What has happened?
On 7 June 2018, the NSW Land and Environment Court handed down its decision in the following Class 3 proceedings: ATB Morton Pty Ltd v Community Association DP270447 (No 2) [2018] NSWLEC 87.
The case involved an application by the holder of a development consent for an easement under s 88K of the Conveyancing Act 1919. The proposed easement would confer a "right of carriageway" over an existing private road.
The application for development consent related to the "demolition of existing buildings; the erection of four new buildings, comprising workshop buildings with attached offices, a warehouse, and an office building; and site remediation of contaminated soils and filling on the land" located at Hexham.
Findings by the Court
The Court determined that an easement should be granted under s 88K. In so doing, it has provided a useful overview of the process a Court will engage in when analysing the requirements of s 88K.
Section 88K relevantly provides that a Court can make an order imposing an easement over land if the following 4 requirements are satisfied:
the easement is reasonably necessary for the effective use or development of other land that will have the benefit of the easement;
the use of the land having the benefit of the easement will not be inconsistent with the public interest;
the owner of the land to be burdened by the easement and each other person having an estate or interest in that land ... can be adequately compensated for any loss or other disadvantage that will arise from imposition of the easement; and
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.
Ordinarily, an application for an easement under s 88K will be heard by the Supreme Court. However, the Land and Environment Court has jurisdiction, under s 40 of the Land and Environment Court Act 1979, to determine applications where:
the Court has determined on appeal to grant or modify a development consent; or
where such an appeal is pending.
The Court applied the following analyses to each of the 4 requirements of s 88K.
Reasonable necessity
In assessing whether the proposed easement was "reasonably necessary", the Court applied the following 10 principles summarised from the Court's earlier decision in Rainbowforce Pty Limited v Skyton Holdings Pty Ltd [2010] NSWLEC 2.
The reasonable necessity:
is a matter to be determined objectively;
is to be determined having regard to the particular easement sought;
applies to either the effective use or the effective development of the land;
is determined having regard to whether the use or development of the land for some planning purpose can be achieved without the proposed easement. If the answer is "no" then the easement is reasonably necessary;
is to be determined having regard to the effective use or development of the land itself (not merely for the current proprietors of the land);
does not mean "absolute necessity" and the fact other ways exist of effectively using or developing the land without the easement does not automatically mean that it is not "reasonably necessary";
requires that the use or development of the land with the easement must at least be substantially preferable to the use or development without the easement;
does not require that there be no alternative land over which the easement could be imposed;
is to be determined in the light of the circumstances at the time of the hearing; and
can be satisfied notwithstanding that some future action may be required in addition to obtaining the easement.
Public interest
The Court relied on the observations of Basten JA in Shi v ABI-K Pty Ltd [2014] NSWCA 293 to conclude that where, as here, there is a development consent existing over land, that is a "highly material and possibly decisive factor demonstrating that the proposed development [in accordance with that consent] was not inconsistent with the public interest".
Adequate compensation
In determining this issue, the Court considered an argument by the Respondent that they would suffer amenity impacts which could not be adequately compensated.
The Court held that it was often the case that such amenity impacts would arise but that this was not itself "a reason for an easement not to be granted provided the other matters in s 88K are satisfied".
Reasonable steps
The Respondent argued that the Applicant had not taken reasonable steps to obtain an easement because the terms of the easement applied for in the proceedings differed substantially from that previously sought.
The Court rejected this argument. It held that the terms of the easement applied for were in fact "generally similar", "not dissimilar to", or "not relevantly different from" those previously sought and that this was sufficient in the circumstances.
Implications
This case provides a very useful overview of the approach a Court will take when deciding whether or not to grant an easement under s 88K. It should be considered before deciding whether to make (or defend) an application to the Court for the grant of an easement.
Further information
For further information on this judgment and its potential implications for your development please contact Marcus Steele, Director, on (02) 8005-1411 or marcus.steele@steelelaw.com.au.