Reported Decision : 151 LGERA 64 New South Wales Supreme Court CITATION : Etwell & Anor v Newcastle City Council [2006] NSWSC 1165 HEARING DATE(S) : 3 November 2006 JUDGMENT DATE : 3 November 2006 JURISDICTION : Equity Division JUDGMENT OF : Palmer J EX TEMPORE JUDGMENT DATE : 11/03/2006 DECISION : Order for easement should be made upon terms; no compensation payable; plaintiffs to pay defendant's costs. CATCHWORDS : REAL PROPERTY – EASEMENT – COMMUNITY LAND – Whether right of carriageway over community land reasonably necessary for effective use of private property – whether Court should impose terms as to release of easement in future – whether compensation should be ordered – whether applicants should pay defendant's costs of application. LEGISLATION CITED : - Conveyancing Act 1919 (NSW) – s.88K - Local Government Act 1993 (NSW) – s.45, s.46, s.47 - Durack v de Winton (1998) 9 BPR 16,403 CASES CITED : - Marshall v Council of the City of Wollongong (2000) 107 LGERA 73 - Tregoyd Gardens Pty Ltd v Jervis (1997) 8 BPR 15,845 Stephanie Claire Etwell – First Plaintiff PARTIES : Andrew Cyril Etwell – Second Plaintiff Council of the City of Greater Newcastle – Defendant FILE NUMBER(S) : SC 2886/05 COUNSEL : S.D. Harvey (Sol) – Plaintiffs M.C. Fraser – Defendant SOLICITORS : Harvey Law Firm – Plaintiffs Levitt Robinson – Defendant 2886/05 Etwell & Anor v Council of the City of Greater Newcastle JUDGMENT 3 November, 2006 Introduction 1 The Plaintiffs seek an order under s.88K of the Conveyancing Act 1919 (NSW) imposing a right of carriageway over land owned by the Defendant. 2 The Plaintiffs are the registered proprietors of a residential property known as 120 Bridges Road, New Lambton, being the land contained in Identifiers 102/20217 and 1/23324 ("the Property"). At the rear of the Property is a small and dilapidated garage. For many years access to that garage has been gained via a gravel track leading across a section of land which adjoins the southern boundary of the Property. That land is part of a public reserve called Alder Park, which is owned by the Defendant and which is classified as community land under the Local Government Act 1993 (NSW). 3 The Plaintiffs wish to replace the old garage on their Property with a new garage. They have lodged a development application with the Defendant for that purpose. The Defendant requires that a right of vehicular access to the new garage be demonstrated before the development application can be granted. 4 It is not in dispute that vehicular access to the rear of the Plaintiffs' Property and to the garage cannot be gained from the street frontage as the house on the Property is built far too close to the side boundaries. The only pragmatic means of vehicular access to the rear of the Property and to the garage is via the track across the section of Alder Park adjoining the southern boundary of the Plaintiffs' Property. 5 On 9 November 2004 the Plaintiffs' solicitor wrote to the Defendant requesting that it grant to the Plaintiffs a right of carriageway over the track giving access to the garage under s.88K of the Conveyancing Act and offering to pay compensation. The position and the dimensions of the proposed easement are as shown in a plan prepared by a surveyor which is now Schedule 1 to the Plaintiffs' Summons. The terms upon which it is proposed that the easement be granted are also set out in Schedule 1. 6 On 9 November 2004 the Defendant wrote to the Plaintiffs' solicitor advising that, as Alder Park is classified as community land under the Local Government Act, the Defendant has no power to grant the easement requested. 7 It is not in dispute that the Defendant has no power to grant the easement requested by the Plaintiffs under the Local Government Act. It is prevented from doing so by s.45 of the Local Government Act and none of the exceptions in s.46 and s.47 apply. It is not in dispute that the only way in which the easement required by the Plaintiffs can be created is if this Court, in the exercise of its discretionary power, makes an order under s.88K(1) of the Conveyancing Act. Both parties accept that s.88K applies to community land under the Local Government Act: Marshall v Council of the City of Wollongong (2000) 107 LGERA 73. 8 The parties have generally agreed upon the issues for determination in this application as follows: i) whether the proposed easement is reasonably necessary for the effective use or development of the Plaintiffs' land; ii) whether the Court should exercise its discretion to grant the easement; iii) if the easement is to be granted, what ought to be the terms of the easement; iv) what compensation ought to be paid; v) who should bear the costs of this application. 9 As to compensation, the Plaintiffs submit that in view of the benefits provided to the Defendant by the Plaintiffs in the proposed terms of the easement, the Court should discount heavily the compensation which otherwise might be payable. 10 As to costs, the Plaintiffs say that, because the Defendant had no power to grant the easement sought pursuant to a negotiation, it was impossible for this application to be resolved other than by recourse to this Court, so that there should be a departure from the prima facie incidence of costs for such an application as stipulated in s.88K(5). The Defendant says that no departure from the usual order is warranted. Description of relevant land 11 For the sake of convenient reference I will refer to that part of Alder Park over which the easement is sought as the servient tenement. The servient tenement is a grassy strip of land a little more than 10m wide and just over 35m long, fronting Bridges Road and leading into Alder Park. Alder Park is divided into two parts by a large stormwater channel running through it. The smaller part is triangular and the Plaintiffs' property and adjoining properties fronting Bridges Road back on to it. According to the evidence, no organised sport is played in this smaller part of Alder Park. It is used by the public for walking dogs and general recreation. The only access to this part of Alder Park from Bridges Road is via the servient tenement. One crosses from the smaller part of Alder Park to the larger part by a small bridge over the stormwater channel. 