Besmaw Pty Ltd v Sydney Water Corporation

Land and Environment Court (NSW)|1989-02-08|Before: Sheahan J, Mr J

The applicant ("Besmaw" or "the company") is the registered proprietor of lot 2 deposited plan 559922 ("the land"). As at the date of the acquisitions the land was used for the extraction of "construction sand" (Exhibit R5 p7), but it also had the benefit of a 1992 development consent for its redevelopment as a tourist resort complex, with associated residential and commercial developments, both of which uses require access to and from Captain Cook Drive. (See Exhibit R2 sec 3.5 and sec 5.5).

Sydney Water gave affected landowners preliminary notification of its acquisition proposals in regard to the sewer main project in late 1997, and advised its Minister (Exhibit A10) that the "timely completion of the new effluent pipeline" to Cronulla Sewerage Treatment Plant made it necessary for compound sites and easements to be available to its contractor at an early date.

Towards the end of the three-day hearing, the parties settled matter 30049, and the court made the relevant consent orders disposing of it on 6 December 2000. A copy of those orders is attached to this judgment.

In matter 30050, which concerns acquisition of an easement, there remained only some slight dispute between the parties in respect of the easement's market value, and the parties agreed upon the following amounts for "disturbance" items - $1,500 for valuation fees , $3,683.80 for legal costs, and $38.30 for disbursements, making a total of $5,222.10 (Exhibit R19).

However, there remained a major contest between the parties in respect of one item of "disturbance", claimed under the Land Acquisition (Just Terms Compensation) Act 1991 (the "JTC" Act), s 55(d) and s 59(f), which provide that "disturbance" includes: any other financial costs reasonably incurred (or that might reasonably be incurred), relating to the actual use of the land, as a direct and natural consequence of the acquisition.

The disputed claim for $1,515,900, representing the cost of providing an appropriate and adequate alternative access to the land was not seriously contested, as to quantum (Exhibit A6 Option B), but Besmaw's entitlement to recoup such costs was, and this judgment is principally concerned with that dispute.

"Land" is defined in the JTC Act to include "any interest in land", and this case turns upon the true interpretation of the rights or interest actually acquired by Sydney Water.

Compensation is payable once only under the JTC Act (see s 52).

The interest acquired in matter 30050 is defined in the Government Gazette notice of 27 November 1998 as "Easement for Sewerage Purposes more fully described in Memorandum 0535501 lodged at the Land Titles Office, Sydney".

The land is described as "All that piece or parcel of land containing 1527m2 in the Local Government Area of Sutherland Shire, Parish of Sutherland, County of Cumberland, and State of New South Wales, being part of Lot 2 in Deposited Plan 559922, and shown on Deposited Plan 268483, as 'PROPOSED EASEMENT FOR SEWERAGE PURPOSES 4.3 WIDE'…".

Easements affect only a very small proportion of (the northern portion of) Besmaw's land. The acquired easement ("SE2") is located adjacent and parallel to the southern boundary of an existing (1973) sewerage easement ("SE1"), 6.1m wide, which is itself south of other easements (see Exhibit R2 fig 2).

The evidence suggests the relevant pipeline has already been laid within the easement:

(a) on the basis that the restored land surface can withstand suitable traffic, and (b) with an estimated life expectancy of 50 years without serious failure requiring maintenance. (See Exhibit R2 sec 5.3).

Besmaw made clear in its provision of particulars (Exhibit R15 p18 par 4) that it was not asserting that its day to day business activity required Sydney Water's consent. Those activities were sand extraction, land rehabilitation and recreational activities. What was contended was that any alteration to the existing surface levels which were a consequence of its day to day business activities, would require prior consent and written approval - see Memorandum 0535501 par 1(c)(i) (Exhibit A2 doc 11 p2).

Besmaw asserts that the rights Sydney Water has now acquired are sufficiently broad to enable it to deny Besmaw physical access across the land affected by SE2, thus compelling the company to reorganise its sandmining enterprise, and its plans for the resort, and to construct an alternative access to and from Captain Cook Drive for the balance of the land.

Besmaw, therefore, claims that it should be compensated now for the cost to which it would be put in the event that the full entitlements acquired pursuant to the terms of SE2 are exercised, either by Sydney Water, or some later beneficiary of this acquisition, necessitating the construction of such an alternative access.

