McKeand v Thomas - [2006] NSWSC 1028

No judgment structure available for this case.

CITATION: McKeand v Thomas [2006] NSWSC 1028

HEARING DATE(S): 26/7/06-28/7/06 & 28/8/06

JUDGMENT DATE :
25 October 2006

JURISDICTION: Equity

JUDGMENT OF: Campbell J

DECISION: Parties to bring in Short Minutes.

CATCHWORDS: CONTRACTS - GENERAL CONTRACTUAL PRINCIPLES - intention to enter legal relations - REAL PROPERTY - easements - when implied easements arise under first rule in Wheeldon v Burrows (1879) 12 Ch D 31 - PRINCIPAL AND AGENT - authority of agent - authority to enter contract distinguished from authority to administer contract - PRINCIPAL AND AGENT - authority of agent - ostensible authority - PRINCIPAL AND AGENT - ratification - need for full knowledge of material circumstances or adoption regardless of material circumstances - PRINCIPAL AND AGENT - ratification - circumstance in which adoption of part of a transaction involves ratifying the whole of it - EASEMENTS - implied incidental rights - LICENCES - implication of terms in - LICENCES - circumstances in which common law regards a licence as irrevocable - ESTOPPEL - equitable estoppel - proprietary estoppel - circumstances when a licence becomes irrevocable - effect on grant of injunction against revocation of licence of availability of remedy in damages against someone other than the licensor - EASEMENTS - creation - under statute - section 88K Conveyancing Act 1919 - requirement that proposed easement "reasonably necessary for the effective use or development" of the applicant's land - PRINCIPAL AND AGENT - breach of warranty of authority

LEGISLATION CITED: Conveyancing Act 1919
Electricity (Consumer Safety) Regulations 2006

CASES CITED: Armstrong v Sheppard & Short Ltd [1959] 2 QB 384
Australian Blue Metal Limited v Hughes (1961) 79 WN (NSW) 498
Australian Blue Metal Ltd v Robert Frank Hughes & Others [1963] AC 74
Bank of Montreal v Dominion Gresham Guarantee and Casualty Company, Limited [1930] AC 659
Brockway v Pando (2000) 22 WAR 405
Campbell v McGrath [2005] NSWSC 496; (2005) 12 BPR 23,073; [2005] ANZ ConvR 435
Canadian Pacific Railway Co v The King [1931] AC 414
Clancy and another v Salienta Pty Ltd and others (2000) 11 BPR 20,425
Crabb v Arun District Council [1976] Ch 179
Crabbtree-Vickers Pty Ltd v Australian Direct Mail Advertising & Addressing Co Pty Ltd (1975) 133 CLR 72
Di Bello & Anor v De Costi Seafoods (Holdings) Pty Ltd [2005] NSWCA 267
Freeman & Lockyer v Buckhurst Park Properties (Mangal) Ltd [1964] 2 QB 480
Hemmes Hermitage Pty Ltd v Abdurahman & Anor (1991) 22 NSWLR 343
Hoath v Connect Internet Services Pty Ltd [2006] NSWSC 158
Inwards v Baker [1965] 2 QB 29
Khattar & Anor v Wiese [2005] NSWSC 1014
Liggins v Inge (1831) 7 Bing 682; 131 ER 263
Maher v Bayview Golf Club Ltd [2004] NSWSC 275; (2004) 12 BPR 22,457
Marsh v Joseph [1897] 1 Ch 213
McGrath & Anor v Campbell & Anor [2006] NSWCA 180
Minister of Health v Bellotti and another [1944] 1 KB 298
Naylor v Canterbury Park Racecourse Co Ltd (1935) 35 SR (NSW) 281
Plimmer v Mayor, Councillors and Citizens of the City of Wellington (1884) 9 App Cas 699
Powell v Smith (1872) LR 14 Eq 85
Ramsden v Dyson (1866) LR 1HL 129
Republic of Peru v Peruvian Guano Company (1887) 36 Ch D 489
Riches v Hogben [1985] 2 Qd R 292
Riches v Hogben [1986] 1 Qd R 315
Rummery & Anor v Dorsman & Ors (1996) NSW ConvR 55-780
State Rail Authority of New South Wales v Heath Outdoor Pty Ltd (1986) 7 NSWLR 170
Taylor v Smith (1926) 38 CLR 48
The Owners of SP 48754 v Anderson [1999] NSWSC 580, (1999) 9 BPR 17,119
The Phosphate of Lime Company, Limited v Green and Anor (1871) 7 CP 43
Union Bank of Australia Ltd v McClintock [1922] 1 AC 240
Wakeling v Ripley (1951) 51 SR (NSW) 183
Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387
Ward v Kirkland [1967] 1 Ch 194
Wheeldon v Burrows (1879) 12 Ch D 31
Wilton and another v Commonwealth Trading Bank of Australia; Model Investments Pty Ltd (Third Party) [1973] 2 NSWLR 644
Winter v Brockwell (1807) 8 East 308

PARTIES: Ross Tyndall McKeand - First Plaintiff
Diane Elizabeth McKeand - Second Plaintiff
Mareta Thomas - First Defendant
Fred Thomas - Second Defendant

FILE NUMBER(S): SC 1864/05

COUNSEL: F Corsaro SC; B Sharp - Plaintiffs
V Culkoff - Defendants

SOLICITORS: NOT Lawyers - Plaintiffs
Steven Klinger - Defendants

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION
EQUITY LIST

CAMPBELL J

25 OCTOBER 2006

1864/05 ROSS McKEAND & ANOR v MARETA THOMAS & ANOR

JUDGMENT

HIS HONOUR:

Nature of the Case

1 Mr and Mrs McKeand live next door to Mr and Mrs Thomas. Mr and Mrs McKeand both own the land on which their home is constructed, but the land on which Mr and Mrs Thomas’ home is constructed belongs to Mrs Thomas alone.

2 In February 2002, when their home was under construction, Mr and Mrs Thomas had made arrangements for electricity, telephone and data cables to be connected to their new home using an underground connection, which was planned to run in a trench to be cut parallel to the border between the McKeand and Thomas properties, and just inside the Thomas land. At that time, the McKeands’ home was already constructed and occupied, and received its electricity and telephone services through cables slung in the air between a power pole in the road reserve just outside their property, and the eaves of their house.

3 In February 2002 there was a conversation between Mr McKeand and Mr Thomas, in which Mr Thomas consented to the McKeands using the trench to be dug on Mrs Thomas’ land to also provide services to the McKeands’ home. The McKeands contend, and the Thomas’ deny, that that conversation amounted to an agreement by Mrs Thomas to grant to the McKeands an easement for services.

4 The McKeands arranged, in mid-February 2002, and following that conversation, for their electricity and telephone service to be connected using cables laid in the trench dug on the Thomas land. Mrs Thomas has refused to execute documentation to grant to the McKeands an easement for services over a strip of her land in which the trench lies.

5 In this action, the principal relief the McKeands seek is specific performance of the alleged agreement. If that relief is not granted, the McKeands bring various alternative claims.

6 The Thomas’, by a cross-claim, seek, in substance, declarations that the McKeands have no rights over Mrs Thomas’ land or in any way against Mr and Mrs Thomas, and a mandatory injunction requiring removal of the cables presently servicing the McKeands’ house.

Issues

7 The issues arising in the proceedings are:

1. Whether, apart from any question of the authority of Mr Thomas, there was an agreement on or about 12 February 2002 between Mr McKeand and Mr Thomas for the granting of an easement, and if so in what terms.

2. Whether Mr Thomas had authority to bind Mrs Thomas.

3. Whether Mrs Thomas ratified any agreement which Mr Thomas made.

4. Whether there have been adequate steps of part performance to overcome the fact that the alleged agreement was not in writing.

5. Alternatively, is there an estoppel which now prevents Mrs Thomas from refusing to treat herself as bound to grant an easement (or alternatively some lesser right relating to the McKeands’ services connection)?

6. Alternatively, is this a suitable case for the Court to grant an easement under section 88K Conveyancing Act 1919 ?

7. Alternatively, has Mr Thomas engaged in a breach of warranty of authority?

8. If yes to 7 what quantum of damages has been established against Mr Thomas?

9. Has Mr Thomas committed the tort of negligent misrepresentation?

10. If yes to 8 what quantum of damages has been established against Mr Thomas?

11. Is the award of interest on any damages appropriate?

12. Ought costs be awarded against the defendants (a) at all, or (b) on an indemnity basis?

13. Ought any of the declarations sought in the cross-claim be made?

14. Ought there be a mandatory injunction requiring the plaintiffs to remove the cables now servicing their house?

Layout and Topography of the Land

8 Aleta Close, Wahroonga is a very short street which runs approximately east to west. Only two houses front onto it, both lying on the southern side of the street. The northern side of the street is not built on, and is bushland. The Thomas’ house is on the western side of the McKeands’ house. The street is a dead-end, ending in bush at its western end. Bushland also runs along the western boundary of the Thomas’ land.

9 Both blocks of land rise as one goes south from Aleta Close.

10 The McKeand house is two storeys high. In the McKeand land, the driveway runs from Aleta Close, along the boundary between the McKeand land and the Thomas land, and leads to a garage located in the lower level of the house. On the same level as the floor of the garage is a part of the house used for living. In front of that particular part of the house used for living is a swimming pool. Because of the rise of the land, the northern part of that swimming pool is well above ground level, while the southern part of the swimming pool is either at, or much closer to, ground level. The surrounds of the swimming pool appear, from photographic evidence which has been tendered, to be on the same level, or perhaps one or two steps below the same level, as the living area which lies on the same level as the garage. A second level of rooms of the house extends over both those lower level rooms, and the garage.

11 The electricity and telephone services used to be connected to a point, on the eastern side of the house, on the eaves of the roof. The roof, in turn, lies immediately above the second level of the house. The power pole that the cables for the electricity and telephone services ran from was in the road reserve, near a prolongation of the McKeands’ eastern boundary.

12 The northern part of the surrounds of the swimming pool sits on a slab which is cantilevered from a wall running east to west. The northern boundary of the McKeand land lies, approximately, immediately below the northern edge of that slab. Between the McKeands’ northern boundary and the road lies some gardens and a rockery, and then, before one gets to the road, a grassed strip.

