Dietrich v Denning

[2016] NSWSC 597

Supreme Court

New South Wales

Medium Neutral Citation:	Dietrich v Denning [2016] NSWSC 597
Hearing dates:	16, 17 March 2016
Date of orders:	12 May 2016
Decision date:	12 May 2016
Jurisdiction:	Equity
Before:	Darke J
Decision:	Plaintiff’s claims for an equitable easement over a driveway, or alternatively that an easement over the driveway should be imposed, are rejected.
Catchwords:	REAL PROPERTY – equitable easements – creation of easements by acquiescence or estoppel – plaintiff given limited permission to use defendant’s driveway – acquiescence in lengthy period of use by plaintiff – not unconscientious of defendants to halt such use – no personal equity established – claim for equitable easement rejected REAL PROPERTY – statutory easements – Conveyancing Act 1919 (NSW) s 88K – whether right of way over part of defendants’ driveway reasonably necessary for effective use of plaintiff’s land –proposed easement would place significant and ongoing burden on defendants’ land – easement not shown to be reasonably necessary
Legislation Cited:	Conveyancing Act 1919 (NSW), s 88K
Cases Cited:	Bahr v Nicolay (No 2) (1988) 164 CLR 604 Bloom v Lepre [2008] NSWSC 79 Breskvar v Wall (1971) 126 CLR 376 Drew v Asimus (1998) 9 BPR 16,531 Frazer v Walker [1967] AC 569 Hanny v Lewis (1998) 9 BPR 16,205 Hillpalm Pty Limited v Heaven’s Door Pty Limited [2004] HCA 59; (2004) 220 CLR 472 Khattar v Wiese [2005] NSWSC 1014 Mitchell v Boutagy [2001] NSWSC 1045; (2001) 118 LGERA 249 Moorebank Recyclers Pty Limited v Tanlane Pty Limited [2012] NSWCA 445 Willmott v Barber (1880) 15 Ch D 96 Winter Garden Theatre (London) Limited v Millennium Productions Limited [1948] AC 173
Texts Cited:	Peter Butt, Land Law, (6th ed 2010, Thomson Reuters)
Category:	Principal judgment
Parties:	Maxwell Cecial Dietrich (Plaintiff) Albert Neil Denning (First Defendant) Aaron Noel Denning (Second Defendant) Cassandra Patricia Denning (Third Defendant)
Representation:	Counsel: Ms S Haddad (Plaintiff) Mr P Walsh (Defendants)   Solicitors: P A Khoury Lawyers (Plaintiff) Collins & Thompson Solicitors (Defendants)
File Number(s):	2015/269505
Publication restriction:	None

Judgment

Introduction

1. The plaintiff, Maxwell Dietrich, is the owner of the property at 8 Eddy Street, Thornleigh. The property fronts onto Eddy Street. The defendants, Albert, Aaron and Cassandra Denning (“the Dennings”) are the owners of the property at 8A Eddy Street, Thornleigh. 8A Eddy Street is a battleaxe block located at the rear of 8 Eddy Street. Access to 8A Eddy Street is obtained by way of a driveway adjacent to the western boundary of 8 Eddy Street (“the driveway”).

2. For many years Mr Dietrich has made use of the driveway in order to obtain access to the rear section of 8 Eddy Street. In August 2015 the Dennings withdrew permission to use the driveway. By Summons filed on 14 September 2015 Mr Dietrich seeks an order to the effect that he has an equitable easement over the driveway. In the alternative, he seeks an order under s 88K of the Conveyancing Act 1919 (NSW) imposing an easement over the driveway. The Dennings deny that Mr Dietrich is entitled to the relief he seeks.

3. In brief, Mr Dietrich alleges that in 1988 and 2001 representations were made to him by the then owners of 8A Eddy Street (the first defendant Mr Albert Denning [“Mr Denning”] and his wife Dorothy Denning) that he would thereafter have the right to use the driveway, and that he relied upon such representations to his detriment by developing his property in a certain way. Mr Dietrich further alleges that the Dennings must have known that he believed that he had a permanent right to use the driveway, yet stood by and allowed him to continue to use the driveway and so develop his property. Accordingly, Mr Dietrich contends that it is not open to the Dennings to now deny that he has the right to use the driveway.

4. At the hearing, Mr Dietrich gave evidence in support of his case. He also called neighbours to give evidence about his use of the driveway. A valuer, Mr Danny Sukkar, was called on the issue of compensation under s 88K of the Conveyancing Act. The Dennings each gave evidence in support of their case. They also called a valuer, Mr Paul Chaloner.

5. Mrs Dorothy Denning died in 2008. Following her death, Mr Albert Denning (who is generally known as Neil Denning) became the sole owner of 8A Eddy Street. He has continued to live at the property. In July 2009 Mr Denning transferred a 10/590th share in the property to Aaron and Cassandra Denning, his son and daughter in law; they hold that share as joint tenants. Aaron and Cassandra Denning moved in to 8A Eddy Street in about July 2010, after the completion of some renovations, and have lived there ever since, together with their daughter.

Summary of the salient evidence

6. Mr Dietrich purchased the 8 Eddy Street property from Mr and Mrs Denning in late 1987. The property is Lot 1 in Deposited Plan 534132. The 8A Eddy Street property is Lot 2 in Deposited Plan 534132.

7. Mr Dietrich and his family moved into 8 Eddy Street in about September 1988. By that time he had finalised plans for renovations and extensions. He proposed to undertake such work as an owner/builder.

The 1988 discussions

8. Mr Dietrich deposed that in about August to October 1988 he approached Dorothy Denning and discussed his building plans and “the need to have vehicular access to my rear yard”, and that she responded with words to the following effect:

Yes, you and your family have our permission to use the battleaxe driveway adjoining the property to access your backyard as needed to carry out necessary works.

9. In cross-examination, Mr Dietrich said that the conversation was not limited to a permission for the carrying out of the works. He said that access was given to carry out the building works and to be able to get into the backyard. When asked to explain why this was not contained in his affidavit, Mr Dietrich said that he was recounting words to the effect of conversations in which both Mr and Mrs Denning took part. He was unable to explain why no conversations with Mr Denning were mentioned in his first affidavit.

10. Mr Denning deposed that in about October 1988 Mr Dietrich asked for written permission to use the driveway for his renovations, and this request was refused. However, Albert Denning says that he gave “temporary verbal permission” to use the driveway to access the yard until the renovations were complete. Mr Dietrich responded to that evidence in his third affidavit. He did not dispute Mr Denning’s recollection, but deposed that he was given permission to access the rear yard using the driveway and that the only stipulation was a limit on the size of vehicles using the driveway to deliver building materials.

11. Mr Dietrich deposed that after these discussions in 1988 he and his family began to access the back of the 8 Eddy Street property via the Dennings’ battleaxe driveway. A section of the wire boundary fence was removed to enable such access. Mr Dietrich states that the access was used for the purpose of using and enjoying the backyard and using the shed which he constructed at the rear of the property.

12. Mr Dietrich gave evidence that, on the basis of the consent granted, he planned the construction of an attached garage (which is located towards the front of his property on the eastern side) “so it had a drive-through to access to the rear yard”. It is clear that the garage was constructed in the period 1988 to 1991 as part of the substantial renovations and refurbishment works he carried out in that period. The shed at the rear of the property was also built during that period. In cross-examination, Mr Dietrich agreed that he installed a roller door at the rear of the garage, at the end furthest from Eddy Street. However, he denied that the roller door had been put in to allow access through the garage to the backyard. He said that it was to get access to the back patio. In giving those answers Mr Dietrich was seemingly referring to the immediate purpose of the roller doors. In his second affidavit, Mr Dietrich explained that the roller door was for access to the patio, and if necessary at some time in the future, he could construct a ramp from the patio down to the backyard.

