Diro Group Pty Ltd v Leuzinger

Background

1. The background facts are relatively uncontentious. On 2 September 2019, Council granted a deferred commencement development consent pursuant to s 4.16(3) of the Environmental Planning and Assessment Act 1979 (NSW) for Development Application DA 18/0377 ('Consent') for a development comprising the construction of three townhouses, one villa and strata subdivision on 33 Oleander ('development').
2. The development includes the construction of a stormwater drainage system, which as currently designed involves the drainage of stormwater through the 150mm pipe that travels along the proposed easement from 33 Oleander through 31 Oleander and into 29A Oleander to enable a connection with Council's 1500mm pipe to be made. The Consent was issued subject to a "deferred commencement condition" which, as noted below, requires the stormwater drainage system to be designed in accordance with "Issue E" of the stormwater concept design that had been provided by Diro in the process of obtaining the Consent; and further, that Diro must provide evidence that downstream property owners have agreed to the creation of the "required" stormwater easement.
3. After the grant of the Consent, Diro sought to modify the Consent to delete certain other deferred commencement conditions of the Consent. Following an appeal against a deemed refusal of the modification application by Council, on 4 August 2020, this Court granted Modification Application 19/0415. For the purposes of this judgment, any reference to Consent is to the Consent as modified at the date of the hearing of these proceedings.
4. At the time of the hearing, the relevant deferred commencement condition of the Consent provided: "1. Deferred Commencement Condition - Stormwater Drainage A. Design The stormwater drainage system must be designed in accordance with stormwater drainage design drawings No.171590 sheets 000E, 101E, 201E, 103E, 104E, 105E, 106E and 107E by Australian Consulting Engineers; Australian Standard AS3500.3:2015 and the BASIX Certificate issued for this Development, except where modified by the following: … ii). A layout of the drainage system showing existing and proposed pipe sizes, type, class, grades, lengths, invert levels, finished surface levels and location of all pipes with levels reduced to Australian Height Datum. Impacts on existing trees must be indicated on the plan. iii). A drainage depression must be provided for the full width and length of the drainage easement to facilitate any required / the overland flow of stormwater. The overland flow route must be designed to have the capacity to carry the difference between a 1 in 20 year flow and the flow in the pipeline within the easement. … vii). Where pipelines are located within the "tree protection zone" of significant vegetation to be retained, the lines shall be excavated by hand or directional underboring techniques to reduce any adverse impact on the root zone of the trees. viii). Evidence must be provided that the downstream property Owners have agreed to the creation of the required stormwater drainage easement. ix). Evidence must be provided that the details of the private pipeline connection to Council's stormwater pipeline is to the satisfaction of Sutherland Shire Council Manager of Stormwater and Waterways. x). Certification from an Accredited Certifier in Civil Engineering or a Chartered Civil Engineer, to the effect that the drainage design is to their satisfaction and satisfies the design requirements in the aforementioned section A. above must accompany this design."
5. Other conditions of the Consent also impact the design of the stormwater drainage system by imposing operational requirements on the 150mm pipe, as follows: "4. Design Changes Required (UNI2020) A. Before Construction The following design changes must be implemented: … iv). To minimise impact on neighbouring trees, any stormwater piping within an easement that traverses neighbouring property 31 Oleander Parade must be under bored to a minimum depth of 900mm under the direct supervision of the Consulting Arborist as outlined in under the Tree Protection conditions. … Details of these design changes must be included in documentation submitted with the application for a Construction Certificate. … 25. ENV2040Tree Retention and Protection The following condition applies to all trees on the subject site, trees on the adjoining sites (which are potentially affected by the development works), as well as trees on the adjoining Council land that are not approved for removal. … All trees not approved for removal must be protected by the following measures: i). To minimise impact on neighbouring trees, any stormwater piping within an easement that traverses neighbouring property 31 Oleander Parade must be under bored to a minimum depth of 900mm under the direct supervision of the Consulting Arborist. …"
6. Following the grant of the Consent, the stormwater concept design was refined such that Diro contends that no disturbance of the surface of 31 Oleander is required to construct the 150mm pipe. Rather, the construction of the 150mm pipe will be undertaken by "guided" underboring (also known as thrust boring or directional boring) at a depth of at least 900mm below the surface of 31 Oleander.
7. The current version of the stormwater concept design before the Court is "Issue K" (noting that a further version, "Issue L", is appended to the joint stormwater expert report, which contains some additional details of existing pipes within 31 Oleander - but does not change the 150mm pipe as shown in Issue K). The stormwater concept design depicted in Issue K differs from Issue E, which was referred to in the Consent, in two relevant respects. First, a pit at the northern end of the proposed easement within 31 Oleander has been omitted; and second, Diro contends that the drainage depression potentially contemplated by deferred commencement condition 1A(iii) has been rendered unnecessary as the 150mm pipe has been designed to convey the "1 in 20 year" (or 5% annual exceedance probability ('AEP')) flows and that given this pipe capacity, Council confirms that the drainage depression facilitating an overland flow path is no longer required.

Relevant legislation

1. Section 40 of the LEC Act provides: 40 Additional powers of Court - provision of easements (1) This section applies if - (a) the Court has determined to grant or modify a development consent pursuant to proceedings on an appeal under the Environmental Planning and Assessment Act 1979, or (b) proceedings on an appeal under the Environmental Planning and Assessment Act 1979 with respect to the granting or modification of a development consent are pending before the Court (whether constituted by a Judge or by one or more Commissioners). (2) The appellant may make an application to the Court for an order imposing an easement over land. (3) The parties to an application under this section include the owner of the land to be burdened by the easement, and each other person having an estate or interest in the land, as evidenced by an instrument registered in the General Register of Deeds or the Register kept under the Real Property Act 1900. (4) In dealing with an application under this section, the Court may exercise the jurisdiction of the Supreme Court under section 88K of the Conveyancing Act 1919 and, in that event, section 88K of the Conveyancing Act 1919 applies to the Court's exercise of that jurisdiction in the same way as it applies to the exercise of that jurisdiction by the Supreme Court.
2. Section 88K of the Conveyancing Act 1919 (NSW) ('Conveyancing Act') relevantly provides: 88K 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. …
3. The principal issue in these proceedings concerns the requirement in s 88K(1) of the Conveyancing Act, that the Court must be satisfied that granting the proposed easement is "reasonably necessary for the effective use or development" of 33 Oleander. Mr Leuzinger's position is that the proposed easement is not reasonably necessary for the effective use and development of 33 Oleander, such that the Court has no power to grant the proposed easement.
4. Mr Leuzinger also puts into issue the requirement in s 88K(2)(a) of the Conveyancing Act, being that the use of 33 Oleander will not be consistent with the public interest. Early in the hearing of these proceedings, the parties agreed, for the purposes of s 88K(2)(b), that Mr Leuzinger can be adequately compensated for any loss or other disadvantage that will arise from the imposition of the proposed easement, by the payment of the amount of $35,000. Mr Leuzinger also does not cavil with the proposition that Diro has previously made attempts to obtain the proposed easement, through correspondence and offers of compensation, for the purposes of s 88K(2)(c).
5. Finally, Mr Leuzinger's position is that the Court's discretion should not be exercised to grant the proposed easement.

