Weekly property law round-up, 11 - 17 March 2024
- Hamish Williamson
- Apr 5, 2024
- 8 min read
Updated: Apr 8, 2024
Overview
Playing catch-up this week after a busy March, this will be the first part in a three-parter covering the last three weeks of decisions.
The latest instalment in a weekly summary of cases involving property law (and selected planning, contract and equity decisions concerning land) in the State and Territory Supreme Courts, the County Court of Victoria, and the Land and Environment Court of NSW.
Selected judgments from last week:
In what circumstances will a court extend the time for removal of a caveat? (Meland Holdings Pty Ltd v Saunders & Anor [2024] SASC 27).
An interesting example of how a court will approach an application for a carriageway easements, when there are several ways in which the landlocked property could be accessed (Bryant v Crompton [2024] NSWSC 238).
Aside from the two cases summarised in this article, I’ve also listed some other cases that may be of interest for further reading. Catchwords and links are included.
Supreme Court of South Australia (Dart J)
REAL PROPERTY - Torrens title - Caveats against dealings - Who may lodge and what interest sufficient – Generally
Why this case may be of interest
This decision concerned an application for an extension of time for a caveat, where there is a genuine question to be tried about the underlying caveatable interest. It provides an example of the approach taken by courts to this issue; while the decision was in South Australia, the relevant legislative provisions in Victoria are similar.
Facts
The applicant lodged a caveat over land in order to protect what it described as its interest as purchaser under two ‘letters of offer’. The contractual effect of the letters of offer was disputed, including whether they were contracts of sale or mere ‘put and call options’ (i.e. options to purchase at some later date).
The relevant legislative provision
Per s 191(1)(e) of the Real Property Act 1886 (SA), a caveatee (the registered proprietor of the land subject to the caveat) may apply to remove a caveat. Notice of this application will be given to the caveator (the party who lodged the caveat). If 21 days expire without the caveator either seeking an extension of time (s 191(1)(g)), or bringing an action to establish the validity of the claim on which the caveat is based (s 191(1)(fa)), the caveat will automatically expire.
The applicant/caveator sought an extension of the time for the removal of the caveat, until after the court determined whether it held a caveatable interest in the property as a purchaser. The respondents opposed the extension, on the basis, inter alia, that there was no binding agreement between the parties.
For Victorian practitioners: in Victoria, there is no direct cognate provision of s 191(1)(g), but the Court has a broad discretion under s 90 of the Transfer of Land Act 1958 (Vic) as to the orders it can make on any application to maintain (sub-s 90(2)) or remove a caveat (see sub-s 90(3)).
Applicable test
In determining whether the Court ought extend the duration of a caveat under s 191(1)(g), it applies the same test as for an interlocutory injunction, as per the leading case of the Full Court of the Supreme Court of South Australia in Nexus Mortgage Securities v Mawson KLM Holdings & Starmaker (No 51) Pty Ltd [1997] SASC 6347 [https://jade.io/article/175169], particularly the lead judgment of Doyle CJ.
As such, the questions for determination on such an application are:
Is the caveator able to show that there is a serious question to be tried as to the existence of the interest in the land that it relies upon to support its caveat?
If a serious question to be tried is established, does the balance of convenience favour the extension of time for the removal of the caveat?
However, one key distinction between the test for an interlocutory injunction, and the test for the extension of time for the removal of a caveat, is that the question of whether damages are an adequate remedy is a relevant consideration for the former, but not for the latter. An interest in land prevails over lesser or later interests, and as such damages are almost never an adequate alternative.
As such, the balance of convenience is also of lesser importance: if the caveator establishes a serious question to be tried as to whether they hold an interest in the subject land, then they will typically be granted an extension.
Reasoning and decision
The Court considered that the ‘letters of offer’ threw up a Masters v Cameron question, that is, the Court would need to determine which of the three categories from that decision they fell into, i.e.: (a) did they constitute a complete and binding agreement, (b) did they set out the final terms of a bargain, but performance of one or more terms was conditional upon the execution of a formal document; or (c) did they not constitute a concluded bargain, unless and until the parties executed a formal contract?
The Court considered the respondent’s various bases for opposing the caveat, which were specific to the case and need not be set out here. Overall, it held that there was serious question to be tried, and observed that, on their face, the letters of offer appeared to be binding contracts for the sale of land.
The Court also observed that the respondent’s submission that the applicant ought give an undertaking as to damages was ‘curious’, and appeared to stem from the respondent treating the application as being identical to that for an interlocutory injunction. While a similar test applied, the two were nevertheless distinct applications, involving different considerations. Because the Real Property Act 1886 (SA) already provided (at s 191(1)(j)) the court with a statutory power to grant compensation for a wrongfully-lodged caveat, the Court considered that an undertaking would not add anything, and ought not be given.
Supreme Court of New South Wales (Peden J)
LAND LAW — Easements — Creation of easements — Creation by order of court — Application for easement under s 88K of the Conveyancing Act 1919 (NSW) for right of carriageway — Where plaintiff owns landlocked rural land — Whether proposed easement over neighbouring property reasonably necessary — Where access possible via a paper road and across plaintiff’s other land
Why this case may be of interest
This decision concerned an application by the plaintiff, a cattle farmer, for a right of carriageway (easement), to allow him to access a landlocked block of land which he owned, from a nearby public road.
