Mauro Poletti v Inner West Council

Is Council's requirement that the Applicant obtain an easement for drainage, in favour of the Subject Site over 341 Darling Street, satisfied by the 'Transfer Granting Easement' agreement provided by the owner of 341 Darling Street?

1. The creation of easements is dealt with under s.88B of the Conveyancing Act 1919 (the Conveyancing Act) which provides: 88B Creation and release of easements, profits à prendre and restrictions on use of land by plans (1) In this section "public road" and "road" have the meanings respectively ascribed to those expressions by the Roads Act 1993. (2) A plan shall not be lodged with the Registrar-General for registration or recording under Division 3 of Part 23 unless it indicates in the manner prescribed in respect of the plan by regulations made under this Act or the Real Property Act 1900 or in the manner required by the lodgment rules under the Real Property Act 1900: (a) what easements, if any, are intended to be created: (i) burdening land comprised in the plan and appurtenant to any existing roads shown on the plan, and (ii) appurtenant to any roads to be vested upon registration of the plan, (b) what easements, if any, referred to in section 88A are intended to be created burdening land comprised in the plan and in whose favour those easements are intended to be created, (c) what other easements or profits à prendre, if any, are intended to be created appurtenant to or burdening land comprised in the plan, and (c1) what easements or profits à prendre, if any, appurtenant to or burdening land comprised in the plan are intended to be released or partially released, and (d) what restrictions on the use of land or positive covenants, if any, are intended to be created benefiting or burdening land comprised in the plan. (3) On registration or recording under Division 3 of Part 23 of a plan upon which any easement, profit à prendre, restriction or positive covenant is indicated in accordance with paragraph (a), (b), (c) or (d) of subsection (2) then, subject to compliance with the provisions of this Division: (a) any easement so indicated as intended to be created as appurtenant to any existing public roads shown in the plan or any roads to be vested in the council upon registration of the plan shall be created and shall without any further assurance vest in the council by virtue of such registration and of this Act, (b) any easement so indicated as intended to be created pursuant to section 88A shall be created and shall without any further assurance vest in the relevant prescribed authority referred to in that section by virtue of such registration and of this Act, (c) any other easement, profit à prendre or any restriction on the use of land (not being a restriction as to user of the type that may be imposed under section 88D or 88E) so indicated as intended to be created shall: (i) be created, (ii) without any further assurance and by virtue of such registration or recording and of this Act, vest in the owner of the land benefited by the easement or profit à prendre or be annexed to the land benefited by the restriction, as the case may be, notwithstanding that the land benefited and the land burdened may be in the same ownership at the time when the plan is registered or recorded and notwithstanding any rule of law or equity in that behalf, and (iii) not be extinguished by reason of the owner of a parcel of land benefited by such easement, profit à prendre or restriction holding or acquiring a greater interest in a separate parcel of land burdened thereby, and (d) any restriction on the use of land or positive covenant that is of the type that may be imposed under section 88BA, 88D or 88E and is so indicated as intended to be created takes effect as if it had been so imposed. (3AA) On registration or recording under Division 3 of Part 23 of a plan on which a release of an easement or profit à prendre is indicated in accordance with subsection (2) (c1), the easement or profit à prendre is released. (3A) When creating a folio of the Register kept under the Real Property Act 1900 for land benefited by any easement, or for land burdened by any easement, restriction on the use of land or positive covenant, created by this section, the Registrar-General shall record in that folio, in such manner as the Registrar-General considers appropriate, the easement, restriction on the use of land or positive covenant, as the case may be. (4) Any restriction on the use of land or positive covenant created by this section shall for the purposes of this Act and the Real Property Act 1900 , have effect as if it was contained in a deed.
2. The Applicant's position was that: 1. the subject site had the benefit of an existing 3m wide right-of-way, across the access handle from Short Street to 341 Darling Street, to enable vehicular access to the Subject Site; 2. the existing building on the Subject Site has always drained to 'the right of carriageway' on 341 Darling Street; 3. the proposed additions and alterations to 337 Darling Street would not change the amount of stormwater run-off currently generated by the existing building on the Subject Site. 4. the owner of 341 Darling Street had provided an executed 'Transfer Granting Easement' document, and as a consequence there was a high level of certainty that the easement would be registered; 5. drainage from the subject site across the easement was a right that existed following execution of the 'Transfer Granting Easement' document by the owner of 341 Darling St; 6. whether the easement was registered prior to the granting of an operational consent, or prior to the granting of an occupation certificate, was of no substantive difference as the rights afforded by the easement existed from the point in time at which the 'Transfer Granting Easement' agreement was signed; 7. the existence of an executed Transfer Granting Easement document afforded an unregistered right to dispose of waste water through the easement; 8. in order to register the easement under section 88B of the Conveyancing Act, the NSW LPI has advised the owner of the subject lot that the transfer granting easement document should be accompanied by a survey of the burdened lot; 9. the Applicant does not accept that the cost of the survey should be borne by him; 10. registration of the easement with NSW LPI, or lack thereof, affected neither the rights associated with the easement, nor the associated planning outcomes that would flow therefrom. 11. registration was, as a consequence, unnecessary to meet the Council's requirement that the applicant obtain an easement for drainage over the burdened property prior to the consent becoming operational.
