White Rock Wind Farm Pty Ltd v Dulhunty

Supreme Court of NSW|2023-05-19|Before: Robb J

James Sidney Nugent (Fifth Defendant) Representation: Counsel: A Smith (17-19 May 2023), P Abdiel (1 September 2023) (Plaintiff/Cross-Defendant) P Folino-Gallo (First, Second, Third and Fourth Defendants/Cross-Claimants)

Solicitors: King & Wood Mallesons (Plaintiff) Hitch Advisory (17-19 May 2023), Diamond Conway (1 September 2023) (First, Second, Third and Fourth Defendants/Cross-Claimants) File Number(s): 2021/00199411 Publication restriction: Nil

JUDGMENT

By summons filed on 12 July 2021, the plaintiff, White Rock Wind Farm Pty Ltd (White Rock), seeks certain relief against the defendants, who are the owners of land in the New England Tablelands that they have leased to White Rock for the purpose of the construction and operation of a wind farm.

Background

As the circumstances of this case are complex, it will assist in the exposition of these reasons to begin by explaining in chronological order the primary events that are relevant to the determination of the remaining disputes between the parties.
In about 2010, a renewable energy company called Epuron began to negotiate with the Landowners and other owners of rural land in their vicinity the agreements necessary to develop and operate a wind farm on their collective properties. Development approval was given in 2012. At some time in 2014, Epuron assigned its rights to White Rock.
The various properties were adjacent to other properties, so that the whole consisted of a substantial area upon which wind turbines could be located for the purpose of producing renewable electricity. The properties were collectively adjacent to the Gwydir Highway and a trunk high voltage transmission line owned and operated by Electricity Transmission Ministerial Holding Corporation (TransGrid).
The proposed wind farm would consist of about 70 wind turbines, an electricity substation, overhead transmission lines to connect the substation with the trunk high voltage transmission line, underground power lines to connect the wind turbines to the substation, access roads and associated infrastructure. The infrastructure that is most relevant to these proceedings is the access road from the Gwydir Highway to the substation. For convenience, I will call this "the access road" to distinguish it from the numerous access tracks that were constructed to allow access to the individual wind turbines.
White Rock entered into a suite of agreements with the Landowners on 16 September 2014, as follows: 1. An Agreement to Lease was entered into between White Rock and each of the Landowners. Annexed to the Agreements to Lease were the terms of a draft Lease, Rent Agreement and a Royalty Payment Deed. These draft documents specified the consideration that White Rock would be required to pay to the Landowners in respect of the occupation of the land and the construction and operation of the wind farm. Importantly, the consideration was specified in a way that did not entitle the Landowners to receive any separate consideration for the grant of the right of access over their land along the access road from the Gwydir Highway to the substation. 2. As it was then uncertain whether it would be preferable for White Rock to construct the substation on land owned by Mr Wood or JWH, both of those Landowners entered into an option agreement with White Rock that gave White Rock the right to acquire a separate lot (the Substation Land) that would be subdivided from the land owned by that Landowner for the purpose of the construction of the substation. 3. As it was proposed that the high voltage transmission line that would be constructed to join the substation with the trunk high voltage transmission line would be erected on part of the land owned by Mr Wood, JWH and Mr Nugent, those Landowners entered into agreements with White Rock that gave it an option to require those Landowners to grant easements for the high voltage transmission line and over the access road. Mr Dulhunty and Mr Cameron did not agree to an option to grant White Rock an easement over any access road, because at that time, it was not proposed that the access road would be constructed over the land owned by those Landowners.
The agreements contained terms that required White Rock to proceed with the Leases by issuing a Notice to Proceed and to exercise all of the options by 10 July 2017.
White Rock entered into a Project Agreement with TransGrid on 10 July 2015, under which TransGrid agreed to assist White Rock in constructing the infrastructure on the Landholders' land that was necessary for the operation of the wind farm. A term of this agreement obliged White Rock to transfer legal and beneficial title to the Substation Land to TransGrid. Another term required White Rock to procure the grant to TransGrid of easements along the route of the overhead transmission line and the access road. White Rock could only ensure compliance with these obligations by validly exercising one of the options for the transfer of the Substation Land and all of the options for the grant of the transmission line easements and the access road easement.
Before the Landowners entered into their agreements with White Rock, there was an access road that had been constructed to allow access from the Gwydir Highway across the land of Mr Nugent and the land owned by JWH to the land owned by Mr Wood. That access road was generally along the same route as the access road that would ultimately be constructed by White Rock from the Gwydir Highway to the substation that was ultimately constructed on the land owned by Mr Wood. Mr Wood and JWH had a right of way over the access road on Mr Nugent's land. The original access road did not intrude upon the land owned by Mr Dulhunty or Mr Cameron. Terms of the Agreements to Lease and the Leases had the effect of constraining the location of the access road from the Gwydir Highway to the substation, and required consultation as to its ultimate location between White Rock and the Landowners. The access road as ultimately constructed by White Rock intruded upon the land owned by Mr Dulhunty and Mr Cameron (although there is some doubt as to whether it intruded upon Mr Cameron's land). The Court must infer that all of the Landowners participated in the process required by the Agreements to Lease and the Leases as to the determination of the location of the access road as finally constructed. The access road was constructed in a way that prevented the relevant Landowners from using the original access road and the rights of way that existed, as the manner in which the final access road was constructed physically prevented the use of the original access road at certain locations. On 23 December 2015, White Rock, by its agent, made an agreement with the Landowners, in the context of the parties negotiating whether the conditions for White Rock to issue Notices To Proceed with the Leases had been satisfied. The agreement was that White Rock would survey and create an easement to accommodate the realignment of the original rights of way to allow for the access road to cross the boundaries of the land owned by Mr Wood, Mr Nugent, Mr Dulhunty and Mr Cameron to the Gwydir Highway. This suggests that the Landowners agreed to the final location of the access road, in the context of an agreement with White Rock that it would survey and create an easement that would give relevant Landowners access along the access road. The enforcement of this agreement is a claim made in the cross claim in these proceedings.
White Rock issued Notices To Proceed, and Leases between White Rock and each of the Landowners were executed on 11 April 2016. White Rock commenced the construction of the wind farm in 2016.
On 10 July 2017, the options granted by Mr Wood and JWH for the transfer of the Substation Land, and the three options for the grant of the transmission line easement and the access road easement expired, without any of the options having been exercised by White Rock. There has not been a word of evidence from White Rock as to why the options were allowed to expire without having been exercised.
During the course of the construction of the wind farm, significant disputes arose between the Landowners and White Rock as to the compliance by White Rock with its obligations under the Leases, in respect of many matters, including the height of the wind turbines, the quarrying of rock from the land, the manner in which the access road and the access tracks had been constructed, and the causing of substantial erosion of the land.
On 19 November 2018, 24 separate landowners, including the five Landowners, compromised their dispute with White Rock by entering into a Deed of Release. The terms of the Deed of Release included the following: 1. Mr Wood agreed to sell the Substation Land on his property, upon which the substation had already been constructed, directly to TransGrid. The enforcement of this agreement against White Rock is a claim made in the cross claim in these proceedings. 2. Mr Wood, JWH and Mr Nugent agreed to grant a transmission line easement directly to TransGrid. 3. The Deed of Release did not deal with the grant of an easement by the five Landowners over whose land the access road had already been constructed. 4. White Rock agreed to remedy specific complaints made by the Landowners in respect of the consequences of the manner in which White Rock had constructed the wind farm, by reference to what were called "punch lists" that were to detail the required remediation works. The enforcement of White Rock's obligations under the Deed of Release in respect of the works the subject of the punch lists is a claim made in the cross claim in these proceedings.
Although a term of the project agreement between White Rock and TransGrid required White Rock to procure the grant of an access easement by the Landowners to TransGrid over the access road, White Rock apparently persuaded TransGrid to accept instead the grant by White Rock to it of a non-exclusive access licence under White Rock's Leases from the Landowners. White Rock provided a copy of the draft Licence Deed to the Landowners on 3 April 2019.
Clause 8.5 of the Leases provided: 8.5 Restrictions on Lessee The Lessee, other than in accordance with clauses 8.1 to 8.4 shall not, deal with its interest in the Lease or any of its rights and obligations under the Lease, for example, by subleasing, sharing or licensing such rights and obligations to a third party, without the Lessor's written consent, not to be unreasonably withheld.
White Rock's primary claim in these proceedings is that, under clause 8.5 of the Leases, the Landowners are obliged to consent to it entering into the proposed Licence Deed with TransGrid, without insisting upon White Rock or TransGrid accepting an access easement over the access road from the Landowners, or agreeing to pay additional consideration for either the easement or the grant of approval to the Licence Deed. That is on the basis that, if White Rock had exercised the options for the grant of access easements, and the wind farm had been constructed and operated as contemplated by the entire suite of agreements entered into on 16 September 2014, the Landowners would not have been entitled to receive any separate or additional consideration for the grant of the access easements, whether to White Rock or to TransGrid.
The Landowners' response includes that the legal relationship between the parties changed when White Rock allowed all of its options to expire without having exercised them, and that, in all of the events that followed, including the agreements by the Landowners to grant rights to TransGrid that enabled White Rock to perform its essential obligations under its agreement with TransGrid, it was reasonable for the Landowners to require TransGrid accept the grant of an access easement along the access road and for White Rock to pay an additional consideration for that grant.

Relief sought by White Rock

White Rock sought the following relief as set out in its summons: 1. DECLARE, in respect of the Site (as that term is defined in the several annexures to the registered leases (the Leases) referred to in (a) to (e), that: a [Mr Dulhunty] in relation to registered lease AKXXXXXX; b [Mr Wood] in relation to registered lease AKXXXXXX; c [JWH] in relation to registered lease AKXXXXXX; d [Mr and Mrs Cameron] in relation to registered lease AKXXXXXX; and e [Mr Nugent] in relation to registered lease AKXXXXXX (together the Lessors) have, contrary to clause 8.5 to the Lease, unreasonably withheld their written consent from the Plaintiff (White Rock) granting to the Electricity Transmission Ministerial Holding Corporation (TransGrid) a non-exclusive licence to use the access track running from the Gwydir Highway to the TransGrid substation to permit TransGrid access to the substation for repair or maintenance in connection with White Rock's wind farm activities conducted from the Site. 2. DECLARE, that the Lessors are not entitled to impose on White Rock a requirement that use of the traversible track by TransGrid be pursuant to easement and on condition of payment levied at the rate of: a $12.50 per metre of traversable track for the first year; and b $5.00 per metre of traversable track for each subsequent year, subject to an annual increase measured by the greater of 3.5% or annual CPI. 3. DECLARE that the Lessors are to give their written consent to White Rock granting to TransGrid a non-exclusive licence to use the access track running from the Gwydir Highway to the TransGrid substation to permit TransGrid access to the substation for repair or maintenance in connection with White Rock's wind farm activities conducted from the Site. 4. Further, DECLARE, in the circumstances which have occurred, that the Lessors have breached clause 18.3(c) of the Leases by making payment by [White] Rock of their legal costs and the costs of the mediator a condition of their participation in the mediation pursuant to clause 18(b) of the annexure to each registered lease. 5. DAMAGES in respect of 4 above. 6. COSTS. 7. INTEREST ON COSTS.
During the course of the proceedings, on the application of White Rock, its claim against Mrs Cameron, as referred to in prayer 1(d), was dismissed. White Rock maintained its claim against Mr Cameron, and the dismissal order has no significance for the purposes of these reasons.
The Court was told by counsel for White Rock during the course of final submissions that White Rock abandoned the claim for the declaration in prayer 2. That apparently followed an inquiry from the Court as to how it could, on the evidence that had been tendered, decide what consideration the Landowners could reasonably require White Rock to pay, if the Court did not decide that the Landowners could not reasonably insist upon any payment. Consequently, the issue that remains concerning whether the Landowners have an obligation to consent to White Rock granting a licence over the access track to TransGrid is the binary one of whether the Landowners are obliged to consent without requiring the payment of any further consideration, or not. If not, the Court will simply dismiss White Rock's summons in respect of prayers 1 and 3, and the parties will be left to their own devices as to what then happens in relation to TransGrid's means of access to the Substation. The Court will not be required to determine whether the consideration which the Landowners seek in return for their consent is reasonable.
At par 221 of its final written submissions, White Rock amended its claim for relief in prayer 3, as follows: 3. That the Lessors are to give their written consent to White Rock granting TransGrid a non-exclusive licence to use the Access Track running from the Gwydir Highway to the TransGrid Substation on the terms set out in the form of the Draft Licence Deed sent by email of Charlie Williamson of Goldwind Australia Pty Ltd, dated 3 April 2019 to Julian Peters, solicitor for the defendants, save that Item 5 be amended to be limited to parcels of land owned by the defendants to the proceedings.
I also understand that the relief sought in prayers 4 and 5 of the summons has now been superseded by events.

