Land and Environment Court of New South Wales CITATION : Gordon v Gioia & Anor [2007] NSWLEC 509 APPLICANT: Jennifer Mary Gordon PARTIES : RESPONDENTS: Emanuel Neil Gioia and Vania Gioia FILE NUMBER(S) : 31240 of 2006 CORAM: Lloyd J KEY ISSUES: Easements :- deferred commencement consent - condition requiring drainage easement - whether the easement is reasonably necessary for the development to have effect - all reasonable attempts to obtain easement - two alternative easement routes - interference with property rights LEGISLATION CITED: Land and Environment Court Act 1979 s 40 Gordon v Leichhardt Council [2007] NSWLEC 103; Hanny v Lewis (1998) 9 BPR 16,205; CASES CITED: Khattar v Wiese [2005] NSWSC 1014; Property Partnerships Pacific Pty Ltd v Owners Strata Plan 58482 [2006] NSWLEC 709; Tregoyd Gardens Pty Ltd v Jervis (1997) 8 BPR 15,845 DATES OF HEARING: 03/07/2007 EX TEMPORE JUDGMENT DATE : 3 July 2007 APPLICANT: N Kingsbury-Carr (agent) SOLICITORS: N/A LEGAL REPRESENTATIVES: RESPONDENTS: C R Xuereb (solicitor) SOLICITORS: Charles R Xuereb & Co JUDGMENT: - 5 - IN THE LAND AND ENVIRONMENT COURT OF NEW SOUTH WALES Lloyd J Tuesday, 3 July 2007 LEC No. 31240 of 2006 Gordon v Gioia & Anor [2007] NSWLEC 509 EX TEMPORE JUDGMENT 1 HIS HONOUR: On 2 March 2007, Commissioner Murrell allowed an appeal against the refusal by Leichhardt Council of a development application for alterations and additions to an existing dwelling and construction of a studio at No. 18 Frazer Street, Lilyfield: Gordon v Leichhardt Council [2007] NSWLEC 103. The commissioner granted a deferred commencement consent subject to conditions. The deferred commencement condition requires the applicant to obtain a drainage easement. 2 The present proceedings is an application by the applicant, Jennifer Mary Gordon, under s 40 of the Land and Environment Court Act 1979 for an order imposing an easement for drainage over an adjoining property, No. 6 Bayside Street, Lilyfield, owned by the respondents, Emanuel Neil Gioia and Vania Gioia. 3 The questions for determination are whether the Court is satisfied of the requirements in s 40(2) of the Land and Environment Court Act 1979, in particular: (1) whether the easement is reasonably necessary for the development to have effect in accordance with the consent; and (2) whether 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. 4 The respondents say that neither of these conditions is satisfied. They say, in particular, that the applicant is able to obtain an alternative grant of an easement through another property, No. 9 Bayside Street. That property is occupied by a townhouse development. There is evidence from the Secretary/Treasurer of the Owners Corporation of Strata Plan 48025, Mr James Allen, in a statement signed by him on 25 June 2007, which is as follows: … I confirm that the Owners Corporation resolved on 15 November 2003 to grant an easement to drain water in favour of the property known as 18 Fraser Street, Leichhardt. The terms of the grant were that the owner of 18 Frazer Street, Leichhardt would pay the owners Corporation $10,000.00 by way of compensation and would also pay all other costs and expenses involved in relation to the grant of the easement. At no time has the Owners Corporation withdrawn its offer to grant the easement. The Owners Corporation will grant the easement provided that compensation of not less than 10,000.00 is paid, and all associated costs (including the Owners Corporation legal costs, title registration, restoration of the area and any other expenses incurred by reason of the grant of easement) are paid for by the owner of 18 Frazer Street, Leichhardt. The Owners Corporation will also require a signed statement accepting responsibility for those costs from the owner of 18 Frazer Street, Leichhardt. The Owners Corporation's legal representative may required an up front fee for that firm's estimated costs. A bond will need to be lodged until the works are completed to the Owners Corporation's satisfaction. 5 I observe that an easement over No. 9 Bayside Street would be over part of the visitors' car park within that property. 6 The applicant submits that the statement of the Secretary/Treasurer of the owners corporation is not authenticated. There is no reason, however, to reject the authenticity of the statement and I have no reason to reject it as not representing the current attitude of the Owners Corporation. 7 Mr Neville Kingsbury-Carr, appearing as an agent for the applicant, submits that the proposed easement through the respondent's property, No. 6 Bayside Street is reasonably necessary because the alternative access through No. 9 Bayside Street would be more difficult and more expensive. 