Parramore v Duggan

[1995] HCATrans 88

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Hobart  No H20 of 1994

B e t w e e n -

COLIN HAROLD PARRAMORE

Appellant

and

VALDA FRANCES DUGGAN

Respondent

BRENNAN J
DEANE J
DAWSON J
TOOHEY J
McHUGH J

TRANSCRIPT OF PROCEEDINGS

AT CANBERRA ON WEDNESDAY, 19 APRIL 1995, AT 10.22 AM

Copyright in the High Court of Australia

MR W.M. HODGMAN, QC:   May it please your Honours, I appear with my learned friend, MR M.B. HUNNIFORD for the appellant herein.  (instructed by Hunnifords)

MR A.G. MELICK:   May it please the Court, I appear with my learned friend, MR T.J. WILLIAMS for the respondent.  (instructed by Gunson Pickard & Hann)

BRENNAN J: May it please your Honours. This appeal raises questions of considerable public importance involving the rights of the citizens of Tasmania involving over 280,000 certificates of title issued in that State under what is colloquially known as the Torrens system. This appeal, for which leave was granted in December last, raises two very important questions of law, we submit. The first is whether section 40(3)(e) of the Land Titles Act 1980 creates an exception to the indefensibility of a registered Torrens title whereby the easement created by express grant has been registered on the title of the dominant tenement but not on the title of the servient tenement. And secondly, whether section 106 of the Land Titles Act 1980 ought to be read as giving an unqualified finality to a statement in a folio of the register that the land comprised therein has the benefit of an easement described therein and/or whether section 106 is an evidentiary provision to be read subject to the provisions of section 40(3)(e).
           Before turning to the facts in detail, might I just paint a broad, but not emotive, picture of what has happened in this case.  Most of your Honours would have heard of or, indeed, visited the historic town of Richmond in Tasmania ‑ ‑ ‑

BRENNAN J:   Mr Hodgman, you have furnished, I think, some notes of argument, is that so?

MR HODGMAN:   Your Honour, yes.

BRENNAN J:   Perhaps you might give us a moment until we just scan those notes ‑ ‑ ‑

MR HODGMAN:   I certainly should and I apologise, your Honour, that late arrival prevented them being lodged last evening, and I also apologise for the pen notations of the change of pages which was done yesterday.

BRENNAN J:   Yes, Mr  Hodgman.

MR HODGMAN:   May it please, your Honours.  The argument is set out therein which I will develop and is fundamentally the same as the arguments that were put in the application for leave, save the leave question specifically.  If I can just give a broad picture then I will turn to the facts and then to our, because our argument, fundamentally, is that the Torrens system will break down if indefeasibility of title, which we regard and will submit as an inviolate principle, is tampered with.

As I was about to say, most of your Honours would have heard of or, indeed, perhaps visited the historic town of Richmond in southern Tasmania.  It was settled in the early 1820s and close by is a small town called Colebrook; a sort of English-type town in a rural setting, and it is in this area that this dispute has arisen, because the title was old general law title, and it was not until 1925 that the right of way, or easement, which is the subject of argument in this case, came into existence, and I will indicate from the judgment of his Honour Mr Justice Zeeman, to which I will take this honourable Court in a moment, in 1925 the right of way was created.  But in 1929 it disappeared, as you will see.  There were dealings with the land and in 1929 the easement disappeared.  It did not return until 1983 and what happened was this, that in 1983 the predecessor in title to the respondent, Mrs Duggan, registered the land of the dominant tenement, claiming the right of way, going back to 1925, over the servient tenement.

TOOHEY J:   What do you mean, Mr Hodgman, when you say the right of way disappeared?

MR HODGMAN:   You will see, your Honour, that what happened in 1929 - perhaps I might go to it.

TOOHEY J:   No, I am just wondering in what sense you are using the word “disappeared”.

MR HODGMAN:   It was omitted from a memorial relating to the land four years after it had been created and it never reappeared and, indeed, his Honour Mr Justice Zeeman points out lack of skill of the draftsman in the conveyance.  It just disappeared, but it was created in 1925.  That is conceded, but all I am saying is that it was unknown, unrecorded from 1925 for 64 years and it re‑emerges in 1983.  I assure your Honour I will develop that point and it does come out clearly from his Honour’s judgment. 

At about the same time as the predecessor in title to the respondent, Mrs Duggan, had her land registered under the Torrens system the appellant, who is a small farmer and motor repairer, had his land brought under the Torrens system and his land was said to be subject to such right of ways and easements as are contained in the second schedule and none was, in fact, impressed, as you will see from the documents.    So you had from 1983 until the present time a situation where the dominant tenement claims a purported right of way over the adjoining property, the servient tenement.  The servient tenement’s title was clear:  it had no right of way or easement over it whatsoever.

TOOHEY J:   What is the conveyancing practice in Tasmania, Mr Hodgman, when an easement is created in terms of registering it on the dominant title and on the servient title?

MR HODGMAN:   I speak with some reluctance.  I should confer with my junior.  My understanding is that there is an obligation to register on both, but I will be arguing that it is more important that it be on the title of the servient tenement because that land then becomes subject to it and I would argue, for example, that if there was the reverse of this case, where the easement, although existing, was not on the title of the dominant tenement but was on the title of the servient tenement, then the registered proprietor of the dominant tenement could simply exercise his right as a matter of law to that easement.  In other words, our argument is - and I will be adopting, with respect, words of Professor Woodman in his book on this - that it is crucial that the person who comes along as a bona fide purchaser for value without notice looks at the title, the whole theory of the Torrens system being you can see it all on the title; if it is not there, is not subject to it.

TOOHEY J:   Except for the range of exceptions.

MR HODGMAN:   Yes, and we will be arguing that they are to be limited.  We will be further arguing that contrary to the judgment of his Honour Mr Justice Zeeman - I might just come to this point immediately ‑ ‑ ‑

BRENNAN J:   Perhaps you might just give us the chronology very briefly.  We have read the judgments.

MR HODGMAN:   Yes, if it pleases your Honour.

BRENNAN J:   The date of creation was 1925, is that right?

MR HODGMAN:   Yes, the date of creation was 2 May 1925.  There was an indenture of mortgage on 19 October 1929 which omitted any reference at all to the easement.

BRENNAN J:   What do you mean, there was an indenture of mortgage?

MR HODGMAN:   I will read directly from page 29 of the appeal book, your Honour.  I am actually getting myself out of time because I want to go back a little earlier, but your Honour will see that on page 29 of the appeal book, line 20 - this is from the judgment of his Honour Mr Justice Zeeman - the following appears:

By an Indenture of Mortgage made 19 October 1929 registered number 18/1799 Miss Nichols mortgaged the unsold portion of the land to one Mary Eleanor Lilley.  The land is described in the mortgage in rather vague terms.  Nevertheless its identity is clear.  The mortgage makes no reference to the fact to the land being subject to the easement, although that had been created by Conveyance number 16/8671.

That is back in 1925:

It may be assumed that that was an oversight on the part of the draftsman of the mortgage whose lack of skill is demonstrated by the inadequate description of the land.

I will read on if I may.

BRENNAN J:   What land is this we are talking about?  What land?  Which piece?

MR HODGMAN:   The piece of land at the dominant tenement.

BRENNAN J:   Dominant tenement.

MR HODGMAN:   Dominant tenement.  I will conclude at that part, if I may, your Honours:

It appears that Miss Nichols defaulted under the mortgage.  In purported exercise of the mortgagee’s power of sale, the personal representative of the mortgagee, by an Indenture of Conveyance made 27 March 1950 and registered number 24/9565, granted and conveyed the mortgaged land to one Frederick Thomas Whelan for an estate in fee simple.  That conveyance did not adopt the description of the land appearing in the mortgage but described the land by metes and bounds.  No mention was made of the easement.

You have a conveyance in 1950, 25 years after the easement has been created, which does not mention the easement at all:

The description of the land contained in that conveyance is the same description as that which appears in the description of parcel annexed to the defendant’s -

That is the appellant, Mr Parramore’s -

folio of the Register, except that the description of parcel excepts out of lot 2 on plan P13956.

One of the defendant’s -

that is Mr Parramore, the appellant -

predecessors in title sold lot 2 on plan P13956 to one of the plaintiff’s predecessors in title without any grant of easement.  The relevance for present purposes is that on the face of it the folio of the Register relating to the plaintiff’s land makes the easement appurtenant to the whole of that land whereas the only grant of the easement was by way of it being appurtenant to lot 1 on plan P13956.

As if this matter has not got enough problems, it seems if that is right, as I said to my learned friend, Mr Melick, last evening, maybe the said right of way in respect to which the Supreme Court has made certain orders does not, in fact, go all the way through to Maconochie Street; but we will not be delaying your Honours on that aspect.

Leaving aside lot 2 on plan P13956, all conveyances of the plaintiff’s land subsequent to the creation of the easement by conveyance 16/8671 up until the time that that land was brought under the former Act were expressed in terms of granting and conveying that land together with the benefit of the easement for an estate in fee simple.  The first conveyance of the defendant’s land after the creation -

that is Mr Parramore’s land -

of the easement was by morgage 18/1799.  That mortgage, and each subsequent conveyance of the defendant’s land, omitted to mention the existence of the easement.  When the defendant’s land -

that is Mr Parramore’s land -

was brought under the Act the easement was not noted on the folio of the Register relating to it.

DAWSON J:   I was probably going ahead, but the defendant denies the plaintiff has an entitlement to easement but places his case solely on the statutory indefeasibility.  All of this history does not matter.

MR HODGMAN:   It does not except, with respect, to point out, as we will be arguing, that this is a classic example of what happens if you go beyond the fundamental statutory principle of indefeasibility.  I am just simply saying that you have a situation that chronologically from 1925 until 1983, effectively the situation was that the easement did not appear in a number of ‑ ‑ ‑

DAWSON J:   But you are not denying the existence of the easement, apart from the indefeasibility point?

MR HODGMAN:   Indeed.

TOOHEY J:   We are not concerned with an argument that it was abandoned or anything of that sort.

MR HODGMAN:   No.

TOOHEY J:   In a sense, are we really concerned with the fact that the land was general law land at one time and subsequently brought under the Act or do we take our starting point as the existence of two blocks of land registered under the Torrens system, the dominant land referring to an easement, the so‑called servient land not referring to an easement?

MR HODGMAN:   Your Honour, it is really six of one and half a dozen of the other.  You have got to go back a shade, as I will indicate with my argument on section 40, because it does deal with the position immediately prior to registration.  But effectively, to conclude my opening comment, what happened was this, that after Parramore obtained his certificate of title, he built a large agricultural implement shed on his land.

BRENNAN J:   But that does not matter very much, Mr Hodgman.  The point is this:  at the moment at which the plaintiff’s land was brought under the Act, it is acknowledged for the purposes of this litigation that it was entitled to the benefit of an easement; is that correct?

MR HODGMAN:   It was entitled to claim an easement which, in fact, it registered.

BRENNAN J:   When you say it was entitled to claim, was it entitled to the benefit of the easement which had originally been granted in 1925?

MR HODGMAN:   I could not argue to the contrary, your Honour.

BRENNAN J:   Do we start from that?

MR HODGMAN:   Yes.

BRENNAN J:   So then it was registered, the plaintiff’s land was registered and the easement was noted on the title as being appurtenant to the registered estate in the land.

MR HODGMAN:   Correct.

BRENNAN J:   Subsequently the defendant’s title was registered and there was no endorsement in the second schedule of the existence of the easement upon that land as a servient tenement.

MR HODGMAN:   That is so, your Honour.

BRENNAN J:   And we are now in the position of saying, in the light of those circumstances, what is the effect of the three statutory provisions with which the courts have concerned themselves.

MR HODGMAN:   That is so, your Honour.

BRENNAN J:   I think you can go directly to your argument on the statute.

MR HODGMAN:   Yes, I shall.

DEANE J:   And there is no relevant intervening transaction.

MR HODGMAN:   No, your Honour.  I suppose the only intervening transaction subsequent to registration was the matter I just wanted to briefly advert to and your Honour noted it because, in fact, it is part of the judgement of his Honour Mr Justice Zeeman, that acting on his title which was clear of any easement, the appellant Mr Parramore then built a large implement shed on the property.  Mrs Duggan, who had by that time become the owner, said, “We want that removed because we have got a right of way through there.” 

That is how the whole case started and if I might just hand to your Honours, because it is at the thrust of our submissions in relation to the matter to be determined by this honourable Court, the short paragraph we seek to quote from The Law of Real Property in New South Wales, Volume 1, by Professor Woodman.  The passage is marked on page 303.  After dealing with three cases the learned author says this:

However, it is difficult to reconcile the three cases last-mentioned with the generally accepted philosophy of the Torrens system.  That system is based upon the principle of conclusiveness of the Register, or indefeasibility of the title of a registered proprietor, and to hold that the title of a registered proprietor is subject to any easements which may have arisen by implication because, at some earlier date, several parcels of land were in common ownership represents -

according to the learned author -

an unwarranted and unreasonable intrusion upon the basic principle of the Act.

DAWSON J:   The Act makes that intrusion itself.

MR HODGMAN:   It does, but the starting point I am trying to make, your Honour, is that the prime philosophy of the Torrens system is the indefeasibility of title that what you see on the certificate of title is what you get; that the old system of searches and memorials and indentures and so on is gone; that the person goes along, it was even argued back in the 1860s, an ordinary person could understand and act upon the Torrens system without the requirement.

TOOHEY J:   But that is just not so because the statutes list a number of exceptions.  Some Torrens statutes admit adverse possession as an exception to indefeasibility.  Some statutes do not admit of such an exception.  So, in the end, you are driven to the statute itself, are you not?

MR HODGMAN:   I accept that too, your Honour.  I am just saying that the dream or the vision was that it would be.  In fact ‑ ‑ ‑

TOOHEY J:   Oh, undoubtedly.

DEANE J:   But it was not, was it?  What you say would be completely right if you were representing a purchaser for value who had acted on the basis of the record.  But, has it ever been said that somebody who brings his or her land under the Torrens system and receives a certificate of title which he or she is not entitled to because it fails to record an encumbrance to which it is subject can then say, “Oh, thanks to things having gone wrong, I have an indefeasible title”?

MR HODGMAN:   Yes and that, in fact, is exactly what we submit happens here and we submit that the Act which contains the provision for the insurance fund covers that and that the appropriate - if I can put it bluntly - situation here is that Mr Parramore, having no knowledge of this right of way allegedly over his property back in 1925, brings ‑ ‑ ‑

DEANE J:   Well, that is the factual matter that you had not told us about.

MR HODGMAN:   No knowledge at all.  He brings his property under the Real Property Act, he gets his title ‑ ‑ ‑

DEANE J:   Well, in that case, you can disregard my question.  It does appear that he had no knowledge and there was nothing to put him on notice.

MR HODGMAN: Nothing at all. And, if I can just follow on, I will come to section 150 and section 151 and 152 of the Act. What the Parliament did in our State, and I believe in most other States, is to set up an insurance fund so that there are rights lost when you come under the Torrens system. And what the insurance fund is there is to pay if there is an error made: “Mrs Duggan, look you have not got your right of way, $25,000” or whatever.

So, you see the argument with Mr Parramore’s point of view is, “Look I have come along, I have acquired the land, I have my title, I have gone ahead, built the shed, used the land and now they come along and say to me, ‘Oh, it’s on the other title, so you’re bound by it’.”

BRENNAN J:   If you are putting the argument in the way that your client took the land without notice of the easement at the time of purchase before the land was registered under the Torrens Act, are you then denying that that land was subject to the easement at the time of registration?

MR HODGMAN:   That is the question your Honour asked me a few minutes ago.

BRENNAN J:   Yes, because if so, the grant of special leave seems to have gone on a basis that was not intended.

MR HODGMAN:   I cannot answer that because there were no reasons given in relation to the grant of special leave.  His Honour Mr Justice McHugh was a member of the Bench, but I would not speculate on that.  I am simply saying that Mr Parramore had no notice and I am pointing out because of the historical background probably could not have had notice unless the search had gone right back to 1925.  In all the other dealings subsequent to 1925 the easement had been omitted.  It was not mentioned at all, even in the mortgage, and even the mortgagee sale.  The mortgage in 1929 and the mortgagee sale in 1950 failed to refer to the easement, to the right of way.

BRENNAN J:   What are the facts found in the stated case?

MR HODGMAN:   The facts basically were set out in the judgment of his Honour Mr Justice Zeeman.

BRENNAN J:   I presume that was founded on a stated case, was it?

MR HODGMAN:   Yes, indeed, your Honours.  If you go to pages 1, 2 and 3 of the appeal book, you will see in paragraph 1 that:

The Plaintiff -

that is the respondent, Mrs Duggan -

is the registered proprietor of the land described.....The Defendant is the registered proprietor.....Immediately before the land comprised in Folio of the Register Volume 3829 Folio 26 was brought under the provisions of the Real Property Act 1862 the documentary title consisted of the documents copies, or copies of memorials, of which are annexed hereto marked “A”.

Similarly with the land in relation to Volume 4012 Folio 97 document “B”:

The parties ask the Court to determine as a question of law on the basis of the Special Case stated and the pleadings as they stand whether the land described in the Folio of the Register Volume 4012 Folio 97 is subject to a right of way (as described in Folio of the Register Volume 3820 Folio 26 or Conveyance dated the 2nd day of May 1925 or otherwise) appurtenant to the land described in Folio of the Register Volume 3820 Folio 26, save and except to the extent that the Plaintiff’s -

that is Mrs Duggan -

claim is based upon long user or upon a grant of easement by a deed now lost made after the 2nd May 1925.

