Sheppard v Smith

[2021] NSWSC 1207

Supreme Court

New South Wales

• Amendment notes

Medium Neutral Citation:

Sheppard v Smith [2021] NSWSC 1207

Hearing dates:

26, 27, 28 July 2021

Date of orders:

23 September 2021

Decision date:

23 September 2021

Jurisdiction:

Equity - Real Property List

Before:

Parker J

Decision:

See [225]-[227]

Catchwords:

LAND LAW – easements – application for extinguishment of right of way – whether easement abandoned – “deeming provision” in Conveyancing Act, s 89(1A) – relevance of conduct of predecessors in title – exercise of discretion – whether easement has become obsolete – whether easement would impede the reasonable user of the plaintiffs’ land without securing practical benefit to the defendants – whether there would be substantial injury to the defendants if extinguishment granted

Legislation Cited:

Conveyancing Act 1919 (NSW), ss 88, 88B, 88K, 89

Evidence Act 1995 (NSW), s 79

Law of Property Act 1925 (UK), s 84

Property Legislation Amendment (Easements) Act 1995 (NSW)

Real Property Act 1900 (NSW), ss 14, 28T, 28V, 46, 47, 49

Real Property and Conveyancing Legislation Amendment Act 2009 (NSW)

Transfer of Land Act 1958 (Vic), s 73

Cases Cited:

Ashoil Holdings Pty Ltd v Fassoulas [2005] NSWCA 80

Ashoil Pty Ltd v Fassoulas [2004] NSWSC 554

Breskvar v Wall (1971) 126 CLR 376

Chiu v Healey [2003] NSWSC 857

Couche v Adams [2002] NSWSC 27

Davey v Colovic [2021] SASC 7

Deguisa v Lynn [2020] HCA 39

Destri Enterprises Pty Ltd v Maxwell [2012] NSWSC 295

Durian (Holdings) Pty Ltd v Cavacourt Pty Ltd [2000] NSWCA 28

Effeney v Millar Investments Pty Ltd [2011] NSWSC 708

Frasers Lorne Pty Ltd v Burke [2008] NSWSC 743

Frazer v Walker [1967] 1 AC 569

Gotobed v Pridmore (Court of Appeal (England and Wales), 16 December 1970, unrep)

Grill v Hockey (1991) 5 BPR 11,421

Hardy v Sidoti [2020] NSWSC 1057

Keewatin Power Co Ltd v Lake of the Woods Milling Co Ltd [1930] AC 640

Laris v Lin (No 2) [2016] NSWSC 560

Lolakis v Konitsas [2002] NSWSC 889

Long v Michie [2003] NSWSC 233

Pieper v Edwards [1982] 1 NSWLR 336

Proprietors Strata Plan No 9,968 v Proprietors Strata Plan No 11,173 [1979] 2 NSWLR 605

Re Bolton; Ex parte Beane (1987) 162 CLR 514

Re Mason and the Conveyancing Act (1960) 78 WN (NSW) 925

Re Robinson [1972] VR 278

Re Rose Bay Bowling and Recreation Club Ltd (1935) 52 WN (NSW) 77

Riley v Penttila [1974] VR 547

Rosedale Farm (NSW) Pty Ltd [2010] NSWSC 1321

Shelmerdine v Ringen Pty Ltd [1993] 1 VR 315

Treweeke v 36 Wolseley Road Pty Ltd (1973) 128 CLR 274

Tujilo v Watts [2005] NSWSC 209

Webster v Strong [1926] VLR 509

Westfield Management Ltd v Perpetual Trustee Co Ltd (2007) 233 CLR 528

Williams v State Transit Authority of NSW [2004] NSWCA 179

Williams v Usherwood (1983) 45 P & CR 235

Wolfe v Freijah’s Holdings Pty Ltd [1988] VR 1017

Yip v Frolich (2003) 86 SASR 162

Texts Cited:

Edgeworth, B, Butt’s Land Law (7th ed, 2017, Lawbook Company)

Category:

Principal judgment

Parties:

Dean Frederick Sheppard (First Plaintiff)
Meredith Jane Chapman (Second Plaintiff)
Dean Clayton Smith (First Defendant)
Emma Jane Munro (Second Defendant)

Representation:

Counsel:
N Hammond (Plaintiffs)
S Fendekian/F McNeil (Defendants)

Solicitors:
Colquhoun & Colquhoun (Plaintiffs)
DC Balog & Associates (Defendants)

File Number(s):

2019/306802

Publication restriction:

Nil

Judgment

1. These proceedings arise out of a dispute concerning a right of way. The plaintiffs, who own the land burdened by the right of way, apply to have the Court order that it be extinguished. This is resisted by the defendants, who have the benefit of the right of way.

2. The parties are two couples who own adjoining terrace houses in Birchgrove in inner Sydney. I will refer to the two houses as number 6 and number 8 (their street numbers). The plaintiffs, Dean Frederick Sheppard and Meredith Jane Chapman, own number 6. The defendants, Dean Clayton Smith and Emma Jane Munro, own number 8.

3. The right of way covers a strip one metre wide extending around two sides of number 6 in the form of an inverted “L”. It originally provided a passageway leading from the street to the rear of number 8 around the side and back of number 6.

4. Below is a plan of number 8 which shows number 6 next to it, with the strip of land the subject of the right of way coloured yellow.

Issues for determination

5. The right of way was created in 1885. At that time the land in question was, of course, under old system title. It has now been brought under the Real Property Act 1900 (NSW) (“RPA”). It will be necessary in this judgment to refer to the legal principles applicable to easements both under the RPA and under the old system.

6. The plaintiffs’ application is made under the Conveyancing Act 1919 (NSW) (“CA”), s 89(1). That enactment gives the Court power to make an order extinguishing an easement in various circumstances. It applies both to old system and RPA land.

7. The plaintiffs rely on three grounds, corresponding to the three sub-paragraphs of CA, s 89(1). These are that:

1. the right of way is obsolete, or unreasonably impedes the plaintiffs’ use of the land without securing practical benefit to the defendants;

2. the easement has been abandoned; and

3. extinguishment of the easement would not substantially injure the defendants.

8. The proceedings were begun in 2019. There have been attempts by the defendants to exercise the right of way, which have been resisted by the plaintiffs. In May 2020 the Court, upon the plaintiffs giving the usual undertaking as to damages, granted an injunction against the defendants. The injunction restrained them, until further order of the Court, from accessing, or interfering with the structures on, the land burdened by the right of way.

9. The right of way is at least partially obstructed by some building works recently undertaken by the plaintiffs on the house and garden at number 6. Those works were undertaken without development consent and the local council has made a development control order requiring them to be removed. I was told that the council has suspended enforcement of the order pending the result of the plaintiffs’ application.

10. The defendants filed a cross-claim seeking orders to have obstructions removed from the right of way. These obstructions include both works recently undertaken by the plaintiffs (the subject of the development control order) and earlier ones undertaken before the plaintiffs bought number 6. The cross-claim was fixed for hearing at the same time as the plaintiffs’ application to extinguish the right of way.

