Sydney Water Corporation v Registrar-General of New South Wales

Representation: Counsel:
Mr G Farland (Plaintiff)
Solicitors:
HWL Ebsworth Lawyers (Plaintiff)
Office of the Registrar General (Defendant)

File Number(s): 2025/00050234

Publication restriction: Nil

JUDGMENT (EX TEMPORE – REVISED FROM TRANSCRIPT)

1. The plaintiff (Sydney Water) intends to resume a wastewater pumping station at Bingara Gorge, a large community title scheme (being Community Scheme DP270536) (Scheme) located in South Western Sydney.

2. The Scheme is subject to the Community Land Development Act 2021 (NSW) (CLD Act). Part 10 of the CLD Act deals with resumptions of the land subject to the CLD Act.

3. Section 73(2) of the CLD Act provides:

a resuming authority proposing to resume part of the land in a scheme parcel or strata parcel must apply to the Supreme Court for an order restructuring the scheme.

4. By summons filed on 7 February 2025, the plaintiff seeks the following relief:

1. Order pursuant to s 73 of the Community Land Development Act 2021 (NSW) (Act) that, as a consequence of the resumption of land described as proposed Lot 47 in Deposited Plan 1306265, (Resumed Lot) being part of Lot 13 in Community Plan DP270536 by the plaintiff, at Bingara Gorge in New South Wales:

(a) there is no adjustment to the schedule of unit entitlements in Community Scheme DP270536.

(b) there is no amendment to the community management statement for Community Scheme DP270536.

(c) the Resumed Lot shall be excluded from Community Scheme DP270536; and

(d) the residue of Lot 13 in Community Plan DP270536, being proposed Lot 46 in Deposited Plan 1306265 (Residue Lot) is to be defined as Lot 54 in Community Scheme DP270536 as specified in the replacement sheets for DP270536 at 1767 to 1771 of Exhibit AIW-1 to the Affidavit of Alexandra Isabella White dated 7 February 2025 filed in these proceedings.

2. Proposed easement for access 5.6 wide & variable width noted and marked "E" on DP1306265 be registered over the Residue Lot.

3. Order that the plaintiff pay the defendant's costs of the proceedings pursuant to s 77 of the Act.

5. The plaintiff also seeks an additional order, set out in some short minutes of order provided to my chambers yesterday evening, as follows:

The Registrar in Equity affix the Seal of the Court to the Schedule of Unit Entitlement in the form being Annexure S to the affidavit of Alexandra Isabella White dated 8 April 2025 and filed in these proceedings (located at Court Book 5/95/2000).

6. This order is necessary by reason of the provisions of s 88(2)(c) of the CLD Act.

7. The only defendant to the proceedings is the Registrar-General who does not oppose the orders sought. The proceedings are otherwise not contested.

8. For the reasons set out below, I am satisfied that the orders sought should be made. What follows is based, with gratitude, on the helpful written submissions provided by Mr Farland of counsel for the plaintiff.

Applicable Legislation and notification of the application

9. As Sydney Water intends to compulsorily acquire the Pump Station (as defined below) and associated easement, Part 10 of the CLD Act applies, necessitating an application to the Supreme Court under s 73 of that Act, as noted above. The section provides (in full):

73 Resuming authority must apply to Supreme Court

(1) A resuming authority proposing to resume the whole of a scheme parcel or strata parcel that will cease to be subject to a scheme must apply to the Supreme Court for an order under Part 9 terminating the scheme.

(2) A resuming authority proposing to resume part of the land in a scheme parcel or strata parcel must apply to the Supreme Court for an order restructuring the scheme.

(3) Subsection (2) does not apply if the only land to be resumed is-

(a) part of the association property or common property in a scheme, or

(b) land below the surface of the scheme parcel and there will be no disturbance to the surface.

(4) The Supreme Court may, when making an order restructuring the scheme, also make any order it considers necessary, including-

(a) to adjust unit entitlements, or

(b) to amend any applicable-

(i) development contract, or

(ii) management statement, or

(iii) by-laws under a strata scheme, or

(c) if part of a lot is to be resumed-

(i) to make the residue of the lot a lot in the scheme, or

(ii) with the consent of the owner of the residue of the lot, to vest the residue of the lot in the relevant association or strata corporation as association property or common property.

