Supreme Court New South Wales

• Medium Neutral Citation: Sahab Holdings Pty Ltd v Castle Constructions Pty Ltd [2014] NSWSC 1281
• Hearing dates: 1 September 2014
• Decision date: 19 September 2014
• Jurisdiction: Equity Division
• Before: White J

Decision

Defendant's notice of motion filed on 23 June 2014 as amended on 1 September 2014 be dismissed.

• Catchwords: REAL PROPERTY - application under Conveyancing Act, s 88K for imposition of easement - motion for summary dismissal - Anshun estoppel - whether plaintiff was unreasonable in not bringing present claim in earlier proceedings - whether same issues of fact and law from earlier proceedings raised in current proceedings - summary dismissal not appropriate
• Legislation Cited: Conveyancing Act 1919 (NSW); Real Property Act 1900 (NSW); Supreme Court Act 1970 (NSW)
• Cases Cited: Sahab Holdings Pty Ltd v Registrar-General & Anor (No. 2) [2010] NSWSC 162; (2010) 14 BPR 27,459; Sahab Holdings Pty Ltd v Registrar-General [2011] NSWCA 395; (2011) 15 BPR 29,627; Sahab Holdings Pty Ltd v Registrar-General (No. 2) (2012) 16 BPR 30,353; Castle Constructions Pty Ltd v Sahab Holdings Pty Ltd & Anor [2013] HCA 11; (2013) 247 CLR 149; Castle Constructions Pty Ltd v Sahab Holdings Pty Ltd (No. 2) [2013] HCA 44; (2013) 303 ALR 84; Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589; O'Brien v Tanning Research Laboratories Inc (1988) 14 NSWLR 601; Dey v Victorian Railways Commissioners (1949) 78 CLR 62; Fancourt v Mercantile Credits Limited (1983) 154 CLR 87; Agar v Hyde (2000) 201 CLR 552; Spencer v The Commonwealth of Australia (2010) 241 CLR 118; CG Maloney Pty Ltd v Noon [2011] NSWCA 397; Rahme v Commonwealth Bank of Australia [1991] NSWCA 230; Bryant v Commonwealth Bank of Australia (1995) 57 FCR 287; Ling v Commonwealth of Australia (1996) 68 FCR 180; Zavodnyik v Alex Constructions Pty Ltd [2005] NSWCA 438; (2005) 67 NSWLR 457
• Category: Principal judgment
• Parties: Sahab Holdings Pty Ltd (Plaintiff); Castle Constructions Pty Ltd (Defendant)
• Representation: Counsel: B Katekar (Plaintiff); M Einfeld QC with A P Cheshire (Defendant); Solicitors: Kenjian & Company (Plaintiff)
• File Number(s): 2014/140789

Judgment

1 HIS HONOUR: In these proceedings the plaintiff (Sahab) seeks an order under s 88K of the Conveyancing Act 1919 (NSW) for the imposition of an easement over land owned by the defendant (Castle Constructions). This is an application by Castle Constructions that Sahab's proceeding be summarily dismissed.

2 There were earlier proceedings between the same parties and the Registrar-General in this court, the Court of Appeal and the High Court. In the earlier proceedings Sahab's case was that the Registrar-General had wrongly removed a right of way from the register and that the right of way should be reinstated. Slattery J dismissed Sahab's summons (Sahab Holdings Pty Ltd v Registrar-General & Anor (No. 2) [2010] NSWSC 162; (2010) 14 BPR 27,459). Sahab succeeded in its appeal to the Court of Appeal (Sahab Holdings Pty Ltd v Registrar-General [2011] NSWCA 395; (2011) 15 BPR 29,627 and Sahab Holdings Pty Ltd v Registrar-General (No. 2) (2012) 16 BPR 30,353). The High Court allowed an appeal from the orders of the Court of Appeal and ordered that the appeal to that court should be dismissed (Castle Constructions Pty Ltd v Sahab Holdings Pty Ltd & Anor [2013] HCA 11; (2013) 247 CLR 149 and Castle Constructions Pty Ltd v Sahab Holdings Pty Ltd (No. 2) [2013] HCA 44; (2013) 303 ALR 84).

