Sodhi v Stanes [2007] NSWSC 177 | Case summary

Sodhi v Stanes [2007] NSWSC 177 | Case summary | Zoe

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1656/06 SUKHVER SINGH SODHI V MALCOLM JOHN STANES & ANOR JUDGMENT (Revised for typographical and minor errors 13 March 2007) 1 HIS HONOUR: By a summons filed on 1 March 2006, the plaintiff, Mr Sodhi, seeks against Mr and Mrs Stanes relief of two kinds. First, he seeks orders for specific performance of an agreement between himself and the defendants, Mr and Mrs Stanes, for the grant of a right of way. Secondly, he seeks in the alternative an order under s 88K(1) of the Conveyancing Act 1919 (NSW) that an easement in the form of a right of carriageway be imposed for his benefit over Mr and Mrs Stanes' land. The summons annexes a diagram, which identifies the site of the right of way that Mr Sodhi seeks to establish. The issues and contentions 2 At the hearing, Mr Sodhi contended that he made an agreement with Mr and Mrs Stanes that they would grant him an easement over a specified area which veers roughly to the north-west from the site reserved for a road running across Mr and Mrs Stanes' land, so as to bypass some trees and rough terrain in the area designated for the road. He submitted, in the alternative, that Mr and Mrs Staines, by their representations and other conduct, induced him to expect that they would grant him an easement over that area of their land for access to his property, and in reliance upon those representations and that conduct he acted to his detriment by contributing money and work for the construction and concreting of an access road, and consequently they are estopped from denying his entitlement to an easement upon the principles enunciated in such cases as Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387 and Riches v Hogben [1986] 1Qd R 315. The equitable estoppel argument is not directly reflected in the prayers for relief in the summons, but no point was made about this at the hearing. He submitted, in the further alternative, that if (contrary to his contention) he is not entitled to the grant of an easement by virtue of agreement or equitable estoppel, the court should impose an easement over the same area under s 88K. 3 Mr and Mrs Stanes denied that they ever agreed to grant him a right of way or did anything that would give rise to an equitable estoppel; they said that there are substantial safety concerns raised by the proposal for a right of way because of the steep gradient, and possible dangers to them and their family, including their young son who suffers from autism; and that the granting a right of way would interfere with the privacy and amenity of their property. They also contend that there are alternative, preferable routes for a right of way from Mr Sodhi's land to public roads, and that Mr Sodhi has not made all reasonable attempts to obtain an easement over such alternative routes. 4 I shall deal with these matters in the following sequence: (i) contentions about the general credibility of the witnesses, especially the parties; (ii) findings of fact about the properties of the parties and the access roads to them; (iii) findings of fact and determinations about the alleged agreement for the grant of an easement and the alleged estoppel; (iv) findings of fact and other determinations preliminary to the application of s 88K; (v) determination of the plaintiff's case under s 88K; (vi) conclusions. Credibility of witnesses 5 Mr Sodhi's evidence was inconsistent with the evidence of Mr and Mrs Stanes on important matters. I have not found it possible to adopt any general approach to the credibility of the parties as witnesses, though I was invited to do so. On the contrary, I regard Mr Sodhi and Mr and Mrs Stanes as generally satisfactory and credible witnesses, in terms of the content and presentation of their evidence and their demeanour. However, it is obvious from the evidence and also from the conduct of their respective cases that the parties have considerable intensity of feeling towards one another and a deep determination to succeed in this litigation. Theirs is the evidence of protagonists rather than independent observers, and is therefore subject to the human tendency to recall and describe matters in their most favourable light (cf Watson v Foxman (2000) 49 NSWLR 315, at 318 per McLelland J). 6 That being so, I have endeavoured to resolve conflicts of evidence one by one, where it has been necessary to do so, by placing particular reliance on external evidence (for example, the engineering evidence and the evidence of Frank David Vaughan, who was at the relevant times a field service manager and compliance officer in the Department of Planning based in the Coffs Harbour office) and subject to that, assessing the plausibility of their respective accounts. As it happens, this process has led me to prefer the evidence of Mr and Mrs Stanes to Mr Sodhi's evidence on most issues. 7 The court has been considerably assisted by the engineering evidence of Robert de Groot and Lewis Ford, presented orally and in writing in a very professional manner. For the most part, they agree with one another. The parties also tendered valuation evidence but in view of the conclusion I have reached, it is unnecessary for me to deal with it. The properties and access roads

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Lot 158 8 Mr Sodhi is the owner of Lot 158 in DP 752853, land having an area of 3.8 ha at Sandy Beach near Coffs Harbour in New South Wales, subject to a mortgage to National Australia Bank Ltd. From the southern boundary, which is at the top of an east/west ridge, the land slopes down quite steeply to the north, the southern boundary being about 100 m above sea level and the northern boundary being about 50 m above sea level. At the top of the ridge there are breathtaking views, especially in the southeastern corner, including a view towards the ocean, which is roughly one kilometre away. At present there is no residence on the land. 9 While I am not in a position to make a finding about the value of Lot 158, there is some evidence to suggest that if development approval were granted for the construction of a dwelling in the southeastern corner of the property, the value could be very high. According to Mr Stanes, Mr Sodhi claimed in 2003 that he could sell the property for $1 million (see also Mr Sodhi's evidence in cross-examination to similar effect, T 83); and there is evidence that Mr Sodhi placed the property on the market in September 2003 for $900,000, although it was not sold. However, the Coffs Harbour City Council is likely to require an access road suitable for two-wheel-drive vehicles as a prerequisite to or condition of the granting of development approval for the construction of a dwelling. 10 Mr Sodhi uses the land as a banana plantation. There is a structure located near the northern boundary, referred to in evidence as "the banana shed", which is used for sorting and packing bananas. There are several unsealed tracks through the banana trees, running from the banana shed roughly in a north/south direction. There is an unsealed track running approximately along the southern boundary, which is the northern boundary of Mr and Mrs Stanes' land, partly on Mr Sodhi's land and partly on Mr and Mrs Stanes' land. Bananas are cut every fortnight and usually three loads are transported out of the property each fortnight by the use of a one-tonne four-wheel-drive tray-back truck.

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The Road 20.115 Wide and the Reserve Road 12 Both Lot 158 and Lot 234 are landlocked, except for the reservation of a road marked on plans as "Road 20.115 Wide Res Road". The southern end of this designated roadsite is at the intersection of Morgans Road and Graham Drive, which are public roads. The designated roadsite passes over intervening properties for about 500 m, and up a hill to Lot 234. The gradient in the section just south of Lot 234 is 32%. It then passes over Lot 234, ending at the northern boundary of Lot 234, which is the southern boundary of Lot 158. It bisects Lot 234 with roughly two-thirds of the lot to its west and about one-third to its east. The average gradient of the designated roadsite from the southern to the northern boundary of Lot 234 is 38%. 13 The designated roadsite up to the southern boundary of Lot 234 is a Crown Public Road under the control of Coffs Harbour City Council. A single-lane road approximately 3 m wide has been constructed, apparently within the designated roadsite area, from Morgans Road/Graham Drive in the south up to a point just inside Lot 234 in the north. As I have mentioned, part of the road is steep. There are no passing bays. Building the road involved some excavation and battering and part of the road (including the top section extending into Lot 234) has been concreted. 14 Where it passes through Lot 234, the designated roadsite is a Crown Road under the control of the Department of Lands. Except for a small portion near the southern boundary of Lot 234, the road as constructed does not continue along the designated roadsite once it enters Lot 234. There is no road within the designated roadsite in Lot 234 except for the part of the road at the southern end of the property. 15 Following the terminology adopted at the hearing, I shall identify the designated roadsite to the south of Lot 234, and the road that has been constructed on it, as "the Road 20.115 Wide". I shall identify the designated roadsite on Lot 234 as "the Reserve Road". 16 The Proposed Right of Way (the Common Road and the Deviation) and the Driveway 17 After traversing the boundary into Lot 234, the road veers to the north-west, providing a single-lane access road about 100 m long to Mr and Mrs Stanes' dwelling, with one passing bay towards the bottom end. The average gradient is 21% up to a fork in the road. At the fork, one segment continues on to the house at a very gentle gradient of perhaps only 5%, while the other segment runs steeply up the hill to Lot 158, reaching Lot 158 at a point roughly midway along the boundary between the two properties. This "deviation" from the roadway to Mr and Mrs Stanes' house is a little over 20 m long and has an average gradient of about 37.5%. The evidence indicates that it is not used at all by Mr and Mrs Stanes, but only by Mr Sodhi. Except for a small portion at its southern end, none of the road on Lot 234 is concreted, but shale gravel has been laid along the road and both arms of the fork. 18 Following, once again, the terminology adopted at the hearing, I shall describe the road over Lot 234 from the southern boundary up to the fork in the road as "the Common Road", the continuation of the road from the fork in the road to the house as "the Driveway", and the road from the fork in the road to Lot 158 as "the Deviation". Mr Sodhi seeks an easement (which I shall refer to as "the Proposed Right of Way") over an area encompassing, but somewhat wider than, the Common Road and the Deviation, with a total length of about 66 m on the eastern side and about 81 m on the western side.

