Rouse Hill Custodian Corporation Pty Ltd v Prisma Rouse Hill Development Pty Ltd

Catchwords

[2001] NSWLEC 15 Billgate Pty Ltd v Woollahra Municipal Council (2004) 136 LGERA 356 [2004] NSWLEC 436Boland v Yates Property Corporation Pty Ltd (1999) 74 ALJR 209 Bonnici v Ku-ring-gai Municipal Council (2001) 121 LGERA 1[2001] NSWSC 1124 Bonvale Enterprises Pty Ltd v Halfpenny Investments Pty Ltd (2005) 62 NSWLR 698[2005] NSWSC 219 Bropho v Western Australia (1990) 171 CLR 1[1990] HCA 24 Casuarina Rec Club Pty Limited v The Owners - Strata Plan 77971 (2011) 80 NSWLR 711[2011] NSWCA 159 Celesteem Rouse Hill Development v Blacktown City Council [2020] NSWLEC 1137 City of Canterbury v Saad (2013) 195 LGERA 329[2013] NSWCA 251 Community Association DP270447 v ATB Morton Pty Ltd (2019) 240 LGERA 32[1999] NSWSC 1045 Khattar v Wiese (2005) 12 BPR 23235[2005] NSWSC 1014 Moorebank Recyclers Pty Ltd v Tanlane Pty Ltd (2012) BPR 31257[1940] HCA 7 Olefines Pty Ltd v Valuer-General (NSW) [2018] NSWCA 265 Potter v Minahan [1908] HCA 637 CLR 277 Pugh v Savage [1970] 2 QB 373 Rainbowforce Pty Ltd v Skyton Holdings Pty Ltd (2010) 171 LGERA 286[2014] NSWCA 50 Rudd v Hornsby Shire Council (1975) 31 LGRA 120 Shi v ABI-K Pty Ltd (2014) 87 NSWLR 568[2006] NSWCA 300 Sydney Seaplanes Pty Ltd v Page (2021) 393 ALR 485

Judgment (123 paragraphs)

[1]

7 Dewhirst v Edwards [1983] 1 NSWLR 34 Diro Group Pty Ltd v Leuzinger [2021] NSWLEC 107 Electricity Commission of NSW v Arrow (1994) 85 LGERA 418 Hamilton v Joyce [1984] 3 NSWLR 279 Huntington & Macgillivray v Hurstville City Council (No 2) (2005) 139 LGERA 84 Katakouzinos v Roufir Pty Ltd (1999) 9 BPR 17,303; [1999] NSWSC 1045 Khattar v Wiese (2005) 12 BPR 23235; [2005] NSWSC 1014 Moorebank Recyclers Pty Ltd v Tanlane Pty Ltd (2012) BPR 31257; [2012] NSWCA 445 Nicole-Anne Hickey v The Owners Strata Plan 78825 [2022] NSWLEC 135 North Shore Gas Co Ltd v Commissioner of Stamp Duties (1940) 63 CLR 52; [1940] HCA 7 Olefines Pty Ltd v Valuer-General (NSW) [2018] NSWCA 265 Potter v Minahan [1908] HCA 63; 7 CLR 277 Pugh v Savage [1970] 2 QB 373 Rainbowforce Pty Ltd v Skyton Holdings Pty Ltd (2010) 171 LGERA 286 ; [2010] NSWLEC 2 Re Maiorana and the Conveyancing Act (1970) 92 WN (NSW) 365 Registrar-General of New South Wales v Jea Holdings (Aust) Pty Ltd (2015) 88 NSWLR 321; [2015] NSWCA 74 Rixon v Horseshoe Pastoral Co Pty Ltd [2017] NSWSC 1293 Roden v Bandora Holdings Pty Limited [2015] NSWLEC 191 Ross v Lane Cove Council (2014) 86 NSWLR 34; [2014] NSWCA 50 Rudd v Hornsby Shire Council (1975) 31 LGRA 120 Shi v ABI-K Pty Ltd (2014) 87 NSWLR 568; [2014] NSWCA 293 Spencer v Commonwealth (1907) 5 CLR 418 Sydney City Council v Claude Neon Limited (1989) 15 NSWLR 724 Sydney City Council v Ipoh Pty Limited (2006) 68 NSWLR 411; [2006] NSWCA 300 Sydney Seaplanes Pty Ltd v Page (2021) 393 ALR 485; [2021] NSWCA 204 Stow v Mineral Holdings (Australia) Pty Ltd (1979) 180 CLR 295; [1979] HCA 30 Terry Rd Development Pty Ltd v Blacktown City Council [2018] NSWLEC 1226 The Queen v Toohey; Ex parte Meneling Station Pty Ltd (1982) 158 CLR 327; [1982] HCA 69 Todrick v Western National Omnibus Co Ltd [1934] CH 561 Tomasic v Port Stephens Council [2021] NSWLEC 56 Tregoyd Gardens Pty Limited v Jervis (1997) 8 BPR 15845 Trevlind v BMP Manufacturing [2008] NSWSC 603 Willoughby City Council v Roads and Maritime Services (2014) 201 LGERA 177; [2014] NSWLEC 6 Woodland v Manly Municipal Council (2003) 127 LGERA 120; [2003] NSWSC 392 Texts Cited: Dennis Pearce, Statutory Interpretation in Australia (9th ed, 2019, LexisNexis Butterworths) New South Wales Legislative Assembly, Parliamentary Debates (Hansard) 10 October 1995 at 1494 Category: Principal judgment Parties: Rouse Hill Custodian Corporation Pty Ltd (Applicant) Prisma Rouse Hill Development Pty Ltd (Respondent) Representation: Counsel: P Tomasetti SC with T Poisel (Applicant) I Hemmings SC with C Koikas (Respondent)

[2]

Solicitors: Harrington Lawyers (Applicant) MillsOakley (Respondent) File Number(s): 2021/243080

[3]

Judgment Application for easement for drainage of stormwater Legislation Conveyancing Act 1919 (NSW) Land and Environment Court Act 1979 (NSW) Local Government Act 1993 (NSW) Roads Act 1993 (NSW) Planning for Area 20 RHCC development consent Prisma development consent/evidence of Mr Ng Poly development consent Stormwater catchments Conditions of RHCC's development consent Easement sought by RHCC Change in evidence/scope of easement Concept drainage scheme Temporary? Pipe under Terry Road Development consent required for work on Prisma's land Threshold issue - should the Court dismiss proceedings for failure to comply with s 40(1)(a) LEC Act RHCC's submissions Prisma's submissions Consideration Threshold issue - should the Court dismiss proceedings for failure to comply with s 40(3) LEC Act? Evidence on s 40(3) issue Prisma's submissions RHCC's submissions Consideration of joinder issue Preliminary issues resolved Issues for determination under s 88K Conveyancing Act Easement does benefit RHCC's land (s 88K(1)) Evidence on issue of Council requirement for easement in gross RHCC's submissions Prisma's submissions Consideration - Easement benefits RHCC's land Balance of s 88K issues RHCC's evidence Prisma's evidence Joint expert reports Exhibits Reasonable attempts made (s 88K(2)(c)) Reasonable necessity established (s 88K(1)) Evidence on reasonable necessity RHCC's submissions on reasonable necessity Prisma's submissions on reasonable necessity Consideration of reasonable necessity Use of RHCC's land not inconsistent with public interest (s 88K(2)(a)) Evidence on public interest RHCC's submissions Prisma's submissions Consideration of public interest Adequately compensated Evidence on adequate compensation Evidence on quantum of compensation A. Can Prisma be adequately compensated? RHCC's submissions Prisma's submissions B. Amount of compensation RHCC's submissions Prisma's submissions Consideration of appropriateness and quantum of compensation Discretion RHCC's submissions Prisma's submissions Consideration of discretion Costs In conclusion

[4]

Application for easement for drainage of stormwater

The Applicant Rouse Hill Custodian Corporation Pty Ltd (RHCC) asks the Court to impose an easement under s 88K of the Conveyancing Act 1919 (NSW) (Conveyancing Act) for the drainage of stormwater from RHCC's land over land owned by the Respondent Prisma Rouse Hill Development Pty Ltd (Prisma). Prisma opposes the imposition of the easement. RHCC's land is located at 49 Terry Road, Rouse Hill. Prisma's land is located across the road at 54 Terry Road, Rouse Hill.
The Court may exercise the jurisdiction of the Supreme Court under s 88K of the Conveyancing Act if the Court has determined to grant or modify a development consent pursuant to proceedings on appeal under the Environmental Planning and Assessment Act 1979 (NSW) (EPA Act) or if proceedings on appeal under the EPA Act for the granting or modification of development consent are pending before the Court: s 40(1) of the Land and Environment Court Act 1979 (NSW) (LEC Act). An applicant may make an application for an order imposing an easement over land: s 40(2). The Court went on a site view of RHCC's land and its surroundings on 6 July 2022 in the course of the Class 3 hearing.
The Court determined in 2018 to grant development consent pursuant to an appeal under the EPA Act in respect of RHCC's land, as explained below in [18].
The Class 3 Application filed 25 August 2021 seeks the following orders: 1. An order imposing an easement for drainage over the respondent's land being Lot 132 in DP 208203 as shown in the plan of easement prepared by Anna Ilona Paterak dated 21 July 2021 being Annexure 1 hereto on the terms in Annexure 2 hereto pursuant to section 40 of the Land and Environment Court Act 1979. 2. An order that no compensation because of the special circumstances of the case. 3. Alternatively to 2., above an order that the applicant pay the respondent compensation in the sum of $30,000. 4. An order providing for the costs of these proceedings.
The terms of the easement have been amended since the Class 3 Application was filed as detailed in [37] below.

[5]

Conveyancing Act 1919 (NSW)

Sections 88, 88A and 88K of the Conveyancing Act provide: Part 6 Covenants and powers … Division 4 Easements and restrictive and positive covenants … 88 Requirements for easements and restrictions on use of land (1) Except to the extent that this Division otherwise provides, an easement expressed to be created by an instrument coming into operation after the commencement of the Conveyancing (Amendment) Act 1930, and a restriction arising under covenant or otherwise as to the user of any land the benefit of which is intended to be annexed to other land, contained in an instrument coming into operation after such commencement, shall not be enforceable against a person interested in the land claimed to be subject to the easement or restriction, and not being a party to its creation unless the instrument clearly indicates - (a) the land to which the benefit of the easement or restriction is appurtenant, (b) the land which is subject to the burden of the easement or restriction - Provided that it shall not be necessary to indicate the sites of easements intended to be created in respect of existing tunnels, pipes, conduits, wires, or other similar objects which are underground or which are within or beneath an existing building otherwise than by indicating on a plan of the land traversed by the easement the approximate position of such easement, (c) the persons (if any) having the right to release, vary, or modify the restriction, other than the persons having, in the absence of agreement to the contrary, the right by law to release, vary, or modify the restriction, and (d) the persons (if any) whose consent to a release, variation, or modification of the easement or restriction is stipulated for. (1A) Land (including the site of an easement) is clearly indicated for the purposes of this section if it is shown - (a) in the manner prescribed by regulations made under this Act or the Real Property Act 1900, or (a1) in the manner required by the lodgment rules under the Real Property Act 1900, or (b) in any other manner satisfactory to the Registrar-General in the particular case or class of cases concerned. This subsection does not limit other ways in which land may be clearly indicated. (2) This section shall not prevent the enforcement by a person entitled to a reversion remainder or other future estate or interest in any land of any contract against a person entitled to the estate or interest on which the reversion remainder or other future estate or interest is expectant. (3) This section applies to land under the provisions of the Real Property Act 1900, and in respect thereof - (a) the Registrar-General shall have, and shall be deemed always to have had, power to record a restriction referred to in subsection (1), in such manner as the Registrar-General considers appropriate, in the folio of the Register kept under that Act that relates to the land subject to the burden of the restriction, to record in like manner any dealing purporting to affect the operation of a restriction so recorded and to record in like manner any release, variation or modification of the restriction, (b) a recording in the Register kept under that Act of any such restriction shall not give the restriction any greater operation than it has under the dealing creating it, and (c) a restriction so recorded is an interest within the meaning of section 42 of that Act. (4) Subsection (1) does not apply to an easement without a dominant tenement acquired by or for a prescribed authority referred to in section 88A, nor to any restriction on the use of land in relation to any such easement. … 88A Easements in gross (1) In this section - prescribed authority means - (a) the Crown, or (b) a public or local authority constituted by an Act, or (c) a corporation prescribed by the regulations for the purposes of this section. (1A) An easement without a dominant tenement may be created in favour of a prescribed authority, and any such easement may be assured to a prescribed authority. (1B) However, an easement without a dominant tenement may only be created in favour of, or assured to, a corporation prescribed by the regulations for the purposes of this section if the easement is for the purpose of, or incidental to, the supply of a utility service to the public, including (but not limited to) - (a) the supply of gas, water or electricity, or (b) the supply of drainage or sewage services. … 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. … (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. …

[6]

Land and Environment Court Act 1979 (NSW)

Section 40 of the LEC Act provides: Part 4 Exercise of jurisdiction … Division 4 Special provisions respecting Class 1, 2 or 3 proceedings … 40 Additional powers of Court - provision of easements (1) This section applies if - (a) the Court has determined to grant or modify a development consent pursuant to proceedings on an appeal under the Environmental Planning and Assessment Act 1979, or (b) proceedings on an appeal under the Environmental Planning and Assessment Act 1979 with respect to the granting or modification of a development consent are pending before the Court (whether constituted by a Judge or by one or more Commissioners). (2) The appellant may make an application to the Court for an order imposing an easement over land. (3) The parties to an application under this section include the owner of the land to be burdened by the easement, and each other person having an estate or interest in the land, as evidenced by an instrument registered in the General Register of Deeds or the Register kept under the Real Property Act 1900. (4) In dealing with an application under this section, the Court may exercise the jurisdiction of the Supreme Court under section 88K of the Conveyancing Act 1919 and, in that event, section 88K of the Conveyancing Act 1919 applies to the Court's exercise of that jurisdiction in the same way as it applies to the exercise of that jurisdiction by the Supreme Court.
In this proceeding, the following two threshold issues arise under s 40 of the LEC Act: 1. Should the Court dismiss proceedings for failure to comply with s 40(1)(a)? 2. Should the Court dismiss proceedings for failure to comply with s 40(3)?
If the Court answers no to the threshold questions, numerous issues arise for consideration under section 88K of the Conveyancing Act as set out below in [87].

[7]

Local Government Act 1993 (NSW)

Section 59A of the Local Government Act 1993 (NSW) (LG Act) provides: Part 3 Restraints and qualifications that apply to service functions … Division 2 Water supply, sewerage and stormwater drainage works and facilities … 59A Ownership of water supply, sewerage and stormwater drainage works (1) Subject to this Division, a council is the owner of all works of water supply, sewerage and stormwater drainage installed in or on land by the council (whether or not the land is owned by the council). (2) A council may operate, repair, replace, maintain, remove, extend, expand, connect, disconnect, improve or do any other things that are necessary or appropriate to any of its works to ensure that, in the opinion of the council, the works are used in an efficient manner for the purposes for which the works were installed. (3) The provisions of this section have effect despite anything contained in section 42 of the Real Property Act 1900.

[8]

Roads Act 1993 (NSW)

The relevant provisions of the Roads Act 1993 (NSW) (Roads Act) provide: Part 6 Road work Division 1 General 71 Powers of roads authority with respect to road work A roads authority may carry out road work on any public road for which it is the roads authority and on any other land under its control. … Division 3 Miscellaneous 85 Location of conduits for utility services A roads authority that proposes to provide conduits across a public road for the carriage of utility services must consult, as to the location and construction of the conduits, with all persons - (a) who are providing utility services along or in the vicinity of the road, or (b) who are, in the opinion of the roads authority, likely to provide utility services along or in the vicinity of the road. … Part 7 Protection of public roads and traffic Division 1 Protection of public roads … 97 Utility services to be located in conduits (1) The roads authority for a public road in which there are conduits for the carriage of utility services across the road may direct any person who is entitled to place utility services in, on or over the road - (a) to locate any new or replacement services in any such conduit, and (b) to pay to the roads authority such proportion as may be prescribed by the regulations of the costs incurred by the roads authority in connection with the construction of the conduit. (2) The direction may specify the manner in which or the standard to which the direction must be complied with. (3) A provision of an Act that authorises the provision of services in, on or over a public road does not authorise the provision of the services in contravention of this section. … Part 9 Regulation of works, structures and activities … Division 3 Other works and structures … 138 Works and structures (1) A person must not - (a) erect a structure or carry out a work in, on or over a public road, or (b) dig up or disturb the surface of a public road, or (c) remove or interfere with a structure, work or tree on a public road, or (d) pump water into a public road from any land adjoining the road, or (e) connect a road (whether public or private) to a classified road, otherwise than with the consent of the appropriate roads authority. Maximum penalty - 10 penalty units. (2) A consent may not be given with respect to a classified road except with the concurrence of TfNSW. (3) If the applicant is a public authority, the roads authority and, in the case of a classified road, TfNSW must consult with the applicant before deciding whether or not to grant consent or concurrence. (4) This section applies to a roads authority and to any employee of a roads authority in the same way as it applies to any other person. (5) This section applies despite the provisions of any other Act or law to the contrary, but does not apply to anything done under the provisions of the Pipelines Act 1967 or under any other provision of an Act that expressly excludes the operation of this section. 139 Nature of consent (1) A consent under this Division - (a) may be granted on the roads authority's initiative or on the application of any person, and (b) may be granted generally or for a particular case, and (c) may relate to a specific structure, work or tree or to structures, works or trees of a specified class, and (c1) in relation to integrated development within the meaning of section 91 of the Environmental Planning and Assessment Act 1979, is subject to Division 5 of Part 4 of that Act, and (d) may be granted on such conditions as the appropriate roads authority thinks fit. (2) In particular, a consent under this Division with respect to the construction of a utility service in, on or over a public road may require the service to be located - (a) in such position as may be indicated in that regard in a plan of subdivision or other plan registered in the office of the Registrar-General with respect to the road, or (b) in such other position as the roads authority may direct. (3) In particular, a consent under this Division with respect to the erection of a structure may be granted subject to a condition that permits or prohibits the use of the structure for a specified purpose or purposes. … 142 Maintenance of works and structures (1) A person who has a right to the control, use or benefit of a structure or work in, on or over a public road - (a) must maintain the structure or work in a satisfactory state of repair, and (b) in the case of a structure (such as a grating or inspection cover) located on the surface of the road, must ensure that the structure is kept flush with the surrounding road surface and that the structure and surrounding road surface are so maintained as to facilitate the smooth passage of traffic along the road, and the person is, by this section, empowered to do so accordingly. Maximum penalty - 30 penalty units. (2) Subsection (1) applies to all structures and works in, on or over a public road, including structures and works for which there is no consent in force under this Division. (3) Subsection (1) does not apply to a person whose right to the control, use or benefit of a structure or work consists merely of a right of passage that the person has as a member of the public or a right of access that the person has as the owner of adjoining land. (4) If - (a) a roads authority has granted a consent under this Division to the doing of anything, and (b) that thing has been or is being done otherwise than in accordance with the consent, the roads authority may direct the holder of the consent to take specified action to remedy any damage arising from the doing of that thing otherwise than in accordance with the consent. … Part 10 Other road management functions Division 1 Functions with respect to land generally 145 Roads authorities own public roads (1) All freeways are vested in fee simple in TfNSW. (2) All Crown roads are vested in fee simple in the Crown as Crown land. (3) All public roads within a local government area (other than freeways and Crown roads) are vested in fee simple in the appropriate roads authority. (4) All public roads outside a local government area (other than freeways and Crown roads) are vested in fee simple in the Crown as Crown land. 146 Nature of ownership of public roads (1) Except as otherwise provided by this Act, the dedication of land as a public road - (a) does not impose any liability on the owner of the road that the owner would not have if the owner were merely a person having the care, control and management of the road, and (b) does not affect the rights or liabilities of any person under any easement or under any Act or law, and (c) does not affect any rights of any person with respect to minerals below the surface of the road, and (d) does not constitute the owner of the road as an occupier of the land, and (e) does not authorise the owner of the road to dispose of any interest (other than an easement or covenant) in the land, and (f) does not prevent any lands that were previously considered to be adjoining lands for the purposes of the Land Acquisition (Just Terms Compensation) Act 1991 from continuing to be so considered. (2) This section does not restrict the power of a roads authority to regulate the digging up of public roads pursuant to the provisions of any other Act. … 149 Leasing of land above or below public road (1) A roads authority may lease the air space above, or land below the surface of, any public road (other than a Crown road) that is owned by the authority. (2) Such a lease may not be granted by a roads authority other than TfNSW except with the approval of the Secretary of the Department of Planning and Environment. (3) The Secretary of the Department of Planning and Environment must not approve a lease in respect of a public road if the granting of the lease would be inconsistent with the rights of passage and access that exist with respect to the road. (4) The term of a lease, together with any option to renew, must not exceed 99 years.

[9]

Planning for Area 20

RHCC's land is in the suburb of Rouse Hill in the local government area of Blacktown City Council (the Council), and was previously zoned rural. The land was rezoned as part of the North West Growth Centre urbanisation plan. RHCC is the registered proprietor of Lot 135 DP208203, known as 49 Terry Road, Rouse Hill, with an area of 2.234ha (or 22,340m²). Prisma's land lies to the east, separated by a public road known as Terry Road. RHCC's land is zoned R3 Medium Density Residential under State Environmental Planning Policy (Precincts - Central River City) 2021 (NSW) (PCRC SEPP).
Prisma is the registered proprietor of Lot 132 DP208203, known as 54 Terry Road. Prisma's land has an area of 2.116ha (or 21,160m²). Part of Prisma's land (approximately 13,300m²) is zoned R3 Medium Density Residential. Approximately 2,440m² is zoned RE1 Public Recreation and approximately 5,420m² is zoned SP2 Infrastructure (Local Drainage) under the PCRC SEPP.
Terry 048 Service Pty Ltd is the registered proprietor of Lot 134 DP208203, known as 51 Terry Road. The parties referred to the owner of Lot 134 as Poly. Poly's land immediately abuts RHCC's land, and is across Terry Road from Prisma's land.
The PCRC SEPP commenced on 1 March 2022. Certain provisions of the State Environmental Planning Policy (Sydney Region Growth Centres) 2006 (NSW) (SGC SEPP) were transferred into the PCRC SEPP. Appendix 6 (Area 20 Precinct Plan) of the SGC SEPP was transferred to Appendix 8 (Area 20 Precinct Plan) of the PCRC SEPP. RHCC's land and Prisma's land is located within the Area 20 Precinct - Cudgegong Road Station pursuant to the Blacktown City Council Growth Centre Precincts Development Control Plan 2010 (NSW) (GCDCP). Schedule 4 of the GCDCP contains the Indicative Layout Plan, which shows the development envisaged for the Area 20 Precinct, reproduced below with markups showing the location of RHCC's and Prisma's lands:
The following aerial satellite image, taken from the report of Mr Bewsher dated 30 March 2022, helpfully depicts the location of the various lots to be discussed in this judgment owned by RHCC, Prisma and Poly. Second Ponds Creek to which stormwater is to drain is also shown.

