Supreme Court New South Wales Medium Neutral Citation: Van Brugge & Anor v Hare & Anor [2011] NSWSC 1640 Hearing dates: 30 November 2011, 13 December 2011 Decision date: 20 December 2011 Jurisdiction: Equity Division Before: Slattery J Decision: Declaration made as sought by the plaintiff. Regime for use and upkeep of inclinator settled. Defendants ordered to pay the plaintiff's costs of the proceedings up to the date of the principal judgment given on 4 November 2011. Catchwords: REAL PROPERTY - Torrens title - easement - parties in dispute as to the form of orders to govern their mutual use and upkeep of the inclinator - parties do not wish to be left merely to their common law rights - parties ask Court to resolve their remaining differences as to the final form of orders. Legislation Cited: Conveyancing Act 1919, s 54A Cases Cited: Bland v Levi [2000] NSWSC 161 Bruce v Nickolaidis & Anor [2011] NSWSC 682 Richard Van Brugge & Anor v Meryl Lesley Hare & Anor [2011] NSWSC 1364 Category: Consequential orders Parties: Plaintiff- Richard van Brugge Second Plaintiff- Chiaki van Brugge Defendant- Meryl Lesley Hare Second Defendant- John Hare Representation: Plaintiff:- T. L. Wong Defendant:- V. R. Gray Plaintiffs- Sparke Helmore Lawyers Defendant- JGP Lawyers File Number(s): 2011/113695 Publication restriction: No. EX TEMPORE Judgment 1This is the second judgment in these proceedings. In my first judgment, given on 4 November 2011, the Court held that the plaintiffs, the owners of the dominant tenement of an easement ("Easement B" as it was called), had the right under the easement to use a mechanical inclinator affixed to the servient tenement: Richard Van Brugge & Anor v Meryl Lesley Hare & Anor [2011] NSWSC 1364. The Court granted an injunction preventing the defendants from interfering with the plaintiffs' use of the inclinator. 2At the time of judgment the Court directed the parties to bring in short minutes of order to give effect to the Court's reasons and to put argument concerning any remaining issues between them. The plaintiffs made a claim for damages in their Summons. This claim was not further pursued. 3But there were issues on which the parties could not fully agree: the precise form of the declaration to be made consequent upon my principal judgment; the arrangements for servicing and repairing the inclinator; the arrangements for bearing the costs and expenses of operating the inclinator; and an appropriate dispute resolution procedure to govern the parties future dealings. After contested argument on 30 November 2011 these issues between the parties were largely settled but a few still remained. The parties asked the Court to resolve them. 4Apart from the dispute about the appropriate form of declaration, the parties disputes were predicated upon a mutual desire to move beyond general declarations and orders that would merely reflect the common law rights of each party. The parties both thought that would leave too much room for debate in their future dealings. They wanted greater certainty. 5Both parties wanted to put in place a regime to govern their mutual use and upkeep of the inclinator, a regime that would be workable and unlikely to generate avoidable further disputes. Nevertheless both parties wanted their remaining differences to be resolved by reference as closely as possible to their respective common law rights. These orders moulding final relief are made bearing this in mind. 6The final orders in the proceedings are set out at the end of this judgment. The differences debated between the parties and decided on 20 December are set out below by reference to the declaration or order number of each disputed order. The first of these relates to Declaration 1. The orders have annexed to them a "Regime for Co-operative Use of Inclinator", which is described as "the Regime" in these reasons. 7Once again Ms T. Wong represents the plaintiffs and Mr V. Gray the defendants on this aspect of the proceedings. Declaration 1 8The plaintiffs successfully contended that the Court should make declaration 1 in the form that was ultimately adopted on 20 December. The defendants competing but unsuccessful contention was in substance that instead of the phrase "reasonable use of the inclinator" in the last line of the declaration, that the form of declaration should read "necessary and reasonable use of the inclinator" [emphasis added]. 9The defendants' contention was based on paragraph [50] of the Court's principal judgment which said:- "[50] For all these reasons the express terms of Easement B grant to the plaintiffs the entitlement to use the existing inclinator. But they must only exercise those rights in a way that is necessary and reasonable." 