The Owners - Strata Plan 85044 v Murrell; Murrell v The Owners - Strata Plan 85044

[2020] NSWSC 20

Supreme Court

New South Wales

Medium Neutral Citation:

The Owners – Strata Plan 85044 v Murrell; Murrell v The Owners – Strata Plan 85044 [2020] NSWSC 20

Hearing dates:

28, 29, 30 April and 14 May 2020

Date of orders:

1 October 2020

Decision date:

01 October 2020

Jurisdiction:

Equity - Real Property List

Before:

Williams J

Decision:

See summary of the Court’s conclusions at [75].

Catchwords:

LAND LAW – covenants – restrictive covenants – construction – where restrictive covenant states that no matter or thing of any nature whatsoever shall be constructed on erected on placed on or permitted to remain on the servient tenement that exceeds a height of RL 26 AHD – where airspace above the servient tenement became part of the dominant tenement after registration of the restrictive covenant – whether on the proper construction of the restrictive covenant there is an implied positive covenant or easement allowing the owner of the servient tenement to enter into the airspace on a transitory basis – restrictive covenant held not to include a positive covenant or easement

LAND LAW – easements – implied easements – easements of necessity – where airspace above the putative dominant tenement is owned by putative servient tenement – where that airspace previously formed part of the property of the putative dominant tenement until the registration of a plan of subdivision under which the airspace became part of the putative servient tenement – whether easement over airspace is essential for the use of the putative dominant tenement – implied easement of necessity held to have arisen at the time of the registration of the plan of subdivision – easement not enforceable by current owners of putative dominant tenement

TORTS – trespass – trespass to land – title to sue - where owners corporation of a strata scheme is the registered proprietor of airspace which contains a view of Sydney Harbour and is located above an adjacent property – where airspace forms part of the common property of the owners corporation – owners corporation held to have standing to bring a claim for trespass to airspace

TORTS – trespass – trespass to land – where owners corporation of a strata scheme is the registered proprietor of airspace which contains a view of Sydney Harbour and is located above an adjacent property – where it is not possible for owner of the adjacent property to access roof of that property without encroaching into the airspace – where agents of adjacent property owner enter into airspace on several occasions to effect repairs to and survey the roof for possible future development – defence of necessity established in relation to some but not all of the encroachments into the airspace – trespass held to have occurred on the other occasions – compensatory damages awarded

TORTS – private nuisance – title to sue – whether the owners corporation of a strata scheme can bring a claim for private nuisance in respect of damages or loss allegedly suffered by individual lot owners in the strata scheme – owners corporation held not to have standing to bring a claim for private nuisance on behalf of lot owners

LAND LAW – covenants – restrictive covenants – application to modify or extinguish restrictive covenant pursuant to s 89 of the Conveyancing Act 1919 (NSW) – power to make orders – where proposed modification to restrictive covenant seeks in substance to create an easement – no power to create an easement under s 89 of the Conveyancing Act

LAND LAW – easements – court-imposed easements – Conveyancing Act 1919 (NSW), s 88K – proposed easement to access the airspace owned by putative servient tenement as reasonably necessary and on a temporary basis to repair, maintain and/or improve structures on the putative dominant tenement – whether reasonably necessary for the effective use or development of the putative dominant tenement – proposed easement reasonably necessary for effective use or development insofar as it permits access to the airspace as necessary and on a temporary basis for repairs and maintenance only

LAND LAW – easements – court-imposed easements – Conveyancing Act 1919 (NSW), s 88K – compensation – whether the lot owners in a strata scheme are entitled to be compensated for any loss or other disadvantage arising from an easement to be imposed over common property of owners corporation – lot owners are not persons having an estate or interest in the common property that is evidenced by an instrument registered in the General Register of Deeds or the register kept under the Real Property Act 1900 (NSW) – lot owners not entitled to compensation – Community Association DP 270447 v ATB Morton Pty Ltd (2019) 240 LGERA 32; [2019] NSWCA 83 applied

LAND LAW – easements – court-imposed easements – Conveyancing Act 1919 (NSW), s 88K – whether reasonable attempts have been made to obtain the easement or an easement having the same effect – where first attempts to obtain the easement or an easement having the same effect made only after the commencement of proceedings – where attempts made after the commencement of proceedings were sufficient in circumstances where lengthy correspondence between the parties about access, and the owner of the putative servient tenement was not prepared to grant an easement on any terms prior to receiving the first offer

PRACTICE AND PROCEDURE – applications – leave to amend pleadings – application to amend summons and statement of claim – application made on the last day of a four-day hearing – no adequate explanation for the delay in making the application – where the proposed amendment merely clarifies what was already implicit in the existing pleadings – application granted

LAND LAW – Torrens title – contents of Register – where restrictive covenant recorded in a previous folio of the dominant land – where that restrictive covenant is not recorded in current folio of dominant land – observations about whether the dominant and servient tenements’ title is subject to the restrictive covenant

Legislation Cited:

Access to Neighbouring Land Act 2000 (NSW), s 11

Civil Procedure Act 2005 (NSW), ss 56, 57 and 58

Community Land Development Act 1989 (NSW), ss 15, 25, 31, 32, 33 and Sch 8

Community Land Management Act 1989 (NSW), s 5

Conveyancing Act 1919 (NSW) ss 88B, 88K, 89

Land and Environment Court Act 1979 (NSW), s 40

Real Property Act 1900 (NSW), ss 31B and 42

Strata Schemes Development Act 2015 (NSW), ss 8, 9, 10, 23, 24, 28 and 118

Strata Schemes (Freehold Development) Act 1973 (NSW), ss 6, 8, 18, 20, 21 and 24

Strata Schemes Management Act 1996 (NSW), s 227

Strata Schemes Management Act 2015 (NSW), ss 8 and 254

Woollarah Local Environment Plan 2014 (NSW)

Cases Cited:

Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175; [2009] HCA 27

Brookfield Multiplex Ltd v Owners Corporation Strata Plan 61288 (2014) 254 CLR 185; [2014] HCA 36

Community Association DP 270447 v ATB Morton Pty Ltd (2019) 240 LGERA 32; [2019] NSWCA 83

Currumbin Investments Pty Ltd v Body Corp Mitchell Park ParkwoodCts [2012] 2 Qd R 511; [2012] QCA 9

Cuzeno Pty Ltd v Owners – Strata Plan 65870 [2013] NSWSC 1385

EB 9 & 10 Pty Ltd v Owners of Strata Plan 934 (2018) 98 NSWLR 889; [2018] NSWCA 288

Elston v Dore (1982) 149 CLR 480

Fincob Pty Ltd v Campbelltown City Council [2010] NSWSC 349

Gordon v Lever (2018) 97 NSWLR 90; [2018] NSWCA 43

Gordon v Lever (No 2) (2019) 101 NSWLR 427; [2019] NSWCA 275

Govindan-Lee v Sawkins (2016) 18 BPR 35,883; [2016] NSWSC 328

Gray v Motor Accidents Commission (1998) 196 CLR 1; [1998] HCA 70

Hill v Higgins [2012] NSWSC 270

Horseshoe Pastoral Co Pty Ltd v Rixon [2018] NSWCA 121

ING Bank Australia Ltd v O’Shea (2010) 14 BPR 27,317; [2010] NSWCA 71

Jarosz v State of New South Wales (2019) 19 BPR 39407; [2019] NSWSC 62

Khattar v Wiese (2005) 12 BPR 23,235; [2005] NSWSC 1014

Kuru v New South Wales (2008) 236 CLR 1; [2008] HCA 26

Lamos Pty Ltd v Hutichson (1984) 3 BPR 9350

Marketform Managing Agency Ltd v Amashaw Pty Ltd (2018) 97 NSWLR 306; [2018] NSWCA 70

Markos v O R Autor (2007) 13 BPR 24,487; [2007] NSWSC 810

McElwaine v The Owners – Strata Plan 75975 (2017) 18 BPR 37,207; [2017] NSWCA 239

McGrath v Campbell (2006) 68 NSWLR 229; [2006] NSWCA 180

Moorebank Recyclers Pty Ltd v Tanlane Pty Ltd (2012) 16 BPR 31,257; [2012] NSWCA 445

Neeta (Epping) Pty Ltd v Phillips (1974) 131 CLR 286

Nickerson v Barraclough [1981] 1 Ch 426

North Sydney Printing Pty Ltd v Sabemo Investment Corp Pty Ltd [1972] 2 NSWLR 150

Owners – Strata Plan 43551 v Walter Construction Group Ltd (2004) 62 NSWLR 169; [2004] NSWCA 429

Panton v The Owners of Survey Strata Plan 46838 [2013] WASC 35

Parish v Kelly (1980) 1 BPR 9394

Plenty v Dillon (1991) 171 CLR 635; [1991] HCA 5

Rainbowforce Pty Ltd v Skyton Holdings Pty Ltd (2010) 15 BPR 29,367; [2010] NSWLEC 2

Rixon v Horseshoe Pastoral Co Pty Ltd [2017] NSWSC 1293

Sedleigh-Denfield v O’Callaghan [1940] AC 880

Sertari Pty Ltd v Nirimba Developments Pty Ltd [2007] NSWCA 324

Simon v Condran (2013) 85 NSWLR 768; [2013] NSWCA 388

State of New South Wales v McMaster (2015) 91 NSWLR 666; [2015] NSWCA 228

Tanlane Pty Ltd v Moorebank Recyclers Pty Ltd [2008] NSWSC 1341

Tenacity Investments v Ku-Ring-Gai Council [2008] NSWLEC 27

The Owners – Strata Plan No 61233 v Arcidiacono (2019) 19 BPR 39,711; [2019] NSWSC 1307

Westfield Management Ltd v Perpetual Trustee Company Ltd (2007) 233 CLR 528; [2007] HCA 45

Wheeldon v Burrows (1879) 12 Ch D 31

Texts Cited:

B Edgeworth, Butt’s Land Law (7th ed, 2017, Lawbook Co)

R P Balkin and J L R Davis, Law of Torts (5th ed, 2013, LexisNexis Butterworths)

Category:

Principal judgment

Parties:

In proceeding 2019/201673:

The Owners – Strata Plan 85044 (Plaintiff)
George Anthony Calvert Murrell (First Defendant)
Deirdre Frances Murrell (Second Defendant)

In proceeding 2019/299582:

George Anthony Calvert Murrell (First Plaintiff)
Deirdre Frances Murrell (Second Plaintiff)
The Owners – Strata Plan 85044 (Defendant)

Representation:

In proceeding 2019/201673:

Counsel:
Mr J J Young with Mr M Dalla-Pozza (Plaintiff)
Mr T A Alexis SC with Ms M Ellicott (Defendants)

Solicitors:
Comino Prassas Lawyers (Plaintiff)
Hones Lawyers (Defendants)

In proceeding 2019/299582:

Counsel:
Mr T A Alexis SC with Ms M Ellicott (Plaintiffs)
Mr J J Young with Mr M Dalla-Pozza (Defendant)

Solicitors:
Hones Lawyers (Plaintiffs)
Comino Prassas Lawyers (Defendant)

File Number(s):

2019/201673; 2019/299582

Publication restriction:

N/A

Judgment

Introduction

1. Professor George Murrell and Professor Deirdre Murrell are the owners of land known as 97 Wentworth Road, Vaucluse. They are presently undertaking certain work on that land, including extensive alterations to the residence. Throughout the hearing, their senior counsel has referred to them as the Murrells. The same terminology is adopted in these reasons, without intending any disrespect. References to Professor Murrell in these reasons are references to Professor George Murrell, who gave evidence at the hearing of these proceedings. (Professor Deirdre Murrell did not give evidence.)

