New South Wales Supreme Court CITATION : Tomara Holdings Pty. Ltd. v. Pongrass & Anor. [1999] NSWSC 1191 CURRENT JURISDICTION : Equity Division FILE NUMBER(S) : No. 2119 of 1999 HEARING DATE(S) : 1 December 1999 JUDGMENT DATE : 1 December 1999 PARTIES : Tomara Holdings Pty. Ltd. - Plaintiff Nicolas Andru Pongrass and Leigh-Anne Clunes-Pongrass - Defendants JUDGMENT OF : Hodgson CJinEq at 1 COUNSEL : R. Walker for Plaintiff S. Gullotta for Defendants SOLICITORS : Sutton & Co., St. Ives for Plaintiff Colin Biggers & Paisley, Sydney for Defendants CATCHWORDS : Real Property - Easements - Construction DECISION : See pars.38 onwards of judgment IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION CORAM: HODGSON, CJ in Eq. Wednesday 1st December 1999 NO. 2119 OF 1999 TOMARA HOLDINGS PTY. LTD. V. PONGRASS & ANOR. JUDGMENT 1 HIS HONOUR: The plaintiff Tomara Holdings is the owner of a property 16 Pearce Street, Double Bay, which adjoins the property 2A Castra Place, Double Bay, owned by the defendants Mr Pongrass and Mrs Clunes-Pongrass. The plaintiff's property has the benefit of a right of way over part of the defendants' property, giving access from Castra Place to the rear of the plaintiff's property. This right of way was created by a transfer in 1961, and contains certain conditions numbered (a) to (f). The defendants gave the plaintiff notice pursuant to those conditions on 12 March 1999, indicating an intention to revoke the right of way unless the notice was complied with. 2 By its summons in these proceedings, the plaintiff seeks a declaration that that notice was invalid, and consequential relief, and also seeks an order modifying the easement to remove conditions (b) to (d). The defendants have put on a cross-claim seeking an order that the plaintiff remove certain encroachments on the easement, and consequential relief, and also orders extinguishing or modifying the easement pursuant to S 89 of the Conveyancing Act. 3 In relation to the s.89 orders sought by the defendants, for reasons given in a short judgment delivered earlier today that matter is not being determined today, but will be dealt with later when further evidence has been put on by both sides. 4 I will briefly outline those facts which are not in dispute. 5 The easement which was created by a transfer from the then owner of 2A Castra Place, was expressed to be subject to the following conditions: (a) That the said Transferees shall at their own cost and expense keep the said carriage way in repair. (b) The said Transferees shall have the right to remove the existing dividing fence between the lands of the said Transferor and Transferees. (c) That if the said Transferees shall remove the existing dividing fence then the said Transferees shall at their own cost and expense erect a suitable dividing fence and gate between the land of the said Transferor and the said Transferees within one month after the said Transferor shall give notice in writing to the said Transferees so to do. (d) The existing gate at the entrance to the carriage way from Castra Place shall not be removed by the said Transferees and shall be kept in repair by the said Transferees at their own costs and expense and shall be kept closed whilst the carriage way is not being used by the said Transferees. (e) The right-of-carriage way hereby granted shall enure so long only as the preceding conditions are observed and performed by the said Transferees and the grant thereof may be revoked by the said Transferor by notice in writing at any time after the Transferees have failed to rectify any breach or non-observance of such conditions within one month after the Transferor shall have given notice in writing requiring such breach or non-observance to be rectified. (f) It is hereby agreed and declared that in the preceding clauses (a) to (e) inclusive the word "Transferees" shall mean Bernard and Yetta Goldstein of 16 Pearce Street, Double Bay or any other registered proprietor for the time being of the land comprised in Registered Certificate of Title Volume 2465 Folio 40 and the word "Transferor" shall mean Leah Pearce of Double Bay or any other registered proprietor for the time being of the land comprised in registered Certificate of Title Volume 1953 Folio 244. 6 The plaintiff acquired its property in 1969; while the defendants acquired their property pursuant to a contract dated 27 September 1997, which was settled on 27 March 1998. It is common ground that at that time there was no gate in place at the entrance to the right of way from Castra Place. There was a dividing fence between the right of way and the plaintiff's property consisting of timber paling, a wire mesh gate and certain wire mesh fencing; and there was a driveway constructed along the right of way, which was at a slightly lower level than the plaintiff's adjoining land. 7 It appears that in about February 1999, the vehicular crossing to the right of way was in disrepair, and the defendants arranged with the Woollahra Municipal Council to reinstate it at a cost of $1,297.00. 