Relief sought in cross summons

Mr Dulhunty and Mr Wood claimed the following relief in their cross claim: 1. A declaration that there is a binding and enforceable agreement between [Mr Dulhunty, Mr Wood, Mr and Mrs Cameron and Mr Nugent] on the one part and [White Rock] on the other in the terms set out in the Deed of Settlement and Release that they entered on 19 November 2018 (Deed). 2. An order that [White Rock] specifically perform and carry into execution the agreement referred to in order 1. 3. An order that [White Rock] specifically perform and carry into execution the agreement referred to in order 1, by executing and exchanging the contract for sale of land in accordance with clause 6 of the Deed. 4. In the alternative to and in the event [White Rock] fails to comply with order 3, an order that [White Rock] pay to [Mr Wood] equitable compensation. 5. An order that [White Rock] specifically perform and carry out its agreement of 23 December 2015 to undertake a survey and create an easement to accommodate the re-alignment of the right of way to allow for the access tracks to cross the boundaries of land owned by the defendants. 6. An order that [White Rock] specifically perform and carry out its agreement to undertake the works in the "punch lists" with [Mr Dulhunty] and [Mr Wood]. 7. Damages. 8. Costs.
Interest pursuant to sections 100 and 101 of the Civil Procedure Act 2005 (NSW).
On the third day of the hearing, the Court made an order by consent that had the effect that White Rock was ordered to specifically perform clause 6 of the Deed of Release, which was referred to in prayer 1 of the cross claim, by procuring TransGrid to simultaneously exchange and settle the contract for the sale of the land the subject of clause 6 of the Deed of Release. White Rock had tendered evidence in the proceedings to the effect that it was ready, willing and able to perform its obligations under clause 6 of the Deed of Release. Issues had arisen between the parties concerning how those obligations were required to be performed. It is not now necessary to address those issues. The effect of the consent orders is that the Court is no longer required to deal with prayers 1 to 4 of the cross claim, save for the determination of a residual claim by which Mr Wood seeks the payment of interest for the late payment of the purchase price under the contract for the sale of land referred to in prayer 3.
I will consider prayer 5 of the cross claim concerning the enforcement of the agreement made by White Rock to survey and create an easement over the access road below. That aspect of the dispute has ceased to be contentious, as White Rock has agreed to take the steps demanded by the cross claimants.
Prayer 6 of the cross claim raises the issue of whether the Court should order specific performance of promises made by White Rock in the Deed of Release in relation to the remediation of damage to parts of the Land owned by the cross claimants. I will consider this issue after I have dealt with the claims made by White Rock in prayers 1 and 3 of its summons. This is the only other remaining contentious issue in the proceedings.
I will now turn to consider the primary issue raised by White Rock's summons, being whether the Landowners are obliged by clause 8.5 of their Leases to give their consent, without any right to claim any further consideration, to White Rock granting a licence to TransGrid to use the primary Access Track that White Rock has constructed over the Land of the Landowners from the public highway to the Substation that has been constructed on Mr Wood's lands for the purpose of operating and maintaining the Substation.
It is necessary to consider in some detail the relationship between the agreements that were entered into for the construction and operation of the wind farm in their historical context. The parties accepted that the reasonableness of the Landowners' refusal to consent to the Licence Deed between White Rock and TransGrid must be assessed in the context of all of the agreements entered into by the parties.

Agreements to Lease

Each of the Landowners entered into an Agreement to Lease with White Rock on 16 September 2014. The Landowners were five of 14 separate groups that entered into equivalent agreements to lease on the same date.
By clause 2.1, subject to the satisfaction of certain conditions precedent, each Landowner agreed to grant to White Rock a lease of the Land simultaneously upon entering into the Rent Agreement and Royalty Deed.
The Land was defined in clause 1 as meaning "the whole allotment(s) described in Annexure 1". Annexure 1 listed the deposited plan lot numbers for the whole of the property owned by the particular Landowner.
The Rent Agreement was defined as the document forming part of the Lease attached as Annexure 4, and the Royalty Deed was defined as the document attached as Annexure 5.
Clause 2.1(a) provided that the Lease, Rent Agreement and Royalty Deed would commence on the date stated in a Notice to Proceed that White Rock served on the Landowner, provided that the Notice to Proceed was served on the Landowner before the Satisfaction Date. The Satisfaction Date was defined as meaning 10 July 2017.
Clause 2.1(b) provided that the Lease would be for an initial term of 30 years plus one right of renewal for 30 years.
Under clause 2.4(a), the parties agreed that there would be a binding Lease, Rent Agreement and Royalty Deed between them on the terms and conditions contained in clause 2.1, subject to the satisfaction of the Conditions Precedent and the issuing of the Notice to Proceed.
Among other Conditions Precedent, clause 3.2 required White Rock to serve a draft Final Layout on the Landowner at least three months prior to issuing the Notice to Proceed, that had taken into account and adequately addressed all reasonable concerns of the Landowner.
Clause 3.3 required that the Final Layout must conform to specified requirements, including in respect of the location of wind turbines and transmission lines, and that the wind farm infrastructure should not encroach on any Excluded Area, which was an area marked on the relevant plans in respect of which White Rock was not entitled to operate the wind farm, except in specified exceptional circumstances.
Annexure 2 to the Agreement to Lease provided for an Indicative Layout, which stated on an indicative basis the number of planned turbines and the proposed route of the high voltage transmission line, the substation, and the access tracks, including the access road.
The Draft Lease document was at Annexure 3. The Leases as ultimately executed by the parties were in the terms of the Draft Lease, so far as is material.

Option Agreements to Purchase Substation Land

White Rock also entered into two Option Agreements to Purchase Substation Land on 16 September 2014. There were two option agreements because there were alternative sites for the location of the substation, and a decision had not been made as to which location was preferable. The Option Agreements, which were in the same terms, were with Mr Wood and JWH.
Clause 2.1 provided for the Landowner to grant to White Rock an exclusive and irrevocable option to purchase the Substation Land on the terms and conditions specified in the draft Contract for Sale that was Annexure 1 to the Option Agreement.
Clause 13 provided that the provisions in Schedule 2 formed part of the agreement. Schedule 2 contained a special condition 17.1 that dealt with the need to obtain planning approval and registration of a subdivision so that the Substation Lot could be created. Special condition 17.1(c) provided: (c) The Landowner understands that the consent authority may require a legal right of way or covenant over the balance of [the Land] (being the part of that lot that is outside the definition of 'Land') to access the Land as a subdivided allotment, and the Landowner understands that the consideration for granting any such right of way and/or covenant will be the benefit arising from the subdivision.
There was no evidence about the subdivision process or whether the consent authority required the grant of the right of way or covenant. White Rock relied upon this term as being some evidence that Mr Wood understood that he would not be entitled to any separate or additional consideration for the grant of an access easement over his land.
Provided that the Substation Land had been subdivided, White Rock was entitled to exercise the Option at any time prior to 5pm on the Expiry Date, which was defined in Schedule 1, relevantly, as being 10 July 2017. The Land was identified on the plan in Schedule 3.
Clause 2.2(b) provided: "If the Option is not exercised by the Expiry Date the Option will lapse."
Item 7 of Schedule 1 provided that the Acquisition Price under the Contract for Sale, if the Option was exercised, would be $100,000 per hectare (to the nearest 0.01 hectare) plus GST, with a minimum price of $100,000.

Option Agreements for Powerline and Access Easements

White Rock entered into Option Agreements for Powerline and Access Easements with JWH, Mr Wood and Mr Nugent. They were all executed on 16 September 2014. The Option Agreement between White Rock and Mr Nugent was separately tendered as Exhibit P5.
Recital B to each Option Agreement provided: B. The Landowner and [White Rock] have entered into this agreement to allow [White Rock] to use land owned by the Landowner for [the purpose stated in Recital A] in return for the payments outlined in this agreement.
By clause 1.1 of each Option Agreement, the relevant Landowner granted an option to White Rock in the following terms: 1.1 Grant of Option The Landowner grants [White Rock] an exclusive and irrevocable option to acquire the Powerline Easement and the Access Easement over the Easement Land (Option).
The "Easement Land" was identified in Item 2 of the Reference Schedule. Item 2 identified the servient tenement by reference to the Deposited Plan lot numbers of the land owned by the Landowner. I infer that the seven lots owned by Mr Nugent were identified as Easement Land in his Option Agreement. That inference may not be entirely correct as it has been drawn from the plan that is Exhibit DP2, and it is not clear from the depiction of the two proposed easements that both were proposed to be located on part of each of the seven lots.
The "Powerline Easement" was defined in clause 10 as "the powerline easement over the Corridor Land on the terms and conditions of the Powerline Easement Document". The "Access Easement" was defined in clause 10 as "the easement for access over the Corridor Land on the terms and conditions of the Access Easement Document". The Powerline Easement Document and the Access Easement Document were respectively Annexures 2 and 4 to the Option Agreement.
The "Corridor Land" was defined in clause 10 as "that land within the Easement Land as defined in Item 3 of the Reference Schedule". Item 3 identified the Corridor Land as: "That part of the Easement Land as indicated on the plan in Annexure 1 (as that part may be amended in accordance with clause 4)".
Clause 4 had the effect that the Landowner would not unreasonably refuse any request in writing by White Rock to vary the location of the Corridor Land, provided that the varied location was not more than 100m of either side of the location shown in the Corridor Land Plan in Annexure 1, subject to a condition that is not presently material. White Rock was not required to pay any additional consideration if the location of the Corridor Land was amended under clause 4.
Clause 4 is significant, as it suggests that both the powerline and the access road would be constructed over pre-agreed parts of the servient tenements, subject to a limited right in White Rock to vary the locations of the easements within defined parameters.
The Corridor Land Plan in Annexure 1 to Mr Wood's Option Agreement depicted the location of the Powerline Easement and the Access Agreement approximately in the locations where Exhibit PD2 shows those easements were intended to be created over Mr Wood's land, with perhaps some apparently small deviations.
In the case of the Corridor Land Plan in Annexure 1 to JLW's Option Agreement, the position is unclear. The Corridor Land Plan appears to have been prepared on the assumption that the substation would ultimately be constructed on one particular lot that was part of JWH's land (when it was ultimately in fact constructed on part of Mr Wood's land). The Corridor Land Plan nonetheless shows the location of the Powerline Easement as being located on both of JWH's lots approximately in the location where the power line was ultimately located, as shown in Exhibit DP2. The Powerline Easement thus provided for the substation being ultimately constructed on Mr Wood's land. However, curiously, the position is different for the Access Easement. It is located only on one of the two lots owned by JWH, and ends at the location of the proposed substation that was not ultimately constructed. It is roughly in the location of the final access road as depicted in Exhibit DP2, but does not travel from the proposed substation site across the balance of that lot or across the other lot to where that lot adjoins Mr Wood's land. The parties did not advert to that circumstance at the hearing, so that the significance of the Corridor Land for the Access Easement not being located over the whole of the JWH land was not addressed. If the Corridor Land Plans for JWH's and Mr Wood's land are taken at face value, there was a gap in the land intended for the Access Easement from the location of the proposed substation on the JWH land to the border of that land with Mr Wood's land.
Clause 1.2 provided for the exercise of the Option relevantly in the following terms: 1.2 Exercise of Option Provided that…[White Rock] may exercise the Option at any time prior to 5.00 pm on the Expiry Date by delivering to the Landowner: (a) a notice stating words to the effect that [White Rock] exercises the Option…
Item 1 of the Reference Schedule identified the Expiry Date as the earlier of 10 July 2017 and the date the Agreement was terminated by White Rock under clause 9.6.
Significantly, even though the Option Agreement provided for the creation of two easements, there was only one Option, which had to be exercised once and for all. The Option Agreement did not provide for White Rock to exercise the Option in relation to one of the easements, but not the other. That meant that, at the time the Option Agreement was executed, the Landowner had the expectation that the Option would either not be exercised by White Rock, or if it was, the Landowner would be subject to the burden but would also enjoy the benefits of both of the easements.
Clause 2(a)(ii) provided that, if the option was exercised by White Rock, the Landowner and White Rock would be bound by the terms and conditions of the Powerline Easement Document and the Access Easement Document from the Option Exercise Date.
Clause 1.3(c) required White Rock to pay to the Landowner the Easement Payment within 30 days of the Option Exercise Date. The "Easement Payment" was defined in Item 6 of the Reference Schedule as "$1 plus GST (if any)."

Draft Powerline Easement Document

The Powerline Easement Document in Annexure 2 was in the form of a draft Transfer Granting Easement in blank as to the terms that would need to be inserted if the Option was exercised. The description of the easement was: "Easement for electricity purposes 60m wide as shown on the plan annexed to this Transfer and marked "B" having terms set out at Annexure "A" hereto."
The draft Transfer Granting Easement in the box for the insertion of the name of the Transferee stated: Registered proprietor of the dominant tenement [I]nsert (at the time the option is exercised) either 1. [White Rock]; or 2. owner of the turbine land; or 3. name of prescribed authority (clause 53, Conveyancing (General) Regulation 2008).
The meaning of the reference to the "owner of the turbine land" is unclear. I infer that the description of the Transferee in this way contemplated that the easement might ultimately be granted to TransGrid. Clause 9 provided that the Easement could operate as an easement in gross under s 88A of the Conveyancing Act 1919 (NSW). Clause 53 of the then Conveyancing (General) Regulation 2008 (NSW) (now Schedule 3 to the Conveyancing (General) Regulation 2018 (NSW)) refers to an energy services corporation within the meaning of the Energy Services Corporations Act 1995 (NSW). I understand that it was accepted by the parties that TransGrid is an energy services corporation.
Annexure A contained covenants by the Transferor and the Transferee. Clause 1 set out the permitted purposes for the Transferee and its Permitted Users to use the easement. "Permitted Users" was defined in clause 17 as meaning "the Grantee's employees, agents, workers, contractors and other persons authorised by any of them or by the Grantee from time to time." Clauses 1(a) to (k) set out in detail uses that would be expected to be permitted to make the Powerline Easement effective. However, some aspects of clause 1 were drafted in a way that qualified the Transferee's rights in a manner that would be beneficial to the Transferor. Clause 1(c) prohibited the Transferee from erecting telecommunications equipment unrelated to a wind farm without the consent of the Transferor. Clause 1(k) entitled the Transferor to "only remove the minimum amount of vegetation necessary for access along the Easement Site to avoid erosion and problems occurring by such erosion."
Clause 2 governed the manner in which the Transferee and its Permitted Users could exercise the rights conferred by the easement. Apart from certain requirements for the Transferee to inform the Transferor in advance of certain details concerning the proposed use of the easement, the clause included the following: 2. Manner in which rights are exercised … (d) use reasonable endeavours to minimise disruption to the Transferor and any occupier as is reasonably practicable; (e) avoid lighting fires, leaving rubbish or waste, bringing guns or any animals on or entering any buildings without the permission of the Transferor; (f) take reasonable precautions to minimise dust and erosion and to avoid introducing any pests, weeds or animal or plant diseases; (g) comply with any reasonable request of the Transferor regarding the manner of access and use, including the use of vehicles and the location of Electricity Works laydown areas during construction or maintenance periods; (h). do was little damage as is reasonably practicable; (i) repair any damage within a reasonable time of the damage occurring, and to the Transferor's reasonable satisfaction.
Clauses 4 and 5 provided: 4. Transferor's rights and obligations The Transferor may use the Easement Site so long as such use does not or is unlikely to: (a) interfere with the Transferee's rights under this easement; or (b) breach the Transferor's covenants set out in clause 3 above. 5. Repair and maintenance The Transferee will at all times and at its own expense keep the Electricity Works in a proper fit state of repair.
Clause 15 obliged the Transferee to replace fences that were required to be removed, replaced or where new fencing was required to be constructed for access to the Easement Site with fences of a similar standard including any new fences so that the Transferor's land was at all times fenced.
Clause 16 provided for payments to the Transferor as follows: 16. Initial and annual payments (a) The purpose of this clause is to achieve payments by the Transferee to the Transferor under this Transfer Granting Easement equivalent to rent payable under the Lease for High Voltage Transmission Line (as defined in the Lease). (b) As consideration for entering into this Transfer Granting Easement the Transferee will pay to the Transferor payments under the Lease pursuant to special condition 16 of the rent agreement (being an exhibit to the Lease).
"Lease" is defined in clause 17(a) as meaning "the lease for wind farm purposes of the Servient Tenement or of nearby land owned by the Transferor entered into by Transferor as lessor and [White Rock] or its nominee or assignee as lessee, including the rent agreement (being an exhibit to the lease)."
At the time the Option Agreements were made, the leases from the Landowners to White Rock had not been granted, so the only means of understanding the effect of clause 16 is to look to the Agreement to Lease to which the Landowner was a party.
Clause 7 of the draft Rent Agreement provides: 7. High Voltage Transmission Line rent High Voltage Transmission Line rent is $20,000 per kilometre payable on the Commencement Date of the Lease, plus $5 per metre in the first year of the Term, and $5 per metre in the subsequent years of the Term (calculated to the nearest metre).
There is no clause 16 of the Rent Agreement (as referred to in clause 16(b) of the draft Transfer Granting Easement), so the reference to clause 16 must have been a transcription error for clause 7.

