Northey v Bega Valley Shire Council

[2010] NSWSC 527

CITATION:	Northey v Bega Valley Shire Council [2010] NSWSC 527
HEARING DATE(S):	16 December 2009
JUDGMENT DATE :	25 May 2010
JURISDICTION:	Equity Division Expedition List
JUDGMENT OF:	Brereton J
DECISION:	Proceedings dismissed with costs
CATCHWORDS:	ESTOPPEL - estoppel in pais - equitable estoppel - general principles – ESTOPPEL - estoppel in pais - matters against which estoppel does not prevail - statutory provisions – where by statute council can consent to erection of structures on a public road but consent is revocable at any time and for any reason – consent cannot be made irrevocable by estoppel – ESTOPPEL - estoppel in pais - application of doctrine to public authorities – roads authorities – ESTOPPEL - estoppel in pais - who are bound – authority of defendant’s agent – within reasonable limits, those to whom a party entrusts the conduct of negotiations must be treated as having the authority, which, within the course of the negotiations, they purport to exercise
LEGISLATION CITED:	(NSW) Dividing Fences Act 1991, s 3, s 11, s 14, s 25 (NSW) Roads Act 1993, s 138, s 139, s 107, s 140, s 141, s 145, s 146
CATEGORY:	Principal judgment
CASES CITED:	Attorney-General to His Royal Highness the Prince of Wales v Collom [1916] 2 KB 193 Attorney-General v The Municipal Council of Sydney (1919) 20 SR (NSW) 46 Challis v Destination Marlborough Trust Board Inc [2003] 2 NZLR 107 Corporation of London v Riggs (1880) 12 Ch D 798 Crabb v Arun District Council [1976] Ch 179; [1975] 3 All ER 865 Gibson v McGeorge (1866) 5 SCR (NSW) 44 Legione v Hateley (1983) 152 CLR 406; 46 ALR 1 Lukey v Sydney Harbour Trust Commissioner (1902) 2 SR (NSW) 152 Moorgate Mercantile Co Ltd v Twitchings [1975] 3 All ER 314 Newbury District Council v Secretary of State for the Environment [1981] AC 578 Nickerson v Barraclough [1981] Ch 426 Northey v Bega Valley Shire Council [2008] NSWLEC 319 NSW Trotting Club Limited v Glebe Municipal Council (1937) 37 SR (NSW) 288 NSW v Scharer [2003] NSWCA 328 Pinnington v Galland (1853) 9 Exch 1, 12-12; 156 ER 1, 6 R v East Sussex County Council [2003] 1 WLR 348 Waltons Stores (interstate) Limited v Maher (1988) 164 CLR 387
TEXTS CITED:	Handley, Estoppel by Conduct and Election, (2006) Meagher, Heydon & Leeming, Equity: Doctrines & Remedies, (2002)
PARTIES:	Janice Northey (plaintiff) Bega Valley Shire Council (defendant)
FILE NUMBER(S):	SC 2008/281995
COUNSEL:	Mr D Raphael (plaintiff) Mr E Peterson (defendant)
SOLICITORS:	Andrew Warren Associates (defendant)

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

BRERETON J

Tuesday, 25 May 2010

2008/281995 Janice Northey v Bega Valley Shire Council

JUDGMENT

1 HIS HONOUR: The plaintiff Janice Louise Northey and her husband Troy Northey (who inexplicably is not a party, although no point was taken in this respect) are the registered proprietors as tenants in common in equal shares of a rural property known as Kia-Ora, being Lot 1 in DP 576558 at Tantawangalo, the eastern boundary of which is formed by the mid-line of Tantawangalo Creek. According to a survey performed on 23 June 2009 by Mr Robert Webb, surveyor, for Mrs Northey – a copy of which is appended – an irregular salient of land that forms the south-eastern extremity of Kia-Ora is abutted, on the south-eastern bank of Tantawangalo Creek, by Lot 7008 (a former travelling stock reserve, which is Crown Land) in the south, and part of Portion 10 (apparently in the ownership of Charlotte Maude Lucas and Ian William Lucas) in the north. Lot 7008 and Part Portion 10 run along the southeastern embankment of Tantawangalo Creek. At the top of that embankment, running approximately southwest to northeast and parallel to and about 25 metres south-east of the south-eastern bank of the creek, is a road reserve 20.115 metres wide and variable, along which runs the Tantawangalo Mountain Road. The road reserve, which is Lot 2 in DP 252303, was on 2 July 1976 resumed (not from Kia-Ora) and declared to be a public road, and – by (NSW) Roads Act 1993, s 145(3) – is vested in fee simple in the defendant Bega Valley Shire Council, which is the roads authority, within the meaning of the Roads Act, for the Tantawangalo Mountain Road. (The existence of Lot 7008 and Part Portion 10 between the Tantawangalo Mountain Road reserve and Tantawangalo Creek is not apparent on most of the plans in evidence, but has been examined only by Mr Webb, and there is no reason to doubt his findings in this behalf).

