The Owners - Strata Plan 61233 v Arcidiacono (No 2)

[2019] NSWSC 1876

Supreme Court

New South Wales

Medium Neutral Citation:	The Owners – Strata Plan 61233 v Arcidiacono (No 2) [2019] NSWSC 1876
Hearing dates:	11, 12 and 16 December 2019
Date of orders:	20 December 2019
Decision date:	20 December 2019
Jurisdiction:	Equity
Before:	Henry J
Decision:	Leave to re-open refused. See [94] for costs and [96] for final orders.
Catchwords:	CIVIL PROCEDURE – application to re-open hearing – where plaintiff’s evidence was found to be inadequate in primary judgment – where plaintiff seeks to correct inadequacy by adducing further evidence after reasons delivered –evidence could have been adduced earlier – application refused COSTS – where plaintiff substantially succeeded – no evidence from either party about costs breakdown - whether usual position under Conveyancing Act 1919 (NSW), s 88K(5) should apply to alternative claim – whether unreasonable conduct by defendant – overall costs order made
Legislation Cited:	Access to Neighbouring Land Act 2000 (NSW), ss 3, 8, 13 and 14 Local Government Act 1993 (NSW), s 59A Conveyancing Act 1919 (NSW), s 88K, Schedule 8 Part 5, Schedule 8 Part 11
Cases Cited:	Autodesk Inc v Dyason (No 2) (1993) 176 CLR 300 Henning v Lynch (1974) 2 NSWLR 254 Inspector-General in Bankruptcy v Bradshaw [2006] FCA 22 Marriner v Australian Super Developments Pty Ltd [2016] VSCA 141 PCCEF Pty Ltd v Geelong Football Club Ltd [2018] VSC 258 Rawson v Studholme [2018] NSWSC 1764 Rawson v Studholme (No 2) [2019] NSWSC 1273 Ross Bilton & Ors v Georgia Ligdas (Costs) [2016] NSWSC 1585 Shi v ABI-K Pty Ltd [2014] NSWCA 293 Smith v New South Wales Bar Association (1992) 176 CLR 256 Spotlight Pty Ltd v NCON Australia Ltd (2012) 46 VR 1; [2012] VSCA 232 The Owners – Strata Plan 17719 v Arcidiacono (No 2) [2019] NSWSC 1800 The Owners – Strata Plan 61233 v Arcidiacono; The Owners – Strata Plan 17719 v Arcidiacono [2019] NSWSC 1307 Urban Transport Authority of NSW v Nweiser (1991) 28 NSWLR 471 Wentworth v Woollahra Municipal Council (No 2) (1982) 149 CLR 672
Category:	Costs
Parties:	The Owners – Strata Plan No 61233 (Plaintiff)  John Anthony Arcidiacono (First Defendant)  Anna Marie Arcidiacono (Second Defendant)
Representation:	Counsel: Mr A Rogers (Plaintiff)  Mr T S Hale SC with Mr R Higgins (Defendants)    Solicitors: Peter Prior & Co Solicitors (Plaintiff)  Russells Law (Defendants)
File Number(s):	2016/187360
Publication restriction:	Nil

Judgment

1. On 30 September 2019, I gave judgment in these proceedings: The Owners – Strata Plan 61233 v Arcidiacono; The Owners – Strata Plan 17719 v Arcidiacono [2019] NSWSC 1307 (Principal Judgment). These reasons assume familiarity with and adopt the same terms used in the Principal Judgment.

2. I deferred making orders in the Principal Judgment to enable the parties to consider the reasons. As the parties could not agree on the terms of the easements and the costs to be paid, the Court made directions for the service of draft orders and written submissions and heard oral argument on those issues on 11 and 12 December 2019.

3. Prior to the resumed hearing, 71 York Street served a notice of motion seeking leave to re-open its case in relation to its claim for orders under s 88K of the Conveyancing Act 1919 (NSW) for easements over the Passage and the Dock for drainage of water and for sewerage. I granted 71 York Street leave to file that motion in Court on 11 December 2019. The defendants object to leave to re-open being granted and oral argument on that motion was heard on 16 December 2019.

4. The defendants also served a draft notice of motion prior to the resumed hearing. Their motion seeks a stay of final orders pending determination of an appeal which they intend to file by the end of this year (Appeal). They had already filed a notice of intention to appeal dated 25 October 2019.

5. The parties are now agreed on the terms of the easement by prescription in relation to the Dock and the ancillary orders to be made to ensure it is recorded on the Register. They are also largely agreed on the terms of the orders to be made under s 88K of the Conveyancing Act for other easements to the benefit of 71 York Street’s land.

6. There is also agreement between the parties that orders should be made in relation to the defendants’ stay application, which will include an order restraining the defendants from locking a gate and placing skip bins on the Passage and the Dock pending the outcome of the Appeal, similar to the injunction that was put in place at the start of the proceedings.

7. Accordingly, these reasons deal with the following issues:

1. whether 71 York Street should be granted leave to re-open its case;

2. the terms of the orders under s 88K of the Conveyancing Act for easements in respect of repairs and services; and

3. the costs order to be made in the proceedings.

Leave to re-open

8. In the Principal Judgment, I declined to make orders under s 88K of the Conveyancing Act for easements for sewerage and drainage over the Passage and the Dock benefitting 71 York Street’s land.