3 At all material times Castle Constructions was the registered proprietor of a property on Sailors Bay Road, Northbridge. When it acquired that property it was subject to a right of way that benefited land fronting Strathallen Avenue, Northbridge. The right of way had been created in 1921 by transfer A752953. In 2001 Castle Constructions applied to the Registrar-General for the removal of the easement from the register on the ground that the easement was only to apply during the ownership of the original transferee of the Strathallen land pursuant to the 1921 transfer A752953. It was held in the earlier proceedings that notice was given to the then owners of the Strathallen land, Mr and Mrs Howard, of Castle Constructions' application to remove the easement from the register and the Registrar-General's intention to do so. Mr and Mrs Howard did not object to that proposed course of action. The right of way was removed from the register in November 2001.

4 Sahab acquired the Strathallen land in 2007, that is, after the easement had been removed. It was aware that the Strathallen land did not have the benefit of an easement. It contended that the Registrar-General had been wrong to remove the easement. In 2008 it applied to the Registrar-General for the easement to be restored. The Registrar-General refused the request. Slattery J held that on the proper construction of the 1921 transfer that created the right of way, the right of way did not enure only for so long as the transferee of the Strathallen land remained the registered proprietor of that land. Rather, it enured for the benefit of subsequent owners (at [29]-[37]). The Court of Appeal agreed that that was the proper construction of the instrument creating the right of way (at [75]-[78]). The High Court did not consider it necessary to decide the question. The Registrar-General's reason for removing the easement from the register was that no objection to the application for its removal had been received (Sahab Holdings Pty Ltd v Registrar-General (No. 2) [2010] NSWSC 162 at [54]). Apparently it was departmental practice to act on such a request if no caveat or court order restraining the Registrar-General from so acting was received (at [59]).

5 Sahab's contention in the earlier proceeding was that the Registrar-General's decision to remove the easement from the register was wrong and should be corrected. Slattery J held that the Registrar-General must have concluded that the easement had been abandoned and had cancelled the recording of the easement pursuant to s 49 of the Real Property Act 1900 (NSW). His Honour held that the Registrar-General was not "obviously exercising powers to correct an error in the Register under either s 12(1)(d) or s 136(1)(b) of the Real Property Act" (at [74]). Rather, his Honour inferred that the Registrar-General was exercising his powers under s 49 to cancel a recording of the easement if the easement had been abandoned (at [74]). Slattery J accepted evidence adduced for Sahab that the right of way had in fact been used up to 2001 (at [77]). His Honour held that nonetheless the Registrar-General acted on the material that had been provided to him, had exercised a discretion under s 49, and the matter was concluded unless the court had power to correct that decision (at [77]). His Honour held there was no such power (at [79]-[96]).

6 The Court of Appeal held that the Registrar-General had not purported to act under s 49 of the Real Property Act to cancel the right of way because it had been abandoned and would not have been justified in doing so (at [51]-[54]). It held that the right of way should not have been cancelled and that the Registrar-General had power under s 12(1)(d) of the Real Property Act to correct the register because the easement had been "omitted" from the register within the meaning of s 42(1)(a1) (at [200], [274]). The "omission" of an easement validly created after land is brought under provisions of the Real Property Act either under the Real Property Act itself or under any other Act or a Commonwealth Act is an exception to indefeasibility (s 42(1)(a1)). Because s 42(1)(a1) provided an exception to indefeasibility the Court of Appeal held that there was power to compel the Registrar-General to reinstate the right of way, pursuant to s 12(1)(d) in combination with s 122 and pursuant to s 138(3) (at [220]-[234], [130]-[132], [274], [275]).

7 Castle Constructions relied on s 12A(3) of the Real Property Act. Section 12A relevantly provides:

"12A Power of Registrar-General to serve notice of proposed action

(1) The Registrar-General may, before taking any action that alters the Register, give notice of the proposed action to any person that the Registrar-General considers should be notified of it.

...

(3) Where a person given notice under subsection (1) does not within the time limited by the notice serve upon the Registrar-General or give the Registrar-General written notice of an order made by the Supreme Court restraining the Registrar-General from taking the action, no action by that person or by any person claiming through or under that person shall lie against the Registrar-General in respect of the taking of the action specified in the notice."