13 The McKeands’ land is and always has been known as 2 Aleta Close, Wahroonga. Mrs Thomas’ land was known at an early stage of the events relevant to this case, as 4 Aleta Close, but in the time which is relevant to this case the numbering was changed, so that it became, and is now, 1 Aleta Close.

Dealings Between McKeands and Thomas’ Before the Cabling

14 Mrs Thomas, then known as Mareta Raphael, had previously owned the land on which the McKeands’ home is constructed. She sold it to the McKeands, under a contract which completed in December 1997. At that time, she also owned the land on which the Thomas home is now constructed, but that lot was still bushland. Before the Contract for Sale was entered, Mr Thomas had suggested to Ms Raphael that she should get council approval for the new home next door before she sold the existing house, to avoid any objections to the plans. Ms Raphael did not follow that advice. While Mr and Mrs McKeand had not met Ms Raphael during negotiations to purchase 2 Aleta Close, the real estate agent handling the sale had told them that Ms Raphael was considering building on the block next door, but that she did not have her family living with her any more and so it would only be a small house. The McKeands gave the impression that they would not mind if that happened.

15 Ms Raphael submitted to Ku-ring-gai Council a development application for a new house, larger than the house the McKeands had been expecting. Three neighbours, including the McKeands, objected to it. Mr and Mrs McKeand engaged a town planner to support the objection they made to the Council, and Mr McKeand addressed the Council in opposition to the application. The Ku-ring-gai Council rejected the development application at a meeting on 4 December 1998.

16 Mrs Thomas (as she had by then become, having married Mr Thomas in July 1998) appealed to the Land and Environment Court. The McKeands appeared in that Court as objectors, supporting the Council’s opposition to the appeal, and engaged their own town planning expert for that litigation. The Land and Environment Court granted approval, subject to modifications to the design.

17 Building work preparatory to construction of the Thomas home began in August 2001, when tree felling and excavation was carried out. In September 2001 Mr Fred de Belin, a surveyor, pegged out the boundaries of the Thomas land, at Mr Thomas’ request. Mr de Belin was the same surveyor who Mr Thomas had earlier requested, in August 1999, to carry out a house set out survey on the Thomas land.

18 Actual construction of the Thomas house began in September or October 2001.

19 In August 2001 Mr Thomas placed a rudimentary fence around parts of the Thomas land. It consisted of star pickets, between which a loose weave fabric was strung. Even though Mr Thomas tried to maintain the integrity of that rough fence, workmen on the site would move it or get over it, and came onto the McKeands’ property from time to time. A concrete path ran on the McKeands’ land beside their house, parallel to the boundary with the Thomas’ land, and workmen found it convenient to use that path for moving materials. As well, they sometimes used the McKeands’ hoses, and cement residue was left on the McKeands’ hoses and driveway. As well, sometimes workmen would have lunch, including beer, in the McKeands’ yard. Mrs McKeand, who was ordinarily at home several days a week, found this disturbing. Various items of rubbish also found their way from the building site onto the McKeands’ land.

20 Before the building work had begun, Mr Thomas had introduced Mr McKeand to the builder, had said to Mr McKeand “if you have any problems with them, let me know”, and gave him a business card with a number at which he could be contacted. In mid-October 2001 Mr McKeand telephoned Mr Thomas and told him about the McKeands’ complaints about the builders. Mr Thomas suggested that Mr McKeand send a facsimile to the builder, and gave Mr McKeand the builder’s facsimile number. Mr McKeand also said that he would speak to the builders, and make sure they were not a nuisance to the McKeands.

21 Mr McKeand sent a facsimile to the builder on 16 October making a complaint, and saying that if the conduct continued “I will obtain a court order restraining your company and its subcontractors”.

22 This did not have the desired result, and on 26 November 2001 Mr McKeand sent a further facsimile to the builder, with a copy to Mrs Thomas, again threatening proceedings to restrain trespassers.

23 Around this time Mrs McKeand wrote out a sign, in large block letters, and placed it over the tap at the side of their house. It said:

“ DO NOT
USE THIS
HOSE!!!
THIS IS PRIVATE
PROPERTY & WE WILL
SUE!”

24 On 27 November, Mr Thomas himself wrote to the builder, in effect supporting Mr McKeand’s complaint. He sent a fax to Mr McKeand, saying “I apologise for the behaviour of the builders & have written to Robert Krslovic (copy attached).” That facsimile was handwritten, addressed to Mr McKeand as “Ross” and ended “Regards, Fred”. The builder replied to Mr McKeand on 27 November 2001, apologising, saying he would formally reprimand the offending tradesmen, and offering to replace the damaged hoses.

25 On 1 December 2001 Mr McKeand saw Mr Thomas on the site. Mr Thomas again apologised for the trouble that the workmen had caused. Mr McKeand’s reply recognised that it was not Mr Thomas’ fault, but Mr McKeand said that they were sick of the workmens’ behaviour and that “if you want someone to come over here when it is necessary, you can ask us first”. There were no more troubles with the workmen after that.

The Agreement Sued On

26 I prefer the evidence of Mr and Mrs McKeand concerning the agreement sued on to that of Mr Thomas.

27 Mrs Thomas had originally intended to have an aerial connection of services to her new house, but by mid-January 2002 had decided to place the service connections underground instead. In mid-January 2002 Mr Thomas mentioned to Mr McKeand that they would now be putting their services in underground, and suggested:

“You could run your cables underground to, if you wanted, and use the same trenches. Your box is opposite ours.”

28 Around Tuesday, 12 February 2002, when Mr McKeand came home from work a conversation to the following effect occurred:

THOMAS: “The fellows that are going to do our electrical cables will be here in a day or so. They are going to have to block your driveway for a while with their digging machine. Do you mind? I can let you know beforehand so you can have a car out.”

McKEAND: “That’s OK as long as you let us know. I will probably be gone before they arrive, but Di will need to get out.”

THOMAS: “Good. Another thing, they said it would be a lot easier if they could run a trench across the grass in front of your pool, lay the cables in the trench and then replace the grass. It is a lot easier for them and cheaper for us than digging up the road the whole way. Then they would just have to use the road in front of your driveway. Then they would run a trench up to the box, just inside our border. They would need access to your driveway for that, if that is alright. If you want to you could use the same trenches and they could lay electrical and telephone cables for you in our trenches. All you would have to pay for is your own cabling and connections.”

McKEAND: “That sounds OK. If we have cables running on your land you would have to give us an easement over that part of your land so that the cables could be serviced if that was ever necessary. The easement would not need to be very wide.”

THOMAS: “Yeah, we will give you an easement. But lets get the work done first. We can do the easement later. You’re not likely to ever have to dig up electrical and telephone cables. You would just pull them through if there was ever a problem.”

McKEAND: “That all sounds great.”

THOMAS: “It can run up here.” [indicating a line just on the Thomas side of the common boundary] “Then it would cross over to your box up there. They would run it under your path.”

McKEAND: “Are you intending to put a fence along the boundary?”

THOMAS: “I don’t see the need for a fence.”

McKEAND: “Neither do I. It is easier to get barrows and ladders up the side without a fence.”

THOMAS: “OK. No fence.”

29 While Mrs McKeand was not a participant in that conversation she was sitting outside, near where the two men were talking, and recalls a conversation to similar effect.

30 I find nothing surprising in Mr McKeand’s very prompt mention of the need for an easement, as he is a barrister of many years experience.

31 The work started on Friday, 15 February 2002. First, a trench was dug from the base of the power pole outside the McKeands’ home, up to where the McKeands’ driveway crossed the road reserve, then a trench was dug in a southerly direction, just inside the boundary of the Thomas’ land, to a point opposite the Thomas’ electrical box. The Thomas’ electrical box was on the eastern wall of the Thomas’ house, almost opposite where the McKeands’ electrical box was located, on the western wall of their house.

32 Just inside the boundary of the Thomas’ land is the location where Mr Thomas later indicated to Mr de Belin that the cables lay. It is also the location shown on a sketch of the work as constructed, which someone involved in the carrying out of the electrical connections to the McKeands’ property drew on the inside of the cover of their electrical installation box. That sketch includes a handwritten note “cable location, just next to footpath”. The “footpath” referred to is clearly the path which runs between the western edge of the McKeands’ house and the western boundary of the McKeands’ land.

33 Mrs McKeand also observed the digging of the trench just inside the Thomas’ boundary.

34 Mrs McKeand saw that in the course of digging the trench machinery and men came onto the McKeands’ land. The digging was done using a mechanical excavator which had tracks 1.55m wide, and a bucket operating in the middle of the machine. Given the location of the trench in which the cables are laid, it is likely, quite apart from Mrs McKeand’s observation, that the excavator would have needed to be at least partly on the McKeands’ land when the trench was being dug.

35 After the trenches were dug, they were connected by a tunnel dug underneath the McKeands’ driveway.

36 On Saturday, 16 February 2002 workmen laid cables in the trench, and connected the services.

37 In the course of that morning, Mr McKeand had a conversation with Mr Thomas, to the following effect:

McKEAND: “In order to get an easement registered we will have to have a survey plan showing where it is. Do you know a surveyor who could do it? I don’t know any.”

THOMAS: “We had a surveyor survey the block recently. I will get him to do it.”

McKEAND: “OK, I can get the legal work done and get it registered. We will pay those costs.”

THOMAS: “No worries.”

38 On 17 February 2002 Mr McKeand made a note, which reads:

“Discussions with Fred re cables -

They wanted to cut trench across our verge to save costs compared to road – they wanted access to drive so men could cut trench along border. We can have cables in their trenches. We pay only for cables and our connection. They pay for trenches. We get easement from them for access to cables to service if necessary. They agree no fence. Fred had survey of their block and will get him to do plan. We pay for legal and registration and get legal work done.”

