Tanlane Pty Ltd v Moorebank Recyclers Pty Ltd

[2008] NSWSC 1341

CITATION:	Tanlane Pty Ltd v Moorebank Recyclers Pty Ltd [2008] NSWSC 1341
HEARING DATE(S):	11-13 November 2008
JUDGMENT DATE :	15 December 2008
JURISDICTION:	Equity Division
JUDGMENT OF:	Young CJ in Eq
DECISION:	Plaintiff's claims other than the claim under s 88K are dismissed with costs.
CATCHWORDS:	CONTRACTS [105]- Parties are adjoining owners of land in the Moorebank precinct- Deed entered into with a view to land redevelopment- Defendant agrees to grant easement for the construction and use of a road bridge to plaintiff subject to construction commencing within five years of the date of deed, failing which, the deed may be terminated (clause 9)- Held that on the facts, no construction work commenced on the bridge- Plaintiff's failure to commence not caused by defendant's breach of its Mackay v Dick obligations. REAL PROPERTY [409]- Easement as indicated by plan does not accord with parties' intended location- Whether s 89 Conveyancing Act 1919 confers jurisdiction to move an easement- Held that a relocation of an easement so that it traverses a completely different track is outside the power conferred by s 89- Application under s 88K Conveyancing Act for the grant of a new easement not decided pending the outcome of the Land and Environment Court proceedings and assessment of the appropriate amount of compensation.
LEGISLATION CITED:	Conveyancing Act 1919, ss 66G, 88K, 89 Supreme Court Act 1970, s 61
CASES CITED:	117 York Street Pty Ltd v PSP 16123 (1998) 43 NSWLR 504; 8 BPR 15,917 Dalgety Wine Estates Pty Ltd v Rizzon (1979) 141 CLR 552 Durack v de Winton (1998) 9 BPR 16,403 High v Bengal Brass Co & Bank of NSW (1921) 21 SR (NSW) 232 Hope v Brown [1954] 1 WLR 250 Katakouzinos v Roufir (2000) 9 BPR 17,303 Kilmister and the Conveyancing Act (C McLelland CJ in Eq, No 246 of 1967) Loclot Pty Ltd v Pullen (2003) 56 NSWLR 592 Mackay v Dick (1881) 6 App Cas 251 Manly Properties Pty Ltd v Castrisos [1973] 2 NSWLR 420 Markos v O R Autor Pty Ltd [2007] NSWSC 810 Medway v Doublelock Ltd [1978] 1 WLR 710 New Zealand Shipping Co v Societe des ateliers et Chantiers de France [1919] AC 1 Re Buchanan-Wollaston's Conveyance [1939] Ch 738 Re Lewis [1959] NZLR 1040 Re Mercantile Trust International Co [1893] 1 Ch 484n Re Seaforth Land Sales Pty Ltd's Land [1976] Qd R 190 Suttor v Gundowda Pty Ltd (1950) 81 CLR 418 Sydney City Council v Ilenace Pty Ltd [1984] 3 NSWLR 414 Williams v Legg (1993) 29 NSWLR 687
PARTIES:	Tanlane Pty Ltd (P) Moorebank Recyclers Pty Ltd (D)
FILE NUMBER(S):	SC 1384/08
COUNSEL:	T S Hale SC and J B Maston (P) G Inatey SC and D P Wilson (D)
SOLICITORS:	Minter Ellison (P) Mark McDonald & Associates Lawyers Pty Ltd (D)

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

YOUNG CJ in EQ

Monday 15 December 2008

1384/08 – TANLANE PTY LTD v MOOREBANK RECYCLERS PTY LTD

JUDGMENT

1 HIS HONOUR: The plaintiff, the defendant and Boral Bricks Pty Ltd (“Boral”) are adjoining owners of land on the Georges River at Moorebank. Historically, the parties’ land and the adjoining land owned by Boral (“the Boral Land”), though zoned rural, were used in the extractive industries or allied purposes. Boral and the plaintiff wish to turn over their lands for residential and commercial purposes. The defendant wishes to use its land to recycle concrete, a use which the plaintiff considers inimical to its intended use.

2 The parties’ land, the Boral Land and land owned by a company called Flower Power have become known as the Moorebank Precinct.

3 There have been many conferences between the land holders in the Moorebank precinct and the Liverpool City Council as to the redevelopment of the precinct. The Council has been operating under the Liverpool Local Environmental Plan 1997 and numerous amendments to it and, more recently, the Liverpool Local Environmental Plan 2008.

4 Some of the land involved in this case is low lying and flood prone, other is well built up. It is the difference in levels between various strata of the disputed land that raises the majority of the problems in these proceedings.

5 In 2002, the parties appear to have been ad idem about redeveloping their respective lands. As a result, a deed was sealed between them on 29 May 2002.

