four corners of the section for the defendant to show that its ability to defend the statutory claim might be a possible source of money coming from a dominant tenant anxious to develop its own property. The section confers a power to abrogate existing rights (cf Australian Securities and Investments Commission v D B Management Pty Ltd [2000] HCA 7 at [44]. 7 In my view Young J should have been satisfied from the primary facts that the appellant had made out its case. 8 When the easement was created in 1964, and for many years prior to that, the easement was represented by a road known as Canal Banks Road or Crown Road. The expressed and only purpose of the easement was to provide reasonable access to and from Ricketty Street. The easement has not been used for this or any other purpose for practically 30 years. This is a simple fact of history, which is both proved and made explicable by the fact that access between the servient and dominant tenants has been blocked by fencing since at least 1981. Furthermore, the way that the surface of the boundary of the dominant tenement has been raised since at least 1981 has made vehicular access impossible. The site of the easement has been used exclusively by the servient tenant as a carpark since 1981. There is no suggestion of usage or need for usage of the easement by pedestrians. 9 The object of the easement was to ensure vehicular access from an otherwise land-locked site onto Ricketty Street. Such egress is no longer used, no longer necessary (in view of alternative access via Gardeners Road) and no longer permissible in view of enforceable planning restrictions which reflect the long-term attitudes of the police and road traffic authorities. The development consent currently held by the respondent contemplates a development that makes the easement unnecessary and irrelevant. The details are set out in the judgment of Meagher JA. 10 The matters just summarised establish to my satisfaction that there have been the requisite changes and other circumstances which ought to deem the easement obsolete and which mean that its continued existence, unmodified, would impede the reasonable user of the servient tenement without securing practical benefit to the dominant tenant. 11 Young J did not think that the easement ought to be deemed obsolete because "the object of access is still capable of performance and is of value [as] shown by the fact that the [respondent] thought that such access was a selling point when it acquired the land and the value it has for more flexible use of the land”. This subjective consideration attributed to the respondent does not, in my respectful view, provide a basis for rejecting the case otherwise established. The easement is no longer capable of useful fulfilment in any practical sense other than as a mere bargaining tool in the hand of the dominant tenant (cf par 6 above). 12    The learned judge also addressed the alternative submission that the continued use of the easement unreasonably impeded the use of the appellant’s land without securing practical benefit to the respondent. He referred to the fact that the servient tenement had been used exclusively by the appellant as a parking lot since 1981. And he acknowledged that the continued existence of the easement would impede the appellant in the use of its land as approved by Botany Council in 1988. In reliance upon that approval, the appellant carried out certain works, such as constructing dwarf retaining walls, carpark kerbing and landscaping. Despite these findings, this alternative submission was rejected by Young J because he held that it was difficult to see on the evidence how it could be suggested that the right of way did not secure practical benefits to the respondent as the owner of the dominant tenement. The ability to utilise additional access space through the servient tenement was held to be self evidently a "practical benefit". His Honour cited the evidence of Mr Dobinson and Mr Rowlands. 13    Mr Dobinson is a transport consultant with engineering qualifications and experience in the Department of Main Roads. He expressed the opinion that the use of the easement clearly provides substantial benefits to the respondent's land. He gave several examples of these benefits, each of which assume that it is permissible for vehicles to use the easement as a means of access into Ricketty Street. Mr Rowlands is a valuer. He expressed the opinion that the availability of the right of way provides increased flexibility to any developer of the dominant tenement and that access directly onto Ricketty Street is a factor which contributes significantly to the value of the site. In my view, this evidence carries very little weight. Each expert drew conclusions which are quite obvious if one treats the easement as a given, as a right capable of present enjoyment, according to its terms. However, this is the very matter in issue. The evidence shows that the easement has not been used, cannot be presently used and is not proposed to be used for its expressed purpose. If the proper application of the section to the proven facts means that the easement ought to be extinguished then the entire basis upon which the experts proceeded is destroyed. For reasons already given, that is the situation as I see it.

14    I agree with the orders proposed by Meagher JA.

15    MEAGHER JA: This is an appeal by the owner of a servient tenement, Durian (Holdings) Pty Limited (Durian), over certain land at Mascot, which is a suburb of Sydney. It had sought extinguishment of the easement. Young J declined to make such an order. Moreover, the owner of the dominant tenement, Cavacourt Pty Limited (Cavacourt), successfully sought declaration as to the validity of the easement and an injunction restraining Durian from trespassing on the easement. Durian appeals. 16    Durian’s land is now known as 1-3 Ricketty Street. It is part of land obtained from the Minister of Public Works, who originally used the land for flood prevention works, (Cavacourt’s land, 5-9 Ricketty Street, was also once vested in the Minister, and for the same reason). 17    The fee simple in the servient tenement remained vested in the Minister until 1972, when it was transferred by him to a company called Whittle, which transferred it to Durian Pty Limited in 1981. 18    The fee simple in the dominant tenement was at some stage conveyed by the Minister to Ansett Transport Pty Limited, which ceased using the premises at all and in March 1981 when it leased it to a company called TNT Seafast Pty Limited. In 1988 Cavacourt Pty Limited became registered proprietor of the land. 19    The easement was granted by the Minister to Ansett Transport Limited by deed of 25 September 1964. Its operative words are:

“the Grantor DOTH HEREBY GRANT AND CONVEY unto the Company as appurtenant to the land described in the Second Schedule hereto (hereinafter called “the dominant tenement”) full and free right and liberty (but subject to the limitations and provisions hereinafter contained) for the Company and all persons authorised by the Company in common nevertheless with the Grantor his successors and Assigns and all persons bodies or corporations who heretofore have been or hereafter may be authorised by the Grantor his successors or assigns or who have or shall hereafter have a like right whether by grant or licence heretofore or hereafter and by whomsoever made at all times after the said Grant by the Grantor to the Company of these rights by day or by night with or without horses carts carriages motors and other vehicles of any description to enter upon go return paesand repass along over and upon the servient tenement for the purposes of gaining or having reasonable access to and from the dominant tenement from and to the public highways adjoining the servient tenement.”

20 It should be noted that, unlike most easements, the right of ingress and egress is limited to obtaining “reasonable access to the public highways adjoining the servient tenement”. I respectfully accept the submission of Mr Campbell QC, learned Senior Counsel for Durian, that “the public highways” must mean Ricketty Street and whatever other public roads are connected with Ricketty Street 21 Section 89 of the Conveyancing Act 1919 (as amended), insofar as it is relevant to this case, says:

“(1) Where land is subject to an easement…, the Court may from time to time, on the application of any person interested in the land, by order modify or wholly or partially extinguish the easement,… upon being satisfied:

(a ) that by reason of change in the user of any land having the benefit of the easement,…or in the character of the neighbourhood or other circumstances of the case which the Court may deem material, the easement,…. ought to be deemed obsolete, or that the continued existence thereof would impede the reasonable user of the land subject to the easement,…. without securing practical benefit to the persons entitled to the easement… or would, unless modified, so impede such user, or”

22    In my view the appeal should be allowed and the easement wholly extinguished. I have come to this conclusion with great hesitation, particularly as the trial judge has great experience in, and knowledge of, this branch of the law. 23    The reasons which have led me to this conclusion are as follows:

1. The easement has not been used for the purpose for which it was created since at least November 1971, and was substantially unused even in 1964.
2. At the time the easement was granted, the dominant tenement was virtually landlocked. In particular, it had no access to Gardener’s Road. Nowdays it has access to Gardeners Road, and has had it for some time. All traffic entering and leaving the dominant tenement does so from and to Gardener’s Road.
3. The consolidation of the multiple blocks of land now forming Cavacourt’s land have made it impossible to use only the land comprising the dominant tenement for the intended purpose of the easement, the present configuration of buildings on the land being entirely different from that which existed at the date of the creation of the easement.
4. Since at least 1981, there have been significant physical obstructions to the use of the easement by the owner of the dominant tenement. Along the boundary between the dominant tenement and the site of the easement there has been constructed (and maintained at least since 1981) either a brick wall half a metre high or a wire fence, in neither of which there is a gate. Moreover, the elevation of the dominant tenement has been, since at least 1981, about 70cm higher than the servient tenement, a drop which makes the use of ordinary vehicles impossible. Further, the site of the easement has for long been used by the owner of the servient tenement as a carpark.
5. What is perhaps the greatest factor tending towards obsolescence is the growth of town planning restrictions which make the original use of the tenement impossible, and now even illegal. His Honour referred, quite correctly, to “the traffic authorities’ restrictions on access to Ricketty Street”. The traffic authorities did refuse any application by Cavacourt to exit from the dominant tenement onto Ricketty Street. But the restrictions were more onerous than that. The use by the owner of the dominant tenement of the easement by vehicular traffic were restricted by the development consent relating to the dominant tenement by Botany Council dated 14 December 1973. Clauses 20, 21 and 22 of that consent were as follows:
“ 20. The observance of the requirements of the State Planning Authority of New South Wales, viz:-
(i)All vehicular access to and from the site being confined to Gardeners Road; and
(ii)the car wash operation being ancillary to existing use.

21. The observance of the requirements of the Police Department (Traffic Branch), viz:-
(a)Crown Road is not used to connect Gardeners Road and Ricketty Street; and
(b)all vehicular access (in and out) is confined to Gardeners Road.