39 The plaintiffs submitted that some later events concerning Mr de Belin supported Mr McKeand’s evidence about this agreement. The bill for Mr Thomas’ mobile phone itemises each call. It shows that on Saturday, 20 April 2002 a call was made, for a little less than 11 minutes, from Mr Thomas’ phone to Mr de Belin’s number. Mr de Belin gives evidence that he had a conversation on 20 April 2002 with Mr Thomas to the following effect:

40 In making a finding about the making of the agreement, I do not place great weight on Mr de Belin’s oral evidence. I have no doubt he was trying to give evidence as accurately as he could, but I am somewhat uneasy about how much he really remembers about the detail of conversations relevant to this case. I do not rely on this evidence just quoted for anything more than that it was Mr Thomas (rather than Mr McKeand) that he had the conversation with on 20 April 2002, and that Mr Thomas outlined the general nature of the task Mr de Belin was being asked to perform, including that he wanted the documentation for an easement prepared.

41 Mr de Belin has a practice of maintaining records of jobs he is involved in. His job book records an entry on 20 April 2002 relating to “F Thomas”, “4 Aleta Close Wahroonga” and “easement”. Both Mr Thomas, and the Thomas land in Wahroonga were known to Mr de Belin, as he had done the previous work there.

42 I do not accept Mr Thomas’ evidence that the explanation for the call undoubtedly made from his mobile phone on 20 April 2002 to Mr de Belin was that Mr Thomas called Mr de Belin’s number, then handed the phone to Mr McKeand, and that it was Mr McKeand who then had a conversation with Mr de Belin, which Mr Thomas did not hear.

43 Mr de Belin did not regard the work as urgent, because the cables were already in place. After some prodding, from both Mr Thomas and Mr McKeand, Mr de Belin came to the site in about August 2004. He met Mr Thomas, who pointed out where the underground cables ran, which Mr de Belin describes as “just inside the boundary shared with the McKeand property, up to the electrical boxes of both properties.” Mr de Belin measured the length which would be necessary for the easement. After that site visit, he drew up a form of transfer granting easement, with a plan attached to it. The plan is one which shows a “proposed easement for services 0.9 wide” running up the northern end of the eastern boundary of the Thomas land, for a distance of 20m.

44 Mr McKeand continued to enquire of Mr Thomas from time to time in 2003 and 2004 about whether Mr de Belin had prepared the plan yet. In September 2004 Mr McKeand and Mr Thomas had a conversation to the following effect:

THOMAS: “Fred de Belin has prepared the documents for the easement.”

McKEAND: “He has done the plan?”

THOMAS: “He has done the plan and the transfer form with it. They just need to be signed. I will get Mareta to sign them.”

McKEAND: “Excellent.”

45 On 31 October 2004 Mr McKeand made a note which reads:

“Conversation with Fred at home -

I asked Fred what was happening about having easement papers signed – he said Mareta has signed them but wants to make sure any damage done with access is repaired - $1,000 plants there on the cables – and make sure land value not affected by easement.

I said these things not a problem but we have an enforceable agreement anyway. He said they want to have lawyers check it and will get back – daughter still sick and not had a chance to do it.”

46 On 12 November 2004 Mr McKeand made a note which reads:

“Phoned Fred from chambers -

Has he made progress – no, too busy, working on installations to finish before Christmas – can’t do it for few weeks – he works late – after Christmas. I said if it is going to be delayed we must put a caveat on to protect us – something could happen to Mareta and without easement we would be in a mess – no reply from Fred.”

47 On 15 November 2004 Mr de Belin took the draft transfer granting easement, and plan, to the Thomas’ home, and gave them to Mr Thomas. He also handed over a tax invoice, for a total of $198, which stated it was for “easement for services”. The name of the recipient of that tax invoice was left blank – an event which would be understandable if it was the McKeands who were to pay for the drawing of the plan. Mr Thomas paid Mr de Belin the amount of that invoice on the spot, in cash.

48 Nothing that Mr Thomas said to Mr de Belin, in any of these dealings, gave Mr de Belin any reason to doubt that Mr Thomas knew what an easement was.

49 Though Mr Thomas told Mr McKeand on 19 November 2004 that “we will stick to the agreement”, on 16 February 2005 Mr Thomas told Mr McKeand that Mrs Thomas would not sign the documents; “She says that you can leave it there but she doesn’t want it dug up if something goes wrong.”

50 Later on 16 February 2005, and also the next day, Mr Klinger, solicitor for Mr and Mrs Thomas, telephoned Mr McKeand. He made clear that his position was that his client said there was no agreement for the grant of an easement, and that if the McKeands wanted an easement they would have to make an application under section 88K Conveyancing Act 1919, which would involve them in paying both compensation, and the legal costs. Mr McKeand’s immediate response was that there was an agreement, and that he would be seeking specific performance of it. Mr Klinger suggested that $30,000 would be an appropriate amount of compensation.

51 I accept that the events occurring after February 2002, which I have just recounted, support the plaintiffs’ account of the agreement entered on 12 February 2002.

52 Mr Thomas gave evidence to the effect that, until Mr de Belin explained the ramifications of an easement to him on 15 November 2004, he thought than an easement was a sketch or plan indicating where services were, which needed to be drawn up so that relevant governmental authorities could have it for future reference. Mr Thomas had had some experience of easements in his previous building work, but it seems to me that his having had that experience is consistent with his having the understanding of an easement that he gave evidence about. On balance, I accept his evidence about his understanding of what an easement amounted to. That he had that understanding of what an easement is makes it all the more understandable that he would see no harm in agreeing to grant the McKeands an easement concerning his wife’s property, without obtaining her prior permission.

53 There is no suggestion that either Mr or Mrs McKeand were aware that Mr Thomas had a defective understanding of what an easement was. In accordance with the objective theory of contract formation, when Mr Thomas agreed to grant an easement, the contract resulting was to grant the entity which the law recognises as an easement, not to grant what Mr Thomas thought an easement was: Powell v Smith (1872) LR 14 Eq 85 at 90.

54 I record that no attempt was made to attack the contract on the basis of mistake, or that it was vitiated in accordance with any equitable doctrine.

55 One further factor supports the conclusion that an agreement of the kind I have found was indeed made. The previous dealings between the Thomas’ and the McKeands are likely to have taught the Thomas’ that the McKeands were not slow to threaten litigation, and were prepared to actually litigate. Even though there had been friendly relations between the two men for some months, it still seems likely that Mr Thomas would seek the McKeands’ permission before digging the trench for the cable, and laying the cable, if there was a risk that the work involved in that task might infringe on the McKeands’ rights. When the cable was to be laid in the position it was, close to the boundary, that risk was real.

56 I should also record that an attack was made upon Mr de Belin’s evidence because Mr McKeand had a role in the preparation of one of Mr de Belin’s affidavits. That role consisted, however, in Mr McKeand being involved in placing into affidavit form, with no change of substance, a written statement which Mr de Belin composed as a piece of continuous prose. The resulting affidavit reproduced even obviously inadmissible passages that were included in Mr de Belin’s statement. Mr McKeand should have known that it is better for a party to litigation to avoid any involvement in the obtaining of evidence, lest that involvement give rise to a doubt about whether the evidence has been contaminated. However, in the present case the tendering of Mr de Belin’s original statement has demonstrated that no such contamination actually occurred.

Was the Conversation of 12 February 2002 Contractual?

57 The defendants submit that there was no intention to enter contractual relations. I do not agree. While the conversation was conducted in a friendly way, and between neighbours, it was still on a serious topic, and the agreement was one which was intended to be acted upon, without any formalisation, inside a matter of days. Performance of it involved, as a reasonable person in Mr Thomas’ position ought to have realised, the McKeands in relying on the agreement to be able to have in their home electricity and telephone services, which any reasonable person realises are very important in current urban living conditions. The seriousness to the promisee of taking the steps envisaged by the contract is a proper matter to take into account in deciding whether an agreement is intended to be legally binding: Wakeling v Ripley (1951) 51 SR (NSW) 183 at 187; Riches v Hogben [1985] 2 Qd R 292 at 297; Riches v Hogben [1986] 1 Qd R 315 at 316-7, 329.

58 The defendants submit there was no consideration for the agreement, because the consent of the McKeands was not needed to do anything which was done. I do not accept that submission. In fact, as I have found, the digging of the trench for the cable involved what would have been, if the agreement had not been entered, a trespass upon the McKeands’ land. As well, the McKeands’ permission for the workmen to come onto their land in connection with the cabling work was consideration which can support a contract, regardless of whether that permission was ever used.

59 Ms Culkoff, for the defendants, submits, concerning the agreement on 12 February 2002:

“Given the legal ramifications and given [Mr McKeand’s] superior legal knowledge, the defendants submit he was obliged to put her fully on notice and advise her to seek her own legal advice. He did nothing.”

60 I can see no basis of principle or authority upon which Mr McKeand had any such obligation.

61 I conclude that, apart from the question of whether Mr Thomas had authority to enter it, the conversation of 12 February 2002 amounted to a contract.

Whether any Implied Easement Arises, or Terms Giving Greater Detail to an Express Agreement to Grant an Easement Arise, Pursuant to Wheeldon v Burrows (1879) 12 Ch D 31

62 The plaintiffs submitted that the terms of the easement which Mr Thomas agreed to grant could be given greater detail pursuant to the first rule in Wheeldon v Burrows (1879) 12 Ch D 31.

63 In Wheeldon v Burrows (1879) 12 Ch D 31 Thesiger LJ (with whom James LJ and Baggallay LJ concurred), at 49, stated two “rules”:

quasi

64 I accept the analysis of Barrett J in Campbell v McGrath [2005] NSWSC 496; (2005) 12 BPR 23,073; [2005] ANZ ConvR 435 at [44] that the first of these “rules”,

“ … operates where the following elements exist: first, “the grant by the owner of a tenement of part of that tenement”; second, grant of the part “as it is then used and enjoyed”; third, the existence of “continuous and apparent easements” or “quasi-easements”; fourth, that those easements “are reasonably necessary to the property granted”; and, fifth, that the easements “have been and are at the time of the grant used by the owners of the entirety for the benefit of the part granted”.

65 The Court of Appeal, in McGrath & Anor v Campbell & Anor [2006] NSWCA 180 at [34] also accepted that analysis.

66 I also accept the explanation that Barrett J gave, in Campbell v McGrath at [46]-[48], of what is meant by “quasi-easements” in this rule:

Nelson v Walker

“Quasi-easements are such things enjoyed de facto during unity of possession as would, had unity not existed, have been easements.”

