Sader v Langham

Supreme Court of NSW|2018-04-30|Before: Darke J

Introduction

The plaintiffs, Mark and Sandra Sader, are the owners of a property at 31 Queens Road, Connells Point. The title reference of the property is Lot 100 in Deposited Plan 1079077. The property has the benefit of certain easements, including rights of way that burden the properties at 29A and 31A Queens Road, Connells Point (Lot B in Deposited Plan 361278 and Lot 101 in Deposited Plan 1079077 respectively). The owners of those properties are Angela Langham (the first defendant) and Margaret Williamson (the second defendant).
The plaintiffs allege that certain works that have been constructed on the rights of way by the first defendant amount to a substantial interference with their rights. The plaintiffs did not press their claims for mandatory injunctive relief to remedy the alleged interference, but maintain, against the first defendant, a claim for damages. The plaintiffs contend that the works have caused the value of their land to be significantly diminished.
The rights of way were created in about 1948 following a sub-division of the land in Lot 23, Section 5 of Deposited Plan 3733 to create Lots A, B, C and D. Those lots were identified by reference to a plan that was filed and may be referred to as FP 361278. The plan depicts four long rectangular blocks lying between Queens Road to the south and Oatley Bay to the north. Lots A and B extend up from the mean high water mark on Oatley Bay and Lots C and D extend down from Queens Road. The plan shows rights of way running north-south along and also east-west across the land, forming the figure of a cross. The plan also contains a note that is in the following terms: It is intended to create Rights of Way over the strips of land shown hereon within each Lot in favour of the other Lots in the subdivision.
On 2 February 1948 Lot C was transferred "together with a right of way over the strips of land noted as right of way within Lots A, B, & D in the Plan annexed hereto as appurtenant to the subject land. Reserving a right of way as appurtenant to Lots A, B & D in the Plan above referred to over strips of the subject land noted as right of way in the said Plan."

Construction of the easements

The easements are embodied in the plan referred to as FP 361278. The plan is an instrument that has been filed and forms part of what is recorded in the Register maintained for the purposes of the Real Property Act 1900 (NSW). The easements must be construed in accordance with the principles enunciated in Westfield Management Ltd v Perpetual Trustee Company Ltd (2007) 233 CLR 528; [2007] HCA 45. The task of construction must therefore be undertaken by reference to the terms of the instrument itself, and evidence of the physical characteristics of the land concerned (see Sertari Pty Ltd v Nirimba Developments Pty Ltd (2008) NSW Conv. R 56-200; [2007] NSWCA 324 at [15]; Hare v van Brugge (2013) 84 NSWLR 41; [2013] NSWCA 74 at [15]-[18]).
There was no direct evidence of the physical characteristics of the relevant land at the time the easements were created. However, evidence concerning the present physical condition of the land, at least insofar as the land has not been developed, may allow inferences to be drawn about the physical features likely to have been present at the time of grant. There was no suggestion that in those respects there had been any material change in the physical features (see Hare v van Brugge (supra) at [18]).
As noted earlier, FP 316278: 1. depicts four long rectangular blocks lying between Queens Road to the south and Oatley Bay to the north; 2. shows rights of way running north-south along and east-west across the land; and 3. contains the note: It is intended to create Rights of Way over the strips of land shown hereon within each Lot in favour of the other Lots in the subdivision. The plan also contains various notations, including as to dimensions.
The plaintiffs submitted that the rights of way they enjoy over No 29A and No 31A are in the nature of rights of carriageway, as opposed to rights of footway. That is, that the rights include rights to pass and re-pass with vehicles. They submit that the plan provides for reciprocal rights of way, and it is clear that the rights of way enjoyed by the owners of No 29A and No 31A over No 29 and No 31 are rights of carriageway to enable motor vehicle access to Queens Road. The plaintiffs submitted that there is no indication in the note on the plan that any of the rights were intended to differ from any of the other rights. The plaintiffs also submitted that the width of the rights of way (approximately 4.88m in the case of the two rights of way the focus of this case) suggests that more than a mere footway was intended.
I note in passing that both sides took the view that, in construing the rights of way, regard could be had to the existence of the other rights of way shown on the plan. That seems to me to be a correct approach, and one that accords with the principles enunciated in Westfield Management Ltd v Perpetual Trustee Company Ltd (supra).
The defendants submitted that a number of factors pointed to the conclusion that the rights of way over No 29A and No 31A were in the nature of rights of footway. These factors were primarily: 1. the width of the rights of way together would allow a motor vehicle to pass along, but not turn around within, the easement area (see St Edmundsbury and Ipswich Diocesan Board of Finance v Clark (No 2) [1973] 1 WLR 1572 at 1600); 2. the approximately 76m length of the rights of way would in those circumstances require a motor vehicle to reverse for a considerable distance, something not likely to have been in contemplation at the time of grant; 3. the steepness of the land, particularly within about 20m of Oatley Bay, further suggests that use by means of motor vehicles was unlikely to have been in contemplation at the time of grant; and 4. the lower ends of the rights of way abut a rocky and shallow part of Oatley Bay, where no boat ramp or jetty was situated.
The terms and conditions of the rights of way are not explicitly stated in the instrument beyond the expression "right of way" itself. However, it can be discerned from the plan that the rights of way were intended to allow access between the plaintiffs' land and Oatley Bay. It must have been contemplated that the rights of way might be used not only to simply walk to and from the bay, but also to transport watercraft to and from the bay, where they might be launched. Further, the distance between the plaintiffs' land and the bay is such that it would have been contemplated that the ability to transport watercraft along the rights of way might require, or at least be facilitated by, the employment of trolleys or other forms of wheeled equipment.
It therefore seems to me that the rights of way should not be construed as being merely in the nature of rights to pass and re-pass on foot without vehicles. I consider that the use of vehicles, including to aid the taking of watercraft (and associated equipment) to and from the bay was contemplated at the time of grant, and thus permitted under the rights of way. I think that in the absence of any words of restriction, the easements should not be read as being limited to pedestrian traffic alone. They extend, in my view, to the use of vehicles in aid of the purposes for which the easements were granted, at least where the vehicles are suited to the physical condition of the rights of way from time to time.
In addition, the plaintiffs as owners of the dominant tenement are entitled to construct improvements on the servient tenement where it is necessary for the exercise of the rights conferred by the easements (see Sertari Pty Ltd v Narimba Developments Pty Ltd (supra) at [9]; Hemmes Hermitage Pty Ltd v Abdurahman (1991) 22 NSWLR 343 at 348 and 354-5).

