A warning for developers on the interpretation of easements

The recent decision in McWilliam v Hunter serves as a reminder for all developers to carefully consider and investigate encumbrances on land earmarked for development, write Nicholas Sharman and Daniel Weissel.

Nicholas Sharman and Daniel Weissel • 27 June 2022 • Big Law

A warning for developers on the interpretation of easements

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The proceedings in McWilliam v Hunter [2022] NSWSC 342 concerned a right of carriageway 3.05 metres wide that burdened the defendant’s land (Lot A) and benefited the plaintiff’s land (Lot B) (Easement). The Easement provided the only existing means of vehicular access to Lot B. The Easement was created pursuant to a s88B Conveyancing Act 1919 (the act) instrument and accompanying deposited plan, registered in 1980.

The defendant sought to develop Lot A, which would involve the erection of a structure to sit above the Easement and consequently restrict the height to which the Easement could be used. Development consent conditions imposed by the local council included, among other things, that the structure allow a clearance height over the Easement of 2.8 metres.

The plaintiffs sought a declaration that the proposed development, to the extent that was to be erected over the site of the Easement, would constitute a substantial and unreasonable interference with the plaintiff’s current and future reasonable use of the Easement.

The defendants cross-claimed and sought an order to modify the Easement such that it be limited in height to 2.8 metres. It was submitted that the dimensions of the Easement and the improvements positioned on Lot B at the time of creation of the Easement (notably a single garage) should lead to the conclusion that only vehicles that would be accommodated by that small single garage were contemplated for use of the Easement.

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The defendants primarily relied upon s89(1)(c) of the act, which permits the modification of an easement where the proposed modification will not substantially injure the persons entitled to the easement. The defendants contended that a modification of the Easement to limit its height to 2.8 metres would not substantially injure the plaintiffs.

Determination

Justice Darke observed:

that the defendants, as owners of the burdened land (Lot A), are entitled to make such use of their land as they see fit provided that use does not amount to an unreasonable interference with the rights of the plaintiffs as owners of the benefited land (Lot B).
the rights conferred under an easement are ascertained as a matter of construction of the terms of the easement. The task of construction must therefore be undertaken by reference to the terms of the instrument itself.

Justice Darke determined that the terms of the Easement should not be construed in such a way that the rights conferred by it are restricted so that the range of vehicles that might be employed in its use are restricted to passenger vehicles that can be accommodated in a single garage. The imposition of a height limit of 2.8 metres, as would occur if the defendant’s proposed development proceeded, would amount to a substantial inference with the reasonable use and enjoyment of the Easement.

Consequently, the court ordered that the defendant be restrained from proceeding to construct the development the subject of the development consent that would allow a clearance height of 2.8 metres above the Easement; and that the defendant’s cross-claim be dismissed.

Key takeaways

Developers should be mindful of the competing interests of a developer’s entitlement to make use of their land as they see fit and the proprietary rights of neighbouring landowners to use easements without unreasonable interference.

In assessing those competing interests, developers ought to understand that:

easements are property rights of an enduring nature and should be construed with that in mind; and
generally speaking, limitations should not be read into the language of the easement by reference to the state of improvements on the land where it can be expected that the improvements will change over time as the land is further developed. Indeed, the historical use of land (including the existence of particular improvements ancillary to the use of land) benefited by easements will not assist a party in its application to modify an easement, so its terms reflect that historical use. Both the current and future reasonable use of the easement must be considered.

Nicholas Sharman (pictured) is a senior associate, and Daniel Weissel is an associate at McCabes.

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