Tanlane Pty Ltd v Moorebank Recyclers Pty Ltd

Judgment 1REIN J: These proceedings concern land at or near Newbridge Road Moorebank. Tanlane and Moorebank own adjacent blocks of land. Tanlane is a developer which currently operates a materials recycling business on the land but wishes to build residential units. Moorebank, for whom Mr T. Robertson SC appears with Mr J.E Lazarus, wishes to establish a material recycling facility ("MRF") on its site. 2Tanlane, for whom Mr Hale SC appears with Ms Z. Steggall, has sought in this Court an easement over Moorebank's land to enable it to build a road bridge over Moorebank's property which will give it access to a road on Lot 309 which lot is owned by Liverpool City Council ("the Council"). The road on Lot 309 leads to Brickmakers Drive, Brickmakers Drive in turn leads to Newbridge Road, which is a main road. Moorebank opposed that application. I shall refer to the easement sought in these proceedings as the "Tanlane easement" 3In Tanlane v Moorebank (No 2) [2011] NSWSC 1286 Young J (as his honour then was) granted the easement sought by Tanlane but made it conditional on an undertaking by Tanlane that if the Council did not grant the approval for the road-bridge then the easement will be extinguished and compensation to be paid by Tanlane in return for the easement as ordered by the court be refunded. 4On appeal to the Court of Appeal by Moorebank, the Court of Appeal upheld the appeal in part holding that an easement could not be granted conditionally (see Moorebank Recyclers Pty Ltd v Tanlane Pty Ltd [2012] NSWCA 445). The Court of Appeal approved broadly the terms of the easement imposed by the trial judge but amended two conditions and noted that compensation for the easement had to be paid by the party obtaining the benefit of the easement at the time of the grant. The Court of Appeal remitted the matter to this Division for determination as to the compensation payable and the final terms of the instrument of easement, summarising the position in [256] - [260] as follows: [256] It follows that subject to an order providing for compensation under s 88K(4) being made, we would make an order in favour of Tanlane, imposing an easement on the terms ordered by the primary judge (see Schedule), but adding the following terms as cll 2(ca) and (cb): The bridge is to comply with AS5100/Bridge Design Code and have the load bearing capacity required by SM1600 referred to in cl 6.2 of Pt 2 of the Code. The bridge design is to be sufficient to accommodate access ramps to and from the servient tenement themselves having the load bearing capacity required by SM1600. [257] However, the easement should not be imposed until the compensation payable pursuant to s 88K(4) has been assessed. In those circumstances the matter should be referred to a judge or associate judge of the Equity Division to be dealt with in accordance with these reasons and in particular: To assess compensation for the loss and value of the Moorebank land by the grant of the easement sought on the basis we have indicated, taking into account the conclusions reached in para [202] of this judgment. Such compensation should be not less than $26,500. To assess compensation for the matters referred to in Order 3 of the orders made by the primary judge, taking into account the conclusions reached in para [253] of this judgment. Once compensation has been assessed, to impose an easement in favour of Tanlane in the terms outlined and to provide pursuant to s 88K(4) for compensation awarded under subparas (a) and (b) above. [258] It will be a matter for the judge or associate judge conducting the assessment to determine what additional evidence he or she will permit to be led in carrying out the assessment referred to in subparas (a) and (b) of para [257] above. [259] The parties should be free to make submissions before the judge or associate judge conducting the assessment as to the precise terms of the easement necessary to give effect to these reasons. [260] The costs of the proceedings before the judge or associate judge conducting the assessment should be dealt with in accordance with s 88K(5) of the Act. 5After the Court of Appeal judgement was handed down the following occurred: (1)Moorebank commenced proceedings in this Court against the Council seeking an easement over Lots 309 and 310 of the Council's land. I shall refer to these as the "Moorebank proceedings" and the easement there sought as the "Moorebank easement". (2)Tanlane sought to be added as a defendant to the Moorebank proceedings as it claims that the easement sought by Moorebank is inconsistent with the easement which the Court of Appeal has ordered. (3)Pembroke J ordered that Tanlane be added as a defendant and also ordered transfer of the Moorebank proceedings to the Land and Environment Court. (4)The Land and Environment Court, once seized of the Moorebank proceedings and recognising that the issue of the Moorebank easement must be determined before June because of its relevance to a development application lodged by Moorebank which itself has to be determined by 30 June 2013, has fixed the Moorebank proceedings for hearing in May. (5)The compensation hearing referred to by the Court of Appeal was fixed for hearing on 9 - 11 July 2013 in this division before me. Moorebank opposed the matter being set down. 6I have noted in that Moorebank opposed the matter being set down and it now seeks to have the hearing vacated and the proceedings stayed until the outcome of the Moorebank proceedings is known. Tanlane opposes both the vacation of the hearing date and any stay. 7Moorebank relies on the affidavit of Mr Mark MacDonald of 28 March 2013, Mr Neil Kennan of 27 March 2013 and Mr Dempsey of 27 March 2013 and 2 April 2013. Tanlane relies on the affidavits of Mr Luke Walker of 3 April 2013 and of Mr David White of 11 April 2013. 