Gallagher v Rainbow

[1993] HCATrans 179

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IN THE HIGH COURT OF AUSTRALIA

Office of the Registry No BlS of 1993

Brisbane

B e t w e e n -

LORRAINE CHERYL GALLAGHER

Appellant

and

ALLAN ROY RAINBOW and MAREE

ELIZABETH RAINBOW

First Respondents

and

OWEN PETER COALDRAKE and LEE

ANN COALDRAKE

Second Respondents

BRENNAN ACJ

DAWSON J

Gallagher(2) 1 30/6/93

TOOHEY J
GAUDRON J

McHUGH J

TRANSCRIPT OF PROCEEDINGS

AT BRISBANE ON WEDNESDAY, 30 JUNE 1993, AT 12.14 PM

Copyright in the High Court of Australia
MR D.B. FRASER, QC: If it please the Court, I appear with

my learned friend, MR M.J. BYRNE, for the

appellant. (instructed by Bayliss Rodgers)

MR P.A. KEANE, QC:  May it please the Court, I appear with

my learned friend, MR J.J.G. HAYDON, of counsel,

for the respondents.	(instructed by Sly & Weigall
Cannan & Peterson)

BRENNAN ACJ:	Mr Fraser.
MR FRASER:	Your Honours, may I hand to Your Honours seven

copies of the appellant's synopsis of argument,

together with an amended list of authorities.

BRENNAN ACJ:  The list of authorities, as you may know, is

for the purpose of assisting the Court staff to

have the cases available.

MR FRASER: Yes, Your Honour. Your Honour, I have done it

so that Your Honours will be able to see at a

glance where the cases are in the copies that have

been provided. There are some others. that will be

handed up and Your Honours will see that they are

not in the original bundle. While Your Honours

embark upon reading the synopsis I should mention

that there will be an application at the outset of

the argument to seek Your Honours' leave to adduce

some evidence of events occurring since the hearing

before the Court of Appeal concerning what has

happened with the planned subdivision and the land

that the action was concerned with.

BRENNAN ACJ: That is a novelty.

MR FRASER: Well, there have have been some changes since

the Court of Appeal's judgment.

GAUDRON J: Does that go to the relief that you would

seek?

MR FRASER: It goes to the relief - - -

GAUDRON J: Does it go to anything other than relief?

MR FRASER:	No, Your Honour.
McHUGH J:	My recollection is that there was some evidence

put on about on the special leave application, was

there not?

MR FRASER:  Yes, Your Honour, there was reference to a

proposed sale of property.

BRENNAN ACJ: Yes, Mr Fraser.

Gallagher(2) 2 30/6/93

MR FRASER:  Your Honour, it is necessary to go to the

description of what pertained under the scheme of

the easements which gave rise to what has been

described in the outline as the private road.	Can
I take Your Honours to page 259 of the record?
Your Honours, the six-lot subdivision, which is
referred to, comprises lots 13 through to 18.
Lots 13 and 18 have direct road access to

Buckingham Street, but the other four lots do not,

and the scheme that has been adopted - and perhaps

to assist at this point: lot 14 was owned by the

appellant; lot 15, immediately above, was owned by

a Mr Murray, lot 16 was owned by Dr and
Mrs Coaldrake, and lot 17 was owned by Mr and

Mrs Rainbow.

Now, the position is that each of the four

lots contributed a strip of land, about 1.5 metres

wide from the point that appears at the

north-eastern corner of lot 14, to

Buckingham Street, so that there are four slivers

of land which make up the area of the easements, in

so far as they provide practical access to the

stage where lot 15, lot 14 commenced. Thereafter

the easement - or the way that it is structured is

that each of lot 16 and 17 contribute a sliver of

land, a little over 3 metres wide in each case, for

the continuation of the private road. Under the

scheme of the easements, each of the registered

proprietors of the four lots was obliged to pay a

one quarter share of the costs of repair,

maintenance or replacement of what was constructed

thereon, and it is in relation to the proposed

subdivision of lot 16 and 17 that the trial was

concerned.

Now, the position that prevailed in the courts

below was that the trial judge found, on his

construction of the terms of the easements, that
the owners of lots 16 and 17 were not entitled to

continue to use the access easements over, inter

alia, the appellant's land if those lots were subdivided. So, in effect, His Honour concluded	that what was intended was that the right of way go
to the lots as a whole in each case. However,
His Honour refused an injunction for reasons which
are not altogether clear, but when the matter
reached the Court of Appeal, the Court of Appeal
held, in essence, that there was really no reason to refuse an injunction on that construction. But they came to a different construction about what
the right of way entailed, and that is that the
of lot 16 and 17 to three separate parcels. If right of way would be available after subdivision record - - -

Gallagher(2) 30/6/93

DAWSON J: Can I just stop you? Looking at the map, the

easement is over the land comprising lot 13, is it?

MR FRASER:  No, Your Honour. The southern boundary of the

easement is the northern boundary of lot 13.

DAWSON J: Over what land is the easement? What is the

servient tenement?

MR FRASER:  There are four separate areas which are subject

in that way.

DAWSON J: But they represent the dominant -

MR FRASER:  No. They actually represent the servient

tenement in each case. There was a scheme of

reciprocal easements set up so that each of those

four slivers of land that go from the north-eastern

boundary of lot 14 to Buckingham Street, each of

those were the subject of the private road; the

private right of way.

DAWSON J:  I appreciate that, but over whose land did each

of those slivers go?

MR FRASER:  Each of the four lots contributed a sliver.

Those four lines shown there represent the title

boundaries.

McHUGH J: When you say "contributed", you mean they were

actually part of the lot.

MR FRASER:	Yes, part of the lot, Your Honour.
DAWSON J:	I see, 14, in fact, is what appears to be the

last part and a sliver of land going all the way up

to Buckingham Street.

MR FRASER: Right to Buckingham Street, yes. So, they

adopted this scheme to, as it were - each lot has

legal road frontage, but not practical because

1.5 meters in width is not really wide enough for a

car to go up and down.

DAWSON J:	I follow.
MR FRASER:	Particularly, it is a steep block of land and

they needed to make provision by way of a private

road.

DAWSON J:  So each granted to the others an easement over

its sliver.

MR FRASER:  Yes.

If we then go to the next page, this plan of subdivision, which is the plan that found no

favour with the appellant, and she sought to

prevent that plan proceeding on the premise that it

Gallagher(2) 4 30/6/93

involved the use of her land and interference with

her rights as the owner of the dominant tenement in

relation to the other slivers of land that

comprised this private road, and she was successful

in obtaining an interlocutory injunction until

trial and then at the trial, although the permanent

injunction was not given, an injunction, pending

appeal was given. Then the judgment of the Court

of Appeal was given, and it is with events that

occurred after that that the application in

relation to the further evidence is made.

But just while this plan is open for

Your Honours; the effect of the plan of subdivision

was that what was originally lot 16 was to be

divided into 26, 27 and 28 and what was 17 was to

be divided into 23, 24 and 25 and only 28 and 23

would continue to have that direct road access in

the same way as previously existed, but it was

proposed that the use of the private road over the

area of land which was part of lots 14 and 15 that

went to Buckingham Street, would be available for use by the owners of new lots 26, 27, 24, 25, and

23 and 28. So that the net effect of it would be

that six lots would then be present. The terms of

the easement which we will take you to in some

detail contained, within their ambit, a limitation

as to domestic use and enjoyment of the dominant

tenement.

The practical result would be that there would

be, in effect, three times the use for each of the

single lots. So there would be six lots carrying

out domestic activities whereas there were

previously two.

TOOHEY J:  Is that the extent of the complaint, Mr Fraser.

I am not seeking to minimize it by saying that, but

it goes to the extent of user, does it?

MR FRASER:  It goes to,,the identification of whether the

rights that were conveyed by the grant of easements

in each case were to be enjoyed by the land before

and after severance.

TOOHEY J:  No, I was not asking you in terms of the legal

issue, but the practical implications are simply

that the amount of user would increase

substantially by reason of the proposed

subdivision, is that right?

MR FRASER:  Yes, and the liability to contribute to

maintenance and repair would also be for practical

purposes - - -

TOOHEY J: And there was not interference, I take it, with

your client's land?

Gallagher(2)	30/6/93
MR FRASER:	No, except the use or the claimed use over her land as part of the private road.

GAUDRON J: And you claim, I suppose, although it probably

does not enter into it, that there was some loss of

amenity and value associated with your client's

land?

MR FRASER:  Yes. The appellant says she did not see this as

being attractive to the neighbourhood. She did not

want to be further overlooked by new lots; new

houses as they were developed, and there was a lot

of evidence put before the court about putting
fences up and things like that, just to stop her

being overlooked, and there was some valuation

evidence called, and we will have to take you to

the findings about that.

McHUGH J:  How does the contribution scheme work after the subdivision?

MR FRASER:  We do not know, Your Honour. Presumably it is

to be said that each of the original four lots will

still be liable pro rata and that each of the

subdivided lots out of each of those will have to

bear a one-quarter share, so - - -

McHUGH J: But how does your client enforce her right to

contribution against 16 and 17 if they have

disappeared?

MR FRASER:	That is one of the difficulties with the construction that has been adopted by the Court of
Appeal. We do not know how that can be done. It
is said that - one of the prospects advanced in the
Court of Appeal was, because those new owners will
be taking the benefit of the easement, they will accordingly be subjected to the burden of the easement which includes this obligation to contribution. But the obligation to contribute in
terms was cast upon the registered proprietor for
the time being of a particular lot number, and
there will be no such person. So, it is difficult
to see how that argument can exist in - - -

TOOHEY J: Well, I suppose, so long as the original

contractors are available - - -

MR FRASER:	We could sue them.
TOOHEY J:	- - - they can be sued as a matter of contract but, of course, that does not answer the long-term
problem.
MR FRASER:	They probably will not be here in a hundred

years time to be sued, yes. The original granters

could have been sued - no, in fact - it is the

Gallagher(2) 6 30/6/93

registered proprietor of that particular lot, for

the time being - - -

McHUGH J: For the time being.

MR FRASER:  - - - so even that would not be of assistance.

I am sorry, I should not have -

TOOHEY J: Well, yes. I must say, I was assuming that there

was some contract pursuant to which the grants of

easement were registered.

MR FRASER:  No. There was a subdivision and the owners of

the land entered into these reciprocal easements as

part of the subdivision process. Mr Appleby was

one of the subdividers and he gave evidence below, and he was accepted in that respect as to what was

going on at that time. So, there was no particular

contract because they owned the whole of the land,

although, at one point, it seems they did introduce

Mr Murray, who was a party to some of the

easements. It is not clear how Mr Murray came to

be involved, except one may infer that when he came

to buy land from the subdivision the terms under

which he was to buy included being a party to the

easements that were proposed under this scheme.

That seems to be how it would have developed.

Now, Your Honours, the position that was

reached after the Court of Appeal's judgment was

that the injunction pending appeal which prevented

the respondents' proceeding with their plan of

subdivision, came to an end because it was not

extended by the Court of Appeal and they construed

the documents on a basis which did not permit any

further hinderance to the registration to the plan

of subdivision. And the evidence of supervening

events that the appellant desires to place before

Your Honours concerns four matters; that is,

registration of the plan that had previously been

prohibited from registration by the interlocutory

injunctions - if I can describe then as such -

issuing new certificates of title, bearing the

benefit of the easement which, on the appellant's

construction, they were not entitled to; the

subsequent sale of the appellant's property, and

the entering into of new easements with the person

who purchased the appellant's property.

It is submitted that each of those matters are

supervening events. Each of them is relevant in

terms of the relief that can be given, and it is

sought to adduce evidence of those matters by

filing, by leave from this Court, an affidavit

deposing to those matters, and we understand that

application is opposed. But our submissions on it

shortly are that this was a course that has been

Gallagher(2) 7 30/6/93

adopted in the past by the Court. It has been the

matter of considerable debate. For example the

Mickelberg case, in which fresh evidence - in terms

of evidence that was not supervening - of

supervening event was sought to be adduced and it
has also been dealt with in a previous decision of

the Court. So, perhaps it should be confirmed that

the receipt of the evidence is still opposed,

Your Honour.

BRENNAN ACJ: Well, perhaps we need to understand what the

relevant is of that evidence to the issues on the

appeal._

MR FRASER: 

The relief sought in the appeal was for the

injunction and declarations or, as an alternative,
an inquiry as to the damage suffered in lieu of
getting an injunction. If supervening facts show

that it is inappropriate for an injunction now to

be granted, then that is relevant.

