Green v Scottney-Turbill[2022] QSC 65

SUPREME COURT OF QUEENSLAND

Jackson J

1. [1]
   The defendants to the proceeding apply (by interlocutory application filed in the claim) for an order removing the caveat^[1] lodged by the plaintiff over lot 2 on registered plan 180661 title reference 16263230, located at 14 Harper Creek Road Conondale Qld (“lot 2”).  Attached to this judgment is a diagram of the relevant area, which was exhibited to the first defendant’s affidavit. 
2. [2]
   Lot 2 is located on the southern side of Harper Creek Road that runs approximately east-west.  From lot 2, Harper Creek Road runs west to a T-junction with Aherns Road.  The defendants are registered as the owners of lot 2.
3. [3]
   Adjacent to the western boundary of lot 2, bounded by Harper Creek Road to the north and Aherns Road to the west is lot 1 on registered plan 180661 title reference 16263229 (“lot 1”).  Colin and Lindel Kielly are registered as the owners of lot 1.
4. [4]
   On the western side of Aherns Road across the road from lot 1 is lot 5 on registered plan 51589 title reference 11934228 (“lot 5”), located at 144 Aherns Road.  This is where Conondale Timbers Sawmill (“mill”) is located.  Conondale Timbers Pty Ltd (“the company”) is registered as the owner of lot 5. 
5. [5]
   From the dates of the mortgages registered on the title of lot 5, I infer that the company owned the land from the early 1970s at least.  On 30 March 1999, it was deregistered as a company.  Accordingly, the company ceased to exist and the land is presently vested in ASIC.^[2]
6. [6]
   Towards the southern boundary of lot 2, there is located a large cylindrical metal tank, originally a boiler for the mill (“boiler tank”).  Many years ago, before the defendants acquired lot 2, it was located on lot 2 to be used as a water tank for the mill.  The purpose of the boiler tank appears to have been to store water and to create a head of pressure for the supply of water to the mill that was pumped from Harper Creek.  Piping is located underground that runs across lot 2, lot 1, Aherns Road and lot 5 to connect the boiler tank to the mill. 
7. [7]
   The parties did not concern themselves with the question whether the boiler tank^[3] or the section of the pipes on lot 2^[4] were fixtures that became part of the land of lot 2.   Nor was there any attention given to the nature of the easement that might exist to support the location of and maintenance of the boiler tank and pipes,^[5] or that no prescriptive easement is recognised under the Land Title Act 1994 (Qld).^[6] 
8. [8]
   The defendants are proposing to sell lot 2.  The plaintiff claims to be entitled to an easement over lot 2 to support an ongoing entitlement to the use of the boiler tank and piping on lot 2.  The starting point is that the defendants as registered owners of lot 2 are owners of the fee simple^[7] in the indefeasible title.^[8]  As such they hold the fee simple subject to registered interests affecting the lot but free from all other interests,^[9] unless the plaintiff has an interest mentioned in s 185 of the Land Title Act 1994 (Qld).^[10]  The interest claimed by the plaintiff is not within s 185 unless it is “an equity arising from the act of the registered proprietor”.^[11]  What was done before the defendants became the registered owners of lot 2 does not bind them.
9. [9]
   On or about 14 November 2021, the defendants entered into a contract to sell lot 2. Perhaps in response to this, on 7 December 2021 the plaintiff lodged a caveat over lot 2.  The caveat claimed: “[a]n equitable interest in the fee simple estate”.  The grounds stated were:

“Pursuant to a constructive and/or implied or resulting trust arising upon the financial and non-financial contributions of the caveator to the acquisition, conservation and/or improvement of the property.

…

See attached sketch plans of necessary easement…”

