Progress and Securities v Burwood Council

KEY ISSUES: Development Application :- Drainage easment, terms of easment, Newbury test for conditions of consent

Conveyancing Act 1919 s88K LEGISLATION CITED: Land and Environment Court Act 1979 s40 Rail Safety Act 2002 Transport Administration Act 1988

Antipas v Kutcher [2006] 144 LGRA 289; Beeton v Minister for Infrastructure Planning and Natural Resources [2005] NSWLEC 197; CASES CITED: Cameron North Sydney Investments v Strata Plan 50411 [2002] NSWSC 726; Kirkjin v Towers, unreported 6 July 1987; Newbury District Council v Secretary of State for the Environment [1981] AC578; Patrial Holdings v Short [1994] NSW Conv R 55-7 11, and on appeal [1994] 6BPR 13,996 at 14,003

Applicant: Mr J Webster SC and Mr P Clay instructed by Ms S Emery of Emery Law Firm First Respondent: LEGAL REPRESENTATIVES: Mr T Robertson SC instructed by Mr S Simmington of Phillip Fox

Second Respondent: Mr P Larkin, barrister instructed by Ms R Daniel of Clayton Utz

JUDGMENT: THE LAND AND ENVIRONMENT COURT OF NEW SOUTH WALES

10238 of 2006 Progress and Securities Building Pty Ltd v Burwood Council (First Respondent) Railcorp (Second Respondent)

JUDGMENT 1 Senior Commissioner: This is an appeal against the refusal by Burwood Council (the council) of a development application to construct a mixed-use development consisting of 233 dwellings, shops and commercial suites on lots 14 and 15 DP 749949, known as 1 Railway Parade.

The objectors' concerns 2 The Court heard the evidence of two objectors during the site visit. Mr J Breen, a committee member of the Burwood and District Historical Society, said that his society would like to see a conservation management plan for the former Post Office (a building of historic importance), which is retained on the site. I explained to Mr Breen that, since the council will own the historic building, a requirement for a conservation management plan cannot be included in conditions of consent that are directed at the applicant. 3 Mr J Panetta, who lives at 38/3 Railway Parade, on the second floor of the southeast corner of the building, said that he was concerned about the separation distance between his balcony and the proposed tower, in particular because of overshadowing. The shadow diagrams indicate that the proposed tower will not overshadow Mr Panetta's balcony.

The dispute about conditions 4 The parties have agreed on all merit matters except the conditions of consent. Unusually, however, the dispute is not between the applicant and the two respondents, but between the applicant and the first respondent on the one hand, and the second respondent on the other. While nine conditions are in dispute, the objection to eight of them is covered by a similar argument, namely that, in the council and the applicant's submission, Railcorp wants unreasonable control (one might call it a "right of veto") over the development, thereby adding another layer of bureaucracy to the principal certifying authority and the council. Railcorp, on the other hand, maintains that ultimate control over those parts of the development that affect the railway line is necessary in the interest of a safe and efficient railway system, which is of paramount importance. The ninth condition, Condition 169A, relates to the terms of the covenant under which Railcorp is to grant a drainage easement under the railway line.

The eight conditions on which the argument relates to control by Railcorp 5 The conditions, which, in the council and the applicant's submission give Railcorp too much control are:

