Papas v Grave

Judgment 1The plaintiffs, Mr Peter Dimitri Papas and Mrs Tami Lynn Papas, commenced these proceedings by Statement of Claim filed on 19 September 2011 seeking an order that the defendants, Dr Warwick Sutton Grave and Mrs Julianne Grave, sign "a statement to the effect that they consent to the lodging of a Development Application with Mosman Council" for development consent to make alterations and improvements to a driveway constructed, inter alia, on the right of carriageway over the defendants' land. 2The plaintiffs and the defendants were neighbours. The third plaintiff, Jiefang Huang, purchased the property from Mr and Mrs Papas after the proceedings were commenced. The right of carriageway provides access both to the plaintiffs' home at the top of the driveway and to the defendants' garage at the bottom of the driveway. The driveway is on a rather sharp incline from the street running up to the plaintiffs' boundary past the defendants' home on the eastern side of the driveway. 3The main proceedings were heard on 23 and 24 April 2013. Mr CRC Newlinds SC leading Ms T Fishburn, of counsel, appeared for the plaintiffs. Mr FG Kalyk leading Mr G Antipas, of counsel, appeared for the defendants. 4The plaintiffs read the affidavits of Mr Papas sworn on 12 September 2011, 16 March 2012, 22 March 2012 and 11 May 2012, the affidavit of Ms Huang affirmed on 3 April 2013, the affidavits of their solicitor, Stephen John Wawn, sworn on 17 October 2011 and 26 March 2013, the affidavit of David Fayle sworn on 21 March 2013 (a former owner of the plaintiffs' property), and the affidavits of their experts, Nicholas Douglas Mitchell, affirmed on 25 March 2013 and Lyle Marshall sworn on 27 March 2013. 5The defendants read the affidavits of Mrs Grave sworn on 19 April 2013 and that of Dr Grave sworn on 22 April 2013 together with the affidavit of their solicitor, Evangelos Patakas, sworn on 22 April 2013. They also sought to rely upon a report of their expert, Mr AC Doyle, a Registered Land Surveyor of Rygate and Company. 6Mr Papas and Ms Huang were cross-examined as was Mr Fayle. Dr and Mrs Grave were also cross-examined. 7On the evening of 23 April 2013 the parties agreed that their respective experts should be asked to answer questions that would assist in the resolution of their dispute. The experts proceeded to do so and their joint answers became Exhibit 2. The experts agreed that the original design by Richmond & Ross would improve access to both properties with the proviso that some work would be required at the entrance to the defendants' garage. 8On 24 April 2013 the parties requested that the Court make consent orders which included the following: 2. Without admission, and without prejudice to the defendants entitlement on any issue as to costs, the defendants undertake to the Court that within 7 days they will provide Owner's Consent to a development application in the form of annexed to the affidavit of Mr Papas sworn 16 March 2012, by signing such development application in the space provided for that consent and delivering the same to the plaintiffs' solicitor. 3. Order that the injunction ordered by Ward J on 13 June 2013 be set (sic) dissolved from the date of these orders. 9Orders were made for the service of submissions in relation to costs and the respective claims as to costs was heard on 6 June 2013. Mr CRC Newlinds SC leading Mr SB Nash of counsel appeared for the plaintiffs. Mr FG Kalyk appeared for the defendants. 10The plaintiffs seek an order that the defendants pay their costs of the proceedings on an indemnity basis. The defendants seek an order that, subject to existing orders as to costs, each party pay their own costs of the proceedings. Background 11It appears that although the plaintiffs and the defendants did not have a close neighbourly relationship, it was, at least until 2007, a civil one. However the plaintiffs decided to construct a new house on their land which required builders and other contractors to utilise the driveway in front of the defendants' home. This process apparently caused some tension between the parties. 12On 20 June 2007 the plaintiffs' consulting engineers, Richmond & Ross, wrote to the defendants advising that they had been engaged by the plaintiffs "to prepare a design to remedy two gradient issues with respect" to the driveway. The engineers advised that they understood that "these works" would form part of the proposed redevelopment of the plaintiffs' house expected to occur in 2008. They advised that there were "two issues" in respect of which they provided some design drawings. The two issues were identified as a substantial isolated dip in the surface of the driveway resulting in loss of traction and potentially dangerous skidding and an existing gradient of the road and footpath which resulted in cars bottoming out as they crossed the layback of the driveway. 