The Council of Trinity Grammar School v Anderson

[2020] NSWCA 292

Court of Appeal

Supreme Court

New South Wales

• Amendment notes

Medium Neutral Citation:

Aussie Skips Recycling Pty Ltd v Strathfield Municipal Council [2020] NSWCA 292

Hearing dates:

8 September 2020

Decision date:

18 November 2020

Before:

Basten JA at [1];
Gleeson JA at [57];
Preston CJ of LEC at [58]

Decision:

(1)   Dismiss the appeal from the judgment and orders in the Land and Environment Court of 20 March 2020.

(2)   Order that the appellants pay the respondent’s costs in this Court.

Catchwords:

LAND LAW – easements – imposition of easement by Court – standard of appellate review –

requirement that proposed easement be “reasonably necessary for the effective use or development” of the land – Conveyancing Act 1919 (NSW), s 88K(1)

LAND LAW – easements – validity – characterisation under general law – rights not to confer exclusive use of servient tenement – enclosure of community land for waste transfer and recycling facility – loss of owner’s use of enclosed land and limited use of residue – whether proposed easement capable of being characterised as an easement

LAND LAW – community land – inability of Council to grant easement over community land – whether Court can impose easement where owner cannot grant it – Local Government Act 1933 (NSW), s 46 and Conveyancing Act 1919 (NSW), s 88K

Legislation Cited:

Conveyancing Act 1919 (NSW), s 88K

Local Government Act 1993 (NSW), s 46; Ch 6, Pt 2, Div 2

Cases Cited:

City of Canterbury v Saad [2013] NSWCA 251

Community Association DP 270447 v ATB Morton Pty Ltd [2019] NSWCA 83; 19 BPR 39,277

Gordon v Lever (No 2) [2019] NSWCA 275; 19 BPR 39,915

House v The King (1936) 55 CLR 499; [1936] HCA 40

ING Bank (Australia) Ltd v O’Shea [2010] NSWCA 71

Klos Farming Estates Pty Ltd (Receivers and Managers appointed) v Easton [2001] NSWSC 525

London & Blenheim Estates Ltd v Ladbroke Retail Parks Ltd [1992] 1 WLR 1278

Marshall v Council of the City of Wollongong [2000] NSWSC 137; 107 LGERA 73

Re Ellenborough Park [1956] Ch 131

Stolyar v Towers [2018] NSWCA 6

The Owners of East Fremantle Shopping Centre West Strata Plan 8618 v Action Supermarkets Pty Ltd [2008] WASCA 180

The Owners of the Ship “Shin Kobe Maru” v Empire Shipping Company Inc (1994) 181 CLR 404; [1994] HCA 54

Texts Cited:

M Leeming, Resolving Conflicts of Laws (The Federation Press, 2011)

P Herzfeld and T Prince, Interpretation (Thomson Reuters, 2nd ed, 2020)

Category:

Principal judgment

Parties:

Aussie Skips Recycling Pty Ltd (First Appellant)
Isas Pty Ltd (Second Appellant)
Strathfield Municipal Council (Respondent)

Representation:

Counsel:
N Hutley SC / C Ireland (Appellants)
M Wright SC / D Robertson (Respondent)

Solicitors:
Minter Ellison (Appellants)
Holding Redlich Lawyers (Respondent)

File Number(s):

2020/114142

 Decision under appeal 

Court or tribunal:

Land and Environment Court

Jurisdiction:

Class 3

Citation:

[2020] NSWLEC 22

Date of Decision:

20 March 2020

Before:

Duggan J

File Number(s):

2019/261671

HEADNOTE

[This headnote is not to be read as part of the judgment]

The second appellant, Isas Pty Ltd, is the owner of a parcel of land in South Strathfield of an irregular shape, bordering the Cox’s Creek drainage channel. The first appellant, Aussie Skips Recycling Pty Ltd, is the lessee which operates a waste transfer and recycling business on the land. There is a narrow strip of land owned by Strathfield Municipal Council between the appellants’ land and the drainage channel.

In the course of building a high “acoustic wall” along the boundary of the appellants’ land and the Council land, the appellants incorporated some 341m² of Council land within their operations. Council commenced enforcement proceedings in the Land and Environment Court to restrain the continued occupation of its land by the appellants.

On 15 July 2019, the appellants commenced proceedings in the Supreme Court pursuant to s 88K of the Conveyancing Act 1919 (NSW) seeking the imposition of four easements over that part of the Council land which they were using for their business. The proceedings were transferred to the Land and Environment Court. On 20 March 2020, the Land and Environment Court refused the application for the easements.

This appeal, brought from the dismissal of the application for the easements, raised two broad issues:

1. whether the easement were at law capable of being characterised as easements; and

2. if so, whether the test of “reasonable necessity” for imposing an easement was satisfied.

Held by Basten JA (Gleeson JA and Preston CJ of LEC agreeing) dismissing the appeal:

Whether the proposed easements were easements at law

1. The proposed easements were incapable of comprising easements at law: [27]. The appellants enclosed 68% of the Council’s lot, in a manner which practically excluded the Council from any use of the enclosed land: [25]. The Council’s rights of access to the land were in truth illusory: [22] and the enclosure diminished the Council’s enjoyment of the residue land: [26].

