Rainbowforce Pty Ltd v Skyton Holdings Pty Ltd - [2010] NSWLEC 2

No judgment structure available for this case.

Reported Decision: (2010) 171 LGERA 286
[2010] ALMD 3117
[2010] ALMD 3345

Land and Environment Court

of New South Wales

CITATION: Rainbowforce Pty Limited v Skyton Holdings Pty Limited and Ors [2010] NSWLEC 2

PARTIES:
APPLICANT
Rainbowforce Pty Limited
FIRST RESPONDENT
Skyton Holdings Pty Limited
SECOND RESPONDENT
Skyton Developments Pty Limited
THIRD RESPONDENT
George Andrews

FILE NUMBER(S): 30115 of 2009

CORAM: Preston CJ

KEY ISSUES: EASEMENTS :- imposition of easement by court - right of carriageway - reasonable necessity - whether easement reasonably necessary for effective use or development of dominant tenement - whether use of dominant tenement will be inconsistent with the public interest - whether servient owner can be adequately compensated - whether all reasonable attempts made to obtain easement - whether any discretionary factors justify refusing relief - quantum of compensation - valuation approach to be adopted - loss of proprietary rights - disturbance - injurious affection - costs - whether indemnity or ordinary costs - terms of easement

LEGISLATION CITED: Conveyancing Act 1919 s 88B, 88K
Courts and Crimes Legislation Amendment Act 2008
Courts and Crimes Legislation Further Amendment Act 2008
Environmental Planning and Assessment Act 1979 s 5, 78A, 96, 96AA, 97
Land and Environment Court Act 1979 s 40

CASES CITED: 117 York Street Pty Ltd v Proprietors of Strata Plan No 16123 (1998) 43 NSWLR 504
A Class Property Pty Ltd v Parker [2004] NSWLEC 398
Antipas v Kutcher [2006] NSWLEC 42; (2006) 144 LGERA 289
Annwrack Pty Ltd v Williams, unreported, NSWSC No 3101 of 1988, Waddell CJ in Eq
Becton Corporation Pty Ltd v Minister for Infrastructure, Planning and Natural Resources [2005] NSWLEC 197
Billgate Pty Ltd v Woollahra Municipal Council [2004] NSWLEC 436; (2004) 136 LGERA 356
Blulock Pty Ltd v Majic [2001] NSWSC 1063; (2002) NSW ConvR 56-012
Castagnet Investments Pty Ltd v Woollahra Municipal Council [2005] NSWLEC 647
Coles Myer NSW Ltd v Dymocks Book Arcade Ltd (1996) 7 BPR 14,638
Durack v de Winton (1998) 9 BPR 16,403
Goodwin v Yee Holdings Pty Ltd (1997) 8 BPR 15,795
Gordon v Gioia [2007] NSWLEC 509
Grattan v Simpson (1998) 9 BPR 16,649; (1999) NSW ConvR 55-880
Hanny v Lewis (1998) 9 BPR 16,205; (1999) NSW ConvR 55-879
Huntington & Macgillivray v Hurstville City Council (No 2) [2005] NSWLEC 155; (2005) 139 LGERA 84
In the matter of an application by Kindervater (1996) ANZ ConvR 331
Katakouzinos v Roufir Pty Ltd [1999] NSWSC 1045; (1999) 9 BPR 17,303
Khattar v Wiese [2005] NSWSC 1014
King v Carr-Gregg [2002] NSWSC 379
March v E & MH Stramare Pty Ltd [1991] HCA 12; (1991) 171 CLR 506
Mitchell v Boutagy [2001] NSWSC 1045; (2001) 118 LGERA 249; (2002) NSW ConvR 56-024
Owners Strata Plan 13635 v Ryan [2006] NSWSC 221
Patrial Holdings v Short (1994) NSW ConvR 55-711
Property Partnerships Pacific Pty Ltd v The Owners of Strata Plan 58482 [2006] NSWLEC 709
Re Seaforth Land Sales Pty Ltd’s Land (No 2) [1977] Qd R 317
Skyton Developments Pty Ltd v The Hills Shire Council [2009] NSWLEC 1299
Tanlane Pty Ltd v Moorebank Recyclers Pty Ltd [2008] NSWSC 1341
Tenacity Investments v Ku-ring-gai Council [2008] NSWLEC 27
Tregoyd Gardens Pty Ltd v Jervis (1997) 8 BPR 15,845
Wengarin Pty Ltd v Byron Shire Council [1999] NSWSC 485; (1999) 9 BPR 16,985; (1999) NSW ConvR 55-903
Wilson v Forrester-Babcock [2000] NSWSC 1208; (2000) 10 BPR 18,377
Woodland v Manly Municipal Council [2003] NSWSC 392; (2003) 127 LGERA 120; (2004) NSW ConvR 56-071

DATES OF HEARING: 14 - 17 September 2009, 25 September 2009, 28 September 2009 and 9 October 2009

DATE OF JUDGMENT:
13 January 2010

LEGAL REPRESENTATIVES:
APPLICANT
Mr P C Tomasetti SC
SOLICITORS
D G Briggs & Associates
RESPONDENTS
Mr P Rigg (solicitor)
SOLICITORS
Deacons

JUDGMENT:

THE LAND AND
ENVIRONMENT COURT
OF NEW SOUTH WALES

PRESTON CJ

13 JANUARY 2010

30115 OF 2009

RAINBOWFORCE PTY LIMITED V SKYTON HOLDINGS PTY LIMITED AND ORS
JUDGMENT

1 HIS HONOUR:

Application is made to the Court to create an easement

Rainbowforce Pty Limited owns land at 19-21 Windsor Road, North Rocks, being Lot 4 in DP 247452 (“the Rainbowforce land”).

2 On 8 December 2006, Rainbowforce lodged a development application for a high density residential development of 299 units with 4-5 levels of basement carparking with Baulkham Hills Shire Council, now named The Hills Shire Council (“the Council”). On 9 April 2008, the Council granted development consent subject to conditions including a condition that the consent is not to operate until Rainbowforce is to satisfy the Council that a right of carriageway has been created over adjoining land variously owned by Skyton Holdings Pty Limited, Skyton Developments Pty Limited and Mr George Andrews (referred to collectively as “Skyton”), being Lots 2 and 3 in DP 247452 and Lot 101 in DP 617754 (“the Skyton land”). The right of carriageway was required to be a minimum of 12 metres wide and contain an access road and footpath from North Rocks Road across the Skyton land and Darling Mills Creek to the Rainbowforce land.

3 Rainbowforce subsequently applied to the Council to modify the development consent and appealed against the Council’s refusal to the Land and Environment Court. On 16 September 2008, by consent of Rainbowforce and the Council, the Court upheld the appeal and modified the development consent previously granted by the Council on 9 April 2008.

4 Rainbowforce has made numerous attempts to obtain the required right of carriageway from Skyton but has been unsuccessful.

5 On 24 February 2009, Rainbowforce made application to the Court under s 40(2) of the Land and Environment Court Act 1979 (“the Court Act”) for an order imposing a right of carriageway over the Skyton land. In dealing with such an application, the Court exercises the jurisdiction of the Supreme Court under s 88K of the Conveyancing Act 1919 (“the Conveyancing Act”). Skyton opposed the Court making an order imposing any easement over the Skyton land.

Summary of decision

6 I have determined that the Court should make an order imposing an easement in the form of a right of carriageway over the Skyton land for the benefit of the Rainbowforce land, and that Rainbowforce should pay compensation to Skyton in a sum to be determined in accordance with these reasons for judgment and also pay Skyton’s costs of the proceedings. The terms of the orders and of the easements will need to be settled in accordance with the reasons for judgment.

The power of the Court to create an easement

7 The Land and Environment Court has power to impose an easement over land under s 40 of the Court Act and s 88K of the Conveyancing Act.

8 The power under s 40 of the Court Act is invoked where an appeal of the kind referred to in s 40(1) is pending or has been determined and the appellant in such appeal makes application to the Court under s 40(2) for an order imposing an easement. Section 40(1) and (2) of the Court Act provide:

(a) the Court has determined to grant or modify a development consent pursuant to proceedings on an appeal under the Environmental Planning and Assessment Act 1979 , or

(b) proceedings on an appeal under the Environmental Planning and Assessment Act 1979 with respect to the granting or modification of a development consent are pending before the Court (whether constituted by a Judge or by one or more Commissioners).

9 In this case, s 40(1)(a) is satisfied as the Court has determined on 16 September 2008 to modify a development consent pursuant to proceedings on an appeal under the Environmental Planning and Assessment Act 1979 (“EPA Act”). The appellant in that appeal, Rainbowforce Pty Limited, has made this application to the Court for an order imposing an easement, satisfying s 40(2) of the Court Act.

10 The parties to an application under s 40(2) of the Court Act are required by s 40(3) to include “the owner of the land to be burdened by the easement, and each other person having an estate or interest in the land, as evidenced by an instrument registered in the General Register of Deeds or the Register kept under the Real Property Act 1900.”

11 In this case, the owners of the Skyton land are the three respondents in these proceedings:

(a) Lot 101 in DP 617754 is owned by Skyton Holdings Pty Limited and Mr George Andrews as tenants in common in equal shares;

(b) Lot 2 in DP 247452 is owned by Skyton Holdings Pty Limited and Mr George Andrews as tenants in common in equal shares;

12 The Court, in dealing with an application under s 40(2) of the Court Act, “may exercise the jurisdiction of the Supreme Court under s 88K of the Conveyancing Act 1919 and, in that event, s 88K of the Conveyancing Act 1919 applies to the Court’s exercise of that jurisdiction in the same way that it applies to the exercise of that jurisdiction by the Supreme Court”: s 40(4) of the Court Act.

13 The power of the Land and Environment Court under s 40 of the Court Act is more extensive than it used to be. Section 40 was substituted by the Courts and Crimes Legislation Amendment Act 2008 which commenced operation on 1 July 2008 and subsection (1) was further amended by the Courts and Crimes Legislation Further Amendment Act 2008 which came into operation on 8 December 2008. The key differences between the former and current s 40 are threefold.

14 First, the former s 40 only applied “if the Court has determined to grant development consent on an appeal under s 97 of the Environmental Planning and Assessment Act 1979” while the current s 40 applies not only to appeals under s 97 of the EPA Act concerning the grant of development consent but also appeals under the EPA Act concerning the modification of a development consent (under ss 96 and 96AA of the EPA Act).