2 The road is on the outer side of a curve in Tantawangalo Creek, and the ground rises from the creek to the road. From at least 1973, when Mrs Northey was 11 years of age, her family (the Dennys) lived on Kia-Ora, which they then operated as a dairy farm. Mrs Northey has herself lived on the property since 1973. In due course she inherited it from her mother, and presumably subsequently transferred a half interest to her husband. Since before 1973 (Mrs Northey suggests, but cannot say, since about 1925) a fence running approximately parallel to and between the creek and the road, and standing about eleven metres southeast of the east bank of the creek, has provided the occupational boundary between Kia-Ora and the road. The location of that fence on the high (outer) bank of Tantawangalo Creek meant that stock could access the water in the creek from Kia-Ora. According to Mr Webb’s survey – which in this respect does not appear to be materially discrepant from that of Mr Jarman, surveyor, who gave evidence for the Council – the old fence is closely coincident with the north-western boundary of the road reserve, where it abuts Lot 7008 and Part Portion 10. A water main runs between and parallel to the old fence and the road.

3 By about 2004, the old fence was in disrepair. The Northeys approached Mr Barry Whittaker, who was then a foreman with Bega Valley Shire Council in charge of a construction team that worked on the bitumen and gravel roads in the shire. Mrs Northey asked him to have a look at the fence line, and they appointed a day for him to do so. Mr Whittaker observed that the extant fence was situated half way down the creek bank from the road. Mrs Northey proposed using a bulldozer to flatten the embankment, but Mr Whittaker responded that she could not, as to do so would erode the whole bank. He suggested:

How about we put the fence up on top of the bank, which puts the fence into the road easement by about five or six metres? As long as the council has about three or four metres off the edge of the gravel road so that the council’s graders can grade the road without hitting the fence line that should do it.

4 They walked the fence line. Mr Whittaker considered that it would be easy to erect a fence in the location he proposed, and would involve little disturbance of existing vegetation. However, he found that if the fence were located there, it would be between the water main and the road, so he said:

If the fence goes here, the council will require access to it to repair the pipe. We will need two gates, one at each end so we can get access either end to get to the water pipe.

5 Mrs Northey said that she did not need gates, and Mr Whittaker said that the Council would provide the gates (as, in due course, it did). A few days after he had walked the fence line with Mrs Northey, at a weekly meeting of the Council’s works sections, Mr Whittaker explained to those present what he had proposed in relocating the fence line. There was no objection, and he proceeded to authorise provision of the gates, and the Northeys proceeded to erect the fence. Just when this took place is not entirely clear from the evidence, but it was probably in 2007. Two Council workers erected the gates and fittings. Otherwise, Mr and Mrs Northey erected the fence, in the location indicated by Mr Whittaker, about eighteen metres southeast of and parallel to the east bank. The survey evidence establishes that the new fence stands up to nine metres inside the road reserve.

6 In December 2007, the Council wrote to the Northeys, requesting that they remove fencing from the Council road reserve and public recreation area along Tantawangalo Road, and stating that it was understood that they might have erected the fence in order to allow stock to use that area. Council requested that they remove the fence within one month. On 2 July 2008, the Council wrote again, referring to the request of December 2007, recording that they had since received further complaints about the fence, and requesting that the Northeys remove it within two weeks, failing which the Council would remove it and impound the materials. This not having produced the desired response, on 13 August 2008, the Council sent to the Northeys a letter, relevantly as follows:

Roads Act 1993 Direction to remove unauthorised fencing
You are the owner of land used or capable of being used in connection with unauthorised fencing on the road reserve of Tantawangalo Mountain Road and Tantawangalo Lane.
Please be advised that you are directed under section 107 of the Roads Act 1993 to remove the unauthorised fence and all associated materials from the Tantawangalo Mountain Road and Tantawangalo Lane road reserves. This direction should be complied with within twenty-eight days of the date hereon.
Please note that section 238 of the Roads Act 1993 gives council power to take such action as is necessary to give effect to the direction if it is not complied with. Council’s costs in removing the fence will be recovered in the Local Court if required. In addition failure to comply with the direction is an offence with substantial penalties applying.

7 Mrs Northey commenced proceedings in the Land & Environment Court; on 10 December 2008, Sheahan J of that court dismissed those proceedings for want of jurisdiction [Northey v Bega Valley Shire Council [2008] NSWLEC 319]. Mrs Northey then commenced these proceedings, by summons filed on 10 December 2008, on which date she also obtained an interim injunction restraining the Council from removing the fence; that injunction was later continued, on an interlocutory basis, until further order. By her summons, as well as an injunction restraining the Council from removing the fence, Mrs Northey also sought an order prohibiting the Council from taking all the water from Tantawangalo Creek. This second (“water”) claim, in respect of which both parties prepared and filed a substantial amount of evidence, was abandoned at the final hearing. Accordingly, the only remaining issue is whether Mrs Northey is entitled to a final injunction restraining the Council from removing the fence.

8 In the course of the proceedings, various arguments were advanced on behalf of Mrs Northey including for continuation of a (cancelled) “permit to enclose road or water course”, for recognition of “riparian rights”, for title by adverse possession, for an easement under the doctrine of “lost modern grant”, and for an easement by prescription. Ultimately, in the plaintiff’s final submissions of 5 January 2010, all these were abandoned. They need no further comment, save that, as to the first, while there was in evidence of a permit granted in 1922 to enclose part of Tantawangalo Creek adjoining certain identified parcels of land, the parcels to which it referred – portions 165 and 184 – have never formed part of Kia-Ora, but are located to its south, and, in any event, the permit was cancelled on 3 December 1985; it does not establish any previous let alone continuing right of the plaintiff or her predecessors in respect of Kia-Ora.

