City of Canterbury v Saad
[2013] NSWCA 251
•06 August 2013
Court of Appeal
New South Wales
Case Title: City of Canterbury v Saad Medium Neutral Citation: [2013] NSWCA 251 Hearing Date(s): 17 June 2013 Decision Date: 06 August 2013 Before: Beazley P at [1];
Meagher JA at [75];
Leeming JA at [76]Decision: 1. To the extent necessary, grant leave to appeal;
2. Appeal dismissed with costs.
[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]
Catchwords: REAL PROPERTY - easements - Conveyancing Act 1919, s 88K(1) - whether easement was reasonably necessary
REAL PROPERTY - easements - Conveyancing Act 1919, s 88K(2)(a) - whether use of the land having benefit of easement was inconsistent with the public interest - where the servient tenement is community land - whether error in having regard to surrounding land
REAL PROPERTY - easements - Conveyancing Act 1919, s 88K(1) - discretion to grant easement - relevance of applicant's knowledge that land is landlocked - whether dominant tenement purchased at discounted price.Legislation Cited: Conveyancing Act 1919
Environmental Planning and Assessment Act 1979
Local Government Act 1993Cases Cited: 117 York Street Pty Ltd v Proprietors of Strata Plan No 6123 (1998) 43 NSWLR 504
Bloom v Lepre [2008] NSWSC 79; 13 BPR 24,923
Etwell v Newcastle City Council [2006] NSWSC 1165; 151 LGERA 64
House v R [1936] HCA 40; 55 CLR 499
ING Bank Australia Ltd v O'Shea [2010] NSWCA 71; 14 BPR 27,317
Khattar v Wiese [2005] NSWSC 1014; 12 BPR 23,235
Marshall v The Council of the City of Wollongong [2000] NSWSC 137; 107 LGERA 73
Moorebank Recyclers Pty Ltd v Tanlane Pty Ltd [2012] NSWCA 445; 16 BPR 31,257
Rainbowforce Pty Ltd v Skyton Holdings Pty Ltd [2010] NSWLEC 2; 171 LGERA 286Category: Principal judgment Parties: City of Canterbury (Appellant)
Samy Saad (Respondent)Representation - Counsel: Counsel:
D A Priestley (Appellant)
J A Loxton (Respondent)- Solicitors: Solicitors:
Pikes & Verekers Lawyers (Appellant)
Gamble Law & Estate Planning (Respondent)File Number(s): CA 2012/151834 Decision Under Appeal - Before: Nicholas J - Date of Decision: 27 April 2012 - Citation: Samy Saad v City of Canterbury [2012] NSWSC 389 - Court File Number(s): 2011/221285
HEADNOTE
[This headnote is not to be read as part of the judgment]
The respondent purchased Lot 1, which was zoned as residential land, following public tender. Lot 1 is landlocked and it was a condition of the Planning Scheme Ordinance that the appellant, the City of Canterbury (the Council), could not consent to the development of a dwelling house on Lot 1 unless it was satisfied that there was adequate vehicular access to the Lot. After unsuccessfully seeking access to the Lot from adjacent private land owners, the respondent applied for an easement pursuant to the Conveyancing Act 1919, s 88K over two lots of land (Lot 7 and Lot 13) owned by the Council. Nicholas J granted the easement on 30 May 2012.
On appeal to this Court, three issues arose for determination:
(1) Whether the easement was reasonably necessary for the effective use or development of Lot 1;
(2) Whether the use of Lot 1, having the benefit of the easement, would be inconsistent with the public interest; and
(3) Whether the court should exercise its discretion to impose an easement.
The Court dismissed the appeal with costs.
Held per Beazley P (Meagher and Leeming JJA agreeing):
In respect of (1):
(i) In the particular and unusual circumstances of this case, the trial judge did not err in taking into account surrounding community land in finding that there was minimal adverse impact on the Council's land: [42]. Even if the trial judge was required to focus on the servient tenements only, the easement would have a minimal impact on the use of the servient tenements and was reasonably necessary for the effective development of Lot 1: [42]-[44].
Considered: Rainbowforce Pty Ltd v Skyton Holdings Pty Ltd [2010] NSWLEC 2; 171 LGERA 286; ING Bank Australia Ltd v O'Shea [2010] NSWCA 71; 14 BPR 27,317; Moorebank Recyclers Pty Ltd v Tanlane Pty Ltd [2012] NSWCA 445; 16 BPR 31,257
Cited: Khattar v Wiese [2005] NSWSC 1014; 12 BPR 23,235In respect of (2):
(i) The determination of whether the use of the land having the benefit of the easement will be inconsistent with the public interest will depend upon the facts of each case: [54]. In circumstances where the impact on the burdened community land is minimal and the easement will allow Lot 1 to be used according to its zoning, the trial judge did not err in finding that the easement was not inconsistent with the public interest: [56], [58].
Considered: Marshall v The Council of the City of Wollongong [2000] NSWSC 137; 107 LGERA 73; Etwell v Newcastle City Council [2006] NSWSC 1165; 151 LGERA 64.