2. The Owners – Strata Plan No 85044 is a body corporate constituted pursuant to s 8 of the Strata Schemes Management Act 2015 (NSW) by the owners of the lots in the strata scheme to which registered Strata Plan No 85044 relates (the Owners Corporation). The Owners Corporation is the registered proprietor of the common property of SP 85044 which comprises land known as 95 Wentworth Road, Vaucluse and also airspace above part of the adjoining property at 97 Wentworth Road (the Airspace). [1]

   1. Strata Schemes Management Act 2015 (NSW), s 8; Exhibit 1, page 444.

3. The building on 95 Wentworth Road comprises four units, each of which occupies an entire level of the building. The building on 97 Wentworth Road is a residence that, as mentioned above, is presently undergoing redevelopment.

4. The apartments in the building on 95 Wentworth Road are oriented to the north and overlook 97 Wentworth Road, including a flat (but slightly sloping) concrete roof on part of the residence on 97 Wentworth Road. The concrete roof is being retained in the redevelopment. It is common ground that the concrete roof is between 11 and 16 centimetres below the lower horizontal boundary of the Airspace that is owned by the Owners Corporation.

5. The juxtaposition of 95 and 97 Wentworth Road, and the location of the flat concrete roof of 97 Wentworth Road, is shown in a photograph that was in evidence, a copy of which is reproduced in Annexure “A” to these reasons. [2] As can be seen from that photograph, each of the four apartments at 95 Wentworth Road has two terraces, one of which overlooks the flat concrete roof of 97 Wentworth Road. As can be seen from another photograph that was in evidence and that is reproduced in Annexure “B” to these reasons, the view from those terraces looking beyond the flat concrete roof is a view of Sydney Harbour. [3] The photograph in Annexure “B” also illustrates the close proximity of the flat concrete roof of the residence on 97 Wentworth Road to part of the terrace of Unit 2 at 95 Wentworth Road, from which the photograph was taken.

   2. Affidavit of George Murrell sworn on 6 February 2020, paragraph 22; Exhibit 1, page 573.

   3. Affidavit of Wayne Howse sworn on 23 August 2019, paragraph 17(i); Exhibit 1, page 585.

6. The dwelling on 97 Wentworth Road, including the flat concrete roof, has existed in its present form since at least about 1960. [4] In 1992, a restriction was created that prevented any improvements or other matter or thing on part of 97 Wentworth Road exceeding the height of RL 26.00 AHD. That part of 97 Wentworth Road above RL 26.00 AHD is the Airspace that became the property of the owner of 95 Wentworth Road in 1997. The apartment building at 95 Wentworth Road was constructed more recently, and the strata plan for the building was registered in March 2011.

   4. Affidavit of George Murrell sworn on 6 February 2020, paragraph 11.

7. A dispute has arisen between the Murrells and the Owners Corporation in the context of the redevelopment of 97 Wentworth Road. The dispute concerns:

1. the Murrells (or contractors engaged by them) undertaking certain work to a wall between 95 and 97 Wentworth Road. The precise location of the wall relative to the boundary between the two properties is in dispute, but it is nevertheless convenient to refer to the wall as the Boundary Wall; and

2. the Murrells (or contractors engaged by them) entering onto the flat concrete roof of 97 Wentworth Road, and into the Airspace, for the purpose of inspecting the roof and carrying out certain work to the roof.

8. By summons filed on 28 June 2019, the Owners Corporation commenced proceeding 2019/201673 against the Murrells claiming damages (including aggravated and exemplary damages) and injunctive relief in relation to alleged trespass and nuisance. It is convenient to refer to this proceeding as the Owners Corporation proceeding.

9. By summons filed on 25 September 2019, the Murrells commenced proceeding 2019/299582 against the Owners Corporation claiming declaratory relief concerning the proper construction of the Restriction, an order under s 89 of the Conveyancing Act 1919 (NSW) modifying the Restriction or an easement under s 88K of the Conveyancing Act. It is convenient to refer to this proceeding as the Murrell proceeding.

10. The two proceedings were heard together, with evidence in one being evidence in the other.

Historical matters concerning the titles to the properties in issue

11. The following matters are not in dispute, save for two matters which are identified below.

12. The Murrells purchased their property at 97 Wentworth Road in November 2018. [5]

    5. Affidavit of George Murrell sworn on 6 February 2020, paragraph 4.

13. The Murrells’ land at 97 Wentworth Road is now contained in folio 1/1254483 of the Register. However, at the time that the Murrells purchased the property and at the time that these proceedings were commenced, this land was known as Lot 21 in DP 871094. [6] These reasons refer to the property as Lot 21, consistently with the pleadings and the terminology used by the parties in submissions. The area of Lot 21 that has been limited in height to RL 26.00 AHD since September 1997 is referred to as Part Lot 21.

    6. Affidavit of George Murrell sworn on 6 February 2020, paragraphs 4–7.

14. The boundaries of Lot 21 at ground level were first established by plan of subdivision DP 399130, which was registered on 27 September 1955. The land was then known was Lot D in DP 399130. [7]

    7. Affidavit of George Murrell sworn on 6 February 2020, paragraph 8; Exhibit 1, page 412.

15. On 10 June 1992, the registration of DP 645772 created a covenant pursuant to s 88B of the Conveyancing Act burdening part of Lot D in DP 399130 and benefitting Lot E in DP 399130 and Lot 2 in DP 323528 on the other hand (the Restriction). The terms of the Restriction set out in the s 88B instrument are: [8]

“No matter or thing of any nature whatsoever (including, without limiting the generality of the aforegoing, any improvements and any moveable items and any plants or natural growth of any nature whatsoever) shall be constructed on erected on placed on or permitted to remain on at any time (and whether in whole or in part) that part of the servient tenement indicated by the letter “B” in the plan which exceeds, in height, a height of 26.00 Australian Height Datum.”

8. Affidavit of George Murrell sworn on 6 February 2020, paragraph 9; Exhibit 1, pages 413–415.

16. The Restriction applied to that part of what is now Lot 21 that is marked “B” on Lot D in DP 399130, as shown in DP 645772. Within the area marked “B” on that plan is a symbol with the following notation:

“Cuts in edge of concrete roof slab RL 25.87 A.H.D”

17. The other part of the land affected by the Restriction – shown on DP 645772 as Lot E in DP 399130 and Lot 2 in DP 323528 – is part of the land at 95 Wentworth Road that is now owned by the Owners Corporation.

18. On 11 September 1997, plan of subdivision DP 871094 was registered. This plan subdivided the land marked “B” on Lot D in DP 399130 (that is, the part of 97 Wentworth Road affected by the Restriction) into “Part Lot 21” and “Part Lot 22” in DP 871094. Part Lot 22 is the Airspace that I have described in [2] above.

19. Within the area of DP 871094 that is marked “Pt 21 & Pt 22”, are the following four markings: [9]

    9. Exhibit 1, page 435.

1. “Note 1”, which records:

“LOT 21 LIMITED IN HEIGHT TO THE LEVEL PLANE AT RL 26.0 AND UNLIMITED IN DEPTH.

LOT 22 LIMITED IN DEPTH TO THE LEVEL PLANE AT RL 26.0 AND UNLIMITED IN HEIGHT.”

2. “A”, which refers to “Covenant A 688587”. The terms of that covenant were not in evidence and neither the Owners Corporation nor the Murrells contended that the covenant has any relevance to the issues in the proceedings;

3. “B”, which refers to “Restriction on the Use of Land (DP 645772)”, being the Restriction referred to in [15] above; and

4. “BM CUT IN ROOF SLAB RL 25.86 (DP 645772) BY SURVEY”, which replicates note “BM2” in DP 645772 referred to in [16] above, save that the height at which the roof slab cuts in is recorded as RL 25.86 rather than RL 25.87 (nothing turns on that difference).

20. At the time that DP 871094 was registered, 97 Wentworth Road (which become Lot 21 on the registration of the plan) was owned by Mr Harry Michael and Ms Liliane Michael, and 95 Wentworth Road (which became Lot 22, including the Airspace, on registration of the plan) was owned by Stromness Pty Limited. [10] As a consequence of the registration of DP 871094, Mr and Mrs Michael’s ownership of the land to which the Restriction applied was limited in height to RL 26.0 AHD and Stromness Pty Ltd became the registered proprietor of that land above the height of RL 26.0 AHD. It is therefore convenient to refer to DP 871094 as the Airspace plan of subdivision.

    10. Exhibit 1, pages 416–435.

21. A survey plan of Lot 21 commissioned by the Murrells and prepared on 26 November 2018 states that the roof of the house on Lot 21 is partly tile and partly flat concrete, and that the height of the flat concrete part of the roof is between 25.84 and 25.89 metres AHD [11] – that is, between 11 and 16 centimetres below the horizontal boundary created by the registration of the Airspace plan of subdivision. It is clear from comparing this survey plan with DP 645772 and the Airspace plan of subdivision that the Restriction applied to part of Lot 21 that included, but was not limited to, the part of 97 Wentworth Road on which the flat concrete roof was constructed.

    11. Affidavit of George Murrell sworn on 6 February 2020, paragraph 10; Exhibit 1, pages 946–947.

20. Although the statement of claim in the Murrell proceedings pleaded that the Airspace plan of subdivision “purported to effect a stratum subdivision … at the level plan at RL 26 AHD”, it was not in dispute that the registration of the plan was in fact effective to create that subdivision with the result that the Airspace became part of the title of Lot 22 in DP 871094. [12]

    12. Murrells’ closing written submissions dated 13 May 2020, paragraph 19.

21. As I have mentioned above, the Restriction is recorded in notation “B” on the Airspace plan of subdivision. It is not in dispute that the subdivision created by registration of the plan was expressly subject to the Restriction. The Owners Corporation contends, and the Murrells dispute, that the Restriction became otiose on the registration of DP 871094. [13]

    13. Transcript, page 31 (lines 23–39). The Murrells noted that the Owners Corporation had not pleaded that the Restriction was otiose following the registration of DP 871094, but took no issue with the Owners Corporation raising that issue in the proceeding save for reserving the Murrells rights in relation to costs: Transcript, page 45.

22. On 8 March 2011, plan of subdivision SP 85044 was registered. This had the effect of subdividing Lot 22 in DP 871094 into four strata lots and the common property. It is clear from Note 1 on SP 85044 that the common property includes the Airspace, with the depth limitation created by DP 871094. [14] The Owners Corporation submitted, and the Murrells disputed, that the Restriction “fell away” or “fell off” the Register upon the registration of SP 85044.