Hansford v Jago

“and the interpretation there interposed [by Thesiger LJ’s reference to ‘quasi-easements’] is necessary, because, where the owner of two tenements grants one of them, there can be no easement at the moment of the grant over the other tenement, the two tenements having belonged to one and the same person, and an easement being a right over the land of somebody else.”

48 An example of the existence of “quasi-easements” bearing a strong resemblance to the facts of this case is given at paragraph 10908 of Butterworths’ “Conveyancing Service New South Wales”:

“For example, suppose that First Street and Second Street are parallel streets, Blackacre faces First Street and Whiteacre faces Second Street, so that the rear of Blackacre and Whiteacre adjoin. Suppose too, that whilst Blackacre and Whiteacre are in common ownership there is an open and apparent path across Whiteacre from the rear of Blackacre to Second Street, and another path across Blackacre from the rear of Whiteacre to First Street. These paths are not easements because the lands are in the sole ownership.””

67 As Barrett J explains in Campbell v McGrath at [49]:

Borman v Griffith

Wheeldon v Burrows

Hansford v Jago

“Now what is required in the case of a quasi-easement is the quality of being apparent. That quality may be arrived at in different ways, and, no doubt, the easiest case is that of a made-up road; it is most important, if not essential, that the road should be made up when it is sought to establish the apparency of a quasi-easement of way over an unenclosed piece of land. But when every other possible indication is present as here and they all point to a defined and enclosed strip having been set aside to provide an access to the rear of certain houses, I certainly decline to hold, unless compelled to do so by authority, that the absence of a made-up road prevented the establishment of an implied grant.”

68 To similar effect, Ungoed-Thomas J in Ward v Kirkland [1967] 1 Ch 194 at 225 said:

“ … the words “continuous and apparent” seem to be directed to there being on the servient tenement a feature which would be seen on inspection and which is neither transitory nor intermittent; for example drains, paths … “

69 In other words, the “continuous” part of the first rule in Wheeldon v Burrows is to do with the features of the servient tenement which indicate the existence of the quasi-easement being continuously in existence, rather than that the user of the quasi-easement is a continuous user.

70 Though the decision in Campbell v McGrath was reversed by McGrath & Anor v Campbell & Anor [2006] NSWCA 180 that reversal was on a point not involving the principles I have just set out, and does not, it seems to me, affect the correctness of those principles.

71 If one applies those principles to the facts of this case, the only thing which could be said to be a grant, by Mrs Thomas, of part of a tenement which she owned occurred when she sold Lot 2 to the McKeands, and retained the land next door. However at that time there were no “quasi-easements” relating to the provision of electricity and telephone services to Lot 2 through the land that Mrs Thomas retained. Further, at the time the McKeands purchased their land from Mrs Thomas, an easement relating to the provision of electricity and telephone services to Lot 2 through the land that Mrs Thomas retained was not discoverable upon inspection of the servient tenement. I conclude that the first rule in Wheeldon v Burrows would have no application in the present case, even if the lots in question were old system lots. Thus it is unnecessary to consider the complications concerning the application of the rule in Wheeldon v Burrows to Torrens Title land, which the Court of Appeal considered in McGrath & Anor v Campbell & Anor [2006] NSWCA 180.

Authority of Mr Thomas?

72 The plaintiffs submit that, in the conversation Mr Thomas had with Mr McKeand on 12 February, he had actual, or implied, or ostensible authority to agree to the grant of the easement on behalf of Mrs Thomas.

73 Mr Thomas had experience in the building industry. A company with which he was involved had carried out one building development project, but he did not repeat that experiment. Mrs Thomas entrusted much of the administration of the building project for her new home and associated matters to him. It was Mr Thomas who was the principal contact with the builder. In the course of a fax to the builder on 27 December 2001 making a complaint, Mr Thomas described the builder’s attitude as “aggravating to me, the customer”, and said, “I am not prepared to authorise any further building works until we have sorted out the stage we are currently at.” It was Mr Thomas, not Mrs Thomas, who dealt with the builder concerning variations, site meetings, progress claims and making complaints. In December 2002 he signed a Certificate of Practical Completion over the word “owner” even though that certificate identified “Ms Raphael” as being the owner. Mr Thomas was the person who dealt with Mr McKeand concerning obtaining the McKeands’ approval to a variation in the Thomas’ house plans, and the person who had contact with Mr de Belin about surveying matters. He discussed what he was doing with his wife regularly.

74 While Mr Thomas had a broad authority concerning matters connected with the building work, that authority did not extend, in my view, to authority to agree to transfer any interest in his wife’s real estate. She never authorised him, in so many words, to grant an easement to the McKeands, or in any way to transfer an interest in her real estate. Transferring an interest in real estate seems to me to be an activity different in kind to carrying out the managerial or project supervision tasks which Mr Thomas carried out in connection with building the house, notwithstanding that he agreed to grant the easement for a purpose which was connected with the building of the house. Having authority to administer a contract is not the same as having authority to enter a contract: State Rail Authority of New South Wales v Heath Outdoor Pty Ltd (1986) 7 NSWLR 170 at 194 per McHugh JA.

75 While the house was intended to be a home for both Mr and Mrs Thomas, their marriage was a second marriage for Mrs Thomas, and they both understood that, considered as an item of property, it was hers alone. As Mrs Thomas explained in cross-examination, her house was one which she had obtained after going through a very difficult divorce, it “represents my childrens’ future and their inheritance”, and in the course of her marriage with Mr Thomas “we have kept many things separate”. Mr Thomas brought very little property into the marriage. At the time of the conversation in February 2002 Mr and Mrs Thomas had been married for less than four years. In these circumstances, and given the difference in kind which seems to me to exist between transferring an interest in real estate and carrying out managerial or project supervision tasks, I do not infer that Mrs Thomas conferred authority on Mr Thomas to grant an easement to the McKeands, or in any way to transfer an interest in her real estate.

76 Ostensible authority arises from the person who is alleged to be the principal having held out the agent as having a particular type of authority: Freeman & Lockyer v Buckhurst Park Properties (Mangal) Ltd [1964] 2 QB 480 at 503; Crabbtree-Vickers Pty Ltd v Australian Direct Mail Advertising & Addressing Co Pty Ltd (1975) 133 CLR 72 at 78; Di Bello & Anor v De Costi Seafoods (Holdings) Pty Ltd [2005] NSWCA 267, at [24]-[25]. Mrs Thomas had not held out Mr Thomas, to Mr and Mrs McKeand, as having any authority to agree to part with an interest in her real estate.

77 I conclude that Mr Thomas did not have the authority of Mrs Thomas to enter the agreement which he entered with Mr McKeand on 12 February 2002.

Did Mrs Thomas Ratify the Agreement?

78 I accept Mrs Thomas’ evidence that shortly after the cabling work was completed she had a conversation with her husband to the following effect:

MR THOMAS: “Ross asked if he could lay their cables in our trench to improve the appearance of their property and I let him.”

MRS THOMAS: “I have a strong gut feeling Fred that this is not a good idea. I think I would have said ‘no’. I don’t think it’s a good idea to get involved with neighbours, particularly as he forced us to go to the Land and Environment Court and cost us $25,000 in legal fees. I would not have been inclined to do him any favours.”

MR THOMAS: “It’s not doing any harm. It’s just a cable inside a pipe beside ours.”

MRS THOMAS: “I suppose I am being petty.”

79 Her evidence continues:

“I also thought it would be embarrassing for Fred to ask the McKeands to remove it after all the work had been done.

There was no mention of an “easement” at the time. There was no mention of any alleged agreement whereby the McKeands would obtain a legal right over the title of my property.”

80 Mrs Thomas expanded on that evidence in cross-examination:

“A. Fred explained to me that he’d just done it to be friendly. It had happened quickly, spontaneously, and I felt as though it would have embarrassed him to have to go back and say my wife said you can’t have it here, you have to pull it out. He convinced me it was nothing more than this cable lying in the trench, it won’t be any harm to us, so I felt as though I was just being mean spirited about it because I don't like them so I said “Fine, we’ll leave it there.”

81 Where someone has purported to enter a contract on behalf of a principal, at a time when they do not have actual authority to enter that contract on behalf of the principal, it is open to the principal to ratify the entering of the contract. If ratification occurs, the person who entered the contract is treated as having had authority to do so, at the time of entering the contract. In other words, the ratification relates back to the time of making the contract: Union Bank of Australia Ltd v McClintock [1922] 1 AC 240 at 248, where Lord Sumner alludes to the maxim Omnis ratihabitio retrotrahitur et mandato priori aequiparatur – every ratification of an act already done has a retrospective effect, and is equal to a previous request to do it. See also Dal Pont, Law of Agency (Butterworths Australia 2001) para [5.38]. The plaintiffs submit that Mrs Thomas has ratified Mr Thomas’ action in entering the contract with the McKeands.

82 Before a person can ratify a contract which has been purportedly entered in their name, that person must have full knowledge of the material circumstances, or else must intend to adopt the entering of the contract regardless of what the material circumstances might be: The Phosphate of Lime Company, Limited v Green and Anor (1871) 7 CP 43 at 56-57; Taylor v Smith (1926) 38 CLR 48 at 54-55, 59, 60, 62; Marsh v Joseph [1897] 1 Ch 213 at 246-7 per Lord Russell of Killowen CJ, Lindley and AL Smith LJJ; Bank of Montreal v Dominion Gresham Guarantee and Casualty Company, Limited [1930] AC 659 at 666; Australian Blue Metal Ltd v Hughes & Ors (1961) 79 WN (NSW) 498 at 515 (affirmed on a different point Australian Blue Metal Ltd v Robert Frank Hughes & Others [1963] AC 74); Wilton and another v Commonwealth Trading Bank of Australia; Model Investments Pty Ltd (Third Party) [1973] 2 NSWLR 644 at 674; Brockway v Pando (2000) 22 WAR 405 at [115]-[116], 433.

