White Rock Wind Farm Pty Ltd v Dulhunty

[2023] NSWSC 1464

Supreme Court

New South Wales

• Amendment notes

Medium Neutral Citation:

White Rock Wind Farm Pty Ltd v Dulhunty [2023] NSWSC 1464

Hearing dates:

17 – 19 May 2023, 1 September 2023

Decision date:

30 November 2023

Jurisdiction:

Equity

Before:

Robb J

Decision:

See [237]-[238]

Catchwords:

LEASES AND TENANCIES – assignment and subletting – consent – where defendants entered into lease agreements with plaintiff to enable it to construct and operate a wind farm on their land – where second and third defendants granted options to plaintiff to acquire a separate lot that would be subdivided for the construction of an electricity substation – where second, third and fifth defendants granted options to plaintiff to acquire easements over their land and over an access road for the erection of a high voltage electricity transmission line – where all options expired without having been exercised by plaintiff – where plaintiff sought defendants’ consent to grant a non-exclusive access licence under the lease agreements to an electricity transmission network operator – where defendants did not consent to the grant of the proposed non-exclusive access licence – whether defendants unreasonably withheld consent – whether the legal relationship between the parties changed when the plaintiff allowed all of its options to expire – whether it was reasonable for the defendants to require the electricity transmission network operator to accept the grant of an access easement along an access road and to require the plaintiff to pay an additional consideration for the grant

EQUITY – equitable remedies – specific performance – cross-claim by first and second defendants against plaintiff – where defendants and plaintiff entered into a deed of release to compromise disputes which arose during the course of the construction of the wind farm – where the deed of release provided that, inter alia, the plaintiff is to undertake a survey and create an easement to accommodate the realignment of a right of way to allow for access tracks to cross the boundaries of land owned by the defendants – where the deed of release further provided, inter alia, that the plaintiff is to remediate damage to parts of the land owned by the defendants in accordance with various “punch lists” – whether the Court should order specific performance of the creation of an easement to accommodate the realignment of a right of way – whether the Court should order specific performance of the completion of remediation items in the “punch lists” which remain outstanding or incomplete

Legislation Cited:

Conveyancing Act 1919 (NSW), s 88A

Conveyancing (General) Regulation 2008 (NSW), cl 53

Conveyancing (General) Regulation 2018 (NSW), Sch 3

Energy Services Corporations Act 1995 (NSW)

Cases Cited:

Construction Technologies Australia Pty Ltd v Doueihi (No 5) [2018] NSWSC 294

Fulham Partners LLC v National Australia Bank Ltd [2013] NSWCA 296; (2013) 17 BPR 32,709

International Drilling Fluids Ltd v Louisville Investments (Uxbridge) Ltd [1986] 1 Ch 513

Queanbeyan Leagues Club Ltd v Poldune Pty Ltd [2000] NSWSC 1100

Texts Cited:

AJ Bradbrook and SV MacCallum, Bradbrook and Neave’s Easements and Restrictive Covenants (3rd

ed, 2011, LexisNexis Butterworths)

Category:

Principal judgment

Parties:

White Rock Wind Farm Pty Ltd (Plaintiff/Cross-Defendant)
Robert Venour Dulhunty (First Defendant/First Cross-Claimant)
John Langley Wood (Second Defendant/Second Cross-Claimant)
John Wood (Harvesting) Pty Ltd (Third Defendant)
William Archibald Cameron (Fourth Defendant)
James Sidney Nugent (Fifth Defendant)

Representation:

Counsel:
A Smith (17-19 May 2023), P Abdiel (1 September 2023) (Plaintiff/Cross-Defendant)
P Folino-Gallo (First, Second, Third and Fourth Defendants/Cross-Claimants)

Solicitors:
King & Wood Mallesons (Plaintiff)
Hitch Advisory (17-19 May 2023), Diamond Conway (1 September 2023) (First, Second, Third and Fourth Defendants/Cross-Claimants)

File Number(s):

2021/00199411

Publication restriction:

Nil

JUDGMENT

1. By summons filed on 12 July 2021, the plaintiff, White Rock Wind Farm Pty Ltd (White Rock), seeks certain relief against the defendants, who are the owners of land in the New England Tablelands that they have leased to White Rock for the purpose of the construction and operation of a wind farm.

2. There are five defendants, being Robert Venour Dulhunty, John Langley Wood, John Wood (Harvesting) Pty Ltd (JWH), William Archibald Cameron and James Sidney Nugent (the last-mentioned defendant now being deceased). I will call the defendants “the Landowners”, where convenient.

3. Two of the defendants, Mr Dulhunty and Mr Wood, filed a cross claim against White Rock on 18 November 2021, in which they claimed certain relief arising out of a Deed of Release into which the defendants, other than JWH, entered with White Rock on 19 November 2018.

4. These proceedings have been conducted without the benefit of pleadings, even though, in the events which have happened, pleadings would have facilitated the efficient conduct of the proceedings by identifying the facts respectively alleged by the parties and the issues that required determination by the Court.

Background

5. As the circumstances of this case are complex, it will assist in the exposition of these reasons to begin by explaining in chronological order the primary events that are relevant to the determination of the remaining disputes between the parties.

6. In about 2010, a renewable energy company called Epuron began to negotiate with the Landowners and other owners of rural land in their vicinity the agreements necessary to develop and operate a wind farm on their collective properties. Development approval was given in 2012. At some time in 2014, Epuron assigned its rights to White Rock.

7. The various properties were adjacent to other properties, so that the whole consisted of a substantial area upon which wind turbines could be located for the purpose of producing renewable electricity. The properties were collectively adjacent to the Gwydir Highway and a trunk high voltage transmission line owned and operated by Electricity Transmission Ministerial Holding Corporation (TransGrid).

8. The proposed wind farm would consist of about 70 wind turbines, an electricity substation, overhead transmission lines to connect the substation with the trunk high voltage transmission line, underground power lines to connect the wind turbines to the substation, access roads and associated infrastructure. The infrastructure that is most relevant to these proceedings is the access road from the Gwydir Highway to the substation. For convenience, I will call this “the access road” to distinguish it from the numerous access tracks that were constructed to allow access to the individual wind turbines.

9. White Rock entered into a suite of agreements with the Landowners on 16 September 2014, as follows:

1. An Agreement to Lease was entered into between White Rock and each of the Landowners. Annexed to the Agreements to Lease were the terms of a draft Lease, Rent Agreement and a Royalty Payment Deed. These draft documents specified the consideration that White Rock would be required to pay to the Landowners in respect of the occupation of the land and the construction and operation of the wind farm. Importantly, the consideration was specified in a way that did not entitle the Landowners to receive any separate consideration for the grant of the right of access over their land along the access road from the Gwydir Highway to the substation.

2. As it was then uncertain whether it would be preferable for White Rock to construct the substation on land owned by Mr Wood or JWH, both of those Landowners entered into an option agreement with White Rock that gave White Rock the right to acquire a separate lot (the Substation Land) that would be subdivided from the land owned by that Landowner for the purpose of the construction of the substation.

3. As it was proposed that the high voltage transmission line that would be constructed to join the substation with the trunk high voltage transmission line would be erected on part of the land owned by Mr Wood, JWH and Mr Nugent, those Landowners entered into agreements with White Rock that gave it an option to require those Landowners to grant easements for the high voltage transmission line and over the access road. Mr Dulhunty and Mr Cameron did not agree to an option to grant White Rock an easement over any access road, because at that time, it was not proposed that the access road would be constructed over the land owned by those Landowners.

10. The agreements contained terms that required White Rock to proceed with the Leases by issuing a Notice to Proceed and to exercise all of the options by 10 July 2017.

11. White Rock entered into a Project Agreement with TransGrid on 10 July 2015, under which TransGrid agreed to assist White Rock in constructing the infrastructure on the Landholders' land that was necessary for the operation of the wind farm. A term of this agreement obliged White Rock to transfer legal and beneficial title to the Substation Land to TransGrid. Another term required White Rock to procure the grant to TransGrid of easements along the route of the overhead transmission line and the access road. White Rock could only ensure compliance with these obligations by validly exercising one of the options for the transfer of the Substation Land and all of the options for the grant of the transmission line easements and the access road easement.

12. Before the Landowners entered into their agreements with White Rock, there was an access road that had been constructed to allow access from the Gwydir Highway across the land of Mr Nugent and the land owned by JWH to the land owned by Mr Wood. That access road was generally along the same route as the access road that would ultimately be constructed by White Rock from the Gwydir Highway to the substation that was ultimately constructed on the land owned by Mr Wood. Mr Wood and JWH had a right of way over the access road on Mr Nugent's land. The original access road did not intrude upon the land owned by Mr Dulhunty or Mr Cameron. Terms of the Agreements to Lease and the Leases had the effect of constraining the location of the access road from the Gwydir Highway to the substation, and required consultation as to its ultimate location between White Rock and the Landowners. The access road as ultimately constructed by White Rock intruded upon the land owned by Mr Dulhunty and Mr Cameron (although there is some doubt as to whether it intruded upon Mr Cameron’s land). The Court must infer that all of the Landowners participated in the process required by the Agreements to Lease and the Leases as to the determination of the location of the access road as finally constructed. The access road was constructed in a way that prevented the relevant Landowners from using the original access road and the rights of way that existed, as the manner in which the final access road was constructed physically prevented the use of the original access road at certain locations. On 23 December 2015, White Rock, by its agent, made an agreement with the Landowners, in the context of the parties negotiating whether the conditions for White Rock to issue Notices To Proceed with the Leases had been satisfied. The agreement was that White Rock would survey and create an easement to accommodate the realignment of the original rights of way to allow for the access road to cross the boundaries of the land owned by Mr Wood, Mr Nugent, Mr Dulhunty and Mr Cameron to the Gwydir Highway. This suggests that the Landowners agreed to the final location of the access road, in the context of an agreement with White Rock that it would survey and create an easement that would give relevant Landowners access along the access road. The enforcement of this agreement is a claim made in the cross claim in these proceedings.

13. White Rock issued Notices To Proceed, and Leases between White Rock and each of the Landowners were executed on 11 April 2016. White Rock commenced the construction of the wind farm in 2016.

14. On 10 July 2017, the options granted by Mr Wood and JWH for the transfer of the Substation Land, and the three options for the grant of the transmission line easement and the access road easement expired, without any of the options having been exercised by White Rock. There has not been a word of evidence from White Rock as to why the options were allowed to expire without having been exercised.

15. During the course of the construction of the wind farm, significant disputes arose between the Landowners and White Rock as to the compliance by White Rock with its obligations under the Leases, in respect of many matters, including the height of the wind turbines, the quarrying of rock from the land, the manner in which the access road and the access tracks had been constructed, and the causing of substantial erosion of the land.

16. On 19 November 2018, 24 separate landowners, including the five Landowners, compromised their dispute with White Rock by entering into a Deed of Release. The terms of the Deed of Release included the following:

1. Mr Wood agreed to sell the Substation Land on his property, upon which the substation had already been constructed, directly to TransGrid. The enforcement of this agreement against White Rock is a claim made in the cross claim in these proceedings.

