Evans v Cornish Nominees Pty Ltd

Conveyancing Act 1919 (NSW) Water Management Act 2000 (NSW) Kiama Local Environmental Plan 1996 LEGISLATION CITED : Access to Neighbouring Land Act 2000 (NSW) Noxious Weeds Act 1993 (NSW) Environmental Planning and Assessment Act 1979 (NSW) Threatened Species Conservation Act 1995 (NSW) Land and Environment Court Act 1979 (NSW)

Argyropoulos v Canterbury Municipal Council (1988) 66 LGRA 202 117 York Street Pty Ltd v Proprietors of Strata Plan No. 16123 (1998) 43 NSWLR 504 Debbula Pty Ltd v Owners - Strata Plan No. 6964 [2003] NSWSC 189; 12 BPR 22,617 CASES CITED : Gittany v McDowell [2009] NSWSC 591 Khattar v Wiese [2005] NSWSC 1014; (2005) 12 BPR 23,235 Tesco Supermarkets Ltd v Nattrass [1972] AC 153 Lennard's Carrying Co Ltd v Asiatic Petroleum Co Ltd [1915] AC 705 Swann & Anor v Spiropoulos & Ors [2006] NSWSC 860

PARTIES : Plaintiff: Heath Evans Defendant: Cornish Nominees Pty Ltd

COUNSEL : Plaintiff: J Trebeck Defendant: J Webster SC with M Seymour

SOLICITORS : Plaintiff: Marriott Oliver Defendant: Morton & Harris with RMB Lawyers

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION

1760/08 Heath Andrew Evans v Cornish Nominees Pty Ltd JUDGMENT 1 HIS HONOUR: This is an application under s 88K of the Conveyancing Act 1919 (NSW) for the grant of a right of carriageway over the defendant's land. The plaintiff and the defendant own adjoining land at Foxground, NSW, a region situated under the Illawarra escarpment between Kiama to the north and Berry to the south. The plaintiff's land has an area of about 26.8 hectares. Most of the plaintiff's land is in an area of high conservation value. It is largely not cleared, although there are some open areas consistent with earlier cattle grazing. It is not used as a farm. There is no building on it. There are no tracks. The plaintiff has occasionally visited the land but has no legal access to it except by licence from an adjoining landowner. He was aware of this when he purchased the land in 2003. 2 The defendant's land is used as a farm for beef cattle. The farm has an area of about 76.2 hectares. 3 The plaintiff proposed various routes for a right of carriageway to his land known as options A, B, C, D, E, F, and modified option F. He now seeks a right of carriageway along the route known as modified option F. The road proposed to be constructed along this route would run for about 740 metres terminating at a creek known as Broughton Creek which forms the southern boundary of the plaintiff's land (lot 3 in DP 601153) and the northern boundary of part of the defendant's land (portion 127). 4 The proposed route of modified option F is reasonably proximate to what is thought to be the location of a closed road. The surveyors have not been able to identify precisely the location of what is shown on the maps as a closed road. The original relevant crown plans have been lost and there are significant inaccuracies in the topographic maps and the Digital Cadastral Data Base which is generally relied upon to prepare accurate maps. Although its situation was shown on maps, the road was never formed. It was closed in 1981. The proposed route of the right of carriageway is very steep in places. It partly follows a farm track before descending to level ground. It passes a site on which a caravan is located before crossing open space and a small watercourse until reaching Broughton Creek. Each of the proposed routes is shown on a plan set out at appendix A to this judgment. 5 The plan also shows the location of land owned by the plaintiff, some of the land owned by the defendant, and an adjacent property owned by Mr and Mrs Goldfinch. They own lot 4 DP 601153. As can be seen on the attached plan, two of the routes proposed by the plaintiff (option C and option D) pass over their land as well as the defendant's land in lot 122 DP 1109759. The defendant owns the lots numbered 96, 122, 127 and 128 as shown on the plan. All of the proposed routes for a right of carriageway, except option A, start at a gate on lot 122 which is the end of a public road. 6 The defendant was willing to grant to the plaintiff a right of carriageway over lot 122 as far as a causeway on the creek which divides lot 122 from the Goldfinch's land, lot 4. Such a right of carriageway would lead to the start of the route known as option C passing along the Goldfinch's land near the creek. Mr Goldfinch advised that he and his wife were not interested in granting a right of access or easement to the plaintiff's lot 3. The plaintiff has not pursued either option C or option D. 7 The route known as option A started from Free Selectors Road and traversed open but steep ground on portion 127 used as grazing paddocks before joining a farm track which is part of the route modified option F. This option was raised in 2008 but not pursued. 8 The route known as option B followed Broughton Creek for several hundred metres. Land within 40 metres of Broughton Creek is designated as waterfront land for the purposes of the Water Management Act 2000 (NSW) and approval of the Department of Water and Energy is required prior to the undertaking of any works on waterfront land. On 21 July 2008 that department advised that is was unable to give in principle support to the proposal for a road following option B. The plaintiff was advised by Mr Matthew Philpott, a civil engineer and principal of the firm Allen Price & Associates, Land and Development Consultants, Nowra, that it was highly unlikely that the department would be willing to issue a Controlled Activity Approval for the proposed road along option B. He recommended that an alternative road alignment option be pursued that minimised works within 40 metres of Broughton Creek. 9 Options E, F, and modified option F were very similar. Option E was intended to follow the course of the closed road. But the exact location of that road could not be identified and two alternatives were proposed to obtain a preferred road alignment. The modified option F is the preferred alignment. 10 The construction of the road would involve significant earthworks to comply with Planning for Bush Fire Protection requirements. The road would have to be sealed with a maximum longitudinal grade of 26.8 percent. At one point the proposed route rises 22.1 metres over a distance of approximately 70 metres. Substantial earthworks would be required to moderate the gradient by providing fill at the base of the hill to a height of approximately 1.65 metres, cutting into the top of the hill to a depth of approximately 1.65 metres, and carrying out associated works to extend the fill and the cut. It is estimated that at the rise of the hill a right of carriageway of approximately 18 metres would be required to accommodate the carriageway and the associated batters and the cut into the hill. There is a winding farm track of about 150 metres. The construction of the road would require an excavation laterally into the existing embankment of approximately 4.5 metres using a three-metre high gabion cage retaining wall. On the level sections the carriageway would be four metres wide, but a wider easement would be required to provide for the road shoulders, table drain and batters of various widths up to about ten metres. (Normal shoulders on private rural roads are between 0.5 and one metre.) Regularly spaced passing bays would also be required to comply with Planning for Bush Fire Protection requirements. 11 The civil engineers were agreed that the easement would need to have a practical minimum width of six metres, and that a more reasonable minimum width that would normally be used in similar situations would be ten metres. They agreed that given the terrain over which the proposed route passes, there would probably be some locations where engineering design and/or passing bays would require a greater width; possibly up to 18 metres. 12 It is anticipated that it would be technically feasible to construct a bridge across Broughton Creek at the point where option F reaches the creek. However, geotechnical studies are required to determine the nature of the construction to cross the creek. A bridge span of 25 metres would be required. This cannot be constructed with a single span. 13 There are environmental and planning constraints affecting the construction of a road, the construction of a bridge, the construction of a further road on the plaintiff's land to the proposed site of any house to be constructed on the plaintiff's land, and to the construction of such a house. The plaintiff says that he intends to construct a house on his land if he is able to do so. However, prior to giving oral evidence, the plaintiff had not identified the site on which he would like to construct a house on his land, nor the proposed route from the proposed point of crossing of Broughton Creek to such a site. At the crossing of Broughton Creek there is a short ridge of higher ground, but the land then descends to a swamp. The plaintiff said that his present intention was to seek to construct a road in a generally north or north-westerly direction on higher ground avoiding the swamp. There was disagreement as to how far the swamp extended in that direction. The plaintiff has not retained any expert to survey a route for the road. On the taking of a view, it was not possible to follow the route indicated by the plaintiff because of impenetrable undergrowth. 14 The plaintiff is not in a position to identify precisely the site of the proposed easement by reference to a plan that is capable of being registered. Geotechnical studies are required before the design of the road can be finalised. The plaintiff submits that if it is determined as a matter of principle that a right of carriageway following the preferred route, being modified option F, should be granted, a declaration to that effect be made and the matter be stood over to enable further studies to be undertaken and final plans prepared. 15 Section 88K of the Conveyancing Act 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. (6) Such an easement may be: (a) released by the owner of the land having the benefit of it, or (b) modified by a deed made between the owner of the land having the benefit of it and the persons for the time being having the burden of it or (in the case of land under the provisions of the Real Property Act 1900) by a dealing in the form approved under that Act giving effect to the modification. (7) An easement imposed under this section, a release of such an easement or any modification of such an easement by a deed or dealing takes effect: (a) if the land burdened is under the Real Property Act 1900, when the Registrar-General registers a dealing in the form approved under that Act setting out particulars of the easement, or of the release or modification, by making such recordings in the Register kept under that Act as the Registrar-General considers appropriate, or (b) in any other case, when a minute of the order imposing the easement or the deed of release or modification is registered in the General Register of Deeds. (8) An easement imposed under this section has effect (for the purposes of this Act and the Real Property Act 1900) as if it was contained in a deed. (9) Nothing in this section prevents such an easement from being extinguished or modified under section 89 by the Court. " Section 88K(1)(a) 16 To determine whether the proposed easement is reasonably necessary for the effective use or development of the plaintiff's land it is necessary to identify what use or development of the land is proposed. The plaintiff points to three matters. First, he needs the benefit of a right of way to obtain access to his land whether or not he is entitled to build a house on the land. At its simplest, the use to which he would wish to put his land is simply being able to walk over or camp on the land. Secondly, the plaintiff contends that he needs access to the land for purposes of bushfire hazard reduction, removal of noxious weeds, or regeneration of native forests. These are currently permitted uses. Thirdly, the plaintiff intends to construct a house on his land if he is able to do so. To fulfil this use, he would need road access to and over his land. 17 In summary, the defendant's response is that a right of carriageway over its land is not reasonably necessary for the first two proposed uses. In relation to the third proposed use and development of the plaintiff's land the defendant says that:

(a) development consent could not lawfully be given to the construction of a road over its land even in conjunction with the granting of a consent to the construction of a dwelling on the plaintiff's land;

(b) there is no real chance that consent to such a dwelling and the associated road construction could be obtained because of planning and environmental constraints; and

(c) as a matter of discretion, a s 88K application should be dealt with by the Land and Environment Court if it is called on to consider an appeal involving the grant, refusal or modification of development consent for the construction of a house on the plaintiff's land. First Proposed Use: Access to the Plaintiff's Land 18 The plaintiff has no legal access to his land except by licence from an adjoining landowner. The defendant does not refuse a licence to the plaintiff to access his land by foot. A right of carriageway, as distinct from a right of footway, is not reasonably necessary for him to use the land for the first identified purpose, namely to walk or camp on the land. 19 Moreover, a road over the defendant's land would pass through areas of high conservation value. Clause 37(2) of the Kiama Local Environmental Plan 1996 ("Kiama LEP") provides: " (2) Development in an area of high conservation value is prohibited other than for the purposes of a public road, care-giving services, cottage industries carried out in association with a dwelling, the regeneration of native forests, removal of noxious weeds, removal of nominated exotic plants and development allowed by clause 38. " 20 The construction of a road over the defendant's land simply to enable the plaintiff to have access to his land, and not for a purpose specified in cl 37(2) of the Kiama LEP or for a development allowed by cl 38 would be unlawful. Second Proposed Use: Removal of Noxious Weeds and other Permitted Activities without Development Consent 21 As to the second proposed use, the plaintiff's land is zoned Rural Environmental Protection 7(e) (Hinterland). Most of the land, including the site the plaintiff identified as his preferred site for the location of a house, is in an area designated as being of high conservation value under the Kiama LEP. The only feasible uses to which the land could be put without development consent are bushfire hazard reduction, regeneration of native forests and removal of noxious weeds. The plaintiff contends that he should have legal access to his land by a right of carriageway for these purposes. 22 A right of carriageway is not reasonably necessary for such uses. This is so for two reasons. First, the defendant, through its director Mr Cornish, has said that it would consent to the plaintiff having access over its land for these purposes. I accept that evidence. In the unlikely event that such consent was not forthcoming, the plaintiff would be entitled to apply for a neighbouring land access order to carry out such work on his land pursuant to s 11 of the Access to Neighbouring Land Act 2000 (NSW). To date, the plaintiff has not approached the defendant to seek its consent to his having access over its land in order to carry out such activities. 23 Secondly, the construction of a road on the defendant's land is not reasonably necessary for such uses of the plaintiff's land. A noxious weed of particular concern is lantana. The plaintiff said that it would not be necessary to have truck access to his land initially in order to remove lantana. He said the lantana would be controlled through sawing off and spraying the roots. That evidence is consistent with the evidence of Dr Mills. 24 Dr Mills, an ecologist, gave evidence that this method of stem-cutting and spraying with a herbicide was an accepted method, but because it is so labour-intensive would not be used over a very broad area. He said it would not be necessary to have truck access to the plaintiff's land to use a foliage spray. He said that herbicide can be pumped great distances using a small conduit to a tank on the back of a utility vehicle. He had seen blackberry being sprayed in a national park by simply pumping herbicide through a conduit extending for three kilometres. He also said that the lantana on the plaintiff's land at present is pretty much at its full extent and was pretty much in a stable situation. I accept Dr Mills' evidence. No weed control notice has been served on the plaintiff under the Noxious Weeds Act 1993 (NSW) requiring him to control noxious weeds on his land (see ss 18 and 19). Indeed there was no evidence of any weed control orders having been made in relation to the control of lantana on the plaintiff's land. 25 Therefore, as matters presently stand, the proposed easement is not reasonably necessary for the effective use or development of the plaintiff's land. It is not reasonably necessary for the only uses to which the land can presently be lawfully put. 26 I should add that it was common ground between the town planners retained by the plaintiff and the defendant, that the Council could not consent to the construction of a road over the defendant's land along the proposed route if the road was not ancillary to the construction of a dwelling house on the plaintiff's land. No contrary submission was advanced by the plaintiff. However, in my view, if the construction of a road across the defendant's land were necessary for the regeneration of native forests on the plaintiff's land, or the removal of noxious weeds from the plaintiff's land, such a development on the defendant's land would not be prohibited by clause 37(2) of the Kiama LEP. But for the reasons I have given it is not. Third Proposed Use: Construction of a House on the Plaintiff's Land A: Legality of Road over Defendant's Land 27 Counsel for the defendant submitted that the grant of an easement was not reasonably necessary for the effective use or development of the plaintiff's land because development consent could not lawfully be given to the construction of a road over the defendant's land, even in conjunction with or ancillary to the granting of consent to the construction of a dwelling on the plaintiff's land. This was not the view of the town planners. But counsel for the defendant said that the town planners were wrong in principle when they agreed that a private road would be permissible over the defendant's land if it were ancillary to the use of the plaintiff's land for a dwelling. The defendant submits that such a use of the defendant's land, that is, to provide a right of carriageway that was not a public road, was prohibited by cl 37 of the Kiama LEP. This was so, it was said, because the right of carriageway would pass through areas of high conservation value on the defendant's land, which was only permitted if the road was a public road, which would not be the case. 28 The proposed route for the right of carriageway passes through areas of high conservation value on the defendant's land. Clause 37(2) of the Kiama LEP is set out at para [19] above. The construction of the road would be a development in an area of high conservation value. As the development would not be for the purpose of a public road or for any of the other specific purposes referred to in the clause, it would be prohibited unless the development on the defendant's land was "development allowed by clause 38". Clause 38 provides: " 38 Areas of High Conservation Value - Dwellings

(1) Except as provided by subclause (2) a person shall not erect a dwelling-house, an attached dwelling resulting from dual occupancy development or a building ancillary to such dwellings on land within an area of high conservation value. (2) A person may, with the consent of the Council, erect a dwelling-house or an attached dwelling on an allotment of land within an area of high conservation value if the land: (a) has an area of not less than 40 hectares, or (b) comprises the whole of an existing holding, being an existing holding that has an area of not less than 20 hectares, and the Council is satisfied that: (i) there will be adequate vehicular access to the dwelling, and (ii) the erection of the dwelling will not create or increase ribbon development along an arterial road, and (iii) adequate services are or will be available to the land, or ... (e) is an allotment created before 21 August 1981 in accordance with clause 32 (1) of the Kiama Planning Scheme Ordinance before its repeal, ... " 29 If the Council gave consent to a development on the plaintiff's land under cl 38 and also consented to the proposed development on the defendant's land, which was ancillary to the development on the plaintiff's land, would the development on the defendant's land be for the purposes of a "development allowed by clause 38" within the meaning of cl 37(2)? Counsel for the defendant submitted that development for the purpose of private roads was specifically prohibited by cl 37(2). That is not correct. There is no specific prohibition on development for the purpose of private roads. Such development may or may not be prohibited depending upon whether it is for a purpose in cl 37(2) or a development allowed by cl 38. 30 The defendant's principal contention was that a land use for a private road was a separate land use to occur on a separate land parcel from a development which might be allowed under cl 38, namely the erection of a dwelling house. Counsel relied upon Argyropoulos v Canterbury Municipal Council (1988) 66 LGRA 202. There, the question was whether a use of land as a road in a residential zone was permitted where the purpose of the road was to provide access to an area zoned as a light industrial zone where the use of land in the residential zone for light industrial purposes was prohibited. It was submitted for the council in that case that because the access or road was intended to serve the light industrial use, the land use for which consent was sought over the land in the residential zone ought to be characterised as being a use for the purpose of the storage of formwork material (the light industrial use) and not as a road (at 206). Cripps CJ of the Land and Environment Court rejected the submission. His Honour said (at 207, 208): " I do not think that the innominate prohibited light industrial use excludes, in the present case, the nominate permissible use. It is true that the road will serve an area of land zoned light industrial but that circumstance does not give it a separate single 'light industrial' purpose or, perhaps more precisely, a 'formwork and materials storage' purpose within the meaning of the Canterbury Planning Scheme Ordnance. In my opinion 'road' use is contemplated by the Scheme as a separate use. The function of a road is to permit the passing and repassing of vehicles. The use of the handle for a 'road' which is a nominate, permissive use under the relevant residential zoning does not become an innominate, prohibited use because of the start and/or destination of vehicles passing over the road is light industrial land. " 31 Counsel for the defendant submitted that the present case is the converse and that as cl 37(2) prohibited (it was said) the use of the defendant's land as a private road, that use did not become permissible because it would be associated with what is assumed to be a permissible use of the plaintiff's land. 32 I do not find the decision or the reasoning in Argyropoulos v Canterbury Municipal Council to be of any real assistance to the construction of the particular planning instrument in question in the present case. I accept that the proposed development over the defendant's land would be a separate development from the assumed permissible development on the plaintiff's land. But developments in areas of high conservation value which are excepted from the prohibition in cl 37(2) are not confined to the specific developments of "a public road, caregiving services, [etc.] and development allowed by clause 38". The developments excepted from the prohibition in cl 37(2) are developments "for the purposes" of any of the specific listed developments. The phrase "for the purposes of" qualifies each of the particular developments or activities which follow. The question is not whether the construction of a right of carriageway on the defendant's land is a development allowed by cl 38. Clearly it is not. The question is whether the construction of a private road is a development "for the purposes of" a development allowed by cl 38. Clearly it would be, if the erection of a dwelling house on the plaintiff's land were allowed by that clause. 33 For these reasons, I do not consider that the town planners were in error in the view they took on this issue. I would not refuse the grant of an easement under s 88K on the ground that, irrespective of whether or not development consent was given to the erection of a dwelling on the plaintiff's land, the proposed development on the defendant's land would be illegal in the absence of amendment to the Kiama LEP.