83 Mrs Thomas’ assent to the cables staying on her land does not amount to a ratification of the whole of the agreement Mr Thomas had made with Mr McKeand. There is no reason to conclude she intended to adopt Mr Thomas’ actions regardless of what the material circumstances might be – before giving consent, she tried to find out from Mr Thomas what the implications would be, and only when he had given his account of the implications did she agree. And she did not at that time have full knowledge of the material circumstances, because Mr Thomas did not tell her about a critical element of the agreement, namely that an easement would be granted.

84 When an easement has been granted, the law regards the grant as bringing with it such ancillary rights as are reasonably necessary for the exercise or enjoyment of the easement which has been granted: Hemmes Hermitage Pty Ltd v Abdurahman & Anor (1991) 22 NSWLR 343 at 348, 354-5; The Owners of SP 48754 v Anderson [1999] NSWSC 580, (1999) 9 BPR 17,119 at [21]-[30]. In consequence, the owner of the dominant tenement is entitled to enter upon the land over which the easement exists and carry out there such work as is necessary to enable the activities expressly permitted on the easement to continue to occur. This attribute of the law of easements is, in my view, one which was material for Mrs Thomas to know. The onus of proving the elements of a ratification rests upon the person who asserts that there has been a ratification. It is not shown that Mrs Thomas was aware of this attribute of the law of easements.

85 I conclude that Mrs Thomas did not ratify Mr Thomas’ entering into of a contract to grant an easement.

86 Counsel for the plaintiffs referred me to a principle contained in Bowstead & Reynolds on Agency, 17th edition, article 17 that: “the adoption of part of a transaction operates as a ratification of the whole.” They submitted that part of what Mr Thomas agreed was that the cables could stay in the ground, that Mrs Thomas ratified that part of what he had done, and therefore that she should be treated as having ratified the whole of the contract which he made.

87 I do not accept that that conclusion follows. The way in which the principle works is illustrated by Republic of Peru v Peruvian Guano Company (1887) 36 Ch D 489. The Peruvian Guano Company had been the agent of the Republic of Peru for the sale of guano. Disputes arose about whether it had adequately accounted for the proceeds of sale. At a time when no de jure government existed in Peru, but a dictator was running a de facto government, a representative of that government entered into a settlement agreement with the Company concerning the disputes, under which the Company paid £260,000. The Republic passed a resolution ratifying this agreement, but did so in ignorance of certain facts which gave it the right to avoid the agreement of compromise. Chitty J held, at 498, that, because the Republic did not then know all the material facts the resolution was not an effective ratification. However, after the election of a new de jure government, and when the facts vitiating the agreement were known, that new government passed a resolution that it did not accept the £260,000 except as a part-payment on account, and that it accepted the agreement of compromise only in that sense. Chitty J said, at 499-500:

Wilson v Poulter

Smith v Hodson

“Although the assignees may either affirm or disaffirm the contract of the bankrupt, yet if they do affirm it, they must act consistently throughout; they cannot, as has often been observed in cases of this kind, blow hot and cold; and as the assignees in this case treated this transaction as a contract of sale, it must be pursued through all its consequences.”

Prince v Clarke

88 This principle can come to operate only at a time when the person in the name of whom the contract was entered has full knowledge of the material facts. If, with such knowledge, that person chooses to keep some of the benefits flowing under the contract, he or she will be held to have ratified the whole of the contract: Australian Blue Metal Limited v Hughes (1961) 79 WN (NSW) 498 at 515 per Jacobs J, Dal Pont, Law of Agency para [5.28]. In the present case, Mrs Thomas never came to be in the position of having full knowledge of the material facts about the contract which her husband had entered, and so the occasion for her ratifying that contract did not arise.

Ratification of Consent for Cables to Remain

89 The defendants’ counsel submits that:

“Mrs Thomas ratified her husband’s unauthorised act to allow the cables to remain – under a licence only and not an easement.” (Defendants’ Further Written Submissions, page 7)

“The only “ratification” of the first defendant was to the placement of the plaintiffs’ cabling in her trench, subject to a licence, revocable at will.”

90 There might at some time be occasion to look more closely at whether there can be ratification of part of a transaction that the person ratifying knows about, but not of the other part of the transaction which the person ratifying does not know about. However, in the present case, where there is no contest about it, I will not seek to go behind this submission which the defendants have put. I shall proceed on the basis that it correctly sets out the common law rights which arose from Mrs Thomas’ decision to not object to the cabling remaining in the trench.

Are There Adequate Steps of Part Performance?

91 In light of my finding that Mrs Thomas is not bound by any contract, it is not necessary to consider this question. However, in case this matter goes on appeal, I record that, even though there was no defence that the contract on which the plaintiffs relied was unenforceable because it was not in writing, the trial was conducted on a basis that one of the issues to be decided was part performance. The plaintiffs, in some written submissions, sought to rely upon the fact that there was no defence of absence of writing, but by the time of those submissions the trial had already been conducted on the basis that part performance was one of the issues. The defendants then sought leave to amend their defence to raise the lack of writing. If there would have been any point in doing so, I would have granted that leave. However, when other findings make the question irrelevant, I do not do so.

Practicability of Alternative Services Connections to McKeand Home

92 Before considering the remaining live issues in the proceedings, some additional facts about the possibility of alternative services connections to the McKeand home need to be stated.

93 Mr Paul Schimke has several decades of experience as a building project manager, as well as tertiary qualifications in building. He is of the view that it would not be possible to reconnect the electricity service to the McKeand home at the spot, on the eaves near the eastern side, to which it was previously connected. There is an Australian and New Zealand Standard for electrical installations known as the Wiring Rules, AS/NZ 3000:2000 in operation, compliance with which is made mandatory by (now) regulation 32 of the Electricity (Consumer Safety) Regulations 2006. Those Wiring Rules provide, in section 2.2.3, that:

“An overhead service … must not cross a swimming pool zone as defined in the SAA Wiring Rules.”

94 A “swimming pool zone” under those rules is a volume of space lying above and around a swimming pool. I accept Mr Schimke’s evidence that reconnection of the McKeands’ electricity service to the spot it was previously connected to would involve it in crossing the swimming pool zone relating to their swimming pool, and hence it is neither possible nor practical to make an aerial electrical service connection to the property that would comply with the regulations.

95 I am not satisfied that there is any more than one practical means of connecting electricity to the McKeands’ home, if the existing connection through Mrs Thomas’ property were to become unavailable. This other possibility is to install a new underground/overhead service within the McKeands’ property, running from the road reserve, just inside the McKeands’ western boundary, and up to their electrical switchboard. I accept the evidence of Martin Castles, an electrical service manager, that the work and materials, based upon rates that are normal and currently charged in the electrical contracting industry for this kind of work, involved in carrying out that method of connection, would be $23,430. I accept Mr Schimke’s evidence that that price is a fair and reasonable price for the work and materials.

96 I do not accept that the work could adequately be done for a lesser price put forward by Mr Leo Wehbe. Mr Wehbe’s expertise concerns provision of cabling and related services in the telecommunications field. He is the man who was involved in digging the trench on the Thomas’ land, in which the cables the subject of this litigation now lie. He at one time expressed the view that there would be no problem whatsoever in reconnecting Mr McKeand’s wires to his house as they were originally. That view ignores the legislative requirements that Mr Schimke drew attention to. After the existence of swimming pool zones was drawn to Mr Wehbe’s attention, he put forward an alternative “aerial option”, which involved installing a steel pole on the western side of the McKeands’ property, and stringing wires from the existing power pole first to that new steel pole, then from the steel pole to the fascia of their house. I accept Mr Shimke’s evidence, to the effect that the Council and other authorities would be unlikely to permit another pole so close to the existing one. Mr Wehbe’s evidence on factual matters concerning which he was cross-examined, did not inspire confidence, and parts of it have been implicitly rejected in factual findings I have already made concerning the location of the trench.

What Common Law Rights do the McKeands Have Concerning the Cables

97 In theory, all easements are derived from a grant, express, implied, or presumed: The Owners of SP 48754 v Anderson [1999] NSWSC 580; (1999) 9 BPR 17,119 at [23] per Young J. That applies even to prescriptive easements (Maher v Bayview Golf Club Ltd [2004] NSWSC 275; (2004) 12 BPR 22,457 at [26]-[33]), and to the easements that are implied in accordance with Wheeldon v Burrows: McGrath & Anor v Campbell & Anor [2006] NSWCA 180 [41], [65]-[75]. The implied incidents that the common law recognised in an easement (para [84] above) arise from the doctrine that a grantor may not derogate from his grant. There is no corresponding doctrine in relation to noncontractual licences. A noncontractual licence is a bare permission to do something which otherwise would be illegal, and there is not the same occasion for the giver of a bare permission to be taken to be giving more than was expressly stated as there is in the case of a conveyance of property.

98 As well, the implications in certain easements are now articulated by the provisions of Schedule 8 Conveyancing Act 1919, which states the legal rights which arise from an easement that is granted by a particular short form of words. For example, Part 11 of Schedule 8 Conveyancing Act 1919 says that when an “easement for services” is granted:

“1 The owner of the lot benefited may:

(a) use each lot burdened, but only within the site of this easement, to provide domestic services to or from each lot benefited, and

(b) do anything reasonably necessary for that purpose, including:

• entering the lot burdened, and

• taking anything on to the lot burdened, and

• carrying out work, such as constructing, placing, repairing or maintaining pipes, poles, wires, cables, conduits, structures and equipment.

2 In exercising those powers, the owner of the lot benefited must:

(a) ensure all work is done properly, and

(b) cause as little inconvenience as is practicable to the owner and any occupier of the lot burdened, and

(c) cause as little damage as is practicable to the lot burdened and any improvement on it, and

(d) restore the lot burdened as nearly as is practicable to its former condition, and

(e) make good any collateral damage.

domestic services

99 There is no corresponding statutory provision which would read implications into a licence such as that which Mrs Thomas ratified.

100 That is not to say that there cannot sometimes be implications in a licence which is conferred. In the case of this particular licence, I am not satisfied that it is something which would have gone without saying, when Mr Thomas gave permission for the McKeands cables to be laid in the trench, that they would have the right to enter onto Mrs Thomas’ land for the purpose of maintaining the cables. Particularly is that so when, in the course of the conversation on 12 February 2002 which I have held is contractual, Mr Thomas said to Mr McKeand “You’re not likely to ever have to dig up electrical and telephone cables. You would just pull them through if there was ever a problem.”