9 In the absence of the proprietors of Lot 7008 and Part Portion 10, this judgment can decide nothing as to rights in respect of those lots. It addresses solely Mrs Northey’s entitlement to have the new fence remain where it is currently located, on the Tantawangalo Mountain Road reserve. Ultimately, the plaintiff’s case was put on the basis of:

· an easement by necessity; and

· a grant of permission (consent) to erection of the new fence, founding an estoppel precluding the Council from insisting on its strict legal right to remove the new fence.

10 The mere fact that Mrs Northey may have had permission to erect the new fence, if that be established, does not avail her if that permission can be revoked. A license to enter upon another’s land is revocable, unless there is a contractual or proprietary right or an estoppel that makes it irrevocable. Accordingly, the mere claim of “permission” will not avail the plaintiff, unless she can establish an easement or an estoppel.

No easement of necessity

11 An easement by necessity may arise where a landowner disposes of part and retains another part of his or her land, leaving one or other part landlocked [Gibson v McGeorge (1866) 5 SCR (NSW) 44; Pinnington v Galland (1853) 9 Exch 1, 12-13; 156 ER 1, 6; Corporation of London v Riggs (1880) 12 Ch D 798], but such an easement arises only upon a “severance” of land in common ownership and not at large [Nickerson v Barraclough [1981] Ch 426, 440].

12 The circumstances here are entirely outside the scope of the doctrine of easements of necessity. There was no relevant “severance” of land in common ownership.

Equitable estoppel?

13 Generally speaking, the matters which a plaintiff must establish to found an equitable estoppel may conveniently be summarised, in the present context at least, as follows [see generally Waltons Stores (Interstate) Limited v Maher (1988) 164 CLR 387, 428-429 (Brennan J); Meagher, Heydon & Leeming, Equity: Doctrines & Remedies, (2002) [17-105]]:

· First, in relation to the plaintiff’s conduct: that the plaintiff acted (or abstained from acting) in reliance upon an assumption or expectation that a particular legal relationship existed or would exist between the plaintiff and the defendant, or that the plaintiff had or would acquire some interest in the defendant’s property; · Secondly, in relation to the defendant’s conduct: that the defendant induced the plaintiff to adopt the assumption or expectation and encouraged the reliant activities of the plaintiff, or at least failed to deny the assumption or expectation with knowledge that the plaintiff was relying on it to the plaintiff’s potential detriment and that it could be fulfilled by transfer of the defendant’s property, a diminution of the defendant’s rights or an increase in the defendant’s obligations; · Thirdly, in relation to the interest or property: that the assumption or expectation was one that the defendant could lawfully satisfy.

14 In my view the evidence, slight as it is, plainly establishes that Mrs Northey acted in reliance upon an assumption or expectation that she would be permitted indefinitely to maintain a fence in the location of the new fence on the defendant’s property. It is a matter of common sense that, but for such an expectation, she would not have expended money and labour to erect a fence where she did. In my view the first element is satisfied.

Was the Council so implicated as to affect its conscience?

15 As to the second, there is no doubt that Mr Whittaker induced Mrs Northey to adopt her assumption or expectation, and encouraged her reliant activities. He suggested that the fence be located where she subsequently erected it, and caused the Council to provide gates for it. Even if Mr Whittaker was under a misapprehension as to the true location of the legal boundary in thinking that it was proximate to the old fence (which, on Mr Webb’s survey, was indeed the true boundary of the road reserve, though not of Kia-Ora), nonetheless he knew that the new fence would stand inside the road reserve. The Council’s submissions give considerable emphasis to the circumstance that, according to Mr Whittaker, Mrs Northey told him that the derelict old fence was erected on her boundary line. The relevant portion of Mr Whittaker’s evidence was as follows:

Q. When you attended that meeting with Ms Janice Northey she told you that she was the property owner owning a block of land approximately to the west of that section of Tantawangalo Mountain Road that you attended?
A. I knew she owned the property.

Q. Did you have any opinion of where the eastern boundary of her property was situated?
A. I knew it was roughly half way down the river bank.

Q. When you say that, were you identifying the location of a derelict fence?
A. Yes.

…

Q. A minute ago you said you formed an opinion of Ms Northey’s property, you agreed the boundary as you understood it coincided with the fence that you saw half way down towards the creek. What information lead you to that location of the boundary line?
A. She told me that was the true boundary.

Q. She pointed at the fence?
A. Yes.

Q. And she said “that is the boundary of my property”?
A. Yes.

Q. When she did that she was pointing at the derelict fence and not pointing at the creek?
A. Yes.

Q. You formed an opinion her block of land extended towards and up towards the fence?
A. Yes.

16 Although it is true that in this passage Mr Whittaker attributed to Mrs Northey the source of his understanding, I am unconvinced that this reflects a specific recollection of any claim by Mrs Northey to that effect, as distinct from something assumed by Mr Whittaker from the location of the old fence. In any event, the old fence was, as Mr Webb’s survey establishes, closely coincident with the true northwestern boundary of the road reserve. While that is not the same thing as the boundary of the Northeys’ land, it deprives the point of much force: on any view, the old fence did not encroach significantly if at all on the road reserve, so Mr Whittaker’s assumption was not misconceived in any way that affected the extent of the potential encroachment onto the road reserve.

