Heavens Door Pty Ltd v Hillpalm Pty Ltd

Land and Environment Court (NSW)|1994-04-28|Before: Sheahan J, Sheller JA

The applicant asserts that "Emerald Mountain" has subdivision potential, and, on 21 September 2000, a development application ("DA") was lodged by Surveyor Coenraad Haan for its subdivision into five lots. On 4 October 2000, Council advised Heavens Door that "in the absence of formal secured access to the subject site", the Council was unable to "assess and ultimately determine" its application. The Council declined to grant approval, even by way of deferred commencement, and Weller claims that Heavens Door has lost a sale of lot 1 as a result.

It is further claimed that physical access over the ROW has been blocked by Hillpalm, and negotiations between the parties to resolve their impasse have been unsuccessful (see Exhibit A4, wherein a damages claim is threatened).

Hillpalm contends that the relevant subdivision consent is not constituted by the letter relied upon by Heavens Door, that being a letter from the Council to surveyors John P Marendy & Associates ("Marendy"), dated 22 December 1977. Hillpalm contends that any consent evidenced by that letter was later varied by letters dated 22 May 1978 and 6 November 1978, which, it says, dispensed with the conditions relied upon by Heavens Door, and that the subdivision consent is really as notified on 6 November 1978.

Hillpalm claims that in so far as any consent required the grant of a ROW, it is void and of no effect.

The relevant "conditions", upon which Heavens Door relies, appear in the Council's letter of 22 December 1977 in the following terms: (a) Provision of a constructed right of carriage way from Clothiers Creek Road. The track shall be at least 2.5 metres wide and constructed 150mm consolidated thickness of gravel. (b) Submission of final plans and payment of fees.

Heavens Door relies on condition (a), but Hillpalm contends (Points of Defence par 8) that condition (a) did not form part of the amended consent and that Hillpalm is, therefore, not bound by it. Alternatively, if it did form part of the consent which authorised the original subdivision, Hillpalm complains that the time for compliance with that condition was upon certification and registration of the original plan for subdivision and no later.

Irrespective of any question of variation of the consent, the Council certified the plan of subdivision on 8 November 1978, and it was subsequently registered as DP 601049, upon which is shown a proposed ROW 10m wide from Clothiers Creek Road through lot 2 to an irregular point in the north-western corner of lot 1. Certificate of Title volume 14571 folio 149 also depicts "Proposed Right of way 10 wide".

Heavens Door's Points of Claim (pars 10 and 11) assert that the ROW has not been formally created and registered, but is shown on DP 1003396, through the land formerly in lot 2 DP 601049 and now in lot 529 DP 1003396. Hillpalm's Points of Defence ignore par 10, but deny that a right of carriageway is shown on DP 1003396. They say all that is depicted is proposed ROW 10 wide. Heavens Door claims that at the time of the grant of subdivision consent a track existed in the approximate position of the designated ROW shown on DP 601049, and that such a track still exists, but not wholly within the ROW shown on DP 601049. Hillpalm does not admit that paragraph.

Mr Wilson, for Hillpalm, submits that the subdivision of land is "perfected by registration" (submissions T30 L44) pursuant to the provisions of the Local Government Act 1919 ("LGA") (s 327(2)) which required the Council clerk to certify that the requirements of the LGA have been complied with. Any purchaser would go to the documents of title, including the DP, see that certificate, and rely upon it - "there is no need to go behind to any consent" (submissions T31 L58 and T32 L9-10).

On the question of what evidences the consent, in any event, Mr Wilson submits that the letter of 22 December 1977 "is no consent at all" (submission T34 L18), that the letter of 6 November 1978, preceding registration of DP601049, is the relevant consent to the subdivision, and that that consent relevantly has no conditions at all regarding any ROW.

Mr Wilson submits that registration of the certified DP perfected the subdivision, and attracted to it the "indefeasibility of title" provisions of the Real Property Act 1900 ("RPA"), upon which the operation of the Environmental Planning & Assessment Act 1979 ("EPA Act") can have no impact to enforce any "equity in the applicant … against the current registered proprietor's title" (submissions T38 L42-44).

Mr Wilson further submits that Hillpalm purchased lot 529 without notice of any claim that Heavens Door or any predecessor in title had in respect of the ROW sought to be created. Hillpalm relies on the provisions of the RPA, especially s 42. At the time of Hillpalm's purchase of the property it now owns, the folio of the register relating to lot 529 contained no notation or record of any right of way existing in favour of the applicant's land.

Hillpalm also seeks the benefit of the court's discretion, on the grounds that: 1. There have been many dealings with the subject land over the long period of time (23-24 years) which has elapsed since the relevant subdivision. 2. Heavens Door has an existing, appropriate and adequate alternative access to the land, via the Crown road on its eastern boundary, to which the applicant may be able to establish " existing use rights ". 3. The Council, as the responsible authority, has never sought to enforce any such condition of consent insofar as it may require the grant of a ROW as alleged.

The chain of documentation described in this section of the judgment is before the court as Exhibit A1.

The relevant lands are at Clothiers Creek in the Parish of Cudgen. Heavens Door owns Lot 1 in DP 601049, and Hillpalm owns lot 529 in DP 1003396. Lot 529 was created out of land which was formerly lot 2 in DP 601049. Lots 1 and 2 in DP 601049 were created by the subdivision of portions 306 and 342 in the Parish of Cudgen, pursuant to the consent relied upon by the applicant. The alleged/proposed ROW runs through lot 529.

At the time of the submission of Marendy's DA in late 1977, the subject land was zoned non-urban "A" pursuant to Shire of Tweed Interim Development Order ("IDO") No.2, gazetted on 24 September 1976 (Exhibit A2, document 2). Agriculture, dwelling houses and forestry were permitted without consent, and subdivision was permitted with consent.

