O'Shea v Athanasakis

[2009] NSWSC 1150

CITATION:	O'Shea & Anor v Athanasakis & Ors [2009] NSWSC 1150 This decision has been amended. Please see the end of the judgment for a list of the amendments.
HEARING DATE(S):	6/10/09, 7/10/09, 8/10/09
JUDGMENT DATE :	17 November 2009
JUDGMENT OF:	Forster J at 1
DECISION:	See paragraphs 125 and 126 of judgment.
CATCHWORDS:	Loss of easement - relief against forfeiture - circumstances in which relief against forfeiture will be granted - requirement of unconscionable or unconscientious conduct - on facts, no such relief granted. - - Conveyancing Act section 88K - imposition of easement - whether reasonably necessary - on facts, easement not imposed.
LEGISLATION CITED:	Conveyancing Act 1919 (NSW)
CATEGORY:	Principal judgment
CASES CITED:	117 York Street Pty Limited v Proprietors of Strata Plan No. 16123 (1998) 43 NSWLR 504 Bloom v Lepre [2008] NSWSC 79 Ciavarella v Balmer (1983) 153 CLR 438 D & D Corak Investments Pty Ltd v Yiasemides [2006] NSWSC 1419 Gittany v McDowell [2009] NSWSC 591 Hanny v Lewis (1998) 9 BPR 16,205 Legione v Hateley (1983) 152 CLR 406 Shiloh Spinners Limited v Harding [1973] AC 691 Stern v McArthur (1988) 165 CLR 489 Tanwar Enterprises Pty Ltd v Cauchi (2003) 217 CLR 315 The Owners Strata Plan No. 13635 & Ors v Ryan [2006] NSWSC 221
PARTIES:	Plaintiffs- John Emmet O'Shea and Elizabeth O'Shea First Defendant- Helen Athanasakis Second Defendant-The Registrar General, Department of Lands Third Defendant- ING Bank (Australia) Ltd
FILE NUMBER(S):	SC 2577/09
COUNSEL:	Plaintiff- I. Pike, E. Bishop Third Defendant- D.P.Robinson SC
SOLICITORS:	Plaintiff-J.P.O'Neill Solicitors Third Defendant-Gadens Lawyers

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

FORSTER J

TUESDAY, 17 NOVEMBER 2009

(2577/09) JOHN EMMET O’SHEA & ANOR v HELEN ATHANASAKIS & ANOR

JUDGMENT

1 HIS HONOUR: In 1955, Mrs O’Shea became the registered proprietor of 27 Adelaide Street, Clontarf (“the Adelaide Street property”). In 1961 she transferred a one half interest to her husband, Mr O’Shea. Ever since that time the O’Sheas have been the registered proprietors of the Adelaide Street property. They have lived there since 1962, although Mrs O’Shea has recently moved to a nursing home and will not be returning to live in the Adelaide Street property.

2 The third defendant (“ING”) is a mortgagee in possession of property adjacent to, and directly to the south of, the Adelaide Street property, namely the property at 34 Alma Street, Clontarf (“the Alma Street property”). In 1986 an easement was registered, burdening the Adelaide Street property in favour of, and appurtenant to, the Alma Street property (“the Easement”). The Easement provided in favour of every person who was from time to time in possession of the Alma Street property a limited right of carriageway and a limited right of footway over the Adelaide Street property.

3 On 4 June 2009, this Court declared that the O’Sheas are entitled to release the Easement.

4 By its cross-claim, ING seeks:

(a) an order granting relief against forfeiture in respect of the release of the Easement; or

(b) in the alternative, pursuant to section 88K of the Conveyancing Act 1919, an order imposing an easement over the Adelaide Street property in favour of the Alma Street property in the same terms as the Easement (“the Proposed Easement”).

5 The principal issues for determination by this Court are:

(a) whether the Court should grant relief against forfeiture in respect of the release of the Easement, and if so, on what terms, if any; and

(b) if no, whether the Court should impose the Proposed Easement over the Adelaide Street property in favour of the Alma Street property, and if so, what compensation should be ordered in favour of the O’Sheas, if any.

Background facts

6 The background facts are not in any substantial dispute. In any event, I find them to be as follows.

7 As I have already noted, Mrs O’Shea became the registered proprietor of the Adelaide Street property in 1955. In 1956 Mr and Mrs Palme became the registered proprietors of the Alma Street property. Mrs O’Shea and Mrs Palme are sisters.

8 In the same year, namely 1956, the Palmes lodged a building application with the Manly Council for the erection of a dwelling on the Alma Street property. That property, which I have already noted is adjacent to, and directly to the south of, the Adelaide Street property, is at substantially the same level for approximately one half of its area, being the area closest to the Adelaide Street property, but then falls steeply to the south towards Alma Street. Having regard to the slope in question, it was made clear in the Palmes’ 1956 building application that their vehicular access would be through the Adelaide Street property, substantially over the same area as that over which the Easement came to extend after 1986.

9 The Council approved the application and the Palmes entered into occupation of their dwelling on the Alma Street property in 1957.

10 Subsequently, the O’Sheas also lodged a development application with Manly Council to build a dwelling on the Adelaide Street property and in about 1962 they moved into the dwelling erected on the Adelaide Street property.

11 Ever since the time the Palmes commenced occupying their dwelling on the Alma Street property, they used the Adelaide Street property as their sole means of vehicular access. They parked their vehicles on a small area located on the south eastern corner of the Adelaide Street property, adjacent to the Alma Street property (“the Parking Area”). The Adelaide Street property being substantially flat, the Parking Area was more or less on the same level as Adelaide Street (which the Adelaide Street property fronted) but it was at a significantly higher level than Alma Street. Indeed, it would have been, as it still is, virtually impossible to drive a vehicle from the Parking Area to Alma Street.

12 Given the close family relationship between the O’Sheas and the Palmes, this form of vehicular access continued to be made available to the Palmes by the O’Sheas on an informal basis until 1986. In that year, the Palmes decided to sell the Alma Street property. They were advised that in order to maximise the price they would obtain for it, they would need to obtain a formal recognition of a right to access Adelaide Street from the Parking Area.

13 In order to assist the Palmes, and for no monetary consideration, the O’Sheas transferred the Parking Area to the Palmes, whereupon it became incorporated into, and thereafter formed part of, the Alma Street property. At the same time, they agreed to the creation of the Easement in favour of the Alma Street property.

14 Under the terms of the Instrument created pursuant to section 88B of the Conveyancing Act 1919 (“the Instrument”), which was registered on 27 November 1986, the terms of the Easement were stated to be as follows:

“(1) Full and free right for every person who is at any time entitled to an estate or interest in possession in the lot benefited (herein called “the benefited owner”) and every person who is at any time authorised by him, to pass and repass over the carriageway;


(a) by a motor vehicle not exceeding 6 metres in length;

(b) by foot but only for the purpose of putting out household refuse for collection.


