Hopkins v Owners Corporation RP449200 (Owners Corporation) [2011] VCAT 1192

1. The Tribunal declares that the Applicant's Lot, being Lot 4C referred to in Plan of Subdivision 449200N (the Applicant not having given the Tribunal details of her particular Certificate of Title) has the benefit of an implied easement over the common property described in that Plan of Subdivision sufficient to enable the Applicant to install a gas main line and gas line as described in paragraph 6 of the Reasons for this Order.

2. The parties have liberty to apply for further Orders or directions arising from paragraph 1 of this Order.

Ms Hopkins owns Lot 4C in the property in Rose Street Hawthorn East which is affected by the Owners Corporation.

The configuration of the property is shown on Sheet 2 of the Plan of Subdivision. Rose Street provides the northern boundary of the land. There are three sets of buildings: Lots 1C to 10C along the western boundary, Lots 7U to 12U in the 'centre', and Lots 1U to 6U along the eastern boundary.

Lots 1C to 10C face east onto a neat and austere area of common property which is in effect a wide concreted driveway, and for convenience I will call it "the driveway".

Ms Hopkins' Lot 4C is the fourth Lot south of Rose Street.

Lots 1C to 10C are commercial buildings, of 3 floors. The Planning Permit allows owners to live in them as well, and Ms Hopkins lives and works in her Lot.

Lots 1C to 10C are connected to the electricity supply but not the gas supply. Ms Hopkins has found her Lot to be cold, due to its high ceilings and a design that has not taken any account of energy ratings, and she wants to install gas powered hydronic heating. This would necessitate a gas line being installed by a gas supplier from the gas main line in Rose Street to a meter box area just inside the common property, then running a gas line down the east side of the driveway in an existing cement brick "dwarf wall" conduit which already houses a water pipe for the sprinkler system, then running the gas line under the driveway into Lot 4C. Ms Hopkins would own the gas line between the meter box and Lot 4C.

The Owners Corporation has refused to permit Ms Hopkins to do this, and in those circumstances Ms Hopkins has issued this VCAT proceeding to seek an Order declaring that she has an implied easement over the common property under section 12 (2) of the Subdivision Act 1988.

The reasons for the Owners Corporation's refusal are unclear. Ms Hopkins' proposal is unobtrusive. The driveway has a decoration of sorts, in that there are several bands of exposed aggregate running across it. The dwarf wall is already in place. Running the gas line under the driveway from the dwarf wall to Lot 4C would require a cut in the concrete, but Ms Hopkins proposes that the cut be patched with an aggregate finish which would match the other bands of aggregate. The surface of the driveway is not pristine: it contains metal grates for drainage, and a large concrete patch where some repair has been carried out. Lots 1C to 10C each have a car parking space which is open to the driveway, and the colour of the concrete in those areas does not match the colour of the driveway.

However, this case is not about the fairness or merits of the Owners Corporation's decision. It is about whether Ms Hopkins satisfies the criteria in section 12 (2) of the Subdivision Act 1988.

Attached to Ms Hopkins' VCAT Application was a solicitor's letter which paraphrased section 12 (2). It is appropriate to set out the full text of the relevant parts of the section.

Sub sections 12(1), (1A) and (1B) set out what a plan of subdivision must contain when easements are to be created expressly.

(i) all the land on a plan of subdivision of a building; and

(ii) that part of a subdivision which subdivides a building; and

(iii) any land affected by an owners corporation; and

(iv) any land on a plan if the plan specifies that this subsection applies to the land; and

(b) for the benefit of each lot and any common property -

(d) passage or provision of water, sewerage, drainage, gas, electricity, garbage, air or any other service of whatever nature (including telephone, radio, television and data transmission); or

(f) full, free and uninterrupted access to and use of light for windows, doors or other openings; or

if the easement or right is necessary for the reasonable use and enjoyment of the lot or the common property and is consistent with the reasonable use and enjoyment of the other lots and the common property.

(3) A plan may provide that some only, or none, of the easements and rights mentioned in subsection (2) are implied over all or any of the land on the plan.

(4) Any person, Council or referral authority entitled to use an easement can gain access to that easement over the common property and any lot for the purpose of using the easement and must repair any damage caused in gaining access to or using the easement.

Having regard to section 12(3), I note that sheet 1 of the Plan of Subdivision says, "Easements pursuant to section 12(2) of the Subdivision Act 1988 apply to the land in this plan". That is, all of the easements and rights mentioned in section 12(2) are implied over all of the land on the plan. Obviously, section 12(2)(d) specifically refers to the passage or provision of gas.

The closing words of section 12(2) are the most important: "if the easement or right is necessary for the reasonable use and enjoyment of the lot or the common property and is consistent with the reasonable use and enjoyment of the other lots and the common property".

Ms Hopkin's solicitor's letter referred to the case of Body Corporate 413424R v Sheppard, but since the letter the Court of Appeal's judgment in that case has been delivered. The citation of the appeal decision is [2008] VSCA 118; (2008) 20 VR 362.

The case involved an owners corporation's desire to have access through the Sheppards' apartment to service the air conditioning and other plant for the benefit of the building. The Sheppards had permitted workers to enter the apartment for some years for that purpose. Eventually the owners corporation issued the Court proceeding to assert a right of way through the apartment. The owners corporation lost at trial, and appealed.

Dodds-Streeton JA wrote the leading judgment, with which the other Appeal Justices concurred. The salient passages of Her Honour's Judgement are in the following numbered paragraphs:

1. In these reasons, I refer to 'if the easement or right is necessary for the reasonable use and enjoyment of the lot or the common property' as the 'first condition' and 'is consistent with the reasonable use and enjoyment of the other lots and the common property' as 'the second condition'.

2. The (owners corporation's) contention that 'necessary' in the context of the first condition should be construed as 'substantially preferable' is, in my opinion, unpersuasive. It is neither mandated by any applicable authority nor likely to reduce any imprecision associated with the word 'necessary'. On the

contrary, 'substantially preferable' is derived from cases decided on s88K of the Conveyancing Act 1919 (NSW), which is in different terms from those of

s12(2) and occurs within a different statutory regime. In my view, the term 'substantially preferable' would constitute an unwarranted gloss on the words of the statute which would aggravate indeterminacy and raise new questions of degree, judgement and identification of vantage or perspective, for which the legislation provides no answers.

Any imprecision in this context springs not from the word 'necessary' which has a well-established meaning. Rather, it arises from the need to apply it in context to the complex or varied facts of each particular case and from the flexibility of the notion of 'reasonable use and enjoyment'.

In my opinion, the word 'necessary' bears its ordinary meaning of 'essential'. It is not, however, to be construed in isolation, but in the context of the composite phrase, in which it is qualified by the broad concept of reasonable use and enjoyment of the benefited property. Further, it is the easement, rather than the function it secures, which must be 'necessary'. The reasonable use and enjoyment of the property not only clearly exceeds mere use, but also admits consideration of the effect on the reasonable use and enjoyment of property if the function to be achieved by the easement is unavailable and of the costs or detriments of securing the function by means other than the easement.

(At the trial below) His Honour, in my view, correctly concluded that 'necessary' meant that the easement was essential to achieving the specified function, in the sense that no alternative means of achieving the relevant function was feasible or reasonably available. In determining whether an alternative to the easement was reasonably available, all relevant circumstances, including physical factors, legal restrictions, safety considerations and cost should be considered.

While the mere possibility of an alternative to the easement would not preclude the satisfaction of the first condition, his Honour did not hold the contrary, but rather, correctly concluded that if the alternative were reasonable, although involving some inconvenience or additional cost, an implied easement would not be necessary in the relevant sense.

His Honour was entitled, on the basis of the evidence, to conclude that the access sought to be achieved pursuant to the implied easement had been, was currently and would in future be readily available by alternative means, albeit at a greater cost and entailing some risks to service personnel, while avoiding other risks.

Further, in my opinion, even were the (owners corporation's) construction of the first condition of s12(2) correct, it could not succeed, because the claimed easements are not, on any view, substantially preferable to the current means of access for the use and enjoyment of the respondents' property. The easement might well constitute a preferable means of access from the

perspective of many service personnel, who must currently climb the fire stairs from the ground floor. The fact that service personnel may prefer an alternative means of providing the services has not, however, affected the availability of the services. Nor is the preference of service providers, even on the appellant's construction, a relevant consideration.

As to the second condition, of being consistent with the reasonable use and enjoyment of the other lots, Her Honour held that it was directed to the Sheppards' property, which would be subject to the implied easement, and not to all of the property. At paragraph 90 Her Honour found the claimed implied easements to be inconsistent with the use of the Sheppards' property.

It is important to consider paragraph 80 of Her Honour's judgment carefully. It is not a matter of saying that 'necessary' means 'essential', so that in the case of Ms Hopkins the availability of electrical heating results in a gas line being unnecessary. The broad concept of the reasonable use and enjoyment of Ms Hopkins' property must be considered. And "it is the easement, rather than the function it secures, which must be 'necessary'. The reasonable use and enjoyment of the property not only clearly exceeds mere use, but also admits consideration of the effect on the reasonable use and enjoyment of property if the function to be achieved by the easement is unavailable and of the costs or detriments of securing the function by means other than the easement". That is, even if "the function it secures" - gas hydronic heating - was said to be unnecessary because electric heating was available, it is the easement - the placing of the gas line - which must be necessary.

The passage, "the reasonable use and enjoyment of the property not only clearly exceeds mere use, but also admits consideration of the effect on the reasonable use and enjoyment of property if the function to be achieved by the easement is unavailable and of the costs or detriments of securing the function by means other than the easement" contemplates Ms Hopkins' desire to have gas hydronic heating in her property.

In the context of Ms Hopkins' situation, paragraph 81 of Her Honour's judgment is directed to considering whether gas could be supplied to Ms Hopkins' property in any way other than by a gas line relying on an easement. If it were the case that gas could be supplied in some other way, the easement would not be 'necessary'. However, on the evidence, there is no alternative.

I conclude that Ms Hopkins satisfies the first condition.

Ms Hopkins undoubtedly satisfies the second condition. The Sheppard case concerned an extraordinary situation where the claimed easement would have allowed tradespeople to walk through a residence. There is no analogy between that scenario and Ms Hopkins' desire to lay a gas line under the driveway. Given that the driveway has drainage pipes below and contains metal grates on its surface to enable water to drain into those pipes, the placing of a gas line under the driveway is consistent with the reasonable use and enjoyment of the driveway. 7. In these circumstances I am satisfied that Ms Hopkins' Lot has the benefit of an implied easement over the common property which will enable her to install a gas main line and gas line as described in paragraph 6 of these reasons, to be exercised by Ms Hopkins in the manner described in her Plan of proposed Works attached to her VCAT Application. Ms Hopkins understands that she will bear the cost of installing the gas line, and section 12(4) of the Subdivision Act will require her to repair any damage to the driveway or other common property which is caused by her use of the easement.