8To understand the competing contentions it is necessary to provide some further background details which are complex but which I will endeavour to simplify. 9Moorebank's land is largely rectangular in shape, sitting in the main, well south of Newbridge Road and with other properties between its own and Newbridge Road. On its western side it contains a thin strip of land approximately 900 meters in length and 10 meters in width the northern end of which abuts Newbridge Road to the north. This strip of the Moorebank property has been described as "the panhandle". Tanlane's land sits east of the panhandle. To the west of the panhandle are Lots 309 and 310. Lot 310 is also owned by the Council and has been declared Community Land. 10The Council has approved the construction by Tanlane of a bridge leading on to and over Lot 309. It has not approved the use of the bridge because it wishes to be satisfied as to the use to be made of the bridge. Lot 309 abuts Brickmakers Drive, a substantial road in the area which, due to problems of congestion at Newbridge Road, appears to be a more desirable route for the anticipated traffic which will arise if Tanlane successfully develops its site as a residential block and marina as it says it wishes to do. 11In order to arrive on to Lot 309, and hence, in due course to Brickmakers Drive, Tanlane needed an easement over Moorebank land. Because the panhandle, in proximity to Lots 309 and 310 at least, is much lower than both lots and lower then Tanlane's land, what is envisaged is a bridge over the panhandle. Moorebank vehicles can therefore pass along the panhandle without let or hindrance. Moorebank thought that it would be necessary for it to be able to access Brickmakers Drive, due to the opposition of the Roads and Traffic Authority to use of the Newbridge exit at the end of the panhandle, and a joint proposal was put to Council for the bridge which involved ramps leading up from the panhandle onto the bridge. That joint proposal was the proposal approved by Council but it had a 5 year life span and on the expiry of the period it was not renewed by Moorebank and Tanlane. 12When the matter was heard by Young J there were in play two proposals for the bridge. One was described as "the Ramps Proposal" because it involved a bridge built over the panhandle but with ramps leading on to the bridge from Moorebank's land and the other proposal was called "the Marshall plan" which was preferred by Moorebank, and which contained ramps coming across Lot 309 at or close to the position which Tanlane's road bridge would, if the Tanlane easement were granted, come onto Lot 309. 13Tanlane sought an easement in terms of the Ramps Proposal. Moorebank asserted that the Ramps Proposal would: (1)Preclude the Marshall plan being implemented, (2)By virtue of (1), sterilise the use of the land and reduce its value by $19.1M. 14The view of Young J and the Court of Appeal was that the Marshall plan had virtually no prospect of acceptance by the Council so that the difference in value between the land with the Tanlane easement in place and the land without the Tanlane easement was extremely limited. The Court of Appeal described the evidence of Mr Dempsey (Moorebank's expert) that the property without the Tanlane easement was worth $19.1M more than the property with the Tanlane easement as being based on "a demonstrably false assumption, namely, that the approval of the recycling facility with access via the Marshall plan was a certainty": see [246]. 15Moorebank, since the decision of the Court of Appeal, has developed an alternative ramps plan to provide it with access to Brickmakers Drive. This plan (sometimes referred to "the third option", or "Ramps2") is the basis of Moorebank's application in the Land and Environment Court for the Moorebank easement from the Council. 16Moorebank asserts that the Moorebank easement does not in any way conflict with or undermine the Tanlane easement. It involves ramps not onto the bridge or in the precise proposed position of the bridge but rather located both to the northern and southern side of the bridge. The Moorebank easement is depicted in p 25 of Mr Dempsey's report of 25 March 2013 which was Exhibit AX3 at a hearing before McDougall J and which page I have marked as Exhibit B. Moorebank has not sought an easement to accommodate its use of Lot 309 in accordance with the Tanlane easement. The Moorebank easement, like the Tanlane easement, involves use of both Lot 309 and Lot 310. 