Mulder v Laura Holdings Pty Ltd

1. [1]

   This case concerns an application for a statutory easement in the form of a right of carriageway.

2. [2]

   The plaintiffs, Jacobus Mulder and Emma Wilhelmina Mulder, are the registered proprietors of a landlocked rural block at Burraga, southwest of Oberon (Mulder Land), being lot 90 of Deposited Plan 753018. They purchased the land in 1980 as a vacant lot and built a property on it. For about a year, they lived in the property. Since then the property has been rented out from time to time. The property is currently vacant.

3. [3]

   The plaintiffs seek an order pursuant to s 88K of the Conveyancing Act 1919 (NSW) for the imposition of an easement over part of the defendant's land, being lots 57 and 68 in Deposited Plan 753018. Those lots are already burdened by rights of carriageway in favour of neighbouring properties. The defendant also owns lots adjacent to lots 57 and 68.

4. [4]

   The defendant is the trustee company for the “Elias Family Trust”. Mr Charlie Elias is the sole director of the defendant.

5. [5]

   Until 2018, the plaintiffs accessed their land from a sealed public road called Bald Ridge Road, over an approximately nine-kilometre route consisting of combination of rights of carriageway, Crown Roads and an existing track on the defendant’s land. At no time did the plaintiffs have a formal right of way over a track of about two kilometres of the defendant’s land where there is no Crown Road. That track is part of the right of carriageway benefitting neighbours. It is over that track that the plaintiffs now seek an easement.

6. [6]

   In submissions, the defendant stated that since it purchased the land in 2012 the plaintiffs’ historical traversal over the track on its land amounted to trespass. However, there is no pleading to that effect and I need not determine that question. I note that there is no allegation that the plaintiffs have trespassed on the defendant’s land since 2018, when the defendant first locked the gates on its boundaries.

7. [7]

   If the easement is granted, the plaintiffs would access their land from Bald Ridge Road, using the following rights, in order:

   1. (1)

      A right of carriageway in favour of the Mulder Land (DP642633), burdening lot 527 in DP1124016 and lot 528 in DP1124016 being land owned by Mr Robert Watson’s family company, Arwat Pty Ltd (Arwat Land).

   2. (2)

      A Crown Road on land owned by Mr Watson (Watson Land).

   3. (3)

      A Crown Road on “Merridown Station”, a property owned by Mr Matthew Twohill, namely lots 5, 13, 25, 32 and 77 in DP753018 (Twohill Land).

   4. (4)

      A Crown Road on part of the defendant’s land, namely lot 65 DP753018.

   5. (5)

      The proposed easement which extends over 2.066 kilometres on the defendant’s land. This land is already subject to DP649935, a registered right of carriageway of variable width up to 20 metres wide that benefits five lots, two belonging to Mr Twohill, and three belonging to Mr and Mrs El-Nachar (existing right of carriageway). This is said to be the “missing piece” in the access route from Bald Ridge Road.

   6. (6)

      A proposed easement over the land belonging to AgriWealth Capital Limited (Agriwealth Land), being lots 101 and 102 in DP1190056. Part of that land is already subject to the same existing right of carriageway. The plaintiffs submit that AgriWealth has consented to the plaintiffs obtaining the benefit of the existing right of carriageway over its part of land, which is considered further below.

8. [8]

   There is no evidence as to why the Mulder Land was not included as one of the dominant tenements benefiting from the existing right of carriageway (DP649935), which the other neighbours enjoy. Had that occurred, the plaintiffs would not need to make this application.

9. [9]

   Reproduced below is a map [1] which illustrates the plaintiffs’ proposed easement heading from the Mulder Land horizontally (east) and ending at Bald Ridge Road (in turquoise). The defendants submit that an alternative access route (in purple) (Southern Access Route), moving south from the Mulder Land, is preferable to the proposed easement. The Southern Access Route traverses four lots, namely lots 60, 59, 85 and 528. The public road, Bald Ridge Road is marked by the dark labelled line, and can be accessed from the Mulder Land by either route, from different exit points on Bald Ridge Road.

10. [10]

    The defendant resists the imposition of the easement sought on any and all of the following bases:

    1. (1)

       The proposed easement is not “reasonably necessary” within the meaning of s 88K(1) Conveyancing Act, because of the existence of the Southern Access Route.

    2. (2)

       The defendant cannot be “adequately compensated” for “any loss or other disadvantage” that would flow from the imposition of an easement for the purposes of s 88K(2)(b).

    3. (3)

       The plaintiffs have not taken all reasonable steps to obtain easements over the Southern Access Route, which is said to have “the same effect” as the proposed easement for the purposes of s 88K(2)(c).

    4. (4)

       The Court ought otherwise not exercise its discretion to order the imposition of an easement as sought.

11. [11]

    The defendant does not suggest that the proposed use of the plaintiffs’ land would be contrary to the public interest under s 88K(2)(a). I accept that there is a public interest in the plaintiffs having access to use their “landlocked” land: Hanny v Lewis (1998) 9 BPR 16,205 at 16,209 (Young J); Marshall v Council of the City of Wollongong (2000) 10 BPR 18,163; [2000] NSWSC 137 at [20] (Bryson J).

12. [12]

    Nor do the defendants submit that the plaintiffs did not take all reasonable steps to obtain the proposed easement from the defendant for the purposes of s 88K(2)(c).

Relevant principles

1. [13]

   Section 88K(1)-(2) of the Conveyancing Act provides:

2. [14]

   If the imposition of an easement is determined to be “reasonably necessary” within the meaning of s 88K(1), then the Court will proceed to make an order imposing the easement if satisfied of the matters set out in s 88K(2): see, eg, Tout v Johnson [2021] NSWSC 1311 at [72] (Darke J). Even then, the Court retains a discretion as to whether to make the order: Khattar v Wiese (2005) 12 BPR 23,235; [2005] NSWSC 1014 (Khattar v Wiese) at [59] (Brereton J).

3. [15]

   Each contested element of s 88K is considered below.

