Perpetual Trustee Company Limited v The Council of the City of Sydney

The position of the defendant

1. The defendant neither consents to nor opposes the grant of the easement. JSG is classified as "community land" pursuant to ss 25 and 26 of the Local Government Act 1993 (NSW) (LGA). Section 45 of the LGA provides, relevantly: 45 What dealings can a council have in community land? 1. A council has no power to sell, exchange or otherwise dispose of community land. 2. A council may grant a lease or estate in community land to the extent permitted by this Division or under the provisions of another Act.
2. Section 46 sets out the circumstances in which leases, licences and "other estates" in respect of community land may be granted. These include in circumstances such as where the interest in land is required for the provision of public utilities. As the easement sought by the plaintiff is not referrable to the provision of public utilities, in order for the defendant to consent to the grant of the easement, it would require express authorisation in the plan of management that applies to JSG.
3. Pursuant to the relevant plan of management, JSG is categorised as a "park." According to s 36G of the LGA: The core objectives for management of community land categorised as a park are: (a) to encourage, promote and facilitate recreational, cultural, social and educational pastimes and activities, and (b) to provide for passive recreational activities and for the casual playing of games, and (c) to improve the land in such a way as to promote and facilitate its use to achieve the other core objectives for its management.
4. The defendant's position is that the plan of management in force in relation to JSG does not authorise it to grant an easement to the plaintiff when regard is had to Table 6.1, 6.2 and 5.1 of the plan of management. Relying on Marshall v The Council of the City of Wollongong [2000] NSWSC 137 (Marshall v CCW), the defendant considers that as a consequence it cannot actively consent to the granting of the easement.
5. Marshall v CCW concerned an application under s 88K of the Conveyancing Act for a permanent right of way over land classified as community land and owned by a council authority. The relevant council in that case also considered that it was not empowered to grant the easement or to consent to an order of the Court: see [13]. After accepting the correctness of this position, Bryson J went on to note that the limitations on the council did not impose any constraints upon the Court's powers under s 88K of the Conveyancing Act: see [24]. His Honour did observe, at [25], that the fact land is community land and is protected through the imposition of limits on how a council might deal with such land is relevant to the exercise of the general discretion conferred by s 88K.

Legal Principles

1. Section 88K of the Conveyancing Act is in the following terms: 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.
2. In 117 York Street Pty Ltd v Proprietors of Strata Plan No 16123 (1998) 43 NSWLR 504 at 508-9, which was cited with approval in Moorebank Recyclers Pty Ltd v Tanlane Pty Ltd [2012] NSWCA 445 at [154], Hodgson CJ in Eq considered that: What does "reasonably necessary" mean? It is clear that "reasonably necessary" in s 88K(1) does not mean "absolutely necessary", and thus that the requirement may possibly be satisfied even when the plaintiff's land could be effectively used or developed without the easement: Tregoyd Gardens v Jervis (Hamilton J, 25 September 1997, unreported); Goodwin v Yee Holdings Pty Ltd (Windeyer J, 6 November 1997, unreported); Re Seaforth Land Sales Pty Ltd's Land [No 2] [1977] Qd R 317. In my opinion: (1) the proposed easement must be reasonably necessary either for all reasonable uses or developments of the land, or else for some one or more proposed uses or developments which are (at least) reasonable as compared with the possible alternative uses and developments; and (2) in order that an easement be reasonably necessary for a use or development, that use or development with the easement must be (at least) substantially preferable to the use or development without the easement. The first of those requirements may seem contrary to a statement by Hamilton J in Tregoyd Gardens (at 14) that the Court "is not to judge upon the reasonableness of the particular development". However, that statement is qualified by the words "at least in this case". If there are some possible reasonable uses or developments of the land for which a proposed easement is not reasonably necessary, then it seems to me that the easement cannot be "reasonably necessary for the effective use or development" of the land, at least unless there is some proposed use or development, for which the proposed easement is reasonably necessary, which is itself a reasonable use or development. It may be that the particular proposed use or development would need also to be preferable to the alternatives; but whether or not that it so, it would in my opinion certainly need to be at least reasonable.
3. In Rainbowforce Pty Ltd v Skyton Holdings Pty Ltd [2010] NSWLEC 2 at [83], Preston CJ made the following observations: Tenthly, the requirement of reasonable necessity can be satisfied notwithstanding that some future action may be required, in addition to obtaining the easement, for the effective use or development of land, such as obtaining some statutory consent. For example, if an easement in the form of a right of carriageway is created, it may be necessary to obtain development consent under the EPA Act to construct the road in the right of carriageway. The requirement in s 88K(1) does not require that all other obstacles to the proposed use or development of the land that will have the benefit of the easement must have been overcome before the Court has power to grant an easement: 117 York Street Pty Ltd v Proprietors of Strata Plan No 16123 at 512. Only if use of the proposed easement would be absolutely illegal and there was no chance of obtaining a consent necessary to make it other than illegal, would the Court be precluded from finding that the easement was reasonably necessary: 117 York Street Pty Ltd v Proprietors of Strata Plan No 16123 at 511-512.
4. This approach was cited with approval by the NSW Court of Appeal in City of Canterbury v Saad [2013] NSWCA 251 at [57].