13. Mr Dietrich gave evidence that in 1992 he completed the exterior brickwork to the renovated and refurbished building. There was a surplus of some 8,000 bricks. He used the driveway to shift these by wheelbarrow to the rear yard. Mr Dietrich had planned that these bricks would be used to do the next part of his renovation. It seems that these renovations were not part of those that had been approved in about 1988.

14. Mr Dietrich gave evidence that no further building works were undertaken in the period 1992 to 2001. However, Mr Dietrich continued to make use of the driveway throughout that period.

The 2001 discussions

15. Mr Dietrich deposed that in about May to July 2001 he began planning the installation of a swimming pool in his backyard. He states that he again approached Dorothy Denning and had a discussion about his plans for renovations and construction of a pool “again confirming permission previously obtained to use the battleaxe driveway”. He deposes that a conversation to the following effect took place:

Mr Dietrich: “The only way to access the pool area for the works will be via the driveway. We are asking for your consent to use the driveway for vehicular access to our backyard in future.”

Mrs Denning: “That’s not an issue; you and your family have our consent to use the driveway for vehicular access to your backyard in the future.”

16. Mr Dietrich deposes that accordingly, he planned and located the pool on the understanding that he would be able to access his backyard via the driveway. The pool was installed between about August and December 2001. It was located on the eastern side of the property, behind the attached garage. This meant that it would no longer be possible to modify the garage to create vehicular access to the rear yard.

17. In cross-examination, Mr Dietrich stated that the conversation to which he deposed took place in the Denning’s house, and that Mr and Mrs Denning were present. He also stated that it was not a single conversation, but rather a series of conversations, and that on occasions he discussed his plans with Mr Denning. He then said that Mr Denning could well have been present when Mrs Denning said the words attributed to her. Mr Dietrich denied that the only permission he requested was to have access for the purpose of the works to be done. He further stated that he wanted to get a clear understanding that he would have “continuing ongoing access” to the rear yard.

18. Mr Denning deposed that in 2001 his wife told him about a conversation she had with Mr Dietrich. She said that Mr Dietrich had again asked for permission to use the driveway to complete the pool construction. She said that she told Mr Dietrich that he could have temporary access to the backyard from the driveway to assist the pool construction. She noted that the pool was to be placed behind the garage.

19. Mr Denning gave evidence in chief in the witness box to the effect that his wife would not have done anything on her own and that any request would have been relayed to him. He maintained that no request was ever made for “permanent access” and that he had never agreed that Mr Dietrich could have permanent access to the driveway.

20. Mr Denning agreed in cross-examination that he was aware in 2001 that the location of Mr Dietrich’s pool meant that Mr Dietrich was “blocking his own access off”. Mr Denning said that was not his problem.

21. It appears that after the installation of the pool in 2001 no significant construction works were carried out on Mr Dietrich’s property until about late 2010. During that time, Mr Dietrich continued to use the driveway to gain access to his rear yard.

22. The extent or general frequency of Mr Dietrich’s use of the driveway over the years is somewhat unclear. He undoubtedly used the driveway in order to facilitate the storage of building materials in the rear yard, and to move a box trailer which was kept in the yard. The driveway was also used in connection with the various building works undertaken on the property at 8 Eddy Street. Mr Dietrich or members of his family have parked vehicles in the rear yard from time to time. It seems that this increased in frequency from about 2008. At least in more recent times there have been occasions when numerous vehicles have been parked there. The photographic evidence shows as many as five at one time. A number of photographs show a great quantity and variety of items placed or stacked throughout the rear yard, such as construction related equipment and materials and automotive parts. There is evidence that one of Mr Dietrich’s sons engages in at least some commercial activity (involving the sale of “mag” wheels) and that the driveway may be occasionally used in relation to such activities.

2009-2010 and onwards

23. In about August 2010 Mr Dietrich obtained approval to carry out further building works. These works involved a two-storey extension to the rear of the existing house.

24. By that time, Aaron and Cassandra Denning were living at 8A Eddy Street. Mr Dietrich deposed that he had a conversation with Aaron Denning to the following effect:

Mr Dietrich: “We are currently undertaking extensions to the property and there will be construction men who will require access to the backyard of my property. As such, I just wanted to confirm the consent we obtained previously to use the driveway and extend that consent to the construction workmen.”

Aaron Denning: “Yes, the consent to you and your family is confirmed as was previously given and the construction workmen have our consent to use the driveway.”

Mr Dietrich further deposed that Aaron Denning wanted to be informed of any deliveries that required driveway access, and further wanted the size of the trucks to be limited.

25. In cross-examination, Mr Dietrich denied that at the time of the conversation he understood that he needed the consent of the Dennings to use the driveway. He said that he spoke to Aaron Denning as a matter of courtesy to let him know that workmen would be coming and going. Mr Dietrich stated that, due to his long use of the driveway since 1988, he thought he had the right to continue to use the driveway.

26. This conversation was not specifically dealt with in Aaron Denning’s affidavits. However, he deposed to a conversation with Mr Dietrich in about 2009 to the following effect:

Aaron Denning: “We’re about to renovate and move in. We also want to erect a timber fence to replace the old wire fence to where the original fence went along the driveway.”

Mr Dietrich: “Yes, I agree, but I would like to use the driveway to complete my extension first.”

Aaron Denning: “We will let you have temporary permission to access your backyard using our driveway to complete your extension on a few conditions. Namely, safety is adhered to, you advise me when trucks will be blocking our driveway and any damage you cause to the fence or driveway is repaired at your cost.”

Mr Dietrich: “Thank you and I agree.”

In cross examination, Aaron Denning suggested that the conversation may have occurred in 2010.

27. The conversation to which Aaron Denning deposed was denied by Mr Dietrich. He agreed that in about June 2009 he had a conversation with Aaron Denning about the fence, but says that the conversation was concerned only with a need to shift the corner post to better enable trucks to access 8A Eddy Street. In cross-examination, Mr Dietrich denied that Aaron Denning had given temporary permission to use the driveway subject to a few conditions. He agreed, however, that Aaron Denning had voiced concern about the size of vehicles, and wanted to be told if anything was going to obstruct the driveway. Mr Dietrich explained that “as previously the vehicle access would be limited to smaller vehicles”.

28. Mr Dietrich commenced the further building works involving the extension to the rear of the house in about early 2011. The evidence is not clear as to when the works were completed. It appears they had concluded by about early 2013.

29. Aaron Denning deposed that at about that time he approached Mr Dietrich and said words to the following effect:

Your extension and renovations are complete, so we would now like to progress the replacement of the old wire fence with a timber fence along the full boundary. I’ve obtained a few quotes and will send them through to you over the next couple of days.

30. This conversation is not disputed by Mr Dietrich in his affidavit in reply. He states that Aaron Denning approached him in March 2013 about replacing the fence to the driveway.