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Mr Sodhi's belief about access over Lot 3 25 Mr Sodhi gave affidavit evidence that Mr Ford "had always said to [Mr Sodhi] that when he sold the land he would write in the title that [Mr Sodhi] had a legal access". He gave similar evidence in cross-examination (at T 41). It seems to me more likely than not that there was at least one conversation between Mr Ford and Mr Sodhi about access, but it is unnecessary for me to decide whether Mr Ford promised an easement, and I should not do so in the present case in the absence of further evidence. However, it is appropriate to find, and I do find, that as a result of a representation or representations by Mr Ford, Mr Sodhi believed for some time that he would be given a right of access over Lot 3. 26 That belief commenced at some time prior to the sale of Lot 3 to the Benning family. In his affidavit made on 16 February 2006, Mr Sodhi said that Henry Ford sold Lot 3 to the Benning family at about the end of 2002. In his affidavit made on 18 August 2006 he said the sale was in about February 2002. However a copy of a memorandum of transfer from Mary Elizabeth Ford (Mr Ford's wife, according to Mr Sodhi) to Moti Singh Benning Pty Ltd, which I infer to be a Benning family company, was tendered as a transfer relating to Lot 3 and is dated 11 April 2001. 27 My conclusion is that Mr Sodhi's recollection is faulty and that in fact the sale of Lot 3 to the Benning family took place no later than April 2001. Consequently Mr Ford's representation or representations to him about access must have been made, and Mr Sodhi's belief that Mr Ford would grant him a right of access must have been formed, no later than that time. 28 When did Mr Sodhi cease to believe that Mr Ford would grant him a right of access? In his affidavit made on 18 August 2006 Mr Sodhi said that he became aware that he did not have legal access through Lot 3 in about February 2002, and in cross-examination he asserted categorically that he knew he had no rights in April 2002 (T 43.45; T 58). He said in the affidavit that he went to see Mr Ford when he heard about the sale of Lot 3, and Mr Ford said to him that he had "written it in the contract only", although in cross-examination he said there was nothing in the contract (T 41.32). Mr Sodhi said in the affidavit that he obtained legal advice from a solicitor who told him he had no legal right of access through Lot 3. He claimed that he only became involved in making the road with Mr Stanes once he knew that he did not have legal access through Lot 3. 29 I do not accept this evidence so far as asserts that it was in February 2002 that Mr Sodhi became aware that he had no legal right of access over Lot 3, for several reasons. First, it was put to Mr Sodhi in cross-examination that he had no concerns at the time of his discussions with Mr Stanes in April 2002 about his access over Lot 3 and he agreed, saying he was still using Lot 3 because the Bennings had not stopped him (T 61.47-T 62.2). Secondly, in cross examination Mr Sodhi was challenged to explain why he did not approach the Benning family for a right of access over Lot 3, and he explained that he obtained legal advice to the effect that he had no right of access over Lot 3 only after Mr Stanes had approached him to share equally the cost of making a road over Lot 234 (at T 24.44). Both parties agree that there first discussion about sharing the cost of a road was in April 2002. 30 Thirdly, Mr Stanes gave evidence that in their discussions in April 2002 and on subsequent occasions, Mr Sodhi told him that he had legal access to his land over Lot 3 granted by Mr Ford, although it had not been "sorted" (see, for example, Mr Stanes' affidavit of 2 August 2006, para 37). Mr Sodhi dealt with this evidence in an unconvincing way. In para 22 of his affidavit made on 18 August 2006 he purported to refer to para 36 of Mr Stanes' affidavit of 2 August 2006 and to agree that the conversation attributed to him was substantially correct, while insisting that he also said that he had been to a solicitor and found out that he did not have legal access over Lot 3. Para 36 of Mr Stanes' affidavit is a short statement about Mr Stanes' belief concerning cost sharing, and does not purport to give an account any conversation. Clearly Mr Sodhi's reference to it is incorrect. It seems likely that he intended to refer to the conversation of which Mr Stanes gives evidence in para 37. But since Mr Stanes' account of the conversation begins with an assertion by Mr Sodhi that he had legal access over Lot 3, it is very odd for Mr Sodhi to respond by saying that the conversation attributed to him was substantially correct but that he also said he had been to a solicitor and found out he did not have legal access - these propositions are contradictory. This confusion in Mr Sodhi's affidavit evidence was not cleared up during cross-examination (at T 42) when Mr Sodhi said he did not know what he was referring to in para 22 of his affidavit. 31 These matters lead me to conclude that any legal advice received by Mr Sodhi that he had no legal right of access over Lot 3 was not obtained until after the initial discussion between Mr Sodhi and Mr Stanes in April 2002. Since Mr Stanes gave plausible evidence that Mr Sodhi said similar things in their subsequent meetings, and Mr Vaughan does not depose that Mr Sodhi made any reference to lack of legal access over Lot 3 although that matter would have been material to his evidence, I infer that any such legal advice was not obtained until after all of the relevant discussions in April 2002 had taken place.

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Meeting between the parties in April 2002 32 The parties gave consistent evidence that Mr and Mrs Stanes and Mr Sodhi had a conversation on the site at Lot 234 in about April 2002, on the subject of an access road. At that time, as I have said, a track towards the proposed site of the Stanes' house had been graded but not concreted or gravelled. It was obvious that something would need to be done to improve the road access in order to permit the building of a house. 33 Mr Sodhi said he was approached by Mr Stanes, whereas Mr and Mrs Stanes said they were approached by Mr Sodhi. It is unnecessary to resolve the conflict of evidence on that point. The evidence about the content of the conversation is also inconsistent in some respects, but it is common ground that they discussed sharing the cost of road construction. They contemplated that they would share the use of the road, and it was arranged that they would meet again in the presence of an officer from the Department of Planning who turned out to be Mr Vaughan. It seems to me unlikely that any final agreement was reached at that stage, given that a further meeting was contemplated with Mr Vaughan. 34 Mr Sodhi gave evidence that during the April conversation he told Mr Stanes that access over Lot 234 would be his only access to his property, as the access he was then using had never been legalised and he had been advised by a solicitor that he did not have legal access over Lot 3. Mr Stanes gave evidence that Mr Sodhi told him he already had legal access to his land over Lot 3 because of Mr Ford's promise, and that he had been slack in not sorting out the problem after the sale to the Benning family. This difference in evidence is material because, if Mr Sodhi's version were correct, it would have set the scene of later discussions by making it plain that Mr Sodhi needed a right of access over Mr and Mrs Stanes' land to avoid being landlocked, and therefore would probably have been seeking a permanent right in the nature of an easement rather than some lesser permission. 35 In my view, however, it is more probable that Mr Stanes' version of the conversation is correct in this respect, and I so find. I do so because of my finding, expressed above, that at the time of the discussion Mr Sodhi was continuing to access his banana plantation over Lot 3 without difficulty and believed that he would be given a right of access over Lot 3. Having that belief, he would not have said (as he claims in para 6 of his affidavit of 16 February 2006) that the Reserve Road was his only access to his property, and more likely that he would have said (as Mr Stanes claims at para 37 of his affidavit of 2 August 2006) that Mr Ford assured him that he had made provision for a right of way over Lot 3 when he sold to the Bennings. I infer that Mr Sodhi's recollection of the conversation is incorrect. This conclusion is supported by the fact that he was using Lot 3 at that time for access to his banana plantation without difficulty, and on his own evidence he continued to do so until about April 2004.

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Meeting of Mr Sodhi, Mr Stanes and Mr Vaughan in late April 2002 37 The parties gave consistent evidence that in late April, there was another meeting on site, this time attended by Mr Vaughan as well as Mr Stanes and Mr Sodhi, but not Mrs Stanes. Mr Vaughan also gave evidence of this meeting. The evidence of the parties as to what was said at that meeting is not wholly consistent, but the evidence of Mr Vaughan provides some assistance in resolving the inconsistency. Mr Stanes, Mr Sodhi and Mr Vaughan all said that there was a discussion in which Mr Vaughan told the others what would be required for a permissible road over Lot 234 to the proposed house and to Mr Sodhi's land. Mr Stanes gave evidence, which I accept (as it is corroborated by the evidence of Mr Vaughan), that he told Mr Vaughan his wife would not agree to anything near the house, and so Mr Vaughan suggested a location for the access road to Lot 158 as far away from the house site as possible to the east, while selecting a location where the access road could be constructed without removing trees. 38 It appears that Mr Vaughan was forthright and categorical. Mr Stanes gave unchallenged evidence that Mr Vaughan was "God" in such matters, in the sense that what he said was to be observed, and he felt under pressure to agree. Mr Vaughan told Mr Stanes and Mr Sodhi that it would be impractical to build a road within the roadsite identified as the Reserve Road. He continued: "The practical solution would be to build the access road on this location [indicating a location where the Deviation was later constructed]. This solution would be in your mutual interests and you would obtain a practical access to both properties. You could share the costs by paying half each resulting in a much better outcome for both parties." 39 I regard it as significant that Mr Vaughan, who presumably understood the nature of an easement and the steps necessary to create one, did not recommend to the parties that an easement be granted; he simply observed that it would be in the mutual interests of the parties to obtain "a practical access to both properties". 40 Mr Sodhi's evidence is that after the meeting with Mr Vaughan had come to an end, Mr Sodhi and Mr Stanes had a further discussion (implying that Mr Vaughan had left). According to Mr Sodhi's evidence, Mr Stanes said: "Does that suit you Billa? We will build the road access here on my land, and avoid the steep section of Reserve Road, and I'll give you an easement over my land. But my wife won't want anyone driving past our house, so we'll make a separate road for you so that you won't be going past our house all the time and we will share the costs equally." Mr Sodhi said he replied, "That sounds fair to me, " and they shook hands. Mr Stanes said he would arrange for a bulldozer and they agreed to gravel the road rather than to concrete it. 41 Mr Stanes denied that he ever promised to give Mr Sodhi an easement, and he gave evidence that in fact Mr Sodhi left the meeting first, leaving him to have a discussion with Mr Vaughan. I regard Mr Vaughan's evidence as determinative on the question whether he or Mr Sodhi left first. It was tendered by Mr Sodhi and not challenged by Mr and Mrs Stanes. Mr Vaughan said that Mr Sodhi left the meeting first. The significance of this evidence is that there cannot have been a subsequent discussion between Mr Sodhi and Mr Stanes in the absence of Mr Vaughan, as Mr Sodhi claimed, and therefore the occasion for Mr Stanes to tell Mr Sodhi that he would give him an easement did not occur. Further, as I have noted, the dominant recommendation by Mr Vaughan was not expressed in terms of granting an easement. I therefore reject Mr Sodhi's evidence that Mr Stanes told him, after the meeting with Mr Vaughan, that he would grant him an easement over Lot 234. 42 Even if, contrary to my finding, there had been a discussion during or after the meeting with Mr Vaughan to the effect that Mr Sodhi would have access by way of the specified route over Lot 234 in return for paying half the construction costs, it is unlikely that the parties would have spoken in terms of the granting of an easement. Both Mr and Mrs Stanes gave evidence about their understanding of the legal concept of an easement, in comparison with what had emerged, in their view, from the various discussions and actions. For Mrs Stanes, the central difference between the permission they had granted Mr Sodhi and a legal easement was that if an easement were granted, it would be unlimited as to the nature of the user and the range of people who could be permitted by Mr Sodhi to use it(T 172.38-58). It seems to me highly unlikely, in view of her desire to protect her children and her privacy, that she would have authorised her husband, at any stage, to consent to an arrangement which she believed would have such an effect. For Mr Stanes, the key difference between the permission they had granted to Mr Sodhi and the granting of a legal easement was that their permission was conditional and could be revoked on breach of condition, whereas an easement was (in his view) perpetual and irrevocable(T 197.44-50; T 198.1-9; T 205.28-206.1; T 217.33-46). Again, it seems unlikely that he would have agreed to grant an easement if his understanding of the concept was in those terms. 43 Mr Sodhi's own evidence makes it unlikely, in my view, that an easement would have been intended. He was aware that the granting of an easement involved instructing solicitors and having plans prepared and that "until the plans were drawn up for the solicitor there would be no legal easement created" (T 44; T 59). He did not give evidence of any discussion about how those matters would be attended to or who would pay the cost of doing so. Mr Sodhi offered to pay costs in connection with the easement much later, when his solicitor wrote to Mr and Mrs Stanes' solicitors on 22 January 2004 offering to pay legal costs and the costs of survey and registration of a plan and instrument creating the easement, and also the costs of valuation and reasonable compensation for the grant of the easement. 44 Other evidence given by Mr Sodhi in cross-examination reinforces the conclusion that no agreement for the grant of an easement was reached during the discussion in late April 2002. Mr Sodhi accepted that in the period from August 2002 when a gravel road was completed until late in 2003 when a draft written agreement to exchange easements was drawn up, he took no steps to obtain an easement from Mr Stanes (T 68). He also agreed in cross-examination that, when he entered into an agency agreement to sell Lot 158 and had his solicitor prepare a draft contract for sale, he did not instruct his solicitor to insert any clause in the draft contract relating to the agreement he claimed to have with Mr and Mrs Stanes for an easement, even though he knew that this would be a matter of some importance for a purchaser, saying, implausibly, that he did not bother about the matter because he thought the grant of an easement was "just a formality" (T 87-88). 45 Mr Stanes said in his first affidavit (paras 45 and 46) that he "agreed" to what he described as "the ROW". His evidence seems to be that after his discussion with Mr Sodhi and Mr Vaughan, and in the course of his subsequent discussion with Mr Vaughan alone, he agreed to the location of an access road from his driveway to Lot 158. Given his otherwise consistent denial of ever having agreed to an easement, I take it that he did not mean to say in his affidavit that he agreed to grant an easement in the form of a right of way over that location (see also his affidavit, para 47). 46 Although there was no agreement reached late in April 2002 for the granting of an easement, and no representation was made to the effect that an easement would be granted, the evidence of Mr Sodhi and Mr Stanes leads to the conclusion that another kind of agreement, or agreement in principle, was struck that time. An arrangement was reached between Mr Sodhi and Mr Stanes under which Mr Stanes would construct, at their equally shared cost, a roadway along the Deviation and the Common Road, and would permit Mr Sodhi to have access to Lot 158 over that roadway, when constructed, joining up to the Road 20.115 Wide over which Mr Sodhi already had a right of access. The arrangement had the flavour, in short, of a contractual licence. At that point the arrangement was probably not sufficiently certain to constitute an enforceable contract, particularly as regards conditions of use, revocability and the specific location of the Deviation. Conditions of use were spelled out, however, at a subsequent meeting between Mr Sodhi and Mr and Mrs Stanes, as I shall note, and the specific location of the Deviation was determined by its construction.

