Gough and Gilmour Holdings Pty Limited v The Council of the City of Holroyd

[2002] NSWLEC 108

Land and Environment Court

of New South Wales

CITATION:

Gough and Gilmour Holdings Pty Limited v The Council of the City of Holroyd [2002] NSWLEC 108

PARTIES:

APPLICANT
Gough and Gilmour Holdings Pty Limited

RESPONDENT
The Council of the City of Holroyd

FILE NUMBER(S):

40207 of 2001

CORAM:

Talbot J

KEY ISSUES:

Development Consent :- construction of condition of consent by inference and implication

LEGISLATION CITED:

Conveyancing Act 1919 s 88A, s 88A(2), s 88B
Environmental Planning and Assessment Act 1979 s 96
Land and Environment Court Act 1979 s 20(2)(c)

CASES CITED:

Bland v Levi (2000) NSW ConvR 55-935;
Jones v Pritchard (1908) 1 Ch 630;
Magor and St. Mellons Rural District Council v Newport Corporation [1952] AC 189 ;
Parramatta City Council v Shell Co of Australia Ltd [1972] 2 NSWLR 632;
Pennant Hills Golf Club Limited v Roads and Traffic Authority of New South Wales [1999] NSWCA 110, unreported;
Pwllbach Colliery Co Limited v Woodman (1915) AC 634;
Ryde Municipal Council v The Royal Ryde Homes and Another (1970) 19 LGRA 321 Matijesevic v Logan City Council (No. 2) (1983) 51 LGRA 51;
The Council of the City of Parramatta v Brickworks Limited (1971 - 1972) 128 CLR 1

DATES OF HEARING:

25/06/2002

DATE OF JUDGMENT:

07/04/2002

LEGAL REPRESENTATIVES:

APPLICANT
Mr T S Hale SC
SOLICITORS
Freehills

RESPONDENT
Mr B J Preston SC with Ms J M Jagot (Barrister)
SOLICITORS
McKees Legal Solutions

JUDGMENT:

IN THE LAND AND Matter No. 40207 of 2001
ENVIRONMENT COURT Coram: Talbot J
OF NEW SOUTH WALES Decision Date: 4 July 2002

Gough and Gilmore Holdings Pty Limited
Applicant

v
The Council of the City of Holroyd

Respondent

REASONS FOR JUDGMENT


1. The dispute in this matter relates to the implementation of development consent No. 94/221 granted by the Council of the City of Holroyd (“the council”) to the applicant on 30 August 1994.

2. The original consent contained conditions 27, 28 and 29 as follows:-

27. Construction of the proposed building over Council’s existing and proposed drainage easements shall be permitted provided the following drainage works are carried out by the applicant-


(i) Submission of a detailed design prepared by a Civil (Hydraulic) Engineer for a 1 in 100 year fully sealed piped system from the southern side of the State Rail Authority’s (SRA) property through the site to the existing open channel. The design shall include consideration (level and line) of all existing Public Utility services and shall conform with the proposed drainage design within SRA property.
(ii) The construction of an approved 1 in 100 year fully sealed piped system from the northern kerb of Crescent Street to the open channel in accordance with Council’s standards and specifications. The existing 900mm diameter RCP shall be retained and be separated from the sealed system to provide for local drainage, including drainage from Crescent Street and the proposed development.

(iii) The submission of a Bond of $100,000.00 to cover satisfactory completion of the drainage works. The Bond may be in the form of a Cash Bond or Bank guarantee to be lodged with Council prior to the release of the Building plans.
(iv) …
(v) …



28. A drainage easement of width to be determined by Council’s Engineer, after examination of the design in 6 above, is to be created in favour of Council. Creation of the easement must be effected by the applicant prior to Council releasing the drainage construction bond. All cost associated with piping, relocation and creation of easements shall be borne by the developer.

29. Special footing will be required where the proposed building is over Council’s drainage easement. The footings shall be taken down to the invert level of the existing and proposed drainage structure or to solid rock, whichever is the lesser and shall be clear of the existing/proposed easements.

The special footings shall be designed by Practising Structural Engineer are to be submitted to Council prior Building approval.

The footing design shall include a cross-section detailing the location, size and invert level of existing/proposed stormwater drainage pipelines within the existing/proposed easement boundaries, and the finished level of the ground surface within the site necessary to determine the depth of footing.

3. Following an application for modification of the consent made on 12 May 1995, condition 27(ii) was modified on 24 May 1995 to read as follows:-

27(ii) The construction of an approved 1-in-100 year fully sealed pipe system from the northern kerb of Crescent Street to the open channel and for a separate pipeline to provide local street and site drainage to the channel, both in accordance with Council’s standards and specifications.