(2) No motor vehicle shall stop whilst on the carriageway except that the benefited owner shall not at any time prevent, impede or otherwise obstruct or attempt to prevent, impede or otherwise obstruct any person who is at any time entitled to an estate or interest in possession in the lot burdened (herein called “the burdened owner”) from parking any motor vehicle on the carriageway for the purpose of loading or unloading the said motor vehicle.

(3) No more than two motor vehicles shall use the carriageway at any one time.

(4) so long as the benefited owner shall be entitled to pass and repass over the carriageway, he shall pay to the burdened owner-


(a) on 1 ^st January of each and every year commencing from 1 ^st January 1987, the sum of $500.00;

(b) on demand, 20% of the amount by which the rates and taxes are increased above the basic amount of rates and taxes levied in respect of the lot burdened;

For the purpose of this Clause:


(i) “rates and taxes” shall mean all rates, taxes and charges of any shire or municipal council and Water Board levied in respect of the lot burdened.

(ii) “basic amount of rates and taxes” means:

(a) in respect of municipal rates, the sum of $1,583.37,

(b) in respect of Water Sewerage & Drainage rates the sum of $818.32.”

15 In the Instrument, the reference to “the lot benefited” is a reference to the Alma Street property and the reference to “the lot burdened” is a reference to the Adelaide Street property.

16 The Instrument provided the persons having the right to release, vary or modify the right of carriageway as being:

“The registered proprietor for the time being of Lot 1 in the abovementioned plan of subdivision, namely the registered proprietor for the time being of the Lot burdened, provided that the said right shall not be exercised unless there has been a breach of the terms of the right of carriageway set out herein.”

17 Again, the reference to “lot 1” is a reference to the Adelaide Street property.

18 Shortly thereafter, the Palmes entered into a contract to sell the Alma Street property to a Mr and Mrs Russo, and by Transfer dated 1 April 1987, they completed the sale. Shortly after their acquisition of the Alma Street property, the Russos lodged a building application with the Manly Council for various improvements to the dwelling, including the addition of a further bedroom and a swimming pool. The application also provided for the erection of a double garage on the Parking Area. Until that time, there had been a single carport and a single garage located on the Parking Area.

19 The Council approved the application, and its chief health and building surveyor’s report noted that vehicular traffic from Alma Street property would be through a “vehicular right-of-way from Adelaide Street”. The Russos then proceeded to further develop the Alma Street property in accordance with the Council’s approval.

20 The Russos remained in occupation of the Alma Street property until 1994, when they transferred it to Mr and Mrs Athanasakis. In March 1999 Mr Athanasakis left and transferred his interest in the Alma Street property to Mrs Athanasakis. From about that time, Mrs Athanasakis also ceased to occupy the Alma Street property but rented it to a series of tenants.

21 Subsequently, in 2002, Mrs Athanasakis executed a mortgage over the Alma Street property in favour of ING and in 2007, she defaulted under the various loan agreements secured by ING’s mortgage. In December 2008, ING obtained judgment for possession of the Alma Street property by an order of this Court, and in February 2009, it took possession of the Alma Street property and has remained in possession of it ever since.

22 Since the time the Russos purchased the Alma Street property in 1987 those in possession of the Alma Street property from time to time breached the terms of the Easement in various ways, including the following:

(a) cars being parked and washed on the Easement;

(b) tradesmen using the Easement;

(c) real estate agents driving into the Easement and using it to show the Alma Street property;

(d) persons using the Easement as a regular means of ingress and egress from the Alma Street property;

(e) removalist trucks being parked on the Easement;

(f) four wheel drives being left on the Easement and washed there;

(g) a flower bed along the Easement being damaged;

(h) various items of stock being delivered to the dwelling on the Alma Street property, which was being used partly for business purposes; and

(i) customers of the business using the Easement to collect purchased goods.

23 Further, on 1 January 2008, and again on 1 January 2009, the amounts of $500.00 per annum referred to in the Instrument were not paid to the O’Sheas, nor was the further amount, referred to in clause (4)(b) of the terms of the Easement paid in respect of the 2008 year, notwithstanding a demand having been made by the O’Sheas on Mrs Athanasakis.

24 On 22 October 2008 proceedings were commenced by the O’Sheas against Mrs Athanasakis in the Local Court for the amounts owing to them and on 14 January 2009 a default judgment was entered against her.

25 On 11 February 2009 the O’Sheas filed with the Department of Lands a Request to Release Right of Way. As the Department refused to comply with that Request without an order from this Court, on 30 April 2009 the O’Sheas commenced these proceedings.

26 Having entered into possession of the Alma Street property, ING appointed a selling agent, scheduling an auction for 20 June 2009. On receiving notice of these proceedings, ING by its solicitors sent to the O’Sheas’ solicitors a cheque in the sum of $1,892.34, being the aggregate of the judgment debt obtained by the O’Sheas in the Local Court proceedings together with the sum of $500.00 due on 1 January 2009 under the terms of the Instrument.

27 Negotiations followed between the O’Sheas and ING, and the O’Sheas conceded that, for the purposes of section 88K(2)(c) of the Conveyancing Act, ING has made all reasonable attempts to obtain the Proposed Easement, but it is clear that those negotiations have been unsuccessful.

28 In those circumstances, ING cancelled its planned auction pending the outcome of these proceedings.

Issues of fact

29 Before I turn to considering the principal issues raised, I propose to make certain findings of fact. Those issues of fact are my conclusions on the following:

(a) the adverse effect on the Adelaide Street property of an easement in the terms of the Easement (sometimes referred to as the “injurious affection”); and

(b) the adverse effect on the Alma Street property of the absence of any such easement.

30 It may not be necessary for me to determine all of the said matters having regard to the conclusion that I have reached. However, should I be found to have been in error in that conclusion, my findings of fact might be of use should an appellate court choose finally to determine all issues rather than remit the matter for further factual determinations.

(a) The effect on the Adelaide Street property.

31 Mr Edmonds, the valuer called by ING, expressed the opinion that the value of the Adelaide Street property, unburdened by any such easement, would be $2,140,000. Mr Foley-Jennings, the valuer called by the O’Sheas’, was of the opinion that that value would be $2,500,000.

32 In the opinion of Mr Edmonds, the value of the Adelaide Street property, if burdened by such an easement, would be $2,030,000, a diminution of $110,000. According to Mr Foley-Jennings, the value of the Adelaide Street property, if so burdened, would be $2,250,000, a diminution of $250,000. Thus the range of opinions of the two valuers in relation to the injurious affection of the Adelaide Street property is between $111,000 and $250,000.