31. Aaron Denning did obtain some quotes, although this seems not to have occurred until much later in 2013. Quotes were obtained from Fairview Carpentry in October 2013 and from Local Fencing in December 2013. It is apparent from the latter quote that 23 metres of fence between the driveway and the western boundary of 8 Eddy Street were envisaged. On 20 March 2014 Aaron Denning sent the quotes to Mr Dietrich attached to an email which was in the following terms:

Hi there Max,

I would like to make a start now on erecting a new boundary fence along the driveway and back fence line. I have received some quotes for the fence. Local Fencing is very keen for the work and have received a couple of follow up phone calls with them since.

Apologies for the lateness of this message. If you have questions please don’t hesitate to contact me.

Regards,

Aaron Denning

32. In April 2014 Mr Dietrich engaged Clisdells Valuers to determine a fair market value for a proposed right of carriageway along about 36 metres of the driveway. The value was assessed by Clisdells as $19,000.

33. It is clear that the grant of an easement was the subject of discussion between Mr Dietrich and Aaron and Cassandra Denning. Aaron Denning deposed that in about late 2013 he and Cassandra had a conversation with Mr Dietrich in which words to the following effect were said:

Mr Dietrich: “Would you agree to a right of way easement over your driveway so that I can put a gate in the fence and continue to have access? I would compensate you for this.”

Aaron Denning: “Doesn’t sound like something we would agree to, but we will consider it and get back to you.

…..

If we were to agree to it, parking cars wouldn’t be permitted. It would only be for your trailer storage, not your son’s multiple vehicles.”

34. Cassandra Denning deposed to a conversation in the same (indeed identical) terms. Aaron Denning further deposed that about a week after the conversation he told Mr Dietrich that they were not agreeable to an easement and wanted to put up a fence.

35. Mr Dietrich deposed that he did not make any approach about an easement until late June 2014. He deposed to a conversation to the following effect:

Mr Dietrich: “We have had access to the driveway since 1987 and we did improvements to the property and the backyard on the understanding that we were able to access our backyard via the driveway and had a right to use the driveway. It would be beneficial for all of us to formalise and register the easement of the driveway, confirming that right so that both our families could access the driveway without any issue in future and a formal instrument will be in place.

……

With the formal easement in place, a gate could be installed to allow access for a car and trailer in the backyard of our property.”

Aaron or Cassandra Denning: “We will look into the registered easement; and we consent to the gate that you and your family have access to driveway to access your backyard.”

36. In cross-examination, Cassandra Denning disagreed with the proposition that Mr Dietrich did not request an easement but rather requested that the existing arrangement for an easement be formalised in writing. She also denied that consent was given to a gate. Aaron Denning denied that Mr Dietrich asked him “to formalise their continued access to that driveway”. Aaron Denning also denied that he gave his consent to the installation of a gate.

36. I note that in his second affidavit Mr Dietrich stated that during his conversation with Aaron and Cassandra Denning he spoke about the process for creating a right of carriageway, and said, among other things, that he would engage a valuer to assess fair compensation. If such words were said by Mr Dietrich, it would suggest that the conversation took place prior to April 2014 when he retained Clisdells Valuers .

37. In about July 2014 arrangements were made by the owner of 6 Eddy Street, Mr Tim O’Brien, for a fencing contractor to build a fence along the common boundaries of 8A and 8 Eddy Street, and 8A and 6 Eddy Street. It seems that at some stage instructions were given to the fencer to allow for a gate to be installed between the driveway and Mr Dietrich’s rear yard. Mr O’Brien gave evidence to the effect that this was something he discussed with Mr Dietrich, but not with the Dennings.

38. The fencer attended the site on 29 and 30 July 2014. He constructed the fence along the rear boundaries of 6 and 8 Eddy Street and made a start on the fence that was to go along the boundary between the driveway and Mr Dietrich’s rear yard.

39. On 30 July 2014 Mr Dietrich asked the fencer to provide a quote for a five metre wide sliding gate which could be installed in a gap in the fence that was to be erected on the side boundary between the rear yard and the driveway. Mr Dietrich gave the fencer a sketch plan of what he wanted. The fencer (Kady’s Fencing) prepared a quote for Mr Dietrich on about 7 August 2014.

40. There was also a discussion on 30 July 2014 involving Mr Dietrich and his wife and Aaron and Cassandra Denning. Mr Dietrich’s version of the discussion, is at odds with the version given by Aaron and Cassandra Denning. Mr Dietrich’s wife did not give evidence. It is not necessary to resolve this particular conflict in the evidence. It is apparent that the discussion was at times heated, and that it centred upon the question of the installation of a gate. Mr Dietrich deposed that he believed agreement had been reached and that he was to obtain quotes for the gate for which he himself would pay. Aaron Denning deposed that he felt threatened and stressed by the confrontation and that he said “get your fence quote and we’ll consider it”. Whatever the terms of the conversation, it appears that the situation thereafter reached a stalemate. The fence along the side boundary remains incomplete. No gate has been installed.

41. In about July 2015 the Dennings retained Collins and Thompson Solicitors in relation to the matter. On 5 August 2015 Collins and Thompson wrote to Mr Dietrich in terms that included the following:

We write to confirm that we act for your neighbours, Mr and Mrs Denning who have instructed us in relation to your continued use of their driveway and also your failure to complete the dividing fence as agreed.

We are now instructed by our clients to:

(a) Formally withdraw any permission you may have had to use their driveway at 8A Eddy Street, Thornleigh; and

(b) Cease using the driveway immediately.

We are also issuing you with a Fencing Notice pursuant to Section 11 of the Dividing Fences Act 1991.

…….

43. Mr Dietrich retained P A Khoury Lawyers. On 14 August 2015 they responded, stating in effect that the continuous use by Mr Dietrich of the driveway for the past 27 years created an implied easement in his favour.

44. These proceedings were commenced on 14 September 2015.

Mr Dietrich’s claim that he has an equitable easement

45. Mr Dietrich’s case, as put in closing submissions by Ms S Haddad of counsel, was that in either 1988 or 2001 he was granted “permanent permission” to use the driveway so as to facilitate access to his rear yard. It was further submitted that even if such permission was not given, an “equity of acquiescence” arose in circumstances where the Dennings, who must have known that Mr Dietrich believed he had a permanent right to use the driveway, acquiesced in Mr Dietrich taking steps (such as locating his pool) on the faith of that belief.

46. In this regard Ms Haddad cited the decision of Santow J in Drew v Asimus (1998) 9 BPR 16,531 at 16,549-50 where his Honour stated:

Even though the creation of an easement may not satisfy the legal requirements set out in s 88 of the Conveyancing Act 1919 (NSW), an agreement to provide an easement may be enforceable in equity: Goff v Albury Soldier, Sailors and Airmen’s Club Limited (1995) 6 BPR 14,029. Furthermore, denial of an easement acknowledged by the registered proprietor to exist may amount to fraud in the equitable sense, sufficient to come within s 43 of the Real Property Act 1900 (NSW); this is where the denial in the particular circumstances necessarily involves dishonesty or moral turpitude on the registered proprietor’s part (Bahr v Nicolay (No 2) (1988) 164 CLR 604; 78 ALR 1). Such a doctrine with its extended notion of equitable fraud, is similar in scope to what is termed an equity of acquiescence, described by Fry LJ in Russell v Watts (1883) 25 Ch D 559 (CA), discussed in Bradbrook & Neave, Easements and Restrictive Covenants in Australia, Butterworths, 1981 at pp34-8 who remark that equitable estoppel, because of the inhibition on using it as a sword, has in practice not found as ready a resort. Thus Fry LJ isolated five essential elements:

In the first place, the plaintiff must have made a mistake as to his legal rights. Secondly, the plaintiff must have expended some money, or must have done some act (not necessarily upon the defendant’s land) on the faith of his mistaken belief. Thirdly, the defendant, the possessor of the legal right, must know of the existence of his own right which is inconsistent with the right claimed by the plaintiff. …Fourthly, the defendant…must know of the plaintiff’s mistaken belief of his rights. …Lastly, the defendant…must have encouraged the plaintiff in his expenditure of money or in the other acts which he has done, either directly or by abstaining from asserting his legal right.