12 The larger part of Alder Park is of much greater size than the smaller part. Aerial photographs show that it is marked up with at least three playing fields. It is clear from the evidence that these playing fields are regularly used by sporting clubs and associations, such as the Little Athletics Association and a junior soccer club. 13 The evidence shows that the Plaintiffs' house was built more than forty-six years ago and that for the whole of that time the servient tenement has been used as the means of gaining vehicular access to the garage at the rear of the Plaintiffs' property. There is no suggestion in the evidence that the Defendant was ever unaware of this use, or that it ever had any objection to it. 14 Photographs of the servient tenement show that the grass covering the area is mown and well kept, and that there is a rough gravel track running almost through the middle of it parallel to the northern boundary and swinging around to give access to the Plaintiffs' Property towards its western boundary. There are a few shrubs along the southern boundary. There is a ramp from Bridges Road and there is no impediment to the public driving on to the servient tenement or walking across it to Alder Park. 15 The terms of the proposed easement do not give the Plaintiffs any right to exclude the public from the track. The easement would not change the use of the servient tenement by the public in the slightest way: the Plaintiffs would continue to use the track for vehicular access and the public would continue to walk unimpeded across the servient tenement to Alder Park. There is no evidence that the Defendant presently has any proposal, either now or in the future, for the use of the servient tenement in any way different from the use to which it has been put for at least the past forty-six years. Whether easement reasonably necessary 16 Section 88K relevantly provides: " 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." 17 The principles relevant to whether or not a proposed easement is reasonably necessary for the effective use of property have been usefully summarised by Einstein J in Durack v de Winton (1998) 9 BPR 16,403, at 16,448-9, as follows (omitting citations): "1. The words "reasonably necessary" in s 88K(1) do not mean "absolutely necessary". The requirement may possibly be satisfied even when the plaintiffs' land could be effectively used or developed without the easement; 2. The proposed easement must be reasonably necessary either for all reasonable uses on developments of the land, or else for some one or more proposed uses or developments which are at least reasonable as compared with the possible alternative uses and developments; 3. In order that an easement be reasonably necessary for a use or development, that use or development with the easement must be at least substantially preferable to the use or development without the easement; 4. The continued use of the word 'necessary' means something more than mere desirability or preferability over the alternative means available. It is always a matter of degree; 5. Reasonable necessity is to be determined objectively. The question of reasonable necessity has to be decided in the light of the present circumstances, taking into account the factual position at the time of the making of the order, as opposed to the court being confined to taking into account only the facts at the time the court proceedings were commenced; 6. The application should be approached with caution, having regard to the fact that a compulsory change of registered property rights is sought and that this is not lightly to be undertaken." 18 The Defendant submits that vehicular access to the rear of the Plaintiffs' property for parking is not reasonably necessary for the effective use of the Property because: – parking is available in Bridges Road directly outside the Property; – there is adequate space in the front garden of the Property to bring a car off Bridges Road and park it in the front garden; – the Second Plaintiff, Mr Etwell, conceded in cross examination that parking at the rear of the Property was "not essential but preferable" . 19 I am unable to accept these submissions. Bridges Road is a four lane arterial road. I accept the unchallenged evidence of Mr Etwell that it is a busy road and that there are times when it is very difficult or impossible to find parking outside his house. This is because there is a popular fast food outlet on Bridges Road a short distance from the Plaintiffs' property. Further, there are often sporting events at Alder Park which attract crowds. There is no parking area provided for Alder Park. People park in Bridges Road outside the Plaintiffs' house and walk through the servient tenement to gain access to these sporting events. 20 I accept that there is adequate space to bring one car off Bridges Road and park it in the front garden of the Plaintiffs' property but the space is just barely adequate. Photographs show that the front lawn of the Property is very small. Further, there is space only to bring one car off the street. The Plaintiffs both work and both have cars. 21 Because of the location of a telegraph pole and a tree at the front of the Property, the only place to bring a car on to the Property is on the front northern boundary. A family size car and a driveway to accommodate parking would take up a considerable proportion of the space in the front garden presently devoted to greenery. Further, it appears that water connections may have to be moved if such a driveway was to be brought in to the Property as there is a water meter directly in the path of the only convenient point of entry from Bridges Road. 22 Finally, if the Plaintiffs had to park in their front garden they would either have to leave the car out in the open and exposed to passers-by, or seek the Defendant's consent to build a carport or garage in an already small garden. 