Katakouzinos v Roufir Pty.Ltd. [1999] NSWSC 1045

Reported Decision : [2000] 9 BPR 17,303

New South Wales Supreme Court CITATION : Katakouzinos v Roufir Pty.Ltd. [1999] NSWSC 1045 CURRENT JURISDICTION : Equity Division FILE NUMBER(S) : No.3862 of 1999 HEARING DATE(S) : 5th October 1999, 15th October 1999 JUDGMENT DATE : 20 October 1999

PARTIES : Dimitrios Katakouzinos and Mary Katakouzinos - Plaintiffs Roufir Pty.Limited - Defendant JUDGMENT OF : Hodgson CJinEq at 1

COUNSEL : Mr. R. Evans for plaintiffs Mr. L. Aitken for defendant SOLICITORS : Phillip Bushby International, Sydney for plaintiffs Perkes & Stone, Sydney for defendant CATCHWORDS : Easements - Creation ACTS CITED : Conveyancing Act s.88K DECISION : See end of judgment

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION

CORAM: HODGSON, CJ in Eq.

Wednesday 20th October 1999

NO. 3862 OF 1999 KATAKOUZINOS V. ROUFIR PTY. LIMITED

JUDGMENT

1 HIS HONOUR: The plaintiffs own the property 112-116 Campbell Parade, Bondi Beach, folio identifier 2/5953, on which they wish to erect a five storey building. The defendant owns the property adjoining the plaintiffs' property to the south, namely 108 Campbell Parade Bondi Beach, folio identifier 3/5953, on which is erected a private hotel known as "The Biltmore". The plaintiffs say that in order to erect their building they need certain temporary easements over the defendant's property, and in these proceedings they seek an order under s.88K of the Conveyancing Act granting these easements. 2 I will commence with a brief history of the dealings between the parties. 3 Prior to December 1998 there was erected on the plaintiffs' property a four storey block of flats. This building extended to the southern boundary of the plaintiffs' property, that is the boundary adjacent to the defendant's property, for the first ten metres from the street frontage, and also for the last seven metres to the rear of the property, and to about one metre from that boundary for the next twelve metres after the first ten metres from the street. It seems that this building extended to the northern boundary for the whole of the length of that boundary. 4 The building on the defendant's land has its northern wall at a distance of about 1.115 metres from the plaintiffs' southern boundary. On the area between the defendant's building and the plaintiffs' southern boundary, there is a paved passage which is, amongst other things, a fire exit passage. There is evidence that between about 1995 and about the end of November 1998 there were substantial renovations effected to the defendant's building, including the installation of a sprinkler system and a new fire escape which leads to this passage. 5 In February 1998, the plaintiffs obtained a building approval for their proposed new building, and they subsequently entered into a building contract with Austruc Constructions Ltd for a price of $3.3 million. 6 On 17 November 1998, Austruc wrote a letter to George Verebes, the principal of the defendant, attaching a report concerning the demolition and construction phase of the plaintiffs' project, and showing the safety scaffolding which would be required, including scaffolding extending into the defendant's property. The letter went on to request permission to erect that scaffolding for four weeks for the demolition of the existing building, and for thirty weeks during the construction of the new building. 7 According to Mr Verebes, some time in November 1998 he conveyed to the plaintiffs' architect, Alex Smith, that he would agree to the scaffolding for the four weeks, but was not sure about the scaffolding for the building phase. 8 On 2 December 1998, there was a letter written by Simon Wakerman, an architect acting on behalf of the defendant, to Mr Smith, confirming the permission to erect the scaffolding on the basis of a payment of $500 per week for four weeks and $1,000 per week for any additional week, and other conditions set out in that letter. 9 On 3 December 1998, Mr Smith replied, in substance agreeing with those conditions. It appears that between about 4 December 1998 and 24 December 1998 this scaffolding was in place for the demolition. It may be that the demolition itself took a little longer, because in a letter dated 10 March 1999 Mr Fenwick, Austruc's construction manager, asserted that the demolition was completed on 15 January 1999. 10 On 8 January 1999, Mr Verebes wrote a letter to Bill Katakouzinos, the plaintiffs' son, complaining about the demolition of the security fire exit door to the passage and damage to the pathway along the passage, and other matters resulting from demolition work. On 6 March 1999, Mr Wakerman wrote to Mr Fenwick concerning excavation which had taken place on the plaintiffs' property, claiming that it had led to erosion from the defendant's property and damage to the path and an associated drain. The evidence makes it clear that Mr Verebes was not satisfied with the response made to these complaints on behalf of the plaintiffs. 