Breen v Clough

1. [1]

   THE COURT: These proceedings arise out of a dispute between neighbours relating to easements for access and storage. The major dispute relates to the use of an inclinator located at or near to the boundary of the two neighbouring lots owned by the parties. As the primary Judge observed, the inclinator and the terms of the easement governing its use have been the focus of tension and conflict between the parties since 2010. [1]

2. [2]

   The contest culminated in the appellants bringing proceedings in the Equity Division in November 2014 claiming that the respondent had wrongfully interfered with their rights as the proprietors of the dominant tenement entitled to the benefit of an easement of access over the respondent’s land. They also claimed that the respondent had trespassed onto their land by erecting fencing and other structures inhibiting their access to the inclinator.

3. [3]

   The appellants enjoyed a measure of success before the primary Judge. His Honour made orders requiring the respondent to remove certain fencing, provide the appellants with keys to various lockable gates, install lift controls (or call stations) at landings serviced by the inclinator and notify SafeWork NSW when the required works are completed. His Honour also entered judgment for the appellants against the respondent in the sum of $6,000 by way of damages for nuisance.

4. [4]

   The appellants [2] were not content with the success they achieved at trial. They filed a notice of appeal, purportedly as of right, challenging the primary Judge’s rejection of the bulk of their claim for damages for nuisance. They claimed that the primary Judge was wrong to conclude that the respondent committed acts of nuisance only after April 2015. The appellants argued that the primary Judge should have found that the respondent committed acts of nuisance by shutting down the inclinator and locking out the appellants from using it between May 2011 and April 2015. On this basis, so the appellants contended, they were entitled to compensatory damages in respect of the acts of nuisance committed over the four year period.

5. [5]

   The appellants also contended that the primary Judge should have awarded them exemplary damages in respect of what they argued was the respondent’s deliberate conduct in denying them access to the inclinator. Mr Ireland, who appeared for the appellants, submitted that they were seeking exemplary damages not only for the post-April 2015 acts of nuisance, but for the pre-April 2015 acts. Mr Ireland conceded, however, that the notice of appeal only challenged the primary Judge’s rejection of the appellants’ claim for exemplary damages in respect of post-April 2015 acts of nuisance.

6. [6]

   Not surprisingly, given the history of conflict between the parties, the respondent filed a summons seeking leave to cross-appeal from part of the decision of the primary Judge. Leave was sought principally to challenge the order entering judgment for the appellants against the respondent in the sum of $6,000. The appellants opposed the grant of leave.

Proceedings in this Court

1. [7]

   Neither the appellants nor the respondent paid proper attention to the rules governing appeals and applications for leave to appeal. The Uniform Civil Procedure Rules 2005 (NSW) (UCPR) contain the following provisions:

2. [8]

   Section 101(2)(r) of the Supreme Court Act 1970 (NSW) (Supreme Court Act) provides that an appeal shall not lie to the Court of Appeal except by leave of the Court of Appeal from:

3. [9]

   The notice of appeal filed on behalf of the appellants did not include a certificate from their solicitor in accordance with UCPR r 51.22(2). This is despite the fact that the approved form for a notice of appeal includes a section for the required certification. [3] It is clear that the appellant’s representatives did not advert to the need to demonstrate that the purported appeal satisfied the requirements of s 101(2)(r) of the Supreme Court Act. How this was overlooked and the required certification omitted from the notice of appeal has not been explained.

4. [10]

   The respondent’s representatives likewise did not advert to the apparent absence of proof that the appellants were entitled to file an appeal as of right from the primary Judge’s decision. The respondent did not file a notice of motion pursuant to r 51.41(1) seeking an order dismissing the appeal as incompetent. [4]

5. [11]

   The Court raised the competency of the appeal during the hearing. Mr Ireland submitted that, despite the absence of the certificate required by r 51.22(2) or an affidavit supporting a claim for damages in excess of $100,000, there was sufficient evidence to demonstrate that an appeal lay as of right. When confronted with the difficulties facing this submission Mr Ireland made an oral application for leave to appeal. This application was opposed by Mr O’Connor, who appeared with Ms McNeil for the respondent.

6. [12]

   At the conclusion of the hearing the Court pronounced the following orders:

Background facts

1. [13]

   In about November 2009 the appellants became the registered proprietors as joint tenants of Lot 15 in DP 11270 known as 118 Moons Avenue Lugarno (No 118). The respondent became the registered proprietor of the neighbouring property, Lot 14 in DP 11270 (No 116), in about March 2002. It appears that the lots comprising No 118 and No 116 were created by the registration of DP 11270 in 1922.

2. [14]

   The respondent has lived in No 116 since acquiring the property. The appellants at first leased No 118 but moved in themselves in July 2011 when tenants vacated the premises.

3. [15]

   Each of No 116 and No 118 has a frontage of about 4.27 metres to Moons Avenue and a depth of about 83 metres to the northern boundary of the lot, which is the mean high water mark of the Georges River.