Cited: Rainbowforce Pty Ltd v Skyton Holdings Pty Ltd [2010] NSWLEC 2; 171 LGERA 286; 117 York Street Pty Ltd v Proprietors of Strata Plan No 6123 (1998) 43 NSWLR 504.In respect of (3):
(i) It is not relevant for the purpose of exercising the discretion under s 88K(1) that the applicant for an easement acquired the dominant tenement at an advantageous price: [68]. In this case, there was no evidence that the dominant tenement had been purchased at a discount: [68].
Cited: Rainbowforce Pty Ltd v Skyton Holdings Pty Ltd [2010] NSWLEC 2; 171 LGERA 286; 117 York Street Pty Ltd v Proprietors of Strata Plan No 6123 (1998) 43 NSWLR 504(ii) The trial judge did not err in holding that the respondent's knowledge that the land was landlocked was not a factor adverse to the grant of an easement: [69]-[70].
(iii) The trial judge did not err in exercising the discretion to grant an easement over community parkland for access to a development on private land: [71]-[73].
JUDGMENT
BEAZLEY P: The appellant, the City of Canterbury (the Council), has appealed against an order made by Nicholas J on 30 May 2012 pursuant to the Conveyancing Act 1919, s 88K granting an easement over two lots of land owned by the Council, for the benefit of land owned by the respondent. The purpose of the easement is to provide access to a property owned by the respondent, which is presently landlocked.
The land
The respondent is the registered proprietor of a block of land (to which I will refer as Lot 1) within the local council area of the City of Canterbury. Lot 1 is a vacant, undeveloped lot, zoned "residential 2(a)" under the relevant Planning Scheme Ordinance. Lot 1 is landlocked by public land known as Heynes Reserve and by neighbouring houses.
The Council is the registered proprietor of two blocks of land, Lot 7 and Lot 13. Lot 7 is a small parcel of land comprising an area of approximately 50 m2. It has a slight downhill slope towards the cycleway/walkway. Lot 13 is a large lot. Neither party adduced evidence of the history of the lots to be burdened by the easement and it may be inferred that that history would be relatively complex. However, given the size of Lot 7, it is likely that it is a remnant lot after various subdivisions had occurred and would never in the ordinary course be created. Presumably that is the basis of the Council's argument that the statutory easement would effectively "sterilise" it.
Lot 7 and Lot 13 are zoned "open space 6(a) - existing recreation" under the Ordinance and are classed as "community land" pursuant to the Local Government Act 1993, Ch 6, Pt 2 Div 1 by operation of Sch 7, cl 6 of that Act. Each of the lots is classified as "a park" pursuant to Ch 6, Pt 2, Div 2, under the Council's Generic Plan of Management for Parks dated 23 March 1993. The Lots are part of Heynes Reserve.
Heynes Reserve is located at the junction of the Cooks River and Cup and Saucer Creek. The northern footpath of the adjacent street to which the respondent is seeking access runs in a westerly direction and links with a bridge over Cup and Saucer Creek, which passes through Heynes Reserve, giving access to further parkland on the western side of the Creek.
The terms of the order granting the easement are Attachment 1 to these reasons. The easement granted by the primary judge leads from the cul-de-sac at the western end of the adjacent local street over Lot 7 and over portions of Lot 13 to Lot 1. It comprises a strip of land about 2.83 m wide and 32 m in length, covering an area of about 90 m². The respondent proposes to construct a driveway over the full length and width of the easement. A plan of the area and the easement is Annexure A to the orders and is also attached to these reasons so to enable a better understanding both of the layout of the land comprised in Lots 1, 7 and 13 and the easement that was sought by the respondent.
There is a combined cycleway/walkway through Heynes Reserve, which traverses Lot 13 and abuts Lot 7. At one time, the cycleway/walkway also traversed a small section of Lot 1 but has been repositioned so as to be solely upon Council land. The cycleway/walkway runs contiguous to the easement.
Evidence was given as to the present use of Lots 7 and 13 by the Council's manager of governance and administration. According to that evidence, Lots 7 and 13 are used by members of the public for unstructured and informal passive and active recreation. The park was described as being for play, exercise and picnicking and was described as contributing to an overall sense of spaciousness in the open space of the park.
The surrounding land is either park land or developed residential land.
History of the land ownership
Prior to the purchase by the respondent, Lot 1 was owned by the Roads and Traffic Authority (the RTA). Whilst in the ownership of the RTA, Lot 1 bordered a road reservation known as the Cooks River County Road Reservation. When the road reservation was abandoned in September 1998 and the RTA requested the land to be rezoned under the Environmental Planning and Assessment Act 1979, s 117.
The Council formed a working party to examine the zoning proposals for land that had been affected by the abandonment of the road reservation. The working party was given the task of recommending a zoning proposal to achieve a significant regional linear park along the Cooks River Valley.
The working party gave its report to the Council's City Development Committee in September 2005. The Committee noted that Lot 1 had been specifically created for the RTA for road widening purposes. Following the abandonment of the road reservation, the land remained vacant as "informal open space". The Committee proposed that the land be zoned "Residential 2(a)" in accordance with a longstanding proposal to that effect. In making that recommendation, the Committee noted that the proposed zoning reflected the fact that the general area in which Lot 1 was located was already "well supplied with existing open space".
The report stated that the land was of sufficient size to contain a separate dwelling house, but that:
"... any development on the land should be subject to satisfactory access arrangements being made given the landlocked nature of this allotment."