(5) An order under subsection (4)(c)(ii) vests the land freed from any mortgage, lease, charge, covenant charge, writ or caveat affecting it before the vesting.

(6) An application under this section must be made before the publication of the relevant notice of resumption.

10. The application has been made before any resumption, as s 73(6) requires. Noting s 73(3), the Pump Station is not association property.

11. Section 74 of the CLD Act deals with notice and requires each owner and each other interested party, such as mortgagees, to be notified of the application. That section provides:

74 Notice of application to the Supreme Court

(1) A resuming authority that makes an application to the Supreme Court under this Division must serve notice of the application on each of the following (an interested person)—

(a) except to the extent, if any, that the Supreme Court otherwise directs—each registered owner, and each registered mortgagee, chargee and covenant chargee of a lot within the scheme,

(b) the association or strata corporation for the scheme,

(c) any subsidiary bodies of the scheme,

(d) if the scheme is a subsidiary body of another scheme, the association for the scheme,

(e) if the land resumed is part of a lot or common property and is to be excluded from the related scheme, the local council,

(f) the Registrar-General,

(g) any other persons as the Supreme Court may direct.

(2) An interested person is entitled to be heard on the application.

12. In view of the minor nature of the change to the Schedule of Unit Entitlements in the Scheme, Sydney Water made application to limit the parties to whom notification of the application to the Court is made as permitted by s 74(1)(a) of the CLD Act. On 18 March 2025, I made orders limiting service to each headline Lot in the Scheme (of which there are 45) together with the Precinct Association, which are subsidiary schemes. I did not require service on the subdivided lots which are themselves within the various Precinct Schemes (as set out below).

13. Service in accordance with those orders has been effected. No party who has been notified of the application by the solicitors for Sydney Water has indicated that they wish to be heard on the application. Exhibit C sets out the position in relation to who has been notified and any responses received.

Evidence relied on

14. Sydney Water reads the following evidence in support of the orders sought in the Summons:

(a) an affidavit of Alexandra Isabella White dated 7 February 2025, which provides the background to the application, giving details of the pumping station, the Scheme itself, various title details for lots in the Scheme, unit entitlement details and an explanation of the resumption, particularly the explanation of why no adjustment of unit entitlement is proposed; (b) an affidavit of Alexandra Isabella White dated 27 February 2025, which relates to service of the Summons and supporting material; (c) an affidavit of Katie Louise Howard dated 14 March 2025, which provides further updates regarding service of Summons and supporting material, which was principally relied upon in support of the motion to limit service of the summons and led to the orders that I made on 18 March 2025; (d) an affidavit of Alexandra Isabella White dated 8 April 2025, which confirms service details, and notes various responses from parties that had been notified of the proceedings; (e) an expert valuation report dated 12 March 2025 of Iain Avery, a registered valuer, as to the value of the proposed resumed and residue lots (exhibit B).

Overview of the facts

The Pump Station

15. The Pump Station is on land being part of Lot 13 in the Scheme. As the name suggests, that land houses a pump station operated by Sydney Water. The Pump Station is a pumping station that connects to the Bingara Gorge water resource recovery facility as part of the Wilton waste water scheme. Waste water from homes and businesses is treated at the facility to produce high quality recycled water which is used to irrigate the Bingara Gorge Golf Course and it is provided as recycled (non-drinking) water to the Bingara Gorge Estate located in Wilton in the Macarthur region of Sydney.

16. Sydney Water acquired the Bingara Gorge water resource recovery facility from Bradcorp Wilton Park Pty Limited, pursuant to a contract for sale dated 23 December 2021, that settled on 28 June 2022.

17. Sydney Water now intends to acquire the Pump Station by way of compulsory acquisition.

18. The actual area to be acquired has been defined as proposed Lot 47 by a plan entitled “Plan of Proposed acquisition and Proposed Easement A affecting lot 13 in DP270536” (Acquisition Plan), which has been registered at the office of the Registrar-General as Deposited Plan 1306265.

19. The residue of Lot 13 (termed Lot 46 in the Acquisition Plan) will become Lot 54 in the Scheme (being the next available lot number in the Scheme) once the compulsory acquisition occurs.

20. The Acquisition Plan also includes a proposed easement for access, which will provide access to and from proposed Lot 47 from what is known as Fairway Drive. That easement is marked E on the Acquisition Plan.