17 The critical question is whether Mr Whittaker’s conduct can be attributed to the Council. For Mrs Northey, Mr Raphael did not submit that Mr Whittaker had actual authority. It is apparent from his job description that he was engaged as “team leader (roads)” and because a foreman in charge of a construction team which dealt with bitumen and gravel roads in the shire. He had no actual authority to enter into dealings concerning title to or use of land, or to create easements. Mr Whittaker says that he reported the proposal to a meeting of works sections. While this is some evidence that the matter was brought to the notice of some subsidiary staff organ of the Council, the evidence does not disclose who was present, and does not establish actual authority. And although it was argued that he had ostensible authority, there was no “holding out” or other “arming” of Mr Whittaker with the means to present himself as the Council’s agent for the purpose of land dealings or creating an easement. An employee cannot acquire ostensible authority simply by acting as if he has that authority; there must be some representation by the alleged principal.

18 However, as the following cases show, in the field of equitable estoppel, a party may become sufficiently implicated in conduct founding an estoppel in circumstances that fall short of what would be recognised at common law as agency: within reasonable limits, those to whom a party entrusts the conduct of negotiations must be treated as having the authority, which, within the course of the negotiations, they purport to exercise. This is illustrated by the leading case of Legione v Hateley (1983) 152 CLR 406; 46 ALR 1 in which, it will be recalled, the crucial conversation from which the relevant representation was said to arise was that the purchasers’ solicitor told a secretary of the vendors’ solicitor that the purchasers would be ready to settle on 17 August, to which the secretary responded “I think that will be alright but I’ll have to get instructions” – which was said to convey a representation that, unless advised to the contrary, the purchasers could with impunity disregard the expiry in the meantime of a notice to complete. In the dissenting judgment of Gibbs CJ and Murphy J, their Honours said that there would be an estoppel if the following facts were established (at 46 ALR, 9):

(1) that Miss Williams, by saying that she would get instructions, induced the solicitors for the purchasers to believe that the vendors’ right to rescind the contract would be kept in abeyance until the instructions were obtained and communicated, and intended that those solicitors should act on that belief;
(2) that the vendors are bound by the conduct of Miss Williams;
(3) that the solicitors for the purchasers, acting on the faith of that inducement, desisted from paying the balance of the purchase price within the time specified in the notice of rescission, although they would otherwise have made payment within that time; and
(4) that it would be inequitable to allow the vendors to rescind the contract without first informing the purchasers that no extension of time would be granted and then giving the purchasers a reasonable opportunity to make the payment.

19 As to the question of the authority of the secretary, Miss Williams, their Honours said that, within reasonable limits, the solicitors, having been entrusted by the vendors with the conduct of the negotiations, must be treated as having the authority which, within the course of the negotiations, they purported to exercise:

It is of course clear that neither the solicitors, nor Miss Williams, had any actual authority from the vendors to make any representation to the purchasers that the vendors’ rights would be kept in abeyance. But the vendors had authorized the solicitors to act for them in completing the sale. Within reasonable limits, the solicitors, having been entrusted by the vendors with the conduct of the negotiations, must be treated as having the authority which, within the course of the negotiations, they purported to exercise: cf Crabb v Arun District Council [1976] Ch 179 at 193. “The solicitor is to be regarded as the alter ego of the client and the rights of the other party to the contract cannot be made to depend upon the diligence or lack of diligence exhibited by the solicitor in his dealings with his client”: Sargent v ASL Developments Ltd (1974) 4 ALR 257; 131 CLR 634, at 659; see also at 649. It was of course the conduct of the vendors that gave the solicitors ostensible authority to act on their behalf. The authority extended to actions carried out in the ordinary course of business by such members or employees of the firm as ordinarily acted for it. When the solicitors selected or permitted Miss Williams to speak on their behalf, in their capacity as solicitors for the vendors, her words bound the vendors. It was no doubt to be expected that if Miss Williams was employed as a secretary, she would promptly communicate the conversation to a member of the firm, who, if he wished to resile from what she had said, could have informed the purchasers’ solicitors accordingly. Similarly one would have expected the solicitors to communicate promptly with the vendors – the fact that the vendors were in Queensland does not mean that they were incommunicado – and, again, to inform the purchasers’ solicitors of any change of attitude. If there was any lack of diligence on the part of the vendors’ solicitors — and we do not suggest that there was – that cannot affect the position of the purchasers.

20 Mason and Deane JJ, who were in the majority, said that the alleged representation, if made, would have been within the authority of Miss Williams, although she was but the secretary of the solicitor, inter alia because she was the person to whom the purchaser’s solicitor was connected when he asked to speak to the person dealing with the matter. (at 46 ALR, 22-23):

If what was said on 9 August 1979 by Miss Williams of the firm of solicitors acting for the vendors to Mr Gardiner, who was the solicitor acting for Mr and Mrs Hateley, amounted to such a representation, it was within the ostensible authority of the solicitor for the vendors to make it on behalf of the vendors. It is true that the evidence indicates that Miss Williams was but the secretary of that solicitor. She was, however, the person to whom Mr Gardiner was connected when he asked to speak to the person dealing with the matter. More importantly, examination of the correspondence between solicitors indicates that it was Miss Williams who had signed in her own name, on behalf of the vendors’ solicitors, a letter advising that the vendors were not prepared to extend the due date for completion of the contract of sale and a subsequent letter enclosing a copy of the notice of rescission.