33 Both valuers ultimately followed the same route in reaching their respective conclusions. Ironically, both initially calculated the value of the Easement by taking a percentage of the per square metre value of the parcel of land over which the Easement extended. Mr Edmonds considered that the range of the relevant percentage is between 20 percent and 50 percent, and ultimately settled on a figure of about 45 percent, while Mr Foley-Jennings considered that in the present case, 86 percent was the appropriate figure.

34 However, both valuers ultimately changed their approach and expressed the view that the appropriate way to calculate the value of the Easement (and hence the injurious affection on the property burdened by it) is to apply one’s subjective experience, taking into account recent or relatively recent sales information. While Mr Foley-Jennings totally abandoned the use of the method involving the application of an appropriate percentage to the land value affected, Mr Edmonds still maintained that such method was at least an appropriate way of cross-checking the result.

35 Mr Edmonds initially worked on the basis that the land value of the Adelaide Street property was $1,300,000 and assumed that the area over which the Easement extended was appropriately 170 square metres out of a total land area of 899 square metres. Applying his percentage formula, he calculated the value of the Easement as being $110,000.

36 Subsequently, Mr Edmonds made two adjustments to his calculations which, by and large, cancelled each other out. First, he reviewed his opinion as to the land value of the Adelaide Street property and increased it from $1,300,000 to $1,600,000. On the other hand, he corrected his assumption of the area affected by the easement from 170 square metres to 130 square metres. As a consequence, although he now conceded that the appropriate role for this calculation is only as a check, he maintained his original view that $111,000 represented a fair estimate of the value of the Easement, and its injurious affection to the Adelaide Street property.

37 By contrast, Mr Foley-Jennings attributed a value of $2,000,000 to the land value of the Adelaide Street property and, applying the same formula as Mr Edmonds, but using a percentage of approximately 86 percent, reached the conclusion that the value of the land the subject of the easement was $250,000.

38 Both valuers maintained their view that the analysis of comparable or largely comparable sales supported their respective opinions.

39 With certain qualifications, I prefer the opinion of Mr Edmonds. I found him to be a careful and conservative valuer who approached his task with the seriousness that it deserved. By comparison, I thought, I hope not too unkindly, that Mr Foley-Jennings, although an experienced valuer, was affected by a degree of emotion in the task he had to perform. He was prone to making somewhat less considered and more extreme pronouncements. Overall, I found that I had a greater degree of confidence in the opinions expressed by Mr Edmonds.

40 I also had the benefit of a view. It is quite clear that the house on the Adelaide Street property has been built to take advantage from its western side of a splendid view over the Spit Bridge and Middle Harbour. It has an abundance of windows facing in that direction. Nevertheless, I accept that in some conditions, particularly in the hot summer months, the western side of the house can be quite warm, particularly in the afternoons, and that a degree of pleasure can be derived from sitting outside on the eastern side of the house at those times. The evidence before me indicates that particularly Mrs O’Shea used to enjoy sitting on the porch on the eastern side of the house, and it was when she was sitting there that she found the Easement to be most oppressive.

41 While I accept the evidence of Mr Foley-Jennings to the effect that there is no view to enjoy sitting on the eastern side of the building, I consider, particularly with the benefit of having been there, that there is a substantial interference with privacy occasioned by the existence, and certainly by the abuse, of an easement of the kind in question. For example, it makes it very difficult to erect a fence across the whole northern boundary of the Adelaide Street property to give the impression of an enclosure. While Counsel for ING made the submission that there would be nothing to prevent the owner of the Adelaide Street property to erect a fence along the northern boundary of the Adelaide Street property, provided that the fence or a gate incorporated in the fence was capable of being opened, I consider that such development of the Adelaide Street property would not be particularly sightly.

42 Further, the presence of the Easement also affects the land to the west of the Easement, limiting its use. It was suggested that were the Easement not in existence, a swimming pool could be installed to the east of the building of the Adelaide Street property. Perhaps more realistically, an attractive garden with shrubs and bushes could be planted there.

43 More importantly, in my opinion, the psychological effect of not having exclusive possession of one’s home would have to be given greater weight than might be the case were the Adelaide Street property a commercial or industrial site.

44 In the circumstances, in my opinion, starting with Mr Edmonds’ calculation but increasing it by reason of the matters to which I have referred, I estimate that the injurious affection on the Adelaide Street property occasioned by an easement in the terms of the Easement would be $110,000 or perhaps a little more.

(b) The effect on the Alma Street property.

45 There can be no doubt that the Alma Street property would have been a difficult block to build on in the first place. It rises very steeply from Alma Street at its south and rises to a height practically level with the Adelaide Street property on its north. There is pedestrian access from Alma Street, leading up a steep set of steps to the house but there is presently no vehicular access to Alma Street.

46 In that respect, the Alma Street property is unusual when compared to the properties both to its east and to its west. The only other property on the northern side of Alma Street without vehicular access to Alma Street is the property adjoining it to the east. However, that property has access to Adelaide Street given that it stretches from Alma Street to Adelaide Street.

47 The other properties along the northern side of Alma Street all have some sort of vehicular access from Alma Street, but they have varying solutions to parking issues. Most of the properties have garages at the northern ends of driveways from Alma Street. Some driveways are steeper than others, depending upon the contours of the property in question. By contrast, one of the other properties has no garage or carport, but there is a hard stand area on which cars are parked. In the case of each of those properties (other than the Alma Street property and the property adjoining it to the east) it is necessary to climb further steps to the entrance of the residence on that property. It would appear that the contours of each parcel of land dictates the distance from the garage to the residence and the number of steps that have to be climbed.

48 There can be no doubt that the Easement substantially benefited the Alma Street property. It enabled the occupants of that property to drive into the garage situated on the Parking Area, which is at substantially the same level as the main living area of the house on the Alma Street property. Accordingly, there were few, if any, steps to negotiate when the occupants came home, perhaps carrying packages of groceries or other items.

49 There was a significant amount of evidence before me as to the effect on the Alma Street property in the absence of such an easement. The first issue to determine is whether the local council would approve an application by the occupier of the Alma Street property to create a driveway into that property from Alma Street. The experts seemed to agree that the answer to that issue would be in the affirmative, and indeed, Mr Grech, the town planning expert called by ING, went further by opining that the Council may indeed require that to occur to avoid further pressure on off-street parking in Alma Street.

50 Taking into account the foregoing evidence, as well as the streetscape of Alma Street, with the vehicular access from Alma Street being available to all but two of the properties along the northern side of the street, I find that the Council would not refuse permission for such access.

51 The second matter to determine is the likely nature of the off-street parking that might then be provided. The general consensus between the various experts appears to be that the appropriate course would be to erect a double garage somewhere near the eastern boundary of the Alma Street property, to which a driveway would lead from Alma Street. There was evidence before me as to how far from the southern boundary of Alma Street such garage would have to be set back, and indeed how far it would be most convenient to set it back. The factors bearing on that issue are the costs of the excavation that would be required, the costs of the driveway and the closeness of the garage to the house, which would have a bearing on the number of steps that would still have to be climbed in order to reach the house.