Clause 11(1) of the IDO (ibid, especially fols 27 and 29) provided that land in that zone "shall not be subdivided", unless each separate lot had an area of not less than 40ha and a frontage to a main road not less than 400m. Lot 1 has no frontage to a main road and the Council appears to have had regard to the purpose for which it was then to be used, nominated in the DA as "rural (bananas)".

At the time of the relevant 1977 subdivision portions 306, 308 and 342 were all in the same ownership, namely Winchcombe Carson Trustee Company (Canberra) Ltd (see docs 1-4 in Exhibit A1). The total area subdivided was 212.66ha. Winchcombe Carson appears to have been the relevant owner from 1976 until 1981.

Marendy applied on behalf of Winchcombe Carson on 24 November 1977 for approval of the subdivision of portions 306 and 342. Lot 1 was to be 45ha, and lot 2 167.12ha. The formal DA was accompanied by a letter from Marendy dated 21 November 1977, which says in part: Physical access to Lot 2 from Clothiers Creek Road will be given by an easement over the proposed new road in Stage 3 of the overall development as shown on Drawing No. C439:00:02 prepared by Geoffrey Burchill & Partners Pty. Ltd.

The unusual shape of the north east corner of Lot 2 is because the intending purchaser of Lot 2 intends to build a dam in that corner and we have tried to accommodate him without interfering too much with overall development. (The lot numbers were reversed in the actual subdivision).

The proposed subdivision plan lodged with the DA cannot be found. (See Exhibits A12 and A13). However, the rather odd boundary line, effected by the subdivision into lots 1 and 2, at the northern end of lot 2 (Exhibit A3) is explained apparently by a desire to construct a dam east of the proposed ROW.

The officers' report to the Council meeting held on 14 December 1977 said: An application has been received to excise an area of 45 hectares of land from the above holding of 212.60 [illegible] hectares. The land is potential useful for only bananas and forms part of the residue of land which is subject to a [illegible] application for rural residential subdivision off Clothiers Creek Road west of Bogangar. It is proposed to serve the smaller lot with a right of carriageway access over the line of the proposed road from Clothiers Creek Road serving the rural residential estate. The road is of course unconstructed at this stage but it is possible to physically traverse the route presently.

It is RECOMMENDED that approval to the subdivision be granted subject to provision of a 2.5 metre wide gravel track 150mm deep over the line of the right of carriageway.

Logically, in the light of the IDO, the subdivision would not have been approved without the provision of access to lot 1 from a public road, and the purpose of the ROW was to enable the owners of the southern uphill lot (lot 1) to have access to Clothiers Creek Road. At that point of time the ROW was to join another track which has since become Tanglewood Road. The ROW was not to be a public road, so there was no need to "open" it when the subdivision was registered. On the DP it was shown as "proposed".

Council wrote to Marendy on 22 December 1977 in the following terms: Your application to subdivide the above land to create a 45 hectare rural lot with right of way access to Clothiers Creek Road was approved by Council at its meeting of 14th December, 1977, under Clause 11(1) of the Interim Development Order subject to compliance with the following conditions: (a) Provision of a constructed right of carriageway from Clothiers Creek Road. The track shall be at least 2.5 metres wide and constructed with 150mm consolidated thickness of gravel. (b) Submission of final plans and payment of fees.

On 4 April 1978 Marendy wrote to Council in the following terms: With respect to the provision of a constructed right of carriageway from Clothiers Creek Road to the proposed 45 hectare rural allotment I advise as follows:

It was originally envisaged that the right of carriageway was to follow the proposed route of a new road of which part is to be constructed in Stage 1 and part in Stage 3 of the overall development. Physical access to the proposed new Lot can at present be gained by an existing track which follows the intended route of the road in Stage 3 but traverses the proposed allotments in Stage 1 as shown on the accompanying plan.

It would be logical if the right of carriageway was to follow the existing track, however not wishing to involve ourselves in any possible legal entanglements at the time of development of Stage 1 the right of carriageway should follow the route of the proposed new road. This further poses the problem of the difficulty in construction of the carriageway over the section of road in Stage 1 because of the nature of the terrain.

Would Council advise if consideration would be given to physical access being attained over the existing track but the actual right of carriageway being granted over the route of the intended new road. I am advised that the road in Stage 1 of the project will begin as of the 1st July, 1978.

By the time the correspondence of 4 April 1978 was sent, the existing track referred to in the subdivision had become Tanglewood Road. The applicant did not seek or require modification of the consent, just permission to use an alternative access during the physical subdivision of the land. Council's reply of 22 May1978 indicated Council's agreement to that interim arrangement, saying: … I can hereby confirm that the arrangement for right of carriageway provisions as access to the proposed lot as described in your letter are acceptable to Council.

This acceptance is conditional upon the rural/residential estate development proceeding. Consequently your client company shall be required to declare by statutory document as a condition of subdivision that a right of carriageway over the existing track shall be created in favour of the proposed rural lot if the new roads are not dedicated within two years of the date of this letter.

On 28 September 1978 Marendy forwarded an original and four copies of the plan of subdivision and requested that it be sealed. Final approval was given to the linen plan by Council on 6 November 1978. The "conditions" of 22 December 1977 were not varied in any way, but the letter of 6 November 1978 says: In response to your recent telephone call, Council is prepared to grant final approval to the above subdivision even though all the conditions of Council's letters dated 22nd December, 1977, and 22nd May, 1978, have not been complied with. However, you are hereby advised that Council will not take any responsibility for the fact that the existing track is outside the right of carriageway; nor will Council be involved in any dispute that may arise because the existing track is outside the right of carriageway.

Enclosed are the plan of subdivision and one copy, both duly certified.

It is clear from the plan referred to in that correspondence that a very large development project was then proposed, referred to in various documents as "Tanglewood Resort" and as involving a golf course, caravan park, equestrian show ring, stables and various types of residential/tourist accommodation. Part of the link between the subject land and Clothiers Road was described as involving difficult construction. That plan also indicates the proposed route south of that difficult section of the ROW.