The rest then sought the relief, including the removal of the shed and other matters.

DEANE J:   What does that mean, that a claim by the plaintiff, based on long user, or upon a grant of easement by deed now lost, remains open?

MR HODGMAN: Yes, that is so. I was not counsel in the matter at that stage, but that is the position. Technically, that still remains open. In the event that the appeal here succeeds, prima facie, it would remain open to Mrs Duggan to again litigate this matter and say, “Well, I claim title by long user”. Now, the Supreme Court of Tasmania, with great respect, was hopelessly divided on this matter. In a nutshell, his Honour Mr Justice Zeeman held that pursuant to the exceptions in section 40(3)(e) of the Land Titles Act 1980, that Mrs Duggan was entitled to her right of way and easement over Mr Parramore’s property. His Honour Mr Justice Zeeman rejected the argument put that section 106 of the Land Titles Act would avail the plaintiff, Mrs Duggan, at all. He said it could not unless. She could bring herself within section 40(3)(e), she could not succeed.

So, at the original hearing, his Honour Mr Justice Zeeman pinned his case totally on his interpretation of section 40.  In a nutshell, what he said was that Parliament had made a mistake, and he said ‑ ‑ ‑

TOOHEY J:   But we cannot be taken back into the earlier history, can we, because we get into all sorts of questions as to the form of the easement, the extent to which it ran with the land, the extent to which a purchaser for value without notice might have been affected by the easement?  But none of these are questions that are really before us.  Do we not have to take as our starting point the existence of an easement, in the sense that the so-called servient land was subject ‑ or let me put it another way, that the so-called dominant land had the benefit of a right of way over the servient land, which would be enforceable save, for your argument, that the title to the servient land is indefeasible, unless the dominant owner can bring himself within one of the exceptions, and you say that those exceptions do not apply.

MR HODGMAN:   That is right.  And we say further that the Parliament intended there would only be two exceptions.

DEANE J:   But that tells us nothing about the problem.  Is your argument this, that if the land had been subject to a mortgage in favour of a bank, you having got the money and put it in your pocket, and if you succeeded or, if by chance, you got a title which did not mention the mortgage, you can say, “Hey presto, I have an indefeasible title and you, the bank, have lost your mortgage.” because, if you accede to what Justice Toohey has put to you, I do not see the difference.

MR HODGMAN:   I would respectfully there is a world of difference because, if I have gained the benefit of the mortgage, it may be that the effect is that because the mortgage is not registered and is not therefore on the certificate of title that it is not enforceable by virtue of the Land Titles Act of 1980, but the bank would most certainly sue and recover ‑ ‑ ‑

DEANE J:   If your land is subject to an easement, why should we not assume that you the owner of the land are aware that your land is subject to an easement, rather than assuming that while your land is subject to an easement you are not aware of it?

MR HODGMAN:   No, with respect, you should not assume that because the certificate of title is paramount.  In this case Mr Parramore has no knowledge at all of the easement.  He brings his land under the real property system.

DEANE J:   Where does it say in the case stated that Mr Parramore has no knowledge of the easement?

MR HODGMAN:   I do not know immediately.  I will ask if my learned junior can - I do not think that matter has ever been in dispute, that he was not aware of the easement until the plaintiff claimed the easement after he had built the shed and she said, “You built the shed on my right of way”.  My friend says he is not conceding.  I would ask my learned junior to come to that specific - none of the four judges who have dealt with this matter have said in their judgments that Parramore was aware of the existence of the easement and it ‑ ‑ ‑

DEANE J:   Have they said that he was not aware?

MR HODGMAN:   I think it is implicit that he was not aware by virtue of the case stated.  That effectively says that within the space of about 13 months the recorder of titles has registered two titles:  one in favour of the predecessor in title to Mrs Duggan which says there is a right of way; and one in favour of Mr Parramore which says there is no encumbrance whatsoever, no easement, no right of way on your property.

BRENNAN J:   Mr Hodgman, for my part, the way I read the stated case is this:  in paragraph 7 of the statement of claim on page 5 there is an assertion of an entitlement to a right of way by virtue of a grant dated 2 May 1925.  In paragraph 9 there is an alternative plea putting the claim as based upon a deed of grant now lost made after 2 May 1925.

MR HODGMAN:   Yes.

BRENNAN J:   If you turn back to page 2, you see the question that is being posed for the Court’s consideration.  Inappropriately and unfortunately, the case is stated on the pleadings as they stand rather than on any statement of fact.  But on the pleadings as they stand, the Court is asked to determine whether or not the land is subject to an easement, leaving aside, looking at the last three lines of paragraph 5:

save and except to the extent that the Plaintiff’s claim is based upon long user or upon a grant of easement by a deed now lost made after the 2nd May 1925.

In other words, the facts in paragraph 9 are being left out of account but the facts in paragraph 7 are being taken into account.  As I read it at the moment, we are to proceed on the footing that the facts are as stated in paragraph 7 of the statement of claim.  If there is an error in that, I would be grateful to be informed.

MR HODGMAN:   Yes, if I might just have one moment, your Honour, please.  Yes, if it please your Honour, my instructions are that the matter would proceed on that basis that no concessions are made.  I cannot turn back the clock or correct the matter but ‑ ‑ ‑

BRENNAN J:   Well then, on that basis, you should come to Justice Deane’s question, based upon your answer to Justice Toohey.  Assuming that there was an entitlement to an easement based on the grant in March 1925, what do you say about the position of a party who becomes a registered proprietor where that easement is not put upon the register?

MR HODGMAN: We argue, and will continue to argue, that that easement and right of way does not bind Mr Parramore and his land is not subject to it. Because, we will argue that she cannot win by virtue of section 40(3)(e) and she certainly cannot win by virtue of section 106. I will come directly to those two matters. I was just ‑ ‑ ‑

DEANE J:   Can I just ask you this so I can understand?  You argue that, regardless of whether the person who bought the land under the Torrens system knew that the land was the subject to an easement or a mortgage.

MR HODGMAN:   Yes, I do, your Honour.  And that is hard, but if we go back to section 40(b), you will see there it is very hard, if you have two competing owners of the one set of land, both of whom claim title to it, the Act just says quite arbitrarily the one who registers first gets it.  So, the Act is very, very strong in the way it works to bring land under the Torrens system to make the title indefeasible and if people are hurt on the way, there is an insurance fund with several million dollars in it from which they can be compensated.

So, I just want to make this point with section 40(b) that, for example, if you have two competing owners for the one block of land and let us just say that morally, claimant A has got a lesser claim or no claim really in moral terms, but claimant B has strong moral and just rights to the land.  If claimant A gets there first and registers it first, that is it.  Quite arbitrary.

TOOHEY J:   Well, that is not really so, is it, not as between the immediate parties to whatever arrangement it is that gives rise to the interest, because there is ample authority that, notwithstanding the indefeasibility provisions, the court can hold the parties to that contract?  But, that is not the situation we are talking about here, is it?

MR HODGMAN:   No.  But, your Honour, I am sorry, I have not put it as clearly as I should have.  Section 40(b) goes to ownership of the land.  Where you have two competing claimants for the land, each presumably with general law documentation to support their claim, it just says arbitrarily the one that is first registered is the one that applies.  That is not the argument in this case.  I am just using that by way of analogy, that section 40(b) is quite cut-throat in relation to the effect of registration.  It says it beyond any doubt, not to go into the morals, or the rights, or the justice of the situation, but whoever registers first, gets up.

Now, your Honours, if I can just continue, please, as to what the Supreme Court did. Mr Justice Zeeman said - and we will argue wrongly held - that there was an error in section 40(3)(e) and he said, “I am going to put it right and I put in the word ‘or’.” His Honour said that section 106 did not avail Mrs Duggan, the respondent, and, with respect, on that we agree. When it got to the Full Court on appeal, his Honour Mr Justice Wright basically adopted the reasoning of Mr Justice Zeeman and he said, “I think Parliament has made a mistake and I think the word ‘or’ should be inserted.” He did not even discuss in his judgment section 106, and one might infer from that was not taken by that argument at all.

His Honour Mr Justice Crawford also agreed with Mr Justice Zeeman and Mr Justice Wright in relation to section 40(3)(e). He said section 106 is of no avail at all. His Honour Mr Justice Cox - and we agree with the first part of his Honour’s judgment - said, “Section 40(3) is as Parliament intended it. There is no basis to add in the word ‘or’. There are, as the Minister said in his second reading speech, but two exceptions. If you add in the word ‘or’, we will argue it becomes three.” But his Honour Mr Justice Cox said, “I think she can win under section 106.” So that in mathematical terms, three out of the four judges have said, “Section 40(3)(e), Parliament made a mistake. We will insert the word ‘or’ to create three exceptions”, when the Minister clearly said there were two.

His Honour Mr Justice Cox, however, said, “No, I will not have a bar of any of that. I proceed on the basis that section 106 creates the right.” And our argument is that section 106 is merely an evidentiary provision and does no more and can do no more in relation to the certificate of title of the land of either of the parties than the Act itself provides under section 40. In other words, you have got to go to section 40 or some other section of the Act before you can find any basis for 106 being used. Your Honours, it is set out succinctly on page 2 of the submission that you have here the dilemma of the dominant tenement purportedly claiming a right of way, the servient tenement’s certificate of title not disclosing the same and we say that that certificate of title is indefeasible unless Mrs Duggan can find her way in by virtue of the provisions of section 40(3). If I could take your Honours to the judgment of his Honour Mr Justice Zeeman.

BRENNAN J:   We have read the judgments.  It might be of most assistance if you could give us the benefit of your argument on why the sections do not mean what has been held against you.

MR HODGMAN:   By three, but not by his Honour Mr Justice Cox?

BRENNAN J:   Yes.

MR HODGMAN:   I can do that very succinctly, your Honour, with respect.  Page 34 of the appeal book, I just refer to the reference in his Honour’s judgment to what the Minister said in the second reading speech and the passage is quite brief.  I read it accordingly:

In the course of his second reading speech in the House of Assembly, the Minister bringing in the bill for the Act, in dealing with cl40, which became s40 of the Act, had this to say (Parliamentary Debates 26 March 1980, 598):

I interpose I was not there -

“In clause 40, two exception to indefeasibility - those relating to the interest of a tenant and to easements - are stated in a different form from the present act.  The form in which they are stated in the bill is thought to declare the present law as interpreted by the courts.   The form in which the possibility of two folios of the register existing for conflicting estates on the same land is stated more clearly.”

My learned friends will argue that the 1980 Act was an Act to consolidate the law and not to change it.  I simply indicate, as you will see in the papers - in fact, it is referred to in Mr Justice Cox’s judgment from recollection - it was to consolidate and amend and I turn immediately to what his Honour Mr Justice Cox said in relation to this and your Honours will find it in the appeal book on page 44 and we respectfully adopt what he says as categorically overruling, we respectfully submit, what his Honour Mr Justice Zeeman said.  His Honour said, and I am reading from line 33 on page 44:

With respect, I have some reservations about the third argument advanced by the plaintiff and accepted by the learned trial judge.

That is, to add in the word “or”.

They are as follows:

1  A court should be very cautious before reading into an Act of Parliament a word which is not there.

And he refers to the cases cited by his Honour Mr Justice Wright and I will refer briefly to them.

2  To read the word “or” into s40(1)(e)(i) makes otiose the words “arising by implication or under a statute”.  Effectively the addition of the word “or” means that a title is not indefeasible so far as regards any easement which would have given rise to a legal interest if the servient land had not been registered land whether arising by implication or under a statute or otherwise.  There would accordingly be no need to specify the first two particular kinds of easements creating legal interests.

We respectfully submit that his Honour is correct in that statement and we adopt it.

3  So far as regards a person dealing with the estate of a registered proprietor, it might be thought that an implied easement or one arising under a statute (eg the Prescription Acts) might be more readily ascertainable by inquiry and inspection of the subject land that would an easement not appearing on the title to adjoining land already registered (and therefore not having the benefit of s106) but deriving from express grant outside the period of commencement of title mentioned in the Conveyancing & Law of Property Act 1884, s35.

His Honour says and I respectfully adopt, contrary to what his Honour Mr Justice Zeeman says, his Honour says:

It does not seem to me to be necessarily remarkable that Parliament should exclude as an exception to indefeasibility an easement by express grant but protect one by implication or statute.

And finally, in dealing with the prime reasons for the judgment of his Honour Mr Justice Zeeman, his Honour Mr Justice Cox says in paragraph 4:

Although such an exclusion would appear to change the law as it appears from certain obiter remarks of Burbury CJ in Wilkinson v Spooner [1957] Tas SR 121 so that, were the servient tenement brought under the Act first and the burden of the easement not recorded on the Register because from the documentary title produced it was not apparent to the Recorder, the owner of the dominant tenement still at General Law would lose the benefit of it, compensation would be available to him.

His Honour, if I can interpose, is saying more succinctly what I was trying to say to your Honour Justice Deane a few minutes ago that people do lose but the scheme provides for them to be compensated.  And his Honour, I respectfully submit, has got it completely right because he says that he, or she, would lose the benefit but

compensation would be available to him.  Section 152 provides that a person deprived of land or any estate or interest in land through the bringing of that land under the Act may bring an action for the recovery of damages.

Now, his Honour Mr Justice Wright, effectively, cautions against putting in words which Parliament has not put in, and his comment appear on page 49 of his Honour’s judgment, and I just read them, quite briefly from line 4:

In Thompson v Goold & Co (1910) AC 409 at 420 Lord Mersey said “It is a strong thing to read into an Act of Parliament words which are not there, and in the absence of clear necessity it is a wrong thing to do”. Stephen J echoed these sentiments in Marshall v Watson  (1972) 124 CLR 640, saying at 649 “it is no power of the judicial function to fill gaps disclosed in legislation”. Again, in Parramatta City Council v Brickworks Ltd (1071-1972) 128 CLR 1 at 12 Gibbs J (as he then was) said “it is for the legislature and not for the courts to fill any gap that may unintentionally have been left in the statute”. In Clarke v Burton ‑

which was a judgment of his Honour Mr Justice Wright, he said:

“It must be remembered that s78 is a penal provision.  It must be strictly construed.  I do not consider that this Court is at liberty to add to the statute a provision which is clearly not there.”

Now, his Honour Mr Justice Zeeman ‑ I will take you directly to it ‑ admits that he is changing the literal meaning of the words of section 40.  But he says, “I believe that I should insert the word ‘or’, otherwise it doesn’t make sense”.  Now, with great respect to his Honour, and with great respect to their Honours Mr  Justice Wright and Mr Justice Crawford, who went along with it, his Honour Mr Justice Cox, in those four short paragraphs, I respectively submit, demolishes - there is nothing remarkable at all, I argue on behalf of the appellant, in Parliament excluding as an exception to indefeasibility an easement by express grant, but protecting one which arises by one of implication or by statute.  Nothing unremarkable about that.  And if it is argued later by the respondent, “Oh well, that is not so in other States”, I simply submit that under our federal system all States do not have to have identical legislation on every single point.

Now, in the argument for leave in this matter most of the discussion revolved around section 106, and I wish to turn immediately to section 106 because on this I wish to argue that his Honour Mr Justice Cox has erred, and curiously there is support for the proposition that section 106 is of no avail to the respondent in the judgment of his Honour Mr Justice Zeeman, in the judgment of his Honour Mr Justice Crawford and, by implication, in the judgment of his Honour Mr Justice Wright.

In dealing specifically with his Honour Mr Justice Zeeman, the passage appears, if it please the Court, on page 32 of the appeal book and it is quite a short passage and I desire to turn to it now, if I may.  At line 25 he says this:

In the alternative, the plaintiff claims that she is entitled to the benefit of the easement by operation of the Act, s106(1). That provision is one of a number contained in the Act which provide that particular statements in a folio of the Register shall be conclusive evidence of the facts stated. Section 106(1) ought not to be read as giving an unqualified finality ‑

the words of Sir Owen Dixon ‑

to a statement in a folio of the Register that the land comprised therein has the benefit of an easement described therein. To do so would derogate from other provisions of the Act in a way plainly not intended. If none of the exceptions to indefeasibility operate so as to make the defendant’s land subject to the easement, s106(1) does not avail the plaintiff.

And with that statement we respectfully adopt and respectfully agree. His Honour Mr Justice Crawford, in his judgment, deals with section 106 on page 53 of the appeal book and also deals with it, with respect, quite briefly. The paragraph commences on line 5:

While urging the court to interpret s40(3)(e)(i) in a strictly literal way counsel for the appellant urged the court not to interpret s106 in the same way. The provisions of s106 are in direct conflict with those of s40(1) and (2) in the case of an easement which is recorded on the folio evidencing title to the dominant tenement but not so recorded on the folio evidencing title to the servient tenement. I respectfully agree with the learned judge that for the reasons given by him s106 does not avail the respondent unless she can bring her case within one of the exceptions to indefeasibility in s40(3).

His Honour Mr Justice Wright, whilst referring to the argument about section 106, which really on the material does not appear to have been argued very fully in the Full Court at all but he mentions it in passing, then never returns to it because he took the view that his Honour Mr Justice Zeeman was correct in inserting the word “or”.

I submit in conclusion that, unless you put the word “or” into section 40(3)(e), then Mrs Duggan cannot succeed. It is only by adding that word and effectively creating a third criterion that she can succeed. I rhetorically ask: on what basis did Mr Justice Zeeman and, with great respect, his Honour Mr Justice Wright, after cautioning himself, reach the conclusion that the Parliament had erred, that it had made a mistake which was so absurd that it could not be put right without adding a new word in and changing the whole thrust from the two - I repeat, two - exceptions which the Minister in his second reading speech referred to to effectively three. I submit that it is the other way that the real property system is working and should be working by virtue of its philosophy. You are looking, as Professor Woodman says, at indefeasibility of title.

