Gordon v Lever (No 2)

BELL P: This is an appeal from two decisions of Sackar J (the primary judge), the principal decision relating to the grant of an easement on terms and the second decision relating to costs.

Section 88K(1) of the Conveyancing Act 1919 (NSW) (Conveyancing Act) provides for the creation of an easement where one is “reasonably necessary for the effective use or development of other land that will have the benefit of the easement.” The appeal from the principal decision raises the question of a case where the easement sought is held to be reasonably necessary some, but not all, of the time. It is not put into question that terms can be imposed regulating its use, but it is put that where (as is said to be the case) the terms imposed are not practically or legally workable, or are not reasonably so, and/or are uncertain in their practical operation, the easement sought is reasonably necessary all of the time, that is to say, without restriction by terms of the kind imposed by the primary judge.

The primary judge ordered the creation of an easement for a right of carriageway on certain terms over land owned by Allen John Lever and Debra Ann Lever (the Levers) in favour of land owned by Stanley Robert Gordon and Christine Margaret Gordon (the Gordons): Gordon v Lever [2018] NSWSC 1888.

The parties are neighbouring farmers in the Northern Rivers region of New South Wales in the Shire of Kyogle. The dominant tenement is occupied and farmed by the Gordons’ daughter, Jodie Louise Dunn (Mrs Dunn), and her family.

For many years, this property was accessed from Summerland Way, the principal road in the area, through land owned by the Levers, until a bridge passing over a gully wholly on the Levers’ property and forming part of the access route to the relevant Lots belonging to the Gordons (the Lever Bridge) was washed away in or about December 2015. The arrangement between the parties as to access which existed prior to the washing away of the bridge was informal in nature. It was at best an informal, unwritten licence. Senior Counsel for the Levers characterised this as a “grace and favour arrangement that’s been on foot for a number of years” which was “satisfactory in personam between the parties.”

After the Lever Bridge was washed away, the only means of accessing the Gordons’ land was by crossing the Richmond River over a ford that had hitherto principally been used by cattle to pass from one side of the river to the other, presumably when the river was at a suitably low level over the ford to permit this to occur. This means of access does not involve the Gordons, Mrs Dunn or her family passing over land owned by the Levers. Indeed, although different parcels of land needed to be traversed to reach the ford from Summerland Way, all were and indeed remain in the ownership of the Gordons. The difficulty is that, at certain times of the year, it is either not possible or not safe to cross the Richmond River at the ford. As shall be seen, the Gordons also have no legal right to do so, the ownership of at least the riverbed, a road reserve and, it would appear, a gravel track immediately adjacent to the river, remaining with the Crown.

This is the context in which an application was made by the Gordons for an easement over the Levers’ land following the route whose use had been acquiesced in by the Levers until the washing away of the Lever Bridge in December 2015. To be effective, any such easement would require the construction of a new bridge over the gully where the Lever Bridge previously existed. This would be wholly on (but provide little practical benefit to) the Levers’ land.

As noted above, the primary judge granted the easement on terms. Critically, one of the terms limited the period during which persons needing or wishing to access the relevant Gordon land could avail themselves of the easement to circumstances where the water level at the ford was 300mm or more above the level of the riverbed at that location.

Relevantly, the primary judge held, in accordance with expert evidence which had been led by both sides, that when the water depth at the ford was 300mm or lower, the crossing was “low hazard” irrespective of the velocity of the water: at [165]. His Honour further held that “as a rough estimate and taken at its highest” the river at the ford would be above 300mm at best on average 54 days per year: at [166]. This translated to a conclusion that, on average, crossing at the ford would represent a low hazard on 311 days or 85% of the year.

Thus, at [177]-[178], the primary judge held that the Richmond River at the ford was “safe to cross for much of the year (on average 85% of the year at least)”, noted that “at 300mm or less of water depth it is safe to cross in a two wheel drive vehicle (2WD), irrespective of the velocity of the water” and concluded that “when under 300mm of water depth, [it was] a safe and alternative route” to that which had been utilised up until December 2015 with the washing away of the Lever Bridge. His Honour went on to say (at [178]) that:

This is the second occasion this dispute has reached the Court of Appeal. In Gordon v Lever [2018] NSWCA 43, this Court allowed an appeal from an earlier decision of Sackar J (Stanley Robert Gordon v Allen John Lever [2017] NSWSC 1282) in which his Honour made a declaration to the effect that an easement should be created, limited to circumstances in which the river crossing was “impassable”, but did not formulate any precise orders in relation to that easement or the terms upon which his Honour contemplated it would be so limited.

