The Uniting Church in Australia Property Trust (NSW) v Crowe

[2024] NSWSC 1387

Supreme Court

New South Wales

Medium Neutral Citation:

The Uniting Church in Australia Property Trust (NSW) v Crowe [2024] NSWSC 1387

Hearing dates:

17, 18, 19 and 20 June; 5 July 2024; further written submissions ending 22 July 2024

Date of orders:

31 October 2024

Decision date:

31 October 2024

Jurisdiction:

Equity - Real Property List

Before:

Parker J

Decision:

See [498]–[501]

Catchwords:

TORTS — trespass to land — defences — land owned by plaintiff and plaintiff’s predecessor in title used by defendant’s predecessors in title and by defendant as garden since 1960s — plaintiff aware of use by 2009 — balcony, roof overhang, concrete slab, and deck constructed by defendant on, or projecting into airspace of, plaintiff’s land in 2009-2010 without plaintiff’s knowledge — deck reconstructed by defendant in 2019 — plaintiff then became aware of defendant’s construction works — whether works impliedly licensed by plaintiff — limitation — balcony and roof overhang gave rise to continuing trespass — deck (in original form) and concrete slab statute did not

EQUITY — equitable remedies — injunctions — trespass to land — mandatory injunction to remove structures — Lord Cairns’ Act damages in lieu of injunction — “good working rule” in Shelfer v City of London Electric Lighting Company [1895] 1 Ch 287 — adequacy of damages — hardship — mandatory injunction awarded

ESTOPPEL — estoppel by convention — discussions concerning purchase of plaintiff’s land by defendant — defendant became aware of unregistered lease between parties’ predecessors in title and asserted during discussions that lease ‘existed’ — whether mutual assumption that defendant entitled to remain in occupation indefinitely — reliance — detriment — no estoppel as to indefinite occupation by defendant

LAND LAW — Encroachment of Buildings Act 1922 — application by defendant for compulsory transfer of, or easement over, plaintiff’s land to accommodate encroaching structures built by defendant — defendant’s knowledge of encroachment at time of construction — hardship — application refused

LAND LAW — easements — application by defendant for compulsory easement over outdoor stairs built by defendant’s predecessor in title on plaintiff’s land — Conveyancing Act 1919, s 88K — “original architectural vision” of defendant’s predecessor in title — heritage factors — past use by defendant and defendant’s predecessors in title — easement not reasonably necessary for the effective use or development of defendant’s land — alleged necessity resulted from defendant’s own conduct in building up to his boundary — application refused

Legislation Cited:

Chancery Amendment Act 1858 (21 & 22 Vict c 27)

Conveyancing Act 1919 (NSW)

Encroachment of Buildings Act 1922 (NSW)

Encroachment of Buildings Act 1955 (Qld)

Limitation Act 1969 (NSW)

Supreme Court Act 1970 (NSW)

Cases Cited:

117 York Street Pty Ltd v Proprietors of Strata Plan No 16123 (1998) 43 NSWLR 504

Arcidiacono v The Owners – Strata Plan No 17719; Arcidiacono v The Owners – Strata Plan No 61233 [2020] NSWCA 269

Bankstown City Council v Alamdo Holdings Pty Ltd (2005) 223 CLR 660

Break Fast Investments Pty Ltd v PCH Melbourne Pty Ltd (2007) 20 VR 311

Clegg v Dearden (1948) 12 QB 576

Crowe v Woollahra Municipal Council [2021] NSWLEC 1659

Haddans Pty Ltd v Nesbitt [1962] QWN 98

Hanny v Lewis (1998) 9 BPR 16,205

Holmes v Wilson (1839) 10 Ad & El 503; 113 ER 190

Hudson v Nicholson (1839) 5 M & W 437

ING Bank (Australia) Ltd v O’Shea [2010] NSWCA 71

ING Bank (Australia) Ltd v O’Shea [2010] NSWCA 71

Jaggardv Sawyer [1995] 1 WLR 269

Kalgovas v Iliopoulos [2022] NSWSC 70

Khattar v Wiese [2005] NSWSC 1014

Konskier v Goodman Ltd [1928] 1 KB 421

Kosciusko Thredbo Pty Ltd v Commissioner of Taxation (1987) 168 CLR 147

Lakes Edge Developments Ltd v Kawarau Village Holdings Ltd [2017] 3 NZLR 336

Llavero v Shearer [2014] NSWSC 1336

Lord v McMahon [2015] NSWSC 1619

McIntosh v Morris [2021] NSWCA 225

Mexfield Housing Co-operative Ltd v Berrisford [2012] 1 AC 955

Miller Heiman Pty Ltd v Sales Principles Pty Ltd [2017] NSWCA 106

MoorebankRecyclers Pty Ltd v Tanlane Pty Ltd [2012] NSWCA 445

Moratic Pty Ltd v Gordon [2007] NSWSC 5

Owners Strata Plan 4085 v Mallone [2006] NSWSC 1381

Permewans(Walgett) Pty Ltd v Morrison [1966] 2 NSWR 32

Petrie v Dickson [2024] NSWSC 972

Redland Bricks Ltd v Morris [1970] AC 652

Shadbolt v Wise [2002] QSC 348

Shadbolt v Wise [2003] QCA 241

Shelfer v City of London Electric Lighting Company [1895] 1 Ch 287

Sheppard v Smith [2021] NSWSC 1207

Tabcorp Holdings Ltd v Bowen Investments Pty Ltd (2009) 236 CLR 272

The Owners – Strata Plan No 61233 v Arcidiacono; The Owners – Strata Plan No 17719 v Arcidiacono [2019] NSWSC 1307

Treweeke v 36 Wolseley Road Pty Ltd (1973) 128 CLR 274

Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387

Texts Cited:

J Eldridge and Ors, Fleming’s Law of Torts (11th ed, 2024, Thomson Reuters)

Meagher, Gummow and Lehane’s Equity: Doctrines and Remedies (5th ed, 2015, LexisNexis Butterworths)

P Butt, Butt’s Land Law (7th ed, 2017, Thomson Reuters)

Category:

Principal judgment

Parties:

Statement of Claim filed 31 October 2022
The Uniting Church in Australia Property Trust (NSW) (Plaintiff)
Stephen Desmond Crowe (Defendant)

Cross-Claim filed 19 December 2022
Stephen Desmond Crowe (Cross-Claimant)
The Uniting Church in Australia Property Trust (NSW) (Cross-Defendant)

Representation:

Counsel:
Statement of Claim filed 31 October 2022
G A Sirtes SC/ D Robertson (Plaintiff)
J Hutton SC (Defendant)

Cross-Claim filed 19 December 2022
J Hutton SC (Cross-Claimant)
G A Sirtes SC/ D Robertson (Cross-Defendant)

Solicitors:
Statement of Claim filed 31 October 2022
Maddocks Lawyers (Plaintiff)
Dentons (Defendant)

Cross-Claim filed 19 December 2022
Dentons (Cross-Claimant)
Maddocks Lawyers (Cross-Defendant)

File Number(s):

2022/324943

Publication restriction:

Nil

JUDGMENT

1. These proceedings arise out of a dispute between owners of adjoining properties at Woollahra in Sydney’s eastern suburbs. Part of the plaintiff’s land, referred to in the evidence as the “side yard”, has for many years been used by the defendant, and his predecessors in title, for recreational purposes. The defendant has built a deck in the side yard. He has also undertaken extension works on his house which project into the side yard. The projecting works are a concrete slab, a balcony, and a roof overhang. The plaintiff, whose title to the side yard is not in dispute, seeks to have the deck and projecting works removed.

2. The properties in question both have a frontage to Edward Street, Woollahra. Number 35 belongs to the plaintiff, The Uniting Church in Australia Property Trust (NSW) (“Church Trust”). Number 33 belongs to the defendant, Stephen Desmond Crowe.

3. Number 35 is one of several adjoining blocks of land acquired by the Church Trust in 1974. The Trust’s holding is the site of a retirement village known as “Lough Neagh”. The village includes a number of buildings but the Edward Street frontage of number 35 is vacant and undeveloped.