If our submissions on this are wrong, the effect in the State of Tasmania, I respectfully submit, could be catastrophic.  You have got 280,000 certificates of title.  Excluding land which is islands, most of those properties have two, three or four adjoining properties.  In some cases of big properties, the Court of Titles reports there can be 10, 20 or 30 adjoining properties.  So do you then have the situation that the owners of servient tenements in the State of Tasmania must, from this point on if this judgment stands, work on the basis that if the recorder of titles registers on the dominant tenement a right of way over their property of which they had no knowledge, no notice whatsoever, that that right of way will take pre‑eminence over their certificate of title which is expressly stated to be free of any encumbrance whatsoever.

The mischief, the uncertainty that would be created by that, we respectfully submit, is just mind‑boggling.  For example, if dominant tenement owner is having a feud with servient tenement owner and discovers that back in 1870 a right of way was given which would effectively go straight through the house occupied by the owner of the servient tenement and his family, the effect of adding the additional word “or” and applying the judgment of Mr Justice Zeeman is that that dominant tenement owner can come along and say, “I’ve found an old right of way.  I claim it by deed of grant.  I have it registered.  I am now going to put a bulldozer through your house”.  That is the implication of it.  So, in a way, your Honours, the reference I made earlier to the farm shed might not have appeared relevant, but that is what the whole case effectively is about here, a case where the owner of the dominant tenement - and if you have read the pleadings you will see that the appellant pleads that since owning the property in 1983, the gate has been permanently locked, a shed has been built, so the argument of long user would seem to be a little bit up in the air ‑ but the owner of the dominant tenement wants that shed gone and the way she achieves that is to say, “I’ve got it on my title.  I am entitled to rely on it.”

We say our title is clear, you cannot do this.  And, we further argue that the most crucial recording, if you said which is it more important that the recorder of titles records a right of way, we submit it should be on the servient tenement because that means that a bona fide purchaser without notice for value comes along, looks at the title and says, “I want to buy that land, but there’s a right of way, so I wouldn’t be able to build a house”.

TOOHEY J:   Well, it is not quite as dramatic as that, is it?  Because, if the easement has been, or is shown to have been abandoned, there is provision in the Act in section 108, as I read it, for the easement to be cancelled.  So, if you had a situation in which the easement has not been used for 20 or 30 years and a house has been built across what once was a right of way, an argument that the easement has been abandoned would seem to have a fair prospect of success.

MR HODGMAN:   I understand that and accept that, too, your Honour.  But, I also want to make the point that ‑ I will be putting it a slightly, and I apologise, Irish way, because I am putting it on this basis ‑that it is more critical that the restriction on the land and its use should be on the title of the land to which it is subject.  Because, I submitted earlier and I probably did not put this as well as I should have, that if the right of way ‑ we can reverse the position, your Honour ‑ and the right of way was on Mr Parramore’s title but was not on Mrs Duggan’s title, it would be my argument Mrs Duggan could still exercise her rights, even though it is not on her title.  If it had been the reverse of what it has ‑ ‑ 

TOOHEY J:   Yes, I understand that.  I was just pointing out that the consequences of rejecting your argument are not quite as alarming as you suggest that they are, or might be.

MR HODGMAN:   I submit they are horrific, with great respect.  You have 280,000 certificates of title;  the recorder of titles is not infallible.  If you have a situation where, for example, owners of dominant tenements have recorded in their favour a right of way over adjoining properties, which is not known to the owner of those adjoining properties, under Parramore v Duggan, if the judgments stand, whichever way you go on section 43(e) or section 106, then the loser is the person who, under the whole system, should be, in fact, protected. The loser is the person who buys a property, becomes the registered proprietor, has a certificate of title which says ‑ we submit, going back to the words of Professor Woodman, if the Torrens system is to work, indefeasibility of title is its total value and none other and the moment that you chip away at that, or you create exceptions or extend exceptions, which is what Mr Justice Zeeman did, he concedes he is not applying the literal words of what the Parliament said it was doing.

My friends will say, oh no, this Bill was simply to consolidate.  It was not.  It was to consolidate and to amend.  I, with great respect, completely agree with his Honour Mr Justice Cox and address that very significant comment.  Mr Justice Zeeman found it remarkable.  “Remarkable”, he said, that Parliament would have acted in the way he read it.  His Honour Mr Justice Cox says there is nothing remarkable about it at all:

It does not seem to me to be necessarily remarkable that Parliament should exclude as an exception to indefeasibility an easement by express grant but protect one by implication or statute.

BRENNAN J:   Mr Hodgman, does your argument lead to this, that if the relationship between a vendor and purchaser of a parcel of land , being a subdivision of another larger parcel, was such that in the absence of express agreement by implication an easement of necessity would arise, that is an exception which is covered by 40(3)(e)(i), but, if the parties should not leave it to a matter of implication but make an express grant, it is not.

MR HODGMAN:   That is not my argument, but that is what Parliament has said effectively, yes. 

BRENNAN J:   Yes.

MR HODGMAN:   I am not, I hope, being semantic, but that is what Parliament has said. It was completely unwarranted, I respectfully submit, for his Honour Mr Justice Zeeman to say it does not matter if the Minister said there are only going to be two exceptions. I am not going to bore the Court, I hope, and I will conclude very quickly by going back. Look at section 40(3)(e). There are two exceptions. You put in “or” you create a third exception. For what it is worth, the Minister of the day said there are the two exceptions; Mr Justice Zeeman said, “Look, I do not think it makes sense. The word ‘or’ should go in after the word ‘statute’”, and he inserted it. With great respect to his Honour and all his ability, one takes on a very heavy burden when one says that one is going to “fill in the gaps” and one is going to put right what Parliament, in the opinion of the learned judge, has put wrong.

Your Honours, I do not believe I could assist the Court further. I wish to conclude that the one common ground from the four judges in the Supreme Court of Tasmania was that Mrs Duggan could either win on section 40(3)(e) or section 106 or not at all. We respectfully submit that she cannot win on section 40(3)(e) for the very simple reason that the proper basis for a judge to say that Parliament had made a mess of it and to put it right, otherwise it would produce an absurd result, just was not established. It may be argued by my learned friends or it may be in your Honours minds, “Well, the result is a little bit different to what we would have expected”. But, with great respect, with the utmost respect to this honourable Court, I submit that the learned judge such as Mr Justice Zeeman, takes on his own shoulders a very big responsibility when he says the whole of the Parliament got it wrong and I am going to put in the word “or” because that makes sense to me. He has moved from the thrust of what the Minister said. The Minister - in fact I will conclude this part of my argument by quoting in a little more detail what the Minister said from the written submissions we have provided to emphasise that he was focusing on indefeasibility. It is on page 4 of our submissions. This is the Minister, the honourable Harry Holgate, in fact, speaking in the Tasmanian Parliament. He says:

In clause 40, two exceptions to indefeasibility - those relating to the interest of a tenant and to easements - are stated in a different form from the present act -

He is already saying, “We are making it different” -

The form in which they are stated in the bill is thought -

piously perhaps, but nevertheless -

to declare the present law as interpreted by the courts.  The form in which the possibility of two folios of the register existing for conflicting estates on the same land is stated more clearly.  The clause adopts for the first time the word ‘indefeasible’ in relation to Torrens title.  let my colleagues listen - they might have to use it some time.  This word has, of course, become the classic word used to describe the essential feature of Torrens titles by judges and textbook writers.

Indefeasible. Mr Parramore says, “I have a title that is indefeasible. There is no right of way over my land. I am in peaceful possession of my land. I have built my implement shed on it. I got it without any knowledge of this and the recorder of titles gave me a title that said I am clear.” Secondly, we submit for the reasons put by his Honour Mr Justice Zeeman and his Honour Mr Justice Crawford and, by implication, his Honour Mr Justice Wright, that section 106 does not help. You cannot pull yourself up by your own bootstraps. Section 106 only avails Mrs Duggan if she has already got her right established under section 40(3)(e).

At the end of the day, we submit, Mrs Duggan fails because she cannot bring herself in with the literal interpretation of section 40(3)(e). She can only get in if you add that crucial word “or” and change the whole criteria of the Act because section 40 is the core of the Act. Everything revolves about section 40 because it is the indefeasibility provision. You tamper with that or add to it, go from two criteria to three, then you are, in

fact, thwarting, we respectfully submit, the will of the Parliament.  If it please the Court.

BRENNAN J:   Thank you, Mr Hodgman.  Mr Melick.

MR MELICK:   Your Honour, I have submissions to hand up. 

BRENNAN J:   Yes, Mr Melick.

MR MELICK:   Your Honour, shortly I will be handing over to my learned junior to develop the argument which he has prepared in the submissions, but before I do so I am concerned that there may be some confusion about the factual background to this case and I just want to take a few minutes to make sure that we are very clear before we start on submissions as to exactly what the factual background was.  If I could take your Honours to page 11 of the appeal book.  That is a diagram representing the land in dispute.  The larger portion of land belongs to the respondent, Mrs Duggan, the smaller piece of land in which the word “Parramore” appears in handwriting is the servient piece of land and the easement to which we are referring is the strip marked “roadway” to the left of Mr Parramore’s land.

These facts appear in a combination of page 29 and 50 of the appeal book.  One has to, in fact, go to the judgment of both his Honour Mr Justice Zeeman at first instance and his Honour Mr Justice Crawford in the Court of Appeal to get the full picture, but I intend condensing it for your Honours.

BRENNAN J:   How do they go further than what is in the case stated?

MR MELICK:   They do not, your Honour.  They have condensed the material in the case stated.  If you look at the case stated, annexed thereto are a lot of conveyances.  We say it is not necessary for your Honours to go to there because the summary as prepared by his Honour Mr Justice Zeeman and his Honour Mr Justice Crawford is an accurate representation of materials contained therein.

The original grant was on 2 May 1925 and was made by Miss Nichols who, in fact, owned all of the property here.  She retained the small portion marked “Parramore” and sold the larger portion marked “Duggan” to a Mr Dransfield and gave him the right of way, or the easement appertaining to the roadway.  That was in the grant of 2 May 1925.

TOOHEY J:   I am not following you there.  You say she retained the small portion marked “Parramore”  ‑ ‑ ‑

MR MELICK:   For herself.

TOOHEY J:   What do you mean by the small portion, Mr Melick?

MR MELICK:   The rectangular piece of land inset into the larger piece of land immediate to the right of the roadway over which the words “Parramore” appear on page 11 of the appeal book.

TOOHEY J:   But did she not also retain the roadway?

MR MELICK:   No, your Honour.  I am sorry, she retained the roadway  I am sorry, yes.

TOOHEY J:   We are talking about an easement here, a right of way of an adjoining owner, so I have assumed, perhaps wrongly, that the Parramore title is not only the small portion but the roadway to the left as well.

MR MELICK:   Your Honour is correct.  I am sorry, I was being imprecise.

McHUGH J:   And together with the land on the left of the roadway as well?

MR MELICK:   There was some other land, your Honour.  I am not quite sure whether it was to the left of the roadway or not but I would submit it is not relevant for the purpose of today’s proceeding.

At this stage we have two parcels of land:  the larger parcel which is the dominant; the smaller which is the servient and the servient includes the easement over the roadway marked “roadway”.  If we trace now Mrs Duggan’s land and putting Mr Parramore’s land to one side for the moment, that is the respondent’s land, at all times that easement remained noted on the common law title and all other titles on the dominant land.  There was a lost deed which is no longer relevant.

McHUGH J:   What do you mean, was noted on the common law title?  Do you mean that there was specific grant, a document, a - - - ?

MR MELICK:   There was a grant of 2 May 1925.  That noted the easement over the servient property and all future common law grants noted that easement and that right appertained to the dominant portion.

BRENNAN J:   What future grants were there?

MR MELICK:   They were merely transfers of the same parcel of land together with the right.

BRENNAN J:   Transfers?

MR MELICK:   Yes, your Honour.

BRENNAN J:   That is, transfers of the dominant tenement?

MR MELICK:   Yes, together with the right over the servient tenement.

BRENNAN J:   So from 1925 onwards the land which is now the respondent’s was the subject of transfers and each of those transfers contained a transfer of an easement.

MR MELICK:   Yes, your Honour.  Now on 10 March 1980 pursuant to the old Real Property Act 1862, that land was brought under the Real Property Act.  It was actually pursuant to the Deceased Persons Estates Duties Act 1978 section 31(c) but it became subject to the Real Property Act 1862 and when the Real Property Act title was issued the right over the servient property and the easement was noted.

TOOHEY J:   Does that mean, Mr Melick, that what is referred to as Mr Parramore’s land includes the rectangular portion, the right of way to the left and the right of way extending to the southern boundary of the sketch?

MR MELICK:   As I understand it, your Honour, yes.  My learned junior says there is some confusion about some of the land at the back; that part of that land may have been, at some stage, subject to another conveyance.  But the bit that we are concerned about is the roadway, where it gives access to the rear of the respondent’s parcel of land.  There is no dispute about the roadway where it extends past the bottom of the subservient tenancy, where there was a rectangle marked “Parramore” and the object is there is a gateway immediately to the rear of Mr Parramore’s land which is used for access to the dominant tenancy via that roadway.

Since 10 March 1980 there have been two other transfers: in August 1987 to Mr and Mrs Duggan, as tenants in common, and in July 1990, to Mrs Duggan alone.  The critical point is at all times the right, or the easement, has been noted or conveyed, along with the dominant property.  However, the same story does not follow with the subservient

tenancy, because on 19 October 1929 there was a mortgage given over the remaining portion of Miss Nichols’ land which includes that land which is now Mr Parramore’s, and on that mortgage, which his Honour Mr Justice Zeeman has already indicated was poorly drafted, there was no notation whatsoever about the right or the easement over that land.

Now, that land continued from 1929 onwards, with transfers and other registrations, with no mention of the easement, in fact there was different description was used because of the imprecise nature of the description used in 1929.  Now, on 1 October 1981, the Land Titles Act 1980 came into force in Tasmania. On 24 February 1983, Mr Parramore’s land was conveyed to him. At that stage it was still a general law conveyance, and critical, we would submit to this case, at that stage, a general law, it was still subject to the right of the dominant portion ‑ that is Mrs Duggan’s land. However, of course, section 17 of the new Act came into effect and, on 11 April 1983, under the Land Titles Act 1980, that land was given a title pursuant to the Land Titles Act.

So, it should be noted that the original conversion from general law to real property, for the dominant title, was pursuant to the 1862 Act in 1980, and the latter matter occurred on 11 April 1983 pursuant to the Land Titles Act.  I should also mention question of use is not relevant to the matters before this Court.  There was no evidence before that which specifically excluded it from the case stated.  There was certainly no evidence of the gateway being permanently locked.  We rely merely upon the case stated, as your Honour has already indicated, relating to paragraph 7 of the statement of claim.

Now, your Honours, if there are no questions about the actual factual background of this case, I would hand over to my learned junior, if it please the Court.

BRENNAN J:   Yes, Mr Melick.  Yes, Mr Williams.

MR WILLIAMS:   May it please the Court.  If I might just clarify one matter about the location of the easement.  The appeal book, page 26, sets out a plan.  It is possible, by looking at page 26 and the plan just referred to, to get an idea of the location of the land.  It is, in any event, irrelevant as to the precise location of the easement.  The easement is described on Mrs Duggan’s title and it is on that which we rely.  Prior to turning to the matters that are outlined in the summary before your Honours, I would like to make two general comments which need to be borne in mind.

The first is that this is not the classic case relating to indefeasibility.  We are not talking about a purchaser for value.  The fact was that Mr Parramore was subject to a general law title at the time his title was converted.  It is not quite accurate to say that the title was noted, when you are talking about general law land.  The basic principle of general law conveyancing is that you cannot give a better title than the one you have.  Effectively, when Mr Parramore’s predecessor in title conveyed away that easement, it was gone and it could not be got back.  The fact that it was omitted by a conveyancing error from being described on Mr Parramore’s successors in titles documents, is neither here nor there.  It was gone and he was subject to it.

There appears to be no dispute about the conclusion put in Mr Justice Zeeman’s judgment that, prior to the conversion of Mr Parramore’s title, he was subject to an easement which arose at general law.  And, of course, Mr Parramore has not mortgaged it, there have been no purchasers of it.  This is not the case where a purchaser for value has acquired a Torrens title.  It is not a case where Mr Parramore has relied on the register to obtain his title.  Mr Parramore had a title prior to the conversion and that title did not include the easement.  Essentially ‑ ‑  ‑

McHUGH J:   Correct me if I am wrong, but it would make no difference to your argument if, prior to the commencement of these proceedings, the Parramores had sold their land to somebody who had bought.  You would still say you had an easement over the purchaser’s land?

MR WILLIAMS:   Can I put it this way:  there is a possibility we may, but it would give me a lot of difficulty in the argument I am developing, so that I am not precluding that argument.  However, I would say that the case we have here needs to be considered only on the facts that apply to it.  The main thrust of what I am saying is that the Court should look at the facts that are before it and that this is not a case where there is any threat to ‑ ‑ ‑

McHUGH J: Well, could I put it another way, Mr Williams? You would certainly be putting the same argument on your section 40(3)(e) point and 106 point, but the thrust of your submissions seems to rely on the creation of rights under the earlier legislation. Or the argument is that there is an easement arising under the earlier statutes, is it?