17Tanlane contends that the Moorebank easement conflicts with its easement and it has made it clear that it will propound that case in the Land and Environment Court, as part of its opposition to the Moorebank easement. 18If the Land and Environment Court determines that Moorebank is entitled to the Moorebank easement Moorebank has indicated that the assessment hearing before me will involve very little further evidence and be capable of speedy determination. It is accepted by both parties that if the Land and Environment Court's decision is adverse to Moorebank the fate of its development application by Planning and Assessment Commission ("PAC") will be determined adversely to Moorebank because it cannot succeed in its application if it does not have access to Brickmakers Drive. It seems to follow that in that event, it is likely that PAC's views on whether the development was otherwise suitable or likely to be approved will not be made clear because the access point is a "jurisdictional threshold point". It is possible that even if the Moorebank easement is granted by the Land and Environment Court, PAC may not approve Moorebank's development application. 19A significant matter, on Moorebank's case, is that at the time of the decision of Young J and the Court of Appeal the relevant planning authority was the Council. The Council had to consider whether to approve Moorebank's development application and the Council was both the planning authority and owner of the relevant land - Lot 309 and Lot 310. The application for approval was however taken out of the hands of the Council and subsequent to the Court of Appeal's decision the matter was remitted to the PAC. Mr Robertson submitted (see T2.49 - T3.4): The effect of 3A is to strip council of its consent function. At the time of the Court of Appeal decision, the Court was looking at the prospects of council granting or refusing our rights, and said that the prospects of refusal were good. Now it is in the hands of a different consent authority which is independent of the Government and comprises experts rather than politicians. PAC cannot approve the Moorebank development approval however, even if otherwise minded to do, if Moorebank has no means of access to Brickmakers Drive. Hence, the importance to Moorebank of obtaining the right to traverse Lots 309 and 310 is in order to arrive at Brickmakers Drive. Lot 310 is needed because Ramp2 requires more space then can be accommodated on Lot 309 (and in any event the Ramps proposal with the bridge structure involves footings of the bridge to rest on Lot 310 as well as the bridge itself sitting in part on Lot 309). 20In the course of submissions, I inquired of Mr Robertson why the Tanlane easement, containing as it does the Ramps proposal as modified by the Court of Appeal, does not give Moorebank access to Brickmakers Drive: T6.31 - T7.36. Mr Robertson pointed out that access to Tanlane's bridge did not grant access to Lot 309, which is owned by Council, and hence did not grant access to Brickmakers Drive. To obtain that access Council would either have to consent or to be required to grant an easement by the Court. 21Mr Robertson added a further concern about the Tanlane easement - namely that the bridge may never be built by Tanlane locking Moorebank out from ever having a bridge on to which the ramps could be attached. 22I inquired of Mr Hale whether Tanlane opposed the use by Moorebank of the bridge: see T13.2 - T15.36. Mr Hale indicated that Tanlane does not oppose Moorebank using the bridge per se but does oppose the development of the Moorebank land for use as a recycling facility for which purpose the Moorebank easement has been sought. 23Moorebank's position can now be summarised: (1)It is pursuing the Moorebank easement. (2)The Moorebank easement is not inconsistent with the Tanlane easement. If it is successful in the Land and Environment Court its evidence for the assessment hearing would be very limited. (3)If it is unsuccessful in the Land and Environment Court with the consequence that it cannot progress its application because it has no access to Brickmakers Drive it may wish to contend that the Tanlane easement has caused its property to be worth $19.1M less than the value without the Tanlane easement. I shall refer to this claim as "the expanded claim". I say "may" because Moorebank accepts as possibility that it may lose in the Land and Environment Court for reasons other than the Tanlane easement. If the only reason that Moorebank is refused an easement by the Land and Environment Court is because it is inconsistent with the Tanlane easement then Moorebank will submit, it is the Tanlane easement which has precluded Moorebank from obtaining access to Brickmakers Drive and hence approval by PAC. (4)Given that the outcome of the Moorebank easement is now uncertain but will be rendered certain by the decision of the Land and Environment Court which must be given before 30 June 2013, it is appropriate to defer the assessment hearing until after the Land and Environment Court judgment is handed down, particularly since if Moorebank is successful in the Land and Environment Court the assessment will involve very little time, and may be capable of resolution without hearing. (5)Moorebank also claims that the evidence which it would seek to call in support of its large claim (i.e. should the Moorebank easement not be granted) would be extensive and could not realistically be prepared before a hearing in July particularly since it will not know why it has failed in the Land and Environment Court until a judgment has been delivered. 