Lipari v Olives & Anor [2001] NSWSC 849

New South Wales Supreme Court

CITATION : Lipari v Olives & Anor [2001] NSWSC 849 CURRENT JURISDICTION: Equity FILE NUMBER(S) : SC 4589/99 HEARING DATE(S) : 17/9/01-19/9/01 JUDGMENT DATE : 27 September 2001

Gwynth Lipari (Plaintiff) PARTIES : Wilfredo Zaragoza Olives (Defendant) Mercedia Medina Olives (Defendant) JUDGMENT OF : Brownie AJ

COUNSEL : D Godwin (Plaintiff) M Dempsey (Defendants) SOLICITORS : W G Cannington & Sons (Plaintiff) John S Zouroudis & Co (Defendants) CATCHWORDS : Injunctions - Mandatory injunction - No question of principle LEGISLATION CITED : s. 89 Conveyancing Act 1919 Contracts Review Act 1980 CASES CITED : Morris v Redland Bricks Limited [1970] AC 652 DECISION : Injunction to be granted on terms to be settled

IN THE SUPREME COURT

OF NEW SOUTH WALES

EQUITY DIVISION

BROWNIE AJ

27 SEPTEMBER 2001

4589/99 - GWYNTH LIPARI v WILFREDO AND MERCEDIA OLIVES

JUDGMENT 1 The plaintiff is the registered proprietor of the land known as 69 Hannan Street Maroubra, and the defendants are the registered proprietors of the land known as 71 Hannan Street. The two properties are situated on the eastern side of the street, and the plaintiff's property is immediately north of the defendants' property. Each parcel of land is rectangular in shape, 10.82 metres wide and 30.175 metres deep. The land slopes down toward the east. 2 The two blocks were part of a larger area of land, subdivided in 1913, when it was not thought necessary to provide for off-street car parking. The land now owned by the plaintiff was formerly owned by her late father, and the land now owned by the defendants was formerly owned by a Mr Dive. In 1960 the plaintiff's father and Mr Dive granted to each other easements over two strips of land on either side of the boundary line between their two blocks of land, so as to create a shared driveway. 3 The space available was limited, but the relationship between the two men was evidently amicable, and they came to an arrangement which benefited them both. The plaintiff's father granted to Mr Dive a right of way over a strip of land 0.915 metres wide, running immediately to the north of his southern boundary line, whilst Mr Dive granted to the plaintiff's father a right of way over a strip of land 1.065 metres wide, situated immediately to the south of his northern boundary line. Between them, they then had a strip of land 1.98 metres wide, which both could use. They built a driveway along that strip of land, and each man built a garage in his back garden, close to the common boundary line, and at the eastern end of their respective properties. 4 There were various encroachments upon the strips of land affected by the easements, either from the time the easements were granted, or soon afterwards. Thus, the eaves and guttering of what is now the plaintiff's house encroached by up to 0.24 metres, the garage by up to 0.26 metres, and the eaves of the garage by up to 0.56 metres. On the other hand, the northern wall of Mr Dive's garage encroached onto the plaintiff's land by up to 0.175 metres. 5 The northern wall of Mr Dive's house did not encroach upon the land effected by the easements. It lay 0.045 to 0.065 metres south of the southern edge of that land. Similarly, the southern side of the plaintiff's father's house lay about 0.15 metres north of the northern edge of the land effected by the easement. That is, in practice, the two men had a formal driveway, protected by the easements, 1.98 metres wide, but were able to utilise a total space approximately 2.175 metres wide. 6 None of these matters appears to have caused any friction. 7 The plaintiff, who is a widow now aged 80, was born in the house that she now owns, and has lived there all her life. After the death of her father, her mother became the owner of the property, and the plaintiff inherited it upon the death of her mother. 8 The defendants bought their property in 1992. They let it to a tenant until 1998, but then recovered possession, demolished the old house, and caused to be erected a new two storey brick house, with a garage at the front, under the main roof. The northern wall of the new house is located on the line marking the southern edge of the strip of land affected by the easement granted by Mr Dive in favour of the plaintiff's father. In the course of their builder carrying out the construction work for the defendant, the builder effectively destroyed the concreted surface of so much of the common driveway as stood upon the defendants' land. 9 On the completion of the building work, the following changes had been effected. The old garage had been demolished; the concrete surface of the former driveway had been removed, as to so much of it as stood upon the defendants' land, and the surface of the land, formerly covered by this concrete surface, had been lowered by several centimetres, the extent of this alternation in level