Coffill v Lagudi Holdings Pty Ltd

[2016] NSWSC 1764

Supreme Court

New South Wales

Medium Neutral Citation:	Coffill v Lagudi Holdings Pty Limited [2016] NSWSC 1764
Hearing dates:	29 and 30 November 2016
Date of orders:	09 December 2016
Decision date:	09 December 2016
Jurisdiction:	Equity
Before:	Darke J
Decision:	Parties to bring in Short Minutes of Orders to give effect to these reasons.
Catchwords:	REAL PROPERTY – easements – particular easements and rights – passageway subject of 1919 and 2008 easements – whether 1919 easement confers right of pedestrian access in addition to vehicular access – whether temporal restriction on use of 2008 easement limited to vehicular access   REAL PROPERTY – easements – extinguishment of easements – similar rights conferred under two easements over passageway – whether earlier easement obsolete by reason of change in character of neighbourhood – whether earlier easement obsolete due to inability to serve or fulfil original purpose or object – whether plaintiffs would suffer substantial injury through extinguishment of earlier easement
Legislation Cited:	Conveyancing Act 1919 (NSW) ss 89(1)(a), 89(1)(c)
Cases Cited:	Cavacourt Pty Limited v Durian (Holdings) Pty Limited [1998] NSWSC 787; (1998) 9 BPR 16,833 Durian (Holdings) Pty Ltd v Cavacourt Pty Limited [2000] NSWCA 28 Heaton v Loblay (1960) SR (NSW) 332 Laris v Lin (No 2) [2016] NSWSC 560 Perpetual Trustee Co Limited v Westfield Management Limited [2006] NSWCA 337 Re Mason and the Conveyancing Act [1962] NSWR 762 Morgensen v Portuland Developments Pty Limited (1983) NSW Conv R 55-116 Tujilo v Watts [2005] NSWSC 209 Westfield Management Limited v Perpetual Trustee Co Limited (2007) 233 CLR 528; [2007] HCA 45
Texts Cited:	P Butt, Land Law (6th ed 2010, Thomson Reuters)
Category:	Principal judgment
Parties:	Geoffrey Coffill (First Plaintiff) Terrance Kennedy (Second Plaintiff) Rodney Holtham (Third Plaintiff/Third Cross-Defendant) Lagudi Holdings Pty Limited (Defendant/Cross-Claimant) Graham William Byrne (First Cross-Defendant) Clive Thomas Roberts (Second Cross-Defendant)
Representation:	Counsel: Ms M Avenell (Plaintiffs/Cross-Defendants) Ms F J Berglund (Defendant/Cross-Claimant)   Solicitors: Bowen Legal (Plaintiffs/Cross-Defendants) Barraket Stanton Lawyers (Defendant/Cross-Claimant)
File Number(s):	2015/262933
Publication restriction:	None

Judgment

Introduction

1. These proceedings concern two parcels of land located on the southern side of Barrack Street in Sydney.

2. The registered proprietors of the first parcel (Lot 1 in Deposited Plan 71977) are Mr Byrne, Mr Roberts and Mr Holtham. They were, until recently, the trustees of the property of the Combined Services RSL sub-branch. The sub-branch is an unincorporated association created pursuant to the constitution of The Returned and Services League of Australia (New South Wales Branch). On 31 August 2016 Mr Coffill and Mr Kennedy replaced Mr Byrne and Mr Roberts as trustees. An Amended Summons was filed in Court at the hearing naming the present trustees as the plaintiffs. Steps have been taken to have the new trustees registered as the proprietors of the property. It is expected that they will become the registered proprietors in the very near future. The first parcel will be referred to as the RSL land.

3. The registered proprietor of the second parcel (Lot 2 in Deposited Plan 608601) is the defendant/cross-claimant, Lagudi Holdings Pty Limited (“Lagudi”). The second parcel will be referred to as the Lagudi land.

4. The dispute centres upon rights of way which the RSL land enjoys over a portion of the Lagudi land. In brief, the plaintiffs seek declaratory relief as to their rights, together with orders for the removal of obstructions within the easement area and injunctive relief to restrain future interference with the plaintiff’s rights, including by the installation of further obstructions within the easement area. There is also a small claim for damages for loss arising as a result of alleged interference with the plaintiffs’ rights.

5. The defendant, by its cross-claim, seeks the extinguishment of certain of the plaintiffs’ rights of way and orders restraining the plaintiffs from using the easement area in excess of their rights. It, too, has a small claim for damages for the cost of effecting certain repairs in the easement area, said to have been required due to the manner in which the plaintiffs or their tenants, employees or agents exercised their rights.