2. Mr Wood, JWH and Mr Nugent agreed to grant a transmission line easement directly to TransGrid.

3. The Deed of Release did not deal with the grant of an easement by the five Landowners over whose land the access road had already been constructed.

4. White Rock agreed to remedy specific complaints made by the Landowners in respect of the consequences of the manner in which White Rock had constructed the wind farm, by reference to what were called "punch lists" that were to detail the required remediation works. The enforcement of White Rock's obligations under the Deed of Release in respect of the works the subject of the punch lists is a claim made in the cross claim in these proceedings.

17. Although a term of the project agreement between White Rock and TransGrid required White Rock to procure the grant of an access easement by the Landowners to TransGrid over the access road, White Rock apparently persuaded TransGrid to accept instead the grant by White Rock to it of a non-exclusive access licence under White Rock's Leases from the Landowners. White Rock provided a copy of the draft Licence Deed to the Landowners on 3 April 2019.

18. Clause 8.5 of the Leases provided:

8.5 Restrictions on Lessee

The Lessee, other than in accordance with clauses 8.1 to 8.4 shall not, deal with its interest in the Lease or any of its rights and obligations under the Lease, for example, by subleasing, sharing or licensing such rights and obligations to a third party, without the Lessor's written consent, not to be unreasonably withheld.

19. White Rock's primary claim in these proceedings is that, under clause 8.5 of the Leases, the Landowners are obliged to consent to it entering into the proposed Licence Deed with TransGrid, without insisting upon White Rock or TransGrid accepting an access easement over the access road from the Landowners, or agreeing to pay additional consideration for either the easement or the grant of approval to the Licence Deed. That is on the basis that, if White Rock had exercised the options for the grant of access easements, and the wind farm had been constructed and operated as contemplated by the entire suite of agreements entered into on 16 September 2014, the Landowners would not have been entitled to receive any separate or additional consideration for the grant of the access easements, whether to White Rock or to TransGrid.

20. The Landowners' response includes that the legal relationship between the parties changed when White Rock allowed all of its options to expire without having exercised them, and that, in all of the events that followed, including the agreements by the Landowners to grant rights to TransGrid that enabled White Rock to perform its essential obligations under its agreement with TransGrid, it was reasonable for the Landowners to require TransGrid accept the grant of an access easement along the access road and for White Rock to pay an additional consideration for that grant.

Relief sought by White Rock

21. White Rock sought the following relief as set out in its summons:

1.    DECLARE, in respect of the Site (as that term is defined in the several annexures to the registered leases (the Leases) referred to in (a) to (e), that:

a   [Mr Dulhunty] in relation to registered lease AKXXXXX X;

b   [Mr Wood] in relation to registered lease AKXXXXX X;

c   [JWH] in relation to registered lease AKXXXXX X;

d   [Mr and Mrs Cameron] in relation to registered lease AKXXXXX X; and

e    [Mr Nugent] in relation to registered lease AKXXXXX X (together the Lessors)

have, contrary to clause 8.5 to the Lease, unreasonably withheld their written consent from the Plaintiff (White Rock) granting to the Electricity Transmission Ministerial Holding Corporation (TransGrid) a non-exclusive licence to use the access track running from the Gwydir Highway to the TransGrid substation to permit TransGrid access to the substation for repair or maintenance in connection with White Rock’s wind farm activities conducted from the Site.

2.   DECLARE, that the Lessors are not entitled to impose on White Rock a requirement that use of the traversible track by TransGrid be pursuant to easement and on condition of payment levied at the rate of:

a   $12.50 per metre of traversable track for the first year; and

b   $5.00 per metre of traversable track for each subsequent year, subject to an annual increase measured by the greater of 3.5% or annual CPI.

3.   DECLARE that the Lessors are to give their written consent to White Rock granting to TransGrid a non-exclusive licence to use the access track running from the Gwydir Highway to the TransGrid substation to permit TransGrid access to the substation for repair or maintenance in connection with White Rock’s wind farm activities conducted from the Site.

4.   Further, DECLARE, in the circumstances which have occurred, that the Lessors have breached clause 18.3(c) of the Leases by making payment by [White] Rock of their legal costs and the costs of the mediator a condition of their participation in the mediation pursuant to clause 18(b) of the annexure to each registered lease.

5.   DAMAGES in respect of 4 above.

6.   COSTS.

7.   INTEREST ON COSTS.

22. During the course of the proceedings, on the application of White Rock, its claim against Mrs Cameron, as referred to in prayer 1(d), was dismissed. White Rock maintained its claim against Mr Cameron, and the dismissal order has no significance for the purposes of these reasons.

23. The Court was told by counsel for White Rock during the course of final submissions that White Rock abandoned the claim for the declaration in prayer 2. That apparently followed an inquiry from the Court as to how it could, on the evidence that had been tendered, decide what consideration the Landowners could reasonably require White Rock to pay, if the Court did not decide that the Landowners could not reasonably insist upon any payment. Consequently, the issue that remains concerning whether the Landowners have an obligation to consent to White Rock granting a licence over the access track to TransGrid is the binary one of whether the Landowners are obliged to consent without requiring the payment of any further consideration, or not. If not, the Court will simply dismiss White Rock’s summons in respect of prayers 1 and 3, and the parties will be left to their own devices as to what then happens in relation to TransGrid’s means of access to the Substation. The Court will not be required to determine whether the consideration which the Landowners seek in return for their consent is reasonable.

22. At par 221 of its final written submissions, White Rock amended its claim for relief in prayer 3, as follows:

3.   That the Lessors are to give their written consent to White Rock granting TransGrid a non-exclusive licence to use the Access Track running from the Gwydir Highway to the TransGrid Substation on the terms set out in the form of the Draft Licence Deed sent by email of Charlie Williamson of Goldwind Australia Pty Ltd, dated 3 April 2019 to Julian Peters, solicitor for the defendants, save that Item 5 be amended to be limited to parcels of land owned by the defendants to the proceedings.

25. I also understand that the relief sought in prayers 4 and 5 of the summons has now been superseded by events.

Relief sought in cross summons

26. Mr Dulhunty and Mr Wood claimed the following relief in their cross claim:

1.   A declaration that there is a binding and enforceable agreement between [Mr Dulhunty, Mr Wood, Mr and Mrs Cameron and Mr Nugent] on the one part and [White Rock] on the other in the terms set out in the Deed of Settlement and Release that they entered on 19 November 2018 (Deed).

2.   An order that [White Rock] specifically perform and carry into execution the agreement referred to in order 1.

3.   An order that [White Rock] specifically perform and carry into execution the agreement referred to in order 1, by executing and exchanging the contract for sale of land in accordance with clause 6 of the Deed.

4.   In the alternative to and in the event [White Rock] fails to comply with order 3, an order that [White Rock] pay to [Mr Wood] equitable compensation.

5.   An order that [White Rock] specifically perform and carry out its agreement of 23 December 2015 to undertake a survey and create an easement to accommodate the re-alignment of the right of way to allow for the access tracks to cross the boundaries of land owned by the defendants.

6.   An order that [White Rock] specifically perform and carry out its agreement to undertake the works in the “punch lists” with [Mr Dulhunty] and [Mr Wood].

7.   Damages.

8.   Costs.

1. Interest pursuant to sections 100 and 101 of the Civil Procedure Act 2005 (NSW).

   27. On the third day of the hearing, the Court made an order by consent that had the effect that White Rock was ordered to specifically perform clause 6 of the Deed of Release, which was referred to in prayer 1 of the cross claim, by procuring TransGrid to simultaneously exchange and settle the contract for the sale of the land the subject of clause 6 of the Deed of Release. White Rock had tendered evidence in the proceedings to the effect that it was ready, willing and able to perform its obligations under clause 6 of the Deed of Release. Issues had arisen between the parties concerning how those obligations were required to be performed. It is not now necessary to address those issues. The effect of the consent orders is that the Court is no longer required to deal with prayers 1 to 4 of the cross claim, save for the determination of a residual claim by which Mr Wood seeks the payment of interest for the late payment of the purchase price under the contract for the sale of land referred to in prayer 3.

   28. I will consider prayer 5 of the cross claim concerning the enforcement of the agreement made by White Rock to survey and create an easement over the access road below. That aspect of the dispute has ceased to be contentious, as White Rock has agreed to take the steps demanded by the cross claimants.

   29. Prayer 6 of the cross claim raises the issue of whether the Court should order specific performance of promises made by White Rock in the Deed of Release in relation to the remediation of damage to parts of the Land owned by the cross claimants. I will consider this issue after I have dealt with the claims made by White Rock in prayers 1 and 3 of its summons. This is the only other remaining contentious issue in the proceedings.

   30. I will now turn to consider the primary issue raised by White Rock’s summons, being whether the Landowners are obliged by clause 8.5 of their Leases to give their consent, without any right to claim any further consideration, to White Rock granting a licence to TransGrid to use the primary Access Track that White Rock has constructed over the Land of the Landowners from the public highway to the Substation that has been constructed on Mr Wood’s lands for the purpose of operating and maintaining the Substation.

   31. It is necessary to consider in some detail the relationship between the agreements that were entered into for the construction and operation of the wind farm in their historical context. The parties accepted that the reasonableness of the Landowners’ refusal to consent to the Licence Deed between White Rock and TransGrid must be assessed in the context of all of the agreements entered into by the parties.

Agreements to Lease

32. Each of the Landowners entered into an Agreement to Lease with White Rock on 16 September 2014. The Landowners were five of 14 separate groups that entered into equivalent agreements to lease on the same date.

33. By clause 2.1, subject to the satisfaction of certain conditions precedent, each Landowner agreed to grant to White Rock a lease of the Land simultaneously upon entering into the Rent Agreement and Royalty Deed.

34. The Land was defined in clause 1 as meaning "the whole allotment(s) described in Annexure 1”. Annexure 1 listed the deposited plan lot numbers for the whole of the property owned by the particular Landowner.

35. The Rent Agreement was defined as the document forming part of the Lease attached as Annexure 4, and the Royalty Deed was defined as the document attached as Annexure 5.

36. Clause 2.1(a) provided that the Lease, Rent Agreement and Royalty Deed would commence on the date stated in a Notice to Proceed that White Rock served on the Landowner, provided that the Notice to Proceed was served on the Landowner before the Satisfaction Date. The Satisfaction Date was defined as meaning 10 July 2017.

37. Clause 2.1(b) provided that the Lease would be for an initial term of 30 years plus one right of renewal for 30 years.

38. Under clause 2.4(a), the parties agreed that there would be a binding Lease, Rent Agreement and Royalty Deed between them on the terms and conditions contained in clause 2.1, subject to the satisfaction of the Conditions Precedent and the issuing of the Notice to Proceed.