15 Secondly, the former s 40 only applied if the Court “has determined” to grant development consent. The meaning of this phrase gave rise to debate: for example, contrast the decision in A Class Property Pty Ltd v Parker [2004] NSWLEC 398 with the decisions in Billgate Pty Ltd v Woollahra Municipal Council [2004] NSWLEC 436; (2004) 136 LGERA 356; Becton Corporation Pty Ltd v Minister for Infrastructure, Planning and Natural Resources [2005] NSWLEC 197; Huntington & Macgillivray v Hurstville City Council (No 2) [2005] NSWLEC 155; (2005) 139 LGERA 84 and Castagnet Investments Pty Ltd v Woollahra Municipal Council [2005] NSWLEC 647. The current s 40 makes it clear that it applies not only if the Court “has determined” to grant or modify a development consent but also proceedings on an appeal with respect to the granting or modification of a development consent “pending before the Court”.

16 Thirdly, the former s 40 empowered the Court to make an order imposing an easement if it was satisfied, amongst other things, that “the easement is reasonably necessary for the development to have effect in accordance with the consent” (see former s 40(2)(a) of the Court Act) while the current s 40 adopts s 88K of the Conveyancing Act so that the Court may make an order imposing an easement if “the easement is reasonably necessary for the effective use or development of the land that will have the benefit of the easement” (see s 40(4) of the Court Act adopting s 88K(1) of the Conveyancing Act). Under the former s 40 the “development” referred to was the development the subject of the development consent which the Court had determined to grant on the appeal under s 97 of the EPA Act. The test of reasonable necessity was whether the easement was reasonably necessary for the development “to have effect in accordance with” that consent. The consequence of such a test was that, where the consent imposed a condition requiring the creation of an easement, the test was readily satisfied because an easement that satisfied the condition of consent was reasonably necessary for the development to have effect in accordance with the consent: see, for example, Antipas v Kutcher [2006] NSWLEC 42; (2006) 144 LGERA 289 at [10] and Tenacity Investments v Ku-ring-gai Council [2008] NSWLEC 27 at [95]. The inquiry was also subjective, namely to the Court’s satisfaction.

17 The current s 40 incorporates the test of reasonable necessity under s 88K(1) of the Conveyancing Act. This is not whether the easement is reasonably necessary for the development to have effect in accordance with the consent but rather whether the easement is reasonably necessary for the effective use or development of other land that will have the benefit of the easement. The test is also not expressed in subjective terms, that is to say to the Court’s satisfaction, but rather in objective terms.

18 As noted, s 40(4) invokes the jurisdiction of the Supreme Court under s 88K of the Conveyancing Act. Section 88K provides, so far as is relevant to the creation of an easement, that:

“(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.

19 As noted in Khattar v Wiese [2005] NSWSC 1014 at [2], on an application under s 88K of the Conveyancing Act, the issues which arise are:

(a) Is the proposed easement reasonably necessary for the effective use or development of the applicant’s land that will have the benefit of the easement (s 88K(1))?

(b) Will the use of the applicant’s land having the benefit of the easement not be inconsistent with the public interest (s 88K(2)(a))?

(c) Can the owner of the land to be burdened by the easement, and each other person having an estate or interest in that land, be adequately compensated for any loss or other disadvantage that will arise from imposition of the easement (s 88K(2)(b))?

(d) Have all reasonable attempts been made by the applicant to obtain the easement or an easement having the same effect, but have been unsuccessful (s 88K(c))?

(e) If yes to each of the foregoing questions, should the Court exercise its discretion to impose an easement (s 88K(1))?

(f) Unless there are special circumstances of the case, what compensation is appropriate to be ordered (s 88K(4))?

Background facts

20 These issues need to be considered having regard to the following facts and circumstances.

21 The Rainbowforce land and the Skyton land were both former industrial land which have been targeted as medium to high density residential redevelopment sites. A constraint on the redevelopment of the sites is access.

22 The Rainbowforce land fronts two roads, Windsor Road and James Ruse Drive, but only has access to Windsor Road. At present, access to the Rainbowforce land is gained solely from Windsor Road (left in and left out only in a south bound direction along Windsor Road). However, this is unsafe and unsatisfactory due to the proximity of the access to the major multi-lane intersection of Windsor Road and Cumberland Highway (James Ruse Drive). No vehicular or pedestrian access is available from the Rainbowforce land onto James Ruse Drive because of the elevation of the on-ramp from Windsor Road to James Ruse Drive above the Rainbowforce land.

23 The Skyton land also fronts two roads, North Rocks Road and James Ruse Drive, but also has access to only one road, North Rocks Road. Vehicular or pedestrian access to James Ruse Drive is prevented by reason of its elevation along its whole frontage with the Skyton land.

24 In order to enable redevelopment of the Rainbowforce land and the Skyton land for medium to high residential development, the Council (and the Roads and Traffic Authority of NSW) have determined that vehicular access to both sites should be from North Rocks Road only. This results in access to the Rainbowforce land being across the Skyton land. Access to Windsor Road would cease once access is able to be provided across the Skyton land from North Rocks Road.

25 In February 1997, the Council finalised its Residential Housing Strategy and forwarded it to the former Department of Urban Affairs and Planning for formal consideration. The Strategy included the identification of target sites appropriate for multi-unit residential development.

26 The purpose of adopting a Residential Housing Strategy was to exempt Baulkham Hills Shire from State Environmental Planning Policy No 53 – Metropolitan Residential Development (“SEPP 53”). SEPP 53 was intended by the State government, amongst other aims, to broaden the range of dwelling types and location in the housing market, to use existing infrastructure and services more efficiently, and to reduce the amount of land take up at the urban fringe for residential development. SEPP 53 sought to achieve these objectives by introducing a range of development controls in areas where the relevant council had not adopted a residential development strategy to achieve the stated objectives. In response to SEPP 53, the Council adopted its Residential Housing Strategy which resulted in the Shire being exempted from SEPP 53.

27 On 7 December 1999, the Council resolved to prepare and exhibit a draft local environmental plan (“LEP”) and development control plan (“DCP”) for those parts of the Skyton land that are now Lot 2 in DP 247452 and Lot 101 in DP 617754 to rezone them from part Light Industrial 4(b) and Residential (2a) to Residential 2(a1), a high density residential zone.

28 On 8 February 2000, the Council adopted amendments to its Residential Housing Strategy, including the nomination of the Rainbowforce land and the Skyton land as target sites. On 13 June 2000, the Council adopted the formation of a Target Site Panel and a process for the preparation of site specific DCPs for the target sites.

29 On 6 April 2001, Skyton exchanged contracts for the purchase of Lot 2 in DP 2474452 and Lot 101 in DP 617754 of the Skyton land from National Foods Milk Limited (the site was the former Dairy Farmers milk depot). The sale was completed almost two years later.

30 On 7 November 2001, the Council adopted DCP 33, a site specific DCP for the target site of 27-29 North Rocks Road (the Skyton land). DCP 33 came into force on 28 March 2002.

31 The principal objectives of DCP 33 included the objective to “(d) ensure that development occurs within an orderly manner and does not sterilise the use of other sites” (cl 1.3). Section 3 of DCP 33 set out the objectives and development controls for residential developments. Setbacks were required from James Ruse Drive (19 metres) and Darling Mills Creek (20 metres). Development of the setbacks was constrained, in the case of the James Ruse Drive setback, to the provision of landscaping, open space, pedestrian and vehicular access, and parking (cl 3.2(iii)) and, in the case of the Darling Mills Creek setback, to the provision of a vegetated buffer strip (cl 3.2(i)). Buildings were required to be designed so as to ensure that road noise emanating from James Ruse Drive was maintained at an acceptable standard for residential living (cl 3.3).

32 DCP 33 also dealt in s 3.5 with access, including the provision of access over the Skyton land to the adjacent Rainbowforce land. One of the objectives of access was stated to be “(b) Access arrangements must be made in relation to the adjacent site (19-21 Windsor Road)”. Development controls provided:

“(i) The principal access to the site should be from North Rocks Road, in a location that provides adequate site distances;

“ ► Lot 3 DP247452 [the other part of the Skyton land that was later purchased by Skyton from the RTA];

33 The “submission requirements” in DCP 33 were that “documentation indicating that access arrangements have been approved by the Roads and Traffic Authority and have had regard for the development of other sites in the locality”.

34 On 28 March 2002, Baulkham Hills Local Environmental Plan 1991 (Amendment No 89) was gazetted, rezoning the Skyton land from part Light Industry 4(b) and Residential (2a) to Residential (2a1), on the same day DCP 33 came into force.

35 On 28 November 2002, Lot 3 in DP 247452 was transferred from the Roads and Traffic Authority of NSW to Skyton Developments Pty Ltd. This lot is located to the west of Darling Mills Creek and abuts the Rainbowforce land.

36 On 31 March 2003, the land purchased from National Foods Milk Limited (Lot 2 in DP 247452 and Lot 101 in DP 617754) was transferred to Skyton Holdings Pty Limited and George Andrews as tenants in common in equal shares.

37 Between 4 August 2003 to 11 November 2003, three separate community consultation workshops were held regarding the target site of 19-21 Windsor Road (the Rainbowforce land).

38 On 18 September 2003, Skyton lodged development application EA933/2004/HC proposing four residential apartment buildings of five storeys each containing 100 units in total on Lot 2 in DP 247452 and Lot 101 in DP 617754.

39 On 20 April 2004, the Council adopted DCP23, a revised and renumbered site specific DCP for the target site of 27-29 North Rocks Road (“the Skyton land”). DCP23 contained the same objectives and development controls for residential developments as DCP 33, including in relation to setbacks (cl 3.2), noise (cl 3.3) and access (cl 3.5). DCP 23 came into force on 27 April 2004.

40 On 27 October 2004, there was a presentation of a revised draft DCP for the target site of the Rainbowforce land to the Target Site Panel which had been formed in June 2000 for the preparation of site specific DCPs for target sites under the Residential Housing Strategy.

41 On 28 February 2005, a draft DCP for the target site of the Rainbowforce land was submitted to the Council. This required vehicular and pedestrian access to the Rainbowforce land to be obtained over the Skyton land from North Rocks Road.

42 On 8 March 2005, the Council granted deferred commencement consent for Skyton’s proposed four residential apartment buildings on Lot 2 in 247452 and Lot 101 in DP 617754 of the Skyton land (“the Skyton development consent”). One of the deferred commencement conditions, condition A4, required the creation of a right of carriageway over the Skyton land in favour of the Rainbowforce land. Condition A4 provided:

“4. The creation of a Right of Carriageway (minimum 12 metres wide and variable width at the North Rocks entrance and at the future creek crossing) over Lot 101 DP617754 and Lot 2 DP247452 in favour of Lots 3 & 4 DP247452 to contain the future access road and footpath as delineated on Plan Drawing No. DA-28 Issue 14 dated 2 November 2004 prepared by Design Effect Pty Ltd.