Third Proposed Use: Construction of a House on the Plaintiff's Land B: Prospect of Development Consent 34 The next question is, what is the prospect that the plaintiff might obtain approvals necessary for the construction of a house on his land and a road leading to it over the defendant's land and his land? 35 The purposes for which development may be carried out on the plaintiff's land after development consent has been obtained are: " attached dwelling dual-occupancy development; buildings ancillary to agriculture ... ; clearing of vegetation; cottage industries; dams; dwelling houses; fill; home hosting facilities; roads; rural workers' dwellings; tree plantations and harvesting; utility installations (other than gas holders and generating works). " (Zone no. 7(e) Rural Environmental Protection (Hinterland) Clause 3.) 36 The plaintiff has not sought development consent to the erection of a dwelling house or to the construction of a road on his property. There are serious obstacles to the granting of such a consent. Most of the plaintiff's land is within an area of high conservation value. Clause 37(2) of the Kiama LEP is set out at [19] above. 37 Clause 37 also provides: " 37 Areas of High Conservation Value - Development

(1) The objectives of identifying land as an area of high conservation value are: (a) to conserve environmentally important land having ecological, scientific, faunal, floristic or aesthetic values, and (b) to preserve intact rainforests and promote regenerating rainforest areas which are of significance, and (c) to preserve areas of significant vegetation stands and to promote the regeneration of forests and eradication of vegetation which competes with native flora, and (d) to protect wildlife and associated habitats and to protect and promote wildlife corridors, and (e) to exclude activities which would prejudice the ongoing conservation or rehabilitation of land referred to in paragraph (a), and (f) to encourage and allow activities which will meet the conservation objectives, and (g) to protect water sources that are to be used for drinking water purposes. ... (4) The Council may decline to consent to development within an area of high conservation value until it has considered a site plan of an appropriate scale clearly and accurately showing the boundary of any forest edge and stands of remnant forest existing on the subject land to enable it to properly assess the impact of the proposed development on that vegetation and the biodiversity it supports. (5) The Council must not consent to development on land adjoining an area of high conservation value if the Council considers that, because of the proposed development, the objectives of the area will not be met. " 38 Relevant parts of clause 38(1) and (2) are set out at [28] above. Clause 38(3), (4) and (5) provide: " 38 Areas of High Conservation Value - Dwellings

... (3) The Council shall not grant consent to the erection of a dwelling-house, an attached dwelling or another building referred to in subclause (1) on any land within a zone that is in an area of high conservation value unless it is satisfied that: (a) there is no alternative site on land within a more appropriate zone, and (b) there is no reasonable alternative site for the proposed development on land within the zone that is not in an area of high conservation value, and (c) the proposed development will not have a detrimental impact on the visual quality of the locality, and (d) any building and access thereto will be designed and sited so as to be visually unobtrusive from any public place, and (e) the amount of any vegetation proposed to be removed is as little as possible, and (f) the proposed development will not be subject to slip hazard, and (g) the proposed development will not be subject to an unacceptable level of bush fire risk, and (h) any fire protection, in relation to the proposed development, can be achieved by bush fire mitigation and building design methods which do not adversely impact on the visual landscape or the habitat of threatened or endangered species that may exist in the vicinity of the proposed development. (4) The Council shall not grant consent as referred to in subclause (2) unless it has taken into account: (a) the impact of the proposed development on the movement of native fauna, and (b) the impact of the proposed development on any rare or significant flora, and (c) the impact of the proposed development on any rare or significant fauna, and (d) the impact of the proposed development on any rare or significant native habitats, and (e) the potential the proposed development may have for impact on adjacent or adjoining land under the control of the National Parks and Wildlife Service, and (f) the impact of the proposed development on the quality of surface and ground waters. (5) The Council shall not grant consent as referred to in subclause (2) where the proposed development will affect or is likely to affect aquatic habitats unless it has consulted with and taken into account: (a) the impact of the proposed development on fish, crustaceans and molluscs, and (b) the impact of the proposed development on the marine environment of aquatic areas and their ecology. " 39 Clause 9(3) of the Kiama LEP provides that: " 9 Zone objectives and Land Use Table

... (3) Except as otherwise provided by this plan, the Council shall not grant consent to the carrying out of development on land to which this plan applies unless the Council is of the opinion that the carrying out of the development is consistent with the objectives of the zone within which the development is proposed to be carried out. " 40 The objectives of zone 7(e) with which a proposed development on the plaintiff's land would need to comply are as follows: " Zone No 7 (e) Rural Environmental Protection (Hinterland)

The objectives are: (a) to maintain the environmental attributes of the hinterland environment, (b) to preserve intact rainforests and to promote the regeneration of rainforest areas, (c) to preserve areas of significant vegetation stands and to promote the regeneration of forests and eradication of introduced vegetation which competes with native flora, (d) to protect varieties of wildlife and their associated habitats and corridors, (e) to retain and enhance the visual and scenic qualities of the escarpment ridges, foot slopes, walls and associated tablelands, (f) to allow on lawfully cleared prime crop and pasture lands the continuation of animal grazing and cropping practices associated with the use of land for agriculture, (g) to ensure that development and land management practices do not have an adverse effect on water catchments, water quality, land surface conditions, important ecosystems (such as streams, estuaries and wetlands) and other land below the hinterland environment, (h) to ensure that existing and future land uses and land management practices do not lead to a diminution of the environmental values of the hinterland environment, and (i) to cater for small domestically-based enterprises that do not adversely affect the environment or the amenity of the neighbourhood and its residents. " 41 Of particular relevance are objectives (b) and (h) of preserving rainforest intact, promoting the regeneration of rainforest areas and not diminishing the environmental values of the hinterland environment. There is a rainforest community at Broughton Creek including at the point at which it is proposed there be a bridge crossing to the plaintiff's land. The rainforest continues to the north of the creek and includes a regionally rare species of orchids and two large specimens of trees known as Podocarpus elatus which are uncommon. The uncontradicted evidence of Dr Mills is that all of the original six route options for crossing Broughton Creek would adversely affect the riparian environment of the creek and adversely affect the rainforest adjacent to it. Dr Mills said that he thought it was unlikely that the Kiama Council would approve a road that adversely affected the rainforest and riparian vegetation which had been identified as having a high conservation value in the Kiama LEP. He was not cross-examined on that evidence and there was no contrary evidence. I accept this evidence. 42 It was Dr Mills' view that an assessment of the development application would need to take into account the matters in s 5A of the Environmental Planning and Assessment Act 1979 (NSW). The plaintiff did not dispute this opinion. The Council would be required to decide whether the proposed development would be likely to have a significant effect on threatened species, populations or ecological communities or their habitats. The Illawarra subtropical rainforest has been listed as an endangered ecological community pursuant to Pt 3 of sch 1 of the Threatened Species Conservation Act 1995 (NSW). The crossing of Broughton Creek would require clearing of the Illawarra subtropical rainforest near the creek. The route indicated by the plaintiff as his proposed route for a road from the creek to his preferred site for a dwelling house on his land would require a further clearing of rainforest. I accept Dr Mills' evidence that the Council would be unlikely to approve the construction of the road or bridge as such work would significantly affect the endangered ecological community. 43 Construction of a bridge over Broughton Creek would require the approval of the Department of Water and Energy under the Water Management Act. As noted earlier in these reasons, on 21 July 2008 the Department advised it was unable to give in principle support for a proposal for option B. In its letter the Department said amongst other things: " DWE advises the following.

• Broughton Creek is also classified as a Category 1 (Environmental Corridor) watercourse in accordance with the classification of waterbodies based on objectives for Riparian Land (Chapter 5 of the 'Blue Book', Soils and Construction Manual by Landcom 2004). This classification reflects the highest level of environmental significance of watercourses.