39. Among other Conditions Precedent, clause 3.2 required White Rock to serve a draft Final Layout on the Landowner at least three months prior to issuing the Notice to Proceed, that had taken into account and adequately addressed all reasonable concerns of the Landowner.

40. Clause 3.3 required that the Final Layout must conform to specified requirements, including in respect of the location of wind turbines and transmission lines, and that the wind farm infrastructure should not encroach on any Excluded Area, which was an area marked on the relevant plans in respect of which White Rock was not entitled to operate the wind farm, except in specified exceptional circumstances.

41. Annexure 2 to the Agreement to Lease provided for an Indicative Layout, which stated on an indicative basis the number of planned turbines and the proposed route of the high voltage transmission line, the substation, and the access tracks, including the access road.

42. The Draft Lease document was at Annexure 3. The Leases as ultimately executed by the parties were in the terms of the Draft Lease, so far as is material.

Option Agreements to Purchase Substation Land

43. White Rock also entered into two Option Agreements to Purchase Substation Land on 16 September 2014. There were two option agreements because there were alternative sites for the location of the substation, and a decision had not been made as to which location was preferable. The Option Agreements, which were in the same terms, were with Mr Wood and JWH.

44. Clause 2.1 provided for the Landowner to grant to White Rock an exclusive and irrevocable option to purchase the Substation Land on the terms and conditions specified in the draft Contract for Sale that was Annexure 1 to the Option Agreement.

45. Clause 13 provided that the provisions in Schedule 2 formed part of the agreement. Schedule 2 contained a special condition 17.1 that dealt with the need to obtain planning approval and registration of a subdivision so that the Substation Lot could be created. Special condition 17.1(c) provided:

(c)   The Landowner understands that the consent authority may require a legal right of way or covenant over the balance of [the Land] (being the part of that lot that is outside the definition of ‘Land’) to access the Land as a subdivided allotment, and the Landowner understands that the consideration for granting any such right of way and/or covenant will be the benefit arising from the subdivision.

46. There was no evidence about the subdivision process or whether the consent authority required the grant of the right of way or covenant. White Rock relied upon this term as being some evidence that Mr Wood understood that he would not be entitled to any separate or additional consideration for the grant of an access easement over his land.

47. Provided that the Substation Land had been subdivided, White Rock was entitled to exercise the Option at any time prior to 5pm on the Expiry Date, which was defined in Schedule 1, relevantly, as being 10 July 2017. The Land was identified on the plan in Schedule 3.

48. Clause 2.2(b) provided: "If the Option is not exercised by the Expiry Date the Option will lapse."

49. Item 7 of Schedule 1 provided that the Acquisition Price under the Contract for Sale, if the Option was exercised, would be $100,000 per hectare (to the nearest 0.01 hectare) plus GST, with a minimum price of $100,000.

Option Agreements for Powerline and Access Easements

50. White Rock entered into Option Agreements for Powerline and Access Easements with JWH, Mr Wood and Mr Nugent. They were all executed on 16 September 2014. The Option Agreement between White Rock and Mr Nugent was separately tendered as Exhibit P5.

51. Recital B to each Option Agreement provided:

B.   The Landowner and [White Rock] have entered into this agreement to allow [White Rock] to use land owned by the Landowner for [the purpose stated in Recital A] in return for the payments outlined in this agreement.

52. By clause 1.1 of each Option Agreement, the relevant Landowner granted an option to White Rock in the following terms:

1.1 Grant of Option

The Landowner grants [White Rock] an exclusive and irrevocable option to acquire the Powerline Easement and the Access Easement over the Easement Land (Option).

53. The "Easement Land" was identified in Item 2 of the Reference Schedule. Item 2 identified the servient tenement by reference to the Deposited Plan lot numbers of the land owned by the Landowner. I infer that the seven lots owned by Mr Nugent were identified as Easement Land in his Option Agreement. That inference may not be entirely correct as it has been drawn from the plan that is Exhibit DP2, and it is not clear from the depiction of the two proposed easements that both were proposed to be located on part of each of the seven lots.

54. The “Powerline Easement" was defined in clause 10 as "the powerline easement over the Corridor Land on the terms and conditions of the Powerline Easement Document". The "Access Easement" was defined in clause 10 as "the easement for access over the Corridor Land on the terms and conditions of the Access Easement Document". The Powerline Easement Document and the Access Easement Document were respectively Annexures 2 and 4 to the Option Agreement.

55. The "Corridor Land" was defined in clause 10 as “that land within the Easement Land as defined in Item 3 of the Reference Schedule". Item 3 identified the Corridor Land as: "That part of the Easement Land as indicated on the plan in Annexure 1 (as that part may be amended in accordance with clause 4)".

56. Clause 4 had the effect that the Landowner would not unreasonably refuse any request in writing by White Rock to vary the location of the Corridor Land, provided that the varied location was not more than 100m of either side of the location shown in the Corridor Land Plan in Annexure 1, subject to a condition that is not presently material. White Rock was not required to pay any additional consideration if the location of the Corridor Land was amended under clause 4.

57. Clause 4 is significant, as it suggests that both the powerline and the access road would be constructed over pre-agreed parts of the servient tenements, subject to a limited right in White Rock to vary the locations of the easements within defined parameters.

58. The Corridor Land Plan in Annexure 1 to Mr Wood's Option Agreement depicted the location of the Powerline Easement and the Access Agreement approximately in the locations where Exhibit PD2 shows those easements were intended to be created over Mr Wood's land, with perhaps some apparently small deviations.

59. In the case of the Corridor Land Plan in Annexure 1 to JLW's Option Agreement, the position is unclear. The Corridor Land Plan appears to have been prepared on the assumption that the substation would ultimately be constructed on one particular lot that was part of JWH's land (when it was ultimately in fact constructed on part of Mr Wood's land). The Corridor Land Plan nonetheless shows the location of the Powerline Easement as being located on both of JWH's lots approximately in the location where the power line was ultimately located, as shown in Exhibit DP2. The Powerline Easement thus provided for the substation being ultimately constructed on Mr Wood's land. However, curiously, the position is different for the Access Easement. It is located only on one of the two lots owned by JWH, and ends at the location of the proposed substation that was not ultimately constructed. It is roughly in the location of the final access road as depicted in Exhibit DP2, but does not travel from the proposed substation site across the balance of that lot or across the other lot to where that lot adjoins Mr Wood's land. The parties did not advert to that circumstance at the hearing, so that the significance of the Corridor Land for the Access Easement not being located over the whole of the JWH land was not addressed. If the Corridor Land Plans for JWH’s and Mr Wood’s land are taken at face value, there was a gap in the land intended for the Access Easement from the location of the proposed substation on the JWH land to the border of that land with Mr Wood’s land.

60. Clause 1.2 provided for the exercise of the Option relevantly in the following terms:

1.2 Exercise of Option

Provided that…[White Rock] may exercise the Option at any time prior to 5.00 pm on the Expiry Date by delivering to the Landowner:

(a)   a notice stating words to the effect that [White Rock] exercises the Option…

61. Item 1 of the Reference Schedule identified the Expiry Date as the earlier of 10 July 2017 and the date the Agreement was terminated by White Rock under clause 9.6.

62. Significantly, even though the Option Agreement provided for the creation of two easements, there was only one Option, which had to be exercised once and for all. The Option Agreement did not provide for White Rock to exercise the Option in relation to one of the easements, but not the other. That meant that, at the time the Option Agreement was executed, the Landowner had the expectation that the Option would either not be exercised by White Rock, or if it was, the Landowner would be subject to the burden but would also enjoy the benefits of both of the easements.

63. Clause 2(a)(ii) provided that, if the option was exercised by White Rock, the Landowner and White Rock would be bound by the terms and conditions of the Powerline Easement Document and the Access Easement Document from the Option Exercise Date.

64. Clause 1.3(c) required White Rock to pay to the Landowner the Easement Payment within 30 days of the Option Exercise Date. The "Easement Payment" was defined in Item 6 of the Reference Schedule as "$1 plus GST (if any)."

Draft Powerline Easement Document

65. The Powerline Easement Document in Annexure 2 was in the form of a draft Transfer Granting Easement in blank as to the terms that would need to be inserted if the Option was exercised. The description of the easement was: "Easement for electricity purposes 60m wide as shown on the plan annexed to this Transfer and marked "B" having terms set out at Annexure "A" hereto."

66. The draft Transfer Granting Easement in the box for the insertion of the name of the Transferee stated:

Registered proprietor of the dominant tenement

[I]nsert (at the time the option is exercised) either 1. [White Rock]; or 2. owner of the turbine land; or 3. name of prescribed authority (clause 53, Conveyancing (General) Regulation 2008).

67. The meaning of the reference to the “owner of the turbine land” is unclear. I infer that the description of the Transferee in this way contemplated that the easement might ultimately be granted to TransGrid. Clause 9 provided that the Easement could operate as an easement in gross under s 88A of the Conveyancing Act 1919 (NSW). Clause 53 of the then Conveyancing (General) Regulation 2008 (NSW) (now Schedule 3 to the Conveyancing (General) Regulation 2018 (NSW)) refers to an energy services corporation within the meaning of the Energy Services Corporations Act 1995 (NSW). I understand that it was accepted by the parties that TransGrid is an energy services corporation.

68. Annexure A contained covenants by the Transferor and the Transferee. Clause 1 set out the permitted purposes for the Transferee and its Permitted Users to use the easement. "Permitted Users" was defined in clause 17 as meaning "the Grantee's employees, agents, workers, contractors and other persons authorised by any of them or by the Grantee from time to time." Clauses 1(a) to (k) set out in detail uses that would be expected to be permitted to make the Powerline Easement effective. However, some aspects of clause 1 were drafted in a way that qualified the Transferee's rights in a manner that would be beneficial to the Transferor. Clause 1(c) prohibited the Transferee from erecting telecommunications equipment unrelated to a wind farm without the consent of the Transferor. Clause 1(k) entitled the Transferor to "only remove the minimum amount of vegetation necessary for access along the Easement Site to avoid erosion and problems occurring by such erosion."

69. Clause 2 governed the manner in which the Transferee and its Permitted Users could exercise the rights conferred by the easement. Apart from certain requirements for the Transferee to inform the Transferor in advance of certain details concerning the proposed use of the easement, the clause included the following:

2. Manner in which rights are exercised

…

(d)    use reasonable endeavours to minimise disruption to the Transferor and any occupier as is reasonably practicable;

(e)    avoid lighting fires, leaving rubbish or waste, bringing guns or any animals on or entering any buildings without the permission of the Transferor;

(f)    take reasonable precautions to minimise dust and erosion and to avoid introducing any pests, weeds or animal or plant diseases;

(g)    comply with any reasonable request of the Transferor regarding the manner of access and use, including the use of vehicles and the location of Electricity Works laydown areas during construction or maintenance periods;

(h).    do was little damage as is reasonably practicable;

(i)    repair any damage within a reasonable time of the damage occurring, and to the Transferor's reasonable satisfaction.

