Bankstown Trotting Recreational Club Ltd v Chisholm

Bankstown Trotting Recreational Club Ltd (the Club) leased land from Bankstown City Council (the Council). The Council subsequently approved a subdivision of adjoining land and the creation of an easement that burdened the leased land. The Club alleged that the Council, as landlord, had derogated from the rights granted under the lease by approving the subdivision and easement. The Club also had a licence agreement with the Council for the use of certain land for car parking, with the licence fee to be determined by agreement or arbitration, or by the primary judge if agreement could not be reached. The Club appealed the primary judge's decision regarding the licence fee.

The central legal issues before the Court of Appeal were whether the Council had breached the implied covenant of quiet enjoyment or the principle of non-derogation from grant by approving the subdivision and easement, and whether the Council's actions were permitted under section 28 of the *Environmental Planning and Assessment Act 1979* (NSW), which allows environmental planning instruments to override other laws and instruments. Additionally, the Court had to determine whether the primary judge had erred in assessing the licence fee for the car parking land, considering the provision for a "fair and reasonable sum" to be determined by agreement or arbitration.

The Court of Appeal dismissed the Club's appeal. It held that the Council's approval of the subdivision and easement did not constitute a derogation from grant or a breach of the covenant of quiet enjoyment. The Court reasoned that the Council, in its capacity as a planning authority, had the power to approve such developments, and the lease did not grant the Club exclusive possession of the entire parcel of land in a manner that would be infringed by the easement. Furthermore, the Court found that section 28 of the *Environmental Planning and Assessment Act 1979* permitted the local environment plan to override any restrictive covenants or agreements that might otherwise have prohibited the development. Regarding the licence fee, the Court found no error in the primary judge's assessment, characterising it as a matter of estimation rather than precise calculation, and that the judge had properly considered the expert evidence.

Consequently, the appeal was dismissed, and the appellant was ordered to pay the respondents' costs of the appeal.