11. But it became clear at the hearing that there is no real dispute that if the plaintiffs’ application fails, the plaintiffs will have to remove works which obstruct the right of way, or will have to permit the defendants to remove them. At the same time, paving and perhaps other works would be required to make the right of way readily trafficable.

12. In the end, it was agreed that the cross-claim should be discontinued. If the defendants prevail then it is to be hoped that the parties will be able to resolve any practical problems with access by negotiation, but if further litigation is necessary then fresh proceedings may be brought. In abandoning the cross-claim the defendants do not abandon any claim for damages to which they might be entitled pursuant to the plaintiffs’ undertaking as to damages.

Summary and analysis of evidence

Historical evidence and chronology of events

13. The evidence included a report from Ms Alice Fuller, who is a very experienced heritage consultant. In her report, she collated and summarised evidence about the history of the area in general and of the houses at number 6 and number 8 in particular. This historical evidence included land title documents, aerial photographs and publications going back to the nineteenth century.

14. Although the report was presented in the form of an expert report under the Evidence Act 1995 (NSW), s 79, I do not think that the opinions expressed by Ms Fuller about the site history are, strictly speaking, admissible under that section. This is not to deprecate Ms Fuller’s skill and experience, or the usefulness of what she has done. But the process of drawing inferences from the historical record (at least in the way done by Ms Fuller) is part of the ordinary process of fact-finding. It is not in my opinion a field of “specialised knowledge” for the purposes of s 79.

15. For these reasons, I indicated that I would receive the report as a collation of historical documentary evidence. The inferences drawn in the report by Ms Fuller (if disputed) were not to be treated as evidence of the facts inferred. Neither party disagreed with this approach.

16. The terraces in question in these proceedings form part of an adjoining group of six which were all built at about the same time in the late nineteenth century. The land on which they were built forms part of a larger plot which had belonged to Thomas O’Toole and had been subdivided, producing five lots. Numbers 6 and 8 were built on lot 3 and the other four terraces in the group (numbers 10 to 16) were built on lots 1 and 2. Mr O’Toole’s subdivision is shown below:

17. In January 1883, Mr O’Toole sold lot 3 to Bridget Turbidy, described as a “spinster”, for £87. He retained lots 1 and 2.

18. At the same time as she purchased lot 3, Miss Turbidy mortgaged it for £400, presumably to fund the costs of construction of the terrace houses to be built on the land. In due course, a pair of terrace houses was built on the site, around a party wall between number 6 and number 8. At the front, these houses consisted of two storeys. Behind each house was a backyard, possibly including lean-to extensions to the houses.

19. The terrace houses at number 6 and number 8 are similar to the four terrace houses built on lots 1 and 2, now numbers 10 to 16. Indeed for a time the block of six terraces was known as “Ferdinand Terrace” with number 6 being known as number 1 Ferdinand Terrace, number 8 being known as number 2 Ferdinand Terrace, and so on.

20. The six terraces were surrounded on three sides by what was described in the 1885 conveyancing documents as a “passage” and to which I will refer as a laneway. The laneway ran from the street along the southern edge of number 6, then along the western edges of numbers 6 to 16 and then back along the northern edge of number 16. It was 3’ 5” (1.045 m) wide.

21. Abutting the laneway at the rear of number 6 and 8 was a pair of outhouses, or in nineteenth century language “water closets”, built around a party wall. There were similar pairs of outhouses for the other four terraces (numbers 10 and 12 and numbers 14 and 16). In Ms Fuller’s report, there is an extract of an 1889 plan from the records of the NSW Lands Department depicting the terrace buildings, the outhouses, and the surrounding laneway.

22. The parties agree that the original purpose of the laneway would have been, or at least would have included, the removal from the outhouses of what is quaintly and euphemistically called “nightsoil”. At that stage, Birchgrove, like other terraced suburbs in inner-city Sydney, was not sewered. Colloquially, the passage was known as a “dunny lane”.

23. Miss Turbidy sold both of her terraces in October 1885. It seems from the sale prices (£350 in each case) that the houses had by then been built. This is confirmed by the metes and bounds descriptions in the conveyances (see [26] below), which also show that the laneway had been constructed by then.

24. In order to sell the terraces, Miss Turbidy subdivided lot 3. A diagram of the subdivision is set out below:

25. The conveyances for number 6 and number 8 were enrolled on the same day. First came the conveyance of number 6 (book 326, number 158), followed by the conveyance of number 8 (book 326, number 160).

26. As the diagram reproduced above shows, the land conveyed with number 6 did not include the L-shaped piece of land on the southern and western sides where the laneway was. The metes and bounds description referred to the northern boundary of number 6 passing through the party wall between two “closets” and partially through a party wall between the two houses, leaving no doubt that the terraces and outhouses had been built, and the laneway constructed, by that time.

27. The conveyance for number 8 covered a larger area; it included the section of the laneway at the rear of the property. The conveyance reserved a right of way over the L-shaped piece of land in favour of number 8. No right of way was reserved over any part of the laneway in favour of number 6.

28. The effect was that on completion of the two conveyances Miss Turbidy retained ownership of the L-shaped piece of land. But that strip of land, burdened as it was by a right of way in favour of number 8, would presumably have had little or no value. There is nothing to suggest that Miss Turbidy ever asserted any interest in it. After her death (the date of which is unknown) its ownership remained in limbo until 2019 (see [62] below).

29. By the beginning of the twentieth century, the old nightsoil collection system was being replaced by a modern reticulated sewerage system. A letter from the sewerage authority (Sydney Water) which is in evidence records that a sewer line servicing the terraces was built in 1908. A full sewerage diagram covering all of the terraces is not in evidence, but it appears from the sewerage diagrams for numbers 6 and 8 that the sewer line serving the houses ran (and continues to run) along the rear of the properties, under the laneway. In the south-western corner of the laneway there was (and is) a sewerage main junction covered by a manhole.

30. As the decades passed, through traffic along the laneway ceased and much of it fell into disuse. The outhouses were demolished and the fence between number 6 and number 8 was extended (or a new fence was built) which extended across the laneway to the boundary of the property behind. The fence between number 8 and number 10 was extended in the same way.

31. The portion of the laneway behind number 8 (which was part of number 8’s land and was not subject to any right of way in favour of any of the other terraces) was thus incorporated into the backyard of number 8. There appears to have been no gate in the fence between number 8 and number 6. Access between the rear of number 8 and the laneway was therefore cut off.

32. Similar developments took place at number 6. The laneway entrance beside number 6 remained, but a gate was installed. It is not clear whether the laneway had been fenced off from the backyard of number 6, but if it had been, any fence was removed and the backyard of number 6 expanded so as to subsume the rest of the L-shaped piece of land behind the laneway gate.

33. As part of this process, works were undertaken on the L-shaped piece of land. Along the southern wall, there was built a raised garden bed which extended for most, if not all, of the width of the former laneway (which, as noted, was 1.045 m wide). This garden bed was 65-75 cm above the ground level of the rest of the backyard.