being greater towards the western end of the property than at the eastern end; and the new house encroached upon the land affected by the easement in various ways. 10 First, there was a stormwater downpipe, falling from the roof level to the ground level. This pipe encroached 0.05 metres upon the land affected by the easement. Secondly, there were three PVC sewer pipes, located on the external side of the northern wall of the house, and they encroached variously by 0.14 or 0.15 metres. Thirdly, there were some PVC pipe caps, located on the northern most surface of these sewer pipes. The effect of the pipes and the caps, considered together, was that there was a total encroachment of 0.20 metres. Finally, the eaves and guttering, located at roof level, encroached 0.46 metres over the land affected by the easement. 11 The plaintiff seeks a mandatory injunction requiring the defendants to remove the sewer pipes from the northern wall of their house, and for the restoration of the surface of the former driveway and/or damages. The defendants resist this, and by their cross-claim, seek to have specifically enforced an agreement for the release of the easement of right of way granted by Mr Dive in 1960; alternatively, they seek an order under section 89 of the Conveyancing Act 1919 for the extinguishment of the easement; and they claim damages for breach of the agreement to release the easement. The plaintiff resists all this, and asserts that, if there was an agreement made, as asserted by the defendants and denied by her, she is entitled to relief under the provisions of the Contracts Review Act 1980. 12 The four principal witnesses in the case were the plaintiff, her son David, and the two defendants, Mr and Mrs Olives. I accept all four of them as honest witnesses, but prefer the evidence of the defendants, on the basis that their evidence is more likely to be reliable than that of the plaintiff or her son. It was clear that English is not the first language of the defendants, and this occasionally led to uncertainty in the case of Mr Olives, particularly when he was asked a question containing one or more negatives. I think it is also reasonably clear that they were unfamiliar with the legal niceties involved, and that they left a lot to their builder, the local council and their solicitor, assuming that those involved knew what they were doing. 13 On the defendants' case, there was an agreement reached for the release of the easement, but the plaintiff retreated from that agreement just before it was perfected. On the plaintiff's case, there was no such agreement. To state my conclusion first, I accept the general thrust of the defendants' evidence, and I consider that the parties reached what a non-lawyer would regard as an agreement, but that the agreement was not one that was legally binding. 14 On the defendants' case, they introduced themselves to the plaintiff and her son David, as new neighbours, in about February 1998, and on that occasion there was some brief conversation concerning, amongst other things, the common driveway; and David Lipari said that he did not use it because it was not wide enough. Although the plaintiff and David Lipari denied that this was said, I accept that something along these general lines was said, and that the defendants inferred from what was said on that occasion that the plaintiff agreed that the driveway had no utility, and that in due course the defendants could erect a dividing fence along the boundary line between the two properties. 15 There was a separate issue debated, as to whether in fact anyone in the plaintiff's family did use the driveway. I accept that, in years gone by, it was used by the plaintiff's father, and by her sons David and Vivian as well as by Mr Dive and later by someone else who lived in his house, but on the whole I do not think it is established that David Lipari or anybody else used it either in 1998 or 1999. 16 The plaintiff herself has never had a driver's licence, and her son Vivian had left home long before. David Lipari had two motor vehicles, a Corolla and a Land Rover. The latter would not fit into the plaintiff's garage: its height was apparently so great that it would not fit through the garage doors, but on the plaintiff's case, David Lipari sometimes drove the Land Rover down the driveway, so that he could carry out work on it in the area between the plaintiff's house and her garage. I accept that this was done at times, but not during 1998 or 1999. 