The plaintiffs' case

The plaintiffs allege that on a proper construction of the easements, the right of way includes a right of carriageway or a vehicular right of way (see Statement of Claim paragraph 10). It is further alleged that the defendants have substantially interfered with their reasonable use and enjoyment of the easements from the point about 20m from the mean high water mark (see Statement of Claim paragraph 11). The particulars of that allegation identify various works carried out on the rights of way which are said to cause the substantial interference, being that the rights of way cannot be used as a right of carriageway or vehicular right of way across the last 20m to the mean high water mark.
The plaintiffs provided further particulars of this allegation on 9 June 2016 and by two letters on 5 May 2017. In the last of those letters, it was stated: The use of the Plaintiffs' right of way which our clients allege your clients have substantially interfered with is use of the right of way as a right of carriageway as opposed to a right of footway. That is, our clients allege that your clients have substantially interfered with their right to pass and re-pass with vehicles (including vehicles towing watercraft) to and from the dominant tenement. In this paragraph, "right of foot way" has the same meaning as in Sch 8 of the Conveyancing Act 1919 (NSW).
The particulars were thus not restricted to use of the rights of way by means of motor vehicles. They were broad enough to encompass vehicles generally, even though no specific types of vehicle were identified. However, in the course of the hearing, it became apparent that the plaintiffs' complaint was focused upon the use of vehicles other than motor vehicles. Reference was made to "wheeled access" by means of trolleys or other wheeled vehicles capable of transporting watercraft, not necessarily by towing such craft.
The defendants complained that there was a lack of clarity in this regard. It was said, for example, that the particulars did not identify any such vehicles, or identify any uses of them that were impeded or prevented. Whilst there was some lack of clarity, the Court was not prepared to accede to the defendants' submission that the plaintiffs should be restricted to a case based on the use of motor vehicles.

The witnesses called

The plaintiffs adduced evidence from three experts, namely, a surveyor Mr Damian Maguire, a town planner Mr Anthony Rowan, and a valuer Mr Greg Parsons. Neither of the plaintiffs gave evidence.
The defendants adduced evidence from a surveyor, Mr David Tremain, and a town planner and building surveyor, Mr Brett Daintry. He and Mr Rowan produced a Joint Report in addition to their individual reports. The defendants also adduced evidence from a traffic engineer, Mr Craig McLaren. The defendants did not adduce any valuation evidence.
A deal of non-expert evidence was adduced by the defendants. Evidence was given by the first defendant Angela Langham, and her husband Richard Langham. Evidence was also given by the first defendant's father Adrian Williams, a former neighbour William Koshakji, and the second defendant's daughter Lynette Barakat.
Neither of the surveyors were required for cross-examination. It was not suggested that there was any relevant divergence between them. Their evidence may be accepted as substantially accurate. The town planners were cross-examined. They gave their evidence in the witness box together. The valuer, Mr Parsons, was also cross-examined.
Of the lay witnesses called by the defendants, only Mr and Mrs Langham, and Adrian Williams, were cross-examined.
Neither counsel suggested that any question arose as to the credit of any of the witnesses who gave evidence.