BRENNAN ACJ: 

Does it affect the existence of the equity on which you relied to found your injunction?

MR FRASER: 

No, Your Honour, because the jurisdiction to

grant equitable damages in lieu of an injunction

depends upon the plaintiff having had that right at

some stage during the proceedings.

BRENNAN ACJ:  The problem will only arise in the event of

your succeeding in showing the error on the part of

the Court of Appeal.

MR FRASER:	Yes, Your Honour.
BRENNAN ACJ:	Would it be convenient for you to proceed to

do that before we get to the stage of the evidence?

MR FRASER:  Yes, Your Honour. I am happy to proceed in that

way.

BRENNAN ACJ: Well then, follow that course, Mr Fraser.

MR FRASER:  Thank you, Your Honour. Your Honours, I

referred to Mr Appleby. He was involved as a party

to each of the grants of easement. There were six

separate easements, which are exhibits 4 to 9 in

the record - I will not take Your Honours to them

at the moment - and there was a scheme - - -

GAUDRON J: Six separate easements?

MR FRASER: Six grants of easement, I should say. Because

of the way that it was structured they saw it as

desirable doing it in this way. Your Honours,

perhaps the easiest way is to take Your Honours to

page 280 of the record. Now, Your Honour, this is

Gallagher(2) 30/6/93

one of the grants of easement, and Your Honours

will see that Mr Appleby in this case is both one

of the granters and one of the grantees and of

importance here is the description of the servient

tenement. Then there is a description of easement

"G", and at the same time there was a grant in

respect of easement "F". So, obviously these

parties held the requisite titles so that it was

convenient to deal with two grants in the one

document.

Then, at point 8, the grant was expressed to

be subject to these three other easements to other

registered proprietors. Then there was a

description of the dominant tenement and it is
described by reference to its real property
description and certificate of title number. Then

there is a short description of the purpose of the

easement, "See Annexure "A" right of way". Then,

at about point 12, the operative provision:

The granter for the above consideration hereby grants to the grantee the easement herein described and the granter and the grantee

hereby covenant with each other in terms of

the schedule hereto.

Now, if we then go to page 282, Your Honours will

find the schedule which imposes various conditions

relevant to the grant of easement. I will not take

Your Honour to the detail of it at the moment, but

if Your Honours can then turn to the next page

Your Honours will see a short general description

of the purpose of the easement, and one of the

points that does emerge is that there is a

limitation - it is not an unlimited grant because

there is a limitation to the domestic use and

enjoyment of the dominant tenement.

Now, Your Honours, the evidence of Mr Appleby, which was accepted by the trial judge, was that at

the time when the grants were executed no further

subdivision of these lots was in contemplation;

that the proposal was for an exclusive development,

to be created and marketed, and that the proposal

was that the four owners of the subdivision would

share the cost of repairs and maintenance of the

easement access.	I have given Your Honours the
references in the outline.	I will not take
Your Honours to that.

BRENNAN ACJ:  Were there findings made?

MR FRASER:  Yes, Your Honour. The findings appear at

page 454 of the appeal record. Your Honours, I do

not want to mislead you. Those are the specific

findings. The evidence went a little further than

Gallagher(2) 9 30/6/93

the specific findings, but there is no reason to

think that His Honour rejected the other evidence

having accepted that body of evidence.

BRENNAN ACJ:  Do you need anything more than what has been

found?

MR FRASER:  No, Your Honour. Having said that, we urge upon

Your Honours' consideration of the other

surrounding circumstances which were referred to in

evidence, which have not been expressly addressed

by His Honour but, in our submission, you do not

need to go further than what was found as set out

there.

Your Honours, it is convenient at this point

to go to the legislative background to these
particular instruments and, in doing that,
Your Honours will find reference to the provisions
in the bundle of authorities in the appellant's

list of authorities at items 26 through to 28, that

is to the back of the bundle.

Your Honours, in item 27, which contains

references or the copies from the Real Property
Act, it is necessary firstly to go to section 51.

Your Honours will see, under section 51, that:

Whenever any easement ..... affecting any land

under the provisions of this Act is created for the purpose of being annexed to or used

and enjoyed together with other land under the

provisions of this Act the Registrar of Titles

shall record in the (register] particulars of

the instrument creating that easement ..... in

relation to such other land when such

instrument is produced to him for

registration.

Now, while there was nothing express in that which

says that it will also be registered over the

servient tenement, it is implicit in that concept

that the instrument is to be registered in that

way, and it is also to be recorded in relation to

the dominant tenement.

The next provision which is relevant is

section 43, which appears a couple of pages earlier

in the same item:

No instrument shall be effectual to pass any

estate or interest in any lands ..... until such

instrument shall have been registered -

then going on -

Gallagher(2) 10 30/6/93

but upon the registration of any such

instrument the estate or interest intended to

be thereby granted or conveyed shall pass -

Now, that is the provision of the Act that picks up

this concept of identifying what is intended by a

particular instrument. Your Honours, the way the

subdivision is affected is dealt with in

section 119, which appears a little further on in

the same item, and subsection (1):

Any proprietor subdividing land under the

provisions of this Act shall lodge for

registration with the Registrar of Titles a

plan of subdivision of the land in the

prescribed form -

and (b) identifies - delineates the separate

subdivisions and, at the bottom of the next page,

subsection (2) -

(2) The registered proprietor shall endorse on

such plan that he agrees to the plan of

subdivision and dedicates to public use any

new roads -

et cetera. Now, the point about that is that we

then go to subsection (3) which gives power to the

Registrar to deal with it in these terms:

(3) If the Registrar of Titles is satisfied

that the plan is correct and that the

requirements of "The Local Government Acts,

1936 to 1951" (or, as the case requires, "The

City of Brisbane Acts, 1924 to 1951), in

respect thereof have been complied with, he

shall record the same in the register and

thereupon and thereafter the land shall not be

dealt with under this Act otherwise than in

accordance with the plan of subdivision.

Subsection (4) goes on to say that:

The registered proprietor thereof shall, after

the plan of subdivision has been registered,
apply forthwith to take out -

new certificates of title.

So, the key regulation of subdivision is set

out in subsection (3) which imposes upon the

Registrar of Titles an obligation to be satisfied.

BRENNAN ACJ:	Would this be a convenient time, Mr Fraser?
MR FRASER:	Yes, Your Honour.

Gallagher(2) 11 30/6/93

BRENNAN ACJ:  The Court will adjourn until 2 pm.

AT 12.49 PM LUNCHEON ADJOURNMENT

UPON RESUMING AT 2.01 PM:

BRENNAN ACJ: Yes, Mr Fraser.

MR FRASER: 

Your Honours, I was dealing with the relevant

provisions of the Real Property Act. Your Honour
Justice Dawson, I believe, asked me about the

situation with the agreement under which these
easements were created and I responded by saying

there was no such agreement, or at least there is

none in evidence. There is, however, a provision

of the Real Property Act that perhaps bears on that
question and I refer to section 67. It has not
been included in the selection copied for

Your Honours, but I have a copy for each of

Your Honours here, if I may hand tho·se up.

The second paragraph is of assistance, in our submission, because it provides that under an

instrument there will be an obligation that the

person creating the estate will:

do all such acts and execute all such

instruments as in accordance with the
provisions of this Act may be necessary to

give effect to all covenants conditions and purposes expressly set forth or by this Act

declared to be implied in any such instrument.

Now, the relevance of that in context can be seen

when one addresses the approach of the Court of

Appeal, which in short summary was to say, there is

no express provision precluding subdivision,

therefore we must take it that the rights go to the

lots in subdivision thereafter, and I will come to

that. In our submission, the proper course is to

identify what interest has been conveyed rather

than by trying to ascertain what has not been

conveyed and in order to do that one must construe

the instrument as a whole. But, Your Honour, I may

pass from that - - -

DAWSON J: Where does the obligation to maintain this right

of way come from?

MR FRASER:  It is found within the terms of the grants of

easement in each case.

Gallagher(2) 12 30/6/93

DAWSON J: Yes.

MR FRASER: Ordinarily the unpredominant tenement would have

to maintain the right of way, but in these

particular instruments, the obligation is cast upon

the owner of the land, that is the servient
tenement, and he is able to recoup that expense as
to a one quarter share from each of the then

registered proprietors of the other three lots.

DAWSON J:	How is that part of an easement?
MR FRASER:	It seems to have been accepted in the Court of

Appeal, that that is something that runs with the

land and may qualify the grant of the easement that

has been given.

DAWSON J: A covenant to maintain your own land?

MR FRASER: Yes, Your Honour.

BRENNAN ACJ:	What is granted by an easement, Mr Fraser?
MR FRASER:	What is granted by an easement?

BRENNAN ACJ: Yes.

MR FRASER: 

A right to go over someone else's land.

exhaustive statement, as it were, of what is the
subject-matter of registration, or are the

BRENNAN ACJ: 

Is that, I do not say an accurate, but an

covenants which might be included in an instrument

which has that effect also included in the

registration?

MR FRASER:  They must be included if they are expressed to

be conditions of the grant of the easement, because

if you have only a conditional right to go over
somebody else's land, then if you do not meet those

conditions you have no right at all.

BRENNAN ACJ: Well, that would be a condition precedent to

the grant of the easement you are speaking of.

MR FRASER:  A condition precedent to the right to use the

easement. You cannot compel someone, usually, to

carry out conditions which are precedent to the

right to use a right of way, if they do not wish to

use the right of way. But if they wish to use the

right of way, they can be compelled to comply with

those conditions.

BRENNAN ACJ: And is that the sort of condition with which

we are concerned here?

MR FRASER:  Yes, Your Honour.

Gallagher(2) 13 30/6/93

BRENNAN ACJ:	Not just with a covenant to maintain?
MR FRASER:	No, they are conditions of the easement.

BRENNAN ACJ: And no doubt you will take us to them in due

course.

MR FRASER:  Yes, Your Honour. Your Honour, I was going to

move to the Local Government Act -

TOOHEY J: Just before you do, Mr Fraser, you took us to

section 67, which speaks of general covenants to be

implied in instruments, is there any section that

deals expressly with covenants to be implied in

easements?

MR FRASER:  No, Your Honour.

TOOHEY J: Nothing at all in the Act?

MR FRASER: Nothing, no, Your Honour.

TOOHEY J: Thank you.

DAWSON J: And nothing to be implied as to rights of way in

relation to subdivisions?

MR FRASER:  No, Your Honour, and there is no express

provision which deals with the fate of easements in
subdivision; there are in other Acts, that is of

other States, but not in the Queensland Act.

DAWSON J:  So that you could create a land lot and not

offend any of the provisions of the Real

Property Act?

MR FRASER:  Not of the Real Property Act, no. One can

certainly do that, but the difficulty with that

flows from the need to subdivide land in order to

achieve that. That is regulated now by the

Local Government Planning and Environment Act and

that makes provision for access, and specifically,

as is set out in the outline, section 5.8(1) - I am
sorry, this appears in item 26 of the binder that

contains the authorities. Section 5.8(1) says

that:

Without limiting its powers under section

5.1(3) -

which includes a power to consider access -

a Local Authority is to refuse an application

for approval of a subdivision of land unless

each proposed allotment in the proposed

subdivision has access.

Gallagher(2) 14 30/6/93

"Access" appears in the interpretation provision on

the previous page and in section 1.4(1) it is

defined as meaning:

the practical means of entry for persons and

vehicles onto an allotment from a constructed

road which abuts the allotment or, where

permitted by a Local Authority pursuant to

section 5.12, access by means of an easement.

Now, the Registrar of Titles, when he comes to

consider a proposed plan of subdivision, has to be

satisfied that this Act has been complied with as

well. So even though there is nothing expressed in

the Real Property Act, which requires access, by
reference to this he ought not proceed with the

subdivision unless he is satisfied that there has

been compliance with that particular aspect of the

subdivision.

TOOHEY J: Under the Queensland Act can an easement of

necessity arise so as to bind subsequent

transferees of the land?

MR FRASER: That is a vexed question; the ca_se of

Pryce v McGuinness, which is in the list and in the

bundle, suggests it can.

TOOHEY J: 

I am sorry, I did not really want to divert you

from your argument, Mr Fraser; it just occurred to
me it might end up having some relevance.

MR FRASER: Well, it has this relevance, because, at the

end, once these lots are created, the people who

buy these lots have a very compelling argument to be allowed to either be a party to the easements,

if our construction is·correct, in order to gain

practical access to their lots by way of being a
party to a modification under section 181 of our

Property Law Act, because there is a power to

modify the terms of easements, or to seek that easement of necessity that is available. There is a discrete provision that deals with that as well.