22 . The observance of the requirements of the Department of Main Roads, viz:-
1. there is no vehicular access to Ricketty Street.”

24    Provisions of a second development consent relating to the same land dated 21 September 1982 contained clauses 5, 6, 19, and 23 in the following terms:

“ 5. A dwarf wall, 300 mm minimum height, or other approved barrier, shall be erected along the entire street frontage, exclusive of approved access ways, and around all landscaped areas to prevent their use by motor vehicles.

6 . Vehicular access shall be constructed at the applicant’s expense, over the footway of the street, adjacent to the subject premises.

1 9 . All vehicular access from the right-of-way off Ricketty Street is to be denied and placed in Gardeners Road in view of the arterial road classification on Ricketty Street and its present traffic volumes.

23 . The provision of signposts displayed on the Ricketty Street frontage indicating that visitor carparking exists on-site from the Gardeners Road access.”

25    A further development application granted on 15 October 1998 contained the following conditions 43, 48 and 52:

“ 43 . The applicant shall prior to the issuing of the Occupation Certificate:-
(a) Construct a full-width industrial vehicular crossing(s) opposite the vehicular entrance(s) to the site.
48 . Entry / exit egresses shall comply with the Roads and Traffic Authority guidelines.

52 .The traffic requirements shall be in accordance with the Local Traffic Advisory Committee and Council’s recommendations:
(a) ingress to the site from Ricketty Street is to be limited to left in turning movements only, via a separate left turn deceleration lane constructed to RTA requirements by the developer. This lane should be 30 metres in length (including short taper) and 3.1m wide. Construction and associated utility adjustment costs are to be met in full by the developer.
(b) kerb arrangements at the entry to the site should be “engineered” in such a way to prevent (discourage) the possibility of right turn movements room Ricketty Street into the site, and
(c)all egress movements via Gardeners Road, as proposed.

26    To make things worse for any use of the easement for its intended purpose, the Council’s development consent to Durian’s application for use of the site of the easement for car-parking purposes dated 20 September 1988 contained the following condition:

“ 11 . The provision on site of eighty-three (83) car spaces in accordance with the submitted plans. Such spaces are to be adequately paved to provide a dust-free surface of concrete or bitumen, clearly linemarked to the satisfaction of the Council, and are to be freely available at all times during business hours for staff and visitors.

12 . The occupier shall make it a condition of the employment of any person employed on the premises that they shall park their vehicle, if any, in the employee parking provided.

13 . The landscaped area shown on the plan approved by the Council’s Landscape Architect on 23rd August, 1988, shall be landscaped and maintained to the satisfaction of Council at all times.

27    Mr Campbell QC, learned senior counsel for Durian, submitted that the result of these four development consents (particularly when coupled with the orders of the traffic authorities) is that the owner of the dominant tenement has been prohibited from using the easement at all, and the owner of the servient tenement has by the terms of its development consent to use the site of the easement for a purpose consistent with the continued use of the easement by the owner of the dominant tenement. To my mind this submission compels acceptance. 28    I am quite aware of the heaviness of the onus one bears if one endeavours to prove an easement “obsolete”. Nonetheless, the combination of the factors I have endeavoured to outline above seem to me to discharge that onus. 29    I am therefore of the view that the following orders should be made:

1. Appeal allowed.
2. Set aside the declarations and orders of Young J.
3. In lieu thereof, order that the easement for right of way Registered Book 2781 No 959 be extinguished.

4. Order the cross-defendant to pay the cross-claimant’s costs both below and on appeal, but to have a certificate under the Suitors Fund Act.

30 STEIN JA: If ever there was an easement which is obsolete under the terms of s 89(1)(a) of the Conveyancing Act 1919, it is this one. The easement was created in 1964. Until 1981 it was substantially unused for most of its length. Part of it was used for the parking of motor vehicles. These facts are unsurprising given that the object of the easement was to provide reasonable access to and from Ricketty Street. This egress became unnecessary in view of the alternative access via Gardeners Road. From at least 1981 the easement has not been used and there have been significant physical obstructions to its use a brick wall 0.5m high and 15m long; a wire fence along part of the boundary and the right-of-way and a 70cm difference between the elevation of the servient and the dominant tenements. This appreciable drop makes use by the vast majority of vehicles impossible. 31 Added to these facts, there are significant legal restrictions on use of the right-of-way. These include the requirements of public authorities and development consents. They are discussed by Mason P and Meagher JA. 32 All of these factors mentioned above lead to me being satisfied that the easement ought to be deemed to be obsolete because of the changes in the character of the neighbourhood and the other relevant circumstances. Its continued existence would impede the reasonable user of the servient tenement without providing any practical benefit to the dominant tenement. 33 I agree with the reasons for judgment of both Mason P and Meagher JA and with orders proposed by the latter.

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