8 The Court of Appeal and the High Court proceeded on the basis that in 2001 the Registrar-General gave notice under s 12A(1) to the then registered proprietors of the Strathallen land of the proposed alteration of the Register to remove the easement. Gageler J described that as a finding that should not be disturbed (at [44]). The Court of Appeal held that s 12A(3) did not deny the application of s 122 in an appropriate case so as to eliminate the Supreme Court's power of review under s 122 (Sahab Holdings Pty Ltd v Registrar-General (No. 2) at [11]). The Court of Appeal held that the purpose of s 12A(3) was to prohibit an action against the Registrar-General in circumstances which could attract a claim for compensation, but it did not exclude the Supreme Court's power to review a decision of the Registrar-General under s 122 on the application of a person who was dissatisfied with a decision of the Registrar-General under s 121 (at [14]-[18]). In its first judgment the Court of Appeal held there was an issue estoppel that precluded Castle Constructions from denying that Sahab was a person so dissatisfied (at [215]).

9 The High Court did not address the issue of whether the right of way had been incorrectly removed from the register. Gageler J held that s 12A(3) was a complete answer to Sahab's case. His Honour held that the effect of s 12A(3) was that a notified alteration of the Register by the Registrar-General could not be legally impugned after the alteration was made (at 168, [53]). The subsection precluded the taking of any action that directly or indirectly challenged the validity of a notified alteration of the Register (at [54]). His Honour said it was unnecessary to decide whether Sahab was a person "dissatisfied" with the 2001 decision within the meaning of s 122 or whether Castle Constructions was estopped from so contending (at 169, [57]).

10 The plurality in the High Court (Hayne, Crennan, Kiefel and Bell JJ) held that the Registrar-General did not have power under s 12(1)(d) of the Act to correct the register because the easement had not been "omitted", but deliberately removed (at 15, 161 and 164, [12], [14], [25] and [39]). The plurality also held that Sahab was not a person dissatisfied with a decision of the Register to remove the easement in 2001 within the meaning of s 122 because it had not then acquired title to the land. Nor was it a person dissatisfied with the decision of the Registrar-General in 2008 not to restore the easement within the meaning of the section because it had obtained title by registration at a time when the land did not have the benefit of the easement (at 164, [37] and [38]). The plurality did not address the question whether there was an issue estoppel precluding Castle Constructions' denying that Sahab was a dissatisfied person within the meaning of s 122(1), but it must be taken that either their Honours did not accept the Court of Appeal's conclusion, or considered the issue irrelevant having regard to their conclusion that Castle Constructions' existing title was indefeasible because s 42(1)(a1) was not engaged. The plurality also said (at 161, [27]) that s 12A(3) would bar a claim by an owner of the dominant tenement for any relief against the Registrar-General in respect of the removal of the easement, including any form of relief that would compel the Registrar-General to restore the easement to the Register.

11 The High Court's decision finally determined that Sahab was not entitled to have the easement that had been removed by the Registrar-General in 2001 restored to the Register pursuant to s 65 of the Supreme Court Act 1970 (NSW) or ss 12(1)(d), 136(1), 138(3) or 122(4)(b) of the Real Property Act and that the Registrar-General could not be compelled to accede to Sahab's request made in 2008 to restore the right of way to the Register.

12 By statement of claim filed on 9 May 2014 Sahab has sought an order pursuant to s 88K(1) of the Conveyancing Act that there be imposed on the Sailors Bay land in favour of the Strathallen land an easement in the form and to the effect of a right of carriageway "as provided for in transfer A752953". Sahab also seeks an order requiring Castle Constructions to remove a fence presently erected on the common boundary so as to enable the use of the right of carriageway sought to be imposed. Section 88K of the Conveyancing Act relevantly provides:

"88K Power of Court to create easements

(1) The Court may make an order imposing an easement over land if the easement is reasonably necessary for the effective use or development of other land that will have the benefit of the easement.

(2) Such an order may be made only if the Court is satisfied that:

(a) use of the land having the benefit of the easement will not be inconsistent with the public interest, and

(b) the owner of the land to be burdened by the easement and each other person having an estate or interest in that land that is evidenced by an instrument registered in the General Register of Deeds or the Register kept under the Real Property Act 1900 can be adequately compensated for any loss or other disadvantage that will arise from imposition of the easement, and

(c) all reasonable attempts have been made by the applicant for the order to obtain the easement or an easement having the same effect but have been unsuccessful.

(3) The Court is to specify in the order the nature and terms of the easement and such of the particulars referred to in section 88 (1) (a)-(d) as are appropriate and is to identify its site by reference to a plan that is, or is capable of being, registered or recorded under Division 3 of Part 23. The terms may limit the times at which the easement applies.

(4) The Court is to provide in the order for payment by the applicant to specified persons of such compensation as the Court considers appropriate, unless the Court determines that compensation is not payable because of the special circumstances of the case.