4. The house on number 33 is a multi-level one which was originally built in the early 1960s for Mr Bruce Gyngell and his family. Mr Gyngell was a well-known television executive. The house was designed by a prominent Sydney architect of the day, Mr W E (“Bill”) Lucas. According to the evidence, it has significant heritage value as an example of the “Sydney style” of architecture.

5. Since Mr Gyngell, number 33 has had a series of owners. Mr Crowe bought it in 2003 with his former wife and is now the sole proprietor.

6. Use of the side yard goes back to Mr Gyngell’s time. It contains two flights of outdoor stairs leading to different levels of the house (these are described at [79]-[85] below; I will refer to them as the “upper stair” and the “lower stair” respectively). Mr Gyngell was granted a lease over part of number 35 which included the side yard and the stairs by the Church Trust’s predecessor in title at a nominal rent and it appears that he was responsible for first laying out the side yard and building the stairs. But the lease was never registered. On the face of it, Mr Gyngell’s successors in title, including, now, Mr Crowe, have never had any legal entitlement to occupy or use the side yard.

7. Since 2003, Mr Crowe has continued to use the side yard for recreational purposes. In 2009, discussions took place between the parties about the possible purchase by Mr Crowe of part of number 35 so that the side yard would become his property. Those discussions petered out in 2010.

8. The construction of the deck and the renovation works projecting into the side yard were undertaken some time in the second half of 2009 or the first half of 2010. Mr Crowe did not seek any formal permission from the Church Trust (or development approval from Woollahra Municipal Council, which is the local council). The then responsible officers of the Trust (who worked at head office, not the retirement village) seem to have been unaware of the works and took no action.

9. About nine years went by. Responsibility for the retirement village land within the Church Trust passed to others who were not familiar with the previous history. In 2019, Mr Crowe refurbished the deck. The officers of the Trust learned of this and became aware of the works on, and projecting into, number 35. They asked Mr Crowe to remove those works and reported the issue to the Council.

10. In 2020, the Council issued a “development without consent” notice. Mr Crowe took no action about the side yard works (although he may have regularised some other works for which permission had not been obtained). Correspondence ensued between Mr Crowe and the Church Trust, but without result. In the course of that correspondence, Mr Crowe lodged a caveat claiming a “proprietary, or equitable” interest in the side yard land.

Claims for determination

11. The proceedings were commenced on behalf of the Church Trust as plaintiff in October 2022. Mr Crowe filed a cross-claim back against the Trust in December of that year.

12. The proceedings have had a somewhat lengthy history which it is unnecessary to recount for the purposes of this judgment. Pleading amendments were made before the trial on both sides, and further extensive amendments were made to Mr Crowe’s cross-claim in the course of the trial. The hearing took place over three days from 17 to 19 June. Oral submissions were presented on 5 July, with supplementary written submissions ending on 22 July.

13. There is no dispute about where the boundary between number 33 and number 35 in fact lies. Prima facie, Mr Crowe’s use of the side yard is, and has at all times been, a trespass.

14. The principal relief sought by the Church Trust is an order in the nature of a mandatory injunction to remove the deck, and the projecting slab, balcony, and roof overhang, from number 35. Alternatively, damages are claimed for trespass. A claim for similar relief with respect to the upper stair was abandoned in final submissions. No relief was sought at any stage with respect to the lower stair, which has never been the subject of any work by Mr Crowe. As the owner of the land, the Church Trust would of course be prima facie entitled to remove either or both of the stairs at its own expense.

15. The Church Trust has not sought an injunction against Mr Crowe to prevent him from going onto the side yard land (or the balcony, to the extent that it projects into the side yard’s airspace). But presumably that is only because no such injunction is necessary. It appears to be common ground that if Mr Crowe fails in his cross-claim, he will have to vacate the side yard (including the encroaching part of the balcony).

16. In the final version of his cross-claim, Mr Crowe advances three claims to enable him to continue to use and occupy the side yard. The first is that he has a legal entitlement to occupy the side yard, which the Court should now recognise. The claim arises in the following way.

17. As already noted, and as I will describe in more detail below, when Mr Gyngell first built the house at number 33 and began to use the side yard for family recreation, he had the benefit of a lease from the Church Trust’s predecessor in title, but that lease was never registered. Mr Crowe alleges that he was unaware of the lease at the time he bought the property. But he says that he became aware of it afterwards, and he referred to it in the 2009-2010 discussions with officers of the Church Trust.

18. Mr Crowe puts his claimed entitlement a number of different ways, but principally he alleges that, as a result of the way in which the 2009-2010 negotiations were conducted, he was led to believe that the Church Trust accepted the lease as being binding, and he relied upon that understanding in his subsequent conduct. He claims that, as a result, an estoppel arises in his favour. He does not claim that the estoppel gives him any interest in number 35 which he can sell to a purchaser. But he does contend that it gives him an entitlement, for as long as he lives at number 33, to use the side yard on the same or similar terms as were set out in the lease.

19. Next, and alternatively, Mr Crowe contends that the projecting slab, balcony, and roof overhang (but not the other structures which have been built on number 35) are encroachments for the purposes of the Encroachment of Buildings Act 1922 (NSW) (“EBA”). He seeks orders under the Act granting him a transfer, or an easement, to allow him to maintain the slab, balcony, and roof overhang in place.

20. Thirdly, and in the further alternative, Mr Crowe seeks the grant of a compulsory easement under s 88K of the Conveyancing Act 1919 (NSW) (“CA”) to allow him to retain the balcony, slab and roof overhang in place. The easement sought also extends to the use of the upper and lower stairs.

21. Finally, even if his cross-claim fails, Mr Crowe resists the grant of a mandatory injunction requiring him to remove the structures he has built. He also contends that the Church Trust has failed to demonstrate that it has suffered any substantial damage.

Summary and analysis of evidence

Documentary evidence

22. Land and title – numbers 35 and 33: From my description of the facts so far, it may seem strange that land forming part of number 35 has been used for decades for recreation by the owners of number 33 and that the present dispute has only now come to a head. The explanation for this, at least in part, lies in the unusual topography of the land.

23. Lying to the north of the land in question is a three-sided valley, with its opening to the west. On the valley’s southern side, the land rises steeply, culminating in a sandstone bluff running from west to east and forming the southern rim of the valley. The southern slopes of the valley (which remain natural bushland) and the valley floor form part of a public park known as Cooper Park.

24. Edward Street runs from west to east at the bottom of the bluff. To the south of Edward Street is View Street, which runs roughly parallel with Edward Street along the flattish land at the top of the bluff. The bluff line lies about half-way between Edward Street and View Street, slightly closer to Edward Street. From the top of the bluff, and the slopes below it, there are views to the north over Cooper Park and towards Sydney Harbour.

25. The land rises very steeply between the southern side of Edward Street and the top of the bluff line further south. It seems as well that, at one point, stone was quarried there. The result is that in some places there are sheer rock faces, interspersed with natural terraces which are roughly flat and are up to a few metres wide. The side yard on number 35 is located on one such natural terrace. It is not accessible from the top of the bluff (or from Edward Street, below) without climbing equipment but it is accessible from the eastern side of the house on number 33.

26. The land in question was first subdivided early last century as part of what was marketed as the “Harbour View Estate”. This subdivision consisted of lots on both sides of Edward Street. It followed the earlier subdivision of a strip of land on the northern side of View Street. The Estate formed part of a grant going back to the 1830s and, at the time of the subdivision, remained under Old System title.

27. At their rear, the lots in the Harbour View Estate on the southern side of Edward Street extended southwards past the bluff line to include some of the flattish land at the top, where they backed onto lots created by the earlier subdivision on the northern side of View Street. Six of those View Street lots form part of the Church Trust’s holding.

28. Reproduced below is an advertisement for the Harbour View Estate auction sale in 1905. The advertisement includes a plan of the subdivision. Lots 42, 43 and 44 became number 35. Lot 45, immediately to the west of lot 44, became number 33. Houses in the existing View Street subdivision (now long gone) are shown to the south, shaded grey.