The condition of the rights of way prior to the undertaking of the works

As noted earlier, the rights of way are each about 2.44m in width and 76m in length. They lie next to each other, running along the western boundary of No 29A and the eastern boundary of No 31A.
Extensive evidence was adduced by the defendants concerning the physical characteristics of the rights of way prior to the carrying out of the works. The evidence consisted of detailed descriptions of the area containing the rights of way, numerous photographs, and a survey drawing prepared in 2011.
Angela Langham lived at No 29A between the ages of 5 and 21, and again since 2008 when she purchased the property from her parents. She gave evidence to the effect that a concrete driveway extended down from Queens Road onto the rights of way to a point adjacent to the garage that serves No 29A. (This is shown clearly on the photographs at exhibit A pages 137 and 138.) She said that was as far as vehicles could travel down towards the water. She said that from that point there was a concrete path (less than 1m wide) which extended for about 7m down to a point adjacent to the front door to No 29A. There were several steps along this path. (Two sets of steps are depicted on a plan prepared by Harrison Friedmann and Associates Pty Ltd on 22 June 2011 - see exhibit A page 147.) Mrs Langham stated that there was a power pole "in the middle of the right of way" along (or near to) the path. The pole can be seen in the photographs at exhibit A pages 137 and 139. She also stated that there was an open stormwater drain constructed alongside the concrete path. It appears, from the Harrison Friedmann survey plan, that this drain commenced near the steps at the northern end of the path, and continued down the right of way on No 29A past the house to an area about 15m from the shoreline. The drain can be seen in the photographs at exhibit A pages 145 and 146. The former photograph also shows that some concrete pavers were laid alongside the house at No 29A from the point where the concrete path finished to the rear of the house.
Mrs Langham gave evidence that along the portion of the right of way that extended from a point adjacent to the rear boundary of the house to the water there were "large trees, shrubs, an open stormwater drain and sandstone rock faces." She further deposed that the terrain was quite steep in that area, especially in the last 7m to the mean high water mark. She also deposed that: The last 15 metres of the right of way to the MHWM between 29A and 31A Queens Road consisted of sandstone cliff drop off, vegetation and cactus plants. The rocks in this area were covered in moss. The rock faces were steep and very slippery. The area I depose to in this paragraph can be seen in the photographs that appear at pages 13 to 16 of Exhibit ALL-1.
In cross-examination, Mrs Langham explained that the sandstone cliff drop off she was referring to was a sandstone drop located quite close to the water, as shown in the photograph at exhibit A page 142. The Harrison Friedmann survey plan suggests that there may have been a drop of about 20cm in that area. The plan also suggests that about 8m further away from the water, there was a drop of about 40cm near the boundary between the two rights of way.
Mrs Langham deposed that the "obstructions" that existed beyond the end of the concrete path "prevented people from walking the entire length of the right of way to access the water at Oatley Bay". She said that the obstructions "completely prevented vehicular or wheeled access to the water's edge, even if it were possible to get past the steps and narrow path". This evidence of Mrs Langham's was not challenged.
Mr Langham (who has lived at No 29A since 2008) gave evidence to similar effect about the physical condition of the area containing the rights of way. He deposed that the open drain continued down to a point about 15m from the mean high water mark. Mr Langham also deposed that: Trees and shrubs grew next to the open channel drain. The section of the right of way about 18 metres from the MHWM was completely obstructed by trees and shrubs. Two large trees grew in this area and there were dense shrubs. People could not walk down this section of the right of way. They had to walk around the trees and shrubs onto our Property to access the water.
Later in his affidavit he deposed that: From our rear balcony onwards, the right of way to the water's edge was not sealed and consisted of steep terrain. Shrubs, large trees, the open dish drainage pit and rock faces obstructed pedestrian access along the right of way to the water's edge. These obstructions forced people off the right of way onto our Property to access the water's edge; … Prior to the construction works, it was not possible for anyone to access the water's edge by foot or wheeled access, along the entire length of the right of way between the Property…and 31A Queens Road…
The evidence set out in the above paragraphs was not challenged. Mr Langham further deposed: The last 15 metres of the right of way to the MHWM falls within the foreshore protection line. About 7 metres from the MHWM, the slope of the terrain in this area becomes steep. Prior to the construction works, the ground in this area was very rough and consisted of vegetation, exposed rocks and a vertical rock face. At the base of the vertical rock face was a grassed area.
Mr Langham said in cross-examination that the rock face he was referring to was that part of the rock face (shown on the photograph at exhibit A page 143) that was upon the right of way. Mr Langham did not agree that at the boundary between No 29A and No 31A the rock face caused a drop of only about 40cm. He thought that the drop was probably over half a metre, or around 400mm-600mm. When shown the survey plan which depicted a drop of about 40cm at that point, Mr Langham appeared to concede that the drop was of that magnitude.
Mrs Langham's father, Adrian Williams, owned No 29A with his wife from 1976 to 2008, when the property was purchased by Mrs Langham. Mr Williams continues to visit the property on a regular basis. Mr Williams deposed, in relation to the rights of way from north of the houses on No 29A and 31A to the point 15m from the foreshore, that: The portion of the right of way running north from the northern face of the dwellings at 29A and 31A Queens Road to the 15 metre foreshore protection line consisted of a moderately sloping grassed area on the western side of the right of way. Trees and shrubs grew along the eastern side of the right of way in this area. Pedestrian access was possible along the western side of the right of way until you were about 18 metres from the mean high water mark (MHWM). When you were about 18 metres from the MHWM, the sloped grass area along the western side right of way was blocked by impenetrable shrubs. The shrubs were about 2.5 metres high and packed densely along the right of way from east to west (and vice versa). You could not walk between or through the shrubs along the right of way. Pedestrian access past these shrubs could only be achieved by diverging several metres off the right of way onto 31A Queens Road. The open channel stormwater drain continued in this section on the eastern side of the right of way and was adjacent to the trees and shrubs. … In this section of the right of way, on the eastern side of the right of way and alongside the trees and shrubs there was an open channel stormwater drain. The drain contacted the eastern boundary of the right of way in 2 locations being the northern face of 29A Queens Road and about 15 metres from the MHWM. Pedestrian access along the eastern side of the open channel stormwater drain was only possible if pedestrians diverged off the right of way and further into 29A Queens Road. About 15 metres from the MHWM, pedestrians could diverge back onto the right of way. It would not have been possible to drive a vehicle down this section of the right of way, assuming one could have got the vehicle past the steps referred to in paragraph [21] above. It was possible to walk down most of the eastern side of the right of way in this area but it was necessary to step off and back on the right of way due to the trees, shrubs and drain. It was not clear or unobstructed. In my opinion based on the physical nature of the right of way it would not have been possible to ride a bike down this area and I never saw anybody attempt to do that.
In relation to the rights of way from the point 15m from the foreshore to the mean high water mark, Mr Williams deposed: The portion of the right of way from the 15 metre foreshore line to the MHWM consisted of exposed rock and vegetation. The last 7 metres of the right of way to the MHWM was very steep and rough. There was lots of vegetation, cactus plants, exposed rocks and a vertical rock cliff. At the bottom of the vertical cliff face there was a small grassed area. Pedestrians could not walk down the entire length of this section of the right of way. They had to deviate from the right of way onto 29A or 31A Queens Road to get around the obstructions and get to the water's edge. The steep and rough terrain on the right of way was not suitable for pedestrian access. Pedestrians risked injury if they tried to access the water's edge along the entire length of the right of way. A person could not drive a vehicle or wheel any trolleys down this portion of the right of way. It was not sealed and was very steep over the last 7 metres falling around 3.5 metres to the water's edge.
This evidence was not the subject of any challenge. However, Mr Williams explained in cross-examination that the rock cliff he was referring could not be seen on the photograph at exhibit A page 143, but could be seen on the photograph at exhibit A page 142, in the area he marked with a circle.
Lynette Barakat is the daughter of the second defendant owner of No 31A. Ms Barakat has lived there at various times, including for at least the last 19 years. In relation to the period prior to the carrying out of the works, Ms Barakat deposed that: Before the work was done by Angela and Richard, the last 7 metres of the Right of Way between 29A and 31A Queens Road, just before the water's edge, was totally inaccessible. There were many obstructions present. There were large rocks, shrubs, small trees and many large cacti. The area was also quite steep. I never saw anybody use this section of the Right of Way. My family, friends and our guests did not use it to get to the water. It was not possible to get down to the water this way as there was no pathway or track there was just large trees, dirt and rocks. About 1.5 metres from the mean high water mark (MHWM), there is also a large rock shelf along the Right of Way. The rock shelf is about 3 metres high and extended about 3 metres across the Right of Way. It made getting to the water along the Right of Way impossible. To get around the rock shelf and access the water, people had to walk onto parts of either 29A or 31A Queen [sic] Road which did not form part of the Right of Way. Due to the inaccessible nature of the lower section of the Right of Way, it was not possible to take a kayak, dingy or any other type of craft through this area to the water to lunch [sic - launch?]. It was not possible to push or ride a mountain bike in this area. Ms Barakat was not cross-examined.
William Koshakji is a former owner of No 29. He and his wife sold the property in 2010. Mr Koshakji deposed: Beyond the garage heading north along the Right of Way there was for a few more metres a narrower sealed path. However it was not possible to drive a vehicle, or even use it for any wheeled trolley on it because (a) as the path had stairs, (b) was not wide enough for any vehicle, and (c) there was a power pole which also blocked access. Continuing north past that path the rest of the Right of Way on both 29A and 31A Queens Road, continuing to the water's edge had no path at all. It was obstructed by large trees, shrubs and an open stormwater drain. The last 10 metres of the Right of Way between 29A and 31A Queens Road towards the water's edge consisted of a steep rock descent. The absence of a path and the existence of the obstructions made it difficult for me to walk down the entire length of the Right of Way from my property to get to the water. These obstructions and steep terrain made it more convenient to me to step outside the Right of Way at certain points to get to the water's edge. Mr Koshakji was not cross-examined.
The condition of certain parts of the rights of way prior to the undertaking of the works is shown in a number of photographs. Many of these photographs were annexed to Mrs Langham's affidavit. These photographs include some "before and after" images (including at exhibit A pages 181 to 183).
I note that the town planning experts, Messrs Rowan and Daintry, also expressed some views concerning the condition of the rights of way prior to the carrying out of the works. These views were seemingly based upon survey plans (see Joint Report paragraph 13) and also some photographs. It was stated in the Joint Report that "pre-development pedestrian path of travel between the rock ledge in the ROC [right of carriageway] and the foreshore would have been achievable by traversing and/or meandering around obstacles and protrusions in the land form, with movement likely to "goat track" over this area". It was further stated that "pedestrian access was physically possible by meandering/zig-zagging across the unmade surfaces of the ROC." The town planners also stated that "pre-development a path of travel for the purpose of manually operated/controlled wheeled equipment, ie a wheelbarrow or small trailer ("wheeled equipment"), over the ROC north of the garage turning area serving Nos 29A and 31A would have had to negotiate obstacles in some parts of it such as the steps south of the house at No 29A and the dish-drain."
Given that neither expert had seen the properties before the works were carried out, I would afford this evidence lesser weight than the unchallenged evidence referred to above. That evidence was given by persons with personal experience (in some cases considerable experience) of the conditions prior to the construction of the works.