    14. Exhibit 1, pages 436–441.

23. As referred to above, the Owners Corporation is the registered proprietor of the common property in SP 85044. [15]

    15. Exhibit 1, page 444.

24. The strata plan contains four lots: [16]

    16. Title search at Exhibit 1, page 444.

1. Lot 1 (known as Unit 1), the registered proprietors of which are Hanoch Neishlos and Hana Neishlos; [17]

2. Lot 2 (known as Unit 2), the registered proprietors of which are Wayne Derec Hose and Jennifer Anne Biviano; [18]

3. Lot 3 (known as Unit 3), the registered proprietors of which are Peter Theodore Bakaric and Nicole Nancy Bakaric; [19] and

4. Lot 4 (known as Unit 4), the registered proprietor of which is Lin Jum Cheung. [20]

   17. Title search at Exhibit 1, page 445.

   18. Title search at Exhibit 1, page 446.

   19. Title search at Exhibit 1, page 447.

   20. Title search at Exhibit 1, page 448.

27. It is convenient to refer to the registered proprietors of the lots as the Unit Owners.

28. Whether or not the Restriction “fell away” on the registration of SP 85044, the practical effect of the above history of dealings concerning the land known as 95 Wentworth Road and 97 Wentworth Road is that any person standing on the flat concrete roof of the residence on 97 Wentworth Road now owned by the Murrells, and any thing of more than 11cm to 16cm in height that is placed on that flat concrete roof, intrudes into the Airspace owned by the Owners Corporation.

Nature of the proceedings and claims for relief

The Owners Corporation proceeding

29. By summons filed on 28 June 2019, the Owners Corporation commenced proceeding 2019/201673 against the Murrells.

30. Because this proceeding was commenced in the Common Law Division of the Court, the parties have referred to it in their written and oral submissions as the “common law proceeding”. These reasons refer to this proceeding as the Owners Corporation proceeding.

31. In their amended statement of claim filed on 22 August 2019, the Owners Corporation claim:

1. an order that the Murrells pay damages to the Owners Corporation for trespass and/or nuisance;

2. further, exemplary or aggravated damages;

3. further, an order that the Murrells restore the paintwork on the northern Boundary Wall of 95 Wentworth Road, Vaucluse to the colour and condition it is was in prior to it being painted by the Murrells (or their servants or agents) on or about 1 December 2018;

4. further, an order that the Murrells remove the whole of the stud wall that was erected on or about 1 December 2018 within the northern boundary of 95 Wentworth Road, Vaucluse thereby encroaching onto the property of SP 85044;

5. an injunction in the following terms:

“…an order that [the Murrells], by their servants or agents, be restrained, until a land access order pursuant to the Access to Neighbouring Land Act 2000 is made in their favour (if any) from entering into or remaining upon or causing or allowing anything (including, without limitation, scaffolding and other building materials or equipment) to enter of [sic] remain upon the [Owners Corporation’s] land, being the air space comprising part of Lot 22 in Deposited Plan 87094 (save for the purposes of performing building works of an emergency nature to the dwelling located on [the Murrells’] land being Lot 21 in Deposited Plan 871904).”

32. The Owners Corporation alleges that the Murrells trespassed on the Strata Plan common property, and created a substantial and unreasonable interference with the property rights of the Owners Corporation in relation to 95 Wentworth Road, by:

1. entering the Strata Plan common property on or about 1 December 2018 and:

1. constructing a stud wall adjacent to, but on the Owners Corporation’s side of, the boundary that the Strata Plan common property shares with Lot 21. It is alleged that the stud wall covers and obstructs a ventilation void adjacent to the Boundary Wall; and

2. painting an existing Boundary Wall that lies on the Owners Corporation’s side of that same boundary,

3. without permission from the Owners Corporation, or any Lot Owner, to do so; and

2. repeatedly entering into or interfering with the Airspace in the period between about November 2018 to July 2019 in the course of carrying out work on the flat concrete roof of the residence on Lot 21.

33. The Murrells admit that their contractor erected the stud wall, but they do not admit it was erected on the Owners Corporation’s side of the boundary. They contend that the stud wall was constructed on the common Boundary Wall, and that this was done because the common Boundary Wall was in disrepair. They do not admit that the stud wall covered a ventilation void. In addition, the Murrells say that the Owners Corporation’s delegate consented to or authorised the erection of the stud wall.

34. The Murrells deny entering the Strata Plan common property to paint the existing Boundary Wall. They say that their contractor painted the surface of that wall that is on the Murrells’ side of the boundary on or about 1 December 2018. They deny needing permission from the Owners Corporation to do so.

35. The Murrells admit that their contractors engaged in works to the roof of the residence on Lot 21 between about November 2018 and July 2019. They say that the work was urgent remedial work that was undertaken to repair water damage to the roof of the residence, including cracks in the concrete surface of the roof and water penetration.

36. The Murrells say that they have informed the Owners Corporation about the nature and circumstances of the work on the roof, and that their entry into the Airspace for the purpose of carrying out that work does not breach the Restriction, does not constitute trespass or a substantial and unreasonable interference with property rights (or, alternatively, that any trespass or nuisance is so temporary and minor that the Court should not grant any relief).

37. For the reasons in [28] above, there can be no dispute that, by entering onto the flat concrete roof of the residence on Lot 21, and permitting or causing their contractors to do so, during the period from November 2018 to July 2019, the Murrells entered into the Airspace.

38. However, the Murrells contend that this did not constitute a trespass on property of the Owners Corporation or a substantial and unreasonable interference with the property rights of the Owners Corporation because:

1. the Strata Plan common property, including the Airspace, is subject to the Restriction;

2. the Restriction, properly construed, includes an implied positive covenant or implied easement for the owner of Lot 21 to exceed the height of RL 26 AHD “on a temporary or transitory basis” “to repair, maintain and/or improve” any structures on Lot 21 below that height, and that implied positive covenant or implied easement continued to operate following the registration of DP 871094; [21]

3. alternatively, on the registration of DP 871094 on 11 September 1997, an implied easement of necessity was created for the benefit of Lot 21 permitting the owners of Lot 21 to exceed the height of RL 26.00 AHD on a temporary or transitory basis in order to repair, maintain and/or improve structures on Lot 21 that exist below the height of RL 26.00 AHD; and

4. the owner of Lot 21 may therefore enter the Airspace in order to “repair, maintain and/or improve” any structures on Lot 21 without committing a trespass.

   21. The Murrells did not plead the contention that an implied positive covenant was included in the Restriction or the alternative contention that an implied easement of necessity arose on the subdivision of the Airspace by the registration of DP 871094. However, the Owners Corporation responded to the substance of these contentions during the hearing and did not identify any prejudice to the Owners Corporation arising from the Murrells relying on these contentions, save in relation to costs: Transcript, pages 45–47.

39. The Owners Corporation admits that the subdivision of the Airspace from the balance of Lot 21 that was effected by the registration of DP 871094 in September 1997 was expressly subject to the Restriction. However, the Owners Corporation contends that:

1. the Restriction, properly construed, did not include a positive covenant or easement permitting the owner of Lot 21 from exceeding the height of RL 26 AHD “on a temporary or transitory basis” “to repair, maintain and/or improve” any structures on Lot 21 below that height;

2. at general law, the owner of Lot 21 would be justified in exceeding the RL 26.00 AHD notwithstanding the Restriction “if they do so with reasonable care and if doing so is reasonably necessary” for the preservation of property of the owner of Lot 21. It was submitted on behalf of the Owners Corporation at trial that this reflected the defence of necessity that is available at general law to a claim in trespass; and

3. on the registration of DP 871094 (the plan of subdivision that created the title to the Airspace that is now held by the Owners Corporation), the Restriction became otiose in the sense that it had no work to do;

4. alternatively, if the Restriction had any work to do following the registration of DP 871094, that work was to give the dominant tenement owners a right to claim damages in the event that it had to take action to remove any matter or thing encroaching into the Airspace in breach of the Restriction;

5. no implied easement of necessity arose on registration of DP 871094; and

6. the Restriction “fell off” the Register when SP 85044 was registered.

40. The Owners Corporation acknowledges that the Murrells have statutory rights to access the Strata Plan common property (including the Airspace) for the purpose of carrying out work under s 11 of the Access to Neighbouring Land Act 2000 (NSW), in addition to such rights as the Murrells have at general law under the defence of necessity to any claim in trespass. The existence of those rights form part of the basis of the Owners Corporation’s contention that no implied easement of necessity arose on registration of DP 871094.

41. The Murrells admit that they did not make any application under the Access to Neighbouring Land Act in respect of the erection of the stud wall, the painting of the existing Boundary Wall or the works carried out on the roof of the residence on Lot 21. They deny that it was necessary to make such an application.

42. The Owners Corporation claims to have suffered the following loss by reason of the alleged trespass and nuisance:

1. the cost of removing the stud wall;

2. the cost of rectifying damage caused by dampness penetrating the wall of Lot 1 in the area of the stud wall;

3. the cost of re-painting the existing Boundary Wall to its original colour;

4. loss of privacy occasioned by the proximity to the balconies of Units 1, 2 and 3 of workmen carrying out work on the flat concrete roof of the residence on Lot 21;

5. loss of amenity caused by the noise and disturbance occasioned by those works on the flat concrete roof;

6. loss of amenity occasioned by the obstruction of views from 95 Wentworth Road during the duration of the works on the flat concrete roof; and

7. the cost of engaging solicitors, surveyors and building consultants to investigate and advise the Owners Corporation in relation to the incidents of trespass.

43. However, the Owners Corporation did not adduce any evidence of the costs referred to in (1) to (3) and (7) above. At the hearing, the Owners Corporation sought a lump sum for general damages for the alleged trespass relating to the Boundary Wall and the Airspace.

44. The Owners Corporation also makes a claim for aggravated and exemplary damages in respect of the alleged trespass and nuisance.

45. In relation to the alleged trespass or nuisance constituted by the Murrells entering into the Airspace, the Owners Corporation seeks an order restraining the Murrells from entering into or remaining in, or causing or allowing anything to enter or remain in, the Airspace (save for the purpose of any works of an emergency nature to the dwelling on 97 Wentworth Road), until such time as a land access order is made in favour of the Murrells under the Access to Neighbouring Land Act.

46. In relation to the alleged trespass or nuisance constituted by the Murrells painting the Boundary Wall and the construction of the stud wall, the Owners Corporation seeks orders requiring the Murrells to restore the Boundary Wall paintwork to its former colour and condition and to remove the stud wall.

The Murrell Proceeding

47. By summons filed on 25 September 2019, the Murrells commenced proceeding 2019/299582 against the Owners Corporation.

48. The parties frequently referred to this proceeding as “the equity proceeding”. In these reasons, this proceeding is referred to as the Murrell proceeding.

49. In the statement of claim filed in the Murrell proceeding on 25 November 2019, the Murrells claim:

1. a declaration that, on the proper construction of the Restriction, the owner of Lot 21 may exceed the height of RL 26.00 AHD on a temporary or transitory basis to repair, maintain and/or improve any structures on Lot 21 that exist below that height. As I have already referred to above, the Murrells contend that this is a positive covenant or easement that is implied in the Restriction;

2. a declaration that the subdivision of Lot 21 at the level plan of RL 26.00 AHD in DP 871094 is subject to the Restriction on its proper construction, so that the owner of Lot 21 may enter the Airspace on a temporary or transitory basis to repair, maintain and/or improve any structures on Lot 21 without committing trespass;

3. alternatively, an order that the Restriction and DP 871094 be modified pursuant to s 89 of the Conveyancing Act so that the owner of Lot 21 may enter the Airspace on a temporary or transitory basis to repair, maintain and/or improve any structures on Lot 21 without committing trespass;

4. alternatively, an order imposing an easement over the Airspace pursuant to s 88K of the Conveyancing Act to permit the owner of Lot 21 to enter the Airspace “as reasonably necessary to repair, maintain and/or improve any structures on Part Lot 21”.