Council's certification of that original DP mentions the proposed ROW. Council did not abandon the condition that indicated the role it may or may not play. The linen plan was processed "at your risk". DP 601049 (Exhibit A3) bears an endorsement that the survey represented on the plan "as regards Lot 1 and right of way" is accurate and has been "made by me" (Marendy) in accordance with the Surveyors Practice Regulations. The DP "panel", stated to be "for use only for statements of intention to dedicate public roads or to create public reserves, drainage reserves, easements or restrictions as to user", was left blank.

Certificates of title issued in May 1979 for lot 1 and lot 2. Both contain diagrams showing "proposed right of way 10 wide" as per the DP.

In 1981 lot 2 in DP 601049 and portion 308, plus some other land, relevantly became lot 15 in DP 261183, (copy in Exhibit A1). The dedication panel on DP 261183 notes the intention to dedicate Tanglewood Drive and Tuckeroo Lane as public road, together with an intention to create, pursuant to s 88B of the Conveyancing Act 1919, various easements and restrictions including "right of carriageway 10 wide" over lots 7 and 8 from lot 9. Lot 11 and lot 10 are separated by a "proposed right of carriageway 10 wide" traversing lot 15 and going through its "neck" area. Its conjunction with the north-western corner of lot 1 DP 601049 is clearly shown. Marendy certified the four sheets of DP 261183 on 14 October 1980 and the Council Clerk did the same on 3 December 1980. Certificate of Title volume 14571 folio 149, being the CT of lot 15 DP 261183, similarly depicts the proposed ROW across lot 15 to lot 1. (The large lot 15 in DP 261183 is north of Clothiers Creek Road and is not the lot 15 which is established south of lot 12 and near lot 1).

In 1983, there was a subdivision of lots 14 and 15 in DP 261183 and portion 178. Lot 15 DP 261183 became lot 150 in DP 630766. Again Marendy was the author of the surveyor's certificate dated 5 August 1982. The Council's certificate was dated 21 December 1982. DP 630766 subdivides lots 14 and 15 and portion 178 into lots 151 and 152. The large lot 15 became lot 150 in DP 630766 north of Clothiers Creek Road. The proposed ROW is clearly shown on the plan of lot 150 and on the CT for lot 150.

Peter Tagget appears to have bought at least some of the subject lands in about 1984. It would appear that subdivision for urban development was then moving in a generally southerly direction.

A further subdivision occurred in 1990 when lot 150 in DP630766 became lot 155 in DP 801121. The panel indicates an intention to dedicate Tuckeroo Lane as a public road. On this occasion the certificate is signed by Kenneth Edgley Michel, of Michel & Partners (Surveys) Pty Ltd. The lots created are 153, 154, 155 and 156. Lot 155 is south of the road. The DP again depicts the proposed ROW across the arm of lot 155 where it meets Tanglewood Drive. The CT refers to DP 801121 for a diagram of the land.

Lot 155 DP 801121 became lot 529 DP 1003396. The CT for lot 529, dating from 1 November 1999, calls up the title diagram as DP 1003396, certified by surveyor Brian Darryl Raaen of Murwillumbah on 21 April 1999, with the Council Clerk's certificate dated 4 August 1999. Diagram C on sheet 3 clearly shows the same route of the proposed ROW over new lot 529 to Tanglewood Drive. It is marked "B", the legend to which is "proposed right of carriageway (DP 261183)".

Over the years the Council has certified the series of deposited plans referred to, and the owner of lot 1 and the Council at each stage endorsed the "proposed" ROW as an "as yet unperformed" condition of a subsisting development consent.

I am satisfied that appropriate investigation of the title to lot 529 would put an enquirer on notice of the proposed ROW in DP 261183, which, in turn, would track back to the original subdivision DP 601049.

The roles relevantly played by the parties to these proceedings

Both Weller and Hambrook made affidavits and gave oral evidence at the hearing. During the hearing Weller also provided a supplementary witness statement (Exhibit A9), upon which he was cross-examined.

Weller was contacted by an agent Cahill, and by a mutual friend of himself and Tagget, Gary Greene, in late 1997, and introduced to "Emerald Mountain", of which Tagget was then the registered proprietor. It was then being sold by Pottsville Watters Pty Ltd as mortgagee in possession, and Tagget was anxious to secure the possibility of regaining the property, and purchasing also "Tanglewood".

Tagget always took Weller into "Emerald Mountain" via the ROW - Weller never used the "alternative" Crown road access until much later (T60 L32-6 and T77), and he regarded the ROW as a well-established "road", the registration of which was a mere formality (T78-9). Weller says (Exhibit A9 par 6): … At no time did Mr Tagget tell me that the Crown reserve road was a viable and practical access nor was it ever used on my visits to the property with Mr Tagget and he did not upgrade it.

The mortgagee's sale to Heavens Door for $409,000 was completed on 14 January 1998, but, on behalf of Heavens Door, Weller made a separate agreement (attached to Exhibit A9) with Tagget, to these effects: (i) Heavens Door was, within a week of the settlement, to place the property on the market for sale and appoint Cahill as sole agent for twelve months to locate a buyer for the property at a minimum price of $850,000. Cahill was to receive a commission of $60,000, but to pay all costs associated with advertising and marketing. If the price achieved was greater than $1.6M, he was to receive $100,000 instead of $60,000. (ii) If after twelve months Cahill had failed to locate a buyer at or above $850,000, Heavens Door could retain another agent and sell by auction at any price. If the price achieved exceeded $1,060,000 Heavens Door would pay Tagget half the excess. (iii) Tagget was to have an option to repurchase the property from Heavens Door, within three months after settlement of the contract between Heavens Door and the mortgagee, at a price of $1.2M, with settlement in 60 days. Tagget was to have liberty to register a caveat against the title protecting his interest and Heavens Door covenanted not to challenge that caveat.
Weller testified that, if all those arrangements came to nothing, he was happy to exploit, for himself, the subdivision potential of the land his company had purchased (T69).

