Gordon v Lever

1. [1]

   McCOLL JA: I agree with Sackville AJA’s reasons and the orders his Honour proposes.

2. [2]

   WHITE JA: I agree with Sackville AJA.

3. [3]

   SACKVILLE AJA: This is an application for leave to appeal from a decision of the Equity Division (Sackar J). [1] The Applicants sought orders in the Equity Division proceedings pursuant to s 88K of the Conveyancing Act 1919 (Conveyancing Act) for the creation of an easement of carriageway over the Respondent’s land. The Applicants and the Respondent are neighbours, each owning properties adjacent or nearly adjacent to the Richmond River, near Grevillia in the Northern Rivers region of New South Wales.

4. [4]

   The Applicants’ case in the Equity Division was that the easement of carriageway was reasonably necessary for the effective use and development of a portion of their land which is used for both agricultural and residential purposes. The proposed easement provides access from the Applicants’ land on the southern side of the Richmond River to a road known as the Summerland Way, which proceeds along the northern bank of the Richmond River.

5. [5]

   The Applicants’ Amended Summons filed in the Equity Division attached a plan which showed the route of the proposed easement of carriageway. The plan identified the servient tenement, being two lots (Lots 36 and 100) of which the Respondent was the registered proprietor and the dominant tenement, being two lots (Lots 40 and 7) of which the Applicants were the registered proprietors. The plan is reproduced below. [2] The Applicants’ proposed easement of carriageway over Lots 36 and 100 was referred to in the proceedings as “Option 1”.

6. [6]

   The primary Judge granted expedition of the hearing because of the difficulties the Applicants claimed to be experiencing in gaining access to the Summerland Way in the aftermath of Cyclone Debbie which caused considerable damage in the Northern Rivers region in March and April 2017. The Applicants said that storm damage effectively rendered unusable an alternative means of access to the Summerland Way (referred to in the proceedings as “Option 4”), which required crossing the bed of the Richmond River.

7. [7]

   The application was heard by the primary Judge over four days in July and August 2017. His Honour delivered the Primary Judgment on 22 September 2017. He concluded that the easement of carriageway proposed by the Applicants was “convenient, serviceable and preferable of the options” considered at the hearing, but that the easement should be limited to circumstances in which it was unsafe to use the Option 4 route because of the condition of the Richmond River crossing. This conclusion was broadly consistent with the Respondent’s “fall-back” position at the hearing, which was advanced as an alternative to outright rejection of the Applicants’ proposed easement of carriageway.

8. [8]

   The primary Judge neither made nor formulated any orders in the Primary Judgment. Instead his Honour invited the parties to draft an easement to conform with the reasons for judgment. [3] His Honour expressly envisaged that the parties might require assistance from a surveyor or other expert to define when water levels might make it impracticable or unsafe to cross the Richmond River. His Honour nonetheless evidently expected or at least hoped that the parties could agree on terms defining the circumstances in which the Richmond River would be regarded as “impassable”.

9. [9]

   In the event the parties could not agree. Even so, no application was made to relist the matter before the primary Judge to resolve the remaining issues and to obtain final orders complying with s 88K(3) of the Conveyancing Act. Among other things, s 88K(3) requires the Court to specify in the order imposing an easement the nature and terms of the easement.

10. [10]

    After a short hearing on 24 November 2017, which was concerned principally with costs, his Honour made the following declaration and orders:

11. [11]

    It can be seen that the declaration did not finally resolve the Applicants’ claim to the easement of carriageway. The formulation of the terms of the easement was left to another day. Because the parties did not seek to relist the matter before the primary Judge, that day has never arrived.

12. [12]

    Instead of seeking to relist the matter, the Applicants filed a notice of appeal purporting to appeal as of right against the decision of the primary Judge. Indeed they filed their notice of appeal on 20 October 2017, after delivery of the Primary Judgment but before his Honour had made any orders. On 15 December 2017, the Applicants filed a summons seeking leave to appeal “from the judgment of Sackar J in the court below”.

13. [13]

    The Applicants’ draft amended notice of appeal (Notice of Appeal) contains numerous grounds, but in essence challenges the primary Judge’s declaration insofar as it limits use of the right of carriageway over the Respondent’s land to periods when the alternative route (Option 4) is impassable.

14. [14]

    The Notice of Appeal asks this Court to make a declaration that in substance is the same as that made by the primary Judge, but that omits the qualification limiting the easement of carriageway to times when the Richmond River is impassable. The Notice of Appeal also seeks an order pursuant to s 88K(1) of the Conveyancing Act imposing the easement of carriageway without any limitation concerning the times during which it can be used.

15. [15]

    In addition to these orders the Applicants challenge the amount of compensation the primary Judge said he proposed to award to the Respondent pursuant to s 88K(4) of the Conveyancing Act. The amount in dispute appears to be only about $12,000 and the challenge is mounted notwithstanding that no orders have yet been made for the payment of compensation.

16. [16]

    The orders made by the primary Judge on 24 November 2017 include an order that the parties bear their own costs. The costs order was made in the course of a brief hearing on that date and his Honour gave no separate reasons for making the order.

17. [17]

    The Respondent has filed a cross-summons seeking leave to appeal from the decision of the primary Judge to order each party to pay his or their own costs. The Respondent also requires an extension of time in which to file his summons. The Applicants did not advance any arguments against an extension of time or a grant of leave to the Respondent to cross-appeal against the costs order. However, they filed a notice of contention seeking to uphold the primary Judge’s costs order on grounds not relied on by his Honour.

Leave to appeal

1. [18]

   A direction was made before the hearing in this Court that the application for leave to appeal be heard concurrently with argument on the substantive appeal.

2. [19]

   Ms Byrne, who appeared with Ms Boettcher for the Applicants, accepted that leave to appeal was required on the basis that the declaration made by the primary Judge did not finally determine the rights of the parties [4] and thus his Honour’s orders were to be regarded as interlocutory. [5] Ms Byrne submitted that the Court should grant leave to appeal because the Applicants had raised significant issues and were likely to suffer serious injustice, including threats to their safety and livelihood, if the Court did not entertain the appeal.