[10]

RHCC development consent

In Terry Rd Development Pty Ltd v Blacktown City Council [2018] NSWLEC 1226, the Court granted development consent to DA SPP-17-00003 on 11 May 2018, for the demolition of existing structures and the construction of three four storey residential flat buildings on RHCC's land. The approved development comprises 311 apartments, a café, basement car parking with 386 car parking spaces, new public roads, stormwater drainage and landscaping works.
The approved civil engineering plan C2-00 revision D prepared by Calibre Consulting as part of RHCC's development consent depicts drainage arrangements for RHCC's land including the piping of stormwater within RHCC's land, a discharge point on the southern boundary for that system, a pipe across Terry Road leading to Prisma's land and a piped system on Prisma's land commencing on the Terry Road boundary. While the development consent cannot apply to Prisma's land or indeed the road reserve in Terry Road the stormwater drainage system depicted at the time development consent was granted envisaged disposal of RHCC stormwater, and Poly stormwater, across Prisma's land.

[11]

Prisma development consent/evidence of Mr Ng

On 24 March 2020 the Court granted a development consent in Celesteem Rouse Hill Development v Blacktown City Council [2020] NSWLEC 1137 in respect of Prisma's land for the demolition of existing structures, subdivision and construction of 43 attached dwellings with associated works to be completed over multiple stages. The Prisma consent is a deferred commencement consent. The deferred commencement consent conditions must be complied with before 24 March 2024. Condition 0.2.i. states: 0.2 Amended drainage and civil plans from Samana Blue, File Ref. 2019026 Rev H (apart from drawing C22 which is Revision I) must address the following to the satisfaction of the Manager Asset Design; i. Revise the trunk drainage line within Road 2. Ensure the starting downstream 10% AEP HGL at pit 2-2 allows for the backwater from the Rocla CDS diversion weir. Set the HGL for the 10% AEP flow and allow for a weir height of 500mm and a weir length of 1.8m. Where the existing 1200 x 600 box cannot carry the required flow a supplementary drainage system may be required. Review HGL on pipe long-sections.
The following diagram in the engineering plans produced by Samana Blue Engineering dated 5 February 2020 required by Prisma's development consent usefully illustrates the outline of the approved development:
Along the northern boundary of Prisma's land runs a half-built road known as Boolavogue Street. The Samana Blue plan above indicates that the development consent includes the construction of half of Road 2 (Boolavogue Street) and consists of three blocks of development separated by internal roads. A temporary bio-retention basin is located at the north-western end of the development.
The Prisma development consent is subject to general conditions including: 6.5 Roads … 6.5.5 Proposed new roads shall be designed and constructed as follows: Name Width (m) Length (m) Formation (mm) Traffic loading N(E.S.A) Road 1 18 75 3.5-11.0-3.5 5x5⁵ Road 2 17 (half) 200 5.5-3.5 5x10⁵ [Boolavogue Street] Road 3 18 75 3.5-11.0-3.5 5x10⁵ Road 4 18 75 3.5-11.0-3.5 5x10⁵

[12]

… 17.2 Site Access 17.2.1 All lots shall have access from a dedicated public road. In this regard, all proposed roads shall be dedicated as public road free of cost to Council.

The northern half of Boolavogue Street has already been built and is fronted by several fully developed houses that have been constructed and occupied, formerly 44 Terry Road, as seen on the view. Cars can park on the northern side of Boolavogue Street. The southern half of Boolavogue Street is identified in the GCDCP Sch 4 as land to be transferred to the Council and used for widening and completion of Boolavogue Street, including completion of stormwater drainage works within the road. The completion of public roads by this means has occurred in neighbouring developments, as was seen on the view along Barbola Street which runs parallel to Boolavogue Street. Conditions 6.5.5 and 17.2.1 of Prisma's development consent require the design and construction of the other half of Boolavogue Street and its dedication as a public road free of cost to the Council.
Mr Ng sole director and secretary of Prisma in his affidavit dated 11 March 2022 stated he has no present intention of acting on Prisma's development consent. The deferred commencement conditions have not yet been satisfied. Mr Ng also deposed that there is a possibility he may never act on the consent for the following reasons: (a) There are significant costs in acting upon the Prisma consent. These include: (i) an estimate of $12,000 in order to satisfy the deferred commencement conditions in relation to amended civil design drawings to be prepared and assessed; (ii) a monetary contribution of $66,688 under the VPA to be paid prior to the issue of a construction certificate for building work (other than investigatory or demolition work) or a subdivision certificate; and (iii) a total development cost estimated to be $18,215,944. … (b) I have not engaged the necessary consultants and/or contracts to carry out and oversee the anticipated works. (c) Over the last few years I have also overseen the preparation of a development application for another site. As part of this I have also had general discussions with contractors in relation to that site whose name I do not remember. In reviewing the documentation that has been prepared and my general conversations, I have become aware that the cost of construction and materials is increasing.

[13]

Poly development consent

On 24 September 2020, Poly obtained a development consent from the Council for construction of new public roads, multi-dwelling housing and subdivision into 145 residential lots inter alia. Poly's land, like RHCC's land, naturally drains downstream in the direction of Prisma's land towards Second Ponds Creek. The drainage of stormwater on Poly's land through RHCC's land is provided for in RHCC's development consent.

[14]

Stormwater catchments

Figure 2 of Mr Bewsher's report dated 30 March 2022 is a topographic map showing the flow directions of stormwater on RHCC's, Prisma's and Poly's lands, and the size of the stormwater catchments, as follows:
RHCC's development consent was approved with two stormwater outlets, one in the northwest and one in the southwest of RHCC's land. The northern catchment of RHCC's land drains to the northwest. According to the approved plans northwest flows are intended to use the public stormwater drainage system on Barbola Street.
In the approved plans stormwater flows from the southern catchment of the RHCC land and stormwater collected on Poly's land is to be drained to a point on the southwest boundary of RHCC's land then through Terry Road (collecting stormwater in Terry Road) to the northern boundary of Prisma's land and through that part of Prisma's land which would become part of Boolavogue Street under Prisma's development consent to Second Ponds Creek. The water collected in the southern catchment of the RHCC land and the catchment on the Poly land naturally drains approximately west towards Second Ponds Creek over Prisma's land. The required capacity to drain the RHCC and Poly water and Terry Road stormwater is identified in the engineering evidence as 2,113 litres per second (l/s).

[15]

Conditions of RHCC's development consent

RHCC's development consent is subject to a number of conditions, relevantly as follows: 5.1 DA Plan Consistency 5.1.2 No construction certificate for building works is to be released until all civil works related to roads and drainage within the road reserve have been completed and sign-off received from the PCA. However, staging of road construction (and any associated drainage works) will be permitted where suitable traffic circulation or temporary turning areas in dead end roads are evident in accordance with Council's Engineering Guide for Development, to the satisfaction of the PCA. … 7.3 Site Works and Drainage … 7.3.2 Stormwater drainage from the site shall be designed to satisfactorily drain rainfall intensities of 159mm per hour over an average recurrence interval of 20 years. The design shall: … (c) ensure that the development, either during construction or upon completion, does not impede or divert natural surface water runoff so as to cause a nuisance to adjoining properties. … 8.3 Roads Act Requirements 8.3.1 Under Section 138 of the Roads Act 1993 an approval for engineering work is required. These works include but are not limited to the following: ● Any works within Council's road reserve ● Half width road construction ● Kerb inlet pit connections or construction ● Vehicular crossings ● Path Paving The above requirements are further outlined in this section of the consent. … 8.4 Other Engineering Requirements … 8.4.3 Submit written permission from the affected owner for any works proposed on adjoining land. … 8.6 Drainage 8.6.1 Drainage discharge from the development shall be designed in accordance with the discharge points as shown in the approved civil engineering plan C2-00 revision D prepared by Calibre Consulting. 8.6.2 Any overland or stormwater flows must be intercepted at the property boundary, conveyed through the site in a piped or channelled drainage system and discharged in a satisfactory manner. … 8.9 Stormwater Quality Control 8.9.1 Provide a stormwater quality treatment system in accordance with Council's Engineering Guide for Development and Development Control Plan Part J - Water Sensitive Urban Design and Integrated Water Cycle Management. … 13.2 Road Damage 13.2.1 The cost of repairing any damage caused to Council's assets in the vicinity of the subject site as a result of the development works be met in full by the applicant/developer. Note: Should the cost of damage repair work not exceed the road maintenance bond, Council will automatically call up the bond to recover its costs. Should the repair costs exceed the bond amount a separate invoice will be issued. 13.3 Easements/Restrictions 13.3.1 In the event that subdivision precedes construction of buildings on any of the lots, Council will require the lodgement of a Section 88B Instrument to ensure that development proceeds in accordance with this consent. The restriction should contain a provision that it may not be extinguished or altered except with the consent of the Council of the City of Blacktown. … 13.9 Engineering Matters … 13.9.2 Easements/Restrictions/Positive Covenants 13.9.2.1 Any easement(s) or restriction(s) required by this consent must nominate Blacktown City Council as the authority to release vary or modify the easement(s) or restriction(s). The form of easement or restriction created as a result of this consent must be in accordance with the following: (a) Blacktown City Council's standard recitals for Terms of Easements and Restrictions (Current Version). (b) The standard format for easements and restrictions as accepted by the Lands Title Office. 13.9.2.2 The Restrictions and positive covenants, to be submitted for each relevant stage of the development, must be endorsed by Council and lodged with NSW Government - Land and Property Information over the Stormwater Quality Control devices/system and outlet works. Documentary evidence of this LPI lodgement shall be submitted to Council. 13.9.2.3 All Section 88B restrictions and covenants created, as part of this consent shall contain a provision that they cannot be extinguished or altered except with the consent of Blacktown City Council. … 14.17 Drainage Matters [Not extracted due to length and lack of relevance.]

[16]

Change in evidence/scope of easement

In the course of the hearing the volume of water intended to be discharged through the easement was clarified by RHCC as being 421 l/s, less than the amount the subject of RHCC's development consent, which provides for drainage of the southern catchment of RHCC's land, Poly's land and stormwater in the public drainage system in Terry Road (2,113 l/s). According to RHCC, only water from the southern catchment of RHCC's land will be discharged through the easement.
Before commencement of cross-examination of the stormwater engineering experts in July 2022, Mr Bewsher, RHCC's stormwater engineering expert, informed the Court that he had prepared his expert report and participated in the production of the first engineers' joint report on the basis that the easement sought by RHCC was in accordance with the RHCC development consent. The engineers' evidence had assumed that the amount of water required to be accommodated by the easement was 2,113 l/s, draining RHCC's southern catchment, the Poly land and the public stormwater drainage system in Terry Road. Mr Bewsher stated orally that he now understood that the amount of water needing to be accommodated was far less, around 500 l/s plus or minus 20%. Mr Bewsher was given leave to prepare a further report, which was prepared and dated 10 July 2022, on the basis of draining 421 l/s from RHCC's southern catchment. On 22 July 2022, the stormwater engineers were ordered to prepare new expert reports and consequently the proceedings were adjourned part-heard. Orders were also made for the possible preparation of new expert reports from the traffic engineers, quantity surveyors and valuers in light of this change. The proceedings resumed in December 2022 on the basis that the easement sought is to accommodate 421 l/s from the southern catchment of the RHCC land only.
Regardless of the reduction in the amount of water intended to flow along the easement, the dimensions of the easement sought did not change. The proposed easement is approximately 210m long and 3m wide. It is set back approximately 3m along the northern boundary of Prisma's land, running approximately parallel to Boolavogue Street, 3.5 to 4m to the south of the centre line of the proposed Boolavogue Street. Based on the valuation experts' agreed description of the easement, the area of land directly impacted by the easement is approximately 755m² of which 600m² is zoned R3 for Medium Density Residential development. RHCC seeks to impose the easement shown in the plan in Annexure 1 to the Class 3 Application, as follows:

[17]

Concept drainage scheme

Plans of possible drainage structures on Prisma's land showing a concept tailout drainage scheme within the easement was identified in Appendix A to the second joint report of the stormwater engineers. Part of Appendix A is reproduced below as it helps to visualise the scale and nature of the easement sought in the context of the development Prisma has consent for.
The easement ends at chainage 210 on the Prisma land. Water is intended to exit the easement area and disperse onto the Prisma land in the direction of the black arrows to the left of the page, that is, in the general direction of Second Ponds Creek. The evidence of Mr Bewsher (below in [176]) is that Second Ponds Creek is roughly 50m from the western edge of the easement. Appendix A also provides further detail as to the potential drainage works for which consent may be sought. Parts of the drainage channel would be below ground level and parts would be above ground level. At its deepest the channel would be approximately 1.5m deep.

[18]

Temporary?

RHCC's submissions described the easement sought as "temporary" because it considers that it is inevitable that, as has occurred in neighbouring developments, the southern half of Boolavogue Street and associated drainage works on the Prisma land must be completed and dedicated as a public road. When that occurs, the easement will become redundant as it will be replaced with a piped system lying on public land under Boolavogue Street as part of the Council's public drainage infrastructure. If the southern half of Boolavogue Street is not built as a condition of consent, RHCC submitted that the land will necessarily be required to be compulsorily acquired by the Council to enable completion of Boolavogue Street and the trunk drainage network. As Prisma submitted the terms of the easement do not include the word temporary. The easement is unlimited as to time and on its face is therefore permanent.

[19]

Pipe under Terry Road

RHCC submitted in the December hearing that in light of the change in scope of the easement, which no longer precisely reflects the 2018 development consent, it will build a pipe under publicly owned Terry Road to connect its land with the easement proposed on Prisma's land. This will require approval pursuant to s 138 of the Roads Act for the work required in Terry Road. That approval has been applied for but not yet granted according to RHCC's submissions because it is pending the outcome of this proceeding. This circumstance generated a lot of argument in the context of whether RHCC's land will benefit from the easement, considered below in [126]-[139].

[20]

Development consent required for work on Prisma's land

If the Court imposes the easement sought under s 88K of the Conveyancing Act, RHCC will require development consent to carry out the drainage works on Prisma's land within the easement. Prisma would be required to provide owner's consent to the making of a development application to enable the determination of that development application. The Court could provide for a term of the easement requiring such owners' consent, as occurred in 117 York Street Pty Ltd v Proprietors of Strata Plan 16123 (1998) 43 NSWLR 504; (1998) 98 LGERA 171 (117 York Street) at 522-523.

[21]

Threshold issue - should the Court dismiss proceedings for failure to comply with s 40(1)(a) LEC Act

The application of s 40(1)(a) of the LEC Act, on which RHCC relies, arises as an issue given the change in scope of the easement sought. The Court must determine whether the proceedings are to be dismissed for failure to comply with s 40(1)(a) of the LEC Act. RHCC identified that it now intends to drain only part of the stormwater the subject of the development consent as identified above in [33]. In other words the terms of the development consent do not underpin precisely the stormwater drainage scheme for which the easement is sought in that only RHCC land is to be drained. RHCC further identified in the course of the substantive hearing that as the easement sought is not intended to accommodate water discharged in accordance with the development consent granted that development consent will need to be modified or a new consent sought: Tcpt 12 December 2022, pp34(45-50)-35(1-29) extracted below. TOMASETTI: Your Honour, I object to this. This is not going to any issue in dispute, this cross examination. Mr Bewsher last time indicated that the assumption that he had was that the easement would service the poly land and the RHCC land, and also Terry Road. That's the very reason we fell into the adjournment, because he said once he had the assumption correct, then all we'd be doing is draining the RHCC land. The volumes dropped down to 421 litres per second. There's no issue between my learned friend and his client and our client that in order ‑ if we were to get the easement ‑ to drain the RHCC land, we would need a further development consent. And we would need that development consent to either update the earlier consent or whatever. But what is now proposed is not in fulfilment of the existing conditions of consent. There's no issue about that, and it's really a matter for legal submission. As I say, I'm in strident agreement with my learned friend. What I understood the engineering experts would be involved in is the examination of alternative options 1, 2 and 3. Not about something with which we are ad idem about. But we can't drain through this proposed easement, water from other areas. It's not an issue. My friend knows that. HEMMINGS: Well, I didn't know that. That's why I'm cross‑examining on it. TOMASETTI: Well, it's in his report‑‑ HEMMINGS: There's never been a concession made until now that they cannot act upon the consent. If my friend's making that concession that they cannot act upon that consent, then I don't need to ask any further questions on it. TOMASETTI: Concession was made last time, but anyway. That concession's made now if that's what you want. HEMMINGS: Okay. I'll now get rid of a couple of questions. Do you have access to Mr Hayek's most recent affidavit, the one from only a couple of days' ago, which is part of exhibit G.

[22]

RHCC's submissions

RHCC submitted that it does not matter if the RHCC consent requires modification as the consent has been granted by the Court and its implementation requires that any drainage over Prisma's land be within a legally created easement.
RHCC relied on cases such as Billgate Pty Ltd v Woollahra Municipal Council (2004) 136 LGERA 356; [2004] NSWLEC 436 (Billgate) Bignold J at [15]-[17], Becton Corporation Pty Ltd v Minister for Infrastructure, Planning and Natural Resources [2005] NSWLEC 197 (Becton) at [16]-[17] and Huntington & Macgillivray v Hurstville City Council (No 2) (2005) 139 LGERA 84 (Huntington) at [10]-[12] to support the beneficial and facultative nature of s 40(1)(a). Regardless that a modification of the RHCC consent may be required s 40(1)(a) is nevertheless enlivened.
An easement can be reasonably necessary although some future action is required in addition to obtaining the easement, Rainbowforce Pty Ltd v Skyton Holdings Pty Ltd (2010) 171 LGERA 286; [2010] NSWLEC 2 (Rainbowforce) at [83]. The same circumstance arose in A.T.B. Morton Pty Ltd v Community Association DP270447 (No 2) [2018] NSWLEC 87 (ATB Morton LEC) where development consent was granted in relation to land by the Court subject to a condition that an easement for access be obtained over the respondent's land.
A development consent has been granted in respect of RHCC's land to enable a large residential development. It is reasonably necessary to be able to drain RHCC's land. And it is reasonably necessary to drain the stormwater generated by the easement sought to be imposed over Prisma's land. There is no reasonable alternative option.
Prisma submits that s 40(1)(a) operates only "for an easement that has a nexus to the court granted or modified development consent".
For the court to have jurisdiction to impose the easement s 40(1)(a) of the LEC Act only requires a development consent to have been granted by the court. The language of the provision makes no reference to any other requirement. Of course, there has to be some nexus between the development that is being carried out and the reasonable necessity in the circumstances for the easement sought to be imposed. Without the nexus it could never be reasonably necessary that the easement be imposed. However, nothing in s 40 mandates that the court lacks jurisdiction to impose the easement where the development consent granted by it in respect of the development requires some modification. Section 40 simply enables the imposition of an easement where it is reasonably necessary to carry out development.

[23]

Prisma's submissions

Prisma identified the change in RHCC's position set out above in [46] and submitted this should not be allowed given the concession made during the hearing as extracted above in [44], which change meant that a line of cross-examination of Mr Bewsher was not pursued, submissions on public interest under s 88K(2)(a) of the Conveyancing Act would have changed and is now intended to cure the jurisdictional hurdle posed by s 40(1)(a).
The Court's power to determine to grant an easement under s 40(1)(a) can only be for an easement that has a nexus to the Court granted or modified development consent. In light of the need to obtain a new or modified development consent there is no nexus between the easement sought and the consent obtained. While s 40 is beneficial and facultative and should be given the widest interpretation which its language permits, the section does not confer jurisdiction on the Court to hear applications for easements that have no nexus with a court granted development consent or modified consent.
Billgate addressed a different issue of whether the jurisdiction of the Court was enlivened in a situation where the Court had decided to grant development consent but withheld making final orders. Here the Court has already issued development consent to RHCC. There is no nexus between the easement sought and the RHCC consent because if the easement is granted the Applicant will need to either modify the RHCC consent or obtain a new easement that satisfies the conditions of the RHCC consent.
Huntington is authority for the circumstance that the Court can grant an easement even if a future development application will be required on the servient tenement's land to give effect to the intent of the easement, in this case Prisma's land. Huntington has no application on the issue of whether s 40(1)(a) of the LEC Act is enlivened in circumstance where the easement sought is unresponsive to RHCC's development consent.

[24]

Consideration

In light of the transcript reference set out above in [44] and my understanding of oral submissions made by RHCC during the hearing to the effect that the RHCC development consent would need to be modified or a new consent obtained in light of the reduced drainage of stormwater, RHCC's position in further written submissions identified above in [46] is a significant change of position. I was not taken to the conditions of consent referred to in RHCC's further written submissions relied on to underpin that change in the course of the hearing. I will approach the matter of whether the Court has jurisdiction under s 40(1)(a) on the basis that RHCC does need to modify its existing development consent or seek a new one as that was the position put by RHCC throughout the second substantial hearing.
Prisma expressed the basis for this determination of the application of s 40(1) as "if the Court grants the amended easement, the Applicant (RHCC) would not be able to act on the RHCC consent (at least until that consent was modified." RHCC's submissions concerning the easement being reasonably necessary although a future action is required, referring to Rainbowforce, is addressing a requirement of s 88K(1) of the Conveyancing Act. That does not precisely address whether the Court has jurisdiction under s 40(1)(a). Subsection (1)(a) states that section applies if the Court has granted development consent.
Nor are these circumstances precisely like ATB Morton LEC. While condition 8.9.1 in the RHCC consent indirectly requires an easement to be obtained due to the reference to the Council's Engineering Guide, the RHCC consent does not entirely permit that which is sought. The approved stormwater drainage plans of Calibre Consulting referred to in condition 8.6 require modification to reflect what is now sought. No 'intervening step' of needing to modify the consent arose in ATB Morton LEC.
None of the three cases referred to Billgate, Becton or Huntington consider the facts that arise in this case and in that sense do not provide immediate assistance to the resolution of the circumstances before the Court. As identified above in [56], Billgate addressed a circumstance that development consent would be granted but final orders were delayed.
Returning to first principles concerning the beneficial and facultative nature of s 40(1)(a), which the cases relied on by RHCC emphasise, I accept that the easement sought does enable the implementation in large part of the RHCC consent in the manner contemplated by that consent concerning the drainage of stormwater through Prisma's land from RHCC's land (Billgate at [16]). That provides sufficient nexus for s 40(1)(a) to apply. The natural flow of stormwater from RHCC's land is towards Second Ponds Creek across Prisma's land and the drainage scheme contemplated in RHCC's development consent does provide for drainage of RHCC's land to Second Ponds Creek.