Re Ellenborough Park [1956] Ch 131; London & Blenheim Estates Ltd v Ladbroke Retail Parks Ltd [1992] 1 WLR 1278; Klos Farming Estates Pty Ltd (Receivers and Managers appointed) v Easton [2001] NSWSC 525; The Owners of East Fremantle Shopping Centre West Strata Plan 8618 v Action Supermarkets Pty Ltd [2008] WASCA 180; Stolyar v Towers [2018] NSWCA 6, applied.

The primary judge’s analysis of “reasonable necessity”

1. Observation: The correct standard of review to apply to that requirement that an easement be “reasonably necessary for the effective use or development” of the land is the less rigorous form of appellate review to be applied on an appeal by way of rehearing, as articulated in Gordon v Lever (No 2) [2019] NSWCA 275; 19 BPR 39,915.

City of Canterbury v Saad [2013] NSWCA 251; Community Association DP 270447 v ATB Morton Pty Ltd [2019] NSWCA 83; 19 BPR 39,277; distinguished

1. The trial judge correctly rejected the asserted factual basis that underpinned the claimed necessity related to the manoeuvring of trucks at the site: [35], and the submission on the cost of removing or replacing the acoustic wall: [36].

Whether the Council had power to grant the easements over community land because the appellants were running a public utility

1. The Council had no power to grant the easement sought by the appellants over land designated community land, and the submissions in this Court that the appellants were running a public utility rather than a private business for profit must be rejected: [41]-[45].

Query: the Court’s power to grant an easement over community land

1. The court may not have a power to grant an easement over community land: For the court to do what the council cannot do may undermine the purpose and operation of the Local Government Act 1993. Section 88K may assume that the owner has the legal power to grant and modify the easement, which operates as if it were a deed: [48]-[52].

Marshall v Council of the City of Wollongong [2000] NSWSC 137; 107 LGERA 73; City of Canterbury v Saad [2013] NSWCA 251; The Owners of the Ship “Shin Kobe Maru” v Empire Shipping Company Inc (1994) 181 CLR 404 at 421; [1994] HCA 54 considered.

Judgment

1. BASTEN JA: The second appellant, Isas Pty Ltd, is the owner of a parcel of land in South Strathfield of an irregular shape, bordering the Cox’s Creek drainage channel. The first appellant, Aussie Skips Recycling Pty Ltd, is the lessee which operates a waste recycling business on the land. There is a narrow strip of land owned by Strathfield Municipal Council between the appellants’ land and the drainage channel. In the course of building a high “acoustic wall” along the boundary of the appellants’ land and the Council land, the appellants incorporated some 341m² of Council land within their operations. On becoming aware of the intrusion, Council requested that a predecessor of the first appellant cease to occupy the land and, in October 2018, commenced Class 4 enforcement proceedings in the Land and Environment Court seeking to restrain the first appellant from carrying out development on the Council’s land.

2. On 15 July 2019 the appellants commenced proceedings in the Supreme Court seeking the imposition of four easements over that part of the Council land which they were using for their business. Those proceedings were transferred by consent to the Land and Environment Court, which, on 20 March 2020, refused the application for the imposition of easements: Aussie Skips Recycling Pty Ltd v Strathfield Municipal Council. [1] This appeal is brought from the dismissal of the application for the easements.

   1. [2020] NSWLEC 22.

The assumed jurisdiction of the Court

3. The power of the Court to impose an easement depended upon the application of s 88K of the Conveyancing Act 1919 (NSW). Section 88K provides:

88K   Power of Court to create easements

(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.

(3) 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.

(4)   The Court is to provide in the order for payment by the applicant to specified persons of such compensation as the Court considers appropriate, unless the Court determines that compensation is not payable because of the special circumstances of the case.

(5)   The costs of the proceedings are payable by the applicant, subject to any order of the Court to the contrary.

(6)   Such an easement may be—

(a)   released by the owner of the land having the benefit of it, or

(b)   modified by a deed made between the owner of the land having the benefit of it and the persons for the time being having the burden of it or (in the case of land under the provisions of the Real Property Act 1900) by a dealing in the form approved under that Act giving effect to the modification.

(7)   An easement imposed under this section, a release of such an easement or any modification of such an easement by a deed or dealing takes effect—

(a)   if the land burdened is under the Real Property Act 1900, when the Registrar-General registers a dealing in the form approved under that Act setting out particulars of the easement, or of the release or modification, by making such recordings in the Register kept under that Act as the Registrar-General considers appropriate, or

(b)   in any other case, when a minute of the order imposing the easement or the deed of release or modification is registered in the General Register of Deeds.

(8)   An easement imposed under this section has effect (for the purposes of this Act and the Real Property Act 1900) as if it was contained in a deed.

(9)   Nothing in this section prevents such an easement from being extinguished or modified under section 89 by the Court.”

