Whether an easement should be extinguished on the basis it has been abandoned or is obsolete, is a question which often arises in the context of property ownership and re-development, particularly where an easement is old.

If agreement cannot be reached to extinguish an easement, there is a legal mechanism under section 89(1) of the Conveyancing Act 1919 (NSW) to seek an order from the Supreme Court of NSW for an order extinguishing the easement.

However, as the recent decision of the NSW Court of Appeal in Sheppard v Smith [2022] NSWCA 167 confirms, satisfying the Court that an easement should be extinguished because it has been abandoned or is obsolete is a high bar

Facts in Sheppard

In Sheppard, there was a right of way for disposal of “night soil” (in effect, a “dunny lane”) which had been granted in 1885 and burdened an L-shaped portion of land, originally a laneway, in Birchgrove. The burdened land was No. 6 and the benefitted land was No. 8. At the time of the grant, there were outhouses on Nos. 6 and 8 which connected to the road by the laneway.

At the time the easement was created, the land was under Old System title (not Torrens title).

No. 6 was converted to Torrens title in 1995, but it was only limited title as the boundaries had not been investigated. An investigation of the boundaries did not occur until 2019, when a plan of delimitation was prepared and registered. That plan showed the right of way extending over an L-shaped portion of land on No. 6.

No. 8 was converted to Torrens title some time prior to 2008, but again it was a limited title as a plan of delimitation was not registered until December 2010. The plan of delimitation registered in 2010 showed that No. 8 had the benefit of a right of way over the L-shaped portion of land on No. 6.

However, it was not until March 2019 when a new Deposited Plan was registered showing the L-shaped piece of land being incorporated into the title of No. 6 and showing the right of way benefitting No. 8, that the easement was registered on the title of No. 8.

Subsequent to the installation of a sewer line in the laneway in 1908, which connected the two terraces at Nos. 6 and 8 to the sewer main, the laneway stopped being used, the outhouses were demolished, a fence was built or extended across the laneway and the backyards of both Nos. 6 and 8 were extended so as to include parts of the L-shaped piece of land, which was the subject of the right of way. Two raised garden beds were also built almost entirely across the width of the right of way.

Other structures subsequently built partly or wholly within the site of the easement included:

• A fish pond, which was replaced by the owner of No. 8 with a new brick wall and fence.
• A pergola, supported by four posts.
• A roof, extending from No. 6 which was later enclosed by the owner of No. 6 and included a concrete floor and bifold doors.

Practically, the effect of these structures was to render the right of way unusable.

After the registration of the Deposited Plan in March 2019 recording the right of way on the title of No. 8, the owner of No. 8 removed some palings in the fence between Nos. 8 and 6 so that he could gain access to use the right of way over No. 6.

Council also issued a Development Control Order requiring No. 6 to remove the structures in the right of way which had been constructed without planning approval.

The owner of No. 6 subsequently commenced Supreme Court proceedings seeking an order to have the easement extinguished on the basis it had been abandoned or was otherwise obsolete.

That application for extinguishment was refused by the Judge at first instance and that decision was upheld on appeal by the Court of Appeal.

Key Findings

The Court of Appeal upheld the following key findings by the trial Judge:

1. No evidence of abandonment of the easement by either the previous owner or the current owner of No. 8.

While the previous owner of No. 8 had never used the right of way and had not “asserted an entitlement to do so”, that did not mean there was an abandonment of the easement.

It did not matter that:

• The previous owner had not objected to the construction of a fence by No. 6 across the right of way. That was not enough to establish that No. 8 had acquiesced to an abandonment of the easement (referring to the seminal case of Treweeke v 36 Wolseley Road Pty Ltd (1973) 128 CLR 274), or
• The new owner of No. 8 had constructed a temporary wooden fence and garden shed in the right of way, shortly before registration of the March 2019 Deposited Plan which had the effect of registering the right of way on title of No. 8. Those structures were temporary and could easily be removed. Further, the owner of No. 8 had taken “active steps” to use the right of way by removing the palings in the fence.

2. Easement not obsolete by virtue either of a change of use of the benefitted land or because continued use of the easement would impede the reasonable use of the burdened land without a practical benefit to the benefitted land.

• The right of way was expressed to be for all purposes, not just for access as a “dunny lane”. The installation of a sewer line under the laneway was not enough to demonstrate there was a change of use of the benefitted land.
• Reasonable use of the burdened land was not impeded. While the owner of No. 6 would have a “compressed backyard” as a consequence of the easement, that was not enough to demonstrate reasonable use of the land would be impeded. The Court also found that the owner of No. 8 had a genuine wish to use the right of way and although work needed to be carried out to make it trafficable, that did not mean there was no practical benefit to No. 8 from the use of the right of way.

3. Whether or not there was substantial injury to the owner of the benefitted lot if the easement was extinguished was not relevant, because abandonment had not been established.

Key Points to Remember

These are the important points to remember when considering an application to extinguish an easement:

1. Establishing non-use of an easement is not enough to prove abandonment. This is the case even if the owner with the benefit of the easement may not know about the easement.
2. Allowing or constructing structures within the site of the easement can be an indicator of an intention to abandon, but not necessarily especially if the structures are temporary or easily removed.
3. Active steps taken by the benefited owner showing an intention to use the easement are relevant to the Court’s assessment of whether an easement has been abandoned.

The decision in Sheppard reinforces that easements are important property law rights and applications for extinguishment will not be entertained lightly by the Court. The bar is high.