In response, Sydney Water claims that the rights of the acquiring authority regarding SE2 are, in fact, not wide enough, realistically, to exclude Besmaw, or some later owner of the land, from any real exercise of its proprietary rights.

Besmaw can never come back for more money if ownership of the easement, or any relevant exploitation policy regarding it, might change in the future. Its loss of rights is permanent, and any assurances given by Sydney Water regarding exercise of the acquired rights may be illusory, transient, and/or not binding on any of its successors.

Sydney Water asserts that it is unlikely to act in accordance with such rights as are asserted by Besmaw to have been acquired, other than in the most temporary of situations during maintenance, etc. works, and that the court should conclude or assume that the difficulty anticipated by Besmaw will not eventuate. That being so, no compensation is payable for the provision of a new access.

Sydney Water's solicitor wrote to Besmaw's solicitor on 3 December (Exhibit R16) in the following terms: Sydney Water instructs us to confirm - 1. that the new pipeline within the new easement area has been constructed taking into account the current use of your client's land, including truck movements - · across the new easement at the current entry and exit points, and · in some places along the new easement on the internal haul road, for purposes of the sandmining and landfill operations on Besmaw's land, and 2. that Sydney Water is of the opinion that the current use of your client's land is consistent with the terms of Memorandum 0535501, and 3. that Sydney Water has no reason to object to the current use of your client's land continuing. Please let us know whether your client would like our client to state its position in another document. We will reserve our client's right to tender this letter at the hearing of your client's easement compensation claim.

The court is left, therefore, to decide market value, and the following three main questions regarding the disputed "disturbance" claim: (a) On a proper interpretation of the rights acquired by Sydney Water, can it carry out its functions so as to deny Besmaw access from its sandmine across the easement SE2 to Captain Cook Drive? (b) What account, if any, should be taken, in the determination of compensation, of the currently stated intentions of Sydney Water as to the use it will make in the future of its easement? (c) What is the relevance to this case, if any, of various statutory provisions of the relevant Sydney Water Corporation legislation?

The court had the benefit of oral and written evidence from the following witnesses:

(a) For the Applicant (i) Cameron John Hubbard, Consulting Valuer (Exhibits A4, A5 and A7). (ii) Brian David Griffiths, an Engineering Associate, leading the Sydney Road Design Group of Connell Wagner Pty Ltd (Exhibits A6 and A8). (iii) (Arthur) Phillip Holt, Managing Director of the applicant company, which is a member of the "Holt Group" (Exhibit A9).

(b) For the Respondent (iv) Garry Allen Shiels, consultant Town Planner (Exhibit R2). (v) Kevin Joseph Gothard, Real Estate Consultant and Valuer (Exhibit R4). (vi) Steven Halias, a Valuer who provided his report (Exhibit R5) while working with the State Valuation Office. (vii) Bernard J G Phillips, Project Manager for the Kurnell project (Exhibit R3). (viii) Kevin Hanley, "Senior Project Manager with Sydney Water Property" (Exhibit R15). (Mr Hanley has worked for Sydney Water and its predecessors for some 30 years. He is a survey draftsman, not a lawyer, and has worked for 18 years in the section most relevant to easements).

Besmaw is entitled to the market value of the easement, but there is no clear means of determining the value of an easement (see JTC Act s 62). Before the court there are three alternative valuations of the market value ranging between $5,000 and $9,000. It would seem to the court appropriate that any benefit of the doubt, or difference of view, ought to be determined in favour of Besmaw in these circumstances.

In any event, although Sydney Water relied on a valuation of $7,600, it conceded (Mr Webster's written submissions p9) that it was appropriate that the full amount advanced by Mr Gothard on behalf of the applicant, namely $9,000, be awarded in respect of market value.

I will, therefore, allow $9,000 for the market value component of the claim in 30050.

I note at this point, in the context of the outstanding "disturbance" issue, that when assessing market value, Sydney Water said that regard was had to the fact that: the existing and proposed sewerage pipes will remain or be laid under the surface of the land and, therefore, will not detract from or cause damage or injury to the existing use, utility or physical appearance of the unaffected land,

the owner or occupier of the unaffected land being able to obtain access from Captain Cook Drive to that land on or over the acquired easements . (See Points of Assessment of Compensation filed 30 June 1999 par (b)(i) A and C).

the Statutory framework in which Sydney Water operates

The relevant legislation now controlling the operations of Sydney Water - established as a statutory State-owned corporation by s 4 - is the Sydney Water Act 1994. Sections 7ff deal with the transfer to the corporation (or a subsidiary) of its predecessor's undertakings, assets, rights or liabilities, relating to water supply, sewerage, drainage and related purposes.