Tagget came to Weller in March 1998 offering to buy back "Emerald Mountain" for $1M (Exhibits R2 and A8) - he was then buying "Tanglewood" (including lot 155 DP 801121) for more than $2M (see Exhibit R1 - the DP is annexed to the contract and shows the proposed ROW through lot 155). Tagget took some of Weller's papers regarding "Emerald Mountain", but has never returned them. He had purchased the shelf company Hillpalm, incorporated on 27 February 1998 (Tagget was a director from 9 March to 2 November 1998; and Greene was a director from 9 March to 10 November 1998).

To Weller, Tagget was, at all times, clearly the controlling mind of Hillpalm.

Holyoake & Associates ("Holyoakes"), to whom Tagget had been introduced on 15 January 1998, were acting for him (see Exhibit R4), and a filenote (in Exhibit R4) mentions "searches of deposited plans and titles". Minutes of a meeting of 12 February 1998 in the solicitor's office, involving Tagget and 4 other men, notes that the vendor of "Tanglewood" was Lendlease, and refers to the need to have proper survey and Council negotiations regarding the overall plan, "including Emerald Mountain (lot 1)".

Holyoakes, in a letter of 27 February 1998 to the solicitors for Lendlease (Freehills), refer to a letter from Council which omitted a list of DAs. Freehills later provided to Holyoakes the list referred to in that letter, and that list included applications which concerned the various lots in DPs 261183 and 630766. The price to be paid for "Tanglewood" was agreed, but when the special conditions had to be amended, Holyoakes wrote to Hillpalm, care of Tagget, by fax on 17 March 1998, (Exhibit A10) saying inter alia:

· Easements and encroachments … We note that you and the other members of the purchasing syndicate had an opportunity to extensively peruse the Contract and all disclosure material and have conducted your own due diligence and are prepared to proceed with the purchase on the terms disclosed in the draft Contract previously submitted. We reiterate that your rights to raise any requisition or claim for compensation or terminate the Contract in relation to matters which may adversely impact upon your development intentions are severely restricted. If you have any queries in this regard please contact us prior to finalising your offer to purchase.

Provision was made for Tagget to sign "on behalf of Hillpalm Pty Ltd", which he did (undated). The endorsement acknowledged the contents of the letter and instructed Holyoakes to finalise the offer to purchase Tanglewood on the terms mentioned in the letter.

The Holyoake file (Exhibit R4) contains also various submissions to the real estate agent including "registered plans comprising the Tanglewood Resort site". They included the most relevant sheet of DP 801121, on which the ROW (proposed) was depicted over lot 155. A filenote of 9 April 1998 refers specifically to lot 1 DP 601049.

On 14 April 1998, Heavens Door contracted to sell "Emerald Mountain" to Hillpalm. Tagget signed the contract on behalf of Hillpalm on 14 April 1998 (Exhibit A8), at a time when he still had possession of many of Weller's documents. The exchanged contract for sale had attached to it the DP marked with the "proposed right of way". The April 1998 arrangements included a release of Heavens Door from the other elements of its 14 November 1997 agreement with Tagget (T66 L21, and Exhibit A9), and novation of the benefit of that agreement to Hillpalm.

Weller did not see the Council's 22 December 1977 letter until after April 1998, when Haan was working on a rezoning application. He took the relevant DP diagram to mean what it said regarding the proposed ROW (T69-70).

Holyoakes advised the directors of Hillpalm, on 29 April 1988 (Exhibit R4), that: We will shortly initiate the usual searches and enquiries normally undertaken in relation to a purchase, which are as follows:- … · Titles Office Search - confirms that there is nothing adverse noted against the title that will affect your ability to become registered owner; · Copy Deposited Plan - confirms that the property you are purchasing is the same dimensions etc as that detailed in the contract … We will report to you prior to settlement if any unusual features are disclosed. If you wish us to make any additional enquiries over and above those listed above, please advise.

An internal Holyoake filenote to Lacey from "Natalie", dated 7 May 1998 (Exhibit R4), says: It is also recommend (sic) that Title searches be done on each property and copies of the Deposited Plans obtained. This is not entirely necessary, however it is best to do these searches so that we can check that the disclosure documents contained in the Contracts are in fact correct. Please let me know if you want these searches and I will attend to same.

Hillpalm could not complete its purchase of "Emerald Mountain" from Heavens Door, and forfeited its deposit on 24 July 1998.

Holyoakes wrote to Weller on Hillpalm's behalf on 16 December 1999 (Annexure 'C' to Weller's affidavit). That letter included the following paragraph:

We have however, obtained instructions to reiterate that our client has reached no agreement with you concerning the construction of an access road through it's (sic) land either in terms of the proposed Joint Venture Agreement annexed to your correspondence or otherwise and our client continues to reserve all of it's (sic) rights in this regard. Our client strongly denies that you or any party has a right of access through it's (sic) land either in the form indicated in the drawings annexed to your correspondence or indeed at all.

The documentary evidence before the court makes it abundantly clear that all Holyoakes' instructions from Hillpalm, until the company changed hands on 2 November 1998, came from Tagget. Lendlease even wrote direct to Tagget on 28 July 1998 regarding Hillpalm's failure to complete the "Tanglewood" purchase.

Hambrook bought Hillpalm on 2 November 1998, and the purchase of "Tanglewood" was completed on 1 December 1998. She has had no personal dealings with Weller, but, with her other business interests, she regards "Tanglewood" as a development property, and relies on various "consultants and specialists", including a Mr Wilson as a consultant on development issues. Tagget was responsible to Wilson for some roadworks (T81).

She continued to instruct, and rely upon, as the company's solicitors, Holyoakes, regarding all issues concerning the subject lands, and claims no personal knowledge of "Emerald Mountain", or "any plan to put any right of way to this 'Emerald Mountain'…" (T84 L6-7).

