Moorebank Recyclers Pty Ltd v Tanlane Pty Ltd

The case of *Moorebank Recyclers Pty Ltd v Tanlane Pty Ltd* was heard in the Court of Appeal of New South Wales, with Bathurst CJ, Beazley and Meagher JJA presiding. The dispute concerned an application under section 88K of the *Conveyancing Act 1919* (NSW) for the imposition of an easement. The primary judge had made orders imposing an easement, subject to an undertaking by the applicant to extinguish it if certain future events did not occur, and had also made orders regarding compensation.

The Court of Appeal was required to determine whether the preconditions for imposing an easement under section 88K had been satisfied, particularly concerning the reasonable necessity of the easement for the effective use and development of the dominant tenement. This involved assessing whether the proposed development was appropriate and economically rational, and whether alternative methods of achieving the development had been considered. The court also had to consider the effect of the proposed easement on the servient tenement, including whether it would be "sterilised" and whether adequate compensation could be assessed and paid, given the uncertainty created by the conditional nature of the easement.

The Court of Appeal reasoned that the preconditions under section 88K must be assessed in light of the circumstances existing at the time of the hearing. It held that the primary judge erred in imposing an easement subject to an undertaking to extinguish it if future events did not occur, as this created an impermissible level of uncertainty. The court found that the power to order conditional easements under section 88K was limited to imposing conditions as a term of the order, not to create a mechanism for future extinguishment based on uncertain future events. Furthermore, the court determined that the primary judge had not adequately considered the effect on the servient tenement and the ability to assess compensation, particularly where the easement's imposition created uncertainty regarding the servient tenement's development.

Consequently, the Court of Appeal set aside several of the primary judge's orders, released the respondent from the undertaking, and remitted the matter to a judge or associate judge of the Equity Division for further determination in accordance with the Court of Appeal's judgment. Each party was ordered to pay its own costs of the appeal.