13The engineers also advised that the design would remedy the issues by regrading the "hump" in the driveway on the low side of the dip (so that vehicles would have constant contact with the driveway) and smoothing out the transition of the driveway by lowering the levels at the crossover and boundary. The letter included the following: The proposed changes to the driveway will require regrading of the area in front of your garage to the street and cross over. This regrading has been designed so that any car using your garage will not bottom out or scrape. The regrading would result in the additional benefit of provide (sic) better access for vehicles using your garage. Additionally, the works will result in the whole driveway area having a consistent and upgraded finish. There will be no disruption to any of your services that currently run under the driveway. We understand that the Pappas's (sic) will also undertake to repair any damage to your property caused by these works. We have been advised that the construction will occur with due notice so that it minimizes any inconvenience to you. We understand that Peter will run through the design with you and seek your formal written approval to undertake the work. However should you have any further questions, please feel free to call me, if required I would be happy to meet on site one morning or afternoon, as I live locally. 14On 10 July 2007 the defendants wrote to the plaintiffs advising that they had examined the proposal that had been sent to them by the engineers and had given serious thought to its implications and how it might impact on them and their home. They advised that they were "happy" with the driveway as it was and had not at any time considered any form of alteration or reconstruction. However they also advised that they had no wish to be obstructive of the plaintiffs' plans to have the changes tie in with the construction of their new home. The defendants raised a number of points that they wished to have "clarified". The first was the question of costs. The defendants asked to be assured that they would not be liable for any cost of the works and matters ancillary to the works. The second was a request that they receive indemnification in respect of any claims that might be made upon them on the basis that the building insurance that the plaintiffs might take out 'may' not provide sufficient protection in respect of work on the defendants' property. The third was a request that the plaintiffs instruct their engineers to make enquiries about "various service items [underneath the driveway] that could be damaged". They advised that this was "an essential preliminary requirement" and that they would like to "see the result" of the enquiries. 15A further matter raised by the defendants was the possibility of damage to the structure of their home. In this regard the defendants sought an indemnity from the plaintiffs supported by a policy of insurance. They also suggested that it may be necessary for them to seek independent legal advice and requested that the plaintiffs meet the costs incurred in this regard. They also sought an undertaking from the plaintiffs that they would repair and reinstate any damage that might occur to the driveway and the garden during the construction of their home and the proposed work on the driveway. 16The plaintiffs wrote to the defendants on 14 July 2007. This letter appears to have crossed the defendants' letter of 10 July 2007 and was clearly not in response to it. The letter referred to the matters in the engineer's letter to the defendants and also included the following: During (and prior to the commencement of) the works we will undertake the following at our cost: + Commission a detailed dilapidation report of your property, inclusive of front sandstone walls, streetscape and gardens; + Remedy any damage to your property or the streetscape and gardens as a consequence of the drive way works; + Ensure that you receive due notice of the works, and agree suitable times for the works with you; + Arrange appropriate builders (contracts works) insurance cover should there be any claim for damages (structural or otherwise) as a result of the works; Accordingly, could you please sign and return the attached notice of approval with this letter so that we may submit the same with our application to Council to carryout (sic) the works listed herein. 17The attachment was a document in draft for the signature of the defendants in the following terms: As owners of [address] we consent to the regrading of the right of way access crossing our land as shown on the drawings C01 and C02 revision A prepared by Richmond and Ross consulting engineers (attached). Our approval is subject to the following at cost to the Papas's (sic). 1. A dilapidation report of our property and right of way access, to be arranged prior to the works commencing. 2. An undertaking by Mr and Mrs Papas to rectify any damage to our property caused by the works listed herein. 3. Any other undertakings by Mr and Mrs Papas in accordance with the attached correspondence dated 14 July 2007. 18On 14 July 2007 the defendants wrote to the plaintiffs including the terms of the draft document extracted above with the addition of a final paragraph in the following terms: Our approval and consent in this matter is also subject to and conditional upon your acceptance in respect to all of the indemnities, undertakings and other matters set out in our letter of July 10, 2007 and we attach a copy of this letter and ask that you both sign each page on the understanding that this letter will then form part of our agreement. 