(See also Willmott v Barber (1880) 15 Ch D 96 at 105-6 per Fry J.)

47. Mr P Walsh of counsel, who appeared for the Dennings, referred Peter Butt, Land Law (6th ed 2010, Thomson Reuters) at par [1685] concerning the creation of easements by acquiescence or estoppel. From that paragraph, Mr Walsh emphasised that for a right to arise more than mere sufferance under good neighbourliness was required; it was necessary to establish a clear and precise representation that a right will be enjoyed. Mr Walsh submitted that Mr Dietrich’s evidence, which he said had various shortcomings, failed to establish any clear or precise representations that he would enjoy a right in the nature of an easement. Mr Walsh noted that, in the conversations upon which Mr Denning relied, there was no discussion about the nature and extent of any rights to be conferred. Mr Walsh further submitted that, even if Mr Dietrich’s case was accepted at its highest, no personal equity could bind Aaron or Cassandra Denning because they were not parties to the conduct upon which Mr Dietrich’s case is based.

48. In order to succeed on this ground, Mr Dietrich needs to establish the existence of a personal equity against the Dennings that would preclude them from denying that he has rights in the nature of an easement over the driveway (see Frazer v Walker [1967] AC 569 at 585; Breskvar v Wall (1971) 126 CLR 376 at 384-5; Bahr v Nicolay (No 2) (1988) 164 CLR 604 at 613 (Mason CJ and Dawson J), 637 (Wilson and Toohey JJ) and 653 (Brennan J); Hillpalm Pty Limited v Heaven’s Door Pty Limited [2004] HCA 59; (2004) 220 CLR 472 at [54]). No other exception to the principle of indefeasibility of title is suggested.

49. The alleged personal equity primarily rests upon statements made in 1988 and 2001 giving permission to Mr Dietrich to use the driveway. It also rests upon the acquiescence by the Dennings, from 1988, in Mr Dietrich’s continued use of the driveway.

50. I note that the statements made in 1988 and 2001 were made in the course of conversations that occurred many years ago. One of the main participants is no longer alive. There is no contemporaneous written record or summary of what was said. The surviving participants had no occasion to record their versions of events until after they fell into dispute. The evidence concerning the statements needs to be considered with these matters in mind.

The 1988 discussions

51. Mr Dietrich’s evidence concerning what was said in 1988 is problematic. As noted earlier, Mr Dietrich initially deposed only to a conversation with Mrs Denning in which she gave permission to use the driveway “as needed to carry out necessary work”. If such words were said, they amounted to no more than a limited permission to use the driveway.

52. It was only in an affidavit in reply that Mr Dietrich referred to a conversation with Mr Denning. Mr Denning’s version of the conversation was to the effect that permission was given to use the driveway until Mr Dietrich’s renovations were complete. Mr Dietrich did not dispute that version, save that he says that permission to use the driveway was given and the only stipulation was a limit on the size of vehicles using the driveway to deliver building materials. Again, the evidence supports no more than a limited permission to use the driveway.

53. The conversations in 1988 occurred in the context of Mr Dietrich’s planned building works and a corresponding need for vehicles to have access to the rear yard of his property. There is no firm evidence that Mr Dietrich requested more than a permission to use the driveway so as to facilitate the carrying out of the works. Mr Denning gave evidence that Mr Dietrich never asked him for permanent access, and that he never told Mr Dietrich that he could have permanent access. I accept that evidence. Mr Denning gave his evidence in a clear and consistent manner and appeared to be doing his best to give truthful evidence. Even allowing that he clearly had difficulty recalling details of the relevant events, I consider the thrust of his evidence to be reliable.

54. I do not accept Mr Dietrich’s evidence, given in cross examination, that he was given a general permission to use the driveway to have access to the rear yard as it suited him. In my view, it is likely that conversations to the effect of the conversation to which Mr Dietrich initially deposed, and the conversation to which Mr Denning deposed, took place.

55. On that basis, it cannot be concluded that Mr and Mrs Denning agreed to anything more than a request for use of the driveway as required in order for Mr Dietrich to carry out his building works. There was no agreement that Mr Dietrich could use the driveway on a permanent basis, or that Mr Dietrich had or would be given the right to use the driveway on a permanent basis. No representations to that effect were made. Further, it would not have been reasonable for Mr Dietrich to assume that the permission he was given in 1988 was of a permanent or irrevocable nature, or that he had or would be given a right to use the driveway on a permanent basis. The evidence given by Mr Dietrich to the effect that the attached garage he constructed in the period 1988 to 1991 was designed so that drive-through access to the rear yard could be achieved in the future tends to suggest that Mr Dietrich in fact made no such assumptions.

56. Mr Dietrich had completed the first part of his building works by 1992. Notwithstanding the limited nature of the permission he had been given in 1988, Mr Dietrich continued to make use of the driveway. No attempt was made by Mr or Mrs Denning to prevent such use. They must have been aware of this continued use, and they should be taken to have acquiesced in it. In cross-examination, Mr Denning agreed that he raised no objections during the periods when no renovations were being carried out. Mr Denning’s attitude seems to have been, at least up to the time when his wife died in 2008, that everything was going smoothly so there was no reason to object.

The 2001 discussions

57. There are difficulties with Mr Dietrich’s evidence about what was said in 2001. The account contained in his first affidavit suggests that when Mr Dietrich approached Mrs Denning he was seeking confirmation of the permission he had obtained in 1988. The account in the affidavit further suggests that in seeking her consent Mr Dietrich explained to Mrs Denning that the only way to access the pool area for the works would be via the driveway. These are indications that Mr Denning was merely seeking to obtain an agreement (as he did in 1988) that he could use the driveway for the purpose of carrying out building works.

58. Against that, the account in the affidavit also suggests that Mr Dietrich requested a general permission “to use the driveway for vehicular access to our backyard in future”. However, I do not accept that Mr Dietrich made a request in such terms, or that a general permission in such terms was given by either Mrs or Mr Denning. Mr Dietrich gave the impression when giving evidence that he had little recollection of the details of what was said in 2001. I note that in his first two affidavits he refers only to a conversation with Mrs Denning, whereas in his third affidavit he deposed that he had several meetings with both Mr and Mrs Denning. No account of those meetings is provided in the third affidavit. In cross-examination, Mr Dietrich made only general statements to the effect that he had wanted to get an assurance or a clear understanding that he would have “continuing ongoing access” to the rear yard.

59. Mr Denning was adamant that no request for permanent access to the driveway was ever made. I accept that no such request was made to him and I do not think that any such request was made to Mrs Denning. It is likely that any requests made by Mr Dietrich to Mrs Denning concerning the use of the driveway would have been discussed by Mrs Denning with her husband. Mr Denning gave evidence to that effect, and in Mr Dietrich’s third affidavit he deposed that when he approached Mrs Denning to discuss these matters she would tell him that she would discuss it with Mr Denning. I accept Mr Denning’s evidence that he and Mrs Denning had no discussions about giving Mr Dietrich permission to access the driveway on a permanent basis.