3. In support of the above position Mr Seymour, for the Applicant, cited Prof Peter Butt ['Land Law' (6th Ed)] concerning the status of unregistered rights, and in which the author comments on the interpretation of s.41(1) of the Real Property Act 1900 that provides: (1) No dealing, until registered in the manner provided by this Act, shall be effectual to pass any estate or interest in any land under the provisions of this Act, or to render such land liable as security for the payment of money, but upon the registration of any dealing in the manner provided by this Act, the estate or interest specified in such dealing shall pass, or as the case may be the land shall become liable as security in manner and subject to the covenants, conditions, and contingencies set forth and specified in such dealing, or by this Act declared to be implied in instruments of a like nature.
4. Mr Seymour noted Prof Butt's opinion [Ch20, para 23] that while s.41(1) 'might be thought to deny any scope for unregistered interests in Torrens title land", the courts have, in the cases of Barry V Heider [1914] 19 CLR 197 at [216], and Brunker v Perpetual Trustee Co Ltd [1037] 57 CLR 555 at [580-581],: 1. 'consistently recognised the validity of unregistered interests in Torrens title land' ; and 2. held that s.41(1) 'whilst denying effect to the instrument (dealing) until registration, does not touch the rights arising out of the transaction that gave rise to the dealing'.
5. However, Prof Butt [at Ch20, para 24] also noted that whilst registered rights are recognised, they remain 'precarious'.
6. However, Mr Bonanno, for the Respondent, said that: 1. while a 'Transfer Granting Easement' agreement did provide rights in equity to the Applicant, an easement reflecting the agreement would not be created until such time as it was registered with NSW LPI; 2. registration of the easement would ensure that all parties involved in the matter, including future landowners of either the beneficial or burdened lots, have security in perpetuity as to the status and function of the easement;
7. Mr Bonanno, in written submissions following the hearing, noted that that as a consequence of s.42 of the Real Property Act 1900 unless an easement is registered it has no legal effect. That section of the Real Property Act is: 42 Estate of registered proprietor paramount (1) Notwithstanding the existence in any other person of any estate or interest which but for this Act might be held to be paramount or to have priority, the registered proprietor for the time being of any estate or interest in land recorded in a folio of the Register shall, except in case of fraud, hold the same, subject to such other estates and interests and such entries, if any, as are recorded in that folio, but absolutely free from all other estates and interests that are not so recorded except: (a) the estate or interest recorded in a prior folio of the Register by reason of which another proprietor claims the same land, (a1) in the case of the omission or misdescription of an easement subsisting immediately before the land was brought under the provisions of this Act or validly created at or after that time under this or any other Act or a Commonwealth Act, (b) in the case of the omission or misdescription of any profit à prendre created in or existing upon any land, (c) as to any portion of land that may by wrong description of parcels or of boundaries be included in the folio of the Register or registered dealing evidencing the title of such registered proprietor, not being a purchaser or mortgagee thereof for value, or deriving from or through a purchaser or mortgagee thereof for value, and (d) a tenancy whereunder the tenant is in possession or entitled to immediate possession, and an agreement or option for the acquisition by such a tenant of a further term to commence at the expiration of such a tenancy, of which in either case the registered proprietor before he or she became registered as proprietor had notice against which he or she was not protected: Provided that: (i) The term for which the tenancy was created does not exceed three years, and (ii) in the case of such an agreement or option, the additional term for which it provides would not, when added to the original term, exceed three years. (iii) (Repealed) (2) In subsection (1), a reference to an estate or interest in land recorded in a folio of the Register includes a reference to an estate or interest recorded in a registered mortgage, charge or lease that may be directly or indirectly identified from a distinctive reference in that folio. (3) This section prevails over any inconsistent provision of any other Act or law unless the inconsistent provision expressly provides that it is to have effect despite anything contained in this section.
8. Having considered the above points, I have concluded that: 1. under s.88B(3), an easement is 'created' on registration or recording, under Division 3 of Part 23, of a plan upon which any easement is indicated; 2. the absence of registration a 'Transfer Granting Easement' agreement does not create a legal easement by reason of s.42 of the Real Property Act 1900; 3. while the existence of a 'Transfer Granting Easement' may confer certain unregistered rights in equity to the Applicant, it is not certain that these rights would persist in perpetuity unless, and until, they registered with NSW LPI. 4. while the 'Transfer Granting Easement' agreement ensures that the rights to an easement are available to the Applicant, it cannot substitute for registration of the easement for the purposes of granting consent. 5. registration of the easement provides clarity as to the presence of the easement and the rights attached thereto for potential future owners of both the Subject Site and the burdened lot.
9. I note that this position is consistent with a recent decision by the Commissioner in Zahrooni v Parramatta City Council [2017] NSWLEC 1170. In that case the Applicant sought to rely on a Deed to confirm the willingness of a downstream owner to grant an easement for drainage in due course. The conclusions of the Commissioner included recognition that: An easement serves an additional purpose of notifying future owners of the existence of the right to drain over the downstream lot consistent with Fortunate Investments Pty Ltd v North Sydney Council (2001) 114 LGERA 1; [2001 NSWLEC 70.