101 Mr Thomas gave some specific evidence concerning his understanding on the need to enter the land for the purpose of maintenance:

“If the cables go wrong I assume they can pull them out and re-feed them through the same conduit that is there. I don’t see the need to dig them up at all, but that is only an assumption on my part. I don’t know how they sever these things.”

102 The correctness of his assumption was confirmed by Mr Wehbe:

103 In these circumstances I do not infer that the bare licence which Mrs Thomas ratified had implied in it any right of the McKeands to enter on Mrs Thomas’ land for maintenance.

Is Mrs Thomas Free to Revoke the Licence – Common Law

104 The question of whether Mrs Thomas is free to revoke the licence should be considered in two stages -- first, whether the common law would recognise such a right, and secondly, whether equity would recognise such a right.

105 In Minister of Health v Bellotti and another [1944] 1 KB 298 at 304 Lord Greene MR applied the statement of the Privy Council in Canadian Pacific Railway Co v The King [1931] AC 414 at 432, that

“Whether any and what restrictions exist on the power of a licensor to determine a revocable licence must, there Lordships think, depend upon the circumstances of each case.”

106 He rejected, at 305, the proposition that the only notice to terminate a licence which the law required was a period sufficient to enable the licensee to remove himself and his property from the premises comprised in the licence.

107 In some contexts, the common law does not regard a licence as being revocable. One example is Winter v Brockwell (1807) 8 East 308; 103 ER 359, an action in nuisance. The plaintiff occupied a house, which received light and air from a courtyard. He complained that the defendant had placed a skylight over the courtyard, which interfered with the plaintiff’s light and air, and prevented unpleasant smells from a neighbouring house from dissipating. Lord Ellenborough CJ upheld a defence that the skylight had been erected with the express consent of the plaintiff. His Lordship is reported, at 310 of East, 360 of ER as saying:

Web v Paternoster

108 Another example is Liggins v Inge (1831) 7 Bing 682; 131 ER 263. In that case, the plaintiff, a mill owner, had a right amounting to an incorporeal hereditament in a stream of water that ran by his mill. The defendant was an upstream mill owner. The defendant had, with the permission of the plaintiff’s father (who was the plaintiff’s predecessor in title), lowered the river banks and constructed weirs on the defendant's own land. This had the effect of reducing the flow of water past the plaintiff's mill. The permission that the plaintiff's father gave was parol, and so was insufficient to divest the plaintiff’s father of his property right. After some years, the plaintiff complained about the continuing presence of the weirs, and brought a common law action on the case against the defendant. The plaintiff failed. Tindal CJ said, at 692 of 7 Bing (NS), 267 of ER:

“We do not, however, consider the object, and still less the effect, of the parol licence, to be the transferring from the plaintiff's father to the defendants of any right or interest whatever in the water which was before accustomed to flow to the lower mill, but simply to be an acknowledgement, on the part of the plaintiff’s father, that he wanted such water no longer for the purposes of his mill…. And we think, after he has once clearly signified such relinquishment, whether by words or acts, and suffered other persons to act upon the faith of such relinquishment, and to incur expense in doing the very act to which his consent was given, it is too late then to retract such consent, or to throw on those other persons the burthen of restoring matters to their former state and condition.”

109 He explained further, at 694 of Bing (NS), 268 of ER:

“Still further, this is not a licence to do acts which consist in repetition, as to walk in a park, to use a carriageway, to fish in the waters of another, or the like: which licence, if countermanded, the party is but in the same situation as he was before it was granted; but this is a licence to construct a work, which is attended with expense to the party using the licence; so that, after the same is countermanded, the party to whom it was granted may sustain a heavy loss. It is a licence to do something that, in its own nature, seems intended to be permanent and continuing. And it was the fault of the party himself, if he meant to reserve the power of revoking such a licence, after it was carried into effect, that he did not expressly reserve that right when he granted the licence, or limit it as to duration.”

110 The principle in these cases has been accepted in New South Wales. In Naylor v Canterbury Park Racecourse Co Ltd (1935) 35 SR (NSW) 281 Jordan CJ (with whom Street and Maxwell JJ concurred) said, at 285:

Winter v Brockwell

Liggins v Inge

111 Similarly in Armstrong v Sheppard & Short Ltd [1959] 2 QB 384 at 399-401 Lord Evershed MR (with whom Ormerod LJ and Willmer LJ agreed) held that a licence to enter upon land and to work there is irrevocable, in the sense that once it has been acted upon by the doing of the work, it is not possible thereafter for the landowner to complain that the doing of the work was a trespass. Thus, if A has installed pipes in B’s land with B’s permission, B cannot thereafter say that the presence of the pipes in the land is a trespass. However his Lordship also held that a licence to pass effluent through pipes in another's land can be revocable, and indeed is revocable unless it is granted by a contract, and to continue to pass the effluent through the pipes after that licence has been revoked can be a trespass: ibid at 401-2.

112 The evidence in this case says nothing concerning what, if any, changes occur in a cable when it is used for the purpose of electricity transmission and telephone transmission. I would not assume, without evidence, that the use of the cables for those purposes involved, or did not involve, transmission of any thing, in a way analogous to the way in which a sewerage pipe conducts effluent through it. Thus, even though the principle in the cases I have just been considering has the effect that it would not be open to Mrs Thomas to require the McKeands to remove the cables from her land, the McKeands have not satisfied me that this principle is enough to entitle them to continue using the cables for electricity and telephone transmission.

113 As well, and importantly, the cases that I have been considering are ones where the fact that a licence had been granted provided a defence to what would otherwise have been a tort. That a licence is not revocable, in a context where what is being considered is a defence to an action for tort, does not mean that the common law provides any way in which that licence can be enforced. In fact, a gratuitous permission to do some act, at common law, does not, without more, confer on the person who has been granted that permission any right to sue the person who gave the permission if that permission is later withdrawn. Thus, even if, were Mrs Thomas to sue the McKeands for trespass because of the presence of the cables in her land, they would have a good defence because of the permission they were given to put the cables there, that does not mean that they have any rights which the common law recognises which enables them to bring an action themselves to stop Mrs Thomas from taking steps to deny them the use of the cables.

Is Mrs Thomas Free to Revoke the Licence -- Equitable Estoppel

114 In Ramsden v Dyson (1866) LR 1HL 129 Lord Kingsdown said, at 170:

115 Though this was a dissenting decision, his Lordship’s dissent was with respect to the facts rather than the law, and his statement of the law has been applied on many occasions, eg Plimmer v Mayor, Councillors and Citizens of the City of Wellington (1884) 9 App Cas 699 at 713, Inwards v Baker [1965] 2 QB 29 at 36,38; Crabb v Arun District Council [1976] Ch 179; Clancy and another v Salienta Pty Ltd and others (2000) 11 BPR 20,425 at [37], [166].

116 A more recent formulation of the principle is to be found in the joint judgment of Mason CJ and Wilson J in Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387 at 404. There, their Honours stated that the decision of the Court of Appeal in Crabb v Arun District Council [1976] 1 Ch 179 was consistent with the principle of proprietary estoppel applied in Ramsden v Dyson. Their Honours articulated that principle as follows:

Crabb

Ramsden v Dyson

117 Brennan J in Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387 at 428–9 put the principle as follows:

“In my opinion, to establish an equitable estoppel, it is necessary for a plaintiff to prove that: (1) the plaintiff assumed that a particular legal relationship then existed between the plaintiff and the defendant or expected that a particular legal relationship would exist between them and, in the latter case, that the defendant would not be free to withdraw from the expected legal relationship; (2) the defendant has induced the plaintiff to adopt that assumption or expectation; (3) the plaintiff acts or abstains from acting in reliance on the assumption or expectation; (4) the defendant knew or intended him to do so; (5) the plaintiff’s action or inaction will occasion detriment if the assumption or expectation is not fulfilled; and (6) the defendant has failed to act to avoid that detriment whether by fulfilling the assumption or expectation or otherwise. For the purposes of the second element, a defendant who has not actively induced the plaintiff to adopt an assumption or expectation will nevertheless be held to have done so if the assumption or expectation can be fulfilled only by a transfer of the defendant’s property, a diminution of his rights or an increase in his obligations and he, knowing that the plaintiff’s reliance on the assumption or expectation may cause detriment to the plaintiff if it is not fulfilled, fails to deny to the plaintiff the correctness of the assumption or expectation on which the plaintiff is conducting his affairs.”

118 The essence of the principle is stated by White J in Hoath v Connect Internet Services Pty Ltd [2006] NSWSC 158 at [200]; 69 IPR 62.

Ramsden v Dyson

Plimmer v Mayor of Wellington

Walton’s Stores (Interstate) Pty Ltd v Maher

Silovi Pty Ltd v Barbaro

Austotel Pty Ltd v Franklins Self-Serve Pty Ltd

119 In the present case, the cables would never have been laid on Mrs Thomas’ land without the permission and encouragement of Mr Thomas. The permission which Mr Thomas gave was not only to the initial laying of the cables, but to their continued use for the provision of electricity and telephone services. Mrs Thomas’ ratification extends to both the initial laying of the cables, and their continued use. That ratification means that the consent which Mr Thomas gave is regarded as having been given, on Mrs Thomas’ behalf, from the time Mr Thomas first gave it.

120 However the expenditure which the McKeands made concerning the cables was not particularly great. They paid Mr Wehbe $3300 for installing the cables. As well Mr McKeand recognises an obligation to reimburse Mr Thomas $198 for the amount which Mr Thomas paid to Mr de Belin (though Mr McKeand has not paid it yet, because he says he has not been asked for it). However, the McKeands having an obligation to reimburse that $198 is not something which flows from any action of Mr Thomas which Mrs Thomas has ratified. Thus I leave that $198 out of account, in deciding what is the appropriate remedy to grant against Mrs Thomas. If the only detrimental reliance which the McKeands had engaged in was paying for the laying and connection of the cables, and relief by way of equitable estoppel were otherwise appropriate, I would not regard that as being sufficient to give rise to anything more than a charge for that expenditure.