Evidence

1. The Court received extensive expert evidence comprising a joint arboricultural expert report prepared by Ross Jackson, retained on behalf of Diro, and Catriona Mackenzie, retained on behalf of Mr Leuzinger; a joint stormwater expert report prepared by Joe Bacha, retained on behalf of Diro, and Drew Bewsher, retained on behalf of Mr Leuzinger; and, two joint valuation expert reports prepared by James Ruben, retained on behalf of Diro, and Geoff McGuirk, retained on behalf of Mr Leuzinger. Each party also tendered an extensive separate bundle of documents containing historical and regulatory material.
2. The bundle of documents (Ex 2) relied upon by Mr Leuzinger contained material relating to the development application including Council's internal assessment reports (including planning and engineering assessments); internal Council memoranda in relation to Council's consideration of the development application; correspondence between Council and various representatives of Diro; and extracts from Council's planning instruments and policies including Sutherland Shire Local Environmental Plan 2015 ('SSLEP'), and Sutherland Shire Development Control Plan 2015 ('SSDCP') including "Chapter 38: Stormwater and Groundwater Management" ('Ch 38').
3. The bundle of documents (Ex A) relied upon by Diro contained various letters of offer in relation to compensation; copies of Issue E and Issue K of the stormwater concept design; extracts from Council's files and documentation including correspondence between Council and various representatives of Diro; various documents of title; and earlier arboricultural reports. There was significant duplication in the bundles of documents prepared by the parties particularly in relation to the correspondence from Council.
4. As noted above at [18], during the hearing, the Court was informed that the parties had agreed on the compensation payable to Mr Leuzinger, if the Court was minded to impose the proposed easement, such that the valuation evidence does not need to be considered in further detail. The Court was also informed that, to the extent there had been earlier disagreement in relation to various arboricultural matters, there is no outstanding issue for resolution, such that the arboricultural evidence also does not need to be considered in further detail.
5. Given this, the primary focus of the documentary and oral evidence was on the separate bundles of documents and the joint stormwater expert report. Despite being directed by the Court to prepare a joint report, the joint stormwater expert report prepared by Mr Bacha and Mr Bewsher comprised a short joint report with extensive annexures relating to the development including: Issue L of the stormwater concept design (prepared by Australian Consulting Engineers, dated November 2020); a Flood Risk Management Plan (prepared by Australian Consulting Engineers, dated October 2018); a Stormwater Engineering Report (prepared by Mr Bacha of Australian Consulting Engineers, dated December 2020); an Assessment of Alternative Stormwater Disposal Options (prepared by Mr Bewsher); a Geotechnical Report (prepared by Alliance Geotechnical, dated March 2019); a Geotechnical Engineers Statement (prepared by Alliance Geotechnical, dated March 2021); correspondence between Council and Diro (and Diro's retained experts) regarding stormwater and easement matters; internal Council correspondence regarding connections to Council stormwater pipes; an extract from an Arborist Report (prepared by Jackson Nature Works, dated April 2019); photographs of 31 Oleander; and, extracts of various Council policies.
6. In their joint stormwater expert report, Mr Bacha and Mr Bewsher considered: first, drainage by gravity to Oleander Parade; second, whether construction of the 150mm pipe through guided underboring solely from 33 Oleander is practically possible; third, the potential for part or all of the stormwater from 33 Oleander to be disposed of by infiltration into the ground within that land; fourth, whether deferred commencement condition 1A(iii) requiring a drainage depression remains relevant or can be disregarded; fifth, whether the 150mm pipe has sufficient capacity to drain stormwater from 33 Oleander; sixth, the terms of the proposed easement; and seventh, whether the proposed easement is reasonably necessary. These issues, and other stormwater issues, were also explored in oral evidence provided by Mr Bacha and Mr Bewsher.
7. In summary, Mr Bewsher opined that the current stormwater drainage system utilising the proposed easement is not reasonably necessary because there are better alternatives available. In his Assessment of Alternative Stormwater Disposal Options, Mr Bewsher assesses four options that he considers to be available for stormwater disposal from the development on 33 Oleander (which includes runoff from roofs, the front yard, the rear yard and the basement areas), being: 1. Option 1, being Diro's approach, that all water from the development is disposed of at the rear of the development via the 150mm pipe through a private easement over 31 Oleander and 29A Oleander (part of which is the proposed easement, the subject of these proceedings). Mr Bewsher opines that this is contrary to proper flooding and drainage practice as it diverts roof water, which currently drains to Oleander Parade, to the rear area of 31 Oleander, 29A Oleander and 29 Oleander Parade, Caringbah South ('29 Oleander'), which is already flood prone. It also suffers from constraints due to trees and structures along the proposed easement, which generate costs and construction difficulties. Mr Bewsher also recounted a telephone conversation with a Council officer about the "approach to stormwater disposal which had been embodied in the consent", where the Council officer had expressed the view that the approach was "not a sensible stormwater disposal method". 2. Option 2, that roof water from the development is piped by gravity to the kerb of Oleander Parade (as currently occurs at 33 Oleander) and some front yard surface run-off is also directed to Oleander Parade by pipe or overland, with the remainder of the yard area run-off (including from the rear yard), to be directed to a new infiltration pit in the rear yard of 33 Oleander where it would discharge into the underlying ground (which would reduce overland flows to adjoining properties). This is Mr Bewsher's preferred option. 3. Option 3, being a variation on Option 2, where the roof water being piped by gravity to Oleander Parade discharges into a new stormwater pit constructed on the western side of Oleander Parade, with a new 375mm pipeline to be constructed under Oleander Parade to carry the water into Council's existing stormwater pit on the eastern side of Oleander Parade opposite 31 Oleander. Although Mr Bewsher noted that this option is more expensive than Option 2, he considers that it would be cheaper than Option 1. 4. Option 4, that all water from the development is directed to a new infiltration pit in the rear yard of 33 Oleander and the pit is fitted with an overland flow spreader to disperse excess flows across the surface should the pit surcharge during extreme storms.
8. Mr Bacha opined that Mr Bewsher's Option 2, Option 3, and Option 4 were not practical for a number of reasons, including issues with using infiltration due to soil permeability at 33 Oleander and existing flooding issues at Oleander Parade, and that Diro's approach to the stormwater drainage system (utilising the proposed easement) is the most appropriate.
9. In relation to drainage by gravity to Oleander Parade, Mr Bewsher maintained that there is sufficient "fall" for all roof water and water in the front yard of the development to drain by gravity in a pipe to Oleander Parade. Then, pursuant to Option 2 and Option 3, the basement water would be pumped out and discharged to Oleander Parade and the remaining yard water would be disposed of by infiltration.
10. Mr Bacha refers to the site-specific Geotechnical Report which revealed a relatively high groundwater level and soil properties which are unsuitable for use of infiltration for stormwater disposal. Mr Bacha also stated that a stormwater drainage system similar to Mr Bewsher's Option 2 and Option 3 was initially investigated but was discussed with Council at the pre-development application stage, and rejected on the basis that it would not be supported by Council as it did not satisfy the requirements in Ch 38 of the SSDCP, as per correspondence from Council to Diro in December 2018.
11. Mr Bacha also noted conversations with a Council officer who advised in November 2020 that an "alternative disposal method" to Oleander Parade would not be supported by Council as Oleander Parade is flood affected and the proposal would not comply with the requirements in Ch 38 of the SSDCP. As a result, Diro pursued the stormwater drainage system utilising the proposed easement, which Mr Bacha maintains is in accordance with Ch 38 of the SSDCP (noting that Mr Bacha was cross-examined on whether the stormwater drainage system utilising the proposed easement met the requirement in Ch 38 of the SSDCP that flows are not diverted from one "drainage sub-catchment" to another).
12. Mr Bewsher and Mr Bacha also considered the practicalities of guided underboring of 31 Oleander, including issues involving conflicts with tree roots, existing services and the need for entry and recovery pits. Mr Bewsher opined that it is unlikely that the 150mm pipe (with appropriate hydraulic capacity) can be constructed at the levels shown in Issue L of the stormwater concept design for a number of reasons, including: 1. The ground level at the common boundary of 31 Oleander and 33 Oleander is the same as the ground level at the connection to Council's 1500mm pipe indicating there is limited hydraulic head available to drive flow through the 150mm pipe; 2. The hydraulic capacity calculations (in stormwater drainage design drawing No.171590, sheet 111, Issue L) assume the hydraulic gradeline at Council's 1500mm pipe is at the obvert level which is inappropriate, with the consequence that the hydraulic capacity would be less than calculated; 3. The connection of the 150mm pipe into Council's 1500mm pipe is shown to occur at mid barrel height on the 1500mm pipe which is contrary to normal practice, noting where the 150mm pipe may need to be raised (including to connect within 45 degrees of the obvert of the 1500mm pipe) would cause concerns in relation to conflict with trees and utilities; and 4. The technique used to locate underground services is approximate only, and would normally be supported by "pot-holing", which would also identify unexpected tree roots, which may require alternations to the proposed alignment of the 150mm pipe.
13. Mr Bewsher noted that where there is only 235mm clearance before the 150mm pipe conflicts with other underground services, there is limited scope to make adjustments in response to these issues.
14. At hearing, in response to concerns raised by Mr Bewsher regarding the capacity to connect with Council's 1500mm pipe, Mr Bacha prepared a further marked-up version of stormwater drainage design drawing No.171590, sheet 111, Issue L (based upon further modelling) (tendered as Ex G), which corrected certain measurements and markings in relation to the "long-section" of the proposed 150mm pipe when connecting to Council's 1500mm pipe. Mr Bacha also considered the measurements that would arise if the proposed 150mm pipe was connected to the 1500mm pipe within a 120 degree arc, concluding that the minimum depth of the guided underboring would be 525mm rather than the 900mm required by the conditions of the Consent. However, Mr Bacha maintained that Council would not require a connection to the 1500mm pipe within a 120 degree arc.
15. In relation to the potential for stormwater from 33 Oleander to be disposed of by infiltration, the hydrological experts gave oral evidence about the soils on 33 Oleander, and more particularly the implications of the Geotechnical Report and the Geotechnical Engineers Statement. The Geotechnical Report recorded borehole testing and characterised soils, and the Geotechnical Engineers Statement made site permeability predictions, concluding that the soils on 33 Oleander were of significantly (one order of magnitude) lower permeability than Council's standard for soil suitability for an absorption system, and although there was some concern as to whether the permeability conclusions were confined to the "sandy clay layer", that on the material before the geotechnical engineer making the Geotechnical Engineers Statement, the soils at 33 Oleander are not suitable for an absorption system.
16. Mr Bewsher expressed concern in relation to this testing, primarily regarding the location of the boreholes which produced the various soil profiles which were then analysed in the Geotechnical Report and the Geotechnical Engineers Statement, and the application of the conclusions in the Geotechnical Report and the Geotechnical Engineers Statement to his proposed infiltration system. Although Mr Bewsher commented that he would expect discrete "infiltration tests" to be undertaken at the precise location of a proposed infiltration system, he accepted that the geotechnical engineer who provided the Geotechnical Engineers Statement had looked at the Geotechnical Report and a supplementary geotechnical report dated October 2019 (not in evidence) and concluded that 33 Oleander is not suitable for an absorption system: Tcpt, 15 April 2021, p 102(4-15).
17. In relation to the drainage depression requirement in deferred commencement condition 1A(iii), Mr Bacha indicated that Council had confirmed in correspondence that it would be satisfied with a stormwater drainage system without the drainage depression where the 150mm pipe is able to "handle the 5% AEP [1 in 20 year] storm event", and that, consequent upon Council's advice, first, the "DRAINS model" had been revised to confirm the capacity of the 150mm pipe to drain the 1 in 20 year storm event; and second, on-site detention of stormwater ('OSD') volume had been increased.
18. Mr Bewsher agreed that increasing the volume of OSD would reduce the flow in the 150mm pipe and it would thereby be "theoretically possible" to contain all 1 in 20 year flows in the 150mm pipe, noting this is contingent on a number of assumptions and uncertainties. Despite this, he maintained that normal stormwater practice would be to provide a drainage depression for an overland flowpath along the entire route of the 150mm pipe (to cater for blockage and unexpected overflows) and did not agree that deferred commencement condition 1A(iii) can be ignored.
19. Mr Bacha and Mr Bewsher also disagreed as to whether the 150mm pipe would have sufficient "head" for flows to enter Council's 1500mm pipe in certain conditions. In this respect, Mr Bewsher opined that there were capacity issues with Council's 1500mm pipe when the hydraulic gradient line was at ground level, such that surcharging could occur which would exacerbate flooding issues. In contrast, Mr Bacha noted, first, that Council's 1500mm pipe did not necessarily have capacity issues; and second, in any event, his modelling had been undertaken on the basis that the hydraulic gradient line was at the obvert of the 1500mm pipe (such that the pipe was full).
20. In relation to the terms of the proposed easement, Mr Bacha and Mr Bewsher considered an earlier version of the proposed easement and agreed that the terms of the proposed easement seemed inconsistent with the work proposed to be undertaken when constructing the 150mm pipe (in that the wording could allow the owner of 33 Oleander to demolish the existing pump shed on 31 Oleander and/or build a drainage depression through 31 Oleander). While Mr Bacha considered that the easement terms could be edited to restrict demolition of existing structures within 31 Oleander (noting this in fact was accounted for in the amended Class 3 application), Mr Bewsher opined that, as a matter of practice, new stormwater pipes should not be constructed under existing buildings without collateral access being provided for maintenance. In response, Mr Bacha accepted that access to the 150mm pipe for future maintenance would be limited, but contended that to the extent maintenance or blockage removal was required, there are available industry practices which do not require invasive or open trench works to be undertaken on 31 Oleander (for example, pipe relining or jet blasting). He further noted that the proposed upstream water quality filtration system would make the 150mm pipe less susceptible to debris ingress, and the 150mm pipe can be selected to be sewer grade for increased durability and strength.
21. In conclusion, Mr Bewsher indicated that the imposition of the proposed easement was not reasonably necessary, and that his Option 2 or Option 3 would be preferred stormwater drainage systems for 33 Oleander. Mr Bewsher maintained his concerns regarding the practicality of the design of the 150mm pipe proposed by Diro. In contrast, Mr Bacha opined that the proposed easement was reasonably necessary having regard to the topography of the catchment, good stormwater practice, and constraints experienced in the design phase.