The essence of the earlier decision of the Court of Appeal was that Sackar J had not been in a position to make a declaration that finally resolved the issue of whether the easement he proposed to impose was reasonably necessary for the effective use or development of the relevant Lots. The Court held that it was necessary for further findings of fact to be made and for the terms of the proposed easement to be formulated with greater precision before a final determination could be made as to whether s 88K of the Conveyancing Act was satisfied. The Court said at [97]:

The Court further held (at [106]) that:

The Court had noted that the evidence made it clear that the level of the Richmond River could change very quickly, depending on conditions, and thus that the width and depth of the crossing at the ford could vary considerably over short periods of time: at [48].

The matter was remitted to Sackar J to be determined in accordance with the reasoning of the Court of Appeal, and it is from his Honour’s second decision that this appeal is brought.

It is clear from the references at [9]-[10] that Sackar J explored the “passability” of the river and safety considerations in his second judgment. It should be noted, as the primary judge did at [174], that, up until final submissions, the Levers contended that a concrete causeway could be built in the location of the ford over the Richmond River. This was not pressed because, according to the primary judge, a question arose over whether or not the Court would have power to order the Gordons to build on “their own land as a prerequisite to the easement”. As will be seen, the riverbed was not and had never been the Gordons’ land.

Before considering the arguments raised by the parties, it is necessary to give a more precise description of the relevant properties in order to understand the need for the easement and the terms imposed by the primary judge limiting its use. The description of the relevant properties which follows draws upon that provided both by the primary judge and in this Court’s earlier decision.

The Gordons are the registered proprietors of five Lots, namely Lot 40 in DP 755733, Lot 7 in DP 131323, Lots 101 and 102 in DP 1045950 and Lot 10 in DP 113613 (Lot 10 is a narrow strip of land, formerly a road reserve). Lots 101 and 102 were purchased in about 1975, and are located to the north of the Summerland Way with each Lot extending over both sides of the road.

The Gordons purchased Lots 7 and 40 in 1998. These Lots adjoin each other and are separated from Lots 101 and 102 by the Richmond River. As the primary judge remarked, Lots 7 and 40 are effectively landlocked in the sense that they have no direct access to a public road: at [11].

The Gordons have lived on Lot 101 since they purchased it in 1975. In 2000, their daughter, Mrs Dunn, commenced living in the dwelling on Lot 7. Her partner (now husband) joined her in 2003. They and their children, born in 2006 and 2010, have remained in occupation of Lot 7 ever since.

Prior to the acquisition of Lots 7 and 40, the land was used for grazing. After 1998, the Gordons’ land, including Lots 7 and 40, was used as a dairy farm. This use continued until 2013 when the Gordons switched to beef production.

The Levers are the registered proprietors of four Lots, namely Lot 100 in DP 1045950, Lots 36 and 87 in DP 755733 and Lot 21 in DP 883903. These Lots have been in Mr Lever’s family since the late 1800s. For the past ten years or so, the Levers have lived in Brisbane and have visited their land about once per month.

Plan A, reproduced at [27] below, depicts the relevant Lots and also depicts the Summerland Way and the Richmond River.

The two options for access that were considered by the primary judge and which have been described in general terms in [5]-[6] above may more specifically be described as follows.

The first option (Option 1), which followed the route which had been used informally prior to December 2015, involved travelling from a point on the Summerland Way, 109m southerly along Lot 100 and, upon reaching the road reserve depicted on Plan A, proceeding along the alignment of the road reserve before re-entering land owned by the Levers through Lot 36 and travelling along Lot 36 for 242m until the boundary of Lot 40 was reached. This route is indicated approximately by the broken light blue line shown on Plan A.