21. Lot 13 itself is subject to various easements. All of those easements are being retained and not released as part of the compulsory acquisition. The Acquisition Plan records that proposed Lot 46 (the residue Lot) and proposed Lot 47 (the lot being acquired) are each subject to the existing easements, as listed in the Acquisition Plan.

22. As required by s 96 of the CLD Act, the Acquisition Plan also bears a statement that “on lot 47 being transferred to Sydney Water Corporation, the land constituting Lot 47 is excluded from the scheme”.

The Community Scheme

23. The Scheme was created by DP207536 pursuant to the former Community Land Development Act 1989 (former CLD Act). It is comprised of residential housing, with common amenities including retail shops, a gym, pool and golf course.

24. Each of the lots in the scheme has a unit entitlement. The unit entitlement details are recorded in a schedule that is part of the administration sheet for DP270536, as I explain below. The Scheme is also subject to a community management statement (CMS). As referred to above, no changes to the CMS are proposed as part of the acquisition, as no part of the community property, or any other lot is affected by the resumption, and an order confirming that position is included in the orders that I propose to make. The Scheme also includes a number of precinct schemes, for which individual Precinct Associations exist. Pursuant to the orders that I made on 18 March 2025, each Precinct Association has been notified of the present application.

25. There have been numerous subdivisions of lots within the Scheme. With each subdivision, a new sheet or sheets within DP207536 has been registered.

A Schedule of Unit Entitlement

26. A Schedule of Unit Entitlement (Schedule) is shown on the community property title created by DP207536, being the initial deposited plan which created the Scheme. With each subdivision, that Schedule is updated.

27. The Schedule records 53 lots in the Scheme with an aggregate entitlement of 9,827,023 units.

28. Presently Lot 13 has an entitlement of two units, as shown in the Schedule. Ms White has calculated, and I accept, that the unit entitlement is 0.00002035204% of the total Unit Entitlement. This is insignificant considering the aggregate unit entitlement of almost ten million units.

Consideration

29. Section 76 of the CLD Act is the principal section that falls for consideration on the hearing of the application, so far as a change per unit entitlement is concerned. That section provides:

76 Hearing of application

(1) The Supreme Court, when deciding an application under this Division, must -

(a) disregard any failure by the resuming authority to comply strictly with the requirements of this Part and of any regulations made for the purposes of this Part, and

(b) consider whether any amendment is required to a schedule of unit entitlement, development contract or management statement, and

(c) consider whether any contribution should be made by the resuming authority for the period following publication of the notice of resumption, and

(d) make any orders the Court considers to be appropriate, just and equitable in the circumstances.

(2) The Supreme Court may order a whole parcel to be resumed or a scheme to be terminated if it appears to the Supreme Court that the effect of a resumption of land would cause the continuation of the scheme to be impracticable.

(3) Nothing in this Division authorises the Supreme Court to modify or nullify the effect of a notice of resumption in relation to the land resumed.

30. Section 76 has been considered in several earlier decisions of this Court, most particularly the decision of Ball J in Transport for NSW v Registrar General of New South Wales [2013] NSWSC 1272, the decision of Peden J in Transport for NSW v Registrar-General of New South Wales [2022] NSWSC 1660 and, most recently, the decision of Williams J in Transport for NSW v Registrar General of New South Wales [2024] NSWSC 1186.

31. In the second of those decisions, Peden J stated at [33]-[37]:

[33] There is no provision in the CLD Act for the method of readjustment of a community scheme for the purposes of a resumption. The Plaintiff was not able to identify any authorities relating to an application under s 73 of the CLD Act.

[34] However, in proceedings brought under the 1989 Act in relation to the consequences of the resumption of land under a neighbourhood scheme, Transport for NSW v Registrar-General of New South Wales [2013] NSWSC 1272 at [10], Ball J set out the task for the Court in determining whether the resumption has altered the relative value of the lots under the 1989 Act:

Although the CLD Act does not set out the criteria the court should have regard to in making orders under ss 53 and 57 of the CLD Act, there can be little doubt that the question for the court is whether the resumption has altered the relative value of the affected lots compared to other lots in the scheme. The original unit entitlement of each lot owner was determined by reference to relative value of the lots that comprised each scheme. The question in those circumstances must be whether those unit entitlements need to be adjusted having regard to any change in value of the affected lots. Other rights may have been conferred on lot owners by other documents regulating the relevant scheme including the management statement of the relevant scheme and the by-laws of a strata scheme. However, it is not suggested in these proceedings that any relevant rights of that sort are affected by the resumption.