9. While accepting that easements for drainage of water and sewerage over the Passage and the Dock may be reasonably necessary for the effective use of 71 York Street’s land, I was not satisfied that 71 York Street had in fact established the reasonable necessity for such easements.

10. I found that 71 York Street did not adduce sufficient evidence to support the orders sought. The sewerage and drainage diagram (Sewerage Diagram) relied on by 71 York Street, which was annexed to an affidavit from its solicitor without any commentary, was unclear. There were discrepancies between it and the surveyors’ evidence as to the location of the soil vent pipe. There was no other water drainage or other plans in evidence. Nor was there evidence from another witness as to the continuing need to use any sewerage and drainage pipes which might be located under the Passage or the Dock (Principal Judgment at [419]-[421], [582], [584], [587] and [588]).

11. 71 York Street now seeks to re-open its case so that it can adduce evidence about the location of sewerage and stormwater pipes that are used to service its land.

12. In support of its application, 71 York Street relies on two affidavits sworn by Brett Gubbay, 71 York Street’s solicitor in these proceedings.

13. Mr Gubbay’s affidavit sworn 10 December 2019 annexes material, including a letter dated 4 and 5 December 2019 from Nicholas Schneider of Subsurface Utility Solutions, that confirms that the Sewerage Diagram relied on by 71 York Street does not accurately identify the location of the sewer line that currently services 71 York Street. It also purports to identify the location of the sewer line and the most likely location of the stormwater pipes, which are relevantly under the Passage.

14. By his affidavit sworn 16 December 2019, Mr Gubbay gives evidence that he relied on the Sewerage Diagram at the hearing based on his previous practice doing work for developers (at [5]). Mr Gubbay’s evidence is that it was only after reading the Principal Judgment that the need was identified to undertake tasks and obtain the information to establish the matters which are now referred to in the annexures to his 10 December 2019 affidavit. Mr Gubbay gives evidence that material of the type annexed to his affidavit might have been procured previously but did not exist at the time of the trial and that there was no forensic decision not to call the evidence needed, but it was simply not thought of: (at [3], [4] and [6]).

15. Initially, 71 York Street’s application for leave to re-open was for it to adduce additional evidence in the form of the material annexed to Mr Gubbay’s affidavit: (16 December 2019, T2:39-41). In the light of the defendants’ submissions as to its admissibility, 71 York Street accepts that the material is not in a proper form and that further evidence of that nature would need to be led if leave to re-open was granted: (16 December 2019, T18:20-41).

Legal principles

16. While the Court has a discretionary power to grant leave to re-open a case to enable a party to adduce new or additional evidence, the power to grant should be exercised with great caution and having regard to the public interest in maintaining the finality of litigation: Wentworth v Woollahra Municipal Council (No 2) (1982) 149 CLR 672 at 684.

17. The principle which should guide the Court in determining whether to grant an application to re-open is whether the interests of justice are better served by allowing or refusing the application: Urban Transport Authority of NSW v Nweiser (1991) 28 NSWLR 471 at 478.

18. The High Court in Autodesk Inc v Dyason (No 2) (1993) 176 CLR 300 noted that a case may be re-opened where a party has, without fault on his or her part, not had the opportunity to be heard (at 309, 317). Mason CJ observed at 303:

"...it must be emphasised that the jurisdiction is not to be exercised for the purpose of re-agitating arguments already considered by the Court; nor is it to be exercised simply because the party seeking a rehearing has failed to present the argument in all its aspects or as well as it might have been put. What must emerge, in order to enliven the exercise of the jurisdiction, is that the Court has apparently proceeded according to some misapprehension of the facts or the relevant law and that this misapprehension cannot be attributed solely to the neglect or default of the party seeking the rehearing."

19. The time at which an application is made to re-open is a relevant consideration. If the application for leave to re-open is made before the other party's case has commenced, leave may be more likely to be granted: Henning v Lynch (1974) 2 NSWLR 254. If, however, the application is made after the hearing has concluded and reasons have been delivered, the position is different. As the Victorian Court of Appeal observed in Marriner v Australian Super Developments Pty Ltd [2016] VSCA 141 at [185]:

“Where a case has been closed and judgment reserved, exceptional circumstances will be required for a court to allow the case to be reopened. This rule applies with even greater force where reasons for judgment have already been delivered but final orders have not yet been made. The rule is necessary to ensure finality in litigation and the efficient administration of justice, and to avoid a reopened hearing being ‘bedevilled by arguments about … the scope of the re-opened proceeding’.”

20. It has also been said that if reasons for judgment have been given, the power of the Court to set aside or vary a judgment is only to be exercised if there is some matter calling for review: Smith v New South Wales Bar Association (1992) 176 CLR 256 at 265.

21. If the application to re-open is on the basis or new or additional evidence, it is relevant to enquire why the evidence was not called at the hearing. If there was a deliberate decision not to call it, ordinarily that will tell against leave being granted. Where reasons for judgment have been delivered, the appeal rules relating to fresh evidence are a useful guide as to the manner in which the discretion should be exercised: Smith v New South Wales Bar Association (1992) 176 CLR 256 at 266.

22. There are four recognised classes of case in which a court may grant leave to re-open, although those classes are not closed: (i) where fresh evidence, unavailable or not reasonably discoverable before, becomes known and available; (ii) where there has been inadvertent error; (iii) where there has been a mistaken apprehension of the facts; and (iv) where there has been a mistaken apprehension of the law: Inspector-General in Bankruptcy v Bradshaw [2006] FCA 22 at [24]; Spotlight Pty Ltd v NCON Australia Ltd (2012) 46 VR 1; [2012] VSCA 232 at [26].

