Land and Environment Court New South Wales Medium Neutral Citation: Wren Investments Pty Ltd v Willoughby City Council [2011] NSWLEC 1167 Hearing dates: 28, 29 April 2011 Decision date: 10 May 2011 Jurisdiction: Class 1 Before: Brown C Decision: Appeal dismissed Catchwords: MODIFICATION: modify condition of consent to provide for alternate drainage design without need for acquisition of easement over downstream property Legislation Cited: Conveyancing Act 1919 Environmental Planning and Assessment Act 1979 Land and Environment Court Act 1979 Roads Act 1993 Cases Cited: Rainbowforce Pty Ltd v Skyton Holdings Pty Ltd (2010) NSWLEC 2 171 LGERA 287 Wren Investments Pty Ltd v Willoughby City Council [2006] NSWLEC 542 Category: Principal judgment Parties: APPLICANT Wren Investments Pty Ltd RESPONDENT Willoughby City Council Representation: APPLICANT Mr D Wilson barrister RESPONDENT Ms H Irish barrister APPLICANT Wilshire Webb Staunton Beattie RESPONDENT Malleson Stephen Jaques File Number(s): 10936 of 2010 Judgment 1COMMISSIONER: This is an appeal against the refusal by Willoughby City Council (the council) of an application to modify a development consent granted by the Court on 28 August 2006 ( Wren Investments Pty Ltd v Willoughby City Council [2006] NSWLEC 542 ) for the demolition of all existing improvements and the construction of a development for older people or people with a disability at 401A and 403 Mowbray Road Chatswood (the site). 2The condition in dispute is the deferred commencement condition in Schedule 1 to the consent that states: Documentary evidence of drainage easement. The applicant shall obtain and register in the Department of Lands and Property Information a drainage easement from one of its adjoining downstream properties to convey stormwater from the development to Council's underground system in Sharland Avenue Chatswood. (Reason: prevention of nuisance flooding). 3The applicant proposes that the deferred commencement condition be deleted and be replaced with a number of operational conditions that reflect a stormwater drainage disposal design prepared by Mr Bruce Kenny, the applicant's drainage engineer. The alternative drainage design involves: (1) amending the initial point of stormwater discharge into council's drainage system from Sharland Avenue to Mowbray Road, (2) constructing a mechanical pump out tank in the basement car park of Block C for stormwater collection to be connected to an on-site detention tank at the Mowbray Road frontage by a rising main, (3) an on site detention (OSD) outlet pipe connecting the OSD tank to the Mowbray Road kerb, (4) the construction of a new stormwater line from the Mowbray Road kerb, west along Mowbray Road, north along Beaconsfield Road and east along Sharland Avenue where it connects to the council's existing stormwater system. The proposed pipeline has a length in excess of 400 m. The evidence 4Engineering evidence for the council was provided by Mr Eric Cheang the Group Leader - Development Engineering with the council. He opposes the applicant's amended stormwater design on the basis that the pump out system is contrary to Pt C.5 - Waste Management of the Willoughby Development Control Plan (the DCP) in that the DCP provides that stormwater "will be discharged under gravity either directly or via an easement....". The proposed pump out system could be affected by failure of the system through a loss of power with the resultant consequence being the car park and the lower ground level could be flooded and excess stormwater could be discharged on to downstream properties. The DCP does allow for pump out of stormwater but only in exceptional circumstances and only for single residential dwellings where physical constraints make it impossible to drain stormwater under gravity. 5Mr Cheang further states that adequate legal measures to compulsorily acquire an easement through s 88K of the Conveyancing Act 1919 have not been undertaken by the applicant. 6In the event that the Court adopts the applicant's stormwater drainage design, Mr Cheang states the design does not provide sufficient detail to allow a proper assessment of any impacts. He states that deferred commencement conditions are necessary to address the internal aerial piping system, to provide a Review of Environmental Factors in order to consider whether the proposed stormwater management system can be carried out in accordance with Pt 5 of the Environmental Planning and Assessment Act 1979 and to submit an application under s 138 of the Roads Act 1993 . 7Engineering evidence for the applicant was provided by Mr Bruce Kenny. He stated that the proposed design is generally consistent with the approach adopted in condition 7 of the consent where a basement stormwater pump and system was required. 8Mr Kenny did not agree with the concerns of Mr Cheang about the potential problems with the failure of the pumps and the potential flooding impacts although he conceded that if given the choice, disposal of stormwater by gravity was more desirable than a pump out system. 9Mr Wilson, the counsel for the applicant, submitted that the applicant has undertaken exhaustive consultation with downstream owners with the view of obtaining an easement, however all attempts were unsuccessful. Details of the correspondence to obtain the easement were provided to the Court as exhibit F. Findings 10Put simply, the council's position is that the deferred commencement condition requiring the acquisition of an easement should remain however if the Court was of the opinion that the amended drainage proposal was appropriate, new deferred commencement conditions should be imposed as the existing details of the amended drainage design are insufficient for the impacts to be fully assessed. 11The applicant's position is that the deferred commencement condition requiring the acquisition of an easement should be deleted and the amended drainage design included as operational conditions rather than deferred commencement conditions. Given that the deferred commencement condition has to be satisfied by 16 August 2011 for the consent to be operational, Mr Wilson opposes any deferred commencement conditions. 