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Subsequent meeting of the parties 47 According to the evidence of Mr and Mrs Stanes, denied by Mr Sodhi, a few days after the meeting of Mr Sodhi and Mr Stanes with Mr Vaughan, there was a further meeting on the site attended by Mr Sodhi and Mr and Mrs Stanes. Mr Stanes pointed out to Mr Sodhi the proposed location of the Deviation. Mrs Stanes expressed her concern about the danger of the steep road and said she did not "want to add to the danger by having to share the access with anyone" (Mrs Stanes' affidavit, para 10). Mr Sodhi said he would only use the access road once or twice a week to access the top part of his banana farm, as he had much better access from the Pacific Highway to his banana shed. 48 Mr Stanes gave evidence, also denied by Mr Sodhi, that during that meeting, he told Mr Sodhi that in return for Mr Sodhi paying half the costs of road construction, he and his family and any employees could use the access road for banana farming as long as the privilege was not abused, but if there was any abuse or any dangerous driving by anyone, Mr and Mrs Stanes would be entitled to terminate access and construct a gate to prevent access. Mr and Mrs Stanes gave evidence that Mr Sodhi agreed to these arrangements and said again that he had legal access to his land over Lot 3. 49 I accept the evidence of Mr and Mrs Stanes on these matters, in preference to Mr Sodhi's denials that the meeting occurred and that the conversations took place. First, it is plausible that, since Mr Stanes and Mr Vaughan continued to discuss the proposed roadwork after Mr Sodhi had left them (according to the finding that I have made), Mr Stanes would have wanted to have another discussion with Mr Sodhi before going ahead with the building work. Secondly, it is plausible that Mr Stanes, whose evidence demonstrates in my view a consistent concern about dangers associated with use of the road, would have wanted the opportunity to convey her concerns to Mr Sodhi. Thirdly, since according to my earlier findings Mr Stanes and Mr Sodhi had reached an arrangement under which Mr Sodhi would have permission to use the road, it is plausible that Mr and Mrs Stanes would have wanted to have a discussion with Mr Sodhi about the conditions of that use and consequently the circumstances in which the permission could be withdrawn. Finally, the evidence of Mr and Mrs Stanes as to what was said is consistent with the findings I have made about other matters, including my finding that Mr Sodhi continued to believe until the time of this meeting that he would be given a right to use Lot 3. 50 Therefore by virtue of this meeting, which occurred before the building works commenced, the parties gave content to the arrangement previously struck between Mr Stanes and Mr Sodhi, by spelling out conditions upon which the contractual licence would be granted to Mr Sodhi and the circumstances in which it might be revoked. It is unnecessary for me to determine whether the arrangements had by this stage reached the level of certainty necessary for the formation of a contract for the grant of a licence to use the roadway when constructed, since the plaintiff does not assert or seek any relief based upon such a contract. However, it is appropriate to observe that the evidence of Mr and Mrs Stanes in their affidavits and in the witness box was consistently to the effect that they regarded themselves as bound by an agreement with Mr Sodhi; and further that any uncertainty that may have remained at that stage about the precise location of the road over which permission would be granted (particularly, the Deviation) was subsequently overcome by the actual construction of the road.

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Concreting part of the road 53 By February 2003, seasonal storm damage had eroded sections of the roadwork. Mr Vaughan advised that the only permanent solution would be to seal the steep section of the Road 20.115 Wide with bitumen or concrete. Mr Stanes proposed to Mr Sodhi that the road be concreted at a cost of approximately $30,000, costed on the basis that he would build it rather than engage a contractor to do so. Mr Sodhi agreed and it was arranged that they would share the cost equally. 54 Mr Sodhi gave evidence that Mr Stanes told him he had talked to the Council who advised that if he wanted to build a house it would be necessary to have access by two-wheel-drive vehicle. Mr Sodhi said he told Mr Stanes that he agreed to contribute to the cost because, if he wanted to build a house on his block, the Council would want him to have two-wheel-drive access as well. Mr Stanes denied that Mr Sodhi said anything about building a house on Lot 158. 55 I am not persuaded that Mr Sodhi spoke to Mr Stanes about building a house at this stage. Mr Sodhi's intention to sell was not implemented until September 2003 and so it has not been shown that sale for residential development was in his mind earlier in 2003 when the parties agreed on the concreting of the road. Furthermore, in view of my finding that Mr and Mrs Stanes specified conditions of use of the road relating to banana farming rather than residential use, it seems to me probable that if Mr Sodhi had spoken about building a house there would have been a strong negative reaction from Mr Stanes, and he does not depose that he received any such response. 56 Mr Stanes obtained quotes from subcontractors and supervised the concreting. Concrete was laid in two sections totalling approximately 200 m in length, running from a point close to Graham Drive in the south and extending for a short distance into Lot 234 in the north. Mr Sodhi brought two friends to help when the concrete was laid. He paid his half share of the bills. The concreting was completed in about July 2003. 57 Mr Sodhi gave evidence that his half share of the bills was $12,000, making his total payment $17,000. Mr Stanes gave evidence that the total amount paid by Mr Sodhi was $16,000. I am not able to resolve this inconsistency of evidence from the documents annexed to Mr Stanes' first affidavit. It is not necessary for me to do so, and in any event counsel for Mr Sodhi conceded that his client would accept the evidence that the lower amount was paid. 58 Mr and Mrs Stanes obtained development consent for the construction of a house, and it was built during 2003. There is no direct evidence that there was any form of approval by the Council of the roadworks but I infer that the completion of the roadworks was a necessary adjunct of the development approval for the house. They moved in, with their three young children (one of whom is autistic), in November 2003, living there until October 2004. Then they moved to Western Australia, where they are currently living. They both gave evidence that a significant factor in their decision to move to Western Australia was their dispute with Mr Sodhi. They intend to return to live on Lot 234 when the present case has been resolved. In the meantime Lot 234 is tenanted. 59 Mr Stanes gave evidence that he and his wife have continued to honour their agreement with Mr Sodhi, under which he is permitted to have access over their land for banana farming. Mr Stanes said in the witness box that this agreement was still in operation(T 201.44-202.18; T 217.52-55). It is unclear whether Mr Sodhi has transported bananas over the Proposed Right of Way since the commencement of the present proceeding, though it appears (as noted below) that he no longer uses the road over Lot 3.

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The alleged "exchange of easements" agreement 60 In September 2003 Mr Sodhi entered into an agency agreement for the sale of Lot 158 for $900,000. He cleared an area in the southeastern corner of the property, an area he believed to be a suitable site for a home. He gave evidence in cross-examination, though not in his affidavits, that at about this time he said to Mr Stanes, "I'm thinking of selling my land, I had better get - you better give me an easement now" (T 69.12). He agreed that he was hoping the property could be sold to someone who wanted to use it to build a house (T 69.30), and the fact that electricity had recently been connected to the property created a greater opportunity to sell to someone for residential purposes (T 69.47). I accept this evidence. 61 Mr Stanes gave evidence, which I accept, that he was approached by a sales representative seeking clarification of boundary locations, and he told the representative that there was no legal right of access to Lot 158 over Lot 234. The representative said Mr Sodhi had told him that there was a right of access. Shortly afterwards Lot 158 was withdrawn from sale. 62 Mr Stanes' evidence is consistent with the evidence of Mr Sodhi in cross-examination. Mr Sodhi said that he discovered that Mr Stanes would not grant him an easement when the real estate agent went to look at the property after he had listed the property for sale, and told him that Mr Stanes was "backing out of the deal" and wanted compensation (T 89.12). He said he received this information from the real estate agent before he went to his solicitor to have documents prepared for an exchange of easements, and the information from the real estate agent made him suspicious and led him to go to the solicitor to have an agreement drawn up (T 90.1-8). 63 I infer that as a result of the information Mr Sodhi received from the real estate agent, he decided to try again to obtain a grant of an easement over Lot 234. Both Mr Sodhi and Mr Stanes deposed to a conversation that they had concerning a proposal to exchange easements. The evidence located the conversation at some time after the completion of the concreting (ie, after about July 2003), but in my view the conversation occurred after Mr Sodhi's unsuccessful attempt in September 2003 to sell Lot 158. The proposal was that Mr and Mrs Stanes would grant Mr Sodhi the Proposed Right of Way, and Mr Sodhi would grant Mr and Mrs Stanes an easement over some part of Lot 158. 64 There is considerable confusion in the evidence as to the location of the proposed easement over Lot 158. Mr Stanes said in his first affidavit that the easement was so that he could "access the northern part" of Lot 234. Mr Sodhi said in his first affidavit that the easement was so that Mr Stanes could access his property "on the northern part" of Lot 234. The draft agreement subsequently prepared by Mr Sodhi's solicitor identified an easement 3.1 m wide "along the southern boundary of Sodhi land commencing on the southwestern boundary and then east to the existing gravel access". I infer that the "existing gravel access" was the Deviation, and so the right of way was to run, roughly speaking, along the north/south boundary from just north of the Staines' house up to the Deviation. But in cross-examination Mr Sodhi told the court that the reference in his affidavit to access "on the northern part" was a mistake and should have referred to the eastern part (T 71). 65 Mr Stanes said the proposal was initiated by Mr Sodhi, and Mr Sodhi said it was initiated by Mr Stanes. Mr Sodhi said he agreed to the proposal when it was advanced by Mr Stanes, and Mr Stanes said he told Mr Sodhi that he would discuss the proposal with his wife but that he already had better access to his house over the Driveway. Mrs Stanes said she opposed the proposal when her husband told her about it. 66 I prefer the evidence of Mr and Mrs Stanes on these matters. Taking into account the evidence as a whole, there does not appear to be any good reason for Mr Stanes to have wanted a right of way over Mr Sodhi's land for access to the northern part of Lot 234, given the existence of the Driveway, and no reason was identified as to why he would want access over Mr Sodhi's land to the eastern part of his land (see T 72). On the other hand, it is plausible that Mr Sodhi would have taken steps to negotiate for the grant of the Proposed Right of Way when he discovered that its absence was an obstacle to the sale of Lot 158. In my view it is likely that the proposal for exchange of easements was advanced only after this discovery was made, given that the documentation of the proposed exchange did not emerge until December. It is also plausible that Mr Sodhi would have offered to grant a right of way over an area at the south of Lot 158 as an enticement to secure the Proposed Right of Way, and that the proposal would not have been accepted by Mr and Mrs Stanes because their existing access over the Driveway was adequate. 67 I therefore conclude, notwithstanding Mr Sodhi's evidence, that Mr Sodhi proposed an exchange of easements but Mr and Mrs Stanes did not agree. I note that if Mr Sodhi's evidence were accepted, he would still have to overcome the obstacle that the alleged oral agreement was too uncertain as regards the location of the easement over Lot 158, as well as the problem of lack of writing. 68 In about December 2003 Mr Sodhi instructed his solicitors to prepare a deed of agreement for the granting of easements by Mr and Mrs Stanes to Mr Sodhi and by Mr Sodhi to Mr and Mrs Stanes. A draft deed was prepared, although only Mr Sodhi and Mr Stanes, not Mrs Stanes, were proposed as parties. Mr Sodhi took the draft document to Mr and Mrs Stanes but they refused to sign it. There is some conflicting evidence as to just what happened at that meeting, and Mr Sodhi alleged contrary to the evidence of Mr and Mrs Stanes that Mrs Stanes told him they wished to be compensated for the easement. It is unnecessary to resolve these matters here. Mr and Mrs Stanes then consulted their solicitor who advised them about the nature of an easement and the rights and obligations attaching to it, and subsequently they had a telephone conversation with Mr Sodhi in which they made it plain that they would not agree to the exchange of easements as proposed. 69 The draft deed for exchange of easements was submitted by Mr Sodhi's solicitor to Mr and Mrs Stanes' solicitor under cover of a letter dated 17 December 2003 in which it was alleged that, notwithstanding submission of the draft agreement, Mr Sodhi and Mr Stanes had already made an agreement before the road was constructed for the sharing of costs and the creation of an easement over the Proposed Right of Way without compensation. Mr and Mrs Stanes' solicitor replied on 21 January 2004, saying that his client strenuously denied that there was any agreement that an easement would be created. 70 Subsequently, in February 2004 Mr Sodhi engaged a surveyor, Martin Pundyk, to prepare a plan showing the location of the easement that Mr Sodhi claimed over Lot 234. 71 The evidence concerning the proposal to exchange easements reinforces my conclusion that no agreement had previously been made for the granting of an easement, and no representation had been made by Mr and Mrs Stanes that an easement would be granted. In my opinion, it was because there was no such agreement that Mr Sodhi put forward the exchange proposal. His experience in attempting to sell Lot 158 brought home to him that his existing permission to have access over Lot 234 was insufficient for the purposes of residential development and sale, and it would be necessary for the purpose of sale to obtain the grant of an easement. But instead of asserting an entitlement under an existing agreement, he made a new proposal containing an added element, namely the offer to grant an easement over Lot 158.