6 The deed defines the defendant as “the Grantor” and the plaintiff as “the Grantee”.

7 Clause 1 of the operative part of the deed provides that in consideration of $1, “the Grantor hereby agrees to grant to the Grantee an easement for construction and use of a road bridge over the Servient Tenement between the Dominant Tenement and the Boral land (‘the Easement’).”

8 Clause 2 provided that the easement should: (i) be of a certain maximum width with a minimum height of 5 metres above ground surface; and (ii) “be in a location to be specified by the Grantee but within the hatched area designated on the Plan annexure ‘A’ hereto. …”

9 Clause 3 provided:

“The Grantor shall at the cost of the Grantee within twenty-eight (28) days of submission to it execute all such document as may be reasonably required by the Grantee to obtain registration of the Easement over the title to the Servient Tenement in the records of Land & Property Information NSW and shall procure execution of such documents by any Mortgagee or encumbrance of the Servient Tenement.”

10 Clause 9 provided:

“9. If construction of the bridge is not commenced within five (5) years from the date of this Deed, the parties agree that the Grantor can terminate this Deed by written notice to the Grantee and its obligations under it will cease. …”

Thereafter were provisions as to what would happen after termination.

11 The defendant’s land currently only has access to a public road, namely Newbridge Road, by a narrow pan handle piece of its land. The photographs show the access as an unmade rustic track with two parallel wheel tracks worn through to the bare earth. Adjoining that pan handle to the west is a drainage channel.

12 The Boral Land which is to the west of the disputants’ land will have a new road leading south from Newbridge Road which has been or will be constructed primarily to cater for the Boral development on its land (for which planning permission has already been granted). That road is called Brickmaker’s Drive.

13 The parties and the Liverpool Council propose that access to both parties’ land would be from Brickmaker’s Drive and then over a bridge to be constructed at high level over the defendant’s current access path and the drainage channel leading on to the plaintiff’s land. That bridge will be constructed over land that was part of Boral’s land, but which has now been ceded to the local council and is described in evidence as the “2a land”.

14 I should note that although I have used the word “bridge”, what is comprehended is the spanning of the pan handle and the drain as well as what might be called an elevated roadway over the 2a land in order to meet Brickmaker’s Drive on more or less the same level.

15 The plaintiff is contemplating a residential and commercial development and is contemplating that vehicles of standard weight for domestic and commercial users will cross the bridge. It also contemplates a relatively quiet environment.

16 The defendant, on the other hand, intends to use its land as a concrete recycling plant which will generate noise. It will also require to be served by heavy vehicles.

17 At present the defendant services its land from Newbridge Road along its pan handle strip. However, when the user is changed for the concrete recycling plant this will not be permitted, and the only access it will be permitted will be via Brickmaker’s Drive, then on to the 2a land. However, because of the turning circle required for heavy trucks, the only way in which the defendant’s vehicles will be able to descend approximately 5 metres to meet up with its current pan handle access, is by means of a ramp to the left and right of the 2a land. I will return to this point.

18 Currently, the land to the left and right of the 2a land is owned by Boral and is zoned 7a so I will refer to it as it was referred to in the evidence as the “7a land”. Boral is also unimpressed with the defendant’s proposed development and although Boral is contractually bound to dedicate the 7a land to the local council in due course, it has been in no hurry to do so. Its development consent requires dedication when so many units have been built on its land, a condition which has not yet come to pass.

19 The plaintiff may erect its proposed bridge without inconveniencing any person other than, perhaps, the defendant.

20 However, if the bridge is constructed, the defendant says that it will suffer detriment because:

(a) the bridge will obstruct its current access route, at least over a five metre height; and
(b) the bridge is proposed to be constructed in such a manner that it will be unsuitable for heavy vehicles;

21 The defendant says that for all practical purposes, the plaintiff’s bridge will prevent it having access to Brickmaker’s Drive.

22 Because the defendant will be taking very heavy vehicles which need a wider turning circle, it will be necessary for it to ascend the grade by having a part of its path over the 7a land owned by Boral.

23 The plans submitted by the plaintiff to the council provide for extra sections to be bolted on to the plaintiff’s works to enable the defendant to have a ramp.

24 However, whilst Boral is still the registered proprietor of the 7a land and declines for its own commercial reasons to consent to the 7a land being used for the ramp, the defendant cannot connect with Brickmaker’s Drive.

25 Once that 7a land is dedicated to the council, then it may be that the council will give its consent and the defendant can link up with Brickmaker’s Drive. It is in that sense a matter of timing.

26 However, the defendant is concerned that until the 7a land is vested in the council, it can use its land for its present purposes, but if it wishes to use it for a concrete recycling process, it will not be able to use the pan handle to get on to Newbridge Road, but rather will be without access because it cannot get on to Brickmaker’s Drive.