43 The plan referred to in condition A4, namely Plan Drawing No. DA-28 Issue 14 dated 2 November 2004 prepared by Design Effect Pty Ltd, had as its title: “Site: Ground floor plan showing provision only of possible future road access to adjoining properties.” The possible future road access shown was an access road 6 metres wide, a bicycle path and pedestrian path, beside one another. The access road and paths entered from an entrance off North Rocks Road in common with the entrance to the Skyton development’s basement car parking. The access road and paths to the Rainbowforce land then diverged from the common entrance and ran parallel to but separated by a landscaping strip from the retaining and acoustic wall along James Ruse Drive. On nearing Darling Mills Creek, the access road and paths turned northwards so as to cross the creek in the northeastern corner of Lot 3 in DP 247452 and then cross into the Rainbowforce land. The note on the plan at this point stated “access to neighbouring property”. Section B-B on the plan showed a section through “possible future road”. The section showed a setback of 19 metres between Building Four and the boundary with James Ruse Drive. Within that 19 metre setback were, running from James Ruse Drive to the building, a landscape strip, road, bicycle path, pedestrian path and hardstand parking area adjacent to the building.

44 Condition A4 was specifically imposed by the Council in order to comply with the access development controls in Section 3.5 of DCP 23. In the council officer’s report considered by the Council when it resolved to grant development consent for the Skyton development, it was noted in relation to the access development controls that:

“Drawing DA-28 shows the opportunity for access to adjoining sites, with the details to be submitted with any development application for the adjacent sites. A site specific DCP has been prepared for the adjacent sites and details of this access road will be required as part of the DA submission for these adjacent sites.”

45 Elsewhere in the council officer’s report it was stated in relation to the need for a right of carriageway that:

46 Two other conditions in the Skyton development consent dealt with ensuring that works required on the access road, footpath and associated landscaping would be completed before occupation of the Skyton development. Deferred commencement condition A5 provided:

47 Ordinary condition 113 of the consent provided:

“The access road, footpath and associated landscaping works required under Clause 3.5 of Council’s Development Control Plan No. 23 -Target Site – Nos. 27-29 North Rocks Road, North Rocks (DCP 23) shall be completed prior to the issue of occupation certificate.”

48 On 26 April 2005, the Council considered a report on the draft DCP and draft LEP for the target site of the Rainbowforce land. The Council resolved to prepare and exhibit a draft LEP to rezone the Rainbowforce land to residential 2(a1) and the adjoining property of Lot 3 in DP 247452 (bought by Skyton from the RTA) also to residential 2(a1) and to exhibit a draft DCP and the draft LEP concurrently.

49 Between 2 and 30 August 2005, the draft LEP and draft DCP were exhibited.

50 On 21 February 2006, the Council considered a report on the outcome of the draft LEP and DCP exhibition and resolved to adopt both the draft LEP and DCP subject to amendments.

51 The DCP adopted was for Target Site No 7, 19-21 Windsor Road, Northmead (“DCP-Target Site 7”). It applied to the Rainbowforce land (Lot 4 in DP247452) and part of the Northmead High School site (part of Lot 2 in DP813854). The objectives of DCP-Target Site 7 include “(i) To achieve a medium to high density residential development on a site identified for this purpose by Baulkham Hills Shire Council.” DCP-Target Site 7 notes that it is a site specific DCP for the target site of 19-21 Windsor Road identified in the Council’s Residential Development Strategy. DCP-Target Site 7 notes that the site specific DCP for the Skyton land (DCP 23) includes a provision to ensure vehicular access across the Skyton land to the Rainbowforce land. DCP-Target Site 7 states in Section 3.6 Access and Movement:

“Vehicular access to the site should be provided from the east (North Rocks Road), given the significant constraints associated with access from either James Ruse Drive or Windsor Road. This access road is to cross Darling Mills Creek via a bridge that spans the most direct route and should be able to accommodate two lanes of vehicular traffic, as well as pedestrians. The location of the proposed access is illustrated in Figure 3.6.

52 Section 4.3 Access of DCP-Target Site 7 deals in greater detail with vehicular and pedestrian access. In Section 4.3.1 Vehicular Access, the objectives are stated to include:

53 The development controls are stated to include:

“(a) The principal vehicular access to the site is to be made from North Rocks Road in accordance with Figure 4.3. The route taken should cause the least disturbance and impact to the core riparian corridor and buffer. The crossing of Darling Mills Creek must be bridged and its design sensitive to the ecology, wildlife corridor and geomorphic functions of the corridor. The crossing is also to be designed in accordance with the principles in the Department of Natural Resources Guideline for Watercourse Crossing Design and Construction – Version 4.

(c) The creation of a Right of Carriageway (minimum 12 metres wide) over Lot 3 DP247452 in favour of Lot 4 DP247452 to contain the future access road and footpath alignment identified in Figure 4.3 (Access to Site).

(d) Submission to council of suitable documentary evidence that indicates the creation of a Right of Carriageway over Lot 3 in DP247452 has been registered with the Land Property Information, New South Wales (LPI).

(e) Consultation and concurrence from Caltex is required for the design of the accessway from North Rocks Road, to ensure the Hunter Pipeline is maintained.

(f) Upon completion of the development, all vehicular access for the site to and from Windsor Road is to cease. All vehicles are to enter and exit the site via the internal road off North Rocks Road.

(g) The design and configuration of access ways and driveways shall be in accordance with Part D Section 1-Parking.

limiting the width of vehicle access points.

ensuring clear sight lines at the pedestrian and vehicular crossing.

separating and clearly distinguishing between pedestrian and vehicular access ways.

… ”.

54 Figure 4.3 shows the access to the site off North Rocks Road. It shows the access road having a common entrance with the access to the adjoining Skyton land and then separating so as to run parallel with James Ruse Drive. As the access road nears Darling Mills Creek it takes a direct route straight across Darling Mills Creek on to Lot 3 in DP 247452 and thence on to Lot 4 in DP 247452 (the Rainbowforce land). Figure 4.4 depicts the intersection treatment I have described of the access road and access to the Skyton land having a common entrance off North Rocks Road.

55 In Section 4.3.2 Pedestrian Access, the development controls include:

56 Figure 3.6 Access and Movement shows a possible pedestrian and cycle route immediately adjacent to and parallel to the access road to North Rocks Road across the Skyton land and Darling Mills Creek to the Rainbowforce land. It also shows a possible pedestrian cycle link along the boundary of Northmead High School grounds to Campbell Street.

57 The design and development controls for residential developments on the Rainbowforce land under DCP-Target Site 7 are based on these access arrangements. For example, the development for potential of the site is formulated having regard to the point of entry into the development from the access road across the Skyton land, as are the space use zones, open space zones and access and movement routes.

58 On 18 August 2006, Baulkham Hills Local Environmental Plan 2005 (Amendment No 6) was gazetted, rezoning the Rainbowforce land and Lot 3 in DP 247452 of the Skyton land to Residential 2(a1).

59 On 31 August 2006, Skyton and its planning consultant, Planning Workshop Australia, presented to the Council’s Target Site Panel proposed amendments to DCP 23, the site specific DCP for the Skyton land, so as to increase the building height and yield of residential development on the Skyton land similar to the adjoining target site of the Rainbowforce land. The Target Site Panel raised a number of urban design concerns including ensuring vehicular access across the Skyton land to the adjoining site of the Rainbowforce land and providing a pedestrian footpath separate to the driveway. Skyton’s consultant confirmed that the proposed amendments to DCP 23 would not propose any reduction in setbacks and a pedestrian pathway could be accommodated separate to the driveway.

60 On 8 December 2006, Rainbowforce lodged development application DA 1137/07/HC for residential apartment development of 5-10 storeys, containing 299 units in total, with 4-5 levels of basement carparking on the Rainbowforce land.

61 On 15 May 2007, the Council resolved not to proceed with Skyton’s proposed amendments to DCP 23. Of critical concern to the Council was the ability of the surrounding road network, the intersection of Windsor and North Rocks Road in particular, to cope with the additional traffic that would be generated by an increase in density on the Skyton land. Fundamental to the Council was maintenance of access across the Skyton land to the adjoining site of the Rainbowforce land. The reasons the Council gave for its decision not to support Skyton’s proposal to amend DCP 23 were:

“ ▪ A DCP has been prepared by Council for the target site that is considered to be acceptable;

▪ A five storey development has been approved (deferred commencement) on the site;

▪ It was determined that the adjoining target site at 19-21 Windsor Road would provide the landmark in this location of the Shire;

▪ It has not been demonstrated that an increase in density will result in additional benefit to the community;

▪ The impact of traffic on the intersection at Church Street in particular, would be unacceptable and it is unlikely that significant improvements could be made; and

62 On 21 August 2007, the Council revised and reformulated its development control plans. DCP 23 applying to the Skyton land became Part E Section 5 of the comprehensive Baulkham Hills Development Control Plan. It was entitled “Target Site 27-33 North Rocks Road, North Rocks”. It came into force on 11 September 2007. The objective and development controls for residential developments remained the same as in DCP 23, including those concerning setbacks (cl 2.2), noise (cl 2.3) and access (cl 2.5). The DCP-Target Site 7 applying to the Rainbowforce land became Part E Section 19 of Baulkham Hills Development Control Plan. The terms of the DCP remained the same. It also came into force in September 2007.

63 On 28 November 2007, Skyton lodged a further development application DA 1167/1008 with the Council for the demolition of existing structures and construction of 190 residential units within four residential towers to 10 storeys over four basement parking levels on the Skyton land. The proposed development made provision for vehicular and pedestrian access to the Rainbowforce land across the Skyton land in accordance with the access route shown in the DCPs for the Skyton land and the Rainbowforce land.

64 On 9 April 2008, the Council granted deferred commencement consent for Rainbowforce’s proposed residential development of 299 apartment units with associated basement car parking (“the Rainbowforce development consent”). One of the deferred commencement conditions was condition A1 which provided:

Right of Carriageway

The submission to Council of suitable documentary evidence from the NSW Department of Lands that indicates the creation of a Right of Carriageway (minimum 12 metres wide) over Lots 2 & 3 DP247452 and Lot 101 DP617754 in favour of Lot 4 DP247452 to contain the future access road and footpath alignment identified in Figure 4-3 (Access to Site) of Baulkham Hills Development Control Plan Part E Section 19 -Target Site No. 7, 19-21 Windsor Road, Northmead.”

65 On 17 November 2008, Skyton appealed against the Council’s deemed refusal of its further development application to the Land and Environment Court. Following commencement of the appeal, the Council resolved to refuse the development application. The appeal was heard between 31 August and 2 September 2009 and was dismissed on 11 September 2009. The issue of vehicular and pedestrian access to the Rainbowforce land across the Skyton land was addressed in pages 52-56 of the Court’s judgment: Skyton Developments Pty Ltd v The Hills Shire Council [2009] NSWLEC 1299.

66 Rainbowforce was granted leave to intervene in the proceedings to adduce evidence and make submissions on the issues of access, traffic and parking. The traffic engineering experts of Rainbowforce and Skyton jointly conferred and produced a joint report which was tendered in evidence in the proceedings. The design of the access road and common entrance off North Rocks Road, and certain conditions, were agreed between the parties’ experts. Skyton later tendered revised engineering plans for the access road. The Court commented in the judgment (at paragraph 56) on these plans:

“56 I note that the engineering plans provided in Exhibit 102 provide for an overall easement width of 10 m that includes a 2.5 m wide shared footpath and cycle way and a combined carriageway of 6.7 m. The remaining width is to accommodate support structures, handrails and kerbing. While the overall width of 10 m varies from the 12 m width of the easement in the joint report, I understand the experts to raise no issue with the reduced width although the reduced width provides no opportunity for landscaping adjoining the vertical retaining wall of James Ruse Drive on the southern boundary of the easement.”

Is the easement reasonably necessary?

67 Section 88K(1) of the Conveyancing Act gives the Court a discretionary power to “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”. At least ten points can be made about this power.

68 First, the power to impose an easement is made conditional upon satisfaction of the requirement in s 88K(1). Subsection (1) has been described as the “governing subsection”, although the criteria in subsection (2) must also be met if an order is to be made: Tregoyd Gardens Pty Ltd v Jervis (1997) 8 BPR 15,845 at 15,854. It is “a precondition of the exercise of the jurisdiction” that “there must be a finding that the easement sought is reasonably necessary for the effective use or development of the land which will have the benefit of it”: Woodland v Manly Municipal Council [2003] NSWSC 392; (2003) 127 LGERA 120; (2004) NSW ConvR 56-071 at [19](1). A finding that the pre-condition in s 88K(1) is met is to be determined objectively: Tregoyd GardensPty Ltd v Jervis at 15,854. That finding “involves the making of a value judgment, but not the exercise of a discretion”: Woodland v Manly Municipal Council at [19](2).

69 Secondly, the requirement in s 88K(1) is to be satisfied with respect to the particular easement that the Court is considering ordering to be imposed. The reference to the “easement” in the beginning of the conditional phrase in s 88K(1) is a reference to the easement the Court orders to be imposed. Section 88K(3) requires the Court to specify in the order, the nature and terms of the easement. The applicant for an order imposing an easement will propose the nature and terms of the easement sought. The proposed easement will accord with the easement which the applicant has made all reasonable attempts to obtain, or have the same effect as that easement, so as to satisfy s 88K(2)(c). The Court’s power to impose an easement under s 88K(1) would extend to amending the proposed easement of the applicant, including so as to ensure the easement which the Court orders to be imposed satisfies the requirement in s 88K(1) of being reasonably necessary for the effective use or development of other land that will have the benefit of the easement.

70 Thirdly, the inquiry directed by the requirement in s 88K(1) is whether the easement is reasonably necessary “for the effective use or development of other land that will have the benefit of the easement”. This other land will be the land of the applicant for the order. The easement may be reasonably necessary for either the effective use or the effective development or both of the applicant’s land. Most of the cases in which an easement has been sought have involved the carrying out of development on land and the subsequent use of the development, but some have involved only use of the land. An example of the latter is Owners Strata Plan 13635 v Ryan [2006] NSWSC 221.

71 The inclusion of “development” as well as “use” means that the Court’s power to impose an easement is enlivened not only if the easement is reasonably necessary for a particular development or use proposed by the applicant but also if the easement is reasonably necessary for any development or use of the applicant’s land, which is within the law: Tregoyd Gardens Pty Ltd v Jervis at 15,854.

72 Fourthly, the easement is to be reasonably necessary for the “effective” use or development of the land that will have the benefit of the easement. The adjective “effective” bears its ordinary meaning of “serving to effect the purpose; producing the intended or expected result”: Macquarie Dictionary and see Woodland v Manly Municipal Council at [7], (5). In context, therefore, the easement is to be reasonably necessary in order for the use or development of the land benefited by the easement to effect the purpose or produce the intended or expected result of the use or development. Thus, if use or development of land for some planning purpose, such as residential, commercial or industrial purposes, cannot be achieved without the creation and use of an easement for, say, access to the land or services to the land or for drainage of the land, the easement is reasonably necessary for such use or development to be effective: see King v Carr-Gregg [2002] NSWSC 379 at [47] and Khattar v Wiese at [30].

73 Fifthly, the easement is to be reasonably necessary for the effective use or development of the land itself, namely the land that will have the benefit of the easement; it is not sufficient for the easement to be reasonably necessary for the enjoyment of the land by any of the persons who, for the time being, are the proprietors: Hanny v Lewis (1998) 9 BPR 16,205 at 16,209; (1999) NSW ConvR 55-879; Woodland v Manly Municipal Council at [19](5). Accordingly, evidence as to the particular problems that one of the existing proprietors may have, or the hardship suffered as a result of those problems, would not be relevant: Hanny v Lewis at 16,209; Owners Strata Plan 13635 v Ryan at [28], [33].

74 Sixthly, the requirement in s 88K(1) is that the easement be “reasonably necessary”. This has two components: first, “reasonably” and second, “necessary”. The requirement that the easement be “reasonably” necessary for the effective use or development of the applicant’s land does not mean that there must be an absolute necessity for the easement: Tregoyd Gardens Pty Ltd v Jervis at 15,854; 117 York Street Pty Ltd v Proprietors of Strata Plan No 16123 (1998) 43 NSWLR 504 at 508; Woodland v Manly Municipal Council at [7], [19](6).

75 This reduction in the quality of necessity to what is reasonable means that an easement may be able to be imposed although another means of right of way may exist (Re Seaforth Land Sales Pty Ltd’s Land (No 2) [1977] Qd R 317 at 320-321; In the matter of an application by Kindervater (1996) ANZ ConvR 331 at 333; Tregoyd Gardens Pty Ltd v Jervis at 15,854 and Grattan v Simpson (1998) 9 BPR 16,649 at 16,651; (1999) NSW ConvR 55-880) or possibly even when the land could be effectively used or developed without the easement (117 York Street Pty Ltd v Proprietors of Strata Plan No 16123 at 508; Durack v de Winton (1998) 9 BPR 16,403 at 16,447; Khattar v Wiese at [24]).

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”: In the matter of an application by Kindervater at 333; Tregoyd Gardens Pty Ltd v Jervis at 15,854; Hanny v Lewis at 16,209 and Woodland v Manly Municipal Council at [7], [19]. Indeed, it has been suggested, “the tone of the word ‘necessary’ is getting close to something which is a vital requirement”: Hanny v Lewis at 16,209.

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 Seventhly, 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:

all

reasonable

with

without

117 York Street Pty Ltd v Proprietors of Strata Plan No 16123

79 This passage has been cited with approval in many subsequent cases, including Durack v de Winton at 16,447-16,448; Hanny v Lewis at 16,209; Khattar v Wiese at [25]; Owners Strata Plan 13635 v Ryan at [50], [57] and Tanlane Pty Ltd v Moorebank Recyclers Pty Ltd [2008] NSWSC 1341 at [92]. However, Hamilton J in Woodland v Manly Municipal Council at [9] expressed concern as to the use in the second proposition of the words “(at least) substantially” saying:

“But what I am most troubled by is that the proposition may be taken to constitute a general and inflexible rule and to provide a criterion or precondition that must be met in every case. No doubt the alternatives will require to be considered and there is unlikely to be a finding of reasonable necessity (or, indeed, an exercise of discretion in favour of a grant) if there is a viable alternative. But to lay down as invariable an additional precondition (if this be what his Honour intended) will in effect create a gloss upon the statute and distract the Court from carrying out its function in accordance with the terms of the statute; and see [19](7) below”.

80 Hamilton J summarised his position in Woodland v Manly Municipal Council at [19](7) as:

“In considering that reasonable necessity, the Court will take into account whether and to what extent use with the easement is preferable to use or development without the easement. That use with the easement is preferable or, a fortiori, substantially preferable to use or development without the easement, will conduce to a finding of reasonable necessity, but is not a necessary precondition to that finding …”.

81 Eighthly, the requirement of reasonable necessity does not demand that there be no alternative land over which an easement could be equally efficaciously imposed. Hamilton J noted in Tregoyd Gardens Pty Ltd v Jervis at 15,854 that “[i]t cannot be the intention of the Act that if an easement would be equally efficacious over two pieces of land it cannot be granted over either because it cannot be said that it is necessary for it to be granted over that piece of land as opposed to the other”: see also Durack v de Winton at 16,445; Khattar v Wiese at [31], [32].

82 Ninthly, 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 Tenthly, 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. Only if use of the proposed easement would be absolutely illegal and there was no chance of obtaining a consent necessary to make it other than illegal, would the Court be precluded from finding that the easement was reasonably necessary: 117 York Street Pty Ltd v Proprietors of Strata Plan No 16123 at 511-512.

84 Applying these principles to the present case, the easement proposed by Rainbowforce to permit the construction and use of an access road and footpath over the Skyton land is reasonably necessary for the effective development and subsequent use of the Rainbowforce land that will have the benefit of the easement. The creation of the easement has been made a deferred commencement condition of the development consent granted by the Council for the development of the Rainbowforce land. The development cannot be carried out unless and until the easement has been created. Indeed, the planning controls applying to the Rainbowforce land, in particular DCP-Target Site 7, require the creation of the proposed easement for all reasonable uses or developments of the Rainbowforce land. Hence, use of the Rainbowforce land with the easement is substantially preferable to use or development without the easement because there can be no reasonable use or development of the Rainbowforce land without the easement.

85 Skyton endeavoured to rebut this seemingly ineluctable conclusion by arguing that the proposed easement over the Skyton land was not reasonably necessary for the effective use or development of the Rainbowforce land because:

(a) the terms of the easement proposed by Rainbowforce differ from and will not satisfy the relevant condition of consent for the Rainbowforce land;

(b) pedestrian access is already available to the Rainbowforce land from Windsor Road and an existing easement from the Rainbowforce land to Campbell Street; and

86 As to the first argument, although there were differences in earlier versions of the proposed easement, after amendment by Rainbowforce the only difference remaining between the easement currently proposed and condition A1 of the Rainbowforce development consent is the width of the right of carriageway, the latter requires a minimum of 12 metres while the former proposes 10 metres. The applicant proposed this reduction in the width of the easement so as to lessen the area of Skyton’s land burdened by the easement and hence the extent of Skyton’s loss or other disadvantage. This reduction in width was achieved by removing the landscaping strip that had previously been proposed within the right of carriageway (see, for example, in the plan approved in the Skyton development consent). The narrower, 10 metre wide right of carriageway without the landscaping was adopted by Skyton in its engineering plans for the access road tendered at the hearing of the appeal of its further development application in September 2009 this year: see para 56 of the Court’s judgment.

87 The simple solution to this first argument of Skyton is for the proposed easement to be amended to reinstate the width to be 12 metres and hence comply with condition A1 of the Rainbowforce development consent. Rainbowforce offered to do so at the hearing if this was considered by the Court to be necessary. I consider that this amendment to increase the width of the easement to 12 metres, as required by condition A1 of the Rainbowforce development consent, should be made. Such amendment would also allow space for landscaping to be planted within the easement, with concomitant benefits for the use and enjoyment of the Skyton land.

88 As to Skyton’s second argument, it is true that pedestrian access to the Rainbowforce land is currently available from Windsor Road and may be available in the future by Rainbowforce exercising rights it has under an existing right of footway over the Northmead High School land through to Campbell Street. However, these current and future pedestrian access routes do not necessarily result in the proposed easement over the Skyton land not being reasonably necessary for the effective use or development of the Rainbowforce land, for two reasons.

89 First, any use or development of the Rainbowforce land is required by law to provide access to North Rocks Road across the Skyton land. Condition A1 of the Rainbowforce development consent requires the right of carriageway to contain a footpath which is to be in the footpath alignment identified in Figure 4.3 (Access to Site) of the DCP-Target Site 7. This DCP requires pedestrian linkages to include not just the current access to Windsor Road and the future pedestrian access to Campbell Street but also access to North Rocks Road (see sections 3.5 and 4.3.2 and Figure 3.6 Access and Movement and Figure 4.3 Access to Site). All new development of the Rainbowforce land is required to provide these pedestrian linkages. Hence, an easement containing a pedestrian footpath to North Rocks Road is not only necessary for the development and subsequent use approved by the development consent but for all reasonable uses and developments of the Rainbowforce land.

90 Secondly, the different pedestrian routes serve different purposes or desire access lines. There are bus routes along North Rocks Road. A footpath along the proposed easement over the Skyton land will enable pedestrians to gain relatively level access to these bus routes on North Rocks Road. The alternative via Windsor Road to North Rocks Road is considerably longer in distance and on an incline. The potential future pedestrian access to Campbell Street is in the opposite direction and serves a different purpose of providing access to Northmead High School. Accordingly, these current and future pedestrian routes do not cause the proposed easement containing a footpath over the Skyton land not to be reasonably necessary for the effective use or development of the Rainbowforce land.

91 As Skyton’s third argument, any use or development of the Rainbowforce land is required to provide vehicular access solely to North Rocks Road. The right of carriageway is required by condition A1 of the Rainbowforce development consent. Condition 121 of that consent also requires the creation and registration of a restriction on vehicular access from the Rainbowforce land to Windsor Road. Furthermore, all reasonable uses or developments of the Rainbowforce land would be required to do the same. DCP-Target Site 7 expressly requires vehicular access to the site only from North Rocks Road. The long planning history concerning the rezoning and redevelopment of the Rainbowforce land and the Skyton land is clear and unchanging in requiring vehicular access only from North Rocks Road. Hence, an easement containing an access road from North Rocks Road is not only necessary for the development and subsequent use approved by the Rainbowforce development consent but also for all reasonable uses and developments of the Rainbowforce land.

92 Next, even if an easement over the Northmead High School land to Campbell Street containing an access road were to be assumed to be equally efficacious as an easement over the Skyton land to North Rocks Road, this would not cause the proposed easement over the Skyton land not to be reasonably necessary for the effective use and development of the Rainbowforce land. As I have noted above, it was not the intention of the legislature if an easement would be equally efficacious over two pieces of land it cannot be granted over either because it cannot be said that it is necessary for it to be granted over that piece of land as opposed to the other.

93 Finally, the requirement is of reasonable necessity. As I have noted earlier, the reduction in the quality of necessity to what is reasonable means that the remedy of ordering that an easement be imposed is available although another means of a right of way may exist. Hence, the potential for an easement to be able to be granted over the Northmead High School land to Campbell Street does not necessarily result in an easement over the Skyton land not being reasonably necessary for the effective use or development of the Rainbowforce land.

Will use of the dominant tenement be inconsistent with the public interest?

94 Section 88K(2)(a) of the Conveyancing Act requires the Court to be satisfied that “use of the land having the benefit of the easement will not be inconsistent with the public interest”. The land having the benefit of the easement is the dominant tenement. It is the use of the dominant tenement that is not to be inconsistent with the public interest: 117 York Street Pty Ltd v Proprietors of Strata Plan No 16123 at 513; Durack v de Winton at 16,448; Hanny v Lewis at 16,209; Grattan v Simpson at 16,651; Woodland v Manly Municipal Council at [13], [19](4).

95 Parliament in enacting s 88K recognised that the private development of land may be beneficial for the public and in the public interest. However, such development, if it requires an easement over neighbouring land, can be unreasonably frustrated or held to ransom by the neighbour not granting an easement. The Act empowers the Court to grant an easement but on condition that the party having the benefit pay reasonable compensation to the party whose land is burdened. In this way, there is a balancing of competing private interests as well as promotion of the public interest: see Tregoyd Gardens Pty Ltd v Jervis at 15,847 and 15,854 and Second Reading Speech, Legislative Council, 4 December 1995.

96 In this case, the development and subsequent use of the Rainbowforce land is for a permitted purpose under the relevant environmental planning instrument, Baulkham Hills Local Environmental Plan 2005, and in accordance with the development consent. It is the culmination and desired outcome of the strategic and site specific planning for the area, from the Residential Housing Strategy, the exemption of the Shire from SEPP 53, the identification of both the Rainbowforce land and the Skyton land as target sites for medium to high density residential development, the rezoning of each target site for this purpose, the preparation of site specific DCPs for each target site, through to the lodgment, consideration and determination of the development applications for these target sites by the grant of development consent. There is nothing in the proposed development or use of the Rainbowforce land that will be inconsistent with the public interest. Similar conclusions were reached in relation to permissible developments of private land in Khattar v Wiese at [47]; Property Partnerships Pacific Pty Ltd v The Owners of Strata Plan 58482 [2006] NSWLEC 709 at [46] and Tenacity Investments v Ku-ring-gai Council at [207].

97 Conversely, if the easement were not be imposed, having regard to the clear and unchanging attitude of the Council that access to the Rainbowforce land is only to be provided over the Skyton land and not otherwise, the Council may not be prepared to approve any other access. In these circumstances, development and use of the Rainbowforce land may not be able to occur and the land would virtually be sterilised: see Tanlane Pty Ltd v Moorebank Recyclers Pty Ltd at [111]. This would not be in the public interest.

98 Skyton submits that the use would be inconsistent with the public interest in three respects:

(a) The use of the easement over the Skyton land would cause unreasonable user and amenity effects on the Skyton land and this is not in the public interest.

(b) It is not in the public interest to allow s 88K to impose on the proprietary rights of one landowner to such an unreasonable extent whilst at the same time creating such considerable benefits to another landowner whose land had such limitations as no useable street frontage.

99 Skyton’s first respect focuses wrongly on the use of the easement on the servient tenement rather than on the use of the dominant tenement. It is the latter use not the former that is the focus of s 88K(2)(a).

100 In any event, if the easement is granted on the terms proposed, I do not consider that there will be unreasonable user or unacceptable amenity impacts on the Skyton land or any future development of it. Rainbowforce adduced evidence from a town planner (Mr Gosling), a traffic engineer (Mr Brodie), an engineer in relation to road and bridge design and construction (Mr Hamilton) and an engineer in relation to flood effects of the bridge (Mr Hodges). The evidence established that the access road, footpath and bridge likely to be constructed in the easement, and the use thereof, would not cause unacceptable planning, environmental, traffic, engineering or flooding effects. Rainbowforce also tendered a joint report of the parties’ traffic engineers that had been tendered in Skyton’s appeal against the Council’s refusal of Skyton’s further development application. The traffic experts concluded that the proposed vehicular and pedestrian access arrangements involving both the access road and footpath to the Rainbowforce Road and access to Skyton’s proposed development, were acceptable in terms of access, traffic and safety.

101 Skyton’s second respect impermissibly canvasses the policy decision of Parliament to empower the Court to impose an easement, and hence impose upon the proprietary rights of the owner of the land burdened by the easement, although on the condition that the party having the benefit of the easement pay reasonable compensation to the owner whose land is burdened. Parliament has determined that the legislation which so permits this result is in the public interest. In any event, Skyton’s second respect is not the relevant public interest to which s 88K(2)(a) refers.

102 Skyton’s third respect also is wrongly directed to the use of the servient tenement, namely the prevention or delay in occupation of a completed development on the Skyton land, rather than the use of the dominant tenement of the Rainbowforce land, which is the focus of s 88K(2)(a).

103 In any event, as a matter of fact, imposition of an easement in the terms proposed is unlikely to prevent an occupation certificate being issued for a completed development on the Skyton land. Rainbowforce has indicated it is ready, willing and able to undertake construction of the access road, footpath and associated landscaping works in the easement in a reasonable timeframe. It is these works that are required to be completed, and not the development on the Rainbowforce land, before an occupation certificate can be issued for development on the Skyton land: see condition 113 of the Skyton development consent. The timeframe for Skyton to carry out and complete its development in accordance with its development consent is likely to be considerably longer than the timeframe for construction of the access road, footpath and associated landscaping works in the easement. Hence, it is unlikely that occupation of the Skyton development will be delayed or prevented by the imposition of the easement.

104 Finally, even if occupation of a completed development on the Skyton land were to be prevented or delayed by reason of the grant of an easement over the Skyton land, Skyton’s assertion that this would necessarily be contrary to the public interest should not be accepted unchallenged. The rezoning and redevelopment of the Skyton land was cognate with the rezoning and redevelopment of the Rainbowforce land and both were done on the basis that the Skyton land would provide access to the Rainbowforce land. The planning history recounted earlier makes this clear. The site specific DCPs for both the Skyton land and the Rainbowforce land require this outcome. Skyton’s development consent that permits Skyton to develop its land for residential development not only requires creation of the right of carriageway to enable access to the Rainbowforce land but fixes the timing of occupation of any completed development by reference to completion of the access road, footpath and associated landscaping works. Hence, even if Skyton’s development were to be prevented or delayed because of the grant of the easement and a delay in completion of the access road, footpath and associated landscaping works in the easement, such an outcome is the product of the strategic and site specific planning for these target sites and is consistent with the public interest in ensuring the orderly and economic use of both sites.

Can the servient owner be adequately compensated?

105 Section 88K(2)(b) of the Court Act requires the Court to be satisfied that the owner of the land to be burdened, and each other person having an estate or interest in that land, can be “adequately compensated for any loss or other disadvantage that will arise from imposition of the easement”. Nine points can be made about this requirement.

106 First, the adequate compensation referred to in s 88K(2)(b) is the same as the compensation that the Court may order under s 88K(4): Goodwin v Yee Holdings Pty Ltd (1997) 8 BPR 15,795 at 15,800, 15,801; Wengarin Pty Ltd v Byron Shire Council [1999] NSWSC 485; (1999) 9 BPR 16,985; (1999) NSW ConvR 55-903 at [26]; Mitchell v Boutagy [2001] NSWSC 1045; (2001) 118 LGERA 249; (2002) NSW ConvR 56-024 at [25]; Khattar v Wiese at [85]; Owners Strata Plan 13635 v Ryan at [85](1).

107 Secondly, compensation is for “any loss or disadvantage” that will arise from the imposition of the easement. The addition of the words “or other disadvantage” provides for compensation for disturbance beyond the actual value of the proprietary right taken: Re Seaforth Land Sales Pty Ltd’s Land (No 2) at 334; Tregoyd Gardens Pty Ltd v Jervis at 15,851 and Wengarin Pty Ltd v Byron Shire Council at [26].

108 Thirdly, the compensation is not a substitute for the price that could have been exacted if the section did not exist: Goodwin v Yee Holdings Pty Ltd at 15,801; Wengarin Pty Ltd v Byron Shire Council at [26]. Hence, there can be no compensation for the loss of bargaining position of the owner of the land to be burdened: 117 York Street Pty Ltd v Proprietors of Strata Plan No 16123 at 515-516; Owners Strata Plan 13635 v Ryan at [85](8). The owner is “to receive a just sum and for value for what he or she has to give over, rather than being able to demand the earth”: Wengarin Pty Ltd v Byron Shire Council at [17].

109 Fourthly, the compensation is for any loss or disadvantage “that will arise from the imposition of the easement”. That language imposes a requirement for a causal relationship between the loss or disadvantage for which compensation is claimed and the imposition of the easement: Mitchell v Boutagy at [26]; Khattar v Wiese at [65]; Owners Strata Plan 13635 v Ryan at [85](2). The common law of causation should be applied, namely that causation is a question of fact to be determined by applying common sense to the facts of each particular case: March v E & MH Stramare Pty Ltd [1991] HCA 12; (1991) 171 CLR 506 at 515; Mitchell v Boutagy at [27]; Khattar v Wiese at [65]; Owners Strata Plan 13635 v Ryan at [85](3).

110 Fifthly, the Court’s task under s 88K is to be satisfied that the persons affected by imposition of the easement are “adequately compensated” and to provide for an order for payment of such adequate compensation. In assessing adequate compensation the Court “is not to err on the side of generosity or miserliness”: Mitchell v Boutagy at [31]. The Court should not depart from the task of assessing adequate compensation because the applicant for the order stands to gain from the development or use which leads to their applying for the order. As Austin J stated in Mitchell v Boutagy at [31]:

Owners Strata Plan 13635 v Ryan

111 Sixthly, ordinarily, compensation will have three elements: (a) the diminished market value of the affected land; (b) associated costs that would be caused to the owner of the affected land, and (c) an assessment of compensation for insecurity and loss of amenities, such as loss of peace and quiet. Against these losses and disadvantages should be allowed, as an offset, any compensating advantages: Wengarin Pty Ltd v Byron Shire Council at [26]; Owners Strata Plan 13635 v Ryan at [85](4).

112 There may be an exceptional case where it is extremely difficult to assess compensation but it is clear that the applicant for the order is to derive a considerable benefit from the application. In such circumstances, Young J suggested in Wengarin Pty Ltd v Byron Shire Council at [26], “it may be appropriate to assess the compensation on a percentage of the profits that would be made”. There does not yet seem to have been a case where this has been done: Tenacity Investments v Ku-ring-gai Council at [112].

113 In the case of a grant of a permanent easement, such as a right of carriageway or easement for drainage or services, compensation includes the loss of proprietary rights by the imposition of the easement and compensation for the disturbance effected by the carrying out of the initial work, such as construction of a road or laying of pipes in the easement, and subsequent repair and maintenance from time to time: Tregoyd Gardens Pty Ltd v Jervis at 15,851; Mitchell v Boutagy at [32]; Owners Strata Plan 13635 v Ryan at [85](7).

114 Seventhly, if the imposition of the easement causes material injury to intangible benefits or the imposition of material intangible detriments, such as reduced amenity, enjoyment of property, and exposure to increased disruption and interference, which are not readily capable of being estimated in monetary terms, the Court may not be able to be satisfied that the servient owner can be adequately compensated: Khattar v Wiese at [50]. However, compensation is often able to be assessed for injury to intangible benefits or the imposition of intangible detriments. Examples of cases where compensation has been able to be assessed for such losses or disadvantages include Tregoyd Gardens Pty Ltd v Jervis at 15,856 (loss of amenity of palm tree); 117 York Street Pty Ltd v Proprietors of Strata Plan No 16123 at 517 (loss of amenity and privacy); Owners Strata Plan 13635 v Ryan at [120] (increased usage of lane and loss of amenity); Antipas v Kutcher at [23]-[25] (additional loss of quiet enjoyment by increased traffic on extension of a right of way).

115 Eighthly, as a general rule, compensation should be assessed once and for all when the order is made. However, liberty can be reserved to the persons affected by imposition of the easement to apply to the Court for further compensation if some unexpected event occurs: 117 York Street Pty Ltd v Proprietors of Strata Plan No 16123 at 516; Tregoyd Gardens Pty Ltd v Jervis at 15,856.

116 Ninthly, the applicant for the order has to establish what the relevant losses and disadvantages are as part of satisfying the Court that the persons affected by imposition of the easement can be adequately compensated: 117 York Street Pty Ltd v Proprietors of Strata Plan No 16123 at 516-517; Owners Strata Plan 13635 v Ryan at [85](9). In the course of the hearing, evidentiary onuses may shift to the person affected: 117 York Street Pty Ltd v Proprietors of Strata Plan No 16123 at 517. Where facts are peculiarly within the knowledge of the person affected and that person does not adduce relevant evidence, it may be open to the Court to draw unfavourable inferences: Mitchell v Boutagy at [34] and see also Wilson v Forrester-Babcock [2000] NSWSC 1208; (2000) 10 BPR 18,377 at [13], [16], [17] and Owners Strata Plan 13635 v Ryan at [85](9).

117 Skyton submits that they are not able to be adequately compensated for certain losses or other disadvantages that will arise from imposition of the easement in the following three respects:

(a) The construction and subsequent use of the access road in the easement will impair the amenity of the Skyton land, by way of noise, dust, pollution, loss of open space, loss of landscaping opportunity, loss of privacy, loss of security and loss of visual outlook. This involves injury to intangible benefits and imposition of intangible detriments which are not able to be adequately compensated.

(b) There is a financial risk to Skyton under condition 113 of the Skyton development consent if Rainbowforce does not complete or is delayed in completing construction of the access road, footpath and associated landscaping works in the easement and, as a result, Skyton is unable to obtain an occupation certificate for its completed development. Neither of the parties’ valuers were able to place a value on the compensation to be attributed to this financial risk.

118 As to Skyton’s first respect, as a matter of fact, I find that the construction and subsequent use of the access road in the easement will not cause unacceptable amenity impacts on the Skyton land, for four reasons. First, the proposed terms of the easement will ensure that any adverse amenity impacts are minimised, both in construction and subsequent use. Rainbowforce is required to ensure that all works are carried out properly, cause as little inconvenience as is practicable to Skyton, cause as little damage to Skyton and any improvement on Skyton’s land, promptly restore any portion of the Skyton land disturbed during the carrying out of works and make good any collateral damage, amongst other requirements.

119 Secondly, even an easement is imposed, Rainbowforce will still be required to lodge with the Council a development application seeking development consent to construct the access road, footpath and associated landscaping works in the easement. Although Skyton would be required to give owners’ consent to the lodging of that development application, Skyton still could make a submission on the proposed development to the Council, either objecting totally to the development or recommending that conditions be imposed which would address Skyton’s concerns: see Annwrack Pty Ltd v Williams, unreported, NSWSC No 3101 of 1988, Waddell CJ in Eq, pp 11-12; 117 York Street Pty Ltd v Proprietors of Strata Plan No 16123 at 523. The Council as consent authority would be required to consider the impacts of the proposed development on the environment, the Skyton land and any development to be carried out on the Skyton land. Any development consent can be granted subject to conditions designed to prevent or mitigate adverse amenity impacts on the Skyton land.

Calculation of quantum of compensation

178 For these reasons, the total amount of compensation that would adequately compensate Skyton for any loss or other disadvantage that will arise from imposition of the easement is the sum of:

(a) the loss of proprietary rights calculated as stated in paragraph 165 above;

(b) disturbance in an amount of $5,000; and

179 Because there are three lots comprising the Skyton land and different respondents own these lots, it may be necessary to apportion the total amount of compensation between the respondents. The parties will need to provide to the Court the appropriate apportionment between the respondents.

180 I would also reserve liberty to Skyton to apply for further compensation if some unexpected event occurs and further loss or disadvantage arises from imposition of the easement.

Costs of the proceedings

181 Section 88K(5) of the Conveyancing Act provides that the costs of the proceedings are payable by the applicant for the order unless the Court orders to the contrary. This creates an entitlement in the person affected by imposition of the easement “to have the costs of having it determined by the Court whether the circumstances appropriate for the grant of an easement are established, and the costs of assessing appropriate compensation”: 117 York Street Pty Ltd v Proprietors of Strata Plan No 16123 at 523.

182 This entitlement will only be lost if and in so far as the person affected has engaged in unreasonable conduct, such as making the proceedings more expensive: 117 York Street Pty Ltd v Proprietors of Strata Plan No 16123 at 523; Mitchell v Boutagy at [60]; King v Carr-Gregg at [71]; Khattar v Wiese at [77].

183 The basis on which costs should be paid is the ordinary basis and not an indemnity basis, unless the conduct of the applicant for the order has been such as to justify an order for indemnity costs: 117 York Street Pty Ltd v Proprietors of Strata Plan No 16123 at 523, 524; Katakouzinos v Roufir Pty Ltd at [82]; Mitchell v Boutagy at [68]; King v Carr-Gregg at [71]; Khattar v Wiese at [78]; Property Partnerships Pacific Pty Ltd v The Owners of Strata Plan 58482 at [89].

184 In this case, there is no unreasonable conduct of either Rainbowforce or Skyton. The usual rule under s 88K(5) should apply. Rainbowforce should pay Skyton’s costs of the proceedings on an ordinary basis.

Terms of the easement

185 Section 88K(3) of the Conveyancing Act provides:

“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.”

186 Rainbowforce has provided a draft instrument setting out the terms of the easement and positive covenants intended to be created pursuant to s 88B of the Conveyancing Act and a survey plan. Rainbowforce subsequently proferred an additional provision to be inserted into the instrument allowing Skyton to give notice to Rainbowforce of commencement of construction of its development (a construction commencement notice), which would trigger obligations on Rainbowforce, first, to complete construction of the access road, footpath, bridge over Darling Mills Creek and associated landscaping works in the easement within 6 months of receipt of the construction commencement notice and, secondly, to cease use of the right of way for construction traffic within 21 months of receipt of the construction commencement notice. This additional provision addressed a number of Skyton’s concerns and was responsive to the evidence at the hearing, including by Mr Hamilton. The additional provision is appropriate. The s 88B instrument will need to be amended to incorporate this provision.

187 I have determined that the width of the right of carriageway should be increased from 10 metres to 12 metres wide. This does not necessarily involve widening the width of the access road, footpath and bridge, but rather allows for landscaping. The s 88B instrument and the survey plan will need to be amended to reflect the increased width of 12 metres.

188 Skyton objected to a number of the terms of the s 88B instrument drafted by Rainbowforce. Some of these objections were resolved through the course of the hearing. The outstanding objections are as follows.

189 First, Skyton objected to the instrument providing for an “access area” outside the boundaries of the easement and upon which Rainbowforce could enter and carry out the works of the access road, footpath, bridge and landscaping in the easement (see the definition of “Access Area”, cl 1.1(b) (second occurring), cl 1.2(g) and cl 2.1(b) (second occurring) of the draft instrument). Skyton submitted that Mr Hamilton, the engineer called by Rainbowforce who gave evidence on the design and construction of the access road, footpath and bridge in the easement, indicated that all works could be carried out entirely within the boundaries of the easement. Hence, Skyton submitted, there is no need to provide for an access area outside the boundaries of the easement. I agree with Skyton. Mr Hamilton’s evidence was that all necessary construction works could be undertaken within the easement. If the width of the easement is increased to 12 metres as I have indicated is appropriate, there ought be no need for Rainbowforce to have an access area outside the boundaries of the easement. Accordingly, the provision of an access area should be deleted from the s 88B instrument and survey plan and the terms of the instrument and survey plan revised accordingly.

190 Secondly, Skyton submitted that the definition of “work” in the instrument should be amended to delete reference to pedestrian pathways, cycleways, drainage, landscaping and street lighting. As far as the pedestrian pathways and cycleways are concerned, this submission was a consequence of Skyton’s argument that an easement for pedestrian access was not reasonably necessary under s 88K(1) of the Conveyancing Act. I have rejected that argument for reasons that I have given above. Accordingly, pedestrian pathways and cycleways should remain in the definition of “works” in the instrument.

191 Skyton’s submission that landscaping should be deleted was responsive to Rainbowforce’s proposal to reduce the width of the easement to 10 metres by deleting landscaping. I have determined that this is not appropriate and that the width of the easement should be reinstated to 12 metres as required by the Council and to contain landscaping. Hence, the reference to landscaping should remain in the definition of “works” in the instrument.

192 Skyton’s suggestion that drainage should be deleted was responsive to Mr Hamilton’s evidence that development on the Rainbowforce land could be constructed in such a way as not to require drainage into the easement on Lot 3. I agree with Skyton that drainage is no longer necessary and it should be deleted from the definition of “works” in the instrument.

193 Finally, as far as street lighting is concerned, I consider that this is a matter for the Council to determine when it considers the development application that Rainbowforce will need to make for consent to carry out the access road, footpath, bridge and associated landscaping works in the easement. The Council can determine whether the provision of street lighting is appropriate and, if so, any conditions to ensure that street lighting will not cause any unacceptable impacts on any development on the Skyton land. Accordingly, the reference to street lighting should remain in the definition of “works” in the instrument.

194 Thirdly, Skyton objected to cl 5.1 and cl 5.2 of the instrument. Clause 5.1 requires Skyton to do certain things, including giving its written consent as owner of the land to any application Rainbowforce might need to make, and cl 5.2 provides that, in the event of Skyton failing to do so, Skyton is to pay indemnity costs for any legal proceedings Rainbowforce might need to bring to enforce its rights against Skyton under cl 5.1.

195 These provisions undoubtedly have been included by Rainbowforce in an endeavour to overcome the problems which dominant owners have encountered in the past in obtaining the co-operation and consent of servient owners to make valid applications for statutory approvals to undertake works in the easement which the dominant owner is entitled by the terms of the easement to undertake. The most common example is the servient owner refusing to give written consent as owner of the land to the dominant owner making a development application under the EPA Act to carry out works for the purpose of which the easement was granted. The written consent of the owner of the land on which development is proposed to be carried out is a statutory requirement of an effective development application: see s 78A(1) of the EPA Act and cl 50(1)(a) and para 1(i) of Schedule 1 of the Environmental Planning and Assessment Regulation 2000. If the servient owner fails voluntarily to give its consent to the making of the development application, the dominant owner is forced to bring proceedings in the Supreme Court to obtain the consent of the servient owner: see Annwrack Pty Ltd v Williams;Patrial Holdings v Short (1994) NSW ConvR 55-711; 117 York Street Pty Ltd v Proprietors of Strata Plan No 16123 at 522.

196 The grant of an easement impliedly obliges the servient owner to give its consent to the making of an application for a statutory approval to undertake works within the easement over the servient tenement, being works for the purpose of which the easement was granted. However, it is appropriate to make the obligation express as a term of the easement. This was done in 117 York Street Pty Ltd v Proprietors of Strata Plan No 16123 at 522. Accordingly, I consider it is appropriate to impose a provision such as cl 5.1 in the s 88B instrument.

197 However, I do not consider it is appropriate to impose the indemnity costs provision proposed in cl 5.2. The basis on which a court should order a party to pay costs of proceedings is a matter for the court hearing those proceedings to determine in light of all the circumstances, including any unreasonable conduct of each party. I do not consider it appropriate to foreclose that judicial discretion by making it mandatory in all proceedings that Rainbowforce may bring for Skyton to pay Rainbowforce’s costs and on an indemnity basis. Clause 5.2 should, therefore, be deleted from the s 88B instrument.

198 Skyton also proposed some additional conditions to be inserted in the s 88B instrument if the Court was minded to impose an easement. Rainbowforce opposed these additional conditions.

199 First, Skyton sought a condition in respect of compensation for any additional noise attenuation measures that Skyton might need to undertake in order to neutralise additional internal noise levels with windows and doors open in the Skyton units so as to comply with condition 28 of the Skyton development consent, caused by traffic on the access road in the easement. As I have noted earlier in the judgment, condition 28 requires Skyton to meet the prescribed internal noise levels or alternatively provide either a mechanical or natural ventilation system or a special acoustic design solution approved by the Council to satisfy the requirements for windows and external façade doors being open. The evidence does not establish whether, even without the easement and the traffic on the access road in the easement, Skyton will be able to comply with the prescribed internal noise levels or will have to resort to the alternative provision of mechanical or natural ventilation system or special acoustic design solution. If noise from the high volume traffic on James Ruse Drive would in any event require Skyton to resort to the alterative provision then, as a matter of causation, the imposition of the easement would not cause Skyton to suffer loss by making this alternative provision. If, however, Skyton establishes that the additional traffic on the access road, beyond the existing traffic on James Ruse Drive, will increase the internal noise levels so as to exceed the prescribed levels and thereby cause Skyton to make alternative provisions, then the cost of doing so can be said to arise by imposition of the easement.

200 I consider the appropriate way to deal with this issue is not by imposition of a term in the s 88B instrument creating the easement, but rather by reserving liberty to Skyton to apply for further compensation if it suffers further loss by making alternative provision to satisfy condition 28 of the Skyton development consent and such further loss arises by imposition of the easement (ie causation is established).

201 Secondly, Skyton sought a condition requiring Rainbowforce to pay the costs of any modification application under s 96 of the EPA Act Skyton might need to make to modify the Skyton development consent to accommodate the works within the easement. In principle, it would be reasonable for Rainbowforce to pay such costs as are established to be caused by imposition of the easement. However, in reality, causation may not be so clear. The Skyton development consent actually requires the creation of the easement and construction of the access road, footpath and associated landscaping in the easement (see conditions A4, A5 and 113 of the Skyton development consent). Hence, the Skyton development consent, on a proper construction, may not require any modification if the easement is imposed and the access road, footpath and associated landscaping works are constructed, as intended. Skyton may also wish to modify the Skyton development consent for its own reasons and include these other modifications with any that are required to accommodate the works within the easement. In this situation, a question of causation arrises: do Skyton’s costs of the modification application, in whole or part, arise from imposition of the easement? Skyton may also decide not to take up the Skyton development consent but instead apply for consent for an alternative development, as it already has done so in 2008 and 2009 with its further development application. Issues of causation would again arise.

202 I consider again that the appropriate course to deal with this issue is not to impose a term in the s 88B instrument creating the easement, but rather to reserve liberty to Skyton to apply for further compensation if it suffers further loss by making application to modify its development consent and such loss arises by imposition of the easement (ie causation is established).

203 Thirdly, Skyton sought seven conditions dealing with construction traffic using the easement. The first was a condition terminating the use of the easement for construction traffic two years and seven months after the date the easement is granted. This issue has been addressed by Rainbowforce’s proffered provision in the instrument that within 21 months of Skyton serving a construction commencement notice, Rainbowforce will cease using the easement for construction traffic.

204 The second was a condition restricting the use of construction traffic to Monday to Friday. I do not consider that this condition is appropriate for a number of reasons. The period of use by construction vehicles will be limited by use of Rainbowforce’s proferred provision restricting use of the easement for construction traffic to a period of 21 months after Skyton serves a construction commencement notice. The Skyton site is currently vacant. Any development on the Skyton site is not likely to be completed before the 21 month period expires. The Rainbowforce development will also be completed in a shorter period of time if construction traffic is not restricted to only Monday to Friday. Finally, the Council can consider this issue when Rainbowforce lodges its development application for consent to construct the access road, footpath, bridge and associated landscaping works and may be able to regulate the times of use if this is considered appropriate.

205 The third is a condition restricting parking by construction vehicles for the access area. I consider this condition also to be inappropriate, for the same reasons I have given above in relation to Skyton’s suggested condition restring use of the easement for construction traffic from Monday to Friday.

206 The fourth condition deals with the road and bridge construction. Skyton sought a condition requiring:

“(1) road and bridge construction to be completed no later than 7 months from the grant of the easement;

(2) the road to be constructed to Aust Roads standards for an arterial road;

(3) the finished road surface be tinted green;

(4) provision of concrete speed humps within the access road;

(5) the bridge to provide access to Lot 3 DP 247452;

(6) the construction of the bridge to maintain the existing riparian zones on the Skyton land; and

207 Paragraph (1) is addressed by Rainbowforce’s proferred provision for the s 88B instrument that Rainbowforce, within 6 months of receipt of a construction commencement notice by Skyton, must complete the access road, footpath, bridge and associated landscaping works required by condition 113 of the Skyton development consent.

208 Paragraph (7) I have rejected already; pedestrian access should be provided in the easement. Paragraphs (2)-(6) are matters for the Council to consider and, if appropriate, require by way of condition of consent when determining Rainbowforce’s development application for consent to carry out the access road, footpath, bridge and associated landscaping works.

209 Accordingly, I do not consider it appropriate to impose Skyton’s suggested condition on road and bridge construction as a term of the instrument creating the easement.

210 The fifth condition was one requiring the installation, maintenance and monitoring of CCTV cameras on the access road and bridge to reduce the impact of anti-social behaviour. Such an issue is again a matter for the Council to consider, and, if appropriate, require by way of condition of consent for the access road, footpath and associated landscaping when Rainbowforce lodges its development application to carry out such development. It is not appropriate to be included as a term of the instrument creating the easement.

211 The sixth condition was one requiring the provision of a bank guarantee to protect and rectify landscaping works on the Skyton land that may be damaged during the construction period. I do not consider this condition to be necessary. The proposed terms of the easement already require Rainbowforce to ensure all works are carried out properly; to cause as little inconvenience as is practicable to Skyton; to cause as little damage as is practicable to Skyton and any improvements on the Skyton land; to erect a suitable temporary construction fence along the northern side of the right of carriageway; to promptly restore, as nearly as is practicable to its former condition, any portion of the Skyton land that is disturbed by the carrying out of the works; and to make good any collateral damage. Furthermore, I have accepted Skyton’s submission that the access area should be deleted from the instrument and all works should be required to be carried out within the boundaries of the easement. Collectively, these terms are sufficient without also requiring a bank guarantee.

212 The seventh condition was one restricting the use and works on the easement to ensure that there are no letterboxes and that the North Rocks Road street address cannot be used by the residents of the Rainbowforce development. I do not consider that this is appropriate to be imposed as a term of the easement. It was a matter for the Council to consider when it determined to grant the Rainbowforce development consent and will again be a matter for the Council when it considers whether to grant any future development consent for the access road, footpath and associated landscaping works in the easement.

213 I have noted a number of times in the judgment that Rainbowforce will need to lodge a development application with the Council to construct the access road and footpath, including the bridge over Darling Mills Creek, and the associated landscaping works. The Council may impose conditions on the consent to carry out such development, which conditions may prevent or mitigate adverse impacts on the Skyton land or any development of it. In these circumstances, I consider that is appropriate to order that Rainbowforce not commence any development or works in the easement until appropriate consents have been obtained and Rainbowforce is otherwise entitled in law to do so. I note that such an order was made in 117 York Street Pty Ltd v Proprietors of Strata Plan No 16123 at 522.

Settling the terms of the easement and the court orders

214 Rainbowforce will need to revise the terms of the s 88B instrument creating the easement, and the survey plan, in light of these reasons for judgment. I would propose that Rainbowforce do this within 21 days of the date of judgment and serve the revised instrument and survey plan on Skyton. Skyton should then have 14 days to file and serve a response to the revised instrument and survey plan. I would grant the parties leave to have the matter listed before me if any of the parties wishes to have an oral hearing on the terms of the easement, the survey plan or the orders the Court should make.

215 Rainbowforce and Skyton should also prepare short minutes of orders that the Court should make in accordance with the same timetable. The orders should reflect these reasons for judgment and would include orders to the following effect:

(a) an order pursuant to s 88K of the Conveyancing Act imposing an easement in the form of an instrument intended to be created pursuant to s 88B of the Conveyancing Act (which would be annexed) and showed in the survey plan (which would be annexed);

(b) an order that Rainbowforce not commence any development or works in the easement until appropriate consents have been obtained and Rainbowforce is otherwise entitled in law to do so;

(c) an order that Rainbowforce pay Sktyon compensation under s 88K(4) of the Conveyancing Act in a sum calculated in the manner stated in paragraph 178 of the judgment. It may be necessary that this sum be apportioned between the three respondents, and, if so, the orders should specify the amount of compensation payable to each respondent;

(d) an order reserving liberty to Skyton to apply for further compensation if some unexpected event occurs, such as I have referred to in a number of places in the judgment, and further loss or disadvantage arises from imposition of the easement; and

216 As with the terms of the easement, I would give the parties an opportunity to have an oral hearing on the terms of the orders the Court should make.

Directions

217 The Court directs:

1. Within 21 days of the date of judgment, the applicant is to file in Court and serve on the respondents a revised form of instrument intended to be created under s 88B of the Conveyancing Act and a revised survey plan, as well as short minutes of order, in accordance with these reasons for judgment.

2. Within 35 days of the judgment, the respondents are to file in Court and to serve on the applicant, any proposed amendments to the revised instrument and survey plan, as well as to the short minutes of order.

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Citations

Rainbowforce Pty Ltd v Skyton Holdings Pty Ltd [2010] NSWLEC 2

Most Recent Citation

Rainbowforce Pty Limited v Skyton Holdings Pty Limited (No 2) [2010] NSWLEC 53

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67

Community Association DP270447 v ATB Morton Pty Ltd [2019] NSWCA 83

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Statutory Material Cited

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CITATION:	Rainbowforce Pty Limited v Skyton Holdings Pty Limited and Ors [2010] NSWLEC 2
PARTIES:	APPLICANT Rainbowforce Pty Limited FIRST RESPONDENT Skyton Holdings Pty Limited SECOND RESPONDENT Skyton Developments Pty Limited THIRD RESPONDENT George Andrews
FILE NUMBER(S):	30115 of 2009
CORAM:	Preston CJ
KEY ISSUES:	EASEMENTS :- imposition of easement by court - right of carriageway - reasonable necessity - whether easement reasonably necessary for effective use or development of dominant tenement - whether use of dominant tenement will be inconsistent with the public interest - whether servient owner can be adequately compensated - whether all reasonable attempts made to obtain easement - whether any discretionary factors justify refusing relief - quantum of compensation - valuation approach to be adopted - loss of proprietary rights - disturbance - injurious affection - costs - whether indemnity or ordinary costs - terms of easement
LEGISLATION CITED:	Conveyancing Act 1919 s 88B, 88K Courts and Crimes Legislation Amendment Act 2008 Courts and Crimes Legislation Further Amendment Act 2008 Environmental Planning and Assessment Act 1979 s 5, 78A, 96, 96AA, 97 Land and Environment Court Act 1979 s 40
CASES CITED:	117 York Street Pty Ltd v Proprietors of Strata Plan No 16123 (1998) 43 NSWLR 504 A Class Property Pty Ltd v Parker [2004] NSWLEC 398 Antipas v Kutcher [2006] NSWLEC 42; (2006) 144 LGERA 289 Annwrack Pty Ltd v Williams, unreported, NSWSC No 3101 of 1988, Waddell CJ in Eq Becton Corporation Pty Ltd v Minister for Infrastructure, Planning and Natural Resources [2005] NSWLEC 197 Billgate Pty Ltd v Woollahra Municipal Council [2004] NSWLEC 436; (2004) 136 LGERA 356 Blulock Pty Ltd v Majic [2001] NSWSC 1063; (2002) NSW ConvR 56-012 Castagnet Investments Pty Ltd v Woollahra Municipal Council [2005] NSWLEC 647 Coles Myer NSW Ltd v Dymocks Book Arcade Ltd (1996) 7 BPR 14,638 Durack v de Winton (1998) 9 BPR 16,403 Goodwin v Yee Holdings Pty Ltd (1997) 8 BPR 15,795 Gordon v Gioia [2007] NSWLEC 509 Grattan v Simpson (1998) 9 BPR 16,649; (1999) NSW ConvR 55-880 Hanny v Lewis (1998) 9 BPR 16,205; (1999) NSW ConvR 55-879 Huntington & Macgillivray v Hurstville City Council (No 2) [2005] NSWLEC 155; (2005) 139 LGERA 84 In the matter of an application by Kindervater (1996) ANZ ConvR 331 Katakouzinos v Roufir Pty Ltd [1999] NSWSC 1045; (1999) 9 BPR 17,303 Khattar v Wiese [2005] NSWSC 1014 King v Carr-Gregg [2002] NSWSC 379 March v E & MH Stramare Pty Ltd [1991] HCA 12; (1991) 171 CLR 506 Mitchell v Boutagy [2001] NSWSC 1045; (2001) 118 LGERA 249; (2002) NSW ConvR 56-024 Owners Strata Plan 13635 v Ryan [2006] NSWSC 221 Patrial Holdings v Short (1994) NSW ConvR 55-711 Property Partnerships Pacific Pty Ltd v The Owners of Strata Plan 58482 [2006] NSWLEC 709 Re Seaforth Land Sales Pty Ltd’s Land (No 2) [1977] Qd R 317 Skyton Developments Pty Ltd v The Hills Shire Council [2009] NSWLEC 1299 Tanlane Pty Ltd v Moorebank Recyclers Pty Ltd [2008] NSWSC 1341 Tenacity Investments v Ku-ring-gai Council [2008] NSWLEC 27 Tregoyd Gardens Pty Ltd v Jervis (1997) 8 BPR 15,845 Wengarin Pty Ltd v Byron Shire Council [1999] NSWSC 485; (1999) 9 BPR 16,985; (1999) NSW ConvR 55-903 Wilson v Forrester-Babcock [2000] NSWSC 1208; (2000) 10 BPR 18,377 Woodland v Manly Municipal Council [2003] NSWSC 392; (2003) 127 LGERA 120; (2004) NSW ConvR 56-071
DATES OF HEARING:	14 - 17 September 2009, 25 September 2009, 28 September 2009 and 9 October 2009
DATE OF JUDGMENT:	13 January 2010
LEGAL REPRESENTATIVES:	APPLICANT Mr P C Tomasetti SC SOLICITORS D G Briggs & Associates RESPONDENTS Mr P Rigg (solicitor) SOLICITORS Deacons