MR WILLIAMS:   Yes, your Honour.  Of course, in terms of indefeasibility, as I will later develop, it is not only Mr Parramore’s title that should claim indefeasibility, but we will submit that the principle of indefeasibility should apply to Mrs Duggan’s title.  The majority of the Full Court upheld his Honour Mr Justice Zeeman who read a statutory provision as if it should have inserted in it the word “or”.  From what my learned friend has read to your Honours, there appears no dispute about what Parliament was told by the Minister when he brought in the legislation.

I would point to two things.  The first was that the Bill was thought to declare the law as presently interpreted in relation to exceptions to indefeasibility and, secondly, by reference to the clause notes which are referred to in his Honour Mr Justice Zeeman’s decision that where but for this Act an easement would have operated at law, the right of a registered proprietor is always subject to it.  It struck me that if this was a deed, not a statute, we are interpreting and someone had been told these things, the thoughts of non est factum, the voidability of the deed and, dare I even say it, the Amadio principle might jump to mind.

If I am being slightly facetious, it still raises an important consideration, and that is to consider the type of statute that Parliament was dealing with.  We were not dealing with a statute which dealt with matters obvious; we are dealing with a statute that was highly technical, that even solicitors struggle with at times and that, when you look at interpreting that type of statute, the Court should be cognisant of the position Parliament was put in.  If it was told that the statute ended up with a result A, then the Court should give heavy weight to that.

TOOHEY J:   Can you give us an illustration, Mr Williams, of an interest arising under a statute in terms of paragraph (e)(i)?

MR WILLIAMS:   I can give you several examples, your Honour.  The first might be an easement arising under the Prescription Act.

McHUGH J:   What about Strata Titles Act?  Nearly all the Strata Titles Acts around Australia provide for implied easements, do they not?

MR WILLIAMS:   Indeed, and there is a miscellany of easements relating to water rights, hydro‑electricity easements that apply in Tasmania and so on.  So that there is a variety of different situations where an easement might be said to arise under a statute.  They could vary from the situation where the statute says the Hydro‑Electric Commission shall have an easement to a situation where the Prescription Act provides the circumstances in which a person might prove to a court of law that he has established an easement by long user.  Thirdly, as I will come to in relation to his Honour Mr Justice Cox’s decision, easements arise under the Land Titles Act itself and that the only way you can create an easement under the Land Titles Act is by virtue of registration under that Act and that that is no less an easement arising under statute than any of the other examples I have quoted.

DEANE J:   Can I divert you for a moment?  Where is the conveyance of 2 May 1925?

MR WILLIAMS:   When the matter was before the Full Court the appeal book included a section of documents which were copies of all the memorials, the memorials being precises of the original deeds which were registered under the Registration of Deeds Act.  Because there was no dispute that his Honour Mr Justice Zeeman had correctly set out the conclusions in relation to the effect of all those memorials, they were not included in the appeal book before this Court.

DEANE J:   Can you show me where there is a concise summary of that conveyance and what it said in relation to the easement?

MR WILLIAMS:   I could refer your Honour to page 28 of the appeal book.

DEANE J:   That is what I was reading.

MR WILLIAMS:   If I can go down to about line 15, your Honour:

The easement was created by that conveyance, Miss Nichols retaining the land over which it was granted.

That is on page 29.

DEANE J:   Yes.

MR WILLIAMS:   And the terms of that easement are set out almost word for word in the title, the certificate of title, which is part of the appeal book in the description of the easement.

DEANE J:   Can you just go on from there:

The easement was created by the conveyance, Miss Nichols retaining the land over which it was granted.  The land she retained was the unsold portion of the land which had been devised to her.  That unsold portion comprised the defendant’s land and lot 2 on plan P13956.  The plaintiff’s land comprises the land conveyed to Mr Dransfield together with lot 2 on plan P13956.

I am just trying to fit in lot 2 and lot 1.

MR WILLIAMS:   Lot 2 is irrelevant, largely, to our considerations.  The unsold portion comprised two parts:  the defendant’s land and lot 2.

DEANE J:   So then the position that emerges is this, is it:  the 1925 conveyance was of the plaintiff’s land together with other land; the land retained was the defendant’s land together with other land and there was an easement in favour of the land conveyed, presumably all of it, over the land retained, presumably all of it, but it is assumed, is it, that notwithstanding subsequent subdivisions, the easement over the whole of the land retained in favour of the whole of the land conveyed remained operative in favour of part of the land conveyed over part of the land retained?

MR WILLIAMS:   Yes, in a nutshell, it is assumed that the land that Mr Parramore now holds, was subject to the easement in favour of the land that the respondent now holds.

DEANE J:   At the back of my mind - it probably has nothing to do with this - is a recollection that that assumption is contrary to authority.  If you have subsequent subdivisions in this context an easement for a right of carriageway does not survive.

MR WILLIAMS:   As I recall, your Honour, there is subsequent authority to the effect that if you have not land which is expressed for all of it to have the benefit of that easement and there is then a subdivision of it, that that does in fact inure for the benefit of all the subdivided parts.

DEANE J:   So if you subdivide one lot of land which has the benefit of one easement in its entirety you produce a consequence that two areas of land have the benefit.  At the back of my mind is a judgment, I think it is of Lord Esher, that says the contrary but I have not thought about it for years.  I gather there is a judgment of this Court ‑ ‑ ‑

McHUGH J:   Over my vigorous dissent the Court decided to the contrary to what Justice Deane is putting.

DEANE J:   I obviously was not in the case.

BRENNAN J:   This is the Queensland case you are speaking about, the subdivision?

McHUGH J:   Gallagher ‑ ‑ ‑

MR WILLIAMS:   I think, as I recall, the dissent was based that you had to interpret each document.

McHUGH J:   Yes, it turned on the construction of the document.

DEANE J:   But I now follow where it comes from and what happened in 1925.

MR WILLIAMS:   Yes, your Honour, as I looked at that bundle of documents - it has never been the most pleasant task to go through such a bundle - but I do not think it is in dispute that as at the moment before Mr Parramore’s land was converted, he was subject to a valid easement which existed at general law.

BRENNAN J:   You cannot take it any further than paragraph 7 of the statement of claim takes it, can you?

MR WILLIAMS:   Except to the extent that the bundle of deeds did form part of that special case.

BRENNAN J:   No doubt they did, but you have a series of documents being conveyances of various kinds in relation to the servient tenement, none of which refer to the easement between 1925 and the date on which the servient tenement became registered under the Torrens Act.

MR WILLIAMS:   Yes, your Honour, but the answer to that is that it simply does not matter.

BRENNAN J:   I understand that.

MR WILLIAMS:   As you would gather from the pleadings, there is obviously going to be some vigorous debate about questions of notice.  The pleadings claim easement arising by prescription and obviously there would be notice of arising in that situation, but the question of notice is irrelevant.

BRENNAN J:   Mr Hodgman is prepared to argue it on the basis of whether or not there was knowledge at the time that the servient tenement became registered.  At that time, according to that argument as I understand it, it is said that you look solely at the terms of the registered instrument.

MR WILLIAMS:   Yes, your Honour.  I am simply saying it is neither here nor there whether there was knowledge or not, but what ‑ ‑ ‑

BRENNAN J:   And you are in furious agreement about it?

MR WILLIAMS:   Yes.  The fact remains that there was a valid easement.  I just return to the background to the question of statutory interpretation. Your Honour, in going through the parts adverted to by my learned friends, I noticed a comment that was made by Mr Bingham, who was then replying on behalf of the Opposition to the Bill, and that appears at page 603 and I do not cite it as authority per se, but merely as illustrative of the point I am making.  I have copies available for your Honours.  If I just read from the top:

Mr BINGHAM (Denison) - Madam Deputy Speaker, at about half past five this afternoon I know the House was absolutely enthralled and agog at the ‑ ‑ ‑

BRENNAN J:   Spare us the details.

MR WILLIAMS:   And I would simply go down to the end of the next passage which quotes Mr Bingham.

BRENNAN J:   What is the point that you are making?

MR WILLIAMS:   I am simply making the point, your Honour, that in relation to a statute that is highly technical the courts have got to be cognisant, more cognisant perhaps, of what Parliament is told, the effect of what it is passing is.  If I might take another example:  if, for example, the Parliament was dealing with an evidentiary provision relating to DNA evidence, the evidentiary provisions relating to that might be highly technical.  At the end of the day a conviction may turn on the interpretation of that statute.  If Parliament was clearly told that the effect of what they were doing was A, surely that in that context should weigh more heavily with the courts than interpreting the second reading speech in a case where the words are plainly self‑obvious and do not relate to a technical or obscure subject that normal parliamentarians ‑ ‑ ‑

McHUGH J:   Why?In Ex parte Beane in re Bolton the Attorney‑General told the Parliament the statute meant something and this Court held it went the opposite.

MR WILLIAMS:   Yes, your Honour, I take that point.

BRENNAN J:   Perhaps you could give us the benefit of the substance of argument on the construction of sections with which we are concerned rather than this periphery.

MR WILLIAMS:   Thank you, your Honour.  If I can turn to that.  When the respondent’s title was converted under the Real Property Act as it then stood, the effect of the equivalent provisions under that Act was to create a title that was based on its registration.  It is probably trite to say that the Torrens system of registered title is not a system of registration of title but a system of title by registration.  It was by virtue of the registration of the title that the estates mentioned in that title had force and effect and no less was it the case that the interests mentioned in that title had force and effect by virtue of that legislation.  So that when the respondent’s title was converted to the Real Property Act, the easement that was clearly set out therein at that stage, had force and effect by virtue of the Real Property Act itself.

TOOHEY J:   What, in fact, happened, Mr Williams?  Does the person applying to bring the land under the Act produce the last conveyance and rely upon that document as evidence in the existence of an easement?

MR WILLIAMS:   All the documents of title that they possess are produced to the recorder of titles.  The recorder of titles is required to make inquiries concerning the title.  Now, as I understand it, what occurred in this case was that the recorder relies on only going back to a good route of title as of 20 years and, in fact, does not search back past the good route of title.  But, as your Honours would be well aware, the fact that there is a defect in title before what is called the good route of title does not alter that defect.  If you have a defect in title appearing before a good route of title ‑ ‑ 

TOOHEY J:   Well, I was not really concerned about the legal effects of it so much as how this document - what evidence there was to satisfy the recorder of the existence of an easement.  And, you say it is to be found in a chain of conveyances and other documents?

MR WILLIAMS:   Yes.  The recorder would have gone back to the conveyance which created the easement and would have searched the register to see whether it had been subsequently lost by a documentary transaction.  On being satisfied that it had not, it would create the easement on the folio of the register.

TOOHEY J:   Yes, thank you.

BRENNAN J:   Well, if you are relying upon the issuing of a title to the registered proprietor of the dominant tenement as satisfying the words, “easement arising under a statute”, how did that issue of a title give rise to the easement?

MR WILLIAMS:   The issuing of the title, per se?

BRENNAN J:   There must be an easement arising under the statute?  How does it arise under a statute?

MR WILLIAMS: It arises under the statute by virtue of the provisions of section 106 of the Act which holds that the ‑ firstly, that is an evidentiary provision, and it says that, having regard to the title, that is evidence of the easement. If you then look to section 39 of the Act:

A folio of the Register is evidence of the particulars recorded in the folio.

And if you then take that down to section 40, which deals with indefeasibility:

subject only to such estates and interests as are recorded on the folio of the Register or registered dealing evidencing title to the land.

BRENNAN J:   But, if we are talking about the dominant tenement here, how does 39 apply?

MR WILLIAMS:   I am sorry, your Honour, 39 relates to 106 as both being evidentiary provisions.

BRENNAN J:   We are talking about the dominant tenement, are we not?

MR WILLIAMS:   Yes, your Honour.

BRENNAN J:   How does 39 apply, having regard to the words of 39(2)(b)?

MR WILLIAMS:   I was taking your Honours to 106 and 39 as both providing the evidentiary armament.

BRENNAN J:   I understand that but, are you not saying that the issue of the title to the registered proprietor of the dominant tenement, noting an appurtenant easement, gives rise to an easement for the purposes of 40(3)(e)(i)?  Is that the argument?

MR WILLIAMS:   Yes.

BRENNAN J:   Well now, my question to you is how is it that the issue of that certificate of title gives rise to the easement upon which you rely?

MR WILLIAMS:   The overall effect of the Act is such that if your Honours take, for example, an easement that is created subsequent to the conversion of the land, the only way that that easement can have any effect is by virtue of the provisions of the Land Titles Act, which say that an easement recorded on the folio of the register has force and effect.  I would submit that that is the only way it can have any validity if it arises by virtue of the Act saying that an easement recorded on the title is to have effect.  And, in that way, it arises.

TOOHEY J: Perhaps I have misunderstood something. Do you take comfort from section 40(3)(e)(i), to support your own easement? You appeared to be saying so in answer to the question directed at you by the presiding judge.

MR WILLIAMS:   Yes, your Honour.  That is the submission I am making, that an easement created under the Land Titles Act is an easement arising under a statute.

TOOHEY J:   But why do you, for the purposes of asserting your own interest, as opposed to destroying the claim of the appellant, go to paragraph (e)(i)?

MR WILLIAMS:   I am sorry, your Honour, I have missed the point.

McHUGH J: Well, your point, you seem to be saying is this, is it not: you say that Parramore’s title is indefeasible, except to the extent that section 40(3) operates otherwise, and it operates otherwise in respect of your easement which you claim arises under the Land Titles Act?

MR WILLIAMS:   Yes, your Honour.

BRENNAN J:   For my part, I do not understand how you say that it arises under the Land Titles Act.

McHUGH J:   No.  I must say, I have the same difficulty.

TOOHEY J: You seem to be reversing the situations of the parties; as if you are driven to section 40(3)(e)(i) to support your own case; whereas I understood that you were relying upon a miscellany of other provisions: 39, 40, 106 and so on, to demonstrate the existence of enforceability of your reasoning.

MR WILLIAMS:   Yes, your Honour, including section 28(2)(a) of the Act which provides that:

(2) Where -

(a) on the bringing of land under this Act it appears to the Recorder that an instrument registered under the Registration of Deeds Act 1935 or Division VII of Part IV of the Companies Act 1962 creates an estate or interest in that land (other than the estate claimed by the person making the application to bring land under this Act or the person who is to be registered proprietor) that could have been created by an instrument registered under this Act if at the time of its creation the land were under this Act.....

(b) he may record that instrument -

What he has done is recorded that instrument on the folio of the register, ie, the conveyance of the right of way or the document that ‑ ‑ ‑

BRENNAN J:   No, he has recorded it, but you are saying that the easement that is thus recorded arises under the statute.  Are you equating the recording of it with the giving rise to the easement?

MR WILLIAMS:   Yes, your Honour, at the end of the day.

BRENNAN J:   That is what you are saying?

MR WILLIAMS:   Yes, that is what Mr Justice Cox - I think the argument that Mr Justice Cox put in his judgment has been misstated by my learned friend and that what your Honour just put is in fact what Mr Justice Cox held.

BRENNAN J:   What you are saying is that once you find a notation of an easement on the certificate of title of the dominant tenement, that notation of the easement gives rise to, for the purposes of 40(3)(e)(i), to an easement under that Act?

MR WILLIAMS:   Yes, your Honour.

BRENNAN J:   I see.  Is there anything you can say in support of that argument except that there are the evidentiary provisions of 106 and 39?

MR WILLIAMS:   And the provision of 28(2)(a) which says that where you find a document which creates an interest such an easement registered under the general law regislation of deeds system, then you can record that instrument on the register and the recording of it therefore gives it effect.  If it were not for the recording and the provisions I have adverted to, it simply could not exist; it would have no life of its own.  So therefore it must arise under the Act.

BRENNAN J:   You had better provide us with a copy of that 28(2)(a) which I do not think we have at the moment, but that can be done during the luncheon adjournment.

MR WILLIAMS: Yes, thank you, your Honour. The situation I have just outlined was strengthened, as is pointed out by his Honour Mr Justice Cox at page 44, lines 15 to 20, of the appeal book, by the passage of section 106. If I could, rather than read that part of the appeal book out ‑ ‑ ‑

BRENNAN J:   Yes.

MR WILLIAMS:   I have not mentioned it in the summary that I have provided to you but, in addition, it appears that under the Real Property Act, as opposed to the Land Titles Act, there was no provision for recording an easement on the servient tenement.  Whereas the Land Titles Act specifically provides that the easement is to be recorded on the servient tenement, the Real Property Act contained no provision that allowed that.  That is pointed out in the annotation that I have referred to in the list of authorities.  It is not a section I can point to, but simply the fact that there is no section under the old Real Property Act which deals with the registration of the easement on the servient tenement.

BRENNAN J:   Why is it not an encumbrance?  Surely there is a provision for registration of encumbrances?

MR WILLIAMS:   Perhaps I could put it this way.  The Act dealt with it in terms of being an interest rather than an encumbrance.

BRENNAN J:   It is both, interest in the hands of the holder of the dominant tenement and encumbrance on the land of the servient tenement.

MR WILLIAMS:   Yes, I would find it difficult to argue with that proposition, your Honour.  I simply noted it in passing that the annotated statute did refer to that effect.  If, in fact, it is an encumbrance, then I would concede that your Honour is correct.

BRENNAN J:   What is the definition of “encumbrance”?  Does it include easement?

TOOHEY J:   The definition in the Land Titles Act itself does not help you, because that speaks of a charge created for the purpose of securing an annuity every so often.  But what about the earlier legislation?