Draft Access Easement Document

The draft Transfer Granting Easement for the Access Easement that is Annexure 4 to the Option Agreement provided for the transferee to be only White Rock or the "Owner of turbine land".
It contains a number of terms that would confer benefits on the Transferor, as follows: 2. Permitted purposes The Transferee must, when exercising the rights conferred by this Transfer Granting Easement, take reasonable precautions to: (a) cause little inconvenience to the owner and any occupier of the Servient Tenements; (b) do as little damage to the Servient Tenement; and (c) only remove the minimum amount of vegetation necessary for access along the Easement Site to avoid erosion and problems occurring by such erosion, as is reasonably practicable.
Clause 4 provided: 4. Transferor's rights and obligations The Transferor may use the Easement Site so long as such use does not or is unlikely to: (a) interfere with the Transferee's rights under this Transfer Granting Easement; or (b) breach the Transferor's covenants set out in clause 3(a) above.
Clause 5 provided that the Transferor will not unreasonably refuse any request by the Transferee to amend the Easement Site within the servient tenement, subject to a number of provisos, including that the location, the width and the borders are not materially different and will not cause any additional inconvenience or disruption to the Transferor, and that the location and extension of the borders do not vary by more than 100m to the left or right of the location shown in the plan of the Easement Site.
This term suggests that the parties to the Option Agreement contemplated that the Access Track would be constructed over an agreed route subject to variation within prescribed parameters.
Clause 9 obliged the Transferee to consent to the subdivision of the servient tenement so as to create a separate lot containing the Easement Site of not less than 100ha, and the Transferee was thereupon obliged to consent to the release of the easement so far as it related to the remainder of the land that initially comprised the servient tenement.
Clause 10 imposed an obligation on the Transferee to replace fences that were required to be removed or replaced or new fencing that was required to be constructed with fences of a similar standard, including any new fences so that the Transferor's land was at all times fenced.
The draft Transfer Granting Easement for the Access Easement did not contain any term relating to the payment of consideration for its use.
If the Option Agreements for Powerline and Access Easements had been exercised and an Access Easement was granted to White Rock over the access road, the grantor Landowners would have had the benefit of the obligation upon White Rock to repair the access road, and an entitlement to damages caused by any failure to repair, as discussed by AJ Bradbrook and SV MacCallum in Bradbrook and Neave's Easements and Restrictive Covenants (3rd ed, 2011, LexisNexis Butterworths) at [1.57]-[1.58], and in the authorities there cited.

Project Agreement between TransGrid and White Rock

On 10 July 2015, some nine months after White Rock entered into the suite of documents with the Landowners on 16 September 2014, White Rock entered into an agreement with TransGrid called "Project Agreement White Rock Wind Farm Connection" (TransGrid Project Agreement).
The TransGrid Project Agreement contained the terms under which TransGrid would assist White Rock in constructing the infrastructure on the Landholders' Land that was necessary for the operation of the wind farm. The "Project" was defined in clause 1.1 as being: "the design and delivery of a 132kV Transmission Line, Substation and Upstream Works between the Customer's Facilities and TransGrid's high voltage transmission network in accordance with this agreement".
By clause 2.1, the operation of most of the terms in the TransGrid Agreement were conditional upon White Rock providing to TransGrid a Notice to Proceed.
Relevantly, clause 13.1 provided: 13.1 Access (a) Subject to clause 13.1(b), and without limiting TransGrid's other rights of access under this agreement, the Customer will provide TransGrid (and its servants, agents and contractors) during the Term with clear, unhindered and safe access to and over the Substation Site, Transmission Line Route, the Land and its associated access roads for the purpose of undertaking the Connection Work and for any related purpose.
Clause 13.3 provided: "Title to and risk in the Assets rests with TransGrid at all times." "Assets" was defined in clause 1.1 as meaning "the Substation and the Transmission Line".
Clause 24 relevantly provided: 24. Transfer of Ownership of the Substation Site and other property interest 24.1 Substation Site The Customer must, no later than the Date of Practical Completion …at its own cost execute any document and do any act reasonably required by TransGrid…to ensure that legal and beneficial title to the Substation Site is transferred to TransGrid free and clear of any Security Interest. The Substation Site shall be of sufficient size as determined by TransGrid including a 20m buffer zone. Failure to comply with this clause 24 shall be deemed a Default for the purpose of clause 16. 24.2 TransGrid Easements (a) On or before the Date of Practical Completion… the Customer must at its own cost and no cost to TransGrid grant to TransGrid (or must do all thing[s] necessary to ensure that the following Easements are granted to TransGrid): (i) a 45m wide Easement for the final Transmission Line Route (i.e. the Transmission Line set out in the Scope of Works); (ii) a 10 metre wide Easement from the proposed Substation Site to the nearest public road for the purpose of accessing the Substation Site (which access route will be agreed between the parties prior to commencing the Connection Work at the Substation Site); … 24.3 Access Right On and from the Commencement Date and during the Term, the Customer must ensure TransGrid is granted any Easement which is required by TransGrid for securing a permanent right to access the Substation Site and Transmission Line Route. The Easements granted under this clause 24.3 will identify the access route agreed between the parties and be otherwise on terms reasonably acceptable to TransGrid. … 24.7 Substation Site and Easement Acquisition Deed … (b) TransGrid acknowledges that, as at the Commencement Date, the Customer holds options to acquire the Substation Site and be granted the Easements, but may not be the owner of the Substation Site or beneficiary of the Easements. …
Clause 24.1 could only be complied with if White Rock exercised the Option in the Option Agreement to Purchase Substation Land in respect of the particular land upon which it was decided as between White Rock and TransGrid would be the site of the Substation. That exercise had to take place before the Expiry Date.
Similarly, clause 24.2 could only be complied with if White Rock exercised the Option Agreements for Powerline and Access Easements with all of the three Landowners who had granted those Options.
There was no evidence of the circumstances that led White Rock to enter into the Option Agreements, or why the Option Agreements were entered into before the TransGrid agreement. Given the complex and sophisticated nature of the arrangements that were required to enable White Rock to construct and operate the wind farm, I infer that White Rock and the solicitors for the parties were experienced in the issues that needed to be addressed in the suite of agreements that would be required, and that the Option Agreements were entered into in the correct anticipation that TransGrid would require to be granted the rights that were ultimately the subject of clause 24 of the TransGrid Agreement.
Even though, strictly, the Landowners who granted the various Options had no means to compel White Rock to exercise the Options, I infer that, as a matter of practical reality at the time the Options were granted, both White Rock and the Landowners anticipated that if White Rock decided to proceed with the wind farm project and issued Notices to Proceed under the Agreements to Lease, then it would follow that White Rock would also exercise the necessary Options.

Communications between parties before date of Leases

On 23 December 2015, the Legal Counsel for Goldwind Capital (Australia) Pty Ltd (Goldwind) (which was apparently managing the exercise for White Rock), Ms Squires, sent an email to the solicitor for the Landowners concerning the satisfaction of the conditions precedent for the issue of the Notices To Proceed by White Rock. Although the evidence does not make the detail clear, apparently the parties were in negotiations as to adjustments that needed to be made before the Landowners were satisfied that White Rock was entitled to issue the Notices To Proceed. The email included the following: 3. Right of Way a. we agree to undertake to survey and create an easement to accommodate the re-alignment of the right of way to allow for the access tracks to cross the boundaries of Wood, Nugent, Dulhunty and Cameron to the Gwydir Highway; b. we agree to provide a double fence, either new or through a combination of new and existing fencing, on the re-aligned road…
This agreement is the basis of the claim for relief in prayer 5 of the cross claim.
The spatial relationship between the original access road over which some of the Landowners had rights of way and the access road ultimately constructed by White Rock was not established precisely by the evidence. The evidence does establish to my satisfaction that the original and the final access roads followed substantially the same route, but with some deviations, including the incursion of the final access road upon Mr Dulhunty's land, and probably also Mr Cameron's land, although Mr Cameron appeared in his evidence to reject that fact. The evidence also established that, to the extent that the final access road deviated from the path of the original one, it was physically constructed in a way that prevented the Landowners from using the rights of way that they had over the original access road. I am satisfied that it was important to at least Mr Wood and JWH that effective rights of way for their benefit be re-established (as they needed those rights to access their land) and that it was important to continuing good relationships between all of the Landowners over whose land the final access road travelled that the legal rights of the owners of the dominant and servient tenements be formally and clearly established in law. I infer that is the reason why the Landowners sought and obtained the agreement of White Rock in the 23 December 2015 email. I am satisfied that the Landowners had a legitimate interest in causing White Rock to survey and create the necessary easements along the new access road. The Landowners might not adequately be protected by the obligations imposed by their individual Leases on White Rock, as those obligations were specific to the Land the subject of each Lease. Securing proper access from the individual properties to the Gwydir Highway required the creation of the necessary easements.
White Rock's agreement contained in Ms Squires' email was made before the Expiry Date of 10 July 2017 of the Option Agreements for Powerline and Access Agreements.
The 23 December 2015 email also contained an agreement by White Rock to pay consideration for the grant of an additional easement over Mr Cameron's land that was not the subject of the Option Agreements for Powerline and Access Easements.
On 20 January 2016, Ms Squires sent an email to the Landowners' solicitors that attached a draft document called "Right of Way Consideration Deed." The email stated: "Please find attached a draft Consideration Deed in relation to the payment arrangement between [White Rock] and John Wood, Nugent, Dulhunty and Cameron associated with the re-alignment of the right of way." The draft deed contained terms that I understand would require White Rock to bear the cost of the steps necessary to create easements over the Access Track for the benefit of the Landowners, as well as the supply and installation of what was called a double fence. On 21 January 2016, the Landowners' solicitor sent a return email to Ms Squires that contained a revised version of the Deed of Consideration.