27 The basic background facts are not really in dispute. The pan handle is part of the defendant’s land. By DP 1097442 which was registered on 1 June 2006, an easement was granted over the pan handle for the construction, maintenance and repair of a road bridge limited in height to 7.2ahd which means 5 metres above ground level. The accompanying s 88B instrument contained terms of easement including a term 1(e)(vii), that in exercising its powers under the grant, the owner of the lot benefited must “(vii) comply with the terms of the Deed between the owner of the lot benefited and the owner of the lot burdened (and their respective successors and assigns) dated 29 May 2002 as amended.”

28 The plaintiff submitted DA 1552/06 to the Liverpool City Council on about 10 May 2006. The council granted its consent to that application on 24 April 2007. On 8 August 2007, the defendant commenced class 4 proceedings in the Land and Environment Court challenging the validity of that consent.

29 It will be remembered that cl 9 of the deed of May 2002 provided that if construction of the bridge is not commenced within 5 years from the date of the deed, ie 29 May 2007, then obligations under the deed would cease. Although the point was in dispute, the evidence shows that some work of construction preparatory to the bridgeworks was done on the plaintiff’s land on Saturday 26 May 2007.

30 I believe that in the end the defendant accepts that that work was done, but says that it was not work on “construction of the bridge” but rather it was preparatory work. I will return to this in due course.

31 There is no doubt that on 6 November 2007, the defendant gave the plaintiff a notice which recited cl 9 of the deed, and stated that given the construction of the bridge was not commenced within 5 years of the date of the deed, the defendant “hereby formally terminates the deed” and requests that the plaintiff remove its easement.

32 I should also note that by an error on the part of the plaintiff’s contractors, the easement on the plan is in the wrong place. It does not line up with the 2a land. In order for there to be a usable access, the easement granted by the defendant would have to be moved to the north so as to align it with the 2a land.

33 The proceedings came on before me on 11 November 2008 and continued until 13 November 2008. Mr T S Hale SC and Mr J Maston appeared for the plaintiff, and Mr G Inatey SC and Mr D P Wilson appeared for the defendant.

34 The plaintiff seeks a series of orders. In summary these are:

1. (a) a declaration that the defendant in commencing proceedings 40748/07 in the Land and Environment Court acted in breach of the deed of May 2002;
(b) an order that the defendant be restrained from continuing such proceedings or ordered to discontinue them;
2. The grant of an equivalent easement pursuant to s 88K of the Conveyancing Act 1919;
3. Alternatively an order under s 89 of the Conveyancing Act modifying the site of the easement created by the registration of DP 1097442; and

4. Consequential orders.

35 The defendants filed a cross-claim on 11 November 2008 seeking that the plaintiff procure the extinguishment of the easement.

36 These prayers and the way the case has been presented, raise the following questions which I need to determine, and I will consider them sequentially:

1. Is the deed of 22 May 2002 still in force?

2. If the answer to 1 is “Yes”, should either order 1(a) or 1(b) noted above be made restraining proceedings in the Land and Environment Court?

3. Should the easement created by DP 1097442 be modified by relocating it to the north so as to align with the 2a land?

4. Should an easement be granted under s 88K of the Conveyancing Act ?

5. What orders should be made on the cross-claim?

6. Consequential matters and the result of this case.

1. Is the deed of 22 May 2002 still in force?

37 It is clear that no bridge was erected by 29 May 2007. It is also clear that the defendant gave the requisite notice electing to terminate the deed. However, the consequence that the deed is no longer in force is resisted on three grounds: (a) that construction of the bridge was commenced by the deadline; (b) the major reason for any failure to commence it by that time was the fault of the defendant so that the defendant should not be permitted to rely upon it; and (c) an alleged implication in the deed that both parties would conduct themselves in good faith and that the defendant had not so conducted itself in giving its notice of November 2007.

38 As to (a), I note that in his written opening, Mr Hale put that:

“7. The plaintiff commenced work in connection with the construction of the bridge prior to 29 May 2007.”

39 This is clearly the right way to put it. The work was not work on the construction of the bridge but work preparatory to or in connection with that construction.

40 I must look at the facts as to the work that was done. Paragraph 176 of the affidavit of the plaintiff’s controller, Mr Dupere dated 7 August 2008, states that:

“In May 2007 I instructed David White to take all necessary steps to physically commence the DA. I observed approximately 1,000 tonnes of material being removed by contractors employed by Tanlane in order to commence geotechnical and contamination investigations required by the DA for the road bridge. Other works undertaken to physically commence the DA which I observed included the relocation of water and power services undertaken by an electrical contractor employed by Tanlane.”

He then annexes at pp 327 to 330 of the affidavit, a series of photographs.

41 Mr White, the plaintiff’s manager, was also cross-examined on the photographs at T60 and surrounding pages. The photographs show that on 26 May 2007, or rather commencing on 26 May 2007, an excavator removed film material to allow preparation of site being part of the plaintiff’s own land for assessment required by the DA. No work was actually done on the bridge.