52 There was some evidence before me about the possibility of installing a lift from the garage to the house, but the evidence before me on that issue does not permit me to express any firm views.

53 There was also evidence before me as to the costs of erecting such a garage. Such evidence as is before me permits me to find, and I do find, that the cost of constructing a new double garage close to the eastern boundary of the Alma Street property and set back even further than six metres from Alma Street would be $119,020. This estimate includes professional costs, appropriate Council and other levies and fees, the demolition of the front fence, the repair and updating of existing pathways and steps, excavation, construction of a concrete driveway and footpath crossing, landscaping and the preparation of a pedestrian path and steps from the garage to access the existing house.

54 I should add that this amount does not include expenses which a developer might take into account, such as holding costs or developers’ profits. I do not consider these amounts to be relevant, as I accept Mr Foley-Jennings’ evidence that the Alma Street property would be of no interest to developers and will almost certainly be purchased by a proposed owner/occupier. Nor does this figure include the cost of a lift, because I am by no means satisfied that a lift would be necessary having regard to the proposed location of the garage.

55 What then is the overall effect on the Alma Street property of the loss of such an easement?

56 There is no doubt that the value of the Alma Street property would decrease without the benefit of the Easement or the Proposed Easement. I consider it likely that any purchaser would wish to install a garage of the kind to which have I referred at a cost of approximately $119,000. Other than that cost, and the undoubted temporary inconvenience that would accompany its construction, I do not consider that the Alma Street property would be detrimentally affected in any other substantial manner.

57 It was submitted on behalf of ING that the loss of the easement would mean that any purchaser would have to climb many more steps to reach the main living area of the house and that this would discourage people of a more advanced age who would not be able to cope with those additional steps.

58 I do not place too much weight on that submission. Having regard to the construction of the house itself, which takes full advantage of the views over Middle Harbour, there are already a substantial amount of stairs to be negotiated just by living in the house itself. For that reason alone, it would not be an ideal home for elderly people, people with physical disabilities or perhaps even people with very young children. In any event, it must be remembered that the Easement did not provide for it being used for pedestrian traffic. Accordingly, when the occupants of the Alma Street property or their visitors or guests wished to enter the house, they were always obliged to walk up the stairs from Alma Street, unless it was the occupants themselves, travelling by car. That of itself, must always have been a serious disincentive for any such person to have any interest in acquiring that property.

59 In my opinion, the Easement was always of limited value, the restrictions on its use being quite significant. Further, because it was so easy to breach with the consequence of it being lost, the Easement was in reality of a somewhat fleeting or evanescent nature. By comparison, a garage situated on the Alma Street property itself would have a degree of permanence which might be important to many potential purchasers.

60 In addition, the present appearance of the Alma Street property, viewed from Alma Street itself, is somewhat out of place when compared to the various other properties along the northern side of the street, all of which have tidy driveways leading to often quite attractive garages. The present appearance of the Alma Street property from Alma Street presents as neglected and overgrown, an appearance which in my opinion may well be ameliorated by the inclusion of a garage.

61 Finally, the garage which presently stands on the Parking Area, which admittedly would be deprived of any vehicular utility in the absence of the Easement would not be totally wasted. Being on the same level as the main living area of the house on the Alma Street property, it could be used as a convenient storage area or in some other useful way.

62 In the circumstances, while I am not in a position to calculate the precise diminution in the value of the Alma Street property should the Easement no longer be available to it, I do not consider that that diminution would be nearly as great as that calculated by Mr Edmonds, who attributed to that diminution a value of $650,000. In my opinion, having regard to the likely cost of erecting a garage, the diminution in the value of the Alma Street property would not be very different from the little over $111,000 which I have found represented the diminution in the value of the Adelaide Street property by reason of the existence of the Easement.

First issue: relief against forfeiture

63 Both parties agree that the resolution of this first issue, namely whether the Court should grant relief against forfeiture in respect of the release of the Easement, was governed by the decision of the High Court in Tanwar Enterprises Pty Ltd v Cauchi (2003) 217 CLR 315. Both parties submitted that that decision, particularly the reasons of the majority, comprising Gleeson CJ, McHugh, Gummow, Hayne and Heydon JJ, supported their respective client’s position.

64 Mr Robinson SC for ING submitted that the decision in Tanwar distinguishes cases such as ShilohSpinners Limited v Harding [1973] AC 691 (which dealt with the forfeiture of a lease) from cases such as Legione v Hateley (1983) 152 CLR 406, Stern v McArthur (1988) 165 CLR 489 and Tanwar itself, all of which dealt with situations involving the failure of a purchaser under a contract for the sale of land to complete the contract within time that had become of the essence. He submitted that there is a basic difference between a case where forfeiture is pursuant to an express provision of a contract contemplating its breach, and the case where forfeiture is the automatic consequence of termination by the innocent party, that is to say the party which is not in breach.

65 He submitted that in the former case, the contract is one of which the “primary object” is to secure a stated result, which a forfeiture clause is to promote. Forfeiture is not its “primary object”; it only encourages the attainment of a stated result, the most typical example occurring in the context of the landlord and tenant relationship, where the stated result is the payment of rent and the fulfilment of the lessee’s various other obligations.

66 By contrast, in the latter situation, there is no express provision providing for forfeiture and hence forfeiture serves no function. It is the inevitable result of termination by the innocent party, occurring principally in cases of contracts for the sale of land.

67 Mr Robinson submitted that the case before me falls in the former category, being analogous to the lease cases in that the right to release the Easement had been added by way of security for the production of a stated result, namely compliance with its terms. In those circumstances, Mr Robinson SC submitted that the governing principles are those articulated particularly by Lord Wilberforce in Shiloh Spinners at [723-4] in the following terms:

“…it remains true today that equity expects men to carry out their bargains and will not let them buy their way out by uncovenanted payment. But it is consistent with these principles that we should reaffirm the right of courts of equity in appropriate and limited cases to relieve against forfeiture for breach of covenant or condition where the primary object of the bargain is to secure a stated result which can effectively be attained when the matter comes before the court, and where the forfeiture provision is added by way of security for the production of that result. The word ‘appropriate’ involves consideration of the conduct of the applicant for relief, in particular whether his default was wilful, of the gravity of the breaches, and of the disparity between the value of the property of which forfeiture is claimed as compared with the damage caused by the breach.”

68 By contrast, Mr Pike submitted that the High Court in Tanwar took a more restrictive approach to the availability of relief against forfeiture, in that in all cases it required, as a condition of such relief, some form of unconscionable or unconscientious conduct on the part of the party against whom such relief is sought.