• DWE is concerned with the 'end' point of the road. That is, the crossing over Broughton Creek doesn't reach a 'practical' location or approved building envelope or link with a continuing access road. It is simply a dead end on the lot and will likely require more disturbance and vegetation clearance to/along Broughton Creek, the riparian zone and beyond, in order to progress past this point. The vegetation also appears to be a rainforest type. From DWEs perspective, the access route and road design should be considered simultaneously with the identification of an appropriate building envelope on the subject lot. The location of the building envelope will likely influence the best access route and hence preferred road and creek crossing location. * A bridge would be required for the upstream crossing of Broughton Creek (for options 1 & 2). The bridge would need to be suitably designed in accordance with DWEs Guidelines for Controlled Activities, Watercourse Crossings . Should alternative options (eg 3 or 4) be considered then a suitable crossing of 3 rd order tributary of Broughton Creek would be required. DWE strongly recommends that the identification of an access route to Lot 3 be considered more holistically and simultaneously with the identification of an appropriate building envelope on Lot 3. " 44 Dr Mills said that without detailed design information for crossings of the creek and floodplain, it was not possible adequately to assess the impact on the riparian environment. There were no detailed designs for the crossing of the creek. No site for a dwelling had been indicated and the route within the plaintiff's land to a dwelling had not been identified. However, all of the routes would require removal of rainforest and riparian vegetation. Within the constraints imposed by the lack of detailed designs and indication of a route on the plaintiff's land, it was his opinion that a bridge and road would have a significant impact on the rainforest community and on the fauna in the area. The rainforest is the habitat for owls. It is likely that a species impact statement would be required under the Threatened Species Conservation Act and the approval of the Department of Environment and Climate Change would be required. I accept that evidence. 45 These matters provide a significant impediment to the plaintiff's ever being in a position to construct a road and build a house on his land. 46 There are additional reasons making it unlikely that the plaintiff would obtain the necessary consents for the development. Another obstacle concerns the requirements of the code known as Planning for Bush Fire Protection 2006. In a joint report prepared by, amongst others, Mr Philpott, a civil engineer consultant engaged by the plaintiff and Mr Stephen Thomas, a land surveying consultant engineer engaged by the defendant, Messrs Philpott and Thomas stated: " 8.4 Mr Thomas and Mr Philpott agree that if a dwelling is ever proposed on the Plaintiff's land, Kiama Municipal Council (as the consent authority to any dwelling development application) will require any road access to a future dwelling on the land to comply with the relevant requirements or performance criteria of Planning for Bushfire Protection 2006 (PBP), Kiama Development Control Plan No. 35 - Rural Dwellings - Design & Siting Guidelines and Kiama Development Control Plan No. 32 - Subdivision Guidelines. Mr Thomas understands that the intended purpose of the Plaintiff as stated in the Statement of Claim is, among other things, to 'construct a dwelling, and to reside in the dwelling' and that the Plaintiff has not brought forward the development intended. 8.5 Mr Thomas and Mr Philpott agree that if a development application is ever lodged for a dwelling on the plaintiff's land, Kiama Municipal Council (as the consent authority to any dwelling development application) would assess the said development application on it's [sic] merits taking into consideration all relevant planning and other statutory standards and requirements, the outcome of which is entirely speculative. 8.6 Mr Thomas and Mr Philpott agree that a possible future dwelling on the Plaintiff's land would be defined under PBP as 'infill development'. 8.7 Mr Thomas and Mr Philpott agree that Section 4.3 of PBP outlines the Planning Controls for infill development, and Section 4.3.5 of PBP outlines Specifications and Requirements for Bush Fire Protection Measures for Infill Development and gives Performance Criteria for, among other things, access requirements to infill development as: 'safe, operational access is provided (and maintained) for emergency services personnel in suppressing a bush fire while residents are seeking to relocate, in advance of a bushfire, (satisfying the intent and performance criteria in sections 4.1.3 and 4.2.7).' 8.8 Mr Thomas and Mr Philpott agree that Section 4.3.2 of PBP states: 'in most cases, infill development proposals will be constrained by existing situations ... Consequently each proposal must be considered on it's [sic] merits and in accordance with the intent and performance criteria for infill development (section 4.3.5.' 8.9 Mr Thomas and Mr Philpott agree that Section 4.3.2 of PBP also states that: 'Ideally, APZs, access and service supply standards for infill developments should be provided in accordance with the acceptable solutions applied to residential subdivision (see section 4.1).' If therefore a dwelling is proposed on the Plaintiff's land, any property access road should ideally comply with the Acceptable Solutions for property access roads as contained within Section 4.1.3 of PBP. Whether there are other solutions which meet the performance criteria cannot now be determined. In the absence of an identified and approved house building site within the Plaintiff's land the existence of such an alternative solution is speculative. 8.10 Mr Thomas and Mr Philpott agree that it is technically possible for a road to be designed and constructed along the alignment of Modified Option F as outlined in the affidavit by Mr Philpott dated 30 October 2008 to comply with most of the Acceptable Solutions of Section 4.1.3 of PBP. However, none of the proposed access options, including Modified Option F, comply with the Acceptable Solution which requires at least one alternative property access road to be provided for individual dwellings that are located more than 200 metres from a public through road. All of the access options proposed have lengths which vary from approximately 700 metres to 880 metres from Free Selectors Road and the construction of only one access road is proposed. Whether or not the performance criteria can be satisfied by an alternate solution is speculative in view of the absence of an identified and approved house building site within the Plaintiff's land and a consideration of any potential adverse environmental impacts. 8.11 Mr Thomas and Mr Philpott agree that despite point 8.10 above, if a development application is ever lodged for a dwelling on the Plaintiff's land, a property access road to the Plaintiff's land along modified Option F could possibly be shown to satisfy the performance criteria for infill development outlined in point 8.7 above. Mr Thomas notes however that this possibility is speculative in the absence of an identified and approved house building site. An alternative acceptable solution which would satisfy the performance criteria cannot necessarily be assumed until all the relevant conditions and circumstances are available for consideration. " 47 Section 79BA of the Environmental Planning and Assessment Act provides: " 79BA Consultation and development consent - certain bush fire prone land

(1) Development consent cannot be granted for the carrying out of development for any purpose (other than a subdivision of land that could lawfully be used for residential or rural residential purposes or development for a special fire protection purpose) on bush fire prone land unless the consent authority: (a) is satisfied that the development conforms to the specifications and requirements of Planning for Bushfire Protection , ISBN 0 9585987 8 9, produced by the NSW Rural Fire Service (or, if another document is prescribed by the regulations for the purposes of this paragraph, that document), that are relevant to the development, or (b) has consulted with the Commissioner of the NSW Rural Fire Service concerning measures to be taken with respect to the development to protect persons, property and the environment from danger that may arise from a bush fire. " 48 The regulation prescribed the document entitled Planning for Bushfire Protection 2006 for the purposes of s 79BA(1)(a) (Environmental Planning and Assessment Regulation 2000, cl 272). 49 As I understand that document and para 8.10 of the joint report, it is a requirement that where a dwelling is located more than 200 metres from a public through road that there be at least one alternative property access road to the dwelling. This recognises the risk to fire fighters as well as to evacuating occupants if the road is cut by fire. The plaintiff adduced no evidence as to how an alternative access road would be provided. It would be necessary for the plaintiff to obtain another right of carriageway, presumably either through the Goldfinch land or possibly through land to the northwest of the plaintiff's site. However, as Messrs Thomas and Philpott say, it is not possible to identify such a solution in the absence of an identified house-building site on the plaintiff's land. 50 Clause 7.2 of the Kiama Development Control Plan No. 35 provides that no roads should traverse areas with gradients in excess of 20 percent. This gradient would be exceeded. Clause 7.4.2 provides that where development proposals involve access over creeks consideration should be given to the level of crossing that will be required. Flood-free access is required to be provided to a minimum of one in 20 year recurrent level. The town planners, Mr Carmichael and Mr Richardson agreed that the report obtained by Mr Philpott, acting for the plaintiff, showed modelling that the southern bank of Broughton Creek was currently overtopped in a one in one year ARI event, and that backwater effects to Broughton Creek from the construction of a bridge and future road infrastructure would result in the access road to the south of the crossing location being overtopped in a one in one year ARI event. Clause 7.4.2 of Development Control Plan No. 35 would not be complied with. 51 Non-compliance with Development Control Plan No. 35 would not necessarily be fatal to a development application. Clause 9 of Development Control Plan No. 35 provides that the Council may permit a variation to the standards contained in the plan only where special circumstances exist and appropriate justification is provided. Any variation must be consistent with the objectives of the plan. 52 Taking all of the above matters into account, it appears to me to be not only unlikely that the plaintiff would obtain the necessary consents for the construction of a dwelling on his land, but, on the current materials, there is no real chance of his doing so. The preparation of further studies and a more specific formulation of his proposal might alter the assessment of the likelihood of the plaintiff's obtaining the requisite approvals. But in determining whether the proposed right of carriageway is reasonably necessary for the effective use or development of the plaintiff's land, I must assess the prospects of the plaintiff's obtaining the requisite approvals for the construction of a dwelling on his land on the materials adduced in evidence. 53 In 117 York Street Pty Ltd v Proprietors of Strata Plan No. 16123 (1998) 43 NSWLR 504, Hodgson CJ in Eq (as his Honour then was) said (at 511-512): " I turn to the question of illegality. If use of a proposed easement would be absolutely illegal, or (probably) if it were shown that there was no chance of obtaining a consent necessary to make it other than illegal, then this would in my opinion prevent the Court from finding that the easement was reasonably necessary. However, I do not think that the proposed use in this case is absolutely illegal, nor do I think that there is no chance of obtaining consent.