The undertaking of the works

The genesis of the works undertaken by the first defendant lies in stormwater drainage problems experienced by No 29A. Mr Langham, who is a licensed plumber, explained in his affidavit that there was no effective stormwater drainage system, and stormwater from No 29 and No 31 ran down the driveway into No 29A, and then Oatley Bay, in a largely uncontrolled manner. Mr Langham described the open drain (referred to earlier) as very primitive, and stated that in heavy rain it was unable to handle the amount of stormwater coming from No 29 and No 31. Mr Langham deposed that on these occasions water would spill out of the drain causing flooding (including in parts of the house), erosion, and the carrying of silt into Oatley Bay.
In about 2011 Mr Langham commenced to design a stormwater management system to control that water. As part of that process, Mr Langham put together some plans to landscape No 29A in the area near the waterfront. Mr Langham deposed: The plan I came up with was to fit the stormwater pipes and pits beneath or along the natural level of the land along the right of way (where possible) then seal these items to prevent them from being damaged. As part of this process, I would remove the obstructions along the right of way. Once the pipes and pits were installed, I would construct a path over them to protect them. The path would provide for better access to the MHWM along the right of way.
Mr Langham gave evidence that he informed the neighbours at Nos 29, 31 and 31A of the general nature of his plans. He said that none of the owners "raised any issues", and none offered to contribute to their cost.
Mr Langham described the works as being carried out in stages.
The first stage involved the clearing of shrubs from the right of way and the commencement of construction of retaining walls and seawalls. These works were largely complete by about early 2012. They can be seen in the aerial photograph that appears in exhibit A at page 213.
The second stage commenced in about March 2014. This stage involved the construction of an underground stormwater drainage system, the extension of the existing driveway along the rights of way so that it extended to the area adjacent to the rear balcony of No 29A, and the construction of a concrete path. The driveway extension and the path cap the stormwater system.
These works required the relocation of the power pole that previously stood near the middle of the rights of way. The new pole can be seen in the photograph at exhibit A page 151. (The cost of the relocation of the power pole was shared by the owners of No 29A and No 31A.)
Mr Langham deposed that the driveway and path follow the natural level of the land, but he accepted in cross-examination that in the area where the second last stormwater pit is located, the pathway is higher than the natural level of the land. This is shown on the plan of levels prepared by Mr Maguire dated 17 May 2017. The plan indicates that at that point there is now a drop of about 800mm. This occurs at the northern most point of the concrete path, before it takes a turn to the east across No 29A. Mr Langham deposed that the second last stormwater pit sits on sandstone rock and that "this is the only place the pit could go".
This "drop off" is of central importance to the plaintiffs' case. In brief, it is contended by the plaintiffs that the creation of the "drop off", and a narrowing of the right of way on No 29A brought about by the construction of concrete block walls as part of the landscaping element of the works, amounts to a substantial interference with their rights under the right of way on No 29A.
The works had not been completed when, in November 2014, a dispute arose between the Saders and the Langhams.
On 17 November 2014 Dr Sader sent an email to Kogarah City Council which included the following: The very recently constructed concrete driveway and retaining wall creates a dangerous 1.5m drop off that previously did not exist and pedestrian access via the right of way has been impeded by this construction. … As far as Council is concerned the retaining wall upon which the concrete driveway has been constructed is more than 1 metre in height (1.45m) and a DA should have been submitted - and this would have avoided the conflict that presently exists. Dr Sader sent a number of further emails to the Council in November 2014.
Also on 17 November 2014 Dr Sader delivered a letter to Mr and Mrs Langham which included the following: The right of way on title to access the high water mark via your property has recently been obstructed by the construction of a newly constructed elevated concrete path, as it has created a 1.45m drop off within the right of way, accordingly forcing access via an adjacent newly constructed concrete ramp extending beyond the right of way on 29A Queens Rd to reach the high water mark. The easiest way to correct this and to allow access to the area beyond the 1.45m drop off and then to the high water mark is by either (i) the provision of stairs down the elevated section within the right of way to allow access to the high water mark on your portion of the property or (ii) allow a new right of way down the ramp and back around.
Mr Langham responded by email later that day in terms which include the following: We never had any intention in blocking your access, actually as you will agree we have down [sic - done?] nothing but improve your access. We have no problem in placing stairs on the right of way. As your [sic] are aware it has taken us some 3 years to get to this stage and approximately $100,000 which we have totally paid for by ourselves. We take this opportunity in apologising for any inconvenience caused. I assure you there will not be a 1.45m drop off as you refer, this is only there now as the drainage/excavation works have not yet been backfilled. We only last week completed this stage. The drop off you are referring to will only be approximately .5-.7 of a metre returned back to the original grass slope falling to the high water mark. We have not tackled the immediate waterfront as yet. Any contributions to the right of way works would be greatly appreciated and help speed up the end result.
There was some further correspondence about these matters but it is not necessary to refer to it, save to note that Dr Sader (who had by this time retained a solicitor) maintained that "the obstructions on the right of way will have to be removed".
The Langhams retained their own solicitor, and on 9 December 2014 those solicitors sent a lengthy letter to the Sader's solicitor. It seems that there was no reply to the letter.
On 13 January 2015 a Council officer inspected the works. On 3 February 2015 the Council sent a letter to Mrs Langham in which it was stated that the Council intended to serve an order under s 121B of the Environmental Planning and Assessment Act 1979 (NSW).
On about 5 March 2015 Mrs Langham lodged an application for a building certificate in respect of the works. The application was supported by statements made by a structural engineer, and representations made by Mr Daintry (who gave evidence at the hearing). A number of meetings between representatives of the Council and Mrs Langham and her representatives were later held.
On 15 September 2015 Council officers prepared a report which contained a recommendation that an order issue requiring Mrs Langham to: Construct termite resistant timber steps incorporated into the landscaping, one metre wide within the Right of Way within 29A Queens Road, from the end of the concrete pathing located approximately six metres back from the waterfront boundary to the level of the drainage pit lid located to the rear of the seawall. The area in front of the constructed retaining walls and adjacent to the proposed timber steps is to be landscaped using a mixture of native planting in accordance with a landscape plan submitted to and approved by Council.
It is apparent from the report that the officers assessed the works "as if a Development Application was submitted to Council prior to the works proceeding". The report included the following: A submission was received from the neighbour at 31 Queens Road, raising concerns that the drainage pipes, seawall and retaining walls built over the ROW that No 31 had the benefit of, were restricting their access to Oatley Bay. Comment Photos of the site taken prior to the unauthorised works taking place has shown that access to the waterfront over the ROW from the objectors property was never a formal stair or pathway and did contain a retaining wall and other obstructions. The construction of the concrete pathing over the ROW down to and over the rock shelf within the ROW approximately six metres back from the foreshore boundary has enabled easier access to that point but has created a higher restriction within the ROW to the foreshore. The applicant has advised that they are willing to construct stairs down from the end of the concrete ramp down to the foreshore. This will be proposed as a condition of deferral. The objector also wanted the seawall constructed within the ROW to be demolished so that it enabled easier access to the water. The applicant is not willing to alter the seawall. … Conclusion The application has been assessed having regard to the Heads of Consideration under Section 79C & Section 149D of the Environmental Planning and Assessment Act 1979, the provisions of KLEP 2012 and KDCP 2013. Following a detailed assessment, it is considered that the works the subject of this Building Certificate Application No 7/2015 should be granted a deferred approval subject to conditions as stated in the recommendation.
On 23 September 2015 the Council issued an order in accordance with the officers' recommendation. The Council indicated that, subject to compliance with the order, it had no objection to the works remaining.
It appears that Mrs Langham proposed that the stairs be instead located partly on the No 31A right of way. After some debate about this, the owner of No 31A (the second defendant) informed the Council on about 19 October 2015 that she had no objection to stairs being built in a certain location on her land.
Two sets of stairs were constructed by Mr Langham in about December 2015. It appears from the Council file that this construction was considered to be in accordance with the intent of the Council's order and instructions given on site on 23 December 2015.
One set of stairs is to the west of the final section of the concrete path, adjacent to the second last stormwater pit and the "drop off". The stairs lead down to a flat area that extends beneath the "drop off". These stairs are on the right of way on No 31A. The second set of stairs leads down from that flat area to another generally flat area quite close to the mean high water mark. These stairs straddle the two rights of way. The "drop off" and the two sets of stairs can be seen on a number of photographs (including at exhibit A pages 166, 178, 239 and 242, and exhibit B page 94). The "drop off" and stairs are also shown on Mr Maguire's plans dated 12 May 2017.
After completion of those works, Mr Langham proceeded to complete the landscaping works. This involved some backfilling, and the laying of grass in the area close to the mean high water mark. Mr Langham deposed that the grass in that area was laid along the original level of the land.