69 It is therefore necessary to review the decision in Tanwar carefully to understand where the law stands. In order to do so, it is necessary first to go back to the decision in Legione, which involved a vendor-purchaser dispute. In that case, a statement made on behalf of the vendor’s solicitors had helped lull the purchasers into the belief that the vendor would agree to late completion. In reliance on that statement, the purchasers effected improvements to the property, only to find that the vendor sought to rescind the contract for sale.

70 The High Court dealt with the dispute principally on the basis of promissory or equitable estoppel. As to the alternative issue of whether there ought to be relief against forfeiture, the order made by the High Court was only that the issue be remitted to the Supreme Court of Victoria for determination.

71 The decision in Legione was distinguished the following year by the High Court in Ciavarella v Balmer (1983) 153 CLR 438. In that case, the appellant before the High Court sought leave to amend his notice of appeal so as to claim relief against forfeiture, invoking in support of his application the then very recent decision in Legione. That application was refused but the reasoning for such refusal by a unanimous court comprised of Gibbs CJ, Mason, Wilson, Deane and Dawson JJ is most instructive. Their Honours placed significance on the presence or absence of unconscionable conduct. They said at pages 453-4:

“…in Legione v Hateley, the material in evidence strongly indicated unconscionable conduct on the part of the vendor in seeking to insist on the rescission of the contract in circumstances where the statement of the vendor's solicitors had helped lull the purchaser into a belief that the vendor would accept completion, provided it took place within a few days and where the consequence of rescission was that the vendor would reap the benefit of the very valuable improvements which the purchaser had effected to the property. Here there is a different situation. Far from acting precipitately the vendor refrained from making time of the essence for a period of nine months approximately. In that period the purchaser might at any time have completed the contract. True it is that the controversy as to the amount actually payable on 3 June 1979, after other matters were taken into account, was still alive between the parties. But this circumstance, of itself, constitutes no ground for saying that the vendor was guilty of unconscionable conduct in giving the notice of termination on 28 April 1980.”

72 The decision in Legione came under further consideration in Stern. In that case, another vendor-purchaser dispute, a contract for the sale of land provided for the payment of the balance of the purchase price by monthly instalments. The contract also provided that default by the purchasers entitled the vendors to determine the contract and forfeit the deposit, and also that on default in the payment of any instalment, the balance of the purchase price became due and payable. Pursuant to the terms of the contract, the purchasers had gone into possession and with the vendor’s knowledge, built a house on the land. They subsequently defaulted in the payment of a number of instalments, although thereafter the instalments were resumed. The vendor then gave the purchasers a notice to complete, which was not complied with. As a consequence, the vendors brought the contract to an end, based on the purchasers’ failure to complete.

73 By a majority comprised of Deane, Dawson and Gaudron JJ (Mason CJ and Brennan J dissenting) the Court held that the purchasers were entitled to relief against forfeiture of their interest in the land. It is unnecessary to review all of the judgments in that case, having regard to the fact that the majority in Tanwar at [36] upheld the views expressed by Mason CJ in Stern.

74 In Stern, Mason CJ dealt with this issue particularly at pages 500-504. His Honour first dealt with the well established principles in Shiloh Spinners and noted that, as Lord Wilberforce had observed, “in appropriate and limited cases” the court will relieve against forfeiture for breach of a covenant or condition where the primary object of the bargain is to secure a stated result which can effectively be attained by the terms of a court order, and where the forfeiture provision is added by way of security for the achievement of that result. Once a forfeiture has occurred it is then for the court to determine whether the circumstances of the case are appropriate for the grant of relief.

75 His Honour then went on to note that until Legione, courts had refused to relieve against forfeiture outside those established situations, and specifically that they had refused to relieve against forfeiture of a purchaser’s interest under a contract for the sale of real estate where there had been a valid rescission. However, his Honour characterised Legione as demonstrating that equity will relieve against an unconscionable exercise of legal rights. He considered the message conveyed by Legione to be that if a vendor’s insistence on his legal rights is, in the circumstances of the case, unconscionable, there can be no unfairness in depriving the vendor of the benefit of the forfeiture of the purchaser’s interest. His Honour concluded, at page 501, that:

“…the actual exercise of the jurisdiction depends upon the existence of circumstances which make it unconscionable for the vendor to insist on rescission and forfeiture of the purchaser’s interest.”

76 His Honour then went on to repeat that the Court in both Legione and Ciavarella had made it clear that relief against forfeiture, particularly in cases involving vendor and purchaser, would only be granted in exceptional circumstances which amounted to unconscionable conduct on the part of the vendor. His Honour continued at page 503:

“…to accept the [purchasers’] submission and extend relief against forfeiture to instances in which no exceptional circumstances are established would be eviscerate unconscionability of its meaning. The doctrine is a limited one that operates only where the vendor has, by his conduct, caused or contributed to a situation in which it would be unconscionable on the vendor’s part to insist on the forfeiture of the purchaser’s interest…[T]he jurisdiction to grant relief against forfeiture does not authorise a court to reshape contractual relations into a form the court thinks more reasonable or fair where subsequent events have rendered one side’s situation more favourable”. (Emphasis in the original)

77 His Honour then went on at page 504 in the following terms:

“In the ultimate analysis therefore the fate of the appeal turns on the question whether the [vendor’s] insistence on maintaining their rescission and forfeiture of the [purchasers’] interest in the land amounts, in the circumstances of the case, to unconscionable conduct.”

78 In my opinion, the foregoing passages indicate that (at least in the vendor-purchaser context) in order for relief against forfeiture to be granted, it is fundamental that the party against whom such relief was being sought had acted in an unconscionable way.

79 Returning then to the majority decision in Tanwar, while their Honours at [36] expressed their preference for what Mason CJ had said in Stern, at [38] they noted that what his Honour had said may have represented a contraction of what had been said in the earlier cases. Yet at [39], they also extended the circumstances in which equity will relieve against forfeiture to cases other than where the vendor’s conduct caused or contributed to a circumstance rendering it unconscionable for the vendor to insist upon its legal rights. They expressed the view that cases falling within the heads of mistake or accident will not necessarily be the result of unconscionable conduct on the part of the vendor, and yet relief against forfeiture may be given.

80 It seems to me that the common thread running through the analysis of the various decisions is that in order for the court to interfere with the contractual rights of the parties, the circumstances must be such that it is necessary to intervene to avoid injustice by relieving against unconscionable or unconscientious conduct.

81 This can occur where the party against whom relief against forfeiture is sought caused or contributed to the circumstances which lead to relief against forfeiture being sought (as was the case in Legione). Relief against forfeiture may also be granted in circumstances where the situation has come about without any contribution on the part of that party, but where the strict insistence on legal rights by that party itself constitutes unconscionable or unconscientious conduct (as was found to be the case by the majority in Stern).