19It would appear that nothing further occurred until January 2008. In the meantime the plaintiffs had obtained development approval for the construction of their home (exclusive of works on the driveway). On 9 January 2008 the defendants' then solicitors (Swaab Attorneys) wrote to the plaintiffs advising that the defendants were concerned that "the carriageway will be destroyed" during the construction works. The solicitors requested "full indemnity" from the plaintiffs for any damage or loss to the defendants' property as a result of the construction work to be performed at their property and an agreement that they would adhere to the specific requests set out in the letter. Those specific requests were for the engineers to carry out the enquiries referred to in the defendants' letter of 10 July 2007 and that the plaintiffs inform them at what stage they envisaged work would be performed. That letter also put the plaintiffs "on notice" that should they ignore it, the defendants reserved their rights to seek an injunction that the proposed construction work not commence until an agreement was in place. 20The plaintiffs' solicitors (Shanahan Tudhope) wrote to the defendants' solicitors on 16 January 2008, observing that there was an easement by way of a right of carriageway over the defendants' property by which the plaintiffs gained access to their property. They advised that if any damage to the carriageway was occasioned during the construction works the plaintiffs had already offered to fully rectify any damage and had offered to upgrade the driveway at no cost to the defendants. 21On 24 January 2008 the plaintiffs' solicitors wrote again to the defendants' solicitors advising that the plaintiffs remained prepared to provide a detailed dilapidation report, rectify any damage to the streetscape and gardens, in addition to the defendants' property, agree to suitable times for the works and arrange appropriate insurance cover for the driveway works. 22On 3 March 2008 the defendants' solicitors wrote to the plaintiffs' solicitors in terms that included the following: 1. Deed of Settlement Subject to and conditional upon the comments made at point 2 below, in order to resolve the issues between the parties our client requires the following to be formalised in a deed signed by the owner(s) of the property. The ownership of the property is to be confirmed by a title search of the property. 1. Your clients are to provide at their cost a detailed dilapidation report prior to the commencement of the works, of the right of way including services and utilities underneath the driveway as well as the front sandstone walls, streetscape and gardens; 2. Your clients are to take all necessary steps to reduce the damage that may occur to the carriageway. 3. Your clients are to rectify at their cost any damage to the streetscape and gardens, in addition to our clients (sic) property; 4. Your clients are to agree to suitable times for the works to be carried out in addition to appropriate notice; and 5. Your clients are to arrange appropriate insurance cover for the driveway works; 6. Your clients are to rectify any damage to our clients (sic) property including but not limited to; the carriageway, the services and utilities underneath (as outlined in our letter of 10 July 2007), arising out of or in connection with your clients (sic) use of the carriage way. Our clients are concerned, that the "report" your clients have obtained states that the carriageway needs replacing. Our clients are concerned this is most likely due to your clients (sic) damage in cutting the driveway. 7. Your clients are to indemnify our clients for any loss they incur as a result of the construction work at the Property. 8. Your clients are to pay our clients $5,000 towards its legal fees to date. 9. Our clients will grant access to your clients over their premises for your clients (sic) heavy vehicles, subject to review of the dilapidation report. 23The solicitors then referred back to the defendants' request in their letter of 10 July 2007 that the plaintiffs instruct their engineers to make "necessary enquiries" in relation to the various service items under the driveway. The solicitors noted that the defendants had not been provided with any results of such enquiries. They advised that the defendants were concerned that damage to the services could prove to be very costly to them and repeated their request for investigations to be undertaken with regard to the service conduits beneath the driveway to determine what damage might have occurred. The letter concluded as follows: In light of the above concerns, we have been instructed that our clients are willing to enter into a deed along in the form set out in 1 above subject to the following being undertaken prior to any vehicles travelling the carriageway: 1. Your clients to undertake to carry out the required investigations with respect to various service conduits beneath the existing concrete driveway. 2. Once the necessary investigations have been carried out to our clients' satisfaction, your clients are to provide our clients with a (sic) information about how they will best reduce the damage to any of the services. 