[25]

Threshold issue - should the Court dismiss proceedings for failure to comply with s 40(3) LEC Act?

Should the Court, in its discretion, dismiss the proceedings because, on Prisma's case, persons referred to in s 40(3) of the LEC Act should have been joined to the proceeding by RHCC (or at least given notice of the proceeding) and were not?

[26]

Evidence on s 40(3) issue

Covenant J182006 (in Ex 1) was registered on 4 August 1962 on the title of Lot 132 in DP208203, Prisma's land. The terms of the covenant are as follows: … the Transferees so as to bind themselves their executors administrators and assigns hereby covenant with the Transferors and their assigns as follows:- (a) Any main building to be erected on the Lot hereby transferred shall only be used for the purpose of a dwelling house. (b) No earth, clay, stone, gravel, soil or sand shall be excavated carried away or removed or permitted to be excavated carried away or removed from the said Lot except for the purpose of excavating for the foundations of any building to be erected thereon nor shall the transferees use or permit or allow the said Lot to be used for the manufacture or winning of bricks, tiles or pottery ware. (c) For the benefit of the adjoining land owned by the Transferors being the land comprised in Deposited Plan No. 208203 but only during the ownership thereof by the Transferors or their assigns other than purchasers on sale, no fence shall be erected upon the land hereby transferred to divide it from such adjoining land without the consent of the transferors or their assigns but such consent shall not be withheld if such fence is erected without expense to the Transferors and their assigns and in favour of any person dealing with the Transferees or their assigns such consent shall be deemed to have been given in respect of every such fence for the time being erected. AND IT IS HEREBY EXPRESSLY AGREED AND DECLARED: (i) That the land subject to the to the burden of the foregoing covenants is the land hereby transferred. (ii) The lands to which the benefit of the foregoing covenants is intended to be appurtenant are the lands comprised in the said Deposited Plan. (iii) The foregoing covenants or any of them may be released varied or modified by or with the consent of the Transferors or their assigns.
The parties agreed that the covenant fitted the description of an instrument registered under the Real Property Act 1900 (NSW) (Real Property Act) as referred to in s 40(3).
RHCC relied on affidavits from Mr Williamson land title searcher dated 11 November 2022, Mr Jiriaev solicitor dated 17 November 2022, and Mr Hayek solicitor dated 22 November 2022 (Hayek #3). Mr Williamson was engaged by RHCC to conduct searches in order to determine the number of current individual lots originating from the 102 lots in DP208203 in 1962 including lots that are still in DP208203, lots that have since changed deposit plan numbers, and lots that have been subdivided into other lots. There are currently 1,150 lots within various deposited plans and public roads that were created from DP208203 from 1962. Those lots, excluding the Prisma land, are benefitted by Covenant J182006.

[27]

Prisma's submissions

Prisma submitted that the Court should dismiss the proceeding for failure to comply with s 40(3) of the LEC Act. Section 40(3) specifies a jurisdictional prerequisite to the grant of an easement by the Court under s 88K of the Conveyancing Act. It requires the parties to an application under s 40 of the LEC Act include each other person having an estate or interest in the land, as evidenced by an instrument registered in the General Register of Deeds or the Register kept under the Real Property Act. While the covenant has not been registered on the title of all 1,150 lots which were once part of DP208203, that is not demonstrative of whether or not they benefit from the dealing. The failure to record an instrument in a certificate of title does not affect the validity of that instrument: Registrar-General of New South Wales v Jea Holdings (Aust) Pty Ltd (2015) 88 NSWLR 321; [2015] NSWCA 74 at [110]-[112], [115] (Bathurst CJ and Beazley P) and [161]-[163] (Basten JA). RHCC has not joined every person required to be joined. Although that would be an onerous task in the circumstances, it is a requirement of s 40(3).
Prisma accepted that the Court has discretion whether to dismiss proceedings by virtue of a failure to comply with s 40(3) of the LEC Act under the principles discussed in Community Association DP270447 v ATB Morton Pty Ltd (2019) 240 LGERA 32; [2019] NSWCA 83 (ATB Morton CA) at [94]-[120] (Leeming JA, Bell P and Payne JA agreeing). The default position is joinder. Prisma accepted that the Council and the Trust have both now been notified of proceedings and have decided not to seek joinder as a party. The failure to join those entities would not be fatal to proceedings in light of ATB Morton CA. Prisma nevertheless submitted that RHCC should have at least taken steps to bring this proceeding to the attention of the 13 landowners who occupy the houses on the northern side of Boolavogue Street proximate to the proposed open drainage infrastructure, who may have wished to be heard against the grant of the easement. The views of those residents may have been relevant to reasonable necessity and public interest in this proceeding because, for example, Mr Bewsher (RHCC's stormwater engineering expert) put at issue the views of those residents (see below in [158]) in relation to options for stormwater disposal.
That the terms of the covenant may not be relevant to the easement or the proposed activities within it is irrelevant, as s 40(3) does not define the right to be a party to this proceeding by reference to the nature of the interest. It is also irrelevant that the covenant may be suspended by operation of a State Environmental Planning Policy or Local Environmental Plan.

[28]

RHCC's submissions

Firstly, s 40(3) of the LEC Act does not require that all persons having an estate or interest in the land be joined as a party to the proceedings: ATB Morton CA at [118]-[119]. Ultimately the necessity for the joinder of parties is discretionary. Section 40(3) exists because parties to Class 1 proceedings in this Court are the applicant for consent and the consent authority. In those circumstances there is an obvious need to join persons who own the land burdened by a proposed easement. It was not practical or feasible for all the proprietors of the 1,150 lots originally within DP208203 to have been joined to this proceeding by RHCC. Common sense does not suggest they would have the slightest interest in the proceedings. RHCC has notified the Council and the Trust of the proceeding and both chose not to participate. Prisma did not plead that some interests were affected more than others in its statement of facts and contentions (SOFAC) in reply. It did not specify that all interests in DP208203 needed to be notified and joined in the proceedings. Prisma specifically referenced public authorities as opposed to other interests in its SOFAC in reply. Either all of the lot owners needed to be joined or none did. In these circumstances, the non-joinder of those parties is not fatal to proceedings: ATB Morton CA at [94]-[120].
Secondly, the easement does not authorise the carrying out of the proposed drainage works within the easement on Prisma's land. Whether the easement is granted does not impact anyone other than RHCC at this stage. If a development application is made for works within the easement, persons in the locality can make submissions on the merits of that development. There would be provision for notification and objections or the seeking of injunctions from the Court.
Thirdly, the activities prohibited by the covenant are not relevant to the grant of the proposed easement and would only become relevant when the works the subject of the later DA are performed. Furthermore, if development consent is granted the covenant will be of no force and effect by operation of cl 5.8 of the State Environmental Planning Policy (Transport and Infrastructure) 2021 (NSW). In these circumstances joinder is not necessary.
The expression "estate or interest" in s 40(3) has a proprietary connotation: Stow v Mineral Holdings (Australia) Pty Ltd (1979) 180 CLR 295; [1979] HCA 30 at 311 (Aickin J); The Queen v Toohey; Ex parte Meneling Station Pty Ltd (1982) 158 CLR 327; [1982] HCA 69 at 342 (Mason J). Each covenantee does not have any "estate or interest" in all of the other parcels of land on which the covenant is registered. A covenantee of one parcel of land does not have an "estate or interest" in the other 1,149 lots and various public roads.

[29]

Consideration of joinder issue

In ATB Morton LEC an application for an easement pursuant to s 88K of the Conveyancing Act made in reliance on s 40 of the LEC Act. The applicant had written to both prospective parties asking whether they wished to be parties to the application and each had declined. Robson J held that two prospective parties who enjoyed registered easements over part of the land over which the easement was sought did not need to be joined as parties under r 6.24 of the Uniform Civil Procedure Rules 2005 (NSW) (UCPR). In ATB Morton CA, Leeming JA (Bell P and Payne JA agreeing) considered the application of rule 6.23 of the UCPR and held that s 40(3) should not be read so as to displace the body of authority on rule 6.23. Rule 6.23 of the UCPR states: Part 6 Commencing proceedings and appearance Division 5 Joinder of causes of action and joinder of parties … 6.23 Effect of misjoinder or non-joinder of parties Proceedings are not defeated merely because of the misjoinder or non-joinder of any person as a party to the proceedings.
ATB Morton CA discussed the body of authority, practice and 19th century legislation of which r 6.23 of the UCPR is a modern reflection at [112]-[119]: 112. It will be seen that ground 1 of the appeal explicitly accepted that UCPR r 6.24 applied. It was common ground that r 6.23 likewise applied to the proceedings in Class 3 of the jurisdiction of the Land and Environment Court. That rule provides as follows: "6.23 Effect of misjoinder or non-joinder of parties Proceedings are not defeated merely because of the misjoinder or non-joinder of any person as a party to the proceedings." 113. That rule has a long history. As was pointed out during the hearing, when Lord Macnaghten said in William Brandt's Sons & Co v Dunlop Rubber Company Ltd [1905] AC 454 at 462 that "no action is now dismissed for want of parties", his Lordship was referring to the well-known reforms effected by the Judicature legislation of 1873. Rule 6.23 is simply the modern incarnation of the basal nineteenth century reform. There is no reason to construe s 40(3) as a return to the days of the unreformed court of chancery whereby misjoinder automatically led to a suit's being dismissed: see Boyd v Thorn (2017) 96 NSWLR 390; [2017] NSWCA 210 at [94]-[102]. … 118. True it is that persons directly affected by an order should ordinarily be joined to litigation. Joinder is the default position, and the obligation to join necessary parties is ordinarily a matter of obligation, not discretion, as Mr Tomasetti emphasised, by reference to what was said in Ross v Lane Cove Council at [54] and [57]. However, the passage in Ross was not unqualified, and continued at [61]-[62] as follows: "All of that said, because the underlying concern is (as McHugh J said in Victoria v Sutton) natural justice, joinder is not always necessary. That reflects a very old approach. Although the common law knew nothing of the joinder of a party merely for the purpose of having that party bound by the judgment, equity was not so strict. Where no prejudice would be suffered by a party not being joined, his or her presence could be dispensed with: see for example Smith v Brooksbank (1834) 7 Sim 18; 58 ER 743, where the non-joinder of the executors who were alleged to have assented to the bequest was held not to be fatal. The direct ancestor of the rules in the UCPR governing joinder of parties is the rule of procedure contained in O XVI r 13 in the First Schedule to the Supreme Court of Judicature Act 1875 (UK). That in turn reflected chancery practice. In particular, and relevantly for present purposes, UCPR r 6.23 'Proceedings are not defeated merely because of the misjoinder or non-joinder of any person as a party to the proceedings' is merely a modern formulation of the chancery practice. The positive assent to an order by the executors who were not joined in Smith v Brooksbank has its modern counterpart in the course adopted by Preston CJ in Woollahra Municipal Council v Sahade. His Honour, recognising that the owners corporation was directly affected by the proposed demolition of a staircase which extended onto the common property, proceeded on the basis that the practical impact was low and its attitude to the orders was abundantly clear (the owners corporation was notified of the proposed order, and informed the Court through the applicant local council that it wished neither to be joined nor heard, but had passed a resolution supporting the orders proposed)." 119. There is no reason why s 40(3) should be read so as to displace this body of authority. No such submission was made, and indeed the Community Association's appeal explicitly proceeded on the basis that rr 6.23 and 6.24 applied. This is inconsistent with s 40(3) having the per se effect of requiring the proceedings to be dismissed. Rather, there is a discretion. There was an overwhelming case for the primary judge proceeding as he did, where Ausgrid and Reliance Hexham were informed of the proceedings and their entitlement to be joined and chose in an informed way not to participate.

[30]

Preliminary issues resolved

The Court has jurisdiction to determine the application under s 40 of the LEC Act. Issues for determination under s 88K of the Conveyancing Act will be considered.

[31]

Issues for determination under s 88K Conveyancing Act

In Alramon Pty Ltd v City of Ryde Council [2022] NSWLEC 108 (Alramon) at [182]-[183], I recently stated that the matters requiring the consideration of the Court under s 88K of the Conveyancing Act are: 182. Section 88K identifies the power of a court to create an easement. The structure of s 88K raises the following threshold issues for determination by the Court: 1. Is the easement over land reasonably necessary for: (a) the effective use; or (b) development…; of other land that will have the benefit of the easement; and 2. Is the Court satisfied that the use of the land having the benefit of the easement will not be inconsistent with the public interest; and 3. Is the Court satisfied that the owner of the burdened land and each person having a registered estate or interest in that land can be adequately compensated for any loss or other disadvantage that will arise from the imposition of the easement; and 4. Is the Court satisfied that all reasonable attempts have been made by the applicant for: (a) the order to obtain the easement; or (b) an easement having the same effect; but have been unsuccessful. 183. For a similar exposition of the matters to be considered under s 88K, see Khattar v Wiese (2005) 12 BPR 23235; [2005] NSWSC 1014 (Khattar) at [2]. Once the applicant has cleared those hurdles, the Court retains a discretion whether or not to grant the easement indicated by the use of the word "may" in s 88K(1). That discretion must be exercised having regard to the purpose of s 88K (Khattar at [60]): 60 …facilitating the reasonable development of land whilst ensuring that just compensation be paid for any erosion of private property rights [Second Reading Speech, Legislative Council, 4 December 1995]…

[32]

Easement does benefit RHCC's land (s 88K(1))

The first issue logically arising from the wording of s 88K(1) of the Conveyancing Act in Prisma's case is whether the easement benefits RHCC's land. On Prisma's case, RHCC's land is not benefitted by the easement. Section 88K(1) requires that there be "land that will have the benefit of the easement." Section 88(1)(a) requires an easement to clearly indicate "the land to which the benefit of the easement or restriction is appurtenant." The terms of the proposed easement are extracted above in [36]-[39] and identify the land benefited as RHCC's land and the land burdened as Prisma's.
According to Prisma, RHCC's development consent requires stormwater from the southern section to be collected and discharged into a piped stormwater system on RHCC's land, with collected waters to be discharged into the Council's public stormwater system to be constructed in Terry Road. That stormwater is then to be discharged into the proposed easement on Prisma's land. This arrangement according to Prisma means that RHCC's land does not benefit from the easement, rather the Council's land does as the easement on Prisma's land drains the public stormwater system. Related to Prisma's argument is the Council's requirement that RHCC provide an easement in gross over Prisma's land, as identified in evidence summarised below in [93]-[97].
This issue has become more complex because in the course of this proceeding the amount of water intended to be discharged from RHCC land through the easement has been substantially reduced from that authorised by RHCC's development consent (see above in [33]-[34]).
A pipe is intended to be built by RHCC under Terry Road which is not intended to be part of the Council's stormwater drainage system and which will convey only water from RHCC's land. A pipe will convey stormwater from the southern catchment of RHCC's land to Prisma's land. That pipe will not accept stormwater from the Council's public drainage system inter alia. Prisma in oral submissions argued that the easement will not benefit RHCC's land because the proposed pipe under Terry Road will become the Council's property, which RHCC disputes.

[33]

Evidence on issue of Council requirement for easement in gross

The Council seeks an easement in gross over Prisma's land, as the following evidence makes clear.

[34]

Mr Tissini's affidavit

Mr Tissini affirmed an affidavit dated 1 October 2021. Mr Tissini is the project director in the employ of the head contractor for the design and construction of the development on RHCC's land, for which RHCC successfully obtained consent. He annexed an email dated 10 February 2021 from a council officer to Mr Tissini's colleague Mr El-Achkar. The email responded to updated civil plans for the drainage works proposed by RHCC. The email stated that the updated civil design was generally acceptable subject to a number of comments. The council officer also stated: Furthermore, an appropriate easement (in gross per Council [Engineering] Guide) covering the length of the tail out works as per the email thread below would be required prior to release of construction approval.
Mr Tissini also annexed an email dated 7 April 2021 from a council officer to Mr El-Achkar in which the Council endorsed further Roads Act plans (RDA) subject to minor marked-up amendments. That endorsement was expressed to be subject to evidence of an easement in gross to the benefit of the Council being created and registered, inter alia.
On 20 April 2021, an email was sent from Mr El-Achkar to the Council, summarising comments received from a council officer in a phone call that morning. The comments recorded that Council requested an easement in gross. Mr El-Achkar stated that the easement in gross is a requirement additional to the DA and RDA requirements.

[35]

Mr Hayek's affidavit dated 9 December 2022

The purpose and content of Mr Hayek's affidavit dated 9 December 2022 (Hayek #4) is described further below in [178]. Relevantly for present purposes, Mr Hayek annexed an email dated 8 December 2022 from Mr Yee council engineer who was involved in the approval of RHCC's development consent. Mr Hayek was seeking Mr Yee's comment on Prisma's proposed alternative drainage options for the RHCC land in this proceeding. Mr Yee stated: … • Paragraphs 17-18 of the Martens Report provide commentary on the proposed easement over 54 Terry Rd [Prisma's land]… The issues raised at paragraph 17 are the reasons why Council requires an easement in gross over 54 Terry Rd. … • It remains Council's position that the delivery of the infrastructure set out in the development consent issued with respect to 54 Terry Rd [Prisma's land] will deliver the best outcome for the locality. However, until this is delivered an easement in gross through 54 Terry Rd provides for the next best drainage outcome with minimal impact on existing Council assets.
Easements in gross are provided for in s 88A of the Conveyancing Act extracted above in [6] whereby an easement without a dominant tenement can be created in favour of an authority, here the Council, in relation to the supply of water inter alia. The Court is unable to grant such an easement.

[36]

RHCC's submissions

The land with the benefit of the proposed easement is identified in the draft easement as RHCC's land. The water to be drained into the proposed easement on Prisma's land will only be from RHCC's land. If other water were to be drained into the easement that may give rise to an actionable claim by Prisma against the offending party, but this is not a relevant consideration for the grant of the easement.
Focus on the method by which stormwater will be disposed of over Prisma's land is misconceived. A development application will need to be made for any drainage works within the easement and it is at this time, during which interested persons can make submissions to the consent authority, that the merits of the proposal are to be considered: Diro Group Pty Ltd v Leuzinger [2021] NSWLEC 107 (Diro).

[37]

Work in public road essential

To drain RHCC's land, water must pass under Terry Road. Work over, under or in that road cannot be carried out except with the approval of the Council as it is the road authority under the Roads Act: ss 138, 139. That application has yet to be approved but is pending, subject to obtaining an easement in gross (see email from the Council above in [94]). Condition 8.3.1 of the RHCC Consent requires RHCC to obtain a s 138 Roads Act approval for works in Terry Road. Condition 8.4.3 requires RHCC to obtain permission to do any work on adjoining land. This would include Council permission. Permission to run a pipe under Terry Road would be achieved pursuant to a s 138 Roads Act application. The conditions of the RHCC consent provide that any overland or stormwater flows must be intercepted at the property boundary, conveyed through the site in a piped or channelled system and discharged in a satisfactory manner. There is no way to do so other than by crossing under Terry Road. This would also be the case for the other unsatisfactory drainage options proposed by Prisma.
Conditions 13.2.1 and 13.3.1 require easements or covenants to ensure that development is carried out in line with RHCC's development consent. Condition 13.9.2 requires the Council's consent to alter or extinguish the easement.
Condition 14.17 of RHCC's development consent makes no reference to the dedication of drainage works to the Council. There is no condition in the RHCC Consent that calls for the dedication of drainage back to the Council if completed in the road reserve by RHCC. The Roads Act does not confer property ownership rights on the Council, and only grants a right to do work in a road reserve.
Section 59A of the LG Act is to the effect that the Council owns all infrastructure that Council carries out in the road. In this case, RHCC's development consent requires it to do those works in Terry Road. That work will be the subject of a Roads Act approval and would include terms for maintenance, repair and the like, see Trevlind v BMP Manufacturing [2008] NSWSC 603 (Trevlind) at [20]-[22].
The stormwater from RHCC's land will not be discharged into the Council's public stormwater system constructed in Terry Road, contrary to Prisma's submissions.

[38]

Benefitted land need not adjoin burdened land

That the land benefited is not actually adjoining the land burdened does not matter. It is common for easements to be granted in favour of other land where the occupier of the land benefited has to go over other land to enjoy the benefit conferred. A right of footway is an example. One might have to cross other land to get to the right of footway. It is well established that a right of way may exist for the benefit of a dominant tenement although between the dominant tenement and the servient land is some intervening land: Todrick v Western National Omnibus Co Ltd [1934] CH 561; Pugh v Savage [1970] 2 QB 373; Re Maiorana and the Conveyancing Act (1970) 92 WN (NSW) 365; Dewhirst v Edwards [1983] 1 NSWLR 34 at 51; Hamilton v Joyce [1984] 3 NSWLR 279 at 291; Casuarina Rec Club Pty Limited v The Owners - Strata Plan 77971 (2011) 80 NSWLR 711; [2011] NSWCA 159 at [5] and [71]-[79]. The right of way will be appurtenant to and for the benefit of the dominant land if the right of way is sufficiently close to the dominant tenement. This line of reasoning equally applies to other forms of easements. Given the proximity of RHCC's land to the proposed easement (only separated by Terry Road) and that it is agreed that the drained water would be confined to that from RHCC's land, the proposed easement is appurtenant to and for the benefit of RHCC's land.

[39]

Final design not required

Prisma asserts that the Court cannot grant the proposed easement sought without reference to any supporting legal authority or statutory basis. Nothing requires the design of the stormwater disposal system to be refined and completed before the power to grant the proposed easement is enlivened and exercised.