8 The notice which I referred to earlier was given on 12 March 1999, and it was in the following terms: We, NICOLAS ANDRU PONGRASS and LEIGH-ANNE CLUNES-PONGRASS being the joint registered proprietors of the property comprised in Certificate of Title Folio Identifier 111/632155 and known as 2A Castra Place, Double Bay HEREBY GIVE YOU NOTICE that you are in default in failing to comply with the conditions of the easement created by Memorandum of Transfer H982926 which dealing creates an easement for right of way over land adjoining our property owned by your Company comprised in Certificate of Title 10/4412 and known as 16 Pearce Street, Double Bay in that you have failed to comply with paragraph (d) of the conditions by: (a) failing to agree to reimburse to us the cost of repair of the entrance driveway, and (b) failing to undertaking (sic) to reinstate gates as referred to in paragraph (d) and in respect of which we have provided to you a quotation to establish gates which would be acceptable to us. NOW YOU ARE FURTHER HEREBY GIVEN NOTICE that if you fail to rectify the non-observance of these conditions within one month after the date of receipt of this notice then we will by further notice to your Company revoke the right of way pursuant to the provisions of paragraph (e) thereof. 9 It appears that on the same day, that is 12 March 1999, surveyors engaged by the defendants attended at the easement, and in the course of their work removed some or all of the paling fence dividing the easement from the plaintiff's property, and took down the wire mesh gate. It seems that later that month, the remainder of the wire mesh fence was taken away, though the evidence is not entirely clear as to the circumstances in which that happened. 10 On 24 March 1999, the plaintiff paid the defendant the $1,297.00 sought by the defendants' notice. 11 These proceedings were commenced on 27 April 1999. 12 It appears that there are also proceedings between the plaintiff and the defendants under the Dividing Fences Act at a Local Court, in which the issue will be the nature of a suitable fence between the easement and the plaintiff's property. The contention of the defendants will be that it should be a brick fence; while the contention of the plaintiff will be that it should be a paling fence, and that in substance the plaintiff should have to contribute to the cost only to the extent of one half of the cost of a paling fence. 13 The issues debated before me are essentially the present and continuing effect of the easement in relation to the gate between Castra Place and the easement, and the dividing fence between the easement and the plaintiff's property; and secondly, the encroachments alleged to exist from the plaintiff's property on to the easement, and whether any order should be made in respect of them. 14 With respect to the first issue, there is a factual question concerning the circumstances in which there came to be no gate between Castra Place and the easement. 15 There is in evidence a photograph of a gate which, according to a director of the plaintiff, Tamara Barrientos, existed prior to 1983. I see no reason to doubt that this photograph does correctly show a gate existing between Castra Place and the easement prior to 1983. 16 Ms Barrientos also gave evidence that in or about 1983, when she was about 13 years old, she observed work being carried out on the defendants' property which included the demolition of a cottage on that property, the building of a new house, the lowering of the level of the driveway on that property, and the removal of the gate. Ms Barrientos gave evidence that she saw the previous owner of the defendant's property, Mr Scarf, speaking to the contractors involved in those operations. She gave evidence that the plaintiff was not involved in the removal of the gate. 17 Ms Barrientos was cross-examined by Mr Gullotta for the defendants, and ultimately conceded that the only matter she was certain about in relation to the removal of the gate was that it was removed; but in my opinion that did not remove the basis in her evidence for the Court accepting the other matters which I have outlined. In the course of cross-examination, Ms Barrientos mentioned that she had spoken to Mr Scarf; and it emerged in re-examination that this was a recent conversation. I indicated at the time that I would not give weight to that evidence, unless I was satisfied that it arose out of the cross-examination. I have to say that the position is not entirely clear in my mind whether it did fairly arise out of cross-examination or not; and as I am satisfied, for reasons I will give, from other evidence that the gate was in fact removed by the defendants' predecessor in title, I will not rely on that particular piece of evidence. 18 Ms Barrientos' mother was in court and did not give evidence. Ms Barrientos was asked a reason for this, and said that her mother would not be able to readily stand up to giving evidence in this Court. 