29. The road reserve retained for Edward Street (which came to be vested in Woollahra Council) was wider than it needed to be for the roadway. The street was built close to the northern side of the reserve, leaving an area of the reserve several metres wide between the lots south of Edward Street and the edge of the street itself.

30. At least in the past, this road reserve seems to have been of little or no economic value. By agreement with the Council, lot 45 was extended up to the road for the purpose of constructing the house on number 33. Number 37, on the eastern side of number 35, has been extended in a similar way. But, presumably because the Edward Street frontage of number 35 has never been developed, there remains an area of road reserve between it and Edward Street itself.

31. Miss Agnes May Turkington was the Church Trust’s predecessor in title. Her holding consisted of six lots in View Street, together with number 35, and, perhaps, other land as well. She had inherited the land in the 1930s and she gave it to the Church Trust (then the Methodist Church (NSW) Property Trust) by transfer dated December 1974.

32. When Miss Turkington inherited number 35, it remained under Old System title. As I will describe in more detail below, it was converted to Torrens title in February 1964, becoming lot 1 in DP216881.

33. Number 33 was purchased by Mr Gyngell in July 1961. At the time, it too, was under Old System title. It was converted to Torrens title in March 1966 (Lot 45 in DP 226775). Later, after the lot was extended northwards to include part of the road reserve, it became Lot 33 in DP1053956.

34. Reproduced below is a survey plan depicting the Church holding, which is outlined in red. Number 35 (Lot 1 in DP 216881) can be seen on the Edward Street frontage, between number 33 (which is mislabelled 37) to the left and number 37 to the right. The View Street lots owned by the Trust are lots 24 to 29 in DP1952. The Church Trust holding also includes two small parcels of land (lots A and B in DP14780) at the top of the cliff behind number 37.

35. Reproduced below is an aerial photograph showing the relevant properties. The retirement village complex can be seen between the line of the top of the cliff to the north and View Street to the south. Number 35 is shaded in yellow and the approximate boundaries of the side yard are shown in red.

36. Construction of house on number 33: Plans for the house on number 33, annotated by Mr Lucas, were in evidence before me. An initial set of plans were approved (subject to some minor conditions of amendment) by Woollahra Council in September 1961, and the amended plans were approved in May 1962. The house, when built, was the subject of an article in the December 1966 edition of Home Beautiful magazine, which was also in evidence.

37. I also had the benefit of expert evidence from Mr Peter Lonergan. Mr Lonergan is a Sydney architect with a special familiarity with Mr Lucas’ work (in fact, in his earlier days in practice, Mr Lonergan worked with Mr Lucas). Mr Lonergan produced a report for the purposes of the proceedings and gave supplementary oral evidence.

36. Mr Lonergan’s report involves, to a considerable extent, the drawing of inferences about historical events. That, for the reasons I gave in Sheppard v Smith [2021] NSWSC 1207 at [13]-[15], is probably not, strictly speaking, a matter of expert evidence. But the inferences Mr Lonergan drew were almost, if not completely, undisputed. In any event, they corresponded with inferences which I would draw from the historical material in evidence.

37. Much of the site consisted of steeply sloping hillside. Three natural terraces ran across it, roughly east to west, but curving slightly southwards. I will refer to these as the “top”, “upper” and “lower” terraces. Under the eastern half of the front edge of the lower terrace was an existing retaining wall, built from sandstone rubble. The front edges of the upper and top terraces consisted of natural rock (see the construction site plan at [47] below).

38. From north to south, the lower terrace was about six metres wide at the eastern boundary of number 33, with only a slight incline towards the south. Behind it was a virtually sheer sandstone cliff face. The upper terrace was not as wide and the natural wall behind it appears to have been an area of steep hillside (see the photograph at [111] below) rather than a cliff face.

39. The living areas of the house, at the rear, were built into the upper and lower terraces. The roof of the house was at approximately the same level as the front edge of the top terrace. That terrace extended back to the southern boundary. It was left undeveloped and appears to have been used as a garden (the site plan refers to an “existing rockery”). It was not accessible from View Street.

40. A sketch from the Home Beautiful article which shows the main internal features of the building (from the west) is reproduced below:

43. As the sketch shows, the house featured an internal staircase giving access to six levels, with two pairs of split-levels making up the living areas. At the top, on level six, were four rooms, one a “utility room” and the other three bedrooms, and, on level five, the master bedroom. Below that was a living room (level four) and a dining room and kitchen (level three). Below that was a small space described as the entrance lobby (level two) and, on level one, an area under the dining room described as the “entrance garden”.

44. In front of the house itself was a flat-topped timber structure clad with vertical slats. The top of the structure formed a balcony for the dining room on level three. At ground level, another staircase descended from the “entrance garden” on level one, through the space enclosed by the front structure, and down towards the street.

45. The front part of the house and the timber structure in front of it are pictured from the north-east on the cover of the Home Beautiful magazine, reproduced below:

46. At the front of the house (levels one, three and five), the building extended across the whole width of the property. Behind that, it stepped in about 2 metres from the eastern boundary. Running along the eastern side of the house at ground level, between the living room on level four and the boundary, a concrete terrace (to which I will refer as the “lower terrace patio”) was built. Erected over this was a timber structure which was partly a balcony accessible from level six and partly a pergola. Extensive glass sliding doors were installed on the eastern side of the living room and the rooms above to allow outdoor access and take advantage of the light from the east. By contrast, there were no windows or doors on the western side, which faced an existing house built on the block immediately to the west.

47. Reproduced below is a plan of the site in its pre-existing state, with the construction work for levels one and two superimposed. The front edges of the natural terraces are shown by lines running across the site. The line for the front edge of the lower terrace is difficult to see, but on the western side it lies behind the internal staircase on levels one and two; to the east of that staircase the line is obscured by a handwritten note referring to the “existing sandstone rubble wall”.

48. Reproduced below is the plan for levels three and four. The living room can be seen on level four opening onto the lower terrace patio. The northern end of the lower terrace patio ended at the front edge of the lower natural terrace, with the sandstone rubble wall beneath (see photo at [106] below). The southern end the lower terrace patio ended at the foot of the rock face behind. The southernmost part of the living room was excavated into that rock face.

49. Reproduced below is the plan for levels five and six. The balcony/pergola structure above the lower terrace patio extended along the eastern side of the utility room, bedroom two and the front half of bedroom three on level six. The southern end of the structure curved to accommodate the front edge of the upper terrace. The southern part of level six, consisting of the rear of bedroom three and bedroom four, stood on that terrace, with some excavation of the slope behind to accommodate bedroom four.

50. Reproduced below is the eastern elevation (as the photo at [106] shows, the front structure, when built, was completely surrounded by timber slats rather than partially by windows as is shown in the drawing). The drawing shows the use of the natural terraces and the glass doors on levels four and six.

51. The drawing also shows that the sliding door on bedroom four provided access to the two-metre wide strip of upper natural terrace between the house and the eastern boundary of the property. Leading southwards, a flight of steps (not shown in the drawing) climbs up the slope to the top terrace. The lower five steps are concrete and the top two are sandstone, apparently cut into the ledge at the front of the top terrace (see photo at [111] below). Mr Lonergan’s opinion, which was not contested, was that these steps were constructed at the time or soon after the house was built. I will refer to them as the “top stair”.

52. The next plan in evidence was a survey plan of number 33 (then lot 45) in March 1999, which is reproduced below:

53. The plan shows the balcony (which protruded 5 cm into the air space on number 35) with a straight southern edge, rather than the curved edge in the original plans. Apparently, it had been modified at some point before 1999. Immediately to the south of the balcony, outside the sliding glass door to bedroom four, and below the top stair, the plan shows a paved area on the upper terrace described as a “patio” (to which I will refer as the “upper terrace patio”). The evidence before me did not identify when the patio was built or when the balcony was modified.

