117 York Street Pty Limited v Proprietors of Strata Plan No. 16123 Matter No 5265/97 [1998] NSWSC 214 (9 April 1998)

Last Updated: 17 June 1998

117 YORK STREET PTY LIMITED v PROPRIETORS OF STRATA PLAN NO. 16123

5265/97

9 April 1998

Hodgson CJ in EQ

The Supreme Court of New South Wales Equity Division

JUDGMENT

HIS HONOUR: I have now heard submissions as to the precise orders which should be made in this case, pursuant to the judgment which I delivered on 19th March 1998. Two main questions have been debated. First, whether I should require the defendant to give written consent to the making of a development application to the Sydney City Council for the erection in Market Row of the crane referred to in my judgment. Second, the question of costs.

WRITTEN CONSENT TO DEVELOPMENT APPLICATION

This question arises because of the terms of s.77(1) of the Environmental Planning & Assessment Act. This is in the following terms:

A development application may be made only by -

(a) the owner of the land to which that development application relates; or

(b) any person, with the consent in writing of the owner of the land to

which that development application relates.

It appears that the Sydney City Council has taken the view that a development application in relation to the crane referred to in my main judgment relates to the defendant's land; and the plaintiff accepts that this view is correct. This view means that, if the development application is made without the written consent of the defendant, it is invalid and could not be granted.

Submissions

Mr. Tobias QC for the plaintiff submitted that s.88K(3) empowered the Court to specify the nature and terms of the easement. That power was at large, and limited only by the purpose of the grant of the easement. It was necessary, in order to give effect to this purpose, that the defendant be required to give written consent to the lodging of the development application.

That this was within the Court's power in s.88K(3) was confirmed by the circumstance that, at common law, the grant of an easement is also the grant of such ancillary rights as are reasonably necessary for its exercise or enjoyment: see Halsbury, Laws of England, 4th Ed., Vol.14, p.10; Zenere v. Leate (1980) 1 BPR 9,300 at 9,305; Central Electricity Generating Board v. Jeunaway (1959) 1 WLR 937 at 944; Fitzgerald v. F.J. Leonhart [1997] HCA 17; (1997) 71 ALJR 653; Clarey v. Women's College (1954) SR(Qd.) 57 at 79. Such ancillary rights included, where appropriate, a right to written consent for the lodging of a development application: see Annwrack v. Williams, Waddell, C.J. in Eq., 8/2/89; Patrial Holdings v. Short, Cohen, J., 14/7/94. Such a right would probably be implied in any event in a statutory grant of an easement: see Prospect County Council v. Cross (1990) 21 NSWLR 601 at 608. However, to avoid any doubt, it should be granted expressly.

Mr. Harper for the defendant submitted that the plaintiff was seeking a mandatory injunction, to take away the defendant's right to withhold consent. If this was to be sought, it should have been sought from the start, and not introduced in this way after the case had been heard and decided. The application should not be entertained.

Next, Mr. Harper submitted that, assuming s.77(1) did require the defendant's consent, the plaintiff had no chance of making a valid application and therefore obtaining the consent necessary to make the erection of the crane lawful. In those circumstances, on the basis of what was said on p.11 of my main judgment, the easement should be refused.

Mr. Harper further submitted that the plaintiff's remedy, in respect of any refusal by the Council based on lack of consent from the defendant, was to appeal from that decision. It was arguable, as a matter of law, that the consent was not strictly necessary within s.77(1), in that the development did not in fact relate to the defendant's land: see Currey v. Sutherland Shire Council (1996) LGERA 85, at 89.

Decision

In my opinion, what is now sought is truly ancillary to the relief sought by the plaintiff in the summons, and falls fairly within the terms of the second paragraph of the summons, namely "any further orders the Court deems appropriate". In my opinion, it is therefore appropriate to entertain the application at this stage.

In my opinion, the authorities referred to by Mr. Tobias do show that s.88K(3) does empower the Court to impose an easement which includes a term that the servient owner consent to the making of an application to a Council for consent to a development (involving work on or use of the servient owner's land), being a development for the purpose of which the easement was granted. In my opinion, this would be implied in the general grant of such an easement, but it is appropriate to make it express.

The decision of Currey does not show that the defendant's consent is not required in this case. The development involved in the erection and use of the crane does itself involve the use of the defendant's land, to the extent of swinging the tail of the crane over it as contemplated by the easement. In Currey, as in North Sydney Council v. Ligon 302 [1996] HCA 20; (1996) 91 LGERA 352, it was held that written consent was not required from the owner of land which was not "land on which the specified development is proposed to be carried out". In this case, the defendant's land is land on which the specified development is proposed to be carried out, in that work, which is part of the proposed development, is to be actually done on the defendant's land. Even if it could be said that there was an arguable case to the contrary, I do not think it would be reasonable to have the plaintiff put to the expense of bringing very doubtful appellate proceedings against a decision of the Council.

However, it does seem to me that the obligation on the defendant to give written consent can only be imposed as part of the easement, not by any order of the Court which is independent of the easement. This being Real Property Act land, s.88K(7) means that the easement takes effect only upon registration. Accordingly, in my opinion, it will not be appropriate, as contemplated in my main judgment, to stay the order creating the easement until appropriate consents have been made: rather, I would order that the plaintiff shall not commence to erect the crane in Market Row, as referred to in the said easement, until development consent has been obtained from the Sydney City Council for such erection and the plaintiff is otherwise entitled in law to erect the said crane.