On 14 July 2006, the Director-General reported to the Minister under the Environmental Planning and Assessment Act, s 69 in respect of the proposed zoning, essentially repeating the contents of the Committee's report.
On 18 August 2006, Canterbury Local Environment Plan 205 (the LEP) was gazetted. The LEP amended the Ordinance by adding cl 62P, which applied to Lot 1, as follows:
"...
(2) The Council must not consent to development for the purposes of a dwelling-house or dwelling on the land unless the Council is satisfied that development provides for adequate vehicular access to the land."On 5 July 2007, whilst Lot 1 was still in its ownership, the RTA asked the Council whether it would grant an easement to provide access to Lot 1, so that it could be disposed of on the open market. It asked, alternatively, whether the Council would be interested in purchasing the land at market price. The Council declined the offer to purchase the land, although it indicated that if, at some time in the future, the RTA had no further use of the land and was prepared to sell it to the Council as open space for nominal consideration, it "may well be interested". At that time, the Council was of the view that the area was well serviced with open space which was adequate for public recreation in the area.
The RTA did not accede to the Council's suggestion for the sale of Lot 1 to it as open space for nominal consideration. Rather, it advertised Lot 1 in the Sydney Morning Herald for sale by public tender. The respondent, having seen the advertisement, made an offer in accordance with the process specified by the RTA and was the successful bidder. There were other bidders, one of whom was the owner of the property adjoining Lot 1. Contracts for sale were exchanged on 18 December 2007 for a purchase price of $140,000. Settlement occurred on 29 January 2008. The respondent proposes to build a dwelling house on Lot 1 for use as his own residence.
The trial judge, who had a view of the subject land, described, at [26], the area of the easement as a grassy bank near the junction of the cycleway/pathway. His Honour, at [32], referred to the measurements of the driveway and noted that the part of Lot 7 over which the easement was proposed was "a pinch of grassy land along the western side" of the westernmost residential properties in the street.
The proposed use of the easement as a driveway and its design were described in the report of Mr Hallam, the respondent's traffic and transport engineer, in the following terms:
"3.1 Proposed Access Drive
... The start of this drive in xxxxxx Avenue would not overlap with any existing residential driveways. A car entering or leaving xxxxxx Avenue would have unrestricted sight lines to and from xxxxxx Avenue, to see other cars.
The drive will be defined not only by the surface but also by bollards on each side. These will physically prevent a car from driving onto the adjoining reserve and path areas. Where the drive will cross over the western continuation of the xxxxxx Avenue northern footpath, this footpath will be re-aligned so that it crosses the drive at right-angles, with a designated crossing point ... At this crossing, the bollards at the north-eastern corner will be combined with a low horizontal fence bar, to direct pedestrians along the path and prevent pedestrians from walking beside the low brick fence on the southern frontage to No. 21 xxxxxx [Avenue]. This is to improve the sight lines for a driver leaving the subject lot and driving to xxxxxx Avenue.
The access drive will continue along the western side of No. 21, prior to entering the subject lot, at a shallow angle. Between the lot and the footpath crossing of the drive, a combination of low height divider wall and open-form metal fence on the outside (western side) of the access drive will separate cars from pedestrians, and reduce the chance of pedestrians walking on the access drive ..."
The respondent, having purchased the land, unsuccessfully negotiated with the owners of neighbouring properties in an effort to gain access to Lot 1. The respondent then requested the Council to grant an easement over Lots 7 and 13, so as to enable access to the property. Whilst an easement may be granted over community land: see Marshall v The Council of the City of Wollongong [2000] NSWSC 137; 107 LGERA 73; Etwell v Newcastle City Council [2006] NSWSC 1165; 151 LGERA 64, the Council had no power to grant the easement: see the Local Government Act, s 45. The Council advised the respondent that it had no power to grant the easement and also informed the respondent it would oppose any application under s 88K for a court ordered easement over its land.
The legislation
The Conveyancing Act 1919
The Conveyancing Act, s 88K provides:
"88K Power of Court to create easements
(1) The Court may make an order imposing an easement over land if the easement is reasonably necessary for the effective use or development of other land that will have the benefit of the easement.
(2) Such an order may be made only if the Court is satisfied that:
(a) use of the land having the benefit of the easement will not be inconsistent with the public interest, and
(b) the owner of the land to be burdened by the easement and each other person having an estate or interest in that land that is evidenced by an instrument registered in the General Register of Deeds or the Register kept under the Real Property Act 1900 can be adequately compensated for any loss or other disadvantage that will arise from imposition of the easement, and
(c) all reasonable attempts have been made by the applicant for the order to obtain the easement or an easement having the same effect but have been unsuccessful.(3) The Court is to specify in the order the nature and terms of the easement and such of the particulars referred to in section 88 (1) (a)-(d) as are appropriate and is to identify its site by reference to a plan that is, or is capable of being, registered or recorded under Division 3 of Part 23. The terms may limit the times at which the easement applies.
(4) The Court is to provide in the order for payment by the applicant to specified persons of such compensation as the Court considers appropriate, unless the Court determines that compensation is not payable because of the special circumstances of the case.
(5) The costs of the proceedings are payable by the applicant, subject to any order of the Court to the contrary.