42 Mr White was cross-examined about document DX 1004. This was an email he sent on 17 August 2007 to Boral, the subject being “Request for Boral’s Owners Consent for Construction of Bridge.” In para 7 he said:

“Ironically, we have owners consent from Moorebank Recyclers to commence construction of the bridge and advise that we will be starting work as soon as practical following receipt of Boral’s consent from you John.”

43 At T62, it was put to Mr White that what he was doing was to look at the project in a number of stages. Stage 1 was to clear some of Tanlane’s land and make assessments etc of the contamination. Stage 2 was to commence work on building the bridge on Boral’s 2a land and then to build the bridge across the pan handle. There was not to be any actual construction of the bridge until Boral had given its consent to do work on its land. (At the time the 2a land had not been vested in the council: this only occurred on 6 February 2008).

44 I do not consider that some of the cases that were referred to by counsel as to when there has been substantial commencement of work in order to preserve the operation of a development consent assist in the present case. What the deed was looking for was not commencement of the works, or commencement of preparation for the bridge, but actual commencement of the bridge, though I take the word “bridge” to mean not only the span over the pan handle but also the elevated road way. Indeed, para 176 of Mr Dupere’s affidavit seems to suggest that all that was done was excavation on Tanlane’s own land for the purpose of commencing geotechnical and contamination investigations required for the bridge.

45 There is a well known distinction in law between preparation for an act and commencing the act. The best illustration is probably in the criminal law. In Hope v Brown [1954] 1 WLR 250, at a time when there was price control over meat, a butcher had prepared price tags for meat which meat was ready to be distributed to customers. The evidence was that “on Saturdays the girl is instructed to change the tickets over”. The inspectors called on Friday. The Queen’s Bench Divisional Court held that the butcher had merely prepared himself to commit a crime, and had not actually attempted to or committed a crime.

46 In the present case it would seem to me that the evidence of Mr Dupere and Mr White show that there was no construction work commenced on the bridge, but merely preparatory work and probably preparatory work not in construction but in the geotechnical and contamination research necessary before construction work could commence. Accordingly, I find that the bridge was not commenced before the deadline.

47 As to (b), I required the plaintiff to give particulars as to the way in which it alleged that the delay was the fault of the defendant. These particulars were marked MI 1005. Essentially the plaintiff relied on the defendant’s conduct in making an objection to the council to its granting the plaintiff’s development consent or by otherwise thinking to persuade the council to delay granting that consent. The actual particular acts were detailed such as the writing of certain letters and the lodging of objections by agents of the defendant. The first of these is said to have occurred on 14 July 2006.

48 It must first be said that where 5 years is allowed to do something, ordinarily impediments that occur in the last year of the period are not to be taken as the only period to examine because an obvious answer is that a prudent person would commence its activities to get the consent and the erection of the bridge earlier than this plaintiff did. However, in the present case that criticism can, to a degree, be answered by saying that until the Boral development was the subject of council approval with the establishment of Brickmaker’s Drive and until various local environmental plans were prepared, the plaintiff could not proceed with its development consent. However, the general point still must be borne in mind.

49 The rule that a person cannot rely on a condition of forfeiture where the forfeiture was brought about by that party’s own wrong stems in modern times from the decision of the House of Lords in New Zealand Shipping Co Ltd v Société des ateliers et Chantiers de France [1919] AC 1. The principle is that a person cannot act to his own advantage because of his own wrong. The principle was affirmed by the High Court in Suttor v Gundowda Pty Ltd (1950) 81 CLR 418 at 441.

50 The plaintiff says that it was a wrong in the sense used in the rule on the part of the defendant to object to the plaintiff’s development application because the deed required the defendant not to derogate from the grant it had made by attempting to ensure that it was of no value. Furthermore, the plaintiff refers to cl 7.6 of the deed requiring the parties to execute and complete any further documents necessary to implement its terms.

51 In their written submissions, the plaintiff’s counsel put that the plaintiff was entitled to an injunction to prevent further proceedings in the Land and Environment Court on the footing that those proceedings represented a breach of the partly express and partly implied obligation in the deed for the defendant to cooperate with the plaintiff in carrying out its obligations under the deed with respect to the road bridge.

52 There is no doubt that there is a principle usually associated with the decision of the House of Lords in Mackay v Dick (1881) 6 App Cas 251 at 263 that:

“[A]s a general rule … where in a written contract it appears that both parties have agreed that something shall be done, which cannot effectually be done unless both concur in doing it, the construction of the contract is that each agrees to do all that is necessary to be done on his part for the carrying out of that thing, though there may be no express words to that effect. What is the part of each must depend on circumstances.”

