Rainbowforce Pty Limited v Skyton Holdings Pty Limited & Ors [2010] NSWLEC 53 | Case summary

3 There is proposed to be a provision entitling Skyton to serve a construction commencement notice upon Rainbowforce whereupon Rainbowforce would be required to commence and complete certain works associated with the construction of the access road and footpath. The parties disagreed as to where the provision should be located. Should the provision be in the terms of the s 88B instrument as had been contemplated at the time of my judgment or would it be sufficient if the court were to make orders in terms of the provision in the orders that the court makes? 4 The parties also disagreed about the precise language of the provision, in particular whether the notice could be given after obtaining a construction certificate for the erection of buildings only above ground level or also below ground level. 5 Rainbowforce's concern was that Skyton should not be able to issue a notice after obtaining a construction certificate for works that are not associated with the erection of buildings. Skyton accepted that the relevant trigger should be a construction certificate for the erection of buildings that are the subject of the Skyton's development consent and if amendments were made to the terms of the provision to specify that, then the debate about whether the buildings should be above or below ground would be eliminated. 6 In the end, therefore, the parties were able to agree upon the terms of the provision for the issuing of a construction commencement notice, the carrying out of works in response to the notice and the consequences if works were not completed within the specified time period. That agreement is now reflected in the applicant's minute of final orders. The changes that will need to be made to that minute are to specify that, first, the buildings are the buildings the subject of Skyton's development consent and, secondly, the benefit and the burden of the order should enure to successors in title of Skyton and Rainbowforce. 7 This leaves the debate as to whether the provision should be included in the s 88B instrument or whether it is sufficient to include it in the orders of the court. 8 Originally, as I noted in the judgment, Rainbowforce proposed that the provision be put in the s 88B instrument. The purpose of so doing was to give legal force to the provision. Upon reflection, however, Rainbowforce says that that may result in unnecessary rigidity and increase costs for the parties without any necessary practical benefit. The alternative that Rainbowforce now proposes is that the terms of the provision be included in orders made by the court. Those orders would, of course, be legally enforceable. They will be binding upon Skyton and Rainbowforce and their successors in title. If Rainbowforce does not comply, then the sanction will be that they would be in breach of court orders and that carries with it, of course, the consequences that come from breach of a court order, including contempt and sequestration of property, intended to enforce compliance. 9 In practice, however, what would happen would be that if a construction commencement notice were to be served, in accordance with the provision, and Rainbowforce was not able to or did not comply with the requirement to complete the access road and cease use of the right of way by construction traffic within the time period specified, Rainbowforce would be forced to apply to the Court for a variation of the order. 10 Skyton would be a party to any such application and would be entitled to be heard. Rainbowforce would have to satisfy the Court that such variation should be made. If the Court were minded to vary the order, it could do so on terms which could include a term such as mandating completion within certain periods of time and also ordering Rainbowforce to pay additional compensation to Skyton for any loss it might suffer by reason of the extension of the time period beyond that specified in the court orders. 11 This mechanism is, therefore, one which entails a legal sanction which is enforceable and enables the Court to supervise the implementation of the order. The alternative of inserting the provision in the s 88B instrument would also have legal effect and create a sanction. However, the mechanism for variation of it is more cumbersome; an application needing to be made under the Conveyancing Act to the Supreme Court. This would involve a longer, more complicated process but without any attendant benefits as compared to the process of applying to this Court, if the Court were to make the orders proposed. 12 Upon further reflection, it would seem preferable to insert the provision in the orders of the court by way of an injunction and also to grant liberty to Skyton and its successors in title to apply to the Court if there has been a breach and to Rainbowforce to apply if it wishes to vary the orders made. If Rainbowforce exercised that liberty to apply, Skyton or its successors in title would be entitled to seek further compensation for any loss that flows from the variation of the orders. 13 On balance, I consider that it is appropriate to insert the provision concerning the construction commencement notice in the orders of the court as proposed by Rainbowforce and as modified in discussion and also to allow liberty to Skyton and Rainbowforce to apply. 14 As a consequence of this decision, the suggested further covenants that Skyton suggested in paras 6 and 7 of the draft s 88B instrument can be deleted. The substance of those matters will be picked up in the proposed provision to be inserted as part of the court orders. There will be knock-on consequences for the drafting of the other parts of the s 88B document and the survey plan itself. 