Grant of Leases

The Leases are all dated 11 April 2016 (before final date for exercise of the option to create easements of 10 July 2017). White Rock must have issued Notices to Proceed before 11 April 2016.
The Leases granted an interest in the land owned by the Landowners that was described as a lease. However, the Leases prescribed the way that White Rock was able to use the Land, and excluded the wind farm activities from the parts of the Land that were described as Excluded Areas. The Leases also granted rights to the Landowners that had the effect that the Landowners were entitled to use most of the land the subject of the Leases for agricultural purposes, provided that that use did not interfere with the permitted wind farming activities. It may be that the appropriate short form description of the effect of the Leases is that they granted leases over the parts of the Land that were not Excluded Areas, subject to a licence back to the Landowners to use the leased areas.
By clause 3.1(a), White Rock was authorised to use the Site 24 hours a day solely to conduct Wind Farm Activities for the Wind Farm from the Commencement Date. "Site" was defined in Schedule 1 to mean the Land other than any Excluded Area.
The Wind Farm Activities were defined in clause 3.2 to relevantly be: "…(b) Construction Activities; (c) Operating Activities…"
In describing the Construction Activities, clause 3.7(a) permitted White Rock to install, construct, and erect Wind Turbines and the related structures necessary to operate the wind farm. Clause 3.7(a)(v) permitted White Rock to construct "access roads, tracks or paths across the Site (including through fence lines)."
The explanation of what constituted Operating Activities in clause 3.8 included: Operating Activities means the following activities performed by, on behalf of, or for the Lessee in relation to the Wind Farm on the Site: (a) maintaining, repairing, operating, using, replacing, continuing and/or upgrading the things referred to in clause 3.7(a); … (d) any other activities reasonably necessary for the operation and maintenance of the Wind Farm and previously approved in writing by the Lessor such approval not to be unreasonably withheld."
Although clause 3.8(a) permitted White Rock to maintain "access roads, tracks or paths across the Site" (by reference to clause 3.7(a)(v)), it did not impose upon White Rock an obligation at the suit of the Landowner to do so. Clause 3.15 obliged White Rock to make good all damage to the Land promptly upon completion of each part of the Wind Farm Activities as set out in clause 3.2, but that is not equivalent to an obligation to repair the access road. Clause 4.1(b) obliged White Rock, at its own cost, to repair damage that it caused to the Land to the reasonable satisfaction of the Landowner, but damage was defined as "a permanent change to the land other than is required for Wind Farm Activities." The Leases do not appear to impose upon White Rock any obligation to maintain the access road in repair. Plainly, it would be in White Rock's interests to do so, but that is not an obligation imposed upon it by the Leases.
Clause 3.14 specified the nature of the Landowners' right to use the Site.
Clause 4.4 provided: 4.4 Ownership of Apparatus & Temporary Infrastructure Despite any rule of law to the contrary, the Apparatus and Temporary Infrastructure remain the property of the Lessee.
Clause 4.13 dealt with the location and size of, inter alia, Accessways and relevantly provided: 4.13 Location and size of Accessways, Apparatus and Temporary Infrastructure (a) Subject to clause 4.13(c), the Lessee shall construct and install the Accessways, Temporary Infrastructure and Apparatus, under this Lease on the Site, strictly only in accordance with the Final Layout… (b) If the Lessee wishes to amend the Final Layout for any reason during the Term, the Lessee must provide a draft of the proposed amendment to the Lessor… The amended Final Layout must be served on the Lessor and must (unless otherwise agreed with the Lessor): … (v) clearly demonstrate the route of Transmission Lines or [aboveground] Cabling which must not alter from that shown on the Indicative Layout without consulting with and addressing all reasonable concerns of the Lessor; … (c) The Lessee may move Accessways, Apparatus or Temporary Infrastructure no more than 100m from the location shown on the Final Layout, without complying with subclause 4.13(b) provided that the Lessee provides the Lessor and any other affected Group Landowner with an amended Final Layout. (d) The Accessway, Apparatus and Temporary Infrastructure where listed in Schedule 4 shall not exceed the sizes and dimensions set out in Schedule 4 at any time during the Term without the Lessor's consent, which may not be unreasonably withheld.
Schedule 4 included "Access track" with the size "6 m nominal trafficable width with local widening to 12 m wide for passing bays, bends and intersections."
"Accessways" was defined in Schedule 1 to mean "any vehicular and other access tracks and roads on the Site or to be constructed on the Site for access to and from the Site or Apparatus as shown on the Final Layout."
Clause 6.1 obliged White Rock to pay the Rent to the Landowner in accordance with the Rent Agreement.
Clause 7.1 provided: 7.1 Lessor to assist Lessee Where reasonably required by the Lessee, the Lessor at the cost of the Lessee must do all things reasonably necessary to assist the Lessee in: (a) conducting the Wind Farm Activities provided that the Lessee reimburses the Lessor for any reasonable expenses so incurred; … (c) granting or seeking any necessary easements or covenants over neighbouring land (and such as building restrictions) for the purposes of the Wind Farm (including without limitation, signing any documents which it is reasonably necessary for the Lessor to sign). However, and for the avoidance of doubt, nothing in this clause 7.1(c) will require the Lessor to negotiate any such easements or covenants on behalf of the Lessee or to draft any documents relating to such easements or covenants, and the Lessee must reimburse the Lessor for any reasonable expenses incurred in providing assistance under this clause 7.1(c) and pay adequate and fair compensation for the granting of any such easement or covenant.
Clause 8.5 is the crucial term upon which White Rock relies in these proceedings. It will be convenient at this point to repeat it, as follows: 8.5 Restrictions on Lessee The Lessee, other than in accordance with clauses 8.1 to 8.4 shall not, deal with its interest in the Lease or any of its rights and obligations under the Lease, for example, by subleasing, sharing or licensing such rights and obligations to a third party, without the Lessor's written consent, not to be unreasonably withheld.

Rent Agreements

The Rent Agreements provided: 1.1 Total Annual Rent means the total rent payable each year of the Term under this Lease, being the sum of the following components, as applicable to Apparatus shown on the Final Layout (including any amendment under clause 4.13(b) or clause 4.13(c) of the Lease), and as adjusted in accordance with clause 9: a. Wind Turbine rent (clause 2); b. Wind Monitoring Mast rent (clause 3); c. temporary construction compound rent (clause 4); d. collector substation rent (clause 5); e. Medium Voltage Transmission Line rent (clause 6.1); f. On or above-ground Cabling rent (clause 6.2); g. High Voltage Transmission Line rent (clause 7); and h. operations and maintenance compound rent (clause 8).
The clauses noted against each component of the Total Annual Rent set out the manner in which that rent would be calculated.
Clause 15.2(a) provided that terms used in the Rent Agreement not otherwise defined were to have the meaning given in the body of the Lease. "Apparatus", as used in clause 1.1, was defined in Schedule 1 to the Lease as meaning: "any compound, building, structure or infrastructure installed or constructed on the Site by or for the Lessee in connection with the operation of the Wind Farm, including without limitation Wind Turbines, Transmission Lines and Cabling, and any wind monitoring tower, temporary construction compound, substation or operations and maintenance compound."
This definition appears to have the result that Total Annual Rent was calculated in respect of White Rock's entitlement under the Lease to construct various types of Apparatus and the Site, but does not otherwise include rent for the use of the Site, including accessways.

Royalty Payment Deeds

The Royalty Payment Deeds had the effect, by clause 2.1, that if the Annual Royalty Calculation (which was, in essence, a percentage of the Audited total gross revenue of White Rock in a year) exceeded the Total Annual Rent, then White Rock was required to pay the Landowner the difference.

Location of Accessways

The provisions in the Leases dealing with the location of Accessways (which include what I have called "the access roads" and "the access tracks") appear to have the following effect. An Indicative Layout was annexed to the Agreements to Lease that depicted the indicative locations of matters such as access tracks as anticipated at the date of the agreement, prior to the detailed design and planning. White Rock was required to serve a draft Final Layout on each Landowner before issuing the Notice to Proceed. That draft was required to take into account and adequately address all reasonable concerns of the Landowner. The function of the Indicative Layout seems to be that it would provide one basis for determining the concerns of the Landowner that should be considered as being reasonable, because it was the information that was available to the Landowner at the date of entry into the Agreement to Lease that told the Landowner indicatively what to expect from the construction of the wind farm. The construction of the Accessways on each Landowner's land was to be strictly in accordance with the Final Layout.
There was no direct evidence as to the manner in which the parties engaged in the process provided by the Agreements to Lease and the Leases concerning the determination of the ultimate route of the access road from the Gwydir Highway to the substation. I infer that Mr Dulhunty, and probably also Mr Cameron, participated in that process, as neither Landowner granted an option for the grant of an access easement over the access road as it was proposed to be constructed as at 16 September 2014, so their consent should have been necessary for the construction of part of the access road over their land. Even if the process was not in fact implemented as required by the agreements, it is a fact that neither Mr Dulhunty nor Mr Cameron agreed to grant to White Rock any access easement over any part of their land.
Although the evidence is limited, it must have been understood by the parties, no later than 23 December 2015, which was the date of White Rock's agreement to survey and create an easement to accommodate the realignment of the right of way, that the access road would ultimately be constructed over part of the land of all of the five Landowners.
There is an unresolved question about whether, under the Agreements to Lease and the Leases to which they were parties, Mr Dulhunty and Mr Cameron could have been compelled by White Rock to permit the access road that was ultimately constructed from the Gwydir Highway to the substation to deviate upon their lands. When one looks at the Indicative Layouts that were annexed to each of the Agreements to Lease, one sees a series of access tracks that not only allow access from the Gwydir Highway to the substation, but also access to the location of each of the wind turbines. The proposed route of the access road from the Gwydir Highway to the substation is not identified separately. Its intended location may be deduced from an inspection of the Corridor Land Plans that were annexed to the Option Agreements for Powerline and Access Easements. It is not clear from any of the plans, or from the evidence, whether or not the access road would be constructed in any different or more substantial way than the access tracks that lead off the access road to the location of the wind turbines. I infer from the fact that Mr Dulhunty and Mr Cameron were not required to enter into Option Agreements for Powerline and Access Easements that the Indicative Layouts for their Agreements to Lease did not depict an access track on the part of their lands upon which the access road was ultimately constructed. Whether or not the terms of the Agreements to Lease and the Leases entered into by Mr Dulhunty and Mr Cameron would have obliged them to consent to the relocation of the access road to cross part of their lands is now a moot point. That is because both Landowners must have consented to that occurrence. In principle, the issue may remain relevant to the question as to whether the Landowners as a group are now all obliged to consent to the grant by White Rock to TransGrid of the proposed non-exclusive licence to use the access road. While on the one hand, as at 18 September 2014, neither Mr Dulhunty nor Mr Cameron was expected to receive any additional consideration for granting the right to use the access road, on the other hand, there was not then intended to be any access road over either Landowner's land.

Failure of White Rock to exercise Options

White Rock did not exercise any of the Options before those options expired.
There was no evidence as to why White Rock issued the Notices to Proceed but did not exercise any of the Options. White Rock's case ignored this issue entirely. There was no evidence of any communications between White Rock and the Landowners as to the consequences of the Leases becoming operative in circumstances where White Rock had abandoned the right to compel Mr Wood or JWH to transfer the Substation Land, and to compel Mr Wood, JWH and Mr Nugent to grant the Powerline and Access Easements.
The evidence was limited as to the timing of the construction of the various elements of the wind farm. White Rock's primary witness, Mr Jeffrey James Ware, said that the construction of the wind farm commenced in late 2016 and was completed in about July 2018. Mr Wood said that the substation was constructed on his land in the period between 2016 and 2017. There was some evidence that the wind farm reached practical completion in July 2018, which was the same year in which it was connected to the national grid.

Communications between parties after date of Leases

On 6 June 2017, White Rock issued a Notice of Dispute to the Landowners in relation to their claims that White Rock had breached the Leases in the manner in which it had constructed the wind farm.
By 7 December 2017, the plan that became Exhibit PD2 had been prepared. I infer that that plan was required to be registered as a Deposited Plan to enable the registration of both the Powerline and Access Easements. An email dated 21 June 2018 stated that the plan had been registered some time before. The Deposited Plan itself stated that it was a: "PLAN OF ACQUISITION & PROPOSED EASEMENT FOR TRANSMISSION LINE." It is not clear why the Access Easement was not mentioned.
An email written on behalf of Goldwind to the Landowners' solicitors and Ms Squires dated 23 May 2018, referred to the agreement by three of the Landowners to grant transmission line easements to TransGrid in the terms of the relevant Option Agreements. The email refers to the attachment of three draft Transfers Granting Easements. The attachments are not included in the Court Book. However, the email states that the Transfers "consolidate the transmission line easement and access easement into one TGE". The email refers to TransGrid as having registered the relevant Plan of Acquisition.
An email from the Landowners' solicitors to Mr Williamson of Goldwind dated 24 September 2018 referred to an email received from Mr Williamson on 19 September 2018. That email does not appear to be in the evidence. The 24 September 2018 email included: … Also, there is no provision in this Transfer Granting Easement providing for payment for the access over the "proposed Right of Carriageway over track and use" as shown on [the Deposited Plan that is Exhibit DP2]. We are instructed to press for this payment to be included in the Transfer Granting this Easement…
The letter noted that the draft Transfers Granting Easement had not been provided for Mr Dulhunty and Mr Cameron, and requested that drafts be provided. This request appears to have reflected the fact that, although Mr Dulhunty and Mr Cameron did not grant Option Agreements for Powerline and Access Easements to White Rock, the Deposited Plan showed the Access Track passing over the Land of those two Landowners.
Mr Williamson replied by email dated 26 September 2018. That email included: … Payment for access easement It has never been contemplated by the parties that the landowners would receive an additional payment above what is set out in the rent agreement for the access agreements associated with the powerline easement. I refer you to the original terms of the option agreements (attached for reference). There is no mention of an additional payment provision in the agreed form of access easement appended to each option agreement. My understanding of the commercial deal agreed between the parties is that these new easement documents are to be commercially in the same form as those appended to the original option agreements. The only changes that are being proposed by [White Rock] relate to the payment clause/lease termination provision (as described above), which is only required as a result of TransGrid being the transferee under the easements. Cameron and Dulhunty I am not aware that there is any proposal to take a powerline or access easement over Cameron or Dulhunty's land. I am only aware that such easements are required from John Wood, John Wood Harvesting and Nugent as per the original option agreements with these parties.
Mr Williamson sent a further email to the Landowners' solicitors on 17 October 2018, which relevantly said: … Given your comments below regarding payment for the access easements, we have decided to remove the access easement from the form of TGE so that it now only refers to a powerline easement (for which your clients are being paid under the rent agreements). Please see attached proposed final form TGEs for: [Mr Wood, JWH and Mr Nugent]. … In addition, in order to provide [TransGrid] with a right to use the [Access Track] to access [their] substation land during the lifetime of the wind farm, [White Rock] now proposes to enter into a separate licence agreement with TransGrid to provide them with a non-exclusive right of access, subject to the terms of that deed. We therefore hereby seek the written consent of your clients to enter into this non-exclusive licence with TransGrid over the access track in accordance with clause 8.5 of each of the following registered leases: [Leases from Landowners listed]. Please confirm whether your clients (the landowners under these leases) consent to the licence arrangement, noting that the landlords cannot unreasonably withhold their consent under clause 8.5 of the leases. …
The Landowners' solicitors responded by email dated 18 October 2018, stating: … Transfer Granting Easement Form and Payment for Access Our client considers that your response is irrelevant, as this is a completely new arrangement and we are instructed to advise you that our client presses for a payment for access over the Proposed Right of Carriageway over track and use shown on [the Deposited Plan]. This payment request is not part of the original dispute, and is to be negotiated after the dispute is settled and will not hold up resolution of the dispute. Cameron & Dulhunty Our clients' understanding, is that both Cameron & Dulhunty are to grant a right of use over the existing road referred to in their Leases to White Rock. …
This correspondence shows that when the parties entered into the Deed of Release that I will consider below, that was on the basis that the deed would contain the terms of the settlement of all of the issues that then existed between the parties, save for the issue of whether the Landowners were obliged to consent to White Rock providing a licence to TransGrid to use the Access Track.
A further email from the Landowners' solicitors to Mr Williamson dated 12 November 2018 referred to an email from Mr Williamson dated 12 November 2018 that does not appear to be in the evidence. The email stated that the Landowners wanted an additional term in the Transfer Granting Easement in relation to the powerline. It also said that the Landowners would consider White Rock's request for their approval in relation to the grant of the licence over the Access Track to TransGrid "and will advise you in due course of their decision."