The land and the easements

6. The RSL land is at 5-7 Barrack Street. The RSL sub-branch acquired the property in about 1945. The property (which is rectangular in shape) extends from Barrack Street in a southerly direction towards but not as far as King Street. The property is currently leased to Combined Services RSL Club Co-Operative Limited. That company conducts a licensed club at the property.

7. The Lagudi land is the property at the corner of Barrack and Clarence Streets. Lagudi acquired the property in 2001. This property also extends from Barrack Street in a southerly direction towards but not as far as King Street. At the rear of the building on the Lagudi land, about 20 metres from the corner of Barrack and Clarence Streets, is a partly covered passageway that extends for about 14.5 metres in an easterly direction as far as part of the western boundary of the RSL land. The passageway is about 3.06 metres wide, although the distance between two heavy steel pillars located at the entrance is only about 2.83 metres. There is a set of gates (that open inwards) at the entrance to the passageway off Clarence Street. The rights of way the subject of these proceedings concern that passageway.

8. Additions were made to the buildings on the RSL land in about 1960. Those works included construction of a wall on that part of the western boundary where it is met by the passageway. Accordingly, it became impossible to pass along the passageway into an open yard area that had formerly existed on the RSL land. However, a doorway in the wall provided a connection between the building and the passageway. That connection remains in place.

9. Two rights of way are recorded on the register on the titles to the RSL land and the Lagudi land. These are:

1. a right of way created as part of a conveyance in January 1919, as recorded in Book 1147 No 992 (“the 1919 easement”); and

2. a right of way created in August 2008 upon the registration of Deposited Plan 1129741 (“the 2008 easement”).

10. The 1919 easement is relevantly in the following terms:

…a lawful and absolute right for the said Purchaser its successors and assigns and its and their agents and servants and the tenants and occupiers of the lands and hereditaments hereinbefore released or intended so as to be and all and every other person and persons for its and their respective benefit and advantage from time to time and all times hereafter at its and their respective will and pleasure by night and by day and for all purposes to go return pass and repass with horses carts waggons [sic] and other carriages laden or unladen and also to drive cattle and other beasts in through and along and over [the passageway] …

11. The 2008 easement is relevantly in the following terms:

Full and free right for every person who is at any time entitled to an estate or interest in possession in the land described in this instrument as the dominant tenement or any part of it with which the right shall be capable of enjoyment, and every person authorised by that person, to go, pass, and repass, both to and from the dominant tenement, and to park, stand, stop, unload, load and turn on that part of the land described in this instrument as the servient tenement which is subject to and delineated on the plan accompanying this instrument as the Right of Way, and to do so for all purposes whether it be with or without animals or vehicles, and if the Right of Way is exercised with vehicles then to exercise the right with or without large commercial vehicles, whether they be articulated or single axle vehicles, delivery vans, garbage trucks, tradesman’s vans and cars and any other vehicles driven by persons authorised to exercise the right by the person who is at any time entitled to an estate or interest in possession in the land described in this instrument as the dominant tenement or any part of it with which the right shall be capable of enjoyment and shall be exercisable at the following times and on the following terms:

Pass and repass and stop, load and unload vehicles between the hours of 6.00am and 9.00am on Tuesday, Wednesday and Thursday of every week.

Subject to those vehicles stopping and standing on the Right of Way for no more than one hour on any one occasion.

The proprietary rights granted by this easement over the Right of Way shall be restricted in height to the horizontal plane at R.L. 25.7 of the Australian Height Datum.

12. The 2008 easement was created in accordance with a settlement of earlier proceedings in this Court between Lagudi and the trustees of the property of the Combined Services RSL sub-branch. The terms of the that settlement were contained in a Deed of Settlement and Release entered into on 21 December 2007. The deed provided, inter alia, for the registration of an instrument under s 88B of the Conveyancing Act 1919 (NSW) in substantially the terms of the instrument at Schedule 1 to the deed.

Summary of relevant facts

13. It appears that the catalyst for the commencement of these proceedings was the erection by Lagudi in early August 2014 of a metal structure, of about 1.26 metres in width, along part of the northern side of the passageway. The existence of that structure reduced the available width of the passageway to no more than 1.8 metres along the length of the structure.