[40]

Roads Act replaces common law

The common law in relation to land does not apply to roads for which a statutory scheme exists such as the Roads Act. Like the situation in North Shore Gas Co Ltd v Commissioner of Stamp Duties (1940) 63 CLR 52; [1940] HCA 7 (North Shore Gas) where gas pipelines were installed in a road pursuant to a private Act of Parliament, the Act negatives entirely the principle expressed by the maxim quicquid plantatur solo, solo cedit (whatever is affixed to the ground belongs to the ground). The pipelines did not become the property of the owner of the road: Dixon J at 67-68.
Approval will be sought from the Council as the roads authority to dig up the road and lay a pipe to convey the water from RHCC's land to Prisma's land within Terry Road. That work will be done by RHCC. That pipe will not otherwise be connected to stormwater from any other land. The pipe will not carry "public stormwater" whatever that term envisages. Ownership of the pipe will not vest in the Council. Even if it did it will only carry water from RHCC's land to Prisma's land. Prisma cannot reasonably object to that.
Prisma concedes that the drainage system is yet to be designed but submits that if the proposed easement is imposed the Council will run its public stormwater system through the easement. That is an untenable submission. The proposed easement does not benefit the Council. If the Council wishes to do that, it will need to negotiate an easement in gross with Prisma or otherwise exercise its powers under s 94 of the Roads Act.
Merely because RHCC lays a pipe in Terry Road, does not mean that the pipe then becomes an asset of the roads authority (in this case, the Council). Utilities are placed in the road for gas, water, power, and communications. Equally, awnings are commonly placed over pedestrian footpaths. The fact that they are placed in the street does not mean they are then owned by the road authority. Prisma does not cite a single authority or legislative provision to support its submission that once the water leaves RHCC's land it somehow becomes the Council's water and the easement will no longer benefit RHCC's land. Reference to the Encroachment of Buildings Act 1922 (NSW) and Nicole-Anne Hickey v The Owners Strata Plan 78825 [2022] NSWLEC 135 (Hickey) are misplaced and do not support the submission.
Prisma appears to have no regard for how the Roads Act operates. It is a statutory scheme governing use, ownership and management of roads in NSW. It can provide conduits across public roads for the carriage of utility services in consultation with the utility services provider but that is not to say that the utility services then become the property of the roads authority: see ss 85 and 97. A person may erect a structure or carry out a work in, on or over a public road: see ss 138, 139 and 139A. Where the person does erect a structure the result is that the structure or work does not necessarily become the property of the roads authority. A person who has the right to the control, use or benefit of a structure or work in, on or over a public road must maintain the structure or work: see s 142. Freeways, crown roads and public roads are vested in various roads authorities: see s 145. The vesting of the road in the public authority is subject to statutory provisions: see s 146. Relevantly, s 146(1)(b) provides that the dedication of land as a public road does not affect the rights or liabilities of any person under any easement. The roads authority will often lease the airspace above or land below the surface of a public road and the term of the lease must not exceed 99 years: see s 149.

[41]

Easement in gross

There is no "requirement" for an easement in gross to be obtained by RHCC. The Council wants an easement in gross so that it can take advantage of the easement as well. The Court does not have the power to order the imposition of an easement in gross (an agreed matter). The Council may want an easement in gross, but RHCC cannot provide it. It is uncontroversial that s 88K does not contemplate the grant of an easement in gross, being an easement without a dominant tenement: Bonvale Enterprises Pty Ltd v Halfpenny Investments Pty Ltd (2005) 62 NSWLR 698; [2005] NSWSC 219 (Bonvale). The Council's requirement is aspirational but is unreasonable. The Council cannot demand that RHCC obtain and provide an easement in gross when it is not possible for RHCC to meet that condition. It was not an express requirement of RHCC's development consent.

[42]

RHCC land not benefitted

Prisma submitted that the proposed easement does not benefit RHCC's land. Rather, it fulfills a public drainage purpose by providing for the discharge of stormwater from the Council's public drainage system. The terms of the easement identify RHCC's land as the benefitted lot, but that suggestion is legally flawed.
Under RHCC's development consent, RHCC collects its water and then discharges it from its site into the Council's public stormwater system at the drainage discharge points as required by condition 8.6.1. Once it reaches a discharge point and is discharged into the road drainage conduits it is no longer RHCC's water. It becomes part of the Council's obligation to manage that public stormwater. This is no different to any other property that disposes of its stormwater into the Council's public stormwater drainage system. In the usual scenario, for example, once the water from a given property is disposed of into the gutter, it forms part of the Council's public stormwater drainage system and the waters are mixed with waters from other properties. Such landowners do not need an easement to drain water through the Council's public stormwater system because once they are in that public system, it is a matter for the Council to manage such flows. The fact that part of the Council's stormwater system may be constructed or funded by upstream developers is irrelevant.

[43]

Easement in gross

Section 88K does not authorise the imposition of an easement in gross to benefit a public authority: Bonvale at [12]-[13]. Ordinarily an easement must identify the dominant tenement: s 88(1)(a) and s 88K(1). Plainly, it is practically impossible to identify all of the lots benefited by the easement where what is being disposed of is something like public water in a public drainage system. Thus, s 88A permits the creation of easements in gross. For the Council to lawfully dispose of its water, in circumstances where the route of the water passes over private land, the Council must obtain an easement in gross. This requirement for an easement in gross over Prisma's land has been made clear to RHCC by the Council on numerous occasions (see above in [93]-[96]).

[44]

Roads Act does not replace common law

RHCC submitted: 1. the easement will only convey 421 l/s and only from RHCC's land; 2. RHCC will need to get a Roads Act approval to construct the necessary pipe; 3. the common law in relation to land does not apply to the roads for which a statutory scheme exists in the Roads Act i.e. the pipe will not become the property of the Council; 4. structures erected over public roads do not necessarily then become owned by the roads authority; and 5. there is a power in the Roads Act for the use and installation of road conduits for utility services.
These matters do not assist RHCC. Firstly, the easement does not limit the future flow through it to 421 l/s nor does it limit flows to the southern catchment of RHCC's land only.
Secondly, Pt 9 Div 3 of the Roads Act is silent on property ownership rights. Section 138 does not grant a right to do work, rather it is an offence provision. It would be an offence to dig up the road and construct a pipe other than in accordance with a consent under s 139 of the Roads Act.
Thirdly, RHCC seems to accept that pursuant to the common law and the application of the Real Property Act once the pipe is constructed on land owned by others, it becomes the property of the other landowner. In oral submissions Prisma referred to Hickey to support this contention. This understanding of the operation of the common law is plainly correct, as can be seen from Dixon J's comments relied upon by RHCC in North Shore Gas (unanimous bench of Rich, Starke, Dixon, Evatt and McTiernan JJ) at 67-68. The second part of Dixon J's comments turn to the potential effect of statutory schemes that seek to avoid the otherwise uncontroversial application of the common law. An example is s 59A of the LG Act, which allows councils to do work in, over or under other land not owned by the Council but retain ownership over the works installed in circumstances where, without that provision, the works would become the property of the landowner. Section 59A only applies to infrastructure installed in or on land by a council, and does not operate in relation to RHCC's suggestion that it would install a pipe under Terry Road. In the absence of a similar applicable provision, once the pipe is installed it will become the property of the Council. RHCC does not identify any similar provision, but relies upon the Roads Act.

[45]

Consideration - Easement benefits RHCC's land

RHCC proposes to connect its land with Prisma's by a pipe under Terry Road. Prisma submits that the pipe will become the Council's pipe by virtue of its placement in the public road reserve for which the Council is the roads authority, and therefore that RHCC's land is not benefitting from the proposed easement rather the Council will be. The placement of the pipe under Terry Road will be regulated by the Roads Act, parts of which are extracted above in [12], in particular Pt 6 Road work, Divs 1, 3, Pt 7 Protection of public roads and traffic, Div 1, Pt 9 Regulation of works, structures and activities, Div 3 and Pt 10 Other road management functions, Div 1.
As submitted by Prisma citing the High Court in North Shore Gas, under the common law principles of quicquid plantatur solo, solo cedit (whatever is affixed to the soil belongs to the soil) the Council will be the owner of the pipe. North Shore Gas required consideration of a specific statutory scheme which did expressly maintain ownership of gas pipes laid under private land in the gas company that laid them, which arrangement was found to continue on the sale of that company. Dixon J stated at 67-68: Ordinarily when the chattel elements by which a permanent system or apparatus is formed are assembled and embedded in the soil or established as part of a building they lose their independent nature and for the purpose of the law take on the character of land. Thus, if the land in which the mains were laid had belonged to the company for an estate in fee simple or for any less estate or interest and the company had not acted under its special statutory powers, the mains until removed would have formed part of the realty. … The peculiarity of the present case consists in the fact that under the company's statutory powers the mains and service pipes are placed in soil in which the company has no estate or interest and it retains both the property in and the control of the mains and pipes.
Contrary to RHCC's submission that the same reasoning must apply in light of the Roads Act, the situation is far from clear as there is no equivalent provision in the Roads Act dealing expressly with ownership of pipes or other structures in road reserves. A well-established principle of statutory construction is that common law principles are not displaced without clear statutory indication: Potter v Minahan (1908) 7 CLR 277; [1908] HCA 63 at 304; Bropho v Western Australia (1990) 171 CLR 1; [1990] HCA 24 cited in Dennis Pearce, Statutory Interpretation in Australia (9th ed, 2019, LexisNexis Butterworths) at 237-238. For completeness I note that Hickey which considered the Encroachment of Buildings Act 1922 (NSW) a different statutory regime did not have to consider the issue I am currently determining.

[46]

RHCC's evidence

RHCC relies on the following evidence in relation to the balance of s 88K issues:

[47]

Expert reports 1. Expert report of Mr Bewsher stormwater engineer dated 30 March 2022 (Bewsher #1) as well as his supplementary report dated 10 July 2022 (Bewsher #2); 2. Expert report of Mr Chambers town planner dated 5 October 2021; 3. Expert report of Mr McLaren traffic engineer dated 28 September 2021; 4. Expert report of Dr O'Donnell quantity surveyor dated 29 September 2021; and 5. Expert report of Mr Adlington valuer dated 1 October 2021.

[48]

Affidavits 1. Affidavit of Mr Hayek solicitor dated 9 September 2021 (Hayek #1); and 2. Affidavit of Mr Hayek dated 30 September 2021 (Hayek #2).

[49]

Prisma's evidence

Prisma relies on the following evidence:

[50]

Expert reports 1. Expert report of Dr Martens stormwater engineer dated 30 May 2022 (Martens #1) and his supplementary report dated 11 October 2022 (Martens #2); 2. Expert report of Mr Mead town planner dated 7 April 2022; 3. Expert report of Mr Dickson urban designer dated 10 May 2022; 4. Expert report of Mr Varga traffic engineer dated 3 June 2022 (Varga #1) and his supplementary report dated 31 October 2022 (Varga #2) and amended supplementary report dated 2 November 2022 (Varga #3); 5. Expert report of Mr Bolt quantity surveyor dated 15 June 2022 (Bolt #1) and his supplementary report dated 16 November 2022 (Bolt #2); and 6. Expert report of Mr Konidaris valuer dated 20 June 2022 (Konidaris #1) and his supplementary report dated 25 November 2022 (Konidaris #2).

[51]

Affidavits 1. Affidavit of Ms Zhao solicitor dated 11 March 2022; and 2. Affidavit of Mr Ng company director dated 11 March 2022.

[52]

Joint expert reports

The following joint expert reports (JER) were filed in this proceeding: 1. Stormwater Engineering JERs prepared by Mr Bewsher and Dr Martens filed on 21 June 2022 (Stormwater JER #1) and 28 October 2022 (Stormwater JER #2); 2. Town Planning and Urban Design JER prepared by Mr Chambers, Mr Reed, Mr Mead and Mr Dickson dated 29 June 2022 (Planning JER); 3. Traffic Engineering JERs prepared by Mr McLaren and Mr Varga dated 16 June 2022 (Traffic JER #1) and 3 November 2022 (Traffic JER #2); 4. Quantity Surveying JER prepared by Dr O'Donnell and Mr Bolt dated 17 June 2022 (QS JER #1) and 18 November 2022 (QS JER #2); and 5. Valuation JERs prepared by Mr Adlington and Mr Konidaris dated 23 June 2022 (Valuation JER #1) and 1 December 2022 (Valuation JER #2).

[53]

Exhibits

The following exhibits were tendered in this proceeding: 1. The Court Book containing the Class 3 application and respective statements of facts and contentions (Ex A); 2. The eight-volume Evidence Book (Ex B) containing the affidavits and expert reports; 3. Applicant's bundle of documents containing documents related to the lands involved in the proceedings, engineering documents related to the design of drainage infrastructure, including the Council's Engineering Guide and correspondence between the parties (Ex C); 4. Council's Contributions Plan No 22W - Rouse Hill (Works) Section 7.11, dated 27 August 2020 (Ex D); 5. Statement of environmental effects (SEE) dated August 2018 prepared by Mr Mead in support of Prisma's development consent (Ex E); 6. Supplementary report of Mr Bewsher dated 10 July 2022 (Ex F); 7. Supplementary Evidence Book (Ex G) containing additional affidavits and supplementary expert reports; 8. Two aerial photographs of Prisma's land dated 12 September 2022 (Ex H); 9. Correspondence including letters of offer from RHCC to Prisma dated 22 June 2022 and 4 July 2022 (Ex J); 10. Traffic and Parking Assessment Report dated 22 August 2018 by Mr Varga in support of Prisma's development application (Ex K); 11. Amended terms of the easement sought (Ex L); and 12. Respondent's bundle of documents containing relevant planning controls, guidelines and other documents, RHCC's development consent, Covenant J182006 and relevant title searches and deposited plans (Ex 1).

[54]

Reasonable attempts made (s 88K(2)(c))

Prisma did not dispute that RHCC made reasonable attempts to secure the easement or an easement having the same effect but has been unsuccessful, pursuant to s 88K(2)(c). Based on the evidence of Hayek #2 setting out the extensive negotiations for access between the parties (and Poly), and the numerous offers by RHCC from July 2021 to 5 July 2022 for compensation relating to the proposed easement, I am satisfied that all reasonable attempts have been made by RHCC.

[55]

Reasonable necessity established (s 88K(1))

The proposed easement must be reasonably necessary for the use and development of RHCC's land under s 88K(1) of the Conveyancing Act. As already identified above in [33]-[34] the engineering evidence on this topic changed during the hearing as a result of the reduction in the amount of stormwater to be accommodated in the easement, from 2,113 l/s to 421 l/s.

[56]

Stormwater engineering evidence

The revised stormwater engineering evidence, resulting from the reduction in stormwater intended to be discharged through the easement, culminated in Stormwater JER #2, following Bewsher #2 and Martins #2 and the preparation of concept plans (Appendix A) for possible drainage infrastructure for which RHCC may seek development consent should the easement be imposed.
Martens #1 expressed the view that the persistent discharge of large volumes of stormwater to the Prisma land will increase soil moisture, make trafficability more difficult, increase pollutants delivered to the land, and increase weed growth. The land will be subject to increased and more frequent nuisance stormwater flows and overland flow flooding.
Martens #2 described various alternative options (1-6) for stormwater disposal from RHCC land, with Options 1-3 most relevant. These options were the focus of the evidence and are summarised below: 1. Option 1 involves connecting drainage from the southern RHCC catchment into the Boolavogue drainage system and upgrading the size of the existing stormwater pipes on the northern side of Boolavogue Street and extending pipework to the top of Boolavogue Street and across Terry Road to RHCC's land (BSD upgrade of existing pipe 1). 2. Option 2 involves installing an on-site stormwater detention (OSD) system within the southern RHCC catchment on RHCC's land and connecting outflows from that system to the Boolavogue drainage system. The existing drainage system would be extended to the top of Boolavogue Street and across Terry Road to RHCC's land (OSD). 3. Option 3 involves installing a new pipe within Boolavogue Street to accept drainage from the southern RHCC catchment. This would require construction of a second 375mm pipe within Boolavogue Street and extending this across Terry Road to RHCC's land (second pipe in Boolavogue Street).
Figure 4 of Martens #2 is an aerial image dated 6 October 2021 that shows development north of Prisma's land, with marked-up examples of pavement disturbances in nearby streets for the purpose of constructing new stormwater infrastructure in support of undertaking Options 1-3.

[57]

Stormwater JER #2

Appendix B to the Stormwater JER #2 contained itemised responses to Martens #2 by Mr Bewsher and additional itemised responses from both engineers. The experts focused on the options for draining the RHCC land either via the proposed easement or by other drainage options. The engineers and parties focussed on options 1-3 (described above in [148]). Dr Martens applied computer drainage models to determine the peak 5 year average recurrence interval (ARI) and 20 year ARI storm flow rates, the importance of which will become apparent.
The level of stormwater flows modelled affects how various drainage systems can accommodate extra flow (as measured in ARI expressed in years). Dr Martens opined that under the Council's Engineering Guide urban areas with catchments under 6ha use the 5 year ARI as a design criteria. Given the southern catchment of RHCC's land is around 1.04ha, this was the applicable standard. Mr Bewsher noted that the conditions of RHCC's development consent applied a 20 year ARI. While Dr Martens stated that his 5 year ARI approach did not require deviation from the Council's Engineering Guide, Mr Bewsher believed that it did.

[58]

Option 1 (BSD upgrade of existing pipe 1)

The experts disagreed about the capacity of the existing drainage system in Boolavogue Street. Dr Martens opined that there is significant spare capacity within the existing system because there is almost no flow from the Prisma land or Terry Road entering the system. Mr Bewsher's estimates of its capacity were wrong because they assumed future contributions from the Prisma land.
Mr Bewsher replied that while he agreed that at present runoff from the Prisma land and Terry Road was negligible, future flows must be taken into consideration if RHCC's flows are to be permanently connected to the Boolavogue Street drainage system. Doing so would cause risk of surcharge when Prisma's flows are connected and would be contrary to the Council's current stormwater drainage strategy.
Dr Martens replied that the pit system provides a drainage connection opportunity for upstream development and demonstrates that the southern catchment of RHCC land was to drain to Boolavogue Street and not into Prisma land. Further, if the southern RHCC catchment were to drain to Boolavogue Street as proposed by Option 1, then that flow would no longer contribute to the potential future flows arriving at the pits if such a connection were ever made. Option 1 is clearly consistent with the Council's drainage strategy to drain water to the western end of Boolavogue Street.
Mr Bewsher's response was that the Council's strategy is for stormwater from upstream sites once developed to be connected to the reinforced concrete box culvert leading from Pit 16 to Pit 8 within the pit system [when Prisma's land is developed]. These flows entering Pit 8 from Pit 16 are proposed to be at least 20 times the flow arriving at Pit 8 from the existing pipe on the northern side of Boolavogue Street. Mr Bewsher disagreed that the Council's strategy was to drain water to Boolavogue Street and not into Prisma's land. The strategy was to drain RHCC's water via the southern side of Boolavogue Street on land that is currently owned by Prisma and in the future is proposed to become public land. Option 1 diverts stormwater into the northern side of Boolavogue Street that was previously to be drained via the southern side. The relative change in flows on the southern side is minor, less than 20% of the proposed flow, whilst on the northern side, the change in flow is more than 3 or 4 times the flows on the northern side. This is a reason why Option 1 is a significant change to the Council's existing drainage strategy for Boolavogue Street.

[59]

Pipe size

Option 1 would require upsizing the existing pipe on the northern side of Boolavogue Street from a 375mm to a 450mm pipe and extending pipework from the top of Boolavogue Street and across Terry Road to RHCC land. Mr Bewsher stated that he discussed this option with the Council. Approval would not be given for it because it would be inconsistent with the Council's current stormwater drainage strategy. In addition, it would cause considerable disruption to the existing residents on the northern side of Boolavogue Street. The diameter of the new pipe within Boolavogue Street would need to increase from 375mm to 525mm or 600mm so that it could accommodate 20 year ARI flows. In addition, to minimise their maintenance responsibilities, the Council's normal practice does not allow major pipe systems to be located on both sides of public roads (in the event that Prisma land is developed). This is another reason why this option would never be approved by the Council.
Dr Martens replied that even if a 20 year ARI was applied, and the replacement pipe needed to be 600mm, this would not be considered a major pipe system. In any case, this option is consistent with the Council's previous development approvals that drain water from RHCC's land to Boolavogue Street and could be approved via an application under s 138 of the Roads Act. If the southern RHCC catchment drained to Boolavogue Street, then that flow would no longer contribute to the potential future flows arriving at Pits 8 or 16 if such a connection were ever made. Normal drainage practice is to locate pipes on the basis of various factors such as engineering design, practicality and cost.
Mr Bewsher continued to disagree, opining that as a matter of normal drainage practice, when the Council has a road drainage pipe located on one side of the street, servicing an upstream catchment beyond that street, the Council will allow a pipe on the other side of the street only if the second pipe services only the local street and not catchments beyond the street.

[60]

Option 2 (OSD)

In respect of Option 2, Dr Martens estimated that the OSD on RHCC's land would need to be around 90m³. The existing Boolavogue Street drainage would be extended to the top of the street and across Terry Road to RHCC's land. Mr Bewsher opined that Dr Martens' estimates underpinning this option are wrong because he used the 5 year ARI and not the 20 year ARI. There is no capacity within the Boolavogue Street system to accept more flows. In addition, a 90m³ storage is not small and implementation would require an amendment to RHCC's DA.
Dr Martens repeated what he said earlier, namely that no flows arrive at Pit 8 from the Prisma land, RHCC land, Terry Road or Poly land at present. Hypothetical future flows considered by Mr Bewsher would include RHCC land, which under this option would be drained to Boolavogue Street and therefore no longer contribute to Pits 8 and 16 if the connection between neighbouring lands and those pits was ever made. Dr Martens agreed that a modification of RHCC's development consent would be required for Option 2, but considered that there is no impediment to this given that the drainage works within the easement would need a development application, a modification of RHCC's development consent, and a s 138 Roads Act application. This option is consistent with previous approvals by the Council to drain water from RHCC land to Boolavogue Street.
Mr Bewsher replied that using a 20 year ARI increases the OSD dimensions to 240m³. He repeated his claim that no allowance has been made for the flows which will enter Pit 8 from the southern side of Boolavogue Street and therefore Dr Martens' modelling is flawed. Splitting the OSD tank into three tanks, as suggested in the alternative by Dr Martens, requires the total storage in all tanks to increase significantly compared with the single tank. Introducing OSD tanks will necessitate considerable changes to RHCC's approved development. Option 2 is also inconsistent with the Council's current stormwater drainage strategy and is neither practical nor reasonable.