4. It is accepted that an “easement” for the purposes of s 88K(1) extends only to rights in the nature of an “easement” as understood under the general law. Accordingly, an application must identify such rights. A condition of engagement of the power to impose an easement is that it be “reasonably necessary for the effective use or development of” the dominant tenement. The primary judge in the Land and Environment Court (Duggan J) held that neither of these requirements was satisfied. As a result, the primary judge did not need to consider the requirements set out in s 88K(2), nor whether, as a matter of discretion, the Court would have been minded to make the order sought, assuming the power was engaged.

5. There is an aspect of the operation of s 88K which does not need to be resolved in this matter, but which should not go unnoted. The Council land in question was “community land”, the use and management of which is subject to extensive and detailed regulation under Ch 6, Pt 2, Div 2 of the Local Government Act 1993 (NSW). The Council may have had no power to grant the easement sought. The proposition that the general power conferred on the Court to grant an easement over the opposition of a land owner extends to community land owned by a council is an issue which requires further consideration. Further, the inability to grant such an easement, or use its own land for the appellants’ business purpose, would appear to preclude consent to a development which required such use pursuant to an easement. If that were correct, the costs associated with an eight day hearing in the Land and Environment Court and an appeal to this Court were all wasted because the proceeding should have been dismissed at the outset for want of jurisdiction. This issue will be explained further after addressing the issues raised by the parties.

6. Whether the Council did lack power to use the community land for the purposes of a waste recycling business (as a “public utility”) arose tangentially as relevant to the exercise of the Court’s discretion, if the power were engaged. Although that issue did not arise either, it will be convenient to address it briefly.

Proposed easements

7. The proposed easements, which it was said were to be read as a “composite package”, [2] were as follows:

   2. Primary judgment at [49].

1. easement for encroaching structure to remain;

2. easement for services;

3. right of carriageway;

4. easement for access and use for waste transfer and recycling facility.

8. A plan showed each of the easements covering the same area, which was the bulk of Lot 1, DP 107494, being the strip of Council land between the drainage channel and the appellants’ land. A copy of the plan appears below:

9. The terms of proposed easement (1) conferred on the appellants the right to:

“(a)   Construct, maintain and enjoy the Acoustic Enclosure on or over the Easement Site:

(i) to be supported vertically and horizontally by; and

(ii) to overhang, overshadow and encroach over,

the structure and soil of the Lot Burdened and any part of it including by all pillars, beams, columns, slabs, roof and walls actually standing for the time being in, on, above or across the soil of the Lot Burdened (or to be constructed) but only to the extent that they are (or will be once constructed) within the site of the Easement Site;

and

(b)   enter onto the Lot Burdened and also to remain there (with tools, plant, equipment, machinery, vehicles, scaffolding or other materials) for the purposes of inspecting, cleaning, repairing, constructing, maintaining, augmenting, renewing, replacing, constructing or removing and making good any part of the Acoustic Enclosure which is or will be located on, supported by or which is or will overhang or encroach upon the Lot Burdened.”

10. The easement was to be in place for a period of 30 years, or until the waste transfer and recycling facility ceased operating, whichever occurred first. The other three easements supplemented the underlying terms and purpose of easement (1).

11. Easement (1) conferred rights on “the grantor” which was identified as the owner of the lot burdened, namely the Council. For example, cl 3.2 of the terms of easement (1) originally read as follows:

“3.2   Access to Easement Site

(a)   The Grantor may:

(i)   at all times access the Easement Site for the purposes of inspecting the Acoustic Enclosure to ensure compliance with the requirements of this easement; and

(ii)   on Sunday and after 6pm on Saturday or 8pm on any weekdays access and remain on the Easement Site for any reasonable purpose, and allow members of the public to do so for any reasonable purpose associated with the reasonable and necessary use of the adjoining Lot Burdened at these times. The Grantee shall make all reasonable efforts to facilitate that access as required from time to time.”

12. Further the Council was given “step-in rights” to rectify any failure of the appellants to maintain the “acoustic enclosure” in a good standard of repair fit for its intended use and to keep the enclosure in a “clean and tidy condition to a standard appropriate for a waste transfer and recycling facility”, to ensure that the enclosure was safe and structurally sound, to rectify any defect and to maintain any equipment in operational and safe condition. [3]

    3. Terms of proposed easement, par 3.3 and 3.4.

13. On the sixth day of the trial the appellant filed an amended summons which replaced cl 3.2 of the terms of the easement with the following:

“3.2   Access to Easement Site

The Grantee acknowledges and agrees that the Grantor’s representatives, relevant service providers and representatives of other statutory authorities may require access to the Easement Site at any reasonable time following 24 hours’ prior notice and for that purpose may enter onto the Easement Site at any time subject always to compliance with the induction requirements under the Work Health and Safety Act 2011 and the Grantee’s reasonable site access procedures. The Grantee acknowledges and agrees that the acoustic wall shall be modified to include at least 2 doors in its southern elevation allowing pedestrian access by the Grantor through it onto the Easement Site to and from the remainder of the Lot Burdened.”