17 According to the defendants' case, David Lipari said in February 1998 that he did not use the driveway any more "because my car is too big, it does not fit any more". Notwithstanding his denials about this, I think the evidence establishes that it would have been very awkward for him to have driven the Land Rover down the driveway between the two existing houses. This is particularly so, in that because of the limited space available, it would have to be either driven in and reversed out, or reversed in and driven out. 18 He said that he left home in August 1998, and was absent for about five months, driving around Australia. It is clear that before he left, the old house and the old garage on the defendants' land had been demolished, and that in the course of that demolition work, the concrete surface of so much of the common driveway as had stood upon the defendants' land had been removed; and it is possible that the work of building the new house had commenced. 19 On 3 August 1998 David Lipari complained in writing that the work carried out by way of demolition had caused damage to the plaintiff's house, and in effect he sought compensation on her behalf. On the hearing no attempt was made to press this claim which seems to have been unjustified. However, what seems to me to be significant is that, before he left on his holiday, neither he nor the plaintiff made any other complaint about the work carried out for the defendants. 20 The relationship with the plaintiff and the defendants remained cordial until March or April 1999, and the defendants' builder proceeded with the building work. Just after Christmas 1998 Mrs Olives called at the plaintiff's house with a Christmas present, and David Lipari opened the door. (It is difficult to reconcile the dates and the periods mentioned in the evidence. It may be that Mr Lipari was absent for a little over four months, rather than five months, but if so it goes only to the question of the reliability of the evidence of some of the witnesses.) 21 Mr Olives spoke of a conversation with Mr Lipari in January 1999, relating to the construction of a dividing fence along the common boundary line: a brick fence at the front, or western end, and a Colorbond fence at the eastern end; and Mr Olives said that Mr Lipari brushed aside the suggestion that solicitors should be retained. 22 Mr Lipari agreed that he had had a conversation with Mr Olives, but denied that there had been any mention of a fence or a solicitor at that stage. On his version of events, his mother had told him upon his return from his holiday, that the defendants were lovely people, who were going to build her a new pathway, a new fence and a gate. Then, he said, he spoke to Mr Olives in February and agreed to speak to the defendants' solicitor. Later, there was a further conversation with Mr Olives in March, on which occasion he told Mr Olives that the defendants could not put a fence along the boundary line without the plaintiff's permission. 23 The first defendant did see his solicitor, Mr Zouroudis. On 26 March 1999 Mr Zouroudis wrote to the plaintiff in these terms:- "We act for Mr & Mrs Wilfredo Olives. In accordance with instructions received from Mr & Mrs Wilfredo Olives we have prepared the Transfer Releasing Easement (Release of Right of Carriageway) benefiting your property and burdening the adjoining property owned by our clients. It will be necessary for you to obtain legal advice in relation to this document so that you are fully aware of its consequences ie. The Release of the Right of Carriageway which presently benefits your property. Our clients have also agreed to release that part of the Right of Carriageway which affects your property and benefits theirs. The intent of registering the two Transfers Releasing Easements is that the Right of Carriageway will be completely extinguished over both properties. It will be necessary for your Solicitor to produce at the Land Titles Office your Certificate of Title Folio Identifier 2/949459 to permit the Transfer Releasing Easement which benefits and affects your property to be registered. Our clients Title will also be produced for the same purpose. We understand that you will be seeking the assistance of the Kingsford Legal Centre in relation to the above and you should take this letter with the original Transfer Releasing Easement to them for the appropriate advice and action on your behalf." 24 The fifth paragraph of this letter was printed in bold type. 25 Mr Lipari then spoke to Mr Zouroudis, who told Mr Lipari that he had instructions that there was already an agreement to the effect that the defendants would construct a new side fence at their expense, but that he needed to send some paperwork to the plaintiff for her signature. According to Mr Lipari, he told Mr Zouroudis that there was no agreement, until it was put in writing, and that his mother would not sign any document without his permission. 