34. Against the rear wall, a smaller garden bed was constructed in the area occupied by the former laneway. This varied between 35 and 42 cm above ground level. In the middle it was 50 cm wide, but it extended out further at both ends; at the south-western end it covered the full width of the former laneway. In the south-western corner, between the two garden beds, the sewer manhole remained with a small area of pavement around it, 42 cm above ground level. At the rear of the yard a roofed structure, described as a pergola, was built, which extended over the former laneway.

35. There was no direct evidence as to precisely when and how the laneway (apart from the entrance section on the southern side of number 6) came to be incorporated in the backyards for numbers 6 and 8. Such evidence as bears on the question is considered in a separate section of the judgment below.

36. Ownership of the two properties was unchanged for most of the second half of the twentieth century. Number 6 was bought by John and Elizabeth McMahon in 1935. She died in 1945 and he died in 1955. The property was transferred to Patrick McMahon (apparently their son) in July 1956. He was to live there for the next fifty years, until 2006 (see [40] below). Number 8 was purchased by Jean Brown Henderson McJannet in November 1956. Miss McJannet never married and appears to have lived alone. She was to hold number 8 for almost fifty-two years, until she sold it to the defendants in 2008: see [45] below.

37. Both properties were still under old system title when acquired by Mr McMahon and Miss McJannet respectively. Number 6 was converted to RPA title in 1995 with the lodgement of DP 997250. Upon conversion, the title was limited; that is, the boundaries would not become indefeasible until a plan of delimitation was lodged: see RPA, s 28V. This did not happen until 2019.

38. Number 8 was likewise, during Miss McJannet’s ownership, converted to RPA limited title. It seems that number 8 may have been lot 2 in DP 997250 (number 6 was lot 1), but a full title history of number 8 is not in evidence so this is not certain. What is clear, however, is that the title conversion had taken place before Miss McJannet sold number 8 in 2008.

39. The right of way over the L-shaped piece of land had been included in the July 1956 conveyance to Miss McJannet. But the conversion of her land from old system did not result in the right of way being noted on the RPA title. The notation did not happen until later (see [46] below).

40. In 2006, Mr McMahon sold number 6 to Matthew William Morgan and Rowena Evelyn Morgan. For the purposes of the sale, a survey was undertaken by a registered surveyor in July 2006. The survey plan is reproduced below with the L-shaped piece of land around the boundary of number 6 highlighted. It shows the raised garden bed on the southern wall and the pergola at the rear.

41. While they lived at number 6, the Morgans constructed, or reconstructed, a fish pond at the eastern end of the raised garden bed. They also extended the roof on the single storey fibro extension at the rear of the house outwards, creating a covered area which reached out, across the former laneway, to number 4’s boundary.

42. It seems that the Morgans also replaced the pergola shown in the 2006 survey with a larger one. The new pergola was supported by four posts, two of which were located in the former laneway area at the rear of the backyard.

43. Reproduced below is a photograph taken from the rear of the yard and looking back towards the house in late 2011. On the right of the photograph the raised garden bed along the southern wall can be seen. Behind it is the roof installed by the Morgans extending over the former laneway.

44. Reproduced below is a photograph showing the garden bed on the former laneway at the rear of the yard. The sewer manhole and the south-western pergola post can be seen on the left. The photograph was taken in June 2020 but apart from the new brick wall on the left and the fence on the right (see [50] and [51] below) the structures shown pre-date 2011 (and the garden bed and sewer manhole pre-date 2006).

45. The defendants (who were then engaged) purchased number 8 from Miss McJannet in June 2008. Mr Smith moved in soon afterwards. Ms Munro followed in April 2009 after their wedding and honeymoon.

46. The defendants had a plan of delimitation for number 8, removing the limitation on the RPA title, registered in December 2010. That plan also noted the right of way over the L-shaped piece of land which had been created by Miss Turbidy’s 1885 conveyance (see [23] above). This resulted in the right of way being recorded on the RPA title of number 8 for the first time.

47. The plaintiffs exchanged contracts to purchase number 6 from the Morgans in November 2011. They completed the purchase in January 2012 and moved in a few weeks later.

48. Reproduced below is a survey of number 6 undertaken for the plaintiffs by Mr Robert David Williamson in December 2011. It shows the larger pergola constructed by the Morgans, the raised garden bed and the covered area at the rear of the house extending over the former laneway.

49. In 2013, the defendants carried out renovations at number 8. Those renovations included the replacement of the fence between number 6 and number 8 with a new wooden paling fence. The new fence was built entirely on number 8’s land. On number 6’s side of the fence (but still on number 8’s land), a metal fence post was placed in the former laneway. Against their rear wall, the defendants built a concrete wall, which was referred to in the evidence as a “knee wall”. This wall extends to the edge of the former laneway on number 8’s side of the fence. At that point, its width is 41.5 cm.

50. Reproduced below is a photograph showing the north-western corner of number 6’s backyard following the works undertaken by the defendants. The photograph shows the new fence and the metal fence post. The southern end of the knee wall can be seen behind the north-western pergola post. The width of the former laneway is depicted with a tape measure.

51. Following the defendants’ renovations to number 8, the plaintiffs likewise conducted renovation works on number 6. They removed the garden bed and fish pond on the southern side, replacing them with a wall against number 4’s boundary. These works were done in October and November 2014. They can be seen in the photograph reproduced below, which also shows the boundary of the former laneway.

52. Then in December 2016 and January 2017, the plaintiffs enclosed the roofed area behind the house which had been created by the Morgans. This involved laying a concrete floor across the area covered by the right of way and enclosing the space above. The gate which had previously been undercover was replaced with a glass door on the eastern side of the extension, and on the western side with bifold doors. The area covered by the right of way effectively became part of a room.

53. The works can be seen in the photograph reproduced below. In the foreground is a tape measure showing the boundary of the right of way.

54. At the same time, the plaintiffs rebuilt an area next to the south-western corner of the site as a smaller garden bed, fronted with rough sandstone blocks. This can be seen in the photograph reproduced below, to the left of the sewer manhole.

55. The plaintiffs were well aware when they bought number 6 that they did not own the L-shaped piece of land on the western and southern boundaries. They were apparently under a belief that it would be a simple matter to make a possessory title application, but they did not delay undertaking the works I have just described until they had done so. Nor did they seek development approval for those works from the local council.

56. Meanwhile, in November 2015, the defendants built a garden shed in their backyard. This was built close to the new fence. According to Mr Smith, the clearance on the southern side was about 60 cm.

57. Set out below is a copy of the December 2011 survey marked up so as to show the works undertaken by the defendants and the plaintiffs that I have just described.

58. In August 2017, the plaintiffs lodged an application for possessory title over the L-shaped piece of land. The application was lodged for them by a solicitor, Mr Paul Alice of Colquhoun & Colquhoun. That firm had acted for the plaintiffs on the purchase of number 6 from the Morgans.

59. Because the L-shaped piece of land was still under old system a primary application was required to bring it under RPA title and incorporate it into the title of number 6 under a new DP. The plaintiffs did not discuss the application with the defendants. Mr Sheppard said in evidence that he did not consider that it was any of their business.