Consideration

23. This is not a case where leave to re-open is being sought because the Court made an error or proceeded to give reasons based on some misapprehension of the facts or the law. Rather, 71 York Street seeks leave to re-open to adduce additional evidence as to the location of the sewer line and stormwater pipes because, it accepts, it made an erroneous analysis of the Sewerage Diagram upon which it decided to rely in support of its claim for easements under s 88K for sewerage and drainage.

24. 71 York Street accepts that it has a high hurdle to overcome to satisfy the Court that leave to re-open should be granted in those circumstances. It acknowledges that it is more difficult to obtain leave to re-open after reasons have been handed down and that at least one of the rules relating to fresh evidence may militate against leave being granted. 71 York Street contends that these matters should not prevent leave being granted as the Court’s discretion should ultimately be guided by whether it is in the interests of justice to grant leave.

25. 71 York Street submits that the interests of justice would be served if leave to re-open was granted because the new evidence it will seek to adduce relates to a narrow issue, being the correct location of the sewer line and stormwater pipes under the Passage, and will “uncontroversially” disclose matters which would have inclined the Court to make orders for an easement under s 88K favourable to 71 York Street in the first instance.

26. 71 York Street argues that it would be a strange outcome if, having been defeated by an insufficiency of evidence, it were not now able to put before the Court sufficient evidence as to the existence of the sewer and stormwater pipes which the defendants have not suggested do not exist and which should lead to a correction of the Court’s findings.

27. Accepting there are issues as to its admissibility, the material annexed to Mr Gubbay’s affidavit suggests that there is likely to be credible evidence as to the location of the sewer line and stormwater pipes under the Passage which service 71 York Street. The insufficiency of evidence as to the correct location of the sewer line and stormwater used by 71 York Street was a significant factor in the Court’s decision on the issue of reasonable necessity. If such evidence is put before the Court it might be said that it would likely influence whether an order under s 88K of the Conveyancing Act for easements for drainage and sewerage might be made.

28. I do not consider that these factors or the submissions made by 71 York Street support the conclusion that the interests of justice warrants the exercise of the Court’s discretion to grant 71 York Street leave to re-open to adduce new evidence in support of its claim for an order under s 88K of the Conveyancing Act for easements for drainage and sewerage in the circumstances of this case.

29. 71 York Street’s application seeks for a party who has had a case defeated by an insufficiency of evidence to be given leave to re-open to correct its evidence where the insufficiency was the result of its own failure to properly prepare and present its arguments and where the evidence it now seeks leave to adduce could have been obtained at the time of the hearing.

30. Mr Gubbay’s evidence may support a finding that the insufficiency of evidence relating to the location of the sewer and stormwater pipes was due to an assumption based on previous practice and not the result of some strategic decision to exclude certain evidence. This oversight may also be explicable in the context where the claim for sewerage and drainage easements under s 88K of the Conveyancing Act played a more minor role in what was otherwise a relatively complex case raising a variety of legal and factual issues.

31. But, plainly 71 York Street turned its mind to the issue of the evidence it needed to support its claim and made a deliberate, albeit erroneous, decision about what it could rely on.

32. Even accepting Mr Gubbay’s evidence that 71 York Street had not obtained expert evidence as to the location of the sewer and stormwater pipes of the type now sought to be relied on at the time of the hearing, such evidence could and, in my view, should have been obtained by 71 York Street acting diligently to complete the enquiries that ought to have been taken prior to, during or immediately after the hearing. This is particularly where issues about the Sewerage Diagram of the nature identified in the Principal Judgment and the lack of 71 York Street’s evidence in support of use and reasonable necessity were raised by the defendants in their written closing submissions and in oral submissions: (at [56] - [59] and [100] and [101], defendants’ closing submissions; at [2], [5] - [11], defendants’ submissions in relation to supplementary submissions by 71 York Street; T337:1-16; T344:13-21)

33. 71 York Street had retained a surveyor who gave evidence in support of its claim for some of the other easements sought under s 88K of the Conveyancing Act. His evidence included plans identifying the location of those easements, including the location of the proposed sewerage and drainage easements. Presumably, the surveyor could have been asked to comment on the defendants’ submissions and review the Sewerage Diagram.

34. Despite issues as to the nature of its evidence having been raised by the defendants, 71 York Street chose to continue to rely on the Sewerage Diagram rather than seek to correct or perfect its evidence at the hearing or prior to reasons being handed down. It also chose to wait until 3 December 2019 to notify the parties of its intention to make an application for leave to re-open, more than seven months after the hearing concluded and just over two months after the Principal Judgment was handed down.

35. As noted in the Principal Judgment, it was a matter for 71 York Street to establish that the easements were reasonably necessary. While extensive evidence may not have been required to satisfy s 88K(1) of the Conveyancing Act, it was to be expected that something more that the Sewerage Diagram would be before the Court and some views would be expressed by a witness, such as the surveyor retained by 71 York Street, as to the location of sewerage and other drainage pipes under the Passage and the Dock, the use to which they are put and the continuing need for 71 York Street to use them: (at [587]).