23 The Defendant relies on the statement made by Mr Etwell in cross examination that parking at the rear of the Property is "not essential but preferable". The Defendant says that this concession shows that there is no need for parking beyond "mere desirability", to quote a phrase used by Young J (as he then was) in Tregoyd Gardens Pty Ltd v Jervis (1997) 8 BPR 15,845. 24 I cannot take Mr Etwell's opinion as to what is preferable or desirable as the test for what is reasonably necessary for the purposes of s.88K(1). The Court must form a conclusion based upon objective considerations, not on the subjective views expressed by parties. 25 In the present case it is quite true that parking for vehicles coming to the Plaintiffs' property, and for the Plaintiffs' vehicles as well, may be found on Bridges Road, or even in the front garden of the Property. Vehicular access to the Property via the servient tenement is in this sense not essential, nor is it an absolute necessity. But, as I have noted above, essentiality or absolutely necessity are not the tests for an order under s.88K(1). 26 It seems to me that in considering the question of what is reasonably necessary for the effective use of a proposed dominant tenement, one must consider not only the use of the dominant tenement with and without the proposed easement, but one must also consider the effect on the use and enjoyment of the servient tenement if the easement is created. Only by weighing the effect of the grant on both tenements can one form a view whether the easement is "reasonably" necessary. 27 In the present case I am of the view that the ability to park vehicles in the Plaintiffs' garage at the rear of the Property is substantially preferable either to compelling the Plaintiffs to park in Bridges Road or to compelling them to use a substantial proportion of their front garden for parking. The Plaintiffs have a small child. It does not take a great deal of foresight to envisage safety issues for the Plaintiffs' child, and perhaps other children, if children were required to gain access to a family car by going on to a busy arterial road such as Bridges Road. In addition, for the reasons which I have mentioned, easy parking in Bridges Road is not always obtainable, either at busy traffic times or when a sporting event is in progress in Alder Park. 28 I do not see that using a substantial portion of the Plaintiffs' small front garden for parking is a reasonable alternative to using the much larger and much safer area at the rear of the Plaintiffs' property. 29 In reaching these views I take very much into account that if the easement is granted in the terms which I propose there will be no discernible change in the use of the servient tenement from its use over the past forty-six years or more. Nor will there be any impediment to its use for public purposes in the future. All that will change is that the Plaintiffs' ability to use the servient tenement will be transformed from a mere licence at the will of the Defendant, revocable without notice, into a right at law. Discretionary considerations 30 The Defendant urges that the Court should not, in the exercise of its discretion, change the Plaintiffs' use of the servient tenement from a mere permission into a legal right. Mr Fraser, who appears for the Defendant, in his helpful argument strongly submits that the servient tenement is community land reserved for public purposes and that there is no need to change the Plaintiffs' ability to use it, in common with other members of the public, into a private right. He says that such a change would be inconsistent with the public interest which the Court is required expressly by s.88K(2)(b) to consider. 31 The Court never makes an order under s.88K(1) lightly. The Court must be particularly cautious when the proposed servient tenement over which the easement is sought is community land. That land has been designated as being retained for the benefit of the public for the indefinite future. Its appropriation for private use by recourse to s.88K must be jealously scrutinised. 32 The Plaintiffs' solicitor, Mr Harvey, in his capable submissions, places strong reliance on the decision of Bryson J in Marshall v Council of the City of Wollongong, in which the Court made an order under s.88K(1) granting an easement over community land. On the other hand, Mr Fraser says that the facts of that case were significantly different from the facts of this case. In Marshall the community land over which the plaintiff sought an easement was, by virtue of its difficulty of terrain and its environmental sensitivity, such that it was not practical for the council to develop it for any form of use by the general public: see esp. at p.79. 33 The servient tenement in the present case could not be said to fit that description. It is certainly conceivable that at some time in the future the Defendant will wish to put the servient tenement to a particular use which will conflict with the easement which is now sought by the Plaintiffs. 34 I do not think that it is in the public interest that an easement be created under s.88K(1) over community land so as to confer private rights which are any greater than they need to be to meet the uses to which both the dominant tenement and the servient tenement are put at the time of the order.. 