4. Condition 27(iii) was amended at the same time to reduce the bond from $100,000.00 to $20,000.00.

5. Amended building plans incorporating the fully sealed piped system were approved by the council on 28 June 1995. The drainage system has been built pursuant to condition 27 in accordance with the approved plans as modified. A culvert has been constructed under the building now erected on the site. A heavy-duty pavement has been laid on each side of the building. The building is a substantial structure designed and constructed to cater for heavy loads. The floor of the building workshop consists of concrete with a design intended to minimise floor joints, to have impact resistance and high load carrying capacity. It is comprised of single panels of concrete in each double bay and extends across the whole width of the building. The project manager for the applicant has given evidence that it would be very difficult and expensive to cut up or dig through the floor of the workshop as the whole slab of any double workshop bay would have to be demolished in order to excavate down to the pipe and culvert. Furthermore, it would be very difficult and expensive to re-instate it to the original standard afterwards.

6. By letter dated 14 April 1999 the applicant’s solicitors submitted a draft form of Instrument creating an easement for drainage under s 88B of the Conveyancing Act 1919 (“the Conveyancing Act”) together with plans showing the site of the proposed 2.6 metre wide easement. Since the submission of the proposed s 88B Instrument, the parties have been in dispute as to its terms.

7. The most significant issue is whether the council is entitled to access from the surface at any point along the site of the easement to the drainage culvert below. The applicant insists that in the circumstances the easement should be limited to the stratum occupied by the culvert. The “900mm diameter RCP” referred to in condition 27(ii) has been re-located from the site of a pre-existing easement and now runs within the culvert.

8. Another important issue is whether the council should give an indemnity against any claim, action, damage, loss, liability, cost, charge, expense, outgoing or payment incurred by the applicant as a result of or arising out of or in any way connected with the exercise of the council’s rights under or pursuant to the easement.

9. The applicant was given leave to amend the application class 4 on 25 June 2002 to claim the following relief:-


1. A declaration that the easement firstly referred to in Part 2 Item 1 and Part 2 Item 1 of the attached easement setting out terms of easement intended to be created (section 88B instrument) if executed will satisfy condition 28 of the development consent No 94/221 granted by the respondent to the applicant on or about 30 August 1994.

1A. A declaration that the submission by the applicant to the respondent of the said easement in registrable form discharges the applicant’ s obligations under condition 28.

10. The council, through its counsel, Mr Preston SC, has advised the Court that it will accept an easement pursuant to and in accordance with s 88A of the Conveyancing Act in the terms of an easement to drain water described in Sch 4A to the Conveyancing Act. It is clear, therefore, that the council accepts that an instrument creating an easement defined in accordance with the statutory definition of an easement to drain water would satisfy the obligation of the applicant under conditions 27 and 28 of the development consent. On the other hand, the applicant contends that the offer to execute the instrument pursuant to s 88B of the Conveyancing Act in the wider terms submitted satisfies the obligation of the applicant under conditions 27 and 28 of the development consent.

11. The issue, therefore, becomes whether the applicant alone can dictate that the easement be confined to the area actually occupied by the culvert and define the terms of that occupation.

12. Mr Preston asserts that there can be no justiciable issue whilever the council refuses to execute an easement in the terms submitted by the applicant. Mr Preston says that, as a matter of construction, condition 28 does not, by its terms, entitle the applicant to insist upon an easement in any particular form. There can be no dispute that, if the Court makes declaration No. 1 and the instrument is executed, condition 28 can be satisfied. In the event of the contingency occurring, that is the execution of the instrument, any dispute would be resolved by the council accepting the grant of the easement in those terms. Accordingly, he submits, in the light of that self-evident inevitable consequence there is no utility in making a declaration in the terms of the relief now sought in par 1 of the amended application.

13. The Court clearly has jurisdiction pursuant to s 20(2)(c) of the Land and Environment Court Act 1979 to make declarations of right in relation to the application of condition 28 by determining the true meaning of the condition. Thus, for the applicant to succeed on either claim for relief it must be shown that as a matter of construction condition 28, read in conjunction with conditions 27 and 29 if necessary, provides that the applicant can satisfy its obligation to grant an easement by dint of the draft instrument submitted to the council. The case put on behalf of the applicant by Mr Hale SC is that, on a proper construction of conditions 27, 28 and 29, the applicant has met its obligation by offering the easement in registrable form.

14. There is no issue that the box culvert and 900mm RCP have been built in accordance with the building plans approved by the council following the modification of the consent in 1995.

15. Ultimately, the issue to be decided in order to resolve the current dispute is whether, on a true construction of the development consent, condition 28 requires the council to accept that the drainage easement be limited to a stratum of the land within which the drainage works are to be constructed. This raises the question whether the proposed easement can be restricted to a stratum and thus not extend to the surface.