21 Brennan J, on the other hand, thought that the express reference to the need for instructions precluded any argument that Miss Williams had the relevant authority (at 46 ALR, 35):

But [Miss Williams] expressed no more than her expectation. She made no promise or representation on behalf of the vendors that they would extend the time or would keep the contract on foot until 17 August; on the contrary, she said that she had to obtain the vendors’ instructions. A principal is not bound by an act of an agent who declares that he has no authority from his principal to bind him by that act ( Lysaght Bros & Co Ltd v Falk (1905) 2 CLR 421 at 430–1).
…
Could Miss Williams’ statement have been understood reasonably by Mr Gardiner as making a promise or representation that, although the time for compliance with the notice might expire, the contract would not become rescinded while instructions were being obtained and for a reasonable time thereafter? The courtesies commonly observed by solicitors negotiating on their clients’ behalf may give rise to an expectation that the status quo will be maintained as between their clients while instructions are being obtained, but whether a conversation which engenders such an expectation amounts to a promise or representation binding on the clients depends upon all the relevant circumstances. A relevant circumstance is the known limits of a solicitor's authority in the matter. Negotiations between solicitors are negotiations between agents, and the known limits of the authority – albeit the apparent or implied authority – of the respective agents define the ambit of their negotiations and thus shape the promises or representations binding upon the clients which can be inferred from the course of the negotiations. Generally speaking, when a party gives a notice to another party to secure or to facilitate the exercise of the first party's rights – such as the notice given by the vendors to the purchasers in the present case – the solicitor for the first party has no apparent or implied authority to countermand or qualify the effect of the notice in order to grant an indulgence to the other party. The solicitor for the party who gives the notice has no apparent or implied authority in such a case to make a binding promise or representation affecting the operation of the notice; he would need his client's instructions to permit him to do so. The solicitor for the other party must be taken to know of that limitation in the absence of facts showing a wider authority. … Without any indication of a wider authority, it is not possible to infer that an undertaking by the vendors’ solicitors to obtain further instructions amounted to a promise or representation that the notice would be countermanded or its operation suspended so as to keep the vendors bound by the contract after the time for rescission had passed. It is not necessary to consider what the position may have been if Miss Williams had represented that she had instructions authorizing her to extend the time for compliance with the notice. The question whether a statement by a solicitor that he has authority wider than his apparent or implied authority estops his client from denying the extent of the authority claimed does not arise upon the facts of the present case.

22 In Crabb v Arun District Council [1976] Ch 179; [1975] 3 All ER 865, Mr Crabb had purchased, from executors of a deceased estate, a two-acre plot. In the conveyance, the executors agreed to erect a fence along the boundary line between it and an adjoining plot, but with a gap at a point that would permit access from the two-acre plot onto a new road proposed to be constructed by the executors along the boundary between the two lots. The executors also granted Mr Crabb a right of access at that point to the proposed new road, and a right of way along it to the nearby highway. Subsequently, the executors sold the adjoining plot to the local district council, expressly reserving the rights of access and way granted to Mr Crabb; and the council undertook to erect the fence on the boundary, save for a gap at the specified point. Mr Crabb decided to subdivide his land into two portions and sell them separately, and at a meeting with a representative of the council in July 1967 explained his plan, pointing out that he would need access to the new road at an alternative point to serve one of the subdivided portions. The council’s representative assured Mr Crabb that that would be acceptable, and although no formal grant was made the parties thereafter acted in the belief that Mr Crabb had or would be granted a right to such access. The council erected the boundary fence and constructed gates at both specified points, which were clearly intended to be permanent. Mr Crabb sold one portion, in the belief that he had a right of access to the other at the second access point, without reserving any right of way over the first portion to the first access point. The council then removed the gates at the second access point and closed up the access. The Court of Appeal (Lord Denning MR, Lawton and Scarman LJJ) held that the council was estopped from denying that Mr Crabb had a right of access at the second access point and a right of way from that point to the highway, since by their words and conduct – by the assurance made by their representative at the meeting and subsequently by the erection of gates at the second point and their failure over a period of more than a year to give any indication that they might resile from their assurance – they had led Mr Crabb to act to his detriment by selling the northern portion of the land without reserving a right of way over it from the southern portion.

23 There was no evidence as to the identity of the representative of the council at the relevant meeting. On the question of authority, Lord Denning said the council could not avoid responsibility by saying that their representative had no authority to agree; having entrusted him with the task of setting out the line of the fence and the gates, they must be answerable for his conduct in the course of it (at All ER, 872):

The question then is: were the circumstances here such as to raise an equity in favour of Mr Crabb? True the council on the deeds had the title to their land, free of any access at point B. But they led Mr Crabb to believe that he had or would be granted a right of access at point B. At the meeting of 26 July 1967, Mr Alford and Mr Crabb told the council's representative that Mr Crabb intended to split the two acres into two portions and wanted to have an access at point B for the back portion, and the council's representative agreed that he should have this access. I do not think the council can avoid responsibility by saying that their representative had no authority to agree this. They entrusted him with the task of setting out the line of the fence and the gates; and they must be answerable for his conduct in the course of it: see Attorney General to His Royal Highness the Prince of Wales v Collom ([1916] 2 KB 193 at 207); Moorgate Mercantile Co Ltd v Twitchings (see p 324, ante, [1975] 3 WLR at 298).
The judge found that there was 'no definite assurance' by the council's representative, and 'no firm commitment', but only an 'agreement in principle', meaning I suppose that, as Mr Alford said, there were 'some further processes' to be gone through before it would become binding. But if there were any such processes in the minds of the parties, the subsequent conduct of the council was such as to dispense with them. The council actually put up the gates at point B at considerable expense. That certainly led Mr Crabb to believe that they had agreed that he should have the right of access through point B without more ado.

