In brief - Unsuccessful attempt to restore an easement which had been removed from the Register
On 10 April 2013 the High Court of Australia handed down a decision in Castle Constructions Pty Limited v Sahab Holdings Pty Ltd  HCA 11 to prevent the restoring in the Register of an easement that had been removed from the Register.
Easement created in 1921 and removed in 2001
In 1921 an easement of way over the western boundary of land to Sailors Bay Road was created. In 2001 when the land was purchased, the buyer asked the Registrar-General to remove that easement from the Register on the basis that the original easement was for a Mr Davis or his successors other than on sale and Mr Davis was no longer around.
The Registrar-General notified the owner of the land that had the benefit of the easement that the Registrar-General was going to remove the easement. The parties having the benefit of the easement did not take court action under the Real Property Act 1900 (NSW) to prevent the Registrar-General from doing this and so the easement was removed.
New owners of land request that easement be restored
In 2008 new owners of the land that had formerly had the benefit of the easement asked the Registrar-General to restore the easement on the basis of an exception to indefeasibility in relation to land where there was an "omitted" easement.
The judge in the Supreme Court did not agree that this was an omitted easement and directed the Registrar-General to give reasons why it made its decision back in 2001. After reviewing the Registrar-General's reasons, the Supreme Court decided that this wasn't an "omitted" easement, but that the Registrar-General had decided deliberately to remove the easement and the adjoining owner had not taken action to maintain the easement.
NSW Court of Appeal overturns Supreme Court decision
The New South Wales Court of Appeal last year by a unanimous decision found that it was an "omitted" easement and decided that the new owner could bring action now for the Registrar-General to restore the easement as an omission from the title and an exception to indefeasibility.
Easement not omitted, but deliberately removed
The High Court of Australia by a unanimous five judge decision (though four judges gave one set of reasonings and another judge gave a different set of reasonings), found that the new owner of the property in 2008 could not bring an action to have the easement restored. That owner had purchased the property with a title in 2008 where the old easement had been removed. That easement had not been omitted, but had in fact been removed by the Registrar-General's action.
The Real Property Act provides for title by registration. In other words, the title you acquire is as shown on the Register. With the deliberate removal from the Register of an easement created by registration, this cannot be treated as "a case of the omission... of an easement" for the purposes of Section 42(1)(a1). The presupposition for the operation of Section 42(1)(a1) that the easement continues to exist is not valid. The easement had been removed from the Register and had not been "omitted" from the Register.
Owners of land did not seek to prevent Registrar-General from removing easement
The Registrar-General removes an easement from the Register by giving notice under Section 12A(1) to the owner of the land that has the benefit of the easement and that owner would not have an action against the Registrar-General in respect of that removal because of Section 12A(3). That section provides that where a person is given such a notice and does not serve on the Registrar-General an order of the Supreme Court to restrain the Registrar-General from taking the proposed action, then "no action by that person or by any person claiming through or under that person shall lie against the Registrar-General in respect of taking of the action specified in the notice".
The High Court of Australia held that Section 12A(3) not only operates as a bar to a claim for any relief by the owner of the land benefitted, but also in relation to subsequent owners as they are claiming through the former owner.
Land transferred to new owner did not have benefit of registered easement
The interest which the former owner of the land benefitted by the easement transferred was the interest as the registered proprietor of land which by then did not have the benefit of any registered easement. The High Court of Australia reminds us again and again that the Real Property Act and the Torrens system is a system of title by registration, so the subsequent purchaser only acquired that interest "shorn as it then was" of any recorded easement.
The Registrar-General can review any of its exercises of any of its powers under Section 32(6). This review is only open to the parties who are the owners of the land at the time the decision is made. (However, there needs to be a valid reason for requesting the review.) This review would not be open to the purchaser who accepted a transfer of the land, as the easement was no longer a part of the title acquired by that subsequent owner.
Real Property Act is a system of title by registration
This case, just like many other recent cases in the High Court of Australia, such as Black v Garnock and Breskvar v Wall reminds us that it is of fundamental importance to recognise that the Torrens system of registered title, of which the Real Property Act is a form, "is not a system of registration of title but a system of title by registration". As the High Court noted in Castle Constructions v Sahab Holdings:
Together with the information appearing on the relevant folio, the registration of dealings manifests the scheme of the Torrens system to provide third parties with the information necessary to comprehend the extent or state of the registered title to the land in question.
Outcomes of litigation are never certain
The case also reminds us of the uncertainties of litigation, given that the first judge in the Supreme Court found in favour of the Registrar-General and the removal of the easement, the New South Wales Court of Appeal by a unanimous decision restored the easement to the Register and the High Court of Australia by unanimous decision found that the Registrar-General was correct and the easement should not be restored, as it was not "omitted" but removed from the Register.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.