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Ward v Hull

 

[2019] QSC 32

SUPREME COURT OF QUEENSLAND

CITATION:

Ward v Hull [2019] QSC 32

PARTIES:

GRAHAM JOHN WARD

(applicant)

v

MICHAEL EDWARD HULL

(respondent)

FILE NO/S:

SC No 61 of 2016

DIVISION:

Trial Division

PROCEEDING:

Application

ORIGINATING

COURT:

Supreme Court at Mackay 

DELIVERED ON:

21 February 2019

DELIVERED AT:

Townsville

HEARING DATE:

12 and 13 February 2018

JUDGE:

North J

ORDERS:

  1. The applicant and the respondent are to submit, within 28 days, a draft of the orders for the imposition of a statutory right of use consistent with these reasons.
  2. Within 28 days, if not otherwise agreed, the applicant and the respondent are to submit written submissions concerning costs and such submissions not to exceed two (2) pages.
  3. The question of costs be determined on the papers without further hearing.
  4. Liberty to apply on four business days notice in writing concerning order 1.

CATCHWORDS:

REAL PROPERTY – EASEMENTS – EASEMENTS GENERALLY – CREATION – BY EXPRESS AGREEMENT OR UNDER STATUTE – STATUTORY EASEMENTS – where an easement was sought over a pipeline on agricultural property – where the respondent accepted that the proposed easement was reasonably necessary in the interests of the effective use of the applicant’s land – where the respondent accepted that the proposed easement would be in the public interest – whether the respondent’s refusal to accept the imposition of the easement was unreasonable in the circumstances

LEGISLATION:

Property Law Act 1974 (Qld), s 180

CASES:

Peulen & Anor v Agius & Anor [2015] QSC 137

Bradshaw v Griffiths [2016] QCA 20

Rainbowforce Pty Ltd v Skyton Holdings Pty Ltd [2010] NSWLEC 2

2040 Logan Road Pty Ltd v Body Corporate for Paddington Mews CTS [2016] QSC 40

Naylor & Anor v Pierce & Anor [2010] QSC 399

COUNSEL:

P Cullinane for the applicant

S McLennan for the respondent

SOLICITORS:

SB Wright & Wright and Condie for the applicant

Beckey, Knight & Elliott for the respondent

Introduction

  1. [1]
    NORTH J: Pursuant to s 180 of the Property Law Act 1974 (Qld) the applicant seeks that a statutory right of user in the form of an easement be imposed upon the land of the respondent in favour of the land owned by the applicant.[1]
  2. [2]
    The application concerns sugar cane farms on lands near Mount Martin, not far from Mackay. The applicant is the owner of the “dominant land” in these proceedings,[2] on which he has grown sugar cane for most of his life.[3] The respondent is the owner of the adjoining “servient land” which is currently leased to a third party who also grows sugar cane on the property.[4] Exhibit 1 is a survey map which depicts the common boundary of the two properties, the location of the pipeline the subject of the proceedings and the location of McGregor Creek which runs through the servient property to join with Silver Creek. The location of the pipeline was done, in part, by using ground penetrating radar by the surveyor Mr Dobbie.[5]

History and pre hearing manoeuvring

  1. [3]
    In approximately 1999 a pipeline was installed from a dam on the dominant land that ran roughly south west through the servient land to the junction of the two creeks to allow the applicant to pump water and irrigate his crop. The survey map (Exhibit 1) highlights the location of the pipeline from the pumping station through to a dam on the applicant’s land. The pipeline was installed by agreement between the applicant and the previous owners of the servient land. No formal agreement was executed and consequently an easement was not registered. According to the applicant the installation of the pipeline and associated work cost in excess of $150,000.[6] The applicant is able to pump water from the creek because he holds a licence with the Pioneer Water Board and pays the required fee. When he needs water for irrigation the applicant notifies the Board which releases water upstream of the junction of McGregor Creek with Silver Creek thus allowing the applicant to pump the quantity released by the Board to the dam on his land.
  2. [4]
    The servient land was sold to the respondent in approximately 2004. The applicant continued to pump from the creek without issue until 2016.
  3. [5]
    In June 2016 the applicant offered to purchase the respondent’s land. The respondent refused the offer. Shortly thereafter the applicant received correspondence from the respondent detailing the respondent’s proposal to lower the pipeline at the applicant’s cost so that the respondent could utilise more of the land for sugar cane production.[7] 
  4. [6]
    On 27 July 2016 the applicant through his solicitor wrote to the respondent rejecting his proposal and requesting the respondent sign an undertaking not to perform any earthworks until agreement was reached between the parties.[8]
  5. [7]
    On 30 July 2016 the respondent replied to the correspondence via email:[9]

“Graham said his pipe is 1 meter down is that to top of pipe or the bottom of pipe, I am trying to work out a price thanks mike hull”.

  1. [8]
    On 1 August 2016 the applicant wrote to the respondent requesting a response by 4.00pm to the previous correspondence enclosing the undertaking.[10]
  2. [9]
    On 1 August 2016 the respondent through his solicitor responded to the applicant. The correspondence stated that:[11]

“He has advised your client that he wishes to carry out certain works to improve the viability and market value of his property…

He does not agree to your client entering onto his property now or in the future…

…he has offered to resolve the issues of relocating the irrigation pipeline to a lower depth by carrying out the necessary works in 3 stages at times when it will not affect the use of the pipeline providing that your client meets the expense of the earthworks that will be performed by our client…

…he has concerns with respect to his being liable for injury to your client or his employees when they have entered onto his property to relocate the pump using a baglifter as a crane…

…in consideration of your client agreeing to the above, our client would agree to enter into a Licence:-

Permitting the location of the irrigation through their property;

Permitting the location of the pump on their property;

Requiring your client to take our [sic] Public Liability insurance and to indemnify our client with respect to any injury suffered to anyone entering onto our client’s property arising out of the location of the pipeline and pump.