54. The 1999 survey was annexed to the contract pursuant to which Mr Crowe purchased number 33 in April 2003, so it presumably represented an accurate depiction of the property as it then was. Also in evidence (although not produced until late in the hearing itself) was a sales flyer dating from the time of Mr Crowe’s purchase. The front page provides a description of the property which includes its basic specifications and accompanying photographs. The back page of the flyer contained a sketch plan depicting three levels of the property (but not the top terrace behind). The flyer has been reproduced below in full:

55. The sketch plan shows that modifications had been made to the internal layout of level six since the initial construction of the house, as depicted in the diagram in the Home Beautiful article ([42] above). The utility room and bedrooms two, three and four had been converted into three rooms: a study and two bedrooms. As a result, the southernmost bedroom, bedroom four (described as bedroom two on the plan), had been expanded northwards. The glass sliding doors on the eastern side had been reduced in extent, resulting in the southern part of the eastern wall of bedroom four being converted into masonry.

56. The sketch plan also combines the balcony and the irregularly shaped upper patio shown on the 1999 survey into a single rectangular area. Whether that represents an oversimplification, or an actual alteration made between 1999 and 2003, is not clear on the evidence.

57. Adjoining areas of number 35 at time of construction of house on number 33: As I have described, the lower terrace patio constructed between the living room and the eastern boundary of number 33 was built on the lower terrace between the front edge and the cliff at the rear. Across the boundary on number 35, the terrace extended eastwards for about ten metres; this was the area later used as the side yard.

58. The upper terrace across the boundary from the patio (or where it was later built) also extended onto number 35. But only for one metre or so. Beyond that the land rose almost sheerly from west to east, forming a natural bastion with one face to the north, about ten metres above the lower terrace, and the other face to the west, about five metres above the upper terrace (see photo at [86] below).

59. Where the upper terrace meets the foot of the bastion, there is a section of brick wall (see photo at [109] below). Moving south, the wall is replaced by a dilapidated paling fence with a chain-link fence in front of it which runs along the eastern side of the upper terrace, thus being located a metre or so on number 35’s side of the boundary. Moving further southwards, the two fences come back to the boundary about half-way up the top stair. Thereafter, they run from north to south roughly along the boundary between the top terrace on number 33 and the higher land on number 35 (see the survey at [120] below). The deviation in the fence line creates a narrow tongue of land belonging to number 35 between the boundary and the wall/fence at the foot of the bastion and which appears to have been used as part of number 33’s garden (see photos at [111]-[112] below).

60. The brick wall and the paling fence appear to be decades old. The chain-link fence appears to have been erected so as to supplement the paling fence, but the chain-link fence itself also appears to have been in place for many years. It is shown in the 1999 survey, but Mr Lonergan considered that it had probably been erected at or around the time the house on number 33 was built.

61. Grant of lease and conversion of number 35 to Torrens title: There was evidence before me of three separate written agreements between Miss Turkington and Mr Gyngell concerning the side yard area.

62. The first was a licence agreement dated 25 January 1963 (“the 1963 Licence”). The parties were Miss Turkington as Licensor and Mr Gyngell as Licensee. The Licence recited that Mr Gyngell wished to have the use of the land to be licensed “as a playground for his children”. Clause 1 provided that he was to have “use and occupation” of:

a piece of land having a frontage of 33'5" to Edward Street, Woollahra, by a depth along the land already owned by the Licensee of 28' and a depth along the other side boundary of 17' and a rear line of 32’ as shown on the plan hereunder.

63. I will refer to this area of land as the “Licensed Area”. It was depicted in a diagram which has been reproduced below:

64. The evidence did not identify precisely where on number 35 the Licensed Area was. I would infer however that the “back fence” referred to was a predecessor of the fence which now exists on the northern side of the top bastion. Reference to Mr Lucas’ plan (above at [48]) shows that the length of the eastern boundary between the foot of the lower stair and the landing of the upper stair is 28 feet which accords with the depth of the Licensed Area along the eastern boundary of number 33 in the above diagram.

65. Clauses 2 and 3 provided:

2   The Licensee may erect:-

(a) Fences of such design and material as are approved by the Licensor in writing along the side boundaries and along Edward Street, Woollahra ---

(b) Children's Swing.

Any such erection shall become the property of the Licensor. Otherwise than aforesaid, no erections whatsoever shall be placed upon the subject land ---

3   The Licensee may cultivate the said land in such manner as the Licensee desires PROVIDED that no shrubs or trees which can grow to a greater height than ten feet shall be planted upon the subject land. Any shrubs, trees, plants or grass planted upon the subject land shall become the property of the Licensor.

66. Clause 4 provided:

It is hereby expressly agreed that this Agreement does not constitute a Lease or Tenancy of the subject land, but grants a licence only, which may be terminated at any time by giving notice in writing by one party to the other …

67. The next agreement was a memorandum of agreement between Miss Turkington as landlord and Mr Gyngell as tenant dated 30 January 1963 (“the 1963 Lease”). It provided for a month-to-month lease until determined by the tenant giving notice, and at a nominal rent (1 shilling per annum, if demanded). The area the subject of the Lease was identified as: “that piece of land with yard and garden thereto…now in occupation of the tenant”.

68. Clause 2 contained the following covenants by the tenant:

Tenant’s covenants - The tenant for himself and his permitted assigns hereby covenants with the landlord as follows:

(1) To pay rent - To pay the said rent if demanded.

(2) To keep in repair - To maintain the yard end garden in good repair and condition.

(3) To keep garden in order and not to remove trees. To keep the said piece of garden in proper order and not to remove any trees shrubs or bushes without the landlord's previous written consent.

(4) Not to assign - Not to assign underlet or part with the possession of the premises of part thereof without the written consent of the landlord.

69. Clause 3 relevantly provided:

Provisos - PROVIDED ALWAYS and it expressly agreed as follows:

(1) Not determinable by death of either party - This tenancy shall not determine on the death of either party.

(2) Not determinable by assignment - This tenancy shall not be determined by the assignment of interest of either party.

(3) Determinable on breach of stipulations - The landlord may determine the demise and forthwith re-enter upon the demised premises upon the non-observance by the tenant of any of the stipulations on his part hereinbefore contained.

(4) Statutes of limitation not to apply – The non-payment of rent by the tenant for any length of time shall not entitle the tenant to possession of the premises under any statute of limitation.

(5) Tenant to yield up possession - Upon the determination of the tenancy the tenant and all persons claiming under him will forthwith yield up possession of the demised premises.

70. The third agreement took the form of a variation of the 1963 Lease. It was dated 30 April 1966 (“1966 Lease”).

71. The 1966 Lease converted the 1963 Lease to a fixed term of 99 years from 30 April 1966. Clause 2(4) of the 1963 Lease was reworded as follows:

The tenant shall be permitted to improve the garden and yard and such improvements shall include the grassing of the said garden and yard, the provision of paving, decking and such other structures as necessary to keep the garden and yard in proper order.

72. Clause 3(5) was also replaced so as to read as follows:

Upon the determination of the tenancy the landlord shall grant the right to the tenant to convert the tenancy to a freehold interest.

73. Copies of the 1963 Lease and the 1966 Lease, as signed by the parties, later came into the possession of Mr Crowe as I will describe. The 1963 Licence, however, did not. The copy in evidence is a conformed copy made by Miss Turkington’s solicitors in connection with the application to convert number 35 from Old System to Torrens title as I now describe.

74. The application was dated 12 December 1962, six weeks or so before the Licence was signed in January 1963. In its initial form, it did not disclose that there were any leasehold interests over the land. But for reasons which are not explained in the evidence, the application took more than a year to procced to registration. On 14 February 1964, Miss Turkington signed a supplementary statutory declaration. Paragraph 2 stated that she was in possession of number 35 and there were no tenancies, but in handwriting, words “except Bruce Gyngell with licence agreement, copy herewith” were added. A copy of the 1963 Licence was attached. No reference was made to the 1963 Lease, which had been signed four days after the Licence.

75. A new folio for number 35 was thereafter registered on 26 February. The 1963 Licence would not have been registrable, and because of its indeterminate term, the 1963 Lease might not have been either (see [331] below). In any event, there is nothing to suggest that any attempt was made to register the 1963 Lease or lodge a caveat. Nor, when the 1966 Lease was signed, was it registered.