Sections 12ff provide for the Governor to grant "operating licenses" to the corporation. A maximum initial term of 5 years is stipulated in s 17, and certain terms and conditions which such licences "must include" are set out in s 14(1). They relevantly include two requiring the corporation: (a) to provide, construct, operate, manage and maintain efficient, co-ordinated and commercially viable systems and services for supplying water, providing sewerage services and disposing of waste water, and (c) to ensure that the systems and services meet the quality and performance standards specified in the operating licence in relation to water quality, service interruptions, pricing and other matters determined by the Governor and set out in the operating licence.

The Act establishes a Licence Regulator (ss 29ff), and the Minister is required to deal with licence contraventions, e.g. he may "reprimand" the corporation (s 19).

Section 20 provides for the Governor to cancel an operating licence, "but only" in certain specified circumstances set out in s 20(1). Section 20 relevantly goes on to provide: (3) If an operating licence is cancelled under this section, the Governor may, by order published in the Gazette, vest in the Crown or in another person specified in the order, from the date specified in the order, the assets and rights of the Corporation that are specified in the order and that, in the opinion of the Minister, are necessary to enable the Crown or other person to do immediately the things referred to in section 14(1), or any of them, for the benefit of existing recipients of the Corporation's systems and services. (4) An order under this section may provide for: (a) the Crown or other person specified in the order to assume those liabilities of the Corporation that the Governor considers appropriate and specifies in the order, or (b) the Crown to pay the whole or any part of the liabilities of the Corporation.
Section 37 vests ownership of works in the corporation, whether or not the land is in the ownership of the corporation. Section 38 provides the power of entry onto land for corporation purposes, and s 40 provides for notice, etc.

Section 41 provides: (1) The Corporation, in exercising its functions under this Division, is to do as little damage as practicable and is, subject to this Division, to compensate all persons who suffer damage by the exercise of the functions. (2) Compensation may be made by reinstatement, repair, construction of works or payment. (3) If the Corporation installs a sewer on land in exercise of powers under this Division, the Corporation is required to pay compensation only if the sewer damages, or interferes with, a building or other structure on the land or causes other physical damage to property or if an access chamber or main ventilator is constructed on the land. (No allowance has been made in this matter for compensation payable under s 41 of the Sydney Water Act 1994 for any loss or damage attributable to the construction, operation or replacement of sewerage pipes in the easements, or the possibility of there being toxic materials or hazardous waste on a surface or in the sub-surface soils).

Section 44 provides that land in or on which the work of the corporation is installed is to be taken to be the subject of a covenant in favour of the corporation such that the owner must ensure that there is no wilful negligent destruction or damage or interference, and so on.

Pursuant to s 45, a person who, without the consent of the corporation, carries out any activity that causes destruction or damage to or interference with any work owned by the corporation, in circumstances in which the person should have known same would follow, is liable to compensate the corporation.

Sections 70ff deal with compliance certificates, and s 78 with liaison between Sydney Water and local consent authorities.

Central issues in this case concern the different terms embodied in "standard" Sydney Water easements at different times, and the implications of those differences.

The terms of easement SE1, granted in May 1973 (Exhibit A2 doc 13), relevantly include the following: an easement or right to use for the construction and maintenance of works for sewerage purposes the surfaces and the subsoil or undersurface of the said land WITH full and free right and liberty for the transferee from time to time and at all times hereafter … generally to exercise and perform in and upon the said land any of the rights powers and authorities conferred on or vested in the transferee under and by virtue of the [Act] … AND in relation to such easement and rights as are hereinbefore transferred to the transferee the transferor DOTH HEREBY covenant with the transferee THAT subject as hereinafter provided the transferor will not erect construct or place any building or other structure whatever upon the said land AND the transferee doth hereby COVENANT with the transferor … upon completion of such work reinstate and restore such land or fencing (as the case may be) … AND … not without the written consent of the transferee first had and obtained make or allow to be made any alteration to the existing surface levels of the said land by any means whatsoever but notwithstanding anything hereinbefore contained RESERVING to the transferor and or other the registered proprietor or proprietors for the time being of the said land and of the residue of the land … and of such lots into which such land and residue may be subdivided from time to time by itself or themselves its or their officers servants workmen or agents: (a) full right and liberty at all times to construct and maintain roads footpaths and other means of access as the transferor or its successors in title may require across the said land to give access to the Captain Cook Drive to the transferor and or other the registered proprietor or proprietors for the time being of the said land and the residue of the land comprised in Lot 5 on D.P. 225537 and such lots into which such land and residue may be subdivided from time to time; (b) full right and liberty to use the said land for the purpose of car parking, landscaping and for any other like purpose whatsoever provided that the same shall not be injurious to the works to be constructed by the transferee and provided that the same will not interfere with the use by the transferee of the easement or right hereby granted . [emphasis added].