Reasonable necessity – section 88K(1)

1. [16]

   The requirement of reasonable necessity is assessed by reference to the circumstances as they exist at the time of the hearing: Gordon v Lever (2019) 101 NSWLR 427 at 438 (Bell P, as the Chief Justice then was). That does not preclude consideration of how the land, the subject of the proposed easement, has previously been used: see, eg, Owners Strata Plan 13635 v Ryan (2006) 12 BPR 23,485; [2006] NSWSC 221 at [67] (Rein AJ); King v Carr-Gregg [2002] NSWSC 379 at [59] (Foster AJ).

2. [17]

   In Moorebank Recyclers Pty Ltd v Tanlane Pty Ltd (2012) 16 BPR 31,257; [2012] NSWCA 445 (Moorebank Recyclers) at [154]-[159], the Court of Appeal summarised the relevant principles:

3. [18]

   The Court also quoted, at [113], from ING Bank (Australia) Ltd v O’Shea (2010) 14 BPR 27,317; [2010] NSWCA 71 at [48-[49], where Giles JA (with whom Campbell JA agreed) said:

4. [19]

   Whether a proposed easement is reasonably necessary turns on “consideration of the alternative methods by which use or development could be achieved”: see Rainbowforce Pty Ltd v Skyton Holdings Pty Ltd (2010) 171 LGERA 286; [2010] NSWLEC 2 at [158] (Preston CJ) (Rainbowforce).

5. [20]

   However, an easement may be reasonably necessary, even though another easement could be created having the same effect: Tregoyd Gardens Pty Ltd v Jervis (1997) 8 BPR 15,845 at 15,852 (Hamilton J) (Tregoyd).

6. [21]

   The comparison of possible easements in s 88K(1) may lead to an evaluation of the advantages and disadvantages of the easements involving considerations such as costs and viability; a detailed comparative inquiry is not required in the language of s 88K(1): see, eg Debbula Pty Ltd v The Owners – Strata Plan 6954 (2003) 12 BPR 22,617; [2003] NSWSC 189 at [26] (Macready M); Fiona Burns, ‘Court Imposed Easements in the Australian Torrens System: Are the Rights of Servient Owners Adequately Protected?’ in Lyria Bennett Moses, Brendan Edgeworth and Cathy Sherry, Property and Security: Selected Essays (2010, Lawbook Co) at 226. As Brereton J stated in Khattar v Wiese at [32] and [60] (and which has been cited with approval in many cases):

7. [22]

   Similarly, Preston CJ stated in Rainbowforce at [81]:

8. [23]

   Here, the defendant submits that the Southern Access Route is superior to the plaintiffs’ preferred access route, which includes the proposed easement.

9. [24]

   The plaintiffs submit that the Southern Access Route is not to the same effect, or sufficiently comparable or superior to render the proposed easement not “reasonably necessary”, particularly because the plaintiffs already have existing proprietary rights to traverse most of their preferred route to the public road.

10. [25]

    The plaintiffs noted that it may be open to them to improve or establish other Crown Roads through the defendant’s paddocks where livestock graze, in order to have access to Bald Ridge Road. In Weissflog v Community Association DP 270159 [2022] NSWSC 239, Darke J rejected an argument that an unformed Crown Road was “to the same effect” as a proposed easement. However, here, the defendant does not submit that those Crown Roads provided a possible “easement” route “with the same effect”, nor that the existence of those unestablished Crown Roads meant that the easement sought was not reasonably necessary.

11. [26]

    Therefore, it is only the Southern Access Route that must be considered in the context of determining whether the plaintiffs’ proposed easement is “reasonably necessary” to satisfy s 88K(1).

12. [27]

    The defendant relies upon various evidence to support the submission that the Southern Access Route renders the proposed easement not reasonably necessary.

13. [28]

    First, the defendant relies on the expert report of a town planner, Mr David Haskew, who undertook a detailed consideration of the location of the proposed easement and the Southern Access Route in terms of “distance, land use, topography, hydrology, maintenance burden and management”. He concluded that, of those considerations, he ascribed “significant weight to the metrics of maintenance cost and management”, and therefore preferred the Southern Access Route.

14. [29]

    However, counsel for the defendant, Mr Le Plastrier, submitted:

15. [30]

    The abandonment of maintenance cost and management was appropriate, because the existing right of carriageway over the defendant’s land does not require the benefitted lot owners to maintain or pay for maintenance. Arguably the plaintiffs or any other of the lot owners using the various access routes could voluntarily maintain and improve the tracks (as Mr Twohill apparently does), or, where they are Crown Roads, they may be required to do so pursuant to the Roads Act 1993 (NSW) Pt 6, Div 4.

16. [31]

    However, the other issues of topography and hydrology raised by Mr Haskew practically relate to possible erosion, flooding and crossing watercourses. The impact of such issues related to “navigability” is directly affected by maintenance, which has been disavowed by the defendant. Therefore, it is not clear the basis upon which the defendant ultimately relied on Mr Haskew’s report.

17. [32]

    Secondly, the defendant relies on a report by the plaintiffs’ traffic expert, Mr Ben Liddell. Mr Liddell drove along the proposed easement route and the Southern Access Route and provided an opinion about the state of each of those tracks, as at the dates of his inspections on 29 July 2022 and 19 September 2022. He considered both routes provided suitable vehicle access with a 4-wheel drive. On balance, he considered the route including the proposed easement was not significantly inferior, but was inferior to the Southern Access Route, because parts of the track on the Twohill Land and Watson Land required a creek crossing and the track was more rutted and scoured. However, I consider this evidence is in the same category to Mr Haskew’s, in that, whether a route was “rutted and scoured” and how a creek is crossed, depend on how the track is maintained. Further, the proposed easement and the Crown Road on the defendant’s land are well maintained.

18. [33]

    Thirdly, the defendant relies on Mr Twohill’s evidence that for some time he has seen the Watsons use the Southern Access Route and he considers it “driveable”. This evidence does not take the matter any further. It can be accepted that the Southern Access Route is driveable. However, the issue is whether the proposed easement is reasonably necessary.