(5) The costs of the proceedings are payable by the applicant, subject to any order of the Court to the contrary.

...

(7) An easement imposed under this section, a release of such an easement or any modification of such an easement by a deed or dealing takes effect:

(a) if the land burdened is under the Real Property Act 1900, when the Registrar-General registers a dealing in the form approved under that Act setting out particulars of the easement, or of the release or modification, by making such recordings in the Register kept under that Act as the Registrar-General considers appropriate, or

..."

13 The statement of claim pleads the creation of the right of way by transfer A752953 registered on 19 November 1921. It pleads that Castle Constructions became registered proprietors of the Sailors Bay land on 21 June 2001 and that on 3 September 2001 Castle Constructions applied to the Registrar-General to cancel the recording of the right of way "due to the happening of an agreed event".

14 This refers to the request supported by a statutory declaration of Castle Constructions' solicitor, a Mr Dockerell, made on 9 September 2001 in which it was asserted that the right of way was only to apply during the ownership of the Strathallen land by the original transferee, a Mr Davis. (Slattery J and the Court of Appeal observed that on any view that was a misconstruction of the instrument and that the intended argument must have been that the right of way was to apply only for so long as the original transferors (Mr and Mrs Middleton) continued to own the Sailors Bay land (at [37] per Slattery J; [38], [44] per Court of Appeal). On 7 April 1922 the original transferee of the Strathallen land, Mr Davis, transferred that land. The Middletons sold the Sailors Bay land in 1960.

15 The statement of claim pleads that the Registrar-General acceded to Castle Constructions' request on 22 November 2001 and cancelled the recording of the right of way. It pleads the erection by the defendant of the fence. It pleads the earlier application for an order requiring the Registrar-General to reinstate registration of the right of way and pleads that although that claim failed, the Supreme Court and Court of Appeal had upheld the plaintiff's contention that on the proper construction of the right of way it had not expired by its own terms and was intended to enure to the benefit of the Strathallen land permanently. Sahab pleads that "reinstatement" of the right of way ought not to be on the basis of its being required to pay compensation by reason of facts which amount to special circumstances within the meaning of s 88K(4). Sahab contends that Castle Constructions obtained a windfall by misrepresenting to the Registrar-General that on its proper construction the right of way enured only for the period that the Strathallen land was owned by the original transferee and by the Registrar-General's having acceded to that argument. It says that in those circumstances no compensation should be payable for the "reinstatement" of the easement by the imposition of an easement pursuant to s 88K in the same terms as the easement which had been removed from the Register without proper cause.

16 Castle Constructions pleads by way of defence that the proceedings constitute an abuse of process on the ground that the matters raised could have been pursued in the earlier proceedings and it was unreasonable for Sahab not to have brought the claim in the earlier proceedings. It pleads that Sahab is estopped from bringing the claim in these proceedings. The estoppel relied on is based on Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589. The principle relied on is that if a matter raised in the second action was so relevant to the subject matter of the first action that it would have been unreasonable not to rely on it, the party seeking to raise that matter will be estopped from doing so (at 602).

17 Whether it was unreasonable for Sahab not to have brought its claim under s 88K as part of the original proceeding involves an evaluative judgment requiring a meticulous examination of the facts concerning the institution of the first proceeding and the reasons the alternative claim based on s 88K was not advanced in the first proceeding (O'Brien v Tanning Research Laboratories Inc (1988) 14 NSWLR 601 at 612).

18 The present application is for summary dismissal of Sahab's claim. On this application the question is not whether the defence based on Anshun estoppel should succeed, but whether it is so clear that that defence must succeed that the proceeding should not go to trial. For the claim to be summarily dismissed the Anshun estoppel defence must be so clear that it is not seriously arguable that Sahab's claim can succeed. That is a high hurdle (Dey v Victorian Railways Commissioners (1949) 78 CLR 62 at 91; Fancourt v Mercantile Credits Limited (1983) 154 CLR 87 at 99; Agar v Hyde (2000) 201 CLR 552 at 575-576, [57]; Spencer v The Commonwealth of Australia (2010) 241 CLR 118 at 131-132, [24]).

19 Mr Kanjian, a director of and solicitor for Sahab, has deposed that he was well aware of the potential for bringing a claim under s 88K as an alternative claim in the original proceeding. The original proceeding was initially commenced only against the Registrar-General. Castle Constructions was joined as a defendant to the summons over Sahab's opposition, although it is hard to see why Sahab might have thought it not to be a necessary party.