The second option depicted by the unbroken pink/red line on Plan A and referred to in the Court below as “Option 4” and which involved the crossing of the ford, commenced from a different point on Summerland Way to Option 1 and then proceeded through Lot 101, passing close to the Gordons’ house, into Lot 102 and then along a well-formed gravel road to the riverbank. From there the route required following a road along the riverbank for approximately 120m until reaching the ford and crossing the Richmond River at that point. This point is marked with an X on Annexure C referred to in the Terms of Easement for right of Carriageway which were referred to in the short minutes of order made by the primary judge on 19 December 2018. Those terms will be referred to more fully later in these reasons but Annexure C is reproduced immediately below. The marking of the X is far from clear on the annexure to the short minutes of order. For ease of reference, I have overlaid it with a white cross on the version set out below.

I have also transposed the location of the ford, as depicted by the letter X on Annexure C, to the following aerial view of the relevant land, this image being the same image reproduced as Plan A in the earlier judgment of the Court of Appeal subject to the transposing of the X.

It is plain from this image that, upon crossing the ford, a vehicle or person will not immediately reach Lot 40 but will remain on Crown land. This is also reflected by the Plan of Lot 40 reproduced at the end of this judgment.

On the assumption that the spot marked X on Annexure C, reproduced at [26] above and transposed onto Plan A at [27] above, is correct, and we must assume it is, then to the extent that the primary judge (at [17]) and the Court of Appeal in its earlier judgment (at [47]) suggested that a person crossing the ford immediately entered Lot 40 following that crossing, that suggestion would not appear to be precisely correct. Both Plan A and the plan of Lot 40 suggest that a vehicle or person so crossing would need to cross land not in the ownership of the Gordons or the Levers in order to reach Lot 40. The practical significance of this will be seen when discussing the practicality and legality of the terms imposed on the right of carriageway created by the easement. It is to that topic that I now turn.

The primary judge found that it was “reasonably necessary” within the terms of s 88K(1) of the Conveyancing Act to grant an easement consistent with Option 1 but, in light of the findings to which I have referred at [9]-[10] above, limited its use significantly. The orders made by the primary judge were as follows:

The terms of the easement for a right of carriageway were as follows:

One way of understanding the primary judge’s orders is that he considered that the easement over the Levers’ land was reasonably necessary when the river at the ford was over 300mm but was not otherwise “reasonably necessary”. This was his reason for the imposition of term 6(b)B which I shall refer to as “the 300mm Term”.

Section 88K of the Conveyancing Act is in the following terms:

It is to be noted that s 88K(3) provides that the terms upon which an easement may be granted “may limit the times at which the easement applies”. As has been seen, the terms imposed by the primary judge in one sense limited the “times at which the easement applies”, not by reference to specific times expressed in terms of particular dates, hours or minutes, but rather by reference to an event, viz. the level of the Richmond River at the ford such that, at the times when it exceeded 300mm, the easement ordered could be used by those wishing to access the dominant tenement (there being an exception for emergency vehicles).

No issue was taken on appeal as to the primary judge’s power to impose terms which limited the times during which an easement could be used by reference to the occurrence of an event or physical phenomenon, such as the level at a particular point of the Richmond River, although neither side pointed to an instance of where such a term had been imposed. This stance was no doubt taken in light of this Court’s observation in Moorebank Recyclers Pty Ltd v Tanlane Pty Ltd [2012] NSWCA 445 at [183]; (2012) 16 BPR 31,257 (Moorebank) that s 88K(3) of the Conveyancing Act “imposes no limitation on the terms which can be imposed”. It is necessary at this point to say something about the meaning of “reasonably necessary” as used in s 88K(1) of the Conveyancing Act. Implicit in the concept of reasonable necessity is a consideration of the alternative methods by which the proposed use or development could be achieved: Moorebank at [158]. Further, as the primary judge observed at [64], “[t]here may still be a necessity for the easement sought, notwithstanding that there are alternative sites for an easement: Re Seaforth Land Sales Pty Ltd’s Land (No 2) [1977] Qd R 317”.

The primary judge referred to the decision of Young J (as he then was) in Grattan v Simpson (1998) 9 BPR 16,649 who said at 16,651:

In Woodland v Manly Municipal Council [2003] NSWSC 392 at [7]; (2003) 127 LGERA 120; (2004) NSW ConvR 56-071 (Woodland), Hamilton J observed that:

In Moorebank at [154], Bathurst CJ, Beazley JA and Meagher JA said:

The observations of Darke J in Govindan-Lee v Sawkins [2016] NSWSC 328 at [49] may also be noted:

Whether or not an easement is “reasonably necessary” is to be assessed by reference to the circumstances as they exist at the time of the hearing: 117 York Street Pty Limited v Proprietors of Strata Plan No 16123 (1998) 43 NSWLR 504 at 511; (1998) 98 LGERA 171 (117 York Street); Moorebank at [96].