19. [34]

    Fourthly, Mr Haskew raised two other concerns with the proposed easement. His first concern was of a “potential conflict with active agricultural production”. I do not accept this hypothetical unspecified “potential” carries any weight. The use of the land, over which the easement would be granted, is already subject to a right of carriageway; the defendant already manages livestock in that context. Further, there is an existing Crown Road on the defendant’s land, which might also “conflict with active agricultural production”, but is managed by the defendant.

20. [35]

    Mr Haskew’s other reason to prefer the Southern Access Route was that it offered a “shorter travel distance to the Local Council road network”. However, while the distance of the Southern Access Route is shorter, Mr Liddell’s unchallenged evidence was that the travel time along each of the routes was equivalent. Therefore, I consider this reason unpersuasive.

21. [36]

    Against that evidence, and to my mind of some significance, is Mr Watson’s uncontradicted evidence that using the Southern Access Route to access Bald Ridge Road added an extra 30 minutes to the length of the drive to the closest town of Burraga, which provided access to “provisions, internet access and social contact”.

22. [37]

    In my view, the proposed easement is “reasonably necessary” for the purposes of s 88K(1) for the following reasons.

23. [38]

    First, an easement will be reasonably necessary where the land would otherwise be landlocked, and no practical use or development could be made of it without the easement: Swann v Spiropoulos [2006] NSWSC 860 at [64] (Campbell J) (Swann). A further factor that demonstrates reasonable necessity is the need to connect landlocked land to the main road to accommodate residents in emergencies like fire: see Pasade Holdings Pty Ltd v Council of City of Sydney [2006] NSWSC 299 at [10] (Campbell J). The evidence of Mr Haskew, the defendant’s town planner, is that “[a]ll of the Plaintiffs’ Land and the Defendant’s Land is bushfire prone land”.

24. [39]

    Secondly, the plaintiffs do not need to seek any order from the Court in relation to most of the access route from the Mulder Land to the end of the Crown Road, which traverses well into the defendant’s land. The plaintiffs only seek an easement for 2.066 kilometres from the end of the Crown Road to where the defendant’s land joins the Agriwealth Land. This is not a case where the alternative method of accessing the Mulder Land starts at an equivalent location to the proposed easement.

25. [40]

    Past and actual use of the land the subject of the putative servient tenement may be considered in the assessment of “reasonable necessity”: Owners Strata Plan 13635 v Ryan [2006] NSWSC 221 at [60]-[63] (Rein AJ) and the cases cited therein. The plaintiffs’ evidence was that since 1980 they had used the track, including over the proposed easement, prior to the defendant locking the gates in 2018. The track is otherwise already subject to the existing right of carriageway that benefits Mr Twohill and neighbours, Mr and Mrs El-Nachar, although Mr Elias’ evidence was that since the defendant purchased the land, he has not seen Mr and Mrs El-Nachar use the track.

26. [41]

    The fact that others already have rights of carriageway over that land is an important matter, because the impact on the defendant is much less than if the proposed easement would result in a novel use of the defendant’s land that caused noticeable detriment: Moorebank Recyclers at [156]. To allow the plaintiffs to use that land will not impact at all on the defendant’s rights to otherwise develop that land, which is already burdened: Moorebank Recyclers at [157].

27. [42]

    Thirdly, the Southern Access Route passes across four different lots and therefore would require the plaintiffs to obtain rights from each of those proprietors. Comparatively, that would have a greater impact in terms of imposition of burdens over proprietary rights. There would be a greater compulsory expropriation of proprietary rights by the imposition of easements in relation to the Southern Access Route, and such expropriation is a last resort: see Khattar v Wiese at [54].

28. [43]

    Fourthly, I do not consider the Southern Access Route and the proposed easement are equivalent, because the latter provides access to part of the public road that is much closer to the closest town than the former, and provides a 60 minute improved travel time for a round trip. Further, there is no advantage in terms of time to drive on the Southern Access Route compared to the easement route.

29. [44]

    Fifthly, in terms of quality of the two tracks, it can be accepted that using either could become difficult depending on the weather and the quality of maintenance. In that regard, the evidence reveals that currently the proposed easement land is well-maintained and there is nothing to suggest that it will not be maintained in the future. As noted above, other parts of the route could be improved if users undertook that work.

30. [45]

    Therefore, while I accept that the Southern Access Route could provide an access route from the public road to the Mulder Land, it is not equivalent or better than the proposed easement; I do not consider it renders the proposed easement other than “reasonably necessary”. Therefore, s 88K(1) is satisfied, such that the other contested criterion in s 88K(2)(b) and (c) must be considered.

Compensation – section 88K(2)(b)

1. [46]

   An easement will only be granted if s 88K(2)(b) is satisfied. Ball J explained in Lonergan v Lewis [2011] NSWSC 1133 at [50]:

2. [47]

   The Court must be in a position to order appropriate compensation at the time of ordering the grant of the easement. If there is insufficient evidence to carry out that task, an easement will not be imposed. However, if the owner of the burdened land can be adequately compensated, even if with difficulty, the Court is required by s 88K(4) to order the compensation it considers appropriate.

3. [48]

   The plaintiffs bear the onus of demonstrating what loss or other disadvantage the defendant will suffer and that such loss or disadvantage can be adequately compensated: Katakouzinos v Roufir Pty Ltd [1999] NSWSC 1045 at [66] (Hodgson CJ in Eq).

4. [49]

   Often, compensation for easements imposed pursuant to s 88K will have three elements: (a) the diminished market value of the affected land; (b) associated costs that would be caused to the owner of the affected land; and (c) an assessment of compensation for insecurity and loss of amenities, such as loss of privacy or peace and quiet. Against these losses and disadvantages should be allowed, as an offset, compensating advantages (if any): Tanlane Pty Ltd v Moorebank Recyclers Pty Ltd (No 2) [2011] NSWSC 1286 at [57] (Young J); see also Wengarin Pty Limited v Byron Shire Council (1999) 9 BPR 16,985; [1999] NSWSC 485 at [26] (Young J).

5. [50]

   Although s 88K(4) creates a broad discretion for the Court to order compensation it “considers appropriate”, that does not extend to ordering compensation for a loss or disadvantage which does not arise from the imposition of the easement: Rainbowforce at [106] (Preston CJ).