70. Clauses 4 and 5 provided:

4. Transferor's rights and obligations

The Transferor may use the Easement Site so long as such use does not or is unlikely to:

(a)    interfere with the Transferee's rights under this easement; or

(b)    breach the Transferor's covenants set out in clause 3 above.

5. Repair and maintenance

The Transferee will at all times and at its own expense keep the Electricity Works in a proper fit state of repair.

71. Clause 15 obliged the Transferee to replace fences that were required to be removed, replaced or where new fencing was required to be constructed for access to the Easement Site with fences of a similar standard including any new fences so that the Transferor's land was at all times fenced.

72. Clause 16 provided for payments to the Transferor as follows:

16. Initial and annual payments

(a)    The purpose of this clause is to achieve payments by the Transferee to the Transferor under this Transfer Granting Easement equivalent to rent payable under the Lease for High Voltage Transmission Line (as defined in the Lease).

(b)    As consideration for entering into this Transfer Granting Easement the Transferee will pay to the Transferor payments under the Lease pursuant to special condition 16 of the rent agreement (being an exhibit to the Lease).

73. "Lease" is defined in clause 17(a) as meaning "the lease for wind farm purposes of the Servient Tenement or of nearby land owned by the Transferor entered into by Transferor as lessor and [White Rock] or its nominee or assignee as lessee, including the rent agreement (being an exhibit to the lease).”

74. At the time the Option Agreements were made, the leases from the Landowners to White Rock had not been granted, so the only means of understanding the effect of clause 16 is to look to the Agreement to Lease to which the Landowner was a party.

75. Clause 7 of the draft Rent Agreement provides:

7. High Voltage Transmission Line rent

High Voltage Transmission Line rent is $20,000 per kilometre payable on the Commencement Date of the Lease, plus $5 per metre in the first year of the Term, and $5 per metre in the subsequent years of the Term (calculated to the nearest metre).

76. There is no clause 16 of the Rent Agreement (as referred to in clause 16(b) of the draft Transfer Granting Easement), so the reference to clause 16 must have been a transcription error for clause 7.

Draft Access Easement Document

77. The draft Transfer Granting Easement for the Access Easement that is Annexure 4 to the Option Agreement provided for the transferee to be only White Rock or the “Owner of turbine land”.

78. It contains a number of terms that would confer benefits on the Transferor, as follows:

2. Permitted purposes

The Transferee must, when exercising the rights conferred by this Transfer Granting Easement, take reasonable precautions to:

(a)    cause little inconvenience to the owner and any occupier of the Servient Tenements;

(b)    do as little damage to the Servient Tenement; and

(c)   only remove the minimum amount of vegetation necessary for access along the Easement Site to avoid erosion and problems occurring by such erosion,

as is reasonably practicable.

79. Clause 4 provided:

4. Transferor's rights and obligations

The Transferor may use the Easement Site so long as such use does not or is unlikely to:

(a)   interfere with the Transferee's rights under this Transfer Granting Easement; or

(b)    breach the Transferor's covenants set out in clause 3(a) above.

80. Clause 5 provided that the Transferor will not unreasonably refuse any request by the Transferee to amend the Easement Site within the servient tenement, subject to a number of provisos, including that the location, the width and the borders are not materially different and will not cause any additional inconvenience or disruption to the Transferor, and that the location and extension of the borders do not vary by more than 100m to the left or right of the location shown in the plan of the Easement Site.

81. This term suggests that the parties to the Option Agreement contemplated that the Access Track would be constructed over an agreed route subject to variation within prescribed parameters.

82. Clause 9 obliged the Transferee to consent to the subdivision of the servient tenement so as to create a separate lot containing the Easement Site of not less than 100ha, and the Transferee was thereupon obliged to consent to the release of the easement so far as it related to the remainder of the land that initially comprised the servient tenement.

83. Clause 10 imposed an obligation on the Transferee to replace fences that were required to be removed or replaced or new fencing that was required to be constructed with fences of a similar standard, including any new fences so that the Transferor's land was at all times fenced.

84. The draft Transfer Granting Easement for the Access Easement did not contain any term relating to the payment of consideration for its use.

85. If the Option Agreements for Powerline and Access Easements had been exercised and an Access Easement was granted to White Rock over the access road, the grantor Landowners would have had the benefit of the obligation upon White Rock to repair the access road, and an entitlement to damages caused by any failure to repair, as discussed by AJ Bradbrook and SV MacCallum in Bradbrook and Neave’s Easements and Restrictive Covenants (3^rd ed, 2011, LexisNexis Butterworths) at [1.57]-[1.58], and in the authorities there cited.

Project Agreement between TransGrid and White Rock

86. On 10 July 2015, some nine months after White Rock entered into the suite of documents with the Landowners on 16 September 2014, White Rock entered into an agreement with TransGrid called "Project Agreement White Rock Wind Farm Connection" (TransGrid Project Agreement).

87. The TransGrid Project Agreement contained the terms under which TransGrid would assist White Rock in constructing the infrastructure on the Landholders' Land that was necessary for the operation of the wind farm. The “Project” was defined in clause 1.1 as being: “the design and delivery of a 132kV Transmission Line, Substation and Upstream Works between the Customer’s Facilities and TransGrid’s high voltage transmission network in accordance with this agreement”.

88. By clause 2.1, the operation of most of the terms in the TransGrid Agreement were conditional upon White Rock providing to TransGrid a Notice to Proceed.

89. Relevantly, clause 13.1 provided:

13.1    Access

(a)    Subject to clause 13.1(b), and without limiting TransGrid's other rights of access under this agreement, the Customer will provide TransGrid (and its servants, agents and contractors) during the Term with clear, unhindered and safe access to and over the Substation Site, Transmission Line Route, the Land and its associated access roads for the purpose of undertaking the Connection Work and for any related purpose.

90. Clause 13.3 provided: “Title to and risk in the Assets rests with TransGrid at all times.” “Assets” was defined in clause 1.1 as meaning “the Substation and the Transmission Line”.

91. Clause 24 relevantly provided:

24.    Transfer of Ownership of the Substation Site and other property interest

24.1    Substation Site

The Customer must, no later than the Date of Practical Completion …at its own cost execute any document and do any act reasonably required by TransGrid…to ensure that legal and beneficial title to the Substation Site is transferred to TransGrid free and clear of any Security Interest. The Substation Site shall be of sufficient size as determined by TransGrid including a 20m buffer zone. Failure to comply with this clause 24 shall be deemed a Default for the purpose of clause 16.

24.2    TransGrid Easements

(a)    On or before the Date of Practical Completion… the Customer must at its own cost and no cost to TransGrid grant to TransGrid (or must do all thing[s] necessary to ensure that the following Easements are granted to TransGrid):

(i)    a 45m wide Easement for the final Transmission Line Route (i.e. the Transmission Line set out in the Scope of Works);

(ii)    a 10 metre wide Easement from the proposed Substation Site to the nearest public road for the purpose of accessing the Substation Site (which access route will be agreed between the parties prior to commencing the Connection Work at the Substation Site);

…

24.3    Access Right

On and from the Commencement Date and during the Term, the Customer must ensure TransGrid is granted any Easement which is required by TransGrid for securing a permanent right to access the Substation Site and Transmission Line Route. The Easements granted under this clause 24.3 will identify the access route agreed between the parties and be otherwise on terms reasonably acceptable to TransGrid.

…

24.7 Substation Site and Easement Acquisition Deed

…

(b)   TransGrid acknowledges that, as at the Commencement Date, the Customer holds options to acquire the Substation Site and be granted the Easements, but may not be the owner of the Substation Site or beneficiary of the Easements.

…

92. Clause 24.1 could only be complied with if White Rock exercised the Option in the Option Agreement to Purchase Substation Land in respect of the particular land upon which it was decided as between White Rock and TransGrid would be the site of the Substation. That exercise had to take place before the Expiry Date.

93. Similarly, clause 24.2 could only be complied with if White Rock exercised the Option Agreements for Powerline and Access Easements with all of the three Landowners who had granted those Options.

94. There was no evidence of the circumstances that led White Rock to enter into the Option Agreements, or why the Option Agreements were entered into before the TransGrid agreement. Given the complex and sophisticated nature of the arrangements that were required to enable White Rock to construct and operate the wind farm, I infer that White Rock and the solicitors for the parties were experienced in the issues that needed to be addressed in the suite of agreements that would be required, and that the Option Agreements were entered into in the correct anticipation that TransGrid would require to be granted the rights that were ultimately the subject of clause 24 of the TransGrid Agreement.

95. Even though, strictly, the Landowners who granted the various Options had no means to compel White Rock to exercise the Options, I infer that, as a matter of practical reality at the time the Options were granted, both White Rock and the Landowners anticipated that if White Rock decided to proceed with the wind farm project and issued Notices to Proceed under the Agreements to Lease, then it would follow that White Rock would also exercise the necessary Options.

Communications between parties before date of Leases

96. On 23 December 2015, the Legal Counsel for Goldwind Capital (Australia) Pty Ltd (Goldwind) (which was apparently managing the exercise for White Rock), Ms Squires, sent an email to the solicitor for the Landowners concerning the satisfaction of the conditions precedent for the issue of the Notices To Proceed by White Rock. Although the evidence does not make the detail clear, apparently the parties were in negotiations as to adjustments that needed to be made before the Landowners were satisfied that White Rock was entitled to issue the Notices To Proceed. The email included the following:

3. Right of Way

a. we agree to undertake to survey and create an easement to accommodate the re-alignment of the right of way to allow for the access tracks to cross the boundaries of Wood, Nugent, Dulhunty and Cameron to the Gwydir Highway;

b. we agree to provide a double fence, either new or through a combination of new and existing fencing, on the re-aligned road…

97. This agreement is the basis of the claim for relief in prayer 5 of the cross claim.

98. The spatial relationship between the original access road over which some of the Landowners had rights of way and the access road ultimately constructed by White Rock was not established precisely by the evidence. The evidence does establish to my satisfaction that the original and the final access roads followed substantially the same route, but with some deviations, including the incursion of the final access road upon Mr Dulhunty’s land, and probably also Mr Cameron’s land, although Mr Cameron appeared in his evidence to reject that fact. The evidence also established that, to the extent that the final access road deviated from the path of the original one, it was physically constructed in a way that prevented the Landowners from using the rights of way that they had over the original access road. I am satisfied that it was important to at least Mr Wood and JWH that effective rights of way for their benefit be re-established (as they needed those rights to access their land) and that it was important to continuing good relationships between all of the Landowners over whose land the final access road travelled that the legal rights of the owners of the dominant and servient tenements be formally and clearly established in law. I infer that is the reason why the Landowners sought and obtained the agreement of White Rock in the 23 December 2015 email. I am satisfied that the Landowners had a legitimate interest in causing White Rock to survey and create the necessary easements along the new access road. The Landowners might not adequately be protected by the obligations imposed by their individual Leases on White Rock, as those obligations were specific to the Land the subject of each Lease. Securing proper access from the individual properties to the Gwydir Highway required the creation of the necessary easements.