24 Lawton LJ referred to evidence given by Mr Crabb’s architect in cross-examination, accepting in part that an arrangement of the kind in question without documents and the intervention of solicitors was an unusual one; his Lordship however thought that this did not amount to resiling from his assertion that there had been a clear undertaking by the council’s representative that access would be granted. His Lordship gave emphasis to the circumstance that the council had participated in the erection of the fence and paid for the gates:

What did the defendants believe had happened on 26 July 1967? The facts speak for themselves. In 1968 the defendants started to put up the fence between their own land and the plaintiff's land, as they were bound to do under the conveyance by which the plaintiff had transferred the land. When they did put up the fence they left gaps for gates at points A and B. Clearly they intended to provide a point of access at B. This could only have been done because they knew their representative had given an undertaking that the plaintiff could have access at point B. On 6 February 1968 they ordered gates for point B at a cost of £76. They were laying out the ratepayers' money to provide gates. Why should they have done that unless they had entered into an agreement to do it?

25 Scarman LJ said that, within reasonable limits, those to whom a defendant entrusts the conduct of negotiations must be treated as having the authority, which, within the course of the negotiations, they purport to exercise (at 875):

Nor do I think it necessary in a case such as this to enquire minutely into the law of agency. These defendants could, of course, only act through agents, but, as I have already made clear, from the very nature of the case, there would be no question of grant, no question of legally enforceable contract. We are in the realm of equity; and within that realm we find that equity, to its eternal credit, has developed an immensely flexible, yet perfectly clear, doctrine: see E R Ives Investments Ltd v High ([1967] 1 All ER 504 at 510, 511, [1967] 2 QB 379 at 399) per Danckwerts LJ. The approach of equity, when there is a question of agency in a field such as this, must I think be a very simple one. It will merely be that, within reasonable limits, those to whom a defendant entrusts the conduct of negotiations must be treated as having the authority, which, within the course of the negotiations, they purport to exercise. I put it in that way in the light of the comments of Lord Denning MR in Moorgate Mercantile Co Ltd v Twitchings – comments which were themselves made on a judgment to the same effect in Attorney General to the Prince of Wales v Collom ([1916] 2 KB 193 at 203). I would add only one reservation to this broad proposition. It is as follows. The defendant, if he thinks that an agent has exceeded his instructions, can always so inform the plaintiff before the plaintiff acts to his detriment in reliance on what the agent has said or done. If a defendant has done so, the plaintiff cannot then establish the equity, for the defendant will have intervened to prevent him acting to his detriment. Nothing of that sort happened in this case. After the meeting in July 1967, to which both Lord Denning MR and Lawton LJ have referred, the plaintiff was left to form his own conclusions as to the intentions of the defendants.

26 In Moorgate Mercantile Co Ltd v Twitchings [1975] 3 All ER 314, Lord Denning MR said that an owner is estopped by the conduct of anyone to whom he entrusts the task of looking after his property and interests (at 324):

In applying these principles of proprietary estoppel, the owner is estopped, not only by his own conduct, but also by the conduct of his agent or anyone who is in privity with him: see Eastern Distributors Ltd v Goldring [[1957] 2 All ER at 529, [1957] 2 QB at 606, 607] by Devlin J. Or, as I would prefer to put it, the owner is estopped by the conduct of anyone to whom he entrusts the task of looking after his property and interests: see Attorney General to the Prince of Wales v Collom [[1916] 2 KB 193 at 203] by Atkin J. Whenever the true owner puts someone in his place to answer questions as to his property, he must be bound by his answers just as if he gave them himself.

27 In Attorney-General to His Royal Highness the Prince of Wales v Collom [1916] 2 KB 193, Atkin J said that in a case where the owner could act through agents, the knowledge or conduct of the agent whose special duty it was to look after the land must bind the owner (at 203):

As to North Park House, Mr Whitmore Richards, for the defendant, relied upon the principle expressed by Lord Cranworth in Ramsden v Dyson (LR 1 HL 129, 140, 141) : ‘If a stranger begins to build on my land supposing it to be his own, and I, perceiving his mistake, abstain from setting him right, and leave him to persevere in his error, a Court of Equity will not allow me afterwards to assert my title to the land on which he had expended money on the supposition that the land was his own. It considers that, when I saw the mistake into which he had fallen, it was my duty to be active and to state my adverse title; and that it would be dishonest in me to remain wilfully passive on such an occasion, in order afterwards to profit by the mistake which I might have prevented. But it will be observed that to raise such an equity two things are required, first, that the person expending the money supposes himself to be building on his own land; and, secondly, that the real owner at the time of the expenditure knows that the land belongs to him and not to the person expending the money in the belief that he is the owner. For if a stranger builds on my land knowing it to be mine, there is no principle of equity which would prevent my claiming the land with the benefit of all the expenditure made on it. There would be nothing in my conduct, active or passive, making it inequitable in me to assert my legal rights’. It appears to me that all the conditions necessary to give rise to this equity exist in this case. Mr Richards knew the real facts throughout, and, though a doubt was thrown upon his authority, I think that in a case where it can only be contemplated that the Duke of Cornwall can act through agents, the knowledge or conduct of the agent whose special duty it is to look after mine buildings, such as this is, must bind the Duchy. I think the true inference from the facts is that knowing the facts he remained passive; I accept the defendant's account of the interview between the defendant and Mr Richards in 1911 after the expenditure had been incurred.

