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Westfield Management Limited v Perpetual Trustee Company Limited [ 2007] HCATrans 336  (31 July 2007)

Last Updated: 1 August 2007

 [2007] HCATrans 336 

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
Sydney No S210 of 2007

B e t w e e n -

WESTFIELD MANAGEMENT LIMITED

Appellant

and

PERPETUAL TRUSTEE COMPANY LIMITED

Respondent

Office of the Registry
Sydney No S166 of 2007

B e t w e e n -

PERPETUAL TRUSTEE COMPANY LIMITED

Applicant

and

WESTFIELD MANAGEMENT LIMITED

First Respondent

CITY OF SYDNEY COUNCIL

Second Respondent

GLEESON CJ
GUMMOW J
KIRBY J
HAYNE J
HEYDON J

TRANSCRIPT OF PROCEEDINGS

AT CANBERRA ON TUESDAY, 31 JULY 2007, AT 10.17 AM

Copyright in the High Court of Australia

__________________

MR B.W. WALKER, SC: May it please the Court, I appear with my learned friends, MR R.G. McHUGH, SC and MR N.J. OWENS, for the appellant in the first case, the respondent to the application in the second case. (instructed by Speed and Stracey)

MR N.C. HUTLEY, SC: If your Honours please, I appear with my learned friends, MR S. FLANIGAN, MR J.C. GILES and MR S.J. FREE, for the respondent in the appeal and the applicant in the special leave application. (instructed by Deacons)

MR E. KONDILIOS: May it please the Court, I appear for the second respondent in the second matter. (instructed by Maddocks)

GLEESON CJ: Mr Walker, is it convenient to hear the argument on the appeal first and then the response to that and the application from Mr Hutley and then you on the application?

MR WALKER: Yes, your Honours. My friend, Mr Hutley, and I have devised this proposal for your Honours’ consideration, namely, that we argue the appeal with the intention that we will finish just before the luncheon adjournment, that is, the whole of the argument on the appeal, that the application which, as your Honours appreciate, involve an application for extension of time which is contested. The special leave application will then be argued as your Honours require us to argue it the written submissions having been prepared, as your Honours have seen, so as to encompass full appellate argument if that is the course the Court wishes us to follow.

GLEESON CJ: Thank you.

MR WALKER: Against that last possibility in particular we have divided the time between the two cases so that there will be a virtually equal allotment of time.

GLEESON CJ: Yes, thank you, Mr Walker.

MR WALKER: Your Honours, the first of the cases, the appeal, concerns the interpretation of an easement which, as your Honours have seen, is contained in its text as granted in volume 2 of the appeal book at page 738. There is a deal of common ground on a number of the issues and arguments in this case and just the first of them is that, of course, these are the words the meaning of which will determine the outcome of the appeal, that is, no other words, these words.

HAYNE J: Now, the significant of the easement is to be found at pages 823 and 831, is it not, 823 and 831 being the relevant certificates of title?

MR WALKER: Yes, your Honour.

HAYNE J: This is Torrens land?

MR WALKER: Yes, your Honour.

HAYNE J: And therefore we are concerned with an easement that is an interest in land and is a qualification to - - -

MR WALKER: To title by registration, yes. Those considerations, which are not fundamentally different from what would be true in relation to the old system but which are the more starkly apparent in a system of title by registration, those - - -

HAYNE J: It is a public register in which successors in title work out what they get and what they are burdened by by looking at the register and the register only, do they not?

MR WALKER: Yes, that is hence my opening remarks. The text at page 738 is what people concern to do that many years down the track, if you will forgive that expression, that is the text that will tell them on the one hand what they are entitled to, on the other hand what they are obliged to suffer.

KIRBY J: Remind me, did Justice Hodgson give any weight to the Torrens element?

MR WALKER: I think it is fair to say that all judges did but without dwelling on it, it never having been the subject of any difference between the parties.

GUMMOW J: It is not a question of exploring communings between the parties, is it, which surrounded this easement?

MR WALKER: No, it is not. That is why I start as I do. These are the words to be construed, these are the words to be found on a register, these are the words which by registration in the appropriate instruments creates the right and imposes the burden. The purpose of my earlier comment to Justice Hayne concerning not a radical difference from that, an old system, is, of course, by reference to the fact that under old system there are searches and registers which will throw up the instruments that similarly contain for successors perhaps many years hence, to ascertain - - -

HAYNE J: Registration of title, not title by registration and that is the radical difference which is at the forefront of consideration.

MR WALKER: That is a radical difference but, in our submission, as to the proposition that this is the text to be construed and the care with which one eschews reference to things which are not so permanent as the terms of the registered text, in our submission, they are in similar case. Certainly we accept entirely the importance of title by registration, the importance therefore, the paramountcy and the entire sufficiency of the text to be construed.

KIRBY J: In a sense this is another instance of the importance which the Court has been emphasising over recent years of construing problems and seeing the problem in the statutory context which is relevant and the statutory context here is the Real Property Act (NSW).

MR WALKER: Yes, it is.

KIRBY J: That is why I ask about Justice Hodgson. I am not conscious that his Honour, as it were, started from that point and he propounded a proposition about the approach to construing easements which he favoured and then backed off from that by reference to authority, but the authority which he then looked to, really, was to a large extent founded in English authority, the 19^th Century, which was not authority in the context of Torrens Title system which was pioneered in Australia and which was really the starting point, as Justice Hayne was suggesting to you.

MR WALKER: Yes. There are, of course, two points and, to be fair to his Honour Justice Hodgson, most of the authorities that we understand Justice Kirby has just referred to were on what I will the “accommodate point” which I will be dealing with second, not first. They are matters which we accept have a continued currency in considering the requirements for the creation of an easement. This is not a case where there is a challenge to the fundamental requirements which include the proposition that the easement must be such as accommodates the well-known tenement.

GUMMOW J: We need to know, Mr Walker, what the New South Wales statutory framework is that gets this instrument on the title. It starts in the Conveyancing Act, does it not?

MR WALKER: Yes, it starts under section 88.

GUMMOW J: 88B, is it?

MR WALKER: Section 88B, which is referred to in the respondent’s submissions. Your Honours will find that at page 77 of the extracted print from the Conveyancing Act 1919. It is of significance that the provisions of section 88B involve the term of art “easement.” There are, of course, in answer to Justice Gummow’s questions the provisions of the Real Property Act as to the registration of instruments, including the instruments that create an easement, and there are the suite of provisions, sections 42 and 43 in particular, which relate to the title by registration, including so-called indefeasibility.

KIRBY J: Do we have those provisions of the Real Property Act before us or not?

MR WALKER: No, your Honours do not.

KIRBY J: See, this is the problem. People are not starting at the right place. I mean, I do not know how often the Court has to say it, but if there is statute that speaks, that is the place where you start, not in the common law cases.

MR WALKER: Your Honours, we will provide those provisions. As to the first point, what I will call the evidentiary point as to the interpretation of these registered instruments, again those provisions in the Real Property Act do not in terms or by any implication hitherto the subject of authoritative statement in this Court say anything to the contrary of the principles which were argued and not contested both at trial and in the Court of Appeal on the basis of authorities in this Court, namely, that the instruments fall to be interpreted in accordance with the approach to the construction of documents inter partes that this Court has referred to frequently in the last 25 years. I do not say only in the last 25 years, but the authorities that your Honours see quoted in both sets of written submissions are also those which are referred to in the reasons for judgment both at trial and in the Court of Appeal.

GUMMOW J: What are those authorities?

MR WALKER: In particular the one that we rely upon is the contractual authority Toll v Alphapharm.

GUMMOW J: Exactly. This is a world away from Toll v Alphapharm, I would have thought.

MR WALKER: I am sorry, your Honour?

GUMMOW J: I would have thought this is a world away from Toll v Alphapharm.

MR WALKER: Your Honour, there is no question that none of the contract cases present that which is to the - - -

GUMMOW J: It is not a contract. It is not a contract.

MR WALKER: That is what I am saying. None of the contract cases - - -

GUMMOW J: It is a registered instrument.

MR WALKER: - - - present that which is to the forefront of this case - - -

GUMMOW J: It may or may not be contractual, but it is a registered instrument.

MR WALKER: What is to the forefront of this case is what I started with. The text to be construed is part of the title by registration affecting persons who are not parties to a contract affecting persons indefinitely into the future.

HAYNE J: Well, the moment you say it is at the forefront you suggest there is something in the background to which reference can be made and it is at that point which it has to be exposed and dealt with and the moment you say that you can look off into the contract cases you are suggesting at once the resort of counsel in the commercial list, it is all part of the matrix of facts, your Honour. How someone searching a register is meant to know this matrix of facts so beloved of counsel is perhaps a question that needs to be confronted.

MR WALKER: Yes, it does. May I seek to confront it by use of the authority that we have cited in paragraph 34 of our written submissions in-chief, namely, The Progressive Mailing House Pty Ltd v Tabali Pty Ltd [1985] HCA 14; (1985) 157 CLR 17. The first of the passages to which we refer is that passage that refers to a lease. This was an unregistered lease of Torrens system land. The fact that it is unregistered, of course, does not mean that it was not an instrument in a form which could be registered. It was in registrable form.

At page 29 about point 8 of the page there is a proposition which was relied upon as being the law in this country concerning the application to the extent they are capable of being applied of the contract authorities concerning interpretation to instruments of title such as in this case the registrable lease. Picking it up simply at the conclusion your Honours see that Justice Mason referred to:

the balance of authority here as well as overseas, and the reasons on which it is based, support the proposition that the ordinary principles of contract law, including that of termination for repudiation or fundamental breach, apply to leases.

I need to stress that that is not in terms a reference to the resort with proprietary of not to material called surrounding circumstances in interpretation, but it is, in my submission, an important start to what we seek to urge as an assimilation.

A similar reference is found in Mr Justice Brennan’s reasons at the - - -

GUMMOW J: That is the Lord Wensleydale case?

MR WALKER: Ultimately, yes, your Honour. At the foot of page 40 Justice Brennan referred to the “ordinary contractual principles” and then at page 53 - - -

GUMMOW J: The question was whether there had been repudiations.

MR WALKER: Yes, that is right, your Honour.

KIRBY J: This was an unregistered lease, was it not?

MR WALKER: Unregistered, but registrable, yes.

HAYNE J: You seek to read the case as saying that because there is reference to the ordinary principles of contract that means you take the whole of the bookmarked principles of contract and apply it to a registered instrument under the Torrens system?

MR WALKER: I think the proper answer to that question is yes, we do, your Honour, that is, there is no indication there in the reasoning supplied - - -

HAYNE J: Because their Honours did not have to confront the question. That is why their Honours did not consider it.

MR WALKER: It is the completeness of the statement concerning the ordinary principles to which I make reference. Can I then come to, in this Court, in Gallagher v Rainbow [1994] HCA 24; 179 CLR 624 concerning easements. In the reasons of Justice McHugh, starting at 639 under the heading “The construction of a grant conferring an easement”, refers in the last three lines of the text to the analogy between deed and a document registered under the Torrens system and goes on to say:

The principles of construction that have been adopted in respect of the grant of an easement at common law, therefore, are equally applicable to the grant of an easement in respect of land under the Torrens System.

In relation to the principles that his Honour located of that kind, may I first go - - -

GUMMOW J: This is about deeds, not contracts.

MR WALKER: Yes, your Honour, but the matter - - -

GUMMOW J: This is not in the world of simple contracts.

MR WALKER: No. The matter continues, however, your Honour, if I may. The deed in question here, of course, pursuant to which the registered instrument was executed is itself found at 649 and following with the terms of the easement proposed to be created set out on page 659.

KIRBY J: But presumably it was a deed with a view to registration.

MR WALKER: It was a deed with a view to eventually an instrument to be registered under the Real Property Act being executed and lodged for registration.

KIRBY J: The question really is one of principle and policy, it seems to me, whether you pick up all the old law of deeds and contracts without modification once it is known that the deed is expected to be and is, in fact, later registered under the Real Property Act with its very high public purposes of title by registration.

MR WALKER: Yes.

KIRBY J: That does not seem to have had enough attention in the courts below, with respect to their Honours.

MR WALKER: Yes, your Honour.

HAYNE J: These are proceedings not between the immediate parties to the deed, but between successors in title, the title each of which holds is marked out within the four corners of the Real Property Act.

MR WALKER: Yes. No part of our argument seeks to qualify that proposition at all. It is a matter then of how do you interpret those words. To go back to page 639 in Gallagher v Rainbow, the approach of common law that his Honour opines is applicable under an instrument to be registered under the Torrens system is there explained or described by the passage from Lord Wensleydale’s speech in Waterpark v Fennell as follows:

in order to apply its –

that is the deed’s –

provisions, evidence is in every case admissible of all material facts existing at the time of the execution of the deed, so as to place the Court in the situation of the grantor.”

That, in our submission, answers exactly without any difference to what is in the law of contract interpretation described as the objective circumstances, circumstances being, that is - - -

GUMMOW J: Who is going to know these?

MR WALKER: I am sorry, your Honour?

GUMMOW J: Who, 30 or 40 years later, is going to know of these when this person, 30 or 40 years later, wants to deal with the register.

MR WALKER: The pre-emptory answer to that is it will be the Court. The more accommodating answer to it is that 30, 40, 50 or 100 years later there may be a paucity of evidence, in which case there will be a paucity of those facts.

GUMMOW J: That is right. There is a whole lot of the law evidence dealing with the problems that arose in litigation arising from old system title by reason of these very circumstances of lapse of time. One of the great policies of the Torrens system is to avoid that. That is why we do not get worried about lost deeds and so on and what the ancient inhabitant of the village thought.

MR WALKER: Quite so, your Honour. However, the common law - the common law, I stress – though recognising the difficulties and grappling with the difficulties in particular cases, still set about finding out what the instrument meant by reference to evidence of all material facts existing at the time of its execution to the extent that that was available. If it was not available, there was no such evidence.

HAYNE J: Does that not commit the cardinal sin put to rest in Breskvar v Wall? Does that not begin analysis of a Torrens system problem by seeing it as a system of registration of title rather than a system of title by registration? That is, the moment you say we may resort to something outside the register described as objective circumstances, you are trying to define the title that a party has or is subject to by reference to things extraneous to the register.

MR WALKER: If our argument goes so far as to supplement the words of the registered text, then the fallacy, heresy or error that your Honour has identified and raised for my consideration would have been committed. We do not do that, which is why I started my argument as I did. That which creates the rights and imposes the burdens is a registered text, no more, no less. The meaning of a text, notwithstanding it has the status of being registered, has been held by this Court to be a meaning ascertained in accordance with what I will call a contextual reading. In other words, it is not the case that you may know nothing about the land which becomes the servient tenement and the land which becomes the dominant tenement because those facts are not recited in the registered text.

GUMMOW J: Justice McHugh was dissenting in Gallagher, was he not?

MR WALKER: Yes, but not on this point, your Honour.

GUMMOW J: What do the majority say on this point?

MR WALKER: They, in fact, did not need to consider – can I go to “Construction of the easements” at page 631.

GUMMOW J: The passage at page 631 is where I had hoped this case would be starting.

MR WALKER: That is halfway down under Real Property Act, your Honour.

GUMMOW J: With the reference to the New South Wales Act, yes.

MR WALKER: But that passage says nothing, with respect, about the question of resort to other material.

GUMMOW J: I realise that, but it at least starts in the right place.

MR WALKER: Yes, your Honour, but it does not say anything about resort to other material. That is not something that has hitherto been seen as to be found stipulated in the terms of the statutes. We certainly go this far, that this Court could not find in the text of those statutes a prohibition on an approach to interpretation that requires, for example, you to take into account what can be known, after or the remove of time it may occur, about the servient tenement and the dominant tenement at the time of the grant.

KIRBY J: That, in a sense, is the reason for the questions you have been asked, whether or not implied in the whole theory and purpose of the Real Property Act is an exclusion of searches into all the minutiae of the dealings of the parties, because once the instrument is intended to be and is, in fact, registered, at least arguably it picks up the purpose of speaking on its own face, according to its own terms, and that alone.

MR WALKER: Your Honour, it is only the last three words which are the difficulty I am presently confronting.

GUMMOW J: I am not sure Gallagher v Rainbow is entirely on the rails actually. If you look at Mr Fraser’s argument on 625, I tried to remain calm as I looked footnote (2).

MR WALKER: I do not have to embrace arguments, your Honour, that were not dealt with and that one was not dealt with.

GUMMOW J: No, but then one looks at Mr Keane’s argument and we are back in the English cases.

MR WALKER: It is the words “of the grant”, fourth line. words “of the grant”. Now, the passage in the reasons of Justices Brennan, Dawson and Toohey, to which I have just taken your Honours, include on page 632, the unremarkable but critical proposition that:

Whether the owners of subdivided lots of a dominant tenement are entitled to the benefit of an easement –

and here come the crucial words –

is a question of construction of the grant.

Immediately their Honours then refer to 19^th century English authority concerning the construction of the grant, not in a way that says anything about a matter which, as Justice Gummow has observed, was clearly not to the forefront of the argument in the case before their Honours in the High Court. In our submission, it would be most unusual to understand that reference to an aspect of the 19^th century interpretation of easements without appreciating, for the purposes of the law in this Court - - -

KIRBY J: Their Honours also refer to a decision of the Supreme Court of Rhode Island and the American law property text, but I do not know whether that is written in the context of a Real Property Act system, a Torrens system.

MR WALKER: I think your Honour should not assume it does.

KIRBY J: No, exactly.

MR WALKER: I am not talking about the registration at the moment. I am saying that when they refer passingly to the question of construction of the grant, there is not only no suggestion that their Honours are differing from what the English cases say about the construction of an easement, they are actually, albeit for another purpose, citing one of them. It would be odd to do that if there were a fundamental point of difference between English and Australian law, namely, that because the English law was pronounced at the time Newcomen v Coulson was decided, not in relation to title by registration but rather registration of title where available, that their Honours were failing to point out that there was this fundamental difference, namely, that in Australia you could not know anything other than what appeared from the printed, registered instrument.

GLEESON CJ: Mr Walker, this may be a very awkward question or problem. It is a principle, as I understand it, of the law of easements that what goes with an easement is the right to do whatever is reasonably necessary to take advantage of the easement. If you looked at this title, this register, how would you know what was reasonably necessary to take advantage of the easement? The register would not even tell you that there was a big shopping centre on this site.

MR WALKER: There is nothing remarkable about the practical and hitherto authoritative answer to the Chief Justice’s question because it transcends the difference between old system, registration of title, and Torrens, title by registration.

HAYNE J: What more would you need to know than is in document DP641047 at pages 737 and following which is the instrument to which the register refers, the content of the easement granted and burdened?

MR WALKER: In many cases, including the present one, you need to know what the present configuration of improvements on the land is. This is an easement which one would have to strive manfully to avoid understanding involves entirely artificial works. It is essentially subterranean. This is not the track trodden by feet or wagon wheels over a paddock. So you would need to know that. You would need to know, furthermore, “whether at common law or under the Torrens system”, to quote from Justice McHugh in Gallagher v Rainbow at the top of page 640, what the old law concerning the interpretation of deeds regarded as uncontroversial but important, uncontroversial because thoroughly well accepted and not the subject of contest, namely:

“the court will consider (1) the locus in quo over which the way is granted; (2) the nature of the terminus ad quem; and (3) the purpose for which the way is to be used.”

Under the third heading it is common ground between these parties at all levels that this case has now been argued that that does not include what in contractual parlance is called the subjective or the uncommunicated subjective intentions of a party. Not least that can have nothing to do with the matter when there is no contractual privity between the actual parties to the litigation.

HAYNE J: You said that in order to understand what this easement was all about you would need to know something about the state of development of the premises, is that right?

MR WALKER: Yes, your Honour.

HAYNE J: Why, in light of what appears between 737 and 742 of the appeal book, and why, in light of particularly condition 10 appearing at 740 about redevelopment, do you need to know more than that it is to appear at the point indicated on the plan at 742 and to be treated in the fashion described in the conditions? What more do you need to know?