Deed of Release

On 19 November 2018, the Group Landowners entered into a Deed of Release with White Rock. There appear to have been 24 separate Group Landowners who were parties to the deed. The Group Landowners included the five Landowners who are defendants to these proceedings.
In part, the purpose of the Deed of Release was to settle disputes raised by the Group Landowners out of the manner in which White Rock had constructed the wind farm, which led to claims by the Group Landowners that White Rock had breached the terms of their respective Leases.
Clause 2 of the Deed of Settlement required White Rock to pay the sum of $2,850,000 in relation to the claims by the Group Landowners that White Rock had allegedly breached the terms of the Leases by constructing oversized wind farm infrastructure.
The Deed of Release contained other terms varying the legal relationships between the parties, including by providing for variations to some of the Leases.
In apparent response to the fact that White Rock did not exercise the option to purchase the Substation Land on Mr Wood's property, clause 6 obliged White Rock and Mr Wood to enter into and complete a contract for the sale of land on the terms set out in Annexure D within 20 business days of the date of the deed. Annexure D contained an elaboration of this term, whereby the contract for sale was to be on the same terms and conditions as the Option Agreement to Purchase Substation Land between Mr Wood and White Rock dated 16 September 2014. However, Annexure D added: "but also including a provision under which [White Rock] (or its nominee purchaser) grants to Mr Wood a perpetual access easement over the Substation Land (located within a "buffer zone" outside of the fenced part of the substation, in a location reasonably agreed between the parties and being a 20m wide easement) and the parties enter into a transfer granting easement upon settlement of the sale." Annexure D also required Mr Wood to grant a further Option Agreement to White Rock to purchase substation land of up to an additional 100m x 100m on the same terms and conditions as the Option Agreement dated 16 September 2014.
While it does not appear that Mr Wood received a separate consideration in money terms for his agreement to sell the Substation Land, notwithstanding the lapse of the Option, he became entitled to a grant of a perpetual access easement over the Substation Land. The parties also negotiated a further option agreement whereby White Rock could purchase additional substation land from Mr Wood.
Clause 7 of the Deed of Release provided: 7 Entry into powerline easement (a) [Mr Wood] must enter into a powerline easement on the terms set out in Annexure E within 20 business days of the date of this deed unless otherwise agreed between [White Rock] and [Mr Wood]. (b) [JWH] must enter into a powerline easement on the terms set out in Annexure F within 20 business days of the date of this deed unless otherwise agreed between [White Rock] and [JWH]. (c) [Mr Nugent] must enter into a powerline easement on the terms set out in Annexure G within 20 business days of the date of this deed unless otherwise agreed between [White Rock] and [Mr Nugent].
Thus, although White Rock failed to exercise the Option Agreements in relation to the powerline easements that it had been granted by Mr Wood, JWH and Mr Nugent, the three grantors renewed their agreement to grant the easements by clause 7 of the Deed of Release.
The Deed of Release contained no provision for the Landowners who were the owners of Land over which the access road from the highway to the substation had been constructed to grant easements over their land in favour of either White Rock or TransGrid.

Draft Licence Deed

On 3 April 2019, White Rock provided to the solicitors for the Landowners a final form version of the non-exclusive access licence to be granted by White Rock to TransGrid over the access road to allow TransGrid to access its substation from the Gwydir Highway.
The draft Licence Deed provided in clause 2.1: 2.1 Grant of Licence The Licensor grants to the Licensee a non-exclusive licence to access the Access Track for the Permitted Purpose during the Licence upon the terms contained in this Licence.
The "Access Track" was defined in clause 1.1 as meaning "the section of the Land marked B on the Plan". "Land" was defined as meaning "the land described in Item 5." The Items were stated in Schedule 1. Item 5 in Schedule 1 identified Land by reference to the Deposited Plan Lot numbers which included the Land the subject of the Leases granted by the Landowners to White Rock.
The "Access Track" was depicted in the Plan included in Schedule 2, by reference to a plan that was admitted into evidence at the hearing as Exhibit DP2 (which had originally been marked for identification as MFI-1). That plan depicted the Access Track as being a broken line from the public highway to the Substation Land on Mr Wood's property and described as: "B PROPOSED EASEMENT FOR ACCESS 10 WIDE…"
The draft Licence Deed in substance would permit TransGrid to pass and repass over the Access Track for purposes connected with its operation and maintenance of the Substation for the period over which White Rock might operate the wind farm. Clause 3.2 would require TransGrid to observe and perform certain identified terms of the Leases. Clause 3.3 would impose some listed general restrictions on the manner in which TransGrid could use the Access Track.
I note for the sake of completeness that, although the Landowners have not yet consented to White Rock entering into the draft Licence Deed, the Landowners have in fact permitted TransGrid to use the access road since mid-2017, so that the dispute between the parties has not impeded the operation of the wind farm.

Communications between the parties after Draft Licence Deed

The Landowners' solicitors sent a letter to Goldwind on 23 May 2019 that referred to the draft licence deed and said: … Our clients in email from the writer's assistant, Anna Gershoig, of 11 October 2018, pressed for payment of access over the [Access Track], and this request was rejected in email from Charlie Williamson on 17 October 2018. We are again instructed by our clients, that they do not consent to an access licence, being granted by [White Rock] to [TransGrid] in place of granting an easement, which was originally agreed. Further, creation of any new easement to [TransGrid] will only be considered to after [White Rock] has complied with their commitment to create a right-of-way over the "Access Track" in favour of the affected landowners. Furthermore, the "Access Track" is not a public road.
The letter concluded by noting that the solicitors acted for the five Landowners who are the defendants in this case.
Mr Williamson replied on behalf of Goldwind by email dated 3 June 2019. He referred to clause 8.5 of each of the Leases and the fact that the Landowners cannot unreasonably withhold their consent to a licence by White Rock. Mr Williamson in substance stated the arguments relied upon by White Rock at the hearing, being that it was "established case law" that it will be unreasonable for a landlord to withhold its consent in circumstances where the landlord requires a commercial payment from the tenant in exchange for the consent, or where the landlord seeks to obtain a collateral purpose or collateral advantage. Mr Williamson relied upon the fact that, in the Option Agreements for Powerline and Access Easements, there was no provision for the receipt by the Landowners of consideration for the grant of the Access Easements as opposed to the Powerline Easements.
Mr Williamson did not advert to the fact that Mr Dulhunty and Mr Cameron had not granted Option Agreements for Powerline and Access Easements.
The Landowners' solicitors replied on 6 June 2019, saying: … We are instructed to advise you, that our clients are happy to grant an access easement to [TransGrid] on the same terms and conditions as access is being granted to other third parties. We specifically refer you to the access given to White Rock Solar Farm (a related company to your company) for access over the same track for which a payment was made. In these circumstances our clients are not acting unreasonably in withholding the consent as consent has been given to another third party for a payment.
The agreement with White Rock Solar Farm Pty Ltd (Solar Farm) referred to in this letter is dated 14 September 2017 and was admitted into evidence as Exhibit PD3. The Transferor was Mr Dulhunty. The Easement Site is defined in clause 21(f) of the annexure to the Transfer Granting Easement as being "the site for the easement for access on the attached Plan, being 20 metres in width." The relationship between the route of this access easement and the access road constructed by White Rock was not clearly established, and it cannot readily be identified by comparing plans. It appears from the definition of "Solar Farm Lease" in clause 20(m) that the solar farm was constructed on land owned by Mr Nugent.
Mr Dulhunty and Solar Farm entered into a Consideration Deed dated 14 September 2017. By clause 1, Solar Farm agreed to pay consideration to Mr Dulhunty that included the payments referred to in prayer 2 of White Rock's summons that is set out above at [21]. Clause 2 contained a formula for a CPI increase that may be the same as in prayer 2.
The evidence is not clear as to whether the other Landowners granted an equivalent easement to Solar Farm.
On 11 July 2019, Mr Williamson replied by asserting that the White Rock Solar Farm analogy was not valid because that involved a payment for a grant of a registrable easement binding the landowner and not a non-exclusive licence as between a lessee and a licensee.
On 19 August 2019, White Rock served a Notice of Breach of Lease on each of the Landowners that asserted that they were in breach of clause 8.5 of the Lease.