12In considering the opposing evidence of Mr Cheang and Mr Kenny, I prefer the conclusions of Mr Cheang for a number of reasons. First, no attempt has been made to obtain an easement under s 40 of the Land and Environment Court Act 1979 (the LEC Act) or s 88k of the Conveyancing Act 1919 notwithstanding that the approval was granted in July 2006. In this regard, the judgment relevantly states [at par 8], Stormwater drainage (issue 7) was in dispute even though the applicant provided details of disposal of a theoretical stormwater through an easement to Sharland Avenue. The Court was advised that the final stormwater design would be subject of negotiation of an easement through one of a number of downstream properties or in the even that this could not be achieved, action through s 40 of the Land and Environment Court Act 1979 to obtain an easement. A deferred commencement condition addresses this issue of stormwater disposal together with operational conditions. I accept that this is an appropriate way of dealing with this issue. 13This was a commitment made by the applicant and accepted by the council and the Court, as part of the approval of the development application. In accepting that circumstances may change over time, the alternative of seeking an easement through s 40 of the LEC Act was not pursued, despite the time available for these proceedings to be commenced and finalised. 14Second, I do not accept that the terms of condition 7 of the development consent provide any warrant for the proposed design. Condition 7 states: 7. Drainage System for Basement Carpark . Provision of a basement stormwater pump out system for the driveway ramp, runoff and subsoil drainage. The system is to comprise two submersible type pumps and be designed for the 100 year runoff, have an emergency alarm system and in accordance with the procedure used in AR&R 1997 BK8 F19 1.4. The two (2) pumps shall be designed to work on an alternate basis to ensure that both pumps received equal usage and neither remains continuously idle. The system is to include a holding well which has storage capacity equivalent to the runoff volume from a 2 hour, 100 year ARI storm event so that the basement is safeguarded from flooding during power failure for such a storm over such a period. Design drawings which include holding well volume calculations inflow and outflow calculations, pump specifications and duty curves are to be prepared by a suitably qualified and experienced hydraulic/civil engineer and submitted to the council for approval prior to the issue of the construction certificate (Reason: Prevent nuisance flooding). 15While condition 7 provides for a "basement stormwater pump out system" it is limited to the driveway ramps and subsoil drainage. Importantly condition 7 needs to be read in conjunction with condition 8 that states: 8. Stormwater Management Plan . Prior to issue of the construction certificate, the applicant must submit for approval by council scale construction plans and specifications in relation to the stormwater management and disposal system for the development. The construction drawings and specifications are to be prepared by a suitably qualified and experienced civil/hydraulic engineer in accordance with the Council's Water Management Development Control Plan 35 and Technical Standards AS3500.2 and AS3500.3- Plumbing and Drainage Code and the BCA. The construction drawings and specifications must provide for the OSD and reuse tanks under the lower ground floor of the terraces of units 9 and 10. (Reason: Ensure compliance). 16If the two conditions are considered concurrently, the general thrust of the DCP and its previous manifestation ( Water Management Development Control Plan 35 ) is to provide gravity disposal of stormwater except for driveway ramp runoff and subsoil drainage. It was unclear from the evidence of Mr Cheang how condition 7 was included in the consent given the absence of a detailed drainage design at the development application stage. However, it remains a valid condition of consent. It does not however, excuse the applicant from the other provisions of the DCP particularly the important concept of gravity disposal of stormwater. 17Third, I accept an easement would be "reasonably necessary for the effective use or development of the benefited land "(see (3) below). While this is not an application for an easement; s 88K(1) of the Conveyancing Act 1919 provides the discretionary power to granting an easement. Preston CJ in Rainbowforce Pty Ltd v Skyton Holdings Pty Ltd (2010) NSWLEC 2 171 LGERA 287 [at 67] makes ten important points about the discretion available in s 88K(1) and while not all are relevant in this case, some provide some guidance in this case. The ten points are: (1) The power to impose an easement is made conditional upon satisfaction of the requirement in s 88K(1). Subsection (1) has been described as the governing subsection although the criteria in subsection (2) must also be met if an order is to be made. (2) The Court is required to stipulate in the order, the nature and the terms of the easement s 88K(3). (3) The enquiry directed by s 88K(1) is whether the easement is reasonably necessary for the effective use or development of the benefited land. (4) The easement is to be reasonably necessary for the effective use or development of that land, effective bears its ordinary dictionary meaning of "serving to effect the purpose; producing the attendant or expected result". (5) The easement is to be reasonably necessary for the effective use or development of the land itself, not merely the current proprietor's enjoyment of that land. (6) The requirement that the easement be reasonably necessary does not mean that there must be an absolute necessity for the easement. Reasonable necessity should be assured having regard to the burden of which the