3. [20]

   Mr Simpson, who appeared for the Respondent, did not object to the Applicants being granted leave to appeal. He adopted this stance both in relation to the proposed appeal against the declaration made by the primary Judge and to the proposed appeal against his Honour’s findings as to the compensation payable to the Respondent.

4. [21]

   Neither Ms Byrne nor Mr Simpson adverted, at least initially, to the difficulty of the Court granting leave to appeal in a matter in which not only the final form of orders has been left unresolved, but potentially important factual issues have not yet been addressed. For example, the Primary Judgment does not make findings as to the circumstances in which the Richmond River is to be deemed “impassable” for the purposes of the Option 1 easement as qualified in the declaration. His Honour envisaged that further expert evidence might be required if the parties could not reach agreement.

5. [22]

   The parties also did not direct attention to the fact that, even now, no order has been made in the Equity Division proceedings for the payment of compensation by the Applicants to the Respondent. The Applicants appear to have overlooked that an appeal is available (relevantly) only against “any judgment or order of the Court”. [6] The statutory language does not include the reasons for judgment in the absence of orders that flow from the reasons of the Court. [7]

6. [23]

   It will be necessary to return to the question of leave.

Legislation

1. [24]

   Division 3 of Part 23 of the Conveyancing Act provides for the preparation and lodgement for registration of a plan showing the site of an easement which is to be created by another instrument. Such a plan must be prepared in the manner required by the regulations and rules under the Real Property Act 1900 (NSW) (RP Act) and contain all the particulars required by those regulations and rules (s 195C(1)(a), (b)). Section 88(1) of the Conveyancing Act states the requirements for an instrument creating an easement. The requirements include a clear indication of the land to which the benefit of the easement is appurtenant and the land which is subject to the burden of the easement (s 88(1)(a), (b)). Section 88 applies to land under the provisions of the RP Act (s 88(3)).

2. [25]

   Section 88B(2) of the Conveyancing Act relevantly provides that a plan is not to be lodged for registration under Div 3 of Part 23 unless it indicates, in the prescribed manner, the easement that is intended to be created appurtenant to or burdening land comprised in the plan (s 88B(2)(c)). On registration of a complying plan, the easement is created and by virtue of registration vests in the owner of the land benefited (s 88B(3)(c)).

3. [26]

   The key provision on the appeal is s 88K of the Conveyancing Act, which provides as follows:

Background

1. [27]

   The Applicants 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). These five lots together are known as the Gordon Land.

2. [28]

   The Applicants purchased Lots 101 and 102 in about 1975, although they apparently rented a house on Lot 7 from 1971 to 1975 from the then owner, Mr Barlow. Lots 101 and 102 are located to the north of the Summerland Way and each Lot extends over both sides of the road.

3. [29]

   The Applicants purchased Lots 7 and 40 in 1998. Lots 7 and 40 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. [8]

4. [30]

   The Applicants have lived on Lot 101 since they purchased it in 1975. In 2000, their daughter, Ms 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.

5. [31]

   Prior to the Applicants acquiring Lots 7 and 40, the land was used for grazing. After 1998, the Applicants used the Gordon Land, including Lots 7 and 40, as a dairy farm. This use continued until 2013 when the Applicants switched to beef production.

6. [32]

   The Respondent is the registered proprietor of four lots, namely Lot 100 in DP 1045950, Lots 36 and 87 in DP 755733 and Lot 21 in DP 883903. Together these lots make up the Lever Land which has been in the Respondent’s family since the late 1800s. For the past ten years or so, the Respondent has lived in Brisbane and visits the Lever Land about once per month.

7. [33]

   The location of the Gordon Land and the Lever Land is show on Plan A, reproduced below:

8. [34]

   The area marked with broken blue lines is a road reserve. After the broken blue lines exit the road reserve into Lot 40, the road reserve roughly follows the course of the Richmond River until it meets the River at the north-eastern end of Lot 7. It appears that the terrain immediately to the north of Lot 40 is now steep and unstable in parts, so that sections of the road reserve are unsuitable for vehicles.

9. [35]

   It will be seen that Plan A identifies three options, each of which constitutes a potential means of access from Lots 7 and 40 to the Summerland Way (Options 1, 2 and 3). In addition, the pink and yellow lines depict what was described in the proceedings as Option 4.

10. [36]

    Options 1, 3 and 4 are described below. There is no need to describe Option 2 since the parties agreed at the trial that it was not a practical alternative to Option 1 by reason of the construction of a dam across its path.

11. [37]

    Option 1, marked by a red line on Plan A, represents the easement of carriageway proposed by the Appellants in their Amended Summons filed in the Equity Division proceedings. Plan B, reproduced below shows the location of the easement of carriageway proposed by Option 1:

12. [38]

    Although there was a dispute as to the extent to which the Applicants and Ms Dunn used the Option 1 route prior to December 2015, there is no doubt that they did and that the Respondent acquiesced in their use of the route. In that month, a bridge on Lot 36 over what was described as a gully, but is in fact an intermittent watercourse flowing into the Richmond River, was destroyed by a rain event. Since that time, the Option 1 route has been effectively unusable.

13. [39]

    Option 1 involves the use of an access track across Lots 36 and 100, although for a short distance the path travels along the road reserve which cuts across Lot 100. An expert engineer’s report from Mr McElroy, tendered by the Applicants, described the access track as:

14. [40]

    From the intersection with the Summerland Way, the track travels 109 metres in a southerly direction along Lot 100. It then reaches the road reserve and proceeds along the alignment of the road reserve. At that point, the track re-enters the Lever Land through Lot 36 and remains within Lot 36 for 242 metres until it reaches the boundary of Lot 40. The destroyed bridge over the gully was located about 62 metres from the boundary between Lots 36 and 40.

15. [41]

    There was a further conflict in the evidence, not the subject of findings, as to who was responsible for the construction of the bridge on Lot 36. It is clear, however, that once the bridge was destroyed by the force of the rain event in December 2015 vehicles could no longer use the Option 1 path to travel from Lot 40 to the Summerland Way.

16. [42]

    The Option 3 route, depicted by the green line on Plan A, appears to have been the historical means of access from Lots 7 and 40 to the Summerland Way. The route was used by the occupiers of Lots 7 and 40 until the bridge over the gully on Lot 36 (Option 1) was built.