99. White Rock’s agreement contained in Ms Squires’ email was made before the Expiry Date of 10 July 2017 of the Option Agreements for Powerline and Access Agreements.

100. The 23 December 2015 email also contained an agreement by White Rock to pay consideration for the grant of an additional easement over Mr Cameron’s land that was not the subject of the Option Agreements for Powerline and Access Easements.

101. On 20 January 2016, Ms Squires sent an email to the Landowners' solicitors that attached a draft document called "Right of Way Consideration Deed." The email stated: "Please find attached a draft Consideration Deed in relation to the payment arrangement between [White Rock] and John Wood, Nugent, Dulhunty and Cameron associated with the re-alignment of the right of way." The draft deed contained terms that I understand would require White Rock to bear the cost of the steps necessary to create easements over the Access Track for the benefit of the Landowners, as well as the supply and installation of what was called a double fence. On 21 January 2016, the Landowners' solicitor sent a return email to Ms Squires that contained a revised version of the Deed of Consideration.

Grant of Leases

102. The Leases are all dated 11 April 2016 (before final date for exercise of the option to create easements of 10 July 2017). White Rock must have issued Notices to Proceed before 11 April 2016.

103. The Leases granted an interest in the land owned by the Landowners that was described as a lease. However, the Leases prescribed the way that White Rock was able to use the Land, and excluded the wind farm activities from the parts of the Land that were described as Excluded Areas. The Leases also granted rights to the Landowners that had the effect that the Landowners were entitled to use most of the land the subject of the Leases for agricultural purposes, provided that that use did not interfere with the permitted wind farming activities. It may be that the appropriate short form description of the effect of the Leases is that they granted leases over the parts of the Land that were not Excluded Areas, subject to a licence back to the Landowners to use the leased areas.

104. By clause 3.1(a), White Rock was authorised to use the Site 24 hours a day solely to conduct Wind Farm Activities for the Wind Farm from the Commencement Date. “Site” was defined in Schedule 1 to mean the Land other than any Excluded Area.

105. The Wind Farm Activities were defined in clause 3.2 to relevantly be: "…(b) Construction Activities; (c) Operating Activities…"

106. In describing the Construction Activities, clause 3.7(a) permitted White Rock to install, construct, and erect Wind Turbines and the related structures necessary to operate the wind farm. Clause 3.7(a)(v) permitted White Rock to construct "access roads, tracks or paths across the Site (including through fence lines)."

107. The explanation of what constituted Operating Activities in clause 3.8 included:

Operating Activities means the following activities performed by, on behalf of, or for the Lessee in relation to the Wind Farm on the Site:

(a)   maintaining, repairing, operating, using, replacing, continuing and/or upgrading the things referred to in clause 3.7(a);

…

(d)    any other activities reasonably necessary for the operation and maintenance of the Wind Farm and previously approved in writing by the Lessor such approval not to be unreasonably withheld."

108. Although clause 3.8(a) permitted White Rock to maintain “access roads, tracks or paths across the Site” (by reference to clause 3.7(a)(v)), it did not impose upon White Rock an obligation at the suit of the Landowner to do so. Clause 3.15 obliged White Rock to make good all damage to the Land promptly upon completion of each part of the Wind Farm Activities as set out in clause 3.2, but that is not equivalent to an obligation to repair the access road. Clause 4.1(b) obliged White Rock, at its own cost, to repair damage that it caused to the Land to the reasonable satisfaction of the Landowner, but damage was defined as “a permanent change to the land other than is required for Wind Farm Activities.” The Leases do not appear to impose upon White Rock any obligation to maintain the access road in repair. Plainly, it would be in White Rock’s interests to do so, but that is not an obligation imposed upon it by the Leases.

109. Clause 3.14 specified the nature of the Landowners’ right to use the Site.

110. Clause 4.4 provided:

4.4 Ownership of Apparatus & Temporary Infrastructure

Despite any rule of law to the contrary, the Apparatus and Temporary Infrastructure remain the property of the Lessee.

111. Clause 4.13 dealt with the location and size of, inter alia, Accessways and relevantly provided:

4.13 Location and size of Accessways, Apparatus and Temporary Infrastructure

(a)   Subject to clause 4.13(c), the Lessee shall construct and install the Accessways, Temporary Infrastructure and Apparatus, under this Lease on the Site, strictly only in accordance with the Final Layout…

(b)    If the Lessee wishes to amend the Final Layout for any reason during the Term, the Lessee must provide a draft of the proposed amendment to the Lessor… The amended Final Layout must be served on the Lessor and must (unless otherwise agreed with the Lessor):

…

(v)    clearly demonstrate the route of Transmission Lines or [aboveground] Cabling which must not alter from that shown on the Indicative Layout without consulting with and addressing all reasonable concerns of the Lessor;

…

(c)    The Lessee may move Accessways, Apparatus or Temporary Infrastructure no more than 100m from the location shown on the Final Layout, without complying with subclause 4.13(b) provided that the Lessee provides the Lessor and any other affected Group Landowner with an amended Final Layout.

(d)    The Accessway, Apparatus and Temporary Infrastructure where listed in Schedule 4 shall not exceed the sizes and dimensions set out in Schedule 4 at any time during the Term without the Lessor's consent, which may not be unreasonably withheld.

112. Schedule 4 included "Access track" with the size "6 m nominal trafficable width with local widening to 12 m wide for passing bays, bends and intersections."

113. "Accessways" was defined in Schedule 1 to mean "any vehicular and other access tracks and roads on the Site or to be constructed on the Site for access to and from the Site or Apparatus as shown on the Final Layout."

114. Clause 6.1 obliged White Rock to pay the Rent to the Landowner in accordance with the Rent Agreement.

115. Clause 7.1 provided:

7.1 Lessor to assist Lessee

Where reasonably required by the Lessee, the Lessor at the cost of the Lessee must do all things reasonably necessary to assist the Lessee in:

(a)    conducting the Wind Farm Activities provided that the Lessee reimburses the Lessor for any reasonable expenses so incurred;

…

(c)    granting or seeking any necessary easements or covenants over neighbouring land (and such as building restrictions) for the purposes of the Wind Farm (including without limitation, signing any documents which it is reasonably necessary for the Lessor to sign). However, and for the avoidance of doubt, nothing in this clause 7.1(c) will require the Lessor to negotiate any such easements or covenants on behalf of the Lessee or to draft any documents relating to such easements or covenants, and the Lessee must reimburse the Lessor for any reasonable expenses incurred in providing assistance under this clause 7.1(c) and pay adequate and fair compensation for the granting of any such easement or covenant.

116. Clause 8.5 is the crucial term upon which White Rock relies in these proceedings. It will be convenient at this point to repeat it, as follows:

8.5 Restrictions on Lessee

The Lessee, other than in accordance with clauses 8.1 to 8.4 shall not, deal with its interest in the Lease or any of its rights and obligations under the Lease, for example, by subleasing, sharing or licensing such rights and obligations to a third party, without the Lessor's written consent, not to be unreasonably withheld.

Rent Agreements

117. The Rent Agreements provided:

1.1    Total Annual Rent means the total rent payable each year of the Term under this Lease, being the sum of the following components, as applicable to Apparatus shown on the Final Layout (including any amendment under clause 4.13(b) or clause 4.13(c) of the Lease), and as adjusted in accordance with clause 9:

a.    Wind Turbine rent (clause 2);

b.    Wind Monitoring Mast rent (clause 3);

c.    temporary construction compound rent (clause 4);

d.    collector substation rent (clause 5);

e.    Medium Voltage Transmission Line rent (clause 6.1);

f.    On or above-ground Cabling rent (clause 6.2);

g.   High Voltage Transmission Line rent (clause 7); and

h.    operations and maintenance compound rent (clause 8).

118. The clauses noted against each component of the Total Annual Rent set out the manner in which that rent would be calculated.

119. Clause 15.2(a) provided that terms used in the Rent Agreement not otherwise defined were to have the meaning given in the body of the Lease. "Apparatus", as used in clause 1.1, was defined in Schedule 1 to the Lease as meaning: "any compound, building, structure or infrastructure installed or constructed on the Site by or for the Lessee in connection with the operation of the Wind Farm, including without limitation Wind Turbines, Transmission Lines and Cabling, and any wind monitoring tower, temporary construction compound, substation or operations and maintenance compound."

120. This definition appears to have the result that Total Annual Rent was calculated in respect of White Rock's entitlement under the Lease to construct various types of Apparatus and the Site, but does not otherwise include rent for the use of the Site, including accessways.

Royalty Payment Deeds

121. The Royalty Payment Deeds had the effect, by clause 2.1, that if the Annual Royalty Calculation (which was, in essence, a percentage of the Audited total gross revenue of White Rock in a year) exceeded the Total Annual Rent, then White Rock was required to pay the Landowner the difference.

Location of Accessways

122. The provisions in the Leases dealing with the location of Accessways (which include what I have called “the access roads” and “the access tracks”) appear to have the following effect. An Indicative Layout was annexed to the Agreements to Lease that depicted the indicative locations of matters such as access tracks as anticipated at the date of the agreement, prior to the detailed design and planning. White Rock was required to serve a draft Final Layout on each Landowner before issuing the Notice to Proceed. That draft was required to take into account and adequately address all reasonable concerns of the Landowner. The function of the Indicative Layout seems to be that it would provide one basis for determining the concerns of the Landowner that should be considered as being reasonable, because it was the information that was available to the Landowner at the date of entry into the Agreement to Lease that told the Landowner indicatively what to expect from the construction of the wind farm. The construction of the Accessways on each Landowner’s land was to be strictly in accordance with the Final Layout.

123. There was no direct evidence as to the manner in which the parties engaged in the process provided by the Agreements to Lease and the Leases concerning the determination of the ultimate route of the access road from the Gwydir Highway to the substation. I infer that Mr Dulhunty, and probably also Mr Cameron, participated in that process, as neither Landowner granted an option for the grant of an access easement over the access road as it was proposed to be constructed as at 16 September 2014, so their consent should have been necessary for the construction of part of the access road over their land. Even if the process was not in fact implemented as required by the agreements, it is a fact that neither Mr Dulhunty nor Mr Cameron agreed to grant to White Rock any access easement over any part of their land.

124. Although the evidence is limited, it must have been understood by the parties, no later than 23 December 2015, which was the date of White Rock's agreement to survey and create an easement to accommodate the realignment of the right of way, that the access road would ultimately be constructed over part of the land of all of the five Landowners.