50. In relation to the declaratory relief concerning the proper construction of the Restriction, the Murrells plead that:

1. as at June 1992, when the Restriction was created by the registration of DP 645772, there was an existing dwelling on the servient tenement (that is, the land referred to in these reasons as Lot 21) with a flat concrete roof below the height of RL 26.00 AHD by a margin of only approximately 15 centimetres (the margin is in fact between 11 centimetres and 16 centimetres: see [19(4)] above);

2. the manifest purpose of the Restriction was to preserve views for the benefit of the dominant tenement above RL 26.00 AHD in the direction of Sydney Harbour;

3. on its proper construction, the Restriction was not intended to prohibit the owner of Lot 21 from exceeding the height of RL 26.00 AHD to repair, maintain and/or improve any structures on the servient tenement that exist below RL 26.00 AHD. On the contrary, the Restriction contained an implied positive covenant or easement permitting the owner of Lot 21 to exceed the height of RL 26.00 AHD for that purpose. Alternatively, implied easement of necessity arose as a matter of law upon the registration of the Airspace plan of subdivision. [22] The owner of Lot 21 may therefore enter the Airspace for that purpose without committing a trespass; and

4. because the registration of DP 871094 was expressly subject to the Restriction, and SP 85044 and CP/SP 85044 expressly record the common property in the strata scheme being limited in stratum in the manner described in DP 871094, the Owners Corporation’s rights to the Airspace are subject to the Restriction.

   22. This alternative contention was not pleaded, but was raised in closing submissions.

51. As I have referred to earlier in these reasons, the Owners Corporation accepts that DP 871094, which created the horizontal subdivision that separated title to the Airspace from title to the remainder of Lot 21, was expressly subject to the Restriction. However, the Owners Corporation disputes that the Restriction contained the implied positive covenant or easement for which the Murrells contend. The Owners Corporation contends that the Restriction had no work to do following the registration of DP 871094.

52. The Owners Corporation also accepts that SP 85044 and folio CP/SP 85044 expressly record that the common property in the strata scheme (including the Airspace) is limited in stratum in the manner described in DP 871094. However, the Owners Corporation contends that this does not have the effect of rendering its title to the common property subject to the Restriction. The Owners Corporation denies that its rights in respect of the Airspace are subject to the Restriction.

53. The Murrells’ alternative claims for relief under s 89 of the Conveyancing Act, and the Owners Corporation’s defence of those claims, proceed on the assumption that the Restriction did survive the registration of SP 85044 and, on its proper construction, did not include the implied positive covenant or easement for which the Murrells contend.

54. Section 89 of the Conveyancing Act relevantly provides:

“(1)    Where land is subject to an easement or a profit à prendre or to a restriction or an obligation arising under covenant or otherwise as to the user thereof, the Court may from time to time, on the application of any person interested in the land, by order modify or wholly or partially extinguish the easement, profit à prendre, restriction or obligation upon being satisfied—

(a)    that by reason of change in the user of any land having the benefit of the easement, profit à prendre, restriction or obligation, or in the character of the neighbourhood or other circumstances of the case which the Court may deem material, the easement, profit à prendre, restriction or obligation ought to be deemed obsolete, or that the continued existence thereof would impede the reasonable user of the land subject to the easement, profit à prendre, restriction or obligation without securing practical benefit to the persons entitled to the easement or profit à prendre or to the benefit of the restriction or obligation, or would, unless modified, so impede such user, or

(b)       …

(b1)       … or

(c)    that the proposed modification or extinguishment will not substantially injure the persons entitled to the easement or profit à prendre, or to the benefit of the restriction or obligation.

(1A)   …

(2)    Where any proceedings are instituted to enforce an easement, profit à prendre, restriction or obligation, or to enforce any rights arising out of a breach of any restriction or obligation, any person against whom the proceedings are instituted may in such proceedings apply to the Court for an order under this section.

(3)    The Court may on the application of any person interested make an order declaring whether or not in any particular case any land is affected by an easement, profit à prendre, restriction or obligation, and the nature and extent thereof, and whether the same is enforceable, and if so by whom.”

55. If the Restriction prevents the owner of Lot 21 from exceeding the height of RL 26.00 AHD to repair, maintain and/or improve the flat concrete roof of the dwelling on Lot 21 on a temporary or transitory basis (contrary to the construction of the Restriction for which the Murrells contend), then the Murrells contend that this impedes the reasonable user of Lot 21 without securing any practical benefit to the Owners Corporation or the Unit Owners because:

1. the flat concrete roof on Lot 21 has sustained water damage and cannot be accessed to effect repairs without exceeding the height of RL 26.00 AHD;

2. the Owners Corporation, as a body corporate, derives no practical benefit from the Restriction, as it does not enjoy views or amenity above RL 26.00 AHD;

3. the effect on views towards Sydney Harbour or any loss of amenity caused by repairs, maintenance and/or improvements to the flat concrete roof of a temporary or transitory nature will not substantially injure the Owners Corporation or Unit Owners.

56. The Murrells seek an order modifying the Restriction so as to permit the owner of Lot 21 exceeding the height of RL 26.00 AHD on a temporary or transitory basis for the purpose of repairing, maintaining and/or improving the flat concrete roof of the dwelling on Lot 21. The order is sought under s 89(1)(a) of the Conveyancing Act or, alternatively, under s 89(1)(c) of the Conveyancing Act on the basis that the modification will not substantially injure the Owners Corporation or the Unit Owners.

57. The Owners Corporation denies that the Restriction impedes the reasonable user of Lot 21 without securing any practical benefit to the Owners Corporation or Unit Owners for three reasons.

58. First, the Owners Corporation contends that the Restriction does not prevent the owners of Lot 21 from exceeding the height of RL 26.00 AHD to repair, maintain and/or improve the flat concrete roof on a temporary or transitory basis because:

1. the owners Lot 21 are justified in exceeding that height if they do so with reasonable care and if it is reasonably necessary to do so in order to preserve the property of the owners of Lot 21; and

2. further or alternatively, the owners of Lot 21 have rights to access the Airspace for the purpose of carrying out pursuant to s 11 of the Access to Neighbouring Land Act.

59. Second, the Owners Corporation does not admit that the Murrells have suffered water damage to the flat concrete roof of the residence on Lot 21.

60. Third, the Owners Corporation contends that the Restriction does secure a practical benefit to the Owners Corporation and Unit Owners because:

1. Unit Owners are disturbed by noise and loss of privacy when persons enter into the Airspace for the purpose of carrying out work on the flat concrete roof of Lot 21 and the views of Unit Owners towards Sydney Harbour are obstructed while the works are carried out; and

2. the Owners Corporation has standing to sue for those losses suffered by the Unit Owners.

61. For the same three reasons, the Owners Corporation denies that the modification of the Restriction sought by the Murrells will not substantially injure the Owners Corporation or the Unit Owners.

62. The Owners Corporation therefore opposes the Murrells’ application for orders under s 89(1)(a) and/or s 89(1)(b) of the Conveyancing Act modifying the Restriction.

63. Section 88K of the Conveyancing Act relevantly provides:

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

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

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

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

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

(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.

(5)    The costs of the proceedings are payable by the applicant, subject to any order of the Court to the contrary.”

64. As referred to in [49(4)] above, the terms of the order sought by the Murrells under s 88K in the summons and statement of claim filed on 25 September 2019 and 25 November 2019 respectively are an easement to permit:

“the owner of Part Lot 21 to enter the airspace of Part Lot 22 as reasonably necessary to repair, maintain and/or improve any structures on Part Lot 21”.

65. Late in the afternoon on the final day of the hearing, the Murrells applied for leave to amend their pleadings to seek an easement under s 88K to permit:

“the owner of Part Lot 21 to enter the airspace of Part Lot 22 as reasonably necessary and on a temporary basis to repair, maintain and/or improve any structures on Part Lot 21”.

66. Given the timing of the amendment application, the Murrells’ submissions in support of the application and the Owners Corporation’s submissions opposing the proposed amendment were made in writing following the conclusion of the hearing and the Court’s decision in respect of the amendment application was reserved to be delivered at the same time as judgment in the proceeding.

67. The Murrells contend that, if the Restriction prevents the owner of Lot 21 from exceeding the height of RL 26.00 AHD to repair, maintain and/or improve the flat concrete roof of the dwelling on Lot 21 on a temporary or transitory basis (contrary to the construction of the Restriction for which the Murrells contend), then an easement in the terms sought is reasonably necessary for the effective use or development of Lot 21 because the flat concrete roof cannot otherwise be accessed to effect repairs without exceeding the height of RL 26.00 AHD due to the space of only 11 to 16 centimetres between the roof and RL 26.00 AHD. As noted above, the Murrells contend (and the Owners Corporation denies) that the roof has sustained water damage.

68. The Owners Corporation denies that the proposed easement is reasonably necessary, referring again to:

1. the owners Lot 21 being justified in exceeding the height of RL 26.00 AHD if they do so with reasonable care and if it is reasonably necessary to do so in order to preserve the property of the owners of Lot 21 (again, this is a reference to the availability of a defence of justification to claims in trespass); and

2. the rights of the owners of Lot 21 to access the Airspace for the purpose of carrying out pursuant to s 11 of the Access to Neighbouring Land Act.

69. The Murrells further contend that the use of Lot 21 with the proposed s 88K easement will not be inconsistent with the public interest. The Owners Corporation denies this.

70. The Murrells contend that the Owners Corporation can be adequately compensated for any loss or disadvantage arising from the imposition of the proposed s 88K easement, noting that:

1. the Owners Corporation does not enjoy views or amenity above RL 26.00 AHD; and

2. the effect on views towards Sydney Harbour or any loss of amenity caused by repairs, maintenance and/or improvements to the flat concrete roof of a temporary or transitory nature will not substantially injure the Owners Corporation or Unit Owners.

71. The Murrells’ statement of claim contains an offer to compensate the Owners Corporation in such amount as may be determined by the Court.

72. The Owners Corporation denies that it can be adequately compensated.

73. The Murrells claim that they have made, and continue to make, all reasonable attempts to obtain the proposed easement, but they have been unsuccessful. The Owners Corporation denies that the Murrells have made all reasonable attempts to obtain the easement.

74. For completeness, I mention here that the Owners Corporation opposes the Murrells’ application for leave to amend the terms of the easement sought under s 88K of the Conveyancing Act. It will be necessary to return to that issue later in these reasons, before determining the application under s 88K (either on the basis of the original pleading, or the amended pleading if leave to amend is granted).

Issues in dispute and summary of conclusions

75. The issues to be resolved in order to determine the parties’ claims in the two proceedings, and my conclusions in relation to each issue, may be summarised as follows:

1. Does the Restriction, properly construed, include a positive covenant or easement permitting the owner of Lot 21 to exceed the height of RL 26.00 AHD on a temporary or transitory basis in order to repair, maintain and/or improve structures on Lot 21 that exist below the height of RL 26.00 AHD?