Reasonable necessity

1. Pursuant to s 88K(1) of the Conveyancing Act, an essential precondition of the Court's power to grant the proposed easement is that the Court must be satisfied that granting the proposed easement is "reasonably necessary for the effective use or development of other land that will have the benefit of the easement". The relevant principles concerning reasonable necessity in the context of s 88K(1) are uncontroversial.
2. In Rainbowforce Pty Ltd v Skyton Holdings Pty Ltd [2010] NSWLEC 2; (2010) 171 LGERA 286 ('Rainbowforce') at [67]-[83], Preston CJ of LEC identified ten commonly cited principles which apply to the Court's consideration of reasonable necessity when deciding whether to exercise its discretionary power to make an order imposing an easement. In the interests of concision, I summarise those principles, which I consider guidelines, without including case references.

• First, the power to impose an easement is conditional upon the Court being satisfied of the requirement of s 88K(1) of the Conveyancing Act, that it is "reasonably necessary for the effective use or development of other land that will have the benefit of the easement". This is a precondition to the Court's exercise of power which is to be determined objectively.
• Secondly, the requirement of s 88K(1) must be satisfied with respect to the particular easement which is to be imposed, where pursuant to s 88K(3) the Court specifies the nature and terms of the easement when making orders imposing the easement.
• Thirdly, s 88K(1) may be satisfied in respect of either the effective use or the effective development of the applicant's land, and can be enlivened in relation to a specific development or development generally.
• Fourthly, the easement must be reasonably necessary to effect the purpose or produce the intended or expected result of the use or development. If use or development of the land for some planning purpose cannot be achieved without the creation and use of an easement, then the easement is reasonably necessary.
• Fifthly, the easement must be reasonably necessary for the effective use or development of the applicant's land itself, not merely for any of the persons who are its proprietors from time to time (such that the subjective circumstances of the proprietors are not relevant).
• Sixthly, the formulation "reasonably necessary" imports two requirements. First, 'reasonably' means that the easement need not be absolutely necessary, such that an easement may be imposed notwithstanding that another means of right of way may exist, or possibly even when the land could be effectively used or developed without the easement. Second, 'necessary' requires more than desirability or preferability over the alternatives. Whether something is "reasonably necessary" is to be assessed with regard to the burden imposed by the easement.
• Seventhly, the reasonable necessity must be in respect of all reasonable uses or developments of the land, or at least a use or development which is reasonable compared to other possible uses or developments. In order for an easement to be reasonably necessary, the use or development with the easement must be at least substantially preferable to the use or development without the easement.
• Eighthly, the requirement of reasonable necessity does not demand that there be no alternative land over which an easement could be equally efficaciously imposed.
• Ninthly, the requirement of reasonable necessity is to be decided in light of the circumstances at the time of the hearing of the application of the order.
• Tenthly, the requirement of reasonable necessity can be satisfied notwithstanding that some future action may be required in addition to obtaining the easement.