36. As the defendants submit, at the hearing they argued against easements being granted under s 88K for sewerage and drainage without adducing their own evidence in response to a case presented by 71 York Street which, they say (and, in my view, with some force) was “sparse and threadbare” and where its evidence was “wanting”. In that context, the defendants submit that if leave to re-open is granted they may also seek to adduce further evidence and raise other arguments not advanced at the hearing by way of challenge to the new evidence from 71 York Street.

37. The defendants did not articulate precisely what evidence and arguments they would advance in response if 71 York Street was given leave to re-open, other than making reference to their own expert evidence and evidence as to possible alternatives that 71 York Street could make use of, which might be relevant to whether an easement under s 88K would be reasonably necessary. Without knowing what their evidence would be, it is difficult to know whether it would negate the evidence which 71 York Street seeks leave to adduce in a re-opened case.

38. If leave was granted and 71 York Street adduced its new evidence, the defendants would be entitled to also adduce new evidence and raise new arguments on the case being re-opened. It follows, in my view, that it cannot be said with certainty, as 71 York Street seems to submit, that granting 71 York Street leave would lead to the Court making orders under s 88K for easements for drainage and sewerage in its favour as originally sought.

39. Granting the application would also result in re-opening for the Court’s consideration of all issues, at least in respect of reasonable necessity, in relation to 71 York Street’s claim for drainage and sewerage easements under s 88K. It would likely require reconvening for another hearing and argument in circumstances where 71 York Street has the benefit of the Court’s observations about the deficiencies of the very evidence for which leave is sought to re-open, as well as findings on other issues relevant to a determination of the issue of reasonable necessity. Doing so could enable it and the defendants to tailor their arguments to the re-opened case: Spotlight Pty Ltd v NCON Australia Ltd (2012) 46 VR 1; [2012] VSCA 232 at [23].

23. While not determinative, to my mind, it is also relevant that 71 York Street may have alternative remedies available to it in the event that issues arise in the future, such as if the sewer or stormwater pipe is blocked, or difficulties arise with obtaining access to the Passage and Dock for purposes related to its sewerage and drainage of water. In that regard, I note that there was no evidence before the Court at the hearing of any history of problems between the defendants and 71 York Street in respect of sewerage and drainage of water. It should also be expected that the defendants would not, in the future, take any steps to interfere with whatever sewer lines and stormwater pipes currently exist.

24. The Access to Neighbouring Land Act 2000 (NSW) enables a party to seek utility service access orders authorising access to land to carry out work on or in connection with sewerage, drainage and water: ss 3, 8, 13 and 14. The Council may also have powers under the Local Government Act 1993 (NSW), s 59A to issue notices in respect of works on sewerage and stormwater drainage installed under the Passage if necessary.

25. While concluding that recourse to an alternative regime did not mean easements under s 88K were not reasonably necessary (at [594], Principal Judgment), the existence of possible alternative remedies suggest that the grant of an easement under s 88K is not essential for the protection of 71 York Street’s interests and that refusing leave to re-open should not cause it insurmountable prejudice.

26. I accept 71 York Street’s submission that the likely prejudice to the defendants if leave to re-open could, to a large extent, be dealt with by an appropriate costs order. But lack of prejudice to a defendant from the grant of leave to re-open is only one factor to be taken into account in the exercise of the Court’s discretion.

27. It is only in exceptional cases that the Court will exercise its discretion and grant leave to re-open where a party has, by its own conduct, failed to adduce the evidence needed to establish its case: Marriner v Australian Super Developments Pty Ltd [2016] VSCA 141 at [185].

28. On balance, I do not consider this to be an exceptional case. 71 York Street’s claims for easements for drainage and sewerage under s 88K were squarely argued, albeit in a summary and high level fashion. There is no error on the record. The evidence sought to be adduced by 71 York Street if leave to re-open is granted is of a nature that was reasonably obtainable at the time of the hearing and, if the case is contested again, may not necessarily lead to a different result.

29. I am also of the view that it would not be consistent with the public interest in maintaining the finality of litigation and the just, quick and cheap resolution of the real issues in proceedings if 71 York Street was to be granted the opportunity to correct the defects that the Principal Judgment identified in its case after reasons have been delivered.

30. It follows that 71 York Street’s notice of motion is to be dismissed. I see no reason why the usual order that costs follow the event should not apply and will order 71 York Street to pay the defendants’ costs of the motion.

Form of orders in relation to easements

48. The parties are largely agreed on the terms of the fourteen orders to be made in respect of the Court’s findings in favour of 71 York Street of the prescriptive easement in respect of the Dock and the easements under s 88K for repairs and services and encroaching and overhanging structures.

49. On the morning of 19 December 2019, the parties provided to the Court an agreed draft proposed declaration in relation to the prescriptive easement in respect of the Dock and ancillary orders. I am satisfied that they are in terms that reflect the Principal Judgment.

50. The remainder of the fourteen orders to be made are based on the draft orders proposed by 71 York Street, which were annexed to the affidavit of Mr Gubbay sworn 29 November 2019. As noted above, most of these orders are agreed.

51. Orders 3 to 10 of the drafts orders proposed by 71 York Street include the following:

“The person having the right to release, vary or modify the easement is the Owners Corporation SP 61233.”

52. At the hearing on 11 December 2019, 71 York Street’s counsel accepted that this wording is not necessary having regard to s 88K(6) of the Conveyancing Act, and so I have not included them: (11 December 2019, T3:28-29).