8 I set out the evidence as to comparative costs of an easement through No. 6 Bayside Street and No. 9 Bayside Street. In addition to the compensation of $10,000 sought by the proprietors of No. 9 Bayside Street, there will be legal costs which, I understand, are already in the vicinity of about $3,000, there will be the payment of the valuation fee and there will be the construction costs of which there is some evidence that they are in the vicinity of $9,320. 9 Mr Kingsbury-Carr also suggests that construction through No. 9 Bayside Street would be less satisfactory when compared to the alternative at No. 6 Bayside Street due, in particular, to the need for an angle in the drainage pipe within the easement. However, there would also be a need for at least one and probably two angles in the pipeline which would need to be laid within No. 6 Bayside Street: one at the entry point at the upper end of the easement and another at the bottom end of the easement in order to enable the pipe to exit to the kerb. That is, the proposal will most likely involve two changes of direction in the drainage line as opposed to at least one and perhaps two changes of direction in the alternative proposal within No. 9 Bayside Street. 10 I note that the applicant's hydraulic engineer, Mr J B Gorringe, said in his oral evidence that it is possible to run a pipe under the brick fence that stands between the two properties No. 9 Bayside Street and No. 18 Frazer Street. It is nevertheless said, that it would be cheaper and easier for the easement to be provided over No. 6 Bayside Street, the construction costs of which are said to be in the order of $2,970. 11 None the less, there is a dispute as to the compensation which would be payable. The applicant's valuer says that this should be $1,500, whereas the respondent's valuer says it should be $10,000 made up as to $8,000 for the blot on the title and $2,000 for disturbance. 12 Section 40(8) of the Land and Environment Court Act 1979 requires the applicant for the order to pay the costs of the proceedings subject to any order of the court to the contrary. Those costs would include the valuation fee incurred by the respondents. There is also a number of services in the vicinity of the proposed easement within No. 6 Bayside Street. These include the existing stormwater line to the street, Telecom cables, including Foxtel connection, gas supply pipes and fencing supports. 13 Although Mr Kingsbury-Carr questions the presence of these services, I accept without question the evidence of Mr Gioia, the first respondent, who has personally observed both the stormwater pipes and the gas pipes in situ. The presence of these services may present some difficulties in implementing the applicant's proposal. I thus find that the merits of the two alternative routes are nicely balanced. 14 The position where there is more than one possible route for an easement to satisfy a necessity was analysed by Brereton J in Khattar v Wiese [2005] NSWSC 1014 at [30] to [32]: [30] …In this case, the proposed development is impossible without the easement or an easement to like effect. It follows that an easement is reasonably necessary for the use or development of the plaintiffs' land. But this is not conclusive of whether the proposed easement is reasonably necessary: two subsidiary issues require to be addressed. [31] First, where, as here, there is more than one possible course for an easement to satisfy the necessity, a further question arises as to whether the particular proposed easement is reasonably necessary. A similar problem confronted Hamilton J in Tregoyd Gardens [ Tregoyd Gardens Pty Ltd v Jervis (1997) 8 BPR 15,845]. In that case, the plaintiff's need for an easement could have been satisfied by an easement over either of two properties ("the Jervis land" and "the Barbalace land"). In rejecting the Jervis' contention that reasonable necessity had not been made out (in respect of an easement over their land), and that other possible alternatives (in particular, an easement over the Barbalace land) had not been negatived, Hamilton J said that it could not be the intention of the Act that, if an easement would be equally efficacious over two pieces of land, it could not be granted over either, just because it could not be said that it was necessary for it to be granted over one as opposed to the other (emphasis added):- However, only three alternatives are mentioned in the evidence. The first is the scheme for pumping uphill which the Council will not countenance. The only other schemes are for a drainage line to carry the water away downhill which, as set out above, to be possible, must pass through either the defendants' land or the Barbalaces' land. It is reasonably necessary that it must pass through one or the other; although the difference between