The condition of the rights of way after the undertaking of the works

The condition of the rights of way after the undertaking of the works can be seen in a number of photographs of parts of the area. These include the photographs at exhibit A pages 166, 173-178, and 238-242.
The Court had the benefit of a view of the properties on the first day of the hearing.
A number of witnesses gave their opinions concerning the question of access to the mean high water mark since the completion of the works. Mrs Langham gave evidence that the works "have improved access to the MHWM along the ROW", and "have improved pedestrian access along the ROW". She further deposed that by constructing a sealed path along the ROW between Nos 29A and 31A she has "created unimpeded and safe pedestrian access to and from the MHWM along the ROW". She also deposed that following completion of the works "vehicles can travel further down the ROW", and that the works "allow for trolleys carrying small watercraft such as kayaks to be taken down the right of way closer to the water's edge", albeit that a kayak would "need to be carried the final six metres down the stairs we constructed".
Mr Langham gave evidence that "wheeled access is now available until the final six metres of the ROW. This type of access did not exist before I completed the construction works." Mr Langham further deposed that he had "created unimpeded pedestrian access" and that "small craft and trolleys can now be taken down the ROW to the last six metres. This could not occur prior to the construction works."
Ms Barakat gave evidence that the works have "improved access along the ROW to the water", although she stated that she rarely goes down to the water herself.
Mr Williams deposed that: I have walked along the right of way between 29A and 31A Queens Road. It is now possible and easy to access the water's edge. You can now drive a vehicle approximately 36 metres further down the right of way than before the works and it is now possible to wheel trolleys or take other smaller wheeled items down the right of way right up to the stairs. … When [Mr and Mrs Langham] completed the works, it was the first time in 40 years that I had been able to walk down the right of way to the water's edge. I can now safely access the water's edge along the right of way via a concrete path and stairs which help pedestrians negotiate the steep terrain over the last 7 metres of the right of way.
The evidence of these lay witnesses, as referred to above, was not the subject of any challenge.
The town planning experts also gave some evidence relevant to this topic. In their Joint Report, Messrs Rowan and Daintry stated: We agree that post-development the gradients between the location of the rock shelf and the foreshore have, in part, been varied such that they have been increased. Pedestrian access over that portion of the ROC occupied by the ramp landing serving No.29A limits the width of access to only the adjacent stairs. These stairs are within the portion of the ROC owned by No.31A. The vertical distance between the landing of the ramp and the garden bed is considered inaccessible. We agree that the stairs provided to the northern section of the ROC provide safe access to pedestrians only from the landing of the elevated ramp to the foreshore area of the ROC. We agree that post-development, the removal of the former steps and the dish drain from the ROC would make the upper section, south of the landing to the ramp, more accessible to wheeled equipment. We agree wheeled equipment could not access the foreshore via the steps north of the dwelling of No.29A, or negotiate the landing retaining wall.

Is there a substantial interference with the plaintiffs' rights?