14. No one appears to have questioned how the grantor, which was not the Council (it had no power to make such a grant), could exercise these powers on community land, given the controls imposed by the Local Government Act which did not extend to the conferral of such powers. The effect of the imposition of an easement in these terms by the court would have involved the conferral of powers on the Council by the court; it is not clear that s 88K vests any such power in the court.

15. It may be added that if, as the Council contended, none of the development consents for the operation of the waste facility extended to the operations on Council land, that operation, sought to be the subject of the easement, was and remains presently unlawful. There was no explanation as to how the Court, by the imposition of an easement, could render lawful that which under the Environmental Planning and Assessment Act 1979 (NSW) was unlawful.

16. In the introductory parts of her reasons, the trial judge noted:

“[44] There are presently a number of separate proceedings pending in this Court relating to obtaining development consent for the use of the Council Land; regularising buildings that have been constructed without development consent; and seeking orders and declarations restraining the use of the Council Land. Other than providing me with context, this material is of little weight or relevance in the broader context of the issues in these proceedings.”

17. At least on one view, the issues raised in the other proceedings did more than provide the judge with “context” to the s 88K application: they suggested a fatal flaw in the underlying premise of the application.

18. The judge identified as the “first issue” raised in the proceedings, the question whether the proposed easements could properly be so described or whether the easements amount to the grant of exclusive occupation. [4] That was seen to depend upon the general law. However the judge also identified a second issue in the following terms:

    4. Primary judgment at [53].

“[54]   The Second issue arises on a construction of s 47D of the LG Act that provides:

47D   Occupation of community land otherwise than by lease or licence

(1)   The exclusive occupation or exclusive use by any person of community land otherwise than in accordance with—

(a)   a lease, licence or estate to which section 47 or 47A applies, or

(b)   a sublease or other title directly or indirectly derived from the holder of such a lease, licence or estate,

is prohibited.

(2)   This section does not apply to—

(a)   the occupation or use of part of the site of a senior citizens’ centre or home or community care facility by a duly appointed manager of the centre, or

(b)   the occupation or use of community land by persons, and in circumstances, prescribed by the regulations.

[55]   The Council accepted that if exclusive occupation was not found in relation to the first jurisdictional ground there was no need to independently determine the second jurisdictional ground, as it too relied upon a finding of exclusive occupation or exclusive use. Whilst there may be some question as to whether, if there was exclusive occupation or use, s 47D may not apply to the subject easements, a finding (either positive or negative) on the first jurisdictional ground would be sufficient for the Council’s purposes and would not require determination if the Council was not successful on the first jurisdictional ground.”

19. Treating the issue as capable of determination first under the general law avoided answering the question as to the operation of the statute. Had the latter question been addressed, the fundamental problem which has been adverted to above, might have been confronted, with much saving of costs and avoidance of delay.

Nature of an “easement”

20. The capacity issue was addressed by the judge in terms of the fourth limiting factor identified in Re Ellenborough Park,[5] namely:

“… whether, if and so far as effective, such rights would amount to rights of joint occupation or would substantially deprive the … owners of proprietorship or legal possession ….”

5. [1956] Ch 131 at 164.

21. After a careful consideration of the circumstances, including the nature of the land owned by the Council, and the nature of the rights of occupation and use proposed under the easements, the primary judge concluded:

“[70] Clearly, the purpose for which the Council Land is capable of being used, namely for amenity and passive purposes in conjunction with some formal or informal planting, is incompatible with the use as a waste recovery and recycling facility. The effect is not even the case of a joint occupation where two uses may co-exist. It is a wholesale occupation of the Easement Land to the exclusion of the Council. To the extent that the Council may presently physically access the Easement Land, such access serves no purpose consistent with the ownership and occupation of the Council of its Land, as the present occupier’s use with the wall and the concrete slab lend itself only to the occupier’s use and not the Council’s.”

22. In reaching that conclusion, the judge found that the rights of access purportedly conferred on the Council were “in truth an illusion”, asking, “what purpose the access would serve?” [6] The suggestion that the Council retained a right to develop the airspace over the land and the subterranean space was described as a “notional potential, it is not a real one.” [7] That was patently correct, even without regard to the fact that this was community land. Taking its status as community land into account, the submission was best characterised as fanciful. The narrow strip of Council’s land taken by the appellants served no useful purpose to either party in isolation from the rest of the appellants’ land. To suggest Council officers had any purpose in accessing that strip was fanciful; to suggest they had a “right” to access that strip inside the appellants’ wall, but not of course the rest of the appellants’ land, was to construct a fantasy on a fantasy.

    6. Primary judgment at [65].

    7. Primary judgment at [67].

23. The fact that an easement may impinge upon the rights of the owner of the servient tenement is not in doubt. The rights conferred on the dominant tenement may be extensive and provide for exclusive occupation of the land, but must be compatible with the continued beneficial ownership of the servient tenement. [8] As Judge Paul Baker QC explained in London & Blenheim Estates Ltd v Ladbroke Retail Parks Ltd: [9]

    8. Moncrieff v Jamieson [2007] 1 WLR 2620.

    9. [1992] 1 WLR 1278 at 1286.

