Cracknell and Lonergan Pty Limited v Council of the City of Sydney
[2007] NSWLEC 392
•28 June 2007
Reported Decision: 155 LGERA 291
Land and Environment Court
of New South Wales
CITATION: Cracknell and Lonergan Pty Limited v Council of the City of Sydney [2007] NSWLEC 392 PARTIES: APPLICANT
RESPONDENT
Cracknell and Lonergan Pty Limited
Council of the City of SydneyFILE NUMBER(S): 11052 of 2006 CORAM: Preston CJ KEY ISSUES: Question of Law :- right of way burdening land to be developed - statutory provision suspending application of specified regulatory instruments to enable development to be carried out - specified regulatory instruments are "any covenant, agreement or similar instrument that purports to impose restrictions on the carrying out of development on land" - whether deed creating right of way is such a specified regulatory instrument LEGISLATION CITED: Conveyancing Act 1919 s88, s88(1), s88E, s88K, s89
Environmental Planning and Assessment Act 1979 s 28(1), s28(2) s78A(1), s79C(1)(b)-(e), s97,
Land and Environment Court Act 1979 s 39(4)
Real Property Act 1900, s42(1) (a1),CASES CITED: Al-Kateb v Goodwin (2004) 219 CLR 562;
Application of Thompson, unreported, Supreme Court of New South Wales, 25 October 1993;
Chui v Healey (2003) 11 BPR 21, 241; [2003] NSWSC 857;
Challister Ltd v Blacktown City Council (1992) 76 LGERA 10;
Clissold v Perry (1904) 1 CLR 363;
Clunies Ross v The Commonwealth (1984) 155 CLR 193;
Cogente Pty Limited v Doe (1998) 98 LGERA 162;
Coles Supermarket v Minister (1996) 90 LGERA 341;
Doe v Cogente Pty Ltd (1997) 94 LGERA 305;
Donald Crone & Associates Pty Ltd v Bathurst City Council [1988] NSWLEC 73 (19 October 1998);
Dresdner v Scida [2003] NSWSC 957;
Lodhi v Regina (2006) 199 FLR 303; [2006] NSWCCA 121;
Ludwig v Coshott (1994) 83 LGERA 22 (Bryson J) and Court of Appeal, unreported, 13 February 1997;
Marjen Pty Ltd v Coles Supermarkets Pty Ltd (1996) 90 LGERA 363;
Meriton Apartments Pty Ltd v Sydney Water Corporation (2004) 138 LGERA 383;
Michael Realty Pty Ltd v Carr [1975] 2 NSWLR 812;
Pancho Properties Pty Ltd v Wingecarribee Shire Council (1999) 110 LGERA 352;
Pettey v Parsons [1914] 2 Ch 653;
Powell v Langdon (1944) 45 SR (NSW) 136;
Tulk v Moxhay (1948) 2 PH 774; 41 ER 1143;
Wade v NSW Rutile Mining Co Pty Ltd (1969) 121 CLR 177;
G H Wainwright v Canterbury Municipal Council [1992] NSWLEC 96 (30 October 1992);
Zenere v Lete (1980) 1 BPR 930DATES OF HEARING: 20 April 2007
DATE OF JUDGMENT:
28 June 2007LEGAL REPRESENTATIVES: APPLICANT
P C Tomasetti (Barrister)
SOLICITORS
D C Balog & AssociatesRESPONDENT
B A J Coles QC with S E Pritchard
SOLICITORS
Maddocks Lawyers
JUDGMENT:
THE LAND AND
ENVIRONMENT COURT
OF NEW SOUTH WALESPRESTON CJ
28 June 2007
11052 OF 2006
CRACKNELL AND LONERGAN PTY LIMITED V COUNCIL OF THE CITY OF SYDNEY
JUDGMENT
1 HIS HONOUR: The applicant, on behalf of its client, lodged with the respondent Council, on 5 August 2005, a development application for construction of an in-ground pool, associated fencing and minor landscape works at 65 Cope Street, Redfern, being Lot 1 in DP 202489. The rear of this land is burdened by a right of way. The location of the proposed pool encroaches about 2.5 metres upon the right of way.
2 The Council refused the applicant’s development application on 14 March 2006. The applicant appealed to this Court pursuant to s 97 of the Environmental Planning and Assessment Act 1979 (“the Act”). The Council filed on 20 December 2006 two questions of law. These were:
- “(1) Whether Clause 44 of the South Sydney Local Environmental Plan 1998 [SS LEP] operates pursuant to Section 28 of the Environmental Planning and Assessment Act 1979?
- (2) If the answer to 1 above is in the affirmative, is the right of carriageway which burdens the subject site, a covenant, agreement or instrument that purports to impose restrictions on the carrying out of development on the land, pursuant to Clause 44 of the SS LEP, for the purpose of enabling development to be carried out?”.