125. There is an unresolved question about whether, under the Agreements to Lease and the Leases to which they were parties, Mr Dulhunty and Mr Cameron could have been compelled by White Rock to permit the access road that was ultimately constructed from the Gwydir Highway to the substation to deviate upon their lands. When one looks at the Indicative Layouts that were annexed to each of the Agreements to Lease, one sees a series of access tracks that not only allow access from the Gwydir Highway to the substation, but also access to the location of each of the wind turbines. The proposed route of the access road from the Gwydir Highway to the substation is not identified separately. Its intended location may be deduced from an inspection of the Corridor Land Plans that were annexed to the Option Agreements for Powerline and Access Easements. It is not clear from any of the plans, or from the evidence, whether or not the access road would be constructed in any different or more substantial way than the access tracks that lead off the access road to the location of the wind turbines. I infer from the fact that Mr Dulhunty and Mr Cameron were not required to enter into Option Agreements for Powerline and Access Easements that the Indicative Layouts for their Agreements to Lease did not depict an access track on the part of their lands upon which the access road was ultimately constructed. Whether or not the terms of the Agreements to Lease and the Leases entered into by Mr Dulhunty and Mr Cameron would have obliged them to consent to the relocation of the access road to cross part of their lands is now a moot point. That is because both Landowners must have consented to that occurrence. In principle, the issue may remain relevant to the question as to whether the Landowners as a group are now all obliged to consent to the grant by White Rock to TransGrid of the proposed non-exclusive licence to use the access road. While on the one hand, as at 18 September 2014, neither Mr Dulhunty nor Mr Cameron was expected to receive any additional consideration for granting the right to use the access road, on the other hand, there was not then intended to be any access road over either Landowner's land.

Failure of White Rock to exercise Options

126. White Rock did not exercise any of the Options before those options expired.

127. There was no evidence as to why White Rock issued the Notices to Proceed but did not exercise any of the Options. White Rock’s case ignored this issue entirely. There was no evidence of any communications between White Rock and the Landowners as to the consequences of the Leases becoming operative in circumstances where White Rock had abandoned the right to compel Mr Wood or JWH to transfer the Substation Land, and to compel Mr Wood, JWH and Mr Nugent to grant the Powerline and Access Easements.

128. The evidence was limited as to the timing of the construction of the various elements of the wind farm. White Rock’s primary witness, Mr Jeffrey James Ware, said that the construction of the wind farm commenced in late 2016 and was completed in about July 2018. Mr Wood said that the substation was constructed on his land in the period between 2016 and 2017. There was some evidence that the wind farm reached practical completion in July 2018, which was the same year in which it was connected to the national grid.

Communications between parties after date of Leases

129. On 6 June 2017, White Rock issued a Notice of Dispute to the Landowners in relation to their claims that White Rock had breached the Leases in the manner in which it had constructed the wind farm.

130. By 7 December 2017, the plan that became Exhibit PD2 had been prepared. I infer that that plan was required to be registered as a Deposited Plan to enable the registration of both the Powerline and Access Easements. An email dated 21 June 2018 stated that the plan had been registered some time before. The Deposited Plan itself stated that it was a: "PLAN OF ACQUISITION & PROPOSED EASEMENT FOR TRANSMISSION LINE.” It is not clear why the Access Easement was not mentioned.

131. An email written on behalf of Goldwind to the Landowners' solicitors and Ms Squires dated 23 May 2018, referred to the agreement by three of the Landowners to grant transmission line easements to TransGrid in the terms of the relevant Option Agreements. The email refers to the attachment of three draft Transfers Granting Easements. The attachments are not included in the Court Book. However, the email states that the Transfers "consolidate the transmission line easement and access easement into one TGE". The email refers to TransGrid as having registered the relevant Plan of Acquisition.

132. An email from the Landowners' solicitors to Mr Williamson of Goldwind dated 24 September 2018 referred to an email received from Mr Williamson on 19 September 2018. That email does not appear to be in the evidence. The 24 September 2018 email included:

…

Also, there is no provision in this Transfer Granting Easement providing for payment for the access over the "proposed Right of Carriageway over track and use" as shown on [the Deposited Plan that is Exhibit DP2]. We are instructed to press for this payment to be included in the Transfer Granting this Easement…

133. The letter noted that the draft Transfers Granting Easement had not been provided for Mr Dulhunty and Mr Cameron, and requested that drafts be provided. This request appears to have reflected the fact that, although Mr Dulhunty and Mr Cameron did not grant Option Agreements for Powerline and Access Easements to White Rock, the Deposited Plan showed the Access Track passing over the Land of those two Landowners.

134. Mr Williamson replied by email dated 26 September 2018. That email included:

…

Payment for access easement

It has never been contemplated by the parties that the landowners would receive an additional payment above what is set out in the rent agreement for the access agreements associated with the powerline easement. I refer you to the original terms of the option agreements (attached for reference). There is no mention of an additional payment provision in the agreed form of access easement appended to each option agreement.

My understanding of the commercial deal agreed between the parties is that these new easement documents are to be commercially in the same form as those appended to the original option agreements. The only changes that are being proposed by [White Rock] relate to the payment clause/lease termination provision (as described above), which is only required as a result of TransGrid being the transferee under the easements.

Cameron and Dulhunty

I am not aware that there is any proposal to take a powerline or access easement over Cameron or Dulhunty's land. I am only aware that such easements are required from John Wood, John Wood Harvesting and Nugent as per the original option agreements with these parties.

135. Mr Williamson sent a further email to the Landowners' solicitors on 17 October 2018, which relevantly said:

…

Given your comments below regarding payment for the access easements, we have decided to remove the access easement from the form of TGE so that it now only refers to a powerline easement (for which your clients are being paid under the rent agreements).

Please see attached proposed final form TGEs for: [Mr Wood, JWH and Mr Nugent].

…

In addition, in order to provide [TransGrid] with a right to use the [Access Track] to access [their] substation land during the lifetime of the wind farm, [White Rock] now proposes to enter into a separate licence agreement with TransGrid to provide them with a non-exclusive right of access, subject to the terms of that deed.

We therefore hereby seek the written consent of your clients to enter into this non-exclusive licence with TransGrid over the access track in accordance with clause 8.5 of each of the following registered leases: [Leases from Landowners listed].

Please confirm whether your clients (the landowners under these leases) consent to the licence arrangement, noting that the landlords cannot unreasonably withhold their consent under clause 8.5 of the leases.

…

136. The Landowners' solicitors responded by email dated 18 October 2018, stating:

…

Transfer Granting Easement Form and Payment for Access

Our client considers that your response is irrelevant, as this is a completely new arrangement and we are instructed to advise you that our client presses for a payment for access over the Proposed Right of Carriageway over track and use shown on [the Deposited Plan].

This payment request is not part of the original dispute, and is to be negotiated after the dispute is settled and will not hold up resolution of the dispute.

Cameron & Dulhunty

Our clients' understanding, is that both Cameron & Dulhunty are to grant a right of use over the existing road referred to in their Leases to White Rock.

…

137. This correspondence shows that when the parties entered into the Deed of Release that I will consider below, that was on the basis that the deed would contain the terms of the settlement of all of the issues that then existed between the parties, save for the issue of whether the Landowners were obliged to consent to White Rock providing a licence to TransGrid to use the Access Track.

138. A further email from the Landowners' solicitors to Mr Williamson dated 12 November 2018 referred to an email from Mr Williamson dated 12 November 2018 that does not appear to be in the evidence. The email stated that the Landowners wanted an additional term in the Transfer Granting Easement in relation to the powerline. It also said that the Landowners would consider White Rock's request for their approval in relation to the grant of the licence over the Access Track to TransGrid "and will advise you in due course of their decision."

Deed of Release

139. On 19 November 2018, the Group Landowners entered into a Deed of Release with White Rock. There appear to have been 24 separate Group Landowners who were parties to the deed. The Group Landowners included the five Landowners who are defendants to these proceedings.

140. In part, the purpose of the Deed of Release was to settle disputes raised by the Group Landowners out of the manner in which White Rock had constructed the wind farm, which led to claims by the Group Landowners that White Rock had breached the terms of their respective Leases.

141. Clause 2 of the Deed of Settlement required White Rock to pay the sum of $2,850,000 in relation to the claims by the Group Landowners that White Rock had allegedly breached the terms of the Leases by constructing oversized wind farm infrastructure.

142. The Deed of Release contained other terms varying the legal relationships between the parties, including by providing for variations to some of the Leases.

143. In apparent response to the fact that White Rock did not exercise the option to purchase the Substation Land on Mr Wood's property, clause 6 obliged White Rock and Mr Wood to enter into and complete a contract for the sale of land on the terms set out in Annexure D within 20 business days of the date of the deed. Annexure D contained an elaboration of this term, whereby the contract for sale was to be on the same terms and conditions as the Option Agreement to Purchase Substation Land between Mr Wood and White Rock dated 16 September 2014. However, Annexure D added: "but also including a provision under which [White Rock] (or its nominee purchaser) grants to Mr Wood a perpetual access easement over the Substation Land (located within a "buffer zone" outside of the fenced part of the substation, in a location reasonably agreed between the parties and being a 20m wide easement) and the parties enter into a transfer granting easement upon settlement of the sale." Annexure D also required Mr Wood to grant a further Option Agreement to White Rock to purchase substation land of up to an additional 100m x 100m on the same terms and conditions as the Option Agreement dated 16 September 2014.

144. While it does not appear that Mr Wood received a separate consideration in money terms for his agreement to sell the Substation Land, notwithstanding the lapse of the Option, he became entitled to a grant of a perpetual access easement over the Substation Land. The parties also negotiated a further option agreement whereby White Rock could purchase additional substation land from Mr Wood.

145. Clause 7 of the Deed of Release provided:

7 Entry into powerline easement

(a)    [Mr Wood] must enter into a powerline easement on the terms set out in Annexure E within 20 business days of the date of this deed unless otherwise agreed between [White Rock] and [Mr Wood].

(b)    [JWH] must enter into a powerline easement on the terms set out in Annexure F within 20 business days of the date of this deed unless otherwise agreed between [White Rock] and [JWH].

(c)    [Mr Nugent] must enter into a powerline easement on the terms set out in Annexure G within 20 business days of the date of this deed unless otherwise agreed between [White Rock] and [Mr Nugent].

146. Thus, although White Rock failed to exercise the Option Agreements in relation to the powerline easements that it had been granted by Mr Wood, JWH and Mr Nugent, the three grantors renewed their agreement to grant the easements by clause 7 of the Deed of Release.

147. The Deed of Release contained no provision for the Landowners who were the owners of Land over which the access road from the highway to the substation had been constructed to grant easements over their land in favour of either White Rock or TransGrid.

Draft Licence Deed

148. On 3 April 2019, White Rock provided to the solicitors for the Landowners a final form version of the non-exclusive access licence to be granted by White Rock to TransGrid over the access road to allow TransGrid to access its substation from the Gwydir Highway.

149. The draft Licence Deed provided in clause 2.1:

2.1 Grant of Licence

The Licensor grants to the Licensee a non-exclusive licence to access the Access Track for the Permitted Purpose during the Licence upon the terms contained in this Licence.