53 However, to apply the principle, one must work out what is to be done under the contract.

54 Mr Inatey says that on its plain reading, the obligation of his client was to grant an easement. That easement was to be in a location to be specified by the grantee within certain limits. In fact, the defendant has granted that easement and has done all things necessary to have the easement registered on the title. Its obligations under the deed have therefore come to an end. There is nothing further for it to do. However, under cl 9, the grantee has the obligation to remove the easement if it has not commenced construction of the bridge by 29 May 2007.

55 In my view, this construction of the deed is correct. There was to be a once and for all grant of an easement and this has already occurred. There was no obligation to shift the site of the easement. The covenant in cl 7.6 to execute and complete any further documents to implement the terms of this deed are obligations before the easement was registered as is indicated to my mind by the words “including registration of the Easement”.

56 Accordingly, anything that the defendant has done after the easement cannot be in breach of any Mackay v Dick obligation.

57 As to (c), Mr Hale says that the implication of good faith and fair dealing arises as a matter of law and/or to give business efficacy to the deed and the easement.

58 A lot has been written about the obligation of good faith in recent times and indeed I was referred to a number of authorities. However, it is not necessary to consider whether I should imply any obligation of good faith. This is because it seems to me that all the defendant’s duties with respect to the easement ceased when the plaintiff nominated a site for the easement, the defendant signed the appropriate documents and the easement as requested was granted. Accordingly, I do not consider this principle gives Mr Hale any comfort.

59 Thus, the basis of the plaintiff’s primary case fails.

2. If the answer to 1 is “Yes”, should either order 1(a) or 1(b) noted above be made restraining proceedings in the Land and Environment Court?

60 Although it is unnecessary to consider the point as to whether, had I come to a different view on the principal question, an injunction should be granted against the defendant from proceeding in the Land and Environment Court, I believe I should spend a brief moment on the point.

61 Prior to 1972, and particularly prior to 1957 when wide-ranging reforms were made to the procedure at common law and in equity, a person with a right cognizable only in equity where a plea on equitable grounds could not be put forward at common law (because the result might not be an absolute perpetual and unconditional injunction) had to obtain a common injunction in equity to prevent the person with the common law right from proceeding. This was known as the common injunction. There were not that many instances of it in the 20th century, one of the latest being High v Bengal Brass Co & Bank of NSW (1921) 21 SR (NSW) 232.

62 Section 61(1) of the Supreme Court Act 1970 now prevents the court from restraining by injunction any proceedings pending in the court. However, as Meagher Gummow & Lehane point out, the common injunction still does exist in special cases; see eg Medway v Doublelock Ltd [1978] 1 WLR 710, or where a Federal Court has exclusive authority and a person purports to take action in a State Court – see [21.020]. Furthermore, there have been cases where the Supreme Court has been asked to grant an injunction against an inferior court such as a licensing court; see eg Dalgety Wine Estates Pty Ltd v Rizzon (1979) 141 CLR 552.

63 I do not know of any recent Australian case where the Supreme Court has been asked to grant an injunction to prevent a person from litigating in another superior court of the same State. Of course, the injunction is against the person, not against the court, so it is theoretically possible.

64 Of course, it must also be noted that the anti-suit injunction in which a court can give an injunction against a person litigating in a foreign court is not at all uncommon; see eg the article by A S Bell and J Gleeson in (1997) 71 ALJ 955.

65 Whilst there is jurisdiction to grant such an injunction, a court considering it must always bear in mind what Mason J said at 574 of the Dalgety Wine Estates case:

“[A] superior court should hesitate before granting an injunction restraining a party from commencing or maintaining proceedings in a court or tribunal which has been specially constituted by statute with a jurisdiction to entertain and determine proceedings of that kind, the more so when the proceedings relate to rights or privileges which depend for their existence on the statute.”

66 I believe those remarks apply a fortiori: (a) where the court in which the other proceedings are being taken is a superior court; (b) where at least theoretically the other court is determining public rights rather than private rights; and (c) where the other court has full discretions to deal with inappropriate proceedings.

67 I am not unmindful of the fact that if a person is seeking an equitable right or a statutory right, the fact that that person has covenanted not to exercise that right may well be a reason why the court in its discretion refuses to give relief. A prime example is an application under s 66G of the Conveyancing Act 1919 by a co-owner to have the property sold; see Re Buchanan-Wollaston’s Conveyance [1939] Ch 738 applied by the NSW Court of Appeal in Williams v Legg (1993) 29 NSWLR 687 at 692. However, I am not at all sure whether the same applies in the situation where a person has a right together with every other member of the public to challenge a public document such as a development consent.

68 I do not need to make a decision on the point in the instant case in view of the finding I have come to under heading 1. I just wish to make it clear that I would have had difficulty in granting the order sought even had I come to the reverse decision on the first matter.