20 Mr Kanjian deposed:

"10. Despite Castle's joinder as a defendant, I decided not to amend the summons to include a cause of action against Castle under s 88K of the Conveyancing Act, 1919 because to do so would have required evidence considerably different in nature, degree and emphasis. I took the view that the judicial/merits based review Sahab sought of the Registrar-General's decision could be dealt with expeditiously by the Court in one day whereas a s 88K application would necessarily involve longer, more complicated and, therefore, considerably more expensive proceedings. In late 2008 and early 2009, I believed that a judicial/merits based review of the Registrar-General's administrative decision to cancel the recording of the right of way would result on its own in the reinstatement of the right of way and that a s 88K application, with its additional costs and complications, would be unnecessary.

11. Furthermore, I believed that if a prayer for s 88K relief against Castle was added to the amended summons, it would detract, in terms of evidence to be adduced and issues to be determined, from its focus which I wished to preserve. I believed that the addition of a s 88K action against Castle would bifurcate the proceedings in a manner militating against their efficient and cost effective conduct.

12. As it happened, the earlier proceedings took a markedly different and far more protracted course than I had envisaged when in early 2009, I amended the summons. For example, there arose contested interlocutory proceedings dealing with whether the Registrar-General was required to give reasons for his 2001 decision to cancel the recording of the right of way. The Registrar-General resisted the notice of motion calling for reasons but was made to file an unconditional appearance before being allowed to contest the issue. The issue was the subject of the first decision by the trial judge, his Honour Mr Justice Slattery, delivered on 26 October 2009. The Case continued thereafter with the active opposition of both the Registrar-General and Castle and resulted in two further decisions by his Honour delivered on 8 March 2010 and 5 May 2010. The case was hard fought by the Registrar-General and Castle at every turn which contributed to its length and ultimate complexity, neither of which I anticipated at the outset of the proceedings."

21 Issues which would arise under the application for the imposition of an easement pursuant to s 88K of the Conveyancing Act are as follows:

a. whether the grant of the easement is reasonably necessary for the effective use or development of the Strathallen land that would have the benefit of the easement (s 88K(1)). Castle Constructions denies that reinstatement of the right of way is reasonably necessary for the effective use of the Strathallen land. This raises a factual question as to the means of access to two levels of the building on the Strathallen land and to the rear of the property, and the asserted leasing of the ground floor level by reason of which Sahab says that without the right of way the upper level of the building and the rear yard cannot be used;

b. whether use of the Strathallen land having the benefit of the easement that is sought would not be inconsistent with the public interest (s 88K(2)(a)). Castle Constructions denies that use of the land having the benefit of the right of way would not be inconsistent with the public interest. It is not clear to me what evidence might be adduced on this question;

c. potentially, whether Castle Constructions could be adequately compensated for any loss or other disadvantage that it would suffer arising from the imposition of the easement (s 88K(2)(b)). Castle Constructions might argue that imposition of the right of way would cause harm not compensable by a monetary award;

d. whether Sahab had made all reasonable attempts to obtain the easement. Castle Constructions denies that Sahab has made reasonable efforts to procure its agreement to the imposition of the right of way (s 88K(2)(c));

e. whether the Court should be satisfied that no compensation should be payable because of special circumstances (s 88K(4)). This issue raises the clear overlap with the earlier proceeding;

f. if no, what amount of compensation is appropriate to be provided to Castle Constructions. This would require valuation evidence; and

g. whether there are grounds for making a different costs order other than that Sahab pay Castle Constructions' costs of the proceedings (s 88K(5)).

Only issue (e) raises an overlap with the earlier proceedings, but there the overlap is significant.

22 The overlap of issues between the earlier proceedings and the present proceedings arises partly because the easement that Sahab seeks to have imposed pursuant to s 88K is in precisely the same terms as the easement removed by the Registrar-General in 2001, and partly because Sahab relies on the circumstances in which the easement was removed, and the finding of the Court of Appeal that it was incorrectly removed, to establish special circumstances within the meaning of s 88K(4) by reason of which it contends no compensation should be payable. Castle Constructions contends that these matters make it unarguably clear that it was unreasonable for Sahab not to have brought the present claim at the same time as it brought the claim it did.