Such a finding “involves the making of a value judgment, but not the exercise of a discretion”: Woodland at [19](2); see also Moorebank at [159] where reference was made to the evaluative nature of the exercise. It was for this reason that, although Senior Counsel for the Levers, Mr Sirtes SC, sought in his written submissions to suggest that the decision at first instance entailed an exercise of discretion to which principles associated with House v R (1936) 55 CLR 499; [1936] HCA 40 would apply, this submission was not pressed with any vigour in the course of the hearing, and rightly so.

Consideration and assessment of the concept of reasonable necessity also requires consideration of the effect of the grant of the easement on the servient tenement: Moorebank at [156]. It is also relevant in this regard to consider what Rein J described as “the historical context of use of the land, both of the dominant and servient tenements”: Owners Strata Plan 13635 v Ryan [2006] NSWSC 221 at [67]. In King v Carr-Gregg [2002] NSWSC 379 at [59], Foster AJ said:

The principal thrust of the challenge to the primary judge’s orders related to terms 6(b)B(i) and (ii), 6(c) and 7 governing the use of the easement, it being submitted that persons seeking to use the easement should be able to know with reasonable certainty what right they did or did not have to cross someone else’s private land. So also it was put that potential acquirers of either the dominant or servient tenements should be able to know what rights or limitations or burdens applied to their prospective title. In both cases it was put that if the terms imposed on the use and enjoyment of the easement did not provide such certainty, an easement unqualified by such terms was reasonably necessary.

It was submitted that the terms conditioning and limiting the use of the easement were in breach of s 88K of the Conveyancing Act for the following reasons:

In their written submissions in this Court, the Gordons put the nub of the matter as follows:

The “problems with Option 4” referred to in the extract from the Gordons’ submissions set out above and which were explored in argument and referred to, albeit in part obliquely, in the notice of appeal, included:

Senior Counsel for the Gordons, Mr Hall SC, submitted that the learned primary judge erred by, in effect, applying a test of necessity as opposed to reasonable necessity, and pointed in this regard to his Honour’s detailed consideration of case law predating the amendments to the Conveyancing Act, the introduction of s 88K and the test of “reasonable necessity”. His Honour had traced the development of the law of easements from the early seventeenth century through to the introduction of s 88K in 1995 at [34]–[53] of his judgment.

Whilst it is correct that the primary judge dealt at some length with the pre-statutory case law, this was not to the exclusion of a proper consideration of the case law postdating the introduction of s 88K and his Honour was plainly conscious of the significant change that accompanied the introduction of s 88K, the review of the earlier case law serving only as a counterpoint in this regard.

Even so, Mr Hall was correct to emphasise that the relevant test was what was reasonably necessary, with the word “reasonably” qualifying a concept which, in its ordinary English meaning, has an absolute sense. He pointed to the fact that the primary judge had (at [183] of his judgment) said:

This statement was not to answer the question whether or not the easement was reasonably necessary when the river was below 300mm. Implicitly, however, the primary judge must be taken to have held that it was not.

Mr Hall also criticised the primary judge for engaging in the “naturalistic fallacy” of “reasoning from the is to the ought”, that is to say, reasoning that because the Gordons had, of necessity, been constrained to use the ford for the previous four years following the washing away of the Lever Bridge, that established that the need for the proposed easement was not made out for the greater part of the year when the ford could safely be crossed. That fact may have established that the easement was not absolutely necessary for approximately 85% of the year but did not establish, so it was submitted, that it was not “reasonably necessary” for the entirety of the year.

There can be no doubt that, when the water level at the ford was at or above 300mm, which his Honour used as a proxy or surrogate for the ability to cross the river in a 2WD motor vehicle safely, the easement over the Levers’ land was not only “reasonably necessary”, but absolutely necessary. There was no other safe means of access. So much was recognised by the primary judge’s reference to “necessity” in the passage I have extracted from [183] of his judgment reproduced at [49] above.