28 These cases show that, in this field, where there is a more flexible approach to the concept of agency, the true issue is whether the defendant is so implicated in the plaintiff’s assumption and reliance as to make it unconscionable for the defendant to deny it.

29 I do not accept that Mr Whittaker was entirely on a frolic of his own: he discussed the matter at the works meeting; and he engaged other Council employees to assist with installation of the gates. Mrs Northey says that she also spoke to a shire engineer who visited the site in 2007, who in company with Mr Whittaker marked the route that they preferred for the new fence. Although Mr Whittaker disagreed that he was accompanied by an engineer on the occasion when he met Mrs Northey on site, his own evidence indicates that he attended the site at least twice, and I think Mrs Northey’s recollection of an engineer being present on at least one occasion is more likely to be reliable.

30 The evidence is admittedly scant as to how it was that Mrs Northey came first to engage with Mr Whittaker. However, Mr Whittaker says that he received a call from Mrs Northey in which she said: “I have been told you are the person to whom I should speak about a problem I have. I wonder if you would go out and look at the fence line at my property with me”. The most probable explanation for Mrs Northey’s initial contact with Mr Whittaker is that, upon inquiry of the Council, she was referred to him as the person with whom to speak.

31 Thus here, the Council initially referred Mrs Northey’s inquiry to Mr Whittaker; subsequently, he attended and inspected the site; then, he raised the matter at the works meeting; he attended the site with an engineer and proposed the location of the fence; thereafter, Council employees delivered and erected at Council’s cost the gates and gate posts. In my view, none of those involved saw this as a negotiation over title to land; rather, it was a much more pragmatic question of where should a fence be located. In that context, Mr Whittaker’s conduct was not outside the “reasonable limits” spoken of in the authorities. In my view, the Council was sufficiently implicated in Mrs Northey’s assumption that its conscience was affected, so that if the other requirements are satisfied an estoppel arising from Mr Whittaker’s conduct could run against it.

Was the assumption one that the Council could lawfully satisfy?

32 That leads to the third main issue, namely whether the assumption was one that the defendant could lawfully satisfy.

33 (NSW) Dividing Fences Act 1991, s 11, authorises an adjoining owner to require the other owner to contribute to the carrying out of fencing work by serving a notice specifying, inter alia, the boundary line on which the fencing work is proposed to be carried out or, if it is impracticable to carry out fencing work on the common boundary of the adjoining lands, the line on which it is proposed to carry out the work. Section 14(1) confers on the Local Court or a local land board jurisdiction to make an order determining, inter alia, the boundary or line on which fencing work is to be carried out, whether or not that boundary or line is on the common boundary of the adjoining lands. Sub-section (2) provides that the occupation of land on either side of a dividing fence as a result of an order determining that fencing work is to be carried out otherwise than on the common boundary of the adjoining lands is not taken to be adverse possession against the owner or to affect the title to or possession of the land, except for the purposes of that Act. By s 3, “dividing fence” is defined to include:

“dividing fence” means a fence separating the land of adjoining owners, whether on the common boundary of adjoining lands or on a line other than the common boundary .

34 Section 25 provides that the Act does not operate to impose any liability or confer any rights with respect of dividing fences on a roads authority with respect to any public road, but sub-section (2) provides that nothing in that Act prevents the Crown or any such body (which appears to include a roads authority) entering into arrangements other than those arising under the Act to contribute to fencing work in respect of dividing fences.

35 Roads Act, s 138, provides that a person must not erect a structure or carry out a work in, on or over a public road otherwise than with the consent of the appropriate roads authority. By sub-section (4), the section applies to a roads authority and to any employee of a roads authority in the same way as it applies to any other person. Section 139 provides that such a consent may be granted on the road authority’s initiative, or on the application of any person, generally or for a particular case, relating to a specific structure or work or to structures or works of a specified class, and on such conditions as the appropriate roads authority thinks fit. Importantly, section 140 provides that a roads authority may at any time and for any reason revoke a consent by notice in writing served on the holder of the consent. Section 141 provides that while a consent is in force, the taking of action in accordance with the consent is taken not to constitute a public nuisance, and does not give rise to an offence against the Act.

36 Although, by operation of Roads Act, s 146, the Council was not entitled to dispose of any interest other than an easement or covenant in the land dedicated as a public road, the provision admits that the owner of the road can create an easement. Moreover, as has been pointed out, I am not considering whether the Northeys have any claim to the land between the creek and the fence line, but only their entitlement to have the fence remain where it is. That would not be a disposition of an interest in the land other than an easement or covenant contrary to s 146. Accordingly, there is no reason why the Council could not have consented to the erection of a fence, located where the new fence is, pursuant to Roads Act, s 138.

37 However, pursuant to s 140, any such consent would have been revocable “at any time and for any reason”. The purpose of s 140 was to make clear that a consent under s 138 was not perpetual but revocable. Because sections 138, 139 and 140 operate in a context where a consent will almost inevitably lead to the expenditure of moneys and/or labour to erect a structure or carry out a work in, on or over a public road etc, it should be assumed that, in providing that such consents were revocable, Parliament was intending to ensure that the relevant roads authority always remained at liberty to do whatever it considered necessary to facilitate the use of the public road for its primary dedicated purpose as a road, regardless of expenditure in reliance on a consent. This conclusion is reinforced by s 139C, which authorises revocation of a street vending consent (in respect of which rent may be charged) if a condition of the consent is breached, or if it is necessary to do so to meet changes of traffic flow and so on, suggesting that consents other than street vending consents, in respect of which revocability is not so limited, were intended to be revocable without limitation. Parliament did not say only that such consents were revocable, but provided that they were revocable at any time and for any reason.