In my opinion, even if the use of the proposed easement would be illegal without consents, and those consents have not been obtained, the easement may still be 'reasonably necessary for the effective use or development of the land', at least so long as the use is not absolutely illegal or there is no real chance of consent. Having regard to my interpretation of the meaning of 'reasonably necessary' in the section, there is no inconsistency in this view. A project like the present one may involve dealing with a number of adjoining properties, and perhaps with other government authorities, as well as with a local council. It may be that some necessary consents will not be available unless the court has already granted an easement. Having regard to the remedial nature of the section, I do not think it should be interpreted in such an inflexible way as to require that all other obstacles to the proposed use must have been overcome before the Court has power to grant an easement. " 54 In Debbula Pty Ltd v Owners - Strata Plan No. 6964 [2003] NSWSC 189; 12 BPR 22,617, Macready M (as his Honour then was) after citing part of the above passage from 117 York Street Pty Ltd v Proprietors of Strata Plan No. 16123 said that he agreed with the comments of Hodgson CJ in Eq that the discretion of the court under s 88 should not be confined (at [47]) and concluded (at [51]) that the easement sought should not be granted because consent was "unlikely to be given to this development or any modification which the plaintiffs suggested in evidence could be made to the present development". 55 Where the use or development for which the easement is sought is not presently legal because a consent or consents of relevant authorities is or are required, there is at least a difference of emphasis as to whether it is sufficient that a plaintiff establish that there is a chance, or a real chance (if there is a difference), that consent will be obtained, or whether the plaintiff must show that it is reasonably likely that consent will be obtained. On the present materials I do not consider that either test is satisfied. The plaintiff does not establish that the right of carriageway "is reasonably necessary for the effective use or development" of his land by pointing to a possibility that if further reports are obtained or proposals formulated, he might be able to use the land in a way for which the easement would be reasonably necessary. The demonstration of a chance or real chance must be made by the materials adduced on the hearing of the s 88K application (Gittany v McDowell [2009] NSWSC 591 at [83]). Such a chance is not demonstrated by hypothesising that other materials might become available which would demonstrate such a chance. 56 It may be that there is no real difference between the approaches of Hodgson CJ in Eq and Macready M because, as Macready M said, a decision whether or not to grant an easement under the section is ultimately discretionary. His Honour's refusal to grant an easement, having found that consent to the proposed development was unlikely, appears to have been made in the exercise of his discretion under the section rather than by concluding that s 88K(1) was not satisfied. If I were satisfied that s 88K(1) was satisfied because there was a chance of the plaintiff's obtaining development consent for the construction of a dwelling, I would nonetheless not exercise my discretion under the section in favour of granting the easement having regard to the improbability of that outcome on the present materials, as well as to the impact which a construction of the road along the proposed right of carriageway would have. 57 For these reasons, s 88K(1) is not satisfied. Third Proposed Use: Construction of a House on the Plaintiff's Land C: Discretionary Consideration - Land and Environment Court 58 The application for approval for a development involving the construction of a road over both the plaintiff's land and the defendant's land would "relate" to both the plaintiff's land and the defendant's land and the defendant's consent to the making of the development application would be required under cl 49(1)(b) of the Environmental Planning and Assessment Regulations. 59 The plaintiff did not submit that the easement was reasonably necessary for the effective use or development of his land because without it he could not apply for the requisite development consent. (If an easement were granted under s 88K it would be an implied term of the easement that the owner of the servient tenement would consent to the making of the development application for the construction of a road contemplated by the easement. The term might be made express: Khattar v Wiese [2005] NSWSC 1014; (2005) 12 BPR 23,235 at [63] and cases there cited; 117 York Street Pty Ltd v Proprietors of Strata Plan No. 16123 at 522-523.) 60 Mr Carmichael, a town planner retained by the plaintiff, considered that development consent could be issued under s 80(3) of the Environmental Planning and Assessment Act conditional upon legal access being granted, and that the Council could issue a deferred commencement development consent for the construction of a dwelling house and associated access upon the plaintiff's land which would not become operational until such time as legal access over the approved property access route was made available. He considered that the necessary work and cost involved in preparing a development application would be significant and as the availability of both legal and practical access would be paramount in the council's assessment and ultimate determination of any development application, it would be unreasonable for the plaintiff to be required to obtain development consent without first obtaining an easement for access over the defendant's land connecting to a public road as required. However, he and Mr Richardson agreed that the most practical solution to ascertaining whether or not approval would be granted for a development on the plaintiff's land would be to seek it. It has not been established that the defendant would not consent to the making of a development application (as distinct from opposing the granting of development consent). If the defendant did refuse its consent to the making of a development application and the application was refused on that ground, it seems to me that if an appeal from the refusal were made to the Land and Environment Court pursuant to s 97 of the Environment Planning and Assessment Act, then whilst the appeal was pending, the plaintiff could apply to the Land and Environment Court for an order imposing an easement over the defendant's land pursuant to s 40 of the Land and Environment Court Act 1979 (NSW). 61 Section 40 of the Land and Environment Court Act provides that in dealing with an appeal involving the grant or modification of a development consent under the Environmental Planning and Assessment Act, the Land and Environment Court may exercise the jurisdiction of the Supreme Court under s 88K of the Conveyancing Act. As counsel for the defendant submitted, this provides an avenue for issues of planning merit to be considered contemporaneously with issues concerning the grant of proprietary interests. Where a s 88K application involves consideration of disputed planning and environmental issues, there is much to be said for the view that the questions arising under s 88K should be dealt with by the same court as will ultimately have to resolve disputed planning and environmental issues (Debulla Pty Ltd v Owners - Strata Plan No. 6964 at [49]-[50]). Section 88K(2)(a) 62 The defendant also submitted that s 88K(2)(a) was not satisfied. It submitted that the proposed easement would not be consistent with the public interest manifested in the policies of the local council, the rural fire service, and in the Environmental Planning and Assessment Act, particularly with respect to the loss of significant and protected flora and fauna. It also submitted that the proposal was not in the public interest because it had not been properly assessed for its environmental impact. The defendant submitted that the use of the road on the defendant's land in accordance with the easement would not be in the public interest. 63 Insofar as this submission was directed to s 88K(2)(a) it involved a misconstruction of the Act. The defendant's submissions in relation to that paragraph were directed to the form of the section prior to its amendment in 1995. The question under s 88K(2)(a) is not whether the construction and use of a right of carriageway on the defendant's land is inconsistent with the public interest. The question under s 88K(2)(a) is whether the use of the plaintiff's land, that is the land having the benefit of the easement, would not be inconsistent with the public interest. If the requisite consents were obtained to the use of the plaintiff's land, that would not be inconsistent with the public interest. To the contrary, the public interest is in favour of landlocked land being able to be used. 64 That is not to say that the matters upon which the defendant relies are irrelevant. Quite apart from their relevance to the issue arising under s 88K(1), they are relevant to an exercise of discretion if the requirements of s 88K(1) and (2) are satisfied. I agree with the substance of the submission and would not exercise the discretion under s 88K(1) if the requirements of s 88K(1) and (2) were satisfied. Section 88K(2)(b) 65 The next question was whether s 88K(2)(b) is satisfied, that is, whether the defendant "can be adequately compensated for any loss or other disadvantage that will arise from the imposition of the easement". In Khattar v Wiese, Brereton J observed: "[49] In the law of restrictive covenants, which is closely analogous to that of easements, the significance of injuries of an intangible kind, and the inadequacy of monetary compensation for them, is well-recognised. Thus, a person may be 'substantially injured' by modification or extinction of a covenant notwithstanding that the value of his or her land would be unaffected or even increased [ Re Parimax SA Pty Ltd [1956] SR (NSW) 130, 133; Heaton v Loblay (1960) 60 SR (NSW) 332, 335-336; Re Cook [1964] VR 808, 810; Re Robinson [1972] VR 278, 283-24; Mogensen v Portuland Developments Pty Ltd (1983) NSW ConvR 55, 56,856], and, particularly in the case of injuries of an intangible kind, subjective tastes, preferences or beliefs of particular individuals may give rise to relevant injury [ Mogensen v Portuland Developments , 56,856]. Ordinarily, damages are not a sufficient remedy for a substantial interference with intangible benefits, because the loss is not one which is readily capable of being estimated in money, nor one which can be adequately compensated by a small money payment: that is why generally injunctive relief is granted to restrain breaches of restrictive covenants, rather than damages being considered sufficient, at least in most suits [cf Shelfer v City of London Electrical Lighting Co [1895] 1 Ch 287, 322 ( A L Smith LJ, CA); Kelsen v Imperial Tobacco Co Ltd [1957] 2 QB 334; Owen v O'Connor [1964] NSWR 1312; Wollerton & Wilson Ltd v Richard Costain Ltd [1970] 1 All ER 483]. Views are the paradigm case of intangible benefits, and in Post Investments Pty Ltd v Wilson (1990) 26 NSWLR 598 Powell J (as he then was) referred to and applied Wakeham v Wood (1982) 43 P&CR 40, in which Waller LJ said ' I find it difficult to say that where one has a view protected by covenant, the denial of that view is capable of being estimated in money terms and therefore it seems to me it cannot be adequately compensated by a small money payment '.