Conclusion: No

2. Did the Restriction become otiose on the registration of the Airspace plan of subdivision and “fall off the Register” on the registration of SP 85044?

Conclusion: The Restriction had no work to do after the Airspace plan of subdivision was registered, but the Restriction did not “fall off” the Register. The question whether the Owners Corporation’s title to the Airspace is subject to the Restriction depends on the operation of s 42 of the Real Property Act 1900 (NSW). The parties’ submissions did not address s 42, so it is inappropriate to determine whether the Owners Corporation’s title is subject to the Restriction.

3. If the Restriction includes the positive covenant or easement contended for by the Murrells, should the Court exercise its discretion to make declaration in the terms sought in prayers 1 and 2 of the statement of claim in the Murrell proceeding?

Conclusion: The Restriction does not include the positive covenant or easement (see Issue 1 above). The Murrells have failed to establish the legal and factual bases for the proposed declarations.

4. On the registration of DP 871094 on 11 September 1997, did Lot 21 have the benefit of an implied easement of necessity permitting the owners of Lot 21 to exceed the height of RL 26.00 AHD on a temporary or transitory basis in order to repair, maintain and/or improve structures on Lot 21 that exist below the height of RL 26.00 AHD? Do the Murrells, as the current owners of Lot 21, have the benefit of any such easement?

Conclusion: On registration of DP 871094, Lot 21 had the benefit of an implied easement of necessity permitting the owners of Part Lot 21 to exceed the height of RL 26.00 AHD on a temporary or transitory basis for the purpose of maintenance or repair to structures existing on Lot 21 below the height of RL 26.00 AHD. The Murrells cannot enforce that implied easement of necessity against the Owners Corporation by reason of s 42 of the Real Property Act.

5. Did the Murrells commit a trespass or create a nuisance by entering the Airspace during the period between November 2018 and July 2019 in order the course of carrying out work on the flat concrete roof of the residence on Lot 21?

Conclusion: The Murrells committed a trespass, save for those occasions on which they entered into the Airspace for the purpose of repairing cracks in the concrete roof during the period from 6 May 2019 to 27 June 2019. The Murrells did not create a nuisance, and the Owners Corporation does not have standing to sue on the cause of action in nuisance in any event.

6. If the Murrells committed trespass or created a nuisance by entering the Airspace, what damages should be awarded to the Owners Corporation in respect of the trespass or nuisance?

Conclusion: The Owners Corporation is awarded $10,000 general damages in respect of the Murrells’ trespass into the Airspace during the period from November 2018 to July 2019.

7. If the Murrells committed trespass or created a nuisance by entering the Airspace, should aggravated and exemplary damages be awarded to the Owners Corporation in respect of the trespass and/or nuisance?

Conclusion: No.

8. If the Restriction continues to apply following the registration of SP 85044 but does not include the implied positive covenant or easement for which the Murrells contend, should the Restriction be modified pursuant to s 89 of the Conveyancing Act in the terms sought in prayer 3 of the statement of claim in the Murrell proceeding?

Conclusion: No. The Court does not have power under s 89 of the Conveyancing Act to modify the Restriction in the manner sought by the Murrells.

9. Should leave be granted to the Murrells to amend the terms of the easement under s 88K of the Conveyancing Act sought in prayer 4 of the statement of claim in the Murrell proceeding?

Conclusion: Yes.

10. Is an easement in the following terms reasonably necessary for the effective use or development of Lot 21:

1. permitting the owner of Lot 21 to enter the Airspace as reasonably necessary to repair maintain and/or improve any structures on Lot 21; or

2. (if leave to amend is granted) permitting the owner of Lot 21 to enter the Airspace as reasonably necessary and on a temporary basis to repair maintain and/or improve any structures on Lot 21.

Conclusion: No. However, an easement in terms to the following effect is reasonably necessary for the effective use or development of Lot 21:

“The owner of Part Lot 21 / DP871094 (now known as Part Lot 1 DP 12534483) (the dominant tenement) is permitted to access Part Lot 22 DP 871094 (now being part of the land comprised in folio CP/SP85044 of the Register) (the servient tenement) as necessary and on a temporary basis to repair and maintain any structure on the dominant tenement and to take onto the servient tenement on a temporary basis anything reasonably necessary for that purpose.”

11. If so, would the use of Lot 21 with the benefit of such an easement be inconsistent with the public interest?

Conclusion: No.

12. If so:

1. what loss or disadvantage will the Owners Corporation suffer from the imposition of the easement? Can the Owners Corporation be adequately compensated for that loss or disadvantage; and

2. what persons other than the Owners Corporation have estates or interests in the Airspace that is evidenced by a registered instrument? Can any such persons be adequately compensated for any loss or other disadvantage that will arise from imposition of the easement?

Conclusion: The Owners Corporation will not suffer any loss or other disadvantage from the imposition of the easement. No other person has an estate or interest in the Airspace to which s 88K(2)(b) of the Conveyancing Act applies. The requirements of s 88K(2)(b) are therefore satisfied.

13. Have the Murrells made all reasonable attempts to obtain the easement?

Conclusion: By the time of the hearing, the Murrells had made all reasonable attempts to obtain the easement.

14. If “yes” to (10) to (13) above, should the Court grant an easement under s 88K in the terms sought by the plaintiffs and what amount of compensation (if any) should the Court specify as payable to the Owners Corporation or Unit Owners pursuant to s 88K(4)?

Conclusion: An order should be made under s 88K of the Conveyancing Act imposing an easement in terms to the effect set out in (10) above. In the special circumstances of this case, no compensation is payable under s 88K(2)(b) and s 88K(4) of the Conveyancing Act.

15. Should the Court grant an injunction restraining the Murrells, by their servants or agents, from entering onto or remaining on, or causing or allowing anything to enter or remain on the Owners Corporation’s Airspace, save for the purpose of performing building words of an emergency nature to the dwelling on Lot 21, unless and until a land access order is made in favour of the Murrells under the Access to Neighbouring Land Act?

Conclusion: No.

16. Did the Murrells commit a trespass or create a nuisance by erecting the stud wall?

Conclusion: No.

17. If so:

1. what (if any) loss or damage did the Owners Corporation suffer by reason of the trespass or nuisance;

2. should aggravated and exemplary damages be awarded to the Owners Corporation in respect of the trespass and/or nuisance;

3. should the Court make an order requiring the Murrells to remove the whole of the stud wall?

Conclusion: Does not arise.

18. Did the Murrells commit a trespass or create a nuisance by painting the existing Boundary Wall?

Conclusion: No.

19. If so:

1. what (if any) loss or damage did the Owners Corporation suffer by reason of the trespass or nuisance;

2. should aggravated and exemplary damages be awarded to the Owners Corporation in respect of the trespass and/or nuisance; and

3. should the Court make an order requiring the Murrells to restore the paintwork on the Boundary Wall to its former colour and condition?

Conclusion: Does not arise.

76. The detailed reasons for each my conclusions summarised above follows, structured in same the order as the issues set out above.

Issue 1: Proper construction of the Restriction

77. Although there is an issue as to whether the Owners Corporation’s title to the Airspace is subject to the Restriction at all (see Issue 2 below), it is convenient to address first the issues raised by the Murrells concerning the proper construction of the Restriction.

Change in the Murrells’ submissions during the hearing

78. The declarations sought by the Murrells are in the following terms:

“1.    A declaration that upon the proper construction of the restriction on the use of land created by Deposited Plan 645772 (Restriction), the owner of the lot burdened by the restriction (now Part Lot 21 in Deposited Plan 871094) may exceed the height of RL 26 AHD on a temporary or transitory basis to repair, maintain and/or improve any structures on the servient tenement that exist below that height.

2.    A declaration that the stratum subdivision of Part Lot 21 and Part Lot 22 at the level plane of RL 26 in Deposited Plan 871094 is subject to the Restriction on its proper construction, so that the owner of Part Lot 21 may enter the airspace of Part Lot 22 on a temporary or transitory basis to repair, maintain and/or improve any structures on Part Lot 21 without committing a trespass.”

79. In their written closing submissions, the Murrells described the declaration sought as a declaration that the Restriction, properly construed, does not prohibit the servient tenement owner from exceeding the height of RL 26 AHD for those purposes.

80. However, in oral opening submissions and oral closing submissions, [23] senior counsel for the Murrells submitted that the Restriction includes an implied positive covenant or easement for the owners of Lot 21 to exceed the height of RL 26 AHD, and that this implied positive covenant continued to operate, in substance as an easement, following the registration of the Airspace plan of subdivision because DP 871094 included the Restriction as notation “B” (see [23] above).

    23. Transcript, page 27 (line 40) – page 29 (line 29).

79. In the Murrells’ oral closing submissions, the implied positive covenant or easement contention overtook the more circumspect contention that the Restriction did not prohibit or prevent owner of Lot 21 from exceeding the height of RL 26.00 AHD on a temporary or transitory basis in order to repair, maintain and/or improve structures on Lot 21 that exist below the height of RL 26.00 AHD. I will nevertheless address both contentions below.

Applicable legal principles

82. It was common ground that, in construing a restrictive covenant registered on Torrens title land:

1. the Court strives to discover the intention of the parties as revealed by the language they used in the document in question;

2. the words of the covenant must be construed in the context of the instrument as a whole;

3. the words of the covenant are generally to be given the meaning they bear in their colloquial or ordinary sense, as opposed to some technical or legal meaning; and

4. the Court does not take into account extrinsic materials beyond the scope of the Register (see Westfield Management Ltd v Perpetual Trustee Company Ltd (2007) 233 CLR 528; [2007] HCA 45 at [35]–[45]), with the exception that the Court may take into account the physical characteristics of the dominant and servient tenements (Westfield Management Ltd v Perpetual Trustee Company Ltd (supra) at [40]; Sertari Pty Ltd v Nirimba Developments Pty Ltd [2007] NSWCA 324 at [15]–[16].)

83. However, there was some dispute between the parties as to the nature of the physical characteristics of the tenements that the Court may take into account.

84. The Murrells submitted that the Court should have regard to physical characteristics of the tenements that are recorded on the Register (in this case, the height of the flat concrete roof approximately 11 to 16 centimetres below the height limitation of Part Lot 21) or about which information was otherwise readily available to third parties (in this case, geographical location of 95 and 97 Wentworth Road and the orientation of both properties towards views of Sydney Harbour).

85. The Owners Corporation accepted that it is permissible to take into account the boundaries of the land and neighbouring lots, and the view from the properties, for the purpose of ascertaining objectively the parties’ intentions and construing the Restriction. However, the Owners Corporation submitted that it is not permissible to take into account the height of the concrete roof, for two reasons. First, the roof is not necessarily a permanent structure on the land and should not be treated as a “structure of title, if there is such a thing”. Second, the area to which the Restriction applied was much larger than the area of the concrete roof (as to which, see [21] above). [24]

    24. Transcript, page 270 (line 32) – page 271 (line 43).

86. I accept the Murrells’ submission that, because the height of the flat concrete roof was expressly noted on registered plan DP 645772 that created the Restriction, the height of that roof compared to the height of RL 26.00 AHD stipulated in the Restriction is a matter that the Court can and should take into account in construing the Restriction.