1. In Moorebank Recyclers Pty Ltd v Tanlane Pty Ltd [2012] NSWCA 445; (2012) 16 BPR 31,257 ('Moorebank Recyclers'), the Court of Appeal noted at [154]: "The requirement that the easement be reasonably necessary for the effective use and development of the land means something more than mere desirability or preferability over the alternative means available: [Rainbowforce at [76]]. However, reasonable necessity does not mean absolute necessity. The correct approach to the question, in our opinion, was stated by Hodgson J (as his Honour then was) in [117 York Street Pty Ltd v Proprietors of Strata Plan 16123 (1998) 43 NSWLR 504; (1998) 98 LGERA 171] as follows: "It is clear that 'reasonably necessary' in s 88K(1) does not mean 'absolutely necessary', and thus that the requirement may possibly be satisfied even when the plaintiff's land could be effectively used or developed without the easement. In my opinion: (1) the proposed easement must be reasonably necessary either for all reasonable uses or 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; and (2) 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. The first of those requirements may seem contrary to a statement by Hamilton J in [Tregoyd Gardens Pty Limited v Jervis (1997) 8 BPR 15,845] (at 14) that the Court 'is not to judge upon the reasonableness of the particular development'. However, that statement is qualified by the words 'at least in this case'. If there are some possible reasonable uses or developments of the land for which a proposed easement is not reasonably necessary, then it seems to me that the easement cannot be 'reasonably necessary for the effective use or development' of the land, at least unless there is some proposed use or development, for which the proposed easement is reasonably necessary, which is itself a reasonable use or development. It may be that the particular use or development would need also to be preferable to the alternatives; but whether or not that is so, it would in my opinion certainly need to be at least reasonable." (at 508-509 citations omitted)"
2. At [155], the Court of Appeal noted: "…To the extent that Preston CJ was suggesting that subject to the other matters which he stated required consideration, an easement would be reasonably necessary for the effective use and development of the land if it was required for any proposed development, regardless of the development's desirability or economic effect, the proposition, with respect, is too wide. That approach would not take adequate account of the word effective. Equally, we do not believe, as suggested by Moorebank, that it is necessary to show that the easement is necessary to achieve the highest and best use of the land. In a case such as the present, where the easement is said to be necessary for the commercial development of the land, it is sufficient in our opinion to show that the proposed development is one which is appropriate to the area in which the land is situated and is at least an economically rational use of the land. That in our opinion is consistent with what was said by Hodgson J in [117 York Street Pty Limited v Proprietors of Strata Plan No 16123 (1998) 43 NSWLR 504; (1998) 98 LGERA 171] in the passage which we have cited above (see also Lonergan v Lewis [2011] NSWSC 1133 at [22])."

Diro's position

1. Diro submits that the Court would "comfortably" conclude that the proposed easement is reasonably necessary for the effective use or development of 33 Oleander, and satisfies the test in s 88K(1) of the Conveyancing Act for four reasons.
2. First, the proposed easement satisfies deferred commencement condition 1A(viii) and is accordingly necessary for both the effective development and effective use of 33 Oleander as authorised by the Consent. This is consistent with the commentary in Rainbowforce at [71], that the power to impose an easement is enlivened where the easement is reasonably necessary for "a particular development or use", as well as where the easement is reasonably necessary for any development or use of the land. These alternative circumstances reflect the wider scope of s 88K(1) of the Conveyancing Act, compared to the previous narrower and subjective formulation of s 40 of the LEC Act which focused on whether the easement was "reasonably necessary for the development to have effect in accordance with the consent": Rainbowforce at [16]-[17].
3. Diro submits that not only is the proposed easement reasonably necessary for the effective development and effective use of 33 Oleander in accordance with the Consent, but it is also reasonably necessary for any development and effective use of 33 Oleander for the purposes of a multi-dwelling housing development. This is because while "[m]ulti dwelling housing" is permissible in the R2 Low Density Residential zone under the SSLEP, following an amendment to the SSLEP to insert cl 4.1E on 1 February 2019, 33 Oleander, with a lot size of 1,050m², no longer meets the 1,200m² minimum lot size for development consent to be granted for multi-dwelling housing on land zoned R2 Low Density Residential.
4. Diro contends that this means that granting the proposed easement is also consistent with the requirement that the easement is reasonably necessary "for some or more proposed uses or developments" which are (at least) reasonable when compared with possible alternative uses and developments: 117 York Street at 508-9; Rainbowforce at [78]. In this context, Diro approaches satisfaction of the test in s 88K(1), by reference to the two questions suggested by Brereton J in Khattar at [26], being, first, whether the proposed development is reasonable (in comparison with the possible alternatives); and second, whether that development with the proposed easement is substantially preferable to that development without the proposed easement. Diro submits that where the development on 33 Oleander constitutes a more valuable use of the land than its current use, it is "self-evident" that the development is reasonable. Diro further submits that the development would be substantially preferable with the proposed easement, where "at the first instance", the development cannot be carried out in accordance with the Consent without the proposed easement.
5. Secondly, the proposed easement is reasonably necessary for the effective development and use of 33 Oleander, in that the development is appropriate for the area, and at least an economically rational use of 33 Oleander, illustrated by the application for, and grant of, the Consent: Moorebank Recyclers at [155]; Shi at [15].
6. Thirdly, and contrary to the position of Mr Leuzinger and his stormwater expert, Mr Bewsher, consideration of potential alternatives to the proposed easement, and in particular Option 2, Option 3 and Option 4, does not support the conclusion that the proposed easement is not reasonably necessary. Diro emphasises that it is unnecessary to demonstrate that there is an "absolute necessity", but rather that the easement is reasonably necessary, which does not exclude the existence of potential alternatives: Rainbowforce at [74].
7. Diro submits that although Mr Bewsher postulated three alternatives to the proposed easement (where Mr Bewsher recommended Option 2 and Option 3, and recorded Council's preference for Option 4), the Court would conclude none of Option 2, Option 3 or Option 4 are "reasonable alternatives", or at least not preferable alternatives. This is because, first, all three options involve the direction of stormwater to an infiltration area in the rear yard of 33 Oleander, where the evidence is that the soils of 33 Oleander have inadequate permeability and are unsuitable for absorption systems; and second, they involve directing additional stormwater (as a result of the additional roof area) to Oleander Parade in circumstances where it is already impacted by flooding. Additionally, the three options are not in accordance with the requirements of the SSDCP.
8. Diro contends that Mr Bewsher's opinion on the Geotechnical Report and the Geotechnical Engineers Statement conclusions on permeability should not be accepted in circumstances where he is not an "expert geotechnical engineer" and he relies on mapping of "infiltration potential" (which is not a substitute for actual testing previously carried out by Alliance Geotechnical when preparing the Geotechnical Report). Further, although Mr Bewsher opines that the testing carried out by Alliance Geotechnical was not located where he would have located an infiltration pit (but was instead located a few metres away), this does not detract from the results of the testing, indicating that the soils of 33 Oleander have inadequate permeability (without contrary evidence of marked changes to soil permeability over this distance).
9. Diro also submits that the use of infiltration in the rear yard of 33 Oleander would result in additional water in this area (increasing the saturation of the soil), as well as potential surcharging to the surface, in circumstances where the parties agree that the rear areas of 33 Oleander, 31 Oleander and 29A Oleander are already affected by flooding, meaning already dangerous flooding conditions would be exacerbated. Accordingly, the Court would conclude that options using infiltration are not reasonable alternatives.
10. Mr Bewsher's preferred Option 2 and Option 3 feature the discharge of roof stormwater to Oleander Parade in circumstances where Oleander Parade is also affected by flooding (albeit not to the extent of the rear areas of 33 Oleander, 31 Oleander and 29A Oleander), again meaning that the flooding conditions would be exacerbated. In contrast, the disposal of stormwater to the rear of 33 Oleander through the use of the proposed easement is consistent with the "fall" of the land, and Council's requirements (as communicated at the pre-development application stage and in its assessment of the development application), and reflects the SSDCP requirements.
11. Fourthly, and again contrary to the position of Mr Leuzinger and Mr Bewsher, the Court would conclude that the 150mm pipe can be constructed with adequate hydraulic capacity.
12. Diro contends that there is no disagreement that the 150mm pipe, as depicted in the long-section on stormwater drainage design drawings No.171590, sheet 111, Issue K (and revised during the course of the hearing of these proceedings in Ex G) provides sufficient hydraulic capacity. The issue raised by Mr Bewsher is that the connection from the 150mm pipe to Council's 1500mm pipe in 29A Oleander should, in his opinion, occur at the obvert or top of the pipe, rather than mid barrel as depicted. Adopting this connection, Mr Bewsher opines that there is insufficient hydraulic capacity (which Diro interprets as "grade" or "fall" to enable water to flow through to Council's 1500mm pipe) such that the pipe would need to be raised causing the potential for conflict with services or tree roots.
13. Diro submits that there is no evidence of any policy or practice of Council for connections to Council's pipes, and instead, advice is given to individual developers on a case-by-case basis. Although there is some evidence that first, a Council officer suggested that a connection should be made within the top one-third of Council's 1500mm pipe (within a 120 degree arc) to avoid flows from Council's system back into the private system; and second, a Council officer suggested that their typical advice would be that a "connection should be made within 45 degrees to the pipe obvert (top hat connection)", that advice is inconsistent with the Consent where Council accepts the connection noted as at "max RL 23.25" in the stormwater drainage design drawings No.171590, sheet 103, Issue E, which is slightly lower than the current height in the long-section on stormwater drainage design drawings No.171590, sheet 111, Issue K.
14. As a result, it is Diro's position that there is no need to raise the height of the connection to Council's 1500mm pipe, and it is not within Mr Bewsher's or Mr Leuzinger's remit to seek to "re-write" what has been approved by Council in the Consent in circumstances where these proceedings are not a merit appeal in relation to the development; and further, Council should be taken to know its drainage infrastructure and development requirements, where Council has not expressed any concern with Diro's stormwater drainage system utilising the proposed easement. Diro submits that the Court would be satisfied that the 150mm pipe has the necessary grade and hydraulic pressure to permit flow from 33 Oleander to Council's 1500mm pipe, and can function as designed, where water would not run from Council's 1500mm pipe to 33 Oleander in "any significant way".
15. In making this argument, Diro notes the comments of Preston J in Rainbowforce at [83], being, that other obstacles to the development of the land do not have to be overcome prior to the imposition of the easement, and "[o]nly if use of the proposed easement would be absolutely illegal and there was no chance of obtaining a consent necessary to make it other than illegal, would the Court be precluded from finding that the easement was reasonably necessary". The Court would not find that there was any inability to satisfy deferred commencement condition 1A(ix) due to the connection between the 150mm pipe and Council's 1500mm pipe, especially given the non-absolute nature of the condition and in the absence of any evidence that Council is concerned about the connection.
16. Diro concludes that the Court would accept Mr Bacha's evidence that he was "very confident", that the connection between the 150mm pipe and Council's 1500mm pipe would be accepted as designed; that it has sufficient hydraulic capacity; and, that the proposed easement to accommodate the 150mm pipe and facilitate the stormwater drainage system, is reasonably necessary.
17. Finally, Diro submits that Mr Leuzinger's contentions regarding the public interest would be resolved in the same manner as the primary issue of reasonable necessity, being in Diro's favour. Further, when considering the exercise of the residual discretion to impose the proposed easement, first, Diro contends that there is no evidence to support concern about the exacerbation of flooding issues; and further, Mr Leuzinger's submissions on this topic constitute a merits assessment. Second, Diro contends that the absence of a specific stratum limitation for the proposed easement is not something to which the Court would give significant weight when deciding whether to impose the proposed easement under its residual discretion, in circumstances where an appropriate limitation could be incorporated. Diro, however, rejects any limitation to the particular development, on the basis that this constrains not only the development, but also the use of the proposed easement, and is not the intention of s 88K of the Conveyancing Act.