MR WALKER: When one looks at 742, particularly by reference to the section, one knows that this involves what I described earlier as artificial works, works to be done to make this, in effect, the tunnel. This easement was granted pursuant to matters which are equally on the public record, namely, the in rem as it has sometimes been called, creation of planning permission affecting the land which became the servient tenement. One knows that the dealings which produced this easement, and that is, in our submission, all material facts in this case of an uncontested kind, that fits the third category of that which in the 19^th century for deeds was regarded as uncontroversial admissible material, namely, evidence as to the purpose for which the way is to be used.

In this case the controversy is whether the expression “all purposes” is comprehensive enough – and this is on the interpretation rather than the accommodation argument – to include the purpose of being able to traverse the dominant tenement so that the way may be used by the owner for the time being of the dominant tenement, among other things, for the purposes of access over the dominant tenement to neighbouring land. That is the issue as to whether the registered words “for all purposes” go so far.

We start, of course, with the proposition that your Honours have seen in the written submissions, that “for all purposes” is not a phrase easily or likely to be cut down and that the very clarity and plainness of the expression “for all purposes” places a very severe onus of persuasion on a later owner of the servient tenement, who says “but not for that purpose” because the literal or ordinary English meaning of “for all purposes” is that you will not be able to identify, name any purpose not included within that class.

That is only the beginning of the case and, again, keeping separate the notion of the accommodation point – that is, the argument that says that even with words which expressly said for all purposes including accessing Imperial Arcade and Centrepoint – leave aside for the moment my friend’s argument that says that would have been a monstrosity at law, could not have been done even if the words were intractable in their meaning to that effect. I will come back to that accommodation argument later.

As to the interpretation argument, we start with the proposition – and as Justice Kirby says, the more one focuses only on the printed text, the stronger the proposition gets – that “for all purposes” means exactly what those words say and if there can be no context to cut them back, including by reference to what has hitherto been regarded as uncontroversial law of interpretation of easements, then that is the end of the case, but in our favour because “for all purposes” prohibits an objection by a successor entitled to the servient tenement, but you are using this for a purpose outside the terms of the grant.

GLEESON CJ: But the purposes of the owner of the dominant tenement expanded, did they not? At the time of the creation of the easement, the registered proprietor of Skygarden was not the registered proprietor of Imperial Arcade and Centrepoint.

MR WALKER: Imperial Arcade or Centrepoint, no. We should say, your Honour, that the fact that they have come into common ownership is not a circumstance that we call in aid for interpretation and is not material in the sense that they might as well have been cooperative neighbours. Cooperative neighbours can equally develop a massive integrated development, that is, massive in the sense that it physically spans and presents as a united or unitary redevelopment of a number of different pieces of land. They do not have to be in the same ownership for that to happen, of course. They happen to be in this case, but that is only a happenstance.

GUMMOW J: Mr Walker, we have to construe this instrument sooner or later. At page 737 the “Right of way” is identified as “wide and variable”. Do you see that?

MR WALKER: Yes, your Honour .

GUMMOW J: “Limited in height to the strata delineated on the plan.”

MR WALKER: Yes, your Honour.

GUMMOW J: I need to understand how the plan at 742 works. I think it makes it clear that this was subterranean?

MR WALKER: Yes. Well, I am not quite sure I can assert that because one needs to know - your Honours will see that, in the left-hand column for the section, the second-bottom row is titled “lower level (exist” – existing, I think that means – “ramp surface)”.

HAYNE J: It gives reference levels by reference to the AHD, which I think is the Australian Height Datum, is it not?

MR WALKER: Yes.

HAYNE J: Which is a point of universal reference.

MR WALKER: Yes, it is, but you need to go outside to find – I was about to say where the natural levels in King Street were. There are no natural levels in King Street, that is, it is a long time since there was anything natural about that part of King Street, which is something that you cannot tell from the registered text but which can be known.

In answer to Justice Gummow’s question, I do not think one can tell without going to material dehors this page or this document that it involves digging.

GUMMOW J: I doubt that. Mr Hutley will explain it to us, I would imagine.

MR WALKER: He probably will, but he will do so, no doubt, by assertions concerning where these relative levels see you or saw you at the time in relation to the excavation. That of course can only be demonstrated by going to material outside this page.

GUMMOW J: There were various abbreviations that surveyors used that are used here. I am sure that can be discovered.

MR WALKER: Your Honour appreciates I am not saying you should not. Of course you should go to that other material in order to understand. For example, if a hundred years from now usage in the surveying profession has changed, there can be no doubt that one would be able to give evidence as to what RL meant and what gave it meaning in a relation to actual topography, AHD, as Justice Hayne has pointed out. That would all be dehors. It would be a little bit of intellectual history that the Court would then be receiving, but it would be none the worst for that. Indeed, in our submission, it would be nothing other than the ordinary resort by the Court to all the tools available for interpretation of an instrument, such as a deed, or a registered instrument, when there are references that require explication. The Court does not give up.

HAYNE J: And we know from condition (10) at 740 that the plan is prepared by reference to or having regard to the fact that there is something known as the buildings erected upon the lots burdened and that the plan is intended to be engaged until the event of the redevelopment of the buildings erected on the land indicated as the lots burdened.

MR WALKER: And thereafter there will be a regrant, a proviso to (10), that there will be:

at no cost and expense to the grantee an alternative right of carriageway by the shortest practicable route and on the same terms as hereinbefore contained from the King Street alignment to that part of the site of this carriageway immediately adjoining the lots benefited.

HAYNE J: Yes, there will be a new instrument.

MR WALKER: In other words, the same connection to the lots benefited will be guaranteed, the same connection. Not a different connection but a different part, the same connection. Very critical of course if Glasshouse redevelops but Skygarden does not, which is absolutely on the cards.

GLEESON CJ: Justice Hodgson thought it was an argument against you and in favour of your opponent, construction of the easement, that condition (3) on page 379 provided for the cost of maintenance and repair to be borne equally.

MR WALKER: Yes.

GLEESON CJ: How would you know whether that was an argument for or against a particular construction of the easement unless you knew more about the commercial circumstances of the parties?

MR WALKER: You would not. You would have no concept, for example, as to whether in the near prospect, which is what this instrument was created for, that is, it was not describing something that happened there and then. It is describing something which required to be built – in that near prospect, unless you had material dehors the instrument and quite a detailed kind, you would not know anything about what I will call traffic generation, that is, the need for people to come on foot or by wheeled vehicles to either of the properties, Glasshouse or Skygarden. You would know nothing about that.

KIRBY J: Yes, but the register itself reveals where this is, it is in the centre of the centre of the city of Sydney.

MR WALKER: Of course, but that is true of both buildings, your Honour. In answer to the Chief Justice’s question, how would you know that equality might lead to some unequal burden that is equal cost would not be reflective of the actual distribution of use; the answer is, of course you would not know. Now, in fact, the material which we submit is plainly available and seems to have been used by all the judges – I say seems because of some doubts about how Justice Hodgson ruled on this matter – includes the fact that there are large buildings with commercial rental space to be or being erected, or having been erected, on these two sites, Glasshouse and Skygarden.

In fact, there was no attempt to show that there was a need for traffic generated in such disparate terms, disparate amounts, as between Glasshouse and Skygarden, which after all only happen to be the first developments of those sites after this easement was granted, in order to throw any light on what the Chief Justice has asked about. In our submission, the suggestion that you cannot look to anything other than the text of the instrument first of all has the result that for the first time this Court would be saying that you may not in interpreting an easement go even so far as under the English law one could go in relation to a deed in the 19^th century.

There may be policy, particularly when one looks 100, 150 years ahead after registration, that would require that to be a form of the law to be considered on its merits. In our submission, it is the kind of policy that would require legislation. When the New South Wales Parliament, talked about an easement in 88B it was using a legal term of art and there was no indication that in understanding what the grant of an easement was the Parliament was saying that there was any departure, let alone a radical departure, from the reading of the terms of the grant which remained the exclusive source of knowledge as to what is the right of a burden. There is no sign that there is a radical departure so as to cut back the capacity to know about the locus in quo, the nature of the locus in quo, the nature of the terminus ad quem, and the purpose for which the way it is to be used.

Your Honours are aware that the law of the interpretation of easements which was treated as common ground in argument, but more to the point, upheld by all the judges at both levels in this case so far, was that it is a cardinal principle that the user may not accede the scope which was contemplated at the time of the grant, a formula which has been repeated so many times that there is an obvious risk that it becomes nothing other than a formalist mantra, but the notion of ascertaining what was the use contemplated at the time is precisely where, for example, Lord Wensleydale was speaking when he referred to the admissibility of all material facts existing at the time of the execution of the deed so as to place the Court in the situation of the grantor.

That is precisely where the old courts were placing themselves when they said they would of course look at material evidence as to the purpose for which the way is to be used. Each of the authorities that we deploy and are deployed against us illustrate to greater or lesser degree the Court doing just that. There is not a single one of them where the reasons ostentatiously confine themselves to a reading of the registered or unregistered text as the case may be, saying we are not to know anything apart from what the actual printed words reveal.

The reason for that, your Honours, is a reason which is a bearable or tolerable analogy with the law of the interpretation of contractual documents as well, that is, that the meaning of words has never been seen in any serious instrument or document, be it contractual or of title, be it registered or not, it is has never been as a matter which is shorn of the context in which the instrument came into existence. Now, clearly enough, as Justice Hayne has raised with me, that leads in the contractual context to, if I may call it this, the “let it all hang out” approach of simply waving the banner commercial matrix or genesis and getting practically everything, including material which either comes perilously close to simply being a recitation of subjective intention or, on any view of it, is just that.

HAYNE J: The problem that I think you have to confront directly is how that proposition sits with sections 42 and 43 of the RPA and, in particular, how the proposition you advance fits with the words that the registered proprietor of an estate or interest shall hold the same subject to, amongst other things, such other interests and such entries as are recorded.

MR WALKER: Yes.

HAYNE J: You seek to expand the interest or expand the purview of what constitutes the interest beyond the register.

MR WALKER: No, not at all, your Honour.

HAYNE J: No?

MR WALKER: No. That is how I start and I hope it is how I will finish, that we seek no more than what this text gives. There is nothing that is contrary to the central provision of section 42 of the Real Property Act in what we are putting. We are not claiming any estate or interest burdening Glasshouse beyond that which this text does. But the search for what the text does is a matter of interpretation.

KIRBY J: The text is limited to Glasshouse.

MR WALKER: It applies to both, that is, it is a right - - -

KIRBY J: Yes, but it does not in its terms apply to Imperial Arcade or - - -

MR WALKER: Your Honour means Skygarden. It burdens Glasshouse in favour of Skygarden. The only dominant tenement is Skygarden. This is not a case of a dominant tenement being Imperial Arcade or Centrepoint. Quite so, your Honour.

GLEESON CJ: The question of construction being the question of the meaning of the expression “for all purposes”.

MR WALKER: Yes, quite. In our submission, but perhaps I have been protesting too much on behalf of our friends, for this reason; that in order to use that canon of interpretation which one finds quoted for the umpteenth time in the authorities by Justice McHugh in the middle of page 640 of Gallagher v Rainbow, then you need to be able to resort to something outside the printed text. Now, what is that canon of interpretation? It is the one that says that:

the Court will not construe the grant in a way that would enable an easement to be used in a manner that goes beyond the use contemplated by the parties at the time of the grant.

Now, that obviously raises the question, are we not confined in our search for the contemplation of the parties just as if one is looking for the so-called intention of parties or the intention of Parliament to the text which is the occasion for the interpretation exercise on hand? The answer is; no, not in relation to a statute, not in relation to a contract and not in relation to a deed or registered instrument are you confined so that you may not know and take into account any matter, fact, or information not contained, that is conveyed by, the words of the text.

GLEESON CJ: But the essence of the problem is this, is it not, Mr Walker? The registered proprietor of Blackacre grants a right of way to the registered proprietor of Whiteacre. Years later, the registered proprietor of Whiteacre acquires Greenacre and Brownacre. Question: does the grant “for all purposes” include use of the right of way to serve the expanded purposes that have resulted from the acquisition of the two later properties?

MR WALKER: Yes. Your Honour puts into that question the notion of expanded use. The difference between the nature of the right and what I will call the practical burden or effect – the authorities have discussed that. Your Honours have seen that in the authorities that both sides have referred to in this case. The question the Chief Justice has asked does not raise matters about, as it were, doubling the number of wagons from 10 to 20, although of course that will almost certainly be the practical grievance that usually leads to litigation, not least because you might double the wagons from 10 to 20 without ever Brownacre or Greenacre. You may simply have a better crop one year.

GLEESON CJ: Blackacre and Whiteacre might be farms and then coal might be discovered on Greenacre and when it comes into the ownership of the owner at Whiteacre, the purpose will become quite different.

MR WALKER: The wagons will be less bucolic, yes, quite.

GLEESON CJ: But the question of construction is that of the expression “for all purposes” and the question is whether the purposes that your client now has by reason of its acquisition of the two further properties, are covered by that expression?

MR WALKER: Your Honour, that is not the only way in which the question arises. That is, of course, how the parties now present in dispute. The question of access being taken from Skygarden to Imperial Arcade and Centrepoint was a question which was intended by the parties to the grant regardless of the then different ownership at the time of the grant. Of course, the nature of the objective circumstance, the planning regime – which I stress is a matter of public record and is not contestable – made that clear from the very outset in relation to those matters available to public examination with respect to the nature of the way in which the owner of Glasshouse could enjoy that land.

Could I take your Honours in particular in the reasons of the learned trial judge which, in our submission, proceeded in orthodox and painstaking fashion to observe the limitations on extraneous material. Could I take you, therefore, in volume 3 of the appeal book to page 884 for these matters. As a matter of planning regime there was what his Honour notes in paragraph 26 – it is the first of these not disputed matters – and I need to draw to your Honours’ attention in particular what is called a floor space bonus element number 7, second last line on that page, the:

“Elective Pedestrian Circulation Improvements” – provided for the award of bonus floor space to encourage developers to undertake the provisions of elements of the pedestrian network –

Those words all translate to this; they wanted Pitt Street to be pedestrians without trucks and cars. Trucks and cars were necessary, are still necessary, for deliveries to commercial properties fronting Pitt Street in what is otherwise a pedestrian mall. Then halfway down paragraph 26 on page 885 at about line 22 this public document stated that:

“One of the most significant tools for implementing the system is through the floor space ratio control code.

It is all about carrots, my interpolation –

A development is granted a floor space bonus –

that is, you can improve your land more lucratively –

if it provides those public facilities which offset the undesirable effects of greater intensity of development on the existing transportation systems, pedestrian movement, street congestion and the environment”.

Then in paragraph 27 we come now to that which is again incontestably undisputed on the record concerning the Glasshouse site before the grant of this easement or the deed requiring it to be granted. February 1985, a second development application prepared by Donald Crone & Associates, who turn out in history to be the architects for Skygarden as well. There is an approval of both the first and second application, both of which contained what is called condition 19. Your Honours will see there not a reference to an easement but a reference to a physical connection. The significance of course is that the easement eventually granted also contains a reference to physical connection, (a) by the terms stipulated by, for the easement itself, the right of way, and (b) for that which will be required in the event of a redevelopment and surrender of the original easement, that is, still an easement with a physical connection.

One sees, therefore, that when one comes to consider the purpose for which the way was to be used or to understand the parties contemplation of the use to be made, the relevant history starts with the requirement imposed upon the owner of Glasshouse physically to provide for connection of what is called the basement service parking levels with the Imperial Arcade and Centrepoint. Your Honours will know that Imperial Arcade and Centrepoint do not abut Glasshouse. Skygarden intervenes. That was achieved by making sure that there was constructed the appropriate hole which would allow for connection through to Imperial Arcade and Centrepoint that Glasshouse could construct, that is, the hole on the northern boundary of Skygarden, the southern boundary of Glasshouse.

GLEESON CJ: That raises a difficulty. I have no idea what the resolution of the difficulty is. It is one thing physically to provide for the future and it is another thing to contract for the future.

MR WALKER: Yes, and another thing to have imposed on you the legal burden to permit that physical access and egress to be used. We entirely accept that.

GUMMOW J: In looking at that, what is the significance of condition (11) on page 740 about disputes? That seems to be limited to grantor and grantee, which I can understand. That is spent, is it not, once there is a transfer of title?

MR WALKER: No, read appropriately so as to apply to their successors, your Honour, that is likely to be related to costs in particular and damage.

GUMMOW J: Why does it apply to successors? How? By what legal mechanism apart from aspiration?

MR WALKER: Yes, I am bound to - - -

GUMMOW J: We start running into the Torrens system again, do we not?

MR WALKER: Yes, and the fact that that appears to be an arbitration agreement.

GUMMOW J: Yes. Pretty strange state of affairs to start registering arbitration agreements under the Torrens system.

MR WALKER: I am pausing, your Honour, before I utter the notion of an in rem arbitration agreement.

GUMMOW J: Something odd is going on here.

HAYNE J: Not least the use of the expression “in rem” in this context.

MR WALKER: Yes, your Honour. Your Honour knows why I use it, because it is used in - - -

HAYNE J: Yes, and that is why I say what I say.

MR WALKER: I am content simply to say this is an easement with the well-known attribute of an easement, that it will bind successors and will benefit successors respectively of the servient and dominant tenements. Justice Gummow has raised 11 - - -

GUMMOW J: Anyhow, this litigation in the Supreme Court was not met by any reliance on condition 11.

MR WALKER: No.

GUMMOW J: I am not surprised.

MR WALKER: Not even by the reservation of rights to legal representation thereto. No, your Honour. Could I then, as I say, go to those things which are known on the public record about the prospective servient and dominant tenements and, with respect, there is not a word my learned friend’s written submissions – his address of course may differ – to suggest that you may not know about them, and neither in the Court of Appeal was that the position taken.

Paragraphs 28 and 29 record the fact that there were, in fact, designs made to achieve condition 19 which the servient tenement representative describes to the counsel as, “to provide possible vehicular connection to adjoining properties along the southern boundary”. Adjoining properties in the plural is presumably intended to mean that which actually abuts Skygarden plus the two others being those which were referred to in the condition, namely, Imperial Arcade and Centrepoint.

Then in paragraph 29 his Honour uses, with respect, the language that the authorities both permitted and required him to use, namely, the search for what was the contemplation concerning the use at this point of the physical ramp. It is a relevant matter because that ramp becomes the way over which the granted right was given. In paragraph 30 then comes again on the public record and undisputed the setting in which one then describes the use contemplated by the parties to the grant of the way granted using the common phrase “for all purposes”.

One sees there that they understood that in their own consideration of their business prospects for development of their Glasshouse site they would need to obtain at cost, considerable cost, millions of dollars, what are called transferable floor space, which is another of these policies by which planning authorities and local government ensure that there is enlisted the desire for profit on the part of developers in this case to protect so-called heritage items by permitting owners of heritage items to sell their unused air space, to sell it in effect as transferable floor space that somebody who wants to overdevelop by reference to permitted floor space ratios to do so.

Now, that was going to cost money and that is what was contemplated then in paragraphs 30 and 31. In 31 your Honours see that the state of affairs was still as the council perceived to be a mischief, namely, in the long-term to be solved by removing vehicles from the pedestrian mall. Then Skygarden gets into the act in February 1987, paragraph 32, and your Honours see that Skygarden were not playing with Glasshouse when it started. They were going to get their vehicular access from Castlereagh Street. Now, one needs to know about that and though it not be referred to on the plans King Street is and one surely must be entitled to know that King Street and Castlereagh Street intersect.

Then in paragraph 33 the Glasshouse developers perceived a commercial advantage, there is no possible argument about that, in proposing that they could remove the Castlereagh Street necessity of access for Skygarden by using the King Street one. Furthermore, they realised that may give them the element 7 bonus floor space, a highly critical matter because then they would not have to use their purchased heritage air space bonus in order to justify the extent of development that they were determined to carry out. That is what his Honour is referring to in paragraph 33, and in particular at the foot of paragraph 33 at the top of page 888 refers to the beginning of the coincidence of the physical provision and that which would be required as a matter of legal right.

GUMMOW J: Mr Walker, these words of grant at page 738 were not devised by this draftsman. They have a very long history.