The company relies upon the difference between those terms and conditions and those governing SE2, as set out in Memorandum 0535501 (Exhibit A2 doc 11 - see Real Property Act 1900 s 80A).

In particular, the applicant relies upon the omission, from the terms of SE2, of the words of reservation in SE1, which follow the expression to which I first added emphasis above (par 38), namely "but notwithstanding…".

Memorandum 0535501 defines the easement SE2 in two parts:

Firstly, it defines it as an easement to drain sewage, as described in Schedule 4A of the Conveyancing Act 1919, which schedule is in the following terms: Full and free right for the body in whose favour this easement is created, and every person authorised by it, from time to time and at all times by means of pipes to drain sewage and other waste material and fluid in any quantities across and through the land herein indicated as the servient tenement, together with the right to use, for the purposes of the easement, any line of pipes already laid within the servient tenement for the purpose of draining sewage or any pipe or pipes in replacement or in substitution therefor and where no such line of pipes exists, to lay, place and maintain a line of pipes of sufficient internal diameter beneath or upon the surface of the servient tenement and together with the right for the body in whose favour this easement is created and every person authorised by it, with any tools, implements, or machinery, necessary for the purpose, to enter upon the servient tenement and to remain there for any reasonable time for the purpose of laying, inspecting, cleansing, repairing, maintaining, or renewing such pipe line or any part thereof and for any of the aforesaid purposes to open the soil of the servient tenement to such extent as may be necessary provided that the body in whose favour this easement is created and the persons authorised by it will take all reasonable precautions to ensure little disturbance as possible to the surface of the servient tenement and will restore that surface as nearly as practicable to its original condition.

Secondly, Memorandum 0535501 makes clear that in addition to the Schedule 4A easement, the following terms form an integral part of SE2: an easement or right to use for the construction and maintenance of works for sewerage purposes the surface and the subsoil or undersurface of the said land together with full and free right and liberty for Sydney Water … [to do various specified things] in and through the said land and upon or at such depths or levels below the surface thereof as Sydney Water shall think fit [including ventilating shafts and other works with fittings and appurtenances thereto (all of which are included in the term "works")] as in its opinion may be required for sewerage purpose AND to use such works for the conveyance and passage of sewerage AND to take up any such works and substitute in lieu thereof any new works AND with the right of support at all times of all such works as shall for the time being in or upon the said land AND for any of the purposes aforesaid to enter, go, return, pass and repass upon, along and over the said land at any hour of the day or night and make and sink excavations, shafts and cuttings in and through the said land and bring and place thereon and remove therefrom any such plant, machinery, tools, implements, materials, articles and things as Sydney Water shall think fit AND generally to exercise and perform in and upon the said land any of the rights, powers and authorities conferred on or vested in Sydney Water under and by virtue of [the relevant Act] as amended ….

Besmaw, as the registered proprietor of the land over which the easement SE2 was obtained, bears the following burdens in respect of that easement (Exhibit A2, doc 11, p2-3): (a) Shall not erect, construct or place upon the said land or allow to be erected, constructed or placed thereon any building or other structure whatsoever and that the Registered Proprietor will at all times bear all risk of and responsibility in connection with damage to any building or other structure for the time being in existence upon the said land; AND (b) Shall permit Sydney Water, its servants or agents to have full right of access to the said land by day or night for maintenance purposes; AND (c) Shall not without the prior consent and approval in writing of Sydney Water first had and obtained or otherwise than in strict compliance with such conditions as Sydney Water may impose: (i) make or allow to be made any alteration to the existing surface levels of the said land by any means whatsoever, or (ii) lay down, construct or place on the said land or allow to be laid down, constructed, placed or remain thereon, any pavement of concrete or having any form of bituminous surface with a base course of ballast metal or rock fill or like material, or (iii) place upon the said land or allow to be placed or remain thereon any timber or any article of plant or any stores filling rubbish or containers or other material whatsoever, or (iv) park or place upon the said land or allow to be parked or remain thereon any vehicle whatsoever other than vehicles parked or placed thereon temporarily so that they may be removed when necessary without undue delay.