She admitted that she "was given legal advice that there is no access given to Mr Weller…". (T85 L52-3), and that she "had no obligation in relation to any other properties and that undertaking was given to me by the directors by Mark Lacey who was acting for all of these people…" (T86 9-13), but she knew of the Tagget "plan … to join these two properties together" (T86 L3-4). She understands that Weller has "his own road" and "doesn't drive through 'Tanglewood' to get to his land" (T88 L32-4). She was told that the "other access that he doesn't need … was relevant to the old plan" to join the two properties, presumably referable to their further development as part of the mooted "resort" (T88 L50-55).

In her affidavit she deposes: At the time of the transfer of the land to the Respondent I was not aware, nor to my enquiry was anyone else associated with the Respondent aware, of the existence of a right of way such as that proposed by Heavens Door Pty Limited .

She said she has never seen the 1997 consent, nor the condition for creation of a ROW (T89 L30-35). She looked at "all the plans", but the word "proposed" was "all over the plans, because a lot of things were proposed and nothing had been done" (T83 L18-20). (The subject lands were, as noted above, to form part of the "Tanglewood Resort" - an integrated residential and golf resort with homes, villas, hotel, equestrian club, airstrip, etc, having a total area of 404ha).

Mr Robertson (submissions T30 L14-20) described Hambrook's approach to the matter as "either a deliberate shutting of one's eyes … or reliance wholly by a director upon the advice, or assistance of others …".

Tweed Local Environmental Plan 2000 ("LEP") and relevant zoning maps (Exhibits A5 and A6) indicate the Weller Land to be zoned 1(c) "Rural Living", and adjoined by land now zoned 8(a) "National Parks and Nature Reserves".

The so-called "alternative access" to "Emerald Mountain" is an unopened Crown road running along the boundary which separates the 1(c) land and the 8(a) land, on the 8(a) side. All development is prohibited in the 8(a) zone, except "any use authorised by the National Parks & Wildlife Act 1974 or any use ordinarily incidental or ancillary to such a use".

Darryl Anderson, a town planning and development consultant, swore an affidavit and gave oral evidence. He carried out a preliminary investigation into the feasibility of constructing an access road in the Crown road reserve on the eastern boundary of lot 1, and concluded that it was not feasible because: (i) 700m of it is zoned 8(a) and, as the purpose of a road construction project would be to provide access to a private subdivision, it would appear to be not authorised by the National Parks & Wildlife Act, and, therefore, prohibited.

(ii) the existing road reserve is a Crown public road, under the care control and management of the Department of Land & Water Conservation (" DLWC "), notwithstanding its partial inclusion in the 8(a) zone. The DLWC normally does not authorise construction of Crown public roads unless the local Council will accept the transfer of the road, and Tweed Council's normal policy is that it will not accept the transfer unless the road is constructed to a public road standard in accordance with the provisions of the subdivision manual. " Given the difficult terrain, 20m road reserve width and existing road reserve geometry, construction to Council's standard may not be achievable and is likely to be prohibitively expensive ". (Anderson obtained his information regarding DLWC from a Departmental letter dated 27 March 2000, which is apparently included in the subdivision DA lodged by Heavens Door).

(iii) the official maps indicate that sections of the road reserve have gradients in excess of 22% necessitating significant cutting and/or filling to achieve Council's absolute maximum gradient of 16%.

(iv) a 20m (?20.115m) road reserve width is insufficient to accommodate cut and fill batters, and clearing of trees and vegetation within the reserve would result in adverse flora and fauna impact.

(v) Clothiers Creek Road is a " designated road " in cl 22 of the LEP, which controls and regulates access to such roads. Because of the location of the junction between the road reserve and Clothiers Creek Road, and from his enquiries of Council itself, Anderson formed the view that Council approval of a new junction is unlikely, particularly in view of likely increased traffic on Clothiers Creek Road which will join the new Pacific Highway interchange 3km from the site.

In cross-examination he acknowledged that there was a track running in and out of the reserve, but he was not aware if it was ever used for access. He conceded that if it was lawfully constructed, there may be existing use rights, but there was no evidence of it having been lawfully constructed. He said (T34 L35-38): Any person is entitled to use a Crown public road reserve for the purposes of vehicular or pedestrian access, but they are not authorised to construct the road without necessary approvals.

He was asked by Mr Wilson about cl 14 of the LEP, which provides 20m "flexibility" at zone boundaries, and he pointed out that cl 14 did not mention, and therefore did not apply to, zone 8(a) (T35).

Anderson was unable to estimate how much the road would cost to build. The specifications in the 1977 consent would not be sufficient for what would be needed in the Crown road reserve to provide adequate access to five lots. There would "inevitably be some clearing and earthworks required" (T36 L17-18) which "may have flora and fauna impacts which have been examined" (T36). He noted the "sensitive nature of the environment" (T37 L52-4), and opined that the construction "standard would need now to be higher than was suggested in 1977" (T38-39).

Haan also swore an affidavit and gave oral evidence. He has worked as a surveyor in the Tweed Region for some 30 years. Access is the principal difficulty in pursuing subdivision in the relevant area (T44 L52-5), and his professional opinion is that the alternative access via the Crown road is neither appropriate nor adequate, due to the grades and environmental concerns (T46 L15-18). It is an unopened Crown road, not a public road (T43 L47-53).

He can identify no track on the Crown land in aerial photographs 1977 and 1987, but can see it in the 1989 and 1996 photos (T53 and Exhibit A7).

Haan gave evidence of best practice in the industry. He knows Marendy and believes him to be competent. He opined that Marendy had certified various stages of the subdivision according to the relevant Survey Regulations. When he certified Exhibit A3, Marendy would, Haan opined, have had the original application plan.