Agreeing to start the pump at a time required by your client on 24hrs notice subject to payment of the following:-

Labour  $45.00 per hour (between 7:00am and
4:00pm)

Labour  $67.50 per hour (after 4:00pm)

Mileage   $1.10 per km”

  1. [10]
    On 2 August 2016 the applicant requested that the respondent’s solicitor withdraw from acting due to a conflict of interest.[12] This was done.
  2. [11]
    On 4 August 2016 the respondent wrote to the applicant and stated: “I have never stop tried to stop or said that I would stop Graham from getting water. I do need to get more of my land under cane, as Graham said that there is so much land not in us [sic], I am prepare to come in and talk about it if Graham would like?”[13]
  3. [12]
    On 4 October 2016 the applicant wrote to the respondent enclosing a draft easement and valuation report addressing the amount of compensation required for the grant of easement.[14] The applicant requested that the respondent permit surveyors to enter upon his land to prepare an easement plan, that the respondent cooperate in the production and execution of documents, that the applicant would pay the assessed amount of compensation ($5,000) into a trust account until the easement was registered, and that the applicant was prepared to pay the respondent’s reasonable legal costs.
  4. [13]
    On 5 October 2016 the respondent replied to the applicant’s correspondence and stated that he needed to lower the pipeline as it is interfering with the farm and not all the land was being utilised.[15] The respondent stated that he is not stopping Graham getting water but the pipe needs lowering so that the respondent can farm the way he needs to. The respondent also stated that he did not want the applicant to enter his land.
  5. [14]
    On 20 October 2017 the applicant wrote to the respondent noting that on 13 October 2017 the applicant had tried to pump water using the pipeline but had been unsuccessful due to the respondent having installed a junction to the pipeline to the respondent’s own dam.[16] The letter requested the respondent enter an undertaking to immediately engage a contractor to attend at the property to remove the connection.
  6. [15]
    The respondent did not reply to the applicant’s request.  On 24 October 2017 an application was filed seeking to restrain the respondent from interfering with or obstructing the pipeline. On 16 November 2017 the respondent cross applied to court seeking that part of the applicant’s statement of claim be struck out on the basis there was no reasonable cause of action.[17] On 23 November 2017 these interlocutory applications were resolved by consent and the respondent was restrained from interfering with the pipeline on an interlocutory basis.
  7. [16]
    On 1 February 2018 a further affidavit of the respondent was filed proposing three options that the respondent was willing to provide to the applicant. The first option proposed that the respondent would grant a perpetual licence allowing the applicant to pump water through the pipeline.[18] Further the respondent was to bear the expense of lowering the pipeline, but the applicant would be required to pay a yearly fee of $4,000, in addition to fees for pumping. The applicant would also be required to pay for the development approval costs and earthworks for cutting a new pumping access to the creek along the access road, with an easement would be granted over the pumping area only.
  8. [17]
    The second option proposed that a new pipeline be installed along the respondent’s fence line at the cost of the applicant.[19] An easement would be granted over the new pipeline and the original pipeline would be exclusively used by the respondent. The applicant would be required to compensate the respondent for the imposition of the easement. The applicant would also still be required to pay for the cost of the new access point to the pumping area as discussed in option one.
  9. [18]
    The third option proposed that the original pipeline be lowered at the cost of the applicant and that the applicant again pay for the creation of a new pumping access point as discussed in option one.[20]

The legislation

  1. [19]
    Section 180 of the Property Law Act 1974 (Qld) provides that:

“Imposition of statutory rights of user in respect of land

  1. (1)
    Where it is reasonably necessary in the interests of effective use in any reasonable manner of any land ("the dominant land" ) that such land, or the owner for the time being of such land, should in respect of any other land ("the servient land") have a statutory right of user in respect of that other land, the court may, on the application of the owner of the dominant land but subject to this section, impose upon the servient land, or upon the owner for the time being of such land, an obligation of user or an obligation to permit such user in accordance with that order.
  2. (2)
    A statutory right of user imposed under subsection (1) may take the form of an easement, licence or otherwise, and may be declared to be exercisable—
    1. (a)
      by such persons, their servants and agents, in such number, and in such manner and subject to such conditions; and
    2. (b)
      on 1 or more occasions; or
    3. (c)
      until a date certain; or
    4. (d)
      in perpetuity or for some fixed period;

as may be specified in the order.

  1. (3)
    An order of the kind referred to in subsection (1) shall not be made unless the court is satisfied that—
    1. (a)
      it is consistent with the public interest that the dominant land should be used in the manner proposed; and
    2. (b)
      the owner of the servient land can be adequately recompensed in money for any loss or disadvantage which the owner may suffer from the imposition of the obligation; and
    3. (c)
      either—
  1. (i)
    the owner of the servient land has refused to agree to accept the imposition of such obligation and the owner’s refusal is in all the circumstances unreasonable; or
  2. (ii)
    no person can be found who possesses the necessary capacity to agree to accept the imposition of such obligation.”