The plaintiffs allege that by constructing the works, and thereafter maintaining them in place, the first defendant has committed an actionable nuisance by obstructing the plaintiffs' enjoyment of their rights of way. In the context of private rights of way, in order for an obstruction to be actionable, it must amount to a real substantial interference with the enjoyment of the right of way (see Powell v Langdon (1944) 45 SR (NSW) 136 at 139 and Keefe v Amor [1965] 1 QB 334 at 347, cited by Bryson J as his Honour then was in Prospect County Council v Cross (1990) 21 NSWLR 601 at 608-9; see also Treweeke v 36 Wolseley Road Pty Ltd (1973) 128 CLR 274 at 280-1).
In this regard, the plaintiffs focused upon the 800mm "drop off" at the northern end of the concrete path and, to a lesser extent, the retaining walls on the eastern side of the right of way on No 29A, and the seawall near the water's edge. The plaintiffs submitted that the "drop off" makes it practically impossible, or at least substantially more difficult, to pass or re-pass using the right of way on No 29A. In relation to the retaining walls, the plaintiffs submitted that they narrowed the usable width of the right of way on No 29A. The plaintiffs also submitted, either further or in the alternative, that the structures complained of have made it practically impossible or at least substantially more difficult to perform such works as may be necessary to enable passing and re-passing along the right of way on No 29A.
It is important to point out that the complaints are focused upon the right of way on No 29A. It is submitted that the effects of the works should be considered in relation to the plaintiffs' rights over that right of way alone, not in conjunction with the plaintiffs' rights under the adjoining right of way on No 31A. That is to say, they are separate and distinct rights and, at least at the level of assessing whether there has been an actionable interference, must be considered so. Counsel were unable to cite any authority which dealt with this point in a context of adjoining rights of way. However, the plaintiffs' submission seems to me to be correct as a matter of principle, and I will proceed to deal with the case on that basis.
The plaintiffs submitted that the "drop off" had the effect of sterilising the right of way on No 29A because it made it practically impossible or at least substantially more difficult for wheeled vehicles and even pedestrians to pass along the right of way at that point, whether going in a northerly direction down to the bay or a southerly direction up from the bay. It was put that at that point there is, for all practical purposes, a dead end. It was put that before the structures were put in place the plaintiffs had a right of way (albeit not a great one) all the way down No 29A, but now, as a practical matter, they do not have a right of way all the way down No 29A.
Counsel for the plaintiffs explained that insofar as vehicles were concerned his submission was practically directed not so much to motor vehicles but rather to small vehicles that might convey small watercraft. That stance is explicable in light of the unchallenged evidence of the traffic engineer, Mr McLaren.
A deal of emphasis was placed upon the change in levels brought about by the works (as shown in Mr Maguire's plan of levels). In particular, it was submitted that the increase in the level of the land in the area of the "drop off" brings about the practical impossibility or substantially greater difficulty complained of. The plaintiffs also pointed to an increase in the level of the land brought about by the construction of the seawall. No issue was taken with the increase in level that was brought about to the south of the "drop off".
The defendants submitted that the works, including the "drop off", have not made it substantially more difficult to use the easement on No 29A, and have not made it substantially more difficult for the plaintiffs to construct any improvements necessary for the exercise of their rights under the easement. It was submitted that there was no evidentiary foundation for a conclusion that the construction of works by the plaintiffs in the exercise of ancillary rights under the easement has been rendered substantially more difficult (or expensive) as a result of the works carried out by the first defendant. It was further submitted that the Court should take a practical approach to the matter, and not ignore the fact that the plaintiffs have rights over both Nos 29A and 31A.
In approaching the questions of substantial interference raised by this case, it is necessary to consider the evidence going to the condition of the rights of way, both prior to the undertaking of the works and after the undertaking of the works. The plaintiffs assert that aspects of the works have created obstructions that substantially interfere with their rights. In circumstances where the works were carried out as part of a single project (albeit effected in stages over some years) a comparison between the pre-works situation and the post-works situation is called for. A comparison of that type underpins the plaintiffs' submission that they had a right of way over the length of No 29A but in practical terms they no longer have it.
As I have said, the plaintiffs' case focuses upon the right of way on No 29A, and the rights thereby conferred, viewed separately from the plaintiffs' rights under the right of way on No 31A. I have referred above to the evidence adduced concerning the condition of the rights of way prior to the undertaking of the works. I recognise that the evidence, or at least the bulk of it, is not directed precisely to one or other of the rights of way. Rather, the witnesses usually spoke generally about "the right of way", being the area that encompasses the adjacent rights of way over Nos 29A and 31A. It is nevertheless possible to discern, including with the aid of the photographic and survey evidence, that aspects of the evidence are concerned with one or other of the rights of way.
It is clear, particularly from the unchallenged aspects of the evidence given by the lay witnesses called by the defendants, that prior to the works, access to and from the mean high water mark along the right of way on No 29A was problematic, if not impossible. Motor vehicles could not travel any further north than the point near the garage to No 29A. Other vehicles (such as trolleys that might transport small watercraft) could continue along the narrow concrete path but would need to contend with at least two sets of steps on the path. If attempting to proceed further north on the right of way, the vehicles would need to cross the open drain (shown at exhibit A pages 145 and 146) at least once. There was unchallenged evidence from Mr Langham that trees and shrubs grew next to the open drain and that this section of the right of way (clearly the right of way on No 29A) was "completely obstructed" by trees and shrubs (described as "dense") about 18m from the mean high water mark, such that people could not walk down that section of the right of way. Some idea of the nature of this vegetation can be gained from the aerial photograph taken in 2009 (exhibit A page 168) and the "before" photograph at exhibit A page 182. I note that there was further unchallenged evidence from Mr Williams that it was possible to walk down most of the eastern side of the right of way (that is, the right of way on No 29A), but it was necessary to step off and back on the right of way due to the trees, shrubs and drain.
It should also be noted that there was a deal of evidence about the steep and rocky terrain that existed from about the last 15m of the right of way to the water's edge. Some idea of that terrain can be gleaned from the "before" photograph at exhibit A page 183. It is clear that, quite apart from the vegetation in this area, there were drops from rocks in the order of 40cm and 20cm. Mrs Langham gave unchallenged evidence about the steep, mossy and slippery nature of the rocks in that area. Mr Williams gave evidence (again unchallenged) that the terrain in that area was not suitable for pedestrian access, and that pedestrians risked injury if they tried to access the water's edge along the entire length of the right of way. (I take that to be a reference to the two rights of way). Ms Barakat described the final 7m of the right of way (again, a reference to the two rights of way) as "totally inaccessible" due to the large rocks and the vegetation, and said that it was not possible to take a kayak, dinghy or other type of craft through that area to the water. Again, the evidence was not challenged.
As noted earlier, I give greater weight to the evidence of these witnesses than I give to the evidence given by the town planners about the condition of the rights of way prior to the works. The views of the planners were not based on any actual experience of the site at that time. In light of the evidence given by the lay witnesses about the impossibility of pedestrians walking to the water within the rights of way, I am not prepared to accept that it was possible for pedestrians to traverse and meander within the rights of way so as to gain access to (and from) the water. I note further that in any case Mr Daintry stated (in his detailed analysis contained in Annexure F to the Joint Report) that access was upon a loose rock surface which in his opinion was unsafe, and the carrying of "personal watercraft or like articles" would have been difficult. I have not overlooked that Mr Koshakji did not go as far as to say that it was impossible to walk down to the water's edge; he stated that the obstructions and steep terrain made it more convenient to step outside the right of way (a reference to both rights of way) at certain points in order to get to the water's edge.
However, having regard to the totality of the evidence on the matter (including the photographic and survey evidence), I conclude that pedestrian access to the water's edge along the right of way on No 29A was, if not impossible for most people, at least very difficult and somewhat hazardous, due to the vegetation and terrain. I further conclude that vehicles such as trolleys could not have been brought along the right of way on No 29A beyond the area where there were trees and dense shrubs about 18m from the mean high water mark. I note further that it would have been difficult to bring vehicles down even that far due to the steps and the open drain.
It was not suggested by the plaintiffs that any obstructions on the rights of way prior to the works (including the open drain) were placed there by the owners of either of the servient tenements such that a right to deviate arose in the plaintiffs' favour (see Hemmes Hermitage Pty Ltd v Abdurahman (supra) at 355). There was no evidence about the provenance of the open drain (which, it would seem, carries water from Nos 29 and 31) or the vegetation that obstructed the right of way on No 29A.