Consistent with the authorities referred to above, the fact that, when the water level was below 300mm, it was possible to access Lot 40 did not mean that the easement without any limitation as to its use was not “reasonably necessary”. The question is whether the easement in such a circumstance was something more than merely desirable or preferable so as to be “reasonably necessary”. As Hanger CJ observed in Re Seaforth Land Sales Pty Ltd’s Land (No 2) [1977] Qd R 317 at 321, “it is a matter of degree”. Adapting the language from 117 York Street, adopted in Moorebank, the “use or development with the easement” had to “be (at least) substantially preferable to the use or development without the easement.”

In my opinion, the learned primary judge should have held that the use of Lots 7 and 40 with the easement met that description and that the easement, unlimited by the 300mm Term was, in all the circumstances, “reasonably necessary” within the meaning of s 88K of the Conveyancing Act. My reasons for that conclusion are as follows.

First, although used as a matter of fact and necessity since the washing away of the Lever Bridge in December 2015, the lawfulness of the use of the ford as a principal means of access to Lot 40 (and to Lot 7 via Lot 40) is very much open to doubt. In this context, s 13.3(6) of the Crown Land Management Act 2016 (NSW) (Crown Land Management Act) relevantly provides that:

Professor Edgeworth observes in Butt’s Land Law (7th ed, 2017, Thomson Reuters) at [2.560] that:

The bed of the Richmond River was reserved from sale or lease by gazettal on 11 May 1923. By the New South Wales Government Gazette, No 56, of that date, folio 2253, WE Wearne, the Minister for Lands, “notified in pursuance of the provisions of the 29th section of the Crown Lands Consolidation Act 1913 (NSW), the Crown Lands hereunder described shall be and hereby are temporarily reserved from sale or lease generally”. The terms of the reservation were as follows:

The Eastern and Central Divisions were defined by s 8 and the Schedule to the Crown Lands Act 1884 (NSW). The plan of Lot 40 (reproduced at the end of this judgment) confirms that Lot 40 falls within the Eastern Division and discloses that its boundary comes close to but does not even abut the river’s edge.

These points were made on behalf of the Gordons in submissions on the regulatory framework filed on 17 August 2017. That was prior to the final day of hearing on the first occasion the matter was before the primary judge. It was there submitted that if what is referred to as Option 4 was taken, “most of this land is Crown land, as either being part of the Richmond River or the Crown road reserve. The Gordons have no legal right of access over it, or right to use any part of the bed of the river and no part of the road reserve passed with the land when they purchased it.” To the extent that Senior Counsel for the Levers stated in oral argument in the appeal that the Gordons had never raised any point about ownership of the riverbed, he was mistaken.

Where the means of access to otherwise landlocked property posited in the alternative to a proposed easement sought under s 88K of the Conveyancing Act requires users to breach the Crown Land Management Act, an easement by which access would be otherwise facilitated can, in my opinion, comfortably be described as “reasonably necessary”. An owner, occupier or visitor to land should not be required to breach an Act in order to utilise the land in question, even if use of such a route is physically possible for a particular period of the year and even though authorities might turn or might have turned a “blind eye” to such a use.

Secondly, access to land, even if lawful, should not, in my view, require an assessment to be made by entrants to the land of the height of a river at a particular point in circumstances where that could not be readily or reliably measured, not only by regular users of the access route but by any users of the route such as persons making deliveries, guests, neighbours, service providers and the like. In this context, Mrs Dunn gave evidence, limited to a statement of her belief or understanding but nonetheless highly relevant in my opinion, that:

At [178] of his decision, the primary judge said:

It was also suggested that concrete blocks could be installed to a height of 250mm to provide a visual cue so as to assess when the river was above 300mm. Thus, at [180] of the judgment, the primary judge said:

The notion of installing concrete blocks was suggested as a means of identifying the river level by users of the ford for the purposes of crossing on to and from Lot 40. If a concrete block or blocks of 250mm were installed and water was below the height of that block or blocks so that the block(s) were still visible, that would indicate to a person planning to cross the river at the ford (and who knew of the existence and purpose of the blocks) that the easement could not be used and, on his Honour’s findings, that it was safe, at least for a 2WD vehicle, to use the ford to cross the river.