The Memorandum goes on to say (ibid p3): AND Sydney Water its successors and permitted assigns will from time to time and at all times hereafter so far as shall be reasonably practicable make good and remedy all damage caused to the said land by reason of or arising out of the exercise of the aforesaid rights, powers and authorities or any of them AND nothing contained herein shall in anyway affect any rights the Registered Proprietor might have under Section 41 of the Water Board (Corporatisation) Act, 1994, as amended, to claim compensation in respect of damage caused by the future operations of Sydney Water. (The context of s 41 of what is now the Sydney Water Act is the making good of/for physical damage, not the payment of damages as understood generally at common law.)

Besmaw claims it would be happy if SE2 had the same provisions as the earlier SE1 easement document, which contained a covenant having the effect of assuring the company of its right to enjoy access to its land.

The covenant in SE1 is so framed as to prevent Sydney Water from thwarting the rights of the company by refusing consent to some works which may be necessary to take advantage of it, such as redeveloping its access.

Besmaw's case is that the refusal of Sydney Water to afford Besmaw the necessary protection in the instrument is not only to place the company's business in genuine peril, by making its continued operation dependant upon the will of Sydney Water and its successors - as per the policies to which Mr Hanley testified - but also to remove the benefit of the comfort afforded to Besmaw by the terms of the 1973 easement. Once the company cannot cross, for whatever reason, the new easement, its right to cross the old one(s) is worthless.

Apart from the operation of a statute (notably the Conveyancing Act), no easement can exist "in gross". Easements "in gross" are dealt with by s 88A of the Conveyancing Act in the following relevant terms: … (1A) An easement without a dominant tenement may be created in favour of a prescribed authority, and any such easement may be assured to a prescribed authority. (1B) However, an easement without a dominant tenement may only be created in favour of, or assured to, a corporation prescribed by the regulations for the purposes of this section if the easement is for the purpose of, or incidental to, the supply of a utility service to the public, including (but not limited to): (a) the supply go gas, water or electricity, or (b) the supply of drainage or sewage services. … (2B) The meaning given to an expression by this section and Schedule 4A may be varied (whether by way of addition, exception, qualification or omission), and is taken to have always been capable of being so varied, by the instrument in which the expression is used.

An easement may be positive or negative. Other than such statutory easements, an easement is always appurtenant (or annexed) to a dominant tenement. The land or interest which benefits is the "dominant" tenement and the land or interest which is burdened is the "servient" tenement.

The easement may either allow the "dominant" owner to do something, or prohibit the "servient" owner from doing something, but the dominant interest must be accommodated by the servient interest.

Section 88AC of the Conveyancing Act provides as follows: Other easements and restrictions appurtenant to easements (1) Another easement, or the benefit of a restriction on the use of land, may be made appurtenant or annexed to an easement. (2) the power conferred by this section is taken always to have existed. (3) This section applies, and is taken always to have applied, to land under the provisions of the Real Property Act 1900.

An easement runs with the land burdened, and is referred to, therefore, as an incorporeal hereditament (intangible thing), or a right which passes to an heir rather than a next of kin. See P Butt "Land Law" 3rd edition 1996 pp 400ff.

Usually the dominant tenement is a parcel of land (a corporeal hereditament), but it may be another easement or right, or a mixture of corporeal and incorporeal property. Relevantly, Butt cites, as an example, an authority to lay pipes which may be appurtenant to the authority's land and existing easement.

It is not what the dominant owner actually takes, but what the dominant owner is allowed by the terms of the instrument, which calls up the key access issue in this case.

The rights taken away from the landowner must be measured, not by what the acquiring authority at any given time might plan to do, or what its policies are, or what assurances or understandings may be given or communicated about the way its rights may be exercised, but by what its enabling instrument allows it to do.

Easements acquired compulsorily must be construed in the same manner as those which have been freely granted, and the courts will infer such ancillary rights as are reasonably necessary to the reasonable exercise and enjoyment of the rights expressly granted. See Bryson J in Prospect County Council v Cross ("Cross") (1990) 21 NSWLR 601, relying on Zenere v Leate (1980) 1 BPR 9300 (at 9304-5) and Ex Parte Purcell (1982) 47 LGERA 433.