17. [43]

    According to Mr McElroy, the Option 3 track intersects with the Summerland Way at an oblique angle and at that point the track is not well defined. The track from that point down to the river bed is also not well defined and lacks a pavement. At the river bank level, the track runs parallel to the Richmond River for about 200 metres. Along this parallel track, the banks of the river are high and substantial slip movement occurs from time to time.

18. [44]

    The track then crosses a shallow section of the Richmond River, at an oblique width of about 30 metres. The crossing does not have a defined pavement. Thereafter, the track continues along the road reserve until it reaches Lot 7 on the Gordon Land.

19. [45]

    There was conflicting evidence as to the extent to which the Applicants or their family used the Option 3 route. The Respondent’s evidence in June 2017 was that up until three years ago, the principal means of access to the Summerland Way from Lots 7 and 40 was along the Option 3 route. The Applicants claimed that until 2015 they mainly used the Option 1 route, including for the vehicular transportation of cattle. Mr Gordon (the First Applicant) acknowledged that he used Option 3 from time to time but claimed that he did so on average only about three times a year.

20. [46]

    Assuming the Applicants’ account to be accurate, it is not entirely clear why the Option 3 route fell more or less into disuse and his Honour made no finding on the question. However, Mr McElroy reported that the Option 3 route near the Richmond River is not well defined and that the track was liable to be washed away whenever the Richmond River was in flood. Mr McElroy considered that the construction of a low level causeway at a cost of about $50,000 would provide stable access across the River. However, he gave a “ball park” estimate of $240,000 as the cost of a permanent solution in the form of a bridge over the Richmond River to accommodate the Option 3 route.

21. [47]

    Option 4 is depicted by the pink and yellow lines on Plan A. The Applicants described the pink line as the “dry” route and the yellow line as the “wet” route. The Option 4 path commences at the Summerland Way some distance to the east of the commencement of the Option 1 path. It proceeds through Lots 101, passing close to the Applicants’ dwelling, and then along a well formed gravel road to the river bank. Thereafter the pathway follows a road along the river bank for about 120 metres until it reaches a shallow rock causeway crossing of the Richmond River. From there the path enters Lot 40 on the Gordon Land.

22. [48]

    Mr Gordon estimated that at the time he swore his affidavit of 1 August 2017, the Richmond River was about 15 metres wide at the crossing and the water was about one third of a metre deep. Photographs of the crossing taken in July 2017 suggest that the width and water level of the crossing at that time were consistent with Mr Gordon’s estimate. The evidence makes it clear that the level of the Richmond River can change very quickly, depending on conditions. Thus the width and depth of the crossing can vary considerably over short periods of time.

23. [49]

    The evidence as to the history of Option 4 was not entirely consistent and was not the subject of detailed findings by the primary Judge. Mr Little, the Respondent’s father-in-law, stated that Option 4 had been used as early as 1959 or 1960 by a previous owner of Lots 101 and 102 to drive farm equipment across the Richmond River to perform work for the then owner of Lots 7 and 40. By contrast, Mr Gordon said that Option 4 did not exist when he purchased Lots 101 and 102 in 1975 and that he only began to use the Option 4 route in about 2002 or 2003 in order to move his cows across the Richmond River. Mr Gordon said that he subsequently used the route to do some tractor work but that until about 2014 the Option 4 river crossing was mostly used by cattle or negotiated by quad bike. However, as the primary Judge recorded, [9] Mr Gordon agreed in cross-examination that he bought Lots 7 and 40 in 1998 knowing that he would have to bring the dairy herd across the Richmond River twice a day for milking.

24. [50]

    Ms Dunn’s evidence was that until December 2015 all access to Lot 7 by family, friends, service utilities, tradesmen and others was by the Option 1 route. She also said that since December 2015 all access to Lot 7 was through Option 4, using the route marked in pink (as distinct from yellow) on Plan A. Ms Dunn was not asked in her oral evidence whether she agreed with her father’s account of the use of Lot 4 prior to December 2015.

25. [51]

    The Respondent himself did not claim that Option 4 was used extensively prior to December 2015, although he pointed out in his affidavit evidence that the Option 4 route to the Summerland Way from the Lot 7 house was much shorter (900 metres along the pink track marked on Plan A) than Option 1 (about 1.7 kilometres). His position was that the Applicants and previous proprietors of Lots 40 and 7 had primarily used Option 3 as their means of access to the Summerland Way.

26. [52]

    The Applicants gave evidence that when the bridge across the gully on Lot 36 was destroyed in December 2015, access from Lots 40 and 7 to the Summerland Way was only available along the Option 4 route. The Applicants said that as a consequence of flooding caused by Cyclone Debbie, Ms Dunn’s house was cut off from the Summerland Way from 30 March 2017 until 14 April 2017.

Primary Judgment

1. [53]

   The primary Judge identified the principal issue to be whether, as the Applicants contended, orders should be made for the creation of the Option 1 easement. The Respondent advanced both Options 3 and 4 as providing satisfactory alternative means of access from Lots 40 and 7 to the Summerland Way, although little attention seems to have been paid to Option 3. The Respondent’s fall-back position was that if the Court took the view that the Option 1 easement was reasonably necessary, the easement should not permit use of the carriageway at all times and for all purposes. The Respondent submitted that any easement should be subject to a condition restricting use of the carriageway “to relevant vehicles for periods around flood times”. [10]

2. [54]

   The primary Judge noted that there was no dispute between the parties that from the time the Applicants acquired Lots 40 and 7 they maintained the Option 1 track and, until its destruction, the bridge on Lot 36. [11] Mr Gordon, stated in his evidence that he was prepared to build a replacement bridge on Lot 36 that would support vehicles weighing up to 40 tonnes.