24It is apparent that on 3 March 2008 there was a heated discussion between Mr Papas and Dr Grave regarding the approval that the plaintiffs had obtained for the development of their property. The defendants' solicitors wrote to the plaintiffs' solicitors on 10 March 2008 referring to that heated discussion and advising that the defendants were wiling to meet with the plaintiffs at their convenience at any time over the following fourteen days in the presence of an officer from Mosman Council. 25On 14 March 2008 the plaintiffs' solicitors responded to the defendants' solicitors' proposed Deed of Settlement. The solicitors advised that paragraphs 1 to 5 were agreed "as previously proposed" by the plaintiffs. As to paragraph 6, the solicitors advised that the plaintiffs accepted that their previous proposal included the services and utilities underneath the driveway. They also advised that in relation to paragraph 7 the plaintiffs would indemnify the defendants against any claims arising out of or relating to any works to the driveway, the services and utilities under the driveway, the front sandstone walls, streetscape and adjacent gardens. In respect of the proposal for payment of $5,000 towards legal costs, the solicitors advised that the plaintiffs were prepared to offer payment not exceeding $2,000. In respect of paragraph 9, the plaintiffs' solicitors advised that it was not necessary to seek the defendants' consent for access. The letter included the following: Further, our client requires a term in the Deed to the effect that your client provides owner's consent to any Development Application that may be lodged by our client with Mosman Council in relation to the work set out in the Report. 26The solicitors' letter also advised that prior to the commencement of any works, the plaintiffs would obtain a report setting out the nature and location of any services located beneath the driveway and commission a report providing detail as to how best to reduce damage to any services beneath the driveway. The letter also included the following: In a final attempt to avert court proceedings our client is prepared to meet with you and your client to discuss the terms of the proposed deed and the works proposed by Richmond and Ross. Please advise promptly whether your client is prepared to enter in to a Deed in keeping with the terms set out above. 27There were no further communications in relation to the driveway for two years. It is apparent that the defendants opposed the development of the plaintiffs' property and had placed "warning" signs at the front of their garage at the entrance of the driveway and along the driveway. Those signs included a direction to the plaintiffs' contractor not to use the driveway. Dr Grave also wrote directly to the plaintiffs' contractors in relation to the use of the driveway. The relationship between the plaintiffs and the defendants soured at this point and Dr Grave made a number of disparaging remarks about Mr Papas to third parties. This resulted in Mr Papas claiming that he had been defamed and that he reserved his rights to sue Dr Grave for defamation. At this point the plaintiffs' solicitors sought an undertaking from the defendants that they would not seek to impede the plaintiffs' lawful use of the right of carriageway both by themselves and for their contractors. 28On 9 November 2010 Dr Grave's solicitors wrote to the plaintiffs' solicitors alleging that an agreement had been reached evidenced by the exchange of letters of 3 March 2008 and 14 March 2008. The terms of the solicitors' letter, no doubt on instructions, did little to reduce the heat in the relationship between these parties. In any event the letter sought to justify the maintenance of the warning signs that the defendants had installed on the driveway. It also suggested that the right of carriageway as granted in 1938 did not envisage large trucks and bulldozers passing over it. The first defendant's solicitors advised that the undertakings as sought would not be provided. However they advised that Dr Grave had instructed that he had not and would not interfere with the plaintiffs' use of the right of carriageway (until that right was determined by agreement or by a Court). Dr Grave reserved his rights in all respects "of his dispute of the validity of the instrument creating the alleged right of way" and the scope and extent of the plaintiffs' rights to use it. 29On 16 November 2010 the plaintiffs' solicitors advised the defendants' solicitors that the previous negotiations in relation to a Deed had broken down and that there was no agreement and no undertakings in place between the parties. 30On 23 November 2010 the plaintiffs' solicitors wrote directly to the defendants requesting once again that they sign the owners' consent form on the front of the Development Application for the work to be carried out on the driveway. There was no response to this letter and on 24 December 2010 the plaintiffs' solicitors wrote once again to the defendants advising that unless they received the signed development application by 10 January 2011 they were instructed to commence proceedings. There was no response and on 4 February 2011 the plaintiffs' solicitors once again wrote to the defendants advising that they had been instructed to prepare the Statement of Claim seeking orders that they sign the Development Application to enable the plaintiffs to proceed with the works on the driveway. The solicitors advised that they would refrain from filing the Statement of Claim for a further 14 days to enable the defendants to take further legal advice. 