MR WILLIAMS:   I do not have to hand a copy of the earlier legislation, your Honour.  Perhaps that could be a matter I deal with during the lunch break.  The last point I would make in relation to that submission is that conversion of the appellant’s title did not alter the fact that the respondent’s easement either arose or was under a statute.  I would submit that they are two alternative wordings, two possible interpretations that could arise or that exist.  It could be said that Parliament was simply referring to an easement under a statute, because the words arising do not qualify it.  That point was made by his Honour Mr Justice Cox but, in our submission, it would qualify under both tests of either arising or simply being an easement under a statute.

MR WILLIAMS:   I might take your Honours directly to the reasons of his Honour Mr Justice Zeeman which appear at page 4 of the submissions.  The other matters that I have raised in the written argument did not form part of any of the judgments and so it is convenient to leave them until later.  It is the respondent’s submission that words may be read into a statute if there is a drafting oversight; it is necessary to achieve a result consistent with Parliament’s intentions and it avoids on a literal reading a result that is incongruous, capricious, irrational or contrary to the objects of the Act.

McHUGH J:   But why do you say it produces a result that is incongruous or capricious or irrational?

MR WILLIAMS:   I will deal with those in order, your Honour.  The first is that we would adopt the reasoning of his Honour Mr Justice Zeeman.

McHUGH J:   He says that the words which would have given rise, et cetera, have no effect, but that is wrong, is it not?  Those words are used in contrast with the words “an equitable easement”.  So paragraph (e) is dealing with two situations.  It is dealing with an easement which arises by implication, which is ordinarily an implied grant, I suppose, or an easement which arises under a statute, and in both cases that type of easement must have given rise to a legal interest.  If it does, no more is required.  Then the second limb is the equitable easement, which I assume is an easement by acquiescence or an easement by estoppel, and in that case the title does not prevail against an equitable easement except as against a bona fide purchaser.  But in relation to (e)(i), the easement which would have given rise to a legal interest prevails even against a bona fide purchaser.  What is left out is the easement by express grant and the reason for that may well be what Justice Cox said.  It is one thing if it arises by implication from a series of grants or perhaps from necessity or under a statute.  It is another thing if you have got loose documents floating around.

MR WILLIAMS:   Your Honour, I would still submit that if an easement arises under statute, it arises in any event and that there would be no need to add the words which would have given rise to a legal interest if the servient land had not been registered land.

McHUGH J:   That may be, but it does not deal with the question of implication.  I have not attempted to think it out but it may be that you could have some form of equitable easement arising under a statute and so they want to draw the contrast between an easement which gives rise to a legal interest and an easement which gives rise to an equitable interest and they have dealt with them in two separate paragraphs, but if your argument is right, you can just strike out the words “arising by implication or under a statute”.

MR WILLIAMS:   Except if they are used as words as a drafting technique to ensure that those words are included under a more general description; that if you say that what Parliament wanted to do was ensure that easements arising by implication or under a statute qualified as types of easement which would have given rise to a legal interest if the servient land had not been registered.

McHUGH J:   So, your argument is that the words “arising by implication or under a statute” are words of extension rather than qualification.

MR WILLIAMS:   Yes, your Honour.  The first point is that we adopt Mr Justice Zeeman’s reasoning in relation to those words being otiose.  The second point which I have noted is that I have referred to a consolidating statute, but as my learned friend correctly says, it is both a consolidating and amending statute.  However, one would not expect statutes to affect conveyancing practices normally.  One would normally assume that to continue on with existing conveyancing conventions or practises and not to alter existing rights.

Further, the wording under subsection (1) would appear to omit an easement arising under lost modern grant yet allow other types of prescriptive easement and that would seem to be illogical.  Why should you allow easements arising under the Prescription Act in but omit the common law easement which arose by long user under the doctrine of lost modern grant.  That would seem entirely illogical for Parliament to have intended that.  Why would you pick one and not the other?

TOOHEY J:   There might be a good reason.  The Prescription Act is perhaps clearer and easier to follow that all the ramifications of the doctrine of lost modern grant.  Parliament may have intended to exclude any easement arising in that way confining it, in that sort of situation, to an easement arising under the Prescription Act.

MR WILLIAMS:   Yes, your Honour, I just bear in mind a recollection of the Prescription Act and its drafting has been roundly criticised.

TOOHEY J:   It might be the lesser of two evils, put it that way.

MR WILLIAMS:   Yes, your Honour.  I am suggesting to you that the Prescription Act may be the worse of the two evils in that case.

TOOHEY J:   Mr Williams, can I just ask you this to make sure that I understand your argument.  You seem to be advancing two disperate propositions: one in which you look to the strength of your own title based upon the evidentiary and other provisions of the Land Titles Act which you say gives you an indefeasibility.

MR WILLIAMS:   In any event, yes.

TOOHEY J:   Then, in so far as the appellant claims indefeasibility for his title, you say that that title is vulnerable because it lets in an easement arising under paragraph (e) and that you can bring yourself within that paragraph.

MR WILLIAMS:   Yes, your Honour.

TOOHEY J:   Is that the way the argument is put?

MR WILLIAMS:   That is the way the argument is put, your Honour.

TOOHEY J:   And for your purposes, it is probably enough if you can make good one or other proposition.

MR WILLIAMS:   Yes, your Honour, if we make good any of the exceptions that should be sufficient in any event.  Even if we do not, we say that you are still left with two indefeasible titles.

TOOHEY J:   I am not sure what you mean by that.  You mean that your title is indefeasible in so far as it records the existence of an easement.

MR WILLIAMS:   Yes.  I could put it perhaps more precisely:  we would submit that the interest recorded on our title is as indefeasible as any estate recorded on Mr Parramore’s title.

TOOHEY J:   Yes, I understand that.  Yes, thank you.

MR WILLIAMS:   The next point that ‑ ‑ ‑ 

DEANE J:   Is the wording of (e)(i) appropriate, if your argument be accepted?  I mean, does an easement give rise to a legal interest?  One can understand an implication or a statute giving rise to a legal interest, but one would have thought if it was an easement, it would have been being a legal interest or which would have been.  I am not putting it by way of conclusion;  I am putting it by way of question.

MR WILLIAMS:   We would submit that the words “legal interest” intended to refer to ‑ ‑ 

DEANE J:   No, I was focusing on the words “which would have given rise” in terms of your construction, that is, that that phrase describes easement rather than implication or statute.

MR WILLIAMS:   In relation to our argument that the word “or” should be inserted?

DEANE J:   Yes.

MR WILLIAMS:   If one inserts the word “or”, I would submit that no damage is done to that phrase.

DEANE J:   I was just saying, would you say it was appropriate to say that an easement gives rise to a legal interest, as distinct from an easement being a legal interest?

MR WILLIAMS:   I would submit it is really a question of semantics.

BRENNAN J:   Of course it is.

MR WILLIAMS:   If an easement is an easement under a statute, the words “give rise” are intended to be broad words that would allow in a whole variety of easements, basically, any easement that existed at law previously, by using the words “give rise” would be allowed in.  And the intent of Parliament, by using “arising” and “give rise” was to allow any type of easement that had been even occasioned or caused to exist by a statute.  I would refer to the clause notes which talk about an easement which, in effect, would otherwise have arisen. 

There was some debate in the previous case of Wilkinson v Spooner which was in 1957 in the Supreme Court about what the meaning of “created” was and I would submit that the move to the wording “giving rise” or “arising” was to the intent of widening the description of easements that could be included. 

In terms of the argument that was put that it is more rational to exclude a deed creating an easement than an easement arising by implication, what I would suggest is that Parliament must be taken to have considered the situation as applies in this case and that is that you are talking about not a deed that arises subsequent to the conversion of the titles, but a deed that was created before the conversion of the titles.

If you are talking about a deed that applied at general law, if it was registered, then there are provisions relating to notice.  If it was registered or even if it was not registered, the parties would still have been bound by that general law.  So that the only situation in which a deed could create an easement at law was a situation where the deed was entered into prior to the conversion of the titles.  If it was entered into prior to the conversion of the titles, it meant that the servient tenement was bound.  So, at the moment before the conversion of the titles, the deed meant the owner of the servient tenement was bound by it.  Why would Parliament intend that on the conversion of the title simply by an omission for the dominant tenement to lose the benefit of that easement?  In a general sense one might say, “If you’ve got a deed that might be anywhere, it would be sensible to exclude it”.

That may be the case, but the fact is that the only deeds that we are talking about are general law deeds prior to conversion.  Therefore there were deeds that created the easement, that both parties were bound by that easement.  Why should not the very parties to that deed perhaps continue to be bound by it even if it was omitted on conversion of the register?  So it would be totally irrational to exclude that type of deed.  It may be the case, for example, that two parties owned their property at general law, they by deed registered in the deeds registry granted an easement over one or other of the properties.

The same parties then might apply to convert their land to the Torrens system.  They were both bound by that easement prior to its conversion.  On the conversion an accident happens and the easement is omitted.  Why would Parliament have intended not to include an easement arising by that deed?  I would submit it simply does not make sense in that situation and that the only situation that a deed is relevant is where it was part of a general law title.

Further, if one looks at the previous situation under the Real Property Act, one would ask, “Why would Parliament intend to change the situation that prevailed?”  And, indeed, not only did it prevail in Tasmania, but it prevailed Australia‑wide.  If I could take your Honours to an example where both titles were held under the Real Property Act ‑ I am sorry, your Honour, can I take you to a different example first up ‑ suppose the dominant tenement is held under general law and arose by deed, the situation is under the Real Property Act  and the servient title is held under the Real Property Act and no easement is noted. 

So, you have a general law title but a dominant tenement which arises by deed.  The servient tenement is held under the Real Property Act and there is an omission of that easement.  On the passage of the Land Titles Act, unless it was saved by section 16 of the Acts Interpretation Act, the dominant tenement would lose the easement.  If it was saved, then on the dominant tenement becoming converted to the Land Titles Act then again, unless it was saved by the Acts Interpretation Act of an accrued right, it would leave the purchasers having to check the dates of conversion to determine if the easement prevailed or not. 

So that it could not be presumed that Parliament would leave such a messy and irrational situation where you had a previous Act with omitted easements clearly formed an exception to indefeasibility.  It would be crazy then to bring in another Act which changed the situation to find out whether easements were good or not, you could end up in a situation of having to check whether your title was brought under one Act or the other Act, and you can play around with various permutations.

BRENNAN J:   What happens to titles issued under the old Act in relation to the new Act?  What gives them indefeasibility?

MR WILLIAMS: Section 124 of the Land Titles Act.

BRENNAN J:   The new Act?

MR WILLIAMS:   Of the new Act.

BRENNAN J:   Then I take it that any title under the old Act becomes subject to whatever infirmities were provided for in the new Act.  Are you suggesting that whatever it was that translated the indefeasibility under the old Act was unaffected by the new Act?

MR WILLIAMS:   I would submit, your Honour, that indefeasibility under the old Act in the normal sense arose in exactly the same way as under the new Act.

BRENNAN J:   No doubt, but the exceptions we are speaking about, are we not?

MR WILLIAMS:   Yes, we specifically referred to an omitted easement..

BRENNAN J:   Under the old Act any omitted easement was enforceable.

MR WILLIAMS:   Yes, your Honour.

BRENNAN J:   And the indefeasibility provisions did not affect it?

MR WILLIAMS:   That is right, your Honour.

BRENNAN J:   Under the new Act that is not so.

MR WILLIAMS:   I am suggesting that if the word “or” is inserted, the effect of that would be to allow in, in effect, all easements and it would mean that the legal situation and the situation in relation to omitted easements would not be changed.

BRENNAN J:   That means that instead of using the words of the old Act, “or other easement created in or existing upon any land”, the legislature went through the exercise of spelling out those words in the language of paragraph (e).  It seems a very unlikely legislative exercise.

MR WILLIAMS:   What I am suggesting to your Honour is that the legislature could not have been intended to have changed the situation without adverting to it in some way.

BRENNAN J:   They adverted to it by the use of language much more extensive than in the old Act.  Is that not so?

MR WILLIAMS:   They widened the wording.  I would submit they still intended - although they used a different wording, that different wording was intended to cover categories of easement such as omitted easements, because if they did not intend to cover easements created by deed which were omitted, it would lead to an illogical situation.  If you hold that an easement created by deed under - suppose you take two easements that are created under the Real Property Act, the servient and dominant tenement, if at that time no easement was noted on the servient tenement, the question could be asked, “Did the passage of the Land Titles Act affect what the rights of the parties were?”.

If section 16 of the Act Interpretation Act does not apply to save accrued or vested rights, then it would surely be an illogical situation for the Land Titles Act to come in and sweep aside existing vested rights and one would say, therefore, that the wording that Parliament has used has a degree of absurdity or illogicality about it and you can play around with the permutations or which title was converted first and which title was under which Act and in a lot of those permutations that you come out with it simply is not logical, the result that you get, if you say that the new Act was not intended to cover easements which were omitted either under a wording which would have given rise to a legal interest - sorry, under the wordings that they were covered as arising under a statute because they arose under either the Real Property Act or the Land Titles Act by virtue of there noting on the register or by adopting the solution of his Honour Mr Justice Zeeman of saying that the word “or” was omitted.

McHUGH J:   On that point, going back to a matter I put to you earlier, under the words “under a statute which would have given rise to a legal interest if the servient land not been registered”, I think you said that there would always be a legal interest of an easement created under a statute, but is that right?  In most States, you can create an easement in gross in favour of the Crown or a public authority and I think that is the case in Tasmania as well.  Now, that being so, there would be no legal interest in the local authority or the Crown, would there?  I mean, there is no dominant tenement so they have no legal interest either in the servient tenement or in anything else.  They just have a right under the statute, which is an easement in gross.  Is it possible that those words are linked to the words “under a statute” to ensure that the only easements that are protected are easements which create legal interest under a statute and not mere easements in gross in favour of the Crown or a public authority, and so on?

MR WILLIAMS:   I would submit that easements in gross were intended to be protected.

McHUGH J:   You would submit they were?

MR WILLIAMS:   Indeed, your Honour.  I would submit it would be totally illogical if easements in gross were not protected.

McHUGH J:   Well, do easements in gross give rise to a legal interest?

MR WILLIAMS:   I would submit that they do give rise to a ‑ ‑ ‑

McHUGH J:   They are a statutory right.  I mean, you cannot have an easement in gross among private parties.

MR WILLIAMS:   Well, it may be debatable whether, in fact, they are a true category of easement.

McHUGH J:   But you could have an easement in gross under the various legislation in the states in favour of the Crown, notwithstanding that there is no dominant tenement.  But does that create a legal interest as opposed to a statutory right?  You might give some thought to that over lunchtime.

MR WILLIAMS:   There is a similar situation, your Honour, that would arise.  I will leave that till after lunch.  Your Honours, those are the reasons why we would submit that the ordinary wording of section 40(e)(i) is illogical or absurd.  In the argument I have referred your Honours to the various passages from the Cooper Brookes Case.  It is probably unnecessary for me to read them ‑ your Honours, may in fact recall them well enough in any event ‑ but basically those passages, I would submit, create the test that I have referred to that if it is incongruous or capricious or irrational, then the Court can remedy the defect.  I have also referred to a case of Tokyo Mart Pty Ltd v Campbell which I submit is further authority to the same effect.

Under section 8(b) of the Acts Interpretation Act 1931, extrinsic material can be used if the ordinary meaning leads to a result that is manifestly absurd or unreasonable or in fact there is an obscurity in the Act. For the same reasons that I have outlined in relation to avoiding a literal reading, I would submit that the Acts Interpretation Act allows in the use of extrinsic material.  If one looks at that extrinsic material which is set out in the judgment of his Honour Mr Justice Zeeman, there are two significant points.  I take your Honours to line 40 of page 34:

In clause 40, two exceptions to indefeasibility - those relating to the interest of a tenant and to easements - are stated in a different form from the present act.  The form in which they are stated in the bill is thought to declare the present law as interpreted by the courts.

I would submit that there is absolutely no doubt what the present law was at that time.  There may be some debate, particularly in other parts of Australia, about whether an easement that is created after the title is converted should form part of a statutory exception.  I would submit that it is quite clear that in relation to easements that arose prior to the title’s conversion there is certainty that the prevailing law at that time, both in Tasmania and Australia, was that they were exceptions to indefeasibility.

I have referred your Honours to two textbooks which are Barton, Bradbrook, MacCullum and Moore which summarise that conclusion.  I have also referred you to Wilkinson v Spooner which I would submit may have been obiter in relation to whether in Tasmania an easement arising after conversion was subject to the exception; but is good authority for the proposition that an easement arising prior to conversion was indeed one of the exceptions to indefeasibility as being clearly an easement omitted.

So, it is quite clear that Parliament thought that they were maintaining the law as it then stood.  In this case we are not concerned about an easement arising after conversion; we are only concerned with an easement arising prior to the conversion of the land.  I would submit it was clear that in that instance Parliament was in no doubt that the legislation it passed was continuing the law as presently understood.

The second matter is in relation to the clause notes which stated, and this is at page 35 of the appeal book, page 8 of his Honour’s judgment:

“At common law an easement can only operate at law if it is created by a grant under seal, or where the existence of the grant is implied, eg by prescription under the Prescription Act 1934, or under the doctrine of lost modern grant.  However there are many other kinds of implied easements arising by estoppel, acquiescence or agreement which operate in equity only.