When should the easement be registered?

1. This appeal seeks: 1. deletion of the requirement to register the easement as a deferred commencement condition and 2. its replacement by an operational condition requiring registration of the easement prior to the issuing of an occupation certificate for the development.
2. The effect of these changes, were they to be approved, would be to shift the required timing for registration of the easement from immediately prior to the consent becoming operational to just prior to the issuing of an occupation certificate..
3. The Respondent said that the application to grant the appeal should not be supported for the following reasons : 1. a deferred commencement condition, requiring registration prior to the granting of an operational development consent, provided a strong incentive for the Applicant to register the easement; 2. an alternative condition to require that the easement be registered before the occupation certificate is issued provided significantly less incentive for the Applicant to register the easement; 3. registration of the easement ensured that all parties involved in the matter, including future landowners of either the beneficial or burdened lots, have security as to the status and function of the easement; 4. the Applicant had had significant opportunity to register the easement; 5. it was open to the Applicant to complete registration through securing a survey of the burdened lot, and the fact that this had not been done did not support the Applicant's assertion that there was a high probability that the easement would be registered.
4. The Respondent also said that should registration of the easement be delayed for reasons of inadvertence or failure of the Applicant to secure the required survey, then the application of s.109M of the EPA Act would limit Council's ability compel the registration of the easement 12 months after the commencement of occupation.
5. The Applicant's position was that: 1. The existence of a 'Transfer Granting Easement' provided confidence that the easement would be registered by the Applicant; 2. whether the easement was registered prior to the consent becoming operational, or prior to the granting of an occupation certificate, was of no substantive difference, as the rights afforded by the easement existed from the point in time at which the 'Transfer Granting Easement' agreement was signed; 3. in order to register the easement under section 88B of the Conveyancing Act, the NSW LPI has advised the owner of the subject lot that the transfer granting easement document should be accompanied by a survey of the burdened lot; 4. the reason for non-registration of the easement to date was an unresolved question between the Applicant and the owner of 341 Darling Street as to who should bear the costs of the survey required for registration of the easement.
6. Expert evidence was provided by Mr James Ogg, a stormwater and development engineer employed by Inner West Council, in which he said that: 1. the Leichardt DCP 2013 (s E1.2.5) required that all roof run-off from a property be drained by gravity to the adjacent street front, and where the property falls away from the street frontage, as is the case on the subject site, and the drainage system cannot be designed internally to drain to an adjacent street frontage, Council seeks a drainage easement over a downstream property to the street below; 2. in cases where the drainage design relies on an easement over a distinct and separate landowner's lot, Council requires the applicant to demonstrate a legal right to drainage over the burdened property prior to determination; 3. this legal right to drainage can be located within an existing easement or can be achieved through the applicant obtaining the relevant rights prior to Council's determination 4. where an applicant can demonstrate that the owner of the burdened property does not object, in principle, to granting an easement, but has not proceeded to a formal agreement, it is Council's standard practice to impose a deferred commencement condition requiring a formal easement to be obtained prior to operational consent being granted. 5. registration of easement prior to the granting of an operational consent supports the objects of the EPA Act insofar as it is consistent with the orderly and economic use and development of land at 337 Darling Street.
7. I share the concern expressed by the Respondent that if the question as to who should bear costs associated with securing the survey were to remain unresolved it is possible that the easement may never be registered. This could place at risk future dealings between the owners of the Subject Site and the burdened lot.
8. I accept the evidence of Mr Ogg that registration of easement prior to the granting of an operational consent is consistent with Council practice: and that registration of the easement is consistent with the objects of the EPA Act, specifically the objective at [s.5(a)(ii)] being the promotion and coordination of the orderly and economic use and development of land.
9. Consequently, I conclude that Condition 1 should remain as a deferred commencement condition and should not be deleted from the conditions of consent, nor should it replaced with an operational condition.