121 However, a far more significant item of detrimental reliance was carrying out work, of a kind which is ordinarily permanent, on Mrs Thomas’ land, and also disconnecting their previous service wires which ran across their own land. By those actions, they committed themselves, in practical terms, to having services that were very important for their home delivered through the trench for the indefinite future. On the basis on which I am approaching this question, Mrs Thomas’ limited ratification of Mr Thomas’ agreement results in her being regarded as having encouraged the McKeands to place the cables in the trench, and continue to use the cables, but without any agreement to grant them an easement.

122 If Mrs Thomas were now to revoke the licence, the McKeands would have no remedy at law against her, precisely because Mrs Thomas is not party to any contract under which she agreed to grant them an easement, or even a licence for any particular term.

123 Sometimes the outcome of a proprietary estoppel can be that a licence, which at law is revocable, comes to be irrevocable in equity: Plimmer v Mayor, Councillors and Citizens of the City of Wellington City. In such a case, the equitable remedy which is appropriate is a perpetual injunction to restrain the defendant from interfering with activities of the type which were licensed: Ward v Kirkland [1967] 1 Ch 194 at 242-3. That is the type of remedy which would be appropriate in the present case if any remedy based on proprietary estoppel were appropriate.

124 The terms of any such injunction against Mrs Thomas should be no wider than would be necessary to ensure that she does not go back on the ratification she has given to Mr Thomas’ conduct in granting permission for the cables to be laid and to continue to be used. That ratification did not extend to the granting of any ancillary rights to the McKeands, such as to enter upon her land for the purpose of future repair.

125 Any such injunction granted against Mrs Thomas would enable the McKeands to maintain their present services connections only during the period that Mrs Thomas was the registered proprietor of her land. Because equity acts in personam, and all that Mrs Thomas would be obliged to do is not to exercise her legal right to revoke the licence, it will be open to any later registered proprietor of Mrs Thomas’ land to require the McKeands to discontinue using the cables.

126 But whether any such injunction should be granted at all depends upon whether it would be unconscionable for Mrs Thomas to revoke the licence. If an injunction based upon proprietary estoppel were the only remedy available to the McKeands, it seems to me that it would be unconscionable for Mrs Thomas to revoke the licence, because it was her encouragement which led to the cables being there and relied on as the sole connection for important services. Even taking into account that it would be possible for the McKeands to obtain an alternative connection on their own property by paying $23,430, any need for them to expend that sum of money arises only because of her encouragement, and later retraction of the consent she gave. It is not so small an amount of money that it should be ignored. She makes no offer to meet the cost of them obtaining an alternative connection.

127 However, as appears later in this judgment, the McKeands have a right to recover damages from Mr Thomas. In deciding whether an equity of proprietary estoppel arises, the relevant question is what does conscionable behaviour require of the person against whom the equity is asserted. Even so, it seems to me that the availability of a right of damages against Mr Thomas affects what is conscionable behaviour for Mrs Thomas in the circumstances. If the McKeands were to recover from Mr Thomas damages which enabled them to have the services connected through a connection located solely on their own land, it would not, it seems to me, be unconscionable for Mrs Thomas to revoke the licence, from a date which gave the McKeands enough time to establish their alternative connection.

128 Having a right to recover damages, and actually recovering them, can be two different things. There is no evidence relating to the ability of Mr Thomas to satisfy any award of damages which might be made against him.

129 The appropriate way to deal with this, in my view, is by granting a perpetual injunction against revocation of the licence only on terms that the plaintiffs forego a right to damages against Mr Thomas. It would be for the plaintiffs to elect whether they will take the remedy of a perpetual injunction, or the damages remedy. If they elected for the damages remedy, an injunction against Mrs Thomas would be appropriate only for a limited time.

130 That election should be made as quickly as is reasonably practicable. I will hear submissions on how long should be allowed for making the election, or any conditions that might attach to it, if the parties cannot agree.

Ought an Easement Be Ordered Under Section 88K?

131 In Khattar & Anor v Wiese [2005] NSWSC 1014 Brereton J at [2] listed the issues which need to be considered before an easement is granted under section 88K:

“1 Is the proposed easement reasonably necessary for the effective use or development of the applicant’s land [s.88K(1)]?

2 Will the use of the applicant’s land be not inconsistent with the public interest [s.88K(2)(a)]?

3 Can the owner of the land to be burdened be adequately compensated for any loss or other disadvantage that would arise [s.88K(2)(b)]?

4 Have all reasonable attempts been made by the applicant to obtain the easement or an easement having the same effect, but been unsuccessful [s.88K(2)(c)]?

5 If yes to each of the foregoing, should the Court exercise its discretion to impose an easement [s.88K(1)]?

6 Unless there are special circumstances, what compensation should be imposed [s.88K(4)]?

7 Is there any reason why the costs should not be paid by the applicant [s.88K(5)]?”

132 Concerning the first of those requirements, Brereton J in Khattar at [24]-[27] said:

Conveyancing Act

absolutely

Tregoyd Gardens Pty Limited v Jervis

Goodwin v Yee Holdings Pty Ltd

Re Seaforth Land Sales Pty Ltd’s Land (No 2)

117 York Street Pty Limited v Proprietors of Strata Plan 16123

Katakouzinos v Roufir Pty Limited

all

reasonable

with

without

117 York Street

Katakouzinos v Roufir

Blulock Pty Limited v Majic

26 Accordingly, where, as in a case such as the present, a particular proposed use or development is in contemplation, the first question is whether that proposed use or development is a reasonable one (in comparison with the possible alternatives); and the second is whether that use or development with the proposed easement is substantially preferable to that use or development without the proposed easement.

Re Seaforth Land Sales Pty Limited v Land

Nelson v Calahorra Properties Pty Limited

Ex parte Edward Street Properties Pty Limited

Re Worthston Pty Limited

Tregoyd Gardens

Durack v D E Winton

Hanny v Lewis

Woodland v Manly Municipal Council

Katakouzinos v Roufir

Woodland v Manly Municipal Council

133 The comparison which this element of section 88K calls for is one between the use or development of the dominant tenement which would be possible if the easement were to be granted, and the use or development of the dominant tenement which would be possible if the easement were not granted. That is a matter of fact that is decided taking into account practical considerations concerning the types of structures that are physically capable of being built on the land or types of activities that are physically capable of being carried out on the land, any legal controls on the use or development of the land, the cost of the various alternative ways the land is used or developed, and the economic viability of the alternatives for use or development. By its use of the expression “effective use or development” it also involves an evaluation of the desirability of the various alternatives for use or development. By its use of the expression “reasonably necessary” it involves deciding how important the grant of the proposed easement is to the various alternatives for use or development.

134 In the present case, no “development” at all of the McKeands’ land is proposed. The “use” which is proposed is its continued use as a home. That use will be every bit as possible if an electricity connection is made within the McKeands’ own property boundaries as if the existing connection through Mrs Thomas’ land is maintained. The only practical difference would be that, if the cabling is laid within the McKeands’ own land, there might be some inhibition about developing the land in the immediate vicinity of where that cabling is laid. However, given that the cabling is to be laid quite close to the boundary, I am not satisfied that any such inhibition is of any real significance.

135 Thus, I am not satisfied that the grant of an easement for services over Mrs Thomas’ land is reasonably necessary for the effective use or development of the McKeands’ land.

136 In that situation, the application under section 88K must fail. However, lest there be an appeal, I will briefly indicate my findings concerning other elements relevant to section 88K.

137 I am satisfied that use of the McKeands’ land with an easement for services over the Thomas’ land would not be inconsistent with the public interest.

138 I am satisfied that Mrs Thomas can be adequately compensated for any loss or other disadvantage which will arise from the provision of the easement. I accept the evidence of Mr Rendall, a valuer, that the appropriate amount of such compensation would be $6,380.

139 I am not satisfied that all reasonable attempts have been made to obtain the easement or an easement having the same effect. The plaintiffs have never made any offer of compensation for the grant of an easement. Rather, they consistently took the stance, which I have held was mistaken, that they had a specifically performable agreement for the grant of an easement.

Breach of Warranty of Authority By Mr Thomas?

140 It is, in my view, implicit in the conversation which Mr Thomas had with Mr McKeand on 12 February 2002 that Mr Thomas had authority to make the agreement he was making. I have already found he did not have that authority. Mr McKeand (acting for himself and his wife) relied on Mr Thomas being authorised by Mrs Thomas. In those circumstances Mr Thomas is liable for breach of warranty of authority: Rummery & Anor v Dorsman & Ors (1996) NSW ConvR 55-780.

141 The measure of damages for breach of warranty of authority is the contractual one – the sum of money which would place the plaintiffs in the position they would have been in if the warranty had been true. The closest practical way of ascertaining that amount is by reference to the cost which the plaintiffs are likely to incur in connecting their services using the underground/overhead type of connection proposed by Mr Castles and approved by Mr Schimke. The best estimate of the cost of implementing that alternative is $23,430.

Negligent Misrepresentation By Mr Thomas?

142 While this issue remained on the pleadings, it was scarcely argued for. In those circumstances, I will not examine whether, in circumstances where the law deems a warranty of authority to exist, it would also regard there as being a duty to take reasonable care in making a representation that one had authority.

143 If there were to be such a duty of care, it is clear enough that it has been breached.

144 Damages for negligent misrepresentation are assessed as that sum of money which would put the plaintiffs into the situation they would have been in if the representation had never been made. Before the representation was made, the McKeands had their services connected by an aerial connection to the eaves. It is no longer practical for them to reconnect their services in that way. However, services can be reconnected using the method proposed by Mr Castles. Any damages for the tort of negligent misrepresentation would not exceed those for breach of warranty of authority.

The Defendants’ Cross-Claim

145 The precise orders which the cross-claimants claim are:

“1. A declaration that there was no oral or other agreement entered into between the parties for the creation of any easement across the First Cross Claimant’s land known as 1 Aleta Close, Wahroonga for the benefit of the Plaintiffs/Cross Defendants.