[24]

Findings as to the alleged agreement to grant an easement and the alleged estoppel 72 For the reasons I have given, I find that there was no agreement at any stage between Mr Sodhi and Mr and Mrs Stanes, or Mr Stanes alone, for the grant of an easement over the area I have designated as Proposed Right of Way, or indeed over any other area. They agreed to grant him a conditional permission to have access to his banana plantation over their land, in consideration of his contribution of half the costs of constructing a shale roadway over the Common Road, the Deviation and the Driveway, and (subsequently) of the concreting of the Road 20.115 Wide. 73 Nor was there any representation or other conduct, or acquiescence or omission to act, on the part of Mr and Mrs Stanes upon the basis of which an equitable estoppel might rest. They promised to give Mr Sodhi conditional permission to use the roadway over their land for access to his banana plantation and they have given him that conditional permission, which according to the evidence of Mr Stanes is still in place. On the facts, they did not promise to give him any more than such a permission, and nothing they did provided any foundation for him to believe that they would grant him an easement. Consequently when he acted to his detriment by contributing half of the road construction costs, as well as some physical work, and incurred expenses for lawyer's and surveyor's fees, he cannot have done so in reliance upon anything that might now estop Mr and Mrs Stanes from denying an easement in his favour. 74 The fact that Mr Sodhi later assisted in the construction of the road and paid $17,000 or $16,000 for the construction costs is not inconsistent with my finding. I infer that at the time of the April conversation, while Mr Sodhi believed that Mr Ford had promised him an easement, he recognised that there was some significant uncertainty as to whether a legally enforceable easement would in fact be granted to him, given that there was bad blood between the Benning family and the Sodhi family. In those circumstances he may well have regarded it as a wise move to agree to pay a substantial amount of money to secure an alternative access by licence over Lot 234, at a time before he discovered that no right of way over Lot 3 would be forthcoming. 75 My findings make it unnecessary to address the question whether the agreement alleged by Mr Sodhi was partly performed and therefore specifically enforceable notwithstanding the absence of writing. Nor is it necessary to deal with the submissions made on behalf of Mr and Mrs Stanes to the effect that any agreement made with, or representation relied on by, Mr Sodhi was made without the authority of Mrs Stanes. It seems to me, however, that she was bound by the agreement to grant Mr Sodhi a licence to use the road, by virtue of her participation in the meeting in late April or early May when the conditions of that permission were spelled out. Findings and determinations preliminary to the application of s 88K 76 Certain findings of fact and other determinations need to be made on matters that are preliminary to the court's ruling on the application of s 88K. I have made determinations on the following issues, which I shall set out before considering and applying the components of s 88K: (i) whether it is possible to construct an access road within the Reserve Road; (ii) facts relating to the availability of access over Lot 3; (iii) facts relating to the availability of access over Lot 2; (iv) facts and determination relating to access via the Central Route identified in Mr Ford's evidence; (v) safety concerns about the Proposed Right of Way; (vi) effect of the Proposed Right of Way on the privacy and amenity of Lot 234.

[25]

Access over the Reserve Road 77 Subject to the requisite development consent, Mr Sodhi would be entitled as against Mr and Mrs Stanes to construct a road over Lot 234 from the Road 20.115 Wide at the southern boundary up to Lot 158, provided that the construction was wholly within the roadsite marked as the Reserve Road. However, it emerges clearly from the evidence that the Reserve Road is an unsuitable site for the construction of such a road. The engineering evidence of Mr de Groot in his reports dated 8 February 2007 and 1 March 2007, substantially accepted in relevant respects by the plaintiff's engineer, Mr Ford, are especially significant. Mr de Groot concluded in his first report that it would not be possible, for two reasons, to obtain approval to construct a roadway within the Reserve Road that would satisfy Council requirements for a public road reserve or a right of carriageway. 78 First, the terrain is very steep, having an average gradient of about 38%. If a "zig-zagging" road were to be constructed so as to reduce the gradient, there would still be a slope of around 33%, assuming that the road remained in the designated area which is about 20 m wide. Secondly, the designated area of the Reserve Road is heavily treed and in particular, there are some substantial blackbutt trees that would have to be removed to permit road construction. The removal of the trees would probably lead to erosion. 79 In his report dated 28 February 2007, Mr Ford expressed the opinion that the design standards that would be adopted by the Council in assessing a road proposal would be standards somewhat less onerous than the ones identified by Mr de Groot, but nevertheless he agreed with Mr de Groot's conclusion that the construction of a road within the Reserve Road would be impractical because of the gradient and the destruction of vegetation that would be involved. The same conclusion was expressed in the evidence of Mr Vaughan. 80 It is therefore necessary to proceed on the basis that access to Lot 158 over the Reserve Road is impossible. That being so, there are no reasonable attempts that could be made to obtain an easement in the area of the Reserve Road, that have not been made. 81 Mr Stanes gave evidence that if no other alternative were available, he would agree to an easement to widen the Reserve Road to the east. He said that if this were done, the existing concrete road could be extended, weaving around the trees to prevent any erosion. He said such a road would be safer than using the Deviation and would be well away from his house. This proposal was not explored in the expert evidence and is not the subject of Mr Sodhi's application to the court. It seems to me plain from the proposal outlined by Mr Stanes that it would not be an easement having the same effect as the easement proposed in the summons, for it would wind through the trees well to the east of the Deviation, presumably at a lower gradient. That being so, s 88K(2)(c) does not apply to this proposal, and it is unnecessary to explore it further.

[26]

Access over Lot 3 82 In his first report, Mr de Groot concluded that the use of the Deviation would be unsafe as well as non-compliant with Council's requirements, and then he considered two alternate access roads, one over Lot 3 (the Benning property) and the other over Lot 2 (the Peters Land). He reached the conclusion that in each case an accessway conforming to Council's requirements could be constructed. Mr Ford agreed with these conclusions. 83 It is common ground that, until about December 2003, Mr Sodhi accessed Lot 158 for the purpose of cutting and transporting bananas via the road over Lot 3 rather than via the Proposed Right of Way. Mr Stanes gave evidence that while he was present on Lot 234, working on the house and the road, and during his residence in the house from November 2003 to October 2004, he observed Mr Sodhi accessing Lot 158 over Lot 3 approximately 4-5 times per fortnight, delivering materials, removing banana crops, and driving employees to and from the banana plantation. During that period he observed Mr Sodhi using the Proposed Right of Way in his Land Cruiser truck approximately once per week, and said he was alone and the truck was empty. He denied that Mr Sodhi used the Proposed Right of Way to transport bananas at any time in the period up to October 2004, when he and his wife moved to Western Australia. 84 Mr Sodhi's evidence is that he transported his bananas over Lot 3, and used the Proposed Right of Way only occasionally, up until either December 2003 or (in another part of his evidence) April 2004. In my opinion, Mr Sodhi's evidence is to be preferred on this point. According to Mr Stanes (first affidavit, para 89), he had a conversation with Mr Sodhi in late 2003 in which Mr Sodhi was angry, saying he wanted to sell his land and move to Sydney, and demanded a written agreement for access because he had spent a lot of money on the road. He told Mr Stanes that Mr Ford had not arranged for a right of way when he sold the land, and the Bennings had informed him they were "going to stop" him having access over their land. I accept that evidence, it being consistent with Mr Sodhi's evidence that he stopped using Lot 3 late in 2003 or early in 2004. I accept that, while he was living in Lot 234, Mr Stanes observed Mr Sodhi using the access road over Lot 3, but his evidence does not persuade me that those observations related to any time after April 2004. In my opinion by that time Mr Sodhi had stopped using Lot 3. 85 Counsel for Mr and Mrs Stanes submitted that the court must, on the evidence, find that Mr Sodhi has the right to access Lot 158 over Lot 3 in accordance with the arrangement that has existed since the least the 1960s. I disagree with this submission. I think the evidence of Mr Sodhi and in para 89 of Mr Stanes' affidavit establishes that Mr Sodhi stopped using Lot 3 for access to Lot 158 at some time between December 2003 and the end of April 2004. Just why he stopped using Lot 3 was left somewhat obscure by the admissible evidence. In his second affidavit Mr Sodhi endeavoured to give some hearsay evidence on that subject but it was objected to and rejected, and he was not able to give any admissible explanation in his oral evidence. He did say that there was bad blood between the Benning and Sodhi families. Additionally, in his engineering expert, Mr Ford, said, somewhat speculatively, that there was a proposed Pacific Highway upgrade cutting through Lot 3, which might make the owner of that lot reluctant to agree to a right of carriageway potentially affecting his negotiations with the New South Wales Roads & Traffic Authority. 86 I infer that there would be considerable expense in establishing an access road over Lot 3 and up to the southeastern corner of Lot 158. To have vehicular access to the southeastern corner, Mr Sodhi would have to construct an extension of the roadway from the vicinity of the banana shed up the steep hill through Lot 158, at grades of up to 27%, which would need to be made suitable for two-wheel-drive vehicles if he wished to secure development approval for a residence. The expert engineering evidence indicates that this would be possible, although I infer that some excavation and concreting would be necessary, at substantial cost.