Your Honours, section 53 of the

binding successors in titles - it is in the	Property Law Act is a provision about covenants of the Court of Appeal, and nothing turns on that
here, with respect, so I might move on.

The question of the approach to the

construction of terms of easements is suggested by

the learned authors, Bradbrook and Neave, in

item 24, that is, in Easements and Restrictive

Covenants in Australia, to create a conflict as to

approach. And Your Honours will see at

Gallagher(2) 15 30/6/93

paragraph 606, which is the fourth page in item 24

in the bundle, that it is suggested that:

A dispute has arisen in the Supreme Court of

New Zealand as to the correct method of

construing words in a grant of a right of way. And without taking Your Honour to the authors'

resolution of the debate, in essence what it

suggested is involved is a question of whether one
goes simply to the terms of the easement and
construes those words, resorting only to

surrounding circumstances, if there is any

ambiguity or uncertainty, or whether one goes to
the surrounding circumstances at the outset in

order to understand the position in which the

particular proprietors of land were in at that

stage.

There is certainly a conflict in the

authorities, and we have listed in paragraph 3.2 of

the outline, with references, the cases in which
the varying approaches are taken. Your Honours, it

is our submission that construing a grant of

easement, like any other document, any other

contract, requires that you must go to the

instrument in the first instance and then have

resort to surrounding circumstances as an aid in

construction where there is ambiguity or
uncertainty. And perhaps the debate has arisen in

the cases because of the nature of grants of

easement, because they are prone to be expressed in

very general ways; think of a free right of way or
a full and free right of way over one parcel of
land to another. And that sort of generalized

expression has within its confines its own

uncertainties. Even though it might seem on the

face that a right which is expressed to be

unfettered, should be unfettered, there may still

be something from the nature of the land involved

which indicates that it simply cannot be so. That

is, a right of way which is expressed to be

completely unfettered by restrictions or

limitations may be only 2 feet wide, and it would

be bizarre to think that you can drive cars

backwards and forwards along that sort of right of

way.

In our submission, the proper approach is, as

we have set out in paragraph 3.3 of the outline. useful to go to the surrounding circumstances

because of the use of expression "domestic" and he

considered that that may contain within it some
uncertainty, and that is, with respect, a very

sensible approach. The Court of Appeal on the

other hand did not go to the surrounding

Gallagher(2) 16 30/6/93

circumstances at all, made no reference to them,

and preferred to resolve the question of the clear

uncertainty that they found within the terms of the

documents by saying, "Well you would expect to find

something expressed forbidding the rights going to

the dominant tenement after subdivision, if that

were intended."

Now, we have already submitted that that is

not a proper approach. That you must identify what

is intended to be conveyed, not what is not

intended to be conveyed. In order to do that, you

must go to the document as a whole. Your Honours,

I have.summarized those observations at paragraphs

3.4 to 3.5 of the outline and we have also made

reference to the South African decision of Louw v

Louw, as a result of which support was seen for

this proposition by His Honour Mr Justice Pincus in

the Court of Appeal.	In the Court of Appeal Mr
Justice Thomas delivered the major judgment.	Mr

Justice Pincus agreed with that judgment and added some further observations and Mr Justice McPherson

agreed with both of the other members of the court.

Your Honour, when one goes to the decision of

Louw v Louw, and it is referred to - it is item

No 14 in the bundle.	I will let Your Honours read
the headnote.	Now, the plaintiff's counsel made a

reference to a statement from Goddard's, Law of

Easements (5th ed). Unfortunately I have been

unable to locate a copy of the 5th edition and

subsequent editions do not enable me to identify

where that statement was found, but the statement

was to the effect:

Where three people own a farm in undivided

shares which has a right of servitude over
another farm and agree to divide up the farm,
the owners of the divided shares do not
acquire rights over the property owned by the

other owners.

And in the judgment, at page 322 - that is the last

page of the judgment - there was reference to this

submission:

Mr Roux contented himself with quoting a

passage from Goddard on Easements, which may

or may not lay that down. But the question

must be decided by reference to our own law.

And then His Honour goes on to deal with the

principles applicable under Roman law.

With respect, Your Honour, that is a fairly

unsatisfactory basis upon which to resolve a

question of uncertainty within the terms of an

Gallagher(2) 17 30/6/93

easement under common law, and at page 3 point 6 we

have referred to the distinctions that are made

between the common law and the civil law in

relation to easements. One of the more important

distinctions which appears in the pages that we

have referred to in Gale on Easements, is that if

one right is given, that includes all other rights

which are regarded as being lower in

categorization. There are three particular types

of description of the rights of way that are given

whereas, under common law, it is a matter of

construction of the terms to see if the grant of

what might have, under civil law, been a higher

style of right of way, includes the lesser rights

of way. In this case, it exemplifies, in our

respectful submission, the error that the Court of

Appeal fell into, because they did not then go to

embark on a proper exercise of construction of the

terms of the easement, based upon, really, a rather

sweeping proposition that if you have subdivision,

the rights will go.

TOOHEY J:  I take it your argument, Mr Fraser, does not

admit of any midway position. In other words, if

the land to be subdivided was quite substantial in

area and was to be carved up into two lots so that

the increase in traffic would be relatively minor,

you would not, I gather, admit that as a factor;
you would say that the right inures for the benefit

of the original - well, the holder of the land in

its unsubdivided form only.

MR FRASER:  Your Honour, that is our primary submission,

because on the terms of these particular grants you cannot, in our submission, get to any other result.

However, some of the other authorities speak about

looking at that issue in terms of whether or not

excessive user would result, and excessive user, if

that is something that is beyond what was

contemplated at the time of the grant, that will be

an indication that it is not permitted. So, to
answer Your Honour's question, that is our primary

contention but there perhaps is a secondary

position, based on that premise of excessive user.

Your Honours, I will take you now to the terms

of the grant of easement itself and, again, can I

ask Your Honours to turn to page 280 of the record.

I have taken Your Honours through this page briefly

before. The point that is made at paragraph 3.7 of

the outline is that there is a description of a

"dominant tenement". Now in terms of the form it

is used, there is reference, or provision at least,

for including the volume, folio, county parish and

description, but there is nothing that prohibits

addition of the words "or any part thereof"

Gallagher(2) 18 30/6/93

appearing on the first page of this grant; nothing

at all in the Act or in this instrument itself.

BRENNAN ACJ: And what would be the certificate of title on

which it would be registered if those words were

added?

MR FRASER:	It would still be registered over - or the notation would be made that this grant has been
given. When the grant is registered over the servient tenement, it would be noted on this
certificate of title.

BRENNAN ACJ: Well, it is not a mere notation, is it, it is

a registration?

MR FRASER:  I am sorry, it would be, to use the words in section 51:

shall record ..... particulars of the instrument creating that easement or incorporeal right in relation to such other land -

so he records the particulars of it.

BRENNAN ACJ:  I see.

TOOHEY J: That is on the dominant tenement?

MR FRASER:	On the dominant tenement.
TOOHEY J:	The servient tenement bears it as an encumbrance on the title.
MR FRASER:	Yes, that is correct, Your Honour, and I had

referred earlier to the feature that section 51

does not in terms require registration, but when

one looks at section 43, unless it is registered,

there would be nothing created, so it is implicit

in that that there must be registration of the

grant of easement over the servient tenement in

order to protect the rights of the dominant

tenement. But our submission here is there is no

reason to think that there could not have been a

better description of the dominant tenement set out

on the first page of the grant of easement.

If we then go to the enlarged panel, the first

thing to note is that there is a reference - at

page 283 of the record, I am sorry, Your Honours -
to the persons who are benefitted by this

particular grant or this particular right of way.

"The Grantee" "and the Registered Proprietors" "and

occupiers for the time being of the dominant

tenement." It is significant that there is no use

of the description "for the time being of the land

contained within the dominant tenement"; it is just

Gallagher(2) 19 30/6/93

expressed to be "of the dominant tenement" and

there is no qualification of that by reference to

any concept of division of it.

Your Honours, we have set out towards the end

of the outline, an analysis of the enlarged panel -

it is the third last page - breaking down the words

that are used with some annotations, so that it is

perhaps a little easier to follow. The point that

must be made here is that the right of the other

grantees of the right of way, that is, the owners
of the other two lots, is dealt with as an
encumbrance in respect of this grant. So, in other

words, they do not claim under the grantor's right

which is reserved under the enlarged panel. I hope

we have made that clear. The grant of easement is

subject to other grants; the right that the grantor

has to continue to use the way in common with the grantee, under each particular easement, does not

permit the persons who are the other grantees to use it; those persons are permitted by virtue of the other grants.

Going then to the analysis, Your Honours. The

right of way for the grantee and the registered

proprietors for the time being of the dominant

tenement and occupiers for the time being of the

dominant tenement and all persons authorized by

those persons, together with all others having the

same rights as the grantee, but in common with the

grantor and every other person who is for the time

being the registered proprietor of the servient

tenement, at all times day or night and for all
purposes ordinarily incidental to or connected with

domestic use and enjoyment of the dominant tenement

or any part thereof. Then there is a description

of how that right of way may be exercised.

The definition in clause 6, if I can take

Your Honours to the schedule, there is a definition

about "context", about who the grantee or the

reference to the grantee means. It is really inappropriate because otherwise you have got	surface reference. In other words, if the
definition of "grantee" is meant to be used instead
of the word "grantee", then the words following "and the registered proprietors" "and occupiers",
et cetera, have no meaning. Not that that
particularly matters for our case, because our case
depends upon the reference to the dominant tenement
really.

If I can then return to the argument, having

taken Your Honours to the breakdown of the words

used in the enlarged panel, the rights have to be

enjoyed in common. If we can then turn to the

covenants, which are expressed to be conditions of

Gallagher(2) 20 30/6/93

the easement, the covenants involve, as covenant No

2:

a condition of the easement that the costs of

maintenance and repair of the servient

tenement -

bearing in mind that the granter has to maintain

doing it -and repair it - this just relates to the cost of

shall be borne by the Registered Proprietors

for the time being of lots 14, 15, 16 and 17,

as to one quarter each respectively.

Now, there is no reference to the registered

proprietors of the land comprised in lots 14, 15,

16 and 17; it is the registered proprietors, for
the time being, of those specified lots. And they
are not to bear it equally; they are to bear it as
to one quarter each respectively.

Your Honour, there is a provision which deals with "dispute resolution" in paragraph 4 - that is

not a major point, but one would expect if this was

to go on, ad infinitum in terms of subdivision,

that would be an unusual provision to find - and

there is the concept recognized by the learned

trial judge that each of the four owners, each of

the four lots contributed an equal part of their

land for common use. In the event, of course, the

owners of lots 16 and 17, for practical purposes,

contributed a greater amount in order to continue

on the access to their lots, but that is qualified

by the obligation of the owners of each of the four

lots to pay a quarter of the costs of maintaining

even that. And one may think that that is

consistent with the view that although the owners

of lot 14 will not be going up to lot 16 or 17 for

domestic purposes, that is, domestic use of their

lots, it is still an idea, a scheme, where it is

all to be paid for equally, because it is one

private road which has to be maintained, and it is

convenient to regard that as being maintained by

the four of them.

BRENNAN ACJ:  Mr Fraser, am I right in thinking that the new

registered proprietors of subdivisions 26, 27, 25

and 24 no longer have any title to the battleaxe

handle of their respective blocks?

MR FRASER: That is correct, Your Honour.

BRENNAN ACJ:  So that they, though they might be described

on one view as occupiers for the time being of what

was lots 16 and 17, are no longer registered

proprietors of a servient tenement?

Gallagher(2) 21 30/6/93

MR FRASER:  That is correct as well; they are not the

registered proprietors of anything to do with the

land that was the subject - the servient tenement is the area of the easement; that is specified in the grant.

BRENNAN ACJ: Yes.

DAWSON J: And that might end up being all the land that is

held by the previous proprietor of, say, lot 16,

that little sliver.

MR FRASER:  If he keeps that block, which is still attached,

or of which that sliver forms part, yes.

DAWSON J: But he would not. If he subdivided and sold off

all the subdivided lots, all he would be left with

is a sliver, is it not?

MR FRASER:  No, he would not be left with anything if he

sold - for example, looking at page 260, if the

owner of lot 28 sold, he would be left with nothing

because that sliver is part now of lot 28.

DAWSON J:	It is part of one of the lots?
MR FRASER:	Yes, Your Honour.

DAWSON J: Yes, I see.

MR FRASER:  There is no separate lot cut off to retain the

benefit of the easement, or burden it, I should

say.