MR WALKER: Yes, it is a common form.

GUMMOW J: The common form is exemplified in schedule 4A, Part 1 of the Conveyancing Act.

MR WALKER: Indeed it is.

GUMMOW J: On page 232 of Reprint No 14:

Full and free right for the body in whose favour the easement is created, and every person authorised by it, to go, pass and repass at all times and for all purposes with or without animals or vehicles –

et cetera.

MR WALKER: Yes.

GUMMOW J: There must be a lot of authority on what the expression “for all purposes” means.

MR WALKER: But there is not. Every authority that matters - - -

GUMMOW J: In particular whether it includes a purpose of passing beyond the servient tenement.

MR WALKER: I think all of those have been drawn to attention in these arguments.

GUMMOW J: Sorry, passing beyond the dominant tenement.

MR WALKER: Yes. I think all of those have been drawn to attention in the written arguments.

HAYNE J: A useful contrast may perhaps lie in section 98 of the Transfer of Land Act (Vic), which is “Easements arising from plan of subdivision. The easement of way you get is:

all such easements of way and drainage and [other things] . . . as may be necessary for the reasonable enjoyment of the allotment or the lot and of any building or part of a building at any time thereon –

So enjoyment of the particular lot. Is there a contrast to be drawn?

MR WALKER: Perhaps not, your Honour. This verges into the accommodation argument as well. We submit there is no authority that says the expression “for all purposes” cannot in any grant – and perhaps one should not be promulgating rules of law in that fashion – or cannot in this grant, or a grant indistinguishable from this grant, include the purpose of using the dominant tenement in common with adjoining properties not themselves dominant tenements and thus involving passing from the dominant tenement on to those adjoining properties.

The use of Skygarden most valuably includes its capacity to be part of what is called an integrated development; integrated only in the sense that different parcels of land are brought together for an overall built development with overall commercial qualities which are different from and obviously the market from time to time, or parts of it, perceives them to be superior to what would result from individual separated development on each of the separate parcels.

This is not a case where we are trying to sneak in, as it were, by later land ownership changes further dominant tenements. That is wrong and could not be done. It is not a case where the character of the actions that we are permitted to authorise will be altered. It is not a case where you can say that there is even necessarily going to be more such traffic than may have been brought about by a separate redevelopment of Skygarden as a dominant tenement without any regard to Imperial Arcade or Centrepoint.

GLEESON CJ: Mr Walker, is the problem a problem connected only with delivery vehicles or is it customer parking?

MR WALKER: No. In relation to the easement, it is not limited to either of those. That, however, will be subject to controls from time to time imposed by town planning.

GLEESON CJ: Both of those are included in it?

MR WALKER: Yes, they could be included in it.

GLEESON CJ: Apart from commercial considerations, what would there be to stop your client turning Skygarden into a large car park to serve customers of Centrepoint and the Imperial Arcade?

MR WALKER: Only the considerable necessity to obtain planning permission.

GLEESON CJ: That is what I mean, apart from commercial consideration, but as far as the word “purposes” in this easement?

MR WALKER: No, there could be no protest by Glasshouse if vehicles and people came on to Skygarden and stopped there and then came back through Glasshouse, it being a property which had as its commercial use something which was rendered valuable by its proximity to other sites altogether.

GLEESON CJ: How does the practical problem manifest itself now?

MR WALKER: There is no practical problem, your Honour.

GLEESON CJ: Well, the complaint is that - - -

MR WALKER: The complaint is that we propose, which is true, that this easement be available for the use subject to council permission of those that we can authorise under the easement to use it - customers and delivery people are obvious classes, so are tenants - to go over the easement to Skygarden and in some cases to go on to Imperial Arcade and on to Centrepoint and then back again.

GLEESON CJ: To drive through?

MR WALKER: Yes.

GLEESON CJ: What about the ones who just want to come and park in the Skygarden area and then go and shop in the Imperial Arcade?

MR WALKER: We do not understand how it is argued, and, with respect, I am not sure that it is argued, that that would be not permitted by the easement.

GLEESON CJ: What is the difference between permitting people to come and park their cars in Skygarden and go shopping in the Imperial Arcade?

MR WALKER: It may be only a question as to how they get into the shops, in other words, whether it is said that a person who parks in Skygarden must walk back along the vehicular way rather than take a lift up to a street level floor of Skygarden and exit there to Castlereagh Street or Pitt Street. We do not think it is seriously suggested that this is an easement that lends itself to interpretation that that use is unlawful because what that person would be doing would still be going to and from Skygarden over Glasshouse. They would be doing something in between as one tends to do when one comes to town, that is, you do not just park and leave. That is commonsense context about what people do in town, which, in our submission, has hitherto never been suggested as unavailable in the reading of these words.

GLEESON CJ: But you could charge people, could you not, to come and park in Skygarden and then go to Wentworth Chambers?

MR WALKER: Yes.

MR GLEESON: It is a question of what constitutes excessive user.

MR WALKER: It is a question of what is beyond the use contemplated by the grant, by the parties at the time of grant.

MR GLEESON: That which is beyond the use is that you are going to - - -

MR WALKER: Encourage people to traverse Skygarden.

MR GLEESON: Well, permit people, insofar as you know what they are doing, to drive over the right of way into your land, and in some cases park there, where they are not confining their proposed activities to your land.

MR WALKER: I think that may well be the nub of the matter, but there is also a more direct one which is obvious and bearing in mind what I get from the background or try to get from the background I cannot obscure this, we want delivery people who are people in particular the council wants off the mall. Private traffic is not allowed in the mall, delivery traffic is. We want to be able to permit – the council wants us to require delivery people to keep off the mall and therefore one of the possibilities is this subterranean central spine access. So it is not just the case of people bringing a vehicle across Glasshouse on to Skygarden, taking a lift, walking off to David Jones, walking down to the Queen Victoria Building, walking up to Wentworth Chambers, then walking back, getting in the car and driving back from Skygarden over Glasshouse, which we would submit is perfectly possible and lawful under this right of way.

GUMMOW J: We have to grapple with these words “for all purposes,” I am afraid.

MR WALKER: Yes, your Honour.

GUMMOW J: Is it not the situation that Mr Hutley wants to read them down?

MR WALKER: Yes, exactly.

GUMMOW J: As if it is said for all purposes as presently - - -

MR WALKER: Except the following.

GUMMOW J: No, for all purposes as presently enjoyed, or something of that description.

MR WALKER: The difficulty with that is that it creates the absurd requirement that an easement not give you anything you have not already got or are not already practically enjoying and that cannot be true. In other words, the classic easements are created on subdivision of virgin land. No one has ever been taking motorcars into the middle of a paddock because it has been a middle of a paddock. Now they are going to be and there is going to be an easement driveway, cul-de-sac or whatever. So it is not the law that you have read words or that easements somehow have some rule attached to them that the use that the terms of the grant permit is restricted to what is in fact being enjoyed. What in fact is being enjoyed - - -

HAYNE J: For all purposes contemplated at the time of the grant may seem to be closer to what is argued against you.

MR WALKER: Yes, your Honours, hence the irony of the position that I am in in relation to resort to extraneous material so called. It is my learned friends, we submit, who really need to go to material outside the terms of the grant in order to read “all” as meaning “but not all”.

GUMMOW J: That is why I wondered why you were so eager to burst outside the words.

MR WALKER: I am not bursting out. I am only going pretty modestly.

GUMMOW J: Maybe it is Mr Hutley who has got to contract them.

MR WALKER: I am only going pretty modestly, your Honours, to that which is clear from the physical configuration (a) required and (b) carried out. What better evidence of contemplated use than how you build the thing? They built the thing, as required on the public record, to have capacity for people not just to go to Skygarden and only Skygarden but explicitly to go further. Now, that, in our submission, answers by analogy – I accept that this is analogy that gets us into trouble but it is our argument – the commercial genesis or aim. It is the equivalent in an easement of that notion in a contract. Why were the parties doing something? You can know that but not by what I will call “private psychology”, but you can know it by reference to the market and what they are actually dealing with. Why were these parties making a deed and then participating in a registered grant of this easement? We know the answer from material which is beyond dispute, which is objective, which is on the public record.

There is some that is not. For example, at paragraph 34, the quote there is from instructions given to Glasshouse’s lawyers, so I am not going to hang my case on that. Your Honours will have observed exactly what the grantor wanted to do. It wanted to be able to say that should the tunnel be constructed, vehicles wishing – and vehicles do not wish, but people do – to access and leave the Imperial Arcade and Centrepoint can use the vehicle ramp of the Glasshouse building. Not can use it only if my successor permit it, but can use it. That was why condition 19 was there, and he wanted to do it for the reason found by his Honour as an objective circumstance – this was the use contemplated in the grant – because that was the only way he would be eligible for the element 7 bonus and that was worth millions.

GLEESON CJ: Where do we most conveniently find the competing points of view on the permissible purposes? Where do we find your assertion of what you are entitled to do? Where do we find the other side’s assertion of the limits of what you are entitled to do?

MR WALKER: Probably in paragraph 1 of Justice Brereton’s reasons at the foot of page 870 about line 42:

The plaintiff Westfield Management Limited is Mastwood’s successor as owner of Skygarden, and has also acquired Imperial Arcade and Centrepoint. It proposes to redevelop all three sites, and wishes to use the ramp to provide access not only to Skygarden, but also through Skygarden to Imperial Arcade and Centrepoint. Westfield contends that as registered proprietor of Skygarden it may authorise persons with vehicles to use the ramp to access Skygarden, even if such access is for the purpose of travelling on to Imperial Arcade or Centrepoint. The defendant Perpetual Trustee Company Limited, Jamino’s successor as owner of the Glasshouse, disputes that contention.

GLEESON CJ: Just pausing there. That seems to define the problem in terms of people who are driving in and almost immediately driving out again.

MR WALKER: Yes.

GLEESON CJ: Is there any contemplated useful purposes of parking, for example, for people who come in, park and might want to go to Centrepoint or might want to go to the Queen Victoria Building or might, if you asked them where they were going to go, tell you to mind your own business?

MR WALKER: There is car parking in Skygarden which, by definition, will be accessed through this easement.

GLEESON CJ: Is that a matter of dispute?

MR WALKER: No, not that we are aware of.

GLEESON CJ: So, as far as you know there is no problem about people who come and pay to park to their cars there and go wherever they want to go?

MR WALKER: Yes, that is right.

GLEESON CJ: The problem is or the dispute is about delivery vehicles that will go in and out again.

MR WALKER: Yes. No, I cannot say it is confined to delivery vehicles, but that is the paradigm, what we wanted to use it for and what they do not want us to use it for. That is the main game, yes.

KIRBY J: The main game is originally you got it in respect of one block and now you want to use for three blocks.

MR WALKER: No, your Honour. Your Honour, I will fail if I cannot persuade - - -

KIRBY J: That has a great economic value which you are not willing to pay, by inference.

MR WALKER: We have paid for it. We paid for it when we - - -

KIRBY J: Great economic value that you want for nothing.

MR WALKER: We paid for it when we bought Skygarden. That was part of what we bought.

GUMMOW J: It is a question of dates again, Mr Walker.

MR WALKER: It does not matter who we are, whether it is the original grantee or my present client, we paid for that right. The question is what did I get?

KIRBY J: In respect of two lots. You now want to - - -

MR WALKER: No, your Honour. No. I am not arguing - - -

KIRBY J: That is the bottom line. You talk to the bottom line. That is the bottom line.

MR WALKER: The bottom line is that this is valuable. There is no question about that. That was one of the reasons why the council was prepared to spare my friend’s predecessor in title millions of dollars of expense so that they could carry out a lucrative development to the extent they wanted to carry it out without having to spend millions of dollars on bonus. It was that valuable. In fact, there is evidence of $3 million worth in terms of the value that was put forward by the grantor to say to the counsel, now, how about my bonus? I have done what you wanted, which is to facilitate, to permit, to ensure, was their word, when in August they described what they had done in February, admissible evidence - - -

KIRBY J: It is sounding awfully commercial.

MR WALKER: Of course it was – everything here – their Honours, there are - - -

HAYNE J: You are not going to tell us that there is some commercial drivers driving both parties, are you, Mr Walker? Heavens above.

MR WALKER: Your Honours, I fear this is all about money - - -

KIRBY J: I feel much happier when we are back in the law of easements.

MR WALKER: Easements are valuable rights which sound in money.

GUMMOW J: Looking at the top of page 871 then, does it come to this:

use the ramp to access Skygarden, even if such access is for the purpose of travelling on to Imperial Arcade or Centrepoint.

MR WALKER: That is right.

GUMMOW J: Does that addition “even if” destroy the character of “all purposes”?

MR WALKER: Yes, exactly, your Honour. My learned friend says there is an unbroken web of authority saying just that. We dispute that. There is no single case at all unless one reads - - -

HAYNE J: An interesting contrast is drawn in the fifth edition of Megarry and Wade – it is not the latest but I think it is the last edited by Megarry and Wade – at page 901, rights of way are often granted in very wide terms, for example, “at all times and for all purposes”.

MR WALKER: Yes.

HAYNE J: But even without such words, the right, if granted in general terms, is not confined to the purpose for which the land is used at the time of the grant. They refer to South Eastern Railway v Cooper [1924] 1 Ch D 211, and go on to give a number of examples where an easement granted as appurtenant to a house could later be used when the house became a hotel and like examples.

MR WALKER: It is at the very essence that it binds successors and benefits successors and the expectation of all those responsible for making the law, that is, the judges over the centuries, that the world will change, which they assuredly knew and which your Honours assuredly know. It is of the essence of such a right that it will be such as to, on its proper interpretation, encompass things that are not presently being done and are probably not in the minds of people, but there is a control. The control is not such as would shock the conscience, not such as that appears so unreasonable that no reasonable grant could, et cetera. We do not use those tests from other areas of law. The test that has been adopted for good or ill authoritatively at the time of the decision in the Court of Appeal was to insist that the use could not exceed that which was contemplated at the time of grant.

KIRBY J: Yes, but that was in the context of old system land that was developed.

MR WALKER: No. In this Court that has been spoken of, in our submission, as being true of Torrens as well, because true of deeds at common law under old system. The reasons of policy are, in our submission, the same, namely, that the words “of an instrument” require to be interpreted paying due regard (a) to the impolitic admission potentially of a whole range of increasingly obscure private dealings, not themselves under public record, on the one hand and on the other hand, the grossly unattractive prospect of interpreting words in such a way as to be quite removed from what those who chose those words to embody the grant, both benefit and burden, intended in the circumstances. I do not mean private intention. I mean that when they refer to vehicles, it may well be that there will be found some limitation with respect of vehicles which will come to exist in a hundred years from now that may be vehicles as a matter of a very, very strict meaning of what that means, but a court may well find that that is not a vehicle such as falls within the contemplation of the time of grant of this easement.

GLEESON CJ: The critical purpose as appears from page 901 in the actual orders made by Justice Brereton is the purpose of driving through.

MR WALKER: Yes.

GLEESON CJ: He declared that on the construction of the right of way, persons with vehicles authorised by your client can use the right of way for the purpose of driving on to Skygarden and proceeding from it to the Imperial Arcade and to Centrepoint.

MR WALKER: Correct.

GLEESON CJ: So the issue is whether using it for a purpose of driving through to gain access to the Imperial Arcade and Centrepoint falls within the words “for all purposes”.

MR WALKER: Yes. Your Honours, I am concerned about the time, can I briefly complete what I wanted to emphasise in the trial judge’s painstaking recitation within what the authorities permitted by recourse to this background material of the relevant material concerning a particular purpose; page 889, paragraph 38.

HEYDON J: That is after the deed.

MR WALKER: It is after and the same is true, your Honour, of that which I am about to go to in paragraph 42, 8 August 1988. The way in which we say being after does not matter is the same way we would say that had there been anyone to cross-examine and I had extracted an answer from them in court about the state of affairs at the time of the grant. It would be evidence many years postdating the events, but it would be about the time of the events.

If, and only if, the material in paragraphs 38 and 42 answers the description of an admission concerning the state of affairs at the time of the grant, then it is grist to the mill. If it does not answer that condition, then it should not be taken into account. That is how we use it. The date does not destroy its relevance to the question of the circumstances at the time of the grant. The one in 38 bespeaks the fact that it refers to the state of affairs from condition 19 and the decision to make the grant. They both pre-date.

Paragraph 42 similarly, in our submission, particularly by the reference with which it starts, which is a reference to condition 19, similarly is an admission as to what the parties contemplated at the time of the grant. In particular, that 8 August 1988 letter shows that it was understood that there would be goods deliveries to all properties permitted by that which had been (a) constructed and (b) the subject of the grant. By August 1988 talking about the past – that is February and before February – the owner of the Glasshouse was making very plain admissions as to the coincidence of, the converging of, the physical requirements for construction and the legal regime for permission to use.

There can be no doubt, when one sees paragraphs 44 and 45, that this was taken in a highly deliberate fashion. These were not accidental, incidental or inadvertent matters of admission concerning the purpose of the use. That was the very gist of why they had undertaken the transaction at all. In answer to the question why did they grant it in these terms, it was so that the council could be assured that the desired access to all properties south of 135 King Street could be ensured. Your Honours see in particular the word “ensuring” in the correspondence with the council quoted in paragraph 41 at the top of page 890 where the connection showing the commercial background is very evident.

GUMMOW J: Mr Walker, is there any treatment in the reasons below of the so-called doctrine of excessive user? It seems to be mentioned in argument that you have to construe the grant first. If the grant is wide, then so be it.

MR WALKER: Quite. Page 929, paragraph 26 – I am sorry, I have gone to the Court of Appeal first. There is, of course, what Justice Brereton did in explicating the so-called rule in Harris v Flower in a passage which, given the time, I respectfully adopt and urge; paragraph 24 on pages 883 and 884. Halfway down at about line 39 on page 883 the language of excessive user is used by his Honour and, with respect, appropriately so. The issue in this case was, would the going on to Imperial Arcade and Centrepoint, after using the easement to get onto Skygarden - - -

GUMMOW J: It is the sentence at line 40 that I have difficulty with.

It is not in excess . . . for those purposes that were contemplated at the time of the grant.

The question is, what was the grant and you work that out. If later something happens - - -

MR WALKER: Then you ask yourself, is that beyond - - -

GUMMOW J: There is an action in trespass.

MR WALKER: By an action in trespass you ask, is that beyond the use contemplated?

GUMMOW J: Yes. The defence is that the.....is the easement, and the response to that is excessive user.

MR WALKER: That is why we start and finish with - - -

GUMMOW J: Therefore an injunction.

MR WALKER: We start and finish with the words of the texts. They have “all purposes”. We submit, for the reasons Justice Brereton points out in relation to Harris v Flower, there cannot be a rule of law operating separately from the interpretation of the particular grant which prevents those purposes including the manifestly commercially valuable adjunct to Skygarden, of it being able to be exploited together with its neighbouring lots. Your Honours, I am very concerned about timing.

Your Honours, may I then very briefly add to what has already fallen out concerning the accommodation issue in what I have already said the following matters of emphasis in relation to matters I think comprehensively put in the exchanged written submissions. The use for the purposes of understanding the requirement that the easement accommodate the dominant tenement is, of course, as Justice Kirby has, with respect, required me to recall, is the use only of the dominant tenement. We accept that and our argument is to be measured against our adherence to it.

It is not, however, the case that the use of land has ever been held not to exist where the enjoyment of the land in question is in conjunction with advantages or aspects of other land, usually neighbouring land. The cases include car parks and hay storage as examples of just that. So there is no absolute rule of law that prevents it.

The way in which my learned friends deal with that is to reverse the phrasing that we use and to describe the use to traverse Skygarden as being merely incidental to its ownership and really to be a use for the purposes of, in the shorthand which attributes a state of mind to land for the purposes of, Imperial Arcade and Centrepoint.

Now, in our submission, the proper way of asking the question is to ask whether what is sought to be enjoyed is a use of Skygarden. The short answer is, as a matter of English at least, of course it is.

GUMMOW J: It has one character, it also has another character.

MR WALKER: Quite.