(6) Such an easement may be:
(a) released by the owner of the land having the benefit of it, or
(b) modified by a deed made between the owner of the land having the benefit of it and the persons for the time being having the burden of it or (in the case of land under the provisions of the Real Property Act 1900) by a dealing in the form approved under that Act giving effect to the modification.(7) An easement imposed under this section, a release of such an easement or any modification of such an easement by a deed or dealing takes effect:
(a) if the land burdened is under the Real Property Act 1900, when the Registrar-General registers a dealing in the form approved under that Act setting out particulars of the easement, or of the release or modification, by making such recordings in the Register kept under that Act as the Registrar-General considers appropriate, or
(b) in any other case, when a minute of the order imposing the easement or the deed of release or modification is registered in the General Register of Deeds.(8) An easement imposed under this section has effect (for the purposes of this Act and the Real Property Act 1900) as if it was contained in a deed.
(9) Nothing in this section prevents such an easement from being extinguished or modified under section 89 by the Court."
Proceedings before the trial judge
In the proceedings at first instance, the Council opposed the grant of the easement upon the following grounds:
(1) The easement was not reasonably necessary for the effective use or development of Lot 1;
(2) The use of Lot 1 with a benefit of the easement would be inconsistent with the public interest;
(3) The Council could not be adequately compensated for loss or disadvantage arising from imposition of the easement;
(4) The respondent failed to make reasonable attempts to obtain the easement or one of similar effect; and
(5) The Court should not exercise its discretion to impose an easement.
There is no ongoing dispute in respect of the issues stated in (3) and (4) above. However, the issues raised in (1), (2) and (5) remain in contention on the appeal and comprise grounds 1, 2 and 3 respectively of the notice of appeal.
First issue: was the easement reasonably necessary?
The trial judge, at [30], held that the evidence established beyond argument that the proposed easement was the only realistic solution available for the effective development of the land for the purposes of a dwelling. His Honour also noted that Lot 1 could not be developed for the benefit of the community because it was private land with the consequence that, without the easement, there would be no effective use or development of the land in accordance with its zoning.
His Honour stated, at [31], that in coming to that conclusion, he had taken into account the burden that the easement would impose upon Lots 7 and 13.
His Honour, at [32], noted that there was no evidence that the loss of any of the land on Lots 7 and 13 that would be burdened by the easement would have any discernible adverse effect on the public use of the surrounding area. In this regard, his Honour noted the City Development Committee had reported that the general area in which the proposed easement was located was already well supplied with existing open space. In this regard, his Honour expressed the opinion, at [32], that:
"A commonsense and objective evaluation of the likely impact of the driveway over these lots supports the finding that any impediment to the public's use and enjoyment of the community land would be minimal."
Accordingly, his Honour, applying the principles in Rainbowforce Pty Ltd v Skyton Holdings Pty Ltd [2010] NSWLEC 2; 171 LGERA 286 at [72], [76]-[78], [82]-[83] found, at [31], that the easement was reasonably necessary for the effective use and development of Lot 1.
In Rainbowforce Preston CJ of LEC summarised the principles governing the requirement of "reasonable necessity" in s 88K, relevantly, as follows:
"76 The requirement that the easement be reasonably 'necessary' for the effective use or development of the applicant's land means that there needs to be 'something more than mere desirability or preferability over the alternative means available' ...
77 Reasonable necessity has to be assessed having regard to the burden which the easement would impose. Hence '[i]n general terms, the greater the burden the stronger the case needed to justify a finding of reasonable necessity': Katakouzinos v Roufir Pty Ltd [1999] NSWSC 1045; (1999) 9 BPR 17,303 at [42]; Woodland v Manly Municipal Council at [12], [19](8); Khattar v Wiese at [27].
78 ... applying the test of reasonable necessity to the effective use or development of the land that will have the benefit of the easement has the consequence that:
'... the proposed easement must be reasonably necessary either for all reasonable uses or developments of the land, or else for some one or more proposed uses or developments which are (at least) reasonable as compared with the possible alternative uses and developments; and (2) in order that an easement be reasonably necessary for a use or development, that use or development with the easement must be (at least) substantially preferable to the use or development without the easement': 117 York Street Pty Ltd v Proprietors of Strata Plan No 16123 at 508-509.
...
82 ... the requirement of reasonable necessity is to be decided in light of the present circumstances at the time of the hearing of the application for an order: 117 York Street Pty Ltd v Proprietors of Strata Plan No 16123 at 511; Durack v de Winton at 16,448; Katakouzinos v Roufir Pty Ltd at [39]; and Tanlane Pty Ltd v Moorebank Recyclers Pty Ltd at [92]. Hence, it would not matter for the purposes of deciding whether the easement is reasonably necessary that the present circumstances were due to the applicant for the order taking a gamble: 117 York Street Pty Ltd v Proprietors of Strata Plan No 16123 at 511. However, if such reasonable necessity for an easement as presently exists arose from previous unreasonable conduct from the applicant, that could be a discretionary factor counting against the granting of relief: 117 York Street Pty Ltd v Proprietors of Strata Plan No 16123 at 511.
83 ... the requirement of reasonable necessity can be satisfied notwithstanding that some future action may be required, in addition to obtaining the easement, for the effective use or development of land, such as obtaining some statutory consent. For example, if an easement in the form of a right of carriageway is created, it may be necessary to obtain development consent under the EPA Act to construct the road in the right of carriageway. The requirement in s 88K(1) does not require that all other obstacles to the proposed use or development of the land that will have the benefit of the easement must have been overcome before the Court has power to grant an easement: 117 York Street Pty Ltd v Proprietors of Strata Plan No 16123 at 512 ..."