60. The application was not formally notified to the defendants until November 2018. They reacted by retaining a solicitor, Mr David Balog. On their behalf, in December 2018 Mr Balog lodged a caveat against the application.

61. The lodgement of the caveat resulted in some discussions between the parties. I describe these in more detail in a later section of this judgment. The plaintiffs’ application provided for the right of way to be noted on the new title when it was issued. A meeting took place between the plaintiffs and the defendants on 17 January 2019. The plaintiffs floated the idea of the defendants surrendering the right of way in return for payment, but this was rejected.

62. Because the application would not affect (and indeed would formally record) the right of way, the defendants did not need to take proceedings in accordance with their caveat. They allowed it to lapse, but made it clear, through Mr Balog, that they would maintain their rights. The new DP incorporating the L-shaped piece of land into the title of number 6, but noting the right of way, was registered in late March 2019.

63. Up until late 2018, relations between the plaintiffs and the defendants had been friendly. But those relations broke down following the meeting on 17 January. In April, Mr Smith removed some of the palings from the boundary fence between number 6 and 8 in the area covered by the right of way, so that he could obtain access. Mr Sheppard asserted that this would be a trespass and called the police. The parties’ solicitors became involved and these proceedings were begun in October 2019.

64. Meanwhile, in May 2019, the local council took formal action against the plaintiffs over the unauthorised works at number 6. The council issued a development control order. The order required the plaintiffs to “demolish and remove all structures and extension installed to” the “Right of Way”. The notice gave the plaintiffs a month to do so, but, as already mentioned, its enforcement has apparently been put on hold pending the outcome of these proceedings.

65. Correspondence from Sydney Water which is in evidence makes it clear that the manhole in the south-western corner at the rear of number 6 is still a functioning part of the sewerage system and, as such, must be kept available for access by Sydney Water when required. In August 2020, at the instigation of Mr Smith, Sydney Water carried out an inspection of the site. This resulted in a formal notice to the plaintiffs dated 27 October which stated that the “surface fitting” (presumably the manhole cover) was inaccessible, and required it to be made accessible. The precise nature of the obstruction was not made clear in the notice and the evidence does not identify what happened by way of response.

66. There was some evidence before me about the other end of the laneway, which ran along the rear of numbers 10 to 16 and back to the street along the northern side of number 16. The four terraces (including the laneway) were on a common title until 1957, when they were subdivided into four lots. The subdivision gave ownership of the rear part of the laneway to number 10, and the side part to number 16, with rights of way being granted so that all of the properties were entitled to use the laneway for access to the street.

67. Despite the grant of these easements, it seems that the laneway behind numbers 10, 12 and 14 fell into disuse and was subsumed into the backyards of the houses in much the same way as occurred with number 8. It still functions, however, at the northern end, along the side and rear of number 16.

68. The laneway currently ends with number 14’s fence. The fence contains a gate, giving number 14 access to the laneway, but numbers 12 and 10 have no access. It has recently been agreed that this is to change. The owner of number 14 has agreed to restore the laneway behind her property by demolishing the fence extending from the boundary with number 16 and building a fence along the rear boundary of her land. It seems that a similar agreement may have been reached with the owner of number 12.

Witnesses

69. Apart from Ms Fuller’s site history report, the plaintiffs relied on reports from the surveyor who undertook the December 2011 survey of number 6, Mr Williamson. There was no cross-examination of either witness.

70. Apart from the plaintiffs themselves, there was evidence in the plaintiffs’ case from Mr and Mrs Morgan and from John William Holcombe, who is a long-term resident of Birchgrove and gave evidence of his recollections going back to the 1950s and 1960s. Each of these witnesses was cross-examined.

71. The defendants gave evidence in their own case and were cross-examined. The defendants’ only other non-formal witness was Cristina Susi Ricci, the owner of number 14. She gave evidence about the northern end of the laneway. She was briefly cross-examined but her evidence was not contentious.

72. There was disagreement on some points between the plaintiffs and the Morgans on the one hand, and the defendants on the other. I have referred to some of those disagreements below, but have not found it necessary to undertake any general comparison of the witnesses’ credit for the purpose of resolving the factual issues in dispute.

Date of pre-2006 building works on former laneway

73. In evidence were aerial photographs of the site taken in 1943, 1961 and 1965. Each of the photographs shows a structure at the rear of number 6, but the resolution is such that it is not possible to identify that structure with the pergola shown in the July 2006 survey (see [40] above). That survey described the fence between number 6 and number 8 as “dilapidated”, which is confirmed by the evidence from the parties (see [79] below). There is insufficient resolution in the aerial photographs to discern the fencing or garden layouts behind number 6 and number 8 at the time the photographs were taken.

74. The only other evidence on this question came from Mr Holcombe. He was born in 1952 and his family lived in the same street (at number 1) until 1966. Thereafter they moved to a house in another street nearby.

75. Mr Holcombe was friendly with two of the children of the McMahons, who lived at number 6. He gave evidence based on his observations when visiting them. Later Mr Holcombe worked as a plumber and did some work for Mrs McMahon at number 6, and perhaps at some other houses in the terrace block.

76. Mr Holcombe’s evidence was that he remembered the lane being disused and full of rubbish. He also said that access along the laneway was blocked by fences.

77. It was not clear to me which part of the laneway Mr Holcombe was describing when he referred to it being full of rubbish. Mr Holcombe was not asked about the state of number 6’s backyard at the time. He was, however, firm in his recollection that number 8 was fenced off. I accept this evidence, which is consistent with the apparent age of the fence as disclosed by the 2006 survey. It seems likely that by the date of that survey there had, for decades, been no regular access to the rear of number 8 from the former laneway.

The defendants’ use of the right of way before 2019

78. It seems that it was Ms Munro (who is a lawyer) who was principally responsible for the conveyancing associated with the defendants’ purchase of number 8. In her affidavit, she noted that the 1956 conveyance to Miss McJannet which included the right of way was annexed to the purchase contract. In cross-examination, she said that at the time of the purchase, she was aware of the existence of the former laneway and of the right of way, but did not know who owned the L-shaped piece of land. As I have already mentioned, the right of way had not at that stage been noted on the title of number 8.

79. It was common ground between the witnesses that at the time the defendants purchased number 8, the fence between number 6 and number 8 at the rear of the two properties was not only dilapidated but was heavily overgrown with ivy. According to Mr Smith, when he moved in the fence was leaning over to such an extent that there was a gap which he could step or climb through. He stated that there were a few occasions early on (in about 2009) when he did so, gaining access through number 6’s backyard and via the laneway entrance back to the street. He said that on one occasion he had locked himself out of the house and on another he retrieved his pet cat.

80. It was in December 2009 that the defendants began the process of producing a delimitation plan so as to remove the limitation on their title to number 8. This was done through the defendants’ architects, who retained a surveyor to draw the plan. A title search was undertaken, which was completed on 22 March 2010. A copy of the search was provided to Ms Munro later that month.

81. The title search identified the existence of the right of way arising from Miss Turbidy’s 1885 conveyance. It stated that there was no record of any subsequent release or extinguishment of the right of way. These conclusions were incorporated into the formal surveyor’s report issued on 8 June.