23 I do not accept this submission. It is arguable that it was reasonable for Sahab to have considered that its primary claim for reinstatement of the right of way raised narrow questions of law that ought not to be complicated by additional issues which would arise on an alternative case under s 88K. Sahab's primary claim involved questions of construction of the 1921 transfer and questions of law regarding the construction of the Real Property Act if it were found, as it was found, that the right of way was incorrectly removed. It is arguable that it was reasonable for Sahab to confine the issues in the first proceeding to questions relating to correction of the register. The Registrar-General was concerned only with those issues. The Registrar-General would not have been concerned with the issues arising under s 88K. If Sahab had been successful in its original proceeding so that it would not have needed to pursue its s 88K claim, there would be serious questions as to whether it could recover its costs of the s 88K claim and whether it might in any event be required to pay the Registrar-General's costs to the extent they were increased by that claim.

24 In Port of Melbourne Authority v Anshun Pty Ltd Gibbs CJ, Mason and Aicken JJ said (at 602-603):

"In this situation we would prefer to say that there will be no estoppel unless it appears that the matter relied upon as a defence in the second action was so relevant to the subject matter of the first action that it would have been unreasonable not to rely on it. Generally speaking, it would be unreasonable not to plead a defence if, having regard to the nature of the plaintiff's claim, and its subject matter it would be expected that the defendant would raise the defence and thereby enable the relevant issues to be determined in the one proceeding. In this respect, we need to recall that there are a variety of circumstances, some referred to in the earlier cases, why a party may justifiably refrain from litigating an issue in one proceeding yet wish to litigate the issue in other proceedings, eg expense, importance of the particular issue, motives extraneous to the actual litigation, to mention but a few: see the illustrations given in Cromwell v County of Sac (94-US at 356-7).

It has generally been accepted that a party will be estopped from bringing an action which, if it succeeds, will result in a judgment which conflicts with an earlier judgment. ...

...

By 'conflicting' judgments we include judgments which are contradictory, though they may not be pronounced on the same cause of action. It is enough that they appear to declare rights which are inconsistent in respect of the same transaction."

25 This is not a case of potentially conflicting judgments. Counsel for Castle Constructions submitted that a plaintiff may be barred on the principles of Anshun estoppel from raising an alternative claim in fresh proceedings that could have been raised in the earlier proceedings, notwithstanding that success on the alternative claim in the new proceedings would not result in inconsistent judgments. I accept that that is so (CG Maloney Pty Ltd v Noon [2011] NSWCA 397, particularly at [79] and [80]). The question is whether it was reasonable for the plaintiff not to have brought the claim in the first proceeding. In my view, on the facts of this case, that is not a question that can be determined on an application for summary judgment. Castle Constructions referred to Rahme v Commonwealth Bank of Australia [1991] NSWCA 230 and Bryant v Commonwealth Bank of Australia (1995) 57 FCR 287. They were both cases in which the plaintiff's claim was summarily dismissed on the basis of an Anshun estoppel. But in both cases the second proceeding, if successful, would have produced decisions inconsistent with what had been decided in the earlier proceeding.

26 Counsel for Castle Constructions submitted that similar issues arise in the present case in that, so it was submitted, Sahab in the present case seeks factual findings in support of its claim for the imposition of an easement under s 88K which would be inconsistent with findings made in the earlier proceedings. Two matters are identified. In his affidavit sworn in support of Sahab's present claim, Mr Kanjian refers to a letter that he wrote to Mr Lahoud of Castle Constructions dated 23 May 2008 in which he said that Sahab purchased the Strathallen land with knowledge that the previous right of way had been extinguished by an administrative act of the Department of Lands. Slattery J made a finding (at [46]) that:

"It is uncontested in these proceedings that at the time of that purchase [viz. Sahab's purchase of the Strathallen land] Sahab was aware of the 2001 decision cancelling the recording of the right of way in the Folio of the Register for [the Sailors Bay land]."

27 At the hearing before Slattery J Mr Kanjian was cross-examined and gave evidence consistent with the finding referred to above.

28 In his affidavit in these proceedings Mr Kanjian deposes:

"At the time the plaintiff purchased the Strathallen land, I knew on its behalf that the right of way over the Sailors Bay land had been closed off and was no longer in physical use, but I did not know that it was the result of an 'administrative act' of the Department of Lands. That knowledge only came to me during the meeting with Mr Lahoud on 13 October 2007. When I wrote the letter dated 23 May 2008 to Mr Lahoud, I was not alive to the sequence of events contributing to my knowledge of the matter as at that date."