Mr Leuzinger's position

1. Mr Leuzinger submits that Diro has not established that the proposed easement is reasonably necessary for the effective use or development of 33 Oleander, and notes that, where property rights are valuable and s 88K(1) of the Conveyancing Act is of a "confiscatory nature", "firm proofs" of reasonable necessity should be required.
2. Mr Leuzinger submits that the existence of the Consent does not in itself, demonstrate that the proposed easement is reasonably necessary for the effective use or development of 33 Oleander. Where the development (or a substantially similar development) needs some sort of stormwater drainage system, Mr Leuzinger characterises the issue for the Court as not whether the development is reasonably necessary, but whether the proposed easement for the 150mm pipe is reasonably necessary to facilitate the development (or a substantially similar development). Mr Leuzinger submits that the proposed easement for the 150mm pipe is not reasonably necessary for four reasons.
3. First, there are reasonable, feasible and preferable alternatives for a stormwater drainage system to facilitate the development of 33 Oleander. This includes Mr Bewsher's Option 2, Option 3, and Option 4. Mr Leuzinger submits that notwithstanding some preliminary advice received from Council regarding the design of the stormwater drainage system, Diro was still obliged to consider alternatives and did properly not do that. In this respect, Diro's alternative of draining against gravity with a pump was contrary to the SSDCP, and Diro did not explore alternatives involving piping roof water by gravity from the development to the existing kerb on Oleander Parade, and the use of infiltration in the rear yard of 33 Oleander (even where Mr Bacha accepted that this would constitute the most economic stormwater drainage system). Given this, deferred commencement condition 1A imposed by Council should be seen as reflecting Diro's sole focus on obtaining the proposed easement, rather than as an indicator that Council was not prepared to consider other alternatives.
4. Second, the stormwater drainage system utilising the proposed easement changes the way the roof water is drained, contrary to proper flooding and drainage practice. Currently, roof water is drained to Oleander Parade, however, the stormwater drainage system utilising the proposed easement will drain roof water to the "flood prone area" at the rear of 31 Oleander, 29A Oleander, and 29 Oleander, which will, according to Mr Bewsher, "marginally worsen the existing flood problems in this area".
5. Third, adopting one of Mr Bewsher's options involving draining roof water by gravity to Oleander Parade and allowing stormwater in the rear yard to disperse by infiltration or reduced overland flow (that is, Option 2 and Option 3) is consistent with the SSDCP, where the SSDCP objectives include to "[m]inimise the impacts of excessive stormwater runoff and flooding of downstream properties" and "[c]ontrol the volume of stormwater runoff from any site to reasonable pre-development levels". Mr Leuzinger also rejects Diro's submissions regarding permeability issues with the rear yard, submitting that the conclusions of the site-specific geotechnical investigation (prepared by Alliance Geotechnical) are equivocal and should be given little weight.
6. Fourth, the proposed easement is not limited in height or depth below the surface of 31 Oleander and is not restricted or limited in any way to the carrying out of the works shown in Issue K of the stormwater concept design.
7. Mr Leuzinger also contends that Diro's reliance upon Issue K of the stormwater concept design as a basis for establishing that the proposed easement is reasonably necessary is "ill-founded", for four "buildability" reasons.
8. First, Issue K of the stormwater concept design does not accord with the design of the stormwater drainage system that is the subject of deferred commencement condition 1A, which refers to Issue E of the stormwater concept design (noting the differences between Issue E and Issue K are outlined above at [14]). Mr Bewsher opines that "it is a matter of normal stormwater practice" to provide a drainage depression along the route of any stormwater pipe to cater for blockage and unexpected flows. Further, on Mr Bewsher's evidence, during a 1 in 5 year flood event, the hydraulic head on Council's 1500mm pipe would mean that flows from the 150mm pipe would not be able to enter the 1500mm pipe, and a drainage depression would be required.
9. As a further submission, Mr Leuzinger notes that in imposing deferred commencement condition 1A by reference to Issue E of the stormwater concept design, Council was not approving the stormwater drainage system or confirming it worked, but simply imposing a series of requirements that must be met prior to the Consent becoming operational. Thus, the Court would not accept Diro's submission that Council knows its drainage infrastructure and has approved the stormwater drainage system for the development. Rather, Mr Leuzinger contends that Diro has been unable to demonstrate a stormwater drainage system that complies with deferred commencement condition 1A or the other conditions of the Consent.
10. Second, Issue K of the stormwater concept design is not consistent with Council's requirement for the connection between the 150mm pipe and Council's 1500mm pipe in 29A Oleander to be in the top one-third of the 1500mm pipe (by reference to correspondence with Council). On this basis, Issue K does not comply with the requirement in deferred commencement condition 1A(ix) that evidence be provided that "the private pipeline connection to Council's stormwater pipeline is to the satisfaction of Sutherland Shire Council Manager of Stormwater and Waterways". The 150mm pipe would need to be "raised substantially" to connect in the top one-third of Council's pipe, and may therefore need to be less than 600mm below the surface with potential impacts upon tree roots and existing infrastructure under the surface of 31 Oleander (and conflict with conditions 4A(iv) and 25A(i) of the Consent). Mr Leuzinger submits that the evidence before the Court is that the connection between the 150mm pipe and Council's 1500mm pipe cannot be constructed in a manner that also accords with the conditions of the Consent.
11. Third, for the reasons set out in Mr Bewsher's evidence summarised at [31] above, it is unlikely that the 150mm pipe, with adequate hydraulic capacity, can be constructed at the levels shown in Issue L (and thus Issue K) of the stormwater concept design.
12. Fourth, while it is agreed that the 150mm pipe capacity would need to sufficiently cater for the 1 in 20 year storm event, this has not been demonstrated. Instead, as noted above at [72], Mr Bewsher's evidence was that as a result of the hydraulic head on Council's 1500mm pipe, the 150mm pipe would not have practical capacity in the 1 in 20 year storm event, such that a drainage depression would be required.
13. In summary, Mr Leuzinger rejects the submission that the imposition of a deferred commencement condition is sufficient to show that the proposed easement is reasonably necessary. Mr Leuzinger contends that there are viable, and in fact preferable, alternatives for the stormwater drainage system which do not require the proposed easement (distinguishing the current circumstances from those considered in Khattar), however Diro has failed to consider these in a "proper or meaningful way", even where Council is apparently willing to consider alternatives, and such alternatives are consistent with the SSDCP, contrary to the commentary in Moorebank Recyclers at [158].
14. Further, Mr Leuzinger contends that Diro has not demonstrated that the 150mm pipe utilising the proposed easement would function properly and would meet the requirements of Council in relation to the connection to Council's 1500mm pipe. In these circumstances, Mr Leuzinger submits that the Court would find that Diro has not demonstrated the reasonable necessity of the proposed easement and would dismiss Diro's application.
15. If the Court is satisfied as to reasonable necessity for the purposes of s 88K(1) of the Conveyancing Act, then Mr Leuzinger submits that where Diro's stormwater drainage system utilising the proposed easement diverts additional stormwater to an area that is already flood prone and as such potentially increases the duration of flooding, it is contrary to the public interest. This should militate against the imposition of the proposed easement, under s 88K(2)(a), or as a matter of discretion. In addition, Mr Leuzinger identifies that the lack of depth or development limitations in the proposed easement (such that the proposed easement could be used for purposes outside those currently contemplated by the development) is another factor that would weigh against the Court exercising its discretion to impose the proposed easement.