“Another case not specifically dealing with parking is the decision of the Court of Appeal in Wright v Macadam [10] concerning the right of a tenant of an upper flat in a house to use a coal shed in the garden of the house. … Jenkins LJ said: [11]

10. [1949] 2 KB 744.

11. Wright at p 752.

‘… In my judgment that is a right or easement which the law will clearly recognise, and it is a right or easement of a kind which could readily be included in a lease or conveyance by the insertion of appropriate words in the parcels.’

This shows that a valid easement can subsist which involves the exclusive occupation of a shed or other piece of the servient tenement.

Wright v Macadam was not cited in Copeland v Greenhalf, [12] which directly concerned the parking of vehicles. The alleged servient tenement was a strip of land about 150 feet long running from the road with a width varying between 15 feet and 35 feet. It was wholly occupied with vehicles and agricultural implements save for a gangway allowing access from the road to the land beyond. The defendant was a wheelwright whose premises were on the other side of the road. The vehicles were his or his customers, awaiting repair or collection. The plaintiff owned the strip and the land beyond. Upjohn J said; [13]

‘I think that the right claimed goes wholly outside any normal idea of an easement, that is, the right of the owner or the occupier of a dominant tenement over a servient tenement. This claim … really amounts to a claim to a joint user of the land by the defendant. Practically, the defendant is claiming the whole beneficial user of the strip of land on the south-east side of the track there; … in my judgment, that is not a claim which can be established as an easement. It is virtually a claim to possession of the servient tenement, if necessary to the exclusion of the owner; or, at any rate to a joint user, and no authority has been cited to me which would justify the conclusion that a right of this wide and undefined nature can be the proper subject matter of an easement.’

… The matter must be one of degree. A small coal shed in a large property is one thing. The exclusive use of a large part of the alleged servient tenement is another.”

12. [1952] Ch 488.

13. Copeland at p 498.

24. This reasoning was adopted by Bryson J in Klos Farming Estates Pty Ltd (Receivers and Managers appointed) v Easton, [14] which in turn was cited with approval by Buss JA in The Owners of East Fremantle Shopping Centre West Strata Plan 8618 v Action Supermarkets Pty Ltd, [15] and by this Court in Stolyar v Towers. [16]

    14. [2001] NSWSC 525 at [39].

    15. [2008] WASCA 180 at [61].

    16. [2018] NSWCA 6 at [42].

25. In the present case, the appellants had enclosed an area constituting 68% of the Council’s lot, in a manner which practically excluded the Council from any use of the enclosed land. As a matter of degree, the appellants’ claim could not qualify as an easement, but as the appropriation of a large part of the Council’s lot for the appellants’ commercial benefit.

26. The appellants contended that there was no major restriction on the Council’s use of the residue of its lot. However, once it is accepted that the bulk of the lot was no longer available to Council for a permissible use, there is no need to determine whether the residue was also unusable in practical terms, or was restricted in its availability, or its continued usage was unaffected. The extent to which the use of the residue of the Council’s land was restricted depended upon the available purposes. It was true that when the whole of the area was available to Council, prior to the construction of a hardstand and the acoustic wall, which occurred between 2003 and 2010, the land had been left in its natural state. That was consistent with the uses permitted under the deed governing use of the reserve of which the lot was a part. The residue could continue in that state, but the effect in providing an area for recreation, or enhancing the amenity of recreation lands on the other side of the drainage channel, was substantially reduced.

27. It follows that the judge’s conclusion that the proposed easements were incapable of comprising easements at law [17] was correct. The appeal should be dismissed on this basis.

    17. Primary judgment at [71].

Reasonable necessity

28. Although the judge disposed of the matter on the ground set out above, she continued, considering, whether the easement satisfied the requirement in s 88K(1) as being “reasonably necessary for the effective use or development” of the appellants’ land. Because the judge was correct to dispose of the matter on the basis set out above, it is not necessary for this Court to address the further ground. However, for the reasons set out below, the judge’s conclusion in this regard also was correct.

29. The reasons for that conclusion may be stated briefly. However, there was an issue raised in this Court as to the proper approach to be taken in reviewing an evaluative judgment of the kind required to determine whether the criterion of engagement in s 88K(1) had been established. It is convenient to refer to that matter first.

Nature of appellate review

30. The respondent submitted that the constrained standard of review identified in House v The King [18] applied, relying on City of Canterbury v Saad,[19] and Community Association DP 270447 v ATB Morton Pty Ltd. [20] The respondent submitted that that standard should be applied, but noted that the submission had been rejected in ING Bank (Australia) Ltd v O’Shea,[21] and in Gordon v Lever (No 2). [22]

    18. (1936) 55 CLR 499 at 505; [1936] HCA 40.

    19. [2013] NSWCA 251 at [69]-[70].

    20. [2019] NSWCA 83; 19 BPR 39,277 at [122].

    21. [2010] NSWCA 71 at [73]-[76] (Young JA).

    22. [2019] NSWCA 275; 19 BPR 39,915 at [41] (Bell P, Payne JA and Emmett AJA agreeing).