14. On 28 October 2014 the plaintiffs’ solicitor, Bowen Legal, wrote to Lagudi about the matter. The letter included the following:

We understand that within the last two (2) months a barrier has been constructed along the Right of Way perpendicular to the street which has the effect of reducing the width of the Right of Way and thus impeding the ability to pass and re-pass across the Right of Way by vehicle. For the last two (2) months the occupier of our clients’ land has been unable to have the Veolia waste disposal truck gain access to the Right of Way to enable the grease trap to be pumped out. Sydney Water has fined the occupier $264.51 on two (2) separate occasions because the grease trap was not pumped out.

Please contact Ms Sturman of our office as a matter of urgency, to advise what steps you will be taking to remove the barrier currently constructed upon the Right of Way.

15. There was no written response to the letter, although it seems that Mr Rocco Lagudi, a director of Lagudi, spoke to a solicitor at Bowen Legal about the matter.

16. Bowen Legal sent a further letter to Lagudi on 24 November 2014. The letter included the following:

Alternative emergency arrangements are now in place to enable the grease trap to be pumped out and so that no further fines are received and so that an environmental catastrophe is averted. This arrangement is not however, convenient to our client or its contractor. Further, our client should not be put in a position where it has to make these alternative arrangements.

Lagudi Holdings Pty Limited is in continuing breach of the terms of the Right of Way and the Deed of Release. It must immediately remove the barrier currently constructed upon the Right of Way and provide our clients with a key to the gate that closes off access to the Right of Way from Clarence Street.

17. By 26 November 2014 Lagudi had retained Barraket Stanton Lawyers. However, no response was made to the matters raised by Bowen Legal for some months. The proceedings were commenced by Summons filed on 8 September 2015. Amongst the orders sought was an order requiring removal of the metal structure.

18. On 26 August 2016 Barraket Stanton wrote to Bowen Legal stating that they were instructed that “the obstruction in the Right of Way has been removed by our Client”. It seems that the metal structure was indeed removed by Lagudi at about that time.

19. However, an upright steel barrier that had been installed at about the time the metal structure was installed remained in place roughly near the centre of the entrance to the passageway from Clarence Street. The barrier was secured to the ground and to the building overhead. The gates, when closed, are secured against the barrier by means of locks. Even when the gates are open, the existence of the barrier would undoubtedly prevent any motor vehicles (other than motorbikes) from entering the passageway.

20. On 7 October 2016 Bowen Legal sent a letter to Barraket Stanton in the following terms:

We refer to your letter of 26 August 2016, when you advised that “the obstruction in the Right of Way has been removed by our Client”. Whilst your client has belatedly removed the part of the obstruction, the Right of Way still remains obstructed.

We attach photos taken on 31 August 2016. They clearly show a barrier bolted into the ground in one place and locked into the ground in another that obstructs the Right of Way. No vehicle can pass between the gates whilst ever that barrier is in place. Further, the photos show bins, tables, boxes and other assorted debris that impedes or obstructs the ability to move along the Right of Way.

Please advise what steps your client will take to remove this continuing obstruction. Your client continues to be in breach of the Rights of Way. Your urgent response is required, bearing in mind the imminent hearing date for this matter.

21. On 3 November 2016 the plaintiffs served an affidavit sworn by the third plaintiff, Mr Holtham, which dealt with the issue of the barrier. On the first day of the hearing the plaintiffs obtained leave to file an Amended Summons which added a prayer for an order requiring removal of the barrier. Following a view of the site on the first day of the hearing, counsel for the defendant informed the Court that it would consent to such an order.

22. Mr Lagudi deposed that the metal structure was erected at the request of a restaurant tenant, in order to enhance safety for patrons of the restaurant who made use of a door that opens on to the passageway. The structure served to prevent the patrons from straying across the passageway, which is not well lit. Mr Lagudi further deposed that he believed that the structure would not unreasonably inhibit access to the right of way because the plaintiffs had by that time ceased to bring vehicles into the passageway. He accepted in cross-examination that the existence of the structure would prevent a car from going down the passageway, and thus accepted that it inhibited the use of the passageway.

23. The plaintiffs adduced evidence from Mr Cahill Poulter, who has been the bar manager of the licensed club since October 2014. He deposed that access for some deliveries to the club is by way of the passageway that runs from the rear of the building to Clarence Street. He stated that at the back of the club building there is a back door and a ramp down to the cellar. He says that each week Tooheys delivers about five to ten kegs of beer to the club, and Carlton and United delivers about twenty kegs of beer to the club. He deposed that kegs cannot be delivered through the club’s front door entrance.

24. Mr Poulter further deposed that the club’s grease trap was cleaned out about once a month using a hose that leads from a waste truck “down the keg ramp”, and that about once a month gas is delivered by a hose that leads from a gas supply truck to a connection in a box located near the club’s back door.