76. It is unclear why the parties went to the trouble of creating a formal licence, only to replace it with a lease four days later. It is also surprising that the statutory declaration in support of the application referred only to the 1963 Licence and not the 1963 Lease. It is also unclear why the parties went to the trouble of signing a formal lease variation, which would presumably have been registrable, and then not registering it. But there was nothing in the evidence which explains what happened.

77. Development and use of side yard to 2009: Photographic evidence from the Home Beautiful article referred to at [86] below shows that, by 1966, at which time the house on number 33 had been completed, the side yard had also been established. The lower natural terrace abutting the eastern edge of the lower terrace patio on level four had been levelled and grassed over as a lawn. A chain-link fence had been erected on the northern and eastern sides of the yard. Part of the northern section of the fence can be seen in the cover photograph from the Home Beautiful article at [45] above. Some parts of the fence, much overgrown, still remain.

78. It is also common ground that the lower stair and the upper stair date back to Mr Gyngell’s day. I will now describe them in more detail.

79. The lower stair is a flight of concrete steps which starts from an external door on the eastern side of the house on level 2 (the entrance lobby level: see the construction plan at [47] above). The stair curves slightly as it rises up to the levelled part of the lower natural terrace (see the survey plan at [103] below). The upper part is therefore on number 35.

80. As built, the lower stair replaced a differently designed external stair in Mr Lucas’ plans. Those plans, in their final approved form, showed a more compact spiral stair leading from the external door on level two to the lower terrace patio on level four above (thus contained entirely within the boundary of number 33). This proposed stair can be seen on the construction plans at [47] above.

81. Mr Lonergan referred to this change in his evidence. He noted that the plans contained an annotation that the spiral stair was not included in the original building contract. His inference was that during the construction of the house, Mr Lucas and Mr Gyngell decided not to proceed with the construction of the spiral stair, which would have required demolition work on the sandstone rubble wall, and built the lower stair instead.

82. This inference was not disputed and is consistent with the arrangements between Mr Gyngell and Miss Turkington about the side yard. The construction work for the house would not have begun until after approval was obtained in May 1962, and would not have been completed until after January 1963, when the 1963 Lease was granted. In fact, Mr Gyngell’s signature on the 1963 Lease was witnessed by Mr Lucas (as was Mr Gyngell’s signature on the 1966 Lease, in April 1966). It may therefore be accepted that the lower stair was built at the same time as, or soon after, the house was built, so as to provide access between it and the side yard.

73. The upper stair leads from the levelled part of the lower terrace back towards the upper terrace, following the curve of the cliff face above the side yard (see the photograph at [108] below). It has a distinctive design. The stairs are mounted on spikes driven into the rock. Each tread is supported by a single piece of metal which is then bent at a right angle and used to support the handrail. The whole of the upper staircase is on number 35. At the top is a concrete landing on the ledge adjacent to the patio, opposite the entrance to bedroom four and below the top stairs (see the photograph at [109] below).

74. In his report, Mr Lonergan expressed the opinion that the upper stair, like the lower stair, dated from the time of construction of the house. This opinion was based on the materials used and on stylistic grounds: in Mr Lonergan’s opinion, it was characteristic of Mr Lucas’s work. In the course of Mr Lonergan’s oral evidence he went on to say that the staircase had probably been built in order to aid construction.

75. Again, the fact that the stair was built on land which did not belong to number 33 can be explained by the existence of the 1963 Lease and the 1966 Lease. In the end, there was no dispute that the stair was the work of Mr Lucas, or that it had been built at the time the house was built on number 33 or shortly afterwards. I do not think it is possible to be certain that it was built to help with the construction of the house. But whether it was or not does not matter for present purposes.

76. Reproduced below is a photograph from the Home Beautiful article which appeared in Mr Lonergan’s report. The lawn on the lower terrace can be seen from inside the living room, looking out past the lower terrace patio (with the balcony/pergola above). On the right-hand side, Mr Lonergan has indicated with a red oval the location of the upper stair, which is obscured by foliage. The top of the lower stair is out of the shot, to the left.

87. The photograph was captioned (emphasis added):

ELEVATED GARDEN shown here is on a narrow rock ledge just below the top of the quarry face. The Gyngells’ property ends at the far edge of this terrace outside their living room, but they leased this strip from their neighbour and made a safe, convenient children’s play area.

88. Later, a pavement made from bricks or pavers replaced the lawn. This work was done before Mr Crowe bought number 33 in 2003.

89. Works by Mr Crowe in side yard: As already noted, Mr Crowe undertook significant unapproved renovation works on the house in 2009/2010. According to Mr Crowe, he himself undertook the works with the help of a carpenter and a bricklayer. For the purposes of this judgment, the important works were as follows.

90. First, Mr Crowe extended part of the eastern side of the house out to the boundary of number 33. The living room on level four was expanded to enclose the original lower terrace patio and, above, the study and bedroom which had been created in the pre-2003 remodelling of level six (see [55] above) were extended to enclose the balcony/pergola structure. The new eastern face of the house was just within the boundary line, but at roof level the extension resulted in an overhang which projected across the boundary by about 0.8 metres.

91. In evidence are plans prepared for further proposed works by Mr Crowe in 2020. The plans depict the existing state of the eastern part of the house and the side yard (which were not affected by the further proposed works) and thus reflect the alterations undertaken by Mr Crowe in 2009-2010.

92. Reproduced below are plans of levels three and four (on the left) and levels five and six of the house (on the right). They show that in 2009-2010 Mr Crowe cut back the cliff face at the southern end of the lower terrace patio on level four and built walls to support the extensions above. At the northern end of the extension, a space surrounded by the house on three sides, referred to at one point in the hearing as a “lightwell”, was created.

93. Reproduced below is the east elevation. On level four, the new supporting wall, clad partially in brick and partially in timber, can be seen. Above it, on level six, are glass sliding doors for the bedrooms created by the extension, with, to the left, the glass sliding door and brick wall created due to the pre-2003 remodelling of bedroom four (see [55] above; this does not appear to have been affected by Mr Crowe’s works).

94. Beyond the eastern face of the extensions to the house, Mr Crowe constructed a new concrete slab and balcony, supported by timber columns, adjacent to where the original lower terrace patio and balcony/pergola had been. The slab and the balcony projected across the boundary into the side yard by about two metres. Beyond the new concrete slab, Mr Crowe built a timber deck on the paved area of the lower terrace. The slab, balcony and deck (as refurbished in 2019: see below at [101]) are also depicted in the plans.

95. The plans and the elevation also show that, behind the house, the top terrace was subdivided into two parts, separated by a wall and a flight of steps on the western boundary. The part closer to the house was described in the evidence as a “courtyard”. The part behind, adjoining the southern boundary, is an area of garden (described in the plan as “landscape”).

96. In passing, it may be noted that the plan appears to show the top stair as being about two metres wide, and extending onto number 35. This is not consistent with the photographic evidence (see [111]-[112] below) but it may have been intended to depict both the stair and the adjacent garden beds, which do extend onto number 35.

97. As already noted, there is a question about precisely when Mr Crowe undertook these works. The evidence at trial included three aerial photographs taken between November 2009 and March 2010. The photographs are reproduced below.

98. In the first photograph, no extension works appear to have been undertaken and the original roof is intact. There is no sign of any work being undertaken in the side yard, but the area is in shadow and it is not possible to be sure.

99. In the second photograph, construction work on the extension is underway. The surface of the side yard is clearly visible and it appears to be being used as a work area; the ground has been cleared, although it is not possible to tell whether the pavers in the area have been removed. Clearly the deck has not yet been constructed. The top terrace also appears to have been partially cleared.

100. In the third photograph, the extension and the roof above it have been completed. The side yard is again in shadow and it is not possible to tell what has happened with the surface; the deck may or may not have been installed by this point.

101. I will return to the timing question below. For present purposes, it is enough to say that, according to Mr Crowe, the works had been completed by mid-2010 at the latest. After that, it seems that no further significant works were undertaken in the side yard until Mr Crowe replaced the timber surface of the deck with a timber lookalike surface in 2019. As already noted, it was this work which came to the Church Trust’s attention and resulted, ultimately, in the present proceedings. Later, in 2020, Mr Crowe replaced the wooden treads of the upper stair with aluminium treads.