Under this Act an easement can only operate at law if it is created by the prescribed form and registered, but by analogy with Smith v Ritchie [(1919) 15 Tas LR 60], the Bill has been drawn to provide

(i)  That where, but for this Act an easement would have operated at law, the right of a registered proprietor is always subject to it, and

(ii)  a person who takes as a bona fide purchaser for value without notice of an equitable easement takes free from it on lodgement of his transfer for registration.”

I would submit that it is clear that under subparagraph (i) Parliament thought that where an easement would have operated at law, the right of a registered proprietor would be subject to it.  And I would point to the similarity of the wording in paragraph (i) to the wording used in paragraph (e)(i).

I would also point to the phrase used, “under this Act an easement can operate at law if it is created by the prescribed form”.  So that they were concerned with easements that could operate generally at law and wish to provide an Act that would allow them to do so.  I would submit it is far more consistent, legislatively, to allow in all easements than to pick and choose between some.  For example, it is debatable under the Act, where it refers to an easement arising by implication, whether that would refer to an easement arising by necessity on the basis that an easement of necessity could be said to be an easement based on public policy considerations as much as any implication.  It would also be debatable whether it referred to an easement arising by estoppel. 

BRENNAN J:   You can develop that at quarter past two, Mr Williams.

MR WILLIAMS:   Thank you, your Honour.

AT 12.47 PM LUNCHEON ADJOURNMENT

UPON RESUMING AT 2.17 PM:

BRENNAN J:   Yes, Mr Williams.

MR WILLIAMS: Thank you, your Honour. If I might just deal with a few matters that were raised before lunch. The first matter was I think section 21(2)(a) of the Land Titles Act. 

BRENNAN J:   Thank you.

MR WILLIAMS:   That related to the point about whether an easement could be said to arise under a statute.  There are three ways that an easement can be created under the Land Titles Act:  firstly, as on conversion under section 28(2)(a);  the second is by a transfer of the easement, which is dealt with by a simple transfer under section 58 of the Act;  and the third is by a plan of subdivision which notes the various easements created, which is under the Local Government Act.  The respondent’s submission is that while the Act talks about recording on a folio of the register and then talks about indefeasibility, you have to turn to the case law to decide how an easement would arise under the Torrens system.

Because it is a system of title by registration and not a system of registration of title, it is the respondent’s submission that the easement arises under the statute by virtue of the very nature of the Torrens system itself and that could be tested, if you took the example of an easement, say, a transfer that was lodged for registration that was void.

The easement could not possibly arise under the void transfer that was lodged but, by virtue of its registration, it would become a valid and enforceable easement.  And so, in that way, it could be truly said to be an easement arising under the statute.  The second point was in relation to encumbrance, and the definition of that.  I have checked, and the Act of 1862 has the same definition of encumbrance, albeit spelt with an ‘e’ instead of an ‘i’, as the 1980 Act.  The third point ‑ ‑ ‑

BRENNAN J:   What does it include?

MR WILLIAMS:  

“encumbrance” means any charge on land created for the purpose of securing the payment of an annuity, or sum of money other than a debt.

BRENNAN J:   That is all?

MR WILLIAMS:   Yes, your Honour.  The third matter that I turn to is the interpretation of section 40(1)(e).

DEANE J:   Is not your argument about arising under the statute circular?  I mean, if the easement arises under this Act, you have already won, which means you do not need to rely on section 40(1)(e)(i).  You are relying on 40(1)(e)(i) to get an easement arising under this statute so you can say you have got an easement arising under the statute for the purposes of 40(1)(e)(i).

MR WILLIAMS:   The respondent’s submission is why should the fact that it arose under the Land Title’s Act necessarily make it any the less a valid and enforceable easement which arises under any statute?

McHUGH J: If you want to put that argument, I do not understand why you rely on section 40(3)(e) as opposed to section 40(1).

MR WILLIAMS:   That is a separate argument, your Honour, that in any event we would rely on the indefeasibility of our title.

McHUGH J:   But “indefeasible” is defined to mean:

subject only to such estates and interests as are recorded on the folio of the Register or registered dealing evidencing title to the land. 

Then subsection (2) says:

the title of a registered proprietor of land is indefeasible.

So I suppose there is a question as to whether or not it can be said that the notation that is recorded in relation to your title is recorded on the folio of the register.

MR WILLIAMS:   I would certainly submit it was recorded on the folio of the register.  Of course, “land” under the definition section includes “easements”.  So that under section 40(1) the title of a registered proprietor of land would include the title to an easement.  So that we are submitting that subsection (1) covers the indefeasibility of an interest being an easement.

McHUGH J:   I do not know that 40(1) protects you so much as arguably it makes Mr Hodgman’s title subject to what appears on the folio of the register, which happens to include your easement.

MR WILLIAMS:   We would submit that the title to our land includes the title to the easement and in that way why should we not be in a situation where we have got indefeasible title to the interest that we claim that is recorded on the folio of the register.

BRENNAN J:   What does section 40(1),.how does that affect your title?

MR WILLIAMS:   We would submit that we are the registered proprietor of land, ie in interest of land, indefeasible in relation to the title to that interest means that we are only subject to such estates and interests are included on the folio of the register.

BRENNAN J:   Well, let that be assumed for the purposes of argument.  Has any attempt been made to defeat your title?

McHUGH J:   No one is attacking your title, you are attacking Mr Hodgman’s client’s title.

MR WILLIAMS:   The proceedings that have been taken thus far would be to enforce our client’s title.

BRENNAN J:   That is right.

McHUGH J:   But this is because you are running the two arguments and there is no reason why you should not but they are two quite different arguments; one which looks to your own title and what is recorded there and which you say because of the variety of provisions evidences your title and to that extent it cannot be upset by anyone else but to the extent that Mr Hodgman’s client says, “Well look at my title.  It does not say anything about rights of way.”, you come back and say, “Well, if that argument has any merit we can bring ourselves under paragraph (e).”

MR WILLIAMS:   Yes, your Honour.

TOOHEY J:   But, that may be a sort of fall-back position.

MR WILLIAMS:   Yes, the fall-back position, from our point of view, is that the worst case scenario is that you have two conflicting indefeasible titles.  That still leaves the Court having to resolve which one will prevail.

BRENNAN J:   But, I do not understand the notion of conflicting indefeasible titles.  You say that you have an entitlement to an easement and Mr Hodgman’s client is the registered proprietor of an estate in fee simple in land.  Now, it is his title and only his title in respect of which any question of defeasance arises.

MR WILLIAMS:   Well, we would submit that the easement is an interest in land to which indefeasibility attaches.

BRENNAN J:   Be it so, where does that take you?

MR WILLIAMS:   To the fact that we have a title to that easement to which indefeasibility attaches and, therefore, that we come within section 40(1).

BRENNAN J:   And where does that take you?

MR WILLIAMS:   To the fact that we ought to be able to enforce that.

BRENNAN J:   Why, if you have to enforce it against a title which is also indefeasible?

MR WILLIAMS:   Well, perhaps I could reverse it around the other way.  Suppose Mr Parramore had instituted proceedings to prevent us using the right of way, would it then be said that there is a stalemate in that neither party can effectively carry forward proceedings, because the other party’s title is indefeasible?

DAWSON J:   We could say your title to the interest is defeated, in those circumstances.

MR WILLIAMS:   That our title is defeated in those circumstances?

DAWSON J:   Yes.

MR WILLIAMS:   No, your Honour.  We would say that, even if we are wrong about everything else, that we do not come within an exception to indefeasibility, that we are still left with an indefeasible title to that easement.

DAWSON J:   But it is an indefeasible title to an easement that you cannot use.  There is not much indefeasibility about that, is there?

MR WILLIAMS:   We would say by virtue of the indefeasibility provision one ought to be able to use it.

DEANE J:   But may it not take you back to first principles. I mean, it may be that there is no argument against you having the benefit but unless you have land with the benefit and land subject to the burden, you have not got an easement because they are the two essential conditions of an easement. And you will not get the easement arising unless you get both subsisting at the same time which is why I suggested to you that your argument, based on section 40(3)(e)(i), has a circularity because it is only if you have land subject to the burden of the easement that you can get an easement arising. If you have land subject to the burden of the easement you do not need section 40(3)(e)(i) at all. I am making that sound as if it is something I am asserting. I am not at all confident of it, I am just putting it to you.

MR WILLIAMS:   Yes.  Perhaps one could look at what actually happened in this case.  The respondent’s land was converted first.  At that time the title was subject to general law.  At that time the respondent’s easement could be said to arise by virtue of either the Real Property Act and then on its conversion to the Land Titles Act.  I would submit that in that scenario there is not a circularity there because it is only by virtue of the Act that the easement could arise particularly when you have a general law servient tenement.  It would be submitted that when the Land Titles Act was passed, that did not alter that situation.

DEANE J:   But can we just take that back.  I mean, before there was anything registered under the Act the easement, on one approach, existed; registration came under the Act.  There is no doubt that registration made your title to the benefit of that easement indefeasible but the easement did not arise and if the easement were extinguished, your indefeasible benefit would have been to nothing.

MR WILLIAMS:   I would submit that, in fact, it did arise because at least one title was still at general law, that is the servient tenement.  One of the keystones of our approach is to say that until the appellant’s title was converted it was subject to an easement.  There was a valid and subsisting easement, so there could be no question about that. 

DEANE J:   I can follow you saying that, in one sense, the benefit arose in its statutory sense but, you are saying that the easement over land which was not even under the Real Property Act or the Torrens legislation arose when your title became registered?

MR WILLIAMS:   Yes, at that stage it arose by virtue, and it could have only arisen by virtue of the legislation.  There would be no other basis for its enforceability.  As, for example, if you took a transfer in lieu of converting title, the easement in that instance can only arise by virtue of the legislation itself.  There is nothing else you can point to to give force and effect to that easement.

BRENNAN J:   Why can you not point to the grant?

MR WILLIAMS:   Well, if that was the nature of Torrens registration ‑ ‑ ‑

BRENNAN J:   No, it is not a matter of Torrens registration.  The servient tenement is not registered at this stage.

MR WILLIAMS:   Well, suppose the grant had been void in that case, or ‑ ‑ ‑

BRENNAN J:   Why would it be void?

MR WILLIAMS:   Well, I am putting a hypothetical example.  Suppose it had been, would that not be the test of how the easement arose?

McHUGH J:   You would not have an easement.

MR WILLIAMS:   Well, if it was registered.

McHUGH J:   You have nothing to enforce.  How can you enforce it?  There is no servient tenement.  Just because it is on the register it would not allow you to enforce it.  What is the owner of the servient tenement say?  He says to you, “I know nothing about it and the grant was void.  It is of no effect whatever.  You might have a piece of cardboard that came out of the registrar of titles’ office ‑ nothing to do with me”.

MR WILLIAMS:   Well, at that stage I would submit you would point to, particularly in the instance of a purchaser for value, would point to the indefeasibility provision and say that the intent of that was in the case of a  purchaser for value that the interest arising being the easement was indefeasible and that was the whole intent of the Act.

DAWSON J:   You might place some reliance on section 106.

MR WILLIAMS:   Well, that is right as his Honour Mr Justice Cox did.  He looked to that as an evidentiary provision and in that way, you can say that it arises under the statute.  In fact ‑ ‑ ‑

DEANE J:   But 106 looks to the benefit.  How does 106 work if there is not an easement?

MR WILLIAMS:   Our submission is that an easement arises by dint of the registration so, when you have registration, you have an easement.

DEANE J:   I follow what you are saying.  That assumes that 106 not only operates to be conclusive evidence of benefit, but operates to create the easement if there is not one.

MR WILLIAMS:   There is no actual provision in the Act which says how the easement is created.  I would submit that that has to be gleaned from the general principles relating to the Torrens system because the Act is fairly silent on it.

DEANE J:   Or the general law that if you have land which has the benefit of the easement, which you have, and land which has the burden of an easement, you will then have an easement, but not if you have land which is said to have the benefit of an easement, that is enough to find the other land and create the easement.

McHUGH J:   And 106(2) emphasises that because it says:

Subsection (1) shall not be construed so as to give effect as an easement to a right which is not recognized as an easement at common law.

So 106(1) deals with benefit.  It does not deal with burden.  You have got to find that from the common law.

MR WILLIAMS:   I would submit that subsection (2) is a section that is intent on dealing with the types of an easement, so that it is saying that you cannot recognise any new types of easement and that it is a section whose applicability ought to be confined to types of easement.

DAWSON J:   And I suppose you would say you cannot have a benefit without a burden.

MR WILLIAMS:   I understand what your Honours are putting about the necessity for two interlocking pieces to create an easement.  I cannot take the matter any further.

McHUGH J:   I mean, 106, despite its language, has always been interpreted, has it not?  I mean, there has got to be a real transaction underneath it.

MR WILLIAMS:   My understanding is that that would not be the case, your Honour, that the basis of Torrens registration is that you can rely on what is recorded on the face of the register.  Certainly in so far as you start dealing with purchases for value, once you get to that stage, the fact of registration is sufficient in itself and that harks back to the argument about immediate or deferred indefeasibility and I would submit that the way that argument has been resolved is to the effect of what appears on the register is what is created and what appears on the register actually exists, that even if there is a fraud or something like that involved, that cannot defeat what appears on the register.

In relation to the argument about an easement under a statute being an easement created under the Land Titles Act, I would make the point that that would, of course, cover most of the problems that I adverted to in relation to the point about inserting the word “or”.  If you interpret the Act in that way, in fact, it resolves virtually nigh on all those problems and there is a lot of sense in taking that interpretation and that also works in with the intent of Parliament expressed in the clause notes and in the Minister’s second reading speech.  If I could turn to the other points raised in the submission.  On page 2 of the reasons the point made there has already been covered to a large extent in the discussion of what would happen when you look at a succession of Acts and interests arising.

Sections 15 and 16 of the Acts Interpretation Act provide that accrued rights continue on, notwithstanding the repeal of the Act that created them. If the bundle of rights that were vested in Mrs Duggan as a proprietor under the Act of 1862 included the right not to have her easement defeated by an omitted easement, then sections 15 and 16 of the Acts Interpretation Act would preserve that right.

BRENNAN J: How does that mesh in with the provisions of section 173(2) of the Land Titles Act?

MR WILLIAMS:   The provision which provides that:

lands, estates and interests which at the proclaimed date are subject to any of the Acts repealed by subsection (1) shall be subject to this Act.

BRENNAN J:   I take it that one of the repealed Acts is the Real Property Act?

MR WILLIAMS:   Yes, your Honour.  I would submit it is obvious that where you have, say, two Real Property Act easements where both the dominant and the servient tenement were brought under pursuant to the provisions of the Real Property Act, that the effect of section 173 in relation to an easement omitted from the servient tenement would not be to convert or to change that situation. Sections 15 and 16 of the Acts Interpretation Act in that situation would have to mean that the fact that the easement was omitted continued to be dealt with under the Real Property Act.  It is an extension of that then to argue that that same situation should apply and should attach to the rights of a proprietor whose land was converted under the Act.

The next alternative submission that is made is that the respondent’s easement is an equitable easement under section 40(3)(e)(ii) of the Land Titles Act 1980. That is based on the proposition that the appellant was the owner of the servient tenement at the time it was converted to Torrens title. At the time of conversion Mr Duggan was subject to a valid and subsisting easement. Whether he knew about it or not would not make a blind bit of different. The easement clearly vested in Mrs Duggan and Mr Parramore was subject to it.

TOOHEY J:   I have just been looking at the title to see what it is that you would learn - that is, looking at your title.  I suppose, simply by reason of the fact that your land was first to come under the Torrens system, the right of way, however it is expressed in terms of right to pass over and so on, is to pass over an area of land that is simply shown on a plan.  Under ordinary circumstances where both pieces of land were under the Torrens system at the time the easement was created, the title to the dominant land would show a right to pass over an area of land within the certificate of title of the servient land, would it not?

MR WILLIAMS:   Or it would refer to a right to pass over land described in a sealed plan so that you would then turn to the sealed plan which is a plan of subdivision perhaps registered with the recorder of titles and you would see the right of way marked on that.  It is not unusual in schedules of easements to see references to the land being subject to a right of way contained in a particular title or for a right of way to have the benefit over land described in a sealed plan.  The sealed plan numbers are referable to folios of the register.

TOOHEY J:   But your certificate of title, I take it, simply shows a right of way over an area of land which at the time your title came into existence was still under the general law and that at least in terms of title description if you go to the certificate of title of the dominant land, it would not refer you to any certificate of title to the servient land.

MR WILLIAMS:   It could not do because the other one would not be under ‑ ‑ ‑

TOOHEY J:   It could not have done originally, of course, but I put my question in terms of present tense as well.  If you went to the title now would you find any reference to a title description of the servient land or would it still be described in the same way that it was described when your land came under the Act?

MR WILLIAMS:   Bear with me, your Honour, I am just trying to recall the various certificates I have seen.

TOOHEY J:   I am looking at the certificate of title that is shown on page 18 of the appeal book.  It contains a very lengthy description of land but I take it that is for the purpose of identifying the land that is to be brought under the Act.  Then you go to page 22 and you have that sketch and I am assuming, rightly or wrongly I am not sure, that if you go to your certificate of title now all you would see is that you have a right of way over a piece of land which is defined by reference to a plan but not by reference to a certificate of title, that is, in respect to the servient land.  Now, I am not suggesting any particular consequence follows from this, I am just trying to understand what, in fact, the register does tell you if you go to it.

MR WILLIAMS:   Yes, your Honour, the description which appears, taken from the general law description, simply refers to “shown on the plan here on” which is the plan on page 22.  My understanding would be that the title would be unaltered.