25. Mr Poulter was not working at the club prior to the erection of the metal structure, and thus could give no evidence about how the club used the passageway at that time. Mr Poulter nonetheless suggested that were it not for the structure, the waste trucks, gas trucks, and even the large brewery trucks, would be able to “fit down the driveway”. Instead, they were forced to park (or attempt to park) on Clarence Street, and run hoses or roll kegs down the passageway. However, little weight can be given to that evidence, which was not supported by evidence of the dimensions of the trucks that are used, or may be used, for those purposes.

26. Mr Lagudi gave evidence that he went to the Lagudi property about once each week, sometimes more often. He deposed that on some occasions prior to the erection of the metal structure, attempts were made by waste disposal trucks and semi-trailer trucks to go into the passageway, and that “on many occasions” the trucks were too large to go into, and fit safely through, the passageway. He says that he witnessed occasions when the sides of trucks and their mirrors hit the brick walls. In cross-examination, Mr Lagudi said that he saw an attempt to unload kegs from a truck in the passageway about five years ago but that it proved too difficult, and the trucks had not gone into the passageway since. Mr Lagudi said that as far as he was aware, none of his tenants brought trucks into the passageway in order to take deliveries.

27. Mr Lagudi also gave evidence that prior to the erection of the metal structure he had seen a waste truck parked on Clarence Street pumping out the grease traps of his tenants (and, it seems, the club) using long hoses.

28. Mr Lagudi gave evidence that the brewery trucks he has observed deliver kegs to the club in more recent times would not fit into the passageway. He also said that these trucks are unloaded from the sides, not the rear, and there is not sufficient room to do this in the passageway. There is some photographic evidence which supports the contention that the unloading of such trucks takes place from the side of the trucks, although it is not shown that unloading from the rear is impossible. The photographic evidence supports the contention that the brewery trucks are semi-trailers of considerable size but, again, there is no evidence of their actual dimensions.

29. Mr Lagudi gave evidence that the brick walls in the passageway have been damaged through chipping, and some bricks became loose. He says that he arranged for this damage (which he believes was caused by trucks servicing the club) to be repaired. There is evidence that various repairs to the passageway were carried out by ECL Constructions Pty Limited in about June 2012 at a total cost to Lagudi of $4,384.

30. Finally, Mr Lagudi gave evidence that on occasions the plaintiffs have used the passageway to place or leave beer kegs for a number of hours, and that they had also made use of the passageway to take deliveries outside of the times stipulated in the 2008 easement.

31. It is not in dispute that the plaintiffs do not have a key to the gates that are at the entrance to the passageway. Both Mr Poulter and Mr Holtham gave evidence to the effect that without a key to the gates at the entrance to the passageway, the gates can only be opened from inside the passageway. Lagudi has declined to provide a key to the plaintiffs. Mr Lagudi gave evidence to the effect that he was not willing to provide a key to the plaintiffs as they had no need for a key.

Determination

What rights do the easements confer?

32. It is convenient to deal first with the issue of the extent of the plaintiffs’ rights of way over the passageway.

33. The defendant initially adopted the position that the 2008 easement replaced the 1919 easement, so that the plaintiffs had no continuing entitlement to the rights conferred by the 1919 easement. The defendant ultimately seemed to accept that, as both easements remained on the titles and appear on the plan that forms part of the registered s 88B instrument, the 1919 easement continues in force. That seems to me to be the correct position.

34. It is thus necessary to construe each of the easements. In undertaking this task it is appropriate to focus upon the terms of each easement as they appear in the instrument made at the time of the creation of the easement (see Westfield Management Limited v Perpetual Trustee Co Limited (2007) 233 CLR 528; [2007] HCA 45 at [15], [37] and [44]). There were two issues between the parties concerning the proper construction of the easements.

32. The point of contention concerning the construction of the 1919 easement is whether it provides for pedestrians, in the absence of horses, carts, wagons and other carriages, to pass along the passageway. Ms Berglund of counsel, who appeared for the defendant, pointed out that the easement did not employ the commonly found expression “with or without” in connection with horses, carts etc, but merely permitted use “with” horses, carts, etc. She submitted that the broader expression could readily have been added (compare Westfield Management Limited v Perpetual Trustee Limited (supra) at [18], citing Perpetual Trustee Co Limited v Westfield Management Limited [2006] NSWCA 337 at [65]).