4. [16]

   No 116 and No 118 have a common boundary, being the western boundary of No 116 and the eastern boundary of No 118. A substantial brick dwelling is erected on each lot at or near the northern boundary. Each lot descends about 44 metres from Moons Avenue to the northern boundary.

5. [17]

   A brick garage and ancillary room are erected close to Moons Avenue. The proprietors of No 116 and No 118 are entitled to use the garage pursuant to cross-easements on their titles.

6. [18]

   The two easements involved in the proceedings were created by the registration on 18 January 2002 of DP 1036625. This attached an instrument setting out the terms of easements to be created pursuant to s 88B of the Conveyancing Act 1919 (NSW) (s 88B Instrument).

7. [19]

   The s 88B Instrument relevantly created the following easements:

8. [20]

   The Inclinator Easement was expressed to burden and benefit both No 116 and No 118 and a third lot owned by the appellants. The Storage Easement was also expressed to burden and benefit both No 118 and No 116.

9. [21]

   The relevant terms of the Inclinator Easement are as follows:

10. [22]

    The inclinator was apparently installed in the 1990s by the previous proprietors of No 116 and No 118. The land over which the Inclinator Easement exists is largely located upon the respondent’s land (No 116), although some supports rest upon No 118. The parties seem to have assumed throughout this litigation that the inclinator, including a series of landings, is wholly erected on the strip of land subject to the Inclinator Easement. It is by no means clear that this is the case but for present purposes nothing turns on the parties’ apparent misapprehension.

11. [23]

    The inclinator was registered as an item of plant under the provisions of the (since repealed) Occupational Health and Safety Act 2000 (NSW) (OHS Act). Shortly after the respondent became registered as the proprietor of No 116, she was noted by WorkCover NSW (WorkCover) as the “controller” of the inclinator. [5]

12. [24]

    As the primary Judge found, much of the dispute between the parties has related to their respective rights to undertake inspections of the inclinator and carry out works to repair and maintain the inclinator so that it conforms with required standards. [6] The disputes began in 2010 when the first appellant (Mr Breen) wanted to participate actively in matters to do with the maintenance and upgrading of the inclinator. As a result of his actions WorkCover became involved and issued a series of Improvement Notices in 2010 pursuant to s 91 of the OHS Act. The parties fell into serious conflict in relation to the notices, in particular as to the work necessary to satisfy WorkCover’s requirements. [7]

13. [25]

    The inclinator was largely out of service and therefore unavailable to the appellants from about May 2011 until April 2015. The primary Judge found that during this period the respondent engaged in conduct that would ordinarily constitute a substantial interference with the appellants’ rights. The conduct included: [8]

14. [26]

    Nonetheless the primary Judge considered that the appellants had not made out a case of substantial interference with their rights under the Inclinator Easement or the Storage Easement during the four year period. His Honour reached this conclusion for the following reasons: [9]

15. [27]

    This conclusion rested in part upon the primary Judge’s preference for the evidence of the respondent over that of Mr Breen. [10]

16. [28]

    The primary Judge recorded that the appellants’ principal complaint concerning matters after April 2015 related to the appellants’ construction of gates and fences in February and March 2015. [11] The appellants also complained that they had not been provided with keys to the electricity box, the control panel in the inclinator car and the locks on various gates. [12]

17. [29]

    The primary Judge rejected some of the appellants’ complaints, but found that others were made out. His Honour summarised the actions of the respondent that constituted a substantial interference with the appellants’ rights as follows: [13]

18. [30]

    In light of these findings the primary Judge made orders requiring the respondent to:

19. [31]

    The primary Judge found that an award of damages of $6,000 would be appropriate to compensate the appellants for the inconvenience they sustained because of lack of access to the storeroom after April 2015 and the location of the lift controls. Hence his Honour gave judgment for the appellants in the sum of $6,000.

20. [32]

    The primary Judge rejected the appellants’ (unpleaded) claim for exemplary damages based on the denial of access to the storeroom. His Honour considered that the respondent’s conduct had to be assessed “in the broader context of the ongoing impasse concerning the … works [necessary] to satisfy the WorkCover notices”. It was the appellants who had largely been responsible for the situation.

21. [33]

    The appellants filed a notice of appeal on 2 March 2018. They purported to appeal as of right from part of the decision of the primary Judge relating to:

22. [34]

    The appellants sought orders remitting the proceedings for the assessment of damages in relation to the respondent’s

The appeal

1. [35]

   In order for the appellants to establish that s 101(2)(r) of the Supreme Court Act does not deprive them of an appeal as of right they must show that they have a realistic prospect on appeal of obtaining judgment in their favour for at least $100,000. [14] In the absence of evidence specifically directed to this issue, Mr Ireland relied on a schedule of damages handed up at the trial. The schedule purported to show that the appellants’ claim for compensatory damages amounted to nearly $300,000. In addition the schedule suggested that exemplary damages of $40,000 might be awarded.

