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Property: Modifying or Extinguishing Easements

Property: Modifying or Extinguishing Easements

The past few months have been quite busy, particularly on the lecturing front. Fortunately (for my sanity at least) most of the seminars I’ve presented have concentrated on really interesting parts of the Conveyancing Act 1919 (NSW) (‘CA’) like options, relief against forfeiture and (my personal favourite) the creation of easements. I had a matter cross my desk earlier this week that really caught my eye. Modifying or extinguishing easements. 

Section 89 CA gives the Court power to modify or extinguish, amongst other things, easements ‘in certain circumstances’. Subsection (1)(a), for instance, permits the Court to modify or extinguish an easement that has become obsolete or otherwise does not secure any practical benefit. Subsection (1)(b) may alternatively be invoked when the parties come to a mutual agreement to modify or extinguish an easement or, by their conduct, abandon or waive the benefit of an easement. Paragraph (c) of subsection (1) is probably the more interesting of the three. It contains a separate wide power that may be exercised if the proposed modification does not cause ‘substantial injury’. 

Justice Darke’s decision in Denshire v Newcastle City Council [2017] NSWSC 57 provides a fantastic insight into the use of section 89 CA. In that case, the applicants sought to extinguish three easements to facilitate satisfaction of a condition of an approval for subdivision of certain land near Newcastle. It was suggested that the first two easements would become redundant as a public road was to be built. The last of the easements was argued to be already redundant because the properties that had the benefit of the easement now had access to a public street either directly or by way of another legal right of access. The owners of the said properties were not involved in the proceedings; it was just Newcastle City Council as respondent. 

His Honour found that the last of the easements did not serve a useful purpose and ought to be extinguished. The sticking point in the proceedings related to the first two easements because they were presently capable of being used for the purpose for which they were granted and continue to serve a useful purpose. Subsection (1)(c) seemed the perfect path to take to extinguish the first two easements as their extinguishment would not substantially injure the persons entitled to the easement. His Honour provided a fantastic summary of the relevant principles relating to section 89(1)(c) at [18]: 

‘It has been held that a substantial injury within the meaning of s 89(1)(c) means an injury which has present substance, not a theoretical injury, but something which is real and has present substance (Tujilo v Watts [2005] NSWSC 209 at [37] Laris v Lin (No 2) [2016] NSWSC 560 at [74]). The kind of injury contemplated is injury to the relevant persons in relation to their ownership of, or interest in, the land benefitted’.

His Honour found that the extinguishment of the first two easements would not substantially injure the persons entitled to the easement. Upon the dedication of the structure as a public road, the first two easements would cease to have practical utility and would therefore be redundant. 

If you would like to discuss modifying and distinguishing easements, please do not hesitate to contact me by:

Phone: (02) 9232 4466
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