GUMMOW J: The question is, the fact that it has the other character, does that destroy the first character?

MR WALKER: Quite. No, that is just the first one. That is just the first one, your Honour, so we are going literally, and we say, does this use - yes, and I accept that is not the end of this argument. The next question, is that a use calculated to better the enjoyment of that land? There I am adapting the language from the cases that straddle both old system and Torrens over 150 years. Clearly enough, to be able to put Skygarden into the pot for a much larger development is not only a very obvious overt use of Skygarden but the capacity to be able to run the commercial endeavours in common in such a way as to attract approval from the council so as to be able to attract customers, tenants and the like for that much larger a set of enterprises as would be contained on land which goes beyond the dominant tenement, is, of course, to add to the perceived value of that dominant tenement to its owner for its use.

In our submission, that suffices on the accommodation argument unless there be an authority that says, by way of a judicial rule in the face of commercial experience and in the face of the flexibility with which landowners in our system are encouraged to make use of their land within the law, unless there be a rule that says, well, it ceases to be a use if it involves enjoyment of the land in conjunction with other land, then, in our submission, we win. That is where the rule in Harris v Flower played a part in the argument at first instance, though less so in the Court of Appeal and the way in which Justice Brereton dealt with Harris v Flower is, in our submission, entirely correct.

Your Honours, there is other case law to which reference has been made but I must in deference to the agreement I have with my friend leave that to the written submissions subject to reply.

GLEESON CJ: Thank you, Mr Walker. Yes, Mr Hutley.

MR HUTLEY: Thank you, your Honour. The order in which we propose to proceed is firstly an examination of the actual terms of this easement. Secondly, an identification of relevant surrounding circumstances excepting, of course, the concern with respect to the Real Property Act, which we will deal with shortly. Thirdly, whether the Court of Appeal erred in excluding from its considerations a matter relied upon by the trial judge as indicating an intention that the easement could be used by the owners of Skygarden as a means of access.

We must stress that what one is looking for if one is looking for common intention as to the contemplated use of the easement is not common intention as to the contemplated use of the physical structure but common intention as to the contemplated exercise of rights conferred under the grant. That distinction was a distinction to which the trial judge did not advert and was adverted to by the Court of Appeal and explained why in part while the Court of Appeal considered the trial judge had erred.

Fourthly, the authorities dealing “for all purposes” – and this has been a phrase used with respect to easements since at least the 1850s, and the approach to it has been consistently completely contrary to that which is advanced by our learned friends and this in fact will be the first case in all the jurisdictions which we have been able to examine, that is, New Zealand, Canada, the United Kingdom, where it would be found, if the appellant is correct, that a dominant tenement owner can use an easement for the purpose of accessing remoter properties unless it is purely incidental to the use of the dominant tenement, that is, where there is, for example, a car park on a remoter tenement used solely for access to the dominant tenement, and we will come to those authorities.

Next, whether an easement which purported to permit a use such as advanced by the appellant would benefit the dominant tenement. Finally, to the extent that we have not already dealt with certain matters raised in the notice of contention, can I take your Honours to the easement. It is conveniently dealt with in appeal book, volume 2 at 648. The first point we note is that there is no reference at all either in the deed or in the easement to the remoter properties Imperial Arcade or Centrepoint. The second point is that if one goes to the terms of the grant, it confers a right, which your Honours will find at 659, of:

Full and free right of carriageway for the grantee . . . or any . . . and every person authorised by it, to go, pass and repass at all times and for all purposes with vehicles to and from the said lots benefited . . . across the lots burdened –

Setting aside for the moment the detailed consideration of the law as to the meaning “for all purposes” we observe that the phrase should not be divorced from the context in which it appears. The relevant purposes are the purposes of the grantee and the persons authorised by the grantee and, further, those purposes of those individuals are purposes of passing to and from the lots benefited. We submit that as a matter of ordinary English a purpose of a person to pass from A to B does not include a purpose to pass to each and every intermediate spot between A and B. Thus, if a person left King Street with the purpose of going to and then coming from Centrepoint, it would be wrong to say that that person had a purpose to go to Skygarden any more than that person would have a purpose of going to Glasshouse.

GUMMOW J: What do we mean by the word “purpose”, you see?

MR HUTLEY: This Court has considered it in various contexts; end sought to be achieved.

GUMMOW J: What is that?

MR HUTLEY: End sought to be achieved.

GUMMOW J: Sought to be achieved.

MR HUTLEY: The end sought to be achieved of a person going to Centrepoint is to go to Centrepoint. It is not to go to Skygarden. That is merely an intermediate step.

GUMMOW J: Why is it not to go to X by getting across Y?

MR HUTLEY: Your Honour, one can formulate it in those terms.

GUMMOW J: Exactly.

MR HUTLEY: Historically – and I will come to it in due course – that has been described as merely colourable.

GLEESON CJ: Is there a difference in this context between purpose and motive?

MR HUTLEY: Yes. We would say it is the difference between ends and means. You do not have a purpose of going to those except in the way formulated by his Honour Justice Gummow. Your purpose, that is, what you are trying to achieve, is to get to X. A necessary subsidiary point is really to have a purpose to go to every point along the way, such as Zeno’s paradox. Historically the courts have said in all jurisdictions that if you are using a right of way for the benefit of tenement A, the dominant tenement, to use the right of way as a means to pass through that property to remoter properties is not to use it for the purpose of the dominant tenement but for a colourable purpose.

HAYNE J: That has its origins in a particular question asked of a particular jury at a trial. Leave that aside. What is the textual connection that you are drawing between the words “for all purposes” and either the expression “to and from the said lots benefited” or the expression “across the lots burdened”? What is the textual connection you are drawing?

MR HUTLEY: You have to ask as a question of fact what is the purpose? Is it to go to this property? The real answer to that question as a matter of substance not as a matter, as it were, we would submit, of verbal gymnastics is to go beyond the property. Then that is not within the terms of the grant, because purpose has to be given a meaning.

HAYNE J: Am I right in understanding this branch of the argument to depend upon connecting “for all purposes” with either or both of the phrases “to and from the said lots benefited” and/or “across the lots burdened”?

MR HUTLEY: To and from, your Honour.

HAYNE J: Right. Why do you connect “purposes” to the phrase “to and from” rather than connect “for all purposes” to go back to “to go, pass and repass for all purposes”?

MR HUTLEY: Your Honour, we submit you cannot, in effect, break up the phrase. We say is to pass and repass for all purposes to and from. To, in effect, as it were, extract “for all purposes” out of that whole phrase is, in our respectful submission, apt to distort the true construction.

HAYNE J: I would agree and thus I am struck by this branch of your argument fastening upon purpose as the determining feature.

MR HUTLEY: The essence of it is to and from, I accept that, your Honour, but one has to, in effect, because of the way the argument is phrased, deal with the question of “for all purposes”. The real right is to pass to and from the property, not to pass across it, is another way of - - -

HAYNE J: “To and from the lots benefited across the lots burdened”.

MR HUTLEY: My learned friends want “to and from and across the lots burdened,” because, in a sense, what he is saying is there is a right to pass both to the lot benefited, pass across the lot benefited to a remoter property and then repass across that track across the lots burdened.

GUMMOW J: But “across the lots burdened” means across Skygarden, does it not?

MR HUTLEY: No, across Glasshouse, your Honour.

GUMMOW J: Across Glasshouse, yes. You have to fix on the words, what, “to and from the lots benefited,” which is Skygarden?

MR HUTLEY: Skygarden.

GUMMOW J: And say it is not “to and from” them.

MR HUTLEY: It is not for a purpose for going to and from.

GUMMOW J: Because it started somewhere else?

MR HUTLEY: No, because your object is somewhere else.

GUMMOW J: Because it starts in Imperial Arcade.

GLEESON CJ: Your object is to go through.

MR HUTLEY: Your object is to go through. In effect, your real purpose is not to go to Skygarden at all. Going to Skygarden is a necessary physical requirement to achieve your end, namely, to go to the remoter tenements. That, when we come to the cases, is the basis of this distinction, this consistent approach in the jurisprudence that you cannot use a dominant tenement, in effect, as a throughway or as a means to benefiting, in substance, remoter lands. It is not to the point to say that it could be of benefit to you to use your land as, in effect, a through point or, in effect, as a joint development.

The leading case, and I will take your Honours to it in due course, Harris v Flower was a case where there was a building built partly on the dominant tenement and partly on a remoter property and the right of way was the right of way for all purposes. The court held you simply could not use that right of way for the purpose of advancing the building insofar as the building was on the remoter property and was an a fortiori case to the examples my learned friend gave where it was no doubt commercially advantageous to develop both properties in consultation. The factory was built across both properties.

HEYDON J: This is all dealt with in paragraphs 32 to 59 of your written submissions?

MR HUTLEY: Yes, your Honour. There is an issue in relation – anyway, it may not be necessary to take you - - -

HEYDON J: Just for identification purposes.

MR HUTLEY: Yes. I will take your Honours to the cases in due course. Returning to the easement, condition (3), which your Honour will find on page 660 at line 20, it says:

Subject to Clause (4) the cost of routine maintenance and repair to the site of the carriageway shall be borne equally between the grantor and grantee.

One knows from the plans of the various properties generally they are respective sizes and they are conveniently found, actually, in the application for special leave. Your Honours no doubt have seen the plans showing the physical sites.

GUMMOW J: We have read the newspaper too.

MR HUTLEY: Have you?

GUMMOW J: We can read the newspaper as well.

MR HUTLEY: I just do not want to get too much into surrounding circumstances, your Honour. It is 2007. We submit that that condition reflects what objectively one would take to be a contemplation by the parties that one was distributing benefits and burdens between uses of the dominant and servient tenements and not leading to a distribution which allowed the dominant tenement owner to expand the usage to remoter properties as and when it thought fit in its commercial interests, because the parties have distributed it on the basis that with respect to the repair and damage in clause (4) of the deed, insofar as the loss is caused by the grantor, their respective service and agents, it will be borne by that individual, but in other respects it will be borne equally.

My learned friend’s construction involves an agreement whereby the grantor and the grantee conferred upon the grantee, in effect, an unlimited capacity to expand potential usages beyond the dominant tenement. The logic of my learned friend’s argument does not stop at Centrepoint. The logic of my learned friend’s argument stops at the point where they can cease to persuade council to allow tunnels to ever remoter properties, because there is no logical distinction between Centrepoint and any property past Market Street, any property over Pitt Street, which - - -

HEYDON J: Keep going south until you hit the Victorian border.

MR HUTLEY: Exactly, your Honour.

HAYNE J: There has got to be some limits, Mr Hutley. Victorian borders.

MR HUTLEY: Exactly. Your Honour, Botany Bay, I think. So, in other words, the structure reflects a distribution which one would conceive in circumstances where both the dominant and servient tenement owner were intending to use this pathway as the means of vehicular access to their buildings. It is one which is passing strange, we would submit, if one was contemplating conferring upon the grantee this capacity to, as it were, open a tollway as far as it can ultimately persuade a local government to allow it.

Clauses 7 and 8 are similarly somewhat strange because of the absence of reference in relation to insurance to owners of remoter properties in the circumstance where it appears that the parties have agreed to allow, on my learned friend’s construction, my learned friend to invite any third parties for whatever consideration it wants to use this right of way to the extent that it is physically able to achieve it.

Clause 9 suffers from a similar defect insofar as it refers again to just the servants and agents of the grantor and the grantee and seems to exclude from consideration interests of or persons associated with remoter owners. Therefore, we say, on the text the clear indication is that the ambit of the right conferred to pass to and from the dominant tenement over the servient tenement and that was all. Objectively, it is unlikely that any company would expose itself to the potentially indeterminate expansion of risk and cost attendant upon the construction by the appellant without any reference or hint in the documents whereby the easements are created than that which was what was contemplated. That is all we wish to say on the terms of the easement.

Can I next turn to the surrounding circumstances. The Court of Appeal identified the relevant commonly known - - -

KIRBY J: How does the Real Property Act issue fall? Does it fall to advantage you? In one sense it would seem to do so because you just go back to the words of the grant and that has to be construed at least in the context of the grant as between the grantor and the grantee.

MR HUTLEY: My learned friend in his submissions really wants a bob each way in relation to this. At one stage he keeps telling your Honours we go back to the grant and that is all we go to, and - - -

GUMMOW J: Can I just put this to you, Mr Hutley? I think a muddle has arisen in all of this. You get into this question of surrounding circumstances and what they thought about it if there is an injunction action based on excessive user. You do not get into it when you are initially construing what is on the Real Property Act register.

MR HUTLEY: Your Honour, excessive user, of course - - -

GUMMOW J: Then all sorts of discretionary factors come into play and the injunction application.

MR HUTLEY: I accept that completely, your Honour.

GUMMOW J: That is how the system works, it makes sense.

MR HUTLEY: Your Honour, firstly, there is the construction issue - - -

GUMMOW J: Do not forget that Harris v Flower was such an action.

MR HUTLEY: I accept that, your Honour.

GUMMOW J: There were two arguments in Harris v Flower. One, abandonment, which would not work under the Torrens system and, two, excessive user and want an injunction.

MR HUTLEY: Yes, and in Harris v Flower the excessive user in a sense can have two meanings and in the older cases there was a tendency to use excessive user in relation to what your Honour has identified as the first question, namely, what is the scope of the easement. Then there is also a question, even if the user as an act is an act contemplated whether the way it is done amounts to excessive user. For example, if one had a right of way to pass and repass, it could be if you had trucks going 24 hours a day, back to back, even though the use of trucks would be permitted there would be excessive user. So there are those two concepts of excessive user at play.

Harris v Flower was essentially a case about the first question because it was an injunction against the threatened user, so the actual amount of the user did not - - -

GUMMOW J: A quia timet action.

MR HUTLEY: Quia timet, exactly.

GUMMOW J: This case is not a quia timet action, is it?

MR HUTLEY: No. It is a declaration for a question of - - -

GLEESON CJ: Did this case occur in the form in which it occurred and at the time at which it occurred because of the local government requirements that are behind the second case we are about to look at?

MR HUTLEY: I am sorry, your Honour, I missed the thrust of your question.

GLEESON CJ: Did this issue arise, at least in part, because the council was requiring Mr Walker’s clients in effect to obtain an easement of the kind they said they already had?

MR HUTLEY: I am loath to speak as to the motivations of Westfield. Their interests are - - -

GLEESON CJ: I am talking about what the council required. Is that not what we are dealing with this afternoon?

MR HUTLEY: The council required under the condition case, which we will be coming to – but this, I think, was developed independently – or not independently – but as a second stream along those lines. They were not being run quite in tandem, but they were being run as two streams. In one view, if we were successful on the condition case and my learned friend is successful on the construction case, my learned friend’s commercial position would not be harmed by the condition case. That is one of the reasons why the cases are so intimately linked.

HEYDON J: Mr Hutley, on page 929 Justice Hodgson sets out two possible approaches to the construction of easements; one he did not favour but found that the authorities compelled him to accept, the other he favoured. Which do you favour, if either, do you remember? At paragraph 27 on page 929 he says you could apply a Codelfa approach. He does not personally favour that, but he says an English case supports it and he follows the English case. Secondly, he says you could limit your attention to “objective circumstances readily ascertainable by the public in general”, which would exclude all private communications between the parties. Do you favour that second one or do you - - -

MR HUTLEY: Your Honour, from a policy point of view, the second one is certainly preferable, if for no other reason, because the matters are on a public register they are likely to survive over time.

HEYDON J: But do you submit that it is correct?

MR HUTLEY: One of the difficulties with public registers is that that really, in a sense, is just the beginning of the inquiry. To some extent one then has to sit down and start interpreting public registers. Public registers are often produced for different purposes other than purposes associated with the true construction of an easement. That is particularly the case in this case. At the end of the day, we submit that, in essence in respect of an easement, particularly an easement in these terms, you can look to physical matters about the property and surrounding properties at the time because they are likely to be enduring and endure in a way that one can determine at a remote period.

Secondly, they are not, as it were, phrased for purposes which may be remote from the purpose with which the Court is concerned, namely, the construction of an easement. Councils produce documents no doubt for their own purposes associated with their own role. That has very little to do with the true meaning of easements.

HEYDON J: So your position is that neither of those is correct but, rather, you limit your attention to the physical conditions of the land adjoining a nearby land?

MR HUTLEY: That is particularly in the case where you have a grant – yes, that is generally our approach. Nothing beyond that really is of any significance in relation to this easement.

HEYDON J: There is no Australian case that has to be overruled.

MR HUTLEY: No, I do not think so. Justice McHugh’s statement in Gallagher v Rainbow has certainly, below this Court, been treated as stating the law and has been followed in many cases. If one were to depart from that, it would be necessary to make clear that that position was no longer the case. We were content to accept the position stated by Justice McHugh because – and I will come to the evidence in - - -

HEYDON J: But Justice Hodgson effects a certain amount of damage on Justice McHugh.

MR HUTLEY: Well, not on the surrounding circumstances evidence point. To refer back to the question Justice Gummow was raising, Justice Hodgson is concerned particularly about the question of excessive user. Permissible user becomes quite difficult, and excessive user, in circumstances where you have an easement in general terms. Basically it permits anything falling within the grant.

That was the point of disagreement between Justice Hodgson and Justice McHugh, not upon this point. Justice Hodgson followed the position stated by Justice McHugh in this case. We submit that there really is no evidence in this case which really requires a final determination of that question as to the relevant surrounding circumstances. My learned friend, and I will come to them and we have dealt with - - -

HEYDON J: Mr Frazer’s conversation that you rely on would be out on your preferred view.

MR HUTLEY: Yes, Mr Denoon’s conversation. We would say if it is in – if you are allowed to have regard to these broad sort of general discussions there was a clear agreement, we have got the best direct evidence of what the object of these parties were in the discussion between Mr Hayson and Mr Denoon who were the relevant principals, and it is a conversation totally at odds with what the position my learned friends advance.

My learned friends seek to rely upon communications from one party only, namely, Skygarden, not established to be agreed or accepted by Glasshouse, in substance, communications which took place after the relevant time. They are communications with council for different purposes not associated with the grant of the easement but seeking to pursue a different interest at a different time.

HEYDON J: Mr Walker says they are admissions or some of them are admissions.

MR HUTLEY: Well, your Honour, my learned friend called all the witnesses, he called from both sides. My learned friend in effect did not call somebody from Glasshouse to say, “We understood that was the use to which this easement was going to be put. We knew it and we agreed with it”. In other words, no one was called relevantly from Glasshouse. The only evidence from Glasshouse is that they entered into an agreement to get access to and from Skygarden.

GLEESON CJ: Do you take the expression “surrounding circumstances” to mean surrounding physical circumstances?

MR HUTLEY: Yes.

GLEESON CJ: And none other?

MR HUTLEY: None is always a – but there - - -

GLEESON CJ: What about surrounding political circumstances? By that I refer to the politics of local government planning wanting to get pedestrians off the Pitt Street mall and so forth.

MR HUTLEY: Can I say, your Honour, the person who deals with a council is one side of this transaction, that is, the person who is seeking the development consent. The intersection between that individual’s desires and needs and the politics no doubt frames their attitude in communications and the like. It does not in any way necessarily involve that the other side of the transaction, that is the grantee, will join in or be aware of those politics - - -

GLEESON CJ: Which might mean that they are not helpful in construction.

MR HUTLEY: Quite.

GLEESON CJ: Assuming you could show that the people were aware of them, would they be relevant?

MR HUTLEY: In our respectful submission, in the face of clear words or words of a standard form such as we are dealing with here – and it is to be recalled this is in effect a standard form – they are of no assistance.

KIRBY J: The problem with the so-called clear words is that they are in such absolute terms, “for all purposes”.

MR HUTLEY: I accept that, your Honour, and I have to deal with that, but they have been in those absolute terms for 150 years. In essence, the cases, as said - - -

KIRBY J: But I think Justice Hodgson relied on the fact that some easements have a much more explicit and confining expression of – or he referred to that fact.