Consideration

1. In support of their application, the plaintiff read an affidavit of Mr John Stalley, an expert in construction and project management, of 27 March 2015. Mr Stalley has a BAppSc (Marine Science) from UNSW and a BAppSc (Construction Management) from NSWIT. He has 25 years of experience in construction and project management as a head contractor and 10 years of experience as the plaintiff's representative in the Sydney construction industry.
2. I will refer to Mr Stalley's evidence as it is pertinent to my consideration of whether the orders sought by the plaintiff should be granted.

Is the easement reasonably necessary for the effective "use" or "development" of the land?

1. As already mentioned, the easement is said to be necessary because of the imminent construction of the CSELR and the challenges this poses for access to the Gateway Building for the purposes of the refurbishment. The responsible entity for the CSELR supports the use of JSG for temporary access to the Gateway Building.
2. The Gateway Building was constructed in the mid-1980s and has not undergone any substantial alterations since this time. The upgrade is sought in order to provide better amenities for tenants and visitors and to ensure compliance with current building and environmental codes and standards.
3. Mr Stalley's affidavit sets out at [30]-[33] the absence of any feasible alternative for access to the building. There are, it seems, serious safety concerns attendant upon utilising other available adjacent land for construction purposes.
4. Mr Stalley's affidavit refers to and annexes a letter of GTA Consultants dated 22 December 2014 that expresses the opinion that the building works cannot be carried out without access to JSG because of transportation and access limitations. The letter from GTA Consultants attaches a table which compares Reiby Place, the Alfred Street frontage, the existing on-site loading dock and JSG as access sites for the refurbishment and redevelopment of the Gateway Building.
5. It is clear from the table that the use of Reiby Place would cause significant disruption to vehicle movement as Reiby Place would need to be closed to accommodate the loading and unloading of vehicles. This could cause queuing into Loftus Street and has the potential to restrict access to parts of Macquarie Place. It would also have the effect of forcing vehicular traffic on to a part of Alfred Street that is primarily designed to cater for bus, taxi and loading vehicle movement rather than through traffic. Although the provision of traffic signals to control two-way vehicle movements over the one-way section of Reiby Place was considered, there is insufficient room to allow vehicles to queue. Using Reiby Place would also require all vehicles on Loftus Street to use Alfred Street to exit the precinct. As Alfred Street may need to be temporarily closed due to the CSELR construction, this has the potential to cause substantial difficulties for traffic.
6. The use of the Alfred Street frontage would cause significant disruption to the high volume of pedestrian traffic along Alfred Street and would come with a high risk of a pedestrian-related incident. As noted above, parts of Alfred Street may also need to be closed for the CSELR construction.
7. The existing on-site loading dock cannot cater for the larger vehicles that will be required to service the site for the refurbishment.
8. Although utilising JSG may cause some disruption to pedestrian traffic on Loftus Street and a reduction to the bus layover area on Loftus Street adjacent to the proposed easement, GTA Consultants concludes in their letter that the preferred location from a transport perspective is JSG.
9. A letter of Taylor Thomson Whitting Consulting Engineers dated 9 December 2014, also annexed to the affidavit of Mr Stalley, contains advice to the effect that because of significant traffic, safety and structural issues the safest and preferred location for access to the Gateway Building is over JSG. The letter notes the substantial traffic and pedestrian disruption that would be caused by the use of Alfred Street, the problems with the existing loading dock, and the fact that Reiby Place would not only have to be closed, but also that it does not have a feasible location for a crane. The letter concludes that JSG is the "only location available for this site".
10. A further annexure is a letter from Transport for New South Wales, the entity responsible for the CSELR, dated 5 February 2015, which advises that access to the Gateway Building from Loftus or Alfred Streets during the construction of the light rail stop adjacent to the Gateway Building will be complicated by potential overlap between the needs of the plaintiff and the needs of Transport for New South Wales. The letter notes that "should agreement be reached with the City of Sydney we would not have any objection to the use of Jessie [sic] Street Gardens as a construction zone".
11. In the circumstances, I am satisfied that the easement is reasonably necessary for the use and development of the Gateway Building.