87. I accept, as the Murrells submitted, that the Register includes not only the certificates of title but also, amongst other things, the folios, dealings and deposited plans: Real Property Act 1900 (NSW), s 31B; Westfield Management Ltd v Perpetual Trustee Company Ltd (supra) at [4]–[5] (per curiam); Sertari Pty Ltd v Nirimba Developments Pty Ltd (supra) at [15]–[16].

88. In my opinion, it is clear from the judgment of the High Court in Westfield Management Ltd v Perpetual Trustee Company Ltd (supra) that the underlying principle that informs the scope of extrinsic circumstances that may be taken into account in construing easements and restrictive covenants is the scheme of the Torrens system, normally that the information in the folios of the public register and the registered dealings provides third parties with “the information necessary to comprehend the extent or state of the registered title to the land in question”. [25] As the Court said:[26]

“The third party who inspects the Register cannot be expected, consistently with the scheme of the Torrens system, to look further for extrinsic material which might establish facts or circumstances existing at the time of the creation of the registered dealing and placing the third party (or any court later seized of a dispute) in the situation of the grantee.”

25. Westfield Management Ltd v Perpetual Trustee Company Ltd (2007) 233 CLR 528; [2007] HCA 45 at [5].

26. Ibid at [39].

89. I respectfully agree with the obiter dicta of Fryberg J in Currumbin Investments Pty Ltd v Body Corp Mitchell Park Parkwood Cts [2012] 2 Qd R 511; [2012] QCA 9 at [48]–[49] that cases may arise where even a physical characteristic of the tenement cannot be taken into account in construing an easement or restriction because the nature of the characteristic is such that a third party, at the time easement or restriction falls to be construed, may be unable to ascertain whether the relevant characteristic existed at the time the easement or restriction was created. In such cases, it would be inconsistent with the scheme of the Torrens system, as confirmed by the High Court in Westfield Management Ltd v Perpetual Trustee Company Ltd (supra), to have regard to those physical characteristics. [27]

    27. See also Panton v The Owners of Survey Strata Plan 46838 [2013] WASC 35 at [35].

90. I accept the Owners Corporation’s submission that the height of the flat concrete roof on Lot 21 may change over time. Indeed, the roof, or the whole of the residence, may be rebuilt at a different height to that noted on the plan. However, a third party wishing to understand the height of the roof at the time that the Restriction was created in order to understand the nature and extent of the Restriction, properly construed, will be able to do so by reviewing DP 645772, which forms part of the Register and contains a notation of the height of the concrete roof. The proper construction of the Restriction is an exercise in ascertaining objectively the parties’ intention at the time the Restriction was created. It is therefore permissible, in my opinion, to take into account the height of the flat concrete roof in determining the proper construction of the Restriction in this case.

Consideration

91. Applying the principles referred to above, the height of the flat concrete roof as recorded on DP 645772 is not the only physical characteristic of the tenements to be taken into account in determining the meaning of the Restriction.

92. It was common ground that the relevant physical characteristics include the orientation of 95 and 97 Wentworth Road towards views of Sydney Harbour.

93. In my opinion, the relevant characteristics must also include that, at the time that the Restriction was created, the title to the dominant tenement (now Lot 21) included the Airspace.

94. It was submitted on behalf of the Murrells that the following matters support the making of a declaration in the terms sought (as set out in [78] above):

1. the terms of the Restriction refer only to the “construction”, “erection”, “placing on” or “permitting to remain on” the servient tenement of any “matter or thing” that exceeds the height of RL 26.0 AHD. The words “matter or thing” do not, in their ordinary meaning, include persons;

2. the words “construction”, “erection”, “placing on” or “permitting to remain on” are an important textual clue that the Restriction is directed at preventing the impairment of views from the dominant tenement from obstruction by something physical of some permanence;

3. this interpretation of the Restriction is also supported by the physical characteristics of the tenements, namely that 95 Wentworth Road is to the south of 97 Wentworth Road and both properties are on the eastern side of Wentworth Road in close proximity to Sydney Harbour. By reason of the orientation of the tenements, the effect of the Restriction is to preserve views from 95 Wentworth Road to the south towards Sydney Harbour. It was submitted that this was not only the effect, but also the manifest purpose, of the Restriction;

4. further, in Panton v The Owners of Survey Strata Plan 46838 [2013] WASC 35, the Court took into account that the words “erect” and “structure” appeared in the context of a restriction, breach of which could have serious consequences, in determining that those words imported a requirement of some element of permanence rather than structures with a merely temporary or transient existence on the servient tenement;

5. the registered plan – DP 645772 – also supports the interpretation of the Restriction as limited to the “construction”, “erection”, “placing on” or “permitting to remain on” the servient tenement by something physical of some permanence because notation “B” on the plan describes the Restriction as a “restriction on the use of land: height restriction RL 26.00 AHD”; and

6. Notation “BM2” on registered plan DP 399130, which recorded the edge of the concrete roof slab at RL 25.87 AHD, provided objective evidence of the small distance between the height of the roof and the height limit imposed by the Restriction, and this was a further matter “which weighs against ascribing an intention to the parties of prohibiting access by the owner of the servient tenement for the limited purposes contemplated” by the proposed declaration because “[t]o construe the Restriction otherwise, so as to prohibit any entry above RL 26 AHD, would lead to absurd results in that it would foreclose access to the Concrete Roof for the purposes of carrying out any necessary repairs or maintenance”.

95. The Murrells relied on the sixth submission referred to immediately above as not only supporting a construction of the Restriction as not preventing the servient tenement owner from exceeding the height of RL 26 AHD on a temporary or transitory basis to repair, maintain and/or improve any structures on the servient tenement that exist below that height, but also as warranting a construction of the Restriction as including an implied positive covenant or easement entitling the servient tenement owner to do so. It was submitted that the “absurd results” referred to in the submission could only be avoided by interpreting the Restriction as including the implied positive covenant or easement for which the Murrells contended.

96. I accept the Murrells’ first submission that the words “matter or thing” do not, in their ordinary meaning, include persons. The submissions of the Owners Corporation acknowledged that an interpretation of “matter or thing” as including persons would be awkward. In my opinion, there is nothing in the language of the Restriction, read in the context of the whole of the s 88B instrument, that warrants such a strained interpretation of those words. In particular, the examples of “matter or thing” set out in the Restriction are “improvements”, “moveable items” and “plants or natural growth”. Whilst those examples do not limit the generality of the expression “matter or thing”, they do not warrant construing those words as including persons in this context.

97. Subject to one qualification, I accept the Murrells’ second, third and fourth submissions, for the following reasons.

98. I accept the submission of the Owners Corporation that the words “matter or thing of any nature whatsoever” (my emphasis), the inclusion of “moveable items” in the examples of such matters or things, and the words “placed on or permitted to remain on at any time” (in addition to the words “constructed on” and “erected on”) clearly point to the parties’ intention at the time the Restriction was created to prohibit the placing of items on the servient tenement that exceed the stipulated height of RL 26.00 AHD, irrespective of whether those items were of a nature designed to be affixed or to remain permanently in place. (I add that the inclusion of those words distinguishes the terms of the Restriction from the terms considered in Panton (supra), and the interpretation of the words “erect” and “structure” in the context of the instrument under consideration in Panton is not applicable to the interpretation of similar words in the different context of the Restriction.)

99. However, having regard to the very small distance between the height of the concrete roof and the RL 26.00 AHD height limit imposed by the Restriction, as plainly recorded in DP 645772, this construction of the Restriction would result in the servient tenement owners being unable to use equipment of height greater than 11 to 16 centimetres when accessing the roof for the purposes of repairs and maintenance, unless the words “placed on or permitted to remain on at any time” are construed as meaning placed or permitted to remain other than on a temporary basis. This construction of the words “placed on or permitted to remain on at any time” avoids the absurd result that the servient tenement owners are themselves able to access the roof, but are unable to use equipment of a height greater than 11 to 16 centimetres on the roof for the purposes of repairs and maintenance. That result would be absurd owing to the obvious potential detriment and prejudice to the servient tenement owners, which is disproportionate to the benefits sought to be conferred on the dominant tenement owners by the Restriction (to which I refer further immediately below). In my opinion, the Court should not attribute to the parties an intention to detract from the servient tenement owner’s ability to use their own airspace in a manner that achieves such an absurd result. (The Airspace was still part of the servient tenement when the Restriction was created).

100. I consider that the physical characteristics of the tenements on which the Murrells rely in their third submission provide further support for my construction of the words “placed on or permitted to remain on at any time” as meaning placed or permitted to remain other than on a temporary basis. However, the qualification is that I should not be taken as accepting that the physical characteristics of the tenements demonstrate that the object or purpose of the Restriction was limited to securing the views from 95 Wentworth Road towards Sydney Harbour. In my view, the physical characteristics of the tenements are equally consistent with the Restriction having additional objects, such as to secure the privacy of the owners or occupants of 95 Wentworth Road. My construction of the Restriction does not undermine either the object of securing harbour views or the object of securing privacy.

101. As to the Murrells’ fifth submission, I do not consider that the description of the Restriction in notation “B” on DP 399130 adds to or detracts from the analysis immediately above. It is clear from the terms of the Restriction as set out in the s 88B instrument that the prohibition applies only to the extent that the matters or things exceed the height of RL 26.00 AHD.

102. In relation to the sixth submission, the Restriction, upon its proper construction, does not prevent the servient tenement owner from exceeding the height of RL 26 AHD on a temporary or transitory basis to repair, maintain and/or improve any structures on the servient tenement that exist below that height, for the reasons that I have explained in [96]–[100] above.

103. However, it does not follow, in my opinion, that the Restriction includes an implied positive covenant or easement entitling the servient tenement owner to exceed the height of RL 26.00 AHD on the servient tenement on a temporary or transitory basis to repair, maintain and/or improve any structures on the servient tenement that exist below that height. The Restriction, properly construed, avoids the absurdity that the Murrells refer to without the implication of the positive covenant or easement contended for. At the time the Restriction was created (being the relevant time for the purpose of determining its proper construction), the servient tenement owners were entitled to use all of their land, including the Airspace, in any manner they saw fit, subject to environmental and planning laws and the limitations imposed by the Restriction. There is no evidence that the parties contemplated, at that time, that the servient tenement owners would cease to own the Airspace in the future. There is no basis for attributing to the parties an intention to confer on the servient tenement owners a positive right that they already had as a matter of law, or an easement over their own land.

104. The Murrells’ submissions in support of construing the Restriction as including an implied positive covenant or easement drew directly or by analogy on principles relevant to easements of necessity. However, it follows from my construction of the Restriction that any relevant “necessity” arose only on the registration of the Airspace plan of subdivision [28] and is therefore irrelevant to the construction of the Restriction. It will be necessary to return to the question whether the Murrells have the benefit of an easement of necessity in addressing Issue 4 below.

     28. As senior counsel for the Murrells acknowledged in closing oral submissions: Transcript, page 258 (lines 1–11).

Conclusions in relation to Issue 1

105. For the reasons above, the Restriction, upon its proper construction, does not prevent the owner of Lot 21 from exceeding the height of RL 26.00 AHD on a temporary or transitory basis to repair, maintain and/or improve any structures on the servient tenement that exist below that height. However, the Restriction does not include a positive covenant or easement expressly permitting the owner of Lot 21 to exceed that height for those purposes.