31There was then lengthy correspondence from the defendants' solicitors to the plaintiffs' solicitors during which the parties discussed the merits of their respective positions. The parties also corresponded directly by email. These communications achieved little. 32On 9 September 2011 the plaintiffs' solicitors advised the defendants' solicitors that they were instructed to commence the proceedings. On 14 September 2011 the defendants' solicitors advised the plaintiffs' solicitors that they were not instructed to act for Mrs Grave and that the plaintiffs' solicitors should correspond with her directly. 33The proceedings were commenced on 19 September 2011 by the filing of the Statement of Claim. After the first directions hearing on 18 October 2011 the defendants' solicitors then sought an array of further material purportedly so that the defendants could file their Defence. 34On 20 June 2012 the plaintiffs' solicitors wrote two letters to the defendants' solicitors. By this time the solicitors were acting for both defendants. One letter purported to be an offer in accordance with the Uniform Civil Procedure Rules 2005, Part 20 Division 4. The other letter was in accordance with the principles in Calderbank v Calderbank [1975] Fam 93. The terms of the offers were identical and in the following terms: The Terms of the Offer are that your clients, the defendants, consent to the entering of the followings in these proceedings: 1. That the defendants sign a Statement to the effect that they consent to the lodging of a Development Application with Mosman Council seeking development consent in accordance with the Mosman Local Environmental Plan 1998 to make alterations and improvements to the driveway constructed inter alia on the right of carriageway forming part of [the defendants' property] as required by the Environmental Planning and Assessment Regulation 2000 (NSW) and being for the works set out in the documentation annexed to the affidavit of Peter Dimitri Papas sworn 16 March 2012 omitting the plans of MacCormick Simonian Architects dated November 2010; and 2. That in default of the defendants signing the Development Application as ordered the same be signed by such person as the Court may order pursuant to S.94 Civil Procedure Act 2005; 3. That each party pay their own costs. Each offer was open for 28 days from 20 June 2012. 35At the end of June 2012 the plaintiffs did some construction work on the top of the driveway near the entrance to their property. The defendants moved for an ex parte injunction restraining the plaintiffs from undertaking any building or construction works on their land. That order was made on 13 June 2012. The matter returned before the Duty Judge on 2 July 2012 and by consent, those orders were continued. 36Further interlocutory steps included a claim by the defendants that the first plaintiff, Mr Papas, was in contempt of the injunction. The plaintiffs then sought to have the ex parte orders that were continued by consent set aside. That application was unsuccessful: Papas v Grave [2012] NSWSC 1461. Accordingly at the time the matter was set down for hearing there was in force an injunction restraining the plaintiffs from carrying out any construction work on the driveway. 37As has been usual in this case, the parties filed detailed evidence in support of their respective applications for costs. The plaintiffs filed and read the affidavit of their solicitor sworn on 5 June 2013. The defendants relied upon the affidavit of their solicitor sworn on 4 June 2013 and those of Dr Grave sworn on 22 April 2013 and 4 June 2013 and Mrs Grave sworn on 19 April 2013. 38Dr Grave was cross-examined. During his cross-examination he complained that the plaintiffs did not come directly to the defendants to discuss the proposal for the work with them (tr 111 and 126). Dr Grave suggested that, although the plaintiffs claimed in these proceedings that there were problems with the driveway, to his observations they did not "seem to be having any problem" (tr 111). He expressed the view that the driveway could be repaired without the need for his consent rather than the whole of the construction work having to be done (tr 112). Indeed he suggested that he did not read the Richmond & Ross report as suggesting that the whole of the driveway needed to have work done on it (tr 112). Dr Grave maintained his position in this regard and refused to accept the proposition that the Richmond & Ross report referred specifically to repairs to the whole of the driveway (tr 114-115). His evidence included the following (tr 120-122): Q. So you don't think there is a real problem; is that it? A. I said before in my previous evidence you can create any problem you want to. Q. In any event, viewing the video when you did didn't change your attitude to defending this case