3 By consent, these questions of law were fixed for hearing on 20 April 2007.
4 The applicant and the respondent agree that question 1 should be answered in the affirmative. They differ, however, in their answers to question 2. The applicant submits that the answer to question 2 is in the affirmative while the respondent submits it is in the negative.
The right of way
5 The Indenture which created the right of way is Deed No 596 Book 530 dated 25 January 1894 between Henry Smith of Redfern and Matthew Smith of Waterloo. It provides that Henry Smith granted to Matthew Smith, his heir and assign:
- “…full and free right and liberty of way and passage for himself and themselves and his and their tenants and servants and other authorised by him or them without horses carts and carriages of all description over and along a road or right of way at the southern end of the said Henry Smith's property on the east side of Botany Street Redfern described in [Deed 590 Book 274] which right of way leads from Botany Street aforesaid being in width eight feet running Easterly for about one hundred and three feet and then running northerly to said Matthew Smith's property and having a width at the rear of about eleven feet eleven inches and the course of which road or right of way is more particularly shown on the diagram at the foot hereof.”
6 The diagram at the foot of the Indenture shows:
(a) as Henry Smith's property, 65, 67, 69, 71, 73 and 75 Botany Street Redfern (now Cope Street);
- (b) as Matthew Smith's property, the land to the north of Henry Smith's property; and
- (c) "H & M Smith's Right of Way" along the southern end of Henry Smith's property and then running northerly behind Henry Smith's property to the rear of Matthew Smith's property.
7 Deposited Plan 202489, registered in September 1961, is the Plan of Subdivision of land comprised in CT Vol 5421 Fol 31. It contains the notation that: "It is intended to create a Right of Way of Variable width over site of same in Lot 1 in favour of Lots 2, 3, 4, 5 & 6 in plan hereon". The plan shows a "Right of Way" to the rear of the properties (formerly Henry Smith's property) being:
(a) Lot 1 in DP 202489 (65 Cope Street, the subject site);
(b) Lot 2 in DP 202489 (67 Cope Street);
(c) Lot 3 in DP 202489 (69 Cope Street);
(d) Lot 4 in DP 202489 (71 Cope Street);
(f) Lot 6 in DP 202489 (75 Cope Street).(e) Lot 5 in DP 202489 (73 Cope Street); and
8 Deposited Plan 225943, registered 19 July 1965, is the Plan of Subdivision comprised in Conveyance Regd No 447 Book 2155. It shows a "PROPOSED RIGHT OF CARRIAGEWAY VARIABLE WIDTH" to the rear of the properties (formerly Matthew Smith's property) being:
(a) Lot 1 in DP 225943 (55 Cope Street);
(b) Lot 2 in DP 225943 (57 Cope Street);
(c) Lot 3 in DP 225943 (59 Cope Street);
(e) Lot 5 in DP 225943 (63 Cope Street).(d) Lot 4 in DP 225943 (61 Cope Street);
9 It thus appears that Nos 55 to 63 Cope Street (the adjoining lots to the north of the subject site) were created as separate Old System title lots by the registration of DP 225943 on 19 July 1965.
10 As to the Certificates of Title for these lots:
(a) the Certificate of Title for Lot 1 in DP 225943 (55 Cope Street) does not notify any right of carriageway, and notifies further "qualified title, caution pursuant to section 28J of the Real Property Act 1900, entered 11.1.8.1977";
(b) the Certificate of Title for Lot 2 in DP 225943 (57 Cope Street) does not notify any right of carriageway;
(c) the Certificate of Title for Lot 3 in DP 225943 (59 Cope Street) notifies by reference to Book 2932 No 154 "right of carriageway affecting the part(s) shown so burdened in the title diagram". The Deed of Conveyance, dated 6 June 1969, for 59 Cope Street, Book 2932 No 154, refers to "a right of way granted by Henry Smith to Matthew Smith Registered No 596 Book 530 TOGETHER WITH as appurtenant to the land hereby conveyed a right of carriageway over those parts of lots two, four and five in deposited plan No 225943 described in the said deposited plan as “proposed right of carriageway variable width" AND RESERVING out of the said lot three in deposited plan No 325943 as appurtenant to lots one two four and five in the said deposited plan a right of carriageway over that part of lot three described in the said deposited plan as "proposed right of carriageway variable width"”;
(e) the Certificate of Title for Lot 5 in DP 225943 (63 Cope Street) notifies by reference to Book 2781 No 86 "right of carriageway affecting the part of the land above described shown so burdened on title diagram". The Deed of Conveyance, dated 1 March 1966, for 63 Cope Street, Book 2781 No 86, refers to the conveyance to the purchaser of the land described in the first schedule together with "a right of carriageway over those parts of Lots 2, 3 and 4 in Deposited Plan No 225943, described in the said Deposited Plan as “proposed right of carriageway, variable width” and RESERVING OUT of the land hereby contained as appertanent Lots 1, 2, 3 and 4 in the said Deposited Plan as "proposed right of carriageway "”.(d) the Certificate of Title for Lot 4 in DP 225943 (61 Cope Street) notifies by reference to Book 3214 No 344 “” right of carriageway affecting the part(s) shown so burdened in the title diagram". The Deed of Conveyance, dated 24 December 1975, for 61 Cope Street, Book 3214 No 344, refers to the conveyance to the purchaser of the land described in the First Schedule together with "as appurtenant to the land hereby conveyed a right of carriageway over that part of Lots 2, 3 and 5 in Deposited Plan No 225943, described in the said Deposited Plan as “proposed right of carriageway, variable width"”;
11 Further, Nos 65 to 75 Cope Street (the adjoining lots to the south of the subject site) were created as separate Torrens title lots by the registration of DP 202489 in September 1961.