15 The second point of disagreement was the route of the easement. I referred in the judgment to the two different routes proposed by Rainbowforce and Skyton. Rainbowforce sought an easement which crossed through the middle of lot 3 in DP 247452. That location accorded with the various development control plans (DCPs) and also with the condition of the Rainbowforce development consent which required the creation of an easement in accordance with those DCPs. 16 On the other hand, the Skyton development consent had a condition which was a deferred commencement condition requiring the creation of an easement in accordance with a particular plan that had been approved as part of that development consent. That plan showed a possible future route for the access road over lot 3 which was not through the middle of lot 3 but to one side. It is at that location that Skyton now seeks for the court to impose the easement. 17 Although I did not expressly resolve the question as to the location of the easement in the judgment, it is nevertheless implicit in the judgment that I accepted that the route of the easement should be that proposed by Rainbowforce in its application and not the alternative route proposed by Skyton. That is clear by the discussion in the judgment where I identify the two alternative routes and in the assessment of the compensation. 18 In assessing compensation, I referred in paras 162 to 164 of the judgment to the proposed location of the easement being through the middle of the lot, that is to say, at the proposed location being sought by Rainbowforce and not that suggested by Skyton. I noted that that location through the middle of the lot accorded with the requirements of the site specific DCPs for both the Rainbowforce land and the Skyton land in both the text and the plans. 19 I did, however, note that that route through the middle of the lot was different to the route shown on the plan that was referred to in the condition of the Skyton development consent. 20 Nevertheless, I proceeded to assess compensation on the basis that the route of the easement would be through the middle of the lot. I noted that that would restrict the potential of lot 3 to be developed for residential purposes. I assessed the compensation that I considered was appropriate on that basis. It is clear, therefore, that I found that the location should be the location proposed by Rainbowforce and not the alternative location proposed by Skyton. 21 Skyton now submits that locating the easement through the middle of lot 3 would cause some difficulty with their development consent. As I noted in the judgment, and I have said again here, there was a deferred commencement condition which required Skyton to obtain an easement and that condition said that the easement over lot 3 was to be as delineated in a particular plan that was referred to in the condition. That plan itself was equivocal as to the location because it refers to a possible future access road without specifying precisely that the route shown on the plan must be the route of the easement. As I said in the judgment, there could be an argument that the plan itself does not require that precise location but rather that was one of the possible routes. Nevertheless, the reference in the condition to the plan does potentially create some difficulty for Skyton if I were to create an easement along the route suggested by Rainbowforce through the middle of lot 3. 22 As events have happened after I gave judgment, Skyton applied to the Court to modify the Skyton development consent under s 96 of the Environmental Planning and Assessment Act 1979. By consent of Skyton and the Council, the Court upheld the s 96 modification and deleted the deferred commencement conditions and, in effect, converted them into general conditions of consent. That had the consequence that the previously deferred commencement condition, which required the creation of an easement over lot 3, became a general condition of consent. However, the wording of the condition has remained the same and still contains a reference to the access road as delineated on the particular plan. 23 It may be that a further s 96 modification application would need to be made simply to delete the reference to the plan in that condition. If that were to be done then the condition could stand even if the easement is granted through the middle of lot 3 rather than on the precise location shown on the plan. 24 Nevertheless, I do not consider that this difficulty which has arisen should lead to the view that the easement that the Court should impose should be an easement that accords with the possible route shown on the plan in the condition of Skyton's development consent rather than the route through the middle of lot 3 proposed by Rainbowforce and on which I have based my judgment. I consider the route of the easement should be that shown by Rainbowforce in its survey plan and not the one shown by Skyton in its amended plans. 25 My rulings on these two matters resolves the issues between the parties. Other amendments have been agreed between the parties and are reflected in the draft minute of final orders. I would now ask Rainbowforce to convert the minute of orders as well as the s 88B instrument and the plan into their final form. I can then make orders in terms of those final orders, instruments and plans. I adjourn the matter to 9.30am tomorrow morning for that purpose.

Rainbowforce Pty Limited v Skyton Holdings Pty Limited & Ors

At a glance

Court

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Before

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Judgment (15 paragraphs)

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Legislation Cited (1)

Cases Cited (2)