53. The remaining issue between the parties relates to the form of proposed orders 3 and 4, which relate to the easements to be made under s 88K of the Conveyancing Act for repairs and services.

54. 71 York Street proposes orders which reflect the terms of Schedule 8 Part 5 of the Conveyancing Act for the easement for repairs, and Schedule 8 Part 11 for the easement for services.

55. The defendants submit that the orders should be limited to repairs and services in respect of the fire sprinkler system and northern wall of the 71 York Street building and in respect of electrical services associated with the encroaching electrical conduits, relying on the observation in the Principal Judgment that an easement for repairs and services appeared to be sought in respect of that matters: (at [589]).

56. I do not agree that the findings in the Principal Judgment require the terms of the easements for repairs and services to be limited in the manner proposed by the defendants.

57. The Principal Judgment noted that there appeared to be some discrepancies as to the precise terms of the easements claimed by 71 York Street. In those circumstances, the Court approached the claim in respect of the other s 88K easements on the basis of the categories referred to by the parties which, relevantly, was identified as being for repairs and services in general terms and not limited in any way: (at [553]). This approach also reflected the way the case was presented by the parties in oral and written submissions.

58. The reasoning and conclusions in the Principal Judgment were also not limited to the easements being limited in the terms suggested by the defendants. The Court concluded that easements for repairs and services were substantially preferable to use without such easements and referred to repairs of the 71 York building and maintenance of essential services in a general way: (at [590] and [591]).

59. Making orders for easements that reflect the terms of the relevant schedules to the Conveyancing Act is also consistent with the terms of the easement instrument and 71 York Street’s offer of compensation, both of which referred to easements for repairs and services in general terms.

60. Accordingly, I am satisfied that it is appropriate to make the orders for easement for repairs and services in the terms proposed by 71 York Street.

Costs of the proceedings

61. The first issue raised by the parties’ submissions is whether the Court should makes separate costs orders in respect of the different issues on which they had success or whether the Court should make an overall order which recognises the outcomes by some form of percentage apportionment.

62. 71 York Street submits that the appropriate approach is to make one costs order. The defendants’ preference is for the Court to make orders on an issue by issue basis.

63. In the Principal Judgment, I found for 71 York Street on its claim for an easement by prescription for a right of carriageway over the Dock but declined to grant declaratory relief that it had a right of carriageway over the Passage in circumstances where it has an existing right of way recorded on its title.

64. I also found for 71 York Street on its alternate claim in relation to a right of way over the Dock, being that 71 York Street would have been entitled to an order under s 88K of the Conveyancing Act (NSW) for an easement over the Dock for a right of carriageway (alternative s 88K easements claim).

65. As to the other easements claimed by 71 York Street, I found in favour of 71 York Street in relation to the making of orders under s 88K of the Conveyancing Act for easements in respect of repairs and services and encroaching and overhanging structures (successful s 88K easements claim) but found against it in respect of the claimed prescriptive easement for drainage of water and sewerage. I also found against 71 York Street in respect of orders under s 88K for easements for drainage of water and sewerage or for light and air.

66. The usual rule is that costs follow the event, unless it appears that some other order should be made: Uniform Civil Procedure Rules 2005 (NSW), r 42.1.

67. Generally, the Court will award costs to a successful party without seeking to apportion costs between the issues on which it has been successful and those on which it has failed, although it may be appropriate to do so if a particular issue or group of issues is “clearly dominant or separable”: Doppstadt Australia Pty Ltd v Lovick & Son Developments Pty Ltd (No 2) [2014] NSWCA 219 at [14]-[19]; Bostik Australia Pty Ltd v Liddiard (No 2) [2009] NSWCA 304 at [38].

68. I accept that the claims made by 71 York Street under s 88K of the Conveyancing Act were dominant and separable in this case and could be subject to different costs orders. There was evidence led by both parties in relation to the s 88K easements that was additional to the evidence adduced in respect of the other claims raised by 71 York Street, such as the expert evidence.

69. While the s 88K easement claims raise dominant and separable issues, in my view, the sensible approach is that proposed by 71 York Street, which is to make one costs order overall which takes into account an apportionment between the issues. As 71 York Street submits, in the absence of any agreement between the parties, making different costs orders on an issue basis would likely lead to inconvenience and difficulties in a costs assessment from having to determine the various components which relate to each of the individual issues. It would also likely lead to debates about the allocation of the costs in respect of common factual matters across the different claims, such as the evidence of the historical and current use of the Dock, and lead to the parties incurring additional costs.

70. As to the terms of the costs order to be made, 71 York Street submits that the Court should order the defendants to pay 85% of its costs on an ordinary basis. It contends that such an order is appropriate in circumstances where:

1. almost all of the proceedings were directed towards the question of whether it had a right of carriageway over the Dock, for which it had success;

2. it served an offer of compromise on 6 February 2017 which it says justifies the Court making a costs order contrary to the usual order under s 88K(5) in respect of its successful s 88K easements claim; and

3. the defendants conduct, in particular the blocking of 71 York Street’s access to the Passage, was unreasonable which justifies the Court awarding it costs in respect of the alternative s 88K easement claim, and not ordering it to pay the defendants’ costs.

71. 71 York Street acknowledges that the defendants are entitled to their costs incurred in respect of the easements under s 88K for which the Court did not make orders, being the easements for sewerage and water and light and air.

72. The defendants submit that, if the Court is not minded to make costs orders by issue, it should order the defendants to pay 50% of 71 York Street’s costs of the proceedings on an ordinary basis.

