Breen v Clough

Court of Appeal (NSW)|2024-11-26|Before: Ward P, Stern JA, Slattery J

Background

The background to the dispute is set out in the primary judgment and need only be briefly stated here.
As noted above, the respective parties own neighbouring properties on land that slopes steeply down from the street above to the Georges River below. The applicants own Lot 118 (the lot benefited by the relevant easement). The respondent owns Lot 116 (the lot burdened by the relevant easement). The neighbours' houses are situated on the low lying slope of the properties, towards the water. There is a single inclinator located on the respondent's land, which both houses use for access to their properties. The inclinator stops at 6 landings, described by Rees J in an earlier decision in Clough v Breen [2020] NSWSC 653 (Rees J decision) (at [5]). It is necessary for the inclinator to be activated by use of a call button.
There are various easements (some 11 in total) burdening or benefiting the respective properties, as the case may be. The easements were created by the registration of a s 88B instrument on 18 January 2002, before either side had acquired their or her property. For present purposes, the relevant easement is Easement I, described as an easement for services. (Somewhat unhelpfully, there are two Easement "I"s on the relevant plan, the other being an easement for support. However, there was no dispute that it was the Easement I which related to an easement for services whose construction was in issue.)
There have been ongoing disputes between the neighbours over the years (see, for example, Breen v Clough [2017] NSWSC 1681, in respect of which applications for leave to appeal and cross-appeal were unsuccessful - see Breen v Clough [2018] NSWCA 172; the Rees J decision in 2020; and the various decisions by the primary judge, Slattery J, in the judgment the subject of this appeal to which I refer below). It can readily be seen from those various decisions that there has been fault on both sides.