3. Should the easement created by DP 1097442 be modified by relocating it to the north so as to align with the 2a land?

69 The next question is whether the plaintiff can have the easement moved so as to line up with the 2a land.

70 There are at least three major problems that the plaintiff faces in this application.

71 The first is whether, because of the maxim sometimes expressed as “Equity like nature doeth nothing in vain”, it is a complete waste of time to make the order because if the defendant is entitled to a release of the easement because of cl 9, it matters not whether it is moved northward or not.

72 The second reason is that there is some authority for the proposition that the jurisdiction under s 89 of the Conveyancing Act does not include jurisdiction to move an easement.

73 The third reason is that the only competent applicant for modification of an easement is the holder of the servient tenement.

74 Dealing with the first point, I have already considered the construction of the deed under heading 1 of this judgment. I have found that construction of the bridge was not commenced within the 5 years, that the defendant has done everything that it was required to do to grant the easement and that any “interference” with the plaintiff’s application to the council to develop its land is really immaterial. Accordingly, there is no reason why cl 9 cannot be invoked by the defendant, and the defendant has in fact invoked it. If the easement has to be released, then there is no point in modifying it.

75 As to the second point, s 89(1) provides:

“Where land is subject to an easement … the Court may from time to time, on the application of any person interested in the land, by order modify or wholly or partially extinguish the easement … upon being satisfied … “.

There then follow a series of what are usually called gateways, and if a person can pass through one of those gateways factually, then the court may make the order extinguishing or modifying the easement.

76 The word “modify” is quite a wide word though it usually means “to alter without radical transformation”; see the Shorter Oxford English Dictionary definition which was picked up by the Court of Appeal in Sydney City Council v Ilenace Pty Ltd [1984] 3 NSWLR 414 at 421. However, the word usually does not comprehend an extinction of rights and replacement by substitute rights; see in the company context Re Mercantile Trust International Co [1893] 1 Ch 484n at 491.

77 In the context of the present section, Holland J said in Manly Properties Pty Ltd v Castrisos [1973] 2 NSWLR 420 at 424, that a relocation of an easement was not a modification of an easement, but rather was the destruction of an existing easement and the grant of a new easement. Einstein J took the same view in Durack v de Winton (1998) 9 BPR 16,403 at 16,434.

78 However, the position is not as black and white as it first appears. First, there is a decision in New Zealand Re Lewis [1959] NZLR 1040 which goes the other way. However, it would seem to me that in the light of the local cases one should not follow it. Secondly, the court has power to order that an existing easement be extinguished subject to a new easement being created; see Castrisos and Durack.

79 Further, there are examples, unreported, where orders have been made which have the effect of substituting or relocating an easement. However, I am not aware of any case where there has been an actual order relocating the easement. The nearest one gets to is the decision of C McLelland CJ in Eq in Kilmister and the Conveyancing Act (No 246 of 1967).

80 The Kilmister case concerned land in Hudson Parade, Avalon, where there was a right of way on the plan and there was a paved road which followed the contours of the cliff type terrain and it was assumed by everybody until a survey was made for an intending mortgagee, that the bitumen road was actually on the same site as the right of way on the plan. However, surveys showed that actually the easement on the map passed right through the living room of the plaintiff’s house.

81 The Chief Judge extinguished the easement so far as it affected the plaintiff’s land. However, he did not go further and relocate the “paper easement” to the site of the bitumen road. No reasons were given. It would appear that the judge considered that for all intents and purposes there was an easement over the site of the bitumen road.

82 Austin J dealt with the point in Markos v O R Autor Pty Ltd [2007] NSWSC 810. He said at [117] that he should follow what was said by Holland J in Castrisos and noted:

“His Honour’s reasoning on that point has been followed in subsequent cases, and the law now seems to be that a relocation of the site of an easement so that it traverses a completely different track is outside the power conferred by s 89(1)(c). “

His Honour refers to Campbell J’s decision in Tujilo v Watts (2005) 12 BPR 23,257 at [52].

83 Gzell J also dealt with the point recently in Loclot Pty Ltd v Pullen (2003) 56 NSWLR 592. His Honour was of the same general view. However, he did go further and query whether the power to wholly or partially extinguish an easement extended to allow an extinguishment subject to conditions, see at 596 [18]. With great respect, I do not share his Honour’s view. Even if I concede it was technically correct (which I cannot currently bring myself to do), I would still see no problem why the court could not decide in its discretion only to extinguish an easement if undertakings or the like were given to the court.

84 Accordingly, although there is validity in the point that one cannot relocate an easement as a modification under s 89, in practical terms this difficulty would not assist the defendant.

85 As to the third point, the statute says that where land is subject to an easement any person interested in the land may apply for an order under the section. “The land” must refer to the servient tenement. With respect to the corresponding provision in the English legislation, s 84 of the Law of Property Act 1925, the leading English book Preston & Newsom, Restrictive Covenants, 9th ed (Sweet & Maxwell, London, 1998) says at p 227 and see also p 197 that “person interested” is a very wide term, but the interest must be in the servient tenement.