Consideration

1. I turn now to my consideration of the evidence before the Court, and the submissions of the parties, in relation to the imposition of the proposed easement. As an initial comment, I note that Diro in these proceedings bears the onus of demonstrating that the Court should impose the proposed easement. I also accept, as submitted by Mr Leuzinger, that the imposition of the proposed easement is a serious matter, which impacts on Mr Leuzinger's valuable property rights in relation to 31 Oleander.

Reasonable necessity

1. The initial issue for consideration is whether the proposed easement is "reasonably necessary for the effective use or development" of 33 Oleander, such that the Court has the power to impose the proposed easement: s 88K(1) of the Conveyancing Act. As this issue is a precondition for the Court's exercise of the power to impose the proposed easement, it remains the primary issue in these proceedings.
2. I remain cognisant of the relevant principles concerning reasonable necessity, summarised at [41]-[47] above. In these proceedings I am considering the imposition of a specific easement (being the proposed easement), in circumstances where a specific development is proposed for 33 Oleander. As such, I adopt the principles noted in 117 York Street at 508-509, summarised in Rainbowforce at [78], and confirmed in Moorebank Recyclers at [154], being that the proposed easement must be reasonably necessary for a proposed development which is reasonable (compared with the possible alternative developments), and further, that the development with the proposed easement must be (at least) substantially preferable to the development without the proposed easement.
3. I accept, as submitted by Diro, that this formulation can be distilled into two questions, being: first, whether the proposed development is reasonable (in comparison with the possible alternatives); and second, whether that development with the proposed easement is substantially preferable to that development without the proposed easement: Khattar at [26]. However, I am conscious that the test remains provided in the statutory language of s 88K(1) of the Conveyancing Act.
4. It is uncontroversial between the parties that undertaking the development pursuant to the Consent on 33 Oleander constitutes a more intense and valuable use of that land, where the existing single occupancy dwelling is to be replaced by four dwellings (three townhouses and one villa). I accept that the development of 33 Oleander for a higher and better use is an economically rational use of the land, and further, one which was, at least at the time the Consent was granted by Council, appropriate to the area where 33 Oleander is situated: Moorebank Recyclers at [155]. This adequately disposes of the first question at [83].
5. However, the parties disagreed as to whether development with the proposed easement is substantially preferable to that development without the proposed easement, such that the proposed easement is reasonably necessary. Resolving this requires further consideration of Mr Bewsher's Option 2, Option 3, and Option 4, which he provided as alternatives to Diro's stormwater drainage system utilising the proposed easement. It also requires consideration of the buildability issues raised by Mr Leuzinger, the position of Council, and the impact of the proposed easement on 31 Oleander as the servient tenement.

Alternatives

1. Diro and Mr Leuzinger have differing positions on whether there are alternative stormwater drainage systems that could be implemented when undertaking the development, meaning that the proposed easement is not reasonably necessary for the development - where it is clear that the caveat of "reasonably" in "reasonably necessary" does not mean the proposed easement must be "absolutely" necessary, but acknowledging that concerns have been expressed with "reasonably necessary" being reduced to a finding that one alternative is "substantially preferable" to the others: Rainbowforce at [74], [79]-[80]; Woodland v Manly Municipal Council [2003] NSWSC 392; (2003) 127 LGERA 120 at [9] and 19.
2. I find that, on the evidence before the Court, Mr Bewsher's Option 2, Option 3, and Option 4 are not as equally efficacious as Diro's stormwater drainage system utilising the proposed easement. As such, the existence of alternatives does not render the proposed easement not reasonably necessary for the effective development of 33 Oleander. My reasons for this finding follow.
3. First, to the extent that Mr Leuzinger contends that Diro did not consider (or properly consider) the existence of alternatives to its stormwater drainage system utilising the proposed easement, such that it has not established the reasonable necessity of the proposed easement, I consider that alternatives were properly considered. The evidence before the Court indicates that there was at least consideration of the alternative option of utilising an easement through 10 Holly Street, Caringbah South (to the immediate west of 33 Oleander) when disposing of stormwater into Council's pipe infrastructure. However, this alternative was the subject of concern and objection from local residents and was not supported by Council officers in relatively early meetings, on the basis that it diverted stormwater to a separate sub-catchment and drained against gravity.
4. Further, I rely on the evidence of Mr Bacha that a stormwater storage system similar to Mr Bewsher's Option 2 and Option 3 was initially investigated, noting that the development of Diro's stormwater drainage system utilising the proposed easement was informed and supported by significant testing and site investigation (including the Stormwater Engineering Report and the Geotechnical Report). I therefore accept that alternatives to Diro's stormwater drainage system utilising the proposed easement did, to an appropriate extent, receive consideration, and reject Mr Leuzinger's submission that alternatives have not been properly considered.
5. Secondly, I find that Mr Bewsher's Option 2 and Option 3 are not proper alternatives to Diro's stormwater drainage system utilising the proposed easement, as a result of their reliance on infiltration pits in circumstances where the soils on 33 Oleander are not sufficiently permeable. I accept, as submitted by Diro, that cl 4.3.3 of Ch 38 of the SSDCP provides that infiltration systems may only be proposed on sites with adequate soil permeability, which is defined as "over 15mm/hr".
6. The Geotechnical Report (which was prepared "to address the Council requirement regarding groundwater presence" on 33 Oleander) involved the drilling of two boreholes as well as carrying out two Dynamic Cone Penetration Tests to ascertain soil consistency on 33 Oleander, and made findings about the subsurface condition and stratigraphy of 33 Oleander. The Geotechnical Engineers Statement assessed the suitability of 33 Oleander for an absorption system based upon Council's SSDCP requirements for soil permeability, by reference to the Geotechnical Report and a supplementary geotechnical report dated October 2019. It concluded that the sandy clay layer encountered on 33 Oleander had an expected permeability of 10ˉ⁹ to 10ˉ⁷m/s (to be confirmed by in-situ testing), such that 33 Oleander was not suitable for absorption systems.
7. I find this conclusion in relation to soil permeability to be persuasive, noting it is informed by an actual assessment of the soils at 33 Oleander, and is to be preferred to Mr Bewsher's alternative opinion. I accept Diro's submission that, despite his extensive experience as a hydrologist, Mr Bewsher is not a geotechnical expert and note that his opinion was informed by Council's mapping of soil infiltration potential within the SSDCP. Despite the detailed evidence given by Mr Bewsher about infiltration pits, and accepting that further testing would be undertaken as part of the installation of an infiltration pit and that the Geotechnical Engineers Statement itself foreshadowed confirmatory testing, in the absence of such testing, I accept the conclusion of the geotechnical engineer who provided the Geotechnical Engineers Statement regarding the suitability of 33 Oleander for an absorption system. Given this, the evidence establishes that the soil permeability at the rear of 33 Oleander is not conducive to Option 2 or Option 3, where those options partly or fully involved infiltration in this area (which itself had flooding concerns).
8. Thirdly, I have considered the submissions made by Mr Leuzinger in relation to the consistency of Diro's stormwater drainage system utilising the proposed easement and Mr Bewsher's Option 2, Option 3, and Option 4 with the requirements of Council's SSDCP. I accept that cl 2.3.4 of Ch 38 of the SSDCP provides that diverting flows from one drainage sub-catchment to another is not permitted. I also accept that cl 1.1 of Ch 38 of the SSDCP contains objectives for off-site disposal of stormwater which include to "[m]inimise the impacts of excessive stormwater runoff and flooding of downstream properties" and "[c]ontrol the volume of stormwater runoff from any site to reasonable pre-development levels".
9. Having regard to the evidence of Mr Bacha, both in respect of the natural topography of 33 Oleander, the interpretation of "sub-catchment" in the SSDCP, and the Geotechnical Report, the Geotechnical Engineers Statement, the Flood Risk Management Plan, and the Stormwater Engineering Report, I find that no inconsistency arises between Diro's stormwater drainage system utilising the proposed easement and the requirements of Council's SSDCP, such that Option 2, Option 3 or Option 4 are more preferrable.
10. In particular, I do not accept the contentions of Mr Bewsher and submissions of Mr Leuzinger in relation to Diro's stormwater drainage system utilising the proposed easement marginally worsening flooding issues at the rear of 31 Oleander, 29A Oleander, and 29 Oleander. I accept, as submitted by Diro, that contrary to Mr Bewsher's opinion, the use of the 150mm pipe connecting through the proposed easement to Council's 1500mm pipe would effectively result in less water in the ground at 33 Oleander (and thus less water at the rear of the neighbouring properties). In this regard, I prefer the evidence of Mr Bacha to that of Mr Bewsher. Moreover, I find that there are concerns regarding flooding impacts on Oleander Parade and the rear of 33 Oleander (which I have found not to have the soil permeability to support an infiltration pit) which would militate against Option 2 and Option 3 being consistent with Council's SSDCP.
11. In conclusion, I do not consider there are "reasonable, feasible and preferable alternatives" to the stormwater drainage system as submitted by Mr Leuzinger. While I accept that Mr Bewsher's Option 2, Option 3 and Option 4 do not require an easement, and further accept that at least one of these options may be more "economic" than Diro's stormwater drainage system utilising the proposed easement, the evidence regarding the unsuitability of the rear of 33 Oleander for an infiltration pit and my consideration of Council's requirements in Ch 38 of the SSDCP, all lead me to the view that Diro's stormwater drainage system utilising the proposed easement is appropriate, reasonable, feasible, proper, and preferable to the other options.