White Rock's claim based upon clause 8.5 of the Leases

White Rock's case was a simple one. It was that, for the purposes of clause 8.5 of each of the Leases, it was unreasonable for the Landowners to refuse their consent to the proposed Licence Deed between White Rock and TransGrid unless White Rock paid to the Landowners the additional consideration that they had demanded. White Rock's case was that the only reasonable course open to the Landowners was to give their consent for no additional consideration, because it was clear under the suite of documents entered into by the Landowners with White Rock on 16 September 2014 that the Landowners would only be entitled to receive consideration in respect of identified parts of the operation of the wind farm, which excluded any right to receive the consideration that the Landowners have now demanded for the grant of an access easement over the access road from the Gwydir Highway to the Substation.
The premise of that submission is true, at least to the extent that clause 16 of the annexure to the Transfer Granting Easement (which is Annexure 4 to the Option Agreements for Powerline and Access Easements) provided that the consideration to be received by the Landowners was "payments under the Lease pursuant to special condition 16 of the rent agreement" which provided: "As consideration for entering into this Transfer Granting Easement the Transferee will pay to the Transferor payments under the Lease pursuant to special condition 16 of the rent agreement (being an exhibit to the Lease)." No additional consideration was to be paid for the grant, or use, of the access easement. The same is true in a negative sense for Mr Dulhunty and Mr Cameron, because they were not required to grant Option Agreements for Powerline and Access Easements, so there was no practical way they would receive any consideration for the grant, or use, of an access easement, because there was to be no such easement over their lands.
White Rock cited Fulham Partners LLC v National Australia Bank Ltd [2013] NSWCA 296; (2013) 17 BPR 32,709, where Basten JA (with whom Barrett JA and Bergin CJ in Eq agreed) said: [44] In Secured Income Real Estate (Australia) Ltd v St Martins Investments Pty Ltd [1979] HCA 51; 144 CLR 596 at 610, Mason J (with whom other members of the court agreed) adopted a statement that "the reason for refusal must be something affecting the subject matter of the contract which forms the relationship between the landlord and the tenant, and not something extraneous and dissociated from the subject matter of the contract": Colvin v Bowen (1958) 75 WN (NSW) 262 at 264 (Walsh J). To similar effect, Warrington LJ in Re Gibbs and Houlder Bros and Co Ltd's Lease [1925] Ch 575 at 584 stated that "the outstanding circumstances to be considered are the nature of the contract to be construed, and the relations between the parties resulting from it"; a passage adopted by Nettle J in Cathedral Place Pty Ltd v Hyatt of Australia Ltd [2003] VSC 385 at [26]. In the latter case, Nettle J also approved a passage from the judgment of Lord Denning in Bickel v Duke of Westminster [1977] QB 517 at 524 where, in the context of a lease, it was said that "in order to be reasonable, the landlord's refusal must be based on (i) either the personality of the assignee or (ii) the user or occupation of the premises". Other reasons were said to be extraneous. [45] Propositions at such a high level of generality do not necessarily convey where to draw the boundary between the legitimate and the extraneous. That is partly because, where the parties have stipulated that an assignment cannot be made without consent which must not be unreasonably refused, the concept of "unreasonable refusal" is not an abstract point of law, but a matter to be understood in the context of the particular contract: Cathedral Place at [27]. Further, there are grounds which, abstractly, might be thought legitimate, in terms of a broadly stated principle, but which in particular cases have been rejected. [46] In Secured Income, the High Court upheld a refusal as not unreasonable where the purchaser of a property withheld consent for the vendor to lease various portions of a large office building on the basis that the purchaser entertained reasonable doubts that the vendor would or could pay the rent promptly. The effect of the purchaser's refusal was to reduce the purchase price of the property, because the aggregate rents were below a figure fixed in the contract. Mason J stated at 610: Approaching the contract in the present case in the light of these observations, I conclude that the respondent was not entitled to refuse to grant a lease to the appellant so as to deprive the appellant of a benefit which would otherwise accrue to it under the contract. A refusal on that ground would be capricious and arbitrary. On the other hand, a refusal on the ground that there were doubts that the appellant could or would pay the rent promptly would, if the ground were made out, not be capricious or arbitrary.
White Rock also referred the Court to further authorities that considered the principles that are relevant to the reasonableness of a refusal by a lessor to consent to the assignment of a lease by the lessee, including the judgment of Balcombe LJ (with whom, Mustill and Fox LJJ agreed) in International Drilling Fluids Ltd v Louisville Investments (Uxbridge) Ltd [1986] 1 Ch 513, where his Lordship said, at 519-521: During the course of argument many cases were cited to us, as they were to the judge. I do not propose to set them out in detail here; many of the older cases were considered in the full judgment of the Court of Appeal in Pimms Ltd. v. Tallow Chandlers Company [1964] 2 Q.B. 547. From the authorities I deduce the following propositions of law. (1) The purpose of a covenant against assignment without the consent of the landlord, such consent not to be unreasonably withheld, is to protect the lessor from having his premises used or occupied in an undesirable way, or by an undesirable tenant or assignee: per A. L. Smith L.J. in Bates v. Donaldson [1896] 2 Q.B. 241, 247, approved by all the members of the Court of Appeal in Houlder Brothers & Co. Ltd. v. Gibbs [1925] Ch. 575. (2) As a corollary to the first proposition, a landlord is not entitled to refuse his consent to an assignment on grounds which have nothing whatever to do with the relationship of landlord and tenant in regard to the subject matter of the lease: see Houlder Brothers & Co. Ltd. v. Gibbs, a decision which (despite some criticism) is binding on this court: Bickel v. Duke of Westminster [1977] Q.B. 517. A recent example of a case where the landlord's consent was unreasonably withheld because the refusal was designed to achieve a collateral purpose unconnected with the terms of the lease is Bromley Park Garden Estates Ltd. v. Moss [1982] 1 W.L.R. 1019. (3) The onus of proving that consent has been unreasonably withheld is on the tenant: see Shanly v. Ward (1913) 29 T.L.R. 714 and Pimms Ltd. v. Tallow Chandlers Company [1964] 2 Q.B. 547, 564. (4) It is not necessary for the landlord to prove that the conclusions which led him to refuse consent were justified, if they were conclusions which might be reached by a reasonable man in the circumstances: Pimms Ltd. v. Tallow Chandlers Company [1964] 2 Q.B. 547, 564. (5) It may be reasonable for the landlord to refuse his consent to an assignment on the ground of the purpose for which the proposed assignee intends to use the premises, even though that purpose is not forbidden by the lease: see Bates v. Donaldson [1896] 2 Q.B. 241, 244. (6) There is a divergence of authority on the question, in considering whether the landlord's refusal of consent is reasonable, whether it is permissible to have regard to the consequences to the tenant if consent to the proposed assignment is withheld. In an early case at first instance Sheppard v. Hongkong and Shanghai Banking Corporation (1872) 20 W.R. 459, 460, Malins V.-C. said that by withholding their consent the lessors threw a very heavy burden on the lessees and they therefore ought to show good grounds for refusing it. In Houlder Brothers & Co. Ltd. v. Gibbs [1925] Ch. 575, 584, Warrington L.J. said: "An act must be regarded as reasonable or unreasonable in reference to the circumstances under which it is committed, and when the question arises on the construction of a contract the outstanding circumstances to be considered are the nature of the contract to be construed, and the relations between the parties resulting from it." In a recent decision of this court, Leeward Securities Ltd. v. Lilyheath Properties Ltd. (1983) 271 E.G. 279 concerning a sub-letting which would attract the protection of the Rent Act, both Oliver L.J. and O'Connor L.J. made it clear in their judgments that they could envisage circumstances in which it might be unreasonable to refuse consent to an underletting, if the result would be that there was no way in which the tenant (the sub-landlord) could reasonably exploit the premises except by creating a tenancy to which the Rent Act protection would apply, and which inevitably would affect the value of the landlord's reversion. O'Connor L.J. said, at p. 283: "It must not be thought that, because the introduction of a Rent Act tenant inevitably has an adverse effect upon the value of the reversion, that that is a sufficient ground for the landlords to say that they can withhold consent and that the court will hold that that is reasonable." To the opposite effect are the dicta, obiter but nevertheless weighty, of Viscount Dunedin and Lord Phillimore in Viscount Tredegar v. Harwood [1929] A.C. 72, 78, 82. There are numerous other dicta to the effect that a landlord need consider only his own interests: see, e.g., West Layton Ltd. v. Ford [1979] Q.B. 593, 605, and Bromley Park Garden Estates Ltd. v. Moss [1982] 1 W.L.R. 1019, 1027. Those dicta must be qualified, since a landlord's interests, collateral to the purposes of the lease, are in any event ineligible for consideration: see proposition (2) above. But in my judgment a proper reconciliation of those two streams of authority can be achieved by saying that while a landlord need usually only consider his own relevant interests, there may be cases where there is such a disproportion between the benefit to the landlord and the detriment to the tenant if the landlord withholds his consent to an assignment that it is unreasonable for the landlord to refuse consent. (7) Subject to the propositions set out above, it is in each case a question of fact, depending upon all the circumstances, whether the landlord's consent to an assignment is being unreasonably withheld: see Bickel v. Duke of Westminster [1977] Q.B. 517, 524, and West Layton Ltd. v. Ford [1979] Q.B. 593, 604, 606-607.
White Rock also referred to the decision of Kunc J in Construction Technologies Australia Pty Ltd v Doueihi (No 5) [2018] NSWSC 294, where his Honour said: [64] The onus lies on CTA to prove that consent has been unreasonably withheld: see Tamsco at paragraph [49]; Fulham Partners LLC v National Australia Bank Ltd [2013] NSWCA 296; (2013) 17 BPR 32,709 at paragraph [59] per Basten JA (Barrett JA and Bergin CJ in Eq agreeing) (Fulham Partners). [65] The defendants articulate the threshold for the inquiry pursuant to clause 1.9 as requiring that the reasons for withholding consent must be "not unfounded" or "not wholly unreasonable", relying on Tamsco and a line of English authorities including International Drilling Fluids Ltd v Louisville Investments (Uxbridge) Ltd [1986] 1 Ch 513 at 519-21 (International Drilling); Pimms Ltd v Tallow Chandlers Co [1964] 2 QB 547 at 564 (Pimms); and older authorities cited therein. [66] However, CTA correctly submits that the question of whether the defendants have unreasonably withheld their consent to the lodgement of the Third s 96 Application must be considered not in the abstract, but according to the specific context of the terms of the Lease between the parties. That proposition is supported by Mason J's adoption in Secured Income (at 610) of a statement of Walsh J in Colvin v Bowen (1958) 75 WN (NSW) 262 at 264 that "the reason for refusal must be something affecting the subject matter of the contract which forms the relationship between the landlord and the tenant, and not something extraneous and dissociated from the subject matter of the contract". The English authorities to which the defendants refer do not suggest otherwise: see International Drilling at 520 and Pimms at 566-7. [67] The thresholds posed by the defendants ("not unfounded" or "not wholly unreasonable") are not of great assistance in determining this issue, which must turn on the construction of the particular contract with which the Court is concerned. I respectfully agree with the observations of Basten JA (with whom Barrett JA and Bergin CJ in Eq agreed) in Fulham Partners (at paragraph [45]) that: Propositions at such a high level of generality do not necessarily convey where to draw the boundary between the legitimate and the extraneous. That is partly because, where the parties have stipulated that an assignment cannot be made without consent which must not be unreasonably refused, the concept of "unreasonable refusal" is not an abstract point of law, but a matter to be understood in the context of the particular contract … .
While I accept that these statements of principle provide guidance in the present case, care must be taken because most of the authorities cited were cases in which the claim of unreasonable failure to give consent was made in the context of a conventional lease of premises. Although the relationship between White Rock and the Landowners was primarily created by the terms of the Leases, with the consideration governed by the Rent Agreements and the Royalty Payment Deeds, the relationship was by no means a conventional one of landlord and tenant under a lease in which the exclusive right to possession was granted to the tenant. In the manner explained above, the Landowners were to be entitled to share the occupation and use of the Land the subject of the Leases, which in my view had the practical effect that they could properly take into account a greater range of issues relevant to the preservation of their own interests, including the preservation of the utility of their own right to use their land, in deciding whether or not to grant their consent under clause 8.5 of the Leases than might be the case if the Landowners had given exclusive possession of their land to White Rock.
At par 191 of its final written submissions, White Rock summarised its argument as follows: The defendants' refusal to consent to White Rock's grant of a licence to TransGrid to use the Access Track, under cl 8.4 [read 8.5] of the Leases, was unreasonable for three primary reasons: a. the sole or predominant purpose of the refusal was to insist on an easement for the payment of additional money and to force White Rock to create a "right of way" over the new Access Track in favour of the affected landowners, both of which purposes were collateral to the terms of the Leases; b. the defendant landowners were already being generously compensated for the use of their land in connection with the wind farm and the evidence demonstrates that the parties originally envisaged that easements would be granted to the plaintiff and/or TransGrid for no additional (or only nominal) payments; and c. TransGrid requires access to the land, and disallowing it access until additional money is paid to the defendants risks thwarting the entire commercial purpose of the Leases.
For reasons that I will now explain, I consider that White Rock's submission at (a) in the preceding paragraph is the only argument in support of its claim that has some force, and requires detailed consideration by the Court.
It is true that the Rent Agreements and the Royalty Payment Deeds provided for substantial consideration to be paid by White Rock to the Landowners. The Court may infer that the Landowners were content with that consideration when they entered into the Agreements to Lease. However, the evidence does not provide a sound basis for the Court to make any judgment as to whether the consideration is, or is not, "generous". As this case has been presented, the quantum of the agreed consideration is an entirely neutral factor. The Court also has no basis for speculating about whether or not the Landowners' subsequent experience of the manner in which White Rock purported to comply with its obligations under the Leases justified the Landowners in forming the opinion that they should receive a greater amount of consideration.
I do not accept White Rock's submission that the maintenance of the Landowners' refusal to grant their consent to White Rock entering into the Licence Deed with TransGrid is likely to thwart the entire commercial purpose of the Leases. As I have noted above, the Landowners have permitted TransGrid to use the access road since mid-2017. The evidence led by White Rock does not establish that an agreement on its part to pay to the Landowners the additional consideration that they have demanded would make the wind farm commercially unviable, because of the magnitude of the additional payments relative to the profit generated by the wind farm. The position is that the Landowners have asked for additional consideration equal to the consideration payable by Solar Farm for an equivalent easement. I infer on the evidence that it is White Rock that has taken the stance that it should not be required to offer any additional consideration at all. The evidence does not establish that the Landowners have declined to engage in any negotiations about the quantum of the additional consideration.
The reality is that White Rock allowed all of the Options to expire, with the result that it lost the right to compel the Landowners to grant the interests in their land that the Landowners would have been required to grant if the necessary Options had been exercised. No explanation has been offered. White Rock placed itself in an equivalent position to any other party who fails to exercise an option before its expiry. That position has been since 10 July 2017 that it has been obliged to achieve the commercial outcomes necessary to ensure the commercial viability of the wind farm, and in particular, the satisfaction of its obligations to TransGrid under the TransGrid Project Agreement, by negotiation with the Landowners. Except perhaps in cases where a party to negotiations is shown to have adopted a patently unreasonable stance, it is not usual for the Court to intrude into commercial negotiations between competent parties, as that would involve the Court in an exercise that is not strictly judicial.
As to White Rock's first submission, I accept that it would usually be taken as an extraneous condition for a lessor to require the payment of an additional rent to that fixed by the lease in return for the grant of its consent to an assignment of the lease, at least in cases where the increase in rent could not be justified by the lessor establishing that the circumstances of the proposed assignee were such as to give rise to a heightened risk of failure to pay the rent or other breach of the lease. In the present case, there has not been, nor could there be, any suggestion that the use of the access road by TransGrid, which is essential to the operation of the wind farm, would subject the Landowners to any risk.
White Rock submitted at par 3 of its final written submissions that the Landowners had withheld their consent "to strong-arm the plaintiff into undertaking a survey and registering a right of way in favour of the landowners". This language may be considered to be a trifle strong, given that White Rock agreed to take these steps on 23 December 2015, in the context of negotiations with the Landowners on the issue of whether the conditions precedent to the entitlement of White Rock to issue Notices to Proceed had been satisfied. As I understand White Rock's present position (as stated in par 232 of its final written submissions), the Court should not make an order against it for specific performance of this agreement "for the simple reason that there is no real dispute between the parties in relation to the realignment of the right of carriageway."
I am satisfied that, during the period when White Rock was resisting the performance of its promise to conduct a survey and create an easement generally over the access road for the benefit of relevant Landowners, it was reasonable for the Landowners to decline to give their consent under clause 8.5 of the Leases. In a loose sense, it may be argued that the achievement of the enforcement of White Rock's agreement was collateral to White Rock's desire to grant a licence to use the access road to TransGrid, but the two issues were not entirely unrelated. The Leases did not preserve each Landowner's right to access from his or its Land to the Gwydir Highway. Enforcement of the agreement made by White Rock was in my view necessary to preserve that access. It was not unreasonable for the Landowners to prevent White Rock from using the access road in a way that suited White Rock, while White Rock refused to honour its agreement in a way that was necessary to enable the Landowners to reinstate their rights of way in an effective and legally binding manner.
White Rock's submissions treated this case as if it were a simple case of a lessee seeking the lessor's consent to a sub-licence of part of the lessee's rights under the lease to a third party. Curiously, White Rock's submissions entirely ignored the terms of the suite of agreements entered into by the parties on 16 September 2014, save only to the extent that those agreements specified the consideration to which the Landowners would become entitled from the construction and operation of the wind farm if White Rock had exercised the necessary Options.
In particular, White Rock's submissions entirely ignored the fact that White Rock failed to exercise any of the options that were granted to it by the Option Agreements entered into on 16 September 2014, save to assert that its failure to exercise the Options was immaterial.
Those Option Agreements gave White Rock options the exercise of which would have permitted White Rock to secure the outcome that it now seeks to achieve by obliging the Landowners to give their consent under clause 8.5 of the Leases for the grant of the licence to TransGrid to use the access road.
As I have explained above, clause 24.1 of the TransGrid Agreement obliged White Rock, by the Date of Practical Completion, to ensure that legal and beneficial title to the Substation Site was transferred to TransGrid. Clause 24.2 obliged White Rock by the same date to procure the grant of an easement over the Transmission Line Route, and an easement from the proposed Substation Site to the nearest public road for the purpose of accessing the Substation Site by TransGrid.
Although it is apparent that TransGrid has agreed to accept a licence from White Rock to use the access road, there is no evidence that TransGrid would have agreed to accept anything less than ownership of the Substation Site or an easement over the Transmission Line Route.
Once White Rock had allowed all of the options to expire without having exercised them, White Rock had no legal means to compel Mr Wood to transfer the Substation Site to TransGrid. Nor did it have any right to compel Mr Wood, JWH and Mr Nugent to grant the transmission line easement required by TransGrid. It may be inferred that TransGrid may have had a different attitude to the need for an easement over the Transmission Line Route than over the access road, as clause 13.3 of the TransGrid Project Agreement provided that TransGrid was to retain ownership of the Transmission Line, notwithstanding that the infrastructure may have otherwise been a fixture to the Landowners' lands.
The terms of the Leases did not grant any proprietary rights to White Rock that would have enabled it to transfer the Substation Site to TransGrid or to grant any easement over the Transmission Line Route. The legal position was different in respect of the access road, because White Rock had a right to possession of the access road under the Leases, and so was legally able to grant a licence to TransGrid to use the access road, subject only to TransGrid being content with that arrangement, and White Rock being able to compel the consent of the Landowners under clause 8.5 of the Leases.
By reason of the failure by White Rock to exercise all of the options before they expired, the Landowners between them had the legal right to deny White Rock's capacity to satisfy its legal obligations to TransGrid under the TransGrid Project Agreement. It may have been counterproductive for the Landowners to have exercised that right, because TransGrid's cooperation was essential to the successful construction and operation of the wind farm. However, the Landowners would have been free to negotiate an additional consideration for granting to White Rock the benefits that it had abandoned when it failed to exercise the Options. That would have been a matter as between the Landowners and White Rock, and would not have been subject to review or control by the Court.
As it has happened, the Landowners entered into the Deed of Release under which Mr Wood agreed to transfer the Substation Site to TransGrid, on terms substantially as provided in the Option Agreement to Purchase Substation Land, subject to an additional negotiated perpetual access easement over the Substation Land in favour of Mr Wood. In that respect, Mr Wood was not bound by the terms of the Option Agreement to Purchase Substation Land. Mr Wood, JWH and Mr Nugent also agreed to enter into a powerline easement on the terms of Annexure G to the Deed of Release. Those Landowners agreed to grant the easements without payment of additional consideration.
It was only after the Landowners had entered into the Deed of Release that White Rock was able to satisfy its obligations to TransGrid under the TransGrid Project Agreement using the device of granting a licence to TransGrid, by means of the consent of the Landlords acquired by the enforcement of clause 8.5 of the Leases.
Having been relieved of its incapacity to cause the Substation Site to be transferred by Mr Wood to TransGrid, and its incapacity to cause the Transmission Line Easement to be granted by the three Landowners to TransGrid, by reason of the reasonableness of the Landowners in agreeing to the terms of the Deed of Release, White Rock now contends that it can oblige the Landowners to give their consent under clause 8.5 of the Lease.
Between the expiration of the Options on 10 July 2017 and the 19 November 2018 date of the Deed of Release, White Rock had, through its own inaction, entirely lost the legal right to compel the Landowners to do what was necessary to satisfy White Rock's obligations to TransGrid under the TransGrid Project Agreement. In that period, the Landowners were free to negotiate for additional consideration from White Rock, as Mr Wood did in respect of the agreement to grant him a perpetual right of access to the Substation Land.
I do not accept that the Landowners lost the commercial advantage of their ability to negotiate the payment of an additional consideration by White Rock by reason of their obligation under clause 8.5 of the Leases to act reasonably in withholding the consent to the grant of a licence to use the access road to TransGrid, after they had exhausted their unconstrained bargaining power by entering into the Deed of Release, on terms satisfactory to White Rock, in a manner that enabled White Rock to satisfy its obligations to TransGrid.
I appreciate that, in a strict sense, the Landowners had no right to compel White Rock to exercise any of the Options, and that they took the risk that White Rock would not do so. However, common sense establishes that it would have been the reasonable expectation of the Landowners that, if White Rock issued Notices to Proceed under the Agreements to Lease before 10 July 2017, it would also have exercised the Options necessary to satisfy its obligations to TransGrid. In my view, the Landowners had reasonable grounds to expect that, as the access road was expected to traverse the Land of three of the Landowners, the Landowners would have the benefit of formal access easements, including that the access road would be required to be repaired by White Rock. That expectation was reinforced by the fact that the access of some of the Landowners to the Gwydir Highway would be by means of rights of way over the access road (although this expectation was complicated by the realisation that the route of the access road would diverge from that of the existing access road, which led to White Rock's agreement of 23 December 2015).
Finally, there is the consideration that, on the evidence, it is more probable than not that Mr Dulhunty and Mr Cameron did not bind themselves on 16 September 2014 to permit the construction of any part of the access road on their land. They are in a different position to the other Landowners, who did agree to the construction of the access road on their land, without payment of any separate or additional consideration. Mr Dulhunty and Mr Cameron were not to receive consideration, but that was because the occasion to pay it did not exist.
In these circumstances, I will make an order dismissing White Rock's claims in prayers 1 and 3 of its summons.

