Land and Environment Court New South Wales Medium Neutral Citation: A.T.B. Morton Pty Ltd v Community Association DP270447 (No 3) [2018] NSWLEC 135 Hearing dates: 30 August 2018 Date of orders: 31 August 2018 Decision date: 31 August 2018 Jurisdiction: Class 3 Before: Robson J Decision: See orders at [16] Catchwords: EASEMENTS – parties unable to agree on final orders and terms of easement as directed by the Court – hearing on appropriate terms to give effect to earlier judgment of the Court – whether term requiring servient tenement to give consent for development applications should be made – final orders entered Legislation Cited: Conveyancing Act 1919 (NSW) s 88K Cases Cited: A.T.B. Morton Pty Ltd v Community Association DP270447 (No 2) [2018] NSWLEC 87 Lowe v Kladis [2018] NSWCA 130 Rainbowforce Pty Limited v Skyton Holdings Pty Limited [2010] NSWLEC 2; (2010) 171 LGERA 286 Sertari Pty Ltd v Nirimba Developments Pty Ltd [2007] NSWCA 324; (2008) NSW ConvR 56-200 Category: Principal judgment Parties: A.T.B. Morton Pty Ltd (Applicant) Community Association DP270447 (Respondent) Representation: Counsel: A M Pickles SC with J McKelvey (Applicant) P Tomasetti SC with A Hemmings (Respondent) Solicitors: A.T.B. Morton Pty Ltd (Applicant) O'Hearn Lawyers (Respondent) File Number(s): 2016/00153777 Publication restriction: Nil Judgment 1. On 7 June 2018, I published my reasons in A.T.B. Morton Pty Ltd v Community Association DP270447 (No 2) [2018] NSWLEC 87 ('principal judgment'), in which I held that the Court's power to order an easement pursuant to s 88K of the Conveyancing Act 1919 (NSW) ought to be exercised in favour of the applicant, subject to some changes in the terms of the easement sought by the applicant. 2. At [250] of the principal judgment, I directed that the parties prepare agreed short minutes of order and the terms of an easement reflecting my findings. In the event that agreement could not be reached, I directed that the matter would be listed for mention on 28 June 2018. 3. Agreement not being reached, the matter came before the Court on 9 August 2018, on which date I gave further directions for the preparation and filing of submissions and listed the matter for further hearing on 30 August 2018. On that date, the Court heard further submissions in respect of the final terms of the easement originally sought by the applicant. 4. The applicant has prepared draft terms of the easement, which amend the terms earlier sought (extracted at [4] of the principal judgment), which it says give effect to my findings in the principal judgment by: 1. Inserting term 1(b) to limit the number of truck movements permissible under the easement to 50 per day (see the principal judgment at [219]); 2. Amending term 2A to require the gate at the northern end of the easement to be locked except when in use unless otherwise permitted by the servient tenement in writing (see the principal judgment at [221]); 3. Amending term 4A to require each of the applicant and the respondent to pay 50% of the road maintenance and costs (see the principal judgment at [225]); and 4. Deleting term 5 (see the principal judgment at [226]). 1. In a letter sent by its solicitors on 22 August 2018, the respondent advised that the following issues remain: 1. The easement makes no provision for the number of truck movements through the servient tenement to be monitored and controlled; 2. The easement makes no reference to how it is proposed by the terms of the grant to prevent vehicles under three metres in height from accessing the easement; 3. The easement does not limit the number of keys for either gate that will be available in the public domain; 4. The easement does not stipulate who is responsible for unlocking and relocking the gates, how that can be assured, and who is to monitor compliance; 5. The easement provides no mechanism for arbitration of disputes and differences in the future between the dominant and servient tenements; 6. The easement provides no mechanism for the giving of notices or the resolution of any breaches of any covenant; and 7. The requirement for the servient tenement to have to consent to any development applications and modifications and planning applications is not reasonable, citing Lowe v Kladis [2018] NSWCA 130 ('Lowe'). 1. At the heart of the contentions raised by the respondent is a concern that the easement will run with the land and that any rights conferred by the easement will be taken up to their fullest extent having regard only to its terms. To the extent that the applicant has sought to provide assurances as to how the terms of the easement will be enforced, the respondent complains that such assurances relate only to the applicant and not its successors in title. 2. In response to the concerns raised in the respondent's letter of 22 August 2018, the applicant submits that the fact that the easement will run with the land means that it must be drafted in terms of performance outcomes rather than in terms of prescriptive measures. It also makes the following submissions in respect of each contention: 1. The manner of achieving the number of truck movements is a matter for the dominant tenement; 2. The way in which the height limit is enforced is a matter for the dominant tenement; 3. The respondent has not proposed any particular limit to the number of keys that may be made available. However, if the Court were minded to impose a limit, limit of ten keys for each of the dominant and servient tenements would be appropriate; 4. The draft terms of the easement currently provides for the dominant tenement to lock the northern gate when it is being used by trucks. It is to be expected that if a member of the servient tenement used the gate, it would ensure it was locked, particularly given the concerns expressed by the respondent in that regard; 5. There is no provision for the arbitration of disputes and such a provision would be unusual. The respondent has not proposed any such terms for consideration; 6. There is no provision for the giving of notices or resolution of disputes, and such a provision would be unusual. The respondent has not proposed any such terms for consideration; and 7. The requirement to give owner's consent is limited to consent for "works within the roadway". The drafting would be subject to any limitations in equity. Whilst the respondent has not proposed alternative terms, the Court may impose a limit on the requirement to give owner's consent so that it is limited to development applications or modification applications relating to the re-surfacing or strengthening of the existing roadway. The applicant does not consider this restriction necessary because the general law already recognises that such rights are limited to what is reasonably necessary to enable the effective use of the easement. 