the two is not great, it is in my view easier and more convenient on the evidence that it pass through the defendants' land than through the Barbalaces' property. It cannot be the intention of the Act that if an easement would be equally efficacious over two pieces of land it cannot be granted over either because it cannot be said that it is necessary for it to be granted over that piece of land as opposed to the other . In these circumstances I am of the view that the plaintiff has established reasonable necessity as claimed by it and I so find. [32] I respectfully agree with Hamilton J that the purpose of s.88K would be defeated if, it being equally efficacious to obtain an easement over either of two lots, it could then be said that it was not necessary for it to be obtained over one or the other of them. In such a situation, the applicant may, within reason, select that lot over which it desires to acquire an easement. This may require the court to undertake some evaluation of the alternatives, in order to be satisfied that the applicant's proposal is reasonable as between them, but this need not involve a precise assessment of the respective advantages and disadvantages of each course, nor necessarily acceptance that the applicant's preferred course is objectively superior to the alternatives, so long as it is reasonable. In this, the court may be guided by the inference that an applicant will ordinarily pursue that course which offers the greatest practical and economic advantages for the development, and incur the least liability to pay compensation: a developer's economic interests will powerfully influence it to select the most reasonable course. 15 These statements were adopted in this Court by Biscoe J in Property Partnerships Pacific Pty Ltd v Owners Strata Plan 58482 [2006] NSWLEC 709 at [15]: Although Khattar v Wiese was a case which arose under s 88K of the Conveyancing Act 1919 , I have previously held that there is no material difference between s 40 of the Land and Environment Court Act and s 88K of the Conveyancing Act : see Antipas v Kutcher (2006) 114 LGERA 289 at [28]. 16 In Khattar, Brereton J also noted, at par [54], that in Tregoyd Gardens Pty Ltd v Jervis (1997) 8 BPR 15,845, Hamilton J held that if an easement over alternative land would have the same effect as the proposed easement, then the applicant is obliged to seek and make all reasonable attempts to obtain the alternative grant. His Honour said at [54]: This construction is consistent with the policy that compulsory imposition of an easement and expropriation of property rights should be a last resort and an applicant should first be required to take all reasonable steps to obtain an alternative solution. 17 What sets this case apart from other cases where there are alternative routes for an easement is that the owner of the land comprising the alternative route has, without any element of compulsion or coercion, offered an easement to the applicant on terms which are not unreasonable. 18 In my view, the applicant has not satisfied the court that the easement that is presently sought over the respondent's land, is reasonably necessary for the development to have effect in accordance with the consent. Subsection 40(2)(d) requires that all reasonable attempts be made by the applicant to obtain the easement – or an easement to the same effect. In my view, the applicant has not made all reasonable attempts to obtain an easement having the same effect, namely, she has not taken up the offer of the proprietors of No. 9 Bayview Street of an easement over that property. I note that the offer, on such evidence as is before me, remains open. The differences in cost between an easement within No. 6 Bayside Street and an easement within No. 9 Bayside Street are not so great that it would justify the loss of a valuable property right when there is evidence that the proprietors of the adjoining property at No. 9 Bayside Street have offered to grant an easement having the same effect. 19 Valuable property rights should not be lightly interfered with and what is sought is an extremely valuable right: see Hanny v Lewis (1998) 9 BPR 16,205. In my view, those rights should not be set aside in the present case where a reasonable alternative exists to that which the applicant presently seeks. It therefore follows that the application must be dismissed. 20 The formal orders of the Court are: (1) The application is dismissed. (2) The applicant is to pay the respondents' costs on a party/party basis. (3) The exhibits may be returned. I hereby certify that the preceding 20 paragraphs are a true copy of the reasons for judgment herein of the Honourable Mr Justice D H Lloyd. Associate ********** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.