MR HUTLEY: Historically, of course, many of the leading easement cases, as your Honour would appreciate, were implied easements. They were easements, in effect, which were only established on the basis of really, in effect, the fiction of loss more than grant on the basis of usage. Therefore, many of the earlier cases, the scope of the easement was purely to be derived from the acts of exercise. There are many cases which deal with those sorts of problems and there are some where there are expressed grants which are used in very limited terms.

KIRBY J: Presumably the Real Property Act is designed to get away from that.

MR HUTLEY: Your Honour, not only has the Real Property Act adopted that form. Your Honour, in Victoria in the Transfer of Land Act a very similar form is to be seen in Schedule 12 where the terminology is:

Together with full and free right and liberty to and for the registered proprietor . . . to go pass and repass at all times hereafter and for all purposes and either with or without horses . . . into and out of and from the said land - - -

HAYNE J: On this drafting aspect and, in particular, the aspect of your argument which hinges upon “to and from” the land, what, if any, assistance may we derive from consideration of Schedule 8 to the Conveyancing Act? There are two parts to this question, one of which you may wish to take on notice. Firstly, Schedule 8 has been subject to amendment, so presumably we would be looking to Schedule 8 in the form it stood at the time of the creation of the instrument with which we are concerned. Subject to that question, when you go to Schedule 8, you find in Part 1 the right of carriageway to and from. Part 2, the right of foot way to and from. Contrast that with Part 3, draining water, which is across and through. Likewise, Part 4, drain sewage. I have in mind particularly then Part 14, right of access. Now, the right of access is confined to the owner of the land. It is not extended, at least in terms, is it, to persons with the permission of the owner? But, be that as it may, Part 14, 1(a):

by any reasonable means pass across each lot burdened . . . to get to or from the lot benefited –

Now, that in different words seems to be the essence of the construction you urge upon us, is it not?

MR HUTLEY: Yes, your Honour, it does. I do not want to - - -

HAYNE J: What use can we make of these standard forms in considering the issue that we have?

MR HUTLEY: Your Honour, can I answer this in two ways? We investigated the source of the standard form in the Conveyancing Act. Standard form was brought about by an amendment Act in 1930. It does not appear to have been derived from any cognate or similar legislation overseas. The form it took – and we can give your Honours the second reading speech if it would assist your Honours – essentially was that it was the result of, in effect, conveyances and the Bar in New South Wales.

GUMMOW J: We better have that, I think.

HAYNE J: Good conveyancing practice at the time.

MR HUTLEY: Yes. The amendments to the Transfer of Land Act in Victoria seem to have come about in 1957 as a result, in effect, of a series of articles, as we understand it, by an English academic, criticising the Torrens system. That led to a report which criticised the English academic for criticising the Torrens system and some amendments.

HAYNE J: To make plain what was plain already.

MR HUTLEY: But, your Honour, it is important, we say, that this “for all purposes” was adopted after that form of consultation. Again, when I come to the cases, it was a phrase which was not invented in New South Wales in 1930. It was a phrase that had been used at least from 1850 in England and in the leading case Harris v Flower Lord Justice Cozens-Hardy has treated the easement there given as an easement “for all purposes”.

GLEESON CJ: Presumably, Evatt and Beckenham’s conveyancing laws and precedence before that had this.

MR HUTLEY: We were not able to find anything particular, your Honour, but we will look again and if we find anything we will pass it on to the Court.

GUMMOW J: That is the substance of your submission, though, is it not, in other words, “to get to and from the lot benefited”?

MR HUTLEY: Yes, “for all purposes”.

GUMMOW J: Yes.

MR HUTLEY: There are exceptions, and I will take your Honours to them in due course, for minor, in effect, going somewhere else if your object is to go to the lot benefit, ie, the incidental car park on the edge. That gets back to the colourable purpose point where they say your purpose in using the right of way to get to the car park is for the purpose of using the dominant tenement. Your purpose is not to get to the car park. It is in the, as it were, somewhat technical sense used by my learned friend would have it, but your real purpose is to go to the dominant tenement.

KIRBY J: A bit of a problem may be is that in terms of the grant, it is not “to go pass and repass at all times for all purposes.” The preposition “and” is interposed. So it is “to go pass and repass at all times and for all purposes”.

MR HUTLEY: “To and from.”

KIRBY J: “With vehicles to and from.”

MR HUTLEY: The “to and from,” in a sense, is express in that easement. You will see in some of the old cases the easement is merely just appended to the dominant tenement to a right of carriage way for all purposes.

GLEESON CJ: Your proposition is that the dominant tenement is the destination.

MR HUTLEY: Yes. Can I finish off what I wish to say about the admissible evidence of the common understanding. I think I have said all I need say in that. We dealt in detail with the matters relied upon by our learned friends in our written submissions from paragraph 60 and following, and I do not need to take your Honours through them. In essence, in the written submissions, my learned friend’s submissions amount to this, that the Court of Appeal should have engaged in some dot joining exercise.

KIRBY J: Some?

MR HUTLEY: My learned friend’s written submissions at paragraph 31 said is that the Court of Appeal failed to engage in “joining the dots” with respect to - - -

GUMMOW J: What paragraph is that, Mr Hutley?

MR HUTLEY: That is paragraph 31, page 11. As we understand it, the fate of this easement should have depended upon a dot joining exercise by the Court of Appeal by reference to the documents, pieces of information and come to the conclusion after doing that dot joining exercise that the common intention was that the easement would be used by Skygarden for the purpose of introducing third persons – properties to more remote properties.

There was no doubt that it was contemplated that some time in the future it could be that the physical pathway passing over Glasshouse could be used to access remoter properties. There was no doubt about that. That is completely different to contemplating that these parties were conferring upon Skygarden a right under its easement to introduce those remoter people.

KIRBY J: The only thing that is a bit attractive in Justice Brereton’s approach prompted by the idea of filling the dots is that leaving aside these particular parties – which you cannot really do, we have got to construe this easement – one thinks that this is going to be a very common problem in cities and that therefore easements provided will interrelate and, like water, the traffic of pedestrians will flow accordingly. What we are trying to do like Canute is to put a barrier up and say you cannot do it.

MR HUTLEY: Your Honour, since your Honour has raised the question, I feel I can make a floodgate submission. My learned friends are right. Every easement granted on the standard terms is now, effectively, a right of tollway insofar as there are remoter properties. There is nothing to - - -

GUMMOW J: It would confer upon the dominant tenement a commercial advantage of charging other parties adjoining for this use.

MR HUTLEY: Not just adjoining, your Honour. If they can do a deal with the person adjoining, they can do a deal with a person remoter. In other words, if an easement is granted in the standard terms under the Conveyancing Act, there is nothing to stop any property owner, if it is for their advantage – because my learned friend’s submission is as long as it, in a sense, for your commercial advantage or it is of value to you as a property owner – to introduce third parties. That can go on forever. We would submit that if anyone contemplated that was the effect of it, one would have thought that there would have been some litigation or something said by way of second reading speech in relation to such things as the Conveyancing Act.

KIRBY J: Yes, but that was written in 1930. We have got to make it apply in 2007.

MR HUTLEY: Your Honour, these easements in this form “for all purposes” have been put in place since 1930. It is a standard term. If this change is to take place - - -

KIRBY J: I do not think there were any underground tunnels in cities in Australia in 1930.

MR HUTLEY: But, your Honour, its subterranean nature cannot affect the character of the extent, the scope of the easement. It merely identifies where the easement has been placed. Every easement granted over every piece of property in terms of this variety, as we understand my learned friend’s submission, now, in effect, can be utilised as a tollway.

KIRBY J: Essentially your bottom line is, if you want to fill the dots and it involves doing something that is different from the terms of the easement, you have to pay for it.

MR HUTLEY: You can pay for it. If, for example, this had said “to and from and across”, a very real question would be whether that was an easement in gross insofar as it referred to as “across” because then a real question would then arise as to whether such an easement could accommodate or benefit the dominant tenement as that law has been - - -

GUMMOW J: It could, could it not? It could confer a valuable commercial right, to charge a toll.

MR HUTLEY: Accommodation under the cases is not co-extensive with commercial value.

GUMMOW J: That is true.

MR HUTLEY: It is different from restrictive covenants in that respect. Our learned friends in their written submissions referred to cases dealing with restrictive covenants. The authorities are that it has to be reasonably necessary for the enjoyment of the dominant tenement. As a matter of history, we say, tollwayism has not been held and has in fact been held not to be a characteristic of a tenement such as to be able to be protected or advanced by acquiring an easement.

KIRBY J: Mr Hutley, before we adjourn, just so that I will understand how these two cases interrelate, if you win on the appeal, do we still have to consider the special leave application or was that so belatedly filed by you defensively of your position? In other words, did you delay so long because you were so confident of the appeal that you did not really think it was necessary?

MR HUTLEY: Your Honour, I was facing a judgment of Justice Brereton. I did not know that that was going to be successful until 1 December.

KIRBY J: You knew when it was handed down.

MR HUTLEY: We knew when it was handed down. Your Honour, I have said what I have said before your Honours in Brisbane - - -

KIRBY J: I just want to understand how the two cases relate.

MR HUTLEY: Central to the question of construction of the condition is the construction of the easement because the Court of Appeal in the condition case, in effect, imported into the condition the easement. If the easement has a meaning such as my learned friends advance, that would change the context in which one construes the condition, but we say the condition case has an independent importance, not just dependent upon the outcome of the easement case, because, we submit, that what the Court of Appeal did in the condition case is really not construe the instrument at all. They merely, in effect, imposed a meaning upon it which bore no relation to the text - - -

KIRBY J: You have to win both cases then. You need to win both cases.

MR HUTLEY: I wish to win both cases, yes.

GLEESON CJ: Is that a convenient time, Mr Hutley?

MR HUTLEY: May it please your Honour.

GLEESON CJ: We will adjourn until 2.15

AT 12.46 PM LUNCHEON ADJOURNMENT

UPON RESUMING AT 2.18 PM:

GLEESON CJ: Yes, Mr Hutley.

MR HUTLEY: Turning to the fourth issue, that is “for all purposes,” that phrase has been used in association with easements since at least 1850. The earliest case we have been able to find is Ackroyd v Smith [1850] EngR 1; (1850) 10 CB 164, 138 ER 68. The terms of the easement, your Honours will see, appears in the headnote. Setting aside the observations of Sir Robert Megarry in Nickerson v Barraclough in [1980] Ch 325 at 366 - - -

GUMMOW J: What do you get out of a headnote of Ackroyd?

MR HUTLEY: They were used “for all purposes.”

GUMMOW J: What did the case decide?

MR HUTLEY: The case decided you could not use it for access to remoter properties.

GUMMOW J: Because?

MR HUTLEY: Because, I will take your Honour, because it was a colourable use of the easement which was an easement “for all purposes” of the dominant tenement.

GUMMOW J: Are you saying it helps you?

MR HUTLEY: Yes. I am not taking your Honour particularly to the detail of Ackroyd v Smith. It was seen as authority for that by the Supreme Court of Canada in 1899 in a case which I will I take your Honours to shortly.

HAYNE J: The relevant passages in Ackroyd v Smith are at page 77 of the English Report, 187 and 188 of the nominal report.

MR HUTLEY: Thank you, your Honour. I am conscious of the time and I do not want to belabour your Honours.

GLEESON CJ: In the 1951 edition of Evatt and Beckenham’s Conveyancing precedents the form that they provided as a standard form says “for all purposes connected with the use and enjoyment of the dominant tenement”.

MR HUTLEY: Yes. Some of the cases used that phrase, but that phrase does not really take the matter any further because it is essential for - - -

GUMMOW J: It is epexegetical of Ackroyd, actually.

MR HUTLEY: I am sorry?

GUMMOW J: It may be epexegetical of Ackroyd. That is what Ackroyd said.

MR HUTLEY: Yes, I accept that, your Honour.

GUMMOW J: The general words meant.

MR HUTLEY: Yes, exactly. Setting aside Nickerson v Barraclough, we submit the only cases that have ever allowed use for a remoter property have been those which I have referred to as the incidental cases, the car parking cases. The most recent example in Australia of that is the decision of the Full Court of Western Australia in Sheehan v Corrine Court which is reported in [2001] WASCA 311; (2001) 25 WAR 65 where access to a car park was allowed because the car park was solely used for access to the dominant tenement and the court held that the use of the right of way to get to the car park was only for the purpose of the dominant tenement.

KIRBY J: These are just particular incidents in particular contexts. What I am still concerned about, looking at some of the maps of traffic flows and so on, is that given this context we are in the middle of the city of Sydney, we are in the most busy and prosperous and pedestrian rich – Justice Heydon says civilised, but I will not add that adjective – area of the nation. I am just concerned that we do not solve this matter by reference to 19th century cases without at least considering how they operate in this particular context.

MR HUTLEY: Your Honour, can I say by way of observation in response to what your Honour has said, firstly, it is the richest part of the city and it is dominated by commercial organisations who can buy and sell interests as they think fit. There is no, in our respectful submission, policy reason which would inform or lead to a construction in respect of this easement any different to every other commercial instrument easement, and most of the cases which I will take your Honour to essentially were commercial easements, or many of them were, throughout history.

All that one is concerned with at the end of the day is, should a servient tenement owner who is given an easement in favour of dominant tenement find that it is being used to access any number of properties who, if they wished an easement over the servient tenement, would be perfectly capable of buying one if they could enter into arrangements with the intermediate properties.

GLEESON CJ: Mr Hutley, I am not suggesting for a moment it is this case, but just to test the proposition about construction. Suppose in this case contrary to the fact there were a document extrinsic to the deed and the grant and the register which recorded the common intention of the parties that if the owner of the dominant tenement ever came also to be the owner of Centrepoint and the Imperial Arcade the right of way could be used for the purpose of access through the dominant tenement to those other areas of land, would that be admissible in evidence to construe the easement?

MR HUTLEY: Your Honour, we would submit, no. It might be - - -

HAYNE J: As between which parties is the - - -

MR HUTLEY: I was about to come to exactly that, your Honour. It may be admissible as between the immediate parties to establish, firstly, that the agreement should be rectified, that there was in effect an agreement between them, that in effect the other properties if it came into the ownership of the dominant tenement owner would be properties which became dominant tenements, hence, there are one or two cases where these sorts of construction issues have arisen as to is it the intention that there be a further dominant tenement, but as between remoter parties successors in title, we would say, it is absolutely irrelevant.

GLEESON CJ: What about admissions against interest by predecessor’s in title, would that be relevant?

MR HUTLEY: No, your Honour. Again, we would submit that as between the parties with respect to possibly rectification and the like, yes, but not as between remoter parties because there would be no limit then. We would be in the situation we are – could be here is, what does one make, for example, in this case of the oral communications between these parties? It would seem to be inconsistent with my learned friend’s case. We do not advance those as relevant evidence unless the Court of Appeal was wrong in excluding the material in which event we say, well, Justice Brereton was wrong in ignoring that material which is utterly inconsistent with the factual conclusions he came to.

GLEESON CJ: There was a statement by Lord Jessel when he was the Master of the Rolls in the case of Cannon v Villars that says:

the grant of a right of way is the grant of a right of way having regard to the nature of the road over which it is granted and the purpose for which it is intended to be used –

Where can you look to find that purpose?

MR HUTLEY: Within the instrument.

GLEESON CJ: And the surrounding physical circumstances?

MR HUTLEY: Let it be assumed that the way was constructed in a particular fashion which was utterly inconsistent with it being used for automobiles and the way, for example, was ambiguous as to the use instrumentally of the way you can have regard to the locus in quo traditionally to do that, whether one could do that with respect to a Real Property Act easement in modern day is debatable, but many of those cases which are dealing with those questions of the use of the way were concentrating on both the terms and the physical structure, for example, across meadows which were not susceptible to carrying modern day lorries and the like.

HAYNE J: But also were cases of acquisition by prescription.

MR HUTLEY: Quite, your Honour. Many of the principles are expressed as arising out of those prescription cases and then they had to be applied to the grant because of the - - -

GUMMOW J: A number of the prescription cases were tried by juries.

MR HUTLEY: Quite, and, your Honour, they depended on the fiction of the lost modern grant and therefore one had to allow, as it were, surrounding circumstances, even subsequent evidence of course, to go to the process of proving the content of the grant. So the fiction which drove them influenced the content of the material to which reference could be had.

We submit that the reason why one cannot get access to remoter grants is because it is common ground that an easement must benefit the dominant tenement and the dominant tenement only. We submit that the requirement entails, and has been held to entail, a need that the end sought to be achieved in the use of the easement must be for the benefit of the dominant tenement. That is a use with the object of benefiting a remoter property. It is not the use for the benefit of the dominant tenement.

Can I take your Honour to what has become referred to as the leading case, at least in England, as Harris v Flower (1904) 74 LJ Ch 127. The facts there were that the dominant tenement, which was referred to in the reports as the “pink land” had the benefit of a right of way, the terms of which your Honours will see at page 127 in the second column at about point 3 and which Lord Justice Cozens-Hardy at page 133 of the report, column 2 at point 3 described as “a right of way for all purposes”. The right gave access to Prior Street. The land adjoined premises, that is the pink land, which were a public house and they were referred to in the report as the “white land”. The white land had no access to Prior Street.

The pink and white lands came into common ownership. The owner ultimately constructed a building which straddled the boundary of the two parcels and was proposing to use that building as a factory. The factory was only accessible by use of the right of way as it had no entrance from the white land. The Court of Appeal reversed the decision at first instance of Mr Justice Swinfen Eady and restrained the use. Can I take your Honours to the report.

At page 129 in the report at about point 6, Lord Justice Vaughan Williams identifies the question which is raised by the case. He says:

The question that is raised in this case is whether the defendant is entitled to use the right of way, which admittedly is a right of way appurtenant to the pink land, for the purpose of approaching the buildings erected partly upon the part of the white land which is not used for the purposes of the public-house and partly upon the pink land to which the right of way is appurtenant.

His Lordship then goes on to consider the approach of Mr Justice Swinfen Eady. Can I take that up on the next page, which is page 130, at the top of the left-hand column. It says:

But what Mr Justice Swinfen Eady does is to ask himself the question whether upon the facts of this case the defendants are using the right of way bona fide for the purposes of access to the pink land, and his conclusion in effect is that the defendant is so using the right of way for the purposes of access to the pink land.

His Lordship then goes on to consider Skull v Glenister and your Honours will see there that the question formulated in that case was whether the use was colourable or bona fide. His Lordship then goes on to consider Williams v James which is a similar sort of case. He refers to the statement of Mr Justice Willes who delivered the second judgment and says:

To be a legitimate user of the right of way, it must be used for the enjoyment of the Nine-acre field, and not colourably for other closes.

I think one can pass down to the bottom of the second column. It says:

That being so, we have to consider here what was in substance and intention the user claimed by the defendant in the present case. There has been very little actual user, and we have to deal rather with what the user threatened is. The question of the user is a question of fact; but if we come to a conclusion different from that at which Mr Justice Swinfen Eady arrived, it will not be on a question of fact –

Factual questions. They then go on to consider the facts of what is proposed. At page 131 in the second column at about point 2 his Lordship formulates the question:

Would such a user under these circumstances be for the purpose of obtaining access to the building on the pink land, or would it be a user for the purpose of obtaining access to the white land?

He then deals with that. The argument put to support it your Honours will see taken up at about point 7 on the page where it says, “But he says”, which is the argument to the contrary, “although that is so” – that is, it is going to the other land –

it is justified under the user of the right of way as appurtenant to the pink land, because what he is really doing is getting access to the pink land, and it is a reasonable user of the pink land to build on it this part of the building: and that being so, he is not the less using the right of way for the purpose of access to the pink land because he is in a position to walk into the rest of the building which is built on the white land; in other words, the proposed user is really access to the pink land, and the access to the white land is a mere subsidiary user, and the principal user is for access to the pink land. I cannot agree. I think if we look at the whole history of this case, including the cutting off –

That had to do with the history of building the factory partly on the back of the white land –

except by this right of way, it is impossible to say that the defendant is not using this right of way for the purpose of access to land to which the right of way is not appurtenant.

KIRBY J: This seems to be a fact specific determination. Maybe there is nothing else one can do, but we do have different facts here. We have got a CBD arrangement which is a very different thing to the facts that were considered in 1904 in the Chancery Division.