Identification of the issues of law

  1. [20]
    It was accepted by the respondent at trial that much of s 180(1) and s 180(3)(a) and (b) were satisfied by the applicant. In particular it was not an issue by trial that the imposition of a statutory right of user was reasonably necessary in the interest of the effective use of the applicant’s land as a cane farm. In the event the issue to be tried was whether the respondent’s refusal was unreasonable in the circumstances (s 180(3)(c))[21] and whether the existing pipeline should be supported by an easement or a licence or whether the pipeline should be moved closer to the creek and be the subject of an easement. These matters require a consideration of not only the applicant’s claim but also the three proposals of the respondent outlined in [16], [17] and [18] above.
  2. [21]
    Counsel for the applicant submitted that in determining this issue, the judgment of Carmody CJ (as he then was) in Peulen & Anor v Agius & Anor must be considered:[22]

“In considering whether the refusal of the owner of the servient tenement was, in all the circumstances, “unreasonable”, factors which the court may consider relevant to this case include:

  1. The absence of any significant detriment, loss or harm to the respondent;
  2. The significant cost associated with establishing any alternative access;
  3. The historic usage of the existing passageway over the servient tenement to access the dominant tenement;
  4. Whether the refusal was motivated by ill-will, malice, or acrimony;
  5. Refusal of reasonable offers subject to appropriate conditions.”
  1. [22]
    Counsel for the respondent’s argument was that the terms of the proposed easement and the compensation offered were inadequate. In support of their compensation argument counsel relied on the New South Wales judgment of Rainbowforce Pty Ltd v Skyton Holdings Pty Ltd,[23] which established nine (9) principles for assessing compensation under the equivalent New South Wales provision of s 180(3)(b):[24]

“First, the adequate compensation referred to in s 88K(2)(b) is the same as the compensation that the Court may order under s 88K(4).

Secondly, compensation is for “any loss or disadvantage” that will arise from the imposition of the easement. The addition of the words “or other disadvantage” provides for compensation for disturbance beyond the actual value of the proprietary right taken.

Thirdly, the compensation is not a substitute for the price that could have been exacted if the section did not exist: Goodwin v Yee Holdings Pty Ltd at 15,801; Wengarin Pty Ltd v Byron Shire Council at [26]. Hence, there can be no compensation for the loss of bargaining position of the owner of the land to be burdened: 117 York Street Pty Ltd v Proprietors of Strata Plan No 16123 at 515-516; Owners Strata Plan 13635 v Ryan at [85](8). The owner is “to receive a just sum and for value for what he or she has to give over, rather than being able to demand the earth”.

Fourthly, the compensation is for any loss or disadvantage “that will arise from the imposition of the easement”. That language imposes a requirement for a causal relationship between the loss or disadvantage for which compensation is claimed and the imposition of the easement: Mitchell v Boutagy at [26]; Khattar v Wiese at [65]; Owners Strata Plan 13635 v Ryan at [85](2). The common law of causation should be applied, namely that causation is a question of fact to be determined by applying common sense to the facts of each particular case.

Fifthly, the Court’s task under s 88K is to be satisfied that the persons affected by imposition of the easement are “adequately compensated” and to provide for an order for payment of such adequate compensation. In assessing adequate compensation the Court “is not to err on the side of generosity or miserliness”: Mitchell v Boutagy at [31]. The Court should not depart from the task of assessing adequate compensation because the applicant for the order stands to gain from the development or use which leads to their applying for the order.

Sixthly, ordinarily, compensation will have three elements: (a) the diminished market value of the affected land; (b) associated costs that would be caused to the owner of the affected land, and (c) an assessment of compensation for insecurity and loss of amenities, such as loss of peace and quiet. Against these losses and disadvantages should be allowed, as an offset, any compensating advantages.

There may be an exceptional case where it is extremely difficult to assess compensation but it is clear that the applicant for the order is to derive a considerable benefit from the application. In such circumstances, Young J suggested in Wengarin Pty Ltd v Byron Shire Council at [26], “it may be appropriate to assess the compensation on a percentage of the profits that would be made”. There does not yet seem to have been a case where this has been done.

In the case of a grant of a permanent easement, such as a right of carriageway or easement for drainage or services, compensation includes the loss of proprietary rights by the imposition of the easement and compensation for the disturbance effected by the carrying out of the initial work, such as construction of a road or laying of pipes in the easement, and subsequent repair and maintenance from time to time.

Seventhly, if the imposition of the easement causes material injury to intangible benefits or the imposition of material intangible detriments, such as reduced amenity, enjoyment of property, and exposure to increased disruption and interference, which are not readily capable of being estimated in monetary terms, the Court may not be able to be satisfied that the servient owner can be adequately compensated: Khattar v Wiese at [50]. However, compensation is often able to be assessed for injury to intangible benefits or the imposition of intangible detriments.

Eighthly, as a general rule, compensation should be assessed once and for all when the order is made. However, liberty can be reserved to the persons affected by imposition of the easement to apply to the Court for further compensation if some unexpected event occurs.

Ninth, the applicant for the order has to establish what the relevant losses and disadvantages are as part of satisfying the Court that the persons affected by imposition of the easement can be adequately compensated. In the course of the hearing, evidentiary onuses may shift to the person affected: 117 York Street Pty Ltd v Proprietors of Strata Plan No 16123 at 517. Where facts are peculiarly within the knowledge of the person affected and that person does not adduce relevant evidence, it may be open to the Court to draw unfavourable inferences.”

[Citations omitted].

  1. [23]
    The main issue is whether the applicant has proven that the respondent’s refusal of the easement proposed by the applicant was unreasonable in all the circumstances. The Court of Appeal considered this issue in Bradshaw v Griffiths:[25]

“His Honour listed some of the factors that led to his conclusion that Mrs Bradshaw was acting unreasonably.  They included: the potential monetary impact of these easements upon her as the owner of Laurel Downs will be small and can be redressed by compensation; the intention to cell graze would not be affected; the other matters raised by her as reasons for her objection do not reveal a reasonable basis for her refusal; the impact of these easements would be minimal; her refusal came from quite a different and presently irrelevant consideration; and her persistence in that refusal has been unreasonable because she did not have a substantial reason for it.

I consider that it was open to his Honour to reach those findings.