It is not clear from the passage from the judgment extracted in [63] above whether or not the primary judge assumed that the ford was the property of the Gordons or whether he contemplated that the blocks would be constructed at the river’s edge on either side of the river (although the emphasised portion of the passage extracted at [62] tends to suggest that he considered that the former was the case). If the former, as has been seen, that assumption was, with respect, incorrect. The ford is not the property of the Gordons. If the latter, as has also been seen, at least with regard to the river’s edge on the southern side of the river, it was also incorrect for the same reason but, even if correct, constructing blocks at the river’s edge would not necessarily have given guidance to a user as to the depth of the river unless the riverbed was (and remained) uniformly at the same level as the posited concrete blocks.

There were a number of other difficulties with this suggestion, even assuming that it would be lawful to install the posited concrete blocks in the riverbed or on either side of the river:

Moreover, with regard to the concrete blocks suggestion, when the posited blocks were not visible, somebody seeking to cross the ford in order to reach Lots 40 and 7 and who knew of their existence and their purpose (as well as the terms attaching to the easement) would know that the river was of such a height as to permit use of the easement. This would in turn require the entrant to reverse along the gravel road adjoining the river, turn his or her vehicle around, return to Summerland Way and use the easement via a different departure point along the Summerland Way. This is a matter that also bore upon the assessment as to whether or not the easement was reasonably necessary without the restrictions as to its use that were imposed by the primary judge.

Thirdly, it was submitted that anyone in two-wheeled vehicles (namely, motorcycles) – these being different from 2WD vehicles (referred to in term 6(b)B(ii)) which are four wheeled vehicles with only two of the wheels powered − would be unable to enter or leave except in times of flood when the easement could be used. Senior Counsel for the Levers submitted orally that there was no finding that pedestrians or two-wheel vehicles could not use Option 4, and stated that the primary judge had made a specific finding as to the safety for 2WD vehicles to use the crossing up to depths of 300mm. The position would, however, appear to be a fortiori, because of the lower degree of power and control of such vehicles.

Whatever the safety implications of a two wheel vehicle such as a motorcycle crossing the ford where there was less than 300mm of water sitting above it, one inescapable consequence of the primary judge’s order was that any entrant seeking to visit Lot 7 or 40 on foot using the ford would need to wade through water unless the river was totally dry.

Fourthly, there was evidence before the Court (including pictorial evidence) indicating that, in times of and following flood or high waters, the gravel road along the river which, as noted in [26] above, needed to be followed for about 120m before reaching the ford, may be damaged and call for repair.

It was no doubt such evidence that led the primary judge to impose term 6(b)B(ii) as set out in [31] above as to permitted use of the easement, namely where:

This term was criticised on several bases.

First, the standard “to such an extent that it is not reasonably and safely passable… for a period of 14 days following the occurrence of that damage” required the potential user of the easement to make an assessment of the condition of the 120m approach or exit track before knowing whether he or she was lawfully entitled to avail him or herself of the easement over the Levers’ property.

Moreover, the 14-day period built into this term assumed that a user would know when such damage occurred. An absence of knowledge of this fact, or uncertainty as to it, would leave a potential user of the easement at risk of trespass.

These two points were, in my opinion, well made and contribute to the conclusion that an easement unrestricted as to time was reasonably necessary. The inability to formulate terms in respect of the use of the easement that allowed clarity as to when it could and could not be used supports this conclusion. In an environment where neighbours have, for many years, evidently not been able to reach agreement as to access, a party wishing to use its land (and have others use it) should not be put at risk of trespass because of such terms.

I should note, parenthetically, that, contrary to one argument advanced by the Gordons, term 6(b)B(ii) did not impose an obligation on anyone to repair the approach or exit tracks to the river crossing within 14 days.

An additional criticism of term 6(b)B(ii) was reflected in the submission that, in instances where tracks to the ford were damaged by a weather event, the availability of the easement for 14 days after the damage and not thereafter, irrespective of whether the tracks could be repaired within 14 days of damage occurring, was unsatisfactory.

The Gordons submitted that it was “not far-fetched” that a damaged track would not be able to be repaired within 14 days, noting that the timeframe for such repairs was “entirely unexplored by the experts” and not the subject of any finding. Given that damage would have occurred as a result of flooding, any such flooding would unlikely be confined to a small area such that the call for the equipment and materials required to repair a 120m stretch of gravel road along the river’s edge would likely be widespread, with demand for such materials and equipment not necessarily being able to be satisfied as expeditiously as the imposed 14 day period would require. Again, I consider that this argument was well made and highlighted the difficulty in formulating workable terms.