at all, did it? A. It didn't change my attitude personally to defending the case. I thought it was a pretty average act, but that's beside the point. Q. But it didn't change your attitude to the case, did it? A. Well, if we refer -- Q. Did it? A. No. No. ... Q. It had nothing to do with your decision to consent to the orders sought, did it? A. That infers it's a hundred percent. I may have considered it, but that doesn't mean it's the primary consideration which you said. The answer is no. ... Q. Now, on the Friday before the case commenced before her Honour your solicitors on your behalf served on Mr Papas' lawyers an expert report; correct? A. Well, that's correct, yes. ... Q. He said, and I am paraphrasing, I don't really agree with Richmond and Ross, what they are proposing will only marginally address the problems of hump, bottoming out and wheel spinning? A. I would have to go back to the report. My understanding was that it improved the Papas' access dramatically better -- Q. All right. Let's stop. So you did understand from the time you got the expert's report that what was being proposed could improve the Papas' access to their property over the driveway; correct? A. That's correct. On the right of way carriageway, that's correct. Q. Now, the expert also said in his report that he thought that doing the work would cause some detriment to you, didn't he? A. Yes, but -- Q. Yes? A. Yes, yes. Q. The experts then met on the evening of the first day of the trial; correct? A. Correct. Q. And after meeting your expert agreed with Richmond and Ross to the following effect, didn't he, firstly, that what was being proposed was to the benefit of the Papas property; correct? A. I understand - there were two points. I haven't got them in front of me. Q. Well that was the first point? A. Right. If you say so I believe you. Q. And the second point was this, and you do remember this, don't you, that what was being proposed would be to the benefit of your property? That is what was agreed by your expert, wasn't it? A. Do I get a yes with an explanation, your Honour, or just a yes? ... Q. That was the agreement wasn't it? A. I believe that's what they signed, but they didn't discuss that with us. Consideration 39Both parties relied upon the often cited passage of McHugh J's judgment in Re the Minister for Immigration and Ethnic Affairs of the Commonwealth of Australia; Ex parte Lai Qin (1997) 186 CLR 622 at 624-625 as follows (footnotes omitted): In an appropriate case, a court will make an order for costs even when there has been no hearing on the merits and the moving party no longer wishes to proceed with the action. The court cannot try a hypothetical action between the parties. To do so would burden the parties with the costs of a litigated action which by settlement or extra-curial action they had avoided. In some cases, however, the court may be able to conclude that one of the parties has acted so unreasonably that the other party should obtain the costs of the action. ... Moreover, in some cases a judge may feel confident that, although both parties have acted reasonably, one party was almost certain to have succeeded if the matter had been fully tried...But such cases are likely to be rare. If it appears that both parties have acted reasonably in commencing and defending the proceedings and the conduct of the parties continued to be reasonable until the litigation was settled or its further prosecution became futile, the proper exercise of the cost discretion will usually mean that the court will make no order as to the cost of the proceedings. 40The defendants submitted that the appropriate order in all the circumstances is that there be no order as to costs. In addressing whether the parties had behaved reasonably, it was submitted that the defendants had done so by proposing entry into a Deed with the conditions in relation to the services under the driveway. It was submitted that Mr Papas' conduct was hostile and abusive and that the only offer to settle the proceedings came on 20 June 2012. 41It was contended that the defendants' concerns were reasonable and that the plaintiffs did not deal with them civilly or appropriately. It is not in issue that the plaintiffs changed the design of the work to be done on the right of way in March 2012 which gave rise to amended pleadings. The defendants also emphasised that it was not until 28 March 2013 that the plaintiffs served evidence (including a video depicting wheels leaving the ground and spinning) which demonstrated the real issue with the driveway. It was submitted that it was not until then that the plaintiffs' real complaint was exposed. 42The plaintiffs contend that this is a rare case in which the Court could be comfortably satisfied that they would have succeeded had the matter been finalised at the hearing. Emphasis was placed on the fact that the majority of the evidence had been given by the time the matter settled. It was submitted that the defendants' conduct throughout the years that the plaintiffs were trying to obtain their consent to the lodgement of the Development Application was unreasonable. 