…Given the reason for Mrs Bradshaw withdrawing her consent to the use of each road had nothing to do with the manner or extent of use of the roads, but something extraneous to that, and given the evidence from the engineering and surveying witnesses about the difficulties that the new road posed, I consider it was open to the learned trial judge to find that Mr Griffiths was justified in refusing those offers.

Relevant also to the conclusion on this issue is the learned trial judge’s finding in paragraph [66] of the Reasons:

It is telling that these roads were used for decades before there was any objection to their use. Mrs Bradshaw purchased Laurel Downs necessarily knowing of the already long-standing use of Road A. She and Mr Bradshaw consented to the use of Road D from 1991. There were some disagreements between the parties as to the grading of Road D but not about whether its use should be discontinued. Eventually Mrs Bradshaw withdrew her consent to the use of these roads, not because of anything to do with the roads, but because of a grievance about another matter.”

In my respectful view it was open to the learned trial judge to reach the conclusion he did as to the unreasonableness of the refusal to consent.”

  1. [24]
    Burns J in 2040 Logan Road Pty Ltd v Body Corporate for Paddington Mews CTS[26] also noted the following in considering whether a refusal was unreasonable:[27]

“As Andrews J held in Ex parte Edward Street Properties Pty Ltd, in order to justify the imposition of a statutory right of user, the case in favour of the applicant should be “clear and persuasive”.  Furthermore, such a case must establish the conditions for the making of an order with an equal degree of clarity. If the applicant does not discharge that burden then “the occasion to include in any such order terms and conditions that are just does not arise”. 

This does not mean that every detail of an applicant's proposal must be worked out in a final way or that every necessary approval or permission is obtained in advance of the hearing of the application, but it does mean that matters of substance are satisfactorily defined and established by the evidence. If otherwise then the court cannot properly assess the merits of the application, let alone settle on conditions to accompany the grant. The words in s 180(3)(a) PLA, “in the manner proposed”, contemplate that an applicant for relief “will come to court with a particular proposal - to use the land in a particular manner”,  and that expectation will not be met where, as here, there are substantial gaps in the detail of what is proposed.

Furthermore, without appropriate definition in detail of the proposal, an applicant for relief runs the risk that it cannot be established that the respondent has unreasonably refused to accept the imposition of the statutory right of user. That is in fact what happened in this case.”

  1. [25]
    McMeekin J also considered the reasonableness of a refusal in Naylor & Anor v Pierce & Anor:[28]

“I should add that I have some difficulty with the notion that an applicant for such an order has no obligation to advance a case as to what might be reasonable compensation.  At the very least it increases the likelihood of refusal of terms where the respondent has no idea what might be the compensatory package.  More significantly, without such evidence I find it difficult to see how the Court can be satisfied that any refusal is unreasonable. Matthews J commented on the lack of evidence concerning reasonable compensation as being relevant in Tipler v Fraser.

…It is one thing to place before the court competing opinions as to the compensation that an expert maintains meets the case, to make an offer in accordance with such an opinion and to argue the merits of any conflicting opinions, at all times indicating a willingness and ability to pay such compensation as may be adjudged reasonable, but quite another to have no evidence at all and to make no offer at all that is in accord with an apparently reasonable and honestly held expert view.

…the onus is on the applicants to put forward a proposition that it would be unreasonable for the respondent to refuse, not for him to come up with a proposition that he finds acceptable.”

  1. [26]
    In summary, relevant considerations for the court in determining whether a refusal was unreasonable in the circumstances include:
  1. Whether a dispute existed between the parties that is not relevant to the issues relating to the easement;[29]
  2. Poor attitude of the applicant towards the respondent;[30]
  3. Whether the terms of the proposed easement are too broad or insufficiently detailed;[31]
  4. Lack of evidence regarding reasonable compensation;[32]
  5. Adequacy of the compensation offered;[33]
  6. Whether the applicant purchased the land with knowledge of the access difficulties;[34]
  7. Absence of any significant detriment, loss or harm to the respondent;[35]
  8. The significant cost associated with establishing any alternative access to the proposed easement;[36]
  9. Historic usage of the existing passageway over the servient tenement to access the dominant tenement;[37]
  10. Whether the refusal was motivated by ill-will, malice or acrimony;[38]
  11. Refusal of reasonable offers subject to appropriate conditions;[39] and
  12. Evidence from witnesses about the difficulties of alternative approaches proposed by the servient owner.[40]
  1. [27]
    Not all of these 12 considerations apply here. In this case issues that affect the question of whether a right of user in the form of an easement should be ordered include, whether the applicant has offered reasonable compensation, whether the respondent would suffer significant detriment or harm, whether the respondent has offered reasonable alternatives at reasonable costs, the terms and conditions of the easement and the history of the installation and use of the pipeline.

An Inspection

  1. [28]
    On the afternoon of the first day of the trial I had the benefit of an inspection. Guided by counsel and with the benefit of the maps and photographs in Exhibit 1 I was able to walk the route of the existing pipeline from near to where the water is pumped from the creek near the junction of the two creeks to near the discharge into a dam on Mr Ward’s property. I was also able to view the structures and improvements mentioned in the evidence. The inspection enabled me to better understand and evaluate the evidence of Mr Ward and Mr Hull which had been given that morning (including the affidavit evidence that had been tendered). It also enabled me to better understand the evidence that was subsequently given including the unchallenged evidence of the experienced can farmer Mr Deguara[41] and the essentially uncontradicted valuation evidence of Mr Williams.[42] The inspection thus assisted me, not as a species of evidence, but in determining which evidence was to be preferred (where there was a conflict) and whether other evidence should be accepted.[43].