6. [51]

   Young AJ in Tanlane Pty Ltd v Moorebank Recyclers [2011] NSWSC 1286 at [55]-[56] (this point not varied on appeal) explained the issue of causation of loss from an imposed easement as follows:

7. [52]

   However, there is also authority which suggests that a test of “common sense” causation applies in determining whether the loss or other disadvantage factually arises from the imposition of the easement: see, eg Mitchell v Boutagy [2001] NSWSC 1045 at [27] (Austin J); Khattar v Wiese at [65]; Rainbowforce, [109].

What loss or disadvantage would the defendant suffer?

1. [53]

   The plaintiffs submit that the defendant can be adequately compensated for diminished value of the land, and that there is no loss of amenity that needs to be compensated.

2. [54]

   In contrast, the defendant submits that it cannot be properly compensated, should an easement be imposed, because:

   1. (1)

      There is no evidence from which the Court can determine the compensation payable for diminished value of the land, because there is no expert evidence of the value of the land; and

   2. (2)

      It is not possible to quantify loss in the form of disruption to the enjoyment of the land by the Elias family, because there will be “loss of control” and possible increase in trespassers on the land.

3. [55]

   Below I consider each suggested type of loss.

4. [56]

   The defendant does not submit that the diminished value of the land could not be adequately compensated. Instead, the submission is that there is no evidence to assist the Court to determine the appropriate compensation and therefore no easement ought to be ordered.

5. [57]

   Before the trial, the plaintiffs served an expert report of valuer, Mr Michael Begg, dated 15 March 2022 and the defendant served an expert report of valuer, Mr Craig Johnstone, dated 1 July 2022.

6. [58]

   On the first day of the hearing, the defendant objected to the admission into evidence of Mr Begg’s report on the basis that the expert had not exposed his reasoning process in giving an opinion as to diminished value. Because that objection had not been earlier notified, the plaintiffs were given an opportunity to consider the objection and provide any submissions, before I made a ruling on the report’s admissibility.

7. [59]

   On the second day of the hearing, having considered the parties’ submissions, I did not admit into evidence Mr Begg’s opinion as to the value of the impacted land at $1,500 per hectare and consequent calculations using that figure. I indicated that reasons for my ruling would be provided as part of this judgment, which are now set out below.

8. [60]

   In order for expert opinion evidence to be admissible it must satisfy the requirements of s 79 of the Evidence Act 1995 (NSW), which were explained by the plurality in Dasreef Pty Ltd v Hawchar (2011) 243 CLR 588 namely:

   1. (1)

      The expert must have specialised knowledge based on the person’s training, study or experience; and

   2. (2)

      The opinion expressed must be wholly or substantially based on that knowledge.

9. [61]

   The evidence must also “be presented in a form that reveals the facts and reasoning on which the opinion rests”: Kyluk Pty Ltd v Chief Executive, Office of Environment and Heritage [2013] NSWCCA 114 at [176] (Schmidt J, with whom McCallum J agreed). Her Honour went on to state at [177]:

10. [62]

    An expert’s evidence should explain how the field of specialised knowledge in which the witness is expert by reason of ‘training, study or experience’ and on which the opinion is wholly or substantially based applies to the facts (as assumed or observed), so as to produce the opinion propounded.

11. [63]

    In Dasreef, the plurality stated at [37] (emphasis added):

12. [64]

    No issue was raised as to Mr Begg’s specialised knowledge; he is a certified professional valuer.

13. [65]

    While Mr Begg does not attach his letter of instruction to his report, I consider it apparent from the text of his report that he was requested to provide a value of appropriate compensation for the granting of an easement for “Supreme Court hearing purposes”, which a reader would understand means pursuant to s 88K Conveyancing Act.

14. [66]

    The subject matter or facts and assumptions Mr Begg identifies in his report are as follows:

    1. (1)

       He set out the lots burdened and benefitting from the proposed easement and included images that identify the proposed easement route and the land involved. He also provides some description of the type of land involved. He explains his personal observations that the burdened land is “mostly wooded country that is moderate to more steeply sloping” and “not suitable for agricultural uses”.

    2. (2)

       He notes that the proposed easement would run along a formed road on an existing right of way that benefits other lots, which he lists.

15. [67]

    He explains his calculation of the area of the proposed easement as 4.3 hectares, based on the length of the required easement.

16. [68]

    Mr Begg then explains his valuation methodology is to take “account [of] comparable sales in the district”, including consideration of the adverse impact on the burdened registered proprietor. He adds that the value of easement is calculated using the “piecemeal method of valuation”, which I note is an accepted valuation method for s 88K cases: see, eg Rainbowforce at [145] (Preston CJ) and the cases referred therein.

17. [69]

    Mr Begg identifies three other sales of local land he considers similar to the land in question. He lists the details of those other properties. He provides a summary of the range of prices per hectare of those properties. I consider that such evidence of comparable property sales is expert opinion evidence wholly or substantially based on Mr Begg’s expertise as a valuer in identifying what he considers comparable properties. It is implicit in his identification of those properties that he considered using his expertise that they were analogous or comparable to the burdened land.

18. [70]

    However, Mr Begg did not provide any reasoning as to how he took the sale prices of the comparable properties and then determined that the appropriate price per hectare of the defendant’s land was $1,500. In that regard, Mr Begg’s opinion is similar to that of a valuer rejected by McDougall J in Bone v Wallalong Investments [2012] NSWSC 137. There, a valuer, using a comparable sales method, listed comparable sales and then “simply state[d] an opinion about the value of the subject land” (at [32]-[34]). Mr Begg has done the same.

19. [71]

    Other opinions of Mr Begg were admissible where the reasoning process was apparent. For example, Mr Begg states that the easement will have minimal impact on the defendant’s land, and gives reasons, namely that the location of the defendant’s house is away from the proposed easement, the property has separate access to the main road, it is unlikely there will be any additional noise or dust nuisance, and the proposed easement track already benefits other lots. I note that expert evidence concerning the adverse effect of a proposed easement, while given without reasons, was readily accepted by White J (as his Honour then was) in Evans v Cornish Nominees Pty Ltd [2009] NSWSC 1295 at [115] (Evans v Cornish Nominees):

20. [72]

    Mr Begg also indicated that the value of the piece of land needed for the easement ought to be discounted for various reasons. First, by 50% with the reasoning that the defendants ought not be compensated with the full value of the land on a fee simple basis. Second, by dividing his figure by three, because he assumes the subject land also benefits three other land holdings.