73. The defendants submit that 50% is appropriate as it reflects 71 York Street’s success in relation to its prescriptive easement claim in relation to the Dock and failure on the other claims made, as well as the usual rule that the defendants should be awarded their costs in respect of the 71 York Street alternative s 88K claim and the successful s 88K easements: s 88K(5) of the Conveyancing Act.

74. The difference between the parties relates to their approach to the costs of 71 York Street’s claim in relation to a right of carriageway over the Passage, the costs in relation to the alternative s 88K easements claim and the costs in relation to the non-successful s 88K easements claim.

75. I do not accept the defendants’ submission that costs should follow the event in favour of the defendants in respect of 71 York’s Street’s claim for a declaration for a right of carriageway over the Passage.

76. 71 York Street had to bring these proceedings on an urgent basis to enable it to gain access to the Passage which had been blocked by the defendants in circumstances where 71 York Street had a clear legal entitlement to use the Passage by virtue of the right of way recorded in its title. The defendants did not challenge 71 York Street’s entitlement to a right of way over the Passage at the hearing. The argument on whether declaratory relief should be granted was made in that context and did not, in my view, represent a dominant and separable issue when compared to the other claims made in this case.

77. As to the costs in relation to 71 York Street’s successful s 88K easement claims, I do not accept its submission that the offer of compromise is a matter which justifies making an order for those costs in its favour.

78. The usual rule in relation to costs of a s 88K proceeding is that they are payable by the applicant subject to any order of the court to the contrary: s 88K(5) of the Conveyancing Act.

79. The meaning and application of the phrase ‘subject to any order of the court to the contrary’ is not completely open-ended. In a claim for an easement under s 88K, a property owner should not be put at risk of an adverse costs order “unless it has done more than reject reasonable offers of compensation”, for example, by engaging in unreasonable conduct which might disentitle a defendant to the usual order for costs: Shi v ABI-K Pty Ltd [2014] NSWCA 293 at [98]; RossBilton& Ors v Georgia Ligdas (Costs) [2016] NSWSC 1585, at [17]; Rawson v Studholme (No 2)[2019] NSWSC 1273, at [3].

80. Other than rejecting the offer of compromise, 71 York Street did not point to any particular conduct on the part of the defendants which was directed to the easements claimed for repairs and services and encroaching and overhanging structures which, in my view, justifies disentitling them to their costs in respect of the successful s 88K easements.

81. It follows that I consider the costs order to be made should reflect the usual rule that the defendants should have their costs paid in respect of all the other easements sought by 71 York Street (that is, easements other than a right of carriageway over the Passage and the Dock), which includes the costs of 71 York Street’s successful s 88K easement claims.

82. That leaves the question of the costs of the alternative s 88K easement claim. Specifically, whether the circumstances of this case, including the defendants’ conduct, warrants departing from the usual rule in relation to s 88K proceedings which would result in 71 York Street paying the defendants costs of the alternative 88K easement claim. In my view, a departure from that usual rule is warranted in this case.

83. The defendants acted in a peremptory way by blocking 71 York Street’s access in 2016. Both the Passage and the Dock had been used by 71 York Street for many years prior to 2016.

84. The defendants were aware that 71 York Street used the Passage and the Dock at the time they bought the land in 2008: (Principal Judgment at [401] to [402]). Presumably, they were also aware of 71 York Street’s easement over the Passage when they took steps to block access given the easement had been recorded on its title in 2011.

85. After locking the gate and blocking their access, 71 York Street put the defendants on notice that they were interfering with 71 York Street’s right of way over the Passage: (letter dated 20 June 2016 from 71 York Street’s solicitor to the solicitors for the defendants at CB76).

86. The defendants also raised arguments in response to the alternative s 88K easement claim on valuation which were seemingly inconsistent with their position in proceedings 2008 where, as the owners of 100 Clarence Street, they sought to obtain for themselves an easement over the Passage under s 88K and relied on valuation evidence which suggested that an easement would not diminish the value of the Passage. Their position on valuation of an easement over the Passage in 2008 would seem to apply with equal if not greater force in respect of the Dock given its smaller size and landlocked position.

87. Some of the other positions taken by the defendants, such as on reasonable necessity, might also be characterised as having seemingly little merit in the context where the Dock stood between the Passage and the rear area of 71 York Street and was the only means for 71 York Street to utilise its right of way over the Passage to get to that area.

88. While the above matters are similar to the position in Rawson v Studholme [2018] NSWSC 1764, I do not accept 71 York Street’s submission that all of the matters raised by the Court in that case at [46] - [55] and in Rawson v Studholme(No 2) [2019] NSWSC 1273 “is correct in every respect and has perfect application to these proceedings”.

89. For example, this was not a case where the defendants ran a number of arguments in defence to the alternative s 88K easement claim which they then abandoned at trial leading to wasted costs on the part of 71 York Street. 71 York Street did not point to any particular evidence, from an expert or otherwise, that was unnecessary and not dealt with as part of the proceedings.

90. To my mind, to require 71 York Street to pay the defendants’ costs of the alternative s 88K easements claim would deprive it of the benefit of its overall success in the proceedings and fail to take account of the defendants’ conduct, as referred to above, which I would categorise as unreasonable. The s 88K claim was also an alternative claim which was brought, not just as a matter for convenience, but where there were issues and evidence, such as on past and current use, which overlapped with its claims for a prescriptive easement over the Dock.