12 As to the Certificates of Title for these lots:
(a) the Certificate of Title for Lot 1 in DP 202489 (65 Cope Street, the
- subject site) notifies by reference to Book 530 No 596 "right of way affecting the right of way variable width shown in DP 202489";
13 The result is that whilst the Certificates of Title of the neighboring properties do not provide notification of any appurtenant rights over the right of way, the Old System Deeds make reference to such rights over the subject site in respect of the properties at Nos 59 to 63 Cope Street. In respect of those properties, at least, a right of way may exist burdening the subject site and benefiting those properties: see Real Property Act 1900, s 42(1)(a1)).
Whether clause 44 of the South Sydney Local Environmental Plan operates pursuant to s 28 of the Environmental Planning and Assessment Act
14 Section 28(2) of the Environmental Planning and Assessment Act 1979 provides, relevantly, that:
- “For the purpose of enabling development to be carried out in accordance with an environmental planning instrument or in accordance with a consent granted under this Act, an environmental planning instrument may provide that, to the extent necessary to serve that purpose, a regulatory instrument specified in that environmental planning instrument shall not apply to any such development or shall apply subject to the modifications specified in that environmental planning instrument”.
15 Section 28(1) provides that a “regulatory instrument” means “any Act (other than this Act), rule, regulation, by-law, ordinance, proclamation, agreement, covenant or instrument by or under whatever authority made”.
16 Clause 44 of South Sydney Local Environmental Plan 1998 provides:
- “ 44 Suspension of covenants, agreements and instruments
- (1) For the purpose of enabling development to be carried out in accordance with this plan (as in force at the time the development is carried out) or in accordance with a consent granted under the Act, the operation of any covenant, agreement or similar instrument that purports to impose restrictions on the carrying out of development on the land to which this plan applies, to the extent necessary to serve that purpose, shall not apply to any such development.
- (2) Nothing in subclause (1) affects the rights or interests of any public authority under any registered instrument.
- (3) Pursuant to section 28 of the Act, before the making of this clause the Governor approved of subclauses (1) and (2).”
17 Three points should be noted about cl 44. First, the regulatory instruments specified are limited to “any covenant, agreement or similar instrument” out of the wider class of instruments in the definition of “regulatory instrument” in s 28(1) of the Environmental Planning and Assessment Act.
18 Secondly, there is a further limitation in that not only must the regulatory instrument be of the type specified (namely any covenant, agreement or similar instrument), it must also be one that “purports to impose restrictions on the carrying out of development on the land”.
19 Thirdly, cl 44 of the South Sydney Local Environmental Plan states that it is “the operation” of the specified regulatory instrument that is not applicable to the development, not the instrument itself. Section 28(2) of the Act provides that the regulatory instrument specified in the environmental planning instrument does not apply to the development. However, it may be that the additional words are not intended to say anything more than that a regulatory instrument of the type specified that purports to impose restrictions on the carrying out of development on the land, shall not operate to impose restrictions on the carrying out of development on the land.
20 The Court is satisfied that clause 44 of South Sydney Local Environmental Plan is made pursuant to s 28(2) of the Environmental Planning and Assessment Act. Accordingly, the answer to the first question is in the affirmative.
Is the right of carriageway a “covenant, agreement or similar instrument that purports to impose restrictions on the carrying out of development of the land” pursuant to Clause 44 of South Sydney Local Environmental Plan?