On behalf of Besmaw, Mr Ayling submits that Sydney Water's Act does not give the corporation any proprietary rights in the land of another, nor any right to compel the owner of land to exercise his own proprietary rights in a particular way. Nor does it take away the proprietary rights of the owners of land. Only an easement with the concurrent powers vested in the dominant owner under s 88AC of the Conveyancing Act does that. Sydney Water's Act gives powers, but it does not vest rights. It may create liabilities but it does not impose obligations.

Equally, there is no guarantee that the corporation will remain a State-owned corporation. Nor indeed is there any guarantee that this or any other State-owned corporation will retain the operating licence. Section 20 provides for that licence to be cancelled by the Governor in certain circumstances. In that event the licence may be vested in the Crown, or in any other person specified in the order, not necessarily another State-owned corporation, or government body of a different sort. The court notes, in this context, that the sewerage undertaking is now in different hands from those in which it rested when SE1 was acquired.

On behalf of Sydney Water, Mr Webster submits that the purpose of the easement was to go no further than the statutory powers vested in the corporation.

He argues that one should not look at the Memorandum in isolation, as it is clear from the nature of the undertaking that the only real reason for obtaining the easement was to build an underground pipeline, which it has done.

I do not accept that submission. The easement SE2 certainly does not go so far as to totally deny, in its terms, Besmaw's right of access to its land, but, on its proper construction there is the potential to go further than pursuing Sydney Water's statutory purposes. In its terms, it allows the corporation to deny Besmaw access adequate for its sandmining or resort undertaking.

The terms of easement SE2 bind Besmaw not to alter in any way the existing surface levels of the land, or to put down any form of concrete or sealed pavement, or to store anything at all on the land, or allow vehicles to park on it, unless they can all be moved "without undue delay". These requirements may be relaxed at the discretion of Sydney Water, but conditions may impose strict obligations.

There is no statutory or other requirement that the consent of the corporation not be unreasonably withheld. Besmaw is in no position to thwart Sydney Water if the latter wishes to act in any way consistent with the rights it has compulsorily acquired.

If Sydney Water, or any other "person" to whom its rights under SE2 devolve at any time, exercises the full extent of those rights, and builds works on the surface, or above the surface along the line of the easement, or if the corporation declines its consent, as it is perfectly entitled to do, to the construction or reconstruction by Besmaw of an access road to cross that line, on the basis that they involve changes of levels, or will be paved, it is possible that Besmaw will lose its access.

Such decisions on the part of Sydney Water may well prove to be, or be held to be, reasonable, but even if they are, Besmaw is still at risk, and it seems to me that it is not reasonable for the company to be at such risk.

Besmaw is, therefore, in my view, entitled to do what is reasonably necessary to avoid what is an inevitable consequence of the full exercise of the corporation's rights under the easement.

Sydney Water has refused to amend the Memorandum governing SE2. It has given certain "assurances" in writing, namely, that most of the advantage taken of the easement would be for works below the ground, indeed that there would probably be no above-ground facilities, and that there would be no proposal to restrict the current access or egress from the site, and no proposal to change or otherwise amend the current use of the easement. (see Exhibit R16, par 21 above).

The corporation's submission is that if Besmaw's arguments are correct, what has been transferred is the fee simple or "the whole beneficial user of the land".

I have concluded that, while easement SE2 does not exclude the applicant's rights totally, it does seriously impede the possibility of its maintaining its access arrangements. See Pennant Hills Golf Club Ltd v RTA of NSW (1997) 96 LGERA 164 (per Lloyd J) and [1999] NSWCA 110 (per Stein JA); and Cross.

Talbot J made clear in West v RTA (1995) 88 LGERA 266 that the purposes of s 59 is to provide compensation, and not to create a bonus or benefit which the dispossessed owner might not otherwise obtain.

In Fitzpatrick Investments Pty Ltd v Blacktown City Council (No.2) [2000] NSWLEC 139 Lloyd J felt that the listing of matters in s 59 evinced an intention on the part of the legislature for that list of matters to be exhaustive. He noted that par (f) of s 59 was wider than the preceding paragraph and he described it as a "catch-all provision" in which the words "any other financial costs" should not be read down. His Honour said (pars 20 and 24): This does not mean, however, that this paragraph opens the flood-gates. The costs must be 'reasonably incurred' and must relate to the actual use of the land, as a direct and natural consequence of the acquisition . … … Paragraph (f) of section 59 requires the amount of the applicant's claim to be reasonable.