[61]

Option 3 (second pipe in existing Boolavogue Street)

Mr Bewsher opined that Option 3 is not feasible as the Council would never allow a second pipe to be constructed on the northern side of Boolavogue Street. This would be the third pipe on the street if Boolavogue Street is constructed as intended. This is very clearly contrary to normal drainage practices and would never be approved.
Dr Martens replied that this option would be a permanent solution and could be made redundant if the second half of Boolavogue Street is constructed. The option is reasonable, very practical and would involve considerably less civil construction works than those required by the proposed easement. The option would not disturb existing driveways on Boolavogue Street and would not interfere significantly with local traffic during construction. The option is entirely consistent with the Council's previous development approvals and drainage strategy to drain water from RHCC's land to Boolavogue Street. He saw no reason why the Council would not approve this under a s 138 Roads Act application. Terry Road drainage and future public roads within the southern RHCC catchment could be serviced by this option (and Options 1 and 2).
Mr Bewsher strongly disagreed. He reiterated his earlier view that Council would not approve that option. He added that the trenching associated with construction within the existing half-road would create considerable disruption. Construction works and costs would be significant and more than the works in the proposed easement. This option is neither reasonable nor practical.

[62]

Mr Bewsher's oral evidence

In cross-examination Mr Bewsher was asked whether he anticipated at the time of writing his first report that developers would fully fund and construct road drainage conduits as part of their development and then transfer ownership to the Council. He answered that this was what he had anticipated. In the latest joint report he had written that the ownership of the pipework beyond the RHCC land was a legal question and did not express an opinion. Mr Bewsher agreed that the RHCC consent envisaged that RHCC is to provide road drainage conduits which would eventually be dedicated to the Council.
Mr Bewsher accepted that the current version of RHCC's development consent requires two discharge points to deal with water from the whole of RHCC's land (including the northern catchment), the water from the Poly catchment, and the Terry Road drainage system. Mr Bewsher agreed that what he called the 'ultimate system' of drainage deals with the water emanating from the RHCC and Poly lands and Terry Road, the subject of the RHCC consent. The proposed discharge would require amendment of RHCC's development consent and an approval under the Roads Act for work in the public road. Under either proposal the pipes from the Poly's land to RHCC's land are capped. Mr Bewsher agreed the system was designed to accept water from Poly's land. Mr Bewsher had not seen such an approval under the Roads Act.
As currently proposed, the easement would not be consistent with Condition 7.3.2(c) of RHCC's approval in relation to accepting water from Poly's land as that will remain capped off until the terms of the easement are amended. Condition 7.3.2(c) requires the design of stormwater drainage to "ensure that the development, either during construction or upon completion, does not impede or divert natural surface water runoff so as to cause a nuisance to adjoining properties."
Mr Bewsher was asked about Mr Yee's comments extracted below in [178]. Mr Bewsher agreed that Mr Yee in effect stated that Dr Martens' options did not deal with the water from the Poly land. Mr Bewsher agreed that Mr Yee's view is that it is imperative to implement the 'ultimate system' draining land other than just RHCC's.
Mr Bewsher considered that under the Council's drainage strategy the easement has always been temporary because where it is to be located will in future be dedicated as a public road and the drainage will then be upgraded and piped to service the whole catchment at which point this easement will be extinguished. The structures designed in the easement could be there permanently.

[63]

Mr Hayek's affidavit dated 9 December 2022

Mr Hayek's affidavit of 9 December stated that RHCC had sent emails to the Council's legal representatives in October and November 2022 asking the Council to make Mr Yee available to prepare an affidavit in this proceeding confirming that the six alternative ways of draining RHCC's land formulated by Dr Martens would not be supported by the Council and that the alternatives proposed were considered and rejected by the Council in discussions with RHCC. The emails also asked the Council to make available a planner to confirm that any development application over Prisma's land would include a condition that land would need to be provided to complete the second half of Boolavogue Street. On 8 December 2022 Mr Yee, through the Council's legal representatives, responded by way of commentary on the alternative drainage options in Martens #2. The email stated as follows: …I have been provided with a copy of the Supplementary Individual Expert Report of Daniel Martens (engineering) filed in the Land and Environment Court on 11 October 2022 (the Martens Report). I have now had the opportunity to review the Martens Report prepared in respect of the Land and Environment Court proceedings commenced by Rouse Hill Custodian Corporation Pty Ltd (49 Terry Rd) seeking the imposition of an easement over Prisma Rouse Hill Development Pty Ltd (54 Terry Rd). I am familiar with the lands the subject of those proceedings and the various development consents to which they relate. The Martens Report contains (commencing at paragraph 15) details of drainage alternatives that do not rely upon discharge of flows to an easement within 54 Terry Rd. The drainage alternatives are, as I understand the Martens report, offered based on a consideration of reduced flow rates to be serviced by the proposed easement. I provide the following general comments in respect of the drainage alternatives: • Several of the options outlined at paragraph 15 of the Martens Report were previously considered by Council in discussions by its engineers and representatives on behalf of 49 Terry Rd. At that time, those options were not supported. • The options contained at paragraph 15 of the Martens Report appear to have omitted the catchment from 51 Terry Rd, being lands adjoining 49 Terry Rd. It is noted that 51 Terry Rd would, in part, drain through the same system as 49 Terry Rd. Council has given consideration to these issues in respect of the conditions of consent annexed to the development consent issued with respect to 54 Terry Rd. It is imperative that any drainage solution both considers and accommodates all upstream catchments which includes 51 Terry Rd. By omitting this catchment it is likely that further reworking of the drainage system in Boolavogue St may be required resulting in further disruption to the residents along that street. • Paragraphs 17-18 of the Martens Report provide commentary on the proposed easement over 54 Terry Rd. Those comments are confusing. The issues raised at paragraph 17 are the reasons why Council requires an easement in gross over 54 Terry Rd. The matters raised at paragraph 18 and in particular (b) and (c) are largely irrelevant as the site is not occupied and is subject to a development consent for subdivision, road and drainage works and dwelling construction. The drainage works as part of the development consent for 54 Terry Rd would occur early in the construction program allowing for flows to be connected to the permanent solution and decommissioning of the swale to facilitate construction of the remainder of the subdivision and building works. • In summary, it is my opinion that drainage options 1-6 only serve 49 Terry Rd and do not address the broader catchment. They also involve varying degrees of reconstruction of existing Council assets. • It is my understanding that Council had indicated, in respect of previous proceedings relating to the development consents referred to above, that it did not have a preference as to the location of the easement. However, it is also my understanding that 54 Terry Rd prefers that the easement to align with the future road, being the southern half of Boolavogue St, and that the drainage was in the form of the ultimate solution outlined in the development consent granted with respect to 54 Terry Rd. Again as a general comment, there is some merit to that approach and Council did not object to that proposal. The drainage options do not appear to address that option. • Whilst Council has not reviewed the modelling referred to in the Martens Report, there are assumptions with some of the assumptions and amendments to the model. As such, a more detailed review of the modelling is unlikely to change our overall opinion for the ultimate outcome. • It remains Council's position that the delivery of the infrastructure set out in the development consent issued with respect to 54 Terry Rd will deliver the best outcome for the locality. However, until this is delivered an easement in gross through 54 Terry Rd provides for the next best drainage outcome with minimal impact on existing Council assets. The location and form of the easement is a matter for negotiation between the affected parties, subject to obtaining all necessary construction approvals. …

[64]

Council's Engineering Guide

The Council's Engineering Guide specifies an ARI of 5 years is applicable to urban residential land use.

[65]

Traffic engineering evidence

The traffic engineers were engaged to provide their opinion on the following issues: 1. Does the construction of Boolavogue Street need to be completed from a traffic engineering perspective? 2. What is the impact of guardrails, bridges over swale (safety, amenity) if the easement is constructed on Prisma's land? 3. Is access to alternative development proposals available from Terry Road?
It is necessary to briefly traverse Traffic JER #1. The experts disagreed on whether Boolavogue Street was required to be widened. Essentially, Mr McLaren opined that the southern half of Boolavogue Street should be widened for road safety considerations, general access for emergency vehicles, access to fire hydrants by fire appliance vehicles, and because the residents of northern Boolavogue Street would expect the second half of the street to be constructed. The residents face tight and undesirable operational constraints. Mr Varga contended that because the on-street parking demands of current residents are minimal, there are multiple opportunities to pass for any vehicles travelling in opposite directions, and traffic is absolutely minimal, there is no traffic or road safety consideration preventing Boolavogue Street from operating in its current state.
The other area of disagreement related to the vehicular access to Mr Dickson's proposed alternative developments on the Prisma land. Mr McLaren opined that all three alternatives were inconsistent with the likely future prohibition on vehicular access to or from Terry Road to the Prisma land. The co-living and seniors housing scenarios provide an internal road which creates increased conflict points for cars on the road which is highly undesirable. Furthermore, the alternatives would not be consistent with the Indicative Layout Plan. Mr Varga disagreed that there was any prohibition on vehicular access from Terry Road to Prisma's land, and did not consider that the internal roadways proposed would be superfluous or unsafe. The number of conflict points is not increased by the internal roads that disperse conflict over two locations rather than one.
In Varga #3, Mr Varga agreed with Dr Martens that the final pavement wearing surface of Boolavogue Street has not yet been built. He also stated that Dr Martens' options are practical and could be accomplished with minimal traffic disruptions. He opined that the construction of a drainage swale would restrict access within the Prisma land to and from Boolavogue Street, particularly if fencing is required by the Council. A guard rail could also be required depending on the slope and depth. Mr Varga also stated that a box culvert or small bridge over the easement would need to accommodate two-way vehicular traffic and pedestrian access comprising a 1.5m wide pedestrian footway plus a 6.1m wide roadway including kerbs. Additional width may be required to accommodate the turning paths of Council garbage trucks (10.5m long) and to accommodate pedestrian handrails and guard rail barriers.

[66]

Traffic and Parking Assessment Report

RHCC also relied upon a Traffic and Parking Assessment Report of Mr Varga dated 22 August 2018 (Ex K). This report was submitted in support of Prisma's development application. In that report, Mr Varga: 1. Extracted the Indicative Layout Plan; 2. Indicated that Terry Road is to become a collector road and will have a default speed limit of 100km per hour (like other rural roads in the area); 3. Concluded that the proposed road layout and vehicular arrangements were consistent with the GCDCP and will adequately cater for the traffic expected to be generated by the proposed development; 4. Concluded that the proposed residential subdivision is consistent with the zoning objectives of the site and will not have unacceptable traffic implications in terms of road capacity; 5. Concluded that the proposed local road layout is consistent with the requirements of the GCDCP road network hierarchy; 6. Concluded that future local roads surrounding the subdivision will have a road reservation width of 18m and road carriageway width of 11m facilitating two-way traffic flows and allowing kerbside parking, which is consistent with the GCDCP; 7. Concluded that the proposed off-street parking facilities satisfy the relevant requirements specified in the GCDCP and Australian Standards, meaning the development will not have any unacceptable parking implications.

[67]

Oral evidence

Mr McLaren was cross-examined. Assuming that the owner of Prisma's land would want to retain vehicular access from Boolavogue Street, Mr McLaren agreed that it would be necessary to install something to cross over the above ground channel or the below ground swale proposed in the easement. He also agreed that, where the structure is above ground level, works would need to include ramping up to the bridge across the channel, and that would occur outside the easement on both sides. Mr McLaren noted that he did not have the levels of the land before him. Mr McLaren agreed that there would need to be some pedestrian fencing where there is a drop of more than 1m to the bottom of the swale. He considered it was not necessary in the circumstances to construct a guard rail to avoid vehicles falling into the swale, as that hazard would be outside the clear zone.
Mr McLaren acknowledged that, while he did not turn his mind to whether the final pavement wearing surface had been applied to Boolavogue Street, it is a common occurrence for the Council to wait to apply this surface until a subdivision is finished because it anticipates that there might be a need to open up road surfaces or deal with damage to road surfaces. He agreed that Barbola Street was yet to have had the final pavement wearing surface applied.
Mr McLaren was asked how wide a bridging structure would need to be to accommodate the swept paths of a HRV. He opined that a 3m width would be sufficient.
Mr Varga was asked by counsel for Prisma whether he had turned his mind to the question of swept paths for a HRV turning onto Prisma's land from Boolavogue Street. He answered that the bridge or crossing would need to be around 9.5m wide. Mr McLaren stated that he believed one could turn tighter than assumed by Mr Varga. Nine and a half metres seemed excessively wide for this type of infrastructure, even on the assumption that parked cars in Boolavogue Street would be accommodated. Mr Varga was asked by counsel for Prisma whether the Council would expect a barrier to be built to prevent vehicles falling into the open swale, to which he answered that it would. If a car hit the backslope, it would come to a dead stop from 40 or 50km per hour.
Mr Varga agreed to a question from RHCC's counsel that an aerial photograph of the Prisma land (Ex H) showed that access to the existing building was from Terry Road. Mr Varga agreed that Prisma's development consent showed access from Boolavogue Street. The intention of Prisma's development consent was for the second half of Boolavogue Street to be built. He also agreed that widening Boolavogue Street would use part of Prisma's land. He agreed that currently when cars are parked on the northern side of Boolavogue Street, one vehicle would have to stop to allow the other to pass. He was not aware of any other instance in the Area 20 Precinct where the owner of the adjoining land to the street system had not been expected to construct half of the road.

[68]

Reasonable Necessity

The town planning and urban design experts disagreed on whether or not the proposed easement is reasonably necessary for development of RHCC's land.
In Mr Chambers' opinion the easement is reasonably necessary in order to satisfy the conditions of RHCC's development consent and facilitate effective use and development of RHCC's land. Prisma's development consent could be carried out with no impediment as the burdened land will become Boolavogue Street. Stormwater drainage would be facilitated in an orderly and efficient manner with the easement providing the most practical and effective means to dispose of stormwater. Mr Reed did not offer an opinion on reasonable necessity as it was not part of his expertise or instructions.
Mr Mead and Mr Dickson stated the easement is not necessary. Mr Mead identified the easement is not an express requirement of the RHCC development consent. He asserted it could not be assumed Prisma will act on its development consent. In addition, the stormwater engineers have the relevant expertise to comment on alternatives to the proposed easement. In agreement with Mr Mead, Mr Dickson opined the easement would detrimentally impact and impede the orderly development of adjoining properties. They identified using a pipe under the half constructed Boolavogue Street as an alternative to the proposed easement.

[69]

Development on Prisma Land

Prisma's expert town planner Mr Mead and urban designer Mr Dickson were instructed to consider three alternative development scenarios for Prisma's land other than its current consent. These were either 1) a centre-based childcare proposal, 2) co-living housing proposal or 3) seniors housing proposal (in the form of independent living units). In the Planning JER the experts agreed that all of these uses were permissible with consent, that none show vehicular access from Boolavogue Street, and that none show the widening of Boolavogue Street or any local roads shown on the indicative layout plan as being on Prisma's land.
Mr Dickson's individual expert report dated 10 May 2022 provided the details of each of the alternative developments, including their floor space ratios (FSR). The FSR control is 1.75:1 for R3 zoned land. According to RHCC's submissions, for the childcare centre, the FSR provided would be 0.09:1. For the co-living development it would be 0.85:1. For the seniors living development, it would be 0.85:1. None of the alternatives were the subject of a current development application.
In Mr Chambers' individual expert report dated 5 October 2021 he expressed the view that the development the subject of Prisma's development consent is "generally" the highest and best use of Prisma's land, because it achieves the objectives of the R3 zone, is consistent with development controls, the southern half of Boolavogue Street would be constructed, and the easement will eventually be within the road reserve for the completed road. Notwithstanding those factors, if Prisma's land was purchased by a different developer, the developer might see greater potential in a differently designed medium density development. In any case, they will still need to carry out the half-road construction of Boolavogue Street.
In the Planning JER, the experts disagreed about the relevance and utility of Mr Dickson's alternative scenarios when considering whether or not the easement is reasonably necessary and in the public interest, and whether either were likely to achieve approval from the consent authority. They were also relevant to a further question addressed by the planning and urban design experts, being 'whether planning controls required the construction of the southern half of Boolavogue Street'.
Mr Mead agreed that the Indicative Layout Plan would be given weight in the assessment of development applications, however strict compliance would not be determinative. The fact that Prisma's current approval includes the half road is a circumstance of a specific development. If the site were developed for another purpose, or subject to a different design, that aspect of the proposal would be reassessed. There would need to be a nexus between that development and the need for the completion of the half road that exists. That nexus could not simply relate to the development that exists on the site to the north but would have to relate to the subject development being sought on the Respondent's land. There is no GCDCP requirement that says that variations to the road network shown in the Indicative Layout Plan "do not include building the remaining half of a road already half-constructed" as Mr Chambers suggests. Mr Reed put forward at least one development scenario that has direct access to Terry Road only whereby there would be no change in the need to widen Boolavogue Street.

[70]

Half Construction of Boolavogue Street

Mr Chambers stated the Indicative Layout Plan for the Area 20 Precinct shows Boolavogue Street as part of the local road network. As it is intended to provide access to other local roads, construction of the remaining half of the road would be expected to be required as part of the redevelopment of the Prisma land. The consent authority would place significant weight on the Indicative Layout Plan given that half of Boolavogue Street has already been constructed and Prisma's development consent requires it to build the other half. Any consent granted which did not require the construction of the second half of Boolavogue Street would not approve development which prevented its construction. A half-constructed road is not acceptable except for temporary periods pending development. While the GCDCP permits variations to the road network shown in the Indicative Layout Plan, these would not include building the remaining half of the half-constructed road.
Mr Reed opined that development to the north of Prisma's land, being 44 Terry Road, has already been carried out in a manner highly consistent with the Indicative Layout Plan including in relation to Boolavogue Street and Bella Parade (identified above in [17]). In his opinion there is no foreseeable reason why the Council would shift away from the Indicative Layout Plan. Any departure from the Indicative Layout Plan would only be with respect to the roads that divide the Prisma land running north to south. There is no plausible development proposal for Prisma's land in which leaving Boolavogue Street half-constructed is a better outcome and likely to achieve approval. Mr Dickson's scenarios do not meet that benchmark. Based on the GCDCP requirements for development to occur consistent with the Indicative Layout Plan, widening Boolavogue Street, regardless of alternative development scenarios for Prisma's land, is necessary.
Mr Reed also opined that the Council will not approve any development that would prevent the southern half of Boolavogue Street from being constructed. The same or similar development potential could be delivered with the widening of Boolavogue Street and continuation of Bella Parade. These alternative diagrams provided by Mr Reed demonstrate that similar buildings could be proposed on Prisma's land and allow the completion of Boolavogue Street. The concepts developed by Mr Dickson would not be approved as they lack significant site analysis and response. They do not meet the objectives of the planning controls. They do not represent coordinated development consistent with the Indicative Layout Plan and lack consideration of context and desired future outcomes.

[71]

Statement of Environmental Effects for Prisma's approved development

A SEE (Ex E) accompanied Prisma's development application. At section 4.1.5, Mr Mead found the proposal was consistent with the objectives of the R3 Medium Density Housing zone and the RE1 Public Recreation zone, and would not be inconsistent with the SP2 Infrastructure zone objectives on Prisma's land. His view, as articulated in the GCDCP compliance table in Annexure B of the SEE, was that the development would be consistent with the GCDCP. He also concluded, inter alia, that: 1. The subdivision pattern proposed was consistent with the Indicative Layout Plan; 2. The road layout is in accordance with the Indicative Layout Plan; 3. The block pattern follows that of the Indicative Layout Plan; and 4. The majority of lots (proposed) are rectangular. Some lots are irregular shape as an unavoidable outcome of the Indicative Layout Plan and the need to retain the turning head on Terry Road.

[72]

Contributions Plan

The Council's Contributions Plan No 22W - Rouse Hill (Works) Section 7.11, dated 27 August 2020, contains a section 3.1 which reads as follows: 3.1 Nexus (Local Roads) Generally local roads are provided by developments that front them when subdivision occurs. Under the environmental planning instrument for Rouse Hill, increased development potential is permitted adjoining and or opposite public land. Developers are required to meet the full cost of providing each of these streets. …

[73]

Stormwater engineering evidence

The Court has before it evidence of a proposed major development on RHCC's land. The Court should be satisfied that the development consent granted is an effective development of RHCC's land, and that the easement is reasonably necessary to effect the purpose, or produce the intended or expected result of the use or development. If use or development of the land for some planning purpose cannot be achieved without the creation and use of an easement, then the easement is reasonably necessary. The Court should find that the Area 20 Precinct has been carefully planned out for the last 15 years, that RHCC's development consent is consistent with the Indicative Layout Plan and the planning controls and objectives for development in this area, zone and site, and that the development cannot be achieved without the creation and use of the easement. Water must run via the shortest possible route to Second Ponds Creek. The easement is required by the Council to give effect to this major development. The approved use is clearly a reasonable use of RHCC's land. Without the easement, the development cannot proceed, as evidenced by the fact that the consent was granted in 2018 and the development has still not been built.
Relying on the tenth point in Rainbowforce, (see below in [264]), RHCC submitted that the Court should impose the easement despite the necessity to obtain a s 138 Roads Act approval or a new development consent for the drainage works on Prisma's land. The easement is also necessary to achieve the highest and best use of RHCC's land, although that need not be demonstrated: Moorebank Recyclers Pty Ltd v Tanlane Pty Ltd (2012) BPR 31257; [2012] NSWCA 445 (Moorebank Recyclers CA) at [155].
Shi v ABI-K Pty Ltd (2014) 87 NSWLR 568; [2014] NSWCA 293 (Shi) at [8] (Basten JA, Barrett and Ward JJA agreeing) is applicable; Prisma has the evidential onus of showing that RHCC's development is not a reasonable use of its land, as the Court has granted RHCC's development consent.
Dr Martens' options must be read mindful that the proposed easement does not need to be the only way that land could be drained. Even if Mr Bewsher's evidence was rejected, the easement can still be reasonably necessary.
An overarching flaw of Dr Martens' evidence is that he disregards the various development consents that apply to the relevant catchments and applies a 5 year ARI as the basis for his opinion. If the Court finds that the 5 year ARI does not apply, then Dr Martens' evidence will be fundamentally flawed and none of his options could be accepted when compared to Mr Bewsher's evidence which applies the 20 year ARI, as provided in the RHCC consent as a minimum. When assessing what is reasonably necessary the Court cannot disregard the current consents applicable to the lands in the catchment and, more particularly, the RHCC consent. The Prisma consent provides that the drainage is proposed at a 100 year ARI. The RHCC consent in condition 7.3.2 and the Poly consent at condition 5.2.2 provide that off-site drainage must allow for a 20 year ARI. It is unrealistic that any drainage proposal would be assessed at a 5 or 10 year ARI. Accordingly, Dr Martens evidence on the remaining three potential options cannot be accepted as it would not satisfy the conditions of the RHCC consent, upon which the proposed easement must be based, and is inconsistent with multiple consents.