The applicant’s submissions
21 The applicant submits:
(a) A right of way is an easement but is not a restrictive covenant: Chui v Healey (2003) 11 BPR 21, 241; [2003] NSWSC 857 at [23];
(b) However, “restrictions on the carrying out of development” within cl 44 may arise by way of easement or restrictive covenant or otherwise;
(c) The words “covenant, agreement or similar instrument” are words of wide import;
(d) The Deed of Indenture by which the right of way was created is an agreement as it was entered into by two parties, Henry and Matthew Smith, on 25 January 1894 and signed by them for consideration in the amount of 40 pounds;
(e) Alternatively, the Deed is a covenant in the broadest sense of being a solemn agreement binding on a party: see Macquarie Dictionary;
(f) The Deed creating the right of way would restrict development in accordance with any development consent granted because the swimming pool would substantially interfere with the use of the right of way. The carrying out of the development could be restrained by injunction: Pettey v Parsons [1914] 2 Ch 653 at 662; Powell v Langdon (1944) 45 SR (NSW) 136 at 139; Dresdner v Scida (2003) 12 BPR 22, 629; [2003] NSWSC 957 at [21];
(g) The right of way impliedly restricts the development of the land within the right of way for any purpose that would substantially interfere with the right of way: see Application of Thompson , unreported, Supreme Court of New South Wales, 25 October 1993;
(h) The decision of Cowdroy AJ in Doe v Cogente Pty Ltd (1997) 94 LGERA 305 at 316-318 held that s 28 of the Environmental Planning and Assessment Act 1979 and a provision of an environmental planning instrument made pursuant to it can apply to a right of way which has its source in an agreement, covenant or instrument;
(i) The existence of the right of way is a matter that can be taken into account by the Court in the consideration of the development application in the appeal as a circumstance of the case (s 39(4) of the Land and Environment Court Act 1979) and in considering the matters under s 79C(1)(b), (c), (d) and (e) of the Environmental Planning and Assessment Act : see also Donald Crone & Associates Pty Ltd v Bathurst City Council [1988] NSWLEC 73 (19 October 1998), p. 20.
The respondent’s submissions
22 The respondent submits for two main reasons that the right of carriageway is not a covenant, agreement or instrument that purports to impose restrictions on the carrying out of development of the land pursuant to Clause 44 of South Sydney Local Environmental Plan.
23 First, the respondent submits that s 28 does not in terms identify rights of way or easements amongst the private rights that may be adversely affected by an environmental planning instrument. Had Parliament, in enacting s 28, intended to interfere in vested proprietary rights conferred in favour of dominant tenements over servient tenements, it would have used plain words.
24 The respondent submits that it is a settled and cardinal principle of statutory construction that valuable proprietary rights are not abolished by a sidewind. In other words, Parliament would not be presumed, absent clear and unambiguous words, to interfere with vested property rights: Clissold v Perry (1904) 1 CLR 363 at 373 and Clunies Ross v The Commonwealth (1984) 155 CLR 193 at 199-200. The presumption against interference in vested property rights has been subsumed under the rubric of the principle of legality: J J Spigelman, “Principle of Legality and the Clear Statement of Principle” (2005) 79 ALJ 769; Al-Kateb v Goodwin (2004) 219 CLR 562 per Gleeson CJ at [19], Lodhi v Regina (2006) 199 FLR 303; [2006] NSWCCA 121 per Spigelman CJ at [32]ff).
25 Secondly, the respondent submits that there is a significant distinction between a “covenant, agreement or similar instrument” which purports to impose restrictions on the carrying out of development on the one hand, and a right of way or easement on the other.
26 This is because easements give the right positively to do something. They entitle the holder of the benefit of the easement to some non-exclusive use of the servient tenement: Bradbook & Neave, Easements and Restrictive Covenants in Australia, 2nd ed at [1.6].
27 Restrictive covenants, by contrast, are of their nature negative. They oblige the proprietor of the servient tenement not to use the land in some way in which he or she would be otherwise entitled to use it: Tulk v Moxhay (1848) 2 Ph 774 [41 ER 1143]; (1848) 1 H & Tw 105 [47 ER 1345]; 18 LJ Ch 83; Bradbook & Neave at [12.4], [12.7]-[12.8]. Bradbook & Neave have observed that the law of restrictive covenants is a morass of technicalities, inconsistencies and uncertainties (at [12.11]). The law relating to restrictive covenants developed at a time when planning and environmental law was at its infancy: Bradbook & Neave, Easements and Restrictive Covenants in Australia, 2nd ed at [12.22]. In this context, the considerable utility of s 28 of the Environmental Planning and Assessment Act 1979 is manifest.
28 The respondent submits it is otherwise with easements which entitle the holder, positively, to some non-exclusive use of the servient tenement. The respondent notes that it might be argued that an easement can, in effect, impede development, for example, by providing a remedy in the nature of an injunction to restrain the construction of a brick wall across a path over which there is a right of way, or a mandatory injunction to restore the land to the state before the disturbance of the easement took place. However, an easement concerns a right to do an act or to prevent an act from occurring. This is not the same as a restrictive covenant which prohibits the performance of specific acts: Bradbook & Neave, Easements and Restrictive Covenants in Australia, 2nd ed at [12.6] (and see, for example, Zenere v Lete (1980) 1 BPR 930 at 9304).