3. [55]

   The Respondent accepted that he never sought to prevent the occasional use of the Option 1 track by the Applicants, Ms Dunn or previous occupiers of Lots 40 and 7. He also accepted that it would be convenient to the Applicants for the track to be used in this way. His objections were to regular use of the track for farming purposes and to the Option 1 track becoming the sole or main access way from Lots 40 and 7 to the Summerland Way. [12]

4. [56]

   The primary Judge accepted that Lots 40 and 7 were used for residential purposes by the Applicants, in particular by Ms Dunn and her family. His Honour was also satisfied that the land was used for agricultural purposes, most recently for beef cattle production. [13]

5. [57]

   However, the primary Judge considered that the proposed Option 1 easement, free from conditions, was not reasonably necessary for the effective use of Lots 7 and 40: [14]

6. [58]

   His Honour was not satisfied on the evidence that the route of Option 4 was impassable “more than on somewhat irregular occasions, and for varying periods”. Even if recent trends continued, the carriageway was “passable for the significant majority of the time”. [15] Option 4 was therefore a practical alternative for the effective use of Lots 7 and 40. [16]

7. [59]

   The primary Judge accepted that Ms Dunn and her family used the Option 1 route as the primary, if not sole means of accessing Summerland Way until the bridge was washed away in 2015. [17] His Honour also accepted that the first Appellant, Mr Gordon, took cattle trucks across the Option 1 bridge when it was in better repair and that Mr Gordon drove smaller vehicles along the Option 1 route after the bridge’s condition deteriorated, although his Honour thought it likely that Mr Gordon’s use of that route lessened after a disastrous loss of his dairy herd in 2006. Nonetheless, in his Honour’s view, “the use of Option 1 was, for the most part, out of convenience rather than reasonable necessity”. [18]

8. [60]

   Since December 2015, Ms Dunn had used the Option 4 route for access to the Summerland Way in dry weather. Mr Gordon had also used the Option 4 route or the Option 3 route to move cattle across the Richmond River. Thus neither Ms Dunn’s nor Mr Gordon’s current use of Lots 40 and 7 would be affected in any material way by having to use the Option 4 track when it is passable. [19] Although Ms Dunn had claimed that emergency services could not access Lots 40 and 7, the chances of emergency services needing to access those Lots were not high enough to justify day to day access through Option 1. [20]

9. [61]

   The primary Judge added the following comment: [21]

10. [62]

    His Honour found that the effect of the Option 1 easement on the Lever Land would be minimal, having regard to the Respondent’s acquiescence in the use of the carriageway before December 2015 and the fact that the Respondent did not live on the property. Moreover, there would be a benefit to the Respondent from the use of a maintained road and a restored bridge along the Option 1 track. [22] Nonetheless, in his Honour’s view, an easement is an imposition on property rights that should not lightly be infringed. [23] For these reasons, the Applicants had not made out their case.

11. [63]

    For the times the Option 4 route is impassable his Honour was satisfied that a limited easement along Option 1 was reasonably necessary for the effective residential and/or agricultural use of Lots 40 and 7. This justified the imposition of an Option 1 easement, but limited to a right of carriageway available only when the Option 4 Richmond River crossing is impassable. [24]

12. [64]

    The primary Judge stated that: [25]

13. [65]

    His Honour considered that s 88K(3) of the Conveyancing Act conferred power to impose conditions on the enjoyment of the easement in the manner he contemplated. [26]

14. [66]

    The primary Judge found that the use of the land having the benefit of the Option 1 easement (Lots 7 and 40) would not be inconsistent with the public interest and that therefore the requirement specified in s 88K(2)(a) of the Conveyancing Act had been satisfied. [27] His Honour was also satisfied that the Applicants satisfied s 88K(2)(c), in that they had made all reasonable attempts to obtain the easement but had been unsuccessful. [28]

15. [67]

    The primary Judge found that the cost of construction of a bridge on Lot 36 adequate to carry family vehicles and cattle trucks would be about $48,000. [29] His Honour clearly contemplated that the Applicants would bear this cost but the Primary Judgment does not address the mechanism by which this is to be achieved. Presumably his Honour had in mind that a term would be imposed on the Option 1 easement requiring the Applicants to restore the bridge on Lot 36.

16. [68]

    The primary Judge also found that:

17. [69]

    The primary Judge concluded the Primary Judgment as follows: [33]

18. [70]

    The primary Judge did not foreshadow in the Primary Judgment that he proposed to grant declaratory relief. He did make a declaration that an easement was reasonably necessary for the effective residential and agricultural use of Lots 7 and 40, but only when the Richmond River is impassable. The declaration, reproduced above, [34] was made on the same day as the brief hearing on costs. The provenance of the declaration is not entirely clear, although the parties may have suggested the form of declaration. The parties do not appear to have made any submissions as to whether it was appropriate for his Honour to made a declaration in that form.

Submissions

1. [71]

   The Applicants submitted that the primary Judge made two “fundamental errors” in construing and applying s 88K of the Conveyancing Act. First, his Honour considered the circumstances of the current proprietors of the Gordon Land instead of analysing the ordinary incidents of the use of the land consistent with its rural zoning. These included the need for emergency services, such as ambulances, to gain ready access to Lots 7 and 40. Secondly, the imposition of an inherently uncertain condition on the Option 1 easement (allowing it only to be used in times of flood), was not in the public interest, contrary to the express requirement in s 88K(2)(a) of the Conveyancing Act. In any event, it was not open to the primary Judge to assume that a satisfactory condition limiting the Option 1 easement to flood times could be drafted and to leave it to the parties to do so.

2. [72]

   Ms Byrne criticised the primary Judge’s findings [35] that the Option 1 easement should be limited to use in flood times and that a condition to that effect could be drafted. Ms Byrne appeared to suggest that the Court could take judicial notice of the variable conditions of the Richmond River and infer that the drafting of a satisfactory condition would be extremely difficult if not impossible.

3. [73]

   The Applicants submitted that the primary Judge also erred in failing to address their contention that Option 4 could not provide a viable alternative means of access because the Applicants had no legal right to use any part of the river bed. The Applicants contended that his Honour should have had regard to evidence that, since the Richmond River is classified as a Class 1 Major Key Fish Habitat waterway, an approved crossing would be required for a river crossing. There was no certainty that the relevant authority would approve a causeway.

4. [74]

   The Applicants also challenged two significant findings of fact made by the primary Judge, namely:

5. [75]

   Ms Byrne submitted that the primary Judge did not resolve the conflict between the evidence of the Respondent and that of Mr Gordon and Ms Dunn as to the condition of the Option 4 track. According to Ms Byrne, the Respondent had no direct knowledge of the condition of the Option 4 track, while Mr Gordon and Ms Dunn had first-hand knowledge of the Option 4 track based on daily use after December 2015. The evidence established, so Ms Byrne argued, that Option 4 was merely a temporary measure attended by significant safety and reliability concerns and could not be regarded as a practical alternative to Option 1 for the effective use of Lots 7 and 40.