[74]

Town planning and urban design evidence

RHCC submitted that the three alternative development concepts produced by Mr Dickson are mere concepts that while permissible have not been lodged for development consent and have not undergone a merits assessment. They do not seek to achieve anywhere near the maximum FSR of 1.75:1 (a minimum of 25 dwellings per hectare), only achieving 0.85:1, 0.85:1, and 0.2:1 respectively (see above in [201]). They would represent a clear underdevelopment of Prisma's land, and do not reflect the highest and best use of Prisma's land. With such an underutilised FSR, the three alternative concepts proposed by Prisma cannot inform the highest and best use and would be irrelevant to any valuation when considering what a hypothetical purchaser would pay for Prisma's land when viewed objectively. Mr Mead and Mr Dickson failed to turn their mind to the highest and best use, while Mr Chambers considered that the highest and best use of Prisma's land was its approved subdivision. Mr Chambers relied on the GCDCP and the Indicative Layout Plan
The Council would not approve development of Prisma's land without access to Boolavogue Street or its completion. This is plain from the Indicative Layout Plan and the extract of the Contributions Plan above in [213]. In Tomasic v Port Stephens Council [2021] NSWLEC 56, Preston CJ observed at [107]: 107. These provisions of Part D13 of PSDCP 2014, which provide guidance as to the desired street layout and transport network in the urban release area, are provisions of a kind that are permitted by the EPA Act to be prescribed by a development control plan. By their nature, such provisions provide guidance on the desired strategic planning outcomes for the urban release area to persons proposing to carry out development in the urban release area. There is no restriction imposed by the EPA Act that the provisions of a development control plan must reasonably and fairly relate to particular development or particular land in the urban release area. That is not the purpose of the provisions of a development control plan.
These observations support RHCC's submission that the illustration of a completed Boolavogue Street on the Indicative Layout Plan demonstrates the desired strategic planning outcome for the Area 20 Precinct and the Council is highly unlikely to depart from that outcome irrespective of the development type proposed on Prisma's land. RHCC also relied on the evidence of Mr Chambers and Mr Reed about the need to construct Boolavogue Street (see above in [202]-[209]).

[75]

Traffic engineering evidence

Mr Varga's conclusion that the second half of Boolavogue Street does not need to be constructed is surprising. It is contradictory of Mr Varga to be adamant that a bridge across the easement must accommodate two-way traffic but at the same time persist in the view that Boolavogue Street can remain a half-road allowing only for one way traffic. His evidence is unreliable. Mr Varga's 2018 Traffic and Parking Assessment Report above in [190]: 1. envisaged that Boolavogue Street (incorrectly referred to as Terry Road) would be completed; 2. stated that the GCDCP envisages that Terry Road would become a Collector route; 3. relied on the Indicative Layout Plan to inform Mr Varga of the local road network, which contemplates: 1. a completed Boolavogue Street; and 2. three additional local roads off the completed Boolavogue Street (parallel to Bella Parade) to complete the road network and allow access to the Landcom land to the south of Prisma's land; 1. indicated that Terry Road has a default speed limit of 100km/hr in rural zones, limiting access to and from frontages along Terry Road; 2. said, on that basis, it is a necessary requirement that Boolavogue Street be completed for any further development of the Prisma's land to allow access as Terry Road will ultimately not be accessible as a Collector Road; and 3. concluded "the future local roads surrounding the subdivision will have a road reservation width of 18m and a road carriageway width of 11m facilitating two-way traffic flows and allowing kerbside parking, which is consistent with the [GC]DCP 2014".
Since 2018, Mr Varga has completely disregarded the Indicative Layout Plan and suggests an inconceivable proposition that Boolavogue Street can remain in its half-built state indefinitely. Any proposed use of Prisma's land will not depart from Mr Varga's earlier analysis in Ex K.
In cross-examination, Mr Varga accepted the following propositions (see above in [195]-[196]): 1. The existing access to Prisma's Land is via Terry Road (as opposed to Boolavogue Street). 2. Prisma's development consent contemplates access off a completed Boolavogue Street and three internal roads (as opposed to Terry Road). 3. Part of the Prisma's land is required for completing the southern half of Boolavogue Street. 4. When cars are parked on the northern half of Boolavogue Street, only one car can pass at a time. 5. There is no active use of the Respondent Land and access is available via Terry Road. 6. The three alternative concepts prepared by Mr Dickson do not envisage access from Boolavogue Street (but rather Terry Road). 7. The part of Prisma's land between the northern edge of the proposed easement and the southern edge of Boolavogue Street can be maintained via access from Boolavogue Street.

[76]

Proposed easement is reasonably necessary

The proposed easement is reasonably necessary for the reasons that follow: 1. The proposed easement is reasonably necessary for the effective use and/or effective development of RHCC's land for the development the subject of RHCC's development consent which accords with the objectives for development of land in the zone. Considering the evidence above and correspondence from the Council, it is evident that the tailout concept and draining RHCC's land via the proposed easement is necessary for the effective use and development of RHCC's land which is dictated by RHCC's development consent. In the correspondence from the Council, it is evident that an easement based on the tailout concept design was endorsed by the Council on 7 April 2021 and since that time RHCC's construction certificate application remains pending subject to an easement being obtained and payment of a levy. It is irrelevant that the Council refers to an easement in gross, as the proposed easement would satisfy RHCC's development consent as submitted above. Further, where the Court must consider effective use of RHCC's land which is dictated by the RHCC's development consent, the drainage alternatives that Prisma proposes must be predicated on a 20 year ARI. This is not the case, as Dr Martens relies on a 5 or 10 year ARI, which makes his evidence on alternative drainage options redundant. 2. Having regard to the zoning of RHCC's land, the development the subject of RHCC's development consent is reasonable as well as an economically rational and a higher and better use of that land. 3. Given that the Court granted RHCC's development consent, Prisma has an onus of demonstrating (and has failed to demonstrate) that the development the subject of RHCC's development consent is not reasonable having regard to the capacity and zoning of RHCC's land. 4. The development the subject of RHCC's development consent with the proposed easement is preferable to that development without the proposed easement - particularly having regard to evidence of Mr Bewsher that the proposed easement is the only viable option to drain RHCC's land for the purpose of the development the subject of RHCC's development consent. There is no evidence to suggest that any of the six alternatives are equally as efficacious as the proposed easement and it is obvious that digging up Boolavogue Street or Barbola Street or amending RHCC's development consent to provide temporary or permanent OSD systems on the RHCC's land are not equally efficacious. 5. RHCC cannot obtain a construction certificate for the development the subject of RHCC's development consent until the proposed easement is registered on the title of Prisma's Land. 6. The approved engineering plans associated with RHCC's development consent requires the drainage of water from RHCC's land onto Prisma's land (via Terry Road). 7. The Council has planned the Drainage Works within the proposed easement. 8. The proposed easement will have no effect on Prisma's land to the extent that it wishes to carry out the development of its land to its highest and best use (which happens to be the development the subject of Prisma's development consent). 9. To the extent that Prisma does not intend to act on its development consent, that is not relevant. It is inevitable (having regard to the planning controls and associated documents) that the part of Prisma's land affected by the proposed easement will be required by the Council for the provision of and construction of the southern half of Boolavogue Street. It is absurd to suggest that Boolavogue Street will be left constructed to the standard that it is. Prisma will be required in due course to provide the land to complete the road as per the Council's planning instruments. When that occurs the Proposed Easement will be extinguished by operation of law (or otherwise) as the drainage will become piped under the road and will lay in the road reserve which is vested in the Council under the Roads Act. As such, there will be no impact on the Respondent that cannot be adequately compensated.

[77]

Prisma's submissions on reasonable necessity

Prisma submitted that the Court cannot be satisfied that the easement is reasonably necessary.

[78]

Amended or new development consent required

As conceded by RHCC, RHCC needs a new development consent or to modify their existing consent to carry out the development. RHCC's development consent at condition 8.6.1 required them to deal with the water from the whole of the catchment including the southern catchment of RHCC's land, the Poly land and the Terry Road land. RHCC now seeks only to deal with water from the southern catchment of the RHCC land.
The Court would be satisfied that a modification application would not be approved because it was fundamental to the design of the drainage system that it would deal with the whole of the catchment waters. That is apparent from the approved plans and conditions 8.6.1 and 8.6.2 (see above in [30]). Mr Yee's most recent correspondence (see above in [178]) stressed that it is imperative that any drainage solution both considers and accommodates all upstream catchments which includes Poly's land. Plainly the easement cannot implement the intended or expected result or use of the development (see the fourth point in Rainbowforce as summarised below in [264]) because one of the imperatives of the conditions of consent is that the development accommodate all of the upstream water, including Poly's. Given condition 5.1.2, which requires all civil works related to roads and drainage within the road reserve to have been completed before a construction certificate is issued, RHCC cannot be permitted to carry out their development pursuant to their current consent. Until a development consent is obtained that authorises reliance on the proposed easement, the Court would not be satisfied that the easement is reasonably necessary for the effective use or development of their land.

[79]

Reasonable alternatives available

There are reasonable alternatives proposed by Dr Martens. RHCC has not made a genuine effort to discharge its onus of proving that there are genuine problems with the alternatives. There needs to be something more than mere desirability or preferability over the alternative means available: Rainbowforce at [76]. In Woodland, Hamilton J said at [9]: 9… No doubt the alternatives will require to be considered and there is unlikely to be a finding of reasonable necessity (or, indeed, an exercise of discretion in favour of a grant) if there is a viable alternative.…

[80]

Option 1

In respect of Option 1, Mr Bewsher produces four reasons for rejecting it and each should be dismissed. Mr Bewsher's first issue, that Option 1 would be inconsistent with RHCC's development consent, can be dismissed because inherent in RHCC's application in this proceeding is a necessity to modify their existing consent.
Mr Bewsher's second issue, the effect on the residents of Boolavogue Street, can be dismissed because such disruptions are, according to Mr McLaren's evidence (see above in [188]) a common occurrence which can be dealt with by normal traffic management plans. This is a low-traffic environment with two-way flow, where the impact would be minor. The final pavement wearing surface has deliberately not yet been laid, in line with condition 13.4.1 of RHCC's development consent and condition 17.4.1 of Prisma's development consent. This is a common feature in new developments in release areas (see above in [192]). No matter the easement granted, road works will need to be carried out in Terry Rd in any event. Road works have been carried out on Terry Road, Barbola Street, Bella Parade and Boolavogue St as recently as 6 October 2021 (see above in [149]). Future road works are inevitable and do not determine the suitability of any option.
Mr Bewsher's third issue with Option 1 concerned Dr Martens' assumption that the pipe size needed to be 450mm to accommodate a 5 year ARI, rather than 600mm to accommodate a 20 year ARI. On either approach, according to Dr Martens, that would not be a major pipe system (see above in [159]). Dr Martens also based his view on the Council's Engineering Guide see above in [179]). That document shows that the design requirements for piped drainage in a road, where servicing a catchment of less than 6ha, is the 5 year ARI. There is a significant difference between accommodating flows from a residential subdivision, as RHCC needed to, and gutter flows down a road. There is nothing inconsistent about having to design an internal system on RHCC's land to a higher standard. Mr Bewsher's criticism is wrong. Even if he was right, it is not a major issue if the size of the pipe changes.
Finally, Mr Bewsher's criticism that Option 1 would not be approved is incorrect, as there is nothing to suggest a permanent, underground solution would not achieve approval. No Roads Act application has been made for this option. This option anticipating the upgrading of the existing infrastructure on Boolavogue Street is to be contrasted with the very significant and temporary above ground works proposed by RHCC.

[81]

Option 2

In respect of Option 2, this would not require any change to the size of the pipe in Boolavogue Street because the OSD would delay the release of stormwater to the pipe. For the same reason as earlier submitted above in [247], Mr Bewsher's complaint that this would require an amendment of RHCC's development consent should be dismissed. Mr Bewsher's criticism of the size of the OSD is wrong for the same reason as above in [252], namely that the 5 year ARI is the correct measure. A further point can be made about Option 2. It is RHCC's onus to demonstrate that the use of their land is substantially preferable with the easement compared to without it. There has been no evidence about the effect of the OSD on RHCC's land, such as on development yield. The burden has not been satisfied.

[82]

Option 3

Option 3 involves considerably less expense and construction than the installation of a temporary swale and above ground channel to be removed and replaced. Mr Bewsher opines that this option would not be approved. There is no evidence of a Roads Act application for this option. The Court would reject the suggestion that a third pipe in Boolavogue Street is contrary to normal drainage practices. Deferred commencement condition 0.2(i) of Prisma's development consent requires trunk drainage within Boolavogue Street to be revised. It also states, "Where the existing 1200[mm] x 600[mm] box cannot carry the required flow a supplementary drainage system may be required". The Council has anticipated that it may be necessary to have a supplementary drainage system in Boolavogue Street, with the anticipated systems being the drains proposed on the northern and southern sides. The supplementary system envisaged a third pipe demonstrating Mr Bewsher's concern that an additional pipe would be rejected. Option 3 is a permanent solution, has less impacts on Prisma's land, does not require the obtaining of any easement, and nothing stands in the way of its approval.

[83]

Burden of imposing easement outweighs necessity of easement

The burden imposed upon Prisma's land is significant and a stronger case is therefore needed to justify reasonable necessity. The burden includes impacts on the land from water flowing from the easement across Prisma's land to Second Ponds Creek, other impacts outside the easement, the fact that the easement is permanent, and safety and amenity concerns.

[84]

Easement to nowhere

Firstly, the proposed easement ends at a certain point on Prisma's land, water would leave the easement and flow for another 50m (see above in [176]) in an uncontrolled manner across Prisma land towards Second Ponds Creek. This would create a nuisance absent an entitlement to spread water on Prisma's land. An actionable nuisance will arise because no such legal right exists and there is a potential damage to Prisma's land. Secondly, to the extent there is potential damage, Prisma will have the obligation to maintain its land. Thirdly, there is evidence that the flow would lead to increased moisture and decreased trafficability (see above in [147]). An invitation would not be accepted to extend the easement all the way to Second Ponds Creek.

[85]

Easement too narrow

The proposed easement is too narrow to serve the suggested purpose. While RHCC does not need to provide a final design for the drainage infrastructure, and it is accepted that they could design it such that they would keep only within the proposed easement, there will be a necessity for ancillary works outside the easement. The typical section C shows works outside the easement, for example excavation to ensure that the surface of the land drains into the swale and battering work where the swale is above ground. The plans attached to RHCC development consent show a width of 4.4m for the indicative drainage works on Prisma's land; this will not fit within a 3m easement. Furthermore, if bridging structures are constructed over the swale, there would need to be ramps up and down, which of necessity requires works outside the easement. Fences and guardrails outside the easement will also be necessary. The land will require grading to prevent interference with the overland flow of water. This demonstrates that the easement cannot satisfy the reasonable necessity test.

[86]

Impacts outside the easement

The land in which the easement would be located will be sterilised from development. Impacts outside the easement include not only the works discussed above in [258], but also sterilise the strip of land between the easement and the northern boundary of Prisma's land. This impact would not occur if the stormwater structure was permanent below ground infrastructure.

[87]

Easement permanent

The easement is not temporary, and this weighs against reasonable necessity. Nothing in the easement terms impose any temporal condition. The release of the easement is dependent on the goodwill of the parties with the benefit of the easement. That may include RHCC, or may not. The Court would reject RHCC's suggestion that the Council be listed as the party with the power to vary, release, modify the easement. The Council should not have such the power to modify without any ability for Prisma to be compensated for additional loss or disadvantage, especially where the Council were not a party to proceedings. There may be significant potential difficulties in releasing the interest when the time comes, perhaps requiring an application to the Supreme Court under s 89 of the Conveyancing Act.

[88]

Impacts on safety and amenity

The easement proposed is a deep open swale with above ground constructed channels. No other drainage with similar structures was identified on the view. There are safety and visual impact issues which arise from such construction which would not arise if a permanent underground solution was proposed. There are plainly pedestrian and vehicle safety concerns arising from the temporary structures in the easement. These necessitate fences and guardrails. The structures also give rise to visual amenity impacts.
As noted by Prisma's expert valuer, the 3m wide portion of land between the northern end of the easement and the northern boundary of Prisma's land will be effectively severed from the balance of Prisma's land.
A final argument made in oral submissions is that the Court cannot be satisfied that an easement which depends upon obtaining a second easement (or other right) to build a pipe under Terry Road is reasonably necessary. This submission flowed from RHCC's submission that a pipe would be built by RHCC to convey water under Terry Road to the easement.

[89]

Consideration of reasonable necessity

In Diro at [42], Robson J summarised the principles relevant to the test of reasonable necessity in s 88K derived from the judgment of Preston CJ in Rainbowforce, without case references. I gratefully adopt that summary as follows: 42. In Rainbowforce Pty Ltd v Skyton Holdings Pty Ltd [2010] NSWLEC 2; (2010) 171 LGERA 286 ('Rainbowforce') at [67]-[83], Preston CJ of LEC identified ten commonly cited principles which apply to the Court's consideration of reasonable necessity when deciding whether to exercise its discretionary power to make an order imposing an easement. In the interests of concision, I summarise those principles, which I consider guidelines, without including case references. • First, the power to impose an easement is conditional upon the Court being satisfied of the requirement of s 88K(1) of the Conveyancing Act, that it is "reasonably necessary for the effective use or development of other land that will have the benefit of the easement". This is a precondition to the Court's exercise of power which is to be determined objectively. [I have considered this issue above at [126]-[139] concluding that the land to be benefitted by the easement is RHCC's land] • Secondly, the requirement of s 88K(1) must be satisfied with respect to the particular easement which is to be imposed, where pursuant to s 88K(3) the Court specifies the nature and terms of the easement when making orders imposing the easement. • Thirdly, s 88K(1) may be satisfied in respect of either the effective use or the effective development of the applicant's land, and can be enlivened in relation to a specific development or development generally. • Fourthly, the easement must be reasonably necessary to effect the purpose or produce the intended or expected result of the use or development. If use or development of the land for some planning purpose cannot be achieved without the creation and use of an easement, then the easement is reasonably necessary. • Fifthly, the easement must be reasonably necessary for the effective use or development of the applicant's land itself, not merely for any of the persons who are its proprietors from time to time (such that the subjective circumstances of the proprietors are not relevant). • Sixthly, the formulation "reasonably necessary" imports two requirements. First, 'reasonably' means that the easement need not be absolutely necessary, such that an easement may be imposed notwithstanding that another means of right of way may exist, or possibly even when the land could be effectively used or developed without the easement. Second, 'necessary' requires more than desirability or preferability over the alternatives. Whether something is "reasonably necessary" is to be assessed with regard to the burden imposed by the easement. • Seventhly, the reasonable necessity must be in respect of all reasonable uses or developments of the land, or at least a use or development which is reasonable compared to other possible uses or developments. In order for an easement to be reasonably necessary, the use or development with the easement must be at least substantially preferable to the use or development without the easement. • Eighthly, the requirement of reasonable necessity does not demand that there be no alternative land over which an easement could be equally efficaciously imposed. • Ninthly, the requirement of reasonable necessity is to be decided in light of the circumstances at the time of the hearing of the application of the order. • Tenthly, the requirement of reasonable necessity can be satisfied notwithstanding that some future action may be required in addition to obtaining the easement.

[90]

RHCC development needs easement

RHCC is not intending to precisely implement its development consent in relation to all the stormwater approved to be disposed of. The rest of the approved substantial development outlined above in [18] of 311 apartments inter alia is otherwise to be implemented. RHCC recognised in the hearing the need to obtain an amended consent or a new consent for the more limited stormwater disposal it presently intends to discharge into the easement. I have accepted above in the context of the application of s 40(1)(a) of the LEC Act that the discharge of the reduced level of stormwater the subject of the evidence is enabling implementation the RHCC development consent (Rainbowforce, first point). In these circumstances the observations in Shi set out above in [268] with emphasis added apply, namely that as RHCC has development consent Prisma must show that the approved development is unreasonable. Prisma's submissions did not do so. These focus on the availability of practical alternatives for stormwater disposal and the burden on Prisma's land rather than arguing RHCC's development consent is for development that is not the appropriate use of that land.
As the authorities extracted above identify, this easement enables the effective use or development of an applicant's land, and can be enlivened for a specific development or development generally (Rainbowforce, third point). The easement proposed is intended to give effect to the purpose of the approved development (Rainbowforce, fourth point). The easement is necessary not just desirable (Rainbowforce sixth point). An important consideration which requires weighing up is the burden on Prisma's land if the easement is granted (Rainbowforce, sixth point) which I discuss below. RHCC's use of its land for the approved development reflects the land use zoning and the Council's overall planning of Area 20 indicating it is preferable to the use or development without the easement (Rainbowforce, seventh point). That future action is required, here amendment of the RHCC consent or a new consent and a Roads Act application for a pipe in Terry Road in relation to more limited stormwater disposal, does not mean that reasonable necessity cannot be satisfied (Rainbowforce tenth point).

[91]

Practical alternatives

Whether the easement is necessary for the effective development of RHCC's land must be considered (Rainbowforce, fifth point). Reasonable necessity does not require that there be no alternate land for the easement (Rainbowforce, eight point). Disposal of stormwater must occur off-site under the RHCC development consent and stormwater from RHCC's land naturally drains to Second Ponds Creek beyond Prisma's land. Prisma submits there are practical alternatives to the grant of the easement. As a result of the substantial reduction in stormwater intended to be disposed of in the easement (421 l/s as now proposed rather than 2,113 l/s as approved in Calibre civil engineering plan C2-00 revision D referred to in condition 8.6.1 of RHCC's development consent), Dr Martens proposed three alternative options which he considers can practically transport the reduced volume of stormwater thereby rendering the easement unnecessary. Prisma's submissions were to the effect that RHCC had the onus of proving that these alternatives were not achievable and had not done so, for example, no Roads Act application had been made in relation to Options 1 and 3.
Options 1 and 3 described above in [148] are different schemes for either enlarging an existing pipe or building a new pipe in the Council's public drainage system under Boolavogue Street for the reduced stormwater flow from RHCC's land. Dr Martens adopted a 5 year ARI because that was consistent with the Council's Engineering Guide for the catchment size of 1.69ha now applicable to determine that the public drainage system could accept the proposed level of stormwater. The RHCC development consent required consideration of a 20 year ARI. Dr Martens' adoption of a 5 year ARI for off-site modelling may well reflect the relevant Council controls, in contrast to what was required of the on-site modelling for the purposes of RHCC's DA.
Option 2 for an OSD on RHCC's land is different to the terms of the existing development consent and would require modification of that consent. Prisma emphasises that the OSD is small and intended only to delay stormwater being released into the public drainage system. That some amendments of RHCC's consent is necessary in relation to stormwater drainage does not mean that any amendment should be considered reasonable. It is difficult to know on the available information how likely it is that the Council would provide consent to such an amendment.