24Tanlane's response is as follows: (1)The Moorebank easement is inconsistent with the Tanlane easement. (2)It is too late in the proceedings for Moorebank to now raise as a third option, the Ramps2 proposal, and seek to delay the outcome of these proceedings because the outcome of the Land and Environment proceedings will not be known until close to the date of the compensation hearing. (3)Tanlane has been kept out of progressing its development for a long period of time due to opposition by Moorebank to Tanlane's development proposals and to its refusal to grant Tanlane an easement and the appeal to the Court of Appeal. (4)Tanlane submits that the approach which Moorebank seeks to take is contrary to the determination of the Court of Appeal. It submits that the Court of Appeal remitter does not permit the introduction of new evidence by Moorebank based on a change of tack, and reference is made to [96], [97], [202], [237], [239], [240], [245] and [258] of the Court of Appeal's judgment. Mr Hale submitted that the issue of what approach should be taken could be clarified by the Court of Appeal. (5)There is a need for Moorebank to identify what is the evidence on which it will seek to rely. 25Moorebank's response to Tanlane's points are: (1)It disputes that the Moorebank easement impinges in any way with the Tanlane easement. (2)It submits that the Court of Appeal was conscious of the principle that assessment of compensation should be determined at the time of the grant of the easement and that there might be new factual matters which would need to be taken into account. It follows, it says, that it is entitled to lead evidence of new circumstances. (3)While Tanlane complains about impediment to its development, Moorebank draws attention to the absence of any development application for residential units and to the fact that Tanlane not only operated its own recycling plant on its site but that it has increased its use of the site for that purpose. (4)It accepts that it needs to identify the evidence which it will call. (5)It does not support a referral back to the Court of Appeal for clarification. 26In relation to the parties agreed on a timetable for Moorebank to identify what evidence it would seek to call and for Tanlane to indicate its attitude. Moorebank has indicated that if it succeeds in obtaining the Moorebank easement it will seek to rely on valuation evidence relating to the land value of easement land taken, the blot on title and similar evidence of a narrow kind. If Moorebank is unsuccessful in the Land and Environment Court because of the Tanlane easement it will seek to lead an extensive array of evidence (see list dated 16 April 2013 provided in accordance with directions made on 12 April 2013) 27Tanlane in submissions dated 26 April 2013 has made clear that it opposes any such expanded claim being advanced. Mr Robertson responded to those submissions by submissions dated 29 April 2013. 28Whether or not Moorebank can advance its expanded compensation claim raises difficulties since it appears to be inconsistent with the approach which the Court of Appeal took and is based on a substratum of fact not previously advanced in the proceedings. On the other hand the Court of Appeal did refer to the need for assessment for compensation at the time of imposition of the easement and, by reason of the matters to which I have referred, the facts pertinent to assessment will, or may, have changed by virtue of the Ramps2 proposal and the Moorebank proceedings. 29 Since Moorebank's foreshadowed case for expanded compensation is dependent on it being unsuccessful in the Land and Environment Court and unsuccessful solely because of the Tanlane easement there is considerable utility in awaiting the outcome because the expanded compensation claim will not be advanced if Moorebank succeeds in the Land and Environment Court, or fails on a different basis, and the question of whether Moorebank's expanded claim can be advanced will not need to be determined. 30Once it is accepted that there is at least the possibility that Moorebank may be able to advance the expanded case for compensation the deferral of the hearing appears attractive. Whilst I accept that ultimately Tanlane's position might be vindicated, I am not able, at present, to conclude that the conclusion for which it contends is inevitable. 31I appreciate that the Court of Appeal did not say anything to indicate that the assessment hearing should be deferred until the outcome of other proceedings was known. However, the developments which have occurred, including the speedy accommodation of the parties in the Land and Environment Court and the fact that the result of those proceedings will be known shortly before the time of the proposed assessment hearing, seem to me to support, as a matter of economy of the Court's resources and avoidance of unnecessary expense to the parties, the deferral of the proceedings.