[2012] NSWCA 445
Shi v ABI-K Pty Ltd (2014) 87 NSWLR 568
Source
Original judgment source is linked above.
Catchwords
[2016] NSWSC 328
Khattar v Wiese (2005) 12 BPR 23,235[2005] NSWSC 1014
Moorebank Recyclers Pty Ltd v Tanlane Pty Ltd (2012) 16 BPR 31,257[2012] NSWCA 445
Shi v ABI-K Pty Ltd (2014) 87 NSWLR 568
Judgment (2 paragraphs)
[1]
Judgment
The plaintiffs in these proceedings are the owners of a property at 32 Darwin Street, West Ryde. They bring an application under s 88K of the Conveyancing Act 1919 (NSW) for the imposition of an easement for stormwater drainage over a property at 31 Huxley Street, West Ryde, owned by the defendant. The plaintiffs contend that the easement is necessary to enable them to carry out a home unit development on their land. The easement is opposed by the defendant.
The proceedings, which were commenced in February 2014, have had a long and difficult history.
The plaintiffs' 32 Darwin Street property ("32 Darwin") lies roughly to the north of the defendant's 31 Huxley Street property ("31 Huxley"). The properties share a common boundary at the rear of each property. By their Amended Summons filed in Court on the first day of the hearing, the plaintiffs seek an easement to drain stormwater one metre wide "at the location identified by Mr Kenny in his report to the Court dated December 2014". That is a reference to Mr Bruce Kenny who was, by consent of the parties, appointed by the Court as an expert pursuant to Uniform Civil Procedure Rules 2005 (NSW) r 31.46. Mr Kenny is a qualified engineer with extensive experience in the design of stormwater drainage systems. He was appointed to inquire into and report on:
(1) The necessity of an easement to drain water benefiting the property known as 32 Darwin Street West Ryde given the development proposed;
(2) The necessity to impose an easement to drain water over the property known as 31 Huxley Street West Ryde, bearing in mind the potential improvements on that land, pursuant to s 88K of the Conveyancing Act 1919;
(3) The identification of all alternative locations of an easement to drain water for the benefit of the property known as 32 Darwin Street West Ryde; and
(4) From the options as set out and identified in (3) above, give an opinion as to the most reasonable option for the easement to drain water benefiting the property known as 32 Darwin Street West Ryde.
McGrath v Mestousis [2017] NSWSC 995 | Case summary | Zoe
Mr Kenny provided his report on 18 December 2014. He had inspected the two properties, and seen the adjoining properties, on 4 August 2014. He received information submitted by each of the parties. The Background section of the report contains the following:
The McGrath property and the Mestousis property lie within an area bounded to the north by Darwin Street, to the West by Meadowbank Lane and to the South by Huxley Street.
On the Mestousis property to the rear and sides of the house is a substantial area of stencilled concrete paving. To the rear and behind the existing house Mestousis proposes a future secondary dwelling and swimming pool.
McGrath proposes the re-development of his property with a three (3) unit villa development.
The Mestousis and McGrath properties lie within a 100 Year ARI overland flow path. In the ordinary course of events, stormwater run-off from the McGrath property not absorbed into the soil would find its way by force of gravity onto the Mestousis property.
In response to the four matters he was required to inquire into and report upon, Mr Kenny's report included the following:
(1) …McGrath has not lodged an application with the City of Ryde Council for seeking Development Consent for his unit villa development.
As a consequence the City of Ryde Council has not granted McGrath a Development Consent for this development. If Council had granted Development Consent, but subject to a Deferred Commencement Condition requiring an easement for stormwater, then this would bespeak both "reasonable necessity" and also satisfaction of public interest.
…
In my opinion, based on my experience with projects of a similar nature, a charged system and a pump-out system would not meet the requirements of the City of Ryde Council.
An on-site absorption system would limit the potential development for this area to 40% site coverage.
A gravity stormwater system utilising an easement which ultimately permits connection to the City of Ryde Council [system] will allow for the effective development of 32 Darwin Street.
On this basis, it is my opinion that an easement to drain water is necessary for the effective development of 32 Darwin Street.
(2) …I am also of the view that, subject to constraints, the alignment of the easement should retain, where reasonable, a similar alignment to the existing stormwater pattern. That is, stormwater should not be re-distributed to the disadvantage of other properties.
…
In order to establish a more realistic representation of the overland flow pattern, I instructed the development of a TUFLOW model. The TUFLOW model reflects more accurately the passage and depth of floodwaters output when compared with a one dimensional model.
…
Based on the findings of the TUFLOW model it is clear that stormwater run-off from the McGrath property is directed primarily onto the Mestousis property.
It is my view that in order to maintain the existing stormwater pattern the easement should be aligned as close as practicable with the overland flow path vectors.
This would suggest that the easement should be located along the western boundary of the Mestousis' property.
…
In my view there are construction techniques which will result in little or no impact on existing structures and services. In this regard, I understand that McGrath proposes the installation of the stormwater pipe through the Mestousis property utilising Horizontal Direction Drilling (HDD).
…
Whilst I understand the defendant's wishes and feelings to have their rights undisturbed, the proposed installation of the pipe within the easement will not require the entry of machinery or excavation onto their property. In this regard there will be no disturbance to the defendant's property resulting from the installation of the stormwater pipe.
Based on the foregoing it is my view that the existing improvements on [the] Mestousis' property are not sufficient reason to prevent the imposition of the easement.
Accordingly, it is my view that it is reasonable to impose an easement over the property known as 31 Huxley Street, West Ryde.
(3) I have prepared a document which identifies the possible alternative routes. In this regard I refer to Figure 1, copy enclosed under Annexure 22.
(4) I refer to Figure 1 (copy enclosed under Annexure 22) which depicts five (5) alternate easement alignments which potentially can provide a gravity fed system to effectively drain 31 Huxley Street [sic].
I have dismissed Options 1-3 on the basis that these properties would be disadvantaged by the re-direction of stormwater resulting from an easement.
The question which arises is the suitability of Option 4 which contemplates the imposition of an easement over 29 Huxley Street. Whilst it would be practicable to install a pipe through this property there is some uncertainty in relation to the ultimate connection into the existing Council stormwater infrastructure. As a consequence it is a likely outcome that Option 4 may require the lowering of the existing Council stormwater system. In my view this would not be a reasonable outcome and, at this point in time, I am unable to accept Option 4 as a reasonable alternative to Option 5.
Based on the forgoing it is my view that Option 5 provides the most reasonable option for an easement to drain water benefiting 32 Darwin Street, West Ryde.
My view is formed on the basis of the following:
(i) The property known as 31 Darwin [sic; scil Huxley] Street receives a benefit, insofar that stormwater run-off onto this property will be reduced as a consequence of an easement to drain water;
(ii) The plaintiff proposes a method of pipe installation which will not require the entry of machinery or excavation onto 31 Huxley Street;
(iii) There will be no impact on the existing improvements or services resulting from the installation of the stormwater pipe;
(iv) There is certainty for the connection of the easement into the Council stormwater system; and
(v) The easement will not adversely impact on the proposed future development of 31 Huxley Street which includes a secondary dwelling and swimming pool.
The Conclusion section of the report was in the following terms:
On the basis of the foregoing, I am of the view that it is reasonable to impose an easement to drain water on the property known as 31 Huxley Street, West Ryde subject to the following recommendations:
The easement be 1.0 m wide and aligned along the western boundary of 31 Huxley Street in accordance with Option 5 noted on Figure 1.
A comprehensive construction methodology report be prepared and included in the final design documentation detailing the method of Horizontal Direction Drilling with a clear notation that no machinery or excavation shall access 31 Huxley Street above ground for the purpose of the [sic] installing the pipe.
A detailed structural engineering report and certification shall be provided which certifies that the easement pipe will not adversely impact on the existing improvements on 31 Huxley Street during the construction phase.
Certification shall be provided which certifies that there will be no adverse impact on the existing improvements on 31 Huxley Street throughout the useful life expectancy of the pipe to be installed within the easement.
Appropriate restriction be imposed with the terms of the easement that protects the existing improvements on 31 Huxley Street in the event of future maintenance or damage arising from the easement.
The preparation of an acceptable maintenance schedule for the piped easement.
I interpolate here that the first plaintiff has since obtained a development consent in respect of 32 Darwin. The City of Ryde Council issued a Deferred Commencement Development Consent on 11 May 2017 for the construction of three units on the property (2016/0419). The consent does not become operative until a deferred commencement condition (imposed pursuant to s 80(3) of the Environmental Planning and Assessment Act 1979 (NSW)) is shown to have been satisfied. The condition is in the following terms:
An easement to drain stormwater must be established over the downstream property(ies) in order for the development to legally drain via gravity to the downstream public drainage infrastructure. The easement is to be located generally as shown on the concept plan prepared by Eclipse Consulting Engineers (Refer to Project No. 8335 Dwgs C203 Rev J dated 21 February 2017). Documentary evidence of registration of the drainage easement with the Land & Property Information Authority, including the terms of the drainage easement and its location on the burdened lot(s), and details of any revisions to the Stormwater Management system arising from this negotiation must be submitted to Council to demonstrate the requirements of this condition have been satisfied, prior to the activation of this Development Consent.
The concept plans referred to in the condition depict an easement upon 31 Huxley 1m wide adjacent to and along the length of the western boundary of the property. If the deferred commencement condition is not met within 12 months of 11 May 2017, the development consent will lapse in accordance with s 95(6) of the Environmental Planning and Assessment Act.
Following the receipt of Mr Kenny's report of December 2014 the parties took up the subject of the recommendations he made in his Conclusion. On 10 February 2015 a consent order was made requiring the plaintiffs to provide the reports and certificates referred to in paragraphs 6.0(ii), (iii) and (iv) of the Conclusion to Mr Kenny's report, and the terms of the easement and maintenance schedule referred to in paragraphs 6.0(v) and (vi) of the Conclusion to the report.
On 3 March 2015 directions were made for the filing of a motion for the adoption of Mr Kenny's report. This was not an appropriate course, as no order for reference to a referee under Uniform Civil Procedure Rules 2005 (NSW) r 20.14 had been made. The motion was filed but did not ultimately proceed.
In any event, it appears that the plaintiffs had by that time provided a Structural Report and Certificate dated 11 February 2015 from Mr Stephen Healey of Eclipse Consulting and Engineers ("Eclipse"). The plaintiffs also provided to Mr Kenny a proposed construction methodology. Another order made on 3 March 2015 was that Mr Kenny provide an opinion on the adequacy of the documents provided to him.
On 15 April 2015 Mr Kenny provided a further report in which he expressed opinions to the effect that the Eclipse report of 11 February 2015 did not satisfy recommendations 6.0(ii), (iii) and (iv) in various respects including:
1. that it did not identify the existing underground services at 31 Huxley and "measures to manage potential conflict";
2. that potential impacts on existing structures cannot be accurately assessed as the size and location of footing structures were only approximated; and
3. that the potential for pipe failure and resulting impact on existing structures was not addressed.
By that time, the defendant had retained the services of his solicitors (Owen Hodge Lawyers) and a consulting structural engineer, Mr Richard Baxendale. (The defendant had earlier directly retained a barrister.)
On 1 June 2015 the Court made orders by consent granting leave to the defendant to adduce expert evidence from Mr Baxendale on certain matters. Also, an order was made directing Mr Kenny to produce a sketch of 31 Huxley which set out a proposed alternate trenchless construction methodology. One of the matters which Mr Baxendale expressed concern about was the possibility of "fracking" occurring in the course of the underboring process then favoured by the plaintiffs as the method of construction of the stormwater drain.
On 12 June 2015 Mr Kenny provided a third report which included plans showing an "alternative methodology" involving a combination of construction techniques of augered boring and hand digging of trenches. Hand digging was proposed to take place in the area from about the south-western corner of the garage to the front fence of 31 Huxley. As will be seen, this area is the principal focus of the contention between the parties. Mr Kenny stated in this report that, based on certain documents (including structural drawings for the house on 31 Huxley) "the western garage wall and slab edge beam adjacent to the proposed easement is supported on concrete piers".
In an affidavit sworn on 3 June 2015 Mr Baxendale deposed that the generic nature of the structural drawings meant that the footing piers for the house may not be as shown on the drawings, and that it was unknown whether the garage slab rests on piers or merely on compacted fill, natural strata, or a combination of those. Mr Baxendale further deposed that further investigation would be required to determine the exact location of the existing underground services on 31 Huxley in the proposed easement area.
There remains some uncertainty about the precise locations of the existing underground services within the proposed easement area. However, it appears from the evidence (including the map prepared by Mr Kenny in April 2016) that those services consist of:
1. a sewerage line of 150mm diameter which, relevantly, runs from the rear of the garage to a point in the area forward of the garage;
2. a water pipe of 25mm diameter which, relevantly, runs from the western side of the garage to a point in the area forward of the garage;
3. electrical wires which run from a power meter on the western wall of the garage to a green electricity box (located close to the front fence);
4. a gas pipe of 20mm diameter that runs from the western side of the garage to the front of the property; and
5. a stormwater drain of 100mm diameter that runs from the rear of the garage to the front of the property.
Mr Baxendale referred in his affidavit to the potential for the proposed stormwater pipe to "clash" with the existing services. His primary concern, however, was with underboring and the associated risk of "frac-outs" involving disturbance of the foundation strata for all structures.
A view was held on 29 July 2015, attended by, amongst others, Mr Healey and Mr Baxendale.
On 28 August 2015 directions were made for Mr Healey to consult with Mr Kenny for the purpose of clarifying certain aspects of the proposal, obtaining Mr Kenny's views as to using horizontal direction drilling ("HDD") as a technique, and for the plaintiffs to serve a revised plan for the implementation of the easement.
On 7 October 2015 Mr Kenny provided comments on a revised stormwater drainage design which would involve the removal of some concrete paving and hand excavation from the area near the rear of the garage though to the front boundary of the property. Mr Kenny's comments included the following:
…
In relation to hand excavation this is common practice for this type of pipe installation where care is required to avoid damage to existing underground services. It is noted that should the need arise it would not be unreasonable, in these circumstances, to realign the existing services in accordance with the relevant statutory requirements to allow installation of the stormwater pipe. There would be a need to ensure that the defendant is not disadvantaged in any way as a consequence of service realignment.
…
The plaintiff should consider raising the easement pipe to reduce the depth of excavation adjacent to the garage in order to provide some certainty in relation to the zone of influence.
…
The plaintiff should consider raising the easement pipe to reduce the depth of excavation adjacent to the strip footings in order to provide some certainty in relation to the zone of influence.
At this stage I am of the view that the plaintiff is relying on the anticipated level of the existing footings, edge beams and the presence of concrete piers to determine zone of influence requirements. There is no certainty at this stage that these assumptions are correct, as a consequence there is still uncertainty in relation to potential impacts resulting from the pipe installation on the existing structure. At the same time I would note that in my view an outcome can be achieved, this is not a unique situation where good engineering practices cannot result in a long term solution.
Mr Baxendale swore a further affidavit on 15 October 2015. He provided his views concerning the revised design, and made comments on Mr Kenny's report of 7 October 2015. Mr Baxendale deposed that it was his view that:
(a) "threading" the stormwater pipe between the existing services and footings as proposed by the Plaintiff is not a sound approach; and
(b) the only practical method of implementing the laying of a pipe in accordance with Mr Healey's sketch dated October 2015 would be as follows:
(i) Excavate around all existing services from the back of the garage to the front of the house and expose all of them, after removing for access existing slabs;
(ii) Underpin the fence on the western boundary (underpinning would stabilise the fence allowing a greater depth for the trench and would allow the proposed pipe to be at a depth which is safe to the footings and doesn't clash with services such as the electricity box.);
(iii) Possibly underpin garage Edge Beam 2;
(iv) Cap off all services and make safe;
(v) Remove all pipes within the trench as excavated;
(vi) Lay proposed stormwater pipe; and
(vii) Reinstate services in a good and workman like manner.
In his section of comments on Mr Kenny's report, Mr Baxendale stated that good engineering practice would only go to such lengths "if there was no reasonable alternative route for the stormwater pipe".
On 3 November 2015 Mr Kenny made the observation that both Mr Baxendale and Mr Healey base their opinions on certain assumptions which may or may not be correct, and that certainty of design could be achieved by undertaking invasive investigation to accurately identify the location of the existing services.
The matter was then referred to Court annexed mediation. The mediation was held on 3 March 2016. It was not successful in facilitating a settlement.
However, on 11 March 2016 consent orders were made providing for Mr Kenny to inquire and report on alternative construction options. For that purpose, Mr Kenny was given access to 31 Huxley in order to have investigations carried out. This occurred on 14 April 2016. The defendant complains that the carrying out of those investigations resulted in some damage, including to the electricity supply cables.
On 15 April 2016 Mr Kenny provided a further report in which he stated that the electrical conduit may run under the concrete footing supporting "the brick wall along the western boundary". Mr Kenny also raised, unsolicited, a new issue as to whether stormwater issues in relation to the development of 32 Darwin might affect the obtaining of a development consent from the Council.
On 18 April 2016 Mr Kenny provided a map of existing services which, he said, should be read with caution. He noted that the existing services might not have been installed in accordance with regulatory requirements and relevant Australian Standards. He stated that it may be problematic to install a new pipe without the removal, re-alignment and re-instatement of certain services, and that there was some uncertainty in relation to a conflict of services.
On 3 June 2016 a direction was made for the plaintiffs to provide details to the defendant of a further construction method proposed by Mr Healey, and for the defendant to serve any evidence in response. The matter was provisionally fixed for hearing on 1 November 2016. Mr Healey provided a further construction method to Mr Baxendale on 20 June 2016. Mr Baxendale swore an affidavit on 28 June 2016 that contained his opinions about the proposed method. Mr Baxendale repeated some of the concerns he had set out in his affidavit of 15 October 2015, and said he was further concerned about the use of a vacuum excavator.
Further directions were made by the Court on 22 July 2016 and 2 September 2016. On the latter occasion the hearing dates were confirmed and Mr Kenny was directed to provide an updating report by 18 October 2016.
Mr Healey swore an affidavit on 26 August 2016. He responded to affidavits of the defendant (22 July 2016) and Mr Baxendale (5 August 2016) and set out (at paragraph 14) a modified construction method which was proposed in order to address the issues raised by the defendant and Mr Baxendale.
On 13 October 2016 Mr Kenny provided a further report. In Section 4 of the report he noted that the plaintiffs' proposed development was reliant upon flood mitigation measures which may result in "planning issues". Mr Kenny stated that such issues were beyond his area of expertise. His report also included the following:
The proper assessment of possible alternate methods of stormwater disposal resulting from the Application, which are not reliant on an easement have not been undertaken, and should have been canvassed with Council.
Notwithstanding, I remain of the view that should Council approve the Application, with a requirement for an easement, I am of the opinion that Mr Healey's methodology which is outlined in his affidavit dated 26 August 2016 for the installation of the pipe within 31 Huxley Street can provide an acceptable outcome.
However the need for the easement, in my view, has not yet been established by the plaintiff, for the reasons outlined under Section 4 of this Report.
For this reason, I am of the view that until the Application is assessed by Council, there is a possibility that the Application could be refused on flooding issues or further modified as a consequence of planning issues.
The requirement for an easement in these proceedings is a consequence of the three villa development. At this stage there is no Council Consent for the Application and I am unable to determine the need for an easement until Council determines the application.
As noted earlier, a deferred commencement consent was issued in respect of the 32 Darwin development on 11 May 2017. Condition 19 requires the development to be carried out in accordance with all relevant Australian Standards. The condition further requires that details demonstrating compliance with the standards are to be submitted to the principal certifying authority prior to the issue of the Construction Certificate. Condition 30 requires stormwater runoff from the development to be collected and piped by gravity flow to the downstream public drainage infrastructure in Huxley Road [sic], generally in accordance with certain plans prepared by Eclipse, subject to certain variations. One such variation calls for the plans to include specific construction details relating to the construction of the drainage infrastructure in the new drainage easement, such details to demonstrate compliance with the technical requirements of Part 8.2 (Stormwater Management) of the City of Ryde Development Control Plan 2014 ("the DCP"), including shoring of neighbouring footing systems to ensure structures are adequately supported during the installation of the drainage line and any future maintenance. Detailed plans, documentation and certification of the drainage system are required to be prepared by a chartered civil engineer and submitted with the application for the Construction Certificate. Condition 57 imposes further requirements upon the manner of construction of the works in the new drainage easement.
The principal matters of factual controversy between the parties concern the construction that would be involved in installing the drainage pipe in the proposed easement so that it is ready for use, and the various risks and inconveniences involved with such construction.
It can be said in general terms, and without being exhaustive, that the defendant is particularly concerned about the possibility of damage being sustained to his existing improvements and services during construction (or subsequent maintenance works), and the likelihood of lengthy and significant disruption, including to his existing services, during construction. The limited space available to install the new drainage pipe, especially in the area near the south-western corner of the garage where all of the existing services are congregated, is a focus of concern. The defendant also took issue with Mr Kenny's opinion that an easement along the western boundary of 31 Huxley was the most reasonable option for an easement to drain water for the benefit of 32 Darwin.
It is convenient to now set out a summary of the salient aspects of the oral evidence adduced in relation to these matters of factual controversy.
Each of Messrs Kenny, Healey and Baxendale was called to give evidence.
Mr Kenny was initially asked about his report of 13 October 2016 and his reservations concerning Council consent. He stated that he had since satisfied himself that the Council would be reluctant to approve any alternative method of stormwater disposal, and that this confirmed the opinion he expressed in his report of December 2014. Mr Kenny stated that his position concerning the various alternative easement locations was as stated in his December 2014 report. Mr Kenny also confirmed that he remained of the view that the methodology outlined by Mr Healey in his affidavit of 26 August 2016 "can provide an acceptable outcome".
Mr Kenny was cross-examined at length by counsel for the defendant. Mr Kenny maintained that the Council would be unlikely to approve an alternative stormwater system (and so avoid the necessity for an easement) because the Council would be relying upon the DCP. He further stated that the proposed stormwater system (including the easement itself) met the intent of the DCP. In relation to the suggested alternative easements, Mr Kenny gave evidence that an easement along the western boundary of 29 Huxley Street was discounted because it would require an upgrade of the Council stormwater system in Huxley Street. He stated that this alternative and the other suggested alternatives all have the potential to cause adverse impacts upon the affected properties by diverting water from its normal paths, and that the proposed easement remained the best outcome in terms of impact on adjoining properties. Mr Kenny stated that 31 Huxley would actually receive some benefit because part of the overland flow that would otherwise come from 32 Darwin (and places beyond) would now be conveyed underground.
On the issue of "constructability" Mr Kenny maintained that the new pipe could be installed if all the existing services were removed and then re-installed. He said that relocation of services is a "normal practice" in the building industry. He accepted that there was uncertainty about the type of footings for the garage, although it was likely that they were piers. He stated that it was quite common to use underpinning if the need arises. However, Mr Kenny ultimately said that he was not asked to provide an opinion as to the constructability (including in accordance with applicable Australian Standards) of Mr Healey's proposal, and that Messrs Healey and Baxendale were better qualified to deal with those matters. Mr Kenny was prepared to suggest that one means of creating extra space in the congested area may be to remove part of the width of the footings of the boundary wall fence. He also stated that compliance with Australian Standards "has to be met at construction certificate level", by the designer issuing a design compliance certificate that addresses the consent conditions.
Mr Healey was asked in chief about aspects of the applicable Australian Standards. He pointed out that paragraph 5.2.6 of AS 2566.2 (2002) was concerned with the concurrent laying of pipelines which is not what is proposed here. He stated that there was information to suggest that if the existing services on 31 Huxley were laid concurrently, they do not comply with current Australian Standards. Mr Healey accepted that "at the corner of the house" there is an issue with the number of services fitting through a fairly confined area. He stated that the standard industry practice would be to have the services closer together than the required separations in that localised area. Mr Healey explained that these sorts of issues arise during construction itself. In the present case, where the exact location of the existing services is not known, open excavation would be carried out to see what was there. He suggested that possible solutions might be removal of parts of footings or adding protection to some of the pipes that would be adjacent to the new stormwater drain.
Mr Healey took issue with Mr Baxendale's estimate of four to six weeks to carry out the easement construction works. He described it as "very excessive". He said that the services and underground works should not take more than a week and that the existing services would only need to be temporarily disconnected at times, and not overnight.
In cross-examination Mr Healey was asked about the possibility of an easement along the eastern boundary of 31 Huxley. Mr Healey said that at the outset the owners were adamant that they did not want an easement there (because it might lead to settlement of the front yard where artificial turf had been laid), and that going down the western side would be more appropriate. Mr Healey said that at a later stage the possibility of installing a pipe on the eastern side of 31 Huxley (or the western side of 29 Huxley Street) was investigated, but it was found that the pipe would be too deep to discharge to the gutter.
Mr Healey was challenged about his proposed construction sequence (as shown on Drawing C204-H) which refers to the certifying engineer inspecting the excavation to ensure the pipe can be installed "adjusting levels to suit as required to miss existing services". Mr Healey agreed that the intent was that the existing services would not be interfered with in any way. He agreed that disconnection, removal and replacement of existing services might need to be undertaken, but that would depend on what was discovered once the ground had been excavated. Mr Healey did not accept that it might be impossible to place the new pipe in accordance with the conditions of the Council consent. In relation to AS 3500.3 (2015) (which, inter alia, establishes requirements for the separation of services from each other), Mr Healey maintained that in the localised area he referred to it was still an unknown quantity, and that these sorts of issues are dealt with on a daily basis during construction when services "clash". Mr Healey further stated in effect that even if the standards could not be met in a localised area a certifier (generally taking the advice of a professional engineer) might approve the works. He said that if in those circumstances a certifier was not prepared to approve the works an alternative solution (such as one involving cutting down the width of the footings for the boundary fence) would be sought.
Mr Baxendale gave evidence in chief that, apart from the localised area (or "hotspot" as it was sometimes referred to) the 300mm separation required by AS 3500.3 (paragraph 6.2.6(j)) would not be met in the area alongside the garage wall where the proposed stormwater pipe moves closer to the wall and the existing sewer and stormwater pipes. He later agreed that an S-bend could be added to take the pipe further away from the wall.
In cross-examination, Mr Baxendale agreed that about two weeks of his four-six week estimate of construction time was attributed to underpinning work. He stated that it would be necessary to underpin the concrete boundary fence (which runs along part of the western boundary then for a short distance across the front boundary). (Mr Healey expressed disagreement with that view). Mr Baxendale said that a vacuum pump should not be used for the excavation as a means of making it quicker. He said that the site was a sensitive one consisting of alluvial fill. He said that the excavation should take place by hand.
Mr Baxendale agreed that once the excavation was done the location of the services would be apparent, and it should not be a problem to work out how the new stormwater pipe could fit in to the site. He maintained that the problem was compliance with the conditions of the Council consent. Mr Baxendale was not sure whether there could be compliance. However, he agreed with Mr Healey's evidence that a certifier could permit a deviation from the standard at a localised area in order to deal with a problem such as the one present here.
Mr Baxendale said he regarded the proposed easement site as "impractical". He agreed that it would be possible to cut back the excess concrete from the fence foundations (by about 150mm), but did not accept that this would enable the issue of the proximity of services to be ameliorated significantly if not avoided. Mr Baxendale could not rule out the possibility that any remaining problems with the standards could be dealt with as part of the certification process.
In addition to Messrs Kenny, Healey and Baxendale, evidence was adduced from the first plaintiff Mr McGrath (who swore numerous affidavits but was not required for cross-examination), the defendant and his wife Mrs Michelle Mestousis, Mr Fred Kourani (an electrician who carried out some repair works for the defendant in January 2017), and Mr Simon Azar (a valuer retained by the defendant). Some affidavits sworn by the defendant's solicitor, Mr Southwell-Keely, were also read. Mr Southwell-Keely was not required for cross-examination.
Section 88K(1)-(2) provides:
(1) The Court may make an order imposing an easement over land if the easement is reasonably necessary for the effective use or development of other land that will have the benefit of the easement.
(2) Such an order may be made only if the Court is satisfied that:
(a) use of the land having the benefit of the easement will not be inconsistent with the public interest, and
(b) the owner of the land to be burdened by the easement and each other person having an estate or interest in that land that is evidenced by an instrument registered in the General Register of Deeds or the Register kept under the Real Property Act 1900 can be adequately compensated for any loss or other disadvantage that will arise from imposition of the easement, and
(c) all reasonable attempts have been made by the applicant for the order to obtain the easement or an easement having the same effect but have been unsuccessful.
The cardinal concept is whether the easement sought to be imposed is reasonably necessary for the effective use or development of the land that will have the benefit of it. A statement of the relevant principles is found in the decision of the Court of Appeal in Moorebank Recyclers Pty Ltd v Tanlane Pty Ltd (2012) 16 BPR 31,257; [2012] NSWCA 445 at [154]-[159]. The Court of Appeal stated:
154 The requirement that the easement be reasonably necessary for the effective use and development of the land means something more than mere desirability or preferability over the alternative means available: Rainbowforce supra at [76]. However, reasonable necessity does not mean absolute necessity. The correct approach to the question, in our opinion, was stated by Hodgson J (as his Honour then was) in 117 York Street supra as follows:
"It is clear that 'reasonably necessary' in s 88K(1) does not mean 'absolutely necessary', and thus that the requirement may possibly be satisfied even when the plaintiff's land could be effectively used or developed without the easement.
In my opinion: (1) the proposed easement must be reasonably necessary either for all reasonable uses or developments of the land, or else for some one or more proposed uses or developments which are (at least) reasonable as compared with the possible alternative uses and developments; and (2) in order that an easement be reasonably necessary for a use or development, that use or development with the easement must be (at least) substantially preferable to the use or development without the easement.
The first of those requirements may seem contrary to a statement by Hamilton J in Tregoyd Gardens (at 14) that the Court 'is not to judge upon the reasonableness of the particular development'. However, that statement is qualified by the words 'at least in this case'. If there are some possible reasonable uses or developments of the land for which a proposed easement is not reasonably necessary, then it seems to me that the easement cannot be 'reasonably necessary for the effective use or development' of the land, at least unless there is some proposed use or development, for which the proposed easement is reasonably necessary, which is itself a reasonable use or development. It may be that the particular use or development would need also to be preferable to the alternatives; but whether or not that is so, it would in my opinion certainly need to be at least reasonable." (at 508-509 citations omitted)
155 In Rainbowforce supra, Preston CJ of the Land and Environment Court, gave a relatively wide meaning to the concept of effective use and development (at [72]) stating that if use or development of land for some planning purpose such as residential, commercial or industrial cannot be achieved without the creation of the easement, the easement is reasonably necessary for such use or development to be effective. To the extent that Preston CJ was suggesting that subject to the other matters which he stated required consideration, an easement would be reasonably necessary for the effective use and development of the land if it was required for any proposed development, regardless of the development's desirability or economic effect, the proposition, with respect, is too wide. That approach would not take adequate account of the word effective. Equally, we do not believe, as suggested by Moorebank, that it is necessary to show that the easement is necessary to achieve the highest and best use of the land. In a case such as the present, where the easement is said to be necessary for the commercial development of the land, it is sufficient in our opinion to show that the proposed development is one which is appropriate to the area in which the land is situated and is at least an economically rational use of the land. That in our opinion is consistent with what was said by Hodgson J in 117 York Street supra in the passage which we have cited above (see also Lonergan v Lewis [2011] NSWSC 1133 at [22]).
156 That is not to say that an easement will always be granted in these circumstances. As we have indicated the authorities have established that the concept of reasonable necessity requires consideration of the effect of the grant of the easement on the servient tenement: O'Shea supra. Further, it is correct in our opinion, that the greater the burden on the servient tenement, the stronger the case needed to justify a finding of reasonable necessity: Rainbowforce supra at [77]; Khattar v Wiese supra at [27]; Woodland v Manly Municipal Council, supra at [12]; Lonergan v Lewis supra at [22].
157 As we indicated earlier (par [131]) in Bloom v Lepre supra, Young J stated that where the effect of the easement was to sterilise the servient tenement insofar as the person's own development or use is concerned, the Court is not necessarily quite so favourable to the application. We would put the proposition more strongly. If the effect of the imposition of an easement was to effectively preclude a reasonably available development or use of the servient tenement appropriate to that land, then it would require a strong case of reasonable necessity before the easement would be imposed.
158 The determination of whether an easement is reasonably necessary for the use or development of the land also involves consideration of the alternative methods by which such use or development could be achieved. That is implicit in the concept of reasonable necessity. In the present case it involves the consideration of whether there is alternative access to give effect to the development.