60. If Mr Dietrich had wanted to obtain an assurance or a clear understanding that he would have “continuing ongoing access” to his rear yard via the driveway, he would need to raise the issue of a permanent right or permission to use the driveway. I do not think that he did so. Had Mr Dietrich squarely raised the issue, Mr Denning would not have agreed to it. I accept his evidence on this matter too.

61. I have given consideration to the fact that in locating the pool behind the attached garage Mr Dietrich shut off the option of constructing a drive-through access from the garage to the rear yard. Mr Dietrich thus had a reason to consider his position in relation to the driveway, including whether he could count on being able to use it in the future. I note, however, that the viability or desirability of obtaining access via the garage is open to question, given that:

1. the rear section of the garage contains a laundry (including a laundry chute from the first floor bathroom above) and a solar hot water unit;

2. there is a concrete or steel pillar that divides the rear section of the garage from the front section; and

3. reinforced concrete ramps extending about eight to ten metres into the rear yard would need to be constructed. Mr Dietrich gave some answers in cross examination that indicated he was not keen on such ramps.

62. In any case, I am not satisfied that the prospect of losing that option prompted Mr Dietrich to raise the issue of a permanent right to use the driveway. In my view, it is likely that Mr Dietrich merely sought permission to use the driveway for the purpose of carrying out his building works, much as he had done in 1988. Such use would go beyond the scope of use he had enjoyed with the acquiescence of the Dennings since the completion of his earlier works in 1992. Mr Dietrich may well have thought that, following completion of the works, Mr and Mrs Denning would continue to allow him to use the driveway as they had done before.

63. I do not accept that Mr and Mrs Denning agreed in 2001 to anything more than a request for use of the driveway as required in order for Mr Dietrich to carry out his building works. There was no agreement that he could use the driveway on a permanent basis, or that Mr Dietrich had or would be given the right to use the driveway on a permanent basis. No representations to that effect were made. Moreover, even in the light of the lengthy period of acquiescence by the Dennings in his use of the driveway for purposes other than carrying out the building works, it would not have been reasonable for Mr Dietrich to assume that he had a permission to use the driveway of a permanent or irrevocable nature, or that he had or would be given a right to use the driveway on a permanent basis. It is one thing for a landowner, by way of express permission, acquiescence or a combination of both, to allow a neighbour to make some use of the landowner’s land; it is quite another thing for a landowner to agree that a neighbour has a permanent right to make some use of the landowner’s land.

64. After completion of the works (principally the installation of the pool) in 2001, Mr Dietrich continued to make use of the driveway, and the Dennings continued to acquiesce in such use. As Mr Denning stated, at least up until about 2008 everything was going smoothly and there was no reason to object.

2009-2010 and onwards

65. In about August 2010, Mr Dietrich was preparing to undertake further building works, being an extension to the rear of the house. On this occasion he approached Aaron Denning about use of the driveway. According to Mr Dietrich, he told Aaron Denning that construction workers would require access to his rear yard. Mr Dietrich states that he sought confirmation of the consent obtained previously, and asked for the consent to be extended to the construction workmen. He says that Aaron Denning confirmed the consent previously given, and said that the construction workers could use the driveway. I accept that Aaron Denning said words to that effect. The conversation was not denied by Aaron Denning and is consistent with Aaron Denning’s evidence of a conversation with Mr Dietrich in which he gave him permission (subject to some conditions) to use the driveway to complete his extension. I accept Aaron Denning’s evidence that he had a conversation in about 2009 or 2010 with Mr Dietrich in which he gave Mr Dietrich permission, subject to some conditions, to use the driveway for the purpose of undertaking the extension. That such a conversation occurred is supported by some of the answers given by Mr Dietrich in cross-examination. He stated that Aaron Denning had “voiced concern that we limit the size of the vehicles and that we let them know exactly if there was going to be anything that was going to obstruct the driveway”. He also stated that “it was one of the stipulations that he did not want to be put to any inconvenience” and that “as previously the vehicle access would be limited to smaller vehicles”.

66. I do not accept the suggestion that Mr Dietrich merely spoke to Aaron Denning as a matter of courtesy. It seems to me that in about 2010 Mr Dietrich was once again seeking permission to use the driveway for the purpose of carrying out building works. This use would go beyond the scope of the use he had enjoyed, with the acquiescence of the Dennings, during the periods when no works were being carried out. Mr Dietrich gave evidence in cross-examination that by this time he thought that his long use of the driveway gave him the right to continue to use it. The holding of such a belief (whether reasonably based or not) is not necessarily inconsistent with a view that consent would be needed for construction workers to make use of the driveway.

65. Mr Dietrich had completed his extensions by about early 2013. Shortly thereafter Aaron Denning spoke to him about replacing the old wire fence, along the boundary between 8 Eddy Street and the driveway on 8A Eddy Street, with a timber fence. In March 2014 Aaron Denning sent Mr Dietrich some quotes for a new fence. It must have been apparent to Mr Dietrich that the Dennings were asserting that they had the right to prevent him from continuing to use the driveway.

66. Around that time, Mr Dietrich spoke to Aaron and Cassandra Denning about obtaining an easement over the driveway. It seems likely that this conversation occurred around the time Mr Dietrich retained Clisdells Valuers in April 2014. Mr Dietrich gave evidence that he spoke about the process for creating a right of carriageway, which would include him engaging a valuer to assess fair compensation. Aaron Denning gave evidence that Mr Dietrich said he would pay compensation for the easement, but that no amount of money was discussed.

67. It is likely that a conversation along the lines of that deposed to by Aaron and Cassandra Denning took place. That is, Mr Dietrich asked whether they would agree to an easement over the driveway so he could continue to use it for access to his rear yard, and said that he would pay compensation for the easement. Mr Dietrich also spoke about installing a gate. I do not accept Mr Dietrich’s evidence that he merely spoke of formalising an easement or confirming an existing right to use the driveway.

68. It appears that Aaron and Cassandra Denning told Mr Dietrich that they would consider an easement. I accept Aaron Denning’s evidence that he later told Mr Dietrich that they did not agree to an easement and wanted to erect the new fence. As noted earlier, arrangements were in fact made for a contractor to erect new boundary fences. I do not think that Aaron Denning agreed to the installation of a gate. I accept his denials to that effect.

Conclusions

71. As previously noted, the personal equity alleged against the Dennings is founded upon statements made in 1988 and 2001 in which permission was given to Mr Dietrich to use the driveway, and the acquiescence by the Dennings from 1988 in Mr Dietrich’s continued use of the driveway.

72. As far as the statements made in 1988 are concerned, I have not accepted that Mr and Mrs Denning agreed to anything more than a request for use of the driveway as required in order for Mr Dietrich to carry out his building works. They did not agree that Mr Dietrich could use the driveway on a permanent basis, or that he had or would be given the right to use it on a permanent basis.

73. As far as the statements made in 2001 are concerned, I have not accepted that Mr Dietrich requested a general permission to “use the driveway for vehicular access to his backyard in future”. Neither have I accepted that a general permission in such terms was given. Once again, Mr and Mrs Denning did not agree to anything more than a request for use of the driveway as required in order for Mr Dietrich to carry out his building works. They did not agree that Mr Dietrich could use the driveway on a permanent basis, or that he had or would be given the right to use it on a permanent basis.