6. [76]

   In her oral submissions Ms Byrne took the Court to numerous photographs of the terrain over which the various Options travel. These photographs, derived from footage taken by a drone on 10 and 17 July 2017, are very useful in understanding the topography of the relevant areas. Ms Byrne also relied on the photographs to support the contention that the condition of the Option 4 route near and across the Richmond River depends heavily on weather conditions and can pose safety risks, particularly to persons with less local knowledge and experience.

7. [77]

   The Applicants made two complaints about the compensation assessed (but nor ordered) by the primary Judge. First, it was said his Honour should have found that there were “special circumstances” within the meaning of s 88K(4) of the Conveyancing Act on the basis that the Respondent’s own conduct in building a dam across the Option 2 route necessitated the application for the Option 1 easement. Secondly, his Honour should have given more weight to the advantage that the Respondent would enjoy by reason of the Applicants having to build the bridge on Lot 36 and maintain the Option 1 track. These two matters should result in a reduction in compensation of $12,350.

8. [78]

   Mr Simpson pointed out that although the Applicants had contended that the primary Judge misapplied s 88K(1) of the Conveyancing Act, his Honour actually found that s 88K(1) had been satisfied. The Applicants’ real complaint was that his Honour’s discretion under s 88K(3) miscarried in imposing a condition on the Option 1 easement in the terms incorporated in the declaration. Mr Simpson also pointed out that the Applicants had paid little or no attention to the viability of the Option 4 route in their evidence in chief notwithstanding that they had used it both before (albeit to a limited extent) and after December 2015 to gain access to the Summerland Way. It was only in response to the Respondent raising the Option 4 route as an alternative means of access that the Applicants adduced evidence addressing whether the route was safe and practicable.

9. [79]

   Mr Simpson submitted that it had been open to the Applicants to adduce more cogent evidence about matters such as the regulatory difficulties the Applicants claimed would be encountered if they sought to have the Option 4 route improved, repaired and maintained. The primary Judge could not be criticised for dealing with the application on evidence presented to him.

10. [80]

    Mr Simpson disputed the Applicants’ contention that the primary Judge construed s 88K so as to permit only circumstances personal to them. It was the Applicants’ case that the Court should focus attention on their use of Lots 7 and 40 and the constraints on that use that would flow if they were not permitted to use the Option 1 route. The evidence, so Mr Simpson contended, did not support the Applicants’ claim that the conditions imposed by the primary Judge would render Lots 7 and 40 effectively unsuitable for agricultural or residential use.

11. [81]

    Safety concerns about the Option 4 route, insofar as they had any foundation, could be allayed by adopting the suggestion that pegs be placed at the Richmond River crossing to indicate water levels. Any issues about crossing the river at night could be addressed by erecting reflector posts or floodlights, as the Applicants’ own engineering expert acknowledged. [36] In any event, there was ample evidence that at times of “normal water levels” the Richmond River could be crossed safely.

12. [82]

    Mr Simpson submitted that the dam in the Option 2 route was constructed on a natural swamp which made that route unusable in any event. Any compensating advantages to the Respondent by the Applicants’ constructing a bridge on Lot 36 and maintaining the Option 1 track were hypothetical and depended on a future sub-division of Lots 36 and 100. There was therefore no basis to alter the primary Judge’s assessment of compensation.

Reasoning

1. [83]

   The material placed before the primary Judge in support of the application for the imposition of the Option 1 easement was incomplete. Whether this came about because the hearing of the application was expedited or for other reasons, it meant that the primary Judge did not have the detailed information or evidence that might be expected on such an application.

2. [84]

   The only proposal before his Honour for the purposes of an order under s 88K of the Conveyancing Act was the proposed easement of carriageway referred to in the Applicants’ Amended Summons. The plan attached to the Amended Summons (Plan B [37] ) identified the dominant and servient tenements [38] and set out the route of the proposed carriageway. While the description of the route was not as precise as it might have been, it was probably adequate for the purpose. [39]

3. [85]

   However the Amended Summons did not incorporate or append the terms of the proposed easement of carriageway. Section 181A(1) of the Conveyancing Act provides that in any instrument purporting to create a right of way, the expression “right of carriage way” has the same effect as if there had been inserted the words contained in Part 1 of Schedule 8 to the Act. These words are as follows:

4. [86]

   More significantly, the Amended Summons did not identify any other terms of the proposed easement of carriageway. It appears that the Applicants submitted a document to the Respondent after delivery of the Primary Judgment which contained terms relating to the construction of the bridge on Lot 36 and maintenance of the bridge and the carriageway. As the parties did not seek the relisting of the matter, the document was not tendered or handed up to the primary Judge. [41]

5. [87]

   The Respondent opposed the making of an order for the creation of the Option 1 easement of carriageway sought by the Applicants and advanced an alternative proposal. The Respondent’s opening written submissions at the trial explained the alternative proposal as follows:

6. [88]

   At no stage did the Respondent provide the primary Judge with terms drafted with “sufficient precision” to satisfy the statutory requirement that the Court specify in the order the nature and terms of the easement. [42] Nonetheless, the stance adopted on behalf of the Respondent presumably encouraged the primary Judge to believe that the parties could reach agreement on terms limiting use of the carriageway to periods during which the Option 4 crossing was affected by floods.