33. However, it is my opinion that, read in its entirety, the words used should not be read so narrowly. The grant of the right is widely drawn for the benefit of a class of persons to exercise at their will and pleasure at any time of the day or night, and “for all purposes”. The use of “with” in that context ought in my view to be read in an inclusionary sense (akin to “including with”) rather than in a restrictive sense (akin to “but only with”). Accordingly, I consider that the 1919 easement confers rights to pass along the passageway as a pedestrian. Such rights are able to be exercised for all purposes and at any time.

34. The defendant accepted that even though the 1919 easement referred only to horses, carts, wagons and other carriages, it could be construed as extending to modern vehicles. Nevertheless, it seems clear that the 1919 easement does not confer rights to stop, to load or unload vehicles, or to park vehicles – other than perhaps momentarily (see Laris v Lin (No 2) [2016] NSWSC 560 at [118]-[120]). Neither party contended to the contrary.

35. The point of contention concerning the 2008 easement is whether the temporal restrictions contained in sub-paragraph (i) apply generally or only to use of the easement with vehicles. The defendant contended for the former position, the plaintiffs for the latter. Ms Avenell of counsel, who appeared for the plaintiffs, referred to that part of the grant commencing with “and if the Right of Way is exercised with vehicles”, and to the words of sub-paragraphs (i) and (ii) themselves which appear to be confined to use involving vehicles. In addition to those structural and textual indications, I would add that no punctuation has been included which would suggest that the subject matter of sub-paragraphs (i) and (ii) is separate from the exercise of the rights with vehicles; indeed, those sub-paragraphs are introduced by words which include “and shall be exercisable”, which can readily be seen as associated with the earlier words “and if the Right of Way is exercised with vehicles”.

36. In my opinion, the language of the grant, read as a whole, leads to the conclusion that the temporal restrictions set out in sub-paragraph (i) (and also in sub-paragraph (ii)) apply only to use of the easement with vehicles – that is to say, use of the easement that involves the bringing of a vehicle into the passageway.

Should the 1919 easement be extinguished?

40. I turn now to consider the claim by Lagudi that the 1919 easement should be extinguished pursuant to s 89 of the Conveyancing Act.

41. Section 89 relevantly provides:

(1) Where land is subject to an easement…the Court may from time to time, on the application of any person interested in the land, by order modify or wholly or partially extinguish the easement…upon being satisfied –

(a) that by reason of a change in the user of any land having the benefit of the easement…or in the character of the neighbourhood or other circumstances of the case which the Court may deem material, the easement…ought to be deemed obsolete…; or…

(c) that the proposed modification or extinguishment will not substantially injure the persons entitled to the easement…

42. The claim was put on two alternative grounds. These were:

1. that by reason of a change in the character of the neighbourhood the 1919 easement should be deemed to be obsolete; and

2. that extinguishment of the 1919 easement would not substantially injure the persons entitled to the easement.

43. As to (1), the suggested change in the character of the neighbourhood was said to arise from three matters: first, that the additions to the buildings on the RSL land in about 1960 removed the open yard area to which the passageway originally led; secondly, that animals are no longer used in central Sydney to drive carts, wagons or other carriages and there is no longer any need to drive beasts through the passageway; and thirdly, that increases in the sizes of trucks used to undertake deliveries in the central Sydney area means that the passageway is now too small to be used by trucks.

44. The first two points may be accepted. There is more difficulty with the third point. Mr Lagudi gave evidence to the effect that he has observed over the past few years that brewery trucks have become “the size of semi-trailers”. Mr Lagudi stated that he believes that this trend is the result of increased traffic in central Sydney and the need to make multiple deliveries on each “run”.

45. I accept that Mr Lagudi genuinely holds those views, based on what he has observed and what he has been told. However, I do not think that the evidence, even when viewed with other evidence adduced (including photographic evidence) concerning the size of brewery trucks in use in more recent times, establishes the existence of the claimed change in the character of the neighbourhood. That is to say, even if large brewery trucks are now commonly used to make deliveries in central Sydney, it has not been shown that trucks more generally used to make deliveries or supply services in central Sydney are of such a size that the passageway is now too small to be used by trucks. I note, again, that there was no evidence adduced concerning the actual dimensions of trucks or other vehicles that may make deliveries or supply services to the RSL land.

46. I do not think that the 1919 easement ought to be deemed obsolete for the purposes of s 89(1)(a) of the Conveyancing Act. The term “obsolete” has in this context been held to mean that the original purpose of the easement can no longer be served, or that the object of the easement is no longer capable of fulfilment or perhaps serves no presently useful purpose (see Re Mason and the Conveyancing Act [1962] NSWR 762 at 764; Durian (Holdings) Pty Limited v Cavacourt Pty Limited [2000] NSWCA 28 at [3]; Laris v Lin(No 2) (supra) at [68]).