The meaning of "reasonably necessary" in s 88K(1) was considered by this Court in ING Bank Australia Ltd v O'Shea [2010] NSWCA 71; 14 BPR 27,317 where Giles JA (Campbell JA agreeing) stated:
"48 'Reasonably necessary' is a composite phrase, in which the necessity is qualified so that it must be a reasonable necessity. Necessity is quite an absolute concept. The qualification is not of the use or development, so that it must be reasonable, although no doubt reasonableness of the use or development comes into reasonable necessity for that use or development. It is of the necessity.
49 A qualification which did no more than reduce the necessity to a less absolute level is unlikely, and if that were intended some other word could have been used such as 'convenient'. Qualification whereby the necessity must be reasonable is apt to, and in my opinion does, permit regard to matters beyond the relatively absolute necessity for the effective use or development of the dominant tenement. It calls for an assessment of that necessity having regard to all relevant matters, according to the criterion of reasonableness. The impact of the easement on the servient tenement, and the fact that ordering an easement detracts from the property rights of the owner of the servient tenement, are matters readily to be taken into account in that assessment. It is difficult to see how reasonable necessity for an easement for the use or development of a dominant tenement, as distinct from necessity, can be arrived at without regard to the effect on the enjoyment of the servient tenement and on the property rights of the owner of the servient tenement." (emphasis added)
Young JA's separate reasons reached the same conclusion: see at [146].
The approach of the Court in O'Shea, as well as the remarks of Brereton J in Khattar v Wiese [2005] NSWSC 1014; 12 BPR 23,235 (cited in Rainbowforce at [77]) were approved by this Court in Moorebank Recyclers Pty Ltd v Tanlane Pty Ltd [2012] NSWCA 445; 16 BPR 31,257, where the Court concluded, at [117]:
"... the question of whether the easement was reasonably necessary for the effective use and development of the [dominant tenement] needs to be considered having regard to the effect it would have on the enjoyment of the [servient tenement] and on the property rights of the owners of that land."
The question raised on the appeal was whether the trial judge erred in finding that there was minimal adverse impact on the Council's land by reference to the significant open space available for use by the members of the public adjacent to Lots 7 and 13, rather than confining his consideration to Lots 7 and 13.
The Council accepted that there was no reasonably available alternative access to the respondent's land. It submitted, however, that in accordance with these authorities, "reasonable necessity" for the purposes of s 88K(1) was to be determined objectively and required that all of the circumstances, including the effect on the servient tenement, be considered. In particular, the Council submitted that s 88K(1) drew attention to the effect of the grant of an easement on the land rather than on the owner, so it was it was appropriate to have regard to the impact on the servient tenement and not by reference to the impact on other land.
The Council contended that the primary judge, therefore, erred in that he considered the effect of the grant of the easement not only by reference to the impact on Lots 7 and 13, but also by having regard to the effect of the grant of the easement on the surrounding parkland.
The Council accepted that the easement was over a relatively small portion of Lot 13 and that its impact on that Lot was relatively small. It submitted, however, that the grant of the easement over Lot 7 would cause it to suffer the total loss of that Lot. The Council submitted that in the circumstances, contrary to his Honour's finding, the combined impact on the servient tenements was significant, and certainly proportionately more so than the effect on the larger "surrounding area" taken into account by the primary judge.
In support of its submission that the grant of the easement would result in the total loss of Lot 7, the Council pointed out that the design of the proposed driveway was such as to secure to the respondent the sole use of Lot 7, because the proposed driveway was to be delineated by bollards along portion of its length. In addition, a small wall along portion of the proposed driveway was a feature of its design. However, the construction of bollards and a fence was not a condition of the grant of the easement. Rather, those features were safety and design measures proposed by the respondent's traffic expert for the construction of the driveway over the easement.
The Council further submitted that the primary judge erred, at [33], in considering as a relevant matter, that any adverse impact by the grant of the easement would be limited, because the final design of the driveway would have to be approved by the appellant as part of the respondent's development application for its construction. The Council contended that this consideration overlooked the fact that the whole of Lot 7 would be lost to the respondent if the easement was granted.
The Council rejected any suggestion that it been the author of its own problem in having zoned a landlocked parcel of land as residential. It submitted that the residential zoning had, in effect, been a default zoning, in that the other zoning options available to the Council, viz industrial or commercial, appeared less appropriate in an otherwise residential area with significant open space. The Council argued that although, in the s 69 Report provided to the Minister in support of the residential zoning, attention had been drawn to the need for vehicular access to the land as a condition of consent to the construction of a dwelling on the property, that did not evidence an intention on the part of Council for Lot 1 to be used as a stand-alone dwelling.
Although the heart of the Council's submission was that the grant of the easement would cause the effective loss of use of the whole of Lot 7, the evidence did not support that submission. The evidence was that Lot 7 was presently used by members of the public to gain access to the greater open space area. In the course of argument on the appeal, the Council accepted that, assuming a driveway was built over Lot 7, members of the public could still, as a matter of law, traverse Lot 7. In other words, Lot 7 could still be used by members of the public in the same way and for the same purposes as it is presently used.