106. In the present circumstances, it is not the Restriction that impedes the Murrells’ ability to exceed the height of RL 26.00 AHD on Lot 21 for those purposes. Rather, that impediment is attributable to the change in ownership of the Airspace after the Restriction was created, together with the inability of the Murrells to enforce against the Ownership Corporation any easement of necessity that arose as a matter of law in favour of the owners of Lot 21 on the registration of the Airspace plan of subdivision. The Murrells inability to enforce any such easement of necessity is addressed under Issue 4 below.

107. Because the Restriction per se does not impede the Murrells’ ability to exceed the height of RL 26.00 AHD on Lot 21 for the purposes specified in the proposed declaration in prayer 1 of the statement of claim in the Murrell proceeding, that proposed declaration is of no practical utility, and therefore should not be made,[29] in my opinion.

     29. Neeta (Epping) Pty Ltd v Phillips (1974) 131 CLR 286 at 306–307 (Barwick CJ and Jacobs J).

108. Accordingly, the Murrells’ claim for declaratory relief in prayer 1 of the statement of claim in the Murrell proceeding is dismissed.

109. Because the Restriction does not include a positive covenant or easement expressly permitting the owner of Lot 21 to enter the Airspace on a temporary or transitory basis for the purpose of repairing, maintaining or improving structures on Lot 21, the Murrells have failed to establish the factual and legal basis for the declaration sought in prayer 2 of the statement of claim in the Murrell proceeding. That claim for declaratory relief is also dismissed.

110. For completeness, I note the Owners Corporation’s submissions to the effect that the Court should not make the declarations sought in prayers 1 and 2 of the statement of claim in the Murrell proceeding because the declarations are not necessary in order to permit the Murrells to enter into the Airspace for the purpose of performing any emergency work. The Owners Corporation submitted that the doctrine of necessity will provide the Murrells with a defence to a claim in trespass in respect of any entry into the Airspace that is reasonable necessary for the purpose of addressing a situation of immediate danger. I have not found it necessary to address these submissions in the context of Issue 1 because the terms of the declaratory relief sought by the Murrells was not confined to emergency work or situations of immediate danger. However, it will be necessary to return to the subject of the doctrine of necessity in the context of Issue 4 and Issue 5 below.

454. This opinion was supported only by Mr Donovan’s characterisation of the proposed easement as allowing access into the Airspace “in an uncontrolled manner”, his concern that the proposed easement gave rise to insecurity that others may seek to impede into the Airspace in the future, and his experience of the behaviour of purchasers in the market, as referred to above.

455. The proposed easement does not permit uncontrolled access into the Airspace. It permits access into the Airspace for limited purposes.

456. There is no logical basis for Mr Donovan’s concern that, if the proposed easement is granted, this may encourage or facilitate other persons seeking access to the Airspace in the future.

457. As Mr Alford points out, Mr Donovan does not take into account the benefit to Unit Owners of the Murrells having the ability to repair and maintain the roof that forms part of the outlook from Units 1, 2 and 3. I reject the Owners Corporation’s submission that Mr Alford’s report focussed exclusively on the benefit. Mr Alford considered both the advantages and disadvantages to Unit Owners of the proposed easement and how those advantages and disadvantages might be viewed by potential purchasers of the Units. I also reject the Owners Corporation’s submission that Mr Alford should have had regard to the fact that advantages of the proposed easement could be achieved without the imposition of an easement by obtaining the Owners Corporation’s consent to undertake the work on the roof. I consider this submission to be disingenuous, having regard to the Owners Corporation’s steadfast refusal to consent to the Murrells undertaking work on the roof, irrespective of the nature of the work and the level of information provided and offered to them, as set out in detail under Issue 5 above.

458. Mr Donovan’s quantification of the diminution in value was unsupported by market evidence and appears to be inconsistent with the evidence of comparable sales on which he relied in determining the current market value of Units 1, 2 and 3.

459. Mr Donovan’s “Sale 1” involved an apartment in Rose Bay with views looking across the suburb to the harbour. “Sale 2” involved the sale of an apartment directly on the beachfront at Rose Bay, with panoramic and intimate harbour and beach views. “Sale 3” and “Sale 4” involved apartments with no substantial views. “Sale 5” involved a property with partial harbour views. “Sale 6” involved an apartment with pleasant district views only (no harbour views).

460. On the basis of the photographic evidence, it is the views from “Sale 1”, looking across buildings in Rose Bay to the harbour, that are most comparable to the views from Units 1, 2 and 3 of 95 Wentworth Road looking across the concrete roof of Lot 21 to the harbour.

461. As Mr Alford identified in his report dated 8 May 2020, in the view from Mr Donovan’s “Sale 1” apartment, the foreground includes the flat roof of an apartment building and the harbour is in the background. Mr Alford identified the address and title of that apartment building with the flat roof. On the basis of title searches of that apartment building and the “Sale 1” property, Mr Alford ascertained that there are no restraints on the ability of the owners of the flat-roofed apartment building to enter into the airspace above their roof to carry out work on that roof (which would interfere with the harbour views from the “Sale 1” apartment in the same sense that the temporary presence of persons or equipment of the Murrells’ roof would interfere with harbour views from Units 1, 2 and 3). Mr Alford also ascertained from those title searches that the owners of the apartment building in which the “Sale 1” property is situated have no proprietary rights over the airspace above the flat-roofed apartment building.

462. Despite the obvious potential for works on the roof of the flat-roofed apartment building, Mr Donovan recorded that “Sale 1” sold at a price equivalent to $38,522 per square metre, significantly greater than Mr Donovan’s per square metre current (without easement) valuations ascribed to Unit 1, 2 and 3 at 95 Wentworth Road.

463. Taking into account these features of “Sale 1” and the benefits to Unit Owners of the outlook from their Units being improved by the owners of Lot 21 being able to undertake repair and maintenance of the flat concrete roof, Mr Alford expressed the opinion that the proposed easement would not result in any diminution in the value of Units 1, 2 and 3.

464. In my opinion, Mr Alford’s evidence is to be preferred to Mr Donovan’s evidence. Mr Alford’s opinion is informed by consideration of the disadvantages and advantages of the proposed easement and the different ways in which they may be considered by potential purchasers, [152] in addition to his assessment of the features of the “Sale 1” property and its views. By contrast, Mr Donovan has ignored the advantages and his report does not explain how his comparable sales evidence has been applied in arriving at his opinions concerning diminution in market value of Units 1, 2 and 3. Indeed, in cross-examination, Mr Donovan conceded that there was no market evidence that could be applied to determine any diminution in value. Mr Donovan claimed to have taken into account the potential for views from “Sale 1” to be disrupted by access to the flat roof in the foreground of those views, but did not explain in any coherent manner how he had done so. [153]

     152. Transcript, page 228 (line 50) – page 231 (line 30).

     153. Transcript, page 248 (line 25) – page 250 (line 5), page 241 (line 29) – page 244 (line 35).

465. For all of those reasons, it is my opinion that, if s 88K(2)(b) requires that any loss or other disadvantage to Unit Owners can be adequately compensated (contrary to my conclusion above), the Unit Owners will not suffer any such loss or disadvantage arising from the imposition of the proposed easement.

Conclusions in relation to Issue 12

470. In summary, I have concluded for the reasons above that:

1. s 88K(2)(b) requires that the Court be satisfied that the Owners Corporation can be adequately compensated for any loss or other disadvantage that it may suffer arising from the imposition of the proposed easement;

2. the Owners Corporation will not suffer any loss or other disadvantage arising from the imposition of the proposed easement;

3. there is therefore no call for the Owners Corporation to be compensated, and the requirements of s 88K(2)(b) are satisfied in this case;

4. s 88K(2)(b) does not require the Court to be satisfied that Unit Owners can be adequately compensated for any loss or other disadvantage that they will suffer arising from from the imposition of the proposed easement; and

5. even if s 88K(2)(b) did require the Court to be satisfied that Unit Owners can be adequately compensated, Unit Owners will not suffer any loss or other disadvantage arising from the imposition of the proposed easement once the disadvantages and advantages of the proposed easement for Unit Owners are considered.

Issue 13: Have the Murrells made all reasonable attempts to obtain an easement having the same effect as the proposed easement (s 88K(2)(c))?

471. The applicable principles were conveniently summarised by Preston CJ in Rainbowforce (supra) at [131] (citations omitted):

“(a)   the applicant for the order must make an initial attempt to obtain the easement by negotiation with the person affected and some monetary offer should be made …;

(b)   the applicant for the order should sufficiently inform the person affected of what is being sought and provide for the person affected an opportunity to consider his or her position and requirements in relation thereto …;

(c)   the applicant for the order is not required to continue to negotiate with a person affected by making more and more concessions until consensus is reached to the satisfaction of the person affected…; and

(d)   the whole of the circumstances are to be considered from an objective point of view; once it appears from an objective point of view that it is extremely unlikely that further negotiations will produce a consensus within the reasonably foreseeable future, it may be concluded that all reasonable attempts have been made to obtain the easement...”

472. The Murrells relied on the following offers made by them in the course of the parties communications summarised under Issue 5 above as demonstrating that they had made all reasonable attempts to obtain the easement, or an easement having the same effect:

1. the Murrells’ correspondence dated 9 May 2019: see [234] above;

2. the Murrells’ correspondence dated 27 May 2019: see [236] above;

3. the Murrells’ correspondence dated 5 June 2019: see [241] above;

4. the Murrells’ solicitor’s correspondence dated 3 December 2019: see [270] above;

5. the Murrells’ solicitor’s correspondence dated 24 April 2020: see [300] above; and

6. the Murrells’ solicitor’s correspondence dated 29 April 2020: see [303] above.

473. I accept the Owners Corporation’s submission that the Murrells’ correspondence dated 9 May, 27 May and 5 June 2019 was an attempt by the Murrells to persuade the Owners Corporation to enter into an agreement that would permit the Murrells to access the Airspace and was not an attempt to obtain an easement. An easement is a proprietary, rather than a contractual, right. It would apply to successors in title to the Murrells and the Owners Corporation. What s 88K(2)(c) requires is that there have been all reasonable attempts to obtain the easement or an easement having the same effect. Attempts to obtain a contractual right do not satisfy that requirement.

474. However, the Murrells’ attempts to negotiate a contractual right of access to the Airspace, together with the Owners Corporation’s responses to those attempts, do form part of the context in which their later attempts to obtain an easement fall to be considered for the purpose of s 88K(2)(c).

475. The Murrells first attempted to obtain an easement on 3 December 2019, more than two months after the Murrell proceeding had been commenced.

476. The Owners Corporation submitted that this attempt, and the subsequent attempts on 24 an 29 April 2020, could not be regarded as reasonable attempts to obtain an easement having the same effect as that sought under s 88K because no attempt to obtain an easement was made prior to the commencement of the Murrell proceeding.

477. I respectfully agree with Pain J in in Tenacity Investments v Ku-Ring-Gai Council [2008] NSWLEC 27 at [72] that the terms of s 88K contain no indication that the Court, in applying s 88K(2), is limited to considering the state of affairs at a time earlier than the hearing of the application for an order imposing the easement.