Cross claim for specific performance of 23 December 2015 agreement

In the absence of pleadings, I will rely upon the issues agreed by the parties before the commencement of the hearing. The parties agreed to the following list of issues in dispute concerning prayer 5 of the cross claim: 10. Whether the Plaintiff/Cross-Defendant entered into a binding agreement with the Defendants/Cross-Claimants to create an easement to accommodate the realignment of the right of way to allow for the access tracks to cross the boundaries of land owned by the Defendants/Cross-Claimants? 11. If the answer to question 10 is yes, what were the terms of that alleged agreement? 12. If the answer to question 10 is yes, whether the alleged agreement is susceptible to an order for specific performance and, if so, on what terms?
I have set out above at [96] the relevant terms of the 23 December 2015 email written to the Landowners' solicitor by Goldwind on behalf of White Rock, upon which this claim is based. I will repeat it for convenience: 3. Right of Way a. we agree to undertake to survey and create an easement to accommodate the re-alignment of the right of way to allow for the access tracks to cross the boundaries of Wood, Nugent, Dulhunty and Cameron to the Gwydir Highway; b. we agree to provide a double fence, either new or through a combination of new and existing fencing, on the re-aligned road…
As I have explained above, it is necessary to infer the circumstances in which the Landowners agreed to permit the new access road to be constructed over their properties from the Gwydir Highway to the substation. The evidence does not establish in any precise way the manner in which the parties implemented the terms of the Agreements to Lease and the Leases in relation to the transition from the Indicative Layouts that were annexed to the Agreements to Lease to the preparation of the Final Layouts. I infer that, whatever was done, the parties were in agreement as to the result. There was no objective evidence about the precise spatial relationship between the original access road used by the Landowners and the new access road constructed by White Rock. The evidence suggests that the two access roads substantially followed the same route, and I infer that the Landowners agreed to deviations because the new access road had to accommodate heavier vehicles and machinery than the old one in order to permit the efficient operation of the wind farm. That agreement permitted White Rock to cause the new access road to deviate onto the land of Mr Dulhunty and probably Mr Cameron. The physical process involved in constructing the new access road made the original one impassable. The evidence did not establish the nature of the rights of way held by some Landowners over the original access road where it passed over the land of other Landowners, but there was no challenge to the general evidence of the Landowners that such rights of way existed. I infer that, before 23 December 2015, the Landowners realised that they would not be able to use their existing rights of way after the construction of the new access road that White Rock proposed to construct.
The 23 December 2015 email was written in the context of negotiations between the parties as to whether the conditions precedent to White Rock's entitlement to issue Notices to Proceed under the Agreements to Lease had been satisfied. Ms Squires' 23 December 2015 email started by referring to a meeting during the previous day in which "Rob" (I infer Mr Dulhunty) had raised concerns on behalf of the Landowners. The email set out White Rock's response to those concerns, including in respect of the right of way, and concluded: It is critical that we receive signed Satisfaction of CPs letters from landowners no later than 31 December 2015 to enable us to serve the Notice to Proceed under the EPC contract and then the Notices to Proceed under the ATLs in order to commence construction in early March 2016 which is a key factor to the business case for progressing the wind farm to construction. We note that many of the concerns above are not CPs to serving the Notice to Proceed pursuant to clause 3.2 of the ATL. Therefore, as a gesture of the Landowner's good faith and ongoing willingness to work together with others, we request that they commit to signing and returning the Satisfaction of CPs letter by the 31 December 2015…
I infer that the Landowners signed the letters required in a manner satisfactory to White Rock.
I conclude that these circumstances gave rise to an enforceable agreement between the Landowners and White Rock, that obliged White Rock to undertake the steps set out under the heading "Right of Way" in the email. That agreement concerned the creation of interests in land, although the exercise of creating the easements would be complicated by the exceptional nature of the relationship between the parties created by the Leases, whereby they shared the right to occupy the Landowners' land. The Landowners would be the registered proprietors and the easements would be created by and in favour of Landowners, but the land would be subject to the Leases granted to White Rock.
The submissions of White Rock do not raise any contest against the Landowners' claim that the agreement to create the right of way is a binding and enforceable contract that is, in principle, liable to be the subject of an order for specific performance. As recorded above, White Rock only submitted at par 232 of its written submissions that relief by way of specific performance should not be granted "for the simple reason that there is no real dispute between the parties in relation to the realignment of the right of carriageway". White Rock referred at par 233 to the fact that a survey has already been undertaken, and that White Rock's witness, Mr Ware, had stated in his 10 June 2022 affidavit that White Rock would undertake to resurvey the access road and to register the amended right of way. Accordingly, White Rock submitted, an order for specific performance would be inutile.
I am satisfied that the Landowners are entitled to a remedy that ensures that the right of way agreement is performed within a reasonable time. If White Rock was prepared to perform the right of way agreement as early as 10 June 2022, it ought to have done so. The Landowners are entitled to the benefit of enforceable rights to use the new access road as between themselves and as against White Rock, for their own benefit and for the benefit of any assignees of their land.
In prayer 5 of their cross claim, Mr Dulhunty and Mr Wood sought an order that White Rock specifically perform and carry out its agreement of 23 December 2015 to undertake a survey and create an easement to accommodate the realignment of the right of way to allow for the access tracks to cross the boundaries of land owned by the defendants. It is not clear that an order for specific performance stated in those terms would be sufficiently clear to fully delineate the obligations to be imposed upon White Rock. The parties did not address this issue in their submissions, as White Rock had indicated that it would perform the tasks that it agreed to in the 23 December 2015 email. The exercise required of White Rock may not be complex, and it should be possible with a reasonable level of cooperation for the parties to agree to the specific requirements for the exercise to be completed in a way that is satisfactory to Mr Dulhunty and Mr Wood.
In these circumstances, the appropriate relief will be for the Court to make an order for specific performance in the terms sought by Mr Dulhunty and Mr Wood, as White Rock has not made a submission that an order in those terms would be unsatisfactory. However, it will be appropriate for the Court to add an order giving the parties leave to apply for further orders to give effect to the order for specific performance, if that becomes necessary.