[50] Thus in many cases, injury to intangible benefits and the imposition of intangible detriments, such as reduced amenity and enjoyment of property, and exposure to increased disruption and interference, may weigh heavily against a conclusion that the servient owner can be adequately compensated for the purposes of s 88K(2)(b). One such case, in which it was found that the servient owner could not be adequately compensated, was Blulock (although that case turned on the constraints which the easement would impose on future use of the servient land, rather than on intangibles). On the other hand, in Tregoyd Gardens , Hamilton J, at least implicitly, rejected a submission that, given the intangible benefits which the defendants in that case obtained from the presence of a palm tree, the viability of which might be jeopardised by the proposed easement, a sum of money in exchange for the tree could not be regarded as adequate, in circumstances where the injury was regarded as unlikely to eventuate, and would be relatively minor in the overall context if it did. " 66 The route of the proposed easement would run close to a site identified by Mr Brett Cornish as a site on which he would wish to construct a dwelling. Mr Brett Cornish is a son of Mr Leslie and Mrs Shirley Cornish, the directors of the defendant. As a child he had camped in a clearing where he later installed a caravan to create what he described as his informal bush retreat on the high ground in the clearing. It is a secluded area with dramatic views. It is his hope that he can make satisfactory arrangements with his sister and brother to allow him to construct a dwelling at the clearing through which the proposed easement would pass. It is not disputed that if a road were constructed through the presently secluded valley, that part of the defendant's land would cease to be a potential building site for prospective purchasers interested in acquiring a secluded private retreat. Mr Brett Cornish said: " 32. The easement would change the whole nature of the site. Presently, it is an isolated, secluded and aesthetically beautiful location. Because it is 'the end of the road' it is totally private, giving it a 'secret valley' character. ... ... 34. People do not come through this part of the property. But, if the easement is imposed, the site becomes just another farm dwelling on a road in the valley. Its present aesthetic is therefore, in my opinion, destroyed. 35. There will be no point in my building the home I envisage because the point of doing so will be totally lost. 36. For many years I have envisaged spending my latter years rocking away on the veranda of my little cabin overlooking the creek and up at the rainforest, then when the time comes, being buried under the 400 year old box tree down by the creek. This vision would be totally destroyed by the proposed easement, with several of the routes going right over my gravesite, within metres of my veranda and then cutting in half my view of the rainforest. This is what I stand to lose. 37. No amount of compensation can recompense me for the loss of this site. " 67 The plaintiff did not dispute the genuineness of Mr Brett Cornish's statement of the aesthetic appeal which the land in its present state has to him. Nor is it disputed that that aesthetic appeal would be lost if a road were constructed along the proposed site of the easement. The plaintiff submitted that the question was not whether the feelings of Mr Brett Cornish, or those of other members of his family, could be adequately compensated, but whether the defendant could be adequately compensated for any loss or other disadvantage suffered by it as a result of the imposition of the easement. Counsel for the plaintiff submitted that a corporation has no feelings or aesthetic sense and that the loss or disadvantage it would suffer from the imposition of an easement would be any diminution in the value of its land. That and any other losses could be assessed and adequately compensated. It was submitted that Mr Brett Cornish's feelings were irrelevant. 68 Mr Brett Cornish is not a director of the defendant. His father, Mr Leslie Cornish, and his mother, Mrs Shirley Cornish, are the sole directors and shareholders of the defendant. Mr Leslie Cornish deposed that the defendant is the trustee of the Cornish Family Settlement, but there is no other detail of the nature of that trust or the identity of the beneficiaries. Mr Leslie Cornish said that if an easement were imposed on the land then "our ability to effectively manage intergenerational succession plans is impaired. No amount of compensation can adequately recompense us for the loss of that opportunity." It was submitted for the plaintiff that the impairment of intergenerational planning for the Cornish family was not a loss or disadvantage suffered by the defendant. 69 Section 88K(2)(b) addresses not only the question of whether the owner or other person having an estate or interest in land can be adequately compensated for loss suffered by them, but whether they can be adequately compensated for disadvantage from the imposition of the easement. This may or may not amount to monetary loss. 70 I do not accept the submission that where the affected land is owned by a company, a diminution of the land's aesthetic appeal which cannot be adequately compensated by money is irrelevant because the company, as distinct from the persons occupying the land, can have no aesthetic sense. No authority was cited for this proposition. It is not self-evident. The mind and will of an individual may be imputed as the directing mind and will of a company where the individual is the embodiment of the company such that his or her action is the action of the company, and his or her mind is the mind of the company. The company's liability is personal and not vicarious (Tesco Supermarkets Ltd v Nattrass [1972] AC 153 at 170-171; Lennard's Carrying Co Ltd v Asiatic Petroleum Co Ltd [1915] AC 705 at 713-714). 71 As the knowledge, intention and will of a person who is the directing mind and will of a company can be imputed to it for the purposes of civil and criminal liability, there is no reason that the aesthetic senses of such a person cannot be imputed to a company for the purposes of asking, pursuant to s 88K(2)(b), whether the company can be adequately compensated for the loss of intangible benefits, where the person is the embodiment of the company in its use and enjoyment of the land. However, Mr Brett Cornish is not the embodiment of the defendant within these principles. 72 A substantial part of the disadvantage from the imposition of the easement would be from the adverse effect on Mr Brett Cornish's expectations and plans. In the family setting, those expectations are realistic, even though he has no legal right against the owner of the land. His position would have to be considered in any event in the exercise of the residual discretion under s 88K(1), even if it were irrelevant under s 88K(2)(b). There is also a disadvantage to the directors of the defendant, Mr and Mrs Cornish, in the impairment of intergenerational succession plans for the farm. That would also have to be considered in exercising the discretion under s 88K(1), even if it were irrelevant under s 88K(2)(b). 73 It is possible (although difficult) to assess the diminution of the market value of the defendant's land from the imposition of the proposed easement. But the defendant may not wish to realise the land for its market value. Prima facie, it would be a proper corporate object for the defendant to deal with its land in a way the directors considered best for the next generation of the Cornish family, in securing family harmony and happiness. The impairment of that object is a disadvantage to the defendant and not only to the family members. I accept that there is such a disadvantage to the defendant arising from the matters to which Mr Brett Cornish and Mr Leslie Cornish deposed set out above. It is not possible to redress that disadvantage by monetary compensation. 74 For these reasons, s 88K(2)(b) is not satisfied. Section 88K(2)(c) 75 The defendant submitted that the plaintiff had not satisfied s 88K(2)(c), which required him to make all reasonable efforts to obtain the easement, or an easement having the same effect. 76 The plaintiff's solicitors corresponded with the defendant's solicitors and with the solicitors for Mr and Mrs Goldfinch in late 2004. At that time the plaintiff's surveyor had identified the alternative routes of access to the plaintiff's land known as routes A, B, C and D. 77 On 24 August 2004 the defendant's solicitor advised that the defendant was prepared to grant a right of way in favour of the plaintiff's land over the existing track shown as option C, on certain conditions. This route traversed the defendant's land for a short distance before crossing the creek to the Goldfinch's land and continuing on the Goldfinch's land up to the point of the tributary to Broughton Creek. 78 Mr and Mrs Goldfinch refused point blank to enter into any negotiation. 79 The plaintiff reasonably took the view that of the routes then proposed, those known as options A or B would be less disruptive to the defendant than would route C or D to Mr and Mrs Goldfinch. The latter routes would either pass relatively close to the residence, or would traverse a central cleared area creating problems for stock control and would be highly visible. 80 At that time, the plaintiff would have been unaware of the intention of Mr Brett Cornish to develop the site of the caravan and of the objections of the Department of Water and Energy to the route known as option B. It was not until after the commencement of these proceedings that the Department's attitude became known. 81 In any event, there was nothing more the plaintiff could do to negotiate with either the defendant or with Mr and Mrs Goldfinch. The latter refused any communication. The plaintiff did all he reasonably could to negotiate with the defendant. Counsel for the defendant did not suggest that the plaintiff could have made any offer involving construction of a road over the defendant's land to Broughton Creek which would have been acceptable to it. 82 I am satisfied that the plaintiff has made all reasonable attempts to obtain the easement, or one to the same effect, and has been unsuccessful. Summary 83 Neither s 88K(1) nor s 88K(2)(b) is satisfied. If both had been satisfied I would nonetheless not exercise the discretion to make an order under s 88K(1). That is because of the absence of a definite proposal for the construction of a house on the plaintiff's land, the uncertainty of development consent being obtained (even if, contrary to my view, there is a real chance of its being obtained), the insufficiency of the assessment of the environmental impact of the proposal, the adverse impact on the rainforest environment at Broughton Creek, and the adverse effect on the members of the Cornish family which could not be adequately compensated for in money. To refuse to grant an easement, even if the grounds for doing so were established, would not create a true hardship to the plaintiff. When he bought the land he knew there was no right of way to a public road. No doubt the purchase price reflected that. A right of carriageway, (as distinct from a right of footway if he were refused a licence to traverse the defendant's land on foot), would substantially interfere with the amenity of the defendant's land. 84 As indicated earlier in these reasons, the plaintiff could not identify the precise route of a right of carriageway, and is not able at this stage to formulate an order under s 88K(3). 85 Nor was the plaintiff able at this stage to specify the amount of compensation he contended was appropriate if the easement were imposed. That was because the extent of the disturbance to the defendant's land could not yet be assessed. Nonetheless, I was invited to determine what in other respects was appropriate compensation for the imposition of the easement. On my earlier findings, that question does not arise. But in case my earlier findings are wrong, I will indicate my findings on the issues of valuation, so far as they can presently be determined. Compensation: Loss of Market Value of Defendant's Land 86 The defendant's land consists of various lots and has an area of about 76.2 hectares. There is a residence on the lot known as portion 96 on the northern side of Free Selectors Road. Other lots include portions 122, 127, 128 and 129. The caravan site is in a secluded valley on portion 127. 87 Clauses 11 and 34 of the Kiama LEP provide that in the relevant zone for the defendant's land a dwelling house may be erected with the consent of the Council if the land has an area not less than 40 hectares. The town planners retained by the plaintiff and the defendant agreed that it would be open to the defendant to seek approval for a dwelling house to be erected on an aggregate allotment comprising portions 127, 128 and 129 which would together comprise an area in excess of 40 hectares, notwithstanding that the remainder of the defendant's land on which the existing residence is constructed would be less than 40 hectares. 