21. [73]

    Using his expertise as a valuer he also provides a “blot on title” valuation of $1,000, which I consider is admissible.

22. [74]

    The defendant did not cross-examine Mr Begg. To the extent admissible, I consider his evidence relevant to any consideration of the issue of compensation.

23. [75]

    Following the ruling on the admissibility of Mr Begg’s opinions, the defendant chose to tender a partly redacted report of registered valuer Mr Johnstone, that provided:

    1. (1)

       An unexplained value of land of $2,475; and

    2. (2)

       An opinion that it was not possible to assess compensation for loss and disadvantage “including insecurity, privacy, loss of amenities, loss of peace and quiet, enjoyment and lessened freedom to utilise the land”.

24. [76]

    In closing oral submissions, the plaintiffs adopted Mr Johnstone’s stated valuation of $2,475 as evidence of the appropriate compensation payable for the imposition of an easement over the defendant’s land.

25. [77]

    After hearing the plaintiffs’ submission placing reliance on Mr Johnstone’s valuation, the defendant orally applied to “re-open” to withdraw the tender of the redacted report and substitute a further redacted version that removed the reference to $2,475. However, the application was then withdrawn. Instead, the defendant submits that the Court ought disregard the reference to $2,475 in the report, because it was not supported by any reasoning, and I accept that submission.

26. [78]

    Further, the defendant submits that because Mr Johnstone concluded that it was not possible to quantify a value for the loss and disadvantage, s 88K(2)(b) could not be satisfied. That head of loss is considered further below.

27. [79]

    If the Court exercises its discretion to order the easement, the Court is to “provide in the order for payment by the applicant … such compensation as the Court considers appropriate” (emphasis added).

28. [80]

    The Court referred the parties to the Court of Appeal decision in Moorebank Recyclers and sought submissions as to whether this was a case where the Court could act as a juror in determining appropriate compensation, should an easement be ordered. At paragraphs [246]-[250] the Court of Appeal stated:

29. [81]

    As noted by the Court of Appeal, at the trial, Young JA had determined the compensation in a different sum to that proposed by the evidence given by valuers. While the Court of Appeal cast doubt on s 88K compensation by way of an account of profits, it did not disagree with the following statements by Young JA at first instance:

30. [82]

    It is useful to consider the cases referred to by the Court of Appeal and the approaches undertaken by those trial judges “acting as juror” in determining compensation.

31. [83]

    In Swann at [39], Campbell J did not consider a first expert valuer’s evidence was reliable because it failed to comply with the expert’s code of conduct, the valuation appeared to be “nothing more than plucking a number out of the air”, and further, an assumption made by the valuer was not made out.

32. [84]

    In relation to a second valuation report, Campbell J stated at [49]:

33. [85]

    His Honour’s various concerns with three various valuation reports was in turn:

34. [86]

    Campbell J concluded at [107]-[109]:

35. [87]

    In Evans v Cornish Nominees, White J did not impose an easement. However, on the proviso that his decision was incorrect, his Honour determined compensation. His Honour did not accept the expert evidence led at the hearing, and therefore put himself in the position of a juror and assessed the appropriate compensation payable. In obiter, White J concluded at [110]-[111]:

36. [88]

    Similarly in Lonergan v Lewis [2011] NSWSC 1133, Ball J determined appropriate compensation when imposing an easement, even where there was no expert evidence. His Honour described the assessment of the appropriate compensation as “necessarily rough” (at [57]) and his Honour drew on an offer of $50,000 the plaintiff had made to the defendant, discounted to $30,000 because “built into that offer was the value of avoiding the inconvenience and costs of court proceedings” (at [56]).

37. [89]

    In Katakouzinos v Roufir Pty Ltd [1999] NSWSC 1045, the plaintiff sought temporary easements over neighbouring property to erect scaffolding during a development. Hodgson CJ in Eq considered the evidence of the plaintiff’s valuer was “of no help” and went on to determine compensation for the impact of the easement on the hotel business on the defendant’s land. He did so by taking evidence of historical rent and then discounting figures based on assumptions as to uncertainty surrounding possible causes of future variations in rent: see [68]-[73].

38. [90]

    These approaches are also consistent with Mason J’s statement in Commissioner of Taxation (Cth) v St Helens Farm (ACT) Pty Ltd (1981) 146 CLR 336 at 381:

39. [91]

    The defendant submits that there is insufficient evidence to determine appropriate compensation for diminution of value of the land.

40. [92]

    However, I consider that the defendant can be adequately compensated for the imposition of an easement in relation to the diminution in value of land.

41. [93]

    I also consider that there is sufficient evidence, from which the Court, acting as juror, can determine the impact on the value of the defendant’s land by reference to the comparable sales identified by the plaintiffs’ Mr Begg, and not contradicted by the defendant.

42. [94]

    Taking the most valuable comparable property without discount, the defendant’s land, the subject of the easement, would be valued at $1,984 per hectare for 4.3 hectares, which is $8,531.20. While Mr Begg provided some justification for discounting the value of the land because the full fee simple value ought not be paid, I will not discount it by 50%, and instead only by 30%, which gives a figure of $5,971.84, which I will round up to $6,000. This provides the defendant with a value higher than that stated by its expert without reasons (namely $2,475).

43. [95]

    The defendant submits that it is not possible to order compensation because of the intangible detriment that will be suffered. In Khattar v Wiese at [49]-[50], Brereton J observed (citations omitted):

44. [96]

    However, at [60] Brereton J also stated:

45. [97]

    The case of Evans v Cornish Nominees provides an example of a situation where the intangible detriment could not be adequately compensated and no easement was ordered. There, White J accepted the evidence of a family member of the directors of the company that owned the property, to the effect that the proposed right of carriageway would completely change the secluded and aesthetically beautiful and entirely private location with “dramatic views”. The proposed carriageway would mean that the location would cease to be a potential site for building a home meant to enjoy the peaceful location. White J was not prepared to order an easement because the detrimental impact perceived could not be adequately compensated.