The Evidence

  1. [29]
    It was not in dispute that the map (or plan) plus the photographs prepared by the surveyor Mr Dobbie (see Exhibit 1 and Exhibit 15) show the creek and the likely course of the pipeline used by the applicant from the pumping point in the creek to the dam on the applicant’s property.
  2. [30]
    The evidence in chief of both the applicant and the respondent was from their respective affidavits.[44]
  3. [31]
    The evidence is that the pipeline runs for about 1,100 metres according to Mr Williams. It is largely covered by soil and grass but at points it is exposed or partly exposed. For the most part it runs close to and follows McGregor Creek which has steep banks and thick vegetation. An impression of this can be gained from the aerial photographs forming part of Mr Dobbie’s plans and report.[45]
  4. [32]
    At trial the issue raised in paragraph 3(b) of the defence was withdrawn[46] so that it was no longer asserted by the respondent that the applicant could irrigate his cane farm by a pipeline that crossed only properties owned or controlled by the applicant. Further it was conceded and not an issue that it was in the interest of the effective use of the applicant’s land for water to be carried to that land for irrigation purposes.[47] It was also admitted that the pipeline associated with a statutory right of user in the form of an easement would be consistent with the public interest that the applicant’s land be used in the manner proposed, that is to facilitate or sustain irrigation for the primary production of sugar cane and that the respondent could be adequately compensated for any loss of disadvantage that he might suffer from the imposition of a statutory right of user.[48]
  5. [33]
    The issues in the trial in so far as they emerged from the cross examination of the applicant and the respondent were whether it was reasonable for an easement to protect the pipeline as it existed at the trial, whether the applicant’s offer of compensation for the imposition of a statutory right of user by way of an easement following the path of the pipeline as it exists was reasonable and further whether any of the respondent’s preferred options were reasonable or whether his objection to the applicant’s proposal was unreasonable in the circumstances.
  6. [34]
    As I noted above, in his affidavit filed and served on 1 February 2018 (Exhibit 7) the respondent put forward three options. The first option was that he would grant a licence, not an easement, to the applicant subject to certain charges to pump water through the pipeline which would be uncovered and lowered at the expense of the respondent. The second proposal was to grant the applicant an easement but predicated upon the pipeline being relocated to run closer to the fence line near the creek. That the cost of that reinstallation will be borne by the applicant and he the respondent would accept the compensation assessed by the jointly appointed valuer. The third proposal was that he would grant the applicant an easement over the existing pipeline conditional upon it being lowered subject to the payment of compensation and the applicant bearing the costs of lowering the pipeline.
  7. [35]
    The three alternatives were not attractive to the applicant. The first because of its uncertainty and the recurring costs of the license.[49] The second and third because of costs[50] The reason for the proposals by the respondent, it may be inferred, was to make a more efficient use of the headlands being the land between the cane fields and the boundary of his property or the creek bank permitting him (or his lessee) to put a greater area under cane and thus improve his revenue and profitability. In respect of one area he estimated three hectares could be saved.
  8. [36]
    The applicant did not accept that it was either practical or profitable to put some of the headlands of the respondent’s farm under cane.[51]  In response to a question the applicant said that the respondent was not, under current arrangements, put to an extra expense of maintaining headlands because the pipeline already followed the headlands which had to be mowed anyway.
  9. [37]
    When cross examined the respondent acknowledged that he had leased his farm, as a cane farm, from 28 October 2016 until 31 December 2026.[52] Further he agreed that he was an earth mover by experience and that he had limited knowledge of cane farming.[53]
  10. [38]
    A body of other evidence was tendered which was either unchallenged or uncontradicted. A report was tendered by a Mr Zammit who was an earth moving contractor[54] which supports the applicant’s contention that the costs of uncovering and moving or uncovering and lowering the pipeline could be very expensive. It will be noted that the respondent in one of his affidavits[55] estimated that these costs could exceed $100,000. An affidavit by an experienced cane farmer, Mr M Deguara[56] which was unchallenged. His evidence was that the area of land that the respondent wanted to put under cane that was currently not under cane was of the order of two hectares but that having regard to the configuration of the land the costs associated with work on the head works when compared with the potential revenue from the cane that could be grown would make the costs difficult to justify.
  11. [39]
    A joint valuation report was prepared by Mr GR Williams[57] in addition to the information canvassed in his report the subject of his consideration he had available to him a letter from the solicitors for the respondent and his letter in response.[58] Mr Williams was called in the case for the applicant and was cross examined by counsel for the respondent. No contradictory valuation evidence was called. In his report under the heading Executive Summary Mr Williams said:

“  The subject property is located approximately 8 kilometres north west of the Mirani Post Office and approximately 44 km west of the Mackay Post Office. This is a near level / gently sloping, irregular shaped inside lot with frontage to Ventons Road in the North and McGregor Creek in the South. It comprises alluvial grey clay soil. Approximately 52.39 ha is developed to irrigated caneland with the balance comprising headlands, drainage lines, curtilage, dam site and creek frontage.

The length of the proposed easement is approximately 1,100 metres. The width of the easement will be 3.0 metres. The area of the proposed easement will be approximately 3,300 square metres. The land which will be encumbered by the proposed easement runs adjacent to McGregor Creek. It is presently used for headlands and internal access or is unused for cane production. Due to its location within the current farm layout and its topography, the market would not recognise any viable potential for development of the proposed easement area to cane.

Given the relatively small area of the land to be encumbered (0.52% of the total area), its current use within the farm and the absence of any severance or injurious affection, we assess nominal consideration.”

  1. [40]
    In his valuation summary Mr Williams expressed that the nominal consideration would be $5,000.