Buildability

1. Mr Leuzinger also submits that Diro's stormwater drainage system utilising the proposed easement is not reasonably necessary on the basis that there are buildability concerns (centred on hydraulic issues). On Mr Leuzinger's submission, where Diro is unable to demonstrate its stormwater drainage system complies with deferred commencement condition 1A or the other conditions of the Consent, the Court would not find that the proposed easement to facilitate that stormwater drainage system was reasonably necessary. Mr Leuzinger refers to the conclusion of Brereton J in Khattar at [45]: …But where the very necessity for the easement is said to arise from the imposition of a condition, it is not possible for an easement which does not satisfy that condition to meet the necessity. It follows that reasonable necessity has not been established by the plaintiffs: as the proposed easement would not satisfy the conditions of approval which are said to make it necessary, it cannot be said to be reasonably necessary for the reasonable use and development of the plaintiffs' land.
2. Mr Leuzinger raises concerns regarding the ability to construct the 150mm pipe with adequate hydraulic capacity, such that there would be sufficient "head" for flow to enter Council's 1500mm pipe when it is at capacity, in the "1 in 5 year" flood event (if not more frequently). Mr Leuzinger contends that in these conditions, stormwater from the 150mm pipe would not flow into Council's 1500mm pipe. Because of this, Mr Leuzinger also submits that Diro's stormwater drainage system utilising the proposed easement is unable to comply with deferred commencement condition 1A(iii), which requires the provision of a "drainage depression" to facilitate the flows of the difference between the 1 in 20 year flow and the flow in the 150mm pipe. I note that there are improvements on that part of the surface of 31 Oleander impacted by the proposed easement, and that Diro does not propose to provide a drainage depression on the surface of 31 Oleander as part of its stormwater drainage system utilising the proposed easement, as its position is that the 150mm pipe has capacity to accommodate 1 in 20 year flows.
3. Having considered the evidence of Mr Bacha and the submissions of Diro regarding the hydraulic capacity of the 150mm pipe, I am satisfied that Diro has provided evidence in relation to the ability of the 150mm pipe to accommodate the 1 in 20 year flows, including through revised DRAINS modelling and an increase in the volume of OSD, which is satisfactory to Council. I am also satisfied that Mr Bacha is alive to issues relating to the head of the 150mm pipe and Council's 1500mm pipe, such that the ability of flows to enter the 1500mm pipe from the 150mm pipe has been properly considered in his calculations. As such, I find that a drainage depression is no longer required to comply with deferred commencement condition 1A(iii), as confirmed in correspondence from Council dated 9 March 2021. In coming to this conclusion I also note that Mr Bewsher agreed that increasing the size of the OSD at 33 Oleander would reduce the flow in the 150mm pipe and such that the 150mm pipe would "theoretically" be able to contain the 1 in 20 year flows, although he maintained other concerns.
4. Mr Leuzinger also contends that there are issues complying with the conditions of the Consent requiring the 150mm pipe to have a minimum depth of 900m, having regard to what he submits is Council's requirement that the 150mm pipe connects to Council's 1500mm pipe within a 120 degree arc or within 45 degrees of the obvert. While acknowledging that there is conflicting evidence about Council's connection requirements before the Court, I prefer the evidence of Mr Bacha, being that Council approaches the issue on a case-by-case basis, and that appropriate arrangements in relation to the connection between the 150mm pipe and Council's 1500mm pipe (more particularly, the angle and manner of connection) will be able to be addressed with Council. I consider that this position is supported by the fact that Council granted the Consent subject to deferred commencement condition 1A(ix), which requires details of the connection between the 150mm pipe and Council's 1500mm pipe to be to the "satisfaction" of a Council officer.
5. In coming to this conclusion, I have had regard to the evidence of Mr Bewsher and Mr Bacha regarding the various conversations they have had with Council officers in relation to the connection with Council's drainage infrastructure. I also have had regard to the various correspondence from Council officers which is in evidence in these proceedings. I consider the inconsistencies in information received from Council to support my conclusion that a case-by-case approach is taken, as there is evidently not a standard policy or practice that is known and accepted across Council.
6. Given my finding in relation to Council's requirements, I am satisfied, on the evidence before the Court (which includes the updated modelling and calculations shown in Ex G) that the 150mm pipe can be constructed within the proposed easement with an appropriate connection to Council's stormwater pipe.
7. To the extent that Mr Leuzinger raises concerns regarding tree roots and other possible obstructions to the imposition of the 150mm pipe, I note that there are other conditions within the Consent that are relevant to these issues. I also note that these issues will be the subject of further consideration by Council and/or an accredited certifier, in circumstances where deferred commencement condition 1A(ix) requires, as noted above, Council to be satisfied of the details of the "private pipeline connection to Council's stormwater pipeline", and further deferred commencement condition 1A(x) requires certification from an Accredited Certifier in Civil Engineering or a Chartered Civil Engineer that the "drainage design" is to their satisfaction and satisfies the design requirements otherwise set out in deferred commencement condition (1A). Moreover, I accept the chapeau to the deferred commencement condition in the Consent provides clearly that the Consent does not operate until Council is satisfied in relation to the matters in the deferred commencement condition.
8. In these circumstances, I consider that the evidence before the Court indicates Diro's stormwater drainage system utilising the proposed easement is able to satisfy Council's requirements in the deferred commencement conditions and the conditions of the Consent, taking into account the scope for further refinement to be undertaken and the requirement for further approvals to be obtained. I accept that the requirements of s 88K(1) of the Conveyancing Act can be satisfied notwithstanding that some further action may be required for the effective use of the development: Rainbowforce at [83]. This is not a situation where "all other obstacles" to the development of 33 Oleander must have been overcome before the Court has power to grant the easement.
9. In this respect, the approach to the deferred commencement conditions and the conditions of the Consent in these proceedings can clearly be distinguished from the condition that was being considered by Brereton J in Khattar. I accept Diro's submission that the condition in Khattar was "absolute", and that it was not possible for the easement to meet the condition. In these proceedings, I have found that the 150mm pipe through the proposed easement can comply with deferred commencement condition 1A and the conditions of the Consent.