19 Mr Gullotta submitted that I should not be satisfied by this evidence that the gate was removed by Mr Scarf. He submitted that it did not exclude the possibility that it was removed at the instigation of the plaintiff, or that the contractors did it of their own initiative. He pointed to a benefit to the plaintiff that could have come from the removal the gate, namely, easier access, particularly for tenants who gained access to their part of the plaintiff's house by a set of stairs adjacent to the right of way. Mr Gullotta submitted it would be uncommon for an owner to remove his own gate. He also relied on the failure of the witness' mother to give evidence, particularly in circumstances where the witness herself was only 13 years old at the time the events happened. 20 Taking into account all those matters, it still seems to me that I should accept Ms Barrientos' evidence that the gate was removed by contractors at a time when Mr Scarf was undertaking extensive work on his own property, including work on the driveway and the building of a new house, and that those contractors were seen talking with Mr Scarf. Accepting that evidence, I think there is a clear inference that the court should draw that the gate was removed as part of this enterprise by Mr Scarf, and I do draw that inference. 21 I might say Mr Walker also sought to rely on an admission contained in a letter written by Mr Pongrass. I do not give any weight to that admission. It seems to me that that is fairly regarded as responding to an assertion made on behalf of the plaintiff, in circumstances where at the time Mr Pongrass did not know one way or the other what the true situation was. 22 The next question is what effect does the easement have in circumstances where the gate was removed by the defendants' predecessor in title. 23 Mr Gullotta, as I understand it, accepted that in those circumstances the defendant couldn't, by notice, require the plaintiff to install a new gate. However he did submit that once a new gate was installed, the terms of paragraph (d) of the easement would apply to the new gate, and that the plaintiff would be obliged to keep that new gate in repair. He also submitted that, should I not be satisfied as to who removed the gate, the terms of paragraph (d) would apply to require the plaintiff to reinstate the gate. Because of the finding of fact I have made, that question does not arise; but I would indicate that in my opinion the obligation in paragraph (d) upon the plaintiff to ensure that the "existing gate" be "kept in repair" would not extend to installing a new gate if the existing gate was removed by persons unknown. 24 Mr Gullotta provided short written submissions concerning the construction of paragraph (d), which I will leave with the papers. He submitted that "repair" included "restore", and that the intention to be derived from paragraph (d) was to cast responsibility for the maintenance of the gate in situ wholly upon the transferees of the easement and their successors in title. 25 In my opinion paragraph (d) does only apply to the "existing gate", and that in circumstances where that gate was removed by the defendants' predecessor in title, paragraph (d) can have no further application. 26 In relation to paragraphs (b) and (c), Mr Walker submitted that those paragraphs also had no further application. He submitted that, even if the plaintiff was responsible for removing part of the existing fence, nevertheless the whole matter dealt with by paragraph (b) and (c) had been overtaken and subsumed in the dividing fences dispute being dealt with by the Local Court, and was really governed by the provisions of the Dividing Fences Act. 27 In my opinion, in circumstances where the Dividing Fences Act proceedings are progressing and where the precise responsibility in relation to the removal of the existing fence has not, to my satisfaction, been clarified, I should not make any finding one way or the other as to whether paragraphs (b) and (c) have any continuing application. I would merely remark that, on a realistic approach, the defendants wished to have a new fence erected, and was responsible for at least part of the removal of the existing fence. It seems, therefore, unlikely that the situation which has actually arisen is a situation intended to be dealt with by paragraphs (b) and (c). However, I am not prepared to either remove (b) and (c) or make a declaration that they can have no further application. 28 The other main issue in the case concerns the existence of encroachments, and what if anything should be done about them. 29 There is evidence from the defendants that the original dividing fence was on the defendants' land, that is upon the easement, and that the fence was in part set in a concrete footpath which extends into the easement at a height greater than the driveway along the easement. There is also evidence that there are tree roots from the plaintiff's land encroaching on to the easement. However, the survey evidence which has been provided is not clear as to the extent of the encroachments. There indeed seems to be some inconsistencies between Annexures P4 and P5 to Mr Pongrass' affidavit. Annexure P4 refers to a small concrete ramp placed upon the easement and adjacent to the plaintiff's property, and it is possible that that ramp was placed there so as to enable the carriageway to be used for access to the plaintiff's property notwithstanding the lowering of the level of the carriageway by the defendants' predecessor in title. 