2. [36]

   The schedule was not evidence of the amount the appellants could realistically claim as damages. When Mr Ireland was asked for evidence to support the claims itemised in the schedule, he was unable to identify any material in the appeal books that would justify the appellants’ claim for compensatory damages in an amount anywhere near $100,000.

3. [37]

   The largest item in the schedule was $175,595 supposedly for rent lost by the appellants from mid-2011 to April 2015 by reason of the respondent’s acts in denying access to the inclinator. But from July 2011 the appellants lived in No 118, having sold their previous home. At most the claim could have been for diminution in the rental value of No 118 (not the entire rental value) for perhaps two months.

4. [38]

   Two items relating to the cost of proposed fencing work amounted to $32,597.50. Not only was Mr Ireland unable to identify any evidence supporting these claims but there was nothing to explain what the items referred to. Claims for the use of a boat to transport supplies and park fees totalling $56,332.50 were said to be supported by affidavit evidence from Mr Breen. But this evidence, which was unsupported by any documentation, verged on the fanciful, implying that the appellants were forced to make about 15 round trips by boat per week simply to ferry supplies to No 118. The affidavit said to support the remarkable amount of $24,360 for park fees did not explain why the appellants could not purchase an annual park ticket at a cost of under $100. Other items listed in the schedule such as the purchase of a lawn mower seemed to lack any evidence or indeed to bear any relationship to any acts of nuisance allegedly committed by the respondent.

5. [39]

   The claim for exemplary damages apparently assumed that it would be open to the appellants on appeal to seek such damages for the period from 2011-2015. But no such claim had been pleaded and the only justification offered for the claim in the notice of appeal related to the respondent’s acts after April 2015 in relation to access to the storeroom. It is difficult to see how any claim for exemplary damages could succeed, let alone one yielding $40,000.

6. [40]

   It follows that the appeal is incompetent.

7. [41]

   The principles governing the grant of leave to appeal are well established. They were recently summarised as follows: [15]

8. [42]

   Mr Ireland said that the principal argument he wished to advance if leave was granted was that the primary Judge erred in finding that the appellants were under a duty to co-operate with the respondent’s efforts to make the improvements necessary to comply with WorkCover’s notice. However, this argument, contrary to Mr Ireland’s submissions, does not raise any issue of principle. It rests on the particular wording of the Inclinator Easement and the particular physical characteristics of No 116 and No 118. In any event, the key finding made by the primary Judge was that the impasse over a period of years was largely the responsibility of the appellants. Whether or not there was a duty to co-operate under the terms of the Inclinator Easement, the attribution of responsibility was material to the conclusion that the respondent had not unreasonably interfered with the rights of the appellants.

9. [43]

   The appellants have not established that they would suffer significant injustice if leave to appeal is refused. Their claim to damages is barely arguable and appears, at best, to be for an amount well under $100,000.

10. [44]

    Two further matters are significant. First, like much litigation between neighbours, the costs incurred by the parties in these proceedings have been wholly disproportionate to the value and significance of the issues in dispute. A relatively minor dispute capable of resolution by some common sense and goodwill has escalated into an Equity Division hearing lasting five days and producing a judgment of 86 pages. [16] If leave was granted and the appeal allowed, the consequence would be yet further litigation in order to have the appellants’ modest claim for damages assessed.

11. [45]

    Secondly, one of the arguments the appellants belatedly wish to raise on the appeal is that it was always open to the respondent to undertake the necessary works on No 118 by virtue of her rights under the Inclinator Easement. Yet the appellants’ position over a lengthy period was that their consent was required and would not be forthcoming.

12. [46]

    For these reasons the Court refused the appellants leave to appeal.

Cross-appeal

1. [47]

   The respondent’s summons for leave to cross-appeal challenged the findings that:

2. [48]

   The draft amended notice of cross-appeal contained grounds contending that:

3. [49]

   Despite filing the summons seeking leave to cross-appeal, the respondent’s written submissions argued, or at least asserted, that s 101(2)(r)(ii) of the Supreme Court Act was engaged because the provision was concerned not with the value of the claim but the value of the lot burdened by the Storage Easement (that is No 116). In support of this submission the respondent cited the decision of the High Court in Milne v James. [17] However this decision was not followed by the High Court in Oertel v Crocker. [18]

4. [50]

   In oral submissions Mr O’Connor appeared to accept that the respondent required leave to appeal. In any event, the correct position was recently restated by this Court in Horseshoe Pastoral Co Pty Ltd v Rixon: [19]

5. [51]

   The value of the rights in issue in the proposed cross-appeal is very low and pales into insignificance compared with the costs the parties have incurred in litigating their claims. The draft amended notice of cross-appeal contains grounds limited to challenging findings of fact. No question of principle or public importance was identified by Mr O’Connor. Nor is there any injustice to the respondent in denying leave to cross-appeal. As Mr O’Connor frankly admitted, leave was sought only because the appellants filed a notice of appeal.

6. [52]

   For these reasons the Court refused to grant the respondent leave to cross-appeal.