MR HUTLEY: With respect, no. This was in effect commercial property which the owner of the dominant tenement was seeking to use in conjunction with remoter property for his commercial advantage. That is precisely what my learned friend’s case is. He says he wishes to use the Skygarden property in conjunction with not only Imperial Arcade, but the Centrepoint.

GLEESON CJ: The word “way” carries with it an idea of destination, does it not? If you look at page 130 of this report in the left-hand column where they identified a question put to the jury:

Did the defendants really use the way with carts and wagons as a way to Wheeler’s land, or did they really use it as a way to the houses they were building?

The idea of a way is a way to something.

MR HUTLEY: Yes, to and from. Can I return then to page 132. At about point 3 his Lordship says:

I cannot help thinking that there not only may be, but there must be, many things to be done in respect of the buildings on the white land which cannot be said to be mere adjuncts to the honest user of the right of way for the purposes of the pink land.

Then he goes on to consider such things as building on the white land. Then passing down to the last paragraph his Lordship says:

The reason of it is that a right of way of this sort restricts the owner of the dominant tenement to the legitimate user of his right; and the Court will not allow that which is in its nature a burthen on the owner of the servient tenement to be increased without his consent and beyond the terms of the grant . . . It is not a mere case of user of the pink land, with some usual offices on the white land connected with the buildings on the pink land. The whole object of this scheme is to include the profitable user of the white land as well as of the pink, and I think the access is to be used for the very purpose of enabling the white land to be used profitably as well as the pink, and I think we ought under these circumstances to restrain the user.

Can I then go shortly to the judgment of Lord Justice Romer. At about point 7 on the page is the statement which appears in most of the text:

If a right of way be granted for the enjoyment of Close A, the grantee, because he owns or acquires Close B, cannot use the way in substance for passing over Close A to Close B. This proposition of law is admitted . . . I will take once instance. The defendant has used, and claims a right to use, this right of way for the purpose of carrying building materials for the part of his buildings on the land coloured white. That, to my mind, is a user of the right of way for passage over the land coloured pink for the enjoyment of this land coloured white. It is impossible to say that by reason of one building being on both lands the defendant has made the right of way which was granted for the enjoyment of the one a right of way for the enjoyment of both, and that is what the defendant is really doing. That would substantially enlarge the grant of the right of way -

and other instances, et cetera.

Finally in his Lordship’s judgment, at the bottom of the first column at 133 he says:

Similarly, in the present case the defendant might have erected a building on the land coloured pink and used it for a contractor’s business, and made use of the right of way for that purpose; but what he is really doing here is, under guise of the enjoyment of the dominant tenement, to try and make the right of way become a right of way for the enjoyment of both lands, the pink and the white, and using the land coloured pink as a mere continuation of the right of passage from the pink to the white. That is not what is justified –

et cetera. Finally, in the judgment of Lord Justice Cozens-Hardy, his Lordship says:

It is a right of way for all purposes – that is, for all purposes with reference to the dominant tenement. The question is whether the defendant has not attempted, and is not attempting, to enlarge the area of the dominant tenement.

HAYNE J: Just before you pass from that, can one summarise the argument thus far as two propositions? One, “to and from” which we find in the words of the grant are words of destination and origin, destination in the dominant land or origin from the dominant land. The notion of “destination” which ordinarily is conveyed by use of the words “to and from” is reinforced by considerations of when an easement is properly to be regarded as appurtenant to the dominant land.

MR HUTLEY: Yes, your Honour.

HAYNE J: That is where we have got to, is it not?

MR HUTLEY: Yes, your Honour.

GUMMOW J: Bound up with this notion of appurtenance, really.

MR HUTLEY: Yes. There has been a debate as to whether these cases are purely cases about construction of the easement, ie, the scope, or they are cases about appurtenance, as your Honour has observed.

HAYNE J: The dichotomy is false.

MR HUTLEY: Quite, exactly.

HAYNE J: They are about both.

MR HUTLEY: They are about both. The best proof that they are about both is that no one has set down in the light of these cases, insofar as we have been able to see, and drafted an easement which is to, from and across. No one seems to have tried to do that so far as the cases we have been able to determine.

GUMMOW J: If it did do that, would that raise a question of appurtenance?

MR HUTLEY: Exactly.

GUMMOW J: You would be in Ackroyd v Smith territory.

MR HUTLEY: Exactly. When Justice Brereton said it is really all a question of construction and that is the only question it is, that, in our respectful submission, misunderstands what is really being discussed in Harris v Flower. It is apparent from Lord Justice Vaughan Williams’ judgment he is talking about both. They are really, in effect, two sides of the same coin.

HAYNE J: There may perhaps be a third proposition which is a negative proposition about “for all purposes.” “For all purposes” may more naturally be seen as attaching to the notions of going, passing and repassing and that there are not limited purposes for the relevant identified journey, but that says nothing about destination or origin of it.

MR HUTLEY: I take your Honour’s point. When we come to the next decision of the House of Lords in Alvis v Harrison and particularly the decision of the Court of Appeal in Peacock v Custins, the cases are tied very much to the concept of purpose in the sense of the end you are seeking to achieve. In one sense, they are all saying exactly the same thing, which is encapsulated in what your Honour has put to me.

HAYNE J: But you identify destination in some cases by working out why you are doing it.

MR HUTLEY: Precisely. Can I take your Honours to the decision of the House of Lords in Alvis v Harrison (1991) 62 P & CR 10. Now, this was an appeal from Scotland, but as appears from the reports, the statements, the principles were said to be identical to the principles in English law and the speech was in the speech of Lord Jauncey of Tullichettle. Now, there the owner of the dominant tenement had a servitude right of access over a driveway and that servitude right of access, the driveway, led off the A73, which was a highway from Lanark to Carluke. The dominant tenement was a property which abutted the driveway and included a woodland. In 1980 the dominant owner built a road from the driveway over the woodland to the highway. Now, the question of interest for this appeal appears from page 13 of the report towards the bottom of that page.

The question which arises in this case –

Do your Honours see that?

GLEESON CJ: Yes.

MR HUTLEY:

The question which arises in this case however is whether he was entitled at point 7 –

which was a point along the driveway. There was a question in the case as to whether you had to move in through a usual access or not, but that does not matter for present purposes –

to take access in to the woodland to the east of the road not for purposes in connection with the woodland but in order to traverse the woodland so as to obtain access to the A73. In my opinion, this was something that the defender was not entitled to do. There are a number of reasons for this conclusion.

Then it goes on to - but I will not – if your Honours then move over to page 14, the passage towards the bottom:

My Lords, it must be borne in mind that the issue to be decided depends first and foremost upon the construction of the grant of servitude upon which the appellant relies. It may be that in order to determine the true construction of an express grant it is necessary to have regard to surrounding circumstances prevailing at the time but if the terms of the grant are clear and unambiguous the character of the any actual possession and use at the time of the grant or thereafter is of no consequence. The grantee may make as much or as little use of his right as he pleases: Gibb v. Bruce. There is thus an important distinction between the considerations applicable to an express grant of servitude and to a grant implied by prescriptive possession.

Then at the top of page 15:

Before turning to the facts of this case it may be convenient to state certain general principles applicable to servitude rights of access and their use:

(1) Where a right of access is granted in general terms the owner of the dominant tenement is entitled to exercise that right not only for the purpose of the use to which the tenement is then being put but also for any other lawful purposes to which it may be put thereafter . . .

It follows, and this is no in dispute either, that the defenders as proprietors of the dominant tenement are entitled to use the lane for traffic of all kinds which is intended to serve, and which in fact serves, any lawful purpose to which they may choose to devote the dominant subjects. Putting the matter in another way the defenders are entitled to obtain access to the dominant tenement in connection with the purposes for which they elect to use it and facilitate the carrying on of those purposes.

Then there is a reference below that to:

the Deed of constitution of this Servitude there is nothing which places any limit on the purposes to which the subjects may be put, and therefore it can be said that not only is there no limit on the extent of user but also no limit on the purpose which the proprietors of the dominant tenement as such proprietors may lawfully pursue within the subjects or for which they may use them.

It appears that the law of England is to the same effect -

Then there is a reference to White v Grand Hotel.

If your Honours then pass down to the passage (4):

A servitude right of access enures to the benefit of the dominant tenement and no other. Thus it cannot be communicated for the benefit of other tenements contiguous thereto.

Then there is a reference to Irvine Knitters Ltd v North Ayrshire Coop. Society Ltd and says:

Lord President, immediately after the passage in his judgment which I have already quoted, said:

What they may not do, however, is to use the way, or permit its use by others, to obtain access to subjects other than the dominant tenement, whether or not they happen to be heritable proprietors of those other subjects. They may not, in short, increase the scope of the right of access, and in particular they may not use the way for the purpose of securing access for persons or goods to subjects contiguous to the dominant tenement by using the dominant tenement merely as a bridge between the end of the lane and the non-dominant subjects.

Then it goes and says that:

Lord Cameron, expressed himself in similar terms and pointed out, as is the case, that the law of England is to the same effect.

Final case I would like to take your Honours to is Peacock v Custins which is a more recent decision of the Court of Appeal.

GUMMOW J: Can you just go back to point (4) on page 15 of Scott’s Case? I think Mr Walker does not dispute that:

A servitude right of access enures to the benefit of the dominant tenement and no other. Thus it cannot be communicated for the benefit of other tenements contiguous thereto.

I think he said to us, well, it is for the benefit of Skygarden to enable the owner of that to control and benefit from further access to Imperial and Centrepoint. You respond to that, I think – I may be wrong about this – by saying that would be one thing to say if this was a restricted covenant case but it is different with a doctrine of.....appurtenance with easements, is that right?

MR HUTLEY: Yes, precisely, your Honour. As his Lordship goes on:

They may not, in short, increase the scope of the right of access, and in particular they may not use the way for the purpose of securing access for persons or goods to subjects contiguous to the dominant tenement –

and that subjects is properties.

GUMMOW J: Is that expressing a view of the doctrine of appurtenance or they get tossed together?

MR HUTLEY: They are identical, in one sense. The “to and from”, “for all purposes” is reflective of the principle that it has to be appurtenant and therefore the issue of so-called construction as to whether it goes further never arises because nobody has ever attempted to, in effect, create what would be an easement in gross.

GUMMOW J: I took you off your course. You were taking us to something else.

MR HUTLEY: Peacock v Custins. That is reported in [2001] 2 All ER 827. Here the dominant tenement referred to as “the red land” had the benefit of a right of way at all times and for all purposes in connection with the use and enjoyment of what is called the red land. The red land was a 15-acre agricultural property. The dominant owners also owned a contiguous block referred to as “the blue land.” The two blocks were farmed as one unit and the right of way was used for farming both blocks.

The judgment of Lord Justice Schiemann conducted a review of all the important cases which commenced at 831 under the heading “The law” towards the bottom of the page. I will not take your Honours to those. Reference was also made at paragraph 21 on page 835 to a decision in Canada of Miller v Tipling which was a decision of the Court of Appeal of Ontario. I will refer to some Canadian cases in a little while. At paragraph 22 his Lordship continued:

The law is clear at the extremes. To use the track for the sole purpose of accessing the blue land is outside the scope of the grant. However, in some circumstances a person who uses the way to access the dominant land but then goes off the dominant land, for instance to picnic on the neighbouring land, is not going outside the scope of the grant.

That is incidental accidental uses. Then his Lordship considered the current case. Can I take your Honours to paragraph - - -

GLEESON CJ: Before you pass over the last sentence at paragraph 22, he uses the expression “a case where one of the essential purposes of the use of the way is to cultivate land other than the dominant land”. That really is the test he applies which involves a distinction between an essential purpose and use and incidental purpose and use.

MR HUTLEY: Yes, your Honour. Then, paragraph 24:

24. The right to use a right of way is determined by the terms of the grant, specifying the dominant tenement for the purposes of which the right is created. Trespass is whatever is not permitted by the grant. The right is not to use the way for the purposes of benefiting any property provided that the total user does not exceed some notional maximum user which the beneficiary might have been entitled to make for the purposes of the dominant tenement. If that were the test, the beneficiary might in some circumstances use the way entirely for the purposes other than those of the dominant tenement. The right is to use the way for the purposes for the dominant tenement only. The grant, when made, had a notional value which would be identified by reference to those purposes and their likely impact. Use for other purposes would be likely to carry its own notional commercial value. The claimants are claiming to use a way granted for the limited purposes of the 15 acres of red land for the extended or additional purpose of accessing and cultivating at the same time the further ten acres of the blue land. That extended or additional use is of self-evident commercial value to the claimants, but any value attaching to it cannot have been embraced in the notional value attached to the actual right of way for the benefit of the red land.

25. Considering the position as a matter of principle, we would consider that the defendants are entitled to the declaration that they seek. In our judgment the authorities to which we have referred, and in particular Harris’ case, also confirm that, where a court is being asked to declare whether the right to use a way comprises a right to use it to facilitate the cultivation of land other than the dominant tenement, the court is not concerned with any comparison between the amount of use made or to be made of the servient tenement and the amount of use made or that might lawfully be made within the scope of the grant. It is concerned with declaring the scope of the grant, having regard to its purposes and the identity of the dominant tenement. The authorities indicate –

et cetera, and then goes on and refers to the passages. Your Honour, the position that we advance has been - - -

GUMMOW J: I have a note that Peacock was applied in a case called Macepark [2004] 3 All ER 1090. Has anyone looked at that?

MR HUTLEY: I am sorry, your Honour, I must confess.

GUMMOW J: And was distinguished in a case of Massey [2002] EWCA Civ 1634; [2003] 2 All ER 87.

MR HUTLEY: I think we have looked – would your Honour bear with me for a moment? The first decision your Honour referred to was a decision of the Court of Appeal which took the statements in Custins as reflective of the law and the second was a first instance decision which distinguished it on the facts of the case. Your Honour, I have not read it. I am told the first instance judge applied it as a matter of law, and I do not know the grounds of the distinction.

GUMMOW J: I will have to have a look at that.

MR HUTLEY: Your Honours, the position as we submit the law is has been accepted in New Zealand at first instance consistently since 1895, and we handed up – I think your Honours will have before you a list of – a document entitled “List of Cases”, a short document. We refer to the decision of White v Chandler [2001] NZLR 28. That refers to a series of single instance judgments in the paragraphs referred to thereafter in New Zealand, all of which adopt the approach we submit is the correct in law.

KIRBY J: Is there any commentary in the professional journals about this case?

MR HUTLEY: About these circumstances, yes.

KIRBY J: About this particular case? The decision?

MR HUTLEY: Not so far as I am aware, your Honour. Not so far as I am aware. Now, your Honour, the next case in the list is a decision of the Supreme Court of Canada in Purdom v Robinson [1899] 30 SCR 64, and we arranged for a copy to be handed up, your Honours. The case was a case which preceded Harris v Flower, but your Honours will see at page 71 of the report in the judgment of the Chief Justice the statements of principle which his Honour derived from Skull v Glenister and Ackroyd v Smith. The third and fourth cases in the list of cases are decisions of the Court of – Gordon and Regan is a decision firstly at first instance in Ontario but was affirmed on appeal for the reasons – shortly, for the reasons of the trial judge, and McKenzie v Matthews is a more recent application of the same principle.

We submit that these words, as is reflected by their adoption in statutes in this country of a conveyancing variety, have established meaning in conveyancing terms which is inconsistent with that advanced by our learned friends. For my learned friends to succeed, that consistent line of authority would have to be determined to be bad in law, and would have the effect of altering what appears to have been a consisting view of conveyances for at least 150 years.

Can I say something shortly about Nickerson v Barraclough. We have said just about all we want to say in our written submissions. However, we wish to make this point. It is apparent that the dictum of Sir Robert Megarry was a dictum expressed in the context of section 62 of the English Law of Property Act 1925. The terms of that statute are not set out in Sir Robert’s judgment but appear in the judgment on appeal at [1981] Ch 325 - - -

HEYDON J: It is actually set out on page 325, is it not?

MR HUTLEY: Sorry, [1981] 1 Ch 426. I do not think the precise terms - - -

HEYDON J: Subsection 1 is but - - -

MR HUTLEY: Yes. I think it appears more fully your Honour will find in [1981] 1 Ch 426 at 444A.

HEYDON J: It sets out some other parts.

MR HUTLEY: Yes. The Court of Appeal, we submit, disapproved of that part of Sir Robert Megarry’s dictum which referred to possible future uses and that is apparent from the judgment of Lord Justice Brightman at page 443E to 445A, particularly at the latter point and Lord Justice Eveleigh at 446C to G. That Law of Property Act had the effect of extending rights which had a reputation of existing so it simply is of little or no assistance in determining the issues in this appeal. Other than that, we have set out what we want to say about it in our written submissions.

Finally, as to the notice of contention, we have submitted in our notice of contention that to the extent that the Court of Appeal referred to the possibility of a use of this land permitting being justified by the possibility of a tollway that it is wrong because the possibility of a tollway does not allow for a right of way to be extended in the way sought because it would not be relevantly appurtenant to the land and I have said all I wanted to say about that.

Finally, if your Honours come to the surrounding circumstances evidence in the way my learned friend advances one would have to have regard to the oral discussions which took place between the parties. Those are our submissions, your Honour.

GLEESON CJ: Thank you, Mr Hutley. Yes, Mr Walker.

MR WALKER: Your Honours, the matter of authority does not support the propositions that my learned friend puts in this case based upon the prepositions “to” and “from” for the purposes of what I will call “destination” meaning ultimate destination. That matter has been considered and as long ago as readings of Ackroyd v Smith itself. For present purposes, for example, one can go to the way in which Ackroyd v Smith was read on the point by the Court of Appeal in Re Ellenborough Park which has been cited by your Honours, in the written submissions, [1956] 1 Ch 131.

At page 172 their Lordships are referring to an argument very similar to the argument which turns here on the possibility that the purposes of those who own or occupy Imperial Arcade and Centrepoint may be served by the purposes of those who cross Glasshouse to go on to Skygarden pursuant to the use of this easement for which we contend. At page 172 their Lordships identify and dissent from this proposition:

If, however, the judge was intimating that, if a right be of such a character that it can factually (as distinct from lawfully) be of benefit to persons other than the owner of the estate to whom the right is granted, it is incapable of legal recognition as an easement, the judge was enunciating a principle which, so far as we are aware, has no other authority to support it.

Their Lordships then refer to - - -

GUMMOW J: This is a law school case, really.

MR WALKER: Yes.

GUMMOW J: There is nothing wrong with it for that purpose.

MR WALKER: No, that is presumably why it is.

GUMMOW J: About this doctrine of appurtenance and easements in gross, is it not?

MR WALKER: Yes, it is, and that is why - - -

GUMMOW J: It is saying it is not an easement in gross to have this “purpose of pleasure” ground.

MR WALKER: That is not the only thing for which it stands, of course. On this page their Lordships in particular go on to refer to the way in which Mr Justice Willes’s observations had been referred to in Todrick v Western National Omnibus Co Ltd [1934] Ch 561. The reference there is to page 573. There are two other references in Todrick which I should give to your Honours because they are germane to the point my learned friend puts. The first is at page 585, the second is at page 591, but before speaking about those passages may I note the way in which the Court of Appeal In re Ellenborough Park deals with the matter. As to this they say:

it is to be observed that, if –

Lord Hanworth:

or Romer and Maugham L.JJ., who sat with him, had regarded the language of Willes J. as establishing the principle now in question, it is difficult to imagine why they expressed no view upon it; for it would have been directly relevant to the decision of the court. The effect of that decision, so far as material to present purposes, was that a right to use a way –

and I stress that word because of the matter that the Chief Justice raised with my friend –

as appurtenant to land can exist as an easement, even though the dominant tenement is not one of the termini of the way. It is clear that such a way is capable of benefiting any passer-by, wholly unconnected with the dominant tenement, who chooses to use it as a shortcut; nevertheless - - -

GUMMOW J: This is sort of beside the point, Mr Walker, is it not, because Megarry & Wade discuss all this in the context of this question, “Is this right, one which is of a general nature, capable of being granted as an easement?” Right?