1. 1A(c)
2. 1B
3. 34(c)
4. 56
5. 79
6. 168(a)(i) and (d)(i)
7. 209
8. 211 6 Railcorp wants to include in the above conditions, in one form or another, a requirement that its agreement be obtained before the proposal can proceed. At the same time Railcorp wants to delete any reference to the need for it to act reasonably. 7 In support of Railcorp's version of the draft conditions, its counsel, Mr P Larkin, submitted the following example. Major excavation is required on the site. There are several methods of excavation. Some result in more subsidence on neighbouring properties, some in less. Subsidence will affect the rails. Too much subsidence will make them buckle and this would affect the speed of the trains. Only Railcorp's own engineers can be relied on to make the judgment how much subsidence can be tolerated. 8 As a matter of principle, I am persuaded by Railcorp's argument that it should be the final judge on any matter that might affect the safety and efficiency of rail transport. When something goes wrong with the trains, Railcorp is the body that is blamed. It is understandable that it wants control to accompany this responsibility. On the other hand, I do not accept that a requirement for Railcorp to act responsibly detracts from the control that Railcorp desires. It provides an avenue for the applicant to challenge Railcorp, should Railcorp unreasonably withhold an approval. I accept that there are other processes of the law under which Railcorp can be obliged to be reasonable; however, by including the requirement for reasonableness in these conditions a challenge to Railcorp would be easier. 9 I apply the above principles to the individual conditions in dispute. I make the general observation that it would have been more user-friendly (and intellectually harder) to include all the matters for which Railcorp's agreement is required in a single condition. · For Condition 1A I accept Railcorp's version of the condition (in blue on my copy) with the inclusion of the paragraph requiring Railcorp not to withhold its approval unreasonably. · I accept Condition 1B with the addition of a sentence to the effect that this confirmation shall not be unreasonably withheld. · For Condition 34(c) I accept Railcorp's version of the condition. · For Condition 56 I accept Railcorp's version. · For Condition 79 I am reluctant to accept Railcorp's additions. Mr Larkin submitted that Railcorp might agree to the deletion of the addition after it has considered two contamination reports. (Following the mention on 3 November 2006, Railcorp has accepted the reports.) · In Condition 168(a)(1) the proposed addition of Railcorp does not make sense. A consultant undertaking the study cannot demonstrate that, in the determination of Railcorp, the proposal will have no unacceptable impacts on the rail corridor. I would accept the addition of the words "including the rail corridor" after the word "properties": If Railcorp is not satisfied with the study, it can withhold its written confirmation required by Condition 1A. · In Condition 168(d)(1) I understand the only dispute to be Railcorp's addition of the words "including any replacement within the rail corridor". I agree with the council and the applicant that the addition is not necessary. However, it causes no difficulty for anyone and it eases Railcorp's mind, so it should be included. · In Condition 209 the additional words "in the determination of Railcorp" is unnecessary, since the first sentence requires Railcorp's prior approval. The addition of the word "unacceptable" before "impact" is reasonable. · In Condition 211 I accept the addition of the phrase "which, in the determination of Railcorp, will".