47. The changes made to the buildings on the RSL land in 1960 have had the result that the original purpose or object of the 1919 easement, insofar as it concerned the passing of vehicles across the passageway to and from the RSL land, can no longer be served or fulfilled. Nonetheless, insofar as the original purpose or object of the 1919 easement concerned the passing of pedestrians across the passageway to or from the RSL land, the purpose or object remains capable of fulfilment. That is the case, it seems to me, even though rights of the same character can also be exercised pursuant to the 2008 easement. The existence of the 2008 easements may, in practical terms, mean that there is no longer a need for the exercise of such rights under the 1919 easement, but I do not regard that circumstance as rendering the 1919 easement obsolete in the sense in which the concept is employed within s 89(1)(a). The rights remain available to be used in furtherance of the purposes or objects of the 1919 easement.

48. As to (2), the only question is whether extinguishment of the 1919 easement would “substantially injure” the persons entitled to the easement (see Heaton v Loblay (1960) SR (NSW) 332 at 335). The party seeking the extinguishment bears the onus of satisfying the Court that it would not cause substantial injury (see Tujilo v Watts [2005] NSWSC 209 at [36]). It has been held that a substantial injury within the meaning of s 89(1)(c) of the Conveyancing Act means an injury which has present substance; that is to say, not a theoretical injury but something which is real and which has a present substance (see Re Mason and the Conveyancing Act (supra) at 764; Tujilo v Watts (supra) at [37]; Laris v Lin (No 2) (supra) at [74]).

49. The kind of injury contemplated is injury to the relevant persons in relation to their ownership of, or interest in, the land benefited (see Morgensen v Portuland Developments Pty Limited (1993) NSW Conv R 55-116 at 56,856; Tujilo v Watts (supra) at [87]). When applying s 89 of the Conveyancing Act it is necessary to bear in mind that an easement is created for an indefinite future and destined to enure in a changing environment (see Durian (Holdings) Pty Limited v Cavacourt Pty Limited (supra) at [4]).

50. It is clear that interference with the type of benefit which an easement explicitly confers on the owners of the dominant tenement can be an injury within s 89(1)(c). So, too, can interference with the incidental effects of the grant of an easement, such as the inhibiting effect the easement may have upon the development of the servient tenement (see Tujilo v Watts (supra) at [40] and [86]). It has been said that the legislation is designed to allow extinguishment of easements of no practical utility, which should be removed to “clear the title” (see Cavacourt Pty Limited v Durian (Holdings) Pty Limited [1998] NSWSC 787); (1998) 9 BPR 16,833).

51. Ms Berglund submitted that the plaintiffs would not suffer substantial injury if the 1919 easement was extinguished. She submitted that the 2008 easement effectively conferred rights which are at least as extensive as those conferred under the 1919 easement. Accordingly, she submitted, the 1919 easement no longer offers any practical benefit to the plaintiffs.

52. Ms Avenell submitted that, notwithstanding the existence of the 2008 easement, the 1919 easement retained value to the plaintiffs. She submitted that even though the existing buildings meant that vehicles could not pass along the passageway to or from the RSL land, the RSL land had the potential to be developed in the future in ways that could re-open that type of use. A development involving the construction of an underground carpark was given as an example of a possible future development. She submitted that it was not unreasonable to regard such potential future use of the 1919 easement (which is not restricted to use within certain times) as a valuable right. She accepted that there was no evidence that any re-development of the RSL land was presently in contemplation.

53. In response, Ms Berglund submitted that whilst such future development could not be dismissed as impossible, it was very unlikely, and merely hypothetical. She submitted that there was thus no injury of real and present substance.

54. I accept Ms Berglund’s submissions on this matter. On the true construction of the easements, the 2008 easement confers rights which, in practical terms, are at least as extensive as those conferred under the 1919 easement. As far as use with vehicles is concerned, the 2008 easement permits more than momentary stopping, loading and unloading, and parking, albeit restricted to the hours stipulated. The 1919 easement permits the passing across the passageway to and from the RSL land at any time, but for the last 55 years or so this has not been possible due to the additions made to the buildings on the RSL land. That situation could change in the future, but there is no immediate prospect of such, and no evidence that the plaintiffs are contemplating any development which might bring that about. As far as use by pedestrians is concerned, the 2008 easement confers rights, unrestricted as to time, just as the 1919 easement does.