The Gordons also submitted that work within 40m of the river required approval from the NSW Department of Primary Industries under the Water Management Act 2000 (NSW) (WM Act), and that there was no finding that such approval could be obtained, let alone the work completed, within 14 days. This meant that even though the water levels at the ford could have subsided to a level below 300mm, that route may remain inaccessible because of the damage to the tracks so that the land would effectively be landlocked, the easement not being available outside the 14 day period.

There is force to the submission that works along the riverbed required approvals before they could be undertaken: see WM Act Pt 3. The terms of the reservation set out in [57] above and to which I have added emphasis also leave uncertain whether or not the 120m stretch of gravel road adjacent to the riverbed on the side of Lot 102 in fact formed part of Lot 102. If it did not, and there was no clarity as to this in the materials before the Court, that would render the terms imposed on and restricting the use of the easement even more problematic, because some or all of the land on which remediation work may need to be done would not be in the ownership or control of the Gordons.

For completeness I should record that I do not think that there was any force in the points made on behalf of the Gordons which are reflected in [44(iv) and (v))] above.

First, as to the suggestion that the easement was defective because Lots 101 and 102 which it was necessary to traverse before reaching the ford would not always necessarily be in the same ownership as Lots 40 and 7, it was correctly submitted on behalf of the Levers that the Court is to determine easement applications in the circumstances as they exist at the time of the hearing: see Moorebank at [96]. It was also observed that, were the Gordons to sell any of their Lots, they would be able to reserve or grant a right of carriageway as necessary. Further, as the primary judge pointed out at [186] of his judgment, were the Gordons in the future to sell Lots 101 and/or 102 to a third party, this was a matter that may be the subject of a variation of easement.

As to the suggestion that the terms were defective because they would not permit the owners of the servient tenement (Lots 100 and 36) to police the use of the easement because, to do so, they would need to trespass upon Lot 40, this argument was dealt with by the primary judge at [186] where he said the following:

The Gordons also submitted that the terms of the easement imposed by the primary judge were problematic in that they required that users cross Crown land, the bed of the Richmond River and Lots 101 and 102. They observed that the order of the Court was for an easement over Lots 100 and 36, the servient tenements, in order to benefit Lots 7 and 40, the dominant tenements. The Gordons noted that Lots 101 and 102 were not specified in the Court orders, and that “they could not be because this land was not the subject of the proceedings”. The Gordons cited the terms of s 88K for the proposition that only parcels of land specified in the order of the Court are bound by the benefit and burden arising on registration of the easement. The Gordons submitted that the order confers no right to cross any other land.

The short answer to this argument was, as the Levers pointed out, that it “misstate[d] the easement actually ordered by the Court”. They submitted correctly that the easement should not be viewed as a combination of Options 1 and 4, but, rather, as comprising only Option 1, with Option 4 explaining when the Option 1 easement was limited. The easement granted was solely over the Levers’ land, and Lots 101 and 102, in the ownership of the Gordons, did not form any part of the easement.

In the earlier appeal to the Court of Appeal, the Court made orders in relation to the costs of the appeal but, in remitting the matter to Sackar J, the Court also remitted to his Honour the question of the costs of the first set of proceedings before him.

By a separate judgment delivered on 17 May 2019, the primary judge ordered that, in both sets of proceedings before him, the Gordons pay the Levers’ costs on an ordinary basis: see Gordon v Lever [2019] NSWSC 571 at [31].

As noted at [33] above, s 88K(5) of the Conveyancing Act provides that “[t]he costs of the proceedings are payable by the applicant, subject to any order of the Court to the contrary.” The primary judge declined to make an order to the contrary. The basis upon which this order had been sought by the Gordons was their contention that the Levers’ course of conduct in the proceedings had been unreasonable and inconsistent. It was put that the Levers had changed their position significantly and, in particular, that the last minute abandonment of the concept of a causeway being built at the ford (see [16] above) involved significant wastage of expert expenses that had been incurred, with expert evidence being filed on both sides going to the cost and feasibility of building a causeway of the ford.