I have concluded that the Crown road is no option for the applicant. The land over which such alternative access would be gained is zoned 8(a), and so can only be developed or used for the purposes set out in the National Parks & Wildlife Act, which are public purposes related to use and enjoyment of a park or reserve and not access to private property. See Packham v Minister for the Environment & Anor (1993) 31 NSWLR 65.

The "boundary flexibility" provision in the LEP does not apply to 8(a) land, so development of access via the Crown road is prohibited development. In any event, the track is not wholly within the road reservation, it did not exist until about 1989, its use has been abandoned for more than 12 months, and I conclude that there is little likelihood that relevant "existing use" rights could be established. The evidence also discloses reasons for the Council not to undertake the burden of the road and not to allow its private acquisition (see evidence of Haan, and submissions T24).

In Anderson's expert opinion the subdivision consent granted by Council was embodied in the letter to Marendy dated 22 December 1997. What was approved on 6 November 1978 was merely the consequential "plan of subdivision" - the final step in the subdivision process from Council's point of view being the release of the linen plan, certified by the Clerk (T41).

The applicant labours under the disadvantage that it cannot obtain the relevant DA plan, submitted to Council, and showing the proposed ROW. Obviously it would have been easier for all concerned had the original subdivision plan as submitted to Council in 1977 been available. As it is not, Mr Robertson has to rely on the fact that the surveyor Marendy was the original applicant, and also the surveyor responsible for preparing the linen plan, shortly after the grant of consent. The court has no evidence from him, but, as he was the holder of the DC, the person dealing primarily with the Council, and, a professional person regarded as reputable by one of his peers (namely Haan, who gave evidence), one can assume that the plan comprised by Exhibit A3, drawn approximately 6 months after the granting of consent, reflects the plan the Council considered.

The Council and Marendy seem to have clearly understood what was proposed, and the court presumes regularity and continuance. Council could not certify a linen plan that was not in conformity with the consent as it understood it. The applicant asks for the inference to be drawn that, consistent with the presumption of regularity, the DP "obviously" reflects the DA and the consent (submissions T10 L16). Winn v Director-General of National Parks & Wildlife Service & Ors [2001] NSWCA 17 allows the use of extrinsic evidence to construe consents (see par 198ff), and, where there is a document missing, the court can accept oral or circumstantial evidence to prove its contents (Evidence Act 1995 ss 48 and 51). See also Auburn Municipal Council v Szabo (1971) 67 LGRA 427 and Sydney Serviced Apartments Pty Ltd v North Sydney Municipal Council [No.2] (1993) 78 LGERA 404.

Haan testified that he would have expected to find a plan in the Council file, but, in its absence, he expressed the expert opinion that the plan accompanying the DA would be reflected in the linen plan approved by the Council and would locate the ROW as the evidence of the applicant suggests.

In this case, the consent was implemented, and the condition appears in diagrammatic form on the face of a series of plans. The court, in those circumstances, can infer the consistency and certainty of the location of the proposed ROW.

Accordingly, the court draws the inference that the location and description of the proposed ROW on the various DPs reflects that which was before the Council in December 1977, and approved by it, and, the consent having been acted upon, and the subdivision having taken place, no "uncertainty" infects that consent.

Was the consent later varied to exclude the conditions?

On the applicant's behalf, Mr Robertson submits that the original subdivider had to obtain, by virtue of the requirements of the then current IDO, consent under both parts XII and XIIA of the LGA. The relevant provisions of the LGA (s 342S ff) gave no power to the Council to grant merely a provisional or interim consent, nor to vary unilaterally a consent once granted, in the absence of some further application. See Progress & Securities Pty Ltd v North Sydney Municipal Council (1988) 66 LGRA 236 (at 241-2), which has never "been doubted" in this court (submissions T6 L20-2); See also Ziade v Woollahra Council & Ors (28 April 1994 per Sheller JA at 10); and Mison & Ors v Randwick Municipal Council (1991) 73 LGRA 349.

I agree with that submission, and, accordingly, conclude that the consent, ie the public consent document, which operates in rem regarding the subject lands, is the Council's letter of 22 December 1997, inclusive of conditions.

The proposed ROW "was an essential object of the subdivision development consent" (submissions T9 L51-3), and the consistent notation of the proposed ROW on the relevant series of DPs subsequent to that in 1978, represents an "endorsement of the conditions" of consent, albeit one of them is as yet unperformed (submissions T18 L9-14). DPs are registered under the Conveyancing Act 1900, and its regulations, and there is a prohibition against challenging the validity of the making of a DP (see now s 195J).

The Conveyancing Act Regulations 1961 were in force at the relevant time (1977), and they established two alternative ways of "creating" an easement by registration of a plan (see Mr Robertson's submissions T42-3, and his supplementary written submissions of 7 March 2001, to which the respondent made no response).
If the easement were to be created immediately upon registration of the plan, it had to appear in the appropriate panel of the DP in order to trigger the operation of s 88B of the Conveyancing Act. That procedure necessitated an instrument of easement to be in existence at the time of registration of the plan.

If the intention were to notify the intention to create an easement at some time in the future, after registration of the plan, it would be signified elsewhere, as "proposed", by way of a diagram on the plan forms provided (see G.P. Stuckey, "The Conveyancing Act 1919-1969 and Regulations", 2nd edn, 1970, at pp 874ff, and Regulation 52A).

It is the latter course which was followed in this case.

Section 40(1B) of the RPA provides for reference to title diagrams to describe estates or interests in land. The relevant title diagram carried forward and consistently "called up" in this case shows the location of the proposed ROW.