55. In short, the 1919 easement no longer offers practical benefits to the plaintiffs over and above that which can be enjoyed pursuant to the 2008 easement. The prospect of that situation changing is in my opinion somewhat remote. In these circumstances I am satisfied that extinguishment of the 1919 easement would not cause the plaintiffs to suffer a substantial injury in the sense of an injury that is not merely a theoretical injury, but an injury that is real and has present substance. The discretion to make an order extinguishing the 1919 easement is thus enlivened.

56. Ms Avenell submitted that the Court should not exercise the discretion to make such an order. She pointed to the existence of the settlement of the earlier proceedings between the parties; those proceedings included an application by Lagudi to extinguish the 1919 easement pursuant to s 89(1)(a). She submitted that the settlement, embodied in the Deed of Settlement and Release entered into on 21 December 2007, contemplated the continued existence of the 1919 easement together with the new 2008 easement. It was submitted that Lagudi ought not be allowed to undo that agreement after such a relatively short time.

57. I do not consider that these circumstances should lead the Court to decline to order that the easement be extinguished. It is now almost 9 years since the settlement was reached. In my opinion, the continued existence of the 1919 easement, which lacks utility alongside the 2008 easement, would be best cleared from the title. An order for extinguishment will be made. In coming to that conclusion I have taken into account that such an order removes a proprietary right, and that it is thus appropriate for the Court to exercise caution.

The plaintiffs’ claims for relief

58. The first claim is for a declaration that the plaintiffs are entitled to the rights conferred by both the 1919 and 2008 easements. In view of the conclusion I have reached concerning extinguishment of the 1919 easement, the declaration sought should not be made.

59. The next claims are for declarations that the metal structure erected in August 2014, and the steel barrier erected at about the same time, each constituted a real and substantial interference with, and an obstruction of, the plaintiffs’ rights over the passageway. In my opinion, both the metal structure and the steel barrier did interfere with the plaintiffs’ rights over the passageway in a real and substantial way. Even if some vehicles are too large to go into, or fit safely through, the passageway, the metal structure and the steel barrier undoubtedly prevented the plaintiffs from bringing vehicles of lesser width into the passageway. Mr Lagudi accepted as much.

60. Nonetheless, the metal structure has now been removed, and the defendant has indicated that it will consent for an order for removal of the steel barrier. Such an order will be made. In those circumstances, I do not see any need to make the declarations sought.

61. The next claims made by the plaintiffs are for orders restraining Lagudi from interfering with or obstructing the plaintiffs’ rights over the passageway, including by the installation of objects. I think that such an order should be made in this case, having regard to the defendant’s past conduct in unilaterally installing structures that interfere with and obstruct the plaintiffs’ rights over the passageway, and subsequently failing to remove those structures despite requests that they be removed. It was not appropriate for the defendant to act in that fashion, even if Mr Lagudi held the opinion that the plaintiffs had ceased to bring vehicles into the passageway. There was no evidence given to the effect, or undertakings proffered, that such conduct will not recur.

62. The final claim for relief is damages for loss alleged to have been caused as a result of the erection of the structures in August 2014. The plaintiffs allege that the erection of the structures disrupted the arrangements it had for the pumping out of its grease trap, by preventing the waste truck from gaining access to the passageway. It is further alleged that it became necessary to make alternative arrangements, by which time Sydney Water had imposed additional charges for failing to pump out the grease trap in a timely fashion. There is evidence that additional charges of $264.51 (for failing to notify by 11 October 2014 that the September pump out had been carried out) and $272.31 (for failing to notify by 12 November 2014 that the October pump out had been carried out) were imposed.

63. There is no direct evidence of the arrangements in place in the latter months of 2014 for the pumping out of the grease trap. In particular, there is no direct evidence that those arrangements involved a waste truck coming into the passageway. However, there is some evidence from which it can be inferred that the erection of the structures in early August 2014 did interfere with the arrangements for the pumping out of the grease trap. The plaintiffs’ solicitor wrote a letter on 28 October 2014 in which it was stated that for the last two months the Veolia waste truck had been unable to gain access to the passageway in order to pump out the grease trap; on 24 November 2014 the plaintiffs’ solicitor wrote a further letter in which it was stated that alternative arrangements had been made to enable the grease trap to be pumped out. I do not think there is any reason to doubt the essential accuracy of those assertions, which were presumably made upon instructions. Neither letter was answered by the defendant.

64. Even though there is evidence (in the form of letters from Sydney Water) that the plaintiffs were late on other occasions in carrying out pump outs, the only times they were so late as to incur an additional charge occurred in the period from September to November 2014. The assertions made in the solicitors letters are consistent with that evidence.