82 In my opinion, it is in this latter class of case that the lessor-lessee cases, and those referred to in Shiloh Spinners fall. Where a lessee fails to make a payment of rent and the lessor seizes upon that single instance in order to re-enter the demised premises, it is that re-entry and the lessor’s strict insistence upon his legal rights that constitutes the unconscionable or unconscientious conduct against which a court will relieve against forfeiture.

83 In other words, I do not consider that the lessor-lessee cases constitute a different genus for the application of the principle of relief against forfeiture.

84 The existence of fraud, mistake, accident, surprise or other similar conditions merely makes it easier for the party seeking relief against forfeiture to establish his entitlement to it. The existence of such circumstances is simply a factor that a court takes into account in determining whether, in all the circumstances, the conduct of the other party is unconscionable or unconscientious.

85 That is not to say that for the court to grant relief against forfeiture the circumstances have to be “exceptional”.

86 In Tanwar at [59] the Court implicitly approved what was said by Deane and Dawson JJ in Stern at 165 CLR at page 526, where they referred to what had been said by Mason and Deane JJ in Legione at 152 CLR at page 449 in the following terms:

"Mason and Deane JJ were not saying that there must be unconscionable conduct of an exceptional kind before a case for relief can be made out. Rather, what was being said was that a court will be reluctant to interfere with the contractual rights of parties who have chosen to make time of the essence of the contract. The circumstances must be such as to make it plain that it is necessary to intervene to avoid injustice or, what is the same thing, to relieve against unconscionable - or, more accurately, unconscientious - conduct."

87 The ultimate question, then, is whether the conduct of the party against whom relief against forfeiture is sought can properly be characterised as unconscionable or unconscientious, independently of whether such conduct consisted of causing or contributing to the circumstances leading to the forfeiture of an interest, or whether such conduct consisted of strictly insisting upon legal rights. It was in the context of answering that question that the court in Tanwar at [40] noted, with apparent approval, what Mason and Deane JJ had said in Legione at 152 CLR at page 449, namely:

"In the ultimate analysis the result in a given case will depend upon the resolution of subsidiary questions which inevitably arise. The more important of these are: (1) Did the conduct of the vendor contribute to the purchaser's breach? (2) Was the purchaser's breach (a) trivial or slight, and (b) inadvertent and not wilful? (3) What damage or other adverse consequences did the vendor suffer by reason of the purchaser's breach? (4) What is the magnitude of the purchaser's loss and the vendor's gain if the forfeiture is to stand? (5) Is specific performance with or without compensation an adequate safeguard for the vendor?"

88 Although Legione, like Stern and Tanwar, involved disputes between vendors and purchasers, I do not see why the same principles would not apply in circumstances where the issue of relief against forfeiture arises between lessor and lessee or, as in the present case, between the owner of the servient tenement and the owner of the dominant tenement under an easement. If one substitutes for “the vendor” the owner of the servient tenement (here “the O’Sheas”), and for “the purchaser” the successive occupiers of the dominant tenement, (here “the successive occupiers”) the more important of the subsidiary questions would be, following what Mason and Deane JJ said in Legione, as follows:

(1) Did the conduct of the O’Sheas contribute to the breaches by the successive occupiers?

(2) Were the breaches of the successive occupiers:

(a) trivial or slight?; and
(b) inadvertent and not wilful?


(3) What damage or other adverse consequences did the O’Sheas suffer by reason of those breaches?

(4) What is the magnitude of the loss to the successive occupiers (in this context represented by ING) and the gain to the O’Sheas if the forfeiture is to stand?

(5) Is the re-imposition of the Easement with or without compensation an adequate safeguard for the O’Sheas?

89 It seems to me that the answers to these questions are significant in determining whether or not, in the present case, relief against forfeiture should be granted. Those questions appear to take into consideration not only the conduct of the parties but also the circumstances in which the breaches occurred and the consequences of granting or refusing relief against forfeiture. They also accommodate circumstances such as fraud, mistake, accident, surprise or other circumstances, as referred to in Shiloh Spinners and in Legione, which might make it unconscionable for the O’Sheas to insist on their legal rights. However, at the end of the exercise, what enlivens the exercise of equity’s jurisdiction to grant relief against forfeiture must be the conclusion that such relief is required to prevent a party from engaging in unconscionable or unconscientious conduct.

90 I turn then to applying the foregoing principles to the facts before me.

91 As to (1), there is no suggestion anywhere in the evidence that the conduct of the O’Sheas in any way contributed to the breaches about which complaint is made. On the contrary, I accept that the O’Sheas tried to persuade the successive occupiers not to breach the terms of the Easement. I do not accept the criticism put forward by Counsel for ING of the fact that the O’Sheas did not earlier refer the matter to their solicitor. I accept the explanation given by Mr O’Shea to the effect that the O’Sheas did not wish to cause an even worse relationship between themselves and their neighbours by having recourse to lawyers. Instead, they attempted to deal with the issue in a neighbourly way, albeit it seems that such approach yielded less than satisfactory results.

92 There is certainly no evidence before me to suggest that the O’Sheas either acquiesced in the manner in which the Easement was being abused, let alone that they encouraged such conduct. The failure by Mrs Athanasakis to pay the amounts specified under the terms of the Easement must have been the catalyst that brought the O’Sheas to taking these proceedings.

93 As to (2), I consider that the breaches in question were neither trivial nor slight, nor were they inadvertent and not wilful. The breaches continued despite constant remonstrances on the part of the O’Sheas and they clearly constituted a source of annoyance and concern to the O’Sheas. This was made known to the successive occupiers in clear terms. The failure to make the payments provided for under the Easement, which, in the overall circumstances, were not enormous amounts, might of themselves have been capable of being described as trivial or slight, and also perhaps as inadvertent and not wilful. However, in my view that breach, while it might have been the last straw, was not the nub of the problem. Certainly Mr O’Shea placed little emphasis on the monetary default, his concern being essentially the loss of amenity constituted by the other breaches, which I consider were significant.

94 As to (3) the O’Sheas suffered substantial inconvenience and loss of amenity by reason of the breaches in question. I refer in this context not so much to the failure to pay the amounts in question, but rather to the result of the various other, physical breaches to which I have referred.

95 As to (4) if no relief were granted, the O’Sheas would be restored to enjoying the whole of the Adelaide Street property which would no longer be subject to any relevant easement. It would enable them to utilise the Adelaide Street property in any way they wished, the monetary benefit to them being, as I have earlier noted, about $111,000, or perhaps a little more.

96 By contrast, if no relief against forfeiture were granted, the extent of the loss to the present owners of the Alma Street property would be, so far as the evidence permits me to assess, about the same.