478. Just as the question of reasonable necessity under s 88K(1) must be assessed by reference to all of the circumstances as they exist at the time of the hearing,[154] so much each of the matters in s 88K(2) be assessed at the time of the hearing. The Court must be satisfied of each of the matters in s 88K(2) before imposing an easement (assuming that s 88K(1) is also satisfied). In my opinion, it would be absurd if the Court was required to decide whether it was satisfied of the matters in s 88K(2) at the time of the hearing by reference to some earlier point in time and was unable to take into account events in the period leading up to the hearing.

     154. Gordon v Lever (No 2) (2019) 101 NSWLR 427; [2019] NSWCA 275 at [40] (Bell P, Payne JA and Emmett AJA agreeing).

479. Ordinarily, it is to be expected that an applicant for an easement under s 88K will have at least commenced the process of making reasonable attempts to obtain the easement sought by negotiation, before commencing proceedings. It will not be uncommon that the negotiation continues after the commencement of proceedings – litigation often sharpens the focus of parties’ negotiations. For the reasons above, I respectfully agree with Pain J’s approach in Tenacity Investments v Ku-Ring-Gai Council (supra) (at [69]–[72]) of considering the whole of the negotiations, both before and after the commencement of the proceedings, in applying s 88K(2)(b). I respectfully decline to adopt her Honour’s obiter dicta remark (at [195]) to the effect that failure to take steps to obtain an easement before commencing proceedings would ordinarily weigh heavily against an applicant. If s 88K(1) and all of the requirements of s 88K(2) are satisfied, then the question whether the Court should exercise its power to make an order imposing an easement will depend on all of the circumstances of the case. The whole of the course of conduct of the parties is likely to be relevant, and the significance of the applicant’s failure to take steps to obtain an easement prior to commencing proceedings falls to be determined in the context of that course of conduct and all other relevant matters.

480. In this case, it was reasonably clear from the whole of the dealings between the parties as summarised under Issue 5 above that that the Owners Corporation was determined not to permit the Murrells to enter the Airspace. The Owners Corporation maintained that stance after receiving the Murrells’ first correspondence seeking an easement on 3 December 2019. Mr Howse’ evidence was that the Owners Corporation was not prepared to grant the Murrells’ an easement on any terms. [155] The Owners Corporation did not even bother to respond to the Murrells’ solicitor’s letter of 3 December 2019, despite the Murrells’ solicitor sending follow up communications to the Owners Corporation’s solicitor seeking a response. [156]

     155. See [277] above.

     156. See [272]–[277] above.

481. By December 2019, the Murrells had not entered the Airspace for approximately six months. I infer that any attempt to negotiate an easement with the Owners Corporation prior to December 2019 would have been met with the same stony silence, or outright refusal, from the Owners Corporation.

482. I also infer that, after the Owners Corporation’s refusal to respond to the Murrells’ attempt to negotiate an easement in early December 2019, the Murrells resigned themselves to the inevitability of these proceedings running their full course. Section 88K(2)(c) did not require the Murrells to continue endeavouring to negotiate with the Owners Corporation in circumstances where it was clear that those attempts would be futile.

483. It is understandable that the Murrells nevertheless made further attempts to negotiate an easement immediately prior to during the hearing of the proceedings on 24 and on 29 April 2020. It is not uncommon that the realities of contested proceedings cause parties to reassess the pros and cons of a compromise compared to a court-imposed outcome. Those attempts also failed.

484. For completeness, I note the Owners Corporation’s submissions that the offers made on 3 December 2019, 24 April 2020 and 29 April 2020 were not reasonable attempts because they were predicated on Mr Donovan’s methodology for assessing compensation being rejected and they did not adequately address the Owners Corporation’s costs of the whole of these proceedings or explain how the Owners Corporation’s costs of the s 88K element of these proceedings was to be separated from its costs of the balance of the proceedings if the offer were taken up. I do not consider that s 88K(2)(c) requires that attempts to obtain an easement resolve the entirety of a larger dispute between the parties, including resolving the question of costs of proceedings which are provided for in s 88K(5). The fact that the Owners Corporation wished to continue the proceedings and advocate for compensation in accordance with Mr Donovan’s report is not relevant. The question is whether the Murrells’ attempts to obtain the easement were reasonable, not whether it was reasonable for the Owners Corporation to reject those attempts.

485. For all of the reasons above, I have concluded that, whilst it would have been preferable for the Murrells to seek to discuss an easement with the Owners Corporation prior to commencing proceedings, the Murrells had made all reasonable attempts to negotiate the easement by the time of the hearing of the s 88K application.

Issue 14: Whether the proposed easement should be granted and what amount of compensation should be specified

486. For the reasons explained under Issues 10 to 13 above, I have concluded that an order should be made under s 88K imposing an easement in terms to the following effect , and that no compensation is payable in the special circumstances of the case addressed under Issue 12 above:

“The owner of Part Lot 21 / DP 871094 (now known as Part Lot 1 DP 12534483) (the dominant tenement) is permitted to access Part Lot 22 DP 871094 (now being part of the land comprised in folio CP/SP85044 of the Register) (the servient tenement) as necessary and on a temporary basis to repair and maintain any structure on the dominant tenement and to take onto the servient tenement on a temporary basis anything reasonably necessary for that purpose.”

Issue 15: Should the Murrells be restrained from entering into the Airspace?

487. The Owners Corporation seeks:

“…an order that [the Murrells], by their servants or agents, be restrained, until a land access order pursuant to the Access to Neighbouring Land Act 2000 is made in their favour (if any) from entering into or remaining upon or causing or allowing anything (including, without limitation, scaffolding and other building materials or equipment) to enter of [sic] remain upon the [Owners Corporation’s] land, being the air space comprising part of Lot 22 in Deposited Plan 87094 (save for the purposes of performing building works of an emergency nature to the dwelling located on [the Murrells’] land being Lot 21 in Deposited Plan 871904).”

488. In view of my decision to make an order under s 88K of the Conveyancing Act, it would not be appropriate to grant an injunction in these terms. The claim for relief in prayer 1 of the summons and prayer 5 in the amended statement of claim in the Owners Corporation proceedings is therefore dismissed.

Issue 16: Claims in trespass and nuisance relating to the stud wall

489. There is no dispute that the Murrells’ contractors erected a stud wall on part of the Boundary Wall. There is a dispute about whether the Boundary Wall on which this work was done was:

1. directly on the boundary between the Murrells’ property and the Owners Corporation’s property, as shown by a survey plan obtained by the Murrells on 26 November 2018; [157] or

2. within the boundary of the Owners Corporation’s property by between 55 and 80 millimetres, as shown by the Strata Plan. [158]

   157. Exhibit 1, page 946.

   158. Exhibit 1, page 436.

490. There was no expert or other evidence before the Court that would enable this discrepancy between the two plans to be resolved. As the Owners Corporation bears the onus of proving that the Murrells entered into the Owners Corporation’s property, the claims in trespass and nuisance relating to the erection of the stud wall on the Boundary Wall, and the painting of the Boundary Wall, fail at this first hurdle.

Issue 17: Claims for damages and rectification orders relating to the stud wall

491. These claims of the Owners Corporation are dismissed for the reasons explained under Issue 16 above.

Issue 18: Claims in trespass and nuisance relating to the painting of the Boundary Wall

492. The Owners Corporation has failed to prove that the painting of the boundary wall constituted trespass or nuisance for the reasons explained under Issue 16 above.

Issue 19: Claims for damages and rectification orders relating to the painting of the Boundary Wall

493. These claims of the Owners Corporation are dismissed for the reasons explained under Issue 16 above.

Orders

494. My conclusions are summarised in [75] above.

495. The parties should formulate the precise terms of the orders to give effect to my reasons for judgment in relation to the Murrells’ claim for an easement under s 88K of the Conveyancing Act (Issues 10 to 14 above). Those orders should impose an easement in the terms of an attached s 88B instrument with accompanying plan intended to be registered to give effect to my reasons. I have set out the terms of the easement under Issue 14 above, but the parties are at liberty to amend the descriptions of the dominant and servient tenements to ensure that they are clearly described by reference to the current folio identifiers for those tenements and the plan that is to accompany the s 88B instrument to be attached to the orders.

494. Section 88K(5) of the Conveyancing Act provides that the costs of proceedings under s 88K are payable by the applicant for the easement, subject to any order of the Court to the contrary. I am not presently aware of any reason why the Court should order to the contrary in this case. [159] If no such reason is identified, and if costs follow the event in relation to the balance of the Murrell proceeding, this would result in the Murrells paying the Owners Corporation’s costs of the Murrell proceeding. If costs follow the event in relation to the Owners Corporation proceeding, the Murrells would also pay the Owners Corporation’s costs of that proceeding as the Owners Corporation has succeeded in part of its claim in trespass. That claim was the most significant issue in the Owners Corporation proceeding. This is not a case that lends itself to issues-based costs orders.

     159. See Gordon v Lever (No 2) (2019) 101 NSWLR 427; [2019] NSWCA 275 at [92] (Bell P, Payne JA and Emmett AJA agreeing).

495. However, the parties asked that I hear them in relation to costs once the outcome of the proceedings is known, and there may be reasons that I am not presently aware of why the Murrells should not pay the costs of the s 88K application or why the costs of the balance of the proceedings should not follow the event. I will therefore determine the question of costs on the papers once the parties have had an opportunity to make written submissions.

496. I make the following orders and directions:

Proceeding 2019/201673

1. Judgment for the plaintiff in the sum of $10,000 in respect of the defendant’s trespasses into the Airspace comprising part of the plaintiff’s property in CP/SP 8504.

2. Costs reserved for determination on the papers in accordance with orders 11 and 12 below.

3. The summons and statement of claim are otherwise dismissed.

Proceeding 2019/299582

4. Dismiss the claims for relief in prayers 1, 2 and 3 of the summons filed on 25 September 2019 and prayers 1, 2 and 3 of the statement of claim filed on 25 November 2019.

5. Grant leave to the plaintiffs to amend prayer 4 of the summons filed on 25 September 2019 and prayer 4 of the statement of claim filed on 25 November 2019 to read:

“… an order imposing an easement over Part Lot 22 of Deposited Plan 871094 pursuant to section 88K of the Conveyancing Act to    permit the owner of Part Lot 21 to enter the airspace of Part Lot 22 as    reasonably necessary and on a temporary basis to repair, maintain    and/or improve any structures on Part Lot 21”

6. Dispense with the requirement to file an amended summons and amended statement of claim.

7. Order the plaintiff to pay the defendant’s costs thrown away by the amendment (if any), as agreed or assessed.

8. Direct the parties to send to my Associate within 14 days agreed draft orders giving effect to the reasons for judgment in relation to the plaintiffs’ claim for relief in prayer 4 of the summons filed on 25 September 2019 (as amended) and prayer 4 of the statement of claim filed on 25 November 2019 (as amended).

9. Grant liberty to the parties to apply on 3 days’ notice if they are unable to reach agreement on the draft orders referred to in order 8 above.

10. Costs reserved for determination on the papers in accordance with orders 11 and 12 below.

Proceedings 2019/201673 and 2019/299582

11. Direct the parties to send to my Associate within 14 days:

1. Agreed draft orders concerning the costs of the proceedings; or

2. In the absence of agreement, a note setting out the costs orders for which each party contends, together with any supporting evidence and written submissions (not exceeding 4 pages).

12. Order that the question of the costs of the proceedings is to be determined on the papers.

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Annexure 'A'

Annexure 'B'

Endnotes

Decision last updated: 01 October 2020