150. The "Access Track" was defined in clause 1.1 as meaning "the section of the Land marked B on the Plan". "Land" was defined as meaning “the land described in Item 5.” The Items were stated in Schedule 1. Item 5 in Schedule 1 identified Land by reference to the Deposited Plan Lot numbers which included the Land the subject of the Leases granted by the Landowners to White Rock.

198. The submissions of White Rock do not raise any contest against the Landowners’ claim that the agreement to create the right of way is a binding and enforceable contract that is, in principle, liable to be the subject of an order for specific performance. As recorded above, White Rock only submitted at par 232 of its written submissions that relief by way of specific performance should not be granted “for the simple reason that there is no real dispute between the parties in relation to the realignment of the right of carriageway”. White Rock referred at par 233 to the fact that a survey has already been undertaken, and that White Rock’s witness, Mr Ware, had stated in his 10 June 2022 affidavit that White Rock would undertake to resurvey the access road and to register the amended right of way. Accordingly, White Rock submitted, an order for specific performance would be inutile.

199. I am satisfied that the Landowners are entitled to a remedy that ensures that the right of way agreement is performed within a reasonable time. If White Rock was prepared to perform the right of way agreement as early as 10 June 2022, it ought to have done so. The Landowners are entitled to the benefit of enforceable rights to use the new access road as between themselves and as against White Rock, for their own benefit and for the benefit of any assignees of their land.

200. In prayer 5 of their cross claim, Mr Dulhunty and Mr Wood sought an order that White Rock specifically perform and carry out its agreement of 23 December 2015 to undertake a survey and create an easement to accommodate the realignment of the right of way to allow for the access tracks to cross the boundaries of land owned by the defendants. It is not clear that an order for specific performance stated in those terms would be sufficiently clear to fully delineate the obligations to be imposed upon White Rock. The parties did not address this issue in their submissions, as White Rock had indicated that it would perform the tasks that it agreed to in the 23 December 2015 email. The exercise required of White Rock may not be complex, and it should be possible with a reasonable level of cooperation for the parties to agree to the specific requirements for the exercise to be completed in a way that is satisfactory to Mr Dulhunty and Mr Wood.

201. In these circumstances, the appropriate relief will be for the Court to make an order for specific performance in the terms sought by Mr Dulhunty and Mr Wood, as White Rock has not made a submission that an order in those terms would be unsatisfactory. However, it will be appropriate for the Court to add an order giving the parties leave to apply for further orders to give effect to the order for specific performance, if that becomes necessary.

Cross claim for specific performance of Deed of Release

204. This aspect of the cross claim raises very detailed factual issues on claims for breach of contract based upon the terms of the Leases entered into by Mr Dulhunty and Mr Wood as amended by the Deed of Release. This is quintessentially a claim that required pleading, and the absence of pleadings seriously limits the ability of the Court to understand the real nature of the claims and the responses of White Rock.

205. The parties agreed to the following list of issues in dispute concerning prayer 6 of the cross claim:

13.   What if any items on the ‘punch list’ in respect of the land of the First Defendant/First Cross-Claimant remains outstanding or incomplete?

14.   Subject to there being any items on the ‘punch list’ in respect of the land of the First Defendant/First Cross-Defendant that remain outstanding or incomplete, whether the Court would in its discretion, order a decree of specific performance?

15.   What if any items on the ‘punch list’ in respect of the land of the Second Defendant/Second Cross-Claimant remains outstanding or incomplete?

16.   Subject to there being any items on the ‘punch list’ in respect of the land of the Second Defendant/Second Cross-Claimant that remain outstanding or incomplete, whether the Court would, in its discretion, order a decree of specific performance?

17.   Where the expert evidence of the First and Second Defendants/First and Second Cross-Claimants refers to alleged defects not the subject of the ‘punch lists’ whether the Court will exercise its discretion to consider those items in circumstances where the First and Second Defendants/First and Second Cross-Claimants have not complied with clause 25 of their respective leases, as varied, which procedures prescribe alternative dispute resolution mechanisms to which the Plaintiff/Cross-Defendant will submit?

18.   What damages (if any) ought to be awarded to the Cross Claimants for:

(a)   The Cross Defendant’s failure to perform the contract for sale?

(b)   The Cross Defendant’s failure to perform the punch list items?

206. The cross claimants set out the orders that they seek in respect of the punch list items in par 236 of their final written submissions, as follows:

(a)   Declare that the list appearing at CB 2041 to CB 2042 is the Agreed Punch List between them for the purposes of clause 25 of the Dulhunty Lease as varied.

(b)   Declare that the list appearing at CB 2046 to CB 2048 is the Agreed Punch List between them for the purposes of clause 25 of the Wood Lease as varied.

(c)   [This is a repeat of (a)].

(d)   [This is a repeat of (b)].

(e)   Order that, within six months of final orders;

i.   That White Rock rectify the V shaped drain identified as Dulhunty Punch List Item 7.

ii.   That White Rock remove timber piles that have been left throughout the property identified as Dulhunty Punch List Item 8.

iii.   That White Rock remove felled trees as identified as Wood Punch List Item 27.

iv.   That White Rock complete remediation work on the culvert outlet, batter chute and reshaping of the land beneath it identified as Wood Punch List Items 60, 100 and 104.

v.   That White Rock remediate the scouring and erosion on the TransGrid Track identified as Wood Punch List Item 102.

vi.   That White Rock remediate all batters on the Dulhunty Land.

(f)   Order that, in accordance with Clause 25.3(a) of the Variation of Lease between Robert Venour Dulhunty and White Rock Wind Farm Pty Ltd, White Rock is to notify Mr Dulhunty in writing of any punch list items which it considers have been completed.

(g)   Order that, in accordance with Clause 25.3(a) of the Variation of Lease between John Langley Wood and White Rock Wind Farm Pty Ltd, White Rock is to notify Mr Wood in writing of any punch list items which it considers have been completed.

(h)   Order that, in accordance with Clause 25.3(a) of the Variation of Lease between John Wood (Harvesting) Pty Ltd and White Rock Wind Farm Pty Ltd, White Rock is to notify John Wood (harvesting) Pty Ltd in writing of any punch list items which it considers have been completed.   

207. It will be necessary to start by providing some background concerning this aspect of the cross claim.

208. By clause 4(a) of the Deed of Release dated 19 November 2018, all of the Group Landowners (which included Mr Dulhunty and Mr Wood) and White Rock agreed to vary the Leases in accordance with Annexure B. That annexure inserted a new clause 25 into the Leases. Clause 25 is a complex term of about four pages in length. In summary, clause 25 provided as follows:

1. Clause 25.1 required each Landowner to serve White Rock with an Initial Punch List that identified remediation issues and proposed solutions for damage, erosion or disruption created before the Practical Operation Date.

2. Clause 25.2 established a procedure for negotiation and identification of an Agreed Punch List and Disputed Punch List Issues.

3. It is implied by clause 25.3 that White Rock would remedy the items on the Agreed Punch List as the Landowner was required to notify items that had been completed. In cases of dispute by White Rock, the item was to be treated as a Disputed Completed Issue. The issue was to be referred for resolution to the Panel in accordance with clause 25.4, and if that was unsuccessful in resolving the issue, the parties were required to seek to resolve the issue in accordance with clause 18 of the Lease. In some cases, the Landowner was given an election to call on the Construction Bond under clause 21 of the Lease.

4. Clause 25.4 established a procedure for consultation between the Landowner and White Rock to resolve Disputed Punch Lists Issues and the Disputed Completed Issues. Clause 25.4 then provided for a process of alternative dispute resolution involving a Panel, constituted by an engineer appointed by White Rock, an engineer appointed by the Landowner, representatives of White Rock (which may include White Rock’s main subcontractor) and an Environmental Representative appointed in relation to the construction of the wind farm. The purpose of the Panel was to provide technical and commercial guidance and instruction on whether the items should be remediated, what the reasonable solution was, the date by which remediation should occur, and whether remediation had been completed to a reasonable standard. If the Panel reached unanimous agreement, then an appropriate report was to be provided to the Landowner and White Rock. If the Panel failed to reach unanimous agreement, the parties were required within 10 business days to resolve the Disputed Punch List Issue in accordance with clause 18 of the Lease.

209. Clause 18 of the Lease provided that, if the parties were unable to resolve any dispute within 10 business days, then they were required to meet within a further 10 business days to attempt to agree upon an appropriate dispute resolution technique, an appropriate procedure and timetable, and to select an independent person to undertake the dispute resolution process. In the absence of agreement, the parties were required to mediate the dispute in accordance with the mediation rules of Leading Edge Alternative Dispute Resolution. The parties were required to use reasonable endeavours to conclude the dispute resolution process within 20 business days of the appointment of the independent person or mediator. By clause 18.1, the parties were prohibited from commencing any court proceedings unless they had complied with the alternative dispute resolution procedure in clause 18.

210. A considerable amount of evidence was admitted at the hearing in respect of the punch list claim. However, the cross claim was filed on 18 November 2021, and it became apparent that over time, between then and the commencement of the hearing on 17 May 2023, White Rock carried out remediation work in relation to the punch list issues. That work did not entirely resolve the dispute, but it changed the nature of the dispute with the passage of time.

211. Mr Wood and Mr Dulhunty gave evidence concerning the need for remediation of the land and the punch list issues and the cross claimants tendered as Exhibit D1 a report of David Howley, an environmental engineer and soil conservationist dated 24 November 2022, as well as Exhibit D2, a second report of Mr Howley dated 16 May 2023. Mr Howley was cross-examined for about 25 minutes.

212. The point must be made that, in the total absence of pleadings or particularisation of the cross claimants’ punch list claim, and in the absence of an extensive inspection of the land, it would be difficult if not impossible for the Court to resolve the factual disputes concerning the punch list issues, particularly given the fact that those issues have been progressively attended to by White Rock, whether in a way satisfactory to the cross claimants or not.

213. As stated in orders (a) and (b) now sought by the cross claimants, which are set out above at [208], the punch list for Mr Dulhunty’s land is at CB 2041 to CB 2042 (part of Exhibit PD1) and the punch list for Mr Wood’s land is at CB 2046 to CB 2048. Mr Dulhunty’s punch list is a two-page screenshot and it is illegible. I have not been able to count the number of items, although I note that many are described as being complete. Mr Wood’s punch list is slightly more legible and has 109 items.

214. I am not sure whether the punch list items listed in proposed order (e) are the only outstanding punch list items that have not been rectified, or whether they are the most significant items that the cross claimant wishes to ensure are remedied as a result of the Court’s order. My understanding is that the latter is what is intended.

215. The Court faces the difficulty that the cross claimants have not provided any detailed submissions to the Court as to the findings that should be made in respect of the factual issues that concern the present state of remediation of the punch list items.

216. I note that proposed order (h) concerns JWH’s punch list, but JWH is not a cross claimant.

217. The evidence provides insufficient explanation to the Court as to what has, or has not happened, concerning the application by the parties of the alternative dispute resolution procedures in clause 25 and clause 18 of the Leases, as amended.