29 The finding of Slattery J quoted above would not give rise to an issue estoppel. If the time at which Sahab through its director, Mr Kanjian, acquired knowledge of the circumstances in which the right of way was removed from the register is relevant to the claim under s 88K, it is open to Sahab to seek a different finding of fact notwithstanding the evidence given in the earlier proceeding. But that is a minor issue in the scheme of things. The possibility of inconsistent factual findings is not itself a sufficient basis for an Anshun estoppel, otherwise there would be a de facto extension of principles of issue estoppel to every issue of fact or law decided, whether or not the decision was on a matter essential to the legal foundation or justification for the decision. The fact that a different finding of fact is sought is relevant in that it demonstrates an overlap of factual issues (Ling v Commonwealth of Australia (1996) 68 FCR 180 at 184; Zavodnyik v Alex Constructions Pty Ltd [2005] NSWCA 438; (2005) 67 NSWLR 457 at [39]). But it is only one integer in the assessment that will have to be made as to the reasonableness of the plaintiff's decision not to pursue the s 88K claim in the first proceeding.

30 The second matter relied on by Castle Constructions concerns the findings in the earlier proceedings that in 2001 the Registrar-General gave notice under s 12A(1) to the then registered proprietors of the Strathallen land of the proposed alteration of the register to remove the easement. Slattery J found (at [76]) that the Registrar-General gave notice under s 49(4) of the prospective cancellation of the right of way to Mr and Mrs Howard. The Court of Appeal did not agree that the notice was given under s 49(4) but recorded (at [41]) that it was common ground that the Registrar-General notified the Howards of the application contained in the 2001 request.

31 In these proceedings Mr Kanjian deposes that the notice sent by the Registrar-General to the Howards dated 8 October 2001 was sent to him by the Registrar-General unannounced on 26 November 2010, being eight months after Slattery J's judgment and when the hearing of Sahab's appeal to the Court of Appeal was pending. No party sought to put the letter into evidence before the Court of Appeal. Sahab applied to the High Court during the hearing of the appeal to the High Court to tender the letter but the application was rejected because the letter was not in evidence before the Court of Appeal. (An appeal to the High Court is an appeal stricto sensu.)

32 Sahab now seeks to rely on the terms of the notice given by the Registrar-General on 8 October 2001 apparently in support of its argument that there are special circumstances that mean that compensation should not be payable for the imposition of an easement.

33 The letter was addressed to Mr and Mrs Howard at the Strathallen land and stated:

"NOTICE OF INTENTION TO CANCEL THE RECORDING OF EASEMENT SECTION 49 REAL PROPERTY ACT 1900

Re: Request No. 7924028 by Castle Constructions Pty Limited

The above Request is an application under section 49 of the Real Property Act 1900 to cancel the recording of an easement being the right of way created by Transfer No. A752953, and the restrictive covenant (pursuant to section 81J(1)(1)(a) created by the same transfer, due to the happening of an agreed event.

The benefit of the right of way and covenant were limited to continue during the ownership of benefited land by the transferors' in the above Transfer, their executors, administrators and assigns other than transferors on sale.

You have a registered interest in the land benefited by the easement and covenant, being the land comprised in Register Folio 1/726736.

A copy of the dealing creating the easement and covenant; Register Folios A/404929 (the servient land) and 1/726736; and the plan showing the easement, DP404929, are attached.

I intend to register the above application and cancel notification of the easement and covenant unless, within one month of the date of this notice,

(i) You furnish written grounds showing cause to my satisfaction why the said easement should not be cancelled.

(ii) A caveat pursuant to section 74F(4A) and/or (4B) of the Real Property Act prohibiting the grant of the Request is lodged.

It is pointed out that:

A person lodging a caveat may be required by the Applicant to show cause in the Supreme Court why he/she should not be ordered to withdraw the Caveat - see Section 74MA of the Act.

A person lodging a caveat without reasonable cause is liable to pay compensation for any damage caused thereby - see Section 74P of the Real Property Act."

34 It may be noted that the notice described the request by Castle Constructions as having been made under s 49 of the Real Property Act, which is how Slattery J treated it, and is not expressed to be given under s 12A of the Real Property Act. It also asserted, apparently as the view of the Registrar-General, that the benefit of the right of way was limited to continue during the ownership of the Strathallen land by "the transferors' in the above Transfer".