BRENNAN ACJ:  So that there is neither privity of estate nor

of contract, on any view, in relation to some of

the new owners of the· parcels?

MR FRASER:	Yes, Your Honour, that is correct. Indeed, looking at that plan, it is difficult to see,
without a new easement or grant of easement, how
the owners of lots 24 and 25 go over the balance of
lot 23. They presumably need a right to go over
the balance of lot 23, but we do not understand how they do it. Of course, we have not come to the
fresh evidence yet. But it just makes it
completely unworkable, in our submission, to come
to the result that the Court of Appeal did.

Your Honours, as far as the way that

conveyancing practice has developed, we have given

a reference to the Australian Encyclopaedia of

Forms and Precedents, the second edition and the

third edition. In the first of the forms that we

have referred to in the outline, the way that it is

described - this is a grant of a right of way in

general terms under Torrens Title land.

Gallagher(2) 22 30/6/93

Unfortunately, the copies do not appear in the

bundle that I have handed to Your Honours, but I

just read it to Your Honours:

In consideration of -

money -

paid by the grantee to the grantor ..... the

granter as beneficial owner hereby grants unto

the grantee Full right and liberty for the
grantee and his successors in title the owners

and occupiers for the time being of the second

land or any part -

So they actually qualify the dominant tenement by

adding the expression "or any part" of the dominant

tenement, whey they are identifying to whom the

grant is given. That is an approach that was kept

up in the third edition, and I have given that

reference in the outline.

The only point in the document that creates

any jar at all in this approach is the use of the

expression "or any part thereof" which appears in

the enlarged panel. That appears at about the

fifth-last line. So it is:

at all times, day or night, and for all

purposes ordinary, incidental to or connected

with domestic use and enjoyment of the

dominant tenement or any part thereof.

The submission we make, and the primary

submission, is that it is, clearly in the context,
descriptive of and referable only to the use that

may be made as distinct from the entitlement to

use. It cannot be read sensibly as identifying any

aspect of what is the dominant tenement because it

is part of the dominant tenement.

So to say that that is the covenant and that

that suggests that there can be subdivision and the

covenant still goes, is to create an absurdity

because every successor in title who owns a part
will have the same right, that is, to the dominant

tenement or part of it, and it will disappear into

the distance if one looks at it in those terms.	It
is an ad infinitum argument. In other words, how
can there be a covenant which qualifies the dominant tenement but gives a right of way to part

of it as indicating that it can be further severed.

I mean, it just seems, with respect, not to go the

way at all that the Court of Appeal thought that it

assisted them to.

Gallagher(2) 23 30/6/93

We have suggested a response to that, to make

sense of it. That is, that there may be some

staged construction of domestic amenities. For

example, assume that the owner of lot 16, before he

built a house, wanted to build a tennis court.

Now, it might be argued that that is not incidental

to the domestic use of the land, but it would

certainly be incidental to the domestic use of part

of the land because he might later say, "Well, I

want to build a house".

It would be different if he wanted to build a

tennis court so that he could later have a

commercial tennis complex or something like that,

but it just puts beyond any doubt that it is not

just limited to the actual building of the house so

that you can then live there, but so that you can

do it in stages if you wished. And as long as you

were going to have a house there eventually - it

was not for commercial purpose - it would be all

right.

Now, Your Honour, there may be other reasons, but in terms of looking at the document as a whole,

that seems to make senses of the instrument. It

does not seem to jar at all yet, when one

approaches it the other way, the substantive

covenants are quite inconsistent with the notion

that this right of way goes to the lots and

subdivision.

Your Honours, we have considered the question of an approach of construing the grant against a

granter, if there are any difficulties in

construction, and that at first blush does seem to
be an attractive process, but here there are six

grants and the grants are subject to grants already

in each case.

The way of construction is not to approach it

in that way because it is a scheme under which a

private road is created and it is too simple, as it

were, to go off and say, "Well, any ambiguity,

construe it against the grantor in this particular

easement". It just does not work, and it is not a

convenient or sensible way of doing it,

particularly when one goes to the surrounding

circumstances of this particular grant.

Your Honours, we have analysed the basis upon which we say that the scheme was constructed in

paragraphs 3.8 and 3.9. There is this concept of

reciprocity. Ownership of a strip of the private

road was an essential pre-requisite to use of the

whole of that road. In other words, that is the

consideration for the use of it. The owners of the

subdivided lots who have no interest at all in the

Gallagher(2) 24 30/6/93

ownership of the private road have not contributed

by way of consideration in that way at all.

One would expect, given this arrangement, that

if there was going to be a significant change that

you would need a further bargain, and the

legislative framework provides for that.	I have
already referred to section 181.

Your Honours, we refer to the construction

approach in relation to restrictive covenants and

Torrens land. May we refer to the first of the

authorities in the bundle, that is Re Arcade Hotel

Pty Ltd, No 1 of the bundle. In approaching both

the Victorian case and the New South Wales case

referred to there, it appears that the various

definition sections are not different in any

material particular, so that we may approach the

principles expressed there as being of general

application, or at least of some application to

this particular case now.

This was a case about whether restrictive

covenants carry through to the subdivided parts of

the original land, the subject of the restrictive

covenant and, in this case, Justice Lowe delivered

a judgment with which Justice Gavan Duffy concurred

and Justice Sholl dissented. But what is referred

to, at page 277 of the judgment of Justice Lowe, is

this:

The covenant must be expressed to be for the benefit of clearly identifiable land. To

enure for the successor's benefit it must, as

a matter of construction, refer to each and

every part of the dominant land.

And he goes on, at about line 15 -

I do not doubt that the covenant in each

instance is for the benefit of clearly

identifiable land nor do I doubt that it

question that remains is - does the covenant
on its proper construction refer to the

dominant land only as a whole or does it refer

to the whole and every part of the dominant

land?

touches and concerns the dominant land. The

Then there are some references.

Reference to Preston & Newsom's book on

Restrictive Covenants ..... conveniently

illustrates by decided cases that conveyancers frequently use precise language to ensure that

the covenant taken is for the benefit of each

and every part of the land.

Gallagher(2) 25 30/6/93

Then there is some discussion further on and, at

the bottom of the page, at about line 55:

There is nothing expressly to indicate that

the benefit of the covenant is to extend to

each and every part of the retained land.

Over at page 278, about line 10:

But it is said that the words "registered

proprietor or proprietors for the time being

of the land ... excepting thereout the land

llereby transferred" point to the intention to

protect owners of portions of the land

retained. If this were the only meaning to be

assigned to these words the argument would turn the scale in favour of a distributive construction, but I think it is not the only

meaning to be assigned to these words. They

apply equally well to the not uncommon case of
more than one person being the proprietors of

the balance of the land.

TOOHEY J:  Does that mean that if, for instance, somebody

about to create a subdivision takes a restrictive

covenant that the purchaser will not build above a

certain height because, for instance, the land to

be sold is between the land to be retained and the

sea or a river, and then the owner of the retained

land sells off another part, what might be called

the dominant tenement, that the purchaser of that

portion of land cannot enforce the restrictive

covenant?

MR FRASER:  That would appear to be the result in this case,

Your Honour, yes. It depends upon specification.

I mean, again, it would depend on construction.

TOOHEY J: 

I mean, in the absence of some clear provision in

the restrictive covenant that it attached to
portions of the land as well as the land as a

whole.

MR FRASER: That would seem to be the result, yes. And,

indeed, the person buying the new lot can search

and find that out for himself. The position in Victoria has been changed by legislation now, I should add - I think it is section 79A of the

Conveyancing Act, and there is an express reference

in the amendments to the "every part thereof" being

included in such a covenant.

Your Honours, in the dissenting judgment of

Justice Sholl, we just draw Your Honours' attention

to a passage at page 291. His Honour goes into a

lengthy discussion of the English cases and then

says, at page 291 about line 22:

Gallagher(2) 26 30/6/93

Is there then some particular virtue in

the addition of the words "or any part
thereof" to the description of the benefited

land? Why should that be so? Unless there is

something in the wording of the covenant

clearly restricting those entitled to the

benefit of it to the person or persons from

time to time holding a whole property in a

single ownership, why should the benefit of

the covenant not be understood to be

distributed over the benefited land -

and t~en, going on at about line 32 -

There have been cases in which ownership of a named "estate" has been referred to, which have been so treated.

Then, at about line 37:

"the said Emily Harriett Ballard her heirs and

assigns and successors in title owners from

time to time of the Childwickbury Estate -

and again, at about line 40 -

"and other the owner or owners for the time

being of the Ratton Estate -

then going on further -

The courts in those cases treated the words as describing the beneficiaries of the covenant

in terms which could not properly be applied

to any but the owners of the whole "estate" in

one ownership, and no doubt a covenant could

easily be drawn to express such a requirement,

eg by referring to "the registered proprietor

or proprietors for the time being (in the one

ownership) of all that piece of land," etc.

But why do not the mere words "registered

proprietor or proprietors for the time being

numbered so and so" adequately describe the

subsequent registered proprietors of portions

of such land -

of the land comprised in Certificate of Title

well, that might well be right, although it is a

dissenting view, but we do not have that here. We

do not have the owners of the land, we have the
owners by reference to the registered proprietors
of particular lots. It is not the land comprised
in the lots, it is of the lots, so why then would
it be necessary to add the words that appear in

parentheses in the example cited by

Mr Justice Sholl.

Gallagher(2) 27 30/6/93

The same approach was taken in Ellison v

O'Neill, which was case No - - -

BRENNAN ACJ:	Can I just take you back to that. Whatever you can be a registered proprietor of, that is the
subject-matter of the clause, is it not?
MR FRASER:	Yes, Your Honour.

BRENNAN ACJ: There is no real dichotomy between saying

"registered proprietor of land" and "registered

proprietor of a lot". You can only be a registered

proprietor of that which is registrable.

MR FRASER:	That will be the result but, in terms of the construction process, if that description is used
rather than the description of a registered proprietor of the land comprised in lot such and
such, then one can see how more readily the reference to the registered proprietor of the land
will lend itself to subdivisional rights.
BRENNAN ACJ:	Why is it not taken to be "registered

proprietor of an estate in fee simple in the land

comprised in certificate of title such and such

being the land known as lot 20"?

MR FRASER: It could be, in context, Your Honour. It would

depend upon the construction of the instrument as a

whole. That is the only answer we can really make.

BRENNAN ACJ: Yes.

MR FRASER: Although perhaps, before passing from that, I

should give Your Honours specific references to
passages in Ellison v O'Neill where the same
question is broached. As I said, that is case No 7

in the bundle. Again, a question about subdivision

and restrictive covenants under Torrens Title land.

At page 249, about line 25:

If they are to be taken as a compendious

reference to such subdivided portions of the
land benefited as the local authority may

permit (in accordance with the wishes of the
covenantee or his successor) it to be
subdivided, then in my opinion there should be

clear words in the covenant to express such an
intention.

Then going on further -

In the second place I am unable to

construe the wording of the subject covenants

"the benefit ... shall be appurtenant to the

land in Certificate of Title Volume 7521 Folio

55" as meaning "each and every part" of the

Gallagher(2) 28 30/6/93

land comprised within such folio. To my mind

such a phrase simply means what it says namely

the -

area in the plan on the relevant certificate of

title. Then going on, at about line 40 -

It would have been so easy for the covenantee

when drafting the covenant to extend the
benefit to (for example) "each and every lot

into which the land benefited may hereafter be

lawfully subdivided".

Perhaps that is one of the answers to this
question: it would have been so easy to do it in a

clear way, why did they choose to do it in this way

if the result contended for by the respondents is

correct.

In the dissenting judgment of Justice Jacobs

at page 258, His Honour, having expressed his

approval of the approach of Justice Sholl, did say

this, at the bottom of page 258, about line 55:

It may be that different problems arise

when the benefit is conferred on the owner for

the time being of certain lands. Such a

phrase may upon its face regard the lands as

an indivisible whole because of the reference

to ownership. I express no concluded opinion

upon this point.

Now, in our submission, this instrument exhibits

all the weaknesses that were acknowledged in those dissenting judgments and, of course, if one simply applies what the majority did then there is no

question but that the right does not go after

subdivision. There is no reason to think that one

would construe a covenant which related to a

restrictive covenant any differently to a covenant

which forms part of an easement or grant of an

easement. It is the same language that is used, it

is the same Act.

Your Honours, we have referred to the approach

of the courts to omitted easements and we have

given some references.