In determining what is "reasonable" reference may be had to dictionary definitions which include, in the modern dictionaries, "not asking for too much".

The test is not, as Mr Webster claimed, whether the interpretation of the instrument is reasonable. The interpretation of the instrument is quite clear, in my view, but what has to be reasonable is the amount of the claim, which in this case was not really in dispute, after being tested by cross-examination of its author (Griffiths).

The court cannot limit the applicant to what has so far been done by the respondent in exercise of its rights under the instrument, but must have regard to the proper construction of that instrument, regardless of the "current policy" of the respondent concerning the possible extent of the exercise of its rights under the easement.

The terms of the instrument speak for themselves in this case; they are clear and unambiguous and must be construed accordingly to ascertain the "rights conferred". See Cross. Such rights as are conferred will be enforceable by the courts. See Annwrack Pty Ltd v Williams (Waddell J, Supreme Court, unreported Matter 3101 of 1988, 8 February 1989).

The applicant clearly suffers from all the limitations imposed by the easement, as described in Mr Ayling's written submissions (pars 11-19), which are too lengthy to repeat in full.

The respondent possibly acquired more than it needed in the foreseeable future, but, having stopped short of acquiring the applicant's land, and having acquired only an easement over a narrow strip of it, it is entirely reasonable for the company to have guaranteed access to the bulk of its land throughout the future.

Such access is not guaranteed in this case, by either the instrument or the relevant correspondence between the (current) parties, and I have concluded that the substantial disturbance claim in dispute should be determined in favour of the company.

The applicant is, therefore, entitled to compensation made up as follows:

Market Value (as conceded) $9,000.00 Disturbance items under ss 59(a) and (b) (as agreed) 5,222.10 Access costs under s 59(f) 1,515,900.00 $1,530,122.10

I, therefore, determine the amount of compensation in matter 30050 of 1999 at $1,530,122.10.

The applicant's costs of the disputed element(s) of the claim in 30050 should be paid by the respondent, but the parties should have leave to list matter 30050 again if they cannot agree on other questions of costs. (Order 3 in the attachment deals with the costs of matter 30049).

The court notes that, as in par 5 of the attachment, the respondent has undertaken, in matter 30050 as well, to reimburse the applicant with respect to any payment of Goods and Services Tax required by law to be paid with respect to the compensation payable (see T p196 L13-16).

The exhibits should be returned, with the exception of Exhibit R18 (which should remain with the court file in matter 30049) and Exhibit R19 (which should remain with the court file in matter 30050).

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.

CITATION : Besmaw Pty Ltd v Sydney Water Corporation [2001] NSWLEC 15 APPLICANT PARTIES : Besmaw Pty Limited RESPONDENT Sydney Water Corporation FILE NUMBER(S) : 30049; 30050 of 1999 CORAM: Sheahan J KEY ISSUES: Compensation :- compulsory acquisition - easement - market value - "disturbance" - claim for cost of providing a new access to retained land unaffected by the easement - relevance of Respondent's policies and practices. Construction & Interpretation - terms of easement - rights of Respondent over land of applicant - extent of exploitation of easement so far Conveyancing Act 1919 s 88A, s 88AC, Schedule 4A LEGISLATION CITED: Land Acquisition (Just Terms Compensation) Act 1991 s 52, s55(d), s59 and s 62 Real Property Act 1900 s 80A Sydney Water Act 1994 s 7ff, s 12ff, s 14, s 17, s 19, s 20, s 29ff, s 37, s 38, s 40, s 41, s 44, s 45, s 70ff, s 78 Annwrack Pty Ltd v Williams unreported 3101 of 1988, 8 February 1989; Ex Parte Purcell (19820 47 LGERA 433; Fitzpatrick Investments Pty Ltd v Blacktown City Council (No.2) [2000] NSWLEC 139; CASES CITED: Pennant Hills Golf Club Ltd v RTA of NSW (1997) 96 LGERA 164; Prospect County Council v Cross (1990) 21 NSWLR 601; West v RTA (1995) 88 LGERA 266; Zenere v Leate (1980) 1 BPR 9300 DATES OF HEARING: 4/12/2000, 5/12/2000, 6/12/2000 DATE OF JUDGMENT: 02/15/2001

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