86 In the Markos case at [115], Austin J said that:

“[T]he introductory language of s 89(1) … empowers the court to modify or extinguish an easement ‘on the application of any person interested in the land’. The ‘land’ there referred to is ‘land [that] is subject to an easement’, in other words the servient tenement. Therefore an application under s 89(1) for modification or extinguishment can be made only by the servient owner or someone else who is interested in the servient owner’s land. The section does not authorise an application to be made by the dominant owner.”

87 In my view I should follow this authority and uphold the point that the present is not a proper application under s 89.

4. Should an easement be granted under s 88K of the Conveyancing Act ?

88 I now turn to the application under s 88K of the Conveyancing Act.

89 Section 88K of the Conveyancing Act provides that the court “may make an order” (that is, whether the order is made or not is in the court’s discretion), imposing an easement over land if: (i) the easement is reasonably necessary for the effective use or development of other land; (ii) that use will not be inconsistent with the public interest; (iii) adequate compensation is given for any loss to the owner of the land being burdened; and (iv) all reasonable attempts have been made to obtain the easement.

90 Mr Hale says that in the circumstances if (as I have now held) his client has no easement, then the court should grant one so that there is an easement over the pan handle at a point where it will connect with the 2a land.

91 The plaintiff says that such an easement is reasonably necessary for the effective use or development of its land for a number of reasons, namely: (a) the plaintiff’s land has recently been rezoned residential R3 “Medium Density Residential” on the basis that access to the land was via Brickmaker’s Drive through the old Boral site through the 2a land over a road bridge on to the plaintiff’s land; (b) if no access from Newbridge Road was available the plaintiff’s land would be sterilised; and (c) the fact that the dominant tenement owner might obtain a collateral commercial advantage was not relevant.

92 It is, of course, trite law that “reasonably necessary” does not mean absolutely essential and that whilst mere desirability is insufficient, it must at least be shown that the use of the claimant’s land with the easement is substantially preferable to its use without the easement; see eg 117 York Street Pty Ltd v PSP 16123 (1998) 43 NSWLR 504 at 509; 8 BPR 15,917 at 15,920 and see Katakouzinos v Roufir (2000) 9 BPR 17,303 at 17,307, which confirms that it is at the date of the hearing that one must consider reasonable necessity and see also Durack v de Winton supra at 16,449.

93 The defendant says that it is not appropriate to look at the situation as it might have been at the time when the deed was granted; rather it must be looked at under present day conditions. The defendant points to the fact that the current planning comprises of the Liverpool Local Environmental Plan 2008 and the development control plan as currently in force and the zoning for the intended development of the various parcels of land.

94 Mr Inatey submits that it is to be remembered that: (a) the connection between Brickmaker’s Drive and the land to the east will be part of a public road system; (b) there will be no access to Newbridge Road other than via the public road system; (c) access by the defendant to Newbridge Road will only be by the public road system; (d) if a bridge is constructed to the design shown in the development consent, the defendant will not have access either to the public road system or directly on to Newbridge Road in the event of the development of its land; (e) the zoning of the defendant’s land permits recycling; and (f) if the relief is granted a part of the public road system will comprise of the easement over the defendant’s land which will be for the benefit of the plaintiff only and not for the benefit of other land to the east or west of the bridge.

95 It seems to me that the proposal meets the test of reasonable necessity. I do not consider the factor that there will be a private road and that the weight limitations on the private road will be insufficient to take heavy trucks is a relevant factor under the consideration of reasonable necessity though it may be a factor to be considered when one is dealing with the general discretion.

96 The next condition, that is, that the use of the land having the benefit of the easement will not be inconsistent with the public interest is clearly made out and the contrary was not argued.

97 The next matter to consider is whether the defendant can be adequately compensated for any loss or disadvantage that will arise from the imposition of the easement.

98 As the defendant points out, no offer of compensation has in fact been made, and indeed, the attitude of the plaintiff in the present proceedings is that: (a) the compensation in the earlier deed was $1; and (b) that the present application comes about because of a slight mistake by a surveyor, the commercial arrangement between the parties remains unaffected so that no compensation is necessary.

99 I do not consider that either of those matters is an adequate answer.

100 What must be assessed is whether the defendant can be adequately compensated for loss or disadvantage that will arise from the imposition of the easement. At present, whether as a result of the surveyor’s innocent mistake or otherwise, the plaintiff has no easement. The defendant is unwilling to grant an easement. The plaintiff needs to obtain an easement for the proper utilisation of its land. The defendant will suffer damage because its use of the pan handle is restricted and the erection of a bridge which will not take fully laden trucks will restrict its own access to a public road.

101 Although no compensation has been offered, I cannot see any reason why a court cannot fix the compensation after considering proper relevant evidence.