82. The plan of delimitation noted the presence of the easement. This was the subject of a requisition from the Land Titles Office. The requisition sought to ensure that the notation on the plan was properly worded so that the easement could be noted on number 8’s title when the plan was registered. The requisition was dated 1 July and, as already noted, the plan was eventually registered in December of that year.

83. The plan (which is reproduced at [4] above) showed the dimensions of the area covered by the right of way. According to Mr Smith, at one point during the process he obtained permission from Mrs Morgan for the surveyor to go on to the L-shaped piece of land so as to survey the right of way.

84. The Morgans initially stated in categorical terms that there had been no use of the right of way by the defendants after they acquired number 8 and before the Morgans sold number 6 to the plaintiffs. As a result of the Morgans’ oral evidence, however, the position became somewhat less clear. The gate to the right of way had a bolt which could only be operated from the inside. It was also padlocked, but apparently not at all times, at least while the Morgans were at home. It also appeared that there was a gap above the gate so that it would have been possible for a person to climb over it from the street side.

85. Ultimately, I did not understand the Morgans to deny the possibility that Mr Smith could, on a couple of occasions, have obtained access to the street through the backyard, as he described. Mrs Morgan, however, flatly denied that she ever gave permission for surveyors to come on to the land.

86. Although the defendants obtained the notification of the right of way on their title as a result of the registration of their plan of delimitation, they do not appear to have taken any further steps to notify the Morgans (or later the plaintiffs) of the right of way, or to make use of it. As already noted, when the new fence was built between number 6 and number 8 in 2013 it did not contain any access from number 8 to the former laneway.

87. Mr Smith explained this in his evidence by saying that in 2013 the defendants understood that the plaintiffs would be conducting some further renovations of their own. The defendants’ renovations had proved more expensive than they had hoped, and as a result, they just had a simple fence constructed on the understanding that the question of access to the former laneway could be pursued at a later time. Mr Smith was pressed on this in cross-examination. But his account was consistent with contemporaneous emails which were in evidence.

88. In October 2014 there was a sewage overflow in the backyard of number 8. This contaminated some soil in the backyard which had to be removed. Rather than try to take the contaminated soil out through the former laneway on number 6, Mr Smith had it carried out through the house.

89. Mr Smith did, however, describe one occasion on which he was involved in using the plaintiffs’ yard for access. This happened in about 2018. Mr Smith was approached by the owner of number 10 who wished to get a dining table into his house and could not get it through the front door. After unsuccessfully trying to fit the table through the front door of number 8, Mr Smith obtained permission from the plaintiffs to carry it through the backyard of number 6.

90. As already noted, Mr Smith in April 2019 attempted to gain access to the former laneway by removing some of the palings of the fence. The reason he gave for doing so was to allow him to remove a build-up of dirt in his backyard without taking it through the house.

91. Later, after the proceedings were begun, there was another sewage overflow affecting number 8. Mr Smith complained to Mr Sheppard but he took no action.

92. Subsequent correspondence from Sydney Water in answer to a letter from Mr Alice makes it clear that a problem with a leak at number 6 did not, and does not, entitle the owners of number 8 themselves to access the manhole cover or the sewer line under the former laneway. Sydney Water’s letter stated that each of the downstream houses have their own access points on their land and they are only entitled to access the sewer main via those access points.

93. Both the defendants gave evidence of an ongoing wish to be able to use the former laneway as a right of way to the rear of their property in future. In particular they referred to using the right of way to carry sporting equipment such as bicycles and kayaks, as well as bringing in household goods and removing bulky items. There was also mention of their daughter using the right of way for late night access when she becomes older.

94. Conclusions: There was no challenge to Ms Munro’s evidence about being aware of the existence of the right of way from the time number 8 was purchased in 2008. In any event it is clear that the defendants, through their architects and surveyors, went to some trouble to include the right of way in the plan of delimitation so that it would be registered on the title. Ms Munro’s evidence about this, and in particular her evidence that the defendants had been provided with the search report in March 2010, was not contested. I must therefore proceed on the basis that, at least from 2010 onwards, the defendants were aware that the L-shaped piece of land did not belong to number 6 and they (the defendants) took active steps to have their right of way registered on number 8’s title.

95. Mr Smith’s evidence about getting access to number 6’s backyard through the fence was not contested, and I see no reason not to accept it. But it is of little significance, as, even on Mr Smith’s evidence, it only happened on a handful of occasions, and the Morgans may not have even been aware of it. On the other hand, I am inclined to accept that Mr Smith did indeed obtain permission from Mrs Morgan for surveyors’ access to the former laneway area. A survey was in fact carried out and Mrs Morgan accepted that such a request would not have been contentious if it had been made.

96. However, there is little evidence that once registration of the right of way was obtained the defendants made any real attempt to exercise it. The access to permit the survey, and later to carry the table across the backyard, appears to have been put as a neighbourly request, rather than on the basis of some sort of entitlement.

97. This is hardly surprising. The fact is that, even before the works enclosing the room at the rear of the plaintiffs’ house in 2016-2017, the right of way was not readily trafficable. Counsel for the defendants accepted that it would have been impracticable to walk through the raised garden bed on the southern side of the yard, and even after that garden bed was removed in 2014, the obstacle course presented by the rear garden bed and the manhole in the south-western corner remained. To overcome this it would be necessary to build a footway over the garden bed, incorporating steps or a ramp up to, and down from, the manhole cover.

98. It is therefore hardly likely that, to the extent that the defendants did obtain access to the backyard of number 6, they would have confined themselves to the former laneway. They would have used the open part of the backyard which is part of number 6’s title. Permission was thus required in any event.

78. In cross-examination the defendants were required to acknowledge the difficulties in using the former laneway for some of the purposes which they had identified in their evidence. Furthermore, although this was not put to the defendants, it would appear that the works required to make the former laneway trafficable, or most of them, would have to be paid for by them (see [185] and [219] below). But it was not suggested that the defendants were not genuine in their wishes. I think I must proceed on the basis that the defendants wish to retain the ability to conduct the necessary works so as to make the right of way trafficable, and thereafter to use it.

Negotiations about defendants’ possessory title application

100. I have already pointed out that at the time they purchased number 6, the plaintiffs were well aware that they did not own the L-shaped piece of land which was the site of the former laneway. But the plaintiffs gave evidence that they were unaware until after completion that that land was subject to a right of way in favour of number 8. The defendants said that they only learned of this as a result of work done by Mr Alice on the possessory title application. The evidence does not indicate precisely when work on the application began, although Mr Sheppard said that it was a “long process”.

101. According to the defendants, in about 2014 Mr Smith was asked by Ms Chapman to make a statutory declaration in support of the application. He discussed this with Ms Munro and refused, on the basis that the defendants did not wish to assist with the application when it would remove their right of way.