7. [89]

   Section 88K(1) of the Conveyancing Act empowers the Court to:

8. [90]

   In 117 York Street, Hodgson J explained the approach that should be taken to the question posed by s 88K(1): [44]

9. [91]

   In ING Bank (Aust) Ltd v O’Shea (O’Shea) [45] the Court rejected an argument that neither adverse impact on the servient tenement nor interference with the property rights of the owner of the servient tenement is relevant to the issue of reasonable necessity for the effective use or development of the dominant tenement. Giles JA, with whom Campbell JA agreed, said this: [46]

10. [92]

    Section 88K(1) is not the only provision that the court must consider in determining whether to make an order imposing an easement. Section 88K(2) imposes three pre-conditions that must also be satisfied before the order can be made. [48] The court can make the order only if it is satisfied that:

11. [93]

    Section 88K(3) is not expressed to create a pre-condition for the exercise of the power in s 88K(1). Nonetheless it is important to the present case for two reasons. First s 88K(3) has been held to confer power to specify the terms on which the Court can impose an easement pursuant to s 88K(1). Although s 88K(3) expressly states that the terms may limit the times at which the easement applies, this Court held in Moorebank that s 88K(3) “imposes no limitation on the terms which can be imposed”. [49]

12. [94]

    Secondly, s 88K(3) requires the Court to specify in the order (that is, the order imposing the easement) “the nature and terms of the easement”. In Moorebank, for example, the Court saw no difficulty in imposing a condition on an easement of carriageway requiring the owner of the dominant tenement to construct a bridge on the servient tenement with the capacity to accommodate trucks of the size the servient owner proposed to use in its business. [50] But the Court also said that any conditions or restrictions on the enjoyment of the easement must be specified in the order imposing the easement and not in an order or undertaking independent of the easement. [51] As the Court explained, the reason for this requirement is that the easement takes effect on registration and persons dealing with the dominant or servient tenements are bound only by what appears on the register. [52]

13. [95]

    The observation in Moorebank about the need to specify conditions in the order itself was made in the context of a discussion concerning the quantum of compensation to be paid by the applicant seeking the order having regard to the requirement in s 88K(4) that the Court is to provide in the order for payment of appropriate compensation. The Court pointed out that s 88K(2)(b) of the Conveyancing Act provides that it is a precondition to the grant of an easement that the Court be satisfied that the owner of the servient tenement can be adequately compensated. This supported the conclusion that the Court must determine the quantum of compensation at the time the order is made. [53]

14. [96]

    Section 88K(3) does not require the Court to be satisfied that the proposed easement contains any particular terms. However, the language of s 88K(4) (“the Court is to provide in the order for payment” of appropriate compensation) is strikingly similar to the direction in s 88K(3) (“the Court is to specify in the orders the nature and terms of the easement”). Indeed, if anything, the direction in s 88K(3) is even more emphatic because of the use of the word “specify”.

15. [97]

    This emphatic language of s 88K(3) makes it clear that the court lacks power to make an order imposing an easement unless the terms of the easement are specified in the order itself. The purpose of the statutory requirement is to ensure that an easement imposed in the exercise of the power conferred by s 88K(1) will be registered in a form that includes all particulars of the easement, as envisaged by s 88K(7). Those particulars may have a marked impact on the respective rights and obligations of the owners of the dominant and servient tenements. For example, an easement of carriageway that entitles the dominant owner (or those acting with his or her authority) to “pass and repass at all times and for all purposes” [54] is likely to have a very different impact on the servient owner then an easement of carriageway that can be used only in limited specified circumstances or at nominated times.

16. [98]

    When s 88K of the Conveyancing Act is read as a whole it is evident that the reference to “an easement” in s 88K(1) is to an easement the “nature and terms” of which are specified by the Court. This follows from the conferral of power on the Court to make an order imposing an easement, coupled with the requirement that the Court is to specify in the order the nature and terms of the easement. The terms include any limitation on the times or circumstances in which the easement “applies”. In the case of an easement of carriageway, the relevant terms will include any constraint on the times or circumstances in which the owner of the dominant tenement can use the carriageway.

17. [99]

    In the present case the primary Judge found that each of the three pre-conditions set out in s 88K(2) had been satisfied. There is no particular difficulty with the finding that the use of Lots 40 and 7 will not be inconsistent with the public interest (s 88K(2)(a)). The finding that the Applicants had made all reasonable attempts to obtain the easement or an easement having the same effect (s 88K(2)(b)) was not the subject of challenge, even though the terms of the Applicants’ proposed easement were materially different from the terms of the easement the primary Judge considered should be imposed.

18. [100]

    Neither the Applicants nor the Respondent submitted in this Court that the primary Judge could not have been satisfied that the Respondent, as the registered proprietor of the dominant tenement, could be adequately compensated unless and until the precise terms of the proposed easement had been determined. Instead the argument revolved around the Applicants’ contention that the primary Judge’s assessment of compensation was too generous.

19. [101]

    Although the parties did not raise the issue, it is difficult to see how a court can be satisfied that the servient owner can be adequately compensated for the imposition of an easement when the court does not know the terms of the proposed easement, at least where the terms are likely to have a material impact on the nature and extent of usage of the easement. The appropriate amount of compensation payable in consequence of the imposition of an easement depends, at least in part, on the degree of disruption to the servient owner’s use or enjoyment of his or her land by reason of the easement. For example, the imposition of an easement that entitles the dominant owner to use a carriageway for the movement of heavy trucks on more than 100 days each year is likely to cause greater disruption to the current or any future servient owner than an easement entitling the dominant owner to use the carriageway only on a few days each year. The former easement is therefore likely to justify an order for substantially higher compensation.

20. [102]

    In the present case, the primary Judge was influenced by the fact that the Respondent did not live on the Lever Land and thus was not likely to suffer serious personal inconvenience. Nonetheless, the “loss or other disadvantage” that will arise from the imposition of an easement is not limited to the personal inconvenience the servient owner is likely to experience. The loss or disadvantage will include, for example, any diminution in the value of the servient tenement by reason of the imposition of the easement.

21. [103]

    As has been noted, no order has yet been made for the Applicants to pay compensation to the Respondent.

22. [104]

    The declaration made by the primary Judge states that the proposed easement of carriageway is reasonably necessary for the effective residential and agricultural use of Lots 40 and 7, but only when the Richmond River is “impassable”. The declaration does not identify the terms of the proposed easement that will limit use of the carriageway to times when the Richmond River is “impassable”.

23. [105]

    The primary Judge recognised that unless the parties were able to agree on the terms of the easement, further expert evidence would be required to formulate terms defining the circumstances in which the Option 4 crossing would be deemed impassable. His Honour expressly accepted that evidence would be required from a surveyor as to the positioning of the marker pegs. But this would not be the only evidence needed to formulate terms capable of being incorporated in final orders imposing an easement over Lots 36 and 100.