[28]

Access over the Central Route 88 Mr Ford's report proposed three alternative routes over Lot 234 that would overcome the very steep gradient of the Deviation (which he called "the Western Route", "the Eastern Route" and "the Central Route"). He concluded by expressing the opinion that one of these alternative routes could be used to provide access to Lot 158, complying with Council's requirements. Counsel for the defendants objected to this evidence, so far as it related to the Western Route and the Eastern Route, but not so far as it related to the Central Route. I excluded the parts of the report that were subject to objection, under s 135 of the Evidence Act 1995 (NSW). There remained Mr Ford's recommendation of the Central Route, which would require substantial excavation and the construction of about 40 m of roadway at 23-25% gradient with (according to his measurements) a maximum cut depth of about 2 m, passing in a curved trajectory over the site of the Deviation and then in an easterly direction over Lot 158 just to the north of its boundary with Lot 234. Mr Ford pointed out that the Central Route would avoid the issue of disturbance of vegetation because it would follow the path of the existing road along the Deviation. 89 Mr de Groot's further report dated 1 March 2007 is essentially an analysis of the Central Route proposal, showing what would be involved in constructing the Central Route in terms of location and batter slope, maximum width of cutting, maximum cut depth and volume of excavated material. Mr de Groot accepted the parameters for Council consent outlined by Mr Ford, but he said that to provide a pavement width of 3 m would require a nominal formation width of at least 3.5 m, because the Central Route driveway would go through a significant cutting. He plotted the Central Route on the basis of two scenarios, varying according to geophysical conditions that he has not yet tested: a worst-case scenario that would require a 1:2 cut batter, and a more favourable scenario that would require only a 1:1 cut batter. 90 In both cases the road and the Eastern batter slope would cut across the eastern edge of the Proposed Right of Way as plotted in the annexure to the summons, and the batter slope would also use a corridor of land on Lot 234 along its northern boundary. In the worst-case scenario, though not in the better scenario, the batter slope would also extend beyond the western edge of the Proposed Right of Way. In both cases the maximum cut depth, to achieve a gradient of 22.2%, would be 3 m at a point at the top of Lot 234 (not 2 m, as Mr Ford had suggested). In the worst-case scenario the maximum width of cutting would be 15.5 m and the excavation volume would be 600 cubic metres, while in the better scenario the maximum width of cutting would be 9.6 m and the excavation volume would be 400 cubic metres. Obviously the excavation works would be substantial and therefore at substantial cost, although he gave no evidence as to what the cost would be. He agreed with Mr Ford that passing bays would be needed along the route of the Road 20.115 Wide. He estimated that 5 or 6 such bays would be needed. Mr Ford was cross-examined about Mr de Groot's work and he did not disagree with it. 91 Mr de Groot's second report posed a threshold issue, namely whether the court make orders under s 88K requiring the defendants to grant an easement over the Central Route. Mr de Groot's second report was tendered by the defendants to demonstrate the impracticality of the Proposed Right of Way as proposed in the summons. It was not tendered as an alternative proposal. However, after the evidence had closed counsel for Mr Sodhi informed the court that his client was prepared to undertake the works contemplated by Mr de Groot's second report (T 268), though he made it clear that he did not seek to amend the summons so as to propose an easement along the Central Route (T 283); and he later said his client's true position was that he was prepared to do the work specified by Mr de Groot or whatever other work was necessary to make the road comply with the Council's requirements (T 284). 92 Counsel for Mr Sodhi submitted that s 88K gave the court the power to impose an easement on the site of the Central Route even though that site was not the subject of the plaintiff's application (T 283). I acknowledge that it may be appropriate in some s 88K cases for the court to impose an easement over an area of little difference from the area specified in the summons. But the court would not do so unless it was satisfied that the defendants had had the opportunity to address the modified proposal in the course of the hearing. 93 In the present case the proposal for an easement that would permit Mr Sodhi to build the access road contemplated in Mr de Groot's second report would involve a significantly wider area of land in Lot 234 than the Proposed Right of Way, as well as land in Lot 158. It would involve some quite deep excavation which might affect safety, and the amenity and use of Lot 234, in ways different from the Proposed Right of Way. The scarring effect of the excavation for about 35 m along the ridge might affect the value of Lot 234, and the compensation to be paid to Mr and Mrs Stanes if a right of way were imposed, in ways not addressed by the valuation evidence concerning the Proposed Right of Way. There is no evidence as to the degree of disruption that would be caused by the excavation or even whether it could be undertaken given the narrowness of the access. 94 Overall, the defendants have not had the opportunity to respond to Mr Sodhi's proposal to act on Mr de Groot's second report. In these circumstances it would be wrong for the court to impose a right of way to permit the construction of the access road on the Central Route, both because that conclusion is not supported by the evidence presented at the hearing, and because it would be procedurally unfair to the defendants to do so.

[29]

Safety concerns about the Proposed Right of Way 95 It is accepted by both parties that the Deviation in its present form is suitable only for four-wheel-drive vehicles, although Mr Sodhi claims that it will be suitable for two-wheel-drive vehicles if concreted (T 86) (a claim that I reject on the basis of the expert evidence to which I shall refer). 96 Mr de Groot gave evidence in his first and second reports to the effect that a driveway constructed at an average gradient of 37.5%, as the Deviation is, is unsafe. He said that a two-wheel-drive vehicle would find it very difficult to negotiate such a steep slope and if the vehicle stopped part way up the slope, it would be difficult for it to undertake a "hill start" and successfully continue up the Deviation. Furthermore, in his opinion if a vehicle (whether it be a two-wheel-drive or a four-wheel-drive vehicle) attempted to stop while travelling down the Deviation, there is a significant possibility of the wheels locking when the brakes are applied, particularly if the vehicle needs to stop suddenly, causing the vehicle to skid and possibly impact with an obstacle such as a tree, the embankment or an oncoming vehicle. He pointed out that the risk of skidding would be exacerbated in wet conditions or if the vehicle was heavily loaded with bananas. He said that when a vehicle transitions from Lot 158 onto the driveway, the available site distance is compromised because it is not possible adequately to see the roadway as it dips dramatically away from the vehicle, a problem that is more acute at night because the headlights are not able to follow the contour of the road. Mr de Groot expressed the opinion that if the Deviation were to be concreted it would still only be suitable for four-wheel-drive vehicles because the safety concerns he had identified would still be present (though reduced to the extent that the concrete surface was given a nonslip finish and was properly maintained to prevent the buildup of soil and vegetative matter). 97 The plaintiff's engineer, Mr Ford, generally agreed with Mr de Groot's concerns on these matters of safety. 98 Mr Stanes also gave evidence bearing on the safety of the Deviation. He said that in 2003 a friend tried to drive up the Deviation in a two-wheel-drive vehicle, but due to the gradient and lack of traction the vehicle failed to negotiate the last part of the Deviation and slid back, ending up sideways on the intersection of the Deviation and the Driveway dangerously close to a steep drop. I accept this evidence, which is consistent with the evidence of the experts. 99 The evidence of Mr and Mrs Stanes is that there are at least three blind spots in the Proposed Right of Way. The first is where it leaves Lot 158 and enters Lot 234 over the ridge. The second is at the intersection of the Deviation and the Driveway. The third is at the joinder of the Common Road with the Reserve Road, where a vehicle travelling down the Common Road must swerve to the right and cannot see a vehicle coming up the Road 20.115 Wide. I accept this evidence, which is supported by Mr de Groot's evidence as regards the first blind spot, and is generally plausible. Mr Sodhi acknowledged that there were blind spots but he insisted that everyone would be driving slowly (T 91). 100 Mrs Stanes gave evidence that on three occasions she encountered Mr Sodhi's vehicle on the Proposed Right of Way, at a point where she was accelerating in low gear up a steep section. On one of these occasions she was forced to reverse in dangerous circumstances so as to permit him to pass. Mr Sodhi disagreed with this evidence, describing an encounter with Mrs Staines on the Common Road but saying that they were both driving slowly and there was no near collision. 101 It seems to me that the important issue for the purposes of this case is whether the Deviation is inherently unsafe due to the gradient. In my view the engineering evidence and the evidence given by Mr Stanes, as identified above, establish that it is. I find it unnecessary to determine whether to accept contested evidence as to whether particular dangerous incidents have occurred in the past. 102 If Lot 158 were to be developed for residential dwelling, with access over the Proposed Right of Way, the existing traffic would be increased a little, and to that extent the inherent danger involved in using the Deviation and the Common Road would also be increased. 103 Mr and Mrs Stanes gave evidence that they have a particular safety concern for their autistic son, who is not aware of the dangers of traffic and is prone to run off without any warning. I sympathise with Mr and Mrs Stanes' concern for the safety of their son, and I recognise the enhanced risk of physical danger to an autistic child if he is not properly supervised. However, I am not persuaded that the risk that he might run off from the house, down the Driveway or through the bush, over a considerable distance to reach the Proposed Right of Way, should lead the court to deprive Mr Sodhi of use of the Proposed Right of Way if such use is otherwise justifiable. It seems to me that responsibility for this special safety issue should rest with the parents and not be partly transferred to their neighbour. 104 Be that as it may, I am persuaded by the evidence that, in view of its gradient, the Deviation is unsafe to drivers and passengers of vehicles using the Driveway, the Common Road, or the Deviation itself, whether in two-wheel-drive or four-wheel-drive vehicles, and it would still be unsafe even if concreted.