26 Mr Zouroudis did not give evidence (he was acting for the defendants in the litigation) but this conversation, as related by Mr Lipari, might well have preceded the writing of the letter of 26 March. In any event, Mr Lipari drafted and typed out, and his mother signed a letter to Mr Zouroudis' firm dated 31 March 1999 in these terms:- "In accordance with Mr & Mrs Wilfredo Olives requests and past conversation prior to the writing of this letter to yourselves dated 31/03/99, between myself and the Olives, both parties have arrived at a reasonable and satisfactory solution to overcome the problem of RIGHT OF CARRIAGEWAY which existed between previous owner of 71 Hannan St, and myself. The Olives have agreed verbally that at their expense, the carriageway between 69 & 71 Hannan St Maroubra, which was demolished by their wrecking crew in the clearing of their land, will be replaced by pathway or pathways and fence line, between both properties. From front fence, bounding Hannan St, low and ornate brick fence to be erected up to their garage, some 20 odd feet in all, from that point a colour bond fence, 5.1 feet in height, to their back fence, already erected, be installed to complete the said, fence line. In return for above considerations, I am prepared to acknowledge receipt of the consideration of $1.00 and as registered proprietor of the dominant tenement TRANSFERS and RELEASES the abovementioned Easement to the TRANSFEREE as registered proprietor of the servient tenement. Before document 97-01TR, Transfer Releasing Easement, Real Property Act 1900, can be signed, witnessed and returned to your clients, it will be necessary for your clients, to have all of the above considerations listed and tabled in writing, signed and witnessed, only then can the matter of Easement number H686195, RIGHT OF CARRIAGEWAY, be fully resolved. Hoping that this compliance will not offend your clients, who I am very close to and look forward to their long term occupancy of 71 Hannan St, and a deep continuing friendship develop with them both and our families." 27 There was then some further discussion between Mr Lipari and Mr Olives, about the detail of the work to be done, relating to the pathway on the plaintiff's side of the proposed fence, the conversation being conducted by reference to a plan. Mr Lipari took the plan inside, spoke to his mother, and then delivered to Mr Olives a form of transfer, apt to release the easement, that had been included in Mr Zouroudis' letter of 26 March. This form had been signed by the plaintiff. This event happened on 18 April. On 20 April, Mr Zouroudis wrote to the plaintiff in these terms:- "We have been advised by Mr & Mrs Olives that agreement has been reached between you on the work they are to carry out to the pathway on your property as evidenced by the copy of the attached plan. Would you please advise whether you require anything further before you sign the Transfer Releasing Easement previously forwarded to you. We look forward to hearing from you." 28 The plaintiff then consulted Mr Cannington, a solicitor in practice in the Newcastle district, who was a distant relative of hers, and who had acted for her previously. Correspondence between Mr Cannington and Mr Zouroudis followed. I refrain from setting out the detail of that, but note that it commenced with Mr Cannington saying:- "We are instructed that there had been an agreement with Mrs Lipari about the release of the easement but on further consideration she has decided that she will not release the easement and has instructed us to seek Counsel's opinion on the subject." 29 On the same day, Mr Cannington wrote to the defendants saying amongst other things, and of the plaintiff:- "She instructs us that she had previously agreed about the release of an easement to your land for the purpose of carriageway." 30 I take the view that there was an oral agreement, to the general effect contended for by the defendants. This is consistent with the contemporary documents and with what seems to have been the conduct of the parties, including for this purpose Mr Lipari. I think that, more likely than not, the agreement would have been carried into execution, but for the fact that Mr Lipari took the view that his mother's property had been devalued by $50,000 by virtue of the loss of the benefit of the easement; and he wished to see her compensated for that loss. 31 However, the agreement could not have been carried into effect without the production to the Land Titles Office of the plaintiff's certificate of title, and the plaintiff never produced, or agreed to produce the certificate of title. 32 As mentioned at [11] the plaintiff seeks a mandatory injunction. Part of her case was constituted by a suggestion that the defendants had acted in a way that was generally unreasonable and wanton, so as to attract the exercise of discretion in her favour, notwithstanding the hardship that such an order would cause the defendants: see Morris v Redland Bricks Limited [1970] AC 652 at 666. Without going into the detail of the evidence as to this, I consider that not only did the defendants successfully defend themselves against this suggestion, but that I am positively satisfied that the contrary is the fact. The defendants appear to me to have acted quite reasonably, although what they did, through their builder, constituted an infringement of the plaintiff's rights. 