24. [106]

    The terms defining the circumstances in which the Richmond River is impassable clearly would have to take into account safety considerations. The crossing might be passable for the driver of a tractor being driven by an experienced farmer, yet be impassable for a vehicle transporting children to school. A night time crossing in rainy conditions might be unproblematic for certain kinds of vehicles but fraught with danger for a sedan being driven by a visitor who is unfamiliar with the terrain. (There was no dispute that residential use of land includes allowing visitors to have access to the property.)

25. [107]

    Ms Dunn gave evidence that in wet weather the Option 4 route was too dangerous to use at night. She also said that at times the Richmond River was too high to use her usual Mazda four wheel drive and in those circumstances she sometimes used the farm Suzuki four wheel drive. When neither of these vehicles was able to make the crossing safely, Mr Gordon was called upon to transport Ms Dunn and her children across the Richmond River. Ms Byrne took the Court to photographs which she said, with some justification, suggested that conditions at or near the Option 4 crossing of the Richmond River could become hazardous in a variety of circumstances such as heavy rain and erosion or slippage of the track.

26. [108]

    The primary Judge accepted that it could be “seriously inconvenient and at times impossible” for the Applicants and particularly Ms Dunn, to access the Summerland Way through the Option 4 route. [55] He opined, however, that weather events of the recent past were not necessarily reliable predictors of future trends. His Honour found that Option 4 was impassable only in “somewhat irregular occasions” [56] but it is not clear what criteria his Honour applied in making this assessment. It is also not clear whether his Honour accepted Ms Dunn’s evidence that the crossing was too dangerous at night and, if so, what consequences flowed from that evidence.

27. [109]

    The primary Judge said that he was satisfied that an easement limited to circumstances where Option 4 is unsafe to pass could be drafted and imposed with sufficient precision. [57] In reaching this conclusion, his Honour appears to have acted on the Respondent’s submission to this effect. However, that submission was not accompanied by any indication as to how the necessary terms could be drafted beyond a suggestion that the terms might be drafted by reference to river levels. Nor was the submission accompanied by an analysis of any evidence that might have assisted in identifying with a reasonable degree of precision the circumstances in which the Option 4 Richmond River crossing would be unsafe to use.

28. [110]

    The only evidence that addressed the measures that might be taken and to which his Honour referred was given by two engineers who gave expert evidence. Mr McElroy, who was called by the Respondent, prepared a report primarily directed to the improvements that could be made to the Option 4 crossing by constructing a causeway, a proposal not embraced by his Honour. Mr McElroy accepted in cross-examination that river crossings often have depth markers that are clearly visible during the day and at night. But he did not address the circumstances in which markers, whether alone or in combination with other measures, would ensure the safety of those using the Richmond River crossing.

29. [111]

    Mr Breen, who was called by the Applicants, expressed the view that construction of a causeway was a “problematic” solution because, amongst other things, it would expose users to significant safety risks. In his cross-examination Mr Breen went no further than accepting that it would be “possible” to erect reflector posts, depth markers and flood lighting at the crossing, on the assumption that solar lighting could be used. He was not asked, for example, to consider whether and to what extent such a measure, if capable of implementation, would overcome the dangers to which Ms Dunn referred in her evidence.

30. [112]

    In determining whether the declaration should stand, it is necessary to bear in mind the effect of a declaration. Under Australian law the “very nature of declaratory relief [is] that it is final relief”. [58] Accordingly, there is no such thing as an interlocutory declaration. [59] As Upjohn LJ explained in International General Electric Co of New York Ltd v Customs and Excise Commissioners: [60]

31. [113]

    This does not mean that a court cannot grant a declaration prior to the conclusion of the proceedings. In Kinsella v Gold Coast Council, [61] McMurdo J carefully reviewed the authorities relating to so-called interim declarations. His Honour pointed out that it is not uncommon for a declaration to be made at the conclusion of a hearing on liability notwithstanding that other issues remain to be determined. [62] However, his Honour concluded that the authorities establish that: [63]

32. [114]

    It follows that it is not necessarily an objection to the declaration made by the primary Judge that it was made before all issues in the proceedings were resolved. Nonetheless, in my view there are two significant difficulties with the declaration.

33. [115]

    The first is the absence of a sound evidentiary foundation for his Honour’s conclusion that there would be no particular difficulty in drafting terms that would limit use of the proposed carriageway to circumstances where the Option 4 route is “unsafe to pass” or is “impassable”. This conclusion underpinned the declaration but there were a number of factual issues that had to be addressed and resolved before his Honour could reasonably be satisfied that the scope and nature of the terms were not matters likely to cause difficulty.

34. [116]

    There would need to be findings made not merely as to the placement of pegs in the bed of the Richmond River, but on the measures required to ensure the safety of the Applicants, their family and visitors seeking access to Lots 40 and 7. Close consideration would need to be given to the measures required to ensure that the safety and well-being of children living on Lot 7 are not compromised by the limitations placed on the use of any proposed easement of carriageway over Lots 36 and 100. This would require consideration of terms that would allow access to medical care if urgently needed and would ensure their safety when being transported to school in times of heavy rain or when the track presents particular hazards. Findings would also presumably have to be made about the extent, if any, to which heavy farm vehicles are used to transport cattle, agricultural produce or machinery to or from the Summerland Way and to identify the circumstances in which the Option 4 route could not be safely used by those vehicles.

35. [117]

    Despite the primary Judge’s conclusion that there should be no special difficulty about drafting the terms limiting the use of the easement of carriageway, the Applicants and the Respondent could not reach agreement. In correspondence and in their submissions to this Court the Applicants maintained that it was simply impossible to formulate terms that would be workable. The failure of the parties to agree, although not decisive in itself, is a reflection of the declaration’s lack of clarity as to the circumstances in which the proprietors of Lots 7 and 40 and those authorised by them are entitled to use the easement of carriageway over Lot 36 and 100. The declaration also leaves unclear what mechanisms, if any, are available to minimise potential disputes between the parties as to whether on any given occasion the circumstances (weather, river levels, darkness, deterioration of the track) entitle the owners of the dominant tenement to use the easement of carriageway over Lots 36 and 100.