Conveyancing Act,

3. An order otherwise dismissing the Plaintiffs’/Cross Defendants’ Amended Statement of Claim filed 26 May 2006.

4. An order that the Plaintiffs’/Cross Defendants’ connection to their underground services located in a trench on the First Cross Claimant’s land at 1 Aleta Close Wahroonga constitutes a trespass against the First Cross Claimant’s said land.

5. An order that the Plaintiffs’/Cross Defendants’, at their sole expense, do all things necessary in order to fully disconnect their current underground services which are located in a trench on the First Cross Claimant’s land at 1 Aleta Close Wahroonga and have such services reconnected fully on their own land.

6. An order that the Plaintiffs/Cross Defendants pay the Cross Claimants’ costs of these proceedings, on an indemnity basis (including interest on costs).”

146 It follows, from the findings I have already made, that a declaration in terms of the first prayer for relief in the Cross-Claim would misrepresent the situation, because there was an agreement between the McKeands and Mr Thomas for the grant of an easement. However, the Cross-Claimants are, it seems to me, entitled to a declaration that there was no oral or other agreement entered into between the plaintiffs and Mareta Thomas for the creation of any easement across Mareta Thomas’ land known as 1 Aleta Close, Wahroonga.

147 While it is appropriate to dismiss the plaintiffs’ application under section 88K, no useful purpose would be served by making a declaration of the kind sought by the second prayer for relief.

148 In light of the findings I have already made, the third prayer for relief in the Cross-Claim is not appropriate.

149 Because of the limited rights, arising from equitable estoppel, which the plaintiffs have to keep their services in the conduit in which they presently lie, it would not be appropriate to make an order or declaration of the type sought by the fourth prayer for relief in the Cross-Claim. It is not necessary to decide whether in addition the plaintiffs would have had a valid defence at common law to an action for trespass arising from their continuing use of the cables.

150 What should be done concerning the fifth prayer for relief will depend upon what remedy the plaintiffs elect to take. If they elect to take their remedy of damages, that election will mean that it is not appropriate for a perpetual injunction to be granted restraining Mrs Thomas from interfering with the continuance of the services. However, it will be the exercise of that election which is the cause of the injunctive remedy becoming inappropriate. Choosing the damages remedy would also be, in my view, an election henceforth not to rely upon the permission which was granted for the cables to remain in the trench. Once that election had been made, the plaintiffs could no longer rely upon that licence to justify the presence of the cables on Mrs Thomas’ land. That does not mean, however, that the plaintiffs would become trespassers the moment they made such an election. In Minister of Health v Bellotti & Anor [1944] 1 KB 298 at 305 Lord Greene MR rejected the proposition that the only notice to terminate a licence which the law required was a period sufficient to enable the licensee to remove himself and his property from the premises comprised in the licence. At 305-6 he said that:

“The true view is that where a licence is revoked, the licensee has, in spite of the revocation, whatever in the circumstances is a reasonable time to enable him to remove himself and his possessions from the scene of the licence.”

151 In the circumstances of the present case, if the plaintiffs were by their own election to become disentitled to the ongoing benefit of the licence, they would, by similar reasoning, have a reasonable time in which to remove or cease using the cables. In circumstances where the presence of the cables is not inconveniencing Mrs Thomas in the least, and where it would require arrangements to be made (possibly including permission from the Council or other statutory authorities) to reconnect the McKeands’ services by a different route, I would not be surprised if a reasonable time was not six months, and possibly more, from the date of the election being made. However, I nominate that period without having heard from the parties, and would entertain submissions on the appropriate length of time.

152 Because Mrs Thomas has a proprietary right in her land, once an infringement of that right is established, prima facie she is entitled to an injunction, unless the wrong done is, in the circumstances, trivial: Armstrong v Sheppard & Short Ltd [1959] 2 QB 384 at 396-7. If the plaintiffs were to elect to take the damages remedy, while an order enforcing their lack of rights over Mrs Thomas’ land would be appropriate, running from a time which gave the plaintiffs enough time to reconnect their services within their own land, the precise terms of any such order may require some further consideration. It may be more appropriately framed in terms of requiring them not to use the cables, but that is a matter on which I would receive further submissions.

Interest and Costs

153 Further submissions concerning whether interest should be awarded, or costs orders made, should be made in the light of these reasons for judgment.

**********

Actions

Download as PDF Download as Word Document

Citations

McKeand v Thomas [2006] NSWSC 1028

Most Recent Citation

Bendigo and Adelaide Bank Limited (ACN 068 049 178) v Kenneth Ross Pickard [2019] SASC 123

Cases Citing This Decision

13

McHugh v Eastern Star Gas Ltd [2012] NSWCA 169

Leybourne v Permanent Custodians Ltd [2010] NSWCA 78

Moneytech Finance Pty Ltd v Diamond Made Pty Ltd (in Liquidation) [2019] NSWSC 259

Cases Cited

14

Statutory Material Cited

2

Campbell v McGrath [2005] NSWSC 496

McGrath v Campbell [2006] NSWCA 180

Branir Pty Ltd v Owston Nominees (No 2) Pty Ltd [2001] FCA 1833

CITATION:	McKeand v Thomas [2006] NSWSC 1028
HEARING DATE(S):	26/7/06-28/7/06 & 28/8/06
JUDGMENT DATE :	25 October 2006
JURISDICTION:	Equity
JUDGMENT OF:	Campbell J
DECISION:	Parties to bring in Short Minutes.
CATCHWORDS:	CONTRACTS - GENERAL CONTRACTUAL PRINCIPLES - intention to enter legal relations - REAL PROPERTY - easements - when implied easements arise under first rule in Wheeldon v Burrows (1879) 12 Ch D 31 - PRINCIPAL AND AGENT - authority of agent - authority to enter contract distinguished from authority to administer contract - PRINCIPAL AND AGENT - authority of agent - ostensible authority - PRINCIPAL AND AGENT - ratification - need for full knowledge of material circumstances or adoption regardless of material circumstances - PRINCIPAL AND AGENT - ratification - circumstance in which adoption of part of a transaction involves ratifying the whole of it - EASEMENTS - implied incidental rights - LICENCES - implication of terms in - LICENCES - circumstances in which common law regards a licence as irrevocable - ESTOPPEL - equitable estoppel - proprietary estoppel - circumstances when a licence becomes irrevocable - effect on grant of injunction against revocation of licence of availability of remedy in damages against someone other than the licensor - EASEMENTS - creation - under statute - section 88K Conveyancing Act 1919 - requirement that proposed easement "reasonably necessary for the effective use or development" of the applicant's land - PRINCIPAL AND AGENT - breach of warranty of authority
LEGISLATION CITED:	Conveyancing Act 1919 Electricity (Consumer Safety) Regulations 2006
CASES CITED:	Armstrong v Sheppard & Short Ltd [1959] 2 QB 384 Australian Blue Metal Limited v Hughes (1961) 79 WN (NSW) 498 Australian Blue Metal Ltd v Robert Frank Hughes & Others [1963] AC 74 Bank of Montreal v Dominion Gresham Guarantee and Casualty Company, Limited [1930] AC 659 Brockway v Pando (2000) 22 WAR 405 Campbell v McGrath [2005] NSWSC 496; (2005) 12 BPR 23,073; [2005] ANZ ConvR 435 Canadian Pacific Railway Co v The King [1931] AC 414 Clancy and another v Salienta Pty Ltd and others (2000) 11 BPR 20,425 Crabb v Arun District Council [1976] Ch 179 Crabbtree-Vickers Pty Ltd v Australian Direct Mail Advertising & Addressing Co Pty Ltd (1975) 133 CLR 72 Di Bello & Anor v De Costi Seafoods (Holdings) Pty Ltd [2005] NSWCA 267 Freeman & Lockyer v Buckhurst Park Properties (Mangal) Ltd [1964] 2 QB 480 Hemmes Hermitage Pty Ltd v Abdurahman & Anor (1991) 22 NSWLR 343 Hoath v Connect Internet Services Pty Ltd [2006] NSWSC 158 Inwards v Baker [1965] 2 QB 29 Khattar & Anor v Wiese [2005] NSWSC 1014 Liggins v Inge (1831) 7 Bing 682; 131 ER 263 Maher v Bayview Golf Club Ltd [2004] NSWSC 275; (2004) 12 BPR 22,457 Marsh v Joseph [1897] 1 Ch 213 McGrath & Anor v Campbell & Anor [2006] NSWCA 180 Minister of Health v Bellotti and another [1944] 1 KB 298 Naylor v Canterbury Park Racecourse Co Ltd (1935) 35 SR (NSW) 281 Plimmer v Mayor, Councillors and Citizens of the City of Wellington (1884) 9 App Cas 699 Powell v Smith (1872) LR 14 Eq 85 Ramsden v Dyson (1866) LR 1HL 129 Republic of Peru v Peruvian Guano Company (1887) 36 Ch D 489 Riches v Hogben [1985] 2 Qd R 292 Riches v Hogben [1986] 1 Qd R 315 Rummery & Anor v Dorsman & Ors (1996) NSW ConvR 55-780 State Rail Authority of New South Wales v Heath Outdoor Pty Ltd (1986) 7 NSWLR 170 Taylor v Smith (1926) 38 CLR 48 The Owners of SP 48754 v Anderson [1999] NSWSC 580, (1999) 9 BPR 17,119 The Phosphate of Lime Company, Limited v Green and Anor (1871) 7 CP 43 Union Bank of Australia Ltd v McClintock [1922] 1 AC 240 Wakeling v Ripley (1951) 51 SR (NSW) 183 Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387 Ward v Kirkland [1967] 1 Ch 194 Wheeldon v Burrows (1879) 12 Ch D 31 Wilton and another v Commonwealth Trading Bank of Australia; Model Investments Pty Ltd (Third Party) [1973] 2 NSWLR 644 Winter v Brockwell (1807) 8 East 308
PARTIES:	Ross Tyndall McKeand - First Plaintiff Diane Elizabeth McKeand - Second Plaintiff Mareta Thomas - First Defendant Fred Thomas - Second Defendant
FILE NUMBER(S):	SC 1864/05
COUNSEL:	F Corsaro SC; B Sharp - Plaintiffs V Culkoff - Defendants
SOLICITORS:	NOT Lawyers - Plaintiffs Steven Klinger - Defendants