MR WALKER: Yes.

GUMMOW J: And they say, “It used to be said that a right to use a path or a garden for taking walks was incapable of being an easement, being a mere jus spatiandi, but this right which is of value to many houses adjacent to parks and gardens” and one could think about central London, “has now been admitted into the company of easements” - Ellenborough Park. The same may apply to a right to boat on a neighbouring lake, et cetera. The law of easements is not closed but it is not open to interests which do not conform to the rules about the general nature of easements.

MR WALKER: Quite, and in relation to that last point, in particular - - -

GUMMOW J: What I am really putting to you, if all that were granted here was a right to come out of King Street and get to the Imperial Arcade and Centrepoint and nothing else, would that have been a valid easement? You have to say, “Yes, to get to it by crossing Skygarden”.

MR WALKER: Your Honour means - - -

GUMMOW J: But nothing else. In other words, not to get to Skygarden, but only to get across it. That is the question.

MR WALKER: Yes, your Honour, but we are not contending for that. We do not say that it means that. This not just for crossing. This is also for going to and if need be stopping at Skygarden.

GUMMOW J: I have not made myself clear.

MR WALKER: If this easement had said that you may use Glasshouse for the purpose of traversing but not stopping on Skygarden in order to attain Imperial Arcade and/or Centrepoint and then to return, then, as we understand it, the question which arises, particularly in reference to what my friend calls the accommodation or appurtenance point, is whether that would be a lawful easement, whether that would be an effective grant of an easement. Could such a right be appurtenant to, could it accommodate, Skygarden as the dominant tenement, and the question I apprehend that Justice Gummow was asking me to concentrate on is an easement where the dominant tenement granting such rights on such a limited basis has as its dominant tenement only Skygarden.

Now, the first thing to observe is that that is not the easement in question here. The second thing to observe is that there would need to be, in our submission, consideration as to what it was in the nature of those lots of land in their relation to each other which could supply the answer to the question, “What benefit for the ownership of Skygarden would be given by that power of sole traversing, that is, without the capacity to tarry at Skygarden at all?”

In our submission, commercially there are uses which are very obvious that can be used, particularly if the matter can be subject of what my friend scornfully calls “toll”. In other words, it is a right that can be charged for. In our submission, that is a classic, well-established use and enjoyment of land, namely, to charge for others to enter it. In our submission, were that the case, and I stress that is not this case, there would be nothing in principle contrary to that in the authorities which say, including for the purposes of construing a grant, that the right must be such as may be appurtenant to the dominant tenement.

The reason why I was going to these passages in Re Ellenborough Park is that they are part of the reasoning where they evaluate the proposition that as one of these general characteristics to which Justice Gummow drew attention something is incapable of legal recognition as an easement if the benefit was such or the right was such where it could factually as distinct from lawfully be of benefit to persons other than the owner of the estate to whom the right is granted.

Now, that would certainly be true of what I call a traversing right, just as it is true in the older decisions such as Todrick of cases such as easements for the passage of water where they continue to flow downstream, of course, to those of your neighbours who can thereby benefit from it.

HAYNE J: Traversing right is of value to the owner of the dominant tenement only so long as he or she owns the adjoining land.

MR WALKER: No, your Honour, not at all. You do not have to own land in order for you to be in a position to derive commercial benefit by toll or otherwise, or by contributing that part to a co-operative venture in an integrated development. I stress, an integrated development does not require, although in this case it comes about because of, common ownership. It requires an agreement, and that agreement may come about in a number of different ways.

HAYNE J: By matters personal to the owner of the dominant tenement whether by contract or holding of an estate in the adjoining land.

MR WALKER: That agreement is. That agreement is, but in our submission - - -

HAYNE J: And absent that no benefit to the dominant tenement.

MR WALKER: No, your Honour, you do not need an agreement here to provide the only benefit. In our submission, the potential to be able to charge for traversing is an immediate benefit sounding in the value of the land. It is something this land has that other land does not have, and it would have a position in the market accordingly. But I stress the case of a traversing only way is not the case before this Court. There is no question that this easement includes – the only question is whether it includes anything else other than the right to come onto Skygarden and return from Skygarden without any excursion anywhere else further than that.

That was the point, in our submission, of the Court of Appeal in Re Ellenborough Park, pointing out that a way does not cease to be of benefit to the dominant tenement simply because the dominant tenement is not one of what they call the termini. It is not the end point. It is for those purposes that in Todrick in the passages to which I have referred there is specific reference to the facts of Ackroyd v Smith, pointing out that in Ackroyd v Smith the closing question was not one of the termini.

To go to Ackroyd v Smith itself briefly, may I draw to attention, your Honours, that as to the question of “all purposes”, which was the reason my learned friend went to it, in fact “all purposes” was construed in that case as to include going onto the land and off it onto other land beyond. That is why it failed on the appurtenance or accommodation question. Your Honours will find that in particular in the nominate report page reference 187 in the paragraph commencing “If the right conferred” and then at the foot of that page and the beginning of page 188 of the nominate report. In our submission, when one sees the way in which the argument was put, which can be found at nominate report at page 182 just before page 183, it is clear that that was a decision which, if anything, favours us on the breadth of the expression “all purposes”, albeit it lands us out of that frying pan into the fire of appurtenance or accommodation.

As to Harris v Flower, the important fact to be considered in the case which was analogised by their Lordships with cases put to juries on whether there were mere colourable uses or what was the real use in certain circumstances, or what was the legitimate user, not colourable, it is to be recalled that in Harris v Flower it was the owner of the dominant tenement who had carried out what I will call the works of physical construction which had produced the happy effect for him that the right of way would permit entry onto the pink land and thus onto the white land and indeed had restricted between pink and white a continuation of that way as being the only physical approach.

The case before your Honours today is entirely opposite. It is the owner of the servient tenement who, pursuant to condition 19 of their planning approval which called for just this, designed and made the physical way insofar as they could, that is, on Glasshouse and adjacent to Skygarden, so as to accommodate in terms under condition 19 Imperial Arcade and Centrepoint; not, I stress, David Jones, Central Railway down to Botany Bay. The facts which would be, in our submission, put before a jury just as the facts of pink and white land factory straddling the boundary and the construction of the doorways, et cetera, would be put before a jury according to the way their Lordships addressed Harris v Flower, those facts would have yielded a very straightforward jury answer to the question; is it a mere colourable use of this way constructed by the owners of the servient tenement, not the dominant tenement, to have “all purposes” extend to traversing, as well as staying on Skygarden?

The short answer is that one cannot imagine a jury saying that that is merely colourable in the same way as that conclusion was found in Harris v Flower when it was not the servient tenement but the dominant tenement that had carried out what I will call the pseudo accommodating work. The Chief Justice raised with my learned friend a question which is evoked by a number of the references my learned friend took your Honours to. At page 131 in Harris v Flower, in the right-hand column about point 2 or 3, your Honours will recall my friend taking you to the test question:

Would such a user under these circumstances be for the purpose of obtaining access to the building on the pink land, or would it be a user for the purpose of obtaining access to the white land?

It has to be asked, particularly in light of the principles and authority concerning a way being available even if the dominant tenement not be one of the termini of the way, it has to be asked whether it must be one or the other, that is, are they mutually exclusive? That, of course, raises the question as to whether you can answer yes to both questions, “Is it really for the use of pink, is it really for the use of white”. Then it raises the subsidiary question, the perhaps deciding question in this case, as to whether if it is for both, that invalidates.

Your Honours, could I then go to the Scottish Lords decision, Alvis v Harrison, to draw to attention that there would appear to be used in that fashion as part of the decisive reason something which notwithstanding the declared similarity of English and Scots law would appear not to be the same as the approach taken in England and Wales bearing in mind the strictures uttered in Peacock v Custins. I refer to the reasoning at page 16 of 62 Property & Conveyancing Reports, the long paragraph commencing “With these principles in mind”, the actual decision of the case at which my learned friend departed his reading of it.

Your Honours will see that the first consideration was the general and unlimited terms and, in our submission, that favours us. I am bound to point out that thereafter, particularly the very foot of that page and up to the top of page 17, there is a form of reasoning which not so much disfavours us as is outside what the Court of Appeal said in Peacock v Custins. It is quite opposite, it would appear, because there is a reference to determining the case by deciding whether or not there would be an actual increase of use, that is, trips. That was one of the points which were very strongly made in the Court of Appeal of England and Wales and Peacock v Custins was not the issue at hand and I am bound to say that we respectfully support the English position rather than what I will call the Scots position in that regard and thus cannot call that in aid. However, we do, for what it is worth, note that the actual decision in Alvis v Harrison which was that there was no excess of use included as one, probably not the decisive matter, that reference to the general and unlimited terms and that favours our “all purposes” argument.

Could I then, again in the context of what the Chief Justice raised with my learned friend, go in Peacock v Custins to paragraph 22 at page 835 of [2001] 2 All ER and I should point out to your Honours by way of emphasis that the last sentence of that paragraph poses as the so-called crucial question whether those circumstances include a case where one of the essential purposes “is to cultivate land other than the dominant land”. One knows how that story ended, that question was answered, those circumstances are outside the scope of the grant.

We are not, when we talk about Imperial Arcade and Centrepoint, anything like a picnic on the neighbouring land, so it is of significance obviously to take into account the different facts. We, with respect, answer my learned friend’s argument about this application of authority by saying that the position, factually, known admissibly from the nature of the dominant and servient tenements and the neighbouring land, to the extent that is relevant, could not be more different when one thinks about the farming of 25 acres in two paddocks and the proposed and expressly contemplated redevelopment on a very large scale of central city commercial property generating traffic of unknowable but considerable scale into an indefinite future.

In our submission, the handling of traffic where one has the public notice of and the common knowledge of all the parties of the political regime, not politics in the sense of electoral advantage being sought but politics in the sense of it being the government and the regime which governed the way in which the land could be used, included the notion of funnelling that particular kind of traffic, that is, for deliveries to the Pitt Street businesses, through from King Street, Glasshouse, through or across by going to and from Skygarden and thereafter beyond to Imperial Arcade and Centrepoint and back. When that is know as one of the objective circumstances, neither Harris v Flower nor Peacock v Custins, in our submission, can stand in its way there being no principle of law pronounced in those cases which transcend the force that those particular facts will have.

Your Honours will recall my learned friend, in dismissing the notion of a toll, referred to the authority of Horner which is noted in both written submissions. Could I simply note that in paragraph 58 of our written submissions in-chief we deal with that matter. In particular, may I emphasise that in Horner the toll in question was charged for use of the servient tenement and that is not what we mean, nor what Justice Hodgson meant in his paragraph 48 when he contemplated that the capacity to charge a toll was just such a benefit or advantage for the better enjoyment of Skygarden as would be appropriate to keep it a proper easement.

We rely upon Justice Hodgson’s comments in that regard and the clear distinction between Horner which concerned a toll for the use of the servient tenement when the people may never come onto the dominant tenement and a toll here for coming onto Skygarden as the dominant tenement. It is a clearly distinguishable matter, clearly importing real benefit from the ownership as owner of Skygarden.

Your Honours had pressed upon you before the luncheon adjournment a number of different matters about purpose by my learned friend. Purpose, of course, is ultimately, as my learned friend said, the purpose of the class of persons which he identified and they include the persons who are authorised by the owner of the dominant tenement. Those persons may include, of course, more than one person in a vehicle. If one person is going to be a tenant in Skygarden, another person is the wife of that businessman who goes off to shop in David Jones exiting through Skygarden into Castlereagh Street on foot, and yet another person is a friend who is going to see a dentist in Macquarie Street, then, in our submission, it cannot be suggested in the context of this vehicular carriageway – and that is what it is, it is a vehicular right of way, I will come to that – it cannot be suggested that that mixture of purposes invalidates that use of the easement.

In our submission, the concentration needs to be on the passing and repassing which is the essence of the vehicular use of the way, and it is the purpose of that repassing and passing which is at the heart of the case, and when one looks at the purpose of passing and repassing one cannot say that it is merely incidental in the case of a trip through to Imperial Arcade and Centrepoint that you traverse Skygarden on the way. Not only is it not merely incidental, it is an essential thing that the person in the car is travelling in Skygarden. That is the very point of this extracted easement as it was of the earlier extracted physical connection possibility of condition 19, namely, to use Skygarden to get to Imperial Arcade and Centrepoint rather than to use Pitt Street mixed up with the pedestrians. Not incidental, but an essential purpose of the entire scheme.

At one stage my learned friend repeated a reference that also appears in his written submissions concerning the right in question being reasonably necessary for the enjoyment of the land which is the dominant tenement. It must, of course, be reasonably necessary for the better enjoyment. It cannot be reasonably necessary for enjoyment in the sense that without it you could not enjoy. We think there is no point further taken by our friends on that matter.

Justice Heydon asked my learned friend about Justice Hodgson’s paragraphs 27 and 28. For our part, we submit that the broader scope of material is permissible but, in our submission, and for the reasons I put
in-chief, if the narrower scope, which is the second alternative favoured by Justice Hodgson, were the law then the same outcome would ensue in this case bearing in mind that which was known to the general public, that is, the publicly recorded and accessible conditions of consent for Glasshouse with its condition 19 and, for that matter, the publicly available law concerning element 7 of bonus floor space involving getting those bonuses in return for providing access over Glasshouse to serve Skygarden, Imperial Arcade and Centrepoint by name.

My learned friend referred to clauses 3, 4, 6, 7, 8 and 9 of the terms of the easement itself as being contra indicators of an intention that the right of way could be enjoyed by my client authorising persons to come onto Skygarden over that right of way and thereafter to go to Imperial Arcade and Centrepoint and back again. However, during the course of that argument, there was more than the passing suggestion that this was because Imperial Arcade and Centrepoint personified – that is, the persons owning or controlling it – ought to be, as it were, paying for the right. Under this easement, however, they never get the capacity to authorise anybody to use this way, it is only ever the owners of Skygarden and for those reasons, in our submission, there is nothing startling about the rough or arbitrary equality which is understandably given in those clauses. I stress Imperial Arcade and Centrepoint are not, in our argument nor on the easement, at any stage in anything like the position of dominant tenements.

Your Honours raised with my learned friend the questions of the Conveyancing Act provisions. May I make this clear. In our case the deed itself, the actual deed that is that preceded the grant, contains its own definition provisions. At 649 of volume 2 recital E – which I am sorry someone has sought to emphasise and has now obscured – in the second line of that the expression “right of carriageway” is used.

HEYDON J: Could you just read recital E onto the transcript.

MR WALKER: Yes:

Jamino has agreed in consideration of the payment of $100,000 to grant to Mastwood a right of carriageway over the said Jamino land on the terms and conditions herein contained.

I apologise for the obscurity. “Right of carriageway” is defined on page 651, not particularly enlighteningly. It is “ as described in the Instrument, shown on the Plan and referred to in this Deed” and that, of course, takes us to page 659 to which your Honours have been before. Page 659, just as page 738 upon which your Honours have been concentrating, contains of course the expression “right of carriageway” which is one of those terms which, pursuant to section 181A of the Conveyancing Act, has been defined in Schedule 8. However, in section 181A, it is to be borne in mind that subsection (3) says:

The meaning given to an expression by this section and Schedule 8 may be varied (whether by way of addition, exception, qualification or omission) and is taken to have always been capable of being varied, by the instrument in which the expression is used.

We know, of course, that there are variations from the Schedule 8, Part 1 full form of the short form “right of carriageway” contained in the easement in question in this case. Your Honours will have noticed that animals are not mentioned and a question might arise as to whether that means ladies cannot bring their poodles in, does it mean that you cannot have a vet or pet shop having deliveries, and, in our submission, no, why would you do that? For the very reasons that dominated this morning’s argument, “for all purposes” will suffice and one does not have to have only inanimate merchandise, for example.

It also illustrates, in our submission, the less than convincing appeal of looking to any of the other parts in Schedule 8 of the Conveyancing Act in order to construe the words which have been selected, not in whole, and then greatly expanded in the fashion that your Honours have seen in the actual instrument registered. Finally, registration of the instrument under subsection 36(11) of the Conveyancing Act deems it to have the effect of a deed. That applies for the purposes of the Real Property Act as well. I am sorry, your Honours; it is the Real Property Act. I am obliged to my friend. Subsection 36(11) of the Real Property Act and that is the equivalent of the provision which had been referred to by Justice McHugh at 179 CLR 639 Gallagher v Rainbow, footnote (34), the Queensland provision, that is, a document registered under the system is deemed to be a deed. That, in our submission, gives real force to what his Honour and their Honours in the majority implicitly might be seen as supporting concerning the proper interpretation of these instruments as a deed. May it please your Honours .

GLEESON CJ: Yes, Mr Hutley.

MR HUTLEY: Your Honours, in relation to the application for leave, in our written submissions in the application book and our submissions in reply which are not in the application book which were corrected so that this application could be argued as an appeal, deal with the matters in relation to the basis on which we seek leave. That was further expanded in debate before the Bench in Brisbane on 29 June where his Honour the presiding judge indicated that that material would be before your Honours. I will not repeat it because of the time involved.

We submit that this is an appropriate case for leave. We submit the delay should not preclude it and we submit that there has simply no prejudice been demonstrated at all arising out of our delay for the simple reason that is apparent that these two appeals would have ended up being heard together by this Court because of their obvious intimate connection.

GUMMOW J: What is that interconnection, shortly? Take the situation that you were successful in resisting Mr Walker’s appeal.

MR HUTLEY: If we were successful, central to the question of the condition is the true construction of the easement because that formed the basis, we submit, of the analysis of the Court of Appeal. The Court of Appeal proceeded on the basis that the construction that they arrived at in the easement case was the construction which should be applied for the consideration of the condition. That is apparent because the Court of Appeal never considers in considering the condition that the easement would have entitled the respondents on the application, that is, Westfield, to do exactly that which they will be able to do if we are required to execute the easements in the form that the Court of Appeal has ordered us to do. Therefore, the approach one took to the easement impacts upon the view one takes of the condition.

HEYDON J: But the dates are the wrong way around, are they not?

MR HUTLEY: I am sorry, your Honour?

HEYDON J: Are not the dates the wrong way around?

MR HUTLEY: The dates of what, your Honour, I am sorry?

HEYDON J: The judgments.

MR HUTLEY: Yes.

HEYDON J: You gave the impression a moment ago that the Court of Appeal construed the easement and then later construed the condition. They did the other way around.

MR HUTLEY: No, no, they assumed it. It is apparent that they do not construe it because that construction was not before them. But it is apparent from one’s reading of the Court of Appeal that the assumption that underlay it was that this easement did not confer upon Westfield, qua dominant tenement of Skygarden, to introduce all the remoter properties to the easement. For example, when the Court of Appeal came to consider our argument about the burdensome nature of this, no reference was made to the fact that there is no burden at all because all this could have been done precisely in the way under the easement.

In fact, it is dealt with on a different basis, that is, on the basis of Rainbow v Gallagher. In other words, because at the time of the argument before the Court of Appeal Justice Brereton had not delivered his judgment in relation to the easement case. So the condition case took place on the basis without a determination of the construction of the easement. The debate took place and it is implicit in the reasoning of the Court of Appeal that the Court of Appeal took the view that the easement would have what we would say is the usual meaning of these things, that is, to and from for the purposes.

It was only after the judgment of Justice Brereton which followed the Court of Appeal’s judgment in the condition case that the broader construction arose which then led to the appeal to the Court of Appeal and therefore we hear on the easement case. That is why we say that these cases on any view are intimately connected and would in the ordinary course had all things happened according to Hoyle, this Court would have entertained the hearing of them either sequentially as it is or at least the decision in one would have abided the decision in the other because of the potential impact between the two constructions.

KIRBY J: It can hardly be said that Westfield put their file away, wrapped it up and considered that the whole issue in the matter the subject of the special leave had gone away.

MR HUTLEY: Now they are confronted by it, they do not seem to be giving up developing this property. The simple fact is that, in our respectful submission, even had we acted consistently with all time provisions, allowing for the general time requirements to get appeals on and reserved, these judgments would have been handed down together. Whether they were heard at the same time, which would be likely, they would be handed down at the same time.