TOOHEY J:   That is what I have assumed and hence the point of my query which is that if you go to your certificate of title, that is the certificate of title of the dominant land, it does not refer by title description to the servient land but still contains the description that it had when the land was brought under the Act, namely a reference to a plan.

MR WILLIAMS:   The description on the dominant tenement would, under general law, have referred to either a 4 metres in bounds description of the land over which the right of way passed, or would have referred to a particular conveyance which described that land.

TOOHEY J:   Or a plan that simply marked out the area by reference to streets and boundaries and other methods of identification.

MR WILLIAMS:   Yes, that would be the other alternative way of doing it.  It nevertheless remains the situation that the land was subject to a valid and subsisting easement in favour of the respondent.  That title to that easement could, perhaps, be peeled into two parts.  At that stage there would obviously have been a legal title and there would also have been an equitable title.  If what has occurred by bringing the servient tenement under the Land Titles Act is to effectively peel away the legal title, it is the respondent’s submission that the equitable title to that land would continue on unaffected and that the respondent is entitled to regard itself as having an equitable interest to that land.

BRENNAN J:   Why do you say there is a division between the equitable and legal title?

MR WILLIAMS:   I would submit that this a very unusual situation.  You have a situation where, prior to the conversion of the servient tenement, there was a valid and enforceable easement.  In similar situations where the legal right has been taken away, equity has stepped in to treat what should be done as being done.  Examples then relate to the equity of redemption under a mortgage, a deed that there is a technical deficiency with and in that way, I would submit that there is an equitable right which would still subsist only in this very unusual situation.

BRENNAN J:   Where is the analogy with that?  Where is the analogy?

MR WILLIAMS:   It is based broadly on the equitable principle that equity treats as being done what should be done and that where you have a situation where you have an easement arising, it is valid and enforceable, that even though the legal title to that easement may be taken away, the effect of section 40(2) would be to leave you with an enforceable equitable easement.  Otherwise, it would leave the appellant in a situation where he is taking something he did not have before.

I would submit that it is clear that the only reason the easement was not registered was due to a mistake on the part of someone because you have got a valid and enforceable easement that existed prior to the conversion.  If it is only by reason of a mistake that the appellant can now find himself freed of an easement, the respondent submits that it would be tantamount to the appellant being unjustly enriched and that the principles generally in relation to unjust enrichment could apply to infer an easement in what is a very peculiar situation.  I would refer your Honours to page 389 of David Securities v Commonwealth Bank.

DEANE J:   How do we fit the defence into this part of your argument?  Do we disregard it or do we say it is an unresolved issue or what do we say?

MR WILLIAMS:   I would submit that it can be inferred that there must have been a mistake.

DEANE J:   What I had in mind is page 14 and 15, if established, would constitute an answer to your suggestion of unjust enrichment to the extent to which they would enable you to obtain the relief that you are seeking, that is, demolition of a building.

MR WILLIAMS:   There may be general equitable arguments about whether it would be just in the situation to award a demolition of the building, but it is a different ‑ ‑ ‑

DEANE J:   What I was asking you, on what basis do we approach this argument:  that the defence is right and that you or your predecessor acquiesced and consented to the obstruction and all these other things or do we ignore the defence, even though the stated case says on the pleadings?

MR WILLIAMS:   The only parts that you can take account of, I would submit, are the parts of the pleadings that are agreed.  In other words, the parts of the pleadings that are admitted by the defence.  I do not seek to put that argument on the basis that you say that the appellant had notice of the easement.  It is simply put on the basis that he is getting a bonus which he has got no right to which he did not have before and that simply as regards the existence or otherwise of the easement ‑ ‑ ‑

DEANE J:   You have answered my question.  I would just like to be sure that what you are saying is correct and that is that we treat paragraph 5 of the stated case as if the only pleadings that we take any notice of are those containing allegations which are admitted.  As I would follow it, that means that the only pleadings we look at are paragraphs 1, 2, 3 and 4 of the statement of claim and the annexures in A and B.

MR WILLIAMS:   Yes.  There was an amended statement of claim, I am assuming that ‑ there was an amended defence ‑ I am assuming that you are referring to that amended document.

TOOHEY J:   Well, that is the one on page 14, is it not?

MR WILLIAMS:   Yes, I understand so.  The only addition to what your Honour is saying is where the pleadings involve an admission by either side, then that would be also a matter you could take account of, and I am not sure whether any of them would.

DEANE J:   Yes, 7(a), (b) and (c).....  Well, can I just ask you a final question on this aspect?  What if one were to come to the view that there was force in your equitable argument, but that paragraph 5 of the defence, if established, might constitute an answer in so far as the relief sought is concerned, does one simply disregard that?

MR WILLIAMS:   Given that it is an agreed statement of fact, one really could not have regard to it, and the only solution may be to leave that to the court below to resolve if that were an issue arising.  Your Honour, the passage I was referring you to in David Securities is simply the quote at page 389, taken from Fibrosa’s Case, which referred to the general principle. 

TOOHEY J:   Have you finished referring to David Securities, Mr Williams?

MR WILLIAMS:   Yes, thank you, your Honour.

TOOHEY J:   Could I ask you another question, because I am finding this all rather difficult.  Let us assume for a moment ‑ we do not have to assume ‑ that your client’sland was brought under the Act, but let us assume that the appellant’s land remained under the general law.  Now, one limb of Mr Hodgman’s argument would go by the board.  He could not rely on indefeasibility himself, that is the strength of his own indefeasibility.  But, having regard to what I asked you earlier about what would show on the dominant certificate of title, it would show a right to pass over a piece of land which was identified by reference to a plan, but it would be land which itself was not under the Torrens system, but which stood outside.  Would that statutory right, created by the Land Titles Act, in so far as it is a statutory right that is relied upon, extend outside the Torrens system to subject land under the general law to a right of way?

MR WILLIAMS:   Yes, I would submit that would be the ‑ ‑ ‑

TOOHEY J:   By force of the statute?

MR WILLIAMS:   By force of the statute.

TOOHEY J:   Is there any authority on that point, do you know?

MR WILLIAMS:   I was unable to find anything in the Tasmanian context.

TOOHEY J:   Ordinarily it would not arise, because you would be looking at interests such as mortgages and so on which would bind the registered proprietor of the land.  Clearly the mortgagee could not lose the mortgage interest simply because the land was brought under the Act, but here you have a situation in which an interest is claimed by the registered proprietor in respect of other land.  While it is a sort of hypothetical situation, it might help to point to some sort of an answer to the situation that in fact exists here.

MR WILLIAMS:   As I understand it, there are authorities in other States where a similar problem has arisen, which would make it clear that certainly under the Real Property Act, while the Real Property Act was in effect, that it just continued on and there was a valid and enforceable easement.

TOOHEY J:   Against land which itself was not under the Torrens system?

MR WILLIAMS:   Yes, your Honour.

TOOHEY J:   If you cannot give us those authorities now, do you think you could let us have them later?

MR WILLIAMS:   Yes, your Honour.  I was going to say it would involve diving into a pile of paper for some time and hopefully finding what I am putting to you.

TOOHEY J:   So far as I am concerned, it can come after the hearing is concluded, as long as you let Mr Hodgman know what they are.

MR WILLIAMS:   Thank you, your Honour.  The difficulty then arises in terms of - because there is no comparable legislation to the new legislation that was brought in in respect of the easements.  So, while my recollection is that there are authorities which would assist in relation to the Real Property Act, because of the change of wording of the legislation there would be nothing in another State that would help us.  But of course, our submission is that the change in wording was never intended to effect the change in the situation as it was to apply.

The appellant, in terms of an equitable easement, cannot qualify under the exception under subparagraph (2) because he cannot be a purchaser who has lodged a transfer, because he was already the owner at the time of conversion.  Therefore, he did not take his interest by virtue of a transfer under the Land Titles Act or the Real Property Act, he took it by virtue of a conveyance under the general law system of conveyancing.  He therefore cannot bring himself under the exception referred to in subparagraph (2).

In support of that argument I would refer your Honours to Frazer v Walker of which I have copies available at page 585.  I would refer your Honours to the three lines down from line B on page 585, the sentence beginning:

In doing so they wish to make clear that this principle in no way denies the right of a plaintiff -

down to the end of that paragraph.  It was only this morning, your Honours, in searching for some further authorities to support that proposition I came across a case of Christopoulos v Kells (1988), 13 NSWLR which refers to an equitable right subsisting.

TOOHEY J:   Well does not Bahr v Nicolay have something to say about this?

MR WILLIAMS:   Yes, your Honour.  Unfortunately, because I only came across it this morning, I am not in a position to make submissions to you concerning that and it was only the paragraph that concerned the continuation of an equitable right to an easement to which I was going to refer your Honours to at page 548.  I would request the reference to that, to any extent we rely on it, could be covered with the written submissions that we will put to you concerning the continuation of an easement where you have a title under general law.

Finally, in relation to that point, I would refer your Honours to section 42 of the Land Titles Act and I would submit that the facts of the case before you are the sort of facts envisaged by the exceptions referred to in section 42. Section 42 envisaged a situation where the interest of a proprietor could be defeated and I would submit that it is in this type of situation where there is no purchaser for value involved and you have the proprietor, who was the proprietor at the time of conversion, that, in fact, his interest that he claims to be indefeasible could be avoided.

The last argument that I would put to your Honours is based on the correctability of the omission of the easement by the recorder of titles. The respondent submits that under sections 139 and 163 of the Land Titles Act, the recorder can correct a mistake being the omission of an easement from the servient tenement.

The principle of indefeasibility should not prevent the correction being made while the title and beneficial interest is solely in the hands of the person who was proprietor when the mistake was made.  There can be no damage to the principles of indefeasibility while the correction is made in those circumstances and on a common sense or general fairness basis, no one would suffer.  Mr Parramore had an easement which was enforceable against him while he held a general law title.  He has not lost anything if that situation is simply reinstated because there was a mistake made when his title was registered.

The submission I have just made to your Honours is supported by the reasoning set out in James v Registrar-General (1967) SR(NSW) 361, at 366. I have copies of that case for your Honours. I refer your Honours to the second paragraph commencing “Section 42” down to the end of that paragraph which refers to the word “unquestionable”.

TOOHEY J:   There is not so much a mistake as an omission, is it not?

MR WILLIAMS:   Omission or mistake.

TOOHEY J:   I am not suggesting that anything necessarily turns on that distinction, but I am just wondering how, in the ordinary course, it would come to the notice of the Titles Office when the servient land came under the Act identifying what there would be to link that with the right of way shown on the plan attached to the dominant land.  In other words, how you are going to put the two together.

MR WILLIAMS:   If the recorder had done a search back to the Crown grant of the general law deeds registry, he would have picked up the deed which created the easement.  The reason he did not, as I understand it, is that the recorder adopts the practice that he need only search back to what is called a good route of title and that the transaction that created the easement was prior to what is called a good route of title.  It is our submission that the recorder, in all cases, ought to search titles back to the Crown grant to ensure that all matters that affect the title are picked up because, of course, if you have a defect of title prior to what is called a good route of title, it is still a defect of title and because you cannot get a better title than your predecessor had, it stands to reason that any subsequent holder of that title is affected by it.

TOOHEY J:   Well, presumably, when you bring land under the Act, you are required, at least to the extent of your knowledge, to disclose any interest that may be affecting the land.

MR WILLIAMS:   Yes, there is a form that you are required to complete, your Honour, in which you are meant to put down the full situation and all deeds that affect it.

The solicitor acting for Mr Parramore would no doubt have searched back to a good route of title himself and hence only put that down, but a good route of title does not alter the fact that if there is a defect prior to then, the defect still prevails.  While the recorder may have a policy of not going back to the Crown grant, we would submit that in not going back to the Crown grant he takes the risk that a mistake can be made on the conversion of land, and that mistake was to fail to pick up that the land was in fact subject to a valid and enforceable easement.  If he had gone back to the Crown grant and searched properly, he would have picked that up.

TOOHEY J:   Is the existence of an easement a defect in title?

MR WILLIAMS:   I am sorry, I perhaps put that too broadly:  that he ought to pick up all matters affecting the title.

TOOHEY J:   I understand that.

MR WILLIAMS:   In relation to the ability of the recorder to correct a mistake, I would also refer your Honours to Baalman, The Torrens System in New South Wales, second edition, pages 22 to 28, of which I have copies.

DEANE J:   There is a general correction section in this legislation, is there?

MR WILLIAMS:   Yes, your Honour.  The next reference I was coming to, which was Whalan at page 366, indicates that ‑ ‑ ‑

DEANE J:   Well, you come to it in due course.

MR WILLIAMS:   The correction sections in Tasmania are the same as in other States.  There are two corrective sections, one of which is designed to be really a slip rule and the other covers substantive mistakes.  In addition, Baalman points out at page 23, the bottom paragraph under “Power to correct errors”, that:

The Registrar-General, having the duty to administer the R P Act, and to administer it correctly, should need no express power to enable him to repair the effects of any incorrect administration; to make such corrections would, itself, be a duty.  This subsection makes his ability to do so explicit.

So that in addition to the statutory provisions, the respondent submits there is a general duty that arises in any event to ensure that the register is correct.  I would further submit that the authorities set out in Whalan and Baalman and the authority of James v Registrar-General make it clear that the recorder can correct mistakes such as the omission of the registration of an easement on the servient tenement.

In addition, although it was obiter, that situation was dealt with in Frazer v Walker, which your Honours have copies of.  If I could refer your Honours to page 581D to G of Frazer v Walker. 

BRENNAN J:   Mr Williams, what is the burden of this argument?  Is it that there is power in the recorder to correct mistake in the title and, if there is that power, then it is said there must be power in an action between the parties to secure a correction?

MR WILLIAMS:   Yes, your Honour.

BRENNAN J:   Even though the repository of the power, namely, the recorder, is not a party to the action?

MR WILLIAMS:   Yes, your Honour.  In any event, if the parties dispute the registrar’s decision, the parties can refer it to the court.  The court would be deciding it on exactly the same basis as the question of ‑ ‑ ‑

BRENNAN J:   That may be so, but the power is a power vested in the recorder, is it not?

MR WILLIAMS:   Yes, your Honour.

BRENNAN J:   How do we get to be concerned with the exercise or non‑exercise of power by the recorder?

MR WILLIAMS:   I would put it on two bases, your Honour.  The first is that it indicates that as regards indefeasibility it was never intended that the situation between the parties that effectively held the title at general law prior to conversion, that they could not correct the situation between themselves.

BRENNAN J:   That seems to me to be an argument very much in favour of indefeasibility.  In other words, once you have a record and it is in proper form, that is the end of it.  Because you have this indefeasibility, you need to have a power to correct, so you confer a power to correct on the recorder and if he does not exercise it properly, you can compel him to.

MR WILLIAMS:   The situation would still be left, I would submit, to the parties to litigate the situation between themselves.  That section would indicate that there is not to be a general bar on the alteration of rights, even though they appear in the register.

BRENNAN J:   Why is that to be a general bar on the alteration of the record, of the register book, unless one brings oneself within that statutory provisions?

MR WILLIAMS:   It may be that under that limb your Honours take the view that an appropriate remedy would have been to have applied to the recorder, and then taken the recorder to the court if he refused to alter the situation, and presumably either party, at the end of the day, would have disputed the recorder’s decision.  If the only assistance is through the font of the recorder’s power, I would ask that the Court go somewhat further, in terms of an indication, that the recorder did have power in this situation and that the parties could go back before the recorder, and that the correction would be an exception to the indefeasibility principle.

BRENNAN J:   Why do you say an exception, as distinct from an application?

MR WILLIAMS:   I am using the indefeasibility principle in the sense of defeating a registered party’s interest, so that any alteration that could defeat a party’s interest could be said to be an attack on indefeasibility.

BRENNAN J:   That is not the sense in which the term is used in the Act, is it?

MR WILLIAMS:   The Act is one of the few Acts that attempts to define indefeasibility. I would submit that the principle of indefeasibility, as interpreted by the courts is essentially related to the protection of persons who have relied on the register and that in that general sense the principles relating to preserving indefeasibility should not be a bar to the recorder making an alteration to the folio of the register.  That was the sense I was using it in.

BRENNAN J:   Yes, I understand the sense you were using it in but it seems to me to have nothing to do with this case.  All you are trying to say, if I understand correctly, is that if we had adopted another procedure, and gone through the recorder, we may have been able to get an amendment to the certificate of title to the servient tenement and that would have been the end of all our troubles.

MR WILLIAMS:   What I am saying is that that would have resulted in exactly the same issues being argued before the Court.

MR WILLIAMS:   Well, it would not have been exactly the same issues.

MR WILLIAMS:   I understand what your Honour is saying.

BRENNAN J:   It would be quite the opposite.  Because what you are attempting to say, as I understand it, is that, despite the state of the servient tenement certificate of title, you are entitled to exercise certain rights.  If you had gone about it the other way, it would have been because of the state of the certificate of title.  You would have been entitled to exercise the rights which are thereby conferred.  It is the exact obverse of what you are attempting to argue, is it not?

MR WILLIAMS:   I would simply put it this way:  it would have been an alternative way of approaching the situation.

BRENNAN J:   It may be just an alternative that was not adopted.

MR WILLIAMS:   No, your Honour.  I concede that, but I was simply making the point in the context of my learned friend’s general remarks about indefeasibility, particularly in relation to the general remarks about how this golden indefeasibility principle would be violated to point out that there are other sections in the Act which do allow a registered proprietor’s interest to be altered and that, therefore, on those general broad principles, if nothing else, the correction powers of the register indicate that the general principles my learned friend was referring to are simply not applicable in this case.  And it may be that to that extent is the only extent I can take that point I am making.