Mr Robertson submits that registration of title does not confer "absolute indefeasibility" upon a proprietor; title can be "defeated by transactions that gain their efficacy from statutory provisions that are Inconsistent with the notion of indefeasibility" (submissions T20 L28-30). See South-Eastern Drainage Board (SA) v Savings Bank of South Australia (1939) 62 CLR 603; Miller v Minister for Mines and The Attorney General of New Zealand [1963] AC 484; Trieste Investments Pty Ltd v Watson (1963) 64 SR (NSW) 98; and Pratten v Warringah Shire Council (1969) 17 LGRA 371. In Trieste, Herron CJ said (at 103): But the fallacy, I think, lies in asserting that the Act achieves complete indefeasibility. For the apparent indefeasibility is qualified. Section 32 contains the authority of the Registrar-General to register dealings. It empowers him to record only particulars of instruments, dealings and matters required by the Act to be registered or entered. Nothing else is to be registered. … Public roads prevailed notwithstanding the absence of any note of their existence from the certificate of title and a transferee took subject to public rights of way although not specified in the certificate …

In this context it is to be noted, as Mr Robertson submits, that "the development consent operates as a document of title" (submissions T20 L35). See P E Bakers Pty Ltd & Ors v Yehuda & Anor (1988) 66 LGRA 403, in which Hope JA said (at 410): In the present case, the res, whether it be the land or the consent, has a status which is not derived from any private arrangement but from the decision of a public authority exercising the statutory powers conferred upon it… The granting of the consent was a public act affecting the status of the land. The consent was also a thing in itself, deriving its status from the statute and instruments made pursuant to the statute. The status of the land and of the consent is a matter in which the public generally are interested, although of course the appellants and the Waverley Council are more directly interested than other persons.

I accept the following submissions which were also put by Mr Robertson, during argument: (a) Where a development consent requires the opening or creation of a road, be it a private road or a public road, and the land subsequently is transferred to a third party, that third party can't be heard in this court to say that by dint of the transfer of the land the new owner can ignore the provisions of a development consent … One could never permit indefeasibility to defeat a condition of development consent for otherwise a land owner who didn't wish to undertake the burden of a development consent could rid himself of the burden by transferring it to a third party for no consideration … or by not making an inquiry … (submissions T20 L55 to T21 L24).

(b) It would be an extraordinary thing if on the one hand the EPA Act creates a criminal offence of not complying with a condition of development consent, and on the other hand a fresh registered proprietor can evade the obligation by relying on the principle of indefeasibility. (submissions T44 L38-42).

(See Rao v Canterbury City Council [2000] NSWCCA 471; and Ryde City Council v Echt & Anor [2000] NSWCA 108).

In any event, here the ROW has not yet been created, so "there's no interest to defeat" and "no question of indefeasibility can arise. We're looking at a future interest, not a current one … We are seeking the creation of an interest, not the enforcement of an existing interest" (submissions T21 L36-45).

Mr Wilson says that Pratten is not good law because of the subsequent "inconsistent" decision of Quach v Marrickville Municipal Council (1990) 22 NSWLR 55 (per Young J), and academic criticism by Pamela O'Connor (see 19 Melbourne University Law Review (1994) at 649 ff). Mr Robertson countered with a list of cases in which Pratten has been followed, and referred, in his oral submissions, also to Attorney General for the Northern Territory v Hand & Ors (1989) 25 FCR 345.

A close reading of Quach certainly indicates that Young J had some misgivings about Pratten, and His Honour noted that it was decided before Barwick CJ said, in Breskvar & Anor v Wall & Ors (1971) 126 CLR 376 (at 385-6): The Torrens system of registered title of which the Act is a form is not a system of registration of title but a system of title by registration. That which the certificate of title describes is not the title which the registered proprietor formerly had, or which but for registration would have had. The title it certifies is not historical or derivative. It is the title which registration itself has vested in the proprietor. Consequently, a registration which results from a void instrument is effective according to the terms of the registration. It matters not what the cause or reason for which the instrument is void.

However, in the end, Young J rejected Counsel's submissions that he should not follow Pratten, and went on specifically to follow it, expressing the view (at p61) that he "must follow such a strong line of authority as holds that these statutory inroads do prevail over the 'ordinary' indefeasibility provisions of the Real Property Act".

I have carefully noted O'Connor's comments. She ended up being critical of Young J, and acknowledged other grounds upon which Street J's decision in Pratten could be defended, observing (at 670): The observations of Young J are further evidence that a stream of judicial opinion embraces a wide view of the public rights exception to indefeasibility. This view extends the class of public rights to include rights akin to private rights vested for public purposes in a government authority, and possibly includes other members of Hogg's class of 'inherent rights' such as rates and charges.

Mr Robertson also relied upon the provisions of RPA s 42, which create an exception to the principle of indefeasibility in the case of omission or misdescription of an easement, whether or not there is any "element of deliberateness or mistake" (submissions T22 L22). See Dobbie & Anor v Davidson & Ors (1991) 23 NSWLR 625.

I have concluded that the principles of indefeasibility of title do not prevent the applicant in this case from relying on condition (a) of the 1977 DC.

Mr Robertson submits that the respondent must be visited with the burden of the condition because it clearly had notice of the consent and its conditions. In early 1998, when Tagget sold "Emerald Mountain" to the applicant, he was well aware of the consent and the proposed ROW. Thereafter, he actually did road construction work on it, pursuant to his agreement with the applicant, and clearly for their mutual benefit, in that it improved access to "Emerald Mountain".

Tagget was the driving force in "forming a consortium to purchase the property", and creating the corporate vehicle (Hillpalm) for that endeavour (Exhibit A10, and submissions T25 L26-30). He took responsibility for the "due diligence" undertaken by the company, which included checking the DA history of the property (submissions T28 L44-50), and so fixed the respondent company with notice of the proposed ROW through examination of the series of relevant DPs. (In his submissions Mr Robertson relies upon the Corporations Law s 128 and s 129 which draw upon the commercial law of agency, and indicate the assumptions a court can make regarding the acts of officers of corporations). There is also no doubt that Tagget was in close discussion with Hambrook when she took over Hillpalm.

Change in the "guiding mind" of that company does not negate the notice with which it had already been fixed.