The only impediment to its use would be the requirement for members of the public to move as and when a motor vehicle was driven along the driveway. However, an easement, by its very nature, involves a shared use, and therefore occasional inconvenience to the owner of the servient tenement and those lawfully entitled to use it. In the end, the Council's submission was no more than that, having regard to the driveway proposed to be built over the easement and, in particular, its incorporated safety design features, members of the public would be discouraged from using Lot 7.
That is a possibility. However, the design of the driveway is ultimately a matter for the Council. In any event, the evidence revealed very little active use of Lot 7 at present and it is possible that with the easement there could be increased use of Lot 7, with a concreted surface being more amenable to use for small children's bikes, prams and the like, than a grassed area, as is the position at present.
In my opinion, his Honour did not err, in the particular and unusual circumstances of this case, in taking into account the surrounding community land in determining whether the grant of the easement was reasonably necessary. Lot 7 is a "remnant lot" of approximately 50 m2 in area. It is easy to see that it could appropriately be amalgamated or consolidated with Lot 13. In those circumstances, it is artificial to consider the burden on Lot 7 independently, since what remains of Lot 7 is a very small part, and because Lots 7 and 13 together form part of a larger area of open space, used as parkland. It is not necessary in this appeal to address broader questions which might arise, for example, if a small lot burdened by a proposed statutory easement were in separate ownership, or if a subdivision application had been made prior to the application under s 88K.
But even if there was error, the outcome would be no different. On the evidence, there was only a low level of use of Lot 7 for the purposes of gaining access to the greater parkland, including to the cycleway/walkway. The grant of the easement over Lot 7 will not seriously impede the level of use as it is as present. Members of the public will still be able to traverse Lot 7 to gain access to the cycleway/walkway and open space areas to the same degree as they do at the moment, save for very short periods, when a vehicle is being driven along the driveway, either to or from any residence constructed on Lot 1. To the extent that any safety features are required to be incorporated into the construction of the driveway, there was no evidence that those features would impede in any way, let alone any significant way, what is, as I have said, low level use of Lot 7.
In my opinion, his Honour's conclusion that the grant of the easement was reasonably necessary was not only open on the evidence, it was the only conclusion available on the evidence.
The public interest
Section 88K(2)(a) requires the Court to be satisfied that use of the dominant tenement would not be inconsistent with the public interest. In Rainbowforce, Preston CJ of LEC noted that the provision in s 88K(2)(b) for the payment of compensation to the owner of the servient tenement provided for a balancing of competing private interests as well as the promotion of the public interest: see at [94]-[95] and cases cited therein. The primary judge applied this approach and held that there was nothing in the proposed use or development of the dominant land that would be against the public interest.
The Council submitted that, although there was no error in applying the decision in Rainbowforce, his Honour's approach was too narrow in confining the consideration of the public interest to the dominant tenement. It was necessary, on the Council's submission, to have regard to broader considerations, including factors that affected the servient tenement: see 117 York Street Pty Ltd v Proprietors of Strata Plan No 6123 (1998) 43 NSWLR 504 at 513. In particular, the Council submitted that because the easement was required to provide permanent driveway access over actively used community land, the easement was plainly inconsistent with the public interest.
In support of this submission, the Council relied upon remarks made by Bryson J in Marshall v The Council of the City of Wollongong [2000] NSWSC 137; 107 LGERA 73 at [26], as follows:
"It would be very rare that community land used in any active way could be subjected to an easement without inconsistency with the public interest in achieving the purposes for which the Community land was held. It would be rare for Community land to have been used for access for so long. There is no basis to fear that s 88K makes public parks readily available for excising small pieces to create access to neighbouring developments."
Bryson J's remarks were made in the context of his understanding that the public interest requirement in s 88K(2)(a) was directed to the impact on the servient tenement. As the clear words of the section state and as the authorities note, the public interest requirement is focussed on the dominant tenement. Whilst the Council accepted that was the correct construction of the section, it submitted that the impact on the servient tenement was relevant in this case, because the easement was over community land, the use of which was, and should remain, for the benefit of the public.
The Council also drew the Court's attention to Etwell v Newcastle City Council, where the applicant sought an easement over community land to gain access to the rear of his property. The community land over which the easement was sought was part of a larger area of parkland and was used by members of the public for walking and general recreation. Prior to seeking an easement over the land, the applicant had, for a long period of time, been using that part of the community land for access to an old garage, being the only practical means of access to that part of the applicant's land. However, the Council had required a means of vehicular access to be demonstrated before granting development consent to the construction of a new garage.
Palmer J ordered the grant of an easement on terms. In doing so, his Honour stated, at [31], that an application for use of community land for private purposes was to be "jealously scrutinised". For that reason, his Honour, at [34], stated that:
"I do not think that it is in the public interest that an easement be created under s 88K(1) over community land so as to confer private rights which are any greater than they need to be to meet the uses to which both the dominant tenement and the servient tenement are put at the time of the order."
Palmer J, at [33], also considered that it was conceivable, in the case before him, that the Council might wish to put the servient tenement to a use that would conflict with the easement. Accordingly, for the purposes of further protecting the public interest, his Honour, at [36], made it a condition of the grant that Etwell release the easement, to the extent necessary, should the Council at some time in the future require the servient tenement for a use that was inconsistent with the retention of the easement.