Draft condition 169A 10 (In a submission dated 29 October 2006, Railcorp's counsel, Mr P Larkin, provided a revised version of draft Condition 169A. My remarks refer to this version, reproduced below, rather than the version in Exhibit R4. ) 169A Prior to the issue of a Construction Certificate, instruments in respect of the proposed stormwater drain between Railway Parade and Railway Crescent must be registered pursuant to section 88D of the Conveyancing Act 1919 in favour of RailCorp (on terms satisfactory to RailCorp, in respect of land within the rail corridor) and section 88E of the Conveyancing Act 1919 in favour of the Council (on terms satisfactory to the Council, in respect of other land). In so far as any such instrument applies to land within the rail corridor, it must: (a) conform to all requirements of RailCorp arising under s. 88D of the Conveyancing Act 1919; (b) reserve to RailCorp (but only for the purpose of exercising any functions conferred by, or fulfilling any objectives of RailCorp under, the Transport Administration Act 1988, or the Rail Safety Act 2002 or any other Act or law which confers or imposes functions on RailCorp) the right to extinguish or vary the covenant, and to require changes to drainage works within the rail corridor to which the covenant relates, at the Council's expense; (c) specify that if RailCorp requires any changes, as described in (b) above, RailCorp will consult with the Council regarding the changes; (d) specify that any changes required by RailCorp under (b) above must be carried out to the reasonable satisfaction of RailCorp and the Council; and (e) provide an indemnity in favour of RailCorp in respect of any damage to the rail corridor or rail infrastructure facilities arising from any failure of any component of any drainage works constructed in the rail corridor adjacent to the proposed development. In so far as any instrument created pursuant to this condition burdens land within the site and not the RailCorp land: (f) it must burden land occupied by the stormwater drainage line plus an additional 1m around the line but be of minimum width if 3m and minimum height of 3m; and shall provide for access by the Council to the drainage lines within the basin. (g) it must also burden the land for a minimum height of 5m above the pipe obvert to allow construction access for inspection, repair, maintenance or replacement of the pipe; and (h) it must burden the land with rights and obligations in the nature of an easement for services within the meaning of s. 196L of the Conveyancing Act 1919. " 11 The above condition is at the core of the dispute between the parties. The background to the dispute is as follows. In order to drain stormwater from the site by gravity, the applicant needs to obtain the agreement of Railcorp to lay a drainage pipe under the railway lines. In Mr Larkin's submission, if the drainage served only the applicant's land, Railcorp would agree to the drainage pipe under the railway line subject to a "service agreement that appropriately secures Railcorp". However, the council requires the applicant to drain not only stormwater falling on its land, but also additional stormwater further up the drainage catchment. The applicant has agreed to construct the larger system necessary to carry the additional stormwater. The result is not only a larger pipe but also the fact that the council will be the future custodian of the drainage pipe. 12 Draft Condition 169A deals with the terms of the section 88D and 88E instrument (under the Conveyancing Act 1919) under which the easement for the pipe is to be registered. In the pursuit of its own objectives, each party seeks different terms and therefore a different wording of Condition 169A. The applicant objects to paragraph (a), in particular to the requirement that the section 88D instrument must conform to all requirements of RailCorp. The applicant accepts the remainder of Condition 169A. The council objects to paragraph (b), in particular to the words "reserving to RailCorp the right to extinguish or vary the covenant, and to require changes to drainage works within the rail corridor to which the covenant relates, at the Council's expense". Mr Larkin submitted that, unless paragraph (b) is included in Condition 169A, Railcorp will not agree to the granting of the required drainage easement. The council also objects to paragraphs (c), (d) and (e). All parties agree to (f), (g) and (h) of the draft Condition. 13 The dispute leaves the Court with a conundrum. I do not think that I have power to impose paragraph (b), because it does not relate to the development. I reject Mr Larkin's submission that paragraph (b) is designed to prevent any impact by the proposed development on the long-term integrity of the rail corridor as a rail corridor. The paragraph does nothing of the sort; its purpose is to ensure that, should the drainage line need to be moved in the future, the council pays for the cost of removal rather than Railcorp. I also doubt that apportioning future costs between two public bodies is a planning purpose. In my opinion, paragraph (b) of the draft Condition fails to meet the Newbury test (Newbury District Council v Secretary of State for the Environment [1981] AC 578). 14 However, if I do not impose paragraphs (a) and (b) (and to a lesser extent (c), (d) and (e)), Railcorp will not grant the easement that the proposed development requires, or at least not the easement for the larger drainage system upon which the council's agreement to consent orders depends. The proposal will therefore not be able to proceed. Given that the terms of the easement still remain to be negotiated, it is not appropriate to grant consent by deleting paragraphs (a) and (b) of condition 169A without making some reference to the need to obtain the easement. 15 It seems to me inappropriate for the Court, in Class 1 merit proceedings, to become involved in the terms under which an easement will be made available, except to the extent that those terms relate to the design, layout, location and maintenance of the drainage pipe. It is true that conditions of consent sometimes go beyond this and specify additional arrangements between the parties, but such conditions do not meet the Newbury test. If they are not challenged, it is only because the parties are in agreement. In this case the parties are in strong disagreement and each has a different position. 16 In Class 1 proceedings I must be satisfied that the proposed drainage system is adequate, can be physically installed and will be properly maintained. All parties agree that these requirements are met. Paragraphs (f), (g) and (h) of draft Condition 169A set out the physical requirements for the easement as well as the requirement that the terms of the easement should comply with section 196L of the Conveyancing Act 1919. In my opinion, these are the only paragraphs appropriate to be included in conditions of consent. 17 However, because the evidence before me demonstrates that the easement required to implement the drainage scheme is not yet available, I can grant consent to the application only subject to a condition to the effect that a Construction Certificate must not be issued until an easement in respect of the proposed stormwater drain has been registered in favour of the council. 18 It seems to me that this way of dealing with the dispute is not only the only lawful avenue available to me, but also the most practical. It allows the parties to negotiate further. Perhaps common sense will prevail and they will find a solution that is acceptable to all. If not, the applicant can seek an easement under section 40 of the Land and Environment Court Act 1979. Section 40(6)(a) provides that the Court is to specify in the order (imposing an easement over land) the nature and terms of the easement. Section 40(3) provides that only a judge may make the order. If the dispute about the terms of the dispute persists, those terms should be decided by a judge under Class 3 of the Court's jurisdiction and not by a commissioner in Class 1.

Conclusions 19 For the reasons set out above I would grant consent to the proposed development subject to · conditions1A(c), 1B, 34(c), 56, 79, 168(a)(i) and (d)(i), 209 and 211 being revised along the lines indicated in this judgment. · condition 169A being amended to refer only to physical requirements for the drainage system or to other requirements on which the parties are in agreement; and · the insertion of a condition to the effect that the Construction Certificate must not be issued until an easement in respect of the stormwater drain has been registered in favour of the council. 20 Following my reading into the record of the above findings and conclusion on 3 November 2006, the parties filed amended conditions complying with the above conclusions. The parties agreed to my making orders in chambers, and I do so now.

2. Development application to construct a mixed-use development consisting of 233 dwellings, shops and commercial suites on lots 14 and 15 DP 749949, known as 1 Railway Parade is determined by the grant of consent subject to the conditions in Annexure A.

3. The exhibits are returned except Exhibits 16 and D.

      Dr John Roseth
      Senior Commissioner

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.