[92]

Effect of proposed easement - burden

Prisma's land is largely zoned for medium density residential development, with a smaller portion towards Second Ponds Creek zoned for public recreation. The area around Second Ponds Creek is zoned SP2 drainage infrastructure. Prisma's director Mr Ng attests that he does not presently intend to carry out the development for which he has development consent (see above in 25). He was not cross-examined and I accept that evidence. As Prisma submitted, in determining whether the easement is reasonably necessary the burden on Prisma's land should be considered. As identified in Rainbowforce at [77] citing Katakouzinos v Roufir Pty Ltd (1999) 9 BPR 17,303; [1999] NSWSC 1045 at 42; Woodland at [12], 19 and Khattar v Wiese (2005) 12 BPR 23,235; [2005] NSWSC 1014 (Khattar) at [27] the greater the burden on the burdened land the more an applicant must demonstrate reasonable necessity. As identified by Basten JA in Shi at [16] citing Moorebank Recyclers CA at [156]-[157], the general principle is that "the greater the burden on the servient tenement, the stronger the case needed to justify a finding of reasonable necessity", also extracted above in [266].
RHCC's submission that the burden on Prisma's land is minimal is based on the assumption that Prisma will undertake the development which it currently has consent for. That is the case if that development proceeds in the future. Prisma's land, a former farm, is presently vacant. Vehicular access is from Terry Road.
Prisma's closing submission summarised above at [258]-[260] focussed on the permanence of the easement, that it was too narrow and there would have to be work outside the easement including any bridge for vehicular access and the likelihood of fencing being placed outside the easement. Prisma's land will be subject to a 210m long by 3m wide easement for draining stormwater, located 3m inside the boundary from Boolavogue Street, in perpetuity if the presently approved development or something similar in terms of stormwater disposal and road works does not proceed. The concept drainage scheme (see above in [39]) is for an open swale drain of 3m in width and of varying depth of up to 1.5m in some locations. To the extent that section drawings of work in the easement in evidence showed work outside the easement RHCC accepts that all work must be accommodated within the 3m easement sought, see [173] above.

[93]

Use of RHCC's land not inconsistent with public interest (s 88K(2)(a))

Under s 88K(2)(a) the Court must consider if the use of land having the benefit of the easement is in the public interest. The proposed easement must not be inconsistent with the public interest, in this case the facilitation of the approved development of RHCC's land for residential development.

[94]

Town planning and urban design evidence

In the Town Planning JER the town planning and urban design experts expressed differing views on whether the use of RHCC's land is consistent with the public interest. Mr Chambers, RHCC's town planner, considered that the use of RHCC's land as envisaged by its consent is in the public interest as it provides for medium density housing in an urban release area where the creation of new housing is an important planning priority. The development provides for the creation of new roads consistent with the Indicative Layout Plan which will create a safe and convenient local road network. The development provides for drainage to Second Ponds Creek. The creation of local roads and drainage in accordance with RHCC's development consent is in the public interest. In Mr Reed's opinion, any development of the subject site should not prevent the widening of Boolavogue Street and the delivery of associated stormwater infrastructure in the public interest. Not widening Boolavogue Street will be detrimental to adjoining properties to the north and will impede orderly development of adjoining properties in accordance with the Precinct Plan and GCDCP.
Mr Mead and Mr Dickson did not agree that "the collection and direction of stormwater over the Respondent's land is orderly planning given that the strip of land over which the easement will run will eventually be transferred to the Council and become part of Boolavogue Street." Mr Mead stated impinging of Prisma's development consent by imposing the burden of a fixed pipe location, and requirement to build that infrastructure when alternatives may be available, is not in the public interest. The open swale will prevent the widening of Boolavogue Street. The development to the north of Boolavogue Street is currently occupied and was found acceptable to be issued consent for occupation with half road construction only.

[95]

RHCC's submissions

The use of the RHCC's land in accordance with its consent is not inconsistent with the public interest. The development is consistent with the applicable zoning and planning controls. Relying on the comments of Basten JA in Shi at [70]-[71], the grant of that consent is a decisive factor demonstrating that the imposition of the easement is in the public interest, absent evidence to the contrary. The dominant tenement is entitled to utilise its land in accordance with its zoning: City of Canterbury v Saad (2013) 195 LGERA 329; [2013] NSWCA 251 at [56] per Beazley P (Meagher and Leeming JJA agreeing). RHCC has not conceded that the easement is no longer necessary to give effect to its consent. It is necessary and that is the purpose of this proceeding.

[96]

Prisma's submissions

Prisma submitted that the use of RHCC's land with the proposed easement would not be in the public interest. Noting the comments of Basten JA in Shi at [70], RHCC's concession that the easement is no longer required to give effect to its development consent weighs heavily against the Court granting the easement because the assumption cannot be made that the use of RHCC's land would be in the public interest. To the contrary, the use of the RHCC's land will not be in the public interest because what is proposed ignores stormwater flows from Terry Road, the Poly land and internal roads that will be constructed on RHCC's land. The public interest would have been served if these stormwater flows were to be accommodated. Failing to accommodate these stormwater flows will likely cause a nuisance to surrounding property owners or shift the burden to others, which does not serve the public interest.

[97]

Consideration of public interest

Under s 88K(2)(a) use of the land with the benefit of the easement must not be inconsistent with the public interest. As identified by RHCC, in Shi at [70]-[71] Basten JA observed: 70. … Where there is an existing consent given, it may be assumed in the absence of evidence to the contrary, after consideration of the matters set out in s 79C of the Environmental Planning and Assessment Act, that would usually be a highly material and possibly decisive factor demonstrating that the proposed development was not inconsistent with the public interest. [Emphasis added] 71. If that were wrong, it would raise significant concerns as to coherence within planning law. As stated in a leading English text, K Gray and SF Gray, Elements of Land Law (OUP, 5th ed, 2009) at [5.1.50]: "The insistence on strict definitional parameters in the law of easements tends to conceal, just as effectively today as it did over a century ago, that the crucial issue at stake is often the boundary of permissible commercial initiative in the exploitation and development of land resources. The recognition of easements of a vague or unlimited character threatens to impose significant limitations on the entrepreneurial exploitation of areas of servient land and, for this reason, may once have seemed contrary to the public interest."
The evidence of Prisma's town planner Mr Mead in [290] above was essentially directed at the burden on Prisma's land, which I have had to consider in the context of reasonable necessity above. Such evidence does not greatly assist in the consideration of subs (2)(a) given its terms focus on the land to be benefitted.
I am satisfied that the use of RHCC's land for the purpose for which it has development consent will not be inconsistent with the public interest, accepting also the opinion of Mr Chambers and Mr Reed above in [289]. The use of Prisma's land for an easement to drain stormwater coming from RHCC's land will support that use.

[98]

Adequately compensated

Section 88K(2)(b) requires that the Court be satisfied that the burdened land's owner can be adequately compensated for any loss or disadvantage arising from the imposition of the easement. If the land's owner can be adequately compensated, the Court must determine the quantum of compensation. The evidence and submissions to determine whether Prisma can be adequately compensated and the amount of compensation overlap.

[99]

Stormwater engineering evidence

The proposed drainage infrastructure in Appendix A to Stormwater JER #2 proposes an open swale drainage system with some points above ground and other points below ground. In Bewsher #1, Mr Bewsher suggested that there might be three crossings over the drainage infrastructure to provide vehicle access into Prisma's land from Boolavogue Street. In Bewsher #2, Mr Bewsher described the drainage works required as an open earthen swale, a pipe or box culvert, or a combination of these.

[100]

Quantity surveying evidence

In QS JER #1 the experts estimated the costs of removing the drainage works to be $70,000. Mr Bolt Prisma's expert costed the construction of easement works required on site (Option 2 in QS JER #2) which was $282,083.31.
In QS JER #2 both experts provided revised costings of the removal of drainage works [if Boolavogue Street is widened as contemplated by Prisma's development consent] (Option 1). The experts agreed that the costs of Option 1 would be $102,000. No guard rail was assumed in this option. Box culverts were assumed. A summary of the agreement reached between the experts in respect of Option 1 is shown in the table below.
Mr Bolt provided revised costings for construction works (Option 2). Option 2 assumed that the recommendations of Mr Varga and Dr Martens were adopted, namely, the construction of guard rails, fencing and box culverts by Prisma to satisfy safety concerns related to an open swale. Mr Bolt assessed the costs as $366,000, with a deduction of $70,000 if no guard rails are included. A summary of Mr Bolt's assessment of costs for Option 2 can be found in the table below. I note that in Bolt #2 (16 November 2022), Mr Bolt's estimate of the costs of removing the swale and construction works was $359,386.55. In QS JER #2 of 18 November 2022, the figure had risen to $366,000.

[101]

Valuation evidence

The valuers' evidence was informed by town planning and urban design evidence, traffic engineering evidence and quantity surveying evidence, summarised above.

[102]

Konidaris #1 and Valuation JER #1

Mr Konidaris analysed several sales of R3 zoned properties to identify an englobo land value of $860/m² for Prisma Land in Konidaris #1. These sales provided a range of land value rates before adjustment for market movement and comparison to the subject land. After adjustment several sales indicated an englobo land value of $860/m².
Mr Konidaris then used a piecemeal approach to determine the value of the easement of $260,000. The piecemeal approach determines the compensation applicable to the land by applying a percentage affectation to the area of the proposed easement that is directly affected by the imposition of the easement. In his opinion 50% of the value of the proposed area for the easement was suitable for compensation for the imposition of the easement. The table below shows Mr Konidaris' calculations to determine the land value in Konidaris #1.
The amount of compensation for loss of land value of $260,000 was agreed by the experts in Valuation JER #1. Mr Adlington only agreed to this amount if the Council were to compulsorily acquire the land to construct the southern half of Boolavogue street [rather than Prisma carrying out its development consent]. It was otherwise his opinion compensation should be in amount of $70,000 for the removal of drainage works based on QS JER #1. Both experts agreed an englobo land value of $860/m² for Prisma land.
Based on the agreed englobo land value rate, RHCC identified the value of Prisma's land comprising: 1. The R3 zoned land only is $11,438,000 (i.e. 13,300m² x $860/m²). 2. The R3 and RE1 zoned land is $13,536,400 (i.e. (13,300m² + 2,440m²) x $860/m²).

[103]

Konidaris - piecemeal

Mr Konidaris' approach in Konidaris #2 resulting in about $1.8m departed significantly from the approach in Konidaris #1. In Konidaris #2 he stated that in his original report he had regard to the following assumptions which are not correct in light of the latest state of the evidence: 1. If the land were to be used for an alternative use, the land subject of the easement retains the ability to be able to be used for private open space and would still be counted towards site cover and floor space calculations. 2. Depending on the density of the development and the type of development that is envisaged for the subject property, the imposition of the easement may interfere with setback requirements. 3. Access to the residue land by the owner of the servient tenement was not known to be restricted by the infrastructure within the easement. 4. The severed land north between the easement land and the northern boundary of the Prisma land was understood to be accessible over the easement land. 5. The depth and configuration of the proposed easement was not as thoroughly discussed with an assumption made in the Konidaris #1 that the easement area could still be utilised to some extent by the servient tenement.
Having regard to the current state of the evidence, he took into account the following attributes: 1. The easement design is proposed to be constructed as an open swale. 2. The depth of this swale varies depending on the location within the easement. A maximum depth of over 1.61m [I note the concept drawing indicates a depth of 1.5m] is noted in the concept drawing. 3. The easement area is likely required to be fenced depending on the final depth of the swale and safety guard rails may be required for motor vehicles. 4. The construction of this swale in any of the forms outlined by the engineering experts would significantly impact the utility of the easement land for the servient tenement and connection with the severed land fronting Boolavogue Street. 5. Access to the residue land will be limited to bridges constructed over the easement land as part of the infrastructure construction. This changes the existing unobstructed access to the entire northern boundary. 6. The construction of above ground infrastructure and potential fencing of the easement area severs land between the easement and the northern boundary of the Prisma land. This severed land becomes sterilised for any potential development due to the narrow shape and land area of this section of the land. 7. It is unlikely that the fenced easement area would be applied in the calculation toward private open space in a potential development, limiting any residual value the easement land has to the servient tenement. 8. If the land were to be acquired by Council, compensation would no longer be based on an unconstrained englobo rate but rather on a heavily constrained rate.

[104]

Valuation JER #2

In Valuation JER #2, the experts agreed on the general description of the land, the applicable planning controls, the description of the easement, and the englobo land value of the Prisma land at $860/m². They did not agree on valuation methodology and this produced significantly divergent valuations.

[105]

Adlington - before/after

In Valuation JER #2, Mr Adlington disagreed with the piecemeal valuation methodology used by Mr Konidaris because this was based on several flawed assumptions in his view: 1. It could not be assumed that the easement area is likely to be required to be fenced. Mr McLaren considered that this was highly unlikely to be required. If fencing was needed, this would be constructed by RHCC. 2. The construction of the swale would not significantly impact the utility of the easement land. When the Prisma land is developed, the drain can be removed and replaced with a piped drain and half of Boolavogue Street. There is no loss in utility when undertaking the approved development on Prisma's land. 3. Access to the residue land will not be obstructed and only be available via bridges over the easement, access continues to be available from Terry Road. 4. The land between the easement and the northern boundary of Prisma's land will not be sterilised from development because it will form part of the second half of Boolavogue Street when the approved development is constructed. If a development is constructed in which Boolavogue Street is not completed, that land will nevertheless become part of the side setback. 5. The fenced easement area will not limit any residual value the easement land has to the servient tenement (because it would not be considered private open space). The easement area is not required to contribute towards private open space based on the approved development. 6. It is incorrect that were the land to be acquired by the Council, the compensation would be assessed on a heavily constrained englobo rate. It is highly unlikely this would occur as Boolavogue Street needs to be constructed and the land will be dedicated as part of the approved development. Even so, any reduction would reflect compensation paid for the easement.
Mr Adlington relied extensively on the opinions of Mr Chambers and Mr Reed. Given that there was a lengthy process involved in gaining Prisma's development consent, including potential proceedings in this Court, and that the approved development is consistent with developments undertaken on surrounding land, producing a marketable product, the approved development was considered to be the highest and best use of the land. An alternative development would also require the construction of the southern half of Boolavogue Street. Once the approved development is undertaken, or any other development requiring the construction of Boolavogue Street, the temporary tailout drain can be removed and replaced with a piped drain as required under Prisma's development consent, and the road constructed. Mr Adlington considered that a reduction in value based on 75% of the unaffected value is excessive, given the land is contributing to the development by providing the road necessary for access. The area between the easement and the northern boundary of Prisma's land forms part of the road to be constructed and is not devalued.

[106]

Mr Konidaris on Mr Adlington

Mr Konidaris disagreed with several points made by Mr Adlington in Valuation JER #2. In response to the first point above in [313], he considered the likelihood of metal fencing around the easement drain would be high based on public liability issues and nearby fencing observed during the site view. In response to the second point above in [313], he emphasised that Prisma's development is one of only several possible developments on the land. In response to the third point above in [313], he stated that while access from Terry Road will continue, the loss of access to approximately 200m of Boolavogue Street frontage will be applicable to any other permitted land use. In response to the fourth point above in [313], the severed land will only become part of Boolavogue Street if the property is developed in line with the existing development consent. In response to the fifth point above in [313], he stated that Mr Adlington had not considered other uses to which the land could be put. In response to the sixth point above in [313], he stated that the reduction in compensation paid by the Council would be separately assessed and reflect the assessed impact of the easement on the Prisma land.
In response to Mr Adlington's comments on his piecemeal approach, Mr Konidaris noted that Mr Mead's opinion contrasted with that of Mr Chambers. Mr Mead discussed flexible application of the GCDCP as set out above in [204]. He also noted that the highest and best use from a planning perspective can differ when applying a financial feasibility perspective, and no analysis has been completed to reach a conclusion from a valuation perspective. Having regard to the comments of Mr Mead and Mr Dickson about permitted development outside the Indicative Layout Plan, a piecemeal approach is appropriate. Mr Konidaris challenged the view that Prisma's existing consent is the highest and best use, as no feasibility studies have been completed. Prisma's inaction since 2020 provides support for the contention that the owners are considering options outside the consent. Mr Adlington's comments are only accurate if the existing easement is required to be dedicated for any development of the land.

[107]

Oral evidence

Mr Adlington was cross-examined. He agreed that to perform the valuation task on one view under s 88K the value of the easement interest acquired is determined and then the amount of any loss or other disadvantage that may arise. He stated these can also be one and the same value. Different valuation approaches can be applied. He agreed that his methodology was to look at the costs that would be incurred in removing the infrastructure in the easement when it is no longer required (the increase in development costs). That is the totality of the compensation to which he says Prisma would be entitled. Asked about valuing the easement interest itself, he has essentially put zero dollars on that interest. Mr Adlington understood he was not to put a value on that interest, but rather look to the decrease in value of the affected land.
Mr Adlington was asked whether it would be unusual for a vendor to agree to part with possession of an easement of this land size for zero dollars. Mr Adlington responded that Prisma was going to be required to part with more than that land for zero dollars to enable its development when they construct the southern half of Boolavogue Street. He agreed that the interest was still a valuable interest. He reiterated he is not meant to consider the benefit to RHCC in his valuation. He agreed that he would expect compensation to be paid for that interest in a market transaction. He completed a before and after exercise to determine the compensation amount. He agreed that he had not looked at comparable sales evidence of properties burdened by easements. He was not aware of any sales of R3 zoned land acquired by the Council, for example.
Mr Adlington agreed that the costs of erecting and removing structures to cross the drainage infrastructure, fences or safety guards would need to be accounted for in the purchase price by a reasonable hypothetical purchase. His approach to compensation was that no reasonable hypothetical purchaser would assume the need for access to Boolavogue Street across the drainage infrastructure as access is available from Terry Road. The only other reason access might be required would be if the approved development proceeds, in which case the drain would be removed. Mr Adlington agreed the easement is a permanent interest in land and stated that he is assuming it will be terminated because Prisma's land will be developed at some point when the half-road will be constructed. He agreed the easement gave upstream owners the ability to discharge waters at any volume, and lay new infrastructure and access the easement for maintenance at any time. He assumed RHCC will surrender the easement when Prisma's development consent is acted on.

[108]

RHCC's submissions

In reply to Prisma's submissions, RHCC submitted that although the precise design of the drainage infrastructure is uncertain, compensation can be determined assuming a worst-case scenario. That scenario is an open swale until Prisma's development consent is acted upon.
In reply to Prisma's submissions below in [338], the Council will not permit the carrying out of works that require fencing and guardrails without imposing that obligation upon the Applicant. It is not necessary to bridge the open channel for pedestrians or vehicles when access to the residue land is freely available from Terry Road. The land has always been accessed from Terry Road in the past when it was used for rural residential purposes. In the future it will come to be used for medium density residential purposes and at that time Boolavogue Street will be completed and internal roads will be constructed connecting to Boolavogue Street so that access can be had to the 43 lots to be developed.

[109]

Prisma's submissions

Prisma submitted that it cannot be adequately compensated for the imposition of the easement. Merely because valuation is possible, does not mean an easement will be imposed, as s 88K(4) means that it is necessary that the Court be in a position to order appropriate compensation at the time of ordering the grant of the easement. If it does not have sufficient evidence to carry out that task, an easement will not be imposed: Moorebank Recyclers CA at [244].
The nature of the drainage infrastructure proposed in the Stormwater JER #2 is uncertain. Mr Bewsher describes it as an open swale, a pipe or box culvert or some combination of these things. While it is accepted that a final design need not be provided, and that this is not a merits review in Class 1 of the Court's jurisdiction, RHCC is endeavouring to obtain an easement that allows it to do whatever it wishes to dispose of an unknown quantity of stormwater. The easement does not impose limits. The Court has before it an indication of what a design may be, but has been told that may not be the ultimate design. The Court must assume the easement is used to its full potential: Besmaw at [55]-[56]. This rationale flows from Rixon v Horseshoe Pastoral Co Pty Ltd [2017] NSWSC 1293, where Brereton J said at [88]: 88. In the case of an easement created by express grant or reservation, the scope of the right of way is prima facie a matter of construction of the words of the grant, although this may be influenced by the circumstances surrounding the grant. A grantee is not confined to the user prevailing at the time of the grant, but may use the right of way for any lawful purpose within the terms of the grant,· thus if the grant is in general terms, it can be used for all purposes for which the dominant tenement can lawfully be used, so far as they are compatible with the physical nature of the servient tenement…
Even on RHCC's approach to compensation, namely that the compensation due is based on the cost of removing the drainage infrastructure, the Court is in an impossible position in that it does not know what infrastructure is to be installed. Although it is accepted that bridges will need to be installed, it is uncertain whether there will be one (Mr McLaren) or three (Mr Bewsher) (see above in [186], [297]). It is also uncertain whether they would be 3.5m wide (Mr McLaren) or 9.5m wide (Mr Varga) (see above in [193]). Fence and/or guardrails may be required but that depends upon the depth of the swale. Estimate of depth is difficult, at best. Open sections of the drainage swale may, or may not be, rock lined. That results in different costs of removal. The works required to existing ground levels to both limit the nuisance impacts occasioned by interception of surface flows and/or to provide access to bridges is simply incapable of quantification.