29 The respondent submits the question to which s 28 directs attention is whether it can be said that an easement on its face “purports” to impose restrictions on the carrying out of development. The respondent contends that the fact that an injunction may be available to restrain conduct which infringes on a person’s enjoyment of the positive rights involved in the grant of an easement is not the same as saying that an instrument purports on its face to restrict development. The availability of a remedy for the disturbance of an easement is simply the result in law, and not something on the face of the instrument which restricts the carrying out of development. For example, it could not be said that to tether a dog in a right of way would be development, although the right of way would entitle the owners of the dominant tenement to seek the removal of the dog from the right of way.
30 The respondent notes the Court of Appeal did not follow Doe v Cogente Pty Limited (1997) 94 LGERA 305 (Cowdroy AJ). Cowdroy AJ’s decision was appealed but the Court of Appeal disposed of the appeal on another ground and found it unnecessary to deal with the issues under s 28 of the Environmental Planning and Assessment Act 1979. The Court of Appeal added that:
- “It should not be assumed however, that we endorse the reasoning of Cowdroy AJ on this issue. Rather, the determination of the matter is not relevant to the outcome of the appeal. It follows that no issue, estoppel or res judicata operates in respect of the decision of Cowdroy AJ relating to the issues raised by s 28 of the Environmental Planning and Assessment Act ”: Cogente Pty Limited v Doe (1998) 98 LGERA 162 at 169.
Court’s finding
31 I am of the opinion that the respondent is correct in its construction of clause 44 of South Sydney Local Environmental Plan and s 28 of the Act and that clause 44 does not apply to any agreement or instrument evidencing the right of way in this case.
32 At the outset, it should be noted that the relevant focus of any inquiry as to the application of a provision of an environmental planning instrument made under s 28 of the Act, such as cl 44 of South Sydney Local Environmental Plan, is not the right or restriction created by a regulatory instrument specified in the environmental planning instrument, but rather the regulatory instrument. Section 28 of the Act provides that “a regulatory instrument specified in that environmental planning instrument shall not apply to any such development…”. Clause 44(1) of South Sydney Local Environmental Plan specifies the regulatory instruments to be “any covenant, agreement or similar instrument that purports to impose restrictions on the carrying out of development on the land to which this plan applies”. Clause 44(1) then provides that “the operation of [those specified regulatory instruments] shall not apply to any such development.”
33 The second question is, therefore, incorrectly framed. Clause 44 of South Sydney Local Environmental Plan cannot apply directly to the right of way. A right of way itself is not a “regulatory instrument” within the meaning of s 28 of the Act or a “covenant, agreement or similar instrument” under clause 44 of South Sydney Local Environmental Plan. A right of way is a right belonging to the dominant owner to use, in a particular manner and in connection with the dominant owner's land, the land belonging to the servient owner. It is true that a right of way might have been created by an agreement (although not necessarily - it could have been imposed by an order of the Court under s 88K of the Conveyancing Act 1919) or evidenced in a memorandum of transfer which is an instrument. But the right under the right of way is not the same thing as the agreement or instrument itself. The situation with an easement can be compared to a covenant. A covenant is an agreement that something has or has not been done or will or will not be done. A restrictive or negative covenant is an agreement which restricts the rights of the covenantor, for example, from using the covenantor's land in a particular way for a particular purpose.
34 The second question would be more correctly framed as: “If the answer to 1 above is in the affirmative, is the right of way that burdens the subject site created by a “covenant, agreement or similar instrument that purports to impose restrictions on the carrying out of development on the land” within the meaning of cl 44 of South Sydney Local Environmental Plan?”
35 A question in these terms sets the relevant inquiry. An answer in the affirmative would mean that s 28 of the Act and cl 44(1) of South Sydney Local Environmental Plan would operate so as to cause any such covenant, agreement or similar instrument creating the right of way not to apply to development carried out in accordance with South Sydney Local Environmental Plan or a development consent granted under the Act. An answer in the negative, however, would mean that s 28 and cl 44 would not have that operation and the covenant, agreement or similar instrument creating the right of way would apply in its terms.
36 I will proceed to determine the second question as re-framed.
37 Assuming the Deed of Indenture evidencing the right of way is either an “agreement or similar instrument”, it is not an agreement or similar instrument that “purports to impose restrictions on the carrying out of development on the land”.
38 An agreement or instrument does not “impose” a restriction on development unless the restriction is expressly stated or necessarily implied in the agreement or instrument: see Application of Thompson, unreported, Supreme Court of NSW, McLelland CJ in Equity, 25 October 1993, p 4.