Primary judgment

The matter first came before Slattery J in the Equity Division in 2022. His Honour, in his first judgment, settled what he referred to as a complex interlocutory regime to stabilise the conflict between the parties pending a final determination of the issues between them (see primary judgment at [1]).
His Honour initially considered that it might be useful to determine (by way of early determination) several legal issues before giving a final judgment on the contested facts but ultimately was of the view that only one of those issues could be decided early (that being the issue relating to the installation of the CCTV camera) since the others raised issues of credibility and reasonableness of use. Hence, his Honour said that the primary judgment dealt only with the limited facts necessary to resolve the issue which he described as the Storage Area Camera Issue.
His Honour noted at [18] that Easement I in the plan and the s 88B instrument was an easement for services; and that its terms are those contained in the Conveyancing Act 1919 (NSW) (Conveyancing Act), Schedule 8 (which for Easement I had not been varied by the s 88B instrument). Although there was some debate about this at the hearing in this Court, it was ultimately accepted by the applicants that the terms of Easement I were as set out by his Honour and that no question as to the variation of the statutory terms by the s 88B instrument arose.
The statutory terms of Schedule 8, Part 11, set out at [20] are: Part 11 Easement for Services 1. The owner of the lot benefited may-- (a) use each lot burdened, but only within the site of this easement, to provide domestic services to or from each lot benefited, and (b) do anything reasonably necessary for that purpose, including-- ● entering the lot burdened, and ● taking anything on to the lot burdened, and ● carrying out work, such as constructing, placing, repairing or maintaining pipes, poles, wires, cables, conduits, structures and equipment. 2. In exercising those powers, the owner of the lot benefited must-- (a) ensure all work is done properly, and (b) cause as little inconvenience as is practicable to the owner and any occupier of the lot burdened, and (c) cause as little damage as is practicable to the lot burdened and any improvement on it, and (d) restore the lot burdened as nearly as is practicable to its former condition, and (e) make good any collateral damage. 3. For the purposes of this easement, "domestic services" includes supply of water, gas, electricity, telephone and television and discharge of sewage, sullage and other fluid wastes.
His Honour then briefly summarised the respective parties' submissions (at [21]-[22]) before concluding that the respondent's argument was the more persuasive on the issue ([23]). His Honour explained that conclusion from [23].
His Honour considered that the language of Schedule 8, Part 11 was clear, noting that the easement for services was to use the burdened lot "to provide domestic services to or from each lot benefited"; and that, to qualify as "services" within the Part 11 definition, the services must answer the description of being "domestic services" and must be services "to or from each lot benefited" ([23]).
His Honour initially said that the CCTV camera and associated cabling at the storeroom level did not qualify because they were neither "domestic services" nor were they services "to or from each lot benefited" ([23]). However, as noted below, his Honour seemingly later departed from the first part of that statement, in that he appeared to accept that the services were probably "domestic" (see at [28]).
Importantly, for present purposes, his Honour accepted the respondent's submission that the statutory definition of "easement for services" connoted the idea of "something that is provided by an outside supplier to the lot benefited" ([24]). The central challenge by the applicants to his Honour's construction relates to this finding. His Honour then said that the use to which the applicants sought to put the CCTV camera (to observe what was happening on the land burdened by the easement) lay "outside that use".
At [28], his Honour, having considered at [25]-[27] the dictionary definitions of "domestic" and "service", accepted that a CCTV camera placed and used as the present one was could "probably" be described as a "domestic" activity, though then said that it did not have the "necessary connection with commercial and utility services demanded by or and [sic] supplied to the public". His Honour said that the activity in question was "individual, discretionary, private, and not a part of something demanded by the public".
However, his Honour went on at (at [29]) to say that: But the additional qualification "to or from each lot benefited" also excludes the placement of a CCTV camera on the burdened lots for this purpose. The words "to or from each lot benefited" need to be interpreted within the structure of this easement. They neither say nor mean "to or from" just the burdened lot to the benefited lot. Consistent with the meaning of domestic service as here interpreted, the words "to or from each lot benefited" connote a "service" that at least enters, leaves or somehow accommodates the benefited lot from a public place through the burdened lot.
His Honour noted that, although only an inclusive definition, cl 3 of Part 11 defined domestic services as including "supply of water, gas, electricity, telephone and television and discharge of sewage, sullage and other fluid wastes", which he regarded as broadly consistent with his interpretation ([29]).
His Honour said that the applicants' submission (that it was a domestic service for reasons including safety and security as well as control and management of the inclinator) gave insufficient weight to the applicable meaning of the word "services" and the words "to or from each lot benefited" in the expanded definition in Schedule 8 ([31]). His Honour gave, as an example sufficient to explain the problems that he considered would arise if the applicants' interpretation were to be accepted, the example of setting up solar panels on the burdened land to generate electricity for the benefited lot; and said that could hardly be what was here intended ([32]).
Hence, his Honour concluded that the CCTV camera was an impermissible fixture placed on Easement I, which was a trespass, and that it could and should be removed. His Honour proceeded to make orders intended to allow the smooth and orderly removal of the camera; and stayed the operation of those orders until 3 February 2023 to enable any disputes about their implementation to be resolved in the period between 30 January and 3 February 2023.
As adverted to earlier, at [37], his Honour said that there had not been a separate determination of this issue (the Storage Area Camera Issue) under r 28.2 of the Uniform Civil Procedures Rules 2005 (NSW) and therefore it would be unnecessary (to preserve rights of appeal) for any party to appeal from the orders he was then making until judgment was given in respect of all other outstanding issues at trial.
Final judgment on liability on the remaining issues was handed down on 22September 2023 (orders having earlier been made on 31 August 2023) (see Clough v Breen (No 4) [2023] NSWSC 1155). Judgment on damages was handed down on 9 April 2024 (Clough v Breen (No 5) [2024] NSWSC 337). The latest judgment, which was handed down on 18 December 2024, was Clough v Breen (No. 6) [2024] NSWSC 1634, which dealt with, among other things, an application for a gross sum costs order (and from which it appears that a further CCTV camera was installed by the applicants at or near landing 6).

Proposed Grounds of Appeal

As noted above, only one ground of appeal is now sought to be raised: 1. The primary judge erred at [J33] of Clough v Breen (No 2) in finding that a CCTV camera is an impermissible fixture placed upon Easement I and a trespass, on the grounds that: a. The primary judge made the finding at [J32] that a CCTV camera is not a "domestic service" within the meaning of Part 11, Schedule 8 of the Conveyancing Act 1919 (NSW), contrary to the finding of the primary judge at [sic; that] the service "enters, leaves or somehow accommodates the benefited lot from a public place through the burdened lot" to constitute a "domestic service": [J29] of Clough v Breen (No 2); and b. In the alternative, the primary judge failed to give consideration to the appellants' submission that the CCTV camera is permissible by way of extension of rights because they are necessarily ancillary to the beneficial exercise of the primary easement rights, namely rights which are implicitly granted to the appellants as proprietors of land gaining the benefit of the easement, to do what is necessary for quiet enjoyment of that easement, and if the primary judge had considered that submission, the finding would not have been made.

Leave

The applicants submit that Ground 1 raises a point of law (challenging the correctness of the primary judge's definition of "domestic service" in the context of the reasonable use of an easement), which they say is a matter of public importance and legal principle; and hence it is an appropriate case for a grant of leave (if leave be necessary).
In that regard, the applicants say that the primary judgment appears to be the only published judgment on this issue; and hence that the correctness of his Honour's construction of the term will bear upon the use of easements and the resolution of any future legal disputes which rely on the Court's interpretation of the defined term. They argue that the public would benefit from a clear and correct delineation of the rights of parties to future disputes of this nature, of which they say that there would likely be many given the prevalence of the use of easements in residential property in New South Wales. (One can only hope that there will not in future be a proliferation of disputes between neighbours pursued with the vigour of this one.)
The applicants further argue that the use of an easement for the provision of safety and security to a residential property is an important matter. Finally, the applicants say that the operative provision is "old", such that there is a public benefit to a modern interpretation of the notion of a domestic service which promotes the attainment of the object of the legislature (the applicants noting, for example, that there is no reference in the relevant provision to internet services).
The respondent accepts that the correct construction of the definition of a "domestic service" for the purposes of the Conveyancing Act could be a matter of public importance for the purposes of granting leave but contends that leave should not be granted because the applicants have failed to show any error in the approach by his Honour to the construction of that term; and they maintain that his Honour determined what was plainly the correct construction.

Determination as to leave

For leave to be granted, if leave be necessary, it is well established that the party seeking leave must show an issue of principle, a question of public importance, or a reasonably clear injustice going beyond what is reasonably arguable (see Be Financial Pty Limited as Trustee for Be Financial Operations Trust v DAS [2012] NSWCA 164 at [32]-[38]).
In the present case, the sole issue for determination relates to the correct construction of the easement for services. The decision reached by his Honour in this regard led to a finding of trespass (and the orders for the removal of the CCTV camera). In my opinion, this is a case where there is a reasonably clear injustice going beyond what is reasonably arguable. That is because, with respect to the primary judge, I consider that the construction placed on the term "domestic services" is incorrect; and hence the applicants should not have been found liable for trespass in relation to the installation of the CCTV camera nor should they have been required to remove an installation that was within the authorised use permitted by the easement.
Leave to appeal, to the extent necessary, should therefore be granted.
Turning then to the sole ground of appeal, I deal with the two sub-grounds as follows.

Applicants' submissions

The applicants contend that the primary judge's interpretation of this term (as requiring that there be a supply of services from an external party) is unduly restrictive and places an impermissible gloss on the definition, in that it reads additional words into the definition (which says nothing about the need for the services to come from an external party).
The applicants say that, on its terms, the provision is clearly directed at permitting the reasonable use of the easement to facilitate the provision of necessary amenities to a home and they contend that this is not determined by whether the amenity comes from an external provider (or is supplied by the owner of the lot burdened itself).
As to the solar panel example given by the primary judge at [32] (see above), as something that would not be thought to have been intended within the term "domestic services", the applicants say it would be extraordinary if it were reasonably necessary to put a solar panel on an easement of the kind in issue when it could plainly go on the roof of the relevant dwelling. However, they submit that the use of solar panels more broadly raises an important point which is demonstrative of the unworkable nature of a restrictive definition which hinges upon the presence of a third party provider.
In that regard, while the applicants accept that a solar panel is a means of supplying electricity to a residence which does not come from a third party, they submit that it is conceivable (if not likely) that a situation may arise where infrastructure (including cabling) for the provision of electricity from a solar panel may necessarily traverse an easement. They say that in such circumstances, and notwithstanding that the text of the provision expressly refers to the supply of electricity as constituting a domestic service, the primary judge's definition restricts the supply of electricity to that which is provided by an external supplier, rather than being supplied from a solar panel.
The applicants give further illustrations of what they contend is the unworkable nature of the primary judge's definition, which I do not here need to set out in great detail (those being: the supply of water from a rainwater tank, rather than from an external provider; and the discharge of sewerage from a sewerage system connected to a septic tank rather than an external provider's system).
The applicants say that the respondent's construction is one that prefers form over substance. The applicants argue that, as a matter of substance, there is no discernible or substantive difference between a camera that feeds directly into the applicants' home and one that send the footage via an external provider.
The applicants contend that the construction of the definition should be directed at the question whether the relevant use of the easement conforms with the provision of a reasonably necessary amenity to the relevant domicile. The applicants complain that, rather than adopting this approach, the primary judge adopted a strict word-by-word definitional approach (or, as they described in oral submissions, an approach which preferred "an artificial dissection word by word rather than a holistic and purposive approach" - see AT 20.31). The applicants say that this approach has distracted from consideration of the object of the provision and that the primary judge was led into error in this respect.
Further, the applicants say that imposing a restrictive definition is at odds with the object of the Property Legislation (Easements) Bill 1995 (NSW) (Bill), which made amendments to the Conveyancing Act including, relevantly, the addition of Part 11 of Schedule 8. It is noted that this object (provided in the overview of the Bill) is expressed as "giving expanded meaning to short form words" when they are used in the context of easements such as the present.
Finally, the applicants say that the primary judge erred in misconstruing the plain words of the provision which require that the domestic service must be provided "to or from each lot benefited". The applicants submit that the CCTV camera does in fact pass a service to the applicants' lot from the lot of the respondent (that is, from the easement site). It is submitted that, in interpreting that the service must pass through the lot from a public place, the primary judge has added an additional condition which does not exist in the text of the provision (namely, that the service comes from a public place).

Respondent's submissions

The respondent maintains the argument made at the hearing (by reference to the Schedule 8, Part 11 definition of the term "domestic service") that a "service" is something that is provided by an outside supplier to the lot benefited and that it does not embrace an "internal" CCTV system.
The respondent accepts that the s 88B Instrument does not exhaustively define the term "domestic services" and, as such, an LAN cable and associated conduit fall within the definition of "domestic services" (see at [22]); and the respondent concedes that the word "includes" in the definition tends to indicate non-exhaustiveness. However, the respondent says that the use of the word "includes" in the definition needs to be read in conjunction with the remainder of the clause (referring in particular to sub-cl (3)), such that it should be concluded that the included "services" are "services" sourced externally and brought onto the land.
The applicant argues that this follows from the examples given in the definition of domestic services, which the respondent says are all "services" which involve something coming to (or from) the property via an external supplier. The respondent says that an internal camera system, connected with no external service provider, cannot be considered a "service" in the context of the other examples given in the definition.

Determination as to Ground 1(a)

The principles of statutory construction are well-known and do not need here to be repeated (see Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355; [1988] HCA 28). They were not in dispute before his Honour.
In the present case, given his Honour's acceptance (albeit in qualified terms) that the service in question was "domestic" and this was not here contested, it is not necessary to dwell on that aspect of the definition. Suffice it to say that, whether for safety and security purposes or simply for convenience, a system that permits the owners of the benefited lot to ascertain whether the passageway area outside their storage room is occupied by others would as a matter of common sense be seen as a "domestic", not commercial or public, use.
Therefore, one must here focus on the requirement that there be a service "to or from" the lot benefited. It is of course necessary to identify the service in question. Here, it was the conveying of images to the benefited lot (whether for or with the aim of enabling the applicants to see what was happening in the passageway area or for safety and security reasons). It was accepted by the applicants that the installation of a CCTV camera for nefarious purposes (say, for voyeurism) would not be permissible (see AT 22.45) but again that seems to intrude the concept of purpose into the construction of the definition. More precisely, if the CCTV camera had been installed for voyeuristic purposes (and there was no suggestion that it was in this case) then it could hardly be said to be reasonably necessary for the better enjoyment of the benefited lot and hence would not be authorised for that reason.
The crux of the issue is whether, as his Honour found, it is necessary for the purpose of the definition that whatever be "supplied" by way of a "service" "to or from" the benefited lot be something supplied from an entity off the property.
There was some debate at the hearing in this Court as to whether it had been accepted by the respondent before the primary judge that, if the CCTV footage was sourced through or monitored by an external provider, the installation would be a permissible use (see transcript before his Honour at 19/05/22; T 556.1-6). The respondent's position in this Court was squarely put as being that the relevant (fairly narrow) question was whether the applicants were "accessing a service from off the property and bringing it onto the property" (AT 28.45). The respondent does not accept that it was conceded before the primary judge that it would be within the permissible use of the easement if the camera were connected to a remote monitoring service (19/05/22; T 540.46-T 541.8); the respondent's position being that such a connection would not suffice because the outside software or internet service was not "providing" the service.
Therefore, the narrow question is whether the concept of service "to or from" the lot benefited requires that the service be supplied by someone off the property. In my opinion, it does not. I consider that the primary judge's reliance on dictionary definitions led his Honour into error. There is nothing in the statutory terms of the easement for services that, read in a common sense way or in their natural meaning, requires the source of the domestic service to be from an external provider. Rather, what is required is that the service be "to" or "from" the lot benefited. Here, the activity or service (of providing images of the passageway area outside the storage rooms) is a service that is clearly "to" the lot benefited. In ordinary language that suffices to bring the use within the terms of the easement. The non-exhaustive examples in sub-cl (3) do not mandate the opposite conclusion (and as the applicants have shown the provision of some of those services could be internal in the sense of not provided through an external service provider in any event). The respondent's examples of, in effect, the potential overreach of the applicants' construction (akin to a floodgates argument) are most likely to be met through the requirement that the use be reasonably necessary for the better enjoyment of the benefited land.
There being no contention at the hearing below that this was not a reasonably necessary use, that is the end of the matter. Ground 1(a) is made good and the declaration and orders made by the primary judge premised on this being an impermissible use should be set aside.

Applicants' submissions

In the alternative, the applicants contend that the primary judge failed to give consideration to their submission that the CCTV camera is permissible by way of extension of rights because it is necessarily ancillary to the beneficial exercise of the primary easement rights (namely rights which are implicitly granted to the applicants as proprietors of the land, gaining the benefit of the easement, to do what is necessary for the quiet enjoyment of that easement). The applicants contend that if the primary judge had considered that submission the impugned finding would not have been made.
In that regard, the applicants submit that the camera was placed for legitimate security and safety reasons which are consistent with the quiet use and enjoyment of the land. The applicants say that their unchallenged evidence conforms precisely with the underlying purpose of the provision, namely, to facilitate the provision of amenities.

Respondent's submissions

As to the argument that the applicants were permitted to install the CCTV camera in the easement "by way of extension of rights" (because they are "necessarily ancillary to the beneficial exercise of the primary easement rights … which are implicitly granted to [the respective parties] as proprietors of land gaining the benefit of the easement, to do what is necessary for quite enjoyment of that easement") (see submissions at [23]), the respondent complains that this argument was not raised at the hearing.
The respondent says that the argument that was raised at first instance (referring to [24]-[25] of the applicants' submissions), as reproduced in the primary judgment at [21], framed the applicants' case on the CCTV camera issue as being that "[t]he only question is whether a CCTV falls within the definition of 'domestic services' as defined". The respondent says that this is the question the primary judge considered and answered.
The respondent says that an appeal is not the occasion for the making of some second, different, case (citing Crampton v R (2000) 206 CLR 161 at 217; [2000] HCA 60). It is noted that the primary judge did not hear some of the preliminary issues that had been identified because those issues could not be decided in "a vacuum". The respondent points out that the applicants had objected to some of the issues being heard because they were making an argument concerning ancillary rights which involved the Court deciding questions of fact as to reasonableness of use and creditability (the respondent here referring to what was said in the primary judgment at [12]-[14]). At [14] of the primary judgment, his Honour referred to the reframing of the applicants' argument (as to the use of the call button at landing 1) as one based on express and ancillary rights (at [14]) but to the CCTV camera issue not having such difficulties.
The respondent says that the argument that the applicants now raise (of whether the CCTV camera was necessarily ancillary to the beneficial exercise of the primary easement) is a question of mixed fact and law that was not traversed during the hearing and should not now be permitted to be raised. The respondent emphasises that the applicants did not argue that the CCTV camera issue was one that "involved making judgments about ancillary rights and the reasonableness of the use" (and says that, had they done so, his Honour would not have determined that issue at the interlocutory hearing). The respondent says that it would be plainly prejudicial to her for the question of ancillary rights to be heard now given the course the applicants took at the hearing.

Determination as to Ground 1(b)

It is not necessary to address this alternative ground in light of the conclusion reached on Ground 1(a) save to note that, insofar as the issue of ancillary rights raises questions of credibility and reasonableness of use, there is force to the respondent's complaint that the stance now taken by the applicants is inconsistent with the approach taken by the primary judge and they should be bound by the forensic choice made at first instance.

Conclusion

For the reasons above, I would allow the appeal. Costs ordinarily follow the event but in this case the applicants abandoned the bulk of the proposed grounds of appeal shortly prior to the hearing and they accept that they should pay the costs thrown away by reason thereof. Therefore, I consider that the applicants should pay the respondents' costs of the summons seeking leave to appeal and the appeal that have been thrown away by the abandonment of all proposed grounds of appeal other than Ground 1; and that the respondent pay the applicants' costs of the ground of appeal on which the applicants succeeded (Ground 1(a)). The applicants' costs of the argument of the CCTV issue in the Court below (which was dealt with as a separate issue from other issues in the hearing) should be paid by the respondent.
Hence, the orders I propose are: 1. Leave to appeal be granted. 2. Allow the appeal on Ground 1(a). 3. Set aside the Declaration (in Order 1) and Order 2 of the orders made by Slattery J on 19 December 2022 and in lieu thereof declare that the defendants are authorised by Easement I to place, maintain and use the CCTV camera installed at the storage area level below landing 5 on the area of the plaintiff's land that is burdened by Easement 1. 4. Order the applicants to pay the respondent's costs thrown away by the abandonment of the proposed grounds of appeal other than Ground 1. 5. Order the respondent to pay the applicants' costs of Ground 1(a) of the appeal. 6. Order the respondent to pay the applicants' costs of the argument in the proceeding at first instance as to the Storage Area Camera issue.
STERN JA: I agree with Ward P.
GRIFFITHS AJA: I agree with Ward P.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 24 December 2024

Uniform Civil Procedures Rules 2005(NSW)

JUDGMENT

WARD P: On 26 November 2024, this Court heard, concurrently, an application for leave to appeal and, if leave be granted, the appeal itself. The present proceeding is but one in a long running litigious saga between warring neighbours who own properties in Lugarno, New South Wales. The sole proposed ground of appeal that is now pressed by the applicants (Mr Breen and Ms Dillon) is as to the decision by the primary judge (Clough v Breen (No 2) [2022] NSWSC 1759) (the primary judgment) that the installation of a CCTV camera on the land of the respondent (Ms Clough), the subject of an easement in their favour, was not authorised under the terms of the easement. Pursuant to the orders made by the primary judge the CCTV camera was required to be removed.
The applicants did not concede that leave was required (although the decision when made was an interlocutory decision and the value of their claimed right to install the CCTV camera was not readily quantifiable) and they point out that they are in the position where a declaration as to their rights has been made. However, in case leave is required, the applicants have sought leave to appeal, maintaining that there is an issue of principle raised which is of public importance as to the construction of the definition of the statutory terms of an easement for services.
For the reasons that follow, to the extent that leave is necessary it should be granted and the appeal allowed.

At a glance

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Judgment (13 paragraphs)

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