10. [10]
    The attached plans identified a square area said to be 20 metres by 20 metres from the southern corner of lot 1 and lot 2 and a six metre wide strip running from the north-west corner of the square area along the western boundary of lot 2 until Harper Creek Road.  That strip does not coincide with the land under which the pipes run from the boiler tank to the west across lot 1.
11. [11]
    On 21 January 2022, the plaintiff started a proceeding by claim claiming “[a]n equitable interest in the fee simple estate of the defendants resulting from a constructive implied 50 year Trust/Covenant, the need for the Supreme Court of Qld to Order via the Property Law Act 1974 s 180(5) that a statutory right of a user to have a subsisting prescriptive easement surrounding the Plaintiff’s utility water supply tank as specified in s 180(1)(2)(4)(c)(e) be recorded on the Register… Sketch and Plan page 7 and 8…”.  The servient tenement was identified as lot 2.  The dominant tenement was identified as lot 5 and lot 20. Lot 20 is not the location of the mill and is not owned by the plaintiff.
12. [12]
    On 2 March 2022, the defendants filed an application to strike out the statement of claim and an application to remove the caveat under s 127 of the Land Title Act 1994 (Qld).
13. [13]
    On 24 March 2022, the Chief Justice struck out the statement of claim on the ground that it failed to disclose a reasonable cause of action.  Leave was granted to file an amended claim and statement of claim.  The application to remove the caveat and the question of costs of the application to strike out were adjourned to 7 April 2022.
14. [14]
    On 7 April 2022, the defendants pressed their application to remove the caveat. 
15. [15]
    The defendants submitted that there is no evidence of the plaintiff making financial or non-financial contributions to the acquisition, conservation or improvement of the property as stated in the grounds of the caveat.
16. [16]
    The plaintiff’s evidence is that the plaintiff’s involvement in the construction and maintenance of the boiler tank and pipework began before the defendants acquired lot 2 and extended back in time before the subdivision of lot 1 and lot 2 when both parcels were owned by members of the Lyon family. 
17. [17]
    In the 1970s, the plaintiff’s father, Campbell Green, made an agreement with Allen and Graeme Lyon to install the boiler tank as a gravity feed water supply for the mill.  There was no rent, fee or other charge for doing so.  The maintenance or replacements were the responsibility of the mill.
18. [18]
    The plaintiff says that in about 1992 to 1994, he and his father shook hands with the first defendant and agreed that he would do an easement for the boiler tank when he sold the property.
19. [19]
    The first defendant says that in or about November 1988 he and his wife and the plaintiff’s father, by way of a “gentlemen’s handshake”, agreed that the boiler tank could remain on lot 2 as a water supply to the mill property for saw cleaning, in return for a water tap being put on the tank for use by the defendants, and that a tap for that purpose was installed on the same day.
20. [20]
    The plaintiff says that for the whole of the period for which the boiler tank has been on the land that became lot 2 he has attended to the maintenance of the boiler tank and its water supply that is pumped from lot 5.
21. [21]
    The two relevant questions on an application to remove a caveat are whether the plaintiff has an arguable interest in lot 2 and, if so, whether the balance of convenience still favours removal of the caveat.^[12]  As the defendants submitted, the plaintiff bore the onus of showing a genuine arguable case that he has an interest of the kind asserted in the caveat.
22. [22]
    The defendants submitted that the agreement made between the male defendant and the plaintiff’s father amounted to nothing more than a licence of indefinite duration for the mill to use the boiler tank.  However, the plaintiff’s evidence is that there was an agreement to grant an easement in the event of a sale by the defendants.
23. [23]
    That may take the plaintiff some way towards establishing an agreement to grant an interest in the land, that could operate as an exception, by operation of law or the operation of a resulting, constructive or implied trust, to the requirement that an interest in land must be created in writing signed by the person creating or conveying same.^[13]  It is unnecessary to consider further issues as to the agreement, for example whether it is uncertain, is not supported by consideration, is unenforceable because it was not reduced to writing,^[14] is not capable of specific performance, or is enforceable as an equitable estoppel.  Not one of these questions was debated on the hearing of the application.
24. [24]
    Irrespective of those questions, there is a fundamental flaw in the caveat and the proceeding as presently constituted.  It is that the dominant tenement of the alleged agreement to grant an easement is lot 5.  The party to the agreement alleged by the plaintiff and owner of lot 5 as the dominant tenement is the proper plaintiff.  That was the company, which no longer exists.  On the evidence, nothing assigned the company’s rights under the alleged agreement with the defendants to grant an easement to the plaintiff^[15] and nothing vested any equitable interest in lot 2 that the company might have had in the plaintiff.
25. [25]
    In the caveat the plaintiff also relied on s 180 of the Property Law Act 1974 (Qld) as supporting the claimed interest in lot 2 of an entitlement to an easement.  Section 180(1) provides:

“(1) Where it is reasonably necessary in the interests of effective use in any reasonable manner of any land (the dominant land) that such land, or the owner for the time being of such land, should in respect of any other land (the servient land) have a statutory right of user in respect of that other land, the court may, on the application of the owner of the dominant land but subject to this section, impose upon the servient land, or upon the owner for the time being of such land, an obligation of user or an obligation to permit such user in accordance with that order.”

26. [26]
    Section 180(1) may only be engaged by the owner of the dominant land, being lot 5.  Again, that is not the plaintiff, on the evidence.
27. [27]
    It follows that the plaintiff is unable to show that he has an arguable interest in lot 2, because the company was the holder of any interest in lot 5 under any agreement to grant an easement and on the evidence any equitable interest under the alleged agreement has not become the plaintiff’s property.  The caveat by the plaintiff must be removed.
28. [28]
    The defendants apply for an order that the plaintiff pay the costs of the application and the costs of paragraphs 1 and 2 of the order of Bowskill CJ made on 24 March 2022.  They also apply for an order that the costs be assessed on the indemnity basis.
29. [29]
    The power to order costs is that conferred by s 15 of the Civil Proceedings Act 2011 (Qld) as regulated by Chapter 17 of the Uniform Civil Procedure Rules 1999 (Qld).  Ordinarily, costs will follow the event.^[16]  It follows that the plaintiff should be ordered to pay the costs of the application, including those under the order of Bowskill CJ to strike out the statement of claim and upon this order to remove the caveat.
30. [30]
    The court has the additional discretionary power to order that the costs ordered to be paid are to be assessed on the indemnity basis.^[17]  There are a number of bases that the case law identifies for making such an order.^[18]  None of them was identified by the defendants.  As well, the defendants pressed a number of contentions in support of their application that it has not been necessary to deal with but which were unlikely to be accepted.  In the end, the defendants’ submission for indemnity costs was founded in the proposition that the plaintiff’s claim to an interest in lot 2 was fundamentally flawed, but not on the basis I have decided.
31. [31]
    Whilst it is true that the plaintiff’s claim of entitlement to an easement in the caveat was defective because on the evidence he does not own the dominant tenement in lot 5, and was not the party who made the alleged agreement to grant the easement with the defendants, I do not consider that the plaintiff was aware of the consequence upon the caveat he lodged of the deregistered company being registered as owner of lot 5.  There was no conduct that justifies an order that the costs of the application to remove the caveat should be assessed on the indemnity basis.