31. Reliance on City of Canterbury v Saad was misplaced. The passage from the reasoning of Beazley P (with which Meagher JA and Leeming JA agreed) was directed to the exercise of the discretionary power. [23] There is no doubt that, once engaged, there may be a lively discretion to be exercised in determining whether or not to impose an easement. This case does not involve that issue, but, depending on the precise issues to be resolved, the application of the constrained scrutiny required by House would be appropriate.

    23. Saad at [69].

32. A similar point may be made with respect to the second case, Community Association v ATB Morton. There Leeming JA stated, with the agreement of Bell P and Payne JA:

“[122] … Section 88K(1) confers a discretion, and so it is necessary to identify appellable error in accordance with the principles in House v The King. It is desirable to articulate more precisely, in the ground of appeal, how it is said that the exercise of discretion has miscarried. It is especially desirable that that occur in a case such as this, given that the appeal is confined [to] of questions of law.”

33. The reasoning in Gordon v Lever (No 2) is, however, squarely on point. Bell P stated (with the agreement of Payne JA and Emmett AJA):

“[40]   Whether or not an easement is ‘reasonably necessary’ is to be assessed by reference to the circumstances as they exist at the time of the hearing ….

[41]   Such a finding ‘involves the making of a value judgment, but not the exercise of a discretion’ …. [24] It was for this reason that, although [the respondent] sought in his written submissions to suggest that the decision at first instance entailed an exercise of discretion to which principles associated with House v The King … would apply, this submission was not pressed with any vigour in the course of the hearing, and rightly so.”

The statement in Gordon v Lever (No 2) is clearly applicable, correct and should be applied. The less rigorous form of appellate review to be applied on an appeal by way of rehearing provides the appropriate standard.

24. Woodland v Manly Municipal Council [2003] NSWSC 392; 127 LGERA 120 at [19](2) (Hamilton J); Moorebank Recyclers Pty Ltd v Tanlane Pty Ltd [2012] NSWCA 445; 16 BPR 31,257 at [159] (Bathurst CJ, Beazley and Meagher JJA).

Challenge to findings of primary judge

34. The judge approached the matter correctly. She accepted that “reasonably necessary” conveyed a higher standard than that of mere convenience, but also accepted that questions of practicability were in play. She stated that the case was not equivalent to an application for an easement over a landlocked site, where the test could readily be met without significant evidence. [25] This was not such a case. The judge stated:

“[129] The Plaintiffs elected not to adduce any evidence as to the extent to which the current use (which includes the presently unauthorised use of the Council Land) is more desirable (in the context of that term as used in s 88K(1)) to the carrying out of the use on Lot 1 exclusively. Rather, the Plaintiffs have relied upon statements of various experts that to exclude the use of the Council Land may require a reconfiguration of the present site layout and potentially affect the truck size that can access the Land or potentially reduce the amount of tonnage of waste able to be processed.

…

[131] Without such information, even at the most basic level, the Court is unable to assess whether the use of the Facility constrained to Lot 1 is not an effective use of the Lot 1 such that it can be assessed as an alternative to that proposed. This is particularly so in the circumstances of this case where the Plaintiffs have numerous consents that authorise the use of Lot 1 for the Facility without the expectation of the use of any of the Council Land. Further, there is clear evidence from aerial photography that the Facility operated without the use of any of the Council Land until about 2000. In those circumstances, without evidence to the contrary, there is an overwhelming inference that the use of Lot 1 for the Facility can be undertaken efficiently without it being reasonably necessary or desirable to use the Council Land.”

25. Primary judgment at [125].

35. There were in substance two primary factors relied on by the appellants to support their case. The first was that, at least with the current configuration of the buildings and placement of stockpiles on its own land, there was difficulty in 19 metre trucks with trailers manoeuvring on the hardstand. To the extent that reconfiguration was required, the evidence did not permit the judge to determine that reconfiguration was not reasonably possible, at a reasonable expense. It was essential for the applicant to establish the relevant facts in order to demonstrate that the power it sought to have the court exercise was engaged.

36. The second issue was the cost of removing and reconstructing the present wall on the appellants’ own land. That would, as the judge noted, involve both inconvenience and cost. [26] However, the judge rejected a submission that “an easement was reasonably necessary, in part, because it was regularising a pre-existing circumstance”. The judge correctly noted, in that respect:

“[140]   As to the cost consequence of having to relocate the acoustic wall versus being able to utilise it, this cost has arisen as a consequence of the predecessors to Aussie Skips having constructed the wall in a location and to a height that was not approved in any development consent or expressly authorised by Council in any other capacity. …”

26. Primary judgment at [136].

37. The appellants complained that the primary judge drew an incorrect comparison between “the needs of Lot 1” and circumstances “primarily personal or commercial to Aussie Skips.” [27] As the appellants correctly submitted, such a distinction would be a departure from the test set out in s 88K(1), which requires a determination as to whether the easement is reasonably necessary “for the effective use or development of” the appellants’ land. However, read in context, the language used in this passage complained of cannot be understood as a departure from the statutory test. It is clear that the judge evaluated various factors relevant to the development and use of the appellants’ land. Indeed, in the paragraph following that containing the offending words, she accepted that the use of that land was “dynamic.” [28]

    27. Primary judgment at [138].

    28. Primary judgment at [139].

38. In concluding that use of the Council’s land in the way proposed was not reasonably necessary for the development and use of the appellants’ land, the judge stated:

“[144] All of these factors would indicate that the justification for the status quo use of Council Land does not arise from need but rather a desire to continue to take advantage of a set of serendipitous circumstances. Therefore, in this case, the [appellants] have failed to satisfy the requirements of demonstrating reasonable necessity for the efficient use of Lot 1 as required by s 88K(1).”