BRENNAN ACJ:  Can I just interrupt you for a moment. The

present registered proprietors of those subdivided

lots that I referred to before, 25, 24, 26 and 27,

do they have any present right of easement over

land which is now part of lots 28 and 23

respectively?

MR FRASER:  No, Your Honour. If I understand Your Honour's

question correctly -

Gallagher(2) 29 30/6/93

BRENNAN ACJ:	In other words, they have not got any - the old subdivision of lots 16 and 17 contained land
which was, vis-a-vis the surrounding neighbours,
servient tenements.

MR FRASER: Yes, Your Honour.

BRENNAN ACJ: 

But are they servient tenements in relation to

the present registered proprietors of the
subdivided lots of those original subdivisions?

MR FRASER: Yes, Your Honour, that is the result. Those are

events that have occurred after the Court of Appeal

and I do not want to trespass on that aspect, but

that is the consequence of the result contended for

by the respondents.

BRENNAN ACJ:  I do not understand that. I mean, the present

registered proprietor, for example, of lot 28, have

they granted a new easement?

MR FRASER:	To lots 27 and 26, yes, that was proposed.
BRENNAN ACJ:	They have done that?

MR FRASER: Yes, that was done, but that means that by

virtue of that right it said the right of way may

be exercised over what is still lot 14 and lot 15,

by the owners of lots 26 and 27.

BRENNAN ACJ: Yes, I understand that.

DAWSON J:  So that they have got an express grant of

easement over one sliver, but not over the other

three.

MR FRASER: Well, no, they have got an express grant over

the land - well, in fact, looking at lot 27 on

page 260, that will not help them to have the

original sliver because it stopped further down the

plan. They have got to have a right to go from the

southern boundary of lot 27 to get to the area of

the original sliver. Of course, the slivers have been - - -

BRENNAN ACJ: Well, that is what I am asking.

MR FRASER: Yes, they both had to get that right, yes.

BRENNAN ACJ: But they have got it?

MR FRASER:  Yes, Your Honour.

TOOHEY J: Would they have a frontage to St John's Avenue,

in any event?

MR FRASER:  No, Your Honour.

Gallagher(2) 30 30/6/93

BRENNAN ACJ: But does that mean that the grant of the

easements to, let us say, the registered proprietor

of 26, is subject to the easement already on the

title in favour of the registered proprietors of

13, 14 and 17.

MR FRASER:  I think 14, 15 and 17, yes, Your Honour. Yes, I

am sorry, that is right, yes, Your Honour.

BRENNAN ACJ:	So that they do not, as it were, rank equally.
MR FRASER:	No, Your Honour.

BRENNAN ACJ: Whatever that means.

MR FRASER: Well, not any more, they do not. There is an

argument, of course, that they are not exercising
the rights in common because they do not own any of

the land that is to be used, but then that did seem

attractive in Jelbert v Davis that this idea of

exercising rights in common involved some question

of the quantum of use that you could make so that

you did not interfere with others' rights to use.

The point being made was that it is all very well

for a person who owns part of the private road to

use it in common with another person who owns part of the private road but, if a person wishes to use

it who has no ownership rights at all, how can it

be exercised in common with people who are in a

different category. Again, that is not a strong

point but it is a point that rather points away

from the result that was - - -

BRENNAN ACJ:  Is there anything in this argument that if I,

being the owner of a servient tenement, grant an
easement being right of way to A, Band C, then it

is a derogation from that grant to grant it also to

D, E and F?

MR FRASER:	Only if it is inconsistent with the rights you have already granted away and yes, it would be, if
that increased the burden that A, Band Chad
agreed to share as part of the condition of taking
that easement, that is the repair, because you
would be saying to A, Band C, instead of four of us using that right of way, you are going to now
repair or pay for the quarter of the costs of
repairing the use that is exacted by five people.
So to that extent it would be a derogation from
grant.
BRENNAN ACJ:	Has that problem been ventilated in any of the

cases?

MR FRASER:  It was ventilated in this case, Your Honour, but

it did not get very far in the Court of Appeal.

There was an implied obligation not to derogate

Gallagher(2) 31 30/6/93

from the grant and you would not have anyone who

was capable of meeting a description of the repair.

That was part of the approach.

BRENNAN ACJ:	None of the cases that you have cited here?
MR FRASER:	No, Your Honour.
BRENNAN ACJ:	I see.

MR FRASER:  I do not think so, Your Honour. We have not

encountered cases where there is a grant of

easement subject to other grants of easement. It

is a very unusual situation in terms of, I suppose,

an easement law generally. Normally you find a

right of way over parcel A to get to parcel B, but

here you have got this unusual set-up of

contributing slivers to get road access and that is
consistent throughout the whole of this particular

estate and seems to be a form - I should not go

beyond the evidence before the court.

Your Honours, we do not want to do any more

than just give Your Honours the references that we

have in 3.12 to the approach to omitted easement.

This is relevant in terms of the exception to

section 44 and the debate about what is entailed

there, but we see consistency in the approach of

having to construe what is conveyed in order to

ascertain whether the easement is omitted. In

other words, how can you say whether the easement

ran with that particular parcel of land unless you

can ascertain that it was intended to go? And if

you do the reverse process that the Court of Appeal did, in terms of saying what is not prohibited, you

cannot come to that result. It is just perhaps a

matter of consistency.of interpretation,

Your Honours.

Your Honours, at para 3.13 we refer to the questions of inequality and excessive user.

Specifically we refer to the maintenance burden.

If one looks at this, the proposal, the changes to

be made, is going to result in an increased cost

eventually to the owner of the servient tenement of

lots 14 and 15. It just must. And that results in

a situation of inequality which is not seen in the

terms of the covenants to which the easement was

expressed to be subject.

Excessive user: there is some evidence about

a three times use that will be made by traffic and

that will have to be repaired sooner rather than

later. The learned trial judge found that these

were not particularly significant risks but in

terms of legal concepts they exist.

Gallagher(2) 32 30/6/93

Your Honours, we have referred to Bower v

Hill, that is case No 3 in the bundle, and this was

a case which concerned a person who claimed a

right, on the fiction of lost grant, as an owner of

part of what was previously the dominant tenement.

The dominant tenement was the occupier of the

King's Head Inn or yard - that appears at page 133

of the report. Then, at page 134, about the fifth

last line - this is referring to the contention

that the right to use the grant passed to each of

the owners of the subdivided portions:

We think, however, such a construction of the grant would lead to very unreasonable

consequences.

Then, going on further, over the page -

the consequence would be, if the Plaintiff

were held to be entitled to the right of

passage, that two different persons would be

entitled to use it for themselves and their

servants with boats and barges, and indeed as

many different persons as possessed any share

of the frontage. This would be an

unreasonable construction against the granter,

who may have been contented to grant the right

to the occupier of the King's Head Inn and

yard, from his knowledge of the degree of user

which would follow from the grant when so

limited.

Now, that is the point. It is, again, an

indication that construction against the grantor

will depend upon what was within the reasonable

contemplation of the parties at the time of the

grant. And that case exemplifies the result that

we submit ought to follow here.

Your Honours, we have given a reference to

Jelbert v Davis. That is, again, about excessive

user, and how that might qualify what was otherwise

an unlimited right of way. That is a case where

somebody wanted to convert the dominant tenement

into a caravan park and the owner of the servient tenement said that he had a right to exercise his

rights in common with the owner of the dominant

tenement and he would be forever impeded in that

use and he could not use it in common with the

owners or with the caravan park users because there

would be 200 of them and only one of him and they

would always be blocking his access.

Your Honours, the best case for the

respondents appears to be Newcomen v Coulsen. That

is No 16 in the list. It is a decision based upon

the Inclosure Act of England in the 1870s and it is

Gallagher(2) 33 30/6/93

a decision of Vice Chancellor Malins, who did not

treat it as being strictly speaking an easement

case but, at page 141, there is a discussion on the

point by the Master of the Rolls:

The first question to be considered is, what

is the effect of the grant? It is not very

artificially worded, but we must look at it

with regard to the nature of the case. The

inclosure was carried out in a way that was

common in former times, by a deed to which all

the allottees are parties.

The first point made was this: It was

said that as this was a grant to the owner and

owners for the time being of the lands, if the

lands became severed the owners of the severed

portions could not exercise the right of way.
I am of opinion that the law is quite clear
the other way. Where the grant is in respect

of the lands and not in respect of the person,

it is severed when the lands are severed, that

is, it goes with every part of the severed

lands. On principle, this is clear. It never

could have been contemplated in the case of an

award like this that the property was never to

be divided, nor is it to be contended that if

a man died and left two or three daughters co-

heiresses, and they partitioned the estate,

the right of way was lost.

Now, the key there is that it is in a case like

this, because it was clearly a case where a right

of way was to be given, in unqualified terms, to

the owners of the land comprised in the dominant

tenement. So it is perfectly natural that when

that occurs the result will ensue. But where you

find specification of a limit to the grant,

specification of the dominant tenement and language

quite inconsistent with that occurring, then it is

simply a matter of construction and ascertaining

the intention of the parties.

DAWSON J: But the spirit of what is being said there is

rather against you, is it not, in the sense that
really what you are objecting to is a further

subdivision and you are using the right of way, or
attempting to do so, to prevent that, which is
rather like the tail wagging the dog? There are
other means of providing for restricting further

subdivision.

MR FRASER:  Your Honour, the answer to that is this, we

respectfully submit: if you want to preserve a
right of amenity or privacy, you must be in a

position where you have some legal right which you

can enforce that results in that. For example, you

Gallagher(2) 34 30/6/93

might buy acreage property and build in the middle

of the acreage property so that you are not
disturbed by traffic. If you have a legal right

which has the consequence·of preservation of
amenity and it means that those around you cannot

subdivide, then you have achieved that purpose.

With respect, to say that it is the tail wagging

the dog -

DAWSON J: Well, a little sliver of land wagging a big

sliver.

MR FRASER: Well, it certainly happens, I suppose,

Your Honour, but that is how they chose to be in

this situation. Of course, the court can impose

something quite different under section 181 of the

Property Law Act, if it becomes inconvenient as

time goes on.

DAWSON J: So the answer is, if they look to this for their

protection they are entitled to do so.

MR FRASER: That is exactly the point.

DAWSON J: Yes.

MR FRASER:  Your Honour, there is a discussion of the point

in Stroud, which is the authority at No 22 of the

bundle. At page 173, which is the second-last of

the pages referred to - this is a 1934 text - what

the learned author there says is - it is point (5)

on the page:

On a severance of the dominant tenement, a

right of way will attach to the severed
portions in accordance with the rule as to

easements in general, but subject to the

condition that the occupants of the severed
portions can bring themselves within the terms

of the grant (if any) and the limits of the

right as previously existing.

That seems to be, with respect, a clear statement.

In other words, if they come within what was conveyed, then they are entitled to exercise the

rights. It is not a question of saying what was

prohibited.

Your Honours, item 25 of the bundle includes

copies from Mr Robinson's text on Drafting. At
page 124 he suggests:

It is a matter of construction of the

terms of a grant whether or not the grant

enures for the benefit of the whole of the

dominant tenement or for that land and also,

Gallagher(2) 35 30/6/93

in the event of the owner dividing the land

up, for the benefit of each part.

Then there is a reference to the way it is done; then there is a reference on page 125 to the:

traditional device is to add after the

description of the dominant tenement the words

"each and every part thereof".

There is a reference to Ellison v O'Neill. But the

point that emerges from that is that in ordinary

conveyancing practice, if you wish to achieve that

result, you should say so.

BRENNAN ACJ:  Mr Fraser, with respect to the relief which is

the matter you are about to come to, I imagine, and

the question of further evidence, is there any

reason why, if you should succeed on the argument

thus far, the appropriate order would not be to

remit the matter to the Court of Appeal to consider

what relief if any in the circumstances of the case

should be granted?

MR FRASER:  I suppose the only difficulty about that - and I

am just responding to Your Honour's question - is

that the power of the Court is to make the order

that ought to have been made. It is our submission

that an injunction should have been given. For

reasons which will become apparent, it will be a

result that that is inappropriate. It is then our

submission, well, we only have a remedy in damages, and that is the remedy we ought to have got at that

time. Nothing can change the facts that have
occurred between now and then so, I suppose,
thinking out loud in that way, there really is

nothing I can say that· would be wrong with that

approach.

BRENNAN ACJ: Yes, and so that if you were to have damages

as an appropriate remedy they could be assessed in

the supreme court?

MR FRASER:  Yes, Your Honour. Indeed, the relief that we

would seek is that there be an inquiry as to

damages in lieu of the obtaining of the injunction,

and we have referred to some of the cases on that.