[30]

Effect of the Proposed Right of Way on the privacy and amenity of Lot 234 105 According to Mr Stanes, the granting of the Proposed Right of Way would "destroy [Mr and Mrs Stanes'] private, peaceful property". I find Mr and Mrs Stanes' evidence on this point to be exaggerated. After all, the Deviation and the Common Road were constructed in 2002 and have been used by Mr Sodhi from time to time in the intervening period. Mr Sodhi is entitled to pass along his own property, including the track which runs along the southern boundary of Lot 158 quite close to the Stanes' house, provided that he does not cross into Lot 234. 106 An annexure to Mr Stanes' first affidavit shows the view from the window of Mr and Mrs Stanes' house, looking to the east along the southern boundary of Lot 158 and the northern boundary of Lot 234. There are banana trees to the left, and dense bush to the right. There is a pathway running between the bananas and the bush, but it emerged in oral evidence that most of the visible pathway is the path along the southern boundary of Lot 158 (which partly crosses into Lot 234), and only a small part of the Deviation is visible to the left of the bush. 107 I accept that Mr Sodhi's truck would make a certain amount of noise coming up the hill from Graham Drive and, in particular, climbing up the Deviation in low gear, but according to the evidence his vehicle would be obscured to a substantial degree by the intervening trees. Mr Pundyk's statement in his report that the Stanes' dwelling is obscured from the Deviation by vegetation and topography seems to be an overstatement, especially considering that the house is elevated, but the photographic evidence confirms that it is substantially correct. Further, the use of the Deviation at present is moderate, and in the foreseeable future it would continue to be moderate, even if a residence were to be built on Lot 158 and the Proposed Right of Way were to be granted. 108 Mr and Mrs Stanes gave evidence that the granting of the easement would restrict any potential future development of their land, referring in particular to their plans to build a veranda, garage, workshop, swimming pool, cubby house and garden. Mr Stanes gave evidence that the planned structures could only be erected to the east of the house, though there was no expert evidence to support that view. Even accepting that their evidence is correct, there is a substantial area of land between the house and the Deviation. The distance is approximately 60 m. 109 I am therefore not persuaded that the granting of the Proposed Right of Way would have any significant impact on these development proposals for Lot 234. That conclusion is supported, in my view, by the fact that Mr and Mrs Stanes agreed to permit Mr Sodhi to use the road constructed on the site of the Proposed Right of Way in 2002 and have told the court that the permission has continued until the present time, and they do not intend to revoke it unless the conditions of the permission are breached. The plaintiff's case under s 88K 110 Relevant parts of s 88K of the Conveyancing Act are as follows: "(1) The Court may make an order imposing an easement over land if the easement is reasonably necessary for the effective use or development of other land that will have the benefit of the easement. "(2) Such an order may be made only if the Court is satisfied that: (a) use of the land having the benefit of the easement will not be inconsistent with the public interest, and (b) the owner of the land to be burdened by the easement and each other person having an estate or interest in that land … can be adequately compensated for any loss or other disadvantage that will arise from imposition of the easement, and (c) all reasonable attempts have been made by the applicant for the order to obtain the easement or an easement having the same effect but have been unsuccessful. (3) The Court is to specify in the order the nature and terms of the easement … and is to identify its site by reference to a plan …. The terms may limit the times at which the easement applies." 111 In the present case, the use of Lot 158 will not be inconsistent with the public interest, for the purposes of s 88K(2)(a). The present use of Lot 158 is for a banana plantation and the only possible future use identified by the evidence is for residential purposes. Counsel for the defendants submitted that the safety concerns to which I have referred should lead the court to conclude that the use of Lot 158 will be inconsistent with the public interest (citing Katakouzinos v Roufir (1999) 9 BPR 97,796). In my opinion, however, it is the use of the Proposed Right of Way that gives rise to safety concerns, rather than any use of Lot 158. Katakouzinos was a different case, where an easement was sought to permit the use of scaffolding in connection with a proposal to build on the dominant tenement, and so the public interest relating to the use of the dominant tenement was in issue. The safety concerns identified in the evidence are an important consideration, but it is a consideration that arises when the court comes to consider whether, in the exercise of its discretion, an order should be made. 112 That leaves for consideration the following issues: (a) whether the easement identified in the summons is reasonably necessary for the effective use or development of Lot 158, which is the "other land" for the purposes of s 88K(1); (b) whether Mr and Mrs Stanes and their mortgagee can be adequately compensated for any loss or other disadvantage that will arise from the imposition of the easement proposed in the summons (s 88K(2)(b)); (c) whether Mr Sodhi has made, unsuccessfully, all reasonable attempts to obtain the easement proposed in the summons or an easement having the same effect (s 88K(2)(c)); (d) whether, assuming that the pre-requisites to making an order specified in subsections (1) and (2) are satisfied, the court should exercise the discretion conferred upon it by subsection (1) by making an order imposing an easement.

[31]

Whether the easement to be imposed is "reasonably necessary for the effective use or development" of Lot 158 113 The meaning of the words "reasonably necessary for the effective use or development [of the dominant land]" in s 88K(1) was usefully explained by Brereton J in Khattar v Wiese (2005) 12 BPR 23,235 at 23,241-2; [2005] NSWSC 1014 at [24]-[27], as follows: "[24] Conveyancing Act, s 88K(1) requires that the proposed easement be 'reasonably necessary for the effective use or development' of the land to be benefited. It does not require that the easement be absolutely necessary for that use or development, nor that the proposed use or development be the only reasonable use of the land to be benefited; thus the requirement may possibly be satisfied even when the applicant's land could be effectively used or developed without the easement: Tregoyd Gardens Pty Ltd v Jervis (1997) 8 BPR 15,845 (Hamilton J); Goodwin v Yee Holdings Pty Ltd (1997) 8 BPR 15,795 (Windeyer J); Re Seaforth Land Sales Pty Ltd's Land (No 2) [1977] Qd R 317; 117 York St Pty Ltd v Proprietors of Strata Plan 16123 (1998) 43 NSWLR 504 at 508G-509D; 8 BPR 15,917 at 15,920-1; Katakouzinos v Roufir (2000) 9 BPR 17,303; [1999] NSWSC 1045 at [38]. "[25] The proposed easement must be reasonably necessary, either for all reasonable uses or developments of the land, or else for some one or more proposed uses or developments which are (at least) reasonable as compared with the possible alternative uses and developments; and in order that an easement be reasonably necessary for a use or development, that use or development with the easement must be (at least) substantially preferable to the use or development without the easement: 117 York St at NSWLR 508G-509D; BPR 15,920-1; Katakouzinos v Roufir at [38]; Blulock Pty Ltd v Majic (2001) 10 BPR 19,143; (2002) NSW ConvR 56-012; [2001] NSWSC 1063 at [14] (Windeyer J). "[26] Accordingly, where, as in a case such as the present, a particular proposed use or development is in contemplation, the first question is whether that proposed use or development is a reasonable one (in comparison with the possible alternatives); and the second is whether that use or development with the proposed easement is substantially preferable to that use or development without the proposed easement. "[27] The authorities repeatedly point to the confiscatory nature of s 88K as requiring firm proof of the reasonable necessity for the easement, and that the court bear in mind that property rights are valuable rights not lightly to be taken away: Re Seaforth Land Sales Pty Ltd's Land [1976] Qd R 190 at 193 (Douglas J); Nelson v Calahorra Properties Pty Ltd (SC(Qld), Thomas J, 5 December 1984, unreported); affirmed Nelson v Calahorra Properties Pty Ltd [1985] ANZ ConvR 352; (1985) QConvR 54-202); Ex parte Edward St Properties Pty Ltd [1977] Qd R 86 at 91 (Andrews J); Re Worthston Pty Ltd [1987] 1 Qd R 400 at 402-3 (Carter J); Tregoyd Gardens at 15,853-4; Durack v De Winton (1998) 9 BPR 16,403 at 16,449 (Einstein J); Hanny v Lewis (1998) 9 BPR 16,205; (1999) NSW ConvR 55-879; Woodland v Manly Municipal Council (2003) 11 BPR 20,903; 127 LGERA 120; [2003] NSWSC 392 at [15]-[18] (Hamilton J). The extent of the burden of the proposed easement on the servient property is a relevant consideration, to the effect that the greater the burden, the stronger is the case needed to justify a finding of reasonable necessity: Katakouzinos v Roufir at [42]; Woodland v Manly Municipal Council at [12]." 114 In McKeand v Thomas [2006] NSWSC 1028, Campbell J quoted these observations of Brereton J with approval and continued: "[133] The comparison which this element of section 88K calls for is one between the use or development of the dominant tenement which would be possible if the easement were to be granted, and the use or development of the dominant tenement which would be possible if the easement were not granted. That is a matter of fact that is decided taking into account practical considerations concerning the types of structures that are physically capable of being built on the land or types of activities that are physically capable of being carried out on the land, any legal controls on the use or development of the land, the cost of the various alternative ways the land is used or developed, and the economic viability of the alternatives for use or development. By its use of the expression 'effective use or development' it also involves an evaluation of the desirability of the various alternatives for use or development. By its use of the expression 'reasonably necessary' it involves deciding how important the grant of the proposed easement is to the various alternatives for use or development." 115 The first task identified by Campbell J in this passage is to ascertain the possible uses and development of the dominant tenement. In the present case there are only two uses for Lot 158 disclosed in the evidence, namely the present use of the land as a banana plantation, and its prospective use, at least as regards the southeastern corner, for the construction and occupation of a residence. Both of those uses are reasonable and no alternatives have been suggested. 116 Counsel for the defendants submitted that the only use established by the evidence is for a banana farm. However, Mr Sodhi gave evidence that he may in future wish to build a house on the land or sell it, or build and sell (T 66, 69, 84). Further, there was some evidence that banana farming in the Coffs Harbour area is in decline, and that banana farms in that area are "coming into their own as homesites" (Mr Delahunty, T 113; report dated 20 May 2004 pages 3 to 4). In those circumstances, it is appropriate in my view to consider single dwelling development as a development of the dominant tenement for the purposes of s 88K(1). However, the evidence implies that subdivision for multiple residential use is not an available development. Mr Pundyk, a surveyor who gave evidence on behalf of Mr Sodhi, said that the applicable local environmental plan prevents Mr Sodhi's land from being subdivided into lots less than 6 ha in area, and the consent authority must be satisfied that the area will be used for the purpose of banana growing. Mr Pundyk said Mr Sodhi's land is suitable only for a small banana plantation and/or a small rural holding with one dwelling entitlement. 117 The next issue is whether the proposed easement is reasonably necessary for the effective use or development of the dominant tenement, so ascertained. The effective use of Lot 158 for the purposes of a banana plantation or for a residential purposes requires access. Use for a banana plantation requires access at least by four-wheel-drive vehicle, whereas the evidence indicates that Council would require access by two-wheel-drive vehicle before granting development consent for the construction of a residence. Consequently one can say that an appurtenant right of carriageway of some kind is necessary for all reasonable uses and developments of the land. 118 At present there is no right of carriageway over any land appurtenant to Lot 158. As I have explained, it is not possible to use the roadsite identified in the Reserve Road to construct an access road to Lot 158 within the designated area. These considerations suggest that a right of carriageway such as the one proposed in the summons is reasonably necessary for the effective present use of Lot 158 as a banana plantation and the effective development of that land for residential purposes. 119 Brereton J's formulation of the principles applicable under s 88K(1) indicates that the court should consider the extent of the burden of the proposed easement on the servient tenement, on the basis that the greater the burden, the stronger is the case needed to justify a finding of reasonable necessity. My consideration of the evidence with respect to the effect of the Proposed Right of Way on Lot 234, in terms of safety concerns and the effect on privacy and amenity (set out above) leads to the conclusion is that: · the effect (in terms of future development of Lot 234, noise, reduction of privacy and impact on general amenity) is significant enough to consider, but it is not a substantially adverse effect; · however, there is a substantial issue about safety of the use of the Proposed Right of Way. That, it seems to me, has the consequence that I should expect the plaintiff to make out a strong case of reasonable necessity. 120 In my view, a generally strong case is made out because of the absence of any other right of access and the necessity of having a right of access for any continuing reasonable use of the land that is not a mere permission exposed to the risk of revocation. Nevertheless, there is a problem about the lawfulness of the proposed easement, which has the consequence that the plaintiff must fail under s 88K(1). 121 In the 117 York St case, Hodgson CJ in Eq drew attention to the relevance of the lawfulness of the proposed easement. He said (at [511-2]): "If use of a proposed easement would be absolutely illegal, or (probably) if it were shown that there was no chance of obtaining a consent necessary to make it other than illegal, then this would in my opinion prevent the Court from finding that the easement was reasonably necessary". 122 Consequently the question arises whether the use of the Proposed Right of Way would be illegal without consent and if so, whether there is a chance of obtaining consent. It is clear from the experts' reports that development consent by the Coffs Harbour City Council is required for the lawful construction of an access road on the site of the Proposed Right of Way. The question whether there is a chance of obtaining consent raises two issues, the first relating to the existing concreted road over the site of the Road 20.115 Wide, and the second relating to the construction of an access road on the site of the Deviation having regard to the steep gradient. 123 There is expert evidence by Mr de Groot, to the effect that the road does not fully comply with Council requirements with respect to the gradient and width, although he expressed the opinion that it would not be economically feasible to modify or demolish the existing roadway access to conform to Council's requirements, implying that in his opinion the Council would not require any such modification or demolition. 124 Mr Ford expressed the opinion that the Council would apply a somewhat less demanding rural residential standard than the design standard applied by Mr de Groot. The rural residential standard allows for reinforced concrete access driveways 3 m wide and with a maximum gradient of 25%, provided there are passing bays at 50 m intervals, although there are also bushfire planning requirements which demand that property access roads have a gradient no greater than 24% with a minimum trafficable width of 4 metres and verge widths of 1 m on either side. According to Mr Ford, the existing concrete roadway does not comply because, although it is generally at least 3 m wide, it does not have passing bays at 50 m intervals and it fails to meet the bushfire planning criteria for maximum gradient and minimum width. 125 As to the bushfire planning criteria, Mr Ford said that the Council's documentation for the development consent for the house that has been built on Lot 234 refers to emergency access for two-wheel-drive vehicles over Lot 2. He suggested that if this was sufficient for Lot 234, a similar arrangement would satisfy the emergency access requirements for a dwelling on Lot 158. However, there would need to be agreement between the owners of Lots 158 and 2. As to the width of the road, Mr Ford agreed with Mr de Groot that as the existing concrete structure was a significant construction, it is unlikely that the Council would require its reconstruction or removal, but additional passing bays would be required to ensure that descending vehicles could stop and allow right of way to climbing vehicles. 126 There is no evidence before me as to whether Mr Sodhi has the consent of the owner of Lot 2 to permit emergency access to Lot 158. But that is an issue relating to any application for development approval for the construction of a residence, and would not prevent me from concluding that the Proposed Right of Way is, in terms of s 88K(1) as interpreted in the cases, "reasonably necessary for the effective use" of Lot 158 as a banana plantation. Consequently the lack of evidence of proper arrangements for emergency access would not be an obstacle to my finding that the requirement of s 88K(1) is satisfied. Counsel for the defendants drew attention to the absence of any evidence as to whether passing bays can be constructed and the cost of doing so. But in my opinion the appropriate inference from Mr Ford's report is that in his expert engineering opinion the construction of the additional passing bays is feasible (though he does not address the question of costs). 127 In my opinion the difficulties concerning bushfire requirements and passing bays do not prevent me from concluding that the requirement of s 88K(1) is satisfied. The question whether development consent is possible in view of the steepness of the gradient at the Deviation is more complicated, and there is substantial expert evidence about it, which I have summarised earlier in these reasons for judgment. It is sufficient for present purposes to state the effect of the evidence, which is that an access road with a gradient shallow enough to permit two-wheel-drive access and satisfy the Council's requirements cannot be constructed wholly within the area of the Proposed Right of Way as identified in the plan annexed to the summons. A greater area would be needed. On the evidence, there is no chance that the Council would approve the construction of an access road wholly within the site of the Deviation as specified in the schedule to the summons. 128 For this reason, my conclusion is that the court is not authorised by s 88K(1) to make an order imposing an easement in the terms sought in the summons. That easement is not reasonably necessary for the effective use or development of Lot 158. The court is not in a position to make an order imposing another easement, namely the one described above as the "Central Route" which has at least a prospect of obtaining Council consent, for reasons I have given.