[35] Although the provisions of the CLD Act with respect to resumptions have been modified since the 1989 Act, the provisions are substantively the same and both Acts seek to deal with the consequences of a resumption on the rights and liabilities of unit holders under a community scheme. The provisions with respect to the powers of the Court on an application in consequence of a resumption are identical. Both Acts expressly require orders to be made in the Supreme Court with respect to the adjustment of any unit entitlements under the applicable schemes as a consequence of the resumption.

[36] I accept that the question for the Court as framed by Ball J is no different with respect to assessing the consequences of the resumption pursuant to section 76(1) of the CLD Act. The main concern for the Court is that the schedule of unit entitlements after the proposed resumption continues to reflect the relative values of the remaining lots.

[37] Each application turns on its own particular facts and circumstances. Valuation evidence may be required for the adjustment of unit entitlements.

32. It will be seen that Peden J adopted what Ball J said in the first of the decisions. In turn, what was said by Peden J was followed in the third and most recent decision of Williams J.

33. Having regard to the provisions of s 76 of the CLD Act itself, and the above authorities, the principal question for the Court is whether the relative values of the remaining lots in the Scheme have altered as a result of the resumption. In this case, whilst there has been an alteration, that alteration is extremely minor. Lot 13, of which the Pump Station forms part, has a unit entitlement of two, measured against the total unit entitlement of almost ten million. Whilst there has been an alteration, it is de minimis as the percentage calculation set out above makes clear.

34. That conclusion, without more, justifies the making of the orders, and principally order 1(a) that I am asked to make.

35. However, for abundant caution, Sydney Water has obtained a valuation from Iain Avery concerning the Pump Station, the proposed easement and the residue land (exhibit B). Mr Avery's report reveals that he has been personally involved with the Scheme as a valuer since 2020.

36. Quite understandably, Mr Avery does not consider that either the part of Lot 13 being retained (the pump station - Lot 47), or the residue (proposed Lot 46) had any value for the purposes of establishing unit entitlement. Accordingly, he attributed a value of $1 to the whole of Lot 13. I accept this evidence.

37. Mr Avery also concluded that "the impact of the proposed severance of lot 46 [the pump station land] is considered to be so minor that no alteration of the unit entitlement is warranted". I accept this evidence.

38. Following the resumption, the Unit Entitlement of the residue will remain as two, in accordance with the recommendation of Mr Avery.

Conclusion

39. Having regard to the matters set out above, I am satisfied that the Court should make the orders sought by Sydney Water.

40. The orders of the Court are -

41. Order pursuant to s 73 of the Community Land Development Act 2021 (NSW) (CLD Act) that, as a consequence of the resumption of land described as proposed Lot 47 in Deposited Plan 1306265, (Resumed Lot) being part of Lot 13 in Community Plan DP270536 by the plaintiff, at Bingara Gorge in New South Wales:

(a) there is no adjustment to the schedule of unit entitlements in Community Scheme DP270536; (b) there is no amendment to the community management statement for Community Scheme DP270536; (c) the Resumed Lot shall be excluded from Community Scheme DP270536; and (d) the residue of Lot 13 in Community Plan DP270536, being proposed Lot 46 in Deposited Plan 1306265 (Residue Lot) is to be defined as Lot 54 in Community Scheme DP270536 as specified in the replacement sheets for DP270536 at Annexure T to affidavit of Alexandra Isabella White dated 8 April 2025 and filed in these proceedings (located at Court Book 5/96-97/2004-2005).

2. Proposed easement for access 5.6 wide & variable width noted and marked "E" on DP1306265 be registered over the Residue Lot.
3. The Registrar in Equity affix the Seal of the Court to the Schedule of Unit Entitlement in the form being Annexure S to the affidavit of Alexandra Isabella White dated 8 April 2025 and filed in these proceedings (located at Court Book 5/95/2000).
4. Order that the plaintiff pay the defendant's costs of the proceedings pursuant to s 77 of the Act.

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