I would then make it a specific term of the easement that, without limiting the generality of Condition (4) of the easement, the defendant, on the written request of the plaintiff or its solicitors, shall forthwith give its written consent for the purpose only of s.77(1)(b) of the Environmental Planning & Assessment Act 1979, for the lodging by the plaintiff of a development application to the Sydney City Council for the erection in Market Row of the crane referred to in paragraph 3 of the said easement and its use within the airspace of the defendant's land in the manner contemplated by the said easement.

In making an order for an easement with that term, I should make it clear that I am doing no more than overcoming a legal obstacle to the making of a development application. The order and the easement does not require the defendant to consent to the development itself. As pointed out by Waddell, C.J. in Eq. in Annwrack at p.12, such a term of an easement leaves the servient owner at liberty to object to the development application, and to exercise such rights as are given to it by the planning laws. It will be a matter for the Council to decide whether the development application should be granted, and it will be open to the defendant to make submissions to the Council that it should not be granted.

COSTS

Submissions

Mr. Tobias submitted that, at worst for the plaintiff, each party should bear its own costs. He submitted that it was apparent from the correspondence that these proceedings were brought about essentially because of disagreement about the amount of compensation, with the plaintiff offering the defendant more than the compensation I have ordered, and the defendant demanding $400,000.00. In those circumstances, the defendant should pay the plaintiff's costs on the issue of compensation. Even on other issues, there was little merit in the defendant's submissions: the main submission, namely that on illegality, sought to undermine the remedial nature of the legislation.

Mr. Harper submitted that the prima facie position was that the plaintiff should pay the defendant's costs: see s.88K(5). Such costs should be on an indemnity basis: see Coles Myer v. Dymocks Book Arcade (1996) 7 BPR 14,638; Tregoyd Gardens v. Jervis, Hamilton, J., 25/9/97 at 17. Certainly, the defendant had not contributed to increased costs by any unreasonable conduct in the hearing. The plaintiff got an urgent hearing on the wrong basis, and the relief sought by the plaintiff kept changing. It reached its final form only on the final submissions made after delivery of judgment. Accordingly, it was not possible at any time for the defendant to give a meaningful consent. Even the valuer's report was made on material which had to be amended. Very little time had been spent on compensation. In any event, consideration of the correspondence indicated that compensation was only one issue as to which agreement was not reached.

Decision

In my opinion, the provisions of s.88K(5) are not such as to indicate that an indemnity costs order should be made as of course in favour of a defendant. On the other hand, that provision does contemplate that the defendant is entitled to have the costs of having it determined by the Court whether the circumstances appropriate for the grant of an easement are established, and the costs of assessing appropriate compensation. Prima facie, this entitlement would be lost only if and in so far as there has been unreasonable conduct by the defendant which has made the proceedings more expensive.

I think it is fair to say that the necessity for these proceedings arose because of very different views about compensation, and that my decision has been in favour of the plaintiff's view and against the defendant's view. However, it still seems to me that unless one can characterise the defendant's conduct as unreasonable, and in particular as unreasonably bringing about legal costs or increased legal costs, then the prima facie result contemplated by the statute would follow. I do not believe that the various points taken by the defendant could, having regard to the current state of the law, be regarded as unreasonable. It may be that the time will come when the taking of such points will be unreasonable, because the principles have become well-established. I do not think that stage had been reached at the time this case was conducted.

A question may arise as to whether the costs should include the costs of Senior Counsel. On the whole, I do not think the plaintiff can fairly object to the costs of Senior Counsel for the defendant, when the plaintiff has itself engaged the services of Senior Counsel. However, I would not propose to order costs on an indemnity basis: I certainly do not think the plaintiff's conduct of the application has been such as to justify that order, nor do I think any other circumstances of the case would justify that order.

Accordingly, the costs order which I propose is an order that the plaintiff pay the defendant's costs of the proceedings.

OTHER MATTERS

It follows from the above discussion that Order 2 in the most recent Short Minutes of Order submitted should be altered in the way indicated in my judgment. Order 3 should be omitted, and a term to similar effect included in the easement itself. Order 5 should be the costs order which I have indicated.

I think the Short Minutes should also provide for the liberties to apply referred to on pp.22 and 25 of my main judgment.

The first of those liberties to apply was for a further order for an easement, should it turn out that an easement is required for a longer period. I noted that if and when any such order was made, further compensation could be given. The necessity for that liberty is to some extent met by Condition (2) in the Conditions of Easements. However, in the event of a dispute, it would in my opinion be convenient still to have the liberty to which I have referred. I would add that it may be appropriate, in Condition (2), to provide for a pro rata compensation for any additional period agreed to under Condition (2).

The next liberty to apply contemplated was one to the defendant to apply for further compensation if some unexpected event occurred. The necessity for any such application may well be very slight, having regard to Condition (1) of the easement, but I am inclined to think that this liberty should also be reserved.

Next, there is the liberty referred to on p.25 of the judgment, for the plaintiff to make a further application in these proceedings. That might conceivably become necessary if the plaintiff proves to be wholly unable to get