Your Honour, the last matter that I would address would be the question of what easements might arise by statute that was put to me before lunch.  It may be of assistance to refer your Honours to ‑ ‑ ‑

DEANE J:   Before you go on, could you give me a reference to the sections enabling the Registrar-General to make amendments?

MR WILLIAMS: Sections 139 and 163, your Honour.

DEANE J:   Have we got those, do you know?

MR WILLIAMS:   I apologise, your Honour, that you do not. 

DEANE J:   I now have.

MR WILLIAMS:   The easements which might arise by statute ‑ there is a list of some of the easements that might arise in the Land Titles Act 1980 (Annotated), appearing at page 42 that may be of assistance to your Honours.  That brings me to the point in relation to that that was made concerning whether the words were otiose appearing in section 40(e)(i) or not.  And it was suggested that the point of the words “giving rise to a legal interest” if the servient land had not been registered land were to distinguish between that situation and the equitable situation which is covered in subparagraph (ii).  Having given some thought to the question of whether any easement arising under a statute could have given rise to anything but a legal interest, it is the respondent’s submission that that would simply be impossible, that an easement arising under a statute must necessarily, of itself, give rise to a legal as opposed to an equitable interest, and that that ‑ ‑ ‑

McHUGH J:   Not if it is an easement in gross, is it, because an easement in gross does not affect a servient tenement?  Sorry, it affects it, but you have got no dominant tenement.

MR WILLIAMS:   Yes, the situation might relate ‑ ‑ ‑

McHUGH J:   I mean, a water board might have an easement in gross over land.  It does not necessarily create any legal interest in anything.  It gives you a statutory right of entry.

MR WILLIAMS:   But, on the other hand, if you are comparing it to a legal as opposed to an equitable interest, it is not going to create an equitable interest in anyone either and, if that is the distinction that is being referred to, I would submit it loses its validity.  If there was a legal interest, it could only be created for the benefit of the hydro-electricity ‑ ‑ ‑

McHUGH J:   It may not be.  It may be that under a particular statute that the legal interest does not arise until registration of some instrument and you may have an equitable interest under the statute pending the registration.

MR WILLIAMS:   That may be the case under the Land Titles Act.

McHUGH J:   It may be entitled under other legislation.  For instance, at least in New South Wales, I think, there are statutes which provide for compulsory acquisition of land and title passing on some instrument being registered, in the meantime there may be some equitable interest.

MR WILLIAMS:   Of course, the respondent is not going to argue too much with that in the sense that if that is the case it means that the Land Titles Act would also be covered under the definition of “Act” as an easement arising.

McHUGH J:   That is another problem that Justice Deane pointed out to you about that particular argument of yours.

MR WILLIAMS:   In any event, if there are easements in gross arising, it would be difficult to see why the statute that created them would not in any event have force and effect by itself.  In relation to easements arising by implication, if one goes through the list from easements arising where you have had a Wheeldon v Burrows situation, they are all legal interests that arise, I would submit.  They are all legal interests because they are enforceable against purchases for value or successes in title and that it would be difficult to think of any situations where you would need to confine that to a legal interest.  Further, if you are going to give them a legal interest, if, for example, you are referring to the situation where you have got an agreement under a statute, why would you not wish for that interest to be covered as well?  Why confine it to simply a legal interest if it is an interest arising under a statute, for example, compulsory ‑ ‑ ‑

McHUGH J:   That is the question you should direct to the legislature but all I was putting to you this morning was that the last limb of (e)(i) does have some work to do contrary to what Justice Zeeman has said.  I think that is unanswerable in relation to implication.  It seems to me that it is also arguable in relation to statute.

MR WILLIAMS:   I would submit, your Honour, with respect, that the vast majority of easements that arise by implication, the only interest that can arise is the legal interest.  Easements that arise by virtue of an inequitable situation are all dealt with in most of the texts under a separate heading in any event and that in easements that arise by implication, you do not get a chance for an easement to be created in equity.  It has either arisen or it has not and once it has arisen, it is a legal interest.

BRENNAN J:   What is the situation with a contract entered into by the vendor of part of a parcel of land when that part parcel needs to have an access to a public highway and the contract has been entered into and completion has not taken place?

MR WILLIAMS:   I would submit that the implication, if you are relying on that by a doctrine of implication, it means that under the contract itself if you let the whole thing go through and the conveyance take place and then the court imposes an easement arising by implication, the ‑ ‑ ‑

BRENNAN J:   I am asking you in relation to the period before completion.

MR WILLIAMS:   Yes, your Honour, I am saying that the effect of the doctrine is one where it implies an intent to the parties.  If it is implying an intent to the parties that would cover the period prior to the conveyance and the logic would be that the court is saying that the parties always intended and, therefore, it would be a part of the contract itself.

BRENNAN J:   And the interest would be what by nature?

MR WILLIAMS:   I would submit that there would not be an interest arising until the conveyance took place because you are dealing with a doctrine that puts to parties an intent they never had in any event and that, therefore, that doctrine cannot arise until the conveyance takes place which does not give accord to what  ‑ ‑ ‑

McHUGH J:   And it did not stop courts imputing equitable interests to unregistered instruments under the Real Property legislation.  Why a parity of reasoning when you apply it in the same way?

MR WILLIAMS:   Equitable interest clearly can arise on Barry v Heider and so on.  It would apply to allow interest to be created in respect of Torrens land. 

McHUGH J:   Good advocacy requires that sometimes counsel should make concessions.  You cannot keep persisting in points which demonstrably have no substance, Mr Williams.  That is the lesson advocates need to learn at an early stage. 

MR WILLIAMS:   Thank you, your Honour.  I take your Honour’s point.  The remaining matter that I turn to deal with is the question of my learned friend’s comments on the insurance fund.  The solution is to be found - one can gain some sort of assistance from the fact that the insurance fund provisions are there.  I would simply refer your Honours to page 582 of Frazer v Walker, which deals with whether the comparative provisions relating to compensation are of any assistance and comes to the conclusion that they are not, and I would submit the same situation applies in this case.

Finally, in relation to the overall merit of the havoc that would be caused if a situation like this were allowed to continue, I would submit firstly that these are a very narrow set of facts.  It only relates to a situation where the deed in question was a deed that was entered into prior to the conversion of the titles.  But if one is looking at a situation and saying as a matter of public policy whether it is better to give effect to easements that do not appear on the title, or whether it is better that the person entitled to the easement should lose the benefit of it, I would submit that, as a matter of common sense, most properties that have the benefit of an easement do so because that is absolutely vital to the enjoyment of that property.  Usually rights of way, drainage easements, water rights, are all there because they are absolutely essential for the party involved to enjoy his or her property. 

Taking away those rights, even though they do not appear on the title, I would submit, would cause far more havoc than a situation where a person might find himself subject to a right of way.  There may be the odd occasion where the person subject to a right of way finds it comes to them as a surprise, but as a matter of policy, and of probability, on most occasions they would have some sort of notice of it and, in any event, the fact that one’s land is subject to an easement usually will  not damage one’s own

land as much as the damage that would be incurred to the dominant tenement if that easement were removed.

Your Honour, those are the submissions for the appellant.  If I could just ‑ ‑ ‑

BRENNAN J:   Mr Williams, the authorities which you undertook to provide to Justice Toohey, they could be provided to the Registry in writing within seven days after notice to your opponent.

MR WILLIAMS:   Yes, thank you, your Honour.

BRENNAN J:   If the appellant seeks to supply any further references with reference to the same subject matter, they could be provided within a further seven days.

MR HODGMAN:   If it please your Honour.

MR WILLIAMS:   Thank you, your Honour.

BRENNAN J:   Thank you for your assistance, Mr Williams.  Mr Hodgman.

MR HODGMAN:   May it please your Honours.  We have gone far and wide.  I can assure the Court my submissions in reply will be brief.  Can I just deal with the last matter my learned friend raised and ask your Honours, in view of the fact that Mr Melick drew your attention to it, to have a look again at the diagram which appears on page 11 of the appeal book and you will see that Mrs Duggan has a clear access to Maconochie Street.  What she is seeking is an additional access by way of right of way on the other side of the block and I repeat Mrs Duggan has the large area.  The smaller octagonal is, in fact, Mr Parramore’s property, and Mrs Duggan seeks the right of way over part of Mr Parramore’s property.  So the last comments ‑ ‑ ‑

BRENNAN J:   There seems to be a considerable disagreement, of shaking of heads at the Bar table, Mr Hodgman.

MR HODGMAN:   There cannot be any because they are the facts as put by my friends, Mr Melick and Mr Williams, in response a moment ago saying the urgent plea to get off the land and so on.  She wants two right of ways, whereas, in fact, she already has access.  Your Honours, I want to just deal briefly with the matters raised.  Your Honour the Chief Justice asked my learned friend whether or not ‑ ‑ ‑

BRENNAN J:   Not yet, Mr Hodgman.

MR HODGMAN:   I am sorry, your Honour.  I apologise.  Your Honour Justice Brennan asked my learned friend whether - someone had to do it, your Honour, and I am just happy it was me and not somebody else - the words arising under the statute, what it meant, and it seemed, with respect, my learned friend was responding along the line that the noting, the mere noting, constituted an arising under the statute and, with respect, I submit that is not so.  I do not want to go over the ground again.  The old case of Wilkinson v Spooner is of no assistance, we respectfully submit.  The wording was quite different there.  Pearce v City of Hobart, it seems, on everybody’s agreement, was incorrectly decided. 

The old Act talked about creating.  The present talks about arising.  It is my respectful submission that it is a classic example of hauling oneself up by one’s own bootstraps to say that by the mere act of noting that creates the situation where it is said to have arisen under the statute.  I respectfully submit section 39 does not assist my learned friends one iota, nor has section 28(2)(a) got anything to do with the case.

In answer to your Honour Justice McHugh, my learned friend was contending it was absurd ‑ that was the implication ‑ to have permitted, as an exception, implied easements or easements arising out of statute, but to have excluded express grants.  Not only is it not absurd, may I, in reply, refer your Honours to our submission and the direct quote from Bradbrook and Neave, Easements and Restrictive Covenants in Australia, in paragraph 1138 which makes the statement which we adopt, namely that easements created by express grant or reservation (except in the case of equitable easements) are not ‑ repeat not ‑ exceptions to the indefeasibility of the applicant’s registered title.

McHUGH J:   Well, what do you say then to Mr Williams’ arguments that there is an equitable easement here, which arises by virtue of the fact that there was an easement under the common law, you failed to have it recorded on your title and it would be unconscionable for you now to insist that there is no easement and, therefore, in equity you are either estopped or it would be unconscionable for you to insist that there is not.

MR HODGMAN:   Well, this is an argument of very recent origin.

McHUGH J:   Well, recent or not, it is put against you.

MR HODGMAN:   I understand that, I just want to take it step by step if I may, if it please your Honour.  It actually arose, or reached me at about 10 o’clock last night;  it is an argument that was not put, either in the case stated or in the argument before Mr Justice Zeeman or in the Full Court, but we are not unhappy about that except one goes directly to the section.  It must be an:

equitable easement, except as against a bona fide purchaser for value without notice of the easement who has lodged a transfer for registration.

And I immediately take the point that the latter parts have simply not been complied with. But, in any event, on the pleadings, there was an issue raised in relation to user. There were three arguments put by Mrs Duggan who wants the right of way which effectively will mean she gets rid of the shed. But, the arguments were, one, section 40(3)(e); two, section 106 which seems to have drifted out a little bit, and, three, was user.

Our respectful submission is, and you will see from the pleadings that it is unresolved, that, in fact, Mr Parramore contends that the gate has been locked since he has been the owner of the property;  that the shed has been constructed in besser block, which is concrete;  that he has used that area for the parking of vehicles and for the establishment of bee hives without any interruption from her, any action being brought for peaceful and quiet enjoyment by her of her equitable ‑ so, I would simply say, with respect, it is very much a johnny-come-lately argument and one in respect of which, on the pleadings alone, there are very substantive issues.

I add to that, on the equity basis, as my friend has raised equity, that you will see in one of the judgments, but it is confirmed in any event in the case stated, that the actual conveyance which created this alleged easement back in 1925 has been lost.  All we are acting on, in any event, is the memorial which was, in fact, what was registered.  And, it is my respectful submission when, on the case stated there is not the slightest suggestion that Mr Parramore knew or ought to have known, or had any cause to know ‑ and, indeed, it was in answer to your Honour Justice Toohey when you inquired about the way in which the easement would get on to the title and my friend correctly told your Honour yes, they go back through the chain of title “until they get a good route of title”, but the obligation is on the recorder to go back equally in relation to the title issue in respect of Mr Parramore. 

It is an arrogance, with respect to my friend, to keep talking about this as being a mistake and with respect, I adopt and I wish I had thought of it, what your Honour Justice Deane said and your Honour Justice McHugh and your Honour Justice Dawson said.  It makes one feel very inadequate when one comes before this Court and something is raised and you just have not thought of it.

How can you have an enforceable easement where you do not have the situation of the two crucial components; land subject to a benefit and land subject to a burden.  And your Honour Justice Toohey pursued that, making, with respect, the point I would wish to ‑ ‑ ‑

TOOHEY J:   I am glad I was included in your praise, Mr Hodgman, I was feeling a bit left out.

MR HODGMAN:   I would never leave your Honour out.  Your Honour hit the nail on the head which almost - I would not say it trumped your brothers but when you made the point that all the certificate of title of the dominant tenement showed is that there is a right of way over something but it does not say what it is.  And again, your Honour, I wish I had thought of that too.  Why is it that express grants are excluded?  Because the whole system will break down if you have side deals.  The whole system will break down if you have express grants which have to be by deed which, in the law of our State, had to be registered in the deeds registry; nothing to do with the lands titles office.

McHUGH J:   But you can get an implication arising from those deeds.

MR HODGMAN:   Yes.

McHUGH J:   A grantor may grant several - there may be several conveyances so you get an easement by implication.

MR HODGMAN: I accept that, with respect, your Honour. I accept, with respect, and adopt what your Honour said about the error of Justice Zeeman’s reasoning in that if you go to section 40(3)(e)(i) and just read it through:

so far as regards -

(i)       an easement arising by implication -

that is number (i) and I make the immediate point you cannot search for easements arising by implication.  They are just not to be found by a proper search -

or under a statute which would have given rise to a legal interest if the servient land had not been registered land -

again, that is by force of law.  Now, my respectful submission is that far from being absurd that is sensible because those are two areas where, in fairness, one would have to say there should be an exception to indefeasibility where it arises by implication or where it arises from a statute but the moment you say you can have neighbour and neighbour can have an express grant by deed which is not registered, does not go on the certificate of title but is registered in some other registry and has nothing to do, you start to violate the inviolability and the indefeasibility of the system.  That is my submission, your Honours.

Finally, your Honours, it is only a small point, but when we go back to Mr Justice Zeeman, he effectively applies the absurd proposition that the Parliament has got it so wrong it is absurd unless I add in the word “or”.  Now even though his Honour Mr Justice Wright ultimately agreed with him after cautioning himself on page 49, I omitted to refer to a short passage in his Honour Mr Justice Wright’s judgment on page 48 and it is important that I should do so because I wish to adopt it.  It is a very strong part of our argument.

It is only three lines and it starts at line 29 of page 48 of the appeal book:

Conscious that the interpretation which he favoured involved the insertion of a word which altered the literal meaning of the section as enacted, his Honour reviewed some of the relevant authorities on statutory interpretation saying:

Now, his Honour Mr Justice Wright is saying Mr Justice Zeeman was conscious of the fact that the interpretation which he favoured involved the insertion of a word which altered the literal meaning of the section as enacted. It is on that rock, I respectfully submit, that the entire section 40(3)(e) argument falls.

This honourable Court might well say, “Well the legislation is different from the rest of Australia, or it is strange, or it is unique”, but can you say it is absurd, capricious and to be set aside, with great respect to his Honour Mr Justice Zeeman, by a non-elected judicial person who has said, “I am telling the Parliament the Parliament has got it so wrong that I have to amend it”.  Now, that is effectively what his Honour, the learned judge, said, and was supported by Justices Wright and Crawford.  My respectful submission is that the one common ground in this case is that

Mrs Duggan can only win, excluding the user argument, which hopefully will never come about, but can only win if she can get up on 40(3)(e) or 106. I am sorry, your Honour, I am again indebted to your Honour Justice McHugh, again, why did I not look more closely at 106(2)? Section 106 cannot create, it only recognises. It is not and cannot be used for the purpose for which his Honour Mr Justice Cox intended, because subsection (2) provides that subsection (1) shall not be construed so as to give effect, as an easement, to a right which is not recognised as an easement at common law.

So, if she cannot get up on section 106, she cannot get up on section 40(3)(e). I respectfully submit that 40(1) does not help her at all. That becomes a circular argument. At the end of the day the answers to the questions in the case stated must surely have been no, and this appeal should succeed. If the Court pleases.

BRENNAN J:   Thank you, Mr Hodgman.

MR MELICK:   Your Honour, this is an unusual step.  I just want to point one factual matter out in case there is any confusion.  It is apparent in the appeal book - - -

BRENNAN J:   First you need to come to the podium.

MR MELICK:   I am sorry, your Honour.  If your Honour looks at page 1 of the appeal book and also at page 4, this is not a question of this action commencing in 1992 in relation to matters raised in paragraph 7; the action commenced in 1985.  I just thought I should point that out.

BRENNAN J:   Yes, thank you.  The Court will consider its decision in this matter.

AT 3.58 PM THE MATTER WAS ADJOURNED