39 This conclusion is reinforced by the use in clause 44 of South Sydney Local Environmental Plan of the word “purports” in the phrase “any covenant, agreement or similar instrument that purports to impose restrictions on the carrying out of development”. To “purport” is “to profess or claim” or “to convey in the mind as the meaning or thing intended; express; imply”: Macquarie Dictionary. Hence, in order for an agreement or instrument to purport to impose restrictions, the agreement or instrument must profess or claim to impose restrictions or convey to the reader that as the meaning or thing intended. This demands that the restriction be expressly stated or necessarily implied in the agreement or instrument.
40 In this case, the Deed evidencing the right of way does not expressly state or necessarily imply a restriction on the carrying out of development on the servient tenement.
41 At best, the existence of the dominant owner's rights gives rise to a correlative duty on the servient owner to observe the dominant owner's rights in relation to the right of way. However, it is not sufficient to attract the operation of clause 44 of South Sydney Local Environmental Plan that in its application to a particular physical situation, or in combination with other requirements of the law, the incidental effect of the right of way would be to inhibit or prevent development inconsistent with the dominant owner’s rights: see Application of Thompson, p. 4.
42 The transfer of the freehold, the grant of a lease, or the grant of an easement in relation to land may prevent development on that land for practical reasons but the instruments effecting such dealings do not in terms impose restrictions on development within the meaning of clause 44 of South Sydney Local Environmental Plan.
43 The Conveyancing Act 1919 (s 88) specifies the requirements for the valid creation of easements and of restrictions arising under covenants or otherwise as to the user of any land. Section 88(1) expressly distinguishes an “easement” from a “restriction”. A restriction may arise “under covenant or otherwise” but in any case will be “contained in an instrument”. The section does not treat easements as creating restrictions. Similarly, s 89 of the Conveyancing Act also distinguishes rights, in the form of the incorporeal hereditaments of an easement and a profit a prendre, from “a restriction or an obligation arising under covenant or otherwise as the user” of land.
44 The proposition that cl 44 of South Sydney Local Environmental Plan only operates to make not applicable an agreement or instrument that in its terms imposes restrictions on the development and not an agreement or instrument that does not in terms but only by requirement of law effect restrictions on the development, is illustrated by reference to an agreement or instrument granting a lease.
45 A lease of property would not prevent the owner of the freehold reversion from applying for and obtaining development consent to carry out development on the leased property (s 78A(1) of the Environmental Planning and Assessment Act and cl 49 of the Environmental Planning and Assessment Regulation 2000) without the consent of the tenant who is not treated as the owner of the land for this purpose: see s 4(1) definition of “owner” and Local Government Act 1993 Dictionary: definition of owner para (b). If development consent was granted, the lease would be an agreement or instrument which prevented the landlord from carrying out on the leased property development which interfered with the tenant’s rights.
46 It would be remarkable if cl 44 could operate to avoid or forfeit the lease in such circumstances. If cl 44 had that operation, it would expropriate or destroy the rights of the lessee without compensation. The clause should not be given this operation if another construction is fairly open on its language: Wade v NSW Rutile Mining Co Pty Ltd (1969) 121 CLR 177 at 181; Application of Thompson, p. 4. Another construction is fairly open. The clause can and should be confined to restrictions of a negative nature imposed on development arising from the language of the agreement or instrument. It has no application where the agreement or instrument confers positive rights of ownership or use which would be interfered with by the development.
47 The above discussion is consistent with all but one of the judicial decisions on clauses of environmental planning instruments made pursuant to s 28 of the Environmental Planning and Assessment Act. All but one of the cases in which a clause of an environmental planning instrument made pursuant to s 28 of the Act has been considered have involved a covenant. Of these cases, most involved a restrictive covenant. Examples include:
(a) Donald Crone and Associates Pty Ltd v Bathurst City Council [1988] NSWLEC 73 (19 October 1988) (a restrictive covenant on the erection of buildings on identified lands);
(b) Challister Ltd v Blacktown City Council (1992) 76 LGERA 10 (a restrictive covenant that “there shall be no vehicular access from the lot hereby burdened to Reservoir Road”);
(c) G H Wainwright v Canterbury Municipal Council [1992] NSWLEC 96 (30 October 1992) (a restrictive covenant that "only one dwelling house shall be erected on the said land");
(e) Ludwig v Coshott (1994) 83 LGERA 22 (Bryson J) and Court of Appeal, unreported, 13 February 1997 (a restrictive covenant that “any main building erected on the land hereby transferred shall be a cottage with brick external walls which shall not be rough casted but may be cement covered and that such cottage shall be so built that there will be at least 55 feet distance from its front extremity to the mean of the front boundary along Gilliver Avenue”).(d) Application of Thompson , unreported, Supreme Court, McLelland CJ in Equity, 25 October 1993 (a restrictive covenant that persons bound “shall not erect or permit to be erected on the said land any main building of less than 500 pounds, such building to face Murdoch Street”); and
48 Another case involved a covenant in a lease. In Coles Supermarket v Minister (1996) 90 LGERA 341 and Marjen Pty Ltd v Coles Supermarkets Pty Ltd (1996) 90 LGERA 363 the lease contained a clause (clause 11.17) which, provided:
- “The Lessor shall have the right from time to time to improve, extend, add to or reduce the Centre or in any manner whatsoever alter or deal with the Centre (other than the Demise Premises) PROVIDED ALWAYS that in exercising such right the Lessor will endeavour to cause as little inconvenience to the Lessee as is practicable in the circumstances PROVIDED HOWEVER that no alteration or variations to the Centre shall reduce the area or significantly alter the location or configuration of the car-parking facilities from the area, location or configuration of the same as at the date of commencement of this Lease without the Lessee's prior written consent”.