At [24]-[26] of his costs judgment, the primary judge held that:

His Honour concluded at [31] that:

What is curious about the debate going to wasted costs associated with the causeway suggestion is that the Gordons simply did not own the land on or over which it would have been constructed, even if approval had been given. The Gordons’ lack of ownership of this land had been pointed out in their submissions on regulatory framework in August 2017, as I have referred to at [59] above. It was not a question of the Court having “no power to order the [Gordons] to spend money on their own land”, to quote the primary judge. Rather, it was the more basic point that the Gordons never had any right or entitlement to build such a causeway.

In Shi v Abi-K Pty Ltd (2014) 87 NSWLR 568 at [98]; [2014] NSWCA 293, Basten JA, with whom Barrett and Ward JJA agreed, observed in relation to s 88K(5) of the Conveyancing Act that:

Senior Counsel for the Levers pointed out that the present case was, in many respects, novel and there is some force to that submission. Further, the Levers’ opposition to an unrestricted easement was understandable in light of the fact that the Gordons had made use of the ford out of absolute necessity for a number of years following the washing away of the Lever Bridge in 2015. Absolute necessity, of course, is different to the statutory concept of reasonable necessity, but the Levers’ initial opposition was, as I have said, nevertheless understandable. To the extent that the introduction of evidence relating to a causeway was based on a mistaken assumption as to the Gordons’ legal entitlement to do so, unnecessary expenses have been incurred. It would be very difficult, however, to disentangle this evidence from the general hydrology evidence that was led.

In their written submissions, the Gordons were critical of the costs that have apparently been incurred by the Levers in the proceedings to date. That is a matter that will no doubt be taken into account on any assessment of costs. It does not found a basis for departing from the presumption to which s 88K(5) of the Conveyancing Act gives effect.

I do not consider, in all the circumstances, that a case has been made out for a departure from the default position set out in s 88K(5) of the Conveyancing Act in relation to the two sets of proceedings at first instance before the primary judge. I also take into account the fact that the Levers will be required to pay the Gordons’ costs of the appeal to this Court.

I have already referred at [87] above to the costs orders made by the primary judge.

The relevant substantive orders in relation to the easement made by the primary judge on 19 December 2018 have been set out at [30] above. At the end of Order 1 of those Orders, his Honour referred to the terms of the right of carriageway as “in accordance with the terms set out in Annexure ‘B’ to these Orders.” Those terms were the terms that are set out in [31] above.

The Gordons, consistent with their argument, contended for a different set of terms to those which his Honour imposed. The Levers, in separate written submissions filed following the hearing, advanced various drafting changes to the Gordons’ proposed terms.

What is set out as Annexure 1 to these reasons is something of an amalgam of the terms proposed by both parties, formulated in a manner designed to give certainty to the parties and clarity as to their rights.

I should note that the Levers sought a term to the effect that:

No submission was made by the Levers that the amount of compensation ordered by the primary judge should be altered depending on whether or not the appeal succeeded. As such, the orders that I propose be made do not disturb any of Orders 2-6 made by the primary judge as reproduced in [30] above.

It follows that I would propose the following orders:

PAYNE JA: I agree with Bell P.

EMMETT AJA: This appeal concerns the creation of an easement for a right of carriageway under s 88K(1) of the Conveyancing Act 1919 (NSW) over land owned by the respondents, Allen Lever and Debra Lever, for the benefit of land owned by the appellants, Stanley Gordon and Christine Gordon. Section 88K(1) relevantly empowers the Court to make an order imposing an easement over land if the easement is reasonably necessary for the effective use or development of other land that is to have the benefit of the easement. Such an order may be made only if the Court is satisfied that use of the land having the benefit of the easement will not be inconsistent with the public interest, the owner of land to be burdened can be adequately compensated for any loss or other disadvantage that will arise from the imposition of the easement, and all reasonable attempts have been made by the applicant to obtain the easement or an easement having the same effect but have been unsuccessful.

Mr and Mrs Gordon applied for an easement and a judge of the Equity Division (the primary judge) granted the easement on terms that limited the circumstances in which persons could avail themselves of the easement. Mr and Mrs Gordon appealed to this Court from the orders made by the primary judge, principally on the basis that the terms governing the use of the easement were such that persons seeking to use it would not be able to know with reasonable certainty whether the easement was capable of being exercised.

I have had the advantage of reading in draft form the proposed reasons of the President for concluding that the appeal should be allowed in part, varying the terms governing the exercise of the easement, removing the relevant uncertainty. I agree with the orders proposed by the President for the reasons proposed by him.