The true meaning of the conditions of consent

16. The applicant relies on the often quoted principle outlined by Hope JA in Parramatta City Council v Shell Co of Australia Ltd [1972] 2 NSWLR 632 at 637 as follows:-

As has been held, it is not permissible, in order to determine what development has been approved, to construe the document constituting the approval in the same way as if it evidenced some inter partes transaction, for development approvals operate, as it were, in rem and may be availed of by subsequent owners and other occupiers of the land. The nature and extent of the approved development must be determined by construing the document of approval, including any plans or other documents which it incorporates, aided only by that evidence admissible in relation to construction which establishes, or helps to establish, the true meaning of the document as the unilateral act of the relevant authority, not the result of a bilateral transaction between the applicant and the council.

17. The applicant’s approach is for the Court to have regard to the substantial construction approved by the consent, an appreciation of the approved use involving the movement of large machinery, the approved means of carrying stormwater through the site, the erection of large permanent structures over the site of the approved drain and the envisaged interaction and interrelationship between the approved development and the three relevant conditions, namely conditions 27, 28 and 29. According to Mr Hale, when this is done it is self-evident that it could never have been intended for there to be access from the surface to the drainage works as constructed within the subject site itself. Moreover, he says, the only discretion given to the Council’s Engineer is in respect of the width of the drainage easement under condition 28.

18. Condition 27(i) does not call for the exercise of any discretion on the part of the council, the applicant being required only to submit a detailed design for the fully sealed piped system. Arguably, condition 27(ii) may involve some discretion on the part of the council after regard is had to the council’s standards and specifications. Condition 28 relates only to the creation of a new easement. The introduction to condition 27 makes it clear that it was the intention for the existing drainage easement to be maintained. This appears to be confirmed by the distinction made between the fully sealed piped system referred to in the first sentence in condition 27(ii) and the existing 900mm diameter RCP referred to in the second sentence. By contrast, the approved building plans bear the following notation at the site of the existing easement:-

Existing 900 f SWD to be maintained during construction of the storm water easement, but to be abandoned & broken up on completion of works by G & G

19. There is support for an argument that where ambiguity occurs in a development consent it should be construed against the interests of the council rather than the interests of the developer ( Ryde Municipal Council v The Royal Ryde Homes and Another (1970) 19 LGRA 321 at 324 and Matijesevic v Logan City Council (No. 2) (1983) 51 LGRA 51 at 57). The difficulty with the present case is the Court is not dealing with an ambiguity but rather the absence of a definitive direction or specification in respect of the terms of the easement. It is not, therefore, a question of construing the conditions of consent in a way that favours the developer. Rather, the Court is being asked to add that which has been omitted. This situation contrasts to the Court’s role in class 1 proceedings where the capacity of the Court to make provisions is not so limited. The grant of development consent is a unilateral act. It is not for the Court in class 4 proceedings to infer an agreement between the parties or to imply a term as if it was part of a bilateral transaction ( Parramatta v Shell Co Australia Ltd ).

20. The applicant relies upon authorities such as Jones v Pritchard (1908) 1 Ch 630 at 637 – 638) to show the existence of implied ancillary rights as discussed in Easements and Restrictive Covenants in Australia , Bradbrook & Neave, 2 ^nd edition, at 1.53 and 1.54. However, these principles apply only where the right in question is necessary for the enjoyment of some other right expressly granted ( Pwllbach Colliery Co Limited v Woodman (1915) AC 634 at 646 (HLE)). The difficulty in the present case is identifying the terms of an initial grant. They are not settled in terms by the condition. This is confirmed by the existence of the dispute which the Court is being asked to resolve.

21. Mr Hale contends that because the council expressly consented to the erection of buildings and other structures over the site of the drain then it is open for the Court to conclude, as a matter of fact, that there was no intention for the owner to permit or for the council to expect access from the surface of the easement.

22. The council’s contention is as follows:-


(a) on its ordinary English meaning, condition 28 requires a “drainage easement” unlimited in depth and height; and

(b) separately from (a) above, the drainage easement is required by the condition to be created “in favour of Council” with the consequence that it is a matter for the Council to determine whether the terms of the proposed easement are reasonably satisfactory. The mere presence of condition 28 on the Development Consent does not operate to bind the Council; a consent binds only the person seeking to carry out development in reliance upon the consent. Absent some other cause of action (be it in contract, tort or some equitable right, such as an equitable estoppel), there can be no declaration or order against the Council as sought by the Applicant.

23. The questions posed by the council raise issues that do not arise for determination in the proceedings. There is no cross claim for a declaration to the above effect. The argument nevertheless poses a defence to the applicant’s claim. It raises the arguable prospect of an alternative construction of condition 28.

24. The Court is here engaged in the process of interpretation. It is doubtful that a court can read words into a development consent. The principle has been enunciated in the context of statutory interpretation. For example, when Gibbs J cited the authority of Magor and St. Mellons Rural District Council v Newport Corporation [1952] AC 189 at 191 – 2 in support of his observations made at p 12 in The Council of the City of Parramatta v Brickworks Limited (1971 – 1972) 128 CLR 1 to the effect that it is not for the courts to fill any gap that may unintentionally have been left in a statute.

25. Nevertheless, in my view, the Court may imply words by reading them into a development consent by use of a purposive approach to give effect to the underlying purpose of the development consent or a particular condition of consent. In the present case, when granting development consent the council has clearly overlooked the prospect that compliance with condition 27 could give rise to a difference of opinion in respect of the term drainage easement where used in condition 28. The intention of the council cannot now be gauged from the subsequent submission, examination and construction of the detailed scheme referred to in condition 27(i). It nevertheless is clearly a matter that enlivens a consideration of the specification for “a drainage easement” required to be created pursuant to condition 28. The stipulation that the easement “be created in favour of Council” is consistent with an easement in gross created in favour of a prescribed authority without a dominant tenement for the purposes of s 88A of the Conveyancing Act. Pursuant to s 88A(2) the expression “easement to drain water” has the same effect as if there had been inserted in lieu thereof the words in Sch 4A.

26. Conversely, for the purpose of s 88B, the servient tenement is not identified, apart from the width of the easement to be determined by the engineer. There is no mechanism for establishing the height or depth dimensions of the easement necessary to substantiate the applicant’s requirement that the easement be limited to a stratum of land. No distinction is drawn between the terms of the existing easement, recognised by condition 27, and the proposed easement required by condition 28. The existing easement extends to the surface of the land.

27. Condition 28 makes no reference to any special conditions. There is no justification to imply a condition to the effect that access from the surface be denied. The only inference that might be drawn is that the council, by failing to stipulate otherwise, was expecting the terms of the new easement to replicate the terms of the existing easement. It is not enough that condition 27 expressly authorised, albeit conditionally, construction of the proposed building “over Council’s existing and proposed drainage easements”. Nor is it open for the applicant, as a matter of construction, to rely on the requirement in condition 29 for special footings in order to justify an inference that the proposed boundaries of the easement are to be limited to a stratum. In circumstances where there is an existing easement, it might reasonably be expected that a clear statement would be made to the effect that something different is required for any new easement.

28. The notation on the approved building plans recognises the removal and destruction of an existing pipe but not the easement itself. Furthermore, the fact that the replacement pipe has been installed in the culvert suggests that the council may be expecting to have the same rights of access as before. The existing easement appears to be otiose.

29. The ordinary concept of an easement to drain water or a drainage easement is that although the water may be directed through pipes at or below the surface, access is generally permitted across the land in the servient tenement. It is established law that an easement carries with it ancillary rights to enter upon the surface of adjoining land for maintenance, repair and cleaning purposes ( Pennant Hills Golf Club Limited v Roads and Traffic Authority of New South Wales [1999] NSWCA 110, unreported, Jones v Pritchard and Bland v Levi (2000) NSW ConvR 55–935 at par 14). No intention to exclude ancillary rights can be gleaned from the words in conditions 27, 28 and 29.

30. Without making a definitive finding for the reasons already explained, in my opinion, the better view of what is intended by condition 28 is an easement to drain water in the statutory form. It is nevertheless not open for the Court to make a firm decision whereby the construction contended for by either party is determined as the right one.

31. Obviously a declaration in the form of par 1 of the amended application class 4 can be made, however, the Court agrees with Mr Preston that there is no utility in such a course. The declaration in par 1A cannot be made in the light of the uncertainty discussed but, in any event, because the applicant has not established, as a matter of interpretation, that the draft instrument is a reflection of the intention of condition 28.

32. If the Court was minded to make a formal finding, it would be to the effect that the only likely inference to be drawn is that it was intended for the terms of the easement to be in such a form acceptable to and approved by the council. It is, therefore, not appropriate for the Court to order the council to execute the draft instrument. However, this does not mean the applicant is thereby deprived of a legal remedy. Even the council recognises that an application may be made to modify the conditions of consent pursuant to s 96 of the Environmental Planning and Assessment Act 1979.

33 . The application is dismissed. The question of costs is reserved as there has been no argument addressing that issue. Where an applicant is entirely unsuccessful, as is the case in these proceedings, in the absence of any extenuating circumstance, the Court would usually exercise its discretion by awarding costs in favour of the respondent as the successful party. The Court has not been appraised of any such circumstance.

Orders

34. The formal orders of the Court are as follows:-


(1) The application is dismissed.

(2) Costs reserved.

(3) The exhibits may be returned.