49 Pearlman J did not hold that the whole lease was an "instrument" to which the clause of the relevant environmental planning instrument made pursuant to s 28 of the Act applied. Rather, Pearlman focused only on clause 11.17, holding that the clause was a covenant between the lessor and lessee; that the requirement expressly stated in the covenant that the lessor obtain the lessee's prior written consent before being able to carry out development which had the consequence of altering the area, location or configuration of the car parking facilities was a restriction on development; and that accordingly the clause of the relevant environmental planning instrument made pursuant to s 28 of the Act operated to relieve the lessor of the operation of that covenant: (1996) 90 LGERA 363 at 366-367. The concept of covenants in leases is well accepted: see ss 84-87 and Pt 2 of Schedule 4 of Conveyancing Act 1919.
50 Hence, in each of the cases there was, first, a covenant, agreement or instrument, secondly, the covenant, agreement or instrument could be said to be “regulatory” and, thirdly, the covenant, agreement or instrument in terms expressly restricted development of the kind permitted by the development consent. At least the second and third of these conditions do not apply in this case.
51 The exception is the decision of Cowdroy AJ in Doe v Cogente (1997) 94 LGERA 305 which held that a provision of an environmental planning instrument made under s 28 of the Act can make a right of way not applicable to a development. The applicant submitted that I should follow this decision, not only because it was correct, but in any event for reasons of judicial comity, it being a decision of another judge of this Court.
52 Contrary to the applicant’s submissions, the part of the decision of Cowdroy AJ on the question of the application of a provision of an environmental planning instrument made under s 28 of the Act to a right of way was in fact obiter dictum, for the following reasons.
53 In that case, the applicant was the owner of land which, together with adjoining lots, benefited from a right of way burdening land proposed to be developed. The developer, as part of the residential unit development, proposed to install a drainage system within the right of way. The applicant was concerned that the construction and maintenance of the drainage system would interfere with the rights under the right of way to access the applicant’s land (one of the dominant tenements). The developer applied for and the Council granted development consent subject to conditions including a condition that the developer lodge a public positive covenant under s88E of the Conveyancing Act 1919 whereby the proprietor of the servient tenement would be responsible for the maintenance of the drainage pipelines and associated structures.
54 The applicant challenged the validity of the consent and otherwise alleged breaches of the Act. Three contentions were advanced:
(a) that the Council in granting consent made erroneous factual and legal assumptions that it was possible for the servient owner to repair the drainage system without regard to the applicant’s rights over the right of way (as a dominant owner) and, accordingly, the consent was invalid (at 309);
(c) that the breach of the Act would not be able to be cured by modifying the consent to rescind or amend the condition as the Council had no power to do so (at 309).(b) that the developer would be in breach of the Act in that it would not be able to fulfil the condition requiring the creation of the public positive covenant without first obtaining the consent of the dominant owners, which consent would not be forthcoming, and any instrument which lacked the consent of the dominant owners would not be a valid public positive covenant (at 309); and
55 The developer and the Council joined issue with each of these contentions. In further answer, they contended in defence that there would be no future breach of the Act because s 28 of the Act and cl 26(1) of Leichhardt Local Environmental Plan would “suspend any restriction imposed by the right of way to the extent necessary to enable the proposed development to take place”: at 310.
56 Cowdroy AJ rejected the applicant’s first two contentions, holding that the development consent was valid and that the registration of the public positive covenant satisfied the condition of consent. Cowdroy AJ held that in light of these two findings, the third contention did not arise. These holdings disposed of the applicant’s case and it was unnecessary to consider and determine the further defence of the developer and the Council in relation to s 28 of the Act and cl 26(1) of Leichhardt Local Environmental Plan. Accordingly, Cowdroy AJ’s determination on this issue was obiter dictum. As such, it need not be followed by another judge of first instance even for reasons of judicial comity.
57 Judicial comity usually dictates that a judge of first instance should follow the decision of another judge of first instance unless convinced that it is wrong: see Michael Realty Pty Ltd v Carr [1975] 2 NSWLR 812 at 820; Pancho Properties Pty Ltd v Wingecarribee Shire Council (1999) 110 LGERA 352 at 369-370 and Meriton Apartments Pty Ltd v Sydney Water Corporation (2004) 138 LGERA 383 at [29]. However, this does not apply where the decision is obiter dictum.
58 The applicant submitted that in any event, however, the obiter dictum is correct and is of persuasive value. I am unable to agree. I am convinced the decision is wrong for the reasons I will now explain.
59 In that case, cl 26(1) of the Leichhardt Local Environmental Plan No 20 (made pursuant to s 28 of the Act) provided that, for the purpose of enabling development to be carried out in accordance with the plan or a consent granted under the Act, in relation to development within certain zones, “the operation of any covenant, agreement or instrument imposing restrictions on the development…to the extent necessary to serve that purpose, shall not apply to any such development”.
60 The developer and the Council contended that the provisions of cl 26(1) “override the interests of the applicant and of the other land owners having the benefit of the right of way to the extent necessary to enable the subject development to proceed”: at 315. Cowdroy AJ upheld this contention. His reasoning was essentially the following:
(a) The issue for determination was “whether the existence of the rights of way in favour of the applicant and other parties over a portion of the land contained in the development can be said to impose a restriction upon such development”: at 315.
(b) The incidental effect of the right of way restricted the development: “There is the possibility that any activity associated with the repair or maintenance of the drain could affect the use of the right of way. Such right could restrict the development”: at 317.
(d) “In the circumstances, cl 26(1) of the LEP is effective to ensure that such rights, to the extent necessary to permit the development are affected”: at 317.(c) “Since rights of way and restrictive covenants have their source in an agreement, covenant or instrument, there is no reason why s 28 should not apply to a restriction on land, namely a right of way”: at 317.
61 I am unable to agree with this reasoning.
62 As to (a), for the reasons I have given earlier, the relevant issue required to be determined by the relevant provision of the environmental planning instrument made under s 28 of the Act (cl 26(1) of Leichhardt Local Environmental Plan), was whether the right of way in that case was created by a covenant, agreement or instrument imposing restrictions on the land. Only if it was created by such covenant, agreement or instrument, would s 28 of the Act and cl 26(1) of Leichhardt Local Environmental Plan operate to make any such covenant, agreement or instrument not apply to the development. The issue was not whether the existence of the right of way imposed restrictions on development of the land.
63 As to (b), the fact that the incidental effect of the right of way might be to restrict development on the land burdened by the right of way is not determinative of the relevant issue, namely whether the covenant, agreement or instrument creating the right of way is one “imposing restrictions on the development”. As I have explained earlier, the relevant issue is to be determined by ascertaining whether the restriction is expressly stated or necessarily implied in the covenant, agreement or instrument.
64 As to (c), the concept of a restriction on land (which a right of way by operation of law effects on the servient tenement) is not the same as the concept of a restriction on development (the relevant inquiry under s 28 of the Act and cl 26(1) of the Leichhardt Local Environmental Plan). Section 28 of the Act and a provision of an environmental planning instrument such as cl 26(1) made under s 28, do not apply to a “restriction on land” but rather to a “restriction on development”. Hence s 28 of the Act or a provision such as cl 26(1) will not apply to an agreement or instrument creating a right of way merely because such agreement or instrument by operation of law effects a restriction on land; the agreement or instrument must go further and, on a proper construction of the agreement or instrument, impose restrictions on development of the land.
65 As to (d), as I have explained earlier, s 28 of the Act and a provision of an environmental planning instrument such as s 26(1) of Leichhardt Local Environmental Plan, do not directly operate on the “rights” of the dominant owners under a right of way. Rights are not regulatory instruments. Rather, the more limited effect of s 28 and cl 26(1) is that “the operation of any covenant, agreement or instrument imposing restrictions on development…shall not apply to any such development”.
66 As noted above, Cowdroy AJ’s decision was subject to appeal but the Court of Appeal not only did not determine the appeal on this ground (and hence did not affirm Cowdroy AJ’s decision on this point) but expressly stated that “It should not be assumed, however, that we endorse the reasoning of Cowdroy AJ on this issue”: Cogente Pty Ltd v Doe (1998) 98 LGERA 162 at 169.
67 In this case, I am convinced that the decision of Cowdroy AJ in Doe v Cogente is wrong and should not be followed.
68 Accordingly, the second question should be answered in the negative.
Conclusion
69 The questions of law (as reframed) should be answered as follows:
- (1) Does Clause 44 of the South Sydney Local Environmental Plan 1998 operate pursuant to Section 28 of the Environmental Planning and Assessment Act 1979? Yes.
- (2) If the answer to 1 above is in the affirmative, is the right of way that burdens the subject site created by a “covenant, agreement or similar instrument that purports to impose restrictions on the carrying out of development on the land” within the meaning of cl 44 of South Sydney Local Environmental Plan? No.
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