91. That leaves the question of an appropriate apportionment for an overall costs order to reflect my conclusions on the differing issues.

92. Neither party adduced any evidence which attempted to estimate the proportion of costs incurred or time spent on the main issues in the proceedings. As a result, it is not possible to identify or test the bases on which the figures of 85% and 50% have been put forward by the parties or to identify to what part of the case the “35% difference” relates. Presumably it relates to the alternative and successful s 88K easements claims.

93. In the absence of evidence, I can only approach the issue of apportionment as a matter of discretion and in a broad brushed and impressionistic manner: James v Surf Road Nominees Pty Ltd(No 2) [2005] NSWCA 296 at [36], citing Dodds Family Investments Pty Ltd v Lane Industries Pty Ltd (1993) 26 IPR 261; Macquarie International Health Clinic Pty Ltd v Sydney Southwest Area Health Service (No 2) [2011] NSWCA 171 at [22].

94. Adopting that approach, I conclude that the proper order is for the defendants to pay 65% of 71 York Street’s costs of the proceedings on an ordinary basis.

95. In my view, that costs order is appropriate as it reflects that a very large part of the proceedings, including the lay and some of the expert evidence (such the first report from Mr Cambridge) and much of the submissions, was directed towards the question of whether 71 York Street had a right of carriageway over the Dock and the Passage, for which 71 York Street had overall success. It reflects that the defendants should be paid their costs in relation to the other easements claimed under s 88K of the Conveyancing Act. It also seeks to reflect that 71 York Street will not pay the defendants’ costs of the s 88K alternative easement claim, but that 71 York Street will not recover its additional costs relating to that claim, such as the costs of 71 York Street’s valuation evidence, for which the defendants should not, in my view, have to pay.

Orders

96. For these reasons, I make the following orders in proceedings 2016/00187360:

1. Declare that The Owners - Strata Plan 61233 is entitled to a right of carriageway over Lot 2 in Deposited Plan 1052948 in the following terms:

An easement in favour of Strata Plan 61233 (the Land Benefited) over Lot 2 in Deposited Plan 1052948 (the Land Burdened) for the full and free right for:

1. every person who is at any time entitled to an estate or interest in the Land Benefited; and

2. every person authorised by that person;

at all times to go, pass and repass on the Land Burdened;

3. with or without animals or vehicles or both; or

4. by foot;

over the Land Burdened in respect of, or in connection with any trade and/or commercial activity carried on the Land Benefited.

2. Order that the Defendants take all steps, do all things and execute all documents necessary for the recording in the register kept by the Registrar-General of easements in the terms of those set out in order 1.

3. An easement for repairs be imposed pursuant to section 88K of the Conveyancing Act 1919 (NSW) in terms of Schedule 8 Part 5 of the Conveyancing Act 1919 (NSW) with:

1. the land to which the benefit of the easement is appurtenant is the land in certificate of title folio identifier CP/SP61233; and

2. the land which is subject to the burden of the easement is lot 1 in DP 619464 and Lot 2 in DP 1052948.

4. An easement for services be imposed pursuant to section 88K of the Conveyancing Act 1919 (NSW) in terms of Schedule 8 Part 11 of the Conveyancing Act 1919 (NSW) with

1. the land to which the benefit of the easement is appurtenant is the land in certificate of title folio identifier CP/SP61233; and

2. the land which is subject to the burden of the easement is lot 1 in DP 619464 and Lot 2 in DP 1052948.

5. An easement to permit overhanging structures to remain be imposed pursuant to section 88K of the Conveyancing Act 1919 (NSW) in terms of Schedule 8 Part 10 of the Conveyancing Act 1919 (NSW) with:

1. the land to which the benefit of the easements is appurtenant is the land in certificate of title folio identifier CP/SP61233; and

2. the land which is subject to the burden of the easements is lot 1 in DP 619464 and Lot 2 in DP I052948.

The overhanging structures mean the structures identified in the Survey Works report prepared by Rolf Cambridge, Surveyor dated 26 September 2016, as follows:

1. Conductor Boxes (Rain Water Heads) -0.335 Wide, Limited in Height & Depth RL 46.70 & RL 46.45 (AHD) as shown on the Easement plan labelled (A) (Diagram 2);

2. Downpipes -0.18 Wide, Limited in Height & Depth RL 46.45 & RL 20.50 (AHD) as shown on the Easement plan labelled (B) (Diagram 3); and

3. Fire System Pipes and Sprinkler Heads-Variable Width, Limited in Height & Depth RL 47.45 & RL 26.25 as shown on the draft Easement plan labelled (C) (Diagram 4)

6. An easement to permit overhanging structures to remain be imposed pursuant to section 88K of the Conveyancing Act 1919 (NSW) in terms of Schedule 8 Part 10 of the Conveyancing Act 1919 (NSW) with:

1. the land to which the benefit of the easement is appurtenant is the land in certificate of title folio identifier CP/SP61233; and

2. the land which is subject to the burden of the easement is Lot 1 in DP 619464.

The overhanging structures mean the structures identified in the Survey Works report prepared by Rolf Cambridge, Surveyor dated 26 September 2016, as follows:

1. Conductor Box (Rain Water Head) 0.335 Wide, Limited in Height & Depth RL 43.15 & RL 42.90 (AHD) as shown on the Easement plan labelled (Al) (Diagram 2);

2. Downpipes -0.18 Wide, Limited in Height & Depth RL 48.10 & RL 20.50 (AHD) as shown on the Easement plan labelled (Bl) (Diagram 3).