The Council submitted that although the remarks of Palmer J were made in the context of the exercise of the court's discretion, they were relevant to the public interest inquiry. Accordingly, the Council submitted that in respect of community land, it was not in the public interest for the status quo to be disturbed in favour of private interests.
The respondent submitted that a concern with the possible future use of the servient tenement was not a relevant aspect of the public interest under subs (2), but accepted it may be a relevant consideration under subs (1). I am not sure that is correct, at least in the case of community land. A determination as to whether the grant of an easement over community land would be inconsistent with the public interest must have regard to the use or intended use of the community land and the extent to which the grant of an easement would interfere with that use.
Be that as it may, the remarks of Palmer J were not intended and should not be taken to be a statement of principle governing the application of s 88K(2)(a) nor, indeed, as governing the exercise of discretion, if that was the context in which the remarks were made. Whether the use of the land having the benefit of the easement will be inconsistent with the public interest will depend upon the facts of each case, as will the manner in which the court exercises its discretion. In this case, Lot 7 was a small remnant parcel of land which had no special or particular use beyond what has already been described. Likewise, the portion of the easement over Lot 13 involved a small area of land which, other than in a minimal way, did not disturb the public's use of that land, which, as explained above, was as part of a greater area of parkland.
The Council accepted that there was not a great deal that could be said in support of this ground. As the primary judge observed, at [32], the area of the easement was small and there was no evidence that the grant of the easement would have any discernable adverse effect on the public use of the surrounding areas. The Council also accepted that if there was no effect on the servient tenement to be concerned about, there was little in this argument.
As I have indicated above, although there will be some impact, I consider that the easement will not have a significant impact on the use of the servient tenement. The grant of an easement over Lots 7 and 13 is not inconsistent with the public interest. The land is zoned residential and an owner of the land is entitled to utilise land in accordance with its zoning provided development consent is obtained. The Director-General's report to the Minister under the Environmental Planning and Assessment Act, s 69 recognised that Lot 1 was landlocked and that any development on it should be subject to satisfactory access arrangements being made.
Further, as Preston CJ of LEC observed in Rainbowforce, at [83], the fact that an applicant for an easement may still have to fulfil other requirements before the land can be utilised in accordance with the zoning, such as obtaining development consent for the construction of a driveway, is not a bar to the grant of an easement. Although his Honour's statement was made in respect of the requirements of s 88K(1), they are also relevant at this point, as the Court's consideration under s 88K(2) is directed to the use of the land having the benefit of the easement.
In my opinion, there was no error in his Honour's finding, at [37], that the provision of an easement that permitted vehicular access to a residence on Lot 1 was entirely consistent with the public interest in the use or development of the land for its designated purpose.
Third issue: error in the exercise of discretion
The grant of an easement involves the exercise by the Court of a discretion: see Rainbowforce at [133]. Relevantly to the issues raised on the appeal, his Honour noted, at [51] and [52], that the Council opposed the grant of the easement on the following discretionary grounds. First, that the respondent had purchased the land knowing that it was landlocked. Secondly, as a consequence of the land being landlocked, the respondent had been able to purchase it at a discounted price. Thirdly, there was no justification in the circumstances of this case for the Court to make available a piece of community parkland for access to a development on private land.
His Honour found, at [51], in respect of the first of these factors, that the respondent's knowledge that the Lot was landlocked at the time of purchase was not a factor that was adverse to the grant of the easement. As his Honour observed, at [51], it was not possible for the respondent to make an application for an easement under s 88K before purchase.
As to the second factor, His Honour held, at [51], that there was no evidence that Lot 1 had been purchased at a discount price.
As to the third factor, his Honour considered, at [53], that given his conclusions as to the reasonable necessity for the easement and the satisfaction of the requirements of ss 88K(2)(a) and (b), the fact that the servient tenement was community land should not weigh against the making of an order. In that regard, his Honour had regard to Mr Hallam's unchallenged evidence of the traffic safety implications of the proposed driveway, which were considered satisfactory having regard to its intended design.
The Council submitted that the primary judge's exercise of the residual discretion in s 88K(1) miscarried because the fact that the respondent had purchased the land with knowledge that it was landlocked and had paid a discounted price, compared to the value of surrounding land, told against the grant of the easement. At times, this submission was cast in terms that the primary judge had failed to take these factors into account.
The Council contended, contrary to his Honour's finding, that there was evidence that Lot 1 had been purchased at a discount, by reference to valuation evidence of "comparable sales". That evidence was in respect of sales two years later of three blocks in the street, although the respondent conceded in cross-examination that the value of properties in the street had not increased between 2007 and 2009. The valuer calculated that as at 2009, the average value of a block of land in the street was approximately $1,200 per square metre. The Council submitted that the land had effectively been valued by the market in 2007 as probably permanently landlocked. There was no evidence to support this. The respondent conceded, nonetheless, that he had paid a price for the property that suggested that a dwelling house could not be built on it other than by adjoining landowners. The respondent refuted that he had contemplated the possibility that residential use of Lot 1 might ultimately be restricted to adjoining landowners who could use it without the need for additional access.