88 The valuers retained by each party (Mr Wall and Mr Dobrow) ultimately agreed that the existing land value of the defendant's land is $3,100,000 being $1,700,000 for the existing site and residence of approximately 37 hectares, and $1,400,000 for the vacant site of approximately 40 hectares. Mr Wall and Mr Dobrow were in profound disagreement as to the effect of the imposition of the easement upon that second site. They agreed that if a road were to be constructed on the proposed easement running directly through the secluded valley where the caravan is presently situated, the development would mean that a prospective purchaser who required a home site looking for privacy and seclusion would not be interested in that land. 89 In Mr Dobrow's view, there is no other potential site for a dwelling house on the aggregated parcel which would have the same appeal. 90 The aggregated parcel includes not only the caravan site but also a large cleared area on high ground to the north of Free Selectors Road and also to the south of Free Selectors Road. These sites, particularly a site on portion 128 to the south of Free Selectors Road, command sweeping views to the sea. Mr Wall was of the opinion that the market would not consider the caravan site to be the optimal position for a house. Rather, in his view, the higher value rural lifestyle property sales in the area were for elevated home sites with expansive views. He considered that the market would prefer potential dwelling sites to the north and south of Free Selectors Road. Hence the construction of a road along the proposed route of option F would not, in his view, significantly affect the market value of the aggregated parcel. 91 Whereas Mr Dobrow thought that the imposition of the easement would reduce the value of the aggregated parcel from $1,400,000 to $850,000, Mr Wall considered the value of the land would not be materially affected by the imposition of the easement. He allowed only $14,000 on this count. 92 The valuers also disagreed on the effect of the imposition of the easement on the value of the remaining 37 hectares, including the existing dwelling. Mr Dobrow considered that it would be reduced in value by $100,000. Mr Wall thought that the effect would only be $20,000. 93 Mr Dobrow assumed that the Council would be likely to approve the construction of a house in the vicinity of the caravan. Mr Wall assumed that the construction of a house on one of the elevated locations would be approved by the Council. No particular proposal for the construction of any house on the defendant's land has been formulated. There is considerable uncertainty on both counts. Mr Wall identified a number of possible locations for a house to the north or south of Free Selectors Road which would command sweeping views either to the sea or to the Illawarra escarpment. All but one of the sites are on a steep slope, apparently with gradients exceeding 20 percent and are outside the Council guidelines for the construction of rural dwellings in the area. One of the identified potential sites was on less steep ground but close to a house on an adjoining property. That would make the site less attractive to a potential purchaser and would be contrary a council guideline that a new dwelling and associated outbuildings be located at least 100 metres from another dwelling. There are issues for all potential sites in this area in relation to minimum asset protection zones, that is, the distance between the dwelling and the edge of bushland, needed as a protection against fire. The minimum required distances vary according to topography. If a house were to be constructed on a steep slope above the edge of the bush, a distance of up to 50 metres would be required. No exact proposed locations were identified and no precise measurements were taken, but this was a significant potential problem to obtaining development consent to the construction of a dwelling at any of the locations identified by Mr Wall. 94 There are also water courses in the area. Effluent disposal areas have to be set back at least 40 metres from a water course which would be another potential obstacle to obtaining development consent. The town planners and engineers were not able to express concluded views on the probability of development consent being given or refused in relation to any particular site. 95 There are similar issues with respect to the construction of a house at the caravan site. It appears that a potential house site would lie outside the area of high conservation value. The site is on relatively level ground at the foot of a hill. Even so, there would have to be a 20-metre setback from the edge of the bush. Mr Richardson said that he thought that there was a finger of land on which a building might be able to be constructed outside that 20-metre setback without putting the dwelling on the floodplain. However, it was not a matter which he or any other witness had investigated in detail. Nor had he investigated in detail where an effluent disposal site for a dwelling in the vicinity of the caravan site could be situated consistently with its being at least 40 metres from the creek. An access road to a dwelling in the vicinity of the caravan site would be needed. Because that site is more than 200 metres from a public through road, an alternative access road would also be needed. 96 Not too much should be made of these potential difficulties because the valuers were agreed, albeit for different reasons, that in its present state, without the imposition of an easement, a willing but not anxious purchaser would be prepared to pay $1.4 million for the aggregated 40-hectare parcel. The valuers had different views as to the likely characteristics of such a purchaser, but such a person is to be taken to have weighed the difficulties of obtaining development consent to the construction of a dwelling at his or her preferred location. I would not reject either valuer's opinion on the basis that his assumption that the type of purchaser he had in mind (either a purchaser looking for a secluded site for a home in the vicinity of the caravan, or a purchaser looking for an elevated position with sweeping views) would be deterred by the uncertainties of obtaining development consent. 97 As Mr Wall said, the best evidence of the effect of the imposition of the easement on the market value of the land would be for the subject property, or a similar property, to sell and resell before and after an easement was created. However, there is no such comparable sale and resale. Mr Wall found support for his estimate of a minimal reduction on the value of the property before and after the imposition of an easement from the price paid by an owner of land outside the nearby town of Gerringong to his neighbour for the grant of a right of way over the neighbour's property. The price paid was $44,000 and the transaction was negotiated in November 2007. The inquiries by the valuers revealed that the vendor and purchaser were good friends as well as neighbours, and they negotiated the price without valuation advice. The right of way is largely shielded from the house on the servient tenement. The owner of the servient tenement did not consider that the right of way affected the value of her land. There was an inspection of the property and the right of way. In my view, the right of way over the Gerringong property is not comparable in its impact on the servient tenement with the easement sought over the defendant's land. I agree with Mr Dobrow that it is not a comparable transaction. 98 The impact of the proposed right of way would be very much reduced for a purchaser of the aggregated parcel of land who proposed to build on either the elevated part of portion 127 to the north of Free Selectors Road or on the elevated part of portions 127 or 128 to the south of Free Selectors Road. 99 Mr Dobrow was of the view that the aggregated parcel of land has a value of $1.4 million because of its potential to a purchaser wanting seclusion and who would wish to build in the vicinity of the caravan. He deposed that such purchasers are "premium" purchasers. He supported that opinion by inquiries of local real estate agents. He said that typically the market is made up of artists, professionals in the entertainment business, and business professionals from Sydney, and that the uses of the properties range from weekenders to lifestyle properties. He said that the real estate agents identified the most important attributes of a property from the perspective of such purchasers as being in order privacy, seclusion, views and access to natural water. 100 In Mr Wall's opinion, the sales evidence indicates that the highest value properties are those with excellent views and good access. He does not dispute that a segment of the market consists of those seeking seclusion. Whilst Mr Wall did not accept that a house could not be built near the caravan site if the road along the easement to the plaintiff's property were constructed, he did accept that such a road would make that site unattractive to such purchasers. This is only common sense. 101 Both valuers considered that the sale of a property at 189 Free Selectors Road, Foxground was an important comparable sale. This property is located to the south of Free Selectors Road. It adjoins the defendant's land on that side of Free Selectors Road. It was sold in August 2008 for $1.6 million. It had been valued by Mr Wall in March 2008 at $1.45 million. He valued the improvements at $200,000 giving a land value, in his view, as at March 2008, of $1,250,000. 102 Mr Dobrow valued the improvements at $380,000 giving a land value of $1,220,000. The property was used as a dairy farm and has an area of 34.89 hectares. Mr Dobrow calculated that 12.2 percent of the land was bushland and the rest was usable rural land. He assessed the value of bushland to be about $2,000 per hectare. He calculated the value of the usable rural land at $41,288 per hectare. Mr Dobrow used this sale to assess a value for the potential aggregated lot on the defendant's land by opining that a home site on one of the elevated positions of about 3.5 hectares would have a value of $600,000. This figure was said to be supported by four sales of other properties in Foxground of between one and two hectares which provided an "entry price" into the Foxground locality. Mr Dobrow then calculated the area of bushland and the area of usable rural land on the remainder of the aggregated parcel. He calculated that there were 29.336 hectares of bushland, which he valued at $2,000 per hectare. He valued two hectares of usable rural land at $41,288 per hectare based on his analysis of the sale at 189 Free Selectors Road. He applied half that value to the remaining rural land (5.36 hectares) to allow for its steepness. These calculations gave a value of $850,000 to the aggregated parcel. 103 I have difficulty with this part of Mr Dobrow's analysis. The first difficulty is with his selection of a figure of $600,000 as the value of the home site arrived at by reference to sales of other properties in different parts of Free Selectors Road. Whilst these sales indicated an "entry price" for the Foxground area, I cannot accept Mr Dobrow's view that their situation or views were comparable to those from the defendant's land. Mr Dobrow said that in reaching the figure for $600,000 he made adjustments to the four lots and thought that the four lots might be preferred by some purchasers. He believed that some purchasers would prefer to be down where the four lots were, as opposed to the higher areas. No doubt these are matters of subjective opinion, but I could not agree that the location of the four lots could be considered superior or equal to the location of the elevated site on the defendant's land. 104 The sales ranged from between $540,000 to $710,000 on sites of about 1 hectare, or in one case, 1.8 hectares. The sales were of cleared open paddocks with a building right. They were relatively close together or to other properties. Although they had views of the Foxground area, none had a comparable view to that obtainable from the defendant's land. At one point of his evidence, the most that Mr Dobrow was prepared to concede was that the subject property had an "ocean glimpse or view, if you were to term it that way". I regret to say that this part of his evidence lacked objectivity. If the land value of the "entry point" sales in Foxground from one to two hectare sites was between $540,000 and $710,000, the land value for a comparable area on the subject site must be considerably higher, if a house could be built on the property. In my view, a value of $600,000 would only be justified on the basis of uncertainties in obtaining development consent, but Mr Dobrow did not seek to make any assessment of those uncertainties. 105 The second difficulty I have with Mr Dobrow's approach is in his valuation of the bushland. No doubt a purchaser whose primary interest was in using the land as a productive farm would heavily discount the value of the bushland. But it does not follow that a purchaser primarily interested in the site for its lifestyle and natural beauty would discount the value of the bushland in the same way. Mr Wall said that: " Many of the rural lifestyle parcels are purchased for weekender, affectively living purposes. They are not purchased for any rural pursuits apart from, you know, perhaps cattle to keep the cleared land cleared. The provision of bushland brings privacy, shelter and just the natural beauty of the native timbered areas. So it is a positive factor in rural lifestyle. ... Many of the sales have a significant component of bushland. "