74. At no time would it have been reasonable for Mr Dietrich to assume that he had permission of a permanent or irrevocable nature, or that he had or would be given a right to use the driveway on a permanent basis. That is the case even allowing for the lengthy period of acquiescence by the Dennings in his use of the driveway for purposes other than the carrying out of the building works. That conduct may be aptly described as the generous, or at least tolerant, behaviour of one neighbour to another. The Dennings’ acquiescence may have led Mr Dietrich to think that the Dennings would most likely continue to allow him to use the driveway following the completion of his building works. However, in circumstances where he did not raise the issue of a permanent right or permanent permission (let alone receive assent to such) Mr Dietrich could not reasonably assume that the Dennings could not require him to cease his use of the driveway.

75. I do not see this as a case of a landowner who, by their conduct, encourages a neighbouring landowner to believe that the latter had or would acquire rights over the former’s land.

76. Moreover, assuming that Mr Dietrich held an erroneous belief that he had a permanent right to use the driveway, I do not think that the Dennings must be taken to know of such a belief. The terms of the conversations of 1988 and 2001 and in particular the fact that permanent access had not been requested by Mr Dietrich or agreed to by the Dennings are not indicative of the existence of such a belief. The mere fact that Mr Dietrich chose to locate his pool in an area which would close off an option for future vehicular access to the rear yard does not in my view lead to a different conclusion. Mr Dietrich gave no evidence to the effect that he told the Dennings that he was locating his pool in that area because he considered he had a permanent right to use the driveway.

77. The above conclusions gain further support from the fact that in 2010 Mr Dietrich again sought permission to use the driveway in relation to construction works, and such a permission was granted subject to conditions. More support is given by the fact that in about April 2014 Mr Dietrich spoke to Aaron and Cassandra Denning about obtaining an easement over the driveway, and in the course of such discussion spoke of the payment of compensation. The making of a payment had not been raised in the earlier conversations concerning the use of the driveway.

78. In summary, Mr and Mrs Denning did not agree that Mr Dietrich had or would be given a permanent right to use the driveway and they made no clear representations to that effect. Moreover, the conduct (including acquiescence) of the Dennings with regard to Mr Dietrich, viewed as a whole as from 1988, does not give rise to any estoppel or “equity of acquiescence” to preclude them, as registered proprietors, from insisting upon their legal rights, including by requiring Mr Dietrich to cease using the driveway. It would not be unconscientious of the Dennings to do so.

79. For the various reasons referred to above, I find that no personal equity arises against the Dennings that would prevent them from asserting their rights as registered proprietors and denying that Mr Dietrich has rights in the nature of an easement over the driveway. Mr Dietrich’s claim for an equitable easement over the driveway is rejected.

80. It is not necessary to determine the point raised by Mr Walsh that, as the conduct upon which Mr Dietrich’s claim rests was that of Albert and Dorothy Denning, not Aaron or Cassandra Denning, no personal equity could arise against the latter couple. The determination of that issue would depend at least in part upon whether Albert and Dorothy Denning ought be regarded as the privies of Aaron and Cassandra Denning such that any estoppel binding the former could be enforced against the latter (see Commonwealth of Australia v Verwayen (1990) 170 CLR 394 at 444 (Deane J)). That question was not addressed in the submissions of counsel.

Mr Dietrich’s claim under section 88K of the Conveyancing Act

81. Section 88K(1)-(2) provides:

(1) The Court may make an order imposing an easement over land if the easement is reasonably necessary for the effective use or development of other land that will have the benefit of the easement.

(2) Such an order may be made only if the Court is satisfied that:

(a) use of the land having the benefit of the easement will not be inconsistent with the public interest, and

(b) the owner of the land to be burdened by the easement and each other person having an estate or interest in that land that is evidenced by an instrument registered in the General Register of Deeds or the Register kept under the Real Property Act 1900 can be adequately compensated for any loss or other disadvantage that will arise from imposition of the easement, and

(c) all reasonable attempts have been made by the applicant for the order to obtain the easement or an easement having the same effect but have been unsuccessful.

‘Reasonably necessary’

82. The first issue to consider is whether the easement sought by Mr Dietrich (a right of carriageway over the Dennings’ driveway) is reasonably necessary for the effective use or development of the property at 8 Eddy Street. The easement is not said to be reasonably necessary for any particular development of the land; it is contended that it is reasonably necessary for the effective use of the land.

83. The relevant principles concerning whether an easement is “reasonably necessary” within the meaning of s 88K(1) were considered by the Court of Appeal in Moorebank Recyclers Pty Limited v Tanlane Pty Limited [2012] NSWCA 445 at [154]-[159]. Relevantly, the Court of Appeal there stated:

154   The requirement that the easement be reasonably necessary for the effective use and development of the land means something more than mere desirability or preferability over the alternative means available: Rainbowforce supra at [76]. However, reasonable necessity does not mean absolute necessity. The correct approach to the question, in our opinion, was stated by Hodgson J (as his Honour then was) in 117 York Street supra as follows:

It is clear that “reasonably necessary” in s 88K(1) does not mean “absolutely necessary”, and thus that the requirement may possibly be satisfied even when the plaintiff’s land could be effectively used or developed without the easement.

In my opinion: (1) the proposed easement must be reasonably necessary either for all reasonable uses or developments of the land, or else for some one or more proposed uses or developments which are (at least) reasonable as compared with the possible alternative uses and developments; and (2) in order that an easement be reasonably necessary for a use or development, that use or development with the easement must be (at least) substantially preferable to the use or development without the easement.

The first of those requirements may seem contrary to a statement by Hamilton J in Tregoyd Gardens (at 14) that the Court “is not to judge upon the reasonableness of the particular development”. However, that statement is qualified by the words “at least in this case”. If there are some possible reasonable uses or developments of the land for which a proposed easement is not reasonably necessary, then it seems to me that the easement cannot be “reasonably necessary for the effective use or development” of the land, at least unless there is some proposed use or development, for which the proposed easement is reasonably necessary, which is itself a reasonable use or development. It may be that the particular use or development would need also to be preferable to the alternatives; but whether or not that is so, it would in my opinion certainly need to be at least reasonable. (at 508–509 citations omitted)

……

156   As we have indicated the authorities have established that the concept of reasonable necessity requires consideration of the effect of the grant of the easement on the servient tenement: O’Shea supra. Further, it is correct in our opinion, that the greater the burden on the servient tenement, the stronger the case needed to justify a finding of reasonable necessity: Rainbowforce supra at [77]; Khattar v Wiese supra at [27]; Woodland v Manly Municipal Council, supra at [12] Lonergan v Lewis supra at [22].

157   As we indicated earlier (para [131]) in Bloom v Lepre supra, Young J stated that where the effect of the easement was to sterilise the servient tenement insofar as the person’s own development or use is concerned, the court is not necessarily quite so favourable to the application. We would put the proposition more strongly. If the effect of the imposition of an easement was to effectively preclude a reasonably available development or use of the servient tenement appropriate to that land, then it would require a strong case of reasonable necessity before the easement would be imposed.

158   The determination of whether an easement is reasonably necessary for the use or development of the land also involves consideration of the alternative methods by which such use or development could be achieved. That is implicit in the concept of reasonable necessity. In the present case it involves the consideration of whether there is alternative access to give effect to the development.