102. Current state of property: In this section of the judgment, I set out some of the pictorial evidence so as to show the current state of the property and the improvements I have earlier described.

103. Reproduced below is a plan of number 33 and its adjoining properties drawn from a survey undertaken in December 2020. The lower, upper and top stairs are marked “S”. The concrete slab, described as a “patio”, is shown at ground level of the lower terrace, along with the deck. Above it can be seen the encroaching roofline.

104. Reproduced below is a photograph from Mr Lonergan’s report, taken from inside the house as it now is, looking east. The photograph is taken from roughly the same place as the Home Beautiful photograph reproduced earlier. Visible in the photograph are the extension to the living room, the concrete slab under the balcony behind, and the deck behind that. Again, Mr Lonergan has indicated with an oval the location of the upper stair, which remains concealed by foliage.

105. The below photo is taken from the deck in the side yard looking west towards the house on number 33. In the centre and on the left are the extensions built by Mr Crowe on the eastern side of level four and level six, with the concrete slab and the balcony extending into number 35. To the right, the lower stair is below the deck level, leading down to the external door on level two of the house.

106. Reproduced below is a photograph looking down at the bottom of the lower stair and the external door on level two of the house. The photograph shows the external door which gives access to the stair from the house. On the left is the sandstone rubble wall which apparently predated the house (see [39] above). Above the wall is a brick wall constructed by Mr Crowe as part of the extension to enclose the former lower terrace patio.

107. The below photograph is taken from within the house on level two, looking eastwards, up the lower stair through the external doorway. On the right, the face of the rubble wall is only just visible. The stair curves to the right gradually as it ascends to the deck which can be seen at the top of the photograph.

108. Below is a photograph of the upper stair looking roughly southwest. The stair curves around the cliff behind the lower terrace, terminating with the landing on number 35, with the southeastern corner of the extensions built by Mr Crowe adjacent. Behind the landing, the southernmost part of level six can be seen. The upper terrace patio is not visible, owing to the angle.

109. Reproduced below is a photograph looking northeast down the upper stair from the upper terrace. At the bottom right of the photograph, part of the concrete landing can be seen. To the left of the stair can be seen the southeastern corner of the extension built by Mr Crowe, the balcony projecting into number 35 and the deck. To the right of the landing is the terminus of the old stone wall on number 35 behind which, out of shot, is the part of the cliff forming the western wall of the natural bastion.

110. The below photograph captures the view looking down from the northwestern corner of the natural bastion on number 35, above the old stone wall shown in the previous photograph (obscured by foliage). At the bottom left is the landing at the top of the upper stair (partly obscured by foliage). Behind the upper stair are the extensions to the house on number 33, with the balcony and the concrete slab below extending across the boundary.

111. Reproduced below is a photograph from the upper terrace patio looking south, towards the top terrace. In the centre, the top stair leads up to the “courtyard” behind the house. To the right, the rear of the house reflects the original building envelope. To the left of the stair, a section of wire fencing runs approximately down the boundary between number 33 and number 35 and effectively serves as a handrail for the top steps (better displayed in the below photograph at [112]). Behind it is the chain-link fence (with the paling fence behind it) which diverges in a north eastward direction from the boundary line.

112. The photograph below looks northwards down the top stair. On the left is the roof over the southernmost part of the house, reflecting the original building envelope. At the foot of the steps, the upper terrace patio. Behind it, a door gives access to the extension of the house with the roof overhanging the boundary with number 35. To the right of the stair is the end of the metal handrailing fence, marking the approximate boundary line between number 33 and number 35. The lowest part of the chain-link and paling fences stand on number 35.

113. Lastly, the photograph reproduced below, which looks east from the top stair, shows the chain-link and the paling fences with part of the retirement village on the higher land behind.

114. Discussions between Mr Crowe and the Church Trust, 2009-2010: Between June 2009 and March 2010, discussions took place between Mr Crowe and executives of the Development and Asset Management Division of Uniting Care Ageing (described as a “service arm” of the Church Trust) for the purchase by Mr Crowe of the side yard land (or, at least, a portion of it). Initially, the discussions also involved a second potential purchaser, Mr Pemberton. He was the owner of number 37. Mr Pemberton appears to have dropped out of the discussions in February 2010 (see [137] below).

115. Mr Chris Lawlor was the Director of the Development and Asset Management Division. When the discussions began, Mr Dennis Fernandez was the Executive Manager, reporting to Mr Lawlor. In March 2010, Mr Fernandez was replaced as Executive Manager by Mr Drago Chikitch.

116. The documentary evidence begins with an email sent by Mr Crowe to Mr Lawlor at 5:52 pm on 16 June 2009 following a meeting they had on the afternoon of the same day. The email had the subject “Potential purchase of Edward Street vacant land” and stated:

Further to our meeting this pm, please be aware that we have been maintaining, gardening and cleaning the land for many years without assistance from neighbours or anyone else.

My understanding of your process is such that you will:

1.   Research the terms of the will/bequeath to ensure the UCA [United Care Ageing] is able to sell the land, and that this answer will take up to 2 weeks from now.

2.   Obtain a surveyors plan, and that this will take up to 2 weeks from now to be obtained.

3.   Write to me requesting whether I am interested in purchasing the property. I can advise you now that I am interested and am willing to agree to jointly appoint Egans National Valuers now … and abide by their valuation. Please let me know whether you would like me to prepare a draft letter of joint appointment and I can email it to you for review/input to commence the valuation process.

Please be aware that I have another proposed venture which will require a final decision on my financial commitment by Monday 6th July. Beyond that time I am unable at present to firmly commit to purchasing UCA's vacant land adjoining my home in Edward St.

I appreciate that there are some things that UCA needs to do, and I want you to be aware that I am a willing purchaser - under an agreed valuation process using Egans - but I do need some understanding of the direction we are both heading and our mutual commitment in view of my other circumstances and the 6th July requirement.

117. On 26 June, Mr Lawlor sent a letter to Mr Crowe which stated:

As you may be aware the Uniting Church owns a vacant parcel of land adjoining your property being part or all of 35 Edward Street. UnitingCare Ageing … is currently considering the future use of the land and whether it might be sold.

Initially we are seeking advice on whether as an adjoining land owner you would be interested in a possible purchase of the vacant section of land.

Should this be the case then we propose to seek formal Church approval to sell the land and enter into a sales/tender process with any interested adjoining property owners.

In the first instance it would be appreciated that if you are interested whether this interest could be confirmed within 10 working days from the date of this letter. Subject to outcome of this initial step we will prepare appropriate documentation (e.g. surveys, titles searches) to allow a more detailed response to this invitation.

118. Mr Crowe replied to this letter on 7 July:

The purpose of this letter is to confirm my interest in a possible purchase of the vacant section of land adjoining my property at 33 Edward Street, Woollahra.

For many years I have been solely maintaining the said vacant section of land including gardening, cleaning, cutting, pruning and such maintenance.

119. Shortly thereafter, on 14 July, Mr Lawlor also sent a letter, in identical terms to that which was sent to Mr Crowe on 26 June, to Mr Pemberton.

120. Next are two identical letters sent to Mr Crowe and Mr Pemberton from Mr Lawler on 23 September. Attached to each letter was a survey plan which proposed a subdivision of number 35 so as to create a 226m² area (referred to as “Lot 202”) covering the Edward Street frontage, including the side yard:

121. Mr Lawlor’s letter stated:

To initiate the next step in the process, I request that you reconfirm your interest within 10 working days from the date of this letter and on this basis that you still wish to proceed with a purchase subject on purchase price and terms within 20 working days of this letter.

The process for potential disposal of the subject property will entail the following:

1.   UnitingCare Ageing receiving an offer to purchase the subject property with a dollar amount and terms.

2.   UnitingCare Ageing selecting a preferred purchaser based on price and terms.

3.   Notifying all parties.

4.   Negotiating with the preferred purchaser.

5.   Obtaining internal approvals based on negotiations.

6.   Preparation, negotiation and execution of Contract of Sale with special conditions e.g. Subject to Council Approval and Disbursements.