Cross claim for specific performance of Deed of Release

This aspect of the cross claim raises very detailed factual issues on claims for breach of contract based upon the terms of the Leases entered into by Mr Dulhunty and Mr Wood as amended by the Deed of Release. This is quintessentially a claim that required pleading, and the absence of pleadings seriously limits the ability of the Court to understand the real nature of the claims and the responses of White Rock.
The parties agreed to the following list of issues in dispute concerning prayer 6 of the cross claim: 13. What if any items on the 'punch list' in respect of the land of the First Defendant/First Cross-Claimant remains outstanding or incomplete? 14. Subject to there being any items on the 'punch list' in respect of the land of the First Defendant/First Cross-Defendant that remain outstanding or incomplete, whether the Court would in its discretion, order a decree of specific performance? 15. What if any items on the 'punch list' in respect of the land of the Second Defendant/Second Cross-Claimant remains outstanding or incomplete? 16. Subject to there being any items on the 'punch list' in respect of the land of the Second Defendant/Second Cross-Claimant that remain outstanding or incomplete, whether the Court would, in its discretion, order a decree of specific performance? 17. Where the expert evidence of the First and Second Defendants/First and Second Cross-Claimants refers to alleged defects not the subject of the 'punch lists' whether the Court will exercise its discretion to consider those items in circumstances where the First and Second Defendants/First and Second Cross-Claimants have not complied with clause 25 of their respective leases, as varied, which procedures prescribe alternative dispute resolution mechanisms to which the Plaintiff/Cross-Defendant will submit? 18. What damages (if any) ought to be awarded to the Cross Claimants for: (a) The Cross Defendant's failure to perform the contract for sale? (b) The Cross Defendant's failure to perform the punch list items?
The cross claimants set out the orders that they seek in respect of the punch list items in par 236 of their final written submissions, as follows: (a) Declare that the list appearing at CB 2041 to CB 2042 is the Agreed Punch List between them for the purposes of clause 25 of the Dulhunty Lease as varied. (b) Declare that the list appearing at CB 2046 to CB 2048 is the Agreed Punch List between them for the purposes of clause 25 of the Wood Lease as varied. (c) [This is a repeat of (a)]. (d) [This is a repeat of (b)]. (e) Order that, within six months of final orders; i. That White Rock rectify the V shaped drain identified as Dulhunty Punch List Item 7. ii. That White Rock remove timber piles that have been left throughout the property identified as Dulhunty Punch List Item 8. iii. That White Rock remove felled trees as identified as Wood Punch List Item 27. iv. That White Rock complete remediation work on the culvert outlet, batter chute and reshaping of the land beneath it identified as Wood Punch List Items 60, 100 and 104. v. That White Rock remediate the scouring and erosion on the TransGrid Track identified as Wood Punch List Item 102. vi. That White Rock remediate all batters on the Dulhunty Land. (f) Order that, in accordance with Clause 25.3(a) of the Variation of Lease between Robert Venour Dulhunty and White Rock Wind Farm Pty Ltd, White Rock is to notify Mr Dulhunty in writing of any punch list items which it considers have been completed. (g) Order that, in accordance with Clause 25.3(a) of the Variation of Lease between John Langley Wood and White Rock Wind Farm Pty Ltd, White Rock is to notify Mr Wood in writing of any punch list items which it considers have been completed. (h) Order that, in accordance with Clause 25.3(a) of the Variation of Lease between John Wood (Harvesting) Pty Ltd and White Rock Wind Farm Pty Ltd, White Rock is to notify John Wood (harvesting) Pty Ltd in writing of any punch list items which it considers have been completed.
It will be necessary to start by providing some background concerning this aspect of the cross claim.
By clause 4(a) of the Deed of Release dated 19 November 2018, all of the Group Landowners (which included Mr Dulhunty and Mr Wood) and White Rock agreed to vary the Leases in accordance with Annexure B. That annexure inserted a new clause 25 into the Leases. Clause 25 is a complex term of about four pages in length. In summary, clause 25 provided as follows: 1. Clause 25.1 required each Landowner to serve White Rock with an Initial Punch List that identified remediation issues and proposed solutions for damage, erosion or disruption created before the Practical Operation Date. 2. Clause 25.2 established a procedure for negotiation and identification of an Agreed Punch List and Disputed Punch List Issues. 3. It is implied by clause 25.3 that White Rock would remedy the items on the Agreed Punch List as the Landowner was required to notify items that had been completed. In cases of dispute by White Rock, the item was to be treated as a Disputed Completed Issue. The issue was to be referred for resolution to the Panel in accordance with clause 25.4, and if that was unsuccessful in resolving the issue, the parties were required to seek to resolve the issue in accordance with clause 18 of the Lease. In some cases, the Landowner was given an election to call on the Construction Bond under clause 21 of the Lease. 4. Clause 25.4 established a procedure for consultation between the Landowner and White Rock to resolve Disputed Punch Lists Issues and the Disputed Completed Issues. Clause 25.4 then provided for a process of alternative dispute resolution involving a Panel, constituted by an engineer appointed by White Rock, an engineer appointed by the Landowner, representatives of White Rock (which may include White Rock's main subcontractor) and an Environmental Representative appointed in relation to the construction of the wind farm. The purpose of the Panel was to provide technical and commercial guidance and instruction on whether the items should be remediated, what the reasonable solution was, the date by which remediation should occur, and whether remediation had been completed to a reasonable standard. If the Panel reached unanimous agreement, then an appropriate report was to be provided to the Landowner and White Rock. If the Panel failed to reach unanimous agreement, the parties were required within 10 business days to resolve the Disputed Punch List Issue in accordance with clause 18 of the Lease.
Clause 18 of the Lease provided that, if the parties were unable to resolve any dispute within 10 business days, then they were required to meet within a further 10 business days to attempt to agree upon an appropriate dispute resolution technique, an appropriate procedure and timetable, and to select an independent person to undertake the dispute resolution process. In the absence of agreement, the parties were required to mediate the dispute in accordance with the mediation rules of Leading Edge Alternative Dispute Resolution. The parties were required to use reasonable endeavours to conclude the dispute resolution process within 20 business days of the appointment of the independent person or mediator. By clause 18.1, the parties were prohibited from commencing any court proceedings unless they had complied with the alternative dispute resolution procedure in clause 18.
A considerable amount of evidence was admitted at the hearing in respect of the punch list claim. However, the cross claim was filed on 18 November 2021, and it became apparent that over time, between then and the commencement of the hearing on 17 May 2023, White Rock carried out remediation work in relation to the punch list issues. That work did not entirely resolve the dispute, but it changed the nature of the dispute with the passage of time.
Mr Wood and Mr Dulhunty gave evidence concerning the need for remediation of the land and the punch list issues and the cross claimants tendered as Exhibit D1 a report of David Howley, an environmental engineer and soil conservationist dated 24 November 2022, as well as Exhibit D2, a second report of Mr Howley dated 16 May 2023. Mr Howley was cross-examined for about 25 minutes.
The point must be made that, in the total absence of pleadings or particularisation of the cross claimants' punch list claim, and in the absence of an extensive inspection of the land, it would be difficult if not impossible for the Court to resolve the factual disputes concerning the punch list issues, particularly given the fact that those issues have been progressively attended to by White Rock, whether in a way satisfactory to the cross claimants or not.
As stated in orders (a) and (b) now sought by the cross claimants, which are set out above at [208], the punch list for Mr Dulhunty's land is at CB 2041 to CB 2042 (part of Exhibit PD1) and the punch list for Mr Wood's land is at CB 2046 to CB 2048. Mr Dulhunty's punch list is a two-page screenshot and it is illegible. I have not been able to count the number of items, although I note that many are described as being complete. Mr Wood's punch list is slightly more legible and has 109 items.
I am not sure whether the punch list items listed in proposed order (e) are the only outstanding punch list items that have not been rectified, or whether they are the most significant items that the cross claimant wishes to ensure are remedied as a result of the Court's order. My understanding is that the latter is what is intended.
The Court faces the difficulty that the cross claimants have not provided any detailed submissions to the Court as to the findings that should be made in respect of the factual issues that concern the present state of remediation of the punch list items.
I note that proposed order (h) concerns JWH's punch list, but JWH is not a cross claimant.
The evidence provides insufficient explanation to the Court as to what has, or has not happened, concerning the application by the parties of the alternative dispute resolution procedures in clause 25 and clause 18 of the Leases, as amended.
White Rock's response to the cross claimants' punch list claim is that it is inappropriate that the Court make an order for specific performance as no party disputes the enforceability of the Deed of Release, the items in the punch lists have been the subject of ongoing remediation works by White Rock, and the cross claimants' principal complaint appears to be that the works are not being done quickly enough. White Rock submitted that it was entirely inappropriate for the Court to order specific performance of detailed remediation works, that would require the supervision of the Court, particularly when the role of the Court would be to supervise the timing of the undertaking of works that are already underway.
Furthermore, White Rock stated at par 230 of its final written submissions that it did not resist the orders sought by the cross claimants, save that in respect of: (a) Dulhunty Punch List Item 8, that it should only be required to remove timber piles that have been left throughout the property as a consequence of construction; and (b) in respect of the batters on Dulhunty Land, that it only be required to remediate batters requiring remediation, or that are able to be remedied.
The first of these reservations appears to be reasonable on its face, as White Rock should only be required to remediate issues for which it is responsible. The second of the reservations is more contentious. The qualification in relation to batters that require remediation is self-evident, but raises the question of when remediation should be required. The qualification in relation to batters that are able to be remediated is more problematic, because it suggests that in the course of the construction of the wind farm, batters may have been created in a manner that was so inadequate that they are beyond remediation. It may be that if batters cannot be remediated, so be it. That may lead to a remedy in damages, but that is hardly satisfactory if Mr Dulhunty must live with the consequences of batters that are beyond remediation, quite apart from the likely difficulty in assessing damages.
I am satisfied in all of these circumstances that the Court should not make any order for specific performance in respect of the punch list items. Even though the parties to the cross claim have reached a level of agreement on this issue, I do not think that the agreement is sufficiently clear and precise to justify the Court in making an order for specific performance in accordance with its terms. However, in the orders that will be made, I will note the terms of the agreement, as that may have the benefit of quelling to some extent the ongoing dispute concerning the carrying out of the work in the punch lists.
Otherwise, I am satisfied that the issues raised by the cross claim in respect of the punch lists is not a satisfactory subject for an order for specific performance, because of the impossibility of formulating the order with sufficient specificity and the inappropriateness of the Court attempting to specifically enforce obligations that require detailed supervision at a distance.
I am satisfied that the alternative dispute resolution mechanisms in clause 25 and clause 18 of the Leases, as amended, are as comprehensive and suitable as could be implemented, and the parties should be required to attempt to resolve issues of the type raised by the punch lists by implementing those mechanisms. Any residual dispute that cannot be resolved in that way is likely to be presented in a relatively narrow way that may make it suitable for judicial determination.
In pars 249 and 250 of their final written submissions, the cross claimants claim damages in the alternative to the Court making an order for specific performance of the Leases in respect of the punch list items. They submit that the quantification of damages should be the subject of a further hearing, or the issue should be referred to a referee for assessment. For the avoidance of doubt, I note that the cross claimants have not on the existing evidence persuaded the Court that they are entitled to damages for breach of the Leases in respect of the punch lists. The evidence is entirely too vague to justify the Court in finding that White Rock's performance of its obligations under the Leases has involved breaches that entitle the cross claimants to damages. I reject the submission in par 250 that the cross claimants are entitled to recover legal costs as damages (see Queanbeyan Leagues Club Ltd v Poldune Pty Ltd [2000] NSWSC 1100 at [45]-[46] per Hamilton J).

Claim for interest for delay in payment of the price for the Substation Site

Clause 6 of the Deed of Release provided: 6 Entry into contract for sale [White Rock] and John Langley Wood must enter into and complete (in accordance with its terms) a contract for the sale of land on the terms set out in Annexure D within 20 business days of the date of this deed unless otherwise agreed between [White Rock] and John Langley Wood.
Annexure D of the Deed of Release provided: [White Rock] and John Langley Wood agreed to: 1. enter into a contract for the sale of land on the same terms and conditions as Annexure 1 of the Option Agreement to Purchase Substation Land between John Langley Wood and [White Rock] dated 16 September 2014, but also including…
The additional agreement that was included concerned the perpetual access agreement to be granted to Mr Wood that is referred to above.
Annexure 1 to the Option Agreement to Purchase Substation Land provided for completion to take place on the 42nd day after the date of the contract. Mr Wood submitted in par 248 of the Landowners' final written submissions that he is entitled to interest pursuant to the express terms of the contract for sale of land, without descending into the detail of identifying the relevant term. I have not been able to identify a term of the draft contract that provides a contractual entitlement to interest as a consequence of any delay in completion.
The failure by White Rock to perform its obligations under clause 6 of the Deed of Release was a breach of contract that may have entitled Mr Wood to sue for damages. It would be necessary for him to prove the amount of the damage that he has suffered before an award of damages could be made in his favour. He has not attempted to do so.
Consequently, Mr Wood's claim for damages for breach of clause 6 of the Deed of Release must be dismissed.

Costs

In these proceedings, White Rock and the cross claimants have all made a number of diverse claims that are forensically unrelated. The claims made by White Rock have in substance failed, although, as I have noted above at [25], the relief sought by White Rock in prayers 4 and 5 of the summons was superseded by events. The Court is unsure as to what those events were. In principle, White Rock should be ordered to pay the defendants' costs of the issues raised by its summons. Although the position as to the costs of the relief sought in prayers 4 and 5 is unclear, it is unlikely that the costs incurred by the parties in respect of those issues have been substantial. It is probably not worthwhile for the Court to consider the possibility of making a separate costs order in relation to those issues. There is scope for the parties to incur significant additional wasted costs in disputing that question.
In relation to the costs of the issues raised by the cross claim, as I have noted above at [27], the Court has not been required to determine whether the relief sought in prayers 1 to 4 should be granted because of White Rock's agreement on the third day of the hearing to an order being made that it specifically perform clause 6 of the Deed of Release. In principle, the result should be that the costs order in respect of prayers 1 to 4 of the cross claim should be determined on the basis that the cross claimants were successful, and their costs of those issues should be payable by White Rock.
The cross claimants also succeeded in their claim for relief in prayer 5 of the cross claim. In principle, White Rock should be ordered to pay the cross claimants' costs of that claim.
The cross claimants substantially failed in their claim in prayer 6 for an order against White Rock that it specifically perform and carry out its agreement to undertake the works in the "punch lists". The Court has found that, at least in the circumstances as presented to the Court by the evidence, those obligations were inherently not appropriate to be the subject of an order for specific performance. The Court understands that, in any event, the dispute between the parties concerning the performance of the works in the "punch lists" changed over time, as White Rock addressed many of the listed works. The Court has been able to make limited orders concerning the performance of the works in the "punch lists", but that has only been to the extent that the parties have agreed as to the terms of that order. In these circumstances, in principle, the cross claimants should be ordered to pay White Rock's costs of this claim, as the measure of success that they have achieved with the ultimate agreement of White Rock is, as I understand it, a small proportion of the relief originally claimed.
In relation to the cross claimants' claim for damages in prayer 7 of the cross claim, that claim was ultimately limited to Mr Wood's claim for damages for breach of clause 6 of the Deed of Release. Mr Wood failed on that claim, so the cross claimants should in principle be ordered to pay White Rock's costs of that claim.
Although there will often be unsatisfactory consequences of the Court making differential orders against the parties in respect of the costs of separate issues, there is no convenient way in the present case for the Court to avoid the application of that approach. There is no realistic way that the Court can make any judgment as to a global basis for one party to be ordered to pay a stated proportion of the costs incurred by the other party or parties.

Orders

For the reasons given above, I propose that the orders of the Court should be in the following terms: 1. Order that the plaintiff's claims in prayers 1 and 3 of the summons be dismissed. 2. Note that the plaintiff's claim for the relief in prayer 2 of the summons was abandoned at the hearing. 3. Dismiss the plaintiff's claim for the relief in prayers 4 and 5 of the summons. 4. Note that the dismissal of the plaintiff's claim for relief in prayers 4 and 5 of the summons is made without any finding as to the merits of those claims. 5. Note that the relief claimed in prayers 1 to 4 of the cross claim has been obviated by the making of an order for specific performance against the cross defendant at the hearing. 6. Order that the cross defendant specifically perform and carry out its agreement of 23 December 2015 to undertake a survey and create an easement to accommodate the realignment of the right of way to allow for the access tracks to cross the boundaries of land owned by the defendants. 7. Grant leave to the parties to apply for such relief as may be necessary or convenient to give proper effect to the previous order for specific performance. 8. Note the agreement between the parties to the cross claim concerning the performance by the cross defendant of the works in the "punch lists" referred to in prayer 6 of the cross claim, being: 1. The list appearing at CB 2041 to CB 2042 is the Agreed Punch List between them for the purposes of clause 25 of the Dulhunty Lease as varied. 2. The list appearing at CB 2046 to CB 2048 is the Agreed Punch List between them for the purposes of clause 25 of the Wood Lease as varied. 3. Within six months of final orders; 1. White Rock will rectify the V-shaped drain identified as Dulhunty Punch List Item 7. 2. White Rock will remove timber piles that have been left throughout the property identified as Dulhunty Punch List Item 8, provided that those timber piles are a consequence of the construction of the wind farm. 3. White Rock will remove felled trees as identified as Wood Punch List Item 27. 4. White Rock will complete remediation work on the culvert outlet, batter chute and reshaping of the land beneath it identified as Wood Punch List Items 60, 100 and 104. 5. White Rock will remediate the scouring and erosion on the TransGrid Track identified as Wood Punch List Item 102. 6. White Rock will remediate all batters on the Dulhunty Land, provided that those batters require remediation and are able to be remedied. 1. In accordance with Clause 25.3(a) of the Variation of Lease between Mr Dulhunty and White Rock Wind Farm, White Rock will notify Mr Dulhunty in writing of any punch list items which it considers have been completed. 2. In accordance with Clause 25.3(a) of the Variation of Lease between Mr Wood and White Rock, White Rock will notify Mr Wood in writing of any punch list items which it considers have been completed. 3. In accordance with Clause 25.3(a) of the Variation of Lease between John Wood (Harvesting) Pty Ltd and White Rock, White Rock will notify John Wood (Harvesting) Pty Ltd in writing of any punch list items which it considers have been completed. 1. Order the plaintiff to pay the defendants' costs of the issues raised by the summons. 2. Order the cross defendant to pay the cross claimants' costs of the issues raised by prayers 1 to 5 of the cross claim. 3. Order the cross claimants to pay the cross defendant's costs of the issue raised by prayers 6 and 7 of the cross claim.
The Court will only have a limited time to make final orders in these proceedings. The parties should inform my Associate by 11 December 2023 if they agree with the proposed orders set out above, and if they do not, they should provide concise written submissions concerning the orders that should be made.

Amendments 20 December 2023 - Correction to typographical errors at [203], [237(1)] and [237(6)]. DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 20 December 2023

Conveyancing (General) Regulation 2008(NSW)

At a glance

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Judgment (29 paragraphs)

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Legislation Cited (5)

Cases Cited (5)

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