GLEESON CJ: As I understand it, what is proposed is that you are going to address your arguments to us on the merits of the proposed appeal?

MR HUTLEY: Yes, your Honour. The judgment of the Court of Appeal commences at application book 40. The principal judgment in relation to the true construction of condition 56 is that of Justice Hodgson and his judgment commences at application book 45. His Honour sets out the circumstances leading up to the imposition of the condition between paragraphs 8 and 23 of his judgment, pages 45 to 55 of the application book. I will address a few matters in relation to those in due course.

The condition was imposed by modification of a development consent No 44/85/0257 which had originally been granted in February 1986 for the erection of what was described as a retail and commercial building of 31 storeys. The development consent, as your Honours are aware, was subject to condition 9, the effect of which was to compel construction of an access way to Glasshouse in a particular form. There was then a series of matters dealing with transferable floor space which are dealt with in the relevant paragraphs of the judgment.

GUMMOW J: Where do we find the text of condition 56?

MR HUTLEY: Your Honour will find the text of condition 56 at the top of application book 46. Can I deal with the legislative context. The development of Glasshouse was undertaken pursuant to a consent granted under the Environmental Planning and Assessment Act 1979, the relevant reprint being as at 19 February 1987. That is attached to our submissions. The central provision is section 76(2) which appears at page 39 of that reprint. It provided that:

where an environmental planning instrument provides that development specified therein may not be carried out except with consent under this Act being obtained therefor, a person shall not carry out that development on land to which that provision applies unless –

(a) that consent has been obtained and is in force under this Act; and

(b) the development is carried out in accordance with the provisions of any conditions subject to which that consent was granted and of that instrument.

Section 76(2) is in the same form today but it has been renumbered as section 76A. “Development” is defined in section 4(1) of the Act at page 3 of the relevant reprint to mean inter alia “in relation to land” “the erection of a building” and the use of the building so erected. The statutory regime dealing with the making and determinations of applications for consent are dealt with in Part IV of the Act. The upshot of a development application is the granting, conditionally or otherwise, of a consent to an application or its rejection, the relevant section being section 91(1) of the Act as it then stood.

GUMMOW J: Where do we see that? I mean, the root of all this is some allegation that some statutory power has been exercised in the way that attracts Wednesbury unreasonableness so we need to start with statutory power.

MR HUTLEY: Exactly, your Honour. If your Honour goes to the reprint, which your Honour has, your Honour will find that at page 48. Section 91(1) says:

A development application shall be determined by –

(a) the granting of consent to that application, either unconditionally or subject to conditions –

Would your Honours also note section 91(4) which says:

A consent to a development application for the carrying out of development, being the erection of a building, shall be sufficient to authorise the use of the building when erected for the purpose for which it was erected where that purpose is specified in the development application.

It is common ground that the relevant specification was a 31-storey commercial and retail building. If your Honours would then go to section 102 which your Honours will find on page 62 of the relevant reprint, it applies:

Upon application being made in the prescribed form by the applicant . . . a consent authority which has granted development consent under this Division may modify the consent where –

(a) it is satisfied that the development to which the consent as modified relates is substantially the same development –

and other matters. Would your Honours also note section 102(4) which says:

Modification of a development consent in accordance with this section shall not be construed as the granting of development consent under this Division but a reference in this or any other Act to a development consent shall be a reference to the development consent so modified.

It was common ground that the validity of the condition imposed, that is condition 56, upon a modification pursuant to section 102 as it stood in 1988 was to be tested for its validity by reference to the test laid down by this Court in Temwood. As I observed, section 104 provides that though modification of the consent is not to be construed as granting a development consent but a reference to a development consent is a reference to the development consent as modified. Thus, the reference to consent in section 76(2) of the Act and to section 91(4) is to the consent as modified. Thus, the condition here has continuing effect upon the operation of the consent, thus, relevantly, the two sections which remain in force although they have been renumbered, and I will give your Honours the renumbered sections, section 76(2) is now section 76A, section 91(4) is section 81A(1) of the Act.

Thus, from my client’s point of view, a failure to comply with a condition 56 if obliged to comply would be a failure to comply with the Act. Your Honours will see that from section 122 of the Act, which deals with the consequences of what is said to be a contravention of the Act. A breach of the Act from 122(a)(i) is said to be a failure to comply with the Act and 122(b) gives a specific meaning to:

a reference to this Act includes a reference to . . .

(ii) a consent granted under this Act; and

(iii) a condition subject to which a consent referred to in subparagraph (ii) was granted.

Section 123 confers a right upon any person to bring proceedings “to remedy or restrain a breach of this Act”. Section 124 confers a power on the Court to make such orders “as it thinks fit”. Division 4 of the Act, which your Honours will see commencing at page 82 of the reprint, imposed penalties for breaches of the Act. Section 125 made it an offence, among other things, to fail to do that which was required to be done under the Act. Thus, a failure to comply with a condition of a development consent which in turn permitted usage of the building pursuant to section 91(4) would result in a breach of section 76 of the Act if the condition was not complied so long as it remained in force.

That is the statutory context in which this takes place, namely, that there are consents and consents can be subject to conditions. Failure to comply with a condition leads to civil and criminal sanctions. We submit at the end of the day condition 56 on its true construction is not a consent within the meaning of the Act because, properly construed, its implications are such as to be uncertain, vague and an unreasonable imposition on any person who is subjected to it because they are not capable of knowing if they have complied with the provision at any time, and that is the point I seek to make good. In that context can I take your Honours to condition 56? Condition 56 stated that:

documentary evidence shall be provided, to the satisfaction of the City Solicitor, that the right-of-way currently applicable to the subject property, in favour of the adjoining property –

that is the easement to which your Honours have received submissions –

is extended to cover the right-of-way to the “Imperial Arcade” site and the “Centrepoint” site, with reciprocal rights where necessary and such rights shall embody a provision ensuring their application in perpetuity, except with the consent of the Council.

Our fundamental disagreement with the judgment of the Court of Appeal – and in this regard the relevant judgment is that of Justice Hodgson between paragraphs 42 and 51 at application book 65 to 51 – is that his Honour never explained what the critical words in the provision meant. Rather, his Honour asserted at paragraph 51, which your Honours will see at application book 68, by reference to what his Honour called “the Upper Hunter approach” being a reference to the decision of this Court in the contracts area, what the content of the requirements of condition 56 should be held to be.

HAYNE J: Can I just understand what you say about 56. When do you go into breach of it? When does it bite?

MR HUTLEY: Your Honour, we say it is very hard to know when we go into breach of it. At the moment, as we understand on the construction of the Court of Appeal, when the owners of Skygarden, Imperial Arcade and Centrepoint together come and produce to us an instrument which is, in the terms of the current easement, amended in the fashion that the Court has identified in paragraph 51, together with circumstances where Skygarden and Imperial Arcade have given easements in the former case in favour of Imperial Arcade and Centrepoint and in the latter case in favour of Centrepoint to the usage of easements over their property. That is as we understand it.

GUMMOW J: There is another question too. The phrase is “shall be provided to the satisfaction of the solicitor”. When does the provision have to be made, and if it is not made, the solicitor does not complain about it and years pass, what is going on?

MR HUTLEY: Quite, your Honour. Eking out – and this is what we said to the Court of Appeal – any sensible meaning of this condition is immensely difficult because it appeared, as we understand it, to be this. If my learned friend’s clients in this circumstance come with the instrument in the current form, we have to execute it to, in effect, create a binding instrument. Presumably we have to also register it, or they register it. We then have to, as we understood it, so soon as that occurs, produce to the relevant council officers evidence of what we have done, by reference to which that solicitor can form the satisfaction which this condition seems to contemplate. That is as we understand the effect of the construction that has been adopted. I am not saying it is perfect, your Honour. In fact, we say it is wholly imperfect, for a whole series of reasons. It stems, we say, from the fact that the Court of Appeal has simply failed to look at the language of condition 56.

HEYDON J: That is an extraordinarily ambitious submission.

MR HUTLEY: Your Honour, with respect, no.

HEYDON J: It is rather an offensive submission. It just has no reality.

MR HUTLEY: No. With respect, your Honour, it is neither extraordinary nor offensive. It is not meant to be offensive. We have language which says, with respect, that it is extended to cover a right of way, et cetera, with reciprocal rights where necessary. It has been found that the “reciprocal rights where necessary” means those rights which have been taken from the existing easement altered mutatis mutandis. There is no reasoning with respect to the Court of Appeal as to how there is a relationship of necessity between that content and those words.

HEYDON J: It is different from what you said before.

MR HUTLEY: I am sorry, your Honour. If I said something that went – I was not intending to go – anything on what I have said in our written submissions, namely, that what appears is we have words which say that there will be with reciprocal rights where necessary, and the Court of Appeal said that meant and always meant one thing, that is, it would apply mutatis mutandis the rights under the easement. This is in respect of a condition which on its face was intended to be ambulatory, could – that is, it was not expressed to have a time period, namely, we were not required to do it before we built the building, we were not required to do it before we commenced occupation of the building. It is wholly ambulatory.

The Court of Appeal held that it meant that it could only attach when all other parties who would be interested would approach us with instruments which satisfied the content which the Court of Appeal gave to it, and I will take your Honours to the relevant paragraphs as to construction.

KIRBY J: Yes, but presumably it would be construed against the background (a) of the council’s power, and (b) of the purpose that is revealed in the documents concerning the traffic flow through and pedestrian and vehicular traffic in this area, and this actually gives a real meaning to the theory of the whole of the case that you do not strain the right of way agreed in the deed between the parties, but you do recognise that the council under its statutes and for planning purposes has powers to adjust for the high public purpose of vehicular and pedestrian traffic, and that seems to be the view of Justice Tobias, who knows an awful lot about this area of the law, took in his reasons at the top of page 228.

MR HUTLEY: But, your Honour, we submit as a matter of rule of law one has to start with the condition and find out what it means. The difficulty we have with the Court of Appeal’s judgment is that the Court of Appeal did not give a – they gave content to the obligation, there is no doubt about that, they told us what we had to do, but we say that that simply does not bear any textual relationship to the words used. Could I develop that? Now, can I take your Honours through the analysis?

KIRBY J: What are the words you latch onto that you – in condition 56 that you really - - -

MR HUTLEY: In our respectful submission, what one has to deal with – there are a series of words. Condition 56 - - -

KIRBY J: Well, the first paragraph:

shall be provided to the satisfaction of the City Solicitor -

That is okay.

MR HUTLEY: Yes, we accept that there is - we understand that.

KIRBY J:

right-of-way currently applicable to the subject property -

That is all right -

in favour of –

That is all right -

extended to cover the right-of-way to the “Imperial Arcade” site -

That could not be more specific.

MR HUTLEY: Well, your Honour, can I stop your Honour there? There was no right of way to the Imperial Arcade and Centrepoint.

KIRBY J: Yes, but this is a condition requiring a new one.

MR HUTLEY: Precisely, your Honour. It has to be – it says:

extended to cover the right-of-way to the “Imperial Arcade” site and the “Centrepoint” site -

We would say, properly understood, that is a reference to the physical right of way. So, in effect, what is being said there is that there is an obligation to extend the current right of way to cover the physical pathway to the Imperial Arcade and Centrepoint, and that is to take place together with reciprocal rights where necessary. Now, when – this is an ambulatory - - -

KIRBY J: So it is “reciprocal rights where necessary” that you really object to.

MR HUTLEY: “Where necessary” is the difficulty. This is a condition which it was contemplated may only, could only or might only attach at some indefinite point in the future. One would not have any idea what would be contemplated as being the structures which could be being proposed to be built on Centrepoint - - -

KIRBY J: You would read that as being incidental to carrying forward the purpose and object of the council in making such a provision.

MR HUTLEY: In the circumstances which maintained at that time when we came to have to have the conditions imposed upon us?

GUMMOW J: Yes. What would happen under this condition if, as is the fact – what has happened is that Glasshouse has been constructed, there it is, it has been there for some years and there is a debate between your side and Mr Walker’s side as to what the necessary reciprocal rights are precisely. Do you have to agree with what they proffer?

MR HUTLEY: The Court of Appeal did not find that. They did not find that we have to take whatever they produced to us in the sense that they could have turned up and said, “We want the rights and we want you to pay a million dollars”. The Court of Appeal instead – and I should take your Honours to the reasoning which is really taken up at paragraph 44 of his Honour Justice Hodgson. His Honour said:

In my opinion, the reference to reciprocal rights and duties does at least refer to the need for Skygarden to give an easement to Imperial Arcade and Centrepoint, and the need for Imperial Arcade to give an easement to Centrepoint –

We take issue with that because it is not the heart of the point. It says:

if the easement is to be effectively extended to Imperial Arcade and Centrepoint. I think it also refers to the question of what the terms of the extended easement are to be. The terms of the existing easement suggest the need for terms in an extended easement relating to such things as the cost for maintenance and repair and insurance, and possibly also as to such things as signage and allocation of risk.

Having regard to the above considerations, and the principles of construction I have referred to, in my opinion condition 56 should be interpreted as imposing an obligation on the owner of Glasshouse to take the action required, if and when there is appropriate co-operation from the owners of Skygarden, Imperial Arcade and Centrepoint; to do so without further consideration; with one aspect of the necessary co-operation being the making of appropriate provision for access across Skygarden to Imperial Arcade and across Imperial Arcade to Centrepoint. As regards the terms of the extended easement, in my opinion this raises questions of the kind referred to in Upper Hunter.

GUMMOW J: It does not, does it? Upper Hunter is all about consensual arrangements, is it not?

MR HUTLEY: Precisely.

GUMMOW J: This is an exercise of quasi law-making power.

MR HUTLEY: Precisely, your Honour. But then it says:

In my opinion there are alternative reasonable ways of extending the terms of the existing easement to the extended easement. The existence of reasonable alternatives does not mean that there is invalidating uncertainty: the Court can resolve which of these alternatives is the correct one.

The Court goes through things and then, your Honour – and I do not mean with any disrespect to the Court of Appeal – we are told at paragraph 51:

Applying the Upper Hunter approach, in my opinion what condition 56 contemplates is that where cls 3 and 4 of the existing easement (set out in par [14] above) provide for equal division of costs between one grantor and one grantee, such costs should be divided four ways between the grantor and three grantees. In my opinion, no change would be required –

et cetera and that is it.

HEYDON J: Is there some passage in the Acting Chief Justice’s judgment in the Land and Environment Court that sets out a model approach to solving this problem which corresponds with your predecessor’s submissions?

MR HUTLEY: If I could just take your Honours to the approach of the Acting Chief Justice. Your Honour will find that at page 29 of the application book at 66. It says:

The omission by the council to consistently provide for a viable and reasonable mechanism for the implementation of its grand scheme reinforces the conclusion that compliance with condition 56 was not feasible. Critical questions remain unanswered even at the present time. These include important matters such as the amount of consideration to be paid for the grant of the further right of way and the undefined “reciprocal rights.” The prospect of the achievement of a consensual outcome is left to speculation. It is not reasonable to require a developer to do that which is impossible without the co-operation of third parties. Particularly where the third parties have no commensurate interest in the subject property.

Could I then take your Honours over to what the chief judge has said at paragraph 71. I do apologise your Honour, I forgot to take your Honour to paragraph 54, beforehand. He says:

It must be assumed that the council was aware of condition 19 when it granted building approval to the Glasshouse including the structure that provided the opening between the two buildings. By reference to the terms of condition 56 it is reasonable to construe condition 19 as requiring no more than the provision of a formal and permanent opening and a built carriageway –

That was the context in which it came, condition 19 dealt with physical then one came to paragraph 66. Can I then take your Honours to paragraph 71 at page 31. It says:

Having regard to the whole of the circumstances applying at the time and the surrounding relevant facts and difficulties of enforcement I determine that the decision of the council to impose condition 56 was so unreasonable –

So his Honour, in effect, construed condition 56 as was submitted at first instance, that it really left a whole lot of matters to be debated because it had to because, once one understood that this was an ambulatory condition taking the best practical approach to it, it would be dealing with circumstances at a time remote from the imposition of the condition. What would be reciprocal rights necessary at that time would be a matter potentially likely to be of differing views between differing people with different commercial aims in a different context, for example, the debate is here happing in 2007, questions associated with security and the like which are vital one would have thought in relation to matters such as easements of this variety, a completely different social environment in real terms to that which maintained in 1988.

One had to come to terms in the construction of this condition with the words “with reciprocal rights where necessary”. We submit, and submitted, that “where necessary” was clearly referring to necessary in the context that maintained at the time that compliance with this condition was called for and that necessity would depend upon the differing commercial aims and objects potentially of up to four parties, namely, what was Centrepoint, how did it want to develop, over what period did it want to develop, how did it want to use these easements during construction periods, what was Imperial Arcade proposing to do, what was its future use? In other words, the parties would have to deal with the differing circumstances concerned with the extension of this easement at a time removed and what, we submit, the Court of Appeal did is that they did not construe those words. I have taken your Honours through the paragraphs.

HAYNE J: Can I take you back to what may be a logically anterior point. The condition with which we are concerned is a condition enforceable by the mechanisms described in sections 122 and 123, is it not?

MR HUTLEY: Enforceable, yes, your Honour.

HAYNE J: It is, therefore, a condition that must be capable of construction as having compulsive effect, that is compelling the person who is the subject of the condition, the beneficiary of the development consent.

MR HUTLEY: Accepted, your Honour.

HAYNE J: Can there be a condition of a development consent which depends for its effectuation upon the agreement or consent of some party outside the development consent, that is, a third party?

MR HUTLEY: Yes, for example, your Honour, there may be a condition imposed upon a development, “The development shall not take place unless one obtains an easement for drainage from the third party”. Therefore, one can impose a condition which says, “Thou shalt not develop unless one obtains an easement to allow drainage to take place”.

HAYNE J: It is not said, is it, that this condition is of that kind?

MR HUTLEY: No, we submit it is of a completely different kind because the condition, in effect, is a condition which calls us - firstly, it is ambulatory, it does not prevent, it allows development, it allows use, it requires us at some indeterminate time in the future to enter into negotiations which we may not be able to reasonably conclude - - -

HAYNE J: But it is that indeterminacy which, if you are right, is perhaps of critical importance in determining whether that which is imposed meets the statutory description “condition”.

MR HUTLEY: Precisely.

HAYNE J: And if it does not meet statutory description as a condition, then - - -

GUMMOW J: In that sense, Wednesbury unreasonableness is a red herring really because you start at the beginning. The question is, “What is the content of the condition imposing power in the light of these penal provisions in 122 and 123?”

MR HUTLEY: We accept that, your Honour. Firstly, one has to give a content to it and then one has to say, “What’s that content? Firstly, does it have the character of being a condition?” Another way of putting it, your Honour, is, a consent to which it is attached, is it capable of describing as a consent to development within the meaning?

HAYNE J: Can it be given content which can be compelled? The condition precedent you earlier described of no use until you have obtained drainage, et cetera, can be compelled, you can restrain the use.

MR HUTLEY: Yes. The conclusion the Court of Appeal came to did have that content but it had that content by saying, “If the other sides come to us with an instrument in this form, you must accept” because in effect they said - - -

GUMMOW J: In fairness to the Court of Appeal, Mr Hutley, I do not know what course the argument took though, I doubt if the argument commenced by focusing on sections 91 and 122 and 123 and hence, it lifted from Wednesbury unreasonableness which is a great buzz word to the Bar into Upper Hunter and so on.

MR HUTLEY: It was also put on the basis of uncertainty and it simply was an impermissible condition.

HAYNE J: Without routing it into the Act.

MR HUTLEY: With respect, one was there dealing with – where it had the first instance judgment where in effect this was dealt with - - -

GLEESON CJ: Mr Hutley, how long do you think you will require to complete your argument?

MR HUTLEY: Twenty minutes.

GLEESON CJ: And Mr Walker?

MR WALKER: About 40, I think, your Honour.

GLEESON CJ: All right. Well, we will adjourn until 10.15 tomorrow and we will say that the next matter will be not before 11.

AT 4.17 PM THE MATTER WAS ADJOURNED
UNTIL WEDNESDAY, 1 AUGUST 2007