97 As to (5), it seems to me that relief against forfeiture, if granted in this case, would not safeguard the interest of the O’Sheas from similar breaches continuing to be committed. Were the only breaches failures to make the requisite payments, the situation may well have been different. In those circumstances, the Court could require the occupiers of the Alma Street property, in order to provide a degree of security to the O’Sheas, to put aside and secure funds to ensure that appropriate payments would be made in the future. However, as it appears to have been conceded by Counsel for ING, it would by no means be certain that the other breaches would not be repeated. Indeed, on the basis of past events, it is likely that they would continue in some form or another. If that did occur, the same issue might arise again as to whether relief against forfeiture should be granted.

98 In all the circumstances, I do not discern in the conduct of the O’Sheas, either before commencing these proceedings or in persisting in their right to release the Easement, anything that approaches unconscionable or unconscientious conduct. I do not consider that they are seeking to take advantage of any undeserved windfall or that they are causing ING to suffer a loss of an interest that is, in the overall context of these two properties, such as to make the O’Sheas’ conduct unconscientious. I do not consider that it would be appropriate to grant relief against forfeiture but require ING, as a condition of granting such relief, to make some monetary payment to the O’Sheas. Such monetary payment would not solve the problem. In his evidence, which I accept, Mr O’Shea made it clear that he was not wishing to receive a financial benefit, only the peace that would come about as a result of the Easement being released.

99 For those reasons, I do not propose to grant ING relief against the forfeiture of the Easement.

Second issue: should an easement be granted under section 88K of the Conveyancing Act?

100 The alternative way in which ING puts its claim is that it should be granted the Proposed Easement pursuant to section 88K of the Conveyancing Act.

101 So far as is relevant, section 88K of the Conveyancing Act provides as follows:

“88K Power of Court to create easements

(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.


(3) The Court is to specify in the order the nature and terms of the easement and such of the particulars referred to in section 88 (1) (a)–(d) as are appropriate and is to identify its site by reference to a plan that is, or is capable of being, registered or recorded under Division 3 of Part 23. The terms may limit the times at which the easement applies.

(4) The Court is to provide in the order for payment by the applicant to specified persons of such compensation as the Court considers appropriate, unless the Court determines that compensation is not payable because of the special circumstances of the case…”

102 It is perhaps more convenient if I deal first with sub-section (2) of section 88K in that it restricts the circumstances in which the Court may make an order under that section. Before it can make such an order, the Court has to be satisfied of the three matters set out in paragraphs (a), (b) and (c) of that sub-section.

103 I am satisfied as to each of those three requirements. As to (a), I am satisfied that the use of the Alma Street property will not be inconsistent with the public interest. It will continue to be used as residential property much in the same way as it has always been used, and indeed in a manner that makes more secure the ability of its occupiers to park their cars off Alma Street.

104 As to (b), I am satisfied that the owner of the Adelaide Street property can be adequately compensated for any loss or other disadvantage that would arise from the imposition of the Proposed Easement. I have already found that the loss in the value of the Adelaide Street property occasioned by the imposition of the Easement is in the vicinity of $111,000. However, I consider that were the Proposed Easement to be imposed, there would have to be some relatively small further compensation provided, given that the sum of $111,000 already takes into account such loss of amenity to some extent.

105 Finally, Counsel for the O’Sheas conceded that all reasonable attempts have been made by ING to obtain an easement to the same effect as the Easement and that those attempts have been unsuccessful. That satisfies (c).

106 Having eliminated any problems that may be caused by the requirements of sub-section (2), I turn then to the requirements of sub-section (1) of section 88K.

107 Before going to the heart of the issue, namely whether a Second Easement is “reasonably necessary” for the effective use or development of the Alma Street property, I should note that the power given to the Court by section 88K is in permissive, not mandatory, terms. In other words, even if satisfied that such an easement is “reasonably necessary”, the Court may (but need not) make an order imposing an easement. I should also note that, in the present case, the issue is whether such easement is reasonably necessary for the effective use (as distinct from the effective development) of the Alma Street property. That property is already developed much to the stage of other properties in the vicinity and there is no proposed change of user. The question before me then is whether such an easement is reasonably necessary for the effective use of the Alma Street property.

108 Counsel for ING, Mr Robinson, relied heavily on what was said by Hodgson CJ in Equity (as his Honour then was) in 117 York Street Pty Limited v Proprietors of Strata Plan No. 16123 (1998) 43 NSWLR 504 at 508-509 where his Honour said:

“It is clear that ‘reasonably necessary’ in s 88 K (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: Tregoyd Gardens v Jervis (Hamilton J, 25 September 1997, unreported); Goodwin v Yee Holdings Pty Ltd (Windeyer J, 6 November 1997, unreported); Re Seaforth Land Sales Pty Ltd's Land [No 2] [1977] Qd R 317.
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.”

109 Mr Robinson submitted that in the present case, ING has satisfied the two tests stated by Justice Hodgson. He submitted that provided those two requirements are satisfied, the requirement of reasonable necessity is thereby also satisfied. He submitted that, in the present case, the second requirement is also satisfied in the sense that its use of the Alma Street property with the Proposed Easement is “substantially preferable” to the use without the Proposed Easement.

110 Two things must be said about that submission. First, his Honour should not be understood as saying that so long as those two requirements are met the requirement of reasonable necessity has been satisfied. A perusal of his Honour’s judgment suggests that the two matters listed by him are necessary for an easement to be “reasonably necessary” but not necessarily sufficient for that purpose. Secondly, the context in which his Honour put that proposition should be kept in mind. The easements in question before him were of a peculiar nature. Two of the easements were to be of a temporary nature which were necessary to enable the plaintiff to develop the property adjacent to that of the defendant. It involved a temporary easement to permit the tail of a crane to swing over the proposed burdened property during the course of the construction and another temporary easement to erect scaffolding for the same purpose. The third easement which was to be 0.2 metres wide was for a gutter to collect rainwater concentrated by the wall of the plaintiff’s building extending above the roof of the defendant’s building, such rainwater being intended to be disposed of in the plaintiff’s stormwater system.

111 In Gittany v McDowell [2009] NSWSC 591 at [78] and [79], I referred to a number of decisions that have dealt with the meaning of the term “reasonably necessary”. I should also refer to the decision of Rein AJ (as his Honour then was) in The Owners Strata Plan No. 13635 & Ors v Ryan [2006] NSWSC 221.