The only matter is that I apprehend my learned

friends have an argument that we suffer no loss if

we have sold the property. That is an argument

that could be addressed if it is raised, I suppose.

BRENNAN ACJ: Yes.

MR FRASER: But, to respond to Your Honours, there is

nothing I can think of now that suggests that is

the wrong course.

Gallagher(2) 36 30/6/93

Your Honour, I might conclude then by saying

that the construction found by the Court of Appeal

really flies in the face of the intention of the

granters. They found that it was a breach of the

covenant or the right of way to permit surveyors to

go up and down the easement, therefore there is

nominal damages for the trespass, but that does not

preclude the result that you can subdivide the lots
because you might be able to get the surveyors in

some other way; by flying them in by helicopter,

perhaps, or by taking them over some neighbours'

land or something like that.

With respect, that is another indication as to

why that result cannot possibly be so because, if

you have to go to absurdities in terms of what is
legally possible, then that rather seems to

indicate that you are going the wrong way in terms

of the construction. The other result in terms of

the - - -

BRENNAN ACJ:  What is the injunction which you sought to

have? What, in your submission, is the appropriate

relief that you ought to have had?

MR FRASER: Well, declarations, as it were, establishing our

rights, or the limitation of the rights which were

available to the subdividers and an injunction

restraining the subdividers proceeding with that

plan of subdivision because it depended upon the access. So it is really set out in those terms.

And also - - -

BRENNAN ACJ:  When you say proceeding, you mean an

injunction to restrain them from seeking

registration?

MR FRASER:  Yes, Your Honour, "from proceeding with the

registration of that plan of subdivision", is the

way it would have been expressed.

BRENNAN ACJ: Yes.

MR FRASER: Also, I suppose, from derogating from their

grant by virtue of the feature that it would be a

nuisance for them to permit others to use the

servient tenements for which they are responsible,

when they had no right to do so, having encumbered

it to us.

BRENNAN ACJ: That may raise a different issue, may it not?

MR FRASER:	Yes, Your Honour.
BRENNAN ACJ:	In the sense that it may be a question of

whether or not, after subdivision and, indeed,

after sale, there was some obligation on the

Gallagher(2) 37 30/6/93

defendants to take some steps with respect to

restraining the use of the servient tenements by

those to whom they had sold.

MR FRASER:  Yes. It is difficult to come to grips with how

they would do it, Your Honour, but I suppose that

is a correct approach, yes. I must say, I am

having some difficulties with that situation, as to

how they could give rights and then restrain the

users of those rights from exercising them.

BRENNAN ACJ:  Your primary submission is that they should

have been restrained from seeking to have

registration of a plan of subdivision.

MR FRASER:  From putting themselves in that situation. Yes,

Your Honour. And, in relation to the repair aspect

to which we have referred, on the cost sharing

arrangement under the original scheme, we would pay

a quarter for effectively a quarter of the use. If

this subdivision proceeded and were permitted, the

owner of one of those quarters subdivided into

10 parcels, we would still pay a quarter for a

fourteenth of the use, and so on. So it would seem

that that would be an absurd result as well.

DAWSON J: What is the basis of the damage claim, Mr Fraser?

MR FRASER:  Trespass by permitting the persons needed for the subdivision to go over the private road.

DAWSON J: Trespass in futuro as well as - - -

MR FRASER: Well, we asked for an injunction or an inquiry

as to damages if we did not get an injunction.	We
also asked for damages for trespass.	We did not
ask for damages for future trespass.	We

apprehended that you could not recover damages for

trespasses until they had occurred, at common law.

But none the less we received a dollar for the

future as well, it seems. Unless it could be

suggested in some way the dollar was the

quantification of the equitable damages, but that

is not how His Honour's judgment reads.	And if
that is the case - - -

GAUDRON J:	Is the claim for equitable damages that you foreshadow based on the failure to obtain an
injunction?
MR FRASER:	Yes, Your Honour.

GAUDRON J: Rather than the trespass.

MR FRASER:  Yes, Your Honour. Your Honour, that was quite

clear in the judgment and that was the approach at

trial. Those are our submissions, Your Honours.

Gallagher(2) 38 30/6/93

BRENNAN ACJ: Thank you, Mr Fraser. Yes, Mr Keane.

MR KEANE:  Your Honours, may we hand up outlines of our submissions.

BRENNAN ACJ: Yes, Mr Keane.

MR KEANE:  Your Honours, before we go to our outline, may we

say that the claim for damages was alive. Evidence was given by the appellant which sought to quantify

the extent to which the loss of amenity, loss of
privacy and so forth would inure to reduce the

value of her property. The learned trial judge

came to the conclusion, which was evidently

affirmed on appeal, that no loss had been suffered.

Indeed, the trial judge concluded that so far as

the value of the property was concerned, it may

indeed have been enhanced.

All we want to say at this stage is to ensure

that Your Honours appreciate that it is our

position that there is nothing about which to have

an inquiry as to damages because it does not matter

whether the loss is said to have come home to the
plaintiff now that she has sold, because her case

was run on the footing that she had already

suffered a loss in terms of a figure of $200,000

diminution in the value of her land. That evidence

was rejected, that the loss that would flow from

the carrying out of the easement claimed as
equitable damages as an alternative to an

injunction, and that was resolved against her.

There are concurrent findings on that point, that

the plaintiff has demonstrated nothing other than

nominal damages.

Your Honours, if we may start by correcting an

impression that may have been created by our

learned friends, no doubt unwittingly, the learned trial judge did not decide the case on the footing

that the dominant tenement was not each and every

part of the land described as the dominant
tenement.	He decided the case in the appellant's

favour on the footing that the use to which the

land was being put was not domestic use; that and

that alone. The other issues that are being agitated before Your Honours did not commend

themselves to His Honour nor, when one looks at

His Honour's summary of the submissions, to anyone

else.

Your Honours, it is submitted that the

decision of the Court of Appeal is correct. May

we, with	respect, refer Your Honours to some of the
passages	in the judgments: firstly, to the
judgment	of Mr Justice Pincus at page 493 of the
record.	In going to the judgments, may we say that

Gallagher(2) 39 30/6/93

Your Honours will not see that Their Honours

address any controversy as to whether one construes

the grant in the light of the surrounding

circumstances or whether one construes the

instrument and looks at nothing else.

It simply does not seem to have been a

consideration and it is perhaps a little unfair to

suggest that Their Honours did not take into

account surrounding circumstances because one can

see, when one looks at the judgments, that they did

have the practical operation of the arrangement in

mind. Firstly, Mr Justice Pincus at 493, lines 45

to 60, suggests that the construction for which the other side contends, and the effect that flows from

that construction that subdivision is in effect

prohibited - although His Honour makes it clear

later that that is an effect that flows from the

absence of any permitted use of the roadway for

access - is something which would be a strong

consequence; it would be something strong to

achieve, given the inherent subdivisibility and

alienability of land. His Honour goes on to

address the question as a matter of principle on

that page and over and he refers to a later edition

of Goddard's Law of Easements than that referred to

in the South African case.

Your Honours, can we say a couple of things

about the South African case, Louw v Louw, to which our learned friends took you. Firstly, it is not a
case that depends solely on Roman Dutch law or the civil law because, as appears from the judgment of

the Chief Justice in that case, the first authority

to which he referred was Gale on Easements, an old

edition which we have not been able to obtain, but

it is not correct to say that it represents simply

a peculiarly Roman Dutch approach to the question.

The other thing we would wish to say about

Louw v Louw and the reference to Roman Dutch law is

that it is not correct to say as a general

proposition that easements are the creature of the
peculiar genius of the common law. It is

particularly a case where the concepts of the Roman

jurists have been imported into English law and

have been of formative influence. May we hand

Your Honours copies of the first page of Easements and Restrictive Covenants in Australia by Bradbrook and Neave, and refer Your Honours to paragraph 101,

Historical Origin, which shows that the learning is essentially Roman - Roman imported via Bracton.

Your Honours, the next thing to say about Louw v Louw is that Your Honours will recall that

reference was made to a proposition in Goddard's

work, the Law of Easements, in an earlier edition

Gallagher(2) 30/6/93

to that which Mr Justice Pincus sets out at

page 494. The passage that Mr Justice Pincus sets

out from the 8th edition of Goddard supports the

view he takes. That view, Your Honours, is a view

as a matter of principle concerning the nature of

the grant of an easement. It is its nature as a

grant, perhaps as something distinct from an
obligation which subsists by way of covenant only,

that is the principal feature and, indeed, the

starting point of His Honour's analysis.

The proposition in Newcomen v Coulson, to

which our learned friends took you, is stated by

His Honour at the bottom of 494 and over the page. Might we say, with the greatest respect, that that proposition is stated in terms of general

principle. If one looks at the judgment of

His Lordship in Newcomen v Coulson - and,

Your Honours, we have supplied two bundles, the

A bundle and the B bundle. If Your Honours would

look at Al in our A bundle, there are two things we

would emphasize about the case. The first is that

at page 141, what Sir George Jessel said in the

second paragraph of the text of his judgment is

stated as a statement of principle. He says as

much about half-way down that paragraph after the

general proposition which he sets out, his opinion

being:

that the law is quite clear the other way.

That is to say, quite clear against the view that

if lands become severed, the owners of the severed

portions cannot exercise the right of way.

McHUGH J:  It must depend upon the particular easement, must

it not, because what is an easement? It is nothing

more than a promise to permit something to be done

in respect of one's land.

MR KEANE: With respect, Your Honour, no. That is a

covenant, with the greatest respect; an easement is

a grant. It is a grant of rights and it is a grant

which creates a proprietary interest in land

capable of registration and in respect of which a

certificate of title may issue.

McHUGH J: Yes, but it is still a grant of a right creating

a corresponding obligation on the owner of the

servient tenement to allow something to be done in

respect of that land. The question is, as a matter

of construction: what obligation has the person

undertaken in respect of that particular land? One

would have thought in the context of this

particular case, having regard to the surrounding

easements, that the proprietor said, "I will allow

the proprietor of three lots to come over my land."

Gallagher(2) 41 30/6/93

You want to say that the correct construction of

that document is, "I am obliged to permit as many people as you want to subdivide your land and the

others want to subdivide their land to, to come
over my land." That is what you have got to make
out of the - - -

MR KEANE: 

Your Honour, can we say, with respect, that yes

indeed, the general principle may be displaced by
the terms of the grant, but one starts not with the

position that one has, and our learned friends took

you to at some length, in relation in covenants,

but one starts with the general proposition, the

general principle as it is stated here, in relation
to the particular question as to whether the

dominant tenement upon being subdivided loses, in

respect of all its parts, the rights that were
previously adhering to or inhering in that
congeries or rights that constitutes the dominant

tenement being a fee simple with a grant of an
easement.

McHUGH J: Yes, but ultimately it is a question of

construction.

MR KEANE:	Your Honour, as we say - - -
McHUGH J:	I know chancery lawyers and conveyancers for

centuries want to convert questions of construction

into questions of law, but first and last it is a

question of construction.

MR KEANE:  But it is also a question of where you start

from, Your Honour, and then the question is, not as

our learned friends would say: is there a positive

indication of an intention that each and every part

of the dominant tenement should benefit, although

we submit that as a matter of construction one can

see it in this document?	We do submit that the
place to start is not there.	The question is

really: has that prima facie position been

displaced?

MCHUGH J:  But why do you start from the position you want

to; as a matter of law?

MR KEANE:  Yes, Your Honour, on the basis that the statement of principle in Newcomen v Coulson is that - - -

McHUGH J: That just strikes me as strange to say that a

document between the number of people - you start

with a presumption as a matter of law.

MR KEANE:	Your Honour, one starts with that presumption because there is a grant, a grant of an interest in
land, and a grant of an interest in land which, in
accordance with our laws about land, prima facie,

Gallagher(2) 42 30/6/93

on subdivision carries to each of the new

transferees the rights that inhered in the original

block.

BRENNAN ACJ: Mr Keane, if that is the law as laid down by

the Master of the Rolls - and one hesitates to

depart from what Sir George Jessel said, but it was

said at a time before strata titles came in - would

your proposition still be applied in the case of

vertical subdivision of land?

MR KEANE:  Your Honour, in so far as one might have a

vertical right of way to other parts or to the

ground - - -

BRENNAN ACJ:	It is not a vertical right of way.
MR KEANE:	- - - one would normally expect those questions

to be dealt with by some means other than the use

of easements.

BRENNAN ACJ: 

Not at all, if, instead of these parcels of

land being subdivided on the ground, one of them
decided to build a multiple storey block of flats.