1. In the circumstance of that position having been expressed by the applicant, further communication ensued between the applicant and the respondent which resulted in the respondent's position before the Court on 30 August 2018 being that all of the terms of the easement, save for term 8, which provides that the servient tenement would be required to provide owner's consent for any development application for works within the roadway, are consistent with the principal judgment. 2. The respondent submits that term 8 should not be made for two reasons: 1. It is unnecessary given that the easement will carry obligations with respect to making future development applications: Sertari Pty Ltd v Nirimba Developments Pty Ltd [2007] NSWCA 324; (2008) NSW ConvR 56-200 ('Sertari'); and 2. There are limits upon the obligation of a servient tenement to provide owner's consent: Lowe. 1. In Sertari, Handley JA, with whom Tobias and McColl JJA agreed, said at [9]: The owner of a dominant tenement is entitled to construct improvements on the servient tenement where this is necessary or convenient for the exercise of the rights conferred by the easement. In Kirkjian v Towers (6/7/87 u/r) Waddell CJ in Eq held that the owner of the servient tenement could be ordered to consent to the lodgement of a development application for construction of improvements which are reasonably necessary for the proper enjoyment of the easement. This decision has been followed: 117 York Street Pty Ltd v Proprietors of Strata Plan No 16123 (1998) 43 NSWLR 504, 521-2; Owners Strata Plan No 50411 v Cameron North Sydney Investments Pty Limited [2003] NSWCA 5 para [23] per Giles JA. 1. In Lowe, Sackville AJA, with whom Meagher and White JJA agreed, said at [96]-[97]: [96] It follows from what has been said that the dominant owner has a commensurate right to enjoy the easement of carriageway free from substantial interference by a servient owner. In addition, the dominant owner has such ancillary rights as are reasonably necessary for the exercise or enjoyment of the easement. This is a common law principle but it has been applied to easements registered on the title to land under the Real Property Act 1900 (NSW). Thus in Hemmes Hermitage Pty Ltd v Abdurahman, this Court held that the owner of a dominant tenement was entitled to go onto the servient tenement beyond the boundaries of a footway, to undertake works necessary to maintain the trafficability of the right of footway. [97] The ancillary rights of a dominant owner include, where appropriate, the right to obtain the written consent of the owner of the servient tenement to the lodgement of a development application by the dominant owner. In Sertari, this Court held that such an order can be made where the development application is for the construction of improvements on the right of way which are reasonably necessary for the proper enjoyment of the easement. Mr Kladis relied on Sertari both in the Equity Division and in this Court to support his claim for relief against the appellants (some citations omitted). 1. The applicant made reference to the decision of Preston CJ of LEC in Rainbowforce Pty Limited v Skyton Holdings Pty Limited [2010] NSWLEC 2; (2010) 171 LGERA 286 ('Rainbowforce') in which his Honour said at [196]: The grant of an easement impliedly obliges the servient owner to give its consent to the making of an application for a statutory approval to undertake works within the easement over the servient tenement, being works for the purpose of which the easement was granted. However, it is appropriate to make the obligation express as a term of the easement. This was done in 117 York Street Pty Ltd v Proprietors of Strata Plan No 16123 at 522. Accordingly, I consider it is appropriate to impose a provision such as cl 5.1 in the s 88B instrument. 1. Having regard to the decisions in Sertari and Lowe, I consider that, in the circumstances of this case, there is force in the respondent's submission that term 8 of the proposed easement should not be made. This is because, first, the term is unnecessary given the ordinary position that the servient tenement would be required to give consent to a development application upon the easement, and secondly, because to the extent it is necessary, it would unreasonably infringe upon the servient tenement's rights as elucidated by the Court of Appeal in Lowe. 2. As such, in the present circumstances, I do not consider the passage in Rainbowforce to which I was directed by the applicant is of great assistance given that the concern of the respondent in relation to term 8 is that it exceeds rather than codifies the rights which the servient tenement would have at common law. The decision in Lowe shows that the common law position is subject to exceptions of which the wording of term 8 at least arguably fails to take account. 3. Accordingly, I propose to remove term 8 from the terms of the easement provided in Annexure A. As this was the only outstanding matter of dispute between the parties, it is appropriate to otherwise make orders in accordance with the Short Minutes of Order prepared by the applicant. Orders 1. The Court orders that: 1. Pursuant to s 88K(1) of the Conveyancing Act 1919 (NSW), an easement is to be imposed over the land identified in, and on the terms set out in, Annexure A to this judgment. 2. The applicant is to pay the respondent compensation in the amount of $262,000 in respect of the easement imposed in Order (1) above, to be paid upon registration of the easement. 3. The applicant is to pay the respondent's costs of the proceedings on a party/party basis as agreed or assessed. ********** Hexham Easement - Annexure A (200 KB, pdf) 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: 31 August 2018