Is the use of JSG for temporary access not inconsistent with the public interest?

1. The plaintiff submits that it is sufficient to show that the easement is required or reasonably necessary to allow the carrying out of the proper commercial development of the Gateway Building consistent with its zoning. The plaintiff says that the zoning of the Gateway Building allows for its development and refurbishment, and that this requires the use of the construction compound and an easement across JSG.
2. The plaintiff submits that temporary access through JSG is not inconsistent with the public interest and, indeed, that it promotes the public interest through the refurbishment of the Gateway Building and the upgrade to JSG. The plaintiff noted the decision of the New South Wales Court of Appeal in City of Canterbury v Saad [2013] NSWCA 251 at [56]-[58], where Beazley P, Meagher and Leeming JJA noted that where land is zoned for a particular purpose that allows development, access may be required across other land to allow its development, and that such access may be consistent with the public interest even where it requires use of a public reserve or park.
3. The plaintiff also submits that the proposed development, including the upgrades to JSG, is consistent with the plan of management and the zoning applying to JSG as the relevant plan of management allows for development of JSG for the purposes of improving access to and amenities within the park. The Council has not accepted that the refurbishment is consistent with the plan of management. Counsel for the plaintiff submitted at the hearing that this is not a critical issue in determining whether the granting of the easement is inconsistent with the public interest and that it was not necessary for me to determine whether or not the development is consistent with the plan of management. I accept that this is the case.
4. There are detailed conditions of access, which DEXUS will comply with in order to minimise the impact on the public and neighbouring buildings. Mr Stalley's opinion is that the proposed development will have no long term negative impact on JSG and will, in fact, improve the amenity and visual character of JSG.
5. Noting the upgrade to the park, the lack of opposition from the defendant, the nature of the refurbishment and the temporary nature of the access required, I am satisfied that the grant of the easement is not inconsistent with the public interest.

Is the compensation adequate?

1. The plaintiff and defendant have agreed than an amount of $344,520 should be paid to the defendant. This reflects the rates specified in the schedule of fees and charges applied by the defendant for construction zones. There is no evidence before the Court that would suggest the agreed amount of compensation is inadequate.

Have all reasonable attempts been made to secure the easement from the defendant?

1. The plaintiff has been in negotiations with the Council since October 2014. On 18 December 2014 the Council advised the plaintiff by letter that it had come to the conclusion it could not grant access to JSG because it did not have the power to do so under the LGA. I accept the correctness of this position having regard to the remarks of Bryson J in Marshall v CCW.
2. Perpetual advised the Council on 6 February 2015 that it intended to seek access to JSG pursuant to the Access to Neighbouring Land Act 2000 (NSW). By letter dated 26 February 2015 the Council indicated that in the Council's view it would be more appropriate to seek access under s 88K of the Conveyancing Act. The Council went on to say that, provided the terms of proposed access and compensation were acceptable to the Council, the Council would not oppose an application under s 88K of the Conveyancing Act. Further communications in March 2015 established acceptable terms for the proposed access.
3. In these circumstances, it is clear that the plaintiff has made every attempt to obtain the easement through negotiation with the defendant.

Conclusion

1. I am satisfied that it is appropriate that the easement be granted. I note that the plaintiff accepted that the plaintiff should pay the defendant's costs of these proceedings.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 23 April 2015