MR KEANE: 

Your Honour, that comes back really, with

respect, to a question His Honour Justice Toohey

raised with our learned friends, and that relates

to excessive user. This is not a case,

Your Honours, with respect, where what has been

made out is that the subject-matter of the grant

has been exceeded because of excessive user. Their

point is narrower than that, with respect. In

relation to the question of excessive user, though,

in this case, can we simply tell Your Honours that

Mr Justice Pincus concluded at page 498 that it

was:

unnecessary to consider, in the present case,

whether subdivision into much smaller lots

than those with which we are concerned would

produce a different result.

It was not a case where you loaded the easement by

building a massive high rise on it, Your Honours,

and in fact Mr Justice Lee at first instance found

that the increase in traffic flow in consequence

upon the subdivision would be, in his words,

minimal. He accepted the evidence of a traffic

engineer called in that regard, and his finding is

at page 464, line 35.

The point is, Your Honours, as I think we have

made clear, this is not a case where principles of

excessive user, abuse of the easement, arise. The question is simply whether the rights - they might

have been alive but they were decided against the

Gallagher(2) 43 30/6/93

other side on the facts, in terms of abuse of user,

but in terms of whether the rights flow to

transferees of parts of the original dominant

tenement, we submit that the starting point is the proposition stated as a matter of principle in the

Court of Appeal with which the other Lords Justices

agreed. May we refer Your Honours to the judgment

of Lord Justice James at page 145. One really, I

suppose, needs to start at page 144 at the bottom,

where His Lordship said:

It is an easement, and our judgment is based

upon its being such. Those rights which the

Master of the Rolls has held to belong to the

Defendants, in which I fully concur, belong to

them as the owners of an easement in respect

of the dominant tenement as against the owner

of the servient tenement.

Your Honours, when we come to look at the decision

of the New South Wales Court of Appeal in Ellison v
O'Neill, to which our learned friends referred, in
the judgment of Mr Justice Jacobs there is
reference to the distinction between the position
with an easement where the conclusion that

ordinarily follows is that, on subdivision of the dominant tenement, rights flow to the transferees

of the parcels that are subdivided, and the

position with restrictive covenants, even though

His Honour deprecated the existence of that

distinction in terms of construction and even

though His Honour in that case, and

Mr Justice Walsh in that case, both indicated their

preference to reject the English approach to the
construction of covenants as being prima facie
attaching benefit to the whole of the dominant

tenement, or the covenantee's land, rather than to

it distributively, as did Mr Justice Lowe, with

whom the Chief Justice agreed in Re Arcade, as did

they.

They made it clear that if they were free of English authority to the contrary view, they would

have rejected that approach in favour of an

approach which commended itself to

Mr Justice Jacobs in dissent about restrictive

covenants and Mr Justice Sholl in dissent about

restrictive covenants. We will take Your Honours

to the particular passage in a moment.

If we may return to the judgments in the Court

of Appeal, Your Honours will see that at 498, in

the first full paragraph of text on the page,

Mr Justice Pincus expresses his agreement with the

views of Mr Justice Thomas:

Gallagher(2) 44 30/6/93

that the use of the easement for the purpose of building a house on the dominant tenement

is permitted -

Their Honours came to a different view from

Mr Justice Lee as to whether that use was domestic

use.	We do not apprehend that view is challenged
here.	Mr Justice Pincus went on - if we can ask

Your Honours to go back to 495, at about line 30,
Your Honours will see that His Honour adverted to

the circumstance - he has referred to exhibit 4;

Your Honours have been referred to exhibit 6:

that the drafting does not appear to

contemplate the possibility of subdivision of

any of Lots 14, 15, 16 or 17.

His Honour refers to the fact that the language

does not deal in detail, in terms of the covenants,

with the possibility of creation of additional

lots, but goes on to say over the page that that

really is consistent with a lack of foresight

rather than a deliberate intention.

Your Honours, Mr Justice Thomas dealt at

greater length with that question, that is to say

the question as to how the owners of the subdivided

dominant tenement meet their obligations in respect

of maintenance. We will take Your Honours to that

in a moment. His Honour Mr Justice Pincus's

conclusion is at 497, commencing at line 15, where

His Honour points out that rather than speaking:

of the possibility of the subdivision being
prohibited. It is more accurate to state the
point as being whether, if subdivision occurs,
the easement is available to the proprietors

of the new lots. They are not any of Lots 14,

15, 16 and 17 mentioned in the document, but

the expression "grantee" is defined so as to

mean, prima facie, the transferees and assigns

of the grantee. Here, the context does not

appear to exclude the result which one would

expect to flow from an assignment of one of

the subdivided lots, namely that the
transferees would have the rights previously

held by the proprietors of the original lot.

If the parties had intended a stipulation

against subdivision, one would have expected

them to say so fairly clearly.

If I may return to the point Your Honour

Justice McHugh raised with us earlier, and that was to say there were four lots and the intention was there should not be further subdivision, that, so

far as the finding which our learned friends took you to is concerned, was based on the evidence of

Gallagher(2) 45 30/6/93

one of the original participants in the subdivision
and the finding was not that there was no

contemplation of further subdivision ever. The

actual finding, which is at 454, line 50, is:

that no further subdivision was then in

contemplation -

Your Honours, that is, it is of the nature of a

right of real property that the owner may change;

there may be a different owner and he may have a

different view. It is also of the nature of real

property that the owner may change his mind in case for the control of property rights the subject of the grants by reference to the intention pro tern of one of the original parties to the subdivision.

terms·of what he does with his proprietary rights.

If we can take Your Honours then to the

reasons of Mr Justice Thomas and, if we may start

by taking Your Honours to 505, Your Honours will

see the four principal issues identified by

His Honour as being issues which the Court of

Appeal was required to address and Your Honours

will see No 4.

His Honour then went on to consider the construction of the easements and sets them out at

507 and 508. At 509, line 35, His Honour makes the

point made by Mr Justice Pincus, that "there is no

express prohibition upon further subdivision", that

being the possibility of subdivision being inherent

in the nature of land. And he adverts to the

arguments our learned friends have advanced in

relation to "lack of symmetry", and comments that

he does not find them compelling. And over the

page, at 510, His Honour says:

It is possible to find words expressly

consistent with the prospect of subdivision.

The easement is granted "for all purposes

ordinary incidental to or connected with

domestic use and enjoyment of the dominant

tenement or any part thereof .. "

And His Honour has emphasized the words, "or any

part thereof". Those words, "or any part thereof",

Your Honours will have seen, are, in the cases

concerned with restrictive covenants, the magic

words, if we may say it in that way, required to

attach distributively to the land of the

covenantee, the benefit of the covenant. And if

there be need for positive indications consistent

with the prospect of subdivision, we rely upon that

feature here. His Honour also refers to the fact

that:

Gallagher(2) 46 30/6/93

the grantee is defined to include the

transferees and assigns of the grantee and the

registered proprietor or proprietors and the

occupier or occupiers of the dominant

tenement. This is appropriate to cover new

owners after subdivision.

Now, it might be said, "Well, that is

equivocal", but it really depends upon your

starting point, with respect. If you start from

the point of view, which we submit is the correct

starting point as a matter of principle, that being

the pqi~t of view adopted by Mr Justice Pincus, on
the footing of the correctness of the statements of

principle in Louw v Louw and Newcomen v Coulson,

then these features, or the features to which our

learned friends have referred, do not suffice to

take the case out of the general principle in
respect of the grant.

Your Honours, His Honour dealt at length with

our learned friend's arguments in relation to the
ability of the granter to ensure or to recover

payment from the owners of the dominant tenements

in respect of their contributions. His Honour

dealt with that commencing at 510, lines 40 to the

bottom of the page, where he observed that the

submission that was made begs the question and then

he goes on to conclude that it is unsound in any

event for the reasons which continue over the next

two pages to page 513, where His Honour concludes

at the top of the page, on this point:

There is no compelling reason why a

similar approach should not be taken in

relation to a grant of an easement over land

and the covenants therein. It may further be

noted that section 53 of the Property Law Act

1974 as amended operates consistently with the

above notions, and facilitates the enforcement

of such covenants by and against those
deriving title from the original covenantors

and covenantees. It follows that the new owners, as

assignees of parts of the dominant tenement,

will remain bound by the covenant. It would

seem that as between themselves the new owners

would have a right of contribution, but it is

unnecessary to pursue that point.

And then His Honour goes on to refer to the

practicalities of the subdivision and he refers to
the circumstance that, at line 30:

Evidence was not given of the conveyancing by which this will be achieved -

Gallagher(2) 47 30/6/93

and Your Honour, the Presiding Justice, has

adverted to the lack of symmetry in the plan of

subdivision that was lodged and which was in

evidence. But, with respect, how that plan was

prepared and the extent to which it did not satisfy

the requirements of section 58 of the

Local Government Planning and Environment Act requirement that there be access is a later matter

which does not reflect on the effect of the

original grants and is a matter of conveyancing

practice and, no doubt, titles office practice.

And His Honour adverts to that and then says, at

line 37, that:

irrespective of the form in which the

existence of the reciprocal easements may be

noted on the new title deeds, the substance of

the matter will be that the benefit of the

existing easements over Lot 14 will continue

in favour of all persons to whom the

subdivided parts of Lots 16 and 17 are

assigned, and so that such persons remain

collectively liable for the burdens of the

existing easement; and the existing easements

in relation to which Lots 16 and 17 are the

servient tenements will continue in favour of

the proprietors of Lot 14 who will remain

liable for their quarter contribution to the

repair and maintenance.

McHUGH J: Well, having regard to the language of the grant,

how does His Honour reach that conclusion, the

sentence, "The grants are in favour and the

proprietors of certain specified lots for the time

being"?

MR KEANE: Well, Your Honour, if we can come to that, the

real property descriptions of dominant and servient

descriptions. They are not, with respect,

tenements are explicitly in the forms to which

definitions. The dominant tenement is not defined

as being a number of words and letters on a piece

of paper; it is described as such and its title,

with all the incidents that flow, derive from the

registration of that instrument under that

description, but it is a matter of description of
what is essentially land, and land, as the

Real Property Act in the provision such as

section 119 to which our learned friends have taken

you, even under the provisions of the Real Property

Act, is recognized as being inherently divisible.

It is, in our respectful submission, incorrect to regard the description of the land, the subject

of the dominant and servient tenements, as being a

matter of definition.

Gallagher(2) 48 30/6/93

McHUGH J: But does it not indicate what the whole purpose

of this grant was? It was for the benefit of the

proprietors of three lots?

MR KEANE: 

One may say that but, with respect, one must then

say, in relation of each of them, are we talking
about benefiting the proprietor of the lots or are

we talking about benefiting the lots? If the case

were one, a restrictive covenant, then the English

authorities and the Australian authorities

reluctantly would support Your Honour's approach.

We are not, with respect, talking about whether the

benefit is to the proprietor of the lot, we are talking about whether there has been a grant in

respect of the land. And, of course, that grant is exercisable by the registered proprietor of the lot

from time to time but the lot itself is inherently

divisible.

As we have said, it is not a case, with

respect, where one is concerned with a question of

covenant in favour of a proprietor. Even a

question of covenant in favour of a proprietor

where the benefit of the covenant is sought to be

annexed to the land. Now, could we go immediately,

in relation to that, Your Honours, to the judgment

in Ellison v O'Neill.	Your Honours will find
that - - -

BRENNAN ACJ:  Just before you pass that. The terms of the

schedule which are expressed in the language of

covenant is a covenant as between the grantor and

grantee. The only definition of those terms, I

take it, is to be found in the nomination of

individuals on the opening page of the grant.	Is
that right?

MR KEANE: Well, there is the definition in paragraph 6 of

the schedule, Your Honour, the extended definition,

to which His Honour Mr Justice Thomas referred.

His Honour referred to that and, in particular, to

the reference in the case of the grantee to the:

transferees and assigns of the grantee and the

registered proprietor or proprietors owner or

owners ..... and the occupier or occupiers for

the time being of the dominant tenement.

As reflecting the possibility of assignment and

being consistent with assignment to more than one

subsequent proprietor.

BRENNAN ACJ: Yes, I see.

MR KEANE:  Your Honours, may we go then to Ellison v

O'Neill. Our learned friends referred you to this

earlier. It is Al6 in our bundle.