38 Equitable estoppel does not operate to enlarge statutory rights to deal with land [Lukey v Sydney Harbour Trust Commissioner (1902) 2 SR (NSW) 152, 165; Attorney-General v The Municipal Council of Sydney (1919) 20 SR (NSW) 46, 58; NSW Trotting Club Limited v Glebe Municipal Council (1937) 37 SR (NSW) 288, 308-9; NSW v Scharer [2003] NSWCA 328, [59]-[62]]. Where the capacity of a public authority to contract or otherwise fetter the future exercise of its powers or discretions is restricted by statute, those restrictions cannot be circumvented by resort to estoppel. Estoppels bind individuals on the basis that it would be unconscionable to deny what has been represented or assumed, but these concepts do not extend into ‘the public law of planning control, which binds everyone’ [Newbury District Council v Secretary of State for the Environment [1981] AC 578, 616 (Lord Scarman); R v East Sussex County Council [2003] 1 WLR 348, 357-8 (HL); Challis v Destination Marlborough Trust Board Inc [2003] 2 NZLR 107, 129-30; Handley, Estoppel by Conduct and Election, (2006) [1-030]].

39 In my view, those principles govern the present case. The Council could have granted, and Mrs Northey could have obtained, consent to the erection of a fence as and where it was erected; but that consent had to be revocable, “at any time and for any reason”. Mrs Northey cannot gain by equitable estoppel what she could not lawfully have been granted by a more formal dealing. The informal arrangement made by Mr Whittaker cannot leave her in a better position, or the Council in a worse position, than that which would have obtained, had a formal consent under s 138 been granted.

40 It follows that the highest any relevant estoppel could run would be to preclude the Council from denying that it had consented to the erection of the fence. However, the (assumed) consent had to be revocable, “at any time and for any reason”.

41 Roads Act, s 107, relevantly provides as follows:

Obstructions and encroachments

(1) A roads authority may direct:
(a) any person who causes an obstruction or encroachment on a public road, or
(b) the owner of any land that is used, or is able to be used, in connection with an obstruction or encroachment on a public road,
to remove the obstruction or encroachment.
(2) A direction under this section may specify the period within which the direction must be complied with.
(3) In the case of an obstruction or encroachment that was created before the alignment of the road, or that is situated on a road that has not been aligned, the period specified in the direction must be at least 60 days.
(4) This section does not apply to an obstruction or encroachment on a public road if its presence on the road is authorised by or under this or any other Act.
(5) However, this section does apply to an obstruction or encroachment on a public road if its presence ceases to be authorised by or under this or any other Act.

42 Thus, a notice to remove the fence could not have been given while a consent was in force [s 107(4)]. However, upon revocation of the consent, the fence would cease to be authorised, and notice for removal could be given [s 107(5)]. In those circumstances, Mrs Northey is not entitled to insist that the fence remain.

Conclusion

43 For the foregoing reasons, I have reached the following conclusions:

44 As a license to enter upon another’s land is revocable, the mere claim of “permission” to erect the fence will not avail the plaintiff, unless she can establish a right, by way of contract, easement or estoppel, to have it remain.

45 The present circumstances are entirely outside the scope of the doctrine of easements of necessity.

46 As to estoppel, Mrs Northey acted in reliance upon an assumption or expectation that she would be permitted indefinitely to maintain the new fence on the Council’s property; and Mr Whittaker induced Mrs Northey to adopt that assumption or expectation, and encouraged her reliant activities. A party may become sufficiently implicated in conduct founding an estoppel in circumstances that fall short of what would be recognised at common law as agency: within reasonable limits, those to whom a party entrusts the conduct of negotiations must be treated as having the authority, which, within the course of the negotiations, they purport to exercise. Here, the Council referred Mrs Northey’s inquiry to Mr Whittaker; he attended and inspected the site; he raised the matter at a works meeting without disapproval; he attended the site with an engineer and determined the location for the fence; thereafter, Council employees delivered and erected at Council’s cost the gates and gate posts. In the context that this was not a negotiation over title to land but as to where a fence should be located, Mr Whittaker’s conduct was not outside the bounds of “reasonable limits”, and the Council was sufficiently implicated in Mrs Northey’s reliance on her assumption as to affect its conscience, so that if the other requirements are satisfied an estoppel arising from Mr Whittaker’s conduct would run against it.

47 Although there is no reason why the Council could not have consented, pursuant to Roads Act, s 138, to the erection of the new fence in its present location, by reason of s 140, any such consent would have to have been revocable “at any time and for any reason”. Where the capacity of a public authority to contract or otherwise fetter the future exercise of its powers or discretions is restricted by statute, those restrictions cannot be circumvented by resort to estoppels, which do not extend into the public law of planning control. The highest any relevant estoppel could run would be to preclude the Council from denying that it had consented to the erection of the fence. However, the (assumed) consent had to be revocable, “at any time and for any reason”. In those circumstances, Mrs Northey is not entitled to insist that the fence remain.

48 It follows that the plaintiff’s claim must fail.

49 I order that the proceedings be dismissed with costs.

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