I accept that evidence. 106 Mr Wall did not accept Mr Dobrow's valuation of bushland at $2,000 per hectare. He showed that if one applied Mr Dobrow's calculation of the value of the bushland and rural land to the site in its present condition, to deduce a value for a two-hectare "caravan" site, Mr Dobrow's calculation would produce a value for that area of about $1,158,000. This, he implied, was obviously out of the ballpark and showed error in Mr Dobrow's approach. On the other hand, Mr Dobrow did not disagree with an analysis showing that the caravan site was worth in the order of $1,158,000. 107 Mr Wall said that it was not appropriate to make a separate calculation of the area and value of bushland and rural land. I agree that Mr Dobrow's approach is overly-analytical. It also assumes what it seeks to prove, namely the lower value of the site due to a high proportion of bushland. 108 I also have difficulty with Mr Wall's approach. He considered that the appropriate compensation for the imposition of the easement was $50,000 plus an undetermined amount for disturbance. He arrived at the figure of $50,000 by adding three sums: $4,000 for "loss of proprietary rights", $30,000 for "injurious affection", and $14,000 for the extent to which the easement affected land value. The sum of $14,000 was calculated as follows. The agreed figure of $1,400,000 as the value of the aggregated 40-hectare parcel was $35,000 per hectare. The easement over this parcel would be approximately 400 metres long with an average width of 12 metres being approximately half an hectare in area. Mr Wall multiplied the resulting figure of $17,500 by 80 percent as the amount by which the easement affected land value. 109 This approach makes no allowance for the diminution in market value of the land by the removal from the market of those prospective purchasers who were looking for seclusion and privacy. 110 The result is that I find neither valuer's evidence persuasive. Although they reached agreement as to the current value of the defendant's land, their reasons, so far as they concern the value of the aggregated portions which would form a 40-hectare area for a new building site, are widely different. I am not able to accept either valuer's approach to assessing the effect on land value of the imposition of an easement. There is no certain answer to that question. I approach the question as did Campbell J (as his Honour then was) in Swann & Anor v Spiropoulos & Ors [2006] NSWSC 860 where his Honour said (at [108]): " It is necessary, it seems to me, to put myself into a position like that of a juror, and simply assess, as best I can, the amount of compensation that would be payable on that head. I recognise that I have criticised the valuers' evidence because they in effect acted as jurors. There is, however, a critical difference between the way in which expert evidence should proceed, - calling on expertise to produce a reasoned conclusion, where premises of the argument and steps of the reasoning can be evaluated by the court, - and the way in which the tribunal of fact at a court hearing can proceed. In this case I am the tribunal of fact, and so am entitled to proceed in the way a juror would." 111 In my view, compensation for the loss in value of the 40-hectare parcel from the imposition of the easement must recognise that the imposition of the easement would remove a potential class of "premium" purchasers interested in acquiring the land in order to build a house in a secluded and private location. Whilst there would remain other purchasers who would be interested in acquiring the property for the sweeping views from its elevated portions, the reduction in demand arising from the imposition of the easement must have an effect on value. But I am unable to accept Mr Dobrow's method of assessing that effect. The sale of 189 Free Selectors Road, which provides a good comparable sale to the property in its present condition, does not provide an answer to how the value of the property would be affected by the imposition of the easement. Had it been necessary to do so, and recognising that I can provide no reasoned basis for the conclusion but am acting as a juror would, I would have assessed the sum of $200,000 as fair compensation for the loss of value of the site consequent upon that reduction in demand. 112 The construction of the road along the site of the easement would also reduce the value of portions 96 and 122 (the 37 hectares including the existing residence). Mr Wall considered that the appropriate compensation for the affectation of that land was $20,000. He arrived at this sum by allowing $4,000 under the heading "loss of proprietary rights", $5,000 for "injurious affection", and $9,800 for an easement length of 280 metres over this part of the land at an average width of 12 metres allowing an 80 percent factor in reduction of the land value for the site of the easement. He then rounded the sum to $20,000. Mr Dobrow considered there should be a $100,000 compensation taking account of the loss of proprietary rights, including blot on title, and the visual blight of the road going up the hill on the northern portion of lot 122. 113 Mr Wall's calculation implies that the reduction in land value of lots 96 and 122 is primarily restricted to the loss of the value of the land within the easement. Whilst the blot on title carries some additional small compensation, as does the item for "injurious affection", it is only to the extent of those two sums that he allows any greater reduction in the value of portions 96 and 122. 114 The existing residence on portion 96 is a considerable distance from the site of the easement. Nonetheless, allowance should be made for the adverse effect of the visibility of a made road and of vehicles on it, not only at the house but on the other areas. In particular the approach to the house on portion 96 is along the same road as would lead to the commencement of the easement. 115 Neither valuer's assessment of the appropriate amount of compensation for the adverse effect of an easement on portions 96 and 122 involved any detailed reasoning. Each valuer's assessment was essentially an instinctive juror's assessment. Such an assessment should be given considerable weight where it is made by an experienced local valuer on the basis of his or her experience and local knowledge. Such an opinion based on experience and expertise is often not susceptible to reasoned analysis. Had there been a measure of agreement between the valuers on this matter, I would have had no hesitation in accepting their opinion. But there was no agreement. On other aspects of their opinions I have not accepted either valuer, and I am not able to prefer the view of one to the other on such a question. I have to make my own juror's determination of the appropriate compensation for the effect of the easement on the 37-hectare portion of the defendant's land. I consider that the sum of $40,000 would be fair compensation. 116 For the reasons I have given, I do not consider it is possible adequately to compensate the defendant if the easement were imposed and for that reason would refuse to make an order under s 88K(1). I do not think that a sum of $240,000 (plus whatever additional compensation is appropriate for the disturbance to the defendant through the construction of a road along the site of the easement) would fairly compensate the defendant. But if I am wrong, I would assess the appropriate amount of compensation under s 88K(4) in the amount of $240,000 plus whatever compensation might be appropriate for disturbance during the construction of the road. This amount cannot presently be determined. Conclusion 117 For the reasons previously given, no question of compensation arises. The proposed easement is not reasonably necessary for the effective use or development of the plaintiff's land. Nor am I satisfied that the defendant could be adequately compensated for disadvantage which would arise from imposition of the easement. In any event, in the exercise of the discretion under s 88K(1) I would not make the order imposing an easement. Accordingly I make the following orders:

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