It would also appear to be open to the court to draw a Jones v Dunkel inference from the respondent's failure to produce Tagget, as had been foreshadowed to the applicant prior to the hearing. The applicant's failure to produce Marendy was also criticised, but it was not submitted that any similar inference should be drawn.

The applicant is entitled to rely upon the terms of the subdivision consent granted 22 December 1977 in respect of the subject lands, including condition (a) which benefits the applicant's land, burdens that of the respondent, and has never been varied or discharged. The intention to create a ROW over what is now lot 529 was clearly stated in Marendy's letter of 21 November 1977, accompanying the subdivision DA, and the court has concluded that the actual DA proposal for the ROW found its way into the 1977 linen plan, and the other subdivision DPs which followed it and call it up.

The respondent had notice of the burden of that condition, and of its import, and, to the extent necessary to implement it, cannot defeat it through the operation of the RPA, or by reliance upon the existence of a potential access to the applicant's land via the neighbouring national park lands. The solicitors acting for the company understood that the directors did their own due diligence, warned them of the risks, and got Tagget to "sign off" the warning (fax to Tagget 17 March 1998). Also, within the law firm, the need for searches to verify contract documentation was at least recognised (filenote 7 May 1998), even though the evidence is not clear as to what due diligence was undertaken, or what precautionary searches were made.

The matters submitted in support of exercising the court's discretion not to grant relief (par 19 above) are not sufficient to outweigh the public and private interests in upholding the 1977 development consent. This applicant was not dilatory in pursuing its rights, and the Council's failure to enforce the condition cannot be held against the applicant.

In all these circumstances I have concluded that the court should grant the relief sought, namely a declaration that the respondent is in breach of condition (a) of the development consent dated 22 December 1977, and orders to create the right of carriageway, and to construct a track within it.

The class 4 application seeks orders that both those things be done within one month, but I think that period is too restrictive so far as the construction is concerned. I will nominate time periods, but grant liberty to apply in regard to those orders.

As I am satisfied that the applicant has made out its case for the declaration and injunctive relief sought in the class 4 application, the normal rule that "costs follow the event" should apply.

Mr Robertson (submissions T30 L24-33) sought an order for the applicant's costs to be paid on an indemnity basis, but that point has not been argued, and the court, as yet, does not know if the applicant can establish that the circumstances satisfy the relevant tests for an order for indemnity costs.

Accordingly, I will make an order for costs on a party-party basis, and stay it for 21 days to allow an opportunity for the applicant to put on a Notice of Motion for indemnity costs, if it decides to pursue the question.

The formal orders of the court will, therefore, be: 1. The court declares that the Respondent is in breach of condition (a) of development consent dated 22 December 1977 issued by Tweed Shire Council to John P Marendy & Associates for subdivision of Portions 306 and 342, Parish of Cudgen at Bogangar. 2. The Respondent is ordered to create, within one month, the 10metre right of carriageway, shown on DP 601049, by registration thereof on the title to the Respondent's land. 3. The Respondent is ordered to construct, within three months, a track at least 2.5metres wide within the right of carriageway referred to in Order 2 hereof. 4. The parties shall have liberty to apply, on 7 days notice, in respect of Orders 2 and 3. 5. The Respondent is ordered to pay the costs of the Applicant, on a party-party basis, within 28 days of their agreement, or assessment according to law. 6. Order 5 is stayed for 21 days. Any application for substitution of a different costs order should be made by Notice of Motion filed within that time. 7. All exhibits may be returned, except Exhibit A9 , which will remain in the court file.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.

CITATION : Heavens Door Pty Ltd v Hillpalm Pty Ltd [2001] NSWLEC 116 APPLICANT PARTIES : Heavens Door Pty Ltd RESPONDENT Hillpalm Pty Ltd FILE NUMBER(S) : 40161 of 2000 CORAM: Sheahan J KEY ISSUES: Injunctions and Declarations :- development consent - what constitutes - subdivision of land - conditions - right of carriageway - enforcement of unperformed condition - notice to purchaser - indefeasibility of title - alternative access - discretion Conveyancing Act 1919 Conveyancing Act Regulations 1961 Corporations Law LEGISLATION CITED: Environmental Planning and Assessment Act 1979 Evidence Act 1995 Local Government Act 1919 National Parks & Wildlife Act 1974 Real Property Act 1900 Attorney General for the Northern Territory v Hand & Ors (1989) 25 FCR 345; Auburn Municipal Council v Szabo (1971) 67 LGRA 427; P E Bakers Pty Ltd & Ors v Yehuda & Anor (1988) 66 LGRA 403; Breskvar & Anor v Wall & Ors (1971) 126 CLR 376; Dobbie & Anor v Davidson & Ors (1991) 23 NSWLR 625; Miller v Minister for Mines and the Attorney General of New Zealand [1963] AC 484; Mison & Ors v Randwick Municipal Council (1991) 73 LGRA 349; Packham v Minister for the Environment & Anor (1993) 31 NSWLR 65; CASES CITED: Pratten v Warringah Shire Council (1969) 17 LGRA 371; Progress & Securities Pty Ltd v North Sydney Municipal Council (1988) 66 LGRA 236; Quach v Marrickville Municipal Council (1990) 22 NSWLR 55; Rao v Canterbury City Council [2000] NSWCCA 471; Ryde City Council v Echt & Anor [2000] NSWCA 108; South-Eastern Drainage Board (SA) v Savings Bank of South Australia (1939) 62 CLR 603; Sydney Serviced Apartments Pty Ltd v North Sydney Municipal Council [No.2] (1993) 78 LGERA 404; Trieste Investments Pty Ltd v Watson (1963) 64 SR (NSW) 98; Winn v Director-General of National Parks & Wildlife Service & Ors [2001] NSWCA 17; Zaide v Woollahra Council & Ors (28 April 1994, Sheller JA) DATES OF HEARING: 05/03/2001-06/03/2001 DATE OF JUDGMENT: 06/07/2001

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Cases Cited (11)