102. The plaintiffs’ response to this evidence was forensically strange. The conversation was allegedly with Ms Chapman, but she did not respond to Mr Smith’s affidavit. Instead, the response came from Mr Sheppard. He asserted that there had been no request for Mr Smith to make a statutory declaration, but rather that the approach was for Ms Munro to witness a statutory declaration by the owner of number 4. It emerged, however, in cross-examination that Mr Sheppard had not been present during the conversation and was unable to give any first hand evidence about what had been said.

103. It is difficult to fit this episode into context. On the one hand, it is hard to understand Mr Smith’s version of events. At least as it was ultimately presented, the application did not involve any extinguishment of the right of way (see [107(1)] below). Mr Smith’s account is also difficult to reconcile with the evidence of Ms Munro (and also Mr Smith) that the defendants were unaware of the application until they received notice of it in November 2018, and that the fracture in the previously friendly relations which resulted from the position taken by the defendants did not occur until after that. On the other hand, the alleged conversation was not disputed by Ms Chapman and it appears to have been accepted on the plaintiffs’ side that there was some sort of request and refusal associated with the application.

104. Neither counsel for the plaintiffs nor counsel for the defendants sought to make anything of this in their submissions. In the circumstances, I propose to pass over it without any further comment.

105. The defendants gave evidence that they were unaware of the works done by the plaintiffs in December 2016 and January 2017 which involved building what was in effect a room across part of the former laneway (see [52]-[53] above). They may in fact have been on holiday at the time. They became aware of the works in May 2017 when one of them took their daughter over to number 6 to visit.

106. Ms Munro noted in her affidavit that the defendants had had no opportunity to object, as council permission had not been sought, but there is no evidence that the defendants remonstrated with the plaintiffs about the obstruction to the right of way at that time. It seems that the defendants were responsible for tipping the council off about the unauthorised works, but this only appears to have occurred in 2018 or 2019 when the relationship between the defendants and the plaintiffs broke down. Again this is difficult to reconcile with the other evidence, but again no point was made about it by counsel and I pass over it.

107. Each of the participants gave evidence about what happened at the meeting on 17 January 2019 about the application. Although there was some disagreement, it is not necessary to resolve that disagreement for the purpose of this judgment. What does clearly emerge is:

1. Mr Sheppard pointed out to the defendants that the application did not seek extinguishment of the right of way, but, to the contrary, would, if successful, result in the right of way being noted on the register;

2. the defendants indicated that on this basis they would consider not pursuing their caveat;

3. the plaintiffs asked the defendants whether they would be prepared to surrender the right of way upon payment of a sum of money (the amount of which was not specified); and

4. the defendants refused. In particular, Mr Smith said that the defendants did not wish to be the only owners in the block of six terraces who did not have rear access, and they would rather retain the right of way, which they considered added value to their property.

108. There was a disagreement between the parties about when the defendants removed their garden shed. According to Ms Chapman it was removed the very same night as the meeting took place. Ms Chapman was extremely vehement and definite about this. But Mr Smith produced a photograph date stamped 5 January which showed the shed having been demolished on that date, and the authenticity of that photograph was not challenged. In the circumstances, I think I must conclude that Mr Smith was right on this point, although it does not seem to have any significance for the resolution of the issues in these proceedings.

Abandonment

109. It is convenient to deal first with the alleged abandonment of the easement. CA, s 89(1)(b) provides:

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

…

(b)   that the persons of the age of eighteen years or upwards and of full capacity for the time being or from time to time entitled to the easement …, whether in respect of estates in fee simple or any lesser estates or interests in the land to which the easement … is annexed, have agreed to the easement … being modified or wholly or partially extinguished, or by their acts or omissions may reasonably be considered to have abandoned the easement … wholly or in part

110. CA, s 89(1)(b) was introduced into s 89(1) by amendments made to the Act in 1930. The provision was based on the United Kingdom Law of Property Act 1925, s 84(1)(b), which in turn reflected common law concepts of abandonment.

111. The operation of the common law doctrine of abandonment was described by Buckley LJ, speaking for the English Court of Appeal, in Gotobed v Pridmore (unreported, 16 December 1970, but noted at 217 EG 759); the passage quoted was later set out in Williams v Usherwood (1983) 45 P & CR 235 at 256) as follows:

To establish abandonment of an easement the conduct of the dominant owner must, in our judgment, have been such as to make it clear that he had at the relevant time a firm intention that neither he nor any successor in title of his should thereafter make use of the easement. … Abandonment is not, we think, to be lightly inferred. Owners of property do not normally wish to divest themselves of it unless it is to their advantage to do so, notwithstanding that they may have no present use for it.

112. The necessary intention may be inferred from the circumstances. It is frequently said that such circumstances may include a long period of non-use of the easement. But there is a logical gap between non-user and abandonment. It is difficult to see how the mere failure to make use of a right can, of itself, provide a sufficient basis for inferring permanent abandonment of that right. Non-user must almost always be explicable on the basis that the dominant owner has no present need to use the easement, but nevertheless wishes to retain the benefit of it for the future.

113. In this context, the words of Viscount Dunedin, speaking for the Privy Council in Keewatin Power Co Ltd v Lake of the Woods Milling Co Ltd [1930] AC 640 at 657, are frequently quoted:

When you are dealing with grant, the grantee may always, if he chooses, not exercise his right under the grant to the full without in any way prejudicing his full right if he finds it convenient to use it.

114. These principles were applied by the High Court in its decision in Treweeke v 36 Wolseley Road Pty Ltd (1973) 128 CLR 274. That case concerned a right of way which led from a block of land in Point Piper in Sydney’s eastern suburbs down across another block to the waterfront at Double Bay. The right of way had been created when the two blocks were created as a result of the subdivision of a larger parcel of land in 1927. By that stage the land had been brought under the RPA.

115. The right of way was not used by the occupants of the dominant block. The land down which it ran was precipitous in places. In fact, at the time the right of way was created it was impassable without the construction of steps or ladders. There was also an impenetrable thicket of bamboo which lay across the route of the right of way. Instead, in order to obtain access to the waterfront, the occupants of the dominant block used a path which ran across an adjoining property. There was no right of way over that path.

116. The plaintiff-appellant, Mrs Treweeke, was the owner of the servient block. She had been registered as a joint tenant since 1928, and as the sole owner since 1929. During her ownership, works were undertaken by her which reinforced the natural impassability of the right of way. A wire fence was installed (in fact on the dominant block, just inside the boundary) blocking access to the route leading to the right of way in 1933. In 1956 a swimming pool was built near the water’s edge, which extended across the last 4’ of the right of way. In 1958 an iron fence was also built which extended across the right of way.

117. Nothing was done by the then owners of the dominant block about the obstructions, either natural or man-made. In fact, the installation of the wire fence seems to have been prompted by a fall by the dominant owner’s husband and the dominant owner contributed to the cost.

118. By the time the litigation took place, the dominant block was the site of a company title block of units. The block had been acquired by the defendant-respondent (“the Company”) in 1959. For nine years the Company continued to take no action to assert the right of way. It appears that the flat owners, although aware of its existence, were unaware of its precise location. In February 1967 they identified the location. In August or September of that year, Mrs Treweeke renewed the wire fence which had been built in 1933 and, like its predecessor, the Company contributed to the cost.