The condition of the right of way on No 29A has been improved, from the point of view of enjoyment of the rights it confers, in a number of respects. Motor vehicles can now travel further along the right of way. Other vehicles, such as trolleys, can now be easily brought down as far as the "drop off", which is about 8m from the mean high water mark. It was not suggested, and there was in any event no evidence, that the retaining walls narrowed the right of way on No 29A such that trolleys and other small vehicles suitable for transporting watercraft such as kayaks could not be taken within the right of way past that point, or that it would be difficult to take them within the right of way past that point. As far as pedestrian access is concerned, the works have plainly improved it up to the point of the "drop off".
The plaintiffs adduced no evidence that any particular use or uses of the rights of way were rendered practically impossible or substantially more difficult due to the existence of the "drop off". Nevertheless, there is little doubt that the "drop off" creates an obstacle to further progression down the right of way on No 29A towards the water. I accept that it is an obstacle that effectively prevents any further progress of a wheeled vehicle. I further accept that it presents a difficulty for pedestrians wishing to continue along the right of way on No 29A towards the water. It would not in my view present a great difficulty for an able bodied person, given the relatively flat, grassed area 800mm below, but it would present a greater challenge to persons (including able bodied persons) seeking to come up from the water along the right of way on No 29A. The difficulty would be greater if the person was also carrying objects, although the "drop off" itself provides a flat surface upon which objects (including small watercraft) could be placed whilst the "drop off" is negotiated.
It is not clear whether the opinion expressed by Messrs Rowan and Daintry, that "the vertical distance between the landing of the ramp and the garden bed" is inaccessible, pertains to the 800mm drop to the grassed area. If it does, I find myself unable to agree with it, at least insofar as concerns pedestrian traffic.
Viewed in isolation, it could be concluded readily that the "drop off" constitutes an obstacle of a magnitude that amounts to a real substantial interference with the plaintiffs' rights under the right of way on No 29A. There was a tendency in the plaintiffs' submissions to look at the matter in that way. However, it seems to me that a broader view, based on a comparison between the pre-works situation and the post-works situation, should be taken.
The evidence shows that prior to the works it would not have been possible for a vehicle to be wheeled down the right of way on No 29A to the point where the "drop off" now exists. The evidence further shows that it was previously not possible, or at least very difficult, for pedestrians to go down the right of way on No 29A to the point where the "drop off" now exists. In any event, I am not convinced that the difficulties posed by the "drop off" to persons seeking to use the right of way are substantially greater than the difficulties that would have been faced before the works by such a person seeking to travel from that point to the water's edge or from the water's edge to that point.
The 800mm drop (or step up) is greater than the drop or step that would have been confronted previously. However, the whole of the landscape, whether natural or affected by human activity, needs to be considered. Is an 800mm drop from a flat platform on to a relatively flat, grassy surface substantially more difficult or hazardous than a 400mm drop from a rock, possibly uneven and slippery, on to another rock or uneven surface? Is the scaling of an 800mm rise from a relatively flat surface up to another flat surface substantially more difficult than scaling a 400mm rise from a rock or uneven surface up to a possibly uneven and slippery rock? Perhaps, but I am not satisfied on the evidence that that is the case. I do not think that the plaintiffs have established the existence of any substantially greater difficulty or hazard insofar as the "drop off" is concerned.
I have reached the same conclusion in relation to the seawall constructed by the first defendant. The seawall itself gives rise to an increase in height, but given the uneven and rocky conditions close to the water I am not satisfied that the seawall gives rise to any substantially greater difficulty or hazard in the exercise of rights under the right of way on No 29A.
Overall, I am not satisfied that the existence of the "drop off", the seawall, or the retaining walls, either separately or together, lead to the conclusion that it is now substantially more difficult to pass and re-pass along the right of way on No 29A, whether by vehicles or on foot. Neither am I satisfied that these features have made such passing and re-passing practically impossible. The works, which include those features, have in my view enhanced the ability of the plaintiffs to exercise their rights under the right of way over No 29A.
The position is even clearer in relation to the right of way on No 31A. The plaintiffs' submissions did not explain how any particular aspect of the works made it substantially more difficult or practically impossible to pass and re-pass along that right of way. It was not shown that the stairs that were erected on the right of way on No 31A had such an effect. In light of the evidence of the conditions prior to the carrying out of the works (in particular the evidence referred to at [89] above), it could not be concluded that the stairs create any greater difficulty or hazard in using the right of way.
I am also not satisfied that the structures complained of have made it practically impossible or at least substantially more difficult to perform such works as may be necessary to enable passing and re-passing along the right of way on No 29A. This aspect of the plaintiffs' case rested largely on the fact that at the "drop off" the level above the water line was higher than it was prior to the carrying out of the works. It was submitted that this increase in height (which can be seen on Mr Maguire's plan of levels to be in the order of 800mm, being the height of the drop) makes it more difficult to construct a pathway down to the mean high water mark that is suitable for pedestrians and small vehicles. It was submitted that this is because the greater height makes it harder to achieve acceptable gradients for the path down to the water's edge.
It may be accepted that, all other things being equal, the increased height makes it harder to achieve acceptable gradients for a path in the area concerned. Mr Rowan expressed the opinion that, before the works, it is likely that development consent would have been given to the construction of a hard surface close to or at the existing ground levels for the purpose of providing pedestrian access to the water (see paragraphs 77 and 78 of Mr Rowan's report). In the Joint Report, it was noted that Messrs Rowan and Daintry differed as to whether, prior to the works, there was an ability to provide "safe access for wheeled equipment" to the foreshore within the ROC (right of carriageway). It seems that for this purpose the experts considered the right of carriageway to consist of the rights of way on both Nos 29A and 31A. Mr Rowan considered that there was "the potential to provide a formalised path of travel for pedestrians and wheeled equipment from above the point of the current landing with a gradient…between 1:3.8-1:4.0 by meandering/zig-zagging across the existing surface of the ROC". It is apparent (from some answers given by Mr Rowan in the witness box) that he envisaged a concrete path, about 900mm in width, that would cut across the rights of way on both Nos 29A and 31A.
Mr Rowan went on to state that post-development there was "less potential to provide the same path of travel due to the increase[d] elevation of the pathway, such that it was less likely to achieve a gradient of 1:3.8-1:4.0, and thus it would be less safe and more difficult."
Mr Rowan does not state that the increase in height renders such a pathway practically impossible. He does not state in terms that it would be substantially or significantly more difficult to achieve that outcome. He seems to only say that there is less potential or less likelihood of achieving that result. So much may be accepted, but that falls short in my view of establishing that the structures (in particular the height of the path at and near the "drop off") make it practically impossible or at least substantially more difficult to construct and achieve approval for a pathway down to the water. As Mr Daintry was at pains to point out, no particular design for a path or ramp was ever produced by the plaintiffs for consideration. There is no apparent reason why such a design, or even a concept plan, could not have been produced by the plaintiffs so as to enable an assessment of feasibility and cost in the "before" and "after" situations. I note that Mr Daintry seemed to accept that it may be possible to erect "a series of ramps in the last 8.2m section of the ROC" (see Joint Report paragraphs 50(i), 50(l) and 50(m)). In these circumstances, I am not prepared to find that the works preclude or make substantially more difficult (or expensive) the performance of works necessary to provide pathway access over about the last 8m or so of the rights of way to the mean high water mark.
I should add, in this context, that it has not been shown that the works preclude or make substantially more difficult the placing of stairs within the right of way on No 29A from the "drop off" to the grassed area below. I note that the Council seems to have taken the view, when it issued its order in September 2015, that stairs would be feasible in that area.
For the above reasons, I have concluded that the construction of the works by the first defendant, and in particular construction of those aspects of the works about which complaint is made, does not amount to a real substantial interference with the enjoyment by the plaintiffs of their rights under the right of way on No 29A, or of their rights under the right of way on No 31A.
It follows that the plaintiffs' claim must be dismissed, and the question of damages does not arise. However, in case my conclusion is incorrect, I will proceed to consider, on the assumption that the complained of aspects of the works do amount to a substantial interference, whether the plaintiffs have established that they have suffered loss so as to entitle them to an award of substantial (not nominal) damages.