46. [98]

    Relying on these authorities, the defendant submits that because of Mr Elias’ subjective beliefs the imposition of an easement on its land would be, in Brereton J’s words, a “substantial interference with intangible benefits”, which could not be adequately compensated. Mr Elias’ beliefs need to be considered in the context of the evidence concerning the property:

    1. (1)

       No one lives permanently at the defendant’s property which Mr Elias described as an “educational hobby farm”. However, “usually” a member of the extended Elias family is at the property each weekend and at various other times. The extended family, including children aged between 3 and 25, often attend the property on holidays “such as Easter and long weekends”.

    2. (2)

       Various livestock is also kept at the property including cattle, goats, sheep, chickens and beehives. Oats are grown to feed the livestock. A modest income is derived from the farm operations.

    3. (3)

       The track forming the proposed easement is used by the extended Elias family, including for riding bikes. Livestock can wander over the land.

    4. (4)

       Before 2018, Mr Elias’s evidence was that he saw uninvited hunters entering the property and shooting wild pigs, uninvited trail bike riders, timber and livestock stolen, rubbish dumped and cars speeding along the track. Gates were installed in 2018. After 12 months, Mr Elias’ evidence was that all such incidents ceased.

47. [99]

    Mr Elias’ concerns about the granting of the easement are as follows:

    1. (1)

       The defendant will “have no control over who will access the Property, at what time such access will occur, and to what use the [right of carriageway] will be put”. He has concerns that other uninvited persons will commit crimes on the property and put his family “at significant risk”. The defendant also relies on evidence of Mr Twohill that he saw previous tenants of the plaintiffs “illegally accessing the [Watson] property … to hunt and ride motorbikes” and asks the Court to infer that future tenants could access the proposed easement and do similar things.

    2. (2)

       The plaintiffs’ property might be subdivided in the future or the property may be sold and so the defendant will have “no control” over who uses the easement.

    3. (3)

       The existing annual insurance premium of $3,325,96, might increase “to accommodate increased usage by their parties”.

48. [100]

    I consider all these concerns are overstated and cannot be accepted for the following reasons.

49. [101]

    First, in relation to Mr Elias’ fear of “loss of control”, I do not accept Mr Le Plastrier’s submission that the Court ought to focus on the current minimal use of the right of way by only Mr Twohill and the Elias family. Mr Le Plastrier accepted that the existing right of way benefits five lots, and each of those lot owners would be entitled to use the right of way at any time, and also invite any persons onto their properties across the right of way at any time. Therefore, the existing legal position is that an almost unlimited number of persons could use the right of way at any time. Merely because the current lot owners, who have the benefit of the right of way, are not using it or not using it extensively, does not affect the conclusion that the Elias family already cannot “control” the numbers of legitimate users. The defendant purchased the property, which was already burdened by the right of way, and must have understood that it could not be assured of “control” in the sense described by Mr Elias.

50. [102]

    In opining that the impact on the defendant cannot be adequately compensated Mr Johnstone’s report stated (emphasis added):

51. [103]

    Noticeably, Mr Johnstone only considers a “potential” reduction in “comfort”, “privacy” and a “general trepidation”. There is no certainty in the opinion, and it rises no higher than Mr Elias’ subjective belief.

52. [104]

    Contrary to the defendant’s submission, I do not consider the facts of Evans v Cornish Nominees analogous. There, the land in question was completely private and secluded; no one other than the registered proprietor’s invitees used the land. Here, the land, over which the easement would be granted, is already a formed track used by the Elias family and invitees, and also subject to the existing right of carriageway for the benefit of Mr Twohill and another three lots and any of their invitees at any time.

53. [105]

    It is in that context that the impact of the proposed easement must be considered. I consider this case is more similar to Antipas v Kutcher [2006] NSWLEC 42, where Lloyd J considered an application for an easement pursuant to s 40 of the Land and Environment Court Act 1979 (NSW) over an existing right of way that benefitted another lot owner. The respondents resisted the easement on the basis that he could not be adequately compensated for the following:

54. [106]

    His Honour considered that because the respondents’ land was already subject to the burden of a right of way in favour of another lot that “could be redeveloped in isolation, resulting in increased traffic volumes within the right of way, which the respondents would be unable to resist”, the concerns were in fact “largely physical”, and, to the extent necessary, could be adequately compensated (see [23]-[25]).

55. [107]

    Here, there is no evidence that the plaintiffs have ever engaged in past alleged criminal activity feared by the defendant, nor will do so in the future. I do not accept that, if the plaintiffs are granted an easement, there will be any noticeable increased detrimental impact for the defendant, and certainly nothing rising to the level of a “substantial interference”.

56. [108]

    The plaintiffs accept that an appropriate condition of an easement could be that the gates protecting the easement remain locked. I do not accept that if the plaintiffs were provided with a key to the locked gates that there would be a significant additional legal or practical burden on the Elias family. Mr Twohill has already been provided a key to the locked gates.

57. [109]

    This situation bears some similarity to the situation in Weissflog v Community Association DP 270159 [2022] NSWSC 239 at [63], where Darke J stated:

58. [110]

    Secondly, I also do not accept that there is a real risk to the livestock of the defendant, should the plaintiffs be provided with a key to the gates. Currently the number of livestock is only a few hundred in total over a large farm that takes approximately 30 minutes to traverse in a vehicle. Further, there are already others who access the track.

59. [111]

    Thirdly, I also note that the prospects of the plaintiffs being able to subdivide their property is low according to Mr Haskew’s expert opinion, which also indicates the perceived risk of a significant increase in traffic eventuating is highly unlikely.

60. [112]

    Fourthly, I do not accept Mr Elias has a genuine concern about insurance, as he has made no enquiries of his insurance company about possible increases in premium. There is no evidence that the insurance premium would increase, should the plaintiffs be granted an easement. For example, there is no evidence that the insurance premium fluctuated depending on whether there were trespassers compared to when the gates were locked or that the premium was contingent on the number of users of the existing right of carriageway. I consider this alleged concern was self-serving and designed to inflate the alleged impact of an easement without any proper basis and also raises a doubt as to whether his other subjective concerns ought be given real weight.