[32]

Whether adequate compensation is possible 129 Counsel for the defendants contended that adequate compensation could not be paid to his clients, given the impact the easement would have upon them and upon Lot 234. He referred to Mrs Stanes' evidence that it was likely her family would sell Lot 234 and move if the easement were to be granted, as she considered the use of the Deviation to be dangerous (T 170.57). Both Mr and Mrs Stanes said that they were not seeking compensation and that they did not want an easement, given the detrimental effect that it would have on their lifestyle. Mr Stanes said (at T 199.55) that he and his wife had travelled around Australia to find the most amazing piece of land, spending nearly $100,000 to do so, and they were ecstatic because they thought they had obtained the best 3 1/2 acres in Australia. 130 Section 88K(2)(b) contemplates the possibility that in some cases no payment can compensate for the imposition of an easement. But in my opinion this is not such a case. Although they gave the evidence that I have just summarised, the defendants tendered the valuation report of Mr Dovers, who specifically calculated a sum of money which he regarded as sufficient to compensate the defendants for the very things they said they would lose if the easement were granted. To take into account such matters is generally consistent with the case law: for example, in Wengarin Pty Ltd v Byron Shire Council (1999) 9 BPR 97,768, Young J said that ordinarily the amount of compensation reflects the diminished value of the affected land (including its potential use), associated costs, and compensation for insecurity and loss of amenities such as peace and quiet. 131 In fact the court has heard evidence from two valuers, James Delahunty of the JM Delahunty & Associates on behalf of Mr Sodhi and Kenneth Dovers of North Coast Valuation Service on behalf of Mr and Mrs Stanes, on the question of compensation for the imposition of an easement. In his report dated 20 May 2004, Mr Delahunty took the view that the "blot on title" produced by the grant of a right of way would be nominal and valued it at $2,500, and calculated the partial loss of use of the land over which the right of way would extend as 50% of the freehold value of the affected area. His view was that the freehold value of the whole site was $150,000 and consequently 50% of the value of the area of the right of way was $3,120, leading to a valuation of the negative impact of the right of way rounded down from $5,620 to $5,500. In a further report prepared in January 2006 he revised the site value of Lot 234 upwards to $200,000, and the consequent estimation of compensation for the easement as $6,600. He adhered to that view in a further report, which he produced in September 2006. 132 Mr Dovers assessed the land value of Lot 234 at $370,000, and expressed the view that compensation should be assessed at 80% of the value proportionately attributed to the affected area, producing a figure of $12,118. He assessed the "blot on title" at $2,000. Then he added an amount, not matched in Mr Delahunty's valuation, for decrease in the value of Lot 234 in terms of loss of privacy and amenity, the impact on views, safety considerations and constraints on future development. He calculated this figure as 5% of the improved market value of the property, that is $25,500. The total estimate of compensation was therefore $39,618, which he rounded to $40,000. 133 It is unnecessary for me to resolve the difference in valuation between these two witnesses. The important point for present purposes is that both valuers proceeded on the basis that Mr and Mrs Stanes could be adequately compensated for any loss or other disadvantage that would arise from the imposition of the Proposed Right of Way. Mr Dovers' evidence implies that in his opinion, Mr and Mrs Stanes can be adequately compensated for loss or disadvantage they will suffer in terms of loss of private and amenity, impact on views, safety considerations and constraints on future development. I prefer that expert opinion to the evidence of Mr and Mrs Stanes, so far as it goes to the question whether they can be adequately compensated as the owners of Lot 234 for loss or disadvantage arising from the imposition of the proposed easement. It is relevant to this conclusion that an access road in fact exists over the length of the Proposed Right of Way and has been there, and has been used by Mr Sodhi, since 2002, pursuant to a contractual licence, and that Mr Stanes gave evidence that the licence would continue so long as the conditions for its use were not contravened.

[33]