11 On 14 April 1999, Mr Smith wrote to Mr Wakerman enclosing details of the proposed scaffolding for the construction phase. According to these proposals, the scaffolding would have no contact with the ground, but would, in effect, project from the first floor upwards and would project to a maximum of seven hundred millimetres into the defendant's property. 12 On 25 May 1999, Mr Wakerman wrote to Mr Fenwick complaining about cracks appearing in the facade of the Biltmore Hotel, and claiming that this was caused by the work on the plaintiffs' land. 13 It appears that in about early July 1999, there was a conversation between Mr Verebes and Bill Katakouzinos, where Mr Katakouzinos said words to the effect that the plaintiffs would soon be needing the air space rights for the scaffolding for the construction phase. It appears that Mr Verebes said words to the effect that he had not seen the April letter, to which I referred, but, in any event, he went on to say that he would not consider the grant of air space rights until the plaintiffs had addressed the problems which had been raised by letters such as those to which I have referred. 14 On 28 July 1999, the plaintiffs' solicitors wrote to the defendant requesting an agreement for the use of the scaffolding, offering $500 per week for such agreement and referring to s 88K of the Conveyancing Act. The letter advised that the builder wished to commence construction in about three weeks. 15 Mr Verebes replied by a letter of 12 August 1999, in which he advised, amongst other things, that access to air space would be granted only after the existing problems had been dealt with. In their reply of 13 August 1999. the plaintiffs' solicitors asked for a document setting out all the defendant's concerns, and Mr Verebes responded with a letter of 16 August 1999 summarising his complaints and seeking a written commitment that all the matters raised would be repaired. 16 The plaintiffs' solicitors responded to this by a letter of the same day seeking confirmation as to their understanding of the complaints, and also requesting advice as to what compensation the defendant thought appropriate for use of the air space. 17 On 18 August 1999, Mr Verebes wrote to the plaintiffs' solicitors indicating that he would supply a report concerning compensation "if and when appropriate" and seeking, amongst other things, $100,000 security in relation to his complaints about damage to his property. 18 Over the next week or so, many letters were exchanged between the plaintiffs' solicitors, on the one hand, and Mr Verebes and the defendant's solicitors, on the other hand, without any resolution. Among other things, Mr Verebes and his solicitors required the actual payment of $2,000 before the solicitors would give, and Mr Verebes would receive, any advice concerning s.88K. 19 In one letter dated 25 August Mr Verebes wrote: "I do not propose to take an extortionary attitude and will be satisfied with a reasonable weekly payment payable 30 weeks in advance together with simultaneous execution of agreements." However, in general terms it was conveyed that this would be considered only when the other problems had been dealt with to Mr Verebes' satisfaction. 20 Further letters were written by the plaintiffs' solicitors to Mr Verebes on 28 August and 31 August 1999, the latter enclosing a draft licence agreement with amendments that had been suggested by Mr Verebes. 21 It appears that on 31 August 1999. Mr Verebes telephoned Mr Bushby, the plaintiffs' solicitor, and said words to the effect that if the plaintiffs wanted the use of the defendant's air space before the other problems had been resolved, he would require payment of $5,000 a day. 22 These proceedings were commenced on 7 September 1999, and the substantial hearing took place on 5 October 1999. After that, there were written submissions, and oral submissions on 18 October. 23 The evidence discloses a lease of a restaurant on the defendant's property to Palzet Pty Ltd. That company had been notified of the proceedings, and the principal of that company has indicated that it did not wish to be involved. 24 There is also evidence that the defendant has leased the remainder of its property to Brampt Pty Ltd, by a lease commencing 4 October. However, as I understand, it is common ground between the parties that I can ignore that lease, and treat any question of affectation and compensation as if the defendant was the only party involved. 25 The issues that need to be considered are essentially those which arise from the terms of s.88K of the Conveyancing Act which as follows: The Court may make an order imposing an easement over land if the easement is reasonably necessary for the effective use or development of other land that will have the benefit of the easement.