61. [113]

    Therefore, while I accept that subjective views of loss of amenity may be relevant, I do not consider that Mr Elias’ subjective concerns demonstrate a “substantial interference” will result from the order of an easement. I do not accept that the concerns are objectively realistic, unlike those in Evans v Cornish Nominees, and regardless of the test of causation to be applied, I am not satisfied on the balance of probabilities that the defendant’s asserted loss of amenity is a loss or other disadvantage that would arise from the imposition of the easement.

62. [114]

    I accept Mr Begg’s evidence that the impact on the defendant is so minimal that no compensable loss would be caused by the imposition of the easement.

63. [115]

    However, if I ought to have concluded that the defendant is entitled to loss of amenity damages, I consider the quantification below in circumstances where there is no expert evidence of an appropriate quantum. If it could be concluded that there was an impact that would be caused by the easement that can be discerned beyond the existing impact of the right of carriageway, then it must be minimal.

64. [116]

    Calculating compensation for loss of amenity is a difficult task: Tanlane Pty Ltd v Moorebank Recyclers Pty Ltd (No 2) [2011] NSWSC 1286 at [53] (Young AJ). Even where there is expert opinion evidence valuing the disturbance, the Court must decide the appropriate compensation. The Court may reject and reduce an expert’s suggested amount. For example, in Gordon v Lever [2017] NSWSC 1282 (appeal allowed, but compensation not affected), Sackar J valued the disturbance caused by a right of carriageway over a farm for loss of “control over who or what could enter the site at any time of the day or night” at $5,000. That was a reduction from the defendant’s valuer’s quantification for disturbance of $15,000, because there was unlikely to be significant use of the right of carriageway (at [179]).

65. [117]

    I note that the defendant here, and unlike in Gordon v Lever, has installed a gate which Mr Elias says has been entirely effective in preventing unwanted entrants on the land. An easement for the benefit of the Mulder Land would not result in a total loss of control of the kind envisaged by the valuer in Gordon v Lever.

66. [118]

    If it were necessary to decide, and doing the best that I can, I would have assessed that additional loss of amenity at $500.

67. [119]

    In some cases, a defendant is awarded additional compensation by reason of the “blot on title” that will result through the imposition of an easement.

68. [120]

    In Muhibbah Engineering (M) BHD v Giuseppe Vartuli [2009] NSWSC 265 at [29], Brereton J stated:

69. [121]

    However, other cases have questioned “blot on title” as a relevant head of loss, if ordered in addition to providing compensation for the diminution in value of land. For example, Campbell J stated in Swann at [104]:

70. [122]

    In circumstances where the defendant’s land is already burdened by the existing right of carriageway, this is not equivalent to a case where an easement would be the first blot on title. It is unlikely that a purchaser would be deterred from purchasing the defendant’s land, if the plaintiffs were also given rights to use the same track by way of an easement.

71. [123]

    Nevertheless, Mr Begg quantified “blot on title” at $1,000. Mr Johnstone did not address blot on title. Other cases often provide a nominal sum for “blot on title”.

72. [124]

    In the circumstances, I will order $1,000 compensation for blot on title.

Attempts to obtain easement – section 88K(2)(c)

1. [125]

   Section 88K(2)(c) requires the plaintiffs to demonstrate that they have made all reasonable attempts to obtain the proposed easement or “an easement having the same effect”.

2. [126]

   The defendant submits that the plaintiffs have failed to satisfy s 88K(2)(c), so no easement can be imposed because:

   1. (1)

      the Southern Access Route is an easement having the “same effect” as the proposed easement, because its purpose is to provide access to the Mulder Land; and

   2. (2)

      the plaintiffs have not attempted to obtain the various easements necessary over the Southern Access Route.

3. [127]

   Mr Le Plastrier for the defendant put it this way:

4. [128]

   I do not accept that the plaintiffs must fail because they have not sought easements from the proprietors of the Southern Access Route for the following reasons.

5. [129]

   The current form of s 88K(2)(c) was introduced in the Property Legislation Amendment (Easements) Bill 1995 (NSW). In the Second Reading Speech on that bill, the then Attorney General said (at 4000):

6. [130]

   Because the section has a remedial function it should not be interpreted in an inflexible way: 117 York Street Pty Ltd v Proprietors of Strata Plan No 16123 (1998) 43 NSWLR 504 at 512 (Hodgson CJ in Eq); Donnellan v Woodland [2012] NSWCA 433 at [98] (Beazley JA).

7. [131]

   In my view, properly construed, the easement “having the same effect” is not any other easement advanced by a defendant, but instead, only contemplates variations of the proposed easement. As Simos J noted in Coles Myer NSW Ltd v Dymocks Book Arcade Ltd (1996) 7 BPR 14,638 at 14,642:

8. [132]

   Such a construction involves the disjunctive operation of “or” in “the easement or an easement having the same effect” (emphasis added): see, eg Brendan Edgeworth, Butt’s Land Law (7th ed, 2017, Lawbook Co) at [16.560].

9. [133]

   If the Court concludes that a plaintiff’s proposed easement is “reasonably necessary” under s 88K(1), then it is not necessary for that plaintiff to demonstrate that it has attempted to negotiate with all other proprietors identified by a defendant, who might have been approached for a different easement. Instead, it is contemplated that before approaching the Court, a plaintiff has taken reasonable steps to negotiate and compromise on the form of easement with the defendant, including investigating an easement “having the same effect”, rather than only being prepared to seek a particular easement.

10. [134]

    On this construction, a defendant cannot take a technical objection, that the plaintiff did not make “reasonable attempts”, because the easement sought at a hearing slightly varies from the easements that were sought during negotiations. If it is construed otherwise, a plaintiff could be “held to ransom” by opportunistic behaviour by defendants and obstruct the statutory purpose of s 88K.