easement would impose, generally the greater the burden the stronger the case needed to justify a finding of reasonable necessity. (7) The precise consequence of applying the test of reasonable necessity to the effective use or development of the benefited land is not settled on the authorities. On one view the Court will take into account whether and to what extent use of development with the easement is preferable to use or development without the easement. (8) Reasonable necessity does not demand that there be no alternative land over which an easement could be reasonably, officiously imposed. Consequently, the Court may impose an easement even where an alternate route exists. (9) Reasonable necessity is to be determined in light of the circumstances at the time of the hearing of the easement application. (10) The requirement of reasonable necessity can be satisfied notwithstanding that some future action may be required in addition to obtaining the easement for the effective use or development land such as obtaining some statutory consent. 18In this case, I am satisfied that an easement is "reasonably necessary for the effective use or development of the land." I agree with Mr Cheang that the gravity disposal of stormwater is the preferred method of stormwater disposal because of the potential problems with pump out systems, except in exceptional circumstances. This was also a position accepted by Mr Kenny. I do not accept that exceptional circumstances occur in this case. 19I also accept that the availability of other methods of disposing stormwater, such as that proposed by the applicant, does not mean that the easement should not be provided, given the agreed preference for gravity disposal (see (6) and (8)). 20Fourth, I am not satisfied that full and proper negotiations have taken place with owners of the downstream properties. The applicant provided copies of correspondence between the applicant and the downstream owners of properties 16, 18, 18A and 20 Sharland Avenue commencing in January 1999. Ms Irish, barrister for the council, helpfully provided a prcis of the communications for each property in her written submissions. While the discussions on the acquisition of an easement started well before the subject development application, I note that only one valuation was provided by the applicant to the downstream property owners and this was dated 20 May 2010. There must be some doubt that any offers, prior to 20 May 2010, were realistic in the absence of any formal valuation for compensation for the easement. Evidence of negotiations is largely unhelpful if based on unrealistic offers of compensation. 21I also do not accept there can be any criticism made of any of the downstream owners in their discussions with the applicant. The owners have no obligation to agree to the imposition of an easement over their land. The onus rests with the applicant to come to an arrangement including reasonable compensation. If no agreement can be reached, opportunities are available through the LEC Act and the Conveyancing Act 1919 . The need for an easement was clearly known by the applicant long before the approval of the development application, based on the chronology of correspondence with downstream property owners. 22Fifth, I am not satisfied that the applicant provided sufficient evidence to indicate that there are physical reasons why an easement could not be created over one of the downstream properties. Expert arboreal evidence was provided by Mr Guy Paroissen for the council and Mr Andrew McGahey for the applicant on the potential impact of an easement on existing vegetation on downstream properties. In my view, their evidence was inconclusive or potentially unreliable as Mr McGahey had not inspected any downstream property, except for observations made from the street frontage and the subject site. Mr Paroissen had inspected only 16 Sharland Avenue from within the property. In any event, there was general agreement between the experts that in the event that a tree warranted retention and was located in the location of a potential easement, then tunnel boring of the pipeline was a potential solution to this particular problem. 23Sixth and while Mr Wilson explained the reasons for the applicant's desire to be free of any restrictive deferred commencement conditions of consent, I do not accept that this is a valid reason to depart from the widely accepted engineering practise of gravity disposal of stormwater. Interim findings 24The hearing was conducted on 28 and 29 April 2011 and the above findings handed down extemporaneously on 2 May 2011 however prior to the final orders being made, Mr Webber, for the applicant requested that the Court defer making any orders or treat the proposed orders as interim orders, as the applicant intended to make an application under s 40 of the LEC Act for an easement over a downstream property. Mr Webber was unclear as to the effect that any orders dismissing the appeal, in these proceedings, would have on any future application under s 40 of the LEC Act for an easement. Ms Irish, for the council, had no instructions, and as I understand, did not agree or oppose the application. 25It was ultimately agreed to that the matter was best referred to the Registrar on 10 May 2011 however at this time, the applicant advised the Registrar that the interim orders, contemplated on 29 April 2011, could be made. Orders 26Consequently, the orders of the Court are: 1. The appeal is dismissed. 2. The application to modify the development consent granted by the Court on 23 August 2006 ( Wren Investments Pty Ltd v Willoughby City Council [2006] NSWLEC 542) for the demolition of existing improvements and the construction of housing for seniors or people with a disability at 401A-403 Mowbray Road Chatswood is refused. 3. The exhibits are returned with the exception of exhibits 1, 10, B and C. G T Brown Commissioner of the Court 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. Decision last updated: 28 June 2011