While the decision itself largely turned on the facts, it provides an example of how the Court approaches the grant of an easement when there are several options for what route the easement could take.
Facts
The application concerned a number of adjacent blocks of rural land at Duck Creek, in northern New South Wales. The plaintiff, a cattle farmer, owned a landlocked block, and wanted access to a nearby public road, ‘Duck Creek Road’. He proposed a route for a right of carriageway which would traverse two blocks, Lot 21 and Lot 69. The Court referred to this as ‘Option A’. The owner of Lot 21 was content for an easement to be granted on the same route as a track which the plaintiff had customarily used, provided that he maintained the track and kept the gates closed.
However, the owners of Lot 69 opposed the grant of Option A, but recognised that the plaintiff needed some form of access to his lot, and instead proposed an alternative rout which would run through two blocks owned by third parties. The Court referred to this as ‘Option C’ (author’s note: it isn’t clear what happened to Option B…).
Relevant principles
The question for the Court was whether the grant of an easement in the form of Option A was ‘reasonably necessary’ within the meaning of section 88K(1)(a) of the Conveyancing Act 1919 (NSW).
For Victorian practitioners, the closest equivalent is the power of an owner to apply to VCAT to acquire or remove an easement under s 36 of the Subdivision Act 1988 (Vic). Subdivisions may also be created upon the registration of a plan of subdivision or consolidation, per s 12 of the Subdivision Act and s 98 of the Transfer of Land Act 1958 (Vic).
The Court summarised the various authorities on the meaning of ‘reasonable necessity’ as follows:
Reasonable necessity does not mean “absolute necessity”, but more is needed than mere desirability or preferability over the alternative means.
The requirement of reasonable necessity can still be satisfied even in circumstances where a plaintiff’s land could be effectively used without the grant of the easement sought. The use with the proposed easement must be at least substantially preferable to the use without the easement.
Regard must be given to the impact of a proposed easement on the servient tenement and the impact on the property rights of the owner of the servient tenement.
The comparison of possible easements in s 88K(1) may lead to an evaluation of the advantages and disadvantages of the easements involving considerations such as costs and viability; a detailed comparative inquiry is not required by the language of s 88K(1).
Past and actual use of the putative servient tenement may be considered in the assessment of “reasonable necessity”.
Analysis and decision
The Court held that Option A was ‘reasonably necessary’ within the meaning of s 88K. The decision largely turned on its own facts, but the factors that the Court took into account are illustrative:
The respective costs of the two options were considered. The parties accepted that Option C would be considerably more expensive. The construction of a driveway along the route of Option A with turning circles sufficient for the plaintiff’s proposed use, which included transporting firewood, cattle and farm equipment, would cost around $200k, whereas similar construction along the route of Option C would cost upwards of $1m.
The impact on Lot 69 was considered. Relatively little evidence was relied on by the owners of Lot 69. They alleged that allowing the plaintiff to traverse their land would increase the risk of contamination, in the form of bio-hazards and weeds, which may affect their beef farming, which they said needed to meet particularly high standards as ‘paddock to plate’ farmers. However, the Court observed that they did not provide evidence of these high standards, nor of the magnitude of the risk. The Court further observed that the owners of Lot 69 accepted that there was a quarantine risk posed by their own movement of cattle and timber across their property, and by nearby public roads.
Other property law decisions last week
Land and Environment Court of New South Wales (Pain J)
APPEAL – s 56A appeal from decision of acting commissioner on question of law in finding that applicant company a fit and proper person under Protection of the Environment Operations Act 1997 (NSW) – no failure to consider matter not identified to acting commissioner at hearing – no failure to consider correct statutory test – no failure to consider specific paragraphs of judgment in separate criminal case – attribution of weight to relevant factors by acting commissioner not reviewable under statutory scheme – decision not legally unreasonable – appeal dismissed
Supreme Court of New South Wales (Pike J)
EQUITY – alleged oral rental agreement – whether property was purchased as an investment or as part of joint endeavour with family members – purchase financed with a loan in the name of the plaintiff – cross claimants paid for completion, contributed some mortgage payments and paid some outgoings
EQUITY – remedies – failed joint endeavour – division of proceeds of sale – division of surplus – return of contributions – indexation – occupation for a period following the failure of a joint endeavour
New Island Developments Pty Ltd v New Island Investments One Pty Ltd [2024] NSWSC 226 (12 March 2024)
Supreme Court of New South Wales (Rees J)
CONTRACT – real estate agent and Chinese investors in property development together – proceedings commenced in Commercial List alleging real estate agent misappropriated $9M to buy property in Meadowbank – proceedings settled – agree to sell Meadowbank land – real estate agent to chose selling agent – property to be sold “on terms to be agreed, such agreement not to be unnecessarily withheld” – proper construction of clause – principles at [26]-[29].
BREACH OF CONTRACT – incomplete agency agreement submitted – real estate agent did not respond to queries – whether breach – principles at [86], [87] – time for performance had not yet arrived.
WORDS AND PHRASES – “unnecessarily withheld” – “unreasonably withheld” – at [50], [87].