159   None of the factors to which we have referred above can be considered in isolation from the others. Ultimately the question of whether an easement is reasonably necessary for the use or development of the land will be determined by an evaluation of those factors in conjunction with each other.

84. Ms Haddad, addressing the question of reasonable necessity in closing submissions, emphasised that without the proposed easement there could be no vehicular access to the rear yard of 8 Eddy Street. That may be accepted. Ms Haddad also referred to paragraph 38 of Mr Dietrich’s first affidavit which suggests that without continued use of the driveway, he and his family will not have “(vehicular or pedestrian)” access to the rear yard of 8 Eddy Street. Mr Dietrich made a similar statement in paragraph 48 of his third affidavit.

85. This evidence, which was not the subject of specific challenge, is puzzling. It may be that Mr Dietrich was intending to convey only that his use of the driveway has included use as a pedestrian, not that it is impossible to walk from his house into the rear yard other than by way of the driveway. Nonetheless, the latter interpretation is open on the language employed, and Ms Haddad clearly suggested that it was the correct interpretation in relation to the yard at the rear of the house.

86. I consider the evidence to be puzzling, given that:

1. annexure B to Mr Dietrich’s third affidavit, a plan said to show “the main improvements and the difference in levels of the attached garage slab and the rear yard at the back of the 2010 extension”, suggests that between the house and the pool area there is a pathway and steps leading down to the rear yard;

2. some aerial photographs are consistent with that conclusion, but are not definitive;

3. one of the photographs forming part of exhibit 2 and some of the photographs forming part of exhibit C show a doorway where the rear extension meets the rear yard; and

4. whilst Mr Dietrich deposed that he located his pool in such a way that he lost the option of driving through his garage into the rear yard, he gave no evidence to the effect that he designed or constructed any of his works so that it was not possible (or difficult or inconvenient) to walk from the house to the rear yard without using the driveway.

87. Having regard to those matters, I do not accept that it is not possible to walk between Mr Dietrich’s house and his rear yard other than by way of the driveway. Rather, the clear likelihood is that it is possible to walk between the house and the rear yard.

88. Mr Dietrich gave evidence to the effect that if he cannot use the driveway to gain access to the rear yard of 8 Eddy Street he would be unable to:

1. make use of the shed at the rear of the property;

2. store his box trailer in the rear yard;

3. have access to canoes that are stored in the rear yard;

4. have access to certain bulky tools and equipment kept in the rear yard which are sometimes required for his work;

5. continue with his hobby involving restoration of old motor vehicles;

6. clear away fallen leaves and branches from a large gumtree located on the property at 6 Eddy Street;

7. gain access to the “western” side of his house so as to read a gas meter, enter the sub-floor area to service a gas heater, and enter the basement to service a water tank or add an additional water tank; and

8. allow the water authority access to the sewer main that runs across the rear of the property.

Mr Dietrich also gave evidence that additional landscaping works were planned.

89. The evidence provides no explanation as to why use of the driveway is necessary in order to gain access to or under the western side of the house. The survey and photographic evidence does not show that the house is built right up to the boundary. It appears from the survey dated 31 August 2010 that there is a gap of at least 800mm. Neither is it explained why use of the driveway is necessary in order to allow access to the sewer main.

90. It is undoubtedly the case that the use Mr Dietrich currently makes of his property will have to be significantly curtailed unless the easement sought is granted. In particular, the movement of numerous vehicles (including his box trailer) to and from the rear yard would no longer be possible. The ability to move heavy or large chattels (or objects such as tree branches) to and from the rear yard would also become problematic.

91. There is a single space garage at the front of the property. There is room for at least another vehicle to park in the driveway without encroaching on the footpath. There is photographic evidence (exhibit A page 294) that there is room to park another small vehicle in the driveway, between the footpath and the kerb. Nevertheless, such space as is available at the front of the property for parking or storage is plainly not enough to cater for all of that which is presently parked or stored in the rear yard or shed.

92. Evidence of the actual use made of 8 Eddy Street since its acquisition by Mr Dietrich is relevant to the question of reasonable necessity. It must be borne in mind, however, that s 88K(1) is satisfied only if the easement is reasonably necessary for the effective use of the land that would be benefitted. The enquiry is directed to the concept of effective use of the land, not to use by a particular proprietor (see Hanny v Lewis (1998) 9 BPR 16,205 at 16,209; Bloom v Lepre [2008] NSWSC 79 at [45]).

93. In considering the question of reasonable necessity regard must be had to the burden the proposed easement would have upon the servient tenement, in this case 8A Eddy Street: Moorebank Recyclers Pty Limited v Tanlane Pty Limited (supra) at [156]. In this regard I note that the driveway to 8A Eddy Street is the only means of access to the property from the street. The proposed easement would place a significant and ongoing burden upon the servient tenement, conferring a perpetual right upon the owner of 8 Eddy Street to use the driveway over much of its length. This entails a loss of control over the use of the driveway, including the ability to fence it, place a gate across the entrance to it, and undertake aesthetic improvements along its length. Further potential problems would arise from greater traffic, such as temporary blockages of the driveway and the possibility of collisions, particularly where vehicles exit from the rear yard of 8 Eddy Street.

94. I have also borne in mind that property rights are valuable rights, not to be taken away lightly: Khattar v Wiese [2005] NSWSC 1014 at [27].

95. 8 Eddy Street is a suburban residential property. It is located in reasonably close proximity to Thornleigh Railway Station. The property has a street frontage onto Eddy Street, where parking is permitted, although perhaps not always available. There is room for storage and/or parking of vehicles at the front of the property in the garage and in the area in front of the garage. A photograph taken by Aaron Denning in September 2015 (part of exhibit 1) shows that a carport structure, possibly of a temporary nature, has been erected in that area.

96. Vehicular access between Eddy Street and the front of the property is available. There is room in the garage and the area at the front of the garage to park at least two vehicles. Some of the garage and that area can be used for storage. The proposed easement would open up a much larger area at the rear which could be used in that way. That would no doubt be desirable in terms of the manner in which the property could be used. It would also be convenient.

89. However, I am not persuaded that the proposed easement is reasonably necessary for the effective use or development of 8 Eddy Street within the meaning of s 88K(1). Accepting that “reasonably necessary” does not mean “absolutely necessary”, I nonetheless do not accept that the proposed easement satisfies the requirement of reasonable necessity.

90. I find that the property can be effectively used as a residential property without the easement. Some of the aerial photographs in evidence show that the other residential properties in the immediate vicinity lack the ability to bring vehicles to and from their rear yard areas. Access of that kind is a matter of desirability or preferability, falling well short of necessity.

91. I have taken into account that the 8 Eddy Street property may have been developed by Mr Dietrich since 1988 on the assumption that the use of the driveway would continue. However, the weight that can be given to that matter is greatly reduced by the fact that, as I have found, Mr Dietrich did not have a reasonable basis for such an assumption.

92. In all the circumstances, including the significant effect that imposition of the easement would have upon 8A Eddy Street, it seems to me that Mr Dietrich has failed to make out his case of reasonable necessity. It follows that his application for the imposition of the easement must be rejected.

Section 88K(2)

101. It is not necessary to proceed to deal with the matters set out in s 88K(2). However, in case my conclusion concerning reasonable necessity is wrong, I will briefly indicate my views on those matters, and also on the question of compensation.