Damages

The plaintiffs contended that the works carried out by the first defendant have caused the value of their land, No 31, to be significantly diminished. The plaintiffs claim damages in the sum of $200,000.
The claim rests upon the opinions of a valuer, Mr Greg Parsons. Two valuation reports of Mr Parsons were served. Both reports were admitted into evidence. The first report provided opinions of the value of No 31 as at 20 December 2016 "before Obstructions" and "after Obstructions". The before value given was $3.5 million and the after value given was $3.3 million. The second report provided opinions on the same basis as at 17 April 2018. The before value given was again $3.5 million and the after value given was again $3.3 million.
The more recent report took into account a change in zoning (to one that had been proposed as at the date of the earlier report), and included updated market commentary and some new sales evidence. There were also some changes to the Valuation Rationale section (notably to paragraphs 98 and 99), but no change was made to the Instructions section which notes certain assumptions.
It appears from the Instructions section, and it was confirmed by Mr Parsons in the witness box, that his before scenario assumes that No 31 had the benefit of access to and use of the entire area of the right of way all the way down to the mean high water mark "and the ability to carry out improvements to perfect that access so as to provide free and unrestricted vehicular access all the way to the MHWM". In his new paragraph 98, Mr Parsons stated that he believed that a hypothetical purchaser would assume that the right of way having a width of 5.49m would be able "with or without minor works" to provide reasonable access to launch a dingy or small watercraft such as a canoe, kayak, surf ski or windsurfer. This was used as the basis of his "before Obstructions" valuation. I note that the assumed width of the right of way is about 0.6m greater than the actual width, although this discrepancy might not be material. It seems that one of the assumptions made for the "before Obstructions" valuation was that development consent could be granted for any works necessary to perfect access to the mean high water mark. Mr Parsons stated in cross-examination that the works, other than those aspects regarded as obstructions, were taken into account in arriving at the before valuation as well as the after valuation.
It appears from the Instructions section that Mr Parsons' after scenario assumes that due to "the Obstructions", No 31 did not have free and unrestricted use of the right of way all the way to the mean high water mark, and that the ability to carry out improvements to perfect the access (so as to provide free and unrestricted vehicular access all the way to the mean high water mark) "is substantially more difficult because of the Obstructions". It further appears, and it was confirmed by Mr Parsons in the witness box, that the after scenario assumes that "legal proceedings would need to be commenced in order to obtain land owners consent for any development application for any works necessary to perfect access".
In his new paragraph 99, Mr Parsons stated that in arriving at the after valuation he noted that, whilst the obstruction works in some respects made pedestrian access to the waterfront easier, "the concrete block retaining wall and the seawall in particular have removed the ability to be able to reverse and launch a dinghy/watercraft for the last 20m approx. down to the water". Mr Parsons also refers in his new paragraph 99 to certain landscaping and trees which he says reduces the practical width of the right of way for the last 30m to the 1.6m width of the concrete path "making it even more difficult to launch a dinghy from the ROW". In paragraph 100, Mr Parsons stated that it is now more difficult to carry and launch small watercraft such as a kayak, canoe or windsurfer and involves negotiating some 15 steps. He further noted that a purchaser "may have the ability to commence court proceedings to force the landholders consent and to make good the obstructions". Mr Parsons continued: However, court proceedings are uncertain, are time consuming and costly. It is my opinion then that taking a longer term view, this situation is considered detrimental in the open market and may serve to eliminate up to half of the prospective buyers at any given time. In addition, it serves to remove those buyers who would pay the biggest premium to have proper access to the water front.
In paragraphs 107 to 109, Mr Parsons explained his after valuation in the following terms: It is difficult to find sales evidence to support a value differential between street front blocks and those with waterfront access in that two properties in this market are rarely identical, particularly regarding size and quality of the improvements. In addition, it is a very subjective market that can vary over short periods of time with prices for individual properties depending on the number of buyers, that is, competition for a property at any given time. Nevertheless, based on many years experience in the prestige residential market, it is my opinion that there is a general value differential between street front blocks and waterfront access blocks in the order of 10%. However, the difference in this case is not comparing waterfront access with no waterfront access in that the subject property still has access but the extent of access is now impeded by the obstructions. Having regard to the issues discussed under heading 19.1 Valuation Rationale, I consider it inappropriate to apply the full 10% discount and consider a reasonable discount would be not less than 5% and up to 10% for those buyers especially wanting right of carriageway access all the way to the water. Based on my 'before' valuation of $3,500,000 this would produce a differential as follows. … All things considered, I believe that the market discount would be closer to 5% than 10% and have adopted an 'after' valuation of $3,300,000. This reflects a discount of $200,000 or 5.71%.
Mr Parsons was asked in cross-examination why he selected a 5% discount, as opposed to, say, 2% or 3%. Mr Parsons stated: Well, it's something more than marginal. It's not 10%. 5% is a - is a reasonable sum. I mean, once you get below 5%, it's - it's difficult to quantify small variations of that nature.
Mr Parsons went on to observe that in valuations there is usually a 10% tolerance anyway, so it would be very difficult to make adjustments of less than 5%. Mr Parsons further stated that in his experience buyers do not do an analysis based on percentages, but rather will make a monetary adjustment. Mr Parsons seemed to accept that the adjustment made by individual buyers will be based on what they think the cost of works to perfect access will be.
Even if the effect of the works carried out by the first defendant was regarded as amounting to a substantial interference with the plaintiffs' rights under either or both of the rights of way, I would not have accepted that the value of No 31 was thereby diminished by $200,000. In my view, there are at least two reasons why Mr Parsons' opinion to that effect ought not be accepted.
First, Mr Parsons has not conducted a comparison between the value of No 31 after the works and the value of No 31 assuming the works had not been done. The before valuation includes (to an unspecified extent) whatever value the works, aside from those aspects regarded as obstructions, add to No 31. There can be no doubt that the works down to the point of the "drop off" improved the rights of way, to the benefit of the plaintiffs.
Secondly, and more importantly, the valuations appear to be based on assumptions that are not established on the evidence. The before valuation, for example, seems to assume that a hypothetical purchaser would assume that at most only minor works would be required to provide reasonable access to launch a dinghy or small watercraft. The evidentiary foundation for such an assumption about the nature and extent of necessary works (an assumption made by Mr Parsons placing himself in the position of a hypothetical purchaser) is in my view lacking. Further, the after valuation seems to proceed on the assumption that legal proceedings would need to be commenced in order to obtain owners' consent to the carrying out of works to perfect access. Mr Parsons confirmed in cross-examination that he had made such an assumption. However, there was no evidence about any particular works, or whether consent to any works would likely be withheld. I do not accept the submission that Mr Parsons merely assumed that a purchaser may have the ability to commence court proceedings to force landowners' consent (see paragraph 100 of Mr Parsons' report). Mr Parsons' statement in paragraph 100 is not inconsistent with the assumption he was asked to make, and apparently made. Another assumption underlying the after valuation was that the ability to carry out improvements to perfect access was made substantially more difficult because of the obstructions. As noted earlier, no designs or even concept plans for such works were advanced. The evidentiary foundation for the assumption was again lacking. Both of these assumptions seem to have played a significant role in the after valuation. In my opinion it would not be safe to proceed on the basis that a hypothetical purchaser would likely make assumptions of that character.
In these circumstances I would not have been prepared to accept, based on Mr Parsons' opinions, that the value of the plaintiffs' land was reduced by $200,000 as a result of the works carried out by the first defendant. Similarly, I would not have been prepared to find, based on Mr Parsons' opinions, that the plaintiffs suffered a loss in some lesser amount. I note that, quite apart from the fundamental problems referred to above, Mr Parsons made it clear that it was very difficult to make adjustments of less than 5%. Recognising, of course, that mere difficulty in estimating damages does not relieve a court of the responsibility of estimating them as best it can, and that in certain circumstances some guesswork is permissible, I consider that in this case to conclude that a smaller loss was suffered would likely involve an impermissible exercise in speculation rather than a rational assessment (see the discussion of the relevant principles by McColl JA, with whom Campbell JA and Handley AJA agreed, in McCrohan v Harith [2010] NSWCA 67 at [118]-[126]). However, it is not necessary to express any concluded view on that question.
I should state that nothing I have said should be construed as a criticism of Mr Parsons. I have no doubt that he carried out his task in a proper manner and did his best to provide his honest opinions on the questions posed for him. The problems stem from some of the assumptions he was asked to make, which were not supported in the evidence before the Court.

Conclusion

For the above reasons, the plaintiffs have failed to make out their claim for damages. The Statement of Claim will be dismissed. The plaintiffs will be ordered to pay the defendants' costs of the proceedings.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 22 May 2018

At a glance

Court

Decision date

Before

Source

Judgment (11 paragraphs)

Parties

Legislation Cited (3)

Cases Cited (9)

Cited By (2)