[110]

RHCC's submissions

A well-established principle of valuation for a dispossessed owner is that property should be compensated for on the basis of its highest and best use per Callinan J in Boland v Yates Property Corporation Pty Ltd (1999) 74 ALJR 209 at [271]. The concept was described in Olefines Pty Ltd v Valuer-General (NSW) [2018] NSWCA 265 by Basten JA at [16] as the most financially rewarding use permitted.
When valuing land for an easement principles were identified in Arrow v Electricity Commission of NSW (1994) 87 LGERA 363 (Arrow LEC) at 366-367 and by Handley JA in Electricity Commission of NSW v Arrow (1994) 85 LGERA 418 (Arrow CA) at 421. See also Willoughby City Council v Roads and Maritime Services (2014) 201 LGERA 177; [2014] NSWLEC 6 at [101]-[102] (Willoughby Council), referring to Besmaw at [55]-[56], there applying a before and after approach. In Rainbowforce the piecemeal approach was considered more appropriate as it would yield a more reliable valuation figure.
In terms of the town planning and urban design evidence and the three alternative developments identified by Mr Dickson, such underutilised FSR means the three alternative concepts cannot inform the highest and best use and would be irrelevant to any valuation when considering what a hypothetical purchaser would pay for Prisma's land when viewed objectively.
RHCC submitted that Prisma can be adequately compensated for the imposition of the proposed easement. There will be no impact on market value. Assuming the proposed drainage concept is built, QS JER #2 identified a cost to remove it when the land is dedicated to form the southern half of Boolavogue Street of $102,000 (see above in [299]). Alternatively, if compensation is to be paid for the area of the easement on a rate per square metre basis for land capable of being developed for medium density use, the valuation experts originally agreed that compensation ought to be $260,000 in Valuation JER #1 (see above in [304]). No intangible benefits will be injured by the imposition of the easement. No compensation for insecurity or loss of amenity is warranted, consequently no other compensation is necessary. Prisma has a development consent granted for a development which is the highest and best use of Prisma's land. Under that consent the land where the easement is to be located will become a road which will ultimately be dedicated to the Council. In the meantime land to the south of the easement can be accessed from Terry Road.

[111]

Quantity surveying evidence

RHCC accepts that the Respondent is entitled to be compensated for the cost of removing the drainage works in the amount of $102,000 (as agreed between the experts). Prisma is not entitled to the costs of constructing the drainage works, which were assessed in Option 2 by Mr Bolt in the amount of $366,000. If the construction of guard rails, fencing, box culverts are needed to satisfy safety concerns, RHCC will be required to undertake these works as a condition of its development consent for the drainage works.

[112]

Valuation evidence

In Valuation JER #1 the valuers agree that the englobo land value of Prisma's land is $860/m² and, if the land required for the second half of Boolavogue Street is acquired by the Council, compensation is assessed in the amount of $260,000. Based on the agreed englobo land value rate, the land value of the Prisma Land comprising R3 zoned land only is $11,438,000. The land value is $13,536,400 for R3 and RE1 zoned land.
Despite agreement about the amount of compensation, in Konidaris #2, Mr Konidaris assesses compensation in the amount of $1,815,000, plus $366,000 removal costs assessed by Mr Bolt. Mr Adlington disagreed with Mr Konidaris' application of the piecemeal approach because it was based on several flawed assumptions (see above in [313]). In circumstances where the easement area and the area between the easement and northern boundary will inevitably form part of the southern half of Boolavogue Street either because Prisma will act on its development consent or the Council will acquire the land and construct the road, the areas are not sterilised from development. Prisma's development consent is the highest and best use of its land (see above in [314]). The proposed easement also does not give rise to any diminution in the value of the balance of Prisma's land (see above in [317]).
Mr Konidaris accepted the following propositions in cross-examination: 1. The original assessment of compensation in the amount of $260,000 was derived after an inspection of the site, familiarisation with the Indicative Layout Plan and careful consideration (see above in [328]). Despite this, the supplementary assessment of compensation changed to $1.8m, some eight fold increase. 2. Prisma's land has historically been used for a rural purpose for many years prior to its rezoning with access via Terry Road. There is a dwelling house and rural sheds on Prisma's land which has access via Terry Road. Into the future, the residual land has access via Terry Road (see above in [328]). 3. He had not considered what is the highest and best use of Prisma's land (see above in [329]). As such, he accepted that his approach is flawed (see above in [330]). 4. The hypothetical purchaser will be the person paying the highest price for Prisma's land having regard to the profit generated from the highest and best use of Prisma's land (see above in [329]). 5. A rural purchaser would not succeed at the hypothetical auction against a developer intending to develop Prisma's land for its highest and best use (see above in [329]). 6. He did not assess whether any of the three alternative concepts prepared by Mr Dickson were economic to determine if any of those concepts is the highest and best use of Prisma's land (see above in [329]). He did not identify any of the three alternative concepts as representative of the highest and best use of Prisma's land (see above in [329]). 7. Nobody would buy Prisma's land to develop a childcare centre, seniors living or co-living unless they could make more money from that development than they would from the approved development (see above in [329]). 8. Under the Indicative Layout Plan, the land to the immediate south of Prisma's land relies on access via the three internal roads on Prisma's land (see above in [330]) as opposed to access from Terry Road. 9. He had researched the Area 20 precinct and is satisfied that the development that has occurred in the precinct has been carried out substantially in accordance with what is shown in the Indicative Layout Plan (see above in [330]). 10. Most of the developers of land in the precinct have proceeded with development on the basis that they transfer some land that they are developing to the Council to create the local road system (see above in [330]). 11. For the purpose of the valuation exercise, the hypothetical purchaser is not Prisma (see above in [330]). 12. In the "before" scenario (i.e. without the proposed easement), the hypothetical purchaser would be aware of Prisma's development consent and the obligation to construct the southern half of Boolavogue Street and dedicate that land to the Council (see above in [330]). 13. In the "after" scenario (i.e. with the proposed easement), the purchase price is no different because drainage works and the southern half of Boolavogue Street are required within the easement area (see above in [330]). 14. The value of Prisma's land in the before and after scenarios is the same (see above in [330]). 15. He derived injurious affection to the residual land in the amount of around $1m on the basis of prohibition of access from Boolavogue Street despite it having access from Terry Road (see above in [331]). 16. The FSR for the three alternative concepts is much less than the maximum FSR control (see above in [331]).

[113]

Prisma's submissions

Mr Adlington's valuation methodology should be rejected. It proceeds on the flawed assumption that Prisma's approved development will be carried out, despite Mr Ng's evidence there is no present intent to satisfy the deferred commencement conditions (see above in [20]). It also proceeds on the flawed assumption that Prisma's land will be dedicated at no cost to the Council for the extension of Boolavogue Street. Mr Adlington purports to conduct a before and after valuation exercise, yet he assesses compensation only on the basis that it reflects the costs associated with removal of the proposed drainage infrastructure. His approach is flawed because it provides zero dollars compensation for the interest acquired in the land within the easement, some 600m² of R3 zoned land (see above in [320]). The usual approach is to include compensation for loss of proprietary rights, which Mr Adlington has not done.
His approach is inconsistent with Khattar where Brereton J stated at [66]: 66. …ordinarily compensation would include the diminished market value of the affected land (including the potential use to which it could have been put), associated costs caused to the owners of the affected land, and provision for insecurity, and loss of amenities such as peace and quiet. In Tregoyd Gardens, Hamilton J identified, in the case of grant of a permanent easement such as one to drain stormwater, that compensation will normally include compensation for loss of the proprietary rights taken by the easement, and compensation for the disturbance effected by carrying out the initial work and subsequent repair and maintenance. In Mitchell v Boutagy, Austin J held that provision was to be made both for initial disturbance (upon installation of the pipes) and future disturbance (least in the future there was a need to service and maintain the pipes). Ultimately, His Honour allowed $2,600 (being the rental value for four weeks during which the initial works would take place), and a further $2,000 (about three weeks) for future disturbance." (emphasis added)
Even accepting his methodology is correct, Mr Adlington also does not provide for the cost of the works costed by Mr Bolt in Option 2 of QS JER #2 (see above in [300]).
Mr Konidaris has valued the loss of the proprietary right occasioned by the imposition of the easement by assessment of a percentage reduction in value of residual land. An available approach, as Mr Adlington accepted (see above in [324]), when valuing a partial interest is to work out the value of the freehold land and apply a diminution percentage. Mr Konidaris applied a rate of 75% for the easement land and 10% for the balance of R3 zoned land (aside from the strip between the easement and northern boundary). Mr Adlington does not engage with this approach. This was the first element of compensation. The second element of compensation is for the reduction in value of the sterilised land between the easement and the northern boundary. Mr Konidaris applies the same rate to the severed land. The third element of compensation is for the reduction in the balance of the land. Mr Konidaris used a rate of 10% diminution for the residue. Mr Adlington did not agree that the market would pay less for a block of land having an easement of this size on it compared to one that would not (see above in [324]). That evidence was unpersuasive. The Court would be satisfied that the market would pay less for a block burdened by the easement than one without such a burden. Reasons supporting this conclusion include: 1. Flexibility in design of any future redevelopment is affected because of the presence both of the above ground infrastructure and the existence of the easement. 2. Access from Boolavogue Street along the 200m long boundary is denied (or at the very least very significantly impeded). 3. The hypothetical purchaser knows that it will need to negotiate with the future owner of the dominant tenement in order to have the easement released. 4. Alternatively, the hypothetical purchaser might reasonably anticipate that it will need to bring proceedings in the Supreme Court to have the easement extinguished. 5. The hypothetical purchaser appreciates the public liability implications associated with the increased risk that someone may suffer harm as a result of the infrastructure. 6. The hypothetical purchaser knows it must provide access to the dominant tenement to maintain and repair the stormwater infrastructure as required. 7. The hypothetical purchaser appreciates the risk that the dominant tenement will not repair or maintain the easement, which will require the hypothetical purchaser to take over this burden (at its own expense) or bring proceedings in the Supreme Court to compel the dominant tenement to maintain and repair the infrastructure in accordance with the terms of the easement.

[114]

Consideration of appropriateness and quantum of compensation

In Rainbowforce at [106]-[111], [113]-[114], [116], Preston CJ summarised the principles to be applied when the Court assesses the statutory precondition in s 88K(2)(b), the key principles relevant to this matter being (references to caselaw omitted): 106. First, the adequate compensation referred to in s 88K(2)(b) is the same as the compensation that the Court may order under s 88K(4)… 107. Secondly, compensation is for "any loss or disadvantage" that will arise from the imposition of the easement. The addition of the words "or other disadvantage" provides for compensation for disturbance beyond the actual value of the proprietary right taken… 108. Thirdly, the compensation is not a substitute for the price that could have been exacted if the section did not exist… Hence, there can be no compensation for the loss of bargaining position of the owner of the land to be burdened...The owner is "to receive a just sum and for value for what he or she has to give over, rather than being able to demand the earth"... 109. Fourthly, the compensation is for any loss or disadvantage "that will arise from the imposition of the easement". That language imposes a requirement for a causal relationship between the loss or disadvantage for which compensation is claimed and the imposition of the easement… The common law of causation should be applied, namely that causation is a question of fact to be determined by applying common sense to the facts of each particular case… 110. Fifthly, the Court's task under s 88K is to be satisfied that the persons affected by imposition of the easement are "adequately compensated" and to provide for an order for payment of such adequate compensation. In assessing adequate compensation the Court "is not to err on the side of generosity or miserliness"… The Court should not depart from the task of assessing adequate compensation because the applicant for the order stands to gain from the development or use which leads to their applying for the order… 111. Sixthly, ordinarily, compensation will have three elements: (a) the diminished market value of the affected land; (b) associated costs that would be caused to the owner of the affected land, and (c) an assessment of compensation for insecurity and loss of amenities, such as loss of peace and quiet. Against these losses and disadvantages should be allowed, as an offset, any compensating advantages… … 113. In the case of a grant of a permanent easement, such as a right of carriageway or easement for drainage or services, compensation includes the loss of proprietary rights by the imposition of the easement and compensation for the disturbance effected by the carrying out of the initial work, such as construction of a road or laying of pipes in the easement, and subsequent repair and maintenance from time to time… 114 Seventhly, if the imposition of the easement causes material injury to intangible benefits or the imposition of material intangible detriments, such as reduced amenity, enjoyment of property, and exposure to increased disruption and interference, which are not readily capable of being estimated in monetary terms, the Court may not be able to be satisfied that the servient owner can be adequately compensated… However, compensation is often able to be assessed for injury to intangible benefits or the imposition of intangible detriments… … 116. Ninthly, the applicant for the order has to establish what the relevant losses and disadvantages are as part of satisfying the Court that the persons affected by imposition of the easement can be adequately compensated… In the course of the hearing, evidentiary onuses may shift to the person affected... Where facts are peculiarly within the knowledge of the person affected and that person does not adduce relevant evidence, it may be open to the Court to draw unfavourable inferences…

[115]

A. Appropriate compensation

I am satisfied that Prisma is able to be adequately compensated for the imposition of the easement. While there is some uncertainty in the precise form of infrastructure to be built, applying Besmaw the Court should assume RHCC will exercise the full extent of their rights in the easement. Accordingly an open swale drain of up to approximately 1.5m in depth in some places will be assumed, the evidence has been prepared on that assumption by the quantity surveyors and costs of removal are generally agreed by them. I have concluded below in [397] in relation to my overall exercise of discretion that the easement needs to be modified to limit the amount of water to be discharged to the amount on 421 l/s the subject of this application. The easement is more certain with the limitation of flow rate imposed. RHCC accepted that all work related to the easement must be built by it within the 3m easement sought and that must include any fencing and bridges for vehicle access if needed. Further, RHCC is responsible for maintenance. The separate issue of who can vary the easement is referred to below in [399].

[116]

B. Amount of compensation

Prisma is seeking compensation in relation to four matters. Firstly, injurious affectation of the 3m strip of land to be occupied by the easement. Secondly, the 3m strip of land between the easement and Boolavogue Street. Thirdly, the loss of value of the remainder of the R3 zoned land. Fourthly, the cost of construction of some of the assumed easement infrastructure and the cost of removal of the infrastructure in the easement is also sought. RHCC's valuer Mr Adlington identified that only the cost of removal is warranted as compensation. As identified in the extract of Rainbowforce above I am considering any loss or disadvantage to by Prisma as a result of the imposition of the easement, and that can include diminished market value of affected land, associated costs and compensation for other impacts such as loss of amenity. Prisma's claims are essentially for loss of market value and associated costs in relation to the easement infrastructure.
The different approaches of the two valuers arise in large part from their respective assumptions about whether valuation of the loss and disadvantage to Prisma's land should assume that Prisma's development consent will be implemented. Mr Adlington's valuation is based on the assumption that it will be implemented. As a result he considers compensation should be awarded solely on the basis of the costs of removing any easement infrastructure, which the QS evidence in QR JER #2 has quantified as $102,000 (minus fencing).
I have stated above in [278] that I have accepted Mr Ng's evidence that he has no intention to implement the development consent for the foreseeable future. I therefore consider that compensation should be awarded on the basis that the easement may well be permanent on Prisma's land. I do not assume that it will be temporary. It follows that the amount of compensation I am likely to award will be greater than the figure applied by Mr Adlington as permanent infrastructure on Prisma's land may well impact the use of that land.
A further issue in relation to Mr Adlington's approach is whether he undertook a before and after exercise meaning an assessment of the value of the land before the easement was imposed and the value after the easement was imposed. Prisma disputed that Mr Adlington undertook a before and after exercise, which submission I agree with. Mr Adlington did not place any value on the interest in the land within the easement, as was clear from cross-examination, and as submitted by Prisma at [356]. Mr Adlington's approach in his before and after analysis did not attribute any value to Prisma's land regardless of whether it had an easement on it, a matter highlighted in cross-examination. I agree with Prisma's criticism of Mr Adlington's view that the market would pay the same amount for the land regardless of whether it had an easement on it or not. Consequently he did not undertake the usual analysis a before and after approach requires. I infer that Mr Adlington's approach arose from his assumption that the Prisma consent will be implemented with conditions requiring disposal of stormwater in what would be land transferred to the Council to become Boolavogue Street. As already identified above that is not an appropriate assumption.

[117]

Discretion

The Court has a discretion whether to make an order to impose the easement even if the other matters in s 88K(1) and (2) are established by an applicant. As I stated in Alramon at [183] citing Khattar extracted above in [87], this is to be exercised in accordance with the purpose of s 88K, being the facilitation of the reasonable development of land whilst ensuring that just compensation be paid for any erosion of private property rights.

[118]

RHCC's submissions

RHCC submitted that the Second Reading Speech for the Property Legislation Amendment (Easements) Bill 1995 (New South Wales Legislative Assembly, Parliamentary Debates (Hansard) 10 October 1995 at 1494), which introduced s 88K into the Conveyancing Act, was relevant to the circumstances of this case. The purpose of s 88K was to give courts the power for the first time to interfere with private property rights to enable easements to be granted where necessary to facilitate development, rather than hinder it.
RHCC faintly pressed an oral submission that the lots to be constructed by RHCC when the development consent is operationalised have been sold off the plan to third parties.
RHCC also sought to counter the submissions made by Prisma that imposing the easement would lead to RHCC straying outside the easement area or to a nuisance where the stormwater leaves the easement area. RHCC does not propose to undertake works outside the easement area and the proposed easement does not by its terms, authorise this. RHCC contends that the stormwater will spread over SP2 zoned area and therefore will not cause any unreasonable interference with Prisma's enjoyment or use of that portion of the land. The water will not affect development yield. That land, as is the case with all other current neighbouring developments which Bella Parade traverses, is not reserved for development. During the view, it was evident that the roads surrounding the undeveloped Prisma land were not kerbed and guttered and therefore in its current state any stormwater naturally overflows onto the Prisma land in order to reach Second Ponds Creek. This is the state of the natural environment. Prisma has not claimed nuisance. What occurs at the conclusion of the easement sought in this proceeding is no different to how water naturally traverses various private properties to reach Seconds Ponds Creek and Prisma has not identified any prejudice or harm or loss of enjoyment that would result by the easement not extending to Second Ponds Creek.
A matter going to discretion is that the Council has reviewed the alternative drainage options proposed by Dr Martens and has rejected all those options (see above in [178]). RHCC submitted that while the correspondence from the Council suggests that an easement in gross is required, that does not detract from the fact that the easement is to benefit a private landowner. Drainage is only possible via an easement through the location proposed in this proceeding. RHCC's development consent requires an easement and cannot specify an easement in gross. Irrespective of the type of easement, there can be no dispute that when one considers the locality and surrounding developments, all developers must provide half-road construction including drainage.

[119]

Prisma's submissions

Prisma made submissions in respect of the terms of the proposed easement in the context of public interest (s 88K(2)(a)), but I view these as more properly relevant to the exercise of discretion.
Prisma submitted that if an easement were to be granted, the terms of the proposed easement are unsatisfactory. Firstly, although the easement will be for "temporary infrastructure" it is a permanent easement. No mechanism is identified as to how the permanent easement may be extinguished. This depends upon the goodwill of the then owner of the dominant tenement and/or the obtaining of an order from the Supreme Court pursuant to s 89 of the Conveyancing Act.
Secondly, although the stormwater design is now said to be for 421 l/s only, there is no such limit on the easement. Nor is there any limit to suggest that the only waters drained through the easement will be those from the southern catchment of the RHCC land. That limitation is fundamental to the amendment of the evidence following Mr Bewsher's oral evidence in July 2022. The amendment, requiring a new development consent, does not include the water from Poly's land, nor water from Terry Road and only includes the southern catchment. In the absence of any limitation upon the easement, and where it was previously anticipated by Mr Bewsher that he could design a system to dispose of the totality of the catchment water (2,113 l/s) within the easement, and applying the Besmaw approach, RHCC merely could rely upon its rights pursuant to an unconstrained easement to seek consent for drainage infrastructure that dispose of the whole of the catchment stormwater requirements.
Thirdly, no power should be given to the Council pursuant to s 88(1)(d) of the Conveyancing Act to vary the easement. There is no necessity for the Council to have that power under s 88(1)(d). Rather it is an option only, as demonstrated by the presence of the words "if any" in s 88(1)(d). The Council is not a party. It is inappropriate to rest such a power in the Council in the circumstances of this matter.
If the Court is satisfied that an easement should be imposed, it would not be in the terms proposed by the Applicant. It should include some mechanism to reflect its temporary nature. It should contain some limitation on flow rates and areas to be drained in order to reflect the expert evidence. It should not include the Council as a party able to vary the terms of the easement.

[120]

Consideration of discretion

I considered in relation to reasonable necessity a number of the matters relied on by RHCC in relation to discretion and I have resolved that an easement is reasonably necessary for the benefit of RHCC under s 88K(1). I accept that the orderly development of RHCC's land is facilitated by the grant of this easement subject to further considerations below in relation to the burden on Prisma's land and that an easement should be imposed.
As highlighted in the consideration of whether reasonable necessity was established by RHCC a few issues relating to the burden imposed on Prisma's land suggest the terms of the easement must be considered in the exercise of my discretion. While I do not consider the burden imposed on Prisma's land warrants refusal of the easement, amendment of the terms of the easement are warranted.
RHCC accepts that all works must be included within the easement. This work may include a bridge to enable vehicles to cross the easement if ultimately required. No amendment in this regard is warranted.
I agree with Prisma that the easement should be varied to restrict the volume of water able to be discharged through it as that reflects the application which RHCC makes. It should also specify where the stormwater can come from, namely RHCC's land. That will provide greater certainty to Prisma about what will happen in a permanent easement.
Amendment to the easement to appropriately deal with all of the dispersal of stormwater on Prisma's land may need to be addressed, namely the 50m at the end of the easement where stormwater is proposed to be dispersed across Prisma's land to Second Ponds Creek. While Prisma identified that this dispersal of stormwater was unsatisfactory and was across land which Prisma would have to maintain, not RHCC, I am not sure if Prisma would seek an extension of any easement sought, particularly given the limitation of flow I intend to impose discussed in the paragraph immediately above. Further advice from Prisma will need to be provided in this regard.
A further issue to consider is what entity if any should be able to vary or extinguish the easement as provided in s 88(1)(d). RHCC has proposed the Council. The Council is not a party to the proceeding, having been asked if it wished to join as a party and declining. No reason for the Council to be the entity named as able to vary or extinguish the easement is provided beyond an assertion by RHCC that it should be. The wider objectives of the Council in obtaining an easement in gross are able to be achieved by it through the exercise of statutory powers of acquisition if such an easement cannot be obtained by negotiation. That is a separate process to what I am presently dealing with namely an easement to benefit a private landowner. The easement will not be granted with the Council identified as being able to vary the easement. I am unclear if the parties would seek to propose an alternative and they will need to further inform the Court on this matter. The terms of this part of the easement are set out above in [38].

[121]

Costs

The effect of section 88K(5) is that Prisma's costs of this proceeding would in the normal course be paid by RHCC. Prisma has flagged that a special costs order may be warranted depending on the outcome of this proceeding given its history. A process for the resolution of costs will also need to be discussed with the parties.

[122]

In conclusion

A timetable for further discussion addressing the issues highlighted in [397]-[402] above leading to the making of a final order: 1. imposing an easement in modified terms as provided for by s 88K(3) of the Conveyancing Act; 2. any appropriate additional order(s); 3. providing for the payment of compensation in the amount determined of $882,000 as provided by s 88K(4) of the Conveyancing Act; and 4. payment of costs, will be determined with the parties.

[123]

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: 03 May 2023

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