33 The plaintiff submitted that there was no evidence of hardship. It is certainly thin, but looking at the photographs which are in evidence, it seems quite clear that if there were to be an injunction granted, requiring the removal of the sewer pipes, the defendants would have to do a great deal of work which I infer would be quite expensive. 34 Given the limited extent to which the pipes and caps encroach upon the land affected by the easement, the conduct of the parties in agreeing in principle that a boundary fence might be erected along the line of their common boundary, thereby effectively rendering the former driveway unusable for vehicles, and the limited use that the plaintiff had made, or might now make, of the former driveway, I do not think that it would be a proper exercise of discretion to make the order sought. 35 The plaintiff herself did not use the right of way. It is true that her son David had used it in the past and that he and others, with the plaintiff's permission, might have used it again but for the work carried out for the defendants, but in a realistic sense it seems likely that the only true value to the plaintiff of the right of way was that a potential future purchaser of her land might regard it as valuable. It might well be the fact that David Lipari suffered some minor inconvenience, in that he could not use the driveway, but his loss is not the same thing as the plaintiff's loss. 36 There was a difference of opinion between two valuers as to the value to be attached to the right of way. For the plaintiff, Mr Langford said that it was worth $50,000. For the defendant, Mr Perkins said that it was worth nothing. It was common ground that the plaintiff's land, with its existing improvements, should be valued at the value of the land alone. However, Mr Langford examined the position so far as concerned land in the area upon which there are semi-detached cottages, and he concluded that in respect of properties answering that description, there was a difference in value, depending upon whether or not the land in question effectively granted a right of vehicular access from the street to the rear of the property. There was dispute about the details, but the principle is, I think, established: in the district, a purchaser of land with a semi-detached cottage upon it will pay more if there is a relevant right of vehicular access than would be the case if there was no such right. 37 However, I do not accept that one can properly extrapolate from this finding a conclusion that the value of the plaintiff's land should be increased, by reason of the existence of the easement, whether by $50,000 or any other sum. On the evidence, the relevant market is not that of land upon which there is a semi-detached cottage, but either vacant land or land upon which there are improvements which a prospective purchaser will wish to demolish. The real value to a prospective purchaser of land such as that which the plaintiff owns is its value as a site for building some new residential structure. What is significant, in this district and in respect of land of this type, is the area of land upon which an owner can practically build - the greater the useable area, the greater the value of the land. In this area, and in respect of properties of this type, owners routinely construct garages under the main roof of the building. To do otherwise is in effect to reduce the area of floor space which might be available in a newly constructed building. 38 In summary then, I do not accept that the plaintiff is presently subjected to more than quite minor inconvenience, which is more that of her son than of the plaintiff herself. She is, however, unable to use the land affected by the easements as a driveway, because of the removal of the concrete surface, and the lowering of the level of the land, on so much of the area of the former driveway as is situated on the defendants' land. She was not, in fact, using the driveway herself prior to the defendants commencing their demolition and building work. 39 The plaintiff has suffered certain minor financial loss, seemingly one sum of $480 and another sum of $3,480. She is entitled to damages to this extent, and if she has actually expended this money, to interest upon it. I consider that she is also entitled in the circumstances to a mandatory injunction to the general effect that the concrete surface of the driveway be restored, and to its former level. The precise terms of an injunction to that general effect will, of course, need to be worked out with care. I do not consider it appropriate to grant her any further relief, at this stage. 40 On this view of the matter, I need not consider the other claims that were pleaded. I direct the plaintiff to bring in short minutes giving effect to these reason for judgment, and I invite submissions as to costs. **********