218. White Rock’s response to the cross claimants’ punch list claim is that it is inappropriate that the Court make an order for specific performance as no party disputes the enforceability of the Deed of Release, the items in the punch lists have been the subject of ongoing remediation works by White Rock, and the cross claimants’ principal complaint appears to be that the works are not being done quickly enough. White Rock submitted that it was entirely inappropriate for the Court to order specific performance of detailed remediation works, that would require the supervision of the Court, particularly when the role of the Court would be to supervise the timing of the undertaking of works that are already underway.

219. Furthermore, White Rock stated at par 230 of its final written submissions that it did not resist the orders sought by the cross claimants, save that in respect of:

(a)   Dulhunty Punch List Item 8, that it should only be required to remove timber piles that have been left throughout the property as a consequence of construction; and

(b)   in respect of the batters on Dulhunty Land, that it only be required to remediate batters requiring remediation, or that are able to be remedied.

220. The first of these reservations appears to be reasonable on its face, as White Rock should only be required to remediate issues for which it is responsible. The second of the reservations is more contentious. The qualification in relation to batters that require remediation is self-evident, but raises the question of when remediation should be required. The qualification in relation to batters that are able to be remediated is more problematic, because it suggests that in the course of the construction of the wind farm, batters may have been created in a manner that was so inadequate that they are beyond remediation. It may be that if batters cannot be remediated, so be it. That may lead to a remedy in damages, but that is hardly satisfactory if Mr Dulhunty must live with the consequences of batters that are beyond remediation, quite apart from the likely difficulty in assessing damages.

221. I am satisfied in all of these circumstances that the Court should not make any order for specific performance in respect of the punch list items. Even though the parties to the cross claim have reached a level of agreement on this issue, I do not think that the agreement is sufficiently clear and precise to justify the Court in making an order for specific performance in accordance with its terms. However, in the orders that will be made, I will note the terms of the agreement, as that may have the benefit of quelling to some extent the ongoing dispute concerning the carrying out of the work in the punch lists.

222. Otherwise, I am satisfied that the issues raised by the cross claim in respect of the punch lists is not a satisfactory subject for an order for specific performance, because of the impossibility of formulating the order with sufficient specificity and the inappropriateness of the Court attempting to specifically enforce obligations that require detailed supervision at a distance.

223. I am satisfied that the alternative dispute resolution mechanisms in clause 25 and clause 18 of the Leases, as amended, are as comprehensive and suitable as could be implemented, and the parties should be required to attempt to resolve issues of the type raised by the punch lists by implementing those mechanisms. Any residual dispute that cannot be resolved in that way is likely to be presented in a relatively narrow way that may make it suitable for judicial determination.

224. In pars 249 and 250 of their final written submissions, the cross claimants claim damages in the alternative to the Court making an order for specific performance of the Leases in respect of the punch list items. They submit that the quantification of damages should be the subject of a further hearing, or the issue should be referred to a referee for assessment. For the avoidance of doubt, I note that the cross claimants have not on the existing evidence persuaded the Court that they are entitled to damages for breach of the Leases in respect of the punch lists. The evidence is entirely too vague to justify the Court in finding that White Rock’s performance of its obligations under the Leases has involved breaches that entitle the cross claimants to damages. I reject the submission in par 250 that the cross claimants are entitled to recover legal costs as damages (see Queanbeyan Leagues Club Ltd v Poldune Pty Ltd [2000] NSWSC 1100 at [45]-[46] per Hamilton J).

Claim for interest for delay in payment of the price for the Substation Site

225. Clause 6 of the Deed of Release provided:

6   Entry into contract for sale

[White Rock] and John Langley Wood must enter into and complete (in accordance with its terms) a contract for the sale of land on the terms set out in Annexure D within 20 business days of the date of this deed unless otherwise agreed between [White Rock] and John Langley Wood.

226. Annexure D of the Deed of Release provided:

[White Rock] and John Langley Wood agreed to:

1.   enter into a contract for the sale of land on the same terms and conditions as Annexure 1 of the Option Agreement to Purchase Substation Land between John Langley Wood and [White Rock] dated 16 September 2014, but also including…

227. The additional agreement that was included concerned the perpetual access agreement to be granted to Mr Wood that is referred to above.

228. Annexure 1 to the Option Agreement to Purchase Substation Land provided for completion to take place on the 42^nd day after the date of the contract. Mr Wood submitted in par 248 of the Landowners’ final written submissions that he is entitled to interest pursuant to the express terms of the contract for sale of land, without descending into the detail of identifying the relevant term. I have not been able to identify a term of the draft contract that provides a contractual entitlement to interest as a consequence of any delay in completion.

229. The failure by White Rock to perform its obligations under clause 6 of the Deed of Release was a breach of contract that may have entitled Mr Wood to sue for damages. It would be necessary for him to prove the amount of the damage that he has suffered before an award of damages could be made in his favour. He has not attempted to do so.

230. Consequently, Mr Wood’s claim for damages for breach of clause 6 of the Deed of Release must be dismissed.

Costs

231. In these proceedings, White Rock and the cross claimants have all made a number of diverse claims that are forensically unrelated. The claims made by White Rock have in substance failed, although, as I have noted above at [25], the relief sought by White Rock in prayers 4 and 5 of the summons was superseded by events. The Court is unsure as to what those events were. In principle, White Rock should be ordered to pay the defendants' costs of the issues raised by its summons. Although the position as to the costs of the relief sought in prayers 4 and 5 is unclear, it is unlikely that the costs incurred by the parties in respect of those issues have been substantial. It is probably not worthwhile for the Court to consider the possibility of making a separate costs order in relation to those issues. There is scope for the parties to incur significant additional wasted costs in disputing that question.

231. In relation to the costs of the issues raised by the cross claim, as I have noted above at [27], the Court has not been required to determine whether the relief sought in prayers 1 to 4 should be granted because of White Rock's agreement on the third day of the hearing to an order being made that it specifically perform clause 6 of the Deed of Release. In principle, the result should be that the costs order in respect of prayers 1 to 4 of the cross claim should be determined on the basis that the cross claimants were successful, and their costs of those issues should be payable by White Rock.

232. The cross claimants also succeeded in their claim for relief in prayer 5 of the cross claim. In principle, White Rock should be ordered to pay the cross claimants’ costs of that claim.

233. The cross claimants substantially failed in their claim in prayer 6 for an order against White Rock that it specifically perform and carry out its agreement to undertake the works in the "punch lists". The Court has found that, at least in the circumstances as presented to the Court by the evidence, those obligations were inherently not appropriate to be the subject of an order for specific performance. The Court understands that, in any event, the dispute between the parties concerning the performance of the works in the "punch lists" changed over time, as White Rock addressed many of the listed works. The Court has been able to make limited orders concerning the performance of the works in the "punch lists", but that has only been to the extent that the parties have agreed as to the terms of that order. In these circumstances, in principle, the cross claimants should be ordered to pay White Rock's costs of this claim, as the measure of success that they have achieved with the ultimate agreement of White Rock is, as I understand it, a small proportion of the relief originally claimed.

234. In relation to the cross claimants' claim for damages in prayer 7 of the cross claim, that claim was ultimately limited to Mr Wood's claim for damages for breach of clause 6 of the Deed of Release. Mr Wood failed on that claim, so the cross claimants should in principle be ordered to pay White Rock's costs of that claim.

235. Although there will often be unsatisfactory consequences of the Court making differential orders against the parties in respect of the costs of separate issues, there is no convenient way in the present case for the Court to avoid the application of that approach. There is no realistic way that the Court can make any judgment as to a global basis for one party to be ordered to pay a stated proportion of the costs incurred by the other party or parties.

Orders

237. For the reasons given above, I propose that the orders of the Court should be in the following terms:

1. Order that the plaintiff's claims in prayers 1 and 3 of the summons be dismissed.

2. Note that the plaintiff's claim for the relief in prayer 2 of the summons was abandoned at the hearing.

3. Dismiss the plaintiff's claim for the relief in prayers 4 and 5 of the summons.

4. Note that the dismissal of the plaintiff's claim for relief in prayers 4 and 5 of the summons is made without any finding as to the merits of those claims.

5. Note that the relief claimed in prayers 1 to 4 of the cross claim has been obviated by the making of an order for specific performance against the cross defendant at the hearing.

6. Order that the cross defendant specifically perform and carry out its agreement of 23 December 2015 to undertake a survey and create an easement to accommodate the realignment of the right of way to allow for the access tracks to cross the boundaries of land owned by the defendants.

7. Grant leave to the parties to apply for such relief as may be necessary or convenient to give proper effect to the previous order for specific performance.

8. Note the agreement between the parties to the cross claim concerning the performance by the cross defendant of the works in the “punch lists” referred to in prayer 6 of the cross claim, being:

1. The list appearing at CB 2041 to CB 2042 is the Agreed Punch List between them for the purposes of clause 25 of the Dulhunty Lease as varied.

2. The list appearing at CB 2046 to CB 2048 is the Agreed Punch List between them for the purposes of clause 25 of the Wood Lease as varied.

3. Within six months of final orders;

1. White Rock will rectify the V-shaped drain identified as Dulhunty Punch List Item 7.

2. White Rock will remove timber piles that have been left throughout the property identified as Dulhunty Punch List Item 8, provided that those timber piles are a consequence of the construction of the wind farm.

3. White Rock will remove felled trees as identified as Wood Punch List Item 27.

4. White Rock will complete remediation work on the culvert outlet, batter chute and reshaping of the land beneath it identified as Wood Punch List Items 60, 100 and 104.

5. White Rock will remediate the scouring and erosion on the TransGrid Track identified as Wood Punch List Item 102.

6. White Rock will remediate all batters on the Dulhunty Land, provided that those batters require remediation and are able to be remedied.

4. In accordance with Clause 25.3(a) of the Variation of Lease between Mr Dulhunty and White Rock Wind Farm, White Rock will notify Mr Dulhunty in writing of any punch list items which it considers have been completed.

5. In accordance with Clause 25.3(a) of the Variation of Lease between Mr Wood and White Rock, White Rock will notify Mr Wood in writing of any punch list items which it considers have been completed.

6. In accordance with Clause 25.3(a) of the Variation of Lease between John Wood (Harvesting) Pty Ltd and White Rock, White Rock will notify John Wood (Harvesting) Pty Ltd in writing of any punch list items which it considers have been completed.   

9. Order the plaintiff to pay the defendants' costs of the issues raised by the summons.

10. Order the cross defendant to pay the cross claimants' costs of the issues raised by prayers 1 to 5 of the cross claim.

11. Order the cross claimants to pay the cross defendant's costs of the issue raised by prayers 6 and 7 of the cross claim.

238. The Court will only have a limited time to make final orders in these proceedings. The parties should inform my Associate by 11 December 2023 if they agree with the proposed orders set out above, and if they do not, they should provide concise written submissions concerning the orders that should be made.

**********

Amendments

20 December 2023 - Correction to typographical errors at [203], [237(1)] and [237(6)].

Decision last updated: 20 December 2023