119. Also at some point in 1967, the adjoining owner blocked access to the pathway which had been used by the residents to reach the waterfront. In September 1968 solicitors acting for the Company wrote to Mrs Treweeke complaining about the obstruction of the route of the right of way by the swimming pool and expressing a wish to negotiate a solution which would involve some other route being made available.

120. In 1971 Mrs Treweeke made an application under s 89, contending that the right of way had been abandoned. The application was dismissed. An appeal to the High Court was also dismissed (McTiernan J and Mason J, Walsh J dissenting).

121. By the time the application was made, there had been no use of the right of way for over forty years. Walsh J (at 291-293) considered that it had been abandoned, relying in particular on the failure to object to the construction of the swimming pool and the assistance with the construction of the wire fence. But both McTiernan J (at 283-285) and Mason J (at 302-304) considered that this conduct did not evidence a decision on the part of the dominant owner to abandon the right of way.

122. McTiernan J noted that the wire fence was an inexpensive one which could readily have been removed or had a gate installed in it. His Honour stated that it was not reasonable to infer an intention to abandon “such a pleasant amenity” as a right of way to a harbour beach.

123. Mason J noted that failure to use the right of way was explicable by the availability of the alternative right of access via the next door property. His Honour acknowledged that the evidence of uncontested obstruction of the right of way was a separate matter, saying (at 303):

Acquiescence in, and failure to object to, the placing by the owner of the servient tenement of obstructions on the site of a right of way which are inconsistent with the exercise of rights by persons having the benefit of the right of way may lead to an inference that they intended to abandon it.

But in the end, his Honour did not consider that the failure to object to the obstructions was sufficient to support an inference of abandonment. In the circumstances, the inference remained only that the owner of the dominant block had decided not to use the right of way, and had no objection to Mrs Treweeke using it for her own purposes, for the time being.

124. The principles which were applied by the majority Judges of the High Court were the same as would have been applied for common law abandonment. Mason J did note that the application of s 89 to Torrens Title land gave rise to some difficulties. One of those difficulties was whether acts of predecessors in title were relevant for the purpose of determining abandonment. I discuss this issue in more detail below. But there is one other point which should be mentioned at this stage.

125. I have already referred to the Court’s power under s 89(1) to order that an easement be extinguished. In addition, s 89(3) provides:

The Court may on the application of any person interested make an order declaring whether or not in any particular case any land is affected by an easement …, and the nature and extent thereof, and whether the same is enforceable, and if so by whom.

126. Mrs Treweeke had sought an order extinguishing the easement under s 89(1) or alternatively a declaration under s 89(3) that the easement was unenforceable or did not affect her land. Mason J referred to this at 301. His Honour noted that for the purposes of s 89(1) it was accepted that the easement remained valid until the Court made an order extinguishing it. But his Honour appears to have contemplated that under s 89(3) a declaration could be made that the easement had ceased to have effect at a point before any order was made by the Court, or indeed at a point before the proceedings had been commenced. But on the view reached by his Honour, it was not necessary to address further the relief to which Mrs Treweeke would have been entitled.

127. Subsequent decisions in New South Wales continued to apply the common law approach to abandonment for the purposes of CA, s 89(1)(b), both for old system and RPA land. In particular, Buckley LJ’s statement of principle from Gotobed was repeatedly cited as authoritative: see for example Proprietors Strata Plan No 9,968 v Proprietors Strata Plan No 11,173 [1979] 2 NSWLR 605 at 617 (Needham J); Grill v Hockey (1991) 5 BPR 11,421 at 11,424 (McLelland J); Long v Michie [2003] NSWSC 233 at [10] (Austin J); Chiu v Healey [2003] NSWSC 857 at [36] (Young J); Ashoil Pty Ltd v Fassoulas [2004] NSWSC 554 at [19] (Gzell J).

128. The decision of Gzell J in the last mentioned case was affirmed by the Court of Appeal: Ashoil Holdings Pty Ltd v Fassoulas [2005] NSWCA 80. Tobias JA, who gave the leading judgment, confirmed that abandonment requires a settled intention on the part of the owner of the dominant tenement (at [53]); and that non-user, of itself, does not furnish evidence of such abandonment (at [54]-[57]).

129. Operation of CA, s 89(1A): Thus, by the time the Court of Appeal decided Ashoil, the principles applied by the court under CA, s 89(1)(b) were well settled. Counsel for the plaintiffs submitted, however, that those principles have been modified by the enactment in 2009 of CA, s 89(1A), which provides:

For the purposes of subsection (1)(b), an easement may be treated as abandoned if the Court is satisfied that the easement has not been used for at least 20 years before the application under subsection (1) is made.

130. The legislative background to CA, s 89(1A) begins with RPA, s 49, which was introduced by the Property Legislation Amendment (Easements) Act 1995 (NSW). RPA, s 49 relevantly provides:

(1)   The Registrar-General may cancel a recording relating to an easement in the Register if the easement has been abandoned.

…

(2)   An easement may be treated as abandoned if the Registrar-General is satisfied it has not been used for at least 20 years before the application for the cancellation of the recording is made to the Registrar-General, whether that period commenced before, on or after, the date of assent to the Property Legislation Amendment (Easements) Act 1995.

131. Under subsection (4) the Registrar-General is required, before cancelling the recording of any easement, to serve a notice of intention to do so on all persons having a registered estate or interest in land benefited by the easement, and consider any submission (provided that the submission is made within the date specified by the notice) which such persons may make.

132. CA, s 89(1A) was inserted by the Real Property and Conveyancing Legislation Amendment Act 2009 (NSW). In the second reading speech, the Minister relevantly stated:

Under section 49 of the Real Property Act 1900 a person may apply to have the easement be removed from the Register if it can be proven that the easement is abandoned. As it has proven almost impossible to establish abandonment according to the complex rules that apply at common law this provision provides a simplified statutory basis for abandonment of easements. As such the provision allows a practical means of removing from the register notifications of easements that are no longer relevant to the land.

However should someone dispute an application to the Registrar General for abandonment of easement then this issue is dealt with by the Supreme Court under section 89 of the Conveyancing Act 1919 and not section 49 of the Real Property Act 1900. In the small number of cases that have been litigated under section 89 of the Conveyancing Act 1919 it has become apparent that there is a conflict between section 49 of the Real Property Act and section 89 of the Conveyancing Act 1919.

In adjudicating on a disputed application for abandonment of easement the Supreme Court under section 89 of the Conveyancing Act 1919 applies the common law rules of abandonment that require an applicant to establish that the owner of the easement "intended" to abandon the easement. The difficulties in supplying such evidence to the Court make it almost impossible for an applicant seeking abandonment to succeed. This difficulty was part of the reason for the introduction of the objective test of 20 years non-use that is applied in section 49.

Accordingly it is also proposed to remove the inconsistency between the two sections by providing that the Court may apply the same criteria as that [sic] applied by the Registrar General under section 49 of the Real Property Act. This may be achieved by providing in section 89 of the Conveyancing Act 1900 that where an application is made to the Court for an order extinguishing an easement abandonment may be inferred if the Court is satisfied that the easement has not been used for at least 20 years.

