Australia: Get it right! There is no substitute for clear drafting in property dealings

The primary source in interpreting an easement or any other registered dealing must be the terms of the document. Parties can assume significant risks if those terms aren't clear or don't clearly reflect their intentions.

When drafting property dealings, the most critical requirement is to be clear, particularly as there is very little scope for the Courts to look to extrinsic evidence. A recent decision by the Queensland Court of Appeal, reinforced that an easement is to be construed according to its terms, and noted the reluctance of the court to imply limitations on those rights.

The dispute over marina facilities

The appellant (Marina Lot) owned freehold land on the Bluewater Marina. The adjoining owner, the respondent (Tavern Owner), purchased land from a related Marina Lot entity to develop a tavern complex.

As part of the sale arrangements, the Tavern Owner granted an easement to Marina Lot, giving it a right of access to enjoy "Marina Facilities", which included 64 car parks together with showers, toilets and a laundry. The rights granted to Marina Lot under the easement also extended to users of the marina, and were stated to include a "free and uninterrupted and unimpeded right of access and use of the Marina Facilities at all times".

For reasons which were not made clear, the Tavern Owner only included 69 car parks in the tavern development, leaving only 4 car parks for the exclusive use of the Tavern Owner and its customers.

The easement had been negotiated so that boat owners who leased marina berths from Marina Lot could park their cars in the tavern car park while using their boats, and also use the shower and laundry facilities.

Despite the broad access rights conferred on the face of the easement, the Tavern Owner sought to implement a Car Park Management Plan, which would impose a time limit of five hours on the use of the car parks, and impose penalties for breach of the plan together with the right to tow any vehicles that exceeded the parking time limit.

Declaration as to the easement terms

Following the Tavern Owner's proposal to limit the car park use by marina berth users, Marina Lot commenced proceedings in the Supreme Court of Queensland, seeking a declaration that on the proper construction of the easement, the rights of Marina Lot and the marina berth users to access and enjoy the Marina Facilities, including the 64 car parks, were unlimited.

At first instance, Justice Mullins found that the car parking rights were not unlimited, as there must be a connection between the exercise of rights conferred under the easement, and the access to and from the dominant tenement (the marina). At some point the use of a boat away from the marina berth for an extended period of time meant that the car parking had lost its connection with the dominant tenement.

Her Honour selected 10 hours of continuous use of the car park as the point at which the connection between the exercise of easement rights and the dominant tenement would be lost; consequently the Tavern Owner could impose a 10 hour limitation on the use of the car parks.

Marina Lot succeeds on appeal

Marina Lot appealed and the Court of Appeal allowed the appeal on the basis the easement contained no express time limitation on the use of the Marina Facilities, and it was incorrect to imply such a limitation as the easement, by its terms, delimited the ambit of the rights it conferred.

Further, a time limitation would materially adversely affect the rights granted under the easement, given that the grantee's rights included a free and uninterrupted right of access and use of the Marina Facilities at all times.

The Court of Appeal declined to declare that the rights of Marina Lot and marina berth users in respect of the Marina Facilities were "unlimited", because the easement did provide for certain, limited circumstances in which their rights could be reasonably restricted. For example, this could occur if the Marina Facilities required maintenance. However, importantly, the only applicable restrictions were those arising out of the proper construction of the easement terms, which did not include any restriction as to time.

Key lessons for drafters

This decision reiterates that the primary source in interpreting an easement or other registered document must be its own terms, given that is all any subsequent owner will have access to. It is also a reminder of the importance, to all parties, of ensuring that any easement clearly articulates the parties' intentions as to the ambit of the rights to be granted pursuant to the easement, together with any relevant restrictions. The same principle applies to all registered property dealings.

Drafters have a heavy responsibility. It is not enough for the drafter and the parties to think they know the intent of a registered document. That intent needs to be clear and obvious to third parties from the drafting.

Clayton Utz communications are intended to provide commentary and general information. They should not be relied upon as legal advice. Formal legal advice should be sought in particular transactions or on matters of interest arising from this bulletin. Persons listed may not be admitted in all states and territories.

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