7. An easement to permit overhanging structures to remain be imposed pursuant to section 88K of the Conveyancing Act 1919 (NSW) in terms of Schedule 8 Part 10 of the Conveyancing Act 1919 (NSW) with:

1. the land to which the benefit of the easements is appurtenant is the land in certificate of title folio identifier CP/SP61233; and

2. the land which is subject to the burden of the easements is Lot 1 in DP 619464.

The overhanging structures mean the structure identified in the Survey Works report prepared by Rolf Cambridge, Surveyor dated 26 September 2016, as follows:

(a)   Vent Pipe- 0.135 Wide, Limited in Height & Depth RL 50.50 & RL 20.50 (AHD) as shown on the draft Easement plan labelled (D) (Diagram 5).

8. An easement to permit overhanging structures to remain be imposed pursuant to section 88K of the Conveyancing Act 1919 (NSW) in terms of Schedule 8 Part 10 of the Conveyancing Act 1919 (NSW) with:

1. the land to which the benefit of the easement is appurtenant is the land in certificate of title folio identifier CP/SP61233; and

2. the land which is subject to the burden of the easement is Lot 2 in DP1052948.

The overhanging structures mean the structures identified in the Survey Works report prepared by Rolf Cambridge, Surveyor dated 26 September 2016, as follows:

1. Electrical Conduits-0.06 Wide, Limited in Height & Depth RL 25.65 & RL 25.50 (AHD) as shown on the draft Easement plan labelled (E) (Diagram 5).

9. An easement to permit encroaching structures to remain be imposed pursuant to section 88K of the Conveyancing Act 1919 (NSW) in terms of Schedule 8 Part 13 of the Conveyancing Act 1919 (NSW) with:

1. the land to which the benefit of the easement is appurtenant is the land in certificate of title folio identifier CP/SP61233; and

2. the land which is subject to the burden of the easement is lot 1 in DP 619464 and Lot 2 in DP 1052948.

The encroaching structures mean the structures identified in the Survey Works report prepared by Rolf Cambridge, Surveyor dated 26 September 2016, as follows:

1. Window Sill Mouldings- 0.08 Wide, Limited in Height & Depth RL 44.50 & RL 23.35 (AHD) as shown on the draft Easement plan labelled (F) (Diagram 6);

2. Parapet- 0.06 Wide, Limited in Height & Depth RL 47.70 & RL 47.50 (AHD) as shown on the draft Easement plan labelled (G) (Diagram 7).

10. An easement to permit encroaching structures to remain be imposed pursuant to section 88K of the Conveyancing Act 1919 (NSW) in terms of Schedule 8 Part 13 of the Conveyancing Act 1919 (NSW) with:

1. the land to which the benefit of the easement is appurtenant is the land in certificate of title folio identifier CP/SP61233; and

2. the land which is subject to the burden of the easement is lot 1 in DP 619464.

The encroaching structures mean the structures identified in the Survey Works report prepared by Rolf Cambridge, Surveyor dated 26 September 2016, as follows:

1. Corbel - 0.18 Wide, Limited in Height & Depth RL 47.70 & RL 20.50 (AHD) as shown on the Easement plan labelled (H) (Diagram 8).

11. Order that the Plaintiff pay compensation to the Defendants in the sum of $8,000 pursuant to section 88K (4) of the Conveyancing Act 1919 (NSW) in respect of the imposition of easements for repairs, services, overhanging structures and encroaching structures in respect as set out in orders 3, 4, 5, 6, 7, 8, 9 and 10.

12. Order that the defendants produce Certificate of Title, Folio Identifier 2/1052948 and Certificate of Title, Folio Identifier 1/619464 to the Registrar-General within 21 days of the date of these orders to enable registration of the said easements.

13. Order that the Registrar-General record the easement on the Certificate of Title, Folio Identifier 2/1052948 and Certificate of Title, Folio Identifier 1/619464 after 21 days from the date of these orders in the event drat the Certificate of Title, Folio Identifier 2/1052948 and Certificate of Title, Folio Identifier 1/619464 are not produced to the Registrar-General in accordance with order 12.

14. Reserve liberty to apply as to the implementation of orders 1 to 13.

15. Orders 1 to 14 be stayed until the appeal against the whole of the Principal Judgment and these orders, in respect of which a notice of intent to appeal dated 25 October 2019 has been filed by the defendants (Appeal), is determined or otherwise ordered.

16. Until the defendants’ Appeal is determined or otherwise ordered, the defendants are restrained from:

1. locking a gate on the land comprised in Lot 1 in DP619464 (Passage) and Lot 2 in DP1052948 (Dock); and

2. placing any skip bin or other items in the passage or Dock which obstruct vehicular access, including garbage trucks.

17. Dismiss the plaintiffs’ notice of motion filed 11 December 2019 seeking leave to re-open with the plaintiff to pay the defendants’ costs of that motion.

18. Except in relation to costs which are subject of orders previously made against the defendants in these proceedings and the costs of the plaintiffs’ notice of motion seeking leave to re-open filed on 11 December 2019, the defendants to pay 65% of the plaintiffs costs of the proceedings on the ordinary basis, in an amount to be agreed or assessed.

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Decision last updated: 20 December 2019