102. As to s 88K(2)(a), it is my view, on the assumption that a right of carriageway over the driveway is reasonably necessary for the effective use or development of 8 Eddy Street, that the use of the property having the benefit of the easement would not be inconsistent with the public interest. I did not understand Mr Walsh to make any submission to the contrary.

103. As to s 88K(2)(b), Mr Walsh submitted that the Dennings could not be adequately compensated for any loss or other disadvantage that will arise from imposition of the easement. He referred to intangible detriments such as the reduced amenity and enjoyment of their property and exposure to increased disruption and interference. He referred to Khattar v Weise (supra) at [49]-[50]. It is true that if the easement was imposed, and the Dennings retained ownership of 8A Eddy Street, they would suffer some ongoing detriments of a kind that could be described as intangible (such as stress and a general loss of enjoyment of their property). It may be difficult to assess a monetary value to be ascribed to such loss, but in my view such loss could be adequately compensated for by an appropriate monetary payment.

104. As to s 88K(2)(c), there was evidence that Mr Dietrich sought an easement over the driveway and that the Dennings declined to engage in discussions about it. The Dennings have remained opposed to any easement. It seems that all reasonable attempts have been made by Mr Dietrich to obtain such an easement, but those attempts have been unsuccessful. Mr Walsh did not make any submission to the contrary.

105. Accordingly, on the assumption that a right of carriageway over the driveway is reasonably necessary for the effective use or development of 8 Eddy Street, I would have been satisfied of each of the matters referred to in s 88K(2). It would then have been open to the Court to exercise the discretion to make an order imposing the easement (see Khattar v Wiese (supra) at [59]).

Compensation

106. As for the amount of compensation to be paid if the proposed easement was imposed, Mr Sukkar assessed it at $18,600. Mr Chaloner assessed it at $55,000.

107. Mr Sukkar’s figure was made up of a component for blot on title of $10,500 and a component for injurious affection of $8,100. Mr Chaloner’s figure was made up of a component for blot on title of $25,000 and a component for loss in use, and hence value of the land affected by the easement, of $30,000.

108. Mr Sukkar’s approach was based on an assessed underlying land value for 8A Eddy Street of $1,050,000, or approximately $825/m2. (8A Eddy Street has a total area of 1,268.2m2.) Mr Sukkar thought that a reasonable method to assess blot on title is to apply a percentage of between 1% and 2% to the value of the property. Mr Sukkar noted that the property was already blighted with a proposed sub-surface acquisition (concerning a motorway tunnel); he considered that it was appropriate to apply 1%, giving $10,500.

109. In relation to injurious affection, Mr Sukkar applied the $825/m2 to the 131.7m2 area subject to the proposed easement to give an approximate value for that area of $108,000. He then took into account various matters before concluding that the degree of affectation would be between 5% and 10% of the value of the area. That range was selected to reflect what he described as the very low impact that the proposed easement would have on the “parent freehold”. Mr Sukkar adopted a mid-point of 7.5% and arrived at an amount of $8,100.

110. Mr Chaloner assessed the improved value of 8A Eddy Street at $1,600,000 and the land value at $1,200,000. He considered that the amount for blot on title was $25,000. This was based on a comparison with the circumstances dealt with by Austin J in Mitchell v Boutagy [2001] NSWSC 1045; (2001) 118 LGERA 249 which concerned a drainage easement. Mr Chaloner said that a blot on title for a right of carriageway is more significant than a blot on title for a drainage easement.

111. In relation to loss in use, and hence value of the land affected by the easement, Mr Chaloner cited various matters which he said were “detrimental”, and concluded that there would be a loss of value of $30,000.

112. Both of the valuers were cross-examined.

113. Guided by the approaches taken by the valuers, had it been necessary to assess compensation I would have assessed an amount for blot on title and an amount for loss of value attributable to the degree of detrimental affectation brought about by imposition of the easement.

114. The approach taken by Mr Sukkar to assessing the blot on title seemed to me to be preferable to that taken by Mr Chaloner. Mr Chaloner’s approach placed considerable emphasis on the effects which particular types of easements are likely to have. This seemed to me to entail a risk of double counting – that is, a risk that amounts reflecting detrimental affectation might be included in the blot on title amount. Based upon Mr Sukkar’s approach, I consider that it would be appropriate to assess the blot on title amount by reference to a range of between 1% and 2% of the land value of the property.

115. The difference between the valuers as to land value was not explored in cross-examination. I would adopt the average of the two values, being $1,125,000. That is about $887/m2. As far as the appropriate percentage to apply is concerned, I think that Mr Sukkar’s 1% is too low. He states that the property is “already blighted” by the proposed sub-surface acquisition, but I agree with Mr Chaloner that this would not provide any significant diminution in value. Further, it seems to me that a right of carriageway over the driveway to a battleaxe block would generally be regarded as a significant impairment upon the title. I think it would be reasonable to apply a percentage of about 1.6%. When that is applied to the assumed land value of $1,125,000 a figure of $18,000 is obtained.

116. Turning to loss of value attributable to detrimental affectation, it is my view that Mr Chaloner’s approach is broadly preferable to that of Mr Sukkar. Mr Sukkar proceeded on the basis that the inconvenience brought about by the easement would be nominal, whereas I have found that the easement would place a significant and ongoing burden upon 8A Eddy Street. I think his assessment of loss of value is too low. On the other hand, Mr Chaloner’s approach proceeds on a basis that is essentially consistent with my finding.

117. In cross-examination, Mr Chaloner accepted that his conclusion was a valuation judgment not based on evidence of transactions in the market. However, he was tested concerning a number of the matters he nominated as “detrimental”, and he was largely able to justify his position. On the basis of Mr Chaloner’s evidence I would be prepared to accept that the diminution in value for detrimental affectation would be in the order of about $25,000. I note that Mr Chaloner further expressed the opinion that there would be a diminution of about 20% in the value of the land affected, being the area of the easement. The area of the proposed easement is 131.7m2. If a rate of $887/m2 is applied to the area, a value of the easement area of about $117,000 is obtained. 20% of that amount is about $23,400.

118. I referred earlier to detriments of an intangible kind that would be suffered by the Dennings if the easement was imposed. It seems that most of these have been taken into account amongst the matters identified by Mr Chaloner. However, I think that it would be appropriate to include a small further allowance for such matters.

119. For the foregoing reasons, had it been necessary to assess the compensation payable under s 88K for the imposition of the easement, I would have assessed it at $45,000. I would regard that as appropriate and adequate compensation for the loss or other disadvantage that would arise if the easement was imposed.

Conclusion

120. Mr Dietrich’s claims that he has an equitable easement over the driveway, or alternatively that an easement over the driveway should be imposed, have not been made out. The Dennings were entitled to withdraw permission to use the driveway. The Dennings did not file a Cross-Summons, and Mr Dietrich did not contend that the Dennings failed to give adequate notice of revocation of permission, or that upon revocation a further period should be allowed, for example to permit the removal of items from the rear yard (see Winter Garden Theatre (London) Limited v Millennium Productions Limited [1948] AC 173 at 196-7 (Lord Porter)). Nevertheless, in the interests of finality, I think that it would be appropriate to allow a further period for that purpose. A period of four weeks would be reasonable. Otherwise, Mr Dietrich’s Summons must be dismissed. It is appropriate that Mr Dietrich pay the Dennings’ costs of the proceedings.

121. I direct the parties to bring in Short Minutes to give effect to these reasons. This should be done within 14 days.

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Decision last updated: 12 May 2016