Approach of Council

1. It is apt to note at this point that, as submitted by Mr Leuzinger, Council has not provided consent for Diro's stormwater drainage system. Rather, it has granted the Consent for the development subject to deferred commencement condition 1A which sets out requirements for the design of a stormwater drainage system, including by reference to Issue E of the stormwater concept design. Some further comments can be made about Council's position in relation to Diro's stormwater drainage system utilising the proposed easement.
2. Although not itself determinative in my consideration of the reasonable necessity of the proposed easement, the evidence before the Court indicates that Council has been supportive of the stormwater drainage system for the development being dealt with by way of an easement over 31 Oleander since pre-development application meetings were held. This is confirmed in correspondence from Council dated 15 January 2018, which provided that as 33 Oleander drains naturally to the rear, "an easement to drain water over a downstream property is required to be sought as per Chapter 38 of the [SSDCP] and Council's Stormwater Management Specifications - Appendix B". This position was maintained by Council, with correspondence from Council dated 6 December 2018 requesting Diro obtain "in principle support for [an] easement (in accordance with Council's stormwater management specification) from downstream properties via 31 Oleander Parade and 29A Oleander Parade".
3. Issue E of the stormwater concept design (which accompanied the development application) provided for a connection to Council's stormwater pipelines via pipe and associated easement through 31 Oleander and 29A Oleander. Further, in the assessment report prepared by Council's officer in August 2019, it was noted that because the natural fall of the land is towards the rear of 33 Oleander, Council preferred a stormwater drainage system in accordance with "the [SSDCP] and stormwater specifications", which involved using "…the natural fall of the land to allow discharge of stormwater by gravity through adjoining properties to the nearest Council drainage system", and that this would require the creation of an easement and the installation of a pipeline to enable discharge of stormwater from 33 Oleander over both 31 Oleander and 29A Oleander.
4. Council then imposed deferred commencement condition 1A on the Consent, which refers to Issue E of the stormwater concept design, indicating that Council had considered and accepted the stormwater concept design in principle. I take into account that Council has provided for deferred commencement conditions in relatively directive terms as to method and concept.
5. I find that it has been the consistent position of Council that stormwater disposal by way of an easement over 31 Oleander and connection to Council's 1500mm pipe is appropriate. In these circumstances, it is clear that Council, being the relevant consent authority for development applications and the owner of drainage infrastructure, would be at least content (if not more) with Diro's current stormwater concept design (as set out in Issue K).

Impact on 31 Oleander

1. Finally, and although not determinative, an assessment of reasonable necessity requires consideration of the effect of the grant of the proposed easement on 31 Oleander as the servient tenement: Moorebank Recycling at [156]. I find that there will be little, if any, practical interference to 31 Oleander (although I accept that there will be legal interference). The present case is clearly not one where the imposition of the proposed easement would effectively preclude a reasonable future development on 31 Oleander, given the position of the proposed easement along of the western (rear) boundary and the restriction on interference with the surface of 31 Oleander. Although I do not place significant weight on this aspect, it is one of the circumstances I take into account.
2. In conclusion, I find that the proposed easement along the boundary at the rear of 31 Oleander to facilitate the construction of the 150mm pipe beneath the surface is reasonably necessary for the effective development and subsequent use of 33 Oleander. Weighing all the factors, while I do not consider that the easement is absolutely necessary, it is clearly more than a mere desirability or preferability over the alternative means of disposing of stormwater from the development. As such, the Court has power to grant the proposed easement.

Public interest

1. To the extent that Mr Leuzinger submits that it would not be in the public interest to grant the proposed easement, for the purposes of s 88K(2)(a) of the Conveyancing Act, he relies on similar arguments to those considered above in relation to Diro's stormwater drainage system utilising the proposed easement causing worse flooding issues on 33 Oleander and neighbouring properties, such that the development would be inconsistent with the public interest. I repeat my factual findings in relation these issues as set out at [95] above. I take the same position in relation to the exercise of the residual discretion, discussed below.
2. I also note that the Court is not undertaking a merit assessment of either the 150mm pipe or the development. Rather, I am considering the imposition of the proposed easement in the context of the statutory test in s 88K of the Conveyancing Act. In these circumstances, I consider that the public interest favours 33 Oleander being used for a permissible purpose and that the owner of 33 Oleander is entitled to utilise the land in accordance with its zoning: City of Canterbury v Saad [2013] NSWCA 251; (2013) 195 LGERA 329 at [56]. In forming my view, I have taken into account the planning instruments relevant to development on 33 Oleander, and in particular that the type of development for which Consent has been received is that which is otherwise permissible under the SSLEP (although noting that a minimum lot size has now been introduced), in circumstances where ss 88K(1) and (2) are to be applied in the context of, and as far as possible in harmony with, relevant legislative planning controls: Arinson Pty Ltd v City of Canada Bay Council [2014] NSWLEC 43; (2014) 205 LGERA 248 ('Arinson') at [52].
3. Finally, I find that the impact on 31 Oleander, while not immaterial, is not such that is relevant in my finding in relation to public interest (or the exercise of discretion, considered below). I therefore find that the development of 33 Olander would not be inconsistent with the public interest. I do not consider s 88K(2)(a) of the Conveyancing Act to militate against the imposition of the proposed easement sought by Diro.

Adequate compensation

1. The provision of s 88K(2)(b) of the Conveyancing Act providing for the payment of compensation facilitates a balancing of competing private interests as well as the promotion of the public interest: Rainbowforce at [95]; Arinson at [63].
2. I am satisfied, given the agreement in relation to the quantum of compensation between the parties in the sum of $35,000, that Mr Leuzinger can be adequately compensated for any loss or other disadvantage that would arise from imposition of the proposed easement.

Reasonable attempts

1. In relation to s 88K(2)(c) of the Conveyancing Act, I am satisfied that having regard to the evidence before the Court, all reasonable attempts have been made by Diro to obtain the easement. I do not understand a contrary submission to have been made in the course of the proceedings.

Residual discretion

1. Notwithstanding satisfaction of all the requirements of ss 88K(1) and (2) of the Conveyancing Act, the Court retains a discretion about whether or not to impose the proposed easement. I consider that the discretion should be exercised having regard to the purpose of s 88K which was summarised, in terms I adopt, by Brereton J in Khattar at [60] (and accepted by Preston J in Rainbowforce at [134]), as "facilitating the reasonable development of land whilst ensuring that just compensation be paid for any erosion of private property rights".
2. In accordance with my findings above, I consider that an order imposing the proposed easement over 31 Oleander is consistent with the purpose of s 88K of the Conveyancing Act because it facilitates the reasonable, orderly and economic development of 33 Oleander consistently with the public interest, and, as I have found, Mr Leuzinger is able to be adequately compensated for any loss or disadvantage that may arise from the imposition of the proposed easement. As such, I consider that there is no reason why it would be an appropriate exercise of the Court's discretion not to grant the proposed easement sought by Diro.
3. Finally, although there was some debate in relation to the terms of the proposed easement, focusing on whether the proposed easement should be limited to a specific stratum, given my findings above and the slight amendments made to the standard wording in Pt 3 of Sch 8 of the Conveyancing Act (to reflect the now intended method of constructing the 150mm pipe by guided underboring through 31 Oleander), I am of the view that Diro's proposed wording in relation to 31 Oleander in the Schedule to the amended Class 3 application (filed pursuant to leave granted on 1 April 2021), is appropriate.

Costs

1. Pursuant to s 88K(5) of the Conveyancing Act, the costs of these proceedings are payable by Diro as the applicant for the proposed easement, subject to any contrary order of the Court.
2. In the circumstances, I find that there is no reason to make a contrary costs order.

Orders

1. The Court directs the parties to confer, prepare, and file with the Court, within 21 days of this judgment, short minutes of order which reflect my findings in this judgment and: 1. Provide for the imposition of an easement to drain water that burdens Lot B in DP 445276, known as 31 Oleander Parade, Caringbah South for the benefit of Lot D in DP 445280, known as 33 Oleander Parade, Caringbah South and set out the terms of an instrument intended to be created under s 88B of the Conveyancing Act 1919 (NSW) ('Conveyancing Act') and a survey plan, in a form capable of being registered and meeting the requirements of s 88K(3) of the Conveyancing Act. 2. Provide for Diro Group Pty Ltd to pay compensation in the amount of $35,000 to Bernard Leuzinger. 3. Provide for Diro Group Pty Ltd to pay Bernard Leuzinger's costs of these proceedings as agreed or assessed.
2. If necessary, the proceedings are listed for mention at 9am on 22 October 2021.

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Annexure A (536970, 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: 04 October 2021