133. The Victorian equivalent of RPA, s 49 is the Transfer of Land Act 1958 (“TLA”), s 73. That enactment relevantly provides:

205. It may well be that the removal of nightsoil was the original purpose of creating the lane, although there is no reason to think that in 1885 that was the lane’s only purpose. In any event, for the purposes of determining obsolescence, the court is deciding whether a right should be extinguished and should have regard to the terms of the right rather than the way in which that right has been exercised in the past.

206. The right of way in the present case does not have the unusual limitation found in Durian: it was a right of way for any lawful purpose, and was in no way limited for the removal of nightsoil. The question for me is whether a general right of way is obsolete in the conditions which now prevail.

207. It is a well-known fact, of which I can take judicial notice, that nightsoil lanes of this type were widespread in the terraced inner city suburbs of Sydney which were developed in the late nineteenth century. Kunc J recently dealt with a case involving possessory title over part of such a lane (Hardy v Sidoti [2020] NSWSC 1057); the right of way in Chiu might also have originated from such a lane: see at [17].

208. Such lanes are part of Sydney’s inner city heritage. They also continue to have a use in providing access. The laneway at the northern end of the terrace block, servicing number 16 and number 14, is an example. The fact that the lane is now to be reopened so as to provide access to more of the houses in the row shows the continuing utility of such access.

209. In Couche at [44] Palmer J spoke of the “continuing convenience of rear access to properties in inner city suburbs” in the context of such a right of way. The laneway in that case does not appear to have been a nightsoil lane in its origin, but the point his Honour was making is generally applicable.

210. I have already explained in an abandonment context that the fact that expenditure may be required to make the right of way readily trafficable does not mean that it is useless. The same is so when considering its obsolescence. The right of way is capable of being restored to its former condition as a rear access laneway and on my findings there is no reason to question the defendants’ desire to do so. In my view it is not obsolete.

211. The second limb of sub-paragraph (a) of s 89(1) would require the plaintiffs to demonstrate that the right of way would impede the reasonable user of their land without securing practical benefit to the defendants. The concept of reasonable impedance is a narrow one. It is not satisfied merely because the easement prevents the plaintiffs’ preferred use of the land. The plaintiffs must demonstrate that no reasonable use is possible: see Frasers Lorne Pty Ltd v Burke [2008] NSWSC 743 at [13]-[15], where the authorities were summarised by Brereton J (as his Honour then was).

212. Counsel submitted that the practical effect of allowing the defendants to use the easement would be to “compress” the size of the backyard of number 6. For the defendants to use the land for access would create privacy, safety and security issues, which might for practical purposes effectively require the plaintiffs to fence off the former laneway area.

213. This may be so, but in my view it does not demonstrate that the right of way impedes reasonable user as that term has been interpreted in the authorities. A “compressed” backyard may be less pleasant for the plaintiffs but it is still a backyard. The overall effect on number 6 falls far short of preventing it from being used.

214. The second limb test also refers to a lack of practical benefit being secured to the defendants. Counsel for the plaintiffs submitted that this did not impose any further limitation on the Court’s power. Rather, counsel contended, the Court should balance the benefit to the plaintiffs from extinguishing the easement (which counsel submitted was a very significant benefit) against the detriment to the defendants (said by counsel to be minor).

215. I do not accept these submissions. The Court has no power, if the value of the benefit to the dominant owner is less than the detriment to the servient owner, to extinguish the easement and award compensation (as there is in the obverse case of a compulsory easement under CA, s 88K). It is extinguishment or nothing. As a matter of language, even if reasonable user of the servient land is impeded by the right of way, the second limb is not satisfied unless the right of way does not secure a practical benefit to the dominant land (the same view was taken by Adam J in Re Robinson [1972] VR 278, see at 283). It follows that there is no room in the second limb of s 89(1)(a) for some sort of balancing exercise.

216. In the present case, the defendants have expressed a wish to use the right of way which I have found to be genuine. In order to do so, they would have to install a gate and perhaps undertake further works such as removing the steel post and modifying the knee wall, so as to provide access. As noted at [185] above, works would also be required if the area of the former laneway is to be made readily trafficable, which the defendants might have to pay for. If reasonable user of the right of way is possible, that is sufficient to defeat the application under this limb of s 89(1)(a): see the authorities referred to by Brereton J in Fraser Lorne at [17]-[18]. In my view the fact that reasonable user would involve some cost to the defendants does not make any difference.

Lack of substantial injury

220. Sub-paragraph (c) of CA, s 89(1) provides:

that the proposed modification or extinguishment will not substantially injure the persons entitled to the easement …

221. In the circumstances of the present case, this ground overlaps with the requirement in the second limb of ground (a) that the continuation of the easement does not secure a practical benefit to the defendants. Counsel submitted that substantial injury involved a balancing exercise but again I think there is no foundation for that in the language.

222. In the oft-cited language of Jacobs J in Re Mason and the Conveyancing Act (1960) 78 WN (NSW) 925 at 928, the word “substantial” in s 89(1)(c) does not mean large or considerable, but rather means non-theoretical or having present substance. In my view the fact that expenditure might be required to use the right of way does not deprive the opportunity to do so of present substance. Extinguishment of that opportunity would on the face of it “substantially injure” the defendants.

223. It is also clear that, even without actual user of the right of way, the defendants consider that its existence adds value to their property. This is not merely a forensic posture: it reflects the position that the defendants have been taking ever since the January 2019 meeting, when they indicated, through Mr Smith, that they preferred to retain the benefit of the right of way for the future rather than accept a sum of money to relinquish it. Given that the plaintiffs were prepared to pay a sum of money to extinguish the easement (although how much does not appear to have been discussed), I would be inclined to accept that the existence of the easement does in fact increase the value of number 8.

224. In any event, the onus lies on the plaintiffs to negative any substantial injury to the defendants: see Tujilo v Watts [2005] NSWSC 209 at [36]. That means that the defendants must prove that the probability of use in the future is so remote, and the financial value of the easement is so small, as to be of no present substance. The plaintiffs did not challenge the defendants about their willingness to pay the cost of making the right of way usable, or lead any evidence to show that the right of way has no value. The application under CA, s 89(1)(c) fails.

Conclusions and orders

225. I have concluded that the plaintiffs fail on each of the grounds of their application to have the easement extinguished. The plaintiffs’ claim will be dismissed and the interlocutory injunction against the defendants will be discharged.

226. I see no reason why costs should not follow the event. I will order that the plaintiffs pay the defendants’ costs of the proceedings. Any application for a variation to that order, and any application by the defendants for an enquiry as to damages pursuant to the undertaking, can be made in accordance with the Rules.

227. The orders of the Court are:

1. Order that the plaintiffs’ claim be dismissed.

2. Order that the injunction granted by the Court on 25 May 2020 be discharged.

3. Order that the plaintiffs pay the defendants’ costs of the proceedings.

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Amendments

24 September 2021 - amend counsel appearance

17 February 2023 - typographical amendments

Decision last updated: 17 February 2023