Gallagher(2) 49 30/6/93

Your Honours, in Ellison v O'Neill: we have

mentioned that there was the dissenting judgment of

Mr Justice Jacobs, as in the Re Arcade Hotel there

had been the dissenting judgment of

Mr Justice Sholl, and we said that Mr Justice Walsh

had indicated a clear predilection for the

rejection of the English approach and regarded

himself as compelled to follow it only by the

course of authority. We do not wish to labour the

point because it is strictly irrelevant, but can we

simply refer Your Honours to the approach which

His Honour, that is to say Justice Walsh, took at page 252 commencing at line 15 to the end of that

paragraph and the whole of the next paragraph.

Then can we take Your Honours, without asking

Your Honours to read his discussion of the English

cases, to 253, the first full paragraph of text on

that page where he refers to the view taken by the

majority in Re Arcade Hotel, and that is finishing

at line 10. If we can then invite Your Honours to

look at line 25 and invite Your Honours to read the

balance of that page but, particularly, what

His Honour says at the bottom where His Honour makes it clear that his own inclination would have

been to the contrary of that to which he felt bound

to come by English authority. That was the same

approach as was taken by the majority in the Re

Arcade Hotel case, Your Honours.

Mr Justice Jacobs was perhaps more robust

about the matter and he considered that it was
appropriate to treat the case - this being a case

of covenant, to treat the question of the

construction of the covenant as to whether it

applied distributively to the land of the original

covenantee as being analogous to the case of

easements which would have produced the

diametrically opposite result. His Honour does

that at page 258 in the last paragraph of text and,

over the page, particularly at line 5 where

His Honour says:	By analogy to easements, to which restrictive covenants in equity bear some resemblance, one would conclude that a reference to the land
benefited generally would be sufficient to
enable the benefit to enure to each part of
the land.

His Honour then refers to a learned article in the Law Quarterly Review. That article is document

A17 in our A bundle, and we propose to refer

Your Honours simply to three brief portions of

that. This is an article, Your Honours, by

P.V. Baker, who with Mr Justice Megarry was the

editor of Snell's Principles of Equity for some

Gallagher(2) 50 30/6/93

time. The first passage to which we take you is

page 24 where the author discusses the requisites

of an annexure of a covenant:

to each and every part of benefited land -

We draw Your Honours' attention to (d) in the list

of four, which he sets out at page 24. Then,

Your Honours, at page 25 - and we do not ask

Your Honours to read this - there is an

introductory discussion of some of the English

authorities and at page 26, half-way down the page

the learned author says:

More specifically one may call attention to

the following.

And he is here referring to a number of features,

or a number of propositions, the burden of which is

to suggest that the English approach to the

construction of restricted covenants in this

respect is incorrect. The important one is at

page 27, (d) and, Your Honours, it is regarded as
being axiomatic that easements so operate. That

view is reaffirmed at page 29 in the.second full

paragraph of text on that page:

From the principles outlined above, and especially from the analogy of easements, we

should expect the right to go along

automatically with the benefited or dominant

land, and, indeed, this happens where the

benefit has been annexed by the original

covenant.

So, Your Honours, it is our submission that

firstly the Court of Appeal were correct in terms

of principle in treating the case as one of

easement and one of grant of rights. We submit,

for the reasons that we set out in paragraph 2(b),

that in any event the conclusion was correct in the

matter of construction.

we submit that there is no compelling reason

to construe the reference to the "use of any part

of the dominant tenement" as if it read - and, in

our respectful submission, as our learned friends

would have it read - "any part of the land

comprised within the dominant tenement so long as

it remains an undivided whole". The use, which our

learned friends give to the words "any part

thereof", really seems, with respect, rather lame

and really adds very little or nothing to the

rights attaching to every part of the dominant

tenement.

Gallagher(2) 51 30/6/93

Your Honours, the last submission we make in

relation to this aspect of the matter is that the
appellant's approach, if it were of general
application, may lead to undesirable consequences

being either restraints upon the use, particularly
the alienation of land, the land being inherently
alienable and it being one of the principal

precepts of our law, at least since quia emptores

that land should not be unalienable and should be

freely alienable, or it may lead to the creation of

landlocked blocks.

McHUGH J:  I do not follow this argument. What do you mean

that the effect of the appellant's approach may

lead to undesirable consequences? Supposing there

had been an express prohibition against subdivision

as part of - - -

MR KEANE:  Your Honour, if there had been an express

prohibition, then it would have been on the

register and everyone dealing would be taken to

know about it.

McHUGH J: Well, it may be that it is up to a court to

construe this particular document.

MR KEANE:  Your Honour, I accept that that would still have

the vice which we suggest our learned friend's

construction would have. But our submission is

that a court should not be astute to adopt a

construction which has that result.

Your Honours, if we can pass on then to deal,

as briefly as we may, with the matter of damages.

Your Honours, in paragraph 5 of our outline, we

mention that the appellant's claim for an inquiry

as to damages was in issue before His Honour the

trial judge; it was litigated before him. He held

that the appellants had failed to demonstrate any

damage.

We have referred, in paragraph 5, to the valuation which was relied upon; it is at page 356

point 5 of the record. May we invite Your Honours

to look at that just briefly to see that it did

indeed - that the appellant's case at trial did

indeed endeavour to establish that actual damage

had been suffered by reason of - or would be

suffered, I should say, by reason of the

apprehended interference with privacy, amenity and

use of the road and so forth.

We have set out at length the references to

His Honour's judgment where he refers to the

circumstance that these matters were in issue, that

is to say, substantial damages, as opposed to

simply nominal damages for trespass in the past,

Gallagher(2) 30/6/93

substantial damages for adverse effect on the

plaintiff's land, and he rejects the valuation

proposed by the plaintiff's valuer and prefers the

evidence of the defendant's valuer, a Mr Johnston,

whose evidence was to the effect that a subdivision

may, indeed, enhance the value of the appellant's

block.

The appeal against the trial judge's

assessment of damages was actually limited to his assessment of damages for future trespass but the question, as appears from the passage in the

judgment of Mr Justice Thomas, was agitated and, in

the Court of Appeal, His Honour concluded that

there was no basis shown for assessing other than

nominal damages. Now, Your Honours, it is our

submission that there is no basis for the

assessment of other than nominal damages. Even if

the appeal was otherwise successful, it would not

be appropriate to order an inquiry as to damages,

because in so far as nominal damages have been

suffered in respect of the trespass, they have been

assessed and awarded and there are no other

damages. And, Your Honours, may we say we are

perfectly content for Your Honours to proceed on
the footing that the appellant has sold her
property and left the land - we are perfectly

content for Your Honours to be aware of that.

We do object to some other aspects of the

affidavit going in. We are perfectly content for

our learned friend to tell Your Honours that it is

no longer appropriate to seek an injunction.	We
accept that.	Our submission is simply this, that

there is no basis for sending the matter back

because, on the basis of the concurrent findings,

there is just simply no damage and it does not

matter, with the greatest respect, that it can now

be said that the loss has been realized, because in

so far as there was any loss that question - any

loss by reason of adverse affect on the property,

diminution in its value - was fully litigated and	resolved against the appellants. Those are our
submissions, Your Honours.

BRENNAN ACJ: Yes, thank you, Mr Keane. Yes, Mr Fraser.

MR FRASER:  Your Honour, just in relation to that last

aspect of damages, our submission - I did not

address Your Honours about damages at any length at all because of what passed. The submission we make

is, as His Honour Mr Justice Thomas found in the

Court of Appeal, there was an award for damages for

past trespass and future trespass. That cannot

stand given that the Court of Appeal concluded that

an injunction should have been granted on the

construction; there has been no attack on that

Gallagher(2) 53 30/6/93

conclusion made by our learned friends. The proper

question then is: what damages should be given in

lieu of an injunction given that an injunction was the proper remedy at that time? Because the trial judge erred in his approach to that question, he

has not been able to come to any proper assessment

of the next issue, that is, well, if an injunction

should be given but I do not give an injunction,

what damages should then be assessed for not giving

the injunction.

BRENNAN ACJ: 

Is it right or is it wrong that there are

concurrent findings of fact that the subdivision of
these parcels of land did not result in any

diminution in the value of your client's property?

MR FRASER: 

Your Honour, there are findings of fact below

that the loss of value, if subdivision proceeded,
was not made out in terms of Mr Quinlan's evidence,
but there are no findings as to what the value of

her property was before the subdivision proceeded.

There was just a finding that if, as Mr Johnston

assumed, proper dwellings were then constructed,

that is, prestige dwellings were constructed on the

new subdivided lots, then on that ~ssumption she

might suffer a benefit.

The point that we make is that the basis of the assessment is not what is likely to have

happened in future but, rather, what should the

appellant receive for not having the right to

restrain what will happen in future. In other

words, it is her personal right, which is

enforceable by injunction, should have been
enforced, and the assessment of that damage depends

not upon what she has lost, but on the

Bracewell v Appleby approach, and we have referred

to Bracewell v Appleby in our outline, what a

reasonable person would have taken to permit the

development to proceed, and the question of how

much would have been taken depends on what stage
you insist on your legal rights.	If you stand by

and permit a development to proceed, then you will
get less than if you take action at an early stage

and say, "No, you are not going to go ahead". And

there are two cases. There is a case referred to

in Bracewell v Appleby of Wrotham Estate.

So, there is no assessment of fact along the proper lines, is our short submission. The only

assessment is what might happen in terms of future

trespasses. That is not the proper test on

Lord Cairns Act assessment of damages.

BRENNAN ACJ:  I do not think it suggests that it is. What

is suggested is that if the question is whether or

not you are entitled to damages in lieu of an

Gallagher(2) 54 30/6/93

injunction, is there not a finding against you

which would preclude the making of any award of

damages?

MR FRASER:	No, Your Honour, because there is a finding in relation to the loss suffered as a result of future
trespass, not by virtue of the refusal of the
injunction. The trespass is part of it. The other aspect - - -
BRENNAN ACJ:	I do not think there is any argument about the trespass part. The question is, whether or not the
evidence in relation to the diminution of the value
of your client's property was relevant to, or if not conclusive of, the question of your entitlement
to equitable damages?
MR FRASER:	It was relevant to, but not conclusive of, and

it may be expressed in this way:  in terms of

ascertaining what you would take in the

Bracewell v Appleby approach, you would say, "What

will the diminution in my property value be?	I
will suffer that as a starting point.	What else do

I want to put up with all this interference and

invasion of my otherwise assertable property

right?". So, it is relevant to, but not conclusive

of, is the response.

Your Honour, just as to the question of the

assessment, Mr Johnston, whose evidence was

accepted by the learned trial judge, accepted there

was a risk that if prestige development did not

proceed on the new lots in subdivision, then his

premises would not be correct, because he assumed

that it would. In other words, if houses were

built which did not fit the amenity and the

environment, the plaintiff's house - and, indeed,

the other three of the four houses on the lots were
described as "prestige houses", a fourth was

described as "not being as attractive" - he assumed

that everything else built on the new lots would be

of a prestigious standard. If that were not so,

then his evidence could not stand, because it was

premised upon there being an improvement of the

overall neighborhood. That is, "There is a lot of

nice houses there. People with a lot of money

flock to areas with nice houses, therefore you will

be just as well off if not better, even though you

are going to lose your bushland setting and your

amenity." He did concede there would be no

immediate improvement in value; rather it would

happen after the construction phase.

So, in terms of the finding of fact and what

was accepted by the learned trial judge, it is our

submission that it really proceeded upon a

Gallagher(2) 55 30/6/93

misapprehension, because that is an assumption that

is not justified on the evidence.

Your Honours, the other aspect in terms of the

consequences of this appeal, as I intimated at the

outset, my client was the beneficiary of

interlocutory injunctions and, of course, she is

liable on the undertakings as to damages that she
gave. So, with respect, that will be dealt with in

terms, largely, I suppose, by the findings as to

the construction of the terms of the easement and

consideration of whether an injunction should have

been given. That will reflect upon the exercise of

any discretion a later court comes to consider.

If Your Honours are against us on the construction of the easement, then it may be

difficult to argue that she should not pay some

damages on that undertaking.

GAUDRON J:  The damages on the undertaking, has that been

referred anywhere? It is still -

MR FRASER:  No, Your Honour, no steps have been taken in relation to that, about which I am aware.

GAUDRON J: Yes.

MR FRASER:	Thank you, Your Honour.
BRENNAN ACJ:	The Court will consider its judgment in this

matter. But if in the course of delivering that

judgment it appears necessary to entertain any

further argument in relation either to the

assessment of damages or to the remittal of any

issues to the Court of Appeal, it may be necessary

to invite further argument at that stage. That

will be indicated when judgment is delivered.

AT 4.21 PM THE MATTER WAS ADJOURNED SINE DIE

Gallagher(2) 56 30/6/93