7.   Finalise plan of proposed subdivision, preparation of Statement of Environmental Effects and Development Application submission to Woollahra Council.

8.   Preparation of a subdivision plan suitable for lodgement and registration at Department of Lands.

In the interim, if you are still interested in the subject property, the attached proposed plan of subdivision should be sufficient for you to use to obtain your own independent valuation. UnitingCare Ageing reserves the right to not accept the highest offer and will not be liable for any losses suffered by a prospective purchaser. Any sale will be subject to Board approvals.

122. Mr Crowe responded by facsimile on 22 October addressed to Mr Fernandez:

I re-confirm my interest in purchasing the land.

I have appointed a Valuation Firm to assist me in ascertaining its value.

I am expecting to receive my Valuation Report shortly and will then respond to you with the proposed purchase terms. I have been told that the Report will be finalise within the next 2 weeks or so and I will respond to you when I receive it.

123. On 10 November, Mr Crowe sent another facsimile to Mr Fernandez and Mr Lawlor, which stated:

… the valuer has requested that I confirm with you the proposed zoning of the site. As that information does not appear to be available, would you please advise me of the zoning of the site so I may forward that information to the valuer to enable their report to be finalised.

Whilst I am awaiting the Valuation Report and your input above, and having regard to what is fair and reasonable given that the Owners of 33 Edward Street have exclusively used and cared for the said site/land for over 50 years, would you please consider and advise me whether you would agree to sell me half of the land and the remaining half to the Owners of 37 Edward Street at market value?

In the event that the Owners of 37 Edward Street do not wish to purchase half of the land, I am purchase [sic] that remaining half from you at market price.

124. There was no response from the Church Trust to this request in evidence. Instead, on 17 December, Mr Crowe sent a further letter to Mr Fernandez and Mr Lawlor setting out, at length, his case as prospective purchaser.

125. In the introduction of the letter, Mr Crowe stated:

From the previous site visits we have conducted together, you will be aware no.35 is, and has been, a critical “part and parcel” of my home since it was built in 1961, and that no. 35 is very steep and inaccessible other than via my home at no.33. The only practicable access to no.35 is from my home, and this has been the case for virtually 50 years.

468. Thirdly, counsel referred to the loss of amenity described in Mr Crowe’s affidavit evidence (see [194] above). Counsel emphasised in particular the value of external stairs to provide separate outdoor access to bedrooms and the top terrace (in particular for transporting garbage and garden waste from the bins kept there down to the street).

469. In his submission, counsel for Mr Crowe relied in particular on the decision of the Court of Appeal in Arcidiacono v The Owners – Strata Plan No 17719; Arcidiacono v The Owners – Strata Plan No 61233 [2020] NSWCA 269, upholding a decision of Henry J at first instance (The Owners – Strata Plan No 61233 v Arcidiacono; The Owners – Strata Plan No 17719 v Arcidiacono [2019] NSWSC 1307). That case concerned the use of two small parcels of land in the Sydney CBD at the rear of properties facing York Street and Clarence Street. One of the issues was whether s 88K easements should be granted over the land in favour of the owners of adjoining buildings in York Street and Clarence Street.

470. One easement was sought for fire access in favour of the York Street property. It was contended that a compulsory easement was not necessary because a fire access way could be created through the York Street building itself. Henry J rejected this contention, concluding that while the construction of an access way on site might be possible, the delay in convenience in doing so was “not insignificant” due to the need to obtain council approval, and, in particular, to overcome heritage concerns (the building was heritage listed). Her Honour also referred to expert evidence from a fire safety expert as to the difficulties: at [174]-[180]. On appeal, her Honour’s decision on the point was upheld: at [76].

471. Another application in the proceedings was for a compulsory easement to permit existing building structures such as “windowsill mouldings, parapet, corbel, conductor boxes/rainwater head, downpipes, electrical conduits, fire system pipes and sprinkler heads, and the vent pipe” to remain. Her Honour considered that reasonable necessity was made out, pointing out that some of the features in question had been in place since 1919 and retention of those features, or at least some of them, was necessary on heritage grounds: at [577]. Again, this conclusion was upheld by the Court of Appeal: at [76].

472. Counsel for Mr Crowe also called in aid the proposition stated in Butt’s Land Law at [16.540] that “[p]ast use may help demonstrate reasonable necessity, if the claimed easement conforms with long-standing actual use of the servient land”. Counsel pointed out that use of the upper and lower stairs by Mr Gyngell and his successors in title continued, unchallenged, for over 50 years before 2019. In counsel’s submission, that was a further reason to conclude that “reasonable necessity” was established in the present case.

473. Counsel for the Church Trust submitted that the factors identified by counsel for Mr Crowe did not amount to more than convenience. Counsel emphasised that it was necessary for Mr Crowe to establish a value to number 33 as land, as distinct from improvements for amenity derived from the particular circumstances of the house’s inhabitants.

474. Counsel also submitted that any need for outside access through number 35 arose from the renovations which Mr Crowe had himself carried out, filling in the corridor between the original eastern side of the house and the boundary. If those renovations had not been undertaken, then access could have been provided through that corridor. In counsel’s submission, it was not open to an applicant under s 88K to obtain an easement based on a need created by the applicant’s own actions.

475. In support of this submission, counsel for the Church Trust relied on the decision of Young J in Hanny v Lewis (1998) 9 BPR 16,205. In that case, the plaintiffs purchased a battleaxe block of land, the head of which lay down a steep slope, with a higher block between it and the street. Access to the battleaxe head was only available via easements for footway involving the use of steps or ladders. After purchasing the land, the plaintiffs built a substantial house on it. Then they made an application under s 88K for an easement over the land the subject of the right of footway to allow them to construct an inclinator. The reason given for an inclinator was that one of the plaintiffs was suffering from infirmities which made access by foot difficult if not impossible.

476. Young J refused the application, holding that reasonable necessity was not established. As his Honour pointed out, factors personal to the plaintiffs could not be used to establish “reasonable necessity” for the purposes of s 88K. His Honour commented, in addition:

As a general approach to applications under this section the court must bear in mind that property rights are valuable rights and the court should not lightly interfere with the property rights of the defendants. It is in the public interest that landlocked land be utilised. However, the section does not exist for people to build right up to the boundary of their property or to build without adequate access and then expect others to make their land available for access. It is not unreasonable for a defendant to show that he or she has a legitimate economic advantage in the status quo, nor is it at all unreasonable for a defendant to say for privacy or other personal reasons that there would be such an interference with his or her property rights that no compensation in money could make up for it, and no order could be made: cf Re Parimax (SA) Pty Ltd (1954) 56 SR (NSW) 130 at 133; 72 WN (NSW) 386 at 388 per Myers J.

His Honour repeated this comment in ING Bank (Australia) Ltd v O’Shea [2010] NSWCA 71 at [155]-[156].

480. In my view, the submission from counsel for Mr Crowe concerning the “vision” of the original architect, Mr Lucas, goes too far. True it is that Mr Lucas chose to open up the rear of the house to the east, and the lower terrace patio and balcony/pergola structure, as well as the glass sliding doors on the eastern walls of levels four and six, were part of that. But he was careful to ensure that the house, including the lower terrace patio and balcony/pergola, did not extend beyond the boundary of number 33. Presumably he would have recognised that Mr Gyngell, and future owners of number 33, could not have prevented the construction of a similar house on number 35, just as the prior construction of the house at number 31 had not prevented the construction of the house on number 33.

481. A similar comment can be made about the lower stair. The spiral staircase originally specified in the approved plans would have been contained entirely within the boundary of number 33. The construction of the stair in that form was not abandoned as a result of any relevant necessity. On the inference drawn by Mr Lonergan, which I have accepted, the change was only made so as to avoid the cost and inconvenience of removing, or cutting into, the existing sandstone rubble wall.