112 In particular, I note what Young J (as his Honour then was) said in Hanny v Lewis (1998) 9 BPR 16,205 at pages 16, 209 to 16,210, where his Honour was considering the general approach the Court takes in relation to an application under section 88K. His Honour said:

“As a general approach to applications under this section the court must bear in mind that property rights are valuable rights and the court should not lightly interfere with the property rights of the defendants. It is in the public's interest that landlocked land be utilised. However, the section does not exist for people to build right up to the boundary of their property or to build without adequate access and then expect others to make their land available for access. It is not unreasonable for a defendant to show that he or she has a legitimate economic advantage in the status quo, nor is it at all unreasonable for a defendant to say for privacy or other personal reasons that there would be such an interference with his or her property rights that no compensation in money could make up for it, and no order could be made: cf Re Parimax (SA) Pty Ltd (1956) 56 SR (NSW) 130, 133.”

113 In the same case his Honour warned against confusing what is desirable with what is reasonably necessary.

114 In D & D Corak Investments Pty Ltd v Yiasemides [2006] NSWSC 1419, his Honour again dealt with the concept of what is “reasonably necessary” in the following terms:

“[12] Because of the thoroughness with which other Judges in this Division have dealt with the concepts, I do not need to perform the same exercise as the concepts and principles have been thoroughly digested in cases such as 117 York St Pty Ltd v Proprietors of Strata Plan No 16123 (1998) 43 NSWLR 504; Khattar v Wiese [2005 NSWSC 1014; Owners Strata Plan 13635 v Ryan [2006] NSWSC 221; Katakouzinos v Roufir Pty Ltd (1999) 9 BPR 17,303; Woodland v Manly Municipal Council (2003) 127 LGERA 120 and, my own decision in Hanny v Lewis (1998) 9 BPR 16,205.

[13] The cases indicate that the word "necessary" does not mean absolutely necessary, but it does mean more than something that is convenient or nice to have and that one must look for a requirement that is far closer to necessity than it is to convenience.

[14] Secondly, that when one is considering whether an easement is reasonably necessary one is not involved in any exercise of a discretionary nature, but rather is evaluating the various factors involved; see Woodland at LGERA 128; BPR 20,908. Thirdly, that when one is evaluating the factors involved one does not only deal with the question of what is good for the applicant, but one must also bear in mind the effect of the grant of the easement on other parties. As Hodgson J said in Katakouzinos, a statement affirmed by both Hamilton J in Woodland at LGERA 128; BPR 20,908 and by Brereton J in Khattar, "The greater the impact the less likely the conclusion that there is reasonable necessity" and that aphorism fits into the assessment by the court of what is reasonable.
[15] Although the court does not look to see whether the proposed use of its land by the plaintiff is the only reasonable course, the court must assess that use in the wider picture of the other surrounding owners as well. Furthermore, when one is dealing with easements one must remember that they are rights over land. Accordingly, when one is assessing whether the grant of an easement is reasonably necessary it means reasonably necessary for the use and enjoyment of the plaintiff's land, not just for the convenience of any particular proprietor or tenant of the land; see Hanny .”

115 His Honour continued at [18] in the following terms:

“[18] The purpose of the Act was probably twofold: (a) to get over what I might call blackmail situations where a temporary easement was needed over land whilst adjoining land was in a construction phase and adjoining owners were making exorbitant demands; and (b) to ensure that proper economic use was made of land which could only occur if there was an easement over adjoining land, such as in the Khattar case where a development could only take place if a drainage easement was available over adjoining land. The Act was not intending that whenever a person thought that they should have a rear access to a block of land in one of the older suburbs where there was only one entrance, that an easement should be given so that that property would be enhanced.”

116 Finally, in Bloom v Lepre [2008] NSWSC 79 particularly at [54] his Honour noted that:

“the judges [of this Court] are very careful to say that whilst reasonable necessity is to be determined objectively in the light of the facts, an order under s 88K is not to be made lightly.”

117 His Honour continued at [55] in the following terms:

“Thus, one must, when working out the reasonable necessity for the plaintiff, not close one’s eyes to the effect on the proper use of the defendant’s land and pay proper respect to the defendant’s present rights of property. If this were not so, and if the court were permitted merely to focus on the reasonable necessity of the use of the plaintiff’s land, then almost any advantage to the plaintiff would be allowed notwithstanding the effect on other people.”

118 Applying the foregoing principles in the present case, I do not consider that ING has established that the imposition of the Proposed Easement over the Adelaide Street property satisfies the requirement that it be “reasonably necessary” for the effective use of the Alma Street property.

119 As I have already found, I am of the opinion that the Manly Council would approve an application for vehicular access from Alma Street into the Alma Street property. It would also approve the construction of a garage, set back from Alma Street towards the eastern boundary of the Alma Street property. The cost of such an exercise would be in the vicinity of $119,000 which, although a substantial sum of money, represents a relatively small investment in a property which, on the evidence before me (and admittedly with the benefit of the Easement) is valued at over $2M. Further, in my opinion, the expense of erecting a double garage would be at least partially off-set by the fact that vehicular access would become permanent and not liable to be lost in the event that there is a breach of the terms regulating the use of the Proposed Easement. The construction of a driveway and of such a garage would certainly give the occupants of the Alma Street property greater security than would the Proposed Easement.

120 If done tastefully, a garage built on the Alma Street property would even improve its appearance and bring it into line with all but one of the properties along the northern side of Alma Street.

121 To use the language of Young J in D & D Corak Investments Pty Ltd, it is not sufficient that having the benefit of the Proposed Easement would be “convenient or nice to have”. It is appropriate to look for a requirement that is far closer to necessity than it is to convenience.

122 I am also conscious of the fact that while the imposition of the Proposed Easement may be convenient for the occupants of the Alma Street property, such imposition would result in a significant adverse impact on the Adelaide Street property and, in accordance with established principles, I am reluctant to interfere with the property rights of others.

123 In reaching my conclusion, I have not ignored the submission made on behalf of ING to the effect that I must take into account the historical context in which the Easement arose and the fact that for over twenty years such Easement burdened the Adelaide Street property. However, in doing so, I must also take into account the abuse of the Easement that has taken place (an abuse which it is impossible to guarantee will not recur should the Proposed Easement be imposed) and the fact that the successive purchasers of the Alma Street property, as well as its various mortgagees, including ING, acquired their respective interests in the Alma Street property subject always to the terms governing the Easement, and with the knowledge (actual or deemed) that it was liable to be lost in circumstances such as those which have now occurred.

124 The fact that the Easement was in place for over twenty years, benefiting the Alma Street property, does not of itself mean that it was reasonably necessary for the effective use of the Alma Street property. It was undoubtedly “convenient or nice to have”, but that is not the same thing as reasonable necessity.

Conclusion and Orders

125 It follows from the foregoing that the first cross-claim should be dismissed with costs, and I so order.

126 If there is any further order required to bring these proceedings finally to an end, the parties have liberty to apply by notifying my Associate within 7 days of today’s date. Were that to occur, I shall arrange to have the proceedings listed before me at 9.30am on a day convenient to the Court and to the parties to deal with such further orders as may be sought for that purpose.

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