30 In any event, it seems that the nature and placing of the dividing fence will have a significant effect upon exactly what is done at the boundary between the plaintiff's property and the easement. Furthermore, there is evidence from Ms Barrientos that the plaintiff has at all times been ready willing and able to remove any encroachment but has not received the authority necessary to enter on to the defendants' land to do so, and that the plaintiff has not been provided with any quote for such work to be done by the defendants' contractors. There is in evidence a letter apparently sent by Mr Pongrass dated 24 March 1999 dealing with the question of encroachment; but having regard to the totality of the state of evidence to which I have referred and to the impending dividing fences proceedings, in my opinion a case has not been made out by the cross-claimants for an injunction requiring the plaintiff to remove the encroachments. 31 For those reasons, what I propose is that I make a declaration that the notice of 1 March 1999 is invalid in respect of paragraph (b) of that notice. I do not see any necessity to restrain the defendants from revoking the easement: plainly, in the light of that declaration and in the light of the previous payment of $1,297.00, the defendants are not entitled to revoke the easement. I do not propose to make any order modifying the easement, but I do propose to declare that paragraph (d) of the easement has no continuing effect. In relation to the cross-claim I would propose dismissing paragraphs 1, 2 and 3, and paragraphs 4A and 4B would be stood over to a later date. 32 In relation to costs, Mr Walker seeks an order for the costs of proceedings to date, and also seeks an order that at least some of the costs be on an indemnity basis. He has referred me to an offer of compromise in relation to paragraphs 1 to 3 of the cross-claim, whereby what was offered was that the plaintiff pay the defendants $560 and that there be no order as to costs. This was followed up by a further document on 29 November. 33 My decision on paragraphs 1, 2, 3 of the cross-claim has not been on the basis that the defendants have no rights in relation to the removal of the encroachments, or that such rights as they have are of no value or of any value less than or equal to $560.00. It rather is that, in the circumstances outlined, I did not think a case was made out for the intervention of the Court to order the plaintiff to take any particular action at the moment in relation to those encroachments. The defendants retains whatever rights they have in relation to the encroachments. For that reason, I do not think this material impacts significantly on the discretion as to costs, and I will not order indemnity costs. 34 For the defendants, Mr Gullotta has submitted that a substantial part of costs have been incurred in relation to the interpretation and the continuing effect of a document created by someone other than the defendants, and that in respect of those matters the defendants have had some success. There is some force in that submission, but in my opinion the occasion for these proceedings is essentially the notice of 12 March 1999, and in relation to matters connected with that notice the plaintiff has been entirely successful. I don't think the other matters have really added anything significant to the costs of the proceedings. 35 The orders that I will make will only relate to the cost of the proceedings to date. 36 The relief sought in paragraphs 4A and 4B of the amended cross-claim can still be pursued, and costs in relation to that will no doubt follow the event of those claims. However, because of the way in which those claims came to be adjourned, I do not think that justifies any diminution in the costs order in favour of the plaintiff for the proceedings to date. 37 For those reasons, these are the orders I make. 38 I declare that the notice of default dated 12 March 1999 by the defendants to the plaintiff in respect of easement created by transfer H982926 is invalid as regards paragraph (b) of that notice. 39 I declare that paragraph (d) of the said easement is of no further effect. 40 Otherwise I dismiss the summons. 41 I dismiss paragraphs 1, 2 and 3 of the amended cross-claim. 42 I order that the defendants pay the plaintiff's costs of the proceedings to date. 43 In relation to paragraphs 4A and 4B, 5, 6 and 7 of the amended cross-claim, I stand the cross-claim over to 7 December 1999 before the Registrar. 44 The exhibits may be returned. 45 In relation to the documents produced on subpoena by the Woollahra Municipal Council both parties can have photocopy access to those. ********** Last Modified: 12/07/1999 DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. 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