43It was submitted that they unreasonably rejected and refused multiple attempts by the plaintiffs both before and after commencement of the proceedings to settle the proceedings in the face of the clear and unambiguous legal obligation that was imposed on the defendants to consent to the Development Application. It was submitted that the defendants persistently requested documents and other material and information from the plaintiffs, thereby unduly and unreasonably protracting the proceedings in circumstances where they were not entitled to that material. Further, the plaintiffs contended that they brought the relevant authorities to the defendants' attention and notwithstanding this they persisted in unreasonably and unnecessarily causing the parties to incur legal costs. 44The defendants submitted that the approach that they adopted to the plaintiffs' request for their consent to the lodgement of the Development Application was consistent with their legal entitlement to demand that any work that the plaintiffs wished to carry out on the right of way was "consistent with the reasonable use and enjoyment of their property"; Zenere v Leate (1980) 1 BPR 9,300 at 9,305. 45There is no issue that the plaintiffs were obliged to lodge a Development Application for approval of the proposed works and that they required the defendants, as the owners of the relevant land, to consent to the lodgement of the Application: s 78A(1) of the Environmental Planning and Assessment Act 1979; and clause 49 of the Environmental Planning and Assessment Regulation 2000. 46The issue for determination in the main proceedings was whether the defendants were obliged to place their signature on the Development Application consenting to its lodgement with the local council. 47The cases comprehensively support the plaintiffs' entitlement to do such work on the right of way that is "reasonably necessary to create or maintain reasonable vehicular access" along the right of way so long as it is consistent with the reasonable use and enjoyment of the right of way by the defendants and does not interfere with the use and enjoyment of the defendants' property to a greater extent than is reasonably necessary: Zenere v Leate at 9305; Bland v Levi (2000) 9 BPR 17,517 at 17,518-17,520 [11]-[22]. 48In not dissimilar circumstances to the present case, the defendants in Kirkjian v Towers (Supreme Court of New South Wales, Waddell CJ in Eq, 6 July 1987, unreported) refused to give their consent to the plaintiffs' plans for constructing a driveway on the right of way. In that case Waddell CJ in Eq confirmed as correct the proposition that by refusing their consent "without any lawful reason" the defendants were obstructing the rights of the plaintiffs to use the right of way (at 4). An order was made requiring the defendants to give their approval to so much of the plaintiffs' application as involved work on the defendants' land (at 6). 49Such an order of course does not require the defendants to consent to the development itself. It leaves the defendants at liberty to object to the development application and to exercise such rights as are given to them by the planning laws: 117 York Street Pty Ltd v Proprietors of Strata Plan No 16123 (1998) 43 NSWLR 504 at 522-523. 50The defendants in this case contended that the driveway had functioned adequately for at least thirty-five years. Dr Grave maintained this contention during his cross-examination on the costs application. The defendants did not concede that the works proposed by the plaintiffs were reasonably necessary for the intended enjoyment by the plaintiffs of the use of the right of way. 51Although the defendants capitulated on the second day of the trial, in his cross-examination on the costs application Dr Grave sought to justify his opposition to the plaintiffs' request for consent to the lodgement of the Development Application. He was not willing to accept that there was a problem with the driveway. However the evidence demonstrated a clear problem with the driveway not only from the point of view of the comfort of anyone driving up to the plaintiffs' property but also from the point of view of safety. Although Dr Grave suggested by his reference to the video that was taken as "a pretty average act" (tr 120) that it was somehow not reliable, I am satisfied that the video and photographic evidence clearly demonstrated the difficulties that were present in the driveway. This included cars bottoming out and scraping the driveway, wheels leaving the driveway at an elevation of some inches at some points and spinning at other points. 52Although the defendants contended that the plaintiffs delayed in trying to have the driveway works approved (in not doing anything between 2008 and 2010) I accept that the difficulties that the plaintiffs were having with the defendants led them to focus on developing their property rather than seeking to have further and difficult communications with the defendants. 