Whether reasonable attempts have been made to obtain the easement or an easement having the same effect 134 Subsection 88K(2)(c) has two limbs, which require the following questions to be answered: (i) what attempts has Mr Sodhi made to obtain the easement sought in the summons, and are they reasonable attempts? (ii) what attempts has he made to obtain an easement having the same effect as the easement sought in the summons, and are they reasonable attempts? The requirements of the subsection are not satisfied unless the Court concludes both that all reasonable attempts have been made by the plaintiff to obtain the easement now sought in the proceeding, and that all reasonable attempts have been made by the plaintiff to obtain an easement having the same effect ( Khattar v Wiese (2005) 12 BPR 98,174 at [54]-[55]; Tregoyd Gardens Pty Ltd v Jervis (1997) 8 BPR 97,688 at 15,855; Property Partnerships Pacific Pty Ltd v Owners of Strata Plan 58482 [2006] NSWLEC 709). Consequently, it is insufficient that the plaintiff has made all reasonable attempts to obtain the easement he seeks from the defendants, if the evidence shows that he has not explored all reasonably available alternatives. For the reasons I shall give, the first but not the second of these limbs is satisfied in the present case. 135 As regards attempts to obtain the easement sought in the summons, the Proposed Right of Way, I have set out earlier in these reasons for judgment the negotiations in which Mr Sodhi engaged in 2002 and then, subsequently, in proposing an exchange of easements late in 2003. The effect of my findings is that in 2003 Mr Sodhi did not engage in an attempt to obtain the easement that he now seeks, but instead he engaged in a successful negotiation by which he was granted a contractual licence. In late 2003 he attempted to obtain an agreement for the granting of the easement that he now seeks but the consideration that he offered was an easement over Lot 158 which, according to the evidence, Mr and Mrs Stanes did not want. That cannot have been a reasonable attempt to obtain the easement. Mr and Mrs Stanes would be entitled to compensation if an easement were to be imposed upon their land, and at that stage Mr Sodhi did not offer any compensation beyond the proposed easement over Lot 158 and the fact that he had contributed money and labour to the construction of the road. 136 Subsequently there was a chain of correspondence between the solicitors for the parties, during the course of which Mr Sodhi's solicitor offered compensation. In his letter dated 21 January 2004, the solicitor for Mr and Mrs Stanes rejected an allegation that their clients had agreed to an exchange of easements, but he added that Mr and Mrs Stanes might consider granting an easement if they were properly compensated, and suggested that Mr Sodhi should pay for the costs of an independent valuer to value the proposed easement. In subsequent correspondence the parties exchanged valuation reports assessing the valuation impact of the grant of the proposed right of way over Lot 234. By letter dated 31 May 2004 Mr Sodhi's solicitor wrote to Mr and Mrs Stanes' solicitor enclosing Mr Delahunty's valuation report dated 20 May 2004 and offering to pay compensation in the assessed amount of $5,500. Mr and Mrs Stanes' solicitor rejected this valuation report and eventually, under cover of a letter dated 3 November 2004, sent Mr Sodhi's solicitor a compensation assessment report by Mr Dovers of North Coast Valuation Service dated 4 October 2004, which assessed compensation at $32,000. By letter dated 3 March 2005 Mr Sodhi's solicitor rejected Mr Dovers' compensation assessment, enclosing a critique prepared by Mr Delahunty and dated 1 March 2005. However, in a without prejudice letter of the same day Mr Sodhi's solicitor communicated his client's offer to pay compensation of $7,000 plus costs. Then on 21 June 2005 the offer was increased to $15,000 plus costs, noting that $16,000 had already been paid by Mr Sodhi of the construction of the road (Mr Sodhi's evidence at the hearing was that he in fact paid $17,000, but Mr Stanes said the correct figure is $16,000). 137 This evidence satisfies me, on balance, that Mr Sodhi has made all reasonable attempts to obtain the easement sought in the summons. The evidence shows that Mr Sodhi has been prepared to engage in a course of negotiation, and to consider and respond to matters put to him by Mr and Mrs Stanes. His original proposal for compensation for a lower figure was revised after he received Mr Dovers' compensation estimate of $32,000. The subsequent correspondence shows his continuing willingness to negotiate. The case law shows that "reasonableness" is a matter of degree, and the court must consider the likelihood that consensus would be reached if any further steps were taken (Coles Myer NSW Ltd v Dymocks Book Arcade Ltd (1996) 7 BPR 14,638; Tregoyd Gardens at 15,855). 138 In my view a plaintiff may satisfy the requirement in s 88K(2)(c) to show that he made all reasonable attempts to obtain the easement proposed without having to establish that he offered the amount which the court, with the benefit of all of the evidence tendered at the hearing, finds to be the amount necessary for fair compensation. Depending upon the surrounding circumstances, it may well be enough to show a willingness to negotiate and respond reasonably to the other side's expert opinions and contentions (compare Katakouzinos v Roufir Pty Ltd (1999) 9 BPR 97,796 at [75]-[77]). The correspondence in evidence exhibits a reasonable approach to negotiations by Mr Sodhi and, it must be said, a less clear and more ambiguous approach to negotiations by Mr and Mrs Stanes. Unlike the plaintiffs in McKeand v Thomas [2006] NSWSC 1028 at [139], Mr Sodhi was prepared to offer compensation while insisting (wrongly, according to my finding) that he had a specifically enforceable agreement for the grant of an easement. I am satisfied that in all the circumstances, reasonable attempts have been made by Mr Sodhi to obtain the easement proposed in the summons. 139 However, it seems to me that the second limb of s 88K(2)(c) is not present in the present case; that is, I am not able to conclude on the facts that all reasonable attempts have been made by Mr Sodhi to establish an easement having the same effect as the easement proposed in the summons. It is necessary to consider, on this issue, whether reasonable attempts have been made in respect of (i) the Reserve Road; (ii) Lot 2; (iii) Lot 3. As I shall explain, my finding is that s 88K(2)(c) is satisfied in respect of the Reserve Road and Lot 2, but it is not satisfied in respect of Lot 3. 140 As with the first limb, s 88K(2)(c) requires that all reasonable attempts be made, not all possible attempts be made, and consequently the requirement may be satisfied where the plaintiff has not approached the registered proprietors of all adjoining properties over which access might be granted, when there are many such properties, and has deferred taking further steps until the applicable consent authority has made a relevant decision (Durack v De Winton (1998) 9 BPR 97,721 at 16,446-8 per Einstein J). Similarly, where there are two alternative properties over which a satisfactory easement could be obtained, and the plaintiff has approached the second landowner and has been firmly rebuffed for apparently valid reasons to do with disruption and costs, the plaintiff need not push the matter further against that landowner (Tregoyd Gardens at 15,856). The issue is whether the attempts that have been made constitute all of the attempts that are reasonable in the circumstances. 141 In Khattar v Wiese at [55]-[58], Brereton J compared the easement proposed by the plaintiffs with an alternative location, noting that the alternative was much longer, would involve additional cost, and might not satisfy a condition of a deferred commencement approval, and he reached the conclusion that the alternative was not an easement having the same effect as the proposed easement. But another alternative site would serve the purpose of the plaintiff's proposal by connecting the plaintiff's properties to the existing drainage system, and the disadvantages of the second alternative were not so great as to entitle the plaintiff substantially to disregard it. His Honour treated the second alternative as one having the same effect as the plaintiff's proposal, and found that s 88K(2)(c) was not satisfied. The case indicates that the question of "same effect" is to be addressed in a pragmatic way, having regard to the function of the proposed easement and the respective advantages and disadvantages of the alternatives. The statutory language does not require that the alternative easement be precisely the same in every detail, but only that as a matter of commonsense it achieves the same purpose as the easement proposed by the plaintiff. On that approach, which I accept, the fact that the two main alternatives to the plaintiff's proposed easement in the present case would provide him with access to Lot 158 from the north and east respectively, rather than (as proposed) the south, does not prevent the court from concluding that these alternatives have the "same effect" as the plaintiff's proposal. 142 As to the Reserve Road, I have already expressed my conclusion that access over the designated site to Lot 158 is impossible and that being so, there are no reasonable attempts that could be made to obtain an easement over the designated site of the Reserve Road, but have not been made. 143 As the Lot 2, I have referred to evidence showing that an access road to Lot 158 would have to pass in a semicircle very close to the Peters' house. That acute proximity means, in my view, s 88K(2)(c) does not impose any obligation on Mr Sodhi to make any further attempt to obtain a right of way over Lot 2. In terms of the language of the subsection, there are two ways of expressing this conclusion: that any right of way over Lot 2 would be so unsatisfactory that any attempt to secure the easement would ipso facto be unreasonable; and in view of the impact on the amenity of Lot 2, an easement over that lot would not have the same effect as the easement proposed in the summons. 144 As to Lot 3, I have noted that the construction of an access road from the entrance of the existing road near that the banana shed at the northern end of Lot 158, progressing up the hill to the southeastern corner, would involve substantial cost. But the fact that an alternative easement may be costly does not of itself establish that all reasonable attempts have been made to procure it, especially where precise evidence of the cost has not been given. 145 I have also noted the evidence that there is bad blood between the Sodhi and Benning families and that the Benning family may be reluctant to negotiate with Mr Sodhi until the Pacific Highway upgrade negotiations have been finalised. But those morsels of evidence do not amount to a case that all reasonable attempts had been made by Mr Sodhi to obtain an easement over Lot 3. The fact that there is bad blood between the families is not a sufficient justification for not seeking to negotiate a commercial transaction, and the impact on such negotiations of impending road widening is a matter for speculation. 146 In my opinion an easement over Lot 3 along the road from the banana shed to Unwins Road falls within the statutory description of "an easement having the same effect" as the easement proposed in the summons. It is true that an easement over Lot 3 would provide access only to the lower, northern end of Lot 158. But it would serve substantially the same purpose as an easement over Lot 234, because it would provide the owner of Lot 158 with access to land that would otherwise be landlocked. The evidence indicates that the access road to Lot 158 is already constructed, sealed in part, and at a gradient much lower than the gradient through Lot 234. Further, the road was in fact used by Mr Sodhi and his family for several decades up until sometime in the period from December 2003 to April 2004. 147 My conclusion is that Mr Sodhi could have done substantially more to explore the prospect of securing alternative access through Lot 3, and should have done so before initiating the present proceeding. He has failed to satisfy s 88K(2)(c) with respect to an alternative easement providing a right of carriageway over Lot 3 along the marked unsealed and bitumen roads from the banana shed to Unwins Road. I should add that I was referred to Simpson v Bagnall [2000] NSWSC 930. That is a case where the court found that the failure to make inquiries about an obvious alternative route led to the conclusion that s 88K(2)(c) was not satisfied. While that case contains a succinct and useful statement of principles by Bergin J (at [99]-[103]), the case is not closely analogous and my determination on this issue is based closely on the facts concerning Lot 3.

[34]

Discretionary considerations 148 If, contrary to my determinations, all the ingredients necessary to give the court jurisdiction to impose an easement under s 88K were present in this case, I would nevertheless decline to exercise jurisdiction. Mr Sodhi has come to the court with a proposal for an easement that would give him a right of access over Lot 234 to Lot 158 in a designated area. Part of the designated area, the site of the Deviation, has a very steep gradient, and there are several blind spots upon the Deviation and the Common Road. The expert evidence satisfies me that there is a real risk of harm to drivers and passengers of vehicles using the access road, not only from other vehicles but also from the steepness of the incline of the road. The expert evidence also shows that the Proposed Right of Way does not comply with the applicable design standard and bushfire access requirements; that an access road complying with those requirements could not be constructed within the designated area of the Proposed Right of Way; and that, even if the consent authority (Coffs Harbour City Council) did not insist on full compliance (for example, if it were satisfied with bushfire access over Lot 2), the authority would refuse its consent having regard to the road gradient. 149 Mr Sodhi has made his application under s 88K without properly investigating the feasibility, in terms of matters of engineering and Council consent, of using the area he specifies as the Proposed Right of Way for an access road. Moreover, he has made the application without properly exploring the prospects of alternative access over Lot 3, as I have found. If the latter consideration were not, of itself, a disentitling factor, it would weigh heavily against Mr Sodhi's application on the question of discretion. 150 These matters imply that it would be unwise for the court to make the order under s 88K sought in the summons. As I have noted, Mr Stanes has indicated a willingness to negotiate another access route using land to the east of the Reserve Road. That appears to be a realistic approach, bearing in mind that the Reserve Road will remain on the title to Lot 234, unaffected by my decision. There is also the proposal for the Central Route, which emerged late in the hearing. Although the evidence does not provide an adequate basis for assessing the impact of the proposal on Lot 234 or the amount that would be required as fair compensation for an easement over that site, the proposal seems to me worthy of further consideration by the parties. Taken together, those considerations would lead to my declining the relief sought, if otherwise s 88K were available.

[35]

Conclusion as to s 88K 151 I have reached the conclusion that s 88K is not available for the imposition of the easement proposed in the summons, for the following reasons: (a) the easement is not reasonably necessary for the effective use or development of Lot 158 because there is no chance that the Coffs Harbour City Council would permit the construction of an access road within the area proposed for the easement, in view of its steep gradient; (b) I am not satisfied that all reasonable attempts have been made by Mr Sodhi to obtain an easement having the same effect as the easement proposed in the summons, that is to say, an easement over Lot 3 to give him access to Lot 158 from Unwins Road; (c) if, contrary to my determinations, the ingredients that must be established under s 88K to supply the court with power to impose an easement had all been established in this case, I would decline to impose an easement having regard to the safety concerns presented by the present access road over the Proposed Right of Way and any road constructed within the site proposed in the summons, and the plaintiff's failure adequately to explore alternative means of access to Lot 158. 152 At one stage during the hearing, I raised the possibility that the court might impose an easement under s 88K on conditions reflecting, as closely as practicable, the conditions upon which the contractual licence was granted by the defendants to the plaintiff (including a condition restricting the easement to use for the purposes of a banana plantation). Both parties made submissions opposing this idea, and they have persuaded me to abandon it. The fact that neither side seeks any such restrictions is itself influential; and further, there is a risk that, if banana farming declines in the Coffs Harbour area, such conditions would become obsolete and unduly onerous for the owner for the time being of Lot 158. In any event, I have found that the conditions for the exercise of the discretion under s 88K are not satisfied. Conclusions and orders 153 I have reached the conclusions that: (a) the plaintiff has failed to prove that there was any agreement for the grant of an easement or any representations, conduct or acquiescence having the effect of estopping the defendants from denying his entitlement to an easement of the kind sought in the summons; and (b) s 88K is not available because the ingredients of s 88K(1) and s 88K(2)(c) are not satisfied, and even if they were, the court would not, in the exercise of its discretion, impose on the defendants' land an easement under s 88K over the area specified in the summons. 154 Consequently the plaintiff has failed on all grounds. In the circumstances, it is unnecessary for me to deal with the question of quantum of compensation for the imposition of an easement, although evidence was tendered on that subject. I shall order that the summons be dismissed and hear the parties on the question of costs.

Sodhi v Stanes

At a glance

Court

Decision date

Before

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Judgment (36 paragraphs)

Parties

Legislation Cited (2)

Cases Cited (10)

Cited By (3)