39. The appellants contended that reference to a set of “serendipitous circumstances” was an error. Why that was so was unclear. The apparent intention was to summarise a series of circumstances whereby developments for which Council had given consent on several occasions, by reference to the appellants’ land alone, had come to be constructed on, or too close to, the Council’s land. Senior counsel for the appellants submitted in the course of oral argument: [29]

“Now, what we say is the requirement to look at the position as it exists at the time of the inquiry is not limited to some notional reality divorced from the illegality. What we're seeking here to do is to seek to regularise wrongdoing by an easement. We are not precluded, we say as a matter of law, in referring to what is occurring, be it wrongful – and I accept it – for the purpose of determining whether the grant of the easement is preferable to constraining us to operating our business upon our land.”

29. CA Tcpt 08/09/20, p 22(35).

40. At no point did the primary judge suggest that the unlawfulness of the development on the Council’s land precluded the grant of an easement to the appellants. Nor was the case put by Council in that way. The fact that the cost of removing the wall and reconstructing it on the appellants’ own land was considered to be a relevant factor supports the view that the illegality was not taken to preclude the grant of an easement. On the other hand, use of the land over a period of years without objection did not give rise by prescription to an entitlement to an easement. Satisfaction of the criterion of engagement specified in s 88K(1) was at all stages treated by the primary judge as a live issue requiring an evaluative judgment. No error was demonstrated in the way that the judge dealt with the issue.

Appellants’ business – public utility

41. The jurisdictional question noted above, but not requiring determination, depended on the correctness of the assumption that Council had no power to grant the easement sought by the appellants over land designated community land. The submission that community land could be lawfully used for the purpose of a public utility was said to undermine the conclusion that the easements sought were not of a kind known to the law. As originally stated, that proposition was identified in grounds 3 and 4 of the notice of appeal as a failure to determine “a principal contested issue between the parties as to the impact of the easements on the Council land as ‘community land’”. Those grounds were not pressed on that basis; however, the issue of whether the land was capable of being used for the purpose of a public utility was said to be relevant to whether the easement was reasonably necessary, on the basis that the appellants’ use of their land was that of a public utility, because they operated a waste recovery and recycling business.

41. The logic of that submission is not self-evident. However, although it has been observed that absence of a power in the Council to grant an easement in a particular form does not prevent the court granting such an easement, it may be arguable that the consideration would be relevant to the exercise of the court’s discretion, if the power were engaged. Again, the matter may be briefly disposed of.

42. The land originally comprised part of the land subject to a trust declared by the Council of the Municipality of Strathfield on 15 October 1952, “for the purpose of providing public garden and recreation space”. Despite that, it was submitted by the appellants that the land was capable of being leased for the provision of “public utilities” in accordance with s 46 of the Local Government Act, which relevantly provided:

46   Leases, licences and other estates in respect of community land – generally

(1)   A lease, licence or other estate in respect of community land—

(a)   may be granted for the provision of public utilities and works associated with or ancillary to public utilities …

…

but may not otherwise be granted.

…

(3)   A council must not grant a lease or licence for a period (including any period for which the lease or licence could be renewed by the exercise of an option) exceeding 21 years.

44. This proposition was relied on in the appellants’ written submissions in support of an argument that it was appropriate to grant the easements sought. That was because the term “public utilities”, although not expressly defined in the Local Government Act, included the supply of any services essential to the community, including garbage collection and waste disposal. Senior counsel for the appellants submitted that the mere fact that they were private profit-making entities did not mean that the use did not constitute a “public utility”. [30] The submission should be rejected, largely for the reasons articulated for the Council. [31] That response had three limbs.

    30. Tcpt, 08/09/20, p 24(10).

    31. Tcpt, 08/09/20, p 47(30)-(50).

45. First, the appellants’ facility was not a garbage collection service, nor did it receive waste from the public. Rather it recycled waste principally for the building industry. Secondly, it operated on a commercial and contractual basis and did not provide services to the Council or any other government entity responsible for public waste disposal. Thirdly, and consequently, the appellants did not operate as a public utility within the meaning of that term when applied to community land.

The power to grant an easement over community land

46. This issue could not be relied on in this appeal without giving the parties an opportunity to address it. If the appeal were otherwise to be upheld, it might be necessary to take that course. Because the appeal is to be dismissed that course is not necessary. However, because it raises an important question as to the powers of the Supreme Court, and the Land and Environment Court where proceedings are transferred to it, and involves a question as to the interrelationship of two important statutes governing the use and development of private and public property, the issue should be flagged.