35 Under s.88K(3) the Court is to approve the terms upon which the easement is created. In the present case the Plaintiffs volunteer a term to the effect that if they redevelop or subdivide their Property in the future they will release the easement. This is an entirely appropriate term to protect against the unnecessary retention of a private right over public land. If the Plaintiffs redevelop the Property, it will be up to them to do so in a way which permits them access to the rear of the Property without recourse to public land. 36 However, I would go further to protect the public interest. As a condition of making an order under s.88K, I would require the Plaintiffs to consent to the inclusion of a term in the easement to the effect that if the Defendant requires the servient tenement for a particular use which is inconsistent with retention of the easement, the Plaintiffs will release the easement to the extent necessary to give effect to that purpose. If this condition also is embodied in the terms of the easement, I am satisfied that the easement will not be inconsistent with the public interest as required by s.88K(2)(b). 37 Finally, on the issue of discretion I have had regard to two objections from members of the public to the creation of the proposed easement. Both of those objections misconceive the use and extent to which the servient tenement would be put if the easement is granted. I do not think that those objections should be given any weight in the exercise of the Court's discretion. Compensation 38 Section 88K(4) requires the Court to order the applicant to pay compensation to the owner of the servient tenement "unless the Court determines that compensation is not payable because of the special circumstances of the case". In the present case, the parties' valuers have valued the servient tenement at $10,900. However, the Defendant concedes that if, as is proposed, the easement not be granted in perpetuity but, rather, is to be extinguishable in certain circumstances which are highly likely to occur at some time in the future, then it is not appropriate to order payment of a lump sum as compensation. Rather, the Defendant submits that something akin to an annual licence fee should be paid for the duration of the easement. The Defendant suggests the sum of $520 per annum. 39 The Plaintiffs, by the terms of the easement, propose to make themselves liable for the maintenance of that part of the servient tenement over which the easement is to run. They offer to indemnify the Defendant in respect of claims and liabilities arising in respect of the grant of the easement. 40 I take into account that the terms of the proposed easement give the Defendant rights and benefits which it did not have in respect of the use of the servient tenement over the past forty-six years. I take into account that the Defendant cannot use the servient tenement for any commercial purpose, nor can it otherwise derive a rent or commercial benefit from it. No cost or other disadvantage has been suggested by the Defendant as flowing from the grant of the easement in the terms proposed by the Plaintiffs, particularly as the easement will be released when the Defendant commences construction of a development on the servient tenement, or puts it to a particular use, which is in conflict with the continued existence of the easement. 41 It seems to me that there are special circumstances in this case which justify the conclusion that no compensation should be ordered. In my view, the Defendant will be sufficiently protected by the grant of rights and benefits in respect of the servient tenement and ought not to receive in addition a windfall in the guise of compensation for a loss or damage which it will not suffer. Costs 42 The Plaintiffs submit that there should be a departure from the usual order for costs which is envisaged by s.88K(5). They say that this was a case in which negotiation to achieve a reasonable result was impossible because the Defendant had no power to accede to their request. Accordingly, recourse to the Court under s.88K was the only means whereby the Plaintiffs could achieve their object in obtaining the easement. 43 I do not regard this as a sufficient reason for departing from the usual order for costs which is stipulated in s.88K(5). Certainly, this is a case where it was necessary to come to the Court for the grant of the easement proposed; the Defendant could not have avoided the costs of the application by agreeing to the Plaintiffs' request for an easement, no matter how much it would have liked to do so. 44 However, it remains the fact that the Plaintiffs are seeking a private right over public land – a right which is not available unless an application to the Court is made under this section. It does not seem to me appropriate or fair that the Defendant, and therefore the public purse, should bear the cost of the Plaintiffs seeking and obtaining a private right for their own benefit. 45 I do not think that this is a case which is outside the considerations which lead to the usual order for costs stipulated in s.88K(5). Accordingly, the costs order which I will make in these proceedings is that the Plaintiffs pay the Defendant's costs of the application. Orders 46 Because it will be necessary for the Plaintiffs to reformulate the terms of the easement to incorporate the additional provision to which I have referred in the judgment if they wish the order to be made, I will stand these proceedings over for a short time to enable the Plaintiffs to bring in Short Minutes of Order. If those Short Minutes of Order are acceptable to the Defendant then there is no necessity to come back to me for the making of final orders. The matter can be finalised by consent orders before the Registrar. 47 Accordingly I will, in the first instance at least, stand the matter over to the Registrar's list at a time to be agreed. If there is any difficulty in formulating the Short Minutes of Order, the matter may be brought back to me by application to my Associate. – oOo – 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.