35 In its reply to the estoppel defence Sahab pleads that the circumstances deposed to by Mr Kanjian in his affidavit in these proceedings concerning the actual contents of the letter dated 8 October 2001 could not have been raised by Sahab in the first proceeding because the letter was not in evidence before the trial judge, having only been produced by the Registrar-General on 26 November 2010 more than eight months after the trial judge dismissed the plaintiff's claim.

36 It seems, although for what purpose it is not clear, that Sahab also seeks to contend that in 2001 the Registrar-General did not give notice of his intention to cancel the right of way to the Commonwealth Bank of Australia as then registered first mortgagee, or to a Mr and Ms Arnold as registered lessees. The "Request" lodged by Castle Constructions for removal of the easement purportedly set out the names and addresses of all parties having a registered interest in the land benefited by the right of way, but did not mention either the registered first mortgagee or registered lessees.

37 The Registrar-General's letter enclosed a copy of the dealing creating the easement and covenant. Slattery J found (at [23]) that the covenants in the instrument of transfer that were said to mean that the right of way was to continue only during the period of ownership of the transferee (Mr Davis) were difficult to read. That is an understatement. The instrument would be well nigh unintelligible to a non-lawyer.

38 The letter of 8 October 2001 is an interesting postscript to the judgments in the first proceedings. It is not entirely clear how Sahab will seek to use the material in the present proceeding. It cannot dispute the conclusiveness of the High Court's determination. It does not appear to me that the plurality in the High Court based their decision on any conclusion that the Registrar-General had in fact given notice under s 12A(1) but that is irrelevant. It is irrelevant in the present case whether the notice can be considered to have been given pursuant to s 12A(1) or not. Sahab's contention that notice was not given by the Registrar-General in 2001 to other persons having registered interest in the property is also prima facie of no relevance to the present proceeding.

39 It seems to me that the only relevance that this material is likely to have in the present proceeding is as part of the matrix of facts Sahab relies upon to seek to establish special circumstances justifying the imposition of an easement without compensation. I apprehend that Sahab would say that Castle Constructions had no right to procure the removal of the right of way, that it procured the removal of the right of way by misrepresenting through its solicitor that the right of way was to continue only during the ownership by the original transferee, Mr Davis, that the Registrar-General acted on that representation by substantially repeating it to the registered proprietors of the Strathallen land as if it were an incontrovertible fact rather than an arguable construction of the instrument of transfer, that it can be inferred that the then registered proprietors were misled as to their rights by the terms of the Registrar-General's letter, that Castle Constructions was primarily responsible for that state of affairs, and accordingly it is not just that Castle Constructions should receive compensation for the reinstatement of the right of way.

40 I do not think that the deployment of the letter in that way raises any issue of conflicting findings, whether of fact or law, between the two proceedings.

41 There is potential for conflicting conclusions as a matter of law, namely the construction of the 1921 transfer, if Castle Constructions were to contend successfully for a different construction of the transfer from that adopted by Slattery J and the Court of Appeal. It might argue that Slattery J's conclusion was not essential to his decision because he ultimately dismissed Sahab's claim and there is therefore no issue estoppel arising from his Honour's judgment, and that the Court of Appeal's conclusion gives rise to no issue estoppel because its orders were reversed, albeit on different grounds.

42 But even though there is potential for conflicting findings of fact and law, I consider that it is still arguable that it was not unreasonable for Sahab to confine its case in the first proceeding to its claim that the Register should be corrected having regard to what, at least in principle, could reasonably be thought to have been the narrow issues that would arise on its claim. Had it been successful the costs associated with preparing and defending a s 88K application would have been avoided. On the other hand, had it brought the s 88K claim as an alternative claim in the first proceeding, there may have been an order for the separate determination of that claim which would have left the parties in materially the same position as they now are. If not, and if Sahab had succeeded in the first action, it may not have recovered its costs of the s 88K claim and may have had to pay additional costs incurred at least by the Registrar-General attributable to that claim. It may be said that it should have brought both claims and sought a separate determination of the s 88K claim, so as to enable the defendants to be heard on the question as to whether the claims should be heard separately or together. But that is itself an arguable question. The area of overlap relates to a significant issue, but the issue is not necessarily decisive and there are other issues in which there is no overlap. I do not conclude that the Anshun estoppel defence must succeed.

43 For these reasons I order that the defendant's notice of motion filed on 23 June 2014 as amended on 1 September 2014 be dismissed. I will hear the parties on costs.

Decision last updated: 19 September 2014