482. In my view, the “original architectural vision” should be understood by reference to the approved plans, and thus did not extend beyond the boundaries of number 33. It did not extend to the creation of the side yard, which depended upon arrangements made by Mr Gyngell with Miss Turkington after approval had been granted, and which allowed Mr Lucas and Mr Gyngell to supplement the “vision” by developing the side yard as they did. So understood, it is Mr Crowe himself, by his own actions and undertaking renovations, who has compromised the “original architectural vision”.

483. It would also be incorrect, even if Mr Lucas’ “vision” did extend to the side yard, to see the upper and lower stairs as stand-alone components of that “vision”. The motive for establishing the side yard was to use it as a garden and children’s play area. I have rejected Mr Crowe’s claimed entitlement to occupy the yard. The easement now sought is simply a right of way through it. Once the potential for use of the yard for recreation disappears, it would be artificial to focus on some sort of architectural vision associated with the stairs alone. The stairs were clearly created to enhance the side yard as a garden, rather than the other way around.

484. I also think that counsel’s submission about the “light well” area being sterilised goes too far. It is true that the steps leading up to the boundary would no longer be of any use. But that would not prevent the space being used at all. There seems no reason why it could not, for example, be modified so as to use it for storage, or for a small area of garden.

485. As to the amenity factors mentioned by Mr Crowe, his counsel accepted that s 88K is concerned with benefit to the proposed dominant tenement as land rather than transient benefits to individuals who happen to be living there at the time. But counsel contended that the factors identified by Mr Crowe were not purely personal, and would be beneficial to any residential owner.

486. This may be true to an extent. But what it tends to emphasise is that the benefits in question are in the nature of the things that are “nice to have” rather than necessities. There is an already internal access through the house. However convenient it would be for Mr Crowe to be able to have access because of his particular circumstances, it is difficult to say that an additional external mode of access is a necessity.

487. The statement by Young J in Hanny about self-inflicted “necessity” seems, with respect, intuitively correct. His Honour did not identify any textual basis for excluding self-inflicted “reasonable necessity” but on any view it would appear to be a matter which could be taken into account in the exercise of the residual discretion.

488. Furthermore, in the present case the works undertaken by Mr Crowe which prevent the eastern side of number 33 being used for external access between the bottom and the top of the house were not only undertaken by Mr Crowe himself, but were undertaken without council approval. As already noted, they remain vulnerable to an application for a demolition order on the part of the council or the Church Trust on that account. It seems to me that this is a further matter to be taken into account, if not in assessing “reasonable necessity”, then in the exercise of the discretion. If the contest is between Mr Crowe demolishing illegal works on his own land so as to provide access or obtaining access by means of an easement on his neighbour’s land, it seems to me that the balance falls in favour of maintaining the Church Trust’s property rights to use its own land as it sees fit.

489. Even if I were satisfied that an external access way were “reasonably necessary”, I would have to consider the intrusiveness of the easement sought. Because of the shape of the proposed right of way, it extends far more deeply into the Church Trust’s land than it needs to. The total area within its perimeter is over 40m². The effect of granting the easement would be to sterilise, or at least severely impede the use of, the whole of that area.

490. It is well established that the effect on the servient tenement is a relevant factor in determining reasonable necessity, and not merely a matter to be taken into account by way of discretion: see Moorebank at [108]-[117]. To my mind, that means that in the usual case the court, if satisfied that an easement is reasonably necessary for a specified use or development of land, should frame it no more widely than is necessary to accommodate that use or development.

491. In the present case, any need for external access could be satisfied by the grant of a right of way over a narrow strip running along number 35’s side of the boundary. That would not allow the use of the existing stairs, but it is up to the dominant owner to make a right of way trafficable, which would include, in the case of a right of way across a cliff face, the construction of steps or ladders: see Treweeke v 36 Wolseley Road Pty Ltd (1973) 128 CLR 274. For the purposes of s 88K, I do not see why Mr Crowe should be able to insist on an easement over a more extensive area merely to save himself that expense.

492. So far as Arcidiacono is concerned, it needs to be borne in mind that the Court of Appeal treated Henry J’s decision as a quasi-discretionary one involving a contested evaluative judgment on which views might differ. In saying this, I am not necessarily saying that I disagree with her Honour’s decision on the facts of the case. But they are remote from the present. It is one thing to say that where fire access is necessary, the Court may take account of the difficulties, and in particular the heritage constraints, on creating such access on the dominant tenement. It is another thing entirely to say that the case for granting an easement is enhanced by works that Mr Crowe undertook without approval and which have no heritage value.

493. Finally, the proposition from Butt’s Land Law about the relevance of prior use of the proposed servient land for the purposes of the proposed easement is far from being decisive, or even weighty, in every case. This is made clear by the rest of the paragraph in which the proposition appears:

Past use may help demonstrate reasonable necessity, if the claimed easement conforms with long-standing actual use of the servient land. For example, if a right of way is sought under s 88K over a path or lane that has in fact been used (but without legal right) for many years, that might indicate (but cannot be conclusive) that use of the right of way is reasonably necessary for use of the land. Similarly, long use of drainage pipes may help demonstrate their reasonable necessity for the purposes of an application under s 88K. But past use, of itself, is never sufficient; the question is always one of reasonable necessity on the facts of the case.

494. The proposition may be relevant to one or other of two aspects of the analysis. One aspect focuses on the land which is to benefit from the proposed easement: the fact that a right of way over adjoining land has in fact been used to gain access to the land in question may demonstrate the necessity for such access to be regularised. The other aspect focuses on the proposed servient tenement. The fact that access has previously taken place over part of that land may be relevant to the effect on it for the purposes of s 88K.

495. In the present case, it is the first aspect, namely benefit to number 33, which appears to be relevant. It may be accepted that the upper and lower stairs appear to have been in use continuously for decades, and that they provide a link between the top of the house, and the top terrace, and the external door on level two, which in turn leads down to the street. But I have already pointed out that the stairs were constructed as an enhancement to the use of the side yard as a garden and extension of the living area of level four of the house, and that use must now cease. No doubt this may have allowed for an alternative mode of access between level two and the top of the house but there was always internal access. Alternative external access may have been convenient and useful on occasion, but it was not necessary in the past and in my view does not satisfy the test of “reasonable necessity” now.

496. The same point may be put in a somewhat different way. Where s 88K speaks of a “use or development” of the subject land, it is apparently referring to some future use or development of the land. But there is no proposed future development of number 33. Nor is there is any proposed change of use. Number 33 ever since Mr Gyngell’s day has been used for residential purposes and that use has not changed. A desire to improve the amenity of the house on number 33 by providing for alternative external access to the top of the house arguably is not substantial enough to amount to a change in the “use” of number 33 for the purposes of s 88K.

497. In my view the s 88K application fails at the first step. It is unnecessary to go into the parties’ submissions about the quantum of compensation payable to the Church Trust if the easement were granted.

Conclusions and orders

498. I have concluded that:

1. Mr Crowe’s claim to be entitled to occupy the side yard indefinitely into the future, by means of estoppel or implied agreement, fails;

2. so too do Mr Crowe’s application for a transfer of parts of the side yard and its airspace, or a compulsory easement, under EBA s 3, and his application for a compulsory easement under CA s 88K;

3. the Church Trust’s claim in trespass succeeds with respect to the roof overhang, the balcony and the deck in the side yard (as reconstructed in 2019), and the Trust is entitled to a mandatory injunction requiring the removal of those structures (or, in the case of the deck, to damages representing the cost of removal).

499. The result is that Mr Crowe’s cross-claim fails and should be dismissed. The Church Trust’s claim succeeds to the extent indicated, but it will be necessary to formulate the mandatory injunction to which the Trust is entitled in precise terms (and deal with the assessment of damages for the cost of removal of the deck, if the parties cannot agree on a regime for its removal).

500. In these circumstances I will defer making final orders in the proceedings to allow the parties an opportunity to negotiate and agree on the form of the final orders, and, if possible, costs. If agreement cannot be reached, I will hear further argument.

501. The orders of the Court are:

1. Order the proceedings be adjourned to 9:30am on 8 November 2024 or such other occasion as may be agreed by the parties and notified to my Associate, for the making of final orders and costs orders, or directions for any further hearing on either of those questions.

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Decision last updated: 01 November 2024