10Although the Court used the expression "necessary and reasonable" in that paragraph, the Court was not then deciding a contest about the formulation of final orders. Citing as an example Bruce v Nickolaidis & Anor [2011] NSWSC 682; (2011) 15 BPR 28, 2999, Ms Wong now says with some force, that to define the dominant tenement owner's rights of use of the easement as rights that are conditional upon what is "necessary and reasonable", is to trench upon the rights of the dominant tenement owner at common law. She points out that the common law allows the dominant tenement owner to exercise rights of use over the easement "reasonably". I accept Ms Wong's contention that there is no requirement upon a dominant tenement owner at common law to establish that it is "necessary" for such owner to use the easement before its use will be permitted. I accept that at common law a dominant tenement owner does not have to justify using an easement by showing that no alternative was available. Accordingly, I prefer the form of words in the declaration that Ms Wong propounds. Disputed Past Costs - Order 4 11The parties have endeavoured to resolve their differences about a relatively small sum (less than $3,000) of outstanding past expenses for maintenance of the inclinator. But they have failed in that endeavour. Accordingly, it is necessary for this issue to be dealt with in the Court's orders, which establish a regime for future dispute resolution. 12As the amount in issue is minor, the best course to serve the overriding objective of the just, quick and cheap resolution of the proceedings ( Civil Procedure Act 2005, s 58) is to refer this particular issue to the Registrar in Equity for an informal mediation. If the Registrar cannot achieve resolution of this minor matter at mediation then there is no reason why the dispute resolution procedure (Regime, clauses 10 and 11) cannot be brought into play to achieve finality. Order 4 achieves this result. Costs - Order 5 13The plaintiffs were substantially successful up to the date of the principal judgment on 4 November 2011. The plaintiffs will have their costs up to and including that date. But since that time both parties have had a measure of success in their formulation of appropriate orders. So the costs order will be that each of the parties will bear their own costs of the proceedings after that date. Extent of the Orders and the Regime for Use of the Inclinator 14There was debate as to whether the parties wished to have their mostly agreed, "Regime for the Co-Operative use of Inclinator", Annexure "A" to the Orders ("the Regime") made into a formal amendment to the registered form of Easement B as recorded in the register, or whether the Regime would merely become binding between the parties. All agreed that they wished the Regime merely to be binding between the parties, so that it would not necessarily burden future owners of these parcels of land, who may, have better relations. Accordingly the Regime has been crafted as a set of permanent orders binding the parties but only the parties, and given effect through order 3. There are some other minor resolutions of differences between the parties, the resolution of which is given effect in these orders. Full reasons are not provided here for the resolution of all those minor differences. They were explained in the course of argument on 20 December 2011. The Defendant's Proviso to Regime Clause 3 15The defendants propose a proviso to Regime, Clause 3 to the following effect:- "PROVIDED that the Plaintiffs shall not carry out any work on the inclinator unless they have first given the Defendants notice of the work they propose to do and the circumstances which make it reasonably necessary for that work to be done to make their right to use the inclinator effective and specified - a reasonable time within which the Plaintiffs require that work to be done and the Defendants have failed to carry out that work within such reasonable time." 16In my view the proviso that the defendants here propose, places an unreasonable restriction on the plaintiffs' common law rights to use the easement and it should not be included. There is no such requirement at common law for a dominant tenement owner to give notice of proposed work to a servient tenement owner. Nor is there a requirement that a dominant tenement owner must give an opportunity to the servient owner to do the work first. What the defendants propose in this proviso is far more onerous than the requirements on a dominant tenement owner at common law. Those rights include the right to decide what works will be done on the servient tenement without consulting the servient tenement owner or giving such owner notice: see for example Bland v Levi [2000] NSWSC 161 at [16] - [23]. Although it must be said that common courtesy and reasonable conduct may make a degree of notice appropriate in some circumstances. Enforcement - Regime Defendants' Clause 8 17The defendants are concerned that if one party is required to satisfy an invoice for outstanding work on the inclinator that there will be no ready means for that party to enforce payment against the other party. So the defendants have proposed a clause 8 as follows (the defendants wording is underlined). "The Costs and Expenses are to be paid by each party within 14 days of receipt by that party of any invoice from the other party in respect of those Costs and Expenses. AND if not so paid within such period without reasonable cause the rights of the party in default to use the inclinator shall be suspended until payment be made. (Pursuit of a difference under clause 11 shall constitute a reasonable cause so long as the difference remains unresolved under clause 11)." 18But the defendants' formulation of Regime, clause 8 is likely to generate its own disputes about the use of the inclinator. For example, just when the rights of one or other party to use the inclinator may be suspended will become one of these new issues. But the defendants do have a point on the question of enforcement of payment. Something is required to ensure that the payment obligations of each party are honoured and disputes about non-payment are minimised. 19Finality about money disputes can in my view be achieved by a simple change to Regime, clause 11. The change involves the result of any Expert determination under Regime clause 11(c) becoming a debt of one of the parties, which debt will be charged upon the land benefited or burdened by Easement B, depending on who is the debtor. Clause 11(c) in the final orders below now provides for this. 20This change will be enforceable and will be compliant with Conveyancing Act, s 54A, if each party executes and then exchanges a copy of these orders with the other party. The exchange of such executed copies is now provided for by the Regime, clause 14. 21Accordingly, the Courts orders are:- (1)Declares that the right of way and easement for services marked "B" on DP 708511 confers upon the plaintiffs, their employees, agents, contractors and invitees, the right to reasonable use of the inclinator constructed on the right of way (the "Inclinator"). (2)Orders that the defendants by themselves, their employees or agents, be restrained from impeding, obstructing or otherwise preventing the reasonable use of the Inclinator by the plaintiffs, their employees, agents, contractors and invitees, including by discontinuing the supply of electricity to the Inclinator. (3)Orders that the parties are to use, maintain, repair, improve and resolve disputes about the Inclinator in accordance with the regime annexed to these Orders and marked "A" ("the Regime"). (4)Orders that the parties (i) submit their remaining disputes as to past outstanding costs of repairs and maintenance of the Inclinator to the Registrar in Equity for mediation, and (ii) if not settled at mediation by 31 March 2012 then it is agreed that a dispute has arisen between the parties for which either party may engage the Dispute Resolution procedure provided for under clauses 10 and 11 of the Regime. (5) Orders the defendants to pay the costs of the plaintiffs up to the date of judgment on 4 November 2011 as agreed or assessed, and thereafter each party will bear his or her own costs. ANNEXURE A REGIME FOR CO-OPERATIVE USE OF INCLINATOR Use of the Inclinator (1) The Plaintiffs and Defendants shall use the Inclinator in a proper and safe manner at all times and in accordance with the technical specifications of the Inclinator. Servicing, maintenance, repair, renewal and improvement of the Inclinator (2) Servicing of the inclinator shall take place every four months by P R King & Sons Pty Limited or such other contractor as shall be agreed by the plaintiffs and the defendants. (3) Subject to clauses 2, 4 and 5, the Plaintiffs and the Defendants shall not conduct or cause to be conducted any maintenance, repair, renewal or improvement to the Inclinator unless: (a)prior to undertaking the works, the party who seeks to conduct the works has given reasonable notice to the other party of the proposal to conduct works on the Inclinator, (including their scope and estimated cost), and that the party who seeks to conduct the works is not requesting the consent of the other party before proceeding with the works; or (b)the party seeking to conduct the works has given reasonable notice to the other party of such works and the anticipated costs thereof and the Plaintiffs and the Defendants have agreed that the works shall be undertaken; or (c)the works upon the Inclinator will cost less than $1000 (or such other sum as may be agreed from time to time) and are necessary for the safe or proper operation or use of the Inclinator, in which case the Defendants may authorise the works to be undertaken, but the total value of works undertaken pursuant to this sub-paragraph (c) shall not exceed $2,000 (or such other sum as may be agreed from time to time) in any calendar year; or (d)the works upon the Inclinator are required on an emergency basis, in which case either the Plaintiffs or the Defendants may authorise the works to be undertaken without the consent of the other party. (4) Clause 3(a) does not confer any rights upon a party to conduct works upon the Inclinator that would exceed the extent of the rights conferred upon that party at common law (5)All works which are undertaken on the Inclinator must be in accordance with any standards required by the WorkCover Authority. Payment of costs and expenses of the Inclinator (6) The costs and expenses of and incidental to any works performed on the Inclinator under clause 3(a) are to be borne solely by the party who has conducted the works or caused the works to be conducted. (7) The Plaintiffs and Defendants are each required to pay 50% of all costs and expenses of and incidental to any works performed on the Inclinator under clauses 2, 3(b), 3(c) and 3(d) (the "Costs and Expenses" ). (8) The Costs and Expenses are to be paid by each party within 14 days of receipt by that party of any invoice from the other party in respect of those Costs and Expenses. (9) The Defendants will as soon as reasonably practicable cause a separate electricity meter to be installed for the electricity supply to the inclinator and the Plaintiffs and the Defendants will each pay 50% of the costs of installation of the meter. From the date of instalment of the meter, the Plaintiffs and the Defendants will each pay 50% of the cost of supplying electricity to the inclinator. (10) The Plaintiffs and the Defendants will separately maintain at all times adequate public liability insurance for a minimum sum insured of $10,000,000 (ten million dollars), or such other amount as may be agreed between the parties from time to time. Dispute Resolution (11) In the event of any dispute arising between the parties in relation to this Regime: (a) the aggrieved party will give notice to the other parties of the dispute within 14 days of the dispute arising; (b) the parties will attempt to resolve the dispute in good faith within 7 days of that notice being given; and (c) if the dispute is not resolved within 7 days of the dispute notice being given, the aggrieved party will request that "ACDC" (Australian Commercial Disputes Centre) appoint an expert (relative to the nature of the dispute) ("the Expert"), who may determine such dispute in such manner as he or she thinks fit, including as to the costs of the determination, having regard to the amount in dispute (if applicable), whose decision shall be final and binding upon the Plaintiffs and Defendants, and whose fees and expenses shall be paid in accordance with the determination given by the Expert. Any amount determined by the Expert as being payable shall constitute a debt immediately due and payable in accordance with the Expert's decision, and the payment of which debt will be charged in Equity upon the land of the debtor, being the land burdened or benefited by Easement B. (12) For the avoidance of doubt, a failure to agree upon whether works should be performed on the Inclinator under clause 3(b) falls within the scope of the disputes that can be referred to the Expert within clause 11 of this Regime, in which case the question to be determined by the Expert to decide whether the works should be performed will be whether the works constitute a reasonable upgrade or are reasonably necessary to make the grant of the easement effective or to ensure the safe and proper use of the Inclinator (the "Test"). If it is determined by the Expert that the works satisfy the Test, payment for such works shall be in accordance with clauses 7 and 8. (13) Any notice to be given by either party to the other hereunder shall be given either: (a) in writing delivered to the residence of the recipient; (b) by facsimile to the recipient; or (c) by e-mail to the recipient; and shall be deemed duly delivered at 9.00am on the day following the date of such delivery or transmission unless in the case of a facsimile or e-mail the sending party receives notice that the transmission was not successful. (14) Order the parties by their solicitors to exchange signed copies of these orders, by 31 January 2012. ********** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 01 February 2012