11. [135]

    This construction is consistent with construing the subsections of s 88K as a whole. If a proposed easement is “reasonably necessary” for the purposes of s 88K(1), including because it is superior, compared to an alternative method by which a use or development could be achieved, the plaintiff must still demonstrate “reasonable attempts” were made to obtain an easement “having the same effect” under s 88K(2)(c). However, those attempts may be with the defendant, rather than other proprietors.

12. [136]

    Further, the text of s 88K(2)(c) does not expressly require that a plaintiff has been “unsuccessful” in respect of each of the proposed easement and any easement with the same effect. This points against the easement having the “same effect” being an entirely different easement to the proposed easement. If read otherwise it would have the effect of requiring a plaintiff to exhaust the universe of alternative easements, which could frustrate the development or use of land, particularly where other proprietors affected by an alternative easement are not joined to the proceedings. Instead, the disjunctive construction of “or” appears more aligned with the statutory objects.

13. [137]

    It follows that so long as the plaintiff has made reasonable attempts in relation to the proposed easement or any variations to the proposed easement, then s 88K(2)(c) will be satisfied. Here, the defendant does not dispute reasonable attempts were made to negotiate with it; it follows that s 88K(2)(c) is satisfied.

14. [138]

    Alternatively, even if a conjunctive construction is given to “or”, leading to a broader reading of s 88K(2)(c), the attempts that a plaintiff must make are couched in the qualification of “reasonableness”. Whether attempts are reasonable will turn on the relative advantages, convenience and costs of the proposed easements: Khattar v Wiese at [55]. On that basis, what is “reasonable” may range from no engagement to detailed engagement.

15. [139]

    Where an alternative easement lacks advantages, even no engagement in obtaining it will be “reasonable”. For example, in Khattar v Wiese, Brereton J considered an alternative drainage easement at [56]:

16. [140]

    In Durack v De Winton (1989) 9 BPR 16,043 at 16,446-7, Einstein J stated:

17. [141]

    In Tregoyd, Hamilton J considered that the plaintiff had taken “reasonable attempts”, despite being immediately being rebuffed, because, inter alia, the plaintiff had received advice that its proposed easement was superior (at 15,856). See also Coles Myer NSW Ltd v Dymocks Book Arcade Ltd (1996) 7 BPR 14,638 at 14,654-5 (Simos J); Property Partnerships Pacific Pty Ltd v The Owners of Strata Plan 58482 [2006] NSWLEC 709 at [56]–[57] (Biscoe J); Crawley v Baxter (No 2) [2023] NSWSC 648 at [253]-[254] (Henry J).

18. [142]

    As I have concluded that the proposed easement is “reasonably necessary” and superior to the Southern Access Route for the reasons outlined at [37]–[45], to the extent necessary, I consider the proposed easement superior and I am not satisfied the Southern Access Route amounts to an easement having the “same effect”. Accordingly, it is not necessary for the plaintiffs to demonstrate that they have attempted and failed to obtain an easement over the Southern Access Route.

Discretion

1. [143]

   Even though s 88K(1) and (2) have been satisfied, the defendant submits that as a matter of discretion no easement would be ordered.

2. [144]

   In particular, the defendant complains that the plaintiffs do not yet have a registered right of way over the AgriWealth Land, such that, even the proposed easement would be pointless, because the plaintiffs could not access the public road without rights granted by AgriWealth.

3. [145]

   The plaintiffs submit AgriWealth will co-operate, and rely on an email dated 2 February 2021 from Hugh Dunchue, Head Forester of AgriWealth, which relevantly provided:

4. [146]

   The “Existing Right of Way” referred to is DP649935, which includes the proposed easement and the track on the AgriWealth Land between the defendant’s land and the public road. As noted above, that track is currently used by the defendant and Mr Twohill, and Mr and Mrs El-Nachar also have rights to use it. That email suggests that AgriWealth does not consider that the plaintiffs’ use of the same track would cause any negative impact to it. However, it is appropriate that any grant of an easement over the defendant’s land is conditional upon the plaintiffs first obtaining a registered easement over the AgriWealth Land within a limited period of time.

5. [147]

   Having considered all the grounds of opposition to the easement raised by the defendant, I am not persuaded that the Court should withhold the relief sought by the plaintiffs. In all the circumstances and having regard to the underlying rationale of the power under s 88K, I am satisfied that it is appropriate to exercise the discretion and make an order imposing the easement sought.

Conclusion

1. [148]

   For the reasons above, I consider it is appropriate to make an order pursuant to s 88K imposing an easement in favour of Mulder Land over the defendant’s land, consistent with the existing right of carriageway.

2. [149]

   The defendant did not make any submissions on appropriate conditions to be attached to the easement, if granted. For example, no submissions were made as to any obligation to maintain the easement. I do not consider it appropriate to impose a condition not sought by the defendant.

3. [150]

   However, the plaintiffs volunteered that they would accept a condition that they keep locked any gates protecting the defendant’s property. I consider it appropriate to impose that condition.

4. [151]

   As noted above, the registration of the easement is also conditional upon the plaintiffs obtaining a registered right to use the AgriWealth Land, already burdened by the existing right of carriageway within a limited time.

Costs

1. [152]

   Section 88K(5) provides that the costs of the proceedings are payable by the applicant for the order ‘subject to any order of the Court to the contrary’.

2. [153]

   A defendant is not obliged to accept the imposition of an easement. Merely putting an applicant to proof does not, of itself, provide any basis for an adverse costs order against a defendant: Shi v ABI-K Pty Ltd (2014) 87 NSWLR 568 at [98] (Basten JA, Barrett and Ward JJA agreeing); Studholme v Rawson [2020] NSWCA 76 at [175]–[176] (Basten JA, Bell P and Gleeson JA agreeing).

3. [154]

   I will make the usual s 88K(5) order, but grant liberty to either party to apply for a different costs order within a short time.

Orders

1. [155]

   The appropriate orders are:

   1. (1)

      The parties are to confer and provide agreed orders giving effect to these reasons to the Associate to Peden J within seven days of this judgment, including as to costs.

   2. (2)

      Should agreement not be possible, competing short minutes, any evidence, and submissions of no more than three pages are to be provided to the Associate to Peden J within 10 days of this judgment.