36. [118]

    The second difficulty with the declaration is perhaps more fundamental. As has been pointed out, [64] a court cannot determine whether a proposed easement is “reasonably necessary” for the purposes of s 88K(1) of the Conveyancing Act unless it takes into account the effect on the enjoyment of the servient tenement and the property rights of the servient tenement. It is not feasible to assess the effect of the proposed easement on the enjoyment of the servient tenement unless and until the extent of permitted use of the easement is known.

37. [119]

    In the present case until the terms of the easement of carriageway are settled (assuming that it is feasible to define when the Richmond River crossing is impassable), the extent of potential interference with the enjoyment of the servient tenement cannot be known. Are the Applicants to be entitled to use the easement of carriageway at night? Are they to be entitled to drive heavy farm vehicles along the carriageway and, if so, on how many days of the year is this entitlement likely to arise? In what circumstances are visitors to Lots 40 and 7 (whether seeking access in connection with the residential or the agricultural use of the Lots) to be entitled to use the carriageway? How are the Applicants and the Respondent, let alone visitors to Lots 40 and 7 to know whether the Richmond River is “impassable” at any given time?

38. [120]

    Depending on how these matters are resolved, the impact of the easement of carriageway on the Respondent’s enjoyment of Lots 36 and 100 might be (as the primary Judge thought) quite limited. But if the terms of the proposed easement allow the carriageway to be used frequently by the Applicants, their family and visitors, the impact on the Respondent’s enjoyment of the servient tenement might be much more substantial. It is true that the Respondent was no longer living on the Lever Land but, as has been pointed out, the extent of personal inconvenience experienced by the servient owner is not the only way in which the enjoyment of the servient tenement might be adversely affected by the imposition of an easement.

39. [121]

    When detailed consideration is given to the need to ensure the safety of the Applicants and others travelling to and from Lots 40 and 7, it may well be that “impassable” will be defined in such a way as to allow use of the carriageway by the Applicants in a much wider range of circumstances than the primary Judge apparently envisaged. If this proves to be the case, the impact on Lots 36 and 100 of an easement of carriageway, even if limited to circumstances when the Option 4 route is unsafe, may not be very different from the impact of the easement of carriageway proposed by the Applicants. In that case the Court’s assessment of reasonable necessity may not be the same as that reached by the primary Judge.

40. [122]

    For these reasons I do not think that the primary Judge was in a position to make a declaration that finally resolved the issue of whether the easement of carriageway he proposed to impose was reasonably necessary for the effective use or development of Lots 40 and 7. 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(1) of the Conveyancing Act was satisfied.

41. [123]

    This conclusion does not mean that in every case the court must have before it the exact terms of the proposed easement in order to determine whether the proposed easement is (or is not) reasonably necessary for the use or development of the dominant tenement. I accept that in practice a court has to make a finding on this issue before any order imposing the easement is made. In undertaking this task the court may have to take into account a range of variables, including competing proposals from the parties. The court may not always have before it the final terms of the easement under consideration. But the court must at least be able to formulate with reasonable precision the substance of any terms of the proposed easement that have a material bearing on the question posed by s 88K(1) of the Conveyancing Act. In the absence of such a formulation, it is unlikely that the court can properly assess the impact of the proposed easement on the use and enjoyment of the servient tenement or, for that matter, whether the proposed easement is reasonably necessary for all reasonable uses or developments of the dominant tenement. [65]

42. [124]

    I should add that in the ordinary course it is to be expected that the party seeking an easement will include the precise terms of the proposed easement (if not in the initiating process then at the trial). In the case of a proposed easement of carriageway, those terms would have to include any restrictions to be imposed on the right to use the carriageway and any obligation of the owner of the dominant tenement to carry out works in the servient tenement to improve or maintain the carriageway. Equally it is to be expected that a party putting forward an alternative proposal will include the precise terms of the proposed easement. Neither party followed this course in the present case.

Other issues

1. [125]

   As has been noted, the primary Judge made findings as to the compensation the Applicants should pay to the Respondent, but did not make any orders from which an appeal can be brought. It may be that when the terms of any easement to be imposed by the Court are settled, the question of compensation will need to be reconsidered, although the amounts involved are small. In the absence of final orders, it is inappropriate to address the arguments advanced by the parties on the quantum of compensation.

2. [126]

   The primary Judge made an order that each party pay his or their own costs of the proceedings. In doing so, his Honour appears not to have taken into account s 88K(5) of the Conveyancing Act which provides that the costs of proceedings under s 88K are payable by the applicant unless the Court makes an order to the contrary. In any event it will be necessary for the question of costs to be revisited in the light of the final orders made in the proceedings.

3. [127]

   Accordingly the costs order should be set aside.

Orders

1. [128]

   The difficulties that have been identified with the declaratory relief granted by the primary Judge have created a significant risk of injustice to the Applicants. They should accordingly be granted leave to appeal notwithstanding that much of their argument was directed to other issues and the appeal should be allowed. The matter will need to be remitted to the primary Judge to determine the outstanding issues.

2. [129]

   Since the matter is to be remitted to the Equity Division and since error has been established in relation to the costs order, the Respondent should be granted leave to appeal on the question of costs.

3. [130]

   The parties should be given the opportunity in the remitted proceedings to make further submissions on the following issues:

4. [131]

   It will be for the primary Judge to determine whether the parties should be permitted to adduce further evidence in the proceedings and, if so, on what issues. It will also be for his Honour to determine whether the parties should be permitted to raise any other issues for determination in the proceedings.

5. [132]

   The following orders should be made:

6. [133]

   The orders I propose are not those sought by the Applicants in their Amended Notice of Appeal. Nonetheless, they have succeeded in setting aside a declaration that they consider to be unfavourable to their interests. The Respondent had enjoyed some success in that he has successfully challenged the costs order made by the primary Judge.

7. [134]

   In determining the appropriate costs order it is necessary to bear in mind that neither party’s written submissions in this Court recognised the difficulties that were created by the form of the declaration and by their joint failure to relist the matter before the primary Judge when agreement could not be reached in the form of orders. Relisting the matter would have given the primary Judge the opportunity to identify and resolve the outstanding issues in the proceedings. His Honour would also have had the opportunity, with the benefit of submissions from the parties, to make final orders complying with the requirements of s 88K of the Conveyancing Act.

8. [135]

   In these circumstances, justice will be done if the following costs orders are made: