Nelson v Calahorra Properties Pty Ltd

2 The applicants, Kenneth Edward Hodgskin and Dawn Maree Hodgskin, are registered proprietors of Lot 11 on Registered Plan 207127 containing 10.07 hectares. The respondents, Kenneth Charles Fusche and Susan Maree Fusche, are registered proprietors of the adjoining Lot 10 on the same plan having an area of 10.18 hectares. The lands are rural residential blocks at Avondale via Bundaberg. Lot 10 is a battleaxe block, the handle of the axe providing access to Avondale Road.

3 To the north of Lot 11 is a gazetted but unformed road. Otherwise it is landlocked. To its east are Lots 12 and 13. Lot 10 lies to its south. The handle of Lot 10 lies between Lots 12 and 9, which have frontages to Avondale Road. See the attached copy of Registered Plan No 207127.

4 Lot 10 is subject to Easement B in favour of Bundaberg Sugar Ltd. (That company has the benefit of the easement originally granted to Bundaberg Sugar Company Limited pursuant to a scheme of arrangement and supporting court orders granted in 1997.) The easement is over the handle of Lot 10 and extends into a small triangular piece of land bordered on one side by Lot 11. It is a 10 metre wide strip reducing to zero in width approximately 60 metres along the common boundary of Lots 10 and 11.

5 Bundaberg Sugar Ltd also has the benefit of Easement C over Lot 10 and Easement D over Lot 11. The three easements are for tramway and road access purposes. In fact sugarcane tram tracks run along Easements C and D. Easement B is used to gain access to the tram track for maintenance purposes. It is a formed track.

6 The applicants purchased their land in 1994 for $36,500. It was then vacant land. When they inspected it, they gained access via the handle of Lot 10 (ie over Easement B), which the estate agent told them would be their access. They retained solicitors to act for them in the conveyance, but were apparently not advised that they would not have any existing lawful access to Lot 11 over Easement B or any practical means of access over the unformed road to the north.

7 About a year later Mr and Mrs Fusche acquired Lot 10 for $28,000. It was vacant land, already subject to Easement B in favour of Bundaberg Sugar Company Limited. Mr Fusche told Mr Hodgskin that he did not have lawful access over Lot 10. The Hodgskins were planning to build a residence on their land; their plans had been approved by the local Council and a water tank had been installed. They went ahead with the construction although they changed the alignment of the proposed residence so that it faced towards the road reserve. Mr and Mrs Fusche constructed a house on their land in about 1996.

8 There was a long period of negotiation between the applicants and the respondents. It reached the point where on 12 November 1998 the applicant sought a right of access over Easement B in return for:-

(b) a continuing obligation on the part of the applicants and their successors in title to meet one-third of the reasonable costs of upkeeping the access track; and

(c) the applicants meeting the costs of registering the requisite easement.

Bundaberg Sugar Ltd has indicated that it has no objection in principle to such an arrangement so long as its rights continue and are protected and are paramount. It set out a number of conditions in a letter of 30 April 1999, with all of which the applicants are prepared to agree.

9 Lots 9, 10, 11, 12 and 13 are part of what was Lot 3 on Registered Plan 188460. Lot 3 was subdivided in 1985. The original proposal was that Lot 11 should have a right of access over Easement B. The subdivision was approved by the Gooburrum Shire Council (which has since been succeeded by the Burnett Shire Council) on 11 November 1985, in accordance with a recommendation of the Subdivision and Town Planning Committee. That Committee recommended (inter alia) that access points to Lots 10, 11 and 12 be limited to that at the end of the access strip forming part of Lot 10. Nevertheless the plan was registered without providing for Lot 11 to have access over the handle of Lot 10.

10 There is a gazetted but unformed road along the northern boundary of Lot 11. In practical terms is there alternative access?

11 To the east this road joins Avondale Road. However, between the north-eastern boundary of Lot 11 and Avondale Road there is a low-lying area currently partly covered by water from a dam on the opposite side of the road in Lot 4 on Registered Plan 188482. The dam backs up over the road reserve when it rains and water is retained there for many months thereafter. The cane tram track which runs along Easements C and D continues over the road reserve. The Burnett Shire Council advised Mr Hodgskin in a letter dated 27 August 1997 that its minimum requirements for access along the road reserve east to Avondale Road would be as follows:-

· the formation of the road should be a minimum 300mm higher than the natural surface at water crossings

· underground drainage to be provided at each water crossing to provide a trafficable standard

If you choose to connect your access to Avondale Road then Council will serve notice on the property owner to lower the spillway of the dam so that water does not back-up over the road reserve. The overhead powerline may also need to be lifted and advice should be sought from the Wide Bay-Burnett Electricity Corporation."

Mr Hodgskin deposed to having been told by the Council's engineer, Mr Peter Jensen, that the cost of constructing such a road would be some $300,000. That evidence was relied on not as probative of the cost of alternative access, but as relevant to the reasonableness of the applicants' conduct.

12 Proceeding in a westerly direction along the road reserve, it would be necessary to travel 7.2 kilometeres in order to reach the point where the handle of Lot 10 joins Avondale Road - 1.8 kilometres west, then south along a track for 700 metres until joining Lowmead Road about opposite its junction with Mattons Road, then 3.3 kilometres along Lowmead Road before turning left into Avondale Road and then 1.4 kilometres up Avondale Road to the entry to Lot 10.

13 Photographs of the road reserve to the north-west of Lot 11 (exhibit 5) show a rough track with what appear to be marks from a vehicle which has traversed it. Counsel for Mr and Mrs Fusche submitted that while it was plainly not a formed road, it was able to be driven on. The Burnett Shire Council has indicated that it would not object to the Hodgskins' carrying out works on the road reserve to the north-west, provided they were of a standard suitable for property access and one that would not create further liability to the Council. This was expanded upon in an affidavit by Mr Jensen, the Council engineer, as follows

"(a) The access road would need to be a cleared, formed and drained road;

(b) The road may be of natural occurring gravelly material except for periods where there are two (2) water crossings. In these two (2) areas the road formation would need to be built up and surfaced with gravel and an appropriate culvert put in place allowing some water to pass under the road;

(c) Where water overtops the road, rock pitched concrete margins will be required;.

(d) I would estimate the cost of clearing, formation, gravelling and drainage works to be unlikely to exceed $20,000;

(e) This estimate does not allow for any access construction within Lot 11 on RP 207127."

14 Mr Fusche says that from time to time the applicants have accessed Avondale Road through the adjoining Lot 12 and he has produced photographs (exhibit 4) of a track through Lot 12. It is not a gravelled path but a rough track showing some evidence of vehicle marks. The Hodgskins have not responded to this assertion.

15 Mr and Mrs Fusche's concerns can be summarised as follows:-

(a) diminution in the value of Lot 10 if an easement were granted over it in favour of Lot 11;

(c) the safety of their three children aged 13, 11 and 6;

(d) security - an interference with an alleged right to erect a gate and fence system, whereupon they would run cattle on the property.

16 The applicants relied on a valuation report by Phillip J Mannell of Browning Valuers while the respondents relied on an assessment of compensation by RD Neubecker of Maddern Valuation Services. Suffice it to say that in the opinion of Mr Mannell, "market value compensation" payable to Mr and Mrs Fusche for the grant of an easement over Lot 10 in favour of the Mr and Mrs Hodgskin would come to $4,050, while in the opinion of Mr Neubecker it would be more like $11,360. Further in the opinion of Mr Mannell, the value of Lot 11 would be $16,500 more if it had the benefit of such an easement. I cannot resolve the valuation issue in circumstances where neither valuer was cross-examined and there were no substantial submissions on this evidence.

17 Section 180 of the Property Law Act provides as follows:

"180.(1) Where it is reasonably necessary in the interests of effective use in any reasonable manner of any land ("the dominant land") that such land, or the owner for the time being of such land, should in respect of any other land ("the servient land") have a statutory right of user in respect of that other land, the court may, on the application of the owner of the dominant land but subject to this section, impose upon the servient land, or upon the owner for the time being of such land, an obligation of user or an obligation to permit such user in accordance with that order.

(2) A statutory right of user imposed under subsection (1) may take the form of an easement, licence or otherwise, and may be declared to be exercisable -

(a) by such persons, their servants and agents, in such number, and in such manner and subject to such conditions; and

(3) An order of the kind referred to in subsection (1) shall not be made unless the court is satisfied that -

(a) it is consistent with the public interest that the dominant land should be used in the manner proposed; and

(b) the owner of the servient land can be adequately recompensed in money for any loss or disadvantage which the owner may suffer from the imposition of the obligation; and

(i) the owner of the servient land has refused to agree to accept the imposition of such obligation and the owner's refusal is in all the circumstances unreasonable; or

(ii) no person can be found who possesses the necessary capacity to agree to accept the imposition of such obligation.

(4) An order under this section (including an order under this subsection) -

(a) shall, except in special circumstances, include provision for payment by the applicant to such person or persons as may be specified in the order of such amount by way of compensation or consideration as in the circumstances appears to the court to be just; and

(b) may include such other terms and conditions as may be just; and

(c) shall, unless the court otherwise orders, be registered as provided in this section; and

(d) may on the application of the owner of the servient tenement or of the dominant tenement be modified or extinguished by order of the court where it is satisfied that -

(i) the statutory right of user, or some aspect of it, is no longer reasonably necessary in the interests of effective use of the dominant land; or

(ii) some material change in the circumstances has taken place since the order imposing the statutory right of user was made; and

(e) shall when registered as provided in this section be binding on all persons, whether of full age or capacity or not, then entitled or afterwards becoming entitled to the servient land or the dominant land, whether or not such persons are parties to proceedings or have been served with notice or not.

(a) direct a survey to be made of any land and a plan of survey to be prepared; and

(b) order any person to execute any instrument or instruments in registrable or other form necessary for giving effect to an order made under this section; and

(c) order any person to produce to any person specified in the order any title deed or other instrument or document relating to any land; and

(d) give directions for the conduct of proceedings; and

(e) make orders in respect of the costs of any of the preceding matters and of proceedings generally.

(6) In any proceedings under this section the court shall not, except in special circumstances, make an order for costs against the servient owner.

"owner" includes any person interested whether presently, contingently or otherwise in land.

"statutory right of user" includes any right of, or in the nature of, a right of way over, or of access to, or of entry upon land, and any right to carry and place any utility upon, over, across, through, under or into land.

"utility" includes any electricity, gas, power, telephone, water, drainage, sewerage and other service pipes or lines, together with all facilities and structures reasonably incidental to the utility.

18 The question of what is "reasonably necessary in the interests of effective use [of Lot 11] in any reasonable manner" cannot be determined without regard to the implications or consequences on the other land likely to be affected: see Nelson v Calahorra Properties Pty Ltd [1985] Q Conv R 54-202 at 57,341-42 per McPherson J with whom Andrews ACJ and Demack J agreed. The evidence in relation to reasonable necessity is to be examined with particular care to ensure that the proprietary rights of Mr and Mrs Fusche are not unnecessarily diminished: see Lynch v White [1987] Q Conv R 54-257 at 57,769-70 per de Jersey J with whom Connolly and Carter JJ agreed. While absolute necessity need not be established, it is necessary to show more than mere preference or convenience: see Tipler v Fraser [1976] Qd R 272; Lynch v White; Re Seaforth Land Sales Pty Ltd (No 2) [1977] Qd R 317 at 322; see also Tregoyd Gardens Pty Ltd v Jervis (1997) 8 BPR 97688 in relation to the NSW legislation.

19 The use of Lot 11 for rural residential purposes would clearly be in accordance with the applicable town plan and a use in a reasonable manner. Further it would be consistent with the public interest: sub-s (3)(a). I shall return to this question further below.

20 Access to Lot 11 over Easement B is more than a matter of convenience or preference. To insist upon use of the unformed road whether east-bound or west-bound would impose on the applicants a very substantial financial burden out of proportion to the unimproved value of Lot 11, as well as the obligation of constructing and maintaining a road which would be available for use by any member of the public.

21 If access were allowed over Easement B, the imposition on Mr and Mrs Fusche would be proportionately much less. There is already an easement over the handle in favour of Bundaberg Sugar Ltd. It is used only a few times a year, but legally there is no restriction on how often it may be used. It is a properly graded roadway maintained (at least partially) by the company. Mr and Mrs Fusche's proposal to erect a gate with a lock would be contrary to their obligations under the easement. If they wish to run cattle, they may have to give consideration to other means of securing the stock such as cattle grids. There is some difference as to the frequency with which Mr and Mrs Hodgskin and their family have been using Easement B. However, it is not suggested that they have used it in a way inconsistent with the use of Lot 11 only for rural residential purposes. The potential frequency of use by Bundaberg Sugar Ltd seems to be much greater. This is relevant to Mr and Mrs Fusche's concerns for privacy and safety. They could be adequately recompensed in money for any loss or disadvantage they might suffer.

22 Counsel for the applicants submitted that there is a public interest in the approval of subdivisions which allow practical as opposed to theoretical access, and that there is a public interest in remedying the apparent oversight by the Council at the time the plan of subdivision was approved. Counsel for the respondents submitted that any oversight was irrelevant since neither party knew about it at the time and since there is other reasonably practicable access available. These arguments relate to whether it would be consistent with the public interest for the statutory right of user to be imposed. However, that is not the issue under sub-s (3)(a), which is whether "it is consistent with the public interest that the dominant land should be used in the manner proposed". See Re: Kindervater (Derrington J, No 11 of 1995, 2 August 1995). I am satisfied that it is consistent with the public interest that the dominant land be used for rural residential purposes.

23 Is Mr and Mrs Fusche's refusal to accept the imposition of such an obligation in all the circumstances unreasonable? This requires a consideration of the applicants' conduct in purchasing the land without the benefit of the easement, the existence of an easement in favour of Bundaberg Sugar Ltd, the parties' respective conduct throughout the dispute, and the adequacy of the compensation offered. Counsel for the respondents submitted that it is relevant that the applicants have a prima facie cause of action against the solicitors who acted for them in the conveyance for negligence, but on the material before me I cannot form a view as to their likely prospects in such an action. However, it is clear that once the applicants realised that they have no legal access over Easement B, they set about investigating whether there were practicable alternatives. They enquired as to the requirements of the local Council, and kept Mr and Mrs Fusche informed. Early negotiations seemed to have broken down when Mr and Mrs Fusche required the Hodgskins to pay the Fusches' capital contribution of $3,221.50 to the Wide Bay-Burnett Electricity Corporation in respect of the supply of electricity to Lots 10 and 11. The Hodgskins' offer of 12 November 1998 was met with outright rejection rather than any attempt to negotiate a higher compensation payment. As I have said, I cannot resolve the amount of compensation at present. Otherwise the offer made by the applicants was a reasonable one, particularly having regard to the attitude subsequently expressed by Bundaberg Sugar Ltd. In my view the respondents' refusal to accept the imposition of a right of user is in all the circumstances unreasonable.

24 An appropriate order would be the grant of a statutory right of way over Easement B. However, as the compensation is still to be assessed I propose adjourning the matter to a date to be fixed. In the meantime it may be possible for the parties to agree on the amount of compensation (perhaps with the assistance of a mediator) and upon the appropriate terms of the order to be made.

25 I shall reserve costs at this stage, but I intimate that given the nature of the relief sought I would be not inclined to make an order for costs against the respondents.