Should Condition 11a be deleted?

1. Condition 11a is: the proposed glazed rear first-floor balcony balustrade shall be altered to a more sympathetic material to minimise the visual impact of the rear works on the surrounding heritage conservation area. Accordingly, the subject balustrade shall comprise of vertical metal pickets in keeping with the historic built character of the locality;
2. During the site inspection it was evident that a several properties in the vicinity of the Subject Site had had installed balconies with glazed balustrade at similar levels to the proposed first-floor balcony at 337 Darling Street. This included a rear balcony with a glass balustrade at number 345 Darling Street. The respondent confirmed that this balustrade had been installed with Council approval and agreed that it was similar in style and context to that proposed by the Applicant.
3. Having viewed the subject site from the adjacent public areas on Short Street I have concluded that it would be difficult for a member of the public to gain a clear view of the proposed first-floor balustrade.
4. Given that Council had previously consented to the installation of a glazed balustrade finish to a first-floor balcony in close proximity to the Subject Site, and that the proposed balustrade would have limited, if any, visibility from public areas, I find that a glazed balustrade would have minimal impact on the heritage or other values of the area.
5. Consequently, I accept with position of the Applicant that condition 11(a) of the consent should be deleted from the conditions of consent for the development.

Conclusion

1. Based on the above, I am satisfied that: 1. the deferred commencement condition (Condition 1) should not be deleted and replaced by a condition requiring registration prior to the issue of the occupation certificate. 2. The condition of consent requiring that the 1st floor balustrade at the rear of the subject site be constructed of vertical metal pickets (condition 11 a) should be deleted, so as to permit the originally proposed use of glazing on the balustrade.

Orders

1. The Court orders that: 1. The appeal is upheld. 2. The conditions of consent for Development Application D/2016/434), issued by the Respondent on 14 February, for the internal alterations and additions to a class 4 dwelling on first floor, strip out of retail premises for new salt float tank on ground and lower ground floors (hours of operation Monday to Sunday 8am to 10pm), and other alterations to existing car park on lower ground floor at 337 Darling St, Balmain, are amended as follows: 1. Delete condition 11(a). 1. Development consent is granted DA D/2016/434), subject to the revised conditions of consent annexed hereto as Annexure 'A'. 2. The exhibits are returned with the exception of Exhibits 1, A and B. …………………………. Michael Chilcott Commissioner 364506.16 Chilcott (C) (411 KB, pdf)

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