53It seems that the defendants would not accept (in particular Dr Grave would not accept) that the step to be taken was merely consent to the Development Application. It appeared that the defendants did not understand or refused to accept that they still had (and have) the capacity to object to the development. It appears from Dr Grave's evidence that he thought it would be more effective to prevent the plaintiffs from being able to lodge the Development Application until they achieved agreement of certain terms. It appears to me that the defendants wanted to secure terms with certainty because they were concerned that the Council may allow the plaintiffs to do work inconsistently with the defendants' wishes. 54From the outset the plaintiffs agreed to rectify the damage that might be caused by the proposed works, to commission a detailed dilapidation report, to take out the appropriate insurance and to give due notice of the works. However the defendants wanted more. They wanted extensive enquiries by engineers into the services that were under the driveway with a plan to ensure that no damage would be done to those services with further meetings and discussions in relation to how this was to be achieved. They also wanted the plaintiffs to pay some thousands of dollars so that they could take independent legal advice. The plaintiffs agreed to investigate the services under the driveway and to pay some of the legal costs. However the defendants still refused to sign the Development Application. 55The clear impression that I have gained from the correspondence between the parties is that the plaintiffs were more than willing to ensure that any damage that was occasioned was remedied at their cost. I am satisfied from the correspondence and from Dr Grave's evidence on the costs application that the defendants (more particularly Dr Grave) sought far more than was reasonable from the plaintiffs in exchange for their consent. There was no lawful reason for failing to give their consent. I regard the defendants' conduct as unreasonable. 56I am comfortably satisfied that the proposed works were reasonably necessary for the plaintiffs to enjoy the use of the right of way. I am also confident that had the proceedings run to final judgment, the plaintiffs would have succeeded in obtaining the order as sought. 57In those circumstances I am satisfied that the defendant should pay the plaintiffs' costs of the proceedings. I turn now to consider whether the plaintiffs' costs should be paid on an indemnity basis. 58The defendants submitted that the Calderbank offer of 20 June 2012 was not a true offer of compromise. In this regard reliance was placed on Bishop v State of New South Wales (Supreme Court of New South Wales, Dunford J, 17 December 2000, unreported). In that case, the defendant had made what was described as a "walk-away offer" requiring the plaintiff to abandon proceedings and avoid the risk of an anticipated order for costs. The plaintiff was unsuccessful and the defendant sought indemnity costs from the date of the offer. Dunford J said at [4] that the offer was "not in any real sense an offer to compromise the proceedings, but merely an offer to induce the plaintiff to abandon his claim". 59The offer under the Rules impermissibly included an offer in relation to costs: Old v McInnes [2011] NSWCA 410. In my view an offer of the kind in the Calderbank letter of 20 June 2012 is capable of being categorised as a "compromise" (subject to what is said below). It enabled the defendants to settle the proceedings without any risk of an adverse costs order against them. 60It is necessary to determine whether in all the circumstances it was unreasonable for the defendants not to have accepted the offer. The context in which the offer was made included that on the defendants' application on 13 June 2012 the Court had granted an ex parte injunction against the plaintiffs, restraining them from continuing to carry out works on the driveway. The injunction was returnable before the Court on 2 July 2012. No mention was made of this aspect of the litigation in the Calderbank offer. Although, on 2 July 2012, the operation of the injunction was extended by consent, it appears that during the 28 day period of the Calderbank offer from 20 June 2012, a question arose as to whether Mr Papas was complying with his obligations under the injunction. This was the subject of a contempt charge that, I understand, is extant. 61On balance I am of the view that in the circumstances in which the offer was made, combined with the fact that the offer made no mention of the injunction, it was not unreasonable for the defendants not to accept the offer. The application for indemnity costs is refused. 62The defendants raised an argument in relation to the necessity for the first and second plaintiffs to continue these proceedings after the third plaintiff purchased their property. Indeed, after the third plaintiff purchased the property a request was made on her behalf for the defendants to consent to the lodgement of the Development Application for the proposed works. That was refused. The defendants submitted that it is not appropriate that an order should be made that they pay the costs of all of the plaintiffs in those circumstances. I disagree with that submission. The only way the plaintiffs could achieve the outcome of the order as made together with the discharge of the injunction was to maintain these proceedings. 63The defendants are to pay the plaintiffs' costs of these proceedings. The plaintiffs' application for indemnity costs is refused.