Easing out of Easements not easy when Title Successors bound - Legalwise Seminars

HWL Ebsworth Partner Gary Newton and Law Clerk Khushaal Vyas discuss the recent decision in Campbell v Hamilton, where the appellant failed to ease out of an easement after the NSW Court of Appeal determined that the easement bound successors to the title.

In Brief

In Campbell v Hamilton [2019] NSWCA 22, the appellant sought to argue that though he had agreed to grant an easement to the respondent, this easement did not bind future successors of the appellant’s title. The Court dismissed the appellant’s submissions highlighting that at a general level, easements are a proprietary right that will bind successors of title. Furthermore, when examining the objective intention of the instrument granting the easement, it was clear that it would bind successors. Hence, the appeal was dismissed with costs.

Factual Background

Mr Campbell (the Landlord) agreed to grant an easement to the Hamiltons (the Tenant) by way of a Deed of Settlement and Release. This initial transfer was not registered. Later, handwritten alterations were made to the deed without the Landlord’s consent an was subsequently registered.

The Landlord argued that the initial transfer did not clearly indicate the benefited land, making it non-compliant with s 88 requirements under the Conveyancing Act 1919 (NSW) and therefore unenforceable against successors in title.

Judgment

In interpreting the deed in question, the Court found that the Deed sufficiently indicated the benefitted land. Whilst the Deed possessed what were some typographical errors, the Court held that a false description will not vitiate the Deed where there is no doubt with regard to what is actually meant. Furthermore, it was found that even if the typographical error left some doubt, the benefitted land was clearly indicated in a subsequent annexure rendering the Landlord’s submissions ineffectual.

In further support of the Tenant, the Court highlighted that because the initial Deed was not registered, it was possible for the Court to consider the objective intention of both parties when entering into the Deed by considering surrounding circumstances.

In light of this, the Court observed that easements are not personal rights, but rather proprietary in nature; the right ‘runs with the land’. Although the Landlord argued that an unclear description of an easement would not bind future successors in title, the Court held that such a qualifier under the Conveyancing Act did not change the ordinary meaning of an ‘easement’. Accordingly, the Court highlighted that the objective intention of the parties to the Deed was to create an easement given that an intention for the easement not to apply to successors in the Landlord’s title did not distinguish between an easement and a contractual licence. Given that the Heads of Agreement clearly used the term ‘easement’, the intention of the parties was to create a right of a proprietary nature.

Lessons

1. The most effective means of cementing the clarity of an agreement and avoid dispute is by registering rights of a proprietary nature with the LPI. Failure to register allows for the surrounding circumstances of an agreement to then be considered in the resolution of a dispute.
2. An easement will generally bind successors in both the landlord and tenant’s title. If this is not the intention of the easement, a contractual licence would be a more appropriate instrument.

Partner Gary Newton is an accredited specialist in property law since 1994 and has a built broad property practice since 1983. Gary advises on a variety of real estate transactions including retail leasing and commercial leasing, both for landlords and tenants, property acquisitions, property developments and sales including residential, commercial, retail and industrial, buying property in Australia, strata, community and neighborhood title law, property joint ventures, due diligence, finance and structuring, partitions, environment and planning; and general property advice. Gary has been named in Best Lawyers™ Australia for Leasing Law and Real Property Law. Gary has also been recognised in the Recommended Tier of the ‘Leading Property & Real Estate Lawyers’ for the 2018 edition of Doyle’s Guide. In 2016, Gary was listed as a recommended lawyer in Real Estate by the Asia Pacific Legal 500.

He has been recognised in the Asialaw Leading Lawyers Guide (2017) as Leading Lawyer in Construction & Real Estate and has been selected for inclusion in the Asialaw Profiles Legal Directory (2017 & 2018) for Real Estate. He was also awarded in 2016 a Lexology Client Choice Award for his excellence in client service in the area of Real Estate. Gary is a member of the Law Society Property Law Committee and is the current Chairman of the Australia Property Law Group of the Law Council of Australia, General Practice Section. Gary has published 8 books on property law including 2 books in 2017. Gary is one of the authors of the LexisNexis Butterworths NSW Conveyancing Service (loose leaf). Gary is a regular speaker at Property Law Conferences. For the Real Estate Institute of NSW Gary presents a regular webinar programme for commercial real estate agents. Contact Gary at gnewton@hwle.com.au or connect via LinkedIn

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Khushaal Vyas is a Research Clerk at Baker McKenzie. He is a final year undergraduate Arts/Law student at the University of New South Wales where he was President of the UNSW Law Society and was a finalist for Australian Law Student of the Year 2017 & 2018. Connect with Khushaal via LinkedIn