Posted on February 14, 2024 by Sue Puckeridge and Emma Wei 3

Unreasonable conduct results in the burdened landowner paying costs in s88K proceedings

Introduction

The Supreme Court has the power to grant easements if the easement is “reasonably necessary for the effective use or development of other land that will have the benefit of the easement”: s 88K(1) of the Conveyancing Act 1919 (NSW) (Conveyancing Act).

In recognition that the creation of an easement over private land by compulsion interferes with a person’s private rights, the Conveyancing Act creates a presumption that the person seeking the easement must pay the costs of the proceedings subject to any order to the contrary: s88K(5).

The Court is unlikely to make an order to the contrary unless owner of the burdened land’s conduct is so unreasonable as to warrant such an order. In a recent case, the Court highlighted the type of conduct that will be seen to be unreasonable and departed from the standard costs order outlined in section 88K(5).

Facts

Jeffrey v Adams [2023] NSWSC 1270, involved a dispute over a 10m wide right of carriageway (ROC) that benefitted land owned by the Jeffreys (Jeffreys’ Land) and burdened the First, Second, and Third Defendants (the Adams), and the Fourth Defendant (Ms Atkinson), being a separate parcel of land (Atkinson’s Land). The ROC connected the lower part of the Jeffreys’ Land, on which their house was located, with a paddock on their land located at the top of a hill. The ROC was crucial for the Jeffreys to access this paddock. Without the ROC, the only alternative was a steep, rocky, and narrow path unsuitable for vehicles.

The ROC was unchallenged until a dam constructed on the Adams’ Land submerged a part of it. Thereafter, for about 15 years after, the Jeffreys used an alternative road, overlapping with another right of carriageway granted to Transgrid, over the Adams’ Land (Alternative Road). The Adams had no objections to the Jeffreys’ use of the Alternative Road until 2022, when they restricted access by erecting a locked gate on the Alternative Road.

A separate section of the ROC passed through a corner of Atkinson’s Land (Track A) before re-entering the Adams’ Land. Ms Atkinson obstructed Track A with wire fences. As a consequence, the Jeffreys used a path adjoining and parallel to Track A on Atkinson’s Land (Track K). The use of Track K was on the mistaken belief that it was part of the ROC. No objection was raised to the use of Track K until after the proceedings commenced when it was clarified that the ROC existed on the land on which Track A was located and not Track K. After being informed of the correct legal position, Ms Atkinson caused locks to be installed on Track K preventing its use and installed new gates on Track A. The new gates on Track A were too narrow for vehicles to pass through and no other route was available through Atkinson’s Land to join to that part of the ROC that was on the Adams’ Land.

The Jeffreys sought several orders against all the defendants, one of which was an order against the Adams under s 88K of the Conveyancing Act creating a right of carriageway over the Alternative Road.

Easement for Reasonable Use

The Court granted the easement sought by the Jeffreys concluding that the proposed easement involving the use of the Alternative Road was necessary for the effective use and development of the Jeffreys’ Land. This was because:

• the easement has only been sought because the ROC has been obstructed and the use of Jeffreys’ Land has to be considered in the context of an existing legal access entitlement that has been in existence since 1972.
• the Alternative Road was the shortest proposed easement and the most direct route around the dam.
• the Alternative Road was necessary for the Jeffreys to access their ROC and in circumstances where an obstruction is caused by a servient tenement, the dominant tenement has a right to deviate around the obstruction (see [57]-[61]).
• the Alternative Route was an established track already used by Ms Atkinson and Transgrid, and its use has been historically unopposed by the Adams since 1998, indicating its practicality and minimal impact on the Adams’ land.
• the Adams and Ms Atkinson’s proposed alternative paths were not viable options. There was no proof that the routes were safe or useable and they were significantly steeper than the Alterative Road.

Unreasonable behaviour of the Defendants resulting in an adverse costs order

The Jeffreys sought an order that all defendants to pay their legal costs, despite section 88K(5) of the Conveyancing Act.

Previous decisions have held that a defendant’s entitlement to costs under s88K(5) could be lost if the affected party had “acted so unreasonably so as to warrant a departure from s 88K(5)”. Such conduct includes making the proceedings more expensive (see Studholme v Rawson [2020] NSWCA 76 at [188] upholding Rainbowforce Pty Ltd v Skyton Holdings Pty Ltd [2010] NSWLEC 2; McGrath v Mestousis (No 2) [2018] NSWSC 32) or actively pursuing defences beyond putting the plaintiff to proof as to the necessity of the proposed easement (see Crawley v Baxter (No 3) [2023] NSWSC 955).

Having regard to these decisions, the Court ordered all defendants to pay the Jeffreys’ legal costs on the ordinary basis, including Ms Atkinson as not only did she actively resist the Jeffreys’ entitlement to deviate around the dam, but she had also filed expert evidence upon which the Adams relied on. Her actions contributed to the Jeffreys incurring additional costs. In the Court’s view:

“There [was] no rational or legal basis for [the Adams] preventing the plaintiffs from using the Alternative Road to deviate around the obstruction of the dam, which they had been doing for so long. The Plaintiffs ha[d] sought an easement that will be registered on title, in order to avoid any future dispute about whether they are entitled to use that track. It ought to have been unnecessary. The defendants resistance went beyond merely putting the plaintiffs to proof and prolonged the hearing“: see [150].

Conclusion

The decision contributes to a body of case law that demonstrates the Court’s dim view of persons who fail to respect the legal rights of those with the benefit of an easement. The judgment also provides insight into the interpretation and application of easements, highlighting the need to consider the practicality and historical use of the land when creating or modifying access routes. Importantly, the Court’s departure from the standard cost order under s 88K(5) of the Conveyancing Act brings to light the serious financial implications of a party’s unreasonable conduct. Obstructive or uncooperative actions, can lead to significant legal costs and prolonged disputes.

You can read the full judgment here.

If you wish to discuss anything in this article, please leave a comment below or contact Sue Puckeridge on 02 8235 9702 or Emma Wei on 02 8235 9725.