102 The next matter to consider is whether there have been all reasonable attempts to obtain the easement which have been unsuccessful.

103 Because there has been no offer of compensation, one is tempted to answer this question “No”. However, that would be too simplistic an approach. The evidence clearly shows that for its own commercial reasons, the defendant was more likely than not to have refused to grant an easement no matter what the compensation offered. The section does not require a person to continue to negotiate if it is clear that negotiations are extremely unlikely to bring about any result. Accordingly, it seems to me that in the circumstances, all reasonable attempts have been made by the applicant to gain the easement.

104 That then leaves me with the question of the public interest. I find it almost impossible to adjudicate on this matter at this stage. On the one hand, it can be said that if an order is not made for an easement, there will be landlocked land unable to be developed in the public interest (as well of course as to the profit of the plaintiff). The local council to date has indicated that it would be appropriate in the light of town planning instruments, that the subdivision take place. The defendant can be adequately compensated; therefore the court should exercise its discretion in the plaintiff’s favour.

105 However, on the other hand, the defendant has property rights. Those property rights are not lightly to be interfered with.

106 Mr Inatey makes a strong point that s 88K is confiscatory in nature and that as has been observed more than once in the authorities; see eg Re Seaforth Land Sales Pty Ltd’s Land [1976] Qd R 190 at 193, the court should not lightly interfere with the proprietary rights of the owner of land over which someone else seeks to exercise a statutory right. He points out that if one looks at the development consent which has been granted to the plaintiff closely, one can see that the consent was only for the construction of a road bridge, not for its use and that the bridge was to be designed and constructed such as that it is able to accommodate the access ramps as suggested by the defendant.

107 He further says the attitude of the plaintiff in opposition to the defendant’s development of its land for a recycling facility and the deliberate limitation of the bridge’s load to low capacity vehicles, the presence of the environmentally sensitive land to the north and south of the 2a corridor, all mean that if the easement is granted, the great probabilities are that the defendant’s land will be denied access to a public road in all practical senses.

108 I believe there is a lot to be said in support of this view, but it is not the only matter that one must take into account when assessing whether an easement should be granted. In particular it is a matter that might be taken into account when assessing compensation. Again, it is a reason why no final decision should be made in the case until after the Land and Environment Court has dealt with the appeal respecting the validity of the development consent.

109 Another matter pointing against the grant of the easement is that such grant will detrimentally affect the defendant, particularly if the bridge is not at a standard that will allow its vehicles to traverse it. However, this point may at least to a degree be met by compensation.

110 Another point against the grant is that to allow the easement will produce the situation whereby there will be a public road being on the 2a strip but then a private bridge of minor load bearing capacity which will service only the plaintiff.

111 I have taken all those points into consideration. However, in my view, the factors determining the grant of the easement at this stage favour the plaintiff. If the bridge is not constructed, the plaintiff’s land will virtually be sterilised. This is not the result that town planning conferences over the last decade between the person holding land in the Moorebank precinct have considered to be desirable. The deed was part of this process. On the other hand, the effect on the defendant’s land, after compensation will not be as great.

112 However, it is not advisable to make a final decision at present. In view of my findings, the Land and Environment Court proceedings can now continue. Should the Land and Environment Court finds the development consent invalid, then a different scenario will present itself.

113 As the question of compensation is now to be considered either by me or by an Associate Judge, it seems to me that I should not go further and determine the application until the compensation has been decided. Apart from what I have said, and what is implicit in what I have said, it just may be that when a judicial officer does attempt the assessment of compensation, he or she will find it too impossible to reach a proper figure. Hopefully, by the time the compensation has been determined, the Land and Environment Court proceedings and any appeal therefrom will have been determined or the council or the responsible Minister will have made some fresh determination.

5. What orders should be made on the cross-claim?

114 It follows from what I have said that unless an order is made under s 88K of the Conveyancing Act, the cross-claim must succeed. However, if such an order is made, any order made under the cross-claim will have virtually no practical value and that may be a good reason for not making any such order.

115 Thus, for the present, I will merely stand over determination of the cross-claim.

6. Consequential matters and the result of this case

116 Thus the plaintiff’s claims other than the claim under s 88K should be dismissed. As to the claim under s 88K, I will stand it over for mention at 9.50am on 19 December 2008 to consider formal short minutes of order and directions to deal with the question of compensation. The cross-claim might formally stand over to say 5 May 2009 at 9:30am with liberty to restore on 2 days’ notice.

117 As to costs, in my view the plaintiff should pay the defendant’s costs of the proceedings to date. Further costs are to be reserved.

118 I should note (this is not an order), that as the evidence stands at this stage, I would favour the grant of an easement under s 88K to the plaintiff to line up with the 2a land provided that there is the existing development consent or a subsequent substantial equivalent and the question of compensation is adequately resolved.

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