Although the Council maintained that it was apparent from the valuation evidence that the respondent had purchased Lot 1 at a discount price, it eschewed any suggestion that its complaint was that the respondent had made a windfall gain. Rather, it contended that the discount demonstrated the respondent's knowledge, expectations and belief in respect of the property, namely, that it was landlocked and he could not get development consent unless he gained access to the property. It was submitted that those matters were relevant to the exercise of discretion.
The respondent argued that, contrary to the Council's contention that the property had been brought at a discount, the evidence disclosed that he had bid for the property in a publicly listed tender, he was not the sole bidder and in bidding for the property at a purchase price of $140,000, he had taken into account costs that he would incur in relation to the purchase and development of the property. Included, in the costs he took into account, were costs for the legal advice he had received as well the costs of consultants he would be required to engage. He had also taken into account the legal costs for the bringing of the s 88K application.
Although there was no evidence of the amount of the costs the respondent paid or would expect to pay, he said that he was told that "there [was] a lot of consultancy" and a "lot of money and time and effort" involved in the bringing of the application. The legal costs for which the respondent would be responsible would ordinarily include the costs of the Council: s 88K(5). The respondent at all times accepted that he was liable for those costs. Accordingly, the effective price of the property was more than $140,000. The respondent also pointed to the fact that the Council's valuation of the property for rating purposes was $140,000. The respondent contended that this was, therefore, evidence that the property was not purchased at a discount.
I am of the opinion that there was no evidence that the respondent had purchased the property at a "discount" in circumstances where it was purchased by way of a public tender. The Court is not concerned, for the purposes of s 88K(1), with whether an applicant for an easement took a gamble in acquiring property: see Rainbowforce at [82] and cases cited therein. In my opinion, it is likewise irrelevant for the purpose of the exercise of the discretion whether an applicant acquired property at an advantageous price, knowing that the land could only be usefully developed if an easement was granted. In this regard, there was no misconduct alleged against the respondent that may have been a relevant discretionary factor: see Rainbowforce at [82]; 117 York Street at 511. Although it is probable that the property will be worth more with the grant of the easement than it is without an easement, that will be the likely position with any property in respect of which an easement is sought. For that reason alone, as a matter of discretion, the price paid for the property without the easement cannot be a factor that militates against the grant of an easement.
The next question is whether the respondent's knowledge of the landlocked nature of the property was relevant to the exercise of discretion. The Council referred the Court to Bloom v Lepre [2008] NSWSC 79; 13 BPR 24,923 at [104] where Young CJ in Eq had regard to the applicant's knowledge of the limited vehicular access to the property as relevant, amongst other factors, to the exercise of discretion. The exercise of a judicial discretion depends upon the facts of the particular case. Appellate review of a discretionary determination invokes the principles stated in House v R [1936] HCA 40; 55 CLR 499. In this case, Nicholas J considered, at [51], the Council's submission on this question and determined that it was not a factor that was adverse to the application. Notwithstanding the occasional framing of the submission in terms that his Honour had not taken this matter into account, it is apparent from the terms of his reasons that he did so: see at [51].
That would only leave available the argument under House v R principles that the decision reached by his Honour was so unreasonable that there must have been some underlying error in his reasoning process: see at 505. Any such argument must fail. His Honour, having considered the argument that the easement should not be granted, given the respondent's knowledge of the nature of the property, held that was not a matter that was adverse to the grant of the easement. That view was plainly open. Lot 1 was landlocked. It had been zoned residential by the Council in circumstances where the Council amended the LEP to provide that residential development could not occur on the property unless access was provided. The Council accepted that an easement over its property was the only means by which access could be obtained to Lot 1.
The Council also complained that his Honour failed to acknowledge and take into account the proposition that a public authority ought not be compelled to cede community land otherwise for public use to individual private interests when those interests can never have had any reasonable expectation of obtaining such rights. The Council submitted that the fact that an individual might expect to be able to force an appropriation of land should not be ignored and relied on the comments of Palmer J and Bryson J in Etwell and Marshall, to which I have referred.
The exercise of a judicial discretion requires the court to have regard to all relevant circumstances. In Bloom the Court considered, at [104], that the applicant's knowledge of the limited access to the purchased property was, amongst other matters, a relevant consideration. In the present case, the respondent had attempted to find alternative means of access. The Council had zoned the land "residential", knowing it was landlocked. The local ordinance required access to be provided as part of any residential development and the easement over the Council's land was the only feasible way to gain access. Rather than the easement being a "forced appropriation" of land, the zoning was such that the Council must have foreseen that the land would be purchased for the very purpose for which it was zoned. The Ordinance, requiring access to be provided to the land before consent could be granted for residential development, further indicates that the Council must have foreseen the possibility of an application as made by the respondent. But in any event, the language of "forced appropriation" is a significant overstatement, having regard to the minimal impact the grant of the easement will have on the servient tenements.
I would reject the Council's argument that any consideration such as it advanced under this argument was such as to require the refusal of the easement in the exercise of the Court's discretion, assuming any such argument was available on the facts of this case.
Conclusion
To the extent that leave to appeal is necessary, there should be a grant of leave, but in my opinion, the appeal should be dismissed with costs.
MEAGHER JA: I agree with Beazley P.
LEEMING JA: I agree with the reasons and orders of the President.
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Annexure A (PDF)
Attachment 1 (PDF)
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