47. There are authorities which support the view that, regardless of the incapacity of the Council to grant an easement for a particular purpose over community land, the Court may nevertheless exercise its power under s 88K to do so. The power to do so has rarely been addressed. There is one case in which the Court of Appeal has approved the grant of an easement, without consideration of the issue of power. [32] However, the issue appears to have been raised, though somewhat obliquely, in 2000 in Marshall v Council of the City of Wollongong. [33] In response to the possibility that the inability of the Council to grant such an easement might affect the powers of the court under s 88K, Bryson J stated:

“[24] Sections 45 and 46 operate by prescribing and limiting the powers of Councils in dealing with Community land; they do not limit or deal with other means by which easements may come into existence, and they do not limit or affect the Court’s powers under s 88K by implication. The powers of the Court are not usually limited or altered by legislative implication, and in any event, there is no basis in the scheme of these provisions for that implication.

[25] To say that there is no inconsistency between ss 45 and 46 of the Local Government Act and the provisions of s 88K is not to say that there is no interaction between them. In relation to Community land the provisions of public law including the Local Government Act and the relevant plan of management should be considered when the court considers the public interest under s 88K. The limits on what the Council can do within its powers have a bearing on considering the issue in subs (2)(c) relating to reasonable attempts to obtain the easement. The fact that the land is Community land and is protected by limiting the Council to much narrower powers than landowners generally have is relevant for the exercise of the general discretion conferred by subs (1), which remains to be exercised after the court has been satisfied of each of the matters in subs (2).”

32. City of Canterbury v Saad [2013] NSWCA 251 (Beazley P, Meagher and Leeming JJA agreeing).

33. [2000] NSWSC 137; 107 LGERA 73 at [23].

48. While it is true that there is no express provision in the Local Government Act which limits the powers of the Supreme Court under s 88K, and whilst it is true that there is a general principle of statutory construction which militates against reading implied limitations into a conferral of power on a superior court, [34] some powers will contain inherent limitations, constitutional or otherwise, which a Supreme Court is required to observe. There are four factors which suggest that the Court does not have power to impose an easement on community land.

    34. The Owners of the Ship “Shin Kobe Maru” v Empire Shipping Company Inc (1994) 181 CLR 404 at 421; [1994] HCA 54.

49. First, the fact that the local council in which the land is vested has no power to grant an easement suggests that, for the court to do so, would be to undermine the purpose and operation of the detailed statutory scheme found in the Local Government Act. The two statutes should be read so as to operate harmoniously together, [35] not so that one undermines the other, and certainly not so that the earlier general power undermines the effect of the later more specific power. [36]

    35. M Leeming, Resolving Conflicts of Laws (The Federation Press, 2011) at pp 46-50.

    36. P Herzfeld and T Prince, Interpretation (Thomson Reuters, 2nd ed, 2020), [11.120]-[11.160].

50. Secondly, s 88K provides that an order imposing an easement “may be made only if the court is satisfied that … 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”: s 88K(2)(c). That requirement carries within it the implication that the owner of the land over which the easement is sought has the legal capacity to grant such an easement. If that is not the case, par (c) has no ready application and the court therefore cannot be satisfied as to an essential condition of the exercise of the power.

51. Thirdly, s 88K(6)(b), permitting the easement imposed by the Court to be modified by a deed between the respective landowners, again appears to assume that the owner of the servient tenement has power to grant an easement and modify it.

52. Finally, s 88K(8), providing that an easement imposed under the section “has effect (for the purposes of this Act and the Real Property Act 1900) as if it was contained in a deed”, would create a curious legal anomaly if one of the parties had no power to enter into such a deed.

Conclusions and orders

53. For the reasons indicated above, the judge was correct to dismiss the application before her on the basis that the package of easements sought by the appellants did not qualify as easements permissible under the general law. The appeal should be dismissed on that basis.

54. There is a degree of artificiality in asking whether an easement in a form which was not known to the law was “reasonably necessary” for the effective use or development of the appellants’ land. Nevertheless, to the extent the question is capable of being answered, the judge’s conclusion that that criterion was not satisfied was also correct. The same result would follow: the appeal should be dismissed.

55. The appellants sought payment of their costs in the event of success; there is no reason why they should not be required to pay the respondent’s costs in this Court.

56. The Court should make the following orders:

1. Dismiss the appeal from the judgment and orders in the Land and Environment Court of 20 March 2020.

2. Order that the appellants pay the respondent’s costs in this Court.

57. GLEESON JA: I agree with Basten JA.

58. PRESTON CJ of LEC: I agree with Basten JA.

**********

Endnotes

Amendments

07 May 2021 - [19] Amending "averted" to "adverted".

[23] Amending "Greehalf" to "Greenhalf". Inserting "that" between "I think" and "the right" in citation. Correcting fn 12 to read "488".

[32], [33] Correcting citation to read "House v The King".

Decision last updated: 07 May 2021