65. In my opinion it is likely that the erection of the structures interfered with the arrangements for the pumping out of the plaintiffs’ grease trap and caused the additional charges, totalling $536.82, to be incurred. An order will be made requiring the defendant to pay that sum to the plaintiffs.

Lagudi’s claims for relief

66. The first claim is for an order extinguishing the 1919 easement. For the reasons given earlier, such an order will be made.

67. The next claim is for an order restraining the plaintiffs (and their tenants, employees and agents) from entering the passageway outside of the hours of 6am to 9am on Tuesdays, Wednesdays and Thursdays. It follows from my conclusion that the temporal restrictions in the 2008 easement apply only to use of the easement that involves the bringing of a vehicle into the passageway that the order sought should not be made.

68. The next claims made by Lagudi are for orders restraining the plaintiffs (and their tenants, employees and agents) from obstructing the use and enjoyment of the passageway by Lagudi (and its tenants, employees and agents), including by depositing objects and leaving them in the passageway. There was evidence given by Mr Lagudi that on occasions beer kegs associated with the club operated on the RSL land have been left in the passageway for a number of hours. This evidence was not challenged. Further, two garbage bins associated with the club were stationed in the passageway when the view was held on 28 November 2016. There was evidence that the bins had been kept there for about two weeks. The Court was informed on 30 November 2016 that the bins had been removed from the passageway.

69. The plaintiffs (or their tenants, employees or agents) can bring chattels through the passageway but they are not entitled to leave chattels in the passageway. In light of the evidence of breaches in this particular regard, and in the absence of evidence to the effect, or undertakings proffered, that such breaches will not recur, I consider that an order should be made restraining the plaintiffs and their tenants, employees and agents from depositing and leaving chattels in the passageway.

70. The remaining claim is the claim for damages for the cost of effecting repairs to damaged brickwork in the passageway. It is alleged that the damage was caused by trucks in the course of exercising rights conferred by one or other of the easements.

66. I accept Mr Lagudi’s evidence to the effect that he witnessed occasions when the sides of trucks or their mirrors hit the brick walls in the passageway. I further accept his evidence that some damage was occasioned to the brickwork, and that such damage was in the nature of avoidable damage (see P Butt, Land Law (6th ed 2010, Thomson Reuters) at [16 102]). Further, based on Mr Lagudi’s evidence that, as far as he was aware, none of his tenants brought trucks into the passageway, I am prepared to infer that the trucks which caused the damage did so in the course of exercising rights conferred by one or other of the easements. I also accept that Mr Lagudi engaged ECL Constructions Pty Limited in about June 2012 to undertake repairs to the damaged walls.

67. A difficulty arises in assessing the cost of such repairs. The invoice issued by ECL Constructions Pty Limited refers to “repairs/damage” to the Clarence Street entry to No 1 Barrack Street. That may be taken to be a reference to the passageway. The invoice then lists four items of work completed. None of the items is clearly a reference to the repairs to the brickwork. At least one item (Item 1) concerns other work not shown (despite Mr Lagudi’s suspicions) to have been caused by persons exercising rights under the easements. In any case, the proportion of the total price of $4,384 attributable to each item is not stated in the invoice.

68. It is not possible to discern from the invoice how much of the total cost is attributable to repairs to the brickwork. It ought to have been a relatively simple matter for the defendant to call evidence from someone at ECL Constructions Pty Limited to explain the nature and extent of the damage to the brickwork, and the approximate proportion of the $4,384 attributable to the repair of such. The Court is left in a position where, even doing the best it can on the available evidence, it would have to engage in impermissible speculation and guesswork in order to assess the cost of the repairs to the brickwork. In these circumstances, the defendant’s claim for damages must fail.

Conclusion

74. The Court will order that the defendant, within 14 days of today and at its own cost, remove the steel barrier presently located near the centre of the entrance to the passageway from Clarence Street.

75. The Court further directs the parties to bring in proposed Short Minutes of Orders to give effect to these reasons. This should be done by no later than 14 December 2016, to enable the Court to make orders in chambers prior to the end of term. These Short Minutes of Orders should provide for the substituting of the first and second plaintiffs as the first and second cross-defendants.

76. The proposed Short Minutes of Orders should also deal with costs. Each party has experienced some success, and some failure. Given that the issues arising on the Amended Summons and the Cross-Claim are inter-related to a considerable extent, there is much to be said for the proposition that each party should bear its own costs of the proceedings. If the parties are unable to agree on the appropriate costs orders, directions will be made for written submissions to be made, with a view to determining any questions of costs on the papers.

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Decision last updated: 09 December 2016