159 None of the factors to which we have referred above can be considered in isolation from the others. Ultimately the question of whether an easement is reasonably necessary for the use or development of the land will be determined by an evaluation of those factors in conjunction with each other.
In Khattar v Wiese (2005) 12 BPR 23,235; [2005] NSWSC 1014 Brereton J stated (at [27]) that "[t]he authorities repeatedly point to the confiscatory nature of s 88K as requiring firm proof of the reasonable necessity for the easement, and that the court bear in mind that property rights are valuable rights not lightly to be taken away".
If the Court concludes that the imposition of an easement is reasonably necessary within the meaning of s 88K(1), the Court can only proceed to make an order imposing the easement if satisfied of the matters set out in s 88K(2). Even then, the Court retains a discretion as to whether to proceed to make the order (see Khattar v Wiese (supra) at [2]). If an order is made, it must provide for payment by the applicant of such compensation as the Court considers appropriate (see s 88K(4)). The compensation contemplated by s 88K(4) is compensation "for any loss or other disadvantage that will arise from imposition of the easement" as referred to in s 88K(2)(b) (see Govindan-Lee v Sawkins (2016) 18 BPR 35,883; [2016] NSWSC 328 at [67]).
The plaintiffs, for whom Mr P Bolster of counsel appeared, submitted that the proposed easement is reasonably necessary for the effective use or development of 32 Darwin. Mr Bolster referred to the development consent issued by the Council on 11 May 2017, and in particular the deferred commencement condition which requires an easement over the downstream property (or properties) to allow stormwater to drain by gravity to the downstream public drainage infrastructure. Mr Bolster also referred to the evidence of Mr Kenny concerning the unlikelihood of alternative methods of stormwater disposal being approved, and as to the reasonableness of the proposed easement route in comparison with other suggested routes. Mr Bolster submitted that the easement would not impose a significant burden upon 31 Huxley given that there are already services located in the easement area.
As to s 88K(2)(a), Mr Bolster submitted that the existence of the development consent was compelling evidence that use of 32 Darwin with the easement would not be inconsistent with the public interest (see Shi v ABI-K Pty Ltd (2014) 87 NSWLR 568; [2014] NSWCA 293 at [70]-[73]).
As for compensation, the plaintiffs largely accepted the evidence of Mr Azar, the valuer called by the defendant. Mr Azar assessed compensation for the imposition of the easement under various heads. He concluded that the defendant's total loss would be about $62,000, not including any costs associated with relocating during the installation process if existing services are disrupted. Mr Bolster's only criticism of Mr Azar's approach was that it failed to take into account the benefit the easement would bring in certain circumstances by channelling some water underground that would otherwise pass across the surface of 31 Huxley. Mr Bolster submitted (in reply) that the evidence did not establish that it would be necessary for the Mestousis family to move out of their home whilst construction works were carried out. Mr Bolster did not specifically address s 88K(2)(b).
As to s 88K(2)(c), Mr Bolster submitted that the plaintiffs had made all reasonable attempts to obtain the proposed easement but have not succeeded. He submitted that the parties had been at loggerheads over the issue for years and had attended a mediation which failed to produce a resolution. He submitted that the plaintiffs had throughout tried to address the defendant's concerns (such as in relation to methods of construction) but "it's never been enough from the defendant's perspective".
Mr A Gruzman of counsel appeared for the defendant. On the issue of reasonable necessity Mr Gruzman pointed to the conditions of the development consent which mandated compliance with various standards, including the Building Code of Australia, Australian Standards and the matters specified in conditions 30 and 57. He submitted that there was a great deal of uncertainty about whether the construction required for the easement could be carried out in accordance with the conditions of the Council consent. Mr Gruzman suggested that it probably could not be done. He emphasised the "conflicting services" in the easement area and the separation requirements of paragraph 6.2.6 of AS 3500.3. He submitted that whilst a solution to the problem might be found, it is not known what that solution is, and what impact it might have upon the existing structures and services. He submitted that in that state of uncertainty the easement should not be imposed. In short, Mr Gruzman submitted that if it cannot be built it cannot be regarded as reasonably necessary for the use or development of the plaintiffs' land.
In relation to the matters referred to in s 88K(2), Mr Gruzman submitted that the evidence given by the defendant and Mrs Mestousis showed that the disruption that would be caused to them and their family (and a business operated by Mrs Mestousis) during construction was such that they could not be adequately compensated for that loss or disadvantage. He also referred to the damage said to have resulted from Mr Kenny's investigations in April 2016, but conceded that this was not strictly relevant to the question of compensation. Mr Gruzman also submitted that the evidence given by Mr McGrath concerning the attempts to obtain the easement was scant. It was also submitted that "there has been insufficient detail and particulars provided to the defendant to be able to consider any resolution of the matter". Mr Gruzman did not specifically address the question of the public interest that arises under s 88K(2)(a).
Mr Gruzman submitted that even if the Court was satisfied as to reasonable necessity and the matters referred to in s 88K(2), the Court should decline to exercise the discretion to impose the easement sought. In that regard, I understood him to rely on the matters otherwise raised by the defendant, including the likelihood that the easement will not be able to be constructed in accordance with the conditions of the Council consent (such that imposing the easement would be futile), and the potential for significant harm to occur if the construction proceeded.
I will deal first with the question whether the proposed easement is reasonably necessary for the effective use or development of 32 Darwin.
The proposed easement is sought in connection with a three unit development of 32 Darwin. The plaintiffs have obtained Council consent to the development, subject to a deferred commencement condition. That condition requires the creation of an easement to drain stormwater over the downstream property (or properties) via gravity to the downstream public drainage infrastructure, such easement to be located generally as shown in the concept plans prepared by Eclipse. Those plans depict a one metre wide easement adjacent to the western boundary of 31 Huxley. The plaintiffs seek the imposition of an easement in that location.
In his report of December 2014, Mr Kenny expressed the opinion that an easement to drain water is necessary for the effective development of 32 Darwin. This opinion was evidently based on his views that an on-site absorption system would limit the potential development of the property to about "40% site coverage", and alternative methods of dealing with stormwater (a charged system or a pump-out system) would be unlikely to meet the requirements of the Council. Despite the doubts expressed by Mr Kenny in his 13 October 2016 report about planning issues associated with the flood mitigation measures proposed for the development, Mr Kenny testified that he had satisfied himself by the time of the hearing that the Council would be reluctant to approve an alternative type of stormwater system.
Moreover, Mr Kenny expressed the opinion (both in his December 2014 report and at the hearing) that of the various alternative routes for an easement to drain stormwater from 32 Darwin, the route along the western boundary of 31 Huxley was "the most reasonable option". Mr Kenny maintained that position (including by reference to the requirements of the DCP) in the face of a challenge to it in cross-examination.
I accept Mr Kenny's evidence on the matters set out above. Indeed, I accept his evidence generally. Mr Kenny was appointed as an expert by the Court (with the consent of the parties). Mr Kenny seemed to me to discharge that role professionally and impartially. He gave his evidence in a forthright manner, and was careful not to stray beyond his areas of expertise. When pressed in cross-examination he made some concessions, but by and large maintained the opinions he had expressed, and did so persuasively. That was the case in relation to the prospects of alternative stormwater systems and the merits of the alternative easement routes. On that score, I note that Mr Healey also gave evidence to the effect that the other alternative routes were found to be not viable for one reason or another. In particular, he stated that installing a pipe on the eastern side of 31 Huxley or the western side of 29 Huxley Street would not work due to the depth of the pipe. I accept that evidence.
It was not suggested that the plaintiffs' proposed development was other than a reasonable development of their land. The development is of a type commonly seen throughout Sydney, and it has been approved by the local Council as the consent authority. Moreover, the evidence of Mr Kenny indicates that the development of 32 Darwin with the proposed easement is substantially preferable to its development without the easement. Given that an easement to drain stormwater to the downstream infrastructure will be required, the location of the easement along the western boundary of 31 Huxley is preferable to any other location in terms of a lesser interference with normal flow paths.
Of course, in assessing reasonable necessity the Court must consider the effect of the grant of the easement on the servient tenement (see Moorebank Recyclers Pty Ltd v Tanlane Pty Ltd (supra) at [156]). In that regard, use of the easement itself is unlikely to have a significant effect upon 31 Huxley. The easement area is so located that it is unlikely to hinder the owner of 31 Huxley in its own use or future development of the property. However, the defendant contends that the construction of the easement (that is, the carrying out of the works needed in order to install the stormwater pipe) is likely, or at least has the potential, to cause significant damage to the structures and services on the property, and will bring about great disruption and inconvenience whilst the works are undertaken.
I accept that there is a risk of damage being caused during construction. The need to excavate in an area close to the footings of the garage slab and the footings of the brick fence near the south western corner of the property clearly entails some risk. So, too, does the need to excavate in areas close to the existing underground services. These risks are perhaps increased by the fact that the precise locations of the footings and services (and the types of footings) are not known, and will not be known unless and until excavation occurs. Nevertheless, the evidence, including that of Mr Baxendale, indicates that these risks can be adequately managed through the adoption of appropriate measures such as excavation by hand and the underpinning of footings. The construction works may, as a result, take longer than would otherwise be the case for a task of this type, and cause a greater than usual degree of disruption and inconvenience. However, I do not think that the degree of disruption or inconvenience is likely to be such as would require the Mestousis family to move out of the property whilst the works proceed.
It seems to me that even if underpinning of both the garage slab and the concrete footings is required, such that the time needed for construction approaches the four to six weeks suggested by Mr Baxendale, the periods during which the existing services may need to be disturbed, and the times within any such periods when services may not be available, is likely to be much shorter. In relation to the electricity, for example, Mr Kourani gave evidence to the effect that a line which by-passed the existing run from the green electricity box to the power meter could be established with an interruption to supply for only about 30 to 45 minutes. Mr Healey gave evidence that services can be disconnected and reconnected to provide a temporary service "within hours", and there would be no need for any services to be unavailable overnight.
The works contemplated for the creation of the easement on 31 Huxley would undoubtedly cause a degree of inconvenience to the occupants of the property and some disruption of normal activities, but not to the extent that relocation from the property to alternative premises would reasonably be required. I therefore do not accept the central premise that underlies the evidence given by Mrs Mestousis about the costs and consequences of the need for the family to relocate.
I am also unable to accept that the easement is unlikely to be able to be constructed so as to become usable. The evidence demonstrates that there is some uncertainty about the locations of the existing services and the dimensions (and types) of the footings to the garage slab and the concrete fence. Moreover, it seems to be the case that in at least one part of the proposed easement (the area near the south-western corner of the garage) the space available to install the new stormwater pipe along with the existing services is so limited that compliance with the separation requirements of paragraph 6.2.6 of AS 3500.3 is likely to be problematic. However, there was evidence that it would be possible to cut down the footing to the concrete fence in that area by about 150mm so as to create additional space. There was also evidence given by Mr Healey to the effect that issues such as this are frequently dealt with in the course of construction, and it was not uncommon to locate services closer than the required separations in a localised area due to particular site conditions. Mr Healey stated that in those circumstances a certifier (based on engineering advice) might approve the works notwithstanding the non-compliance in the localised area. Mr Baxendale did not disagree with that evidence.
The issue would be likely to arise initially at the time a construction certificate was sought. By condition 30 of the Council consent, plans, documentation and certification of the drainage system, prepared by a chartered civil engineer, are required to be submitted. The submitted material must include certification that the design is in accordance with the requirements of AS 3500.3. It therefore seems that the design will need to include some detail as to how compliance with the standard can be or is likely to be met, including in relation to the congested area near the south-western corner of the garage.
The scope for creating additional space in that area provides a sound reason to think that the difficulties in achieving compliance there can be largely if not entirely overcome. That, coupled with the evidence concerning certification notwithstanding non-compliance in a localised area, suggests that a construction certificate is likely to be granted.
The issue would thereafter be dealt with in the course of construction. In my opinion it is likely that in those circumstances an engineering solution would be found (involving the cutting back of footings and/or re-alignment of existing services) which either eliminates the problem or so substantially reduces it that a certification of the works would issue. Whilst I accept that there is some uncertainty about that outcome, I am satisfied that it is much more likely to occur than a situation where a non-compliance with AS 3500.3 results in the easement not being able to be used.
In my opinion, the proposed easement is reasonably necessary for the effective use or development of 32 Darwin. In summary, the proposed development is a reasonable development that has been approved in accordance with the applicable planning laws. The carrying out of the development requires a stormwater management system that accords with the requirements of the DCP. I am satisfied that a stormwater system that did not involve an easement to drain water to the downstream infrastructure would have been unlikely to be approved if sought. I am further satisfied that, notwithstanding the construction issues involved, the route along the western boundary of 31 Huxley is the most reasonable route for such an easement. It is not a case where it can be said that the easement is merely desirable or preferable over other available means. Whilst the construction of the easement involves some risks and would cause a degree of disruption and inconvenience, the risks are capable of being adequately managed and the degree of disruption and inconvenience is not such that relocation from the property to alternative premises would reasonably be required. Finally, the difficulties involved in achieving compliance with AS 3500.3 are not likely to result in a situation where the easement is not able to be used.
I will next deal with the matters referred to in s 88K(2).
As to s 88K(2)(a), I am satisfied that use of 32 Darwin having the benefit of the easement will not be inconsistent with the public interest. As noted earlier, Mr Gruzman did not specifically address this question. In any case, the easement forms part of a development of a type which is common throughout many areas of Sydney. There is nothing to suggest that the development, including the use of the easement, would be contrary to the public interest. On the contrary, such development and use would be in accordance with the Council consent given on 11 May 2017. In the absence of evidence to the contrary, it may be assumed that the consent was given after consideration by the Council of the matters required to be taken into account under the Environmental Planning and Assessment Act 1979 (NSW). Even if not itself decisive, that fact is highly material (see Shi v ABI-K Pty Ltd (supra) at [70]). The evidence of Mr Kenny concerning the merits of various alternative routes for an easement further supports the conclusion that the use of 32 Darwin having the benefit of the easement is not inconsistent with the public interest.
As to s 88K(2)(b), I am satisfied that the defendant (and his family) can be adequately compensated for any loss or other disadvantage that will arise from the imposition of the easement. The evidence of Mr Azar which, as I have said, was essentially not challenged, assessed monetary compensation for various heads of loss or disadvantage including loss of use of land, blot on title, disturbance and inconvenience during installation, and disturbance when maintenance is carried out on the easement in the future. Mr Azar excluded from his assessment the costs associated with relocating during the installation process if existing services are disrupted. I have found that the inconvenience and disruption likely to arise from the construction works is not such that relocation to alternative premises would reasonably be required. As a result, the business operated by Mrs Mestousis will not be put into jeopardy. In any event there is no apparent reason why an amount of monetary compensation would not be adequate to compensate for any inconvenience or disruption of that character (such as is described by Mrs Mestousis in her affidavit), if considered appropriate. There is no suggestion that any other person with an interest in 31 Huxley will suffer loss or be disadvantaged by the imposition of the easement.
As to s 88K(2)(c), I am satisfied that all reasonable attempts have been made by the plaintiffs to obtain the easement but have been unsuccessful. It is true that there is little evidence of negotiations between the parties about compensation. There is evidence that the plaintiffs made offers to the defendant in 2014 or early 2015 and that those offers "expired". It seems that the defendant did not respond to the offers. In an email sent on 24 February 2015 the defendant stated that "we are not in a position to act upon them as yet". No details of the content of the offers appear to be in evidence.
Nevertheless, the quantum of compensation is not a matter of great moment in this case. The history of the proceedings, and the defendant's attitude to the easement, as expressed in the witness box, reveals that for at least two years the defendant has opposed the proposed easement as a matter of principle. Compensation is not the issue.
Mr Mestousis gave evidence that he was not happy about the easement "because of the damage that will be left on my property". He also said that he would not consent to the easement "because of the lack of room in that western corner". Mr Mestousis appeared implacably opposed to the easement. This is illustrated by his rejection of the suggestion that the green electricity box might be moved a short distance to the east so as to allow more room for the services near the front of the property. Mr Mestousis said that this would create a dangerous situation because of cars reversing out of the driveway. He said there would be a risk of cars running into the electricity box. Given that the proposed new location for the box is off the raised driveway and to the west of the concrete fence pillar which is on the western side of the entrance to the driveway, it is difficult to see any realistic danger arising.
I referred earlier to Mr Gruzman's submission that there has been insufficient detail and particulars provided to the defendant to be able to consider any resolution of the matter. I do not accept that the plaintiffs have not provided sufficient details and particulars of what is proposed. The remaining uncertainties are the product of the fact that various matters will not become clear unless and until excavation in the proposed easement area takes place.
The plaintiffs have sought to obtain the easement over a number of years. They have agreed to make changes to construction methods in order to meet concerns raised by the defendant, who has remained opposed to the imposition of the easement. In all the circumstances, I consider that the plaintiffs have taken all reasonable steps to obtain the easement, but without success.
Being satisfied that the proposed easement is reasonably necessary for the effective use or development of 32 Darwin, and being satisfied of the matters referred to in s 88K(2), it remains to consider whether to exercise the discretion under s 88K(1) to order that the easement be imposed. Having regard to the findings and conclusions I have made, and again considering the matters advanced by the defendant in opposition to the easement (including the risk of damage, and the likelihood of significant inconvenience and disruption being suffered), I consider that it is appropriate to make an order imposing the easement sought by the plaintiffs.
The final issue to consider is compensation for any loss or other disadvantage that will arise from imposition of the easement.
The plaintiffs essentially accepted Mr Azar's assessment of $62,000, although it was submitted that some reduction should be made to take into account the benefit 31 Huxley would obtain from the easement. I accept, based on Mr Kenny's evidence, that there would be a benefit of the nature he described. However, there is no firm basis in the evidence to quantify the benefit. Accordingly, I do not think that an allowance should be made for it. I note that Mr Bolster seemed to accept that the benefit was of limited worth.
The defendant seeks compensation, additional to the compensation assessed by Mr Azar, for the costs and inconvenience involved in relocating for a period of four to six weeks whilst construction takes place. For the reasons given earlier, I do not accept that relocation to alternative premises would reasonably be required as a result of the construction works (even if such works were to continue for four to six weeks). I accept, however, that it might be necessary for the family dog, a Rottweiler, to be boarded for a period. Mrs Mestousis gave some evidence concerning the cost of boarding. On that basis an allowance of about $1,500 would seem appropriate to cater for that possibility.
Despite the lack of challenge by the plaintiff, I think that some adjustments ought be made to Mr Azar's assessment. First, I think that Mr Azar's assessment is excessive insofar as $10,000 is allowed for "associated costs" including valuations, legal fees (not being costs in these proceedings) and "time factors". I do not think that this head, the basis for which is not explained and is, at least to me, not self-evident, should be allowed, other than for a very small proportion to cater for any costs associated with the process of registration of the easement. Secondly, I think that Mr Azar's assessment of $7,000 for loss of access and disturbance during installation (which calculation assumes a construction period of 10 days) should be increased by about 50% or so, given the realistic possibility that construction may take longer than that.
When all of these matters are taken into account, a total figure of about $58,000 is obtained. Overall, I think that compensation in the sum of $60,000 would be appropriate in this case, to adequately compensate the Mestousis family for the effects of the imposition of the easement.
The plaintiffs seek an easement in the terms specified in Part 8 of Schedule 8 to the Conveyancing Act. The easement sought is one metre wide "at the location identified by Mr Kenny in his report to the Court dated December 2014". The Court is prepared to make an order to that effect. I direct that the plaintiffs, within 14 days, provide to my Associate (and serve upon the defendant) a form of order that satisfies the requirements of s 88K(3) of the Conveyancing Act, and gives effect to these reasons. The Court will then settle the form of order in chambers. Directions will also be made at that time in relation to the question of costs.
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Decision last updated: 27 July 2017