Rival contentions

  1. [41]
    I have already mentioned the issues remaining as a consequence of the admissions on the pleading. In written submissions the applicant argued that the respondent’s refusal was unreasonable having regard to the principles outlined by Carmody CJ in Peulen v Agius. He submitted that the respondent will not suffer significant detriment, loss or harm. It was submitted that the statutory right of user would relate only to a discrete section of the servient land in close proximity and roughly parallel to McGregor Creek. Counsel submitted that because the area was headlands, being a vacant area used by machinery to manoeuvre whilst farming, the creation of the easement would have no impact on the area. Counsel also submitted that the respondent is unable to show any personal detriment, loss or harm as the servient land is subject to a lease until 2027, and the respondent therefore does not have possession of the land. Counsel further submitted that the respondent has never personally sought to grow sugar cane, and that during evidence the respondent had in fact stated that the sugar cane industry was dying. Counsel argued that such speculative intentions, which could not be actioned for a further nine years in any event, should not restrict a statutory right of user being created.
  2. [42]
    Further it was submitted that the court should give no weight to the evidence of the respondent in regards to the proposed aquaculture venture as it was a belated and insincere proposal. Counsel also noted that no evidence was tendered by the respondent to demonstrate that the current lessees of the property would suffer any significant detriment, loss or harm.
  3. [43]
    Counsel for the applicant contended that there would be significant costs associated with establishing the alternative access as proposed by the respondent, in excess of $100,000. Further, counsel noted the historic usage of the existing passageway extended to 1999, which the respondent was aware of when he purchased the land in 2004. Counsel accepted that there was no evidence of a dispute between the parties other than that currently before the court.
  4. [44]
    Lastly, it was submitted that the respondent had rejected a reasonable offer of compensation. Counsel noted that the applicant had raised the issue of obtaining an easement when the respondent purchased the land, but the respondent declined on the agreement that the applicant could continue using the pipeline as he had previously done. Counsel for the applicant submitted that the refusal by the respondent of the applicant’s offer of $5,000 in 2016 for the registration of an easement, which was based on an independent valuation, was unreasonable.
  5. [45]
    Counsel for the respondent argued that the refusal was reasonable on two grounds: that the terms of the proposed easement were inadequate, and the compensation offered was nominal. Counsel submitted that the respondent never had the intention of preventing the applicant from accessing water through the pipeline, and referenced correspondence in support of this.
  6. [46]
    It was submitted that the proposed terms of the easement were not restrictive enough in terms of access. Counsel pointed to proposed clause 1(d), which allows the applicant access to the servient property, and submitted that it allows the applicant access at any time during the night or day and was therefore not reasonable.
  7. [47]
    Counsel also submitted that clause 2 of the proposed easement, which requires the applicant to take all reasonable steps to minimise damage to the servient tenement,  fails to provide for compensation to be paid in circumstances where repairs need to be done and any sugar cane above the pipeline needed to be dug out.
  8. [48]
    It was further submitted that the respondent’s refusal was reasonable as the applicant’s proposal did not provide for the use of the pipeline to be shared, and the applicant’s offer of compensation did not include compensation for such a loss. The respondent relied on the decision of Naylor v Pierce in this regard, where one of the factors taken into account by McMeekin J in concluding that the refusal was reasonable was the unnecessarily broad terms of the proposed easement.
  9. [49]
    Secondly, counsel argued that the compensation offered was grossly inadequate having regard to the principles established in Rainbow Pty Ltd v Skyton Holdings Pty Ltd, discussed above at paragraph [22]. Broadly, the respondent relied on four grounds for his argument that the compensation was inadequate.
  10. [50]
    First, counsel for the respondent submitted that the respondent was a special owner and was thus entitled to a higher amount of compensation. It was submitted that the compensation referred to in both s 180(3)(b) and 180(4)(a) were the same and that the valuer’s evidence did not take into account the respondent’s special expertise in earthmoving and aquaculture.
  11. [51]
    Secondly, counsel submitted that the creation of an easement over the area where the pipeline is currently situated would deprive the respondent of the opportunity to develop the land. It was submitted that the applicant himself had advised the respondent of this. Counsel also submitted that the evidence of Mr Deguara (the expert) was limited as he did not enter the property. Counsel submitted that his evidence about the economic viability and lowering of the pipeline should also not be accepted over that of the respondent because of the respondent’s substantial experience as an earthmover.
  12. [52]
    Counsel submitted that the land would appreciate by $28,300 after the earthworks were completed, and bring in an additional $2,264 per year in cane production. It was submitted that the profit made by increased cane production would surpass the compensation offered by the applicant in three years.
  13. [53]
    Further, it was submitted that the fact that the respondent was restricted from possession of the property until the lease ended in 2026 was not an impediment. It was also submitted that the respondent had entered into conversations with the current lessees about the earthworks, and that in any case the easement had a permanent effect beyond that of the lease duration.
  14. [54]
    Thirdly, counsel submitted that the necessary maintenance of the headlands was not taken into consideration when the valuation was completed. Fourthly, it was submitted that the existing pipeline was a fixture on the respondent’s land and thus owned by the respondent. Counsel submitted that the compensation proposed by the applicant for his exclusive use did not take into account compensation for the loss and disadvantage associated with the respondent’s inability to use his pipeline. It was also submitted that the respondent’s proposed aquaculture development was a legitimate development because of the respondent’s experience with both aquaculture and earthmoving.
  15. [55]
    Overall, counsel submitted that the cost of building another pipeline in the existing location was between $60,000 - $84,000 and that accordingly the applicant’s offer of $5,500 was grossly inadequate.

Discussion and Findings

  1. [56]
    I was impressed by the applicant in the manner and way in which he gave his evidence. He appeared to answer questions in an open and frank way consistent with a man of his age who had been a farmer for his adult life. In comparison I was not as impressed with the respondent. He was not able to accurately state the terms of the long lease of his property.[59] It was only late in the proceedings relatively shortly before the hearing that there was any mention of an intention to discontinue cane farming and take up aquaculture. The evidence did not explain how this might be done, whether it is a viable proposition upon the respondent’s land nor why or how an easement might affect such an endeavour. The respondent by his own admission has no experience in cane farming. Further evidence from both Mr Deguara and Mr Williams, which I accept, supports the applicant’s contention concerning the significance and use of the headlands land, that its conversion to cane land would neither be profitable nor economic and that headlands around cane fields serve a purpose in conjunction with land under cane. For these reasons I have formed a conclusion that the applicant’s evidence should be accepted and preferred to that of the respondent. Further I record that the inspection I had fortified me in the conclusions I have stated. Not only did the inspection help me in better understanding the evidence but also in concluding that I could safely prefer the evidence of the applicant to that of the respondent and also that the inspection could assist me in the acceptance of the evidence of Mr Williams and Mr Deguara.
  2. [57]
    The undisputed historical narrative is that with the concurrence of the then owner[60] the applicant at considerable expense installed the irrigation pipeline and continued to service it and use it with the knowing acquiescence of the respondent for more than ten years.[61] The admitted case is that it is in the interest of the effective use of the applicant’s land for water to be carried to it for irrigation purposes; that the pipeline and associated right of user in the form of an easement is consistent with the public interest that the dominant land be used in the manner proposed namely to facilitate or sustain irrigation for the production of sugar cane and that the respondent can be adequately compensated for any loss or disadvantage which he may suffer from the imposition of such an easement.
  3. [58]
    The pipeline follows closely the path of McGregor Creek which has steep and thickly vegetated banks. At points the land is uneven or sloping. In the state of the evidence it is difficult to see how either the movement of the pipeline closer to the creek bank (the scope for which is very limited) or the excavation of and lowering of the pipeline would improve in any significant way the economic productivity of the farm.
  4. [59]
    The evidence of Mr Williams confirms that an easement following the path surveyed by Mr Dobbie in his report[62] of approximately 1,100 metres long and 3 metres wide would not economically affect either the productive capacity of the respondent’s land as a cane farm or injuriously affect its intrinsic value in the open market and that any compensation should be valued at nominal. In the circumstances the respondent could be adequately recompensed for any loss or disadvantage which he might suffer from the imposition of the easement I have described by a payment of the sum proposed by the applicant $5,500 (see s 180(3)(b)).
  5. [60]
    In the circumstances of the evidence I have concluded that each of the respondent’s three proposals are unreasonable within s 180(3)(c)(i). My reasons for this are as follows. Firstly the applicant has incurred the considerable expense of installing the pump and pipeline and has continued to maintain and operate it without interfering with the operation of the cane farming upon the respondent’s land. Nextly the respondent has not satisfied me that either the productive capacity of his farm nor the value of his farm would be improved by any one of the three options. The perpetual licence would provide uncertainty to the applicant going into the future and with the recurrent expense of the payment of a licence fee and a charge for water pumped. There is no evidence to support the charging of these fees as part of a reasonable economic necessity facing the respondent were a licence to be provided. The second option would require the applicant to incur the considerable expense of installing a new pipeline along a different route. The third alternative, of lowering the existing pipeline, would also require the applicant to incur the considerable expense of this work. In view I take each of these proposals is unreasonable in circumstance where it has not been demonstrated that there is any need economic or otherwise for any of these proposals.
  6. [61]
    Consistent with my findings I am satisfied that the applicant has put forward a proposition that is more than merely acceptable, and is one that in the circumstances that apply in this case is unreasonable for the respondent to refuse. It is in this context the respondent’s counter proposals are unreasonable.[63]
  7. [62]
    It remains for me to make observations concerning two other matters raised in submissions. It was submitted that the respondent was a special owner entitled to further compensation in circumstances where he had expertise as an earth mover and also because of his desire to explore the conversion of the farm to aquaculture. The first point, that the applicant has experience as an earth mover is factually correct however his evidence did not persuade me that the land the subject of the proposed easement could be economically better used if he could reconfigure it by excavation or earth movement. Bluntly the detail is lacking. Furthermore the evidence I accept from the plaintiff and also Mr Deguara and Mr Williams the valuer (reinforced by my inspection), is that the land, for the most part being close to the creek or the boundary has no better economic use. Concerning the second issue, aquaculture, there was no evidence that this proposal was more than a pipe dream. The issue was raised very late in proceedings in the respondent’s last affidavit unsupported by any study or expert evidence. In the circumstances where the respondent’s land is subject to a long lease to tenants for the use as a cane farm the view I take is that the issue is so speculative being unsupported by evidence that it can be safely disregarded.
  8. [63]
    Another matter was mentioned more than once in the course of the proceedings, that the respondent was legally the owner of the pipeline it being a fixed installation present at the time he purchased the land. Even if this be the case against the background that the applicant installed the pipeline at great expense and in the circumstances of the admissions and the pleading and the evidence as I find it to be it is, in my view not only within my power to impose a statutory right of user in the form of an easement as contended for by the applicant but also just so to do.

Conclusion and Orders

  1. [64]
    The applicant is entitled to relief under s 180 of the Property Law Act 1974 (Qld) by the imposition of an easement consistent with the surveyed path of the pipeline performed by Mr Dobbie in Exhibits 1 and 15. I will leave it to the parties to determine if it is necessary to specify the path of the easement (that is the route of the pipeline)[64] or any other dimensions. It is obvious that the grant is intended to protect the pipeline more or less as it is under the surface of the land, rights to enter and to pass over for purposes of maintenance and repairs and rights to provide power for the pumping of water. Costs associated with the maintenance and repair of the pipeline should be borne by the applicant. The easement should also, to the extent consistent with my findings, be consistent with the draft, Exhibit 13 which appears to satisfactorily describe the terms necessary to give effect to an easement to pump water from the creek to the dam on the applicant’s land and to provide for necessary repairs and maintenance. The lodgement and registration costs should be at the expense of the applicant. He should also pay the compensation offer of $5,500. Plainly care will have to be taken with the drafting of the orders and the easement to ensure it is consistent with my findings, to enable the parties (and future owners) to understand their respective rights and obligations[65] and to enable registration of the easement promptly following the making of final orders.
  2. [65]
    There is also an outstanding question of the costs of this proceeding.
  3. [66]
    The orders will be:
  1. The applicant and the respondent are to submit, within 28 days, a draft of the orders for the imposition of a statutory right of use consistent with these reasons.
  2. Within 28 days, if not otherwise agreed, the applicant and the respondent are to submit written submissions concerning costs and such submissions not to exceed two (2) pages.
  3. The question of costs be determined on the papers without further hearing.
  4. Liberty to apply on four business days notice in writing concerning order 1.

Footnotes

[1]  Originating application filed 14 November 2016.

[2]  Title reference 50001212 and title reference 50001213.

[3]  Note, for convenience, the applicant’s land will be referred to as the dominant land, and the respondent’s land as the servient land despite no formal easement being registered.

[4]  Title reference 21053154.

[5]  See Ex 1 and the report by Mr Dobbie, Ex 15.

[6]  Affidavit of GJ Ward filed 14 November 2016 at para 14.

[7]   Ex A at pages 20-21 to the affidavit of GJ Ward filed 14 November 2016 (See Ex 2).

[8]   Ex A at pages 1-4 to the affidavit of AD Busch filed 14 November 2016 (See Ex 17).

[9]   Ibid at page 5.

[10]  Ibid at page 10.

[11]  Ibid at pages 7-9.

[12]  Ibid at page 11.

[13]  Ibid at page 12.

[14]  Ibid at pages 15-57.

[15]  Ibid at page 58.

[16]  Ex A to the affidavit of AD Busch filed 24 October 2017.

[17]  Application filed 16 November 2017.

[18]  Affidavit of ME Hull filed 14 February 2018 at [5]-[8].

[19]  Ibid at [9]-[19].

[20]  Ibid at [20]-[27].

[21]  Transcript, 12 February 2018, 1-8 – 1-10. See also statement of claim para [6] and defence para [3].

[22]  [2015] QSC 137 at [74] (‘Peulen’).

[23]  [2010] NSWLEC 2.

[24]  Ibid at [105] – [116].

[25]   [2016] QCA 20 at [72]-[73], [75]-[77] (‘Bradshaw’).

[26]   [2016] QSC 40 (‘2040 Logan Road’).

[27]   Ibid at [39]-[41].

[28]  [2010] QSC 399 at [25], [97], [98] (‘Naylor’).

[29]  Bradshaw at [72]-[76].

[30]  Naylor at [71]-[82].

[31]  Ibid at [83]-[87]; 2040 Logan Road at [39]-[41].

[32]  Naylor at [97]-[98].

[33]  Re Hodgskin [1999] QSC 225 at [23].

[34]  Naylor at [25-[26], [100].

[35]  Peulen at [74]; Bradshaw at [72].

[36]  Peulen at [74].

[37]  Bradshaw at [76]; Peulen at [74].

[38]  Peulen at [74].

[39]  Ibid.

[40]  Bradshaw at [75].

[41]  See Ex 9, affidavit filed 10 July 2017.

[42]  See Ex 11, valuation report 10 August 2017, filed 28 August 2017 and the letters contained in Exhibits
    12A and B.

[43]  Scott v Mumurkah Corporation (1954) 91 CLR 300 at [314].

[44]  For The applicant see Exhibits 2, 3 and 4 being the affidavits filed 14 November 2016, 10 July 2017 and
    24 October 2017. For Mr Hull see Exhibits 5, 6 and 7 being the affidavits filed 10 February 2017,
    23 November 2017 and 1 February 2018.

[45]  Ex 1 and Ex 15.

[46]  See T1-10 l10.

[47]  See para 6(a) of the statement of claim and para 3(a) of the defence.

[48]  See para 6(b) and (c) of the Statement of Claim and para 3(c) and (d) of the defence.

[49]  See T1-25 l20.

[50]  See T1-26 l10 and T1-27 l35.

[51]  See T1-17 l4 – 1-18 l5.

[52]  See Ex 8.

[53]  T1-34 l45 and T1-42 l40.

[54]  Ex 16.

[55]  See Ex 7 at paras [17]-[19].

[56]  Ex 9, affidavit filed 10 July 2017.

[57]  Ex 11 valuation report 10 August 2017.

[58]  Ex 12 A&B.

[59]  Compare T1-37 l31 to T1-38 l39 with Exh A (8) and evidence at T1-49 and 1-50.

[60]  See Ex 10.

[61]  See for example Ex 14, the affidavit of LM Ward.

[62]  See Ex 1 and Ex 15.

[63]  c/f Naylor & Anor v Pierce & Anor [2010] QSC 399 at [98].

[64]  Whether it follows the path shown in Ex 1 and Ex 15.

[65]  c/f Westfield Management Ltd v Perpetual Trustee Co Ltd (2007) 233 CLR 528.

Close

Editorial Notes

  • Published Case Name:

    Ward v Hull

  • Shortened Case Name:

    Ward v Hull

  • MNC:

    [2019] QSC 32

  • Court:

    QSC

  • Judge(s):

    North J

  • Date:

    21 Feb 2019

  • White Star Case:

    Yes

Litigation History

Event Citation or File Date Notes
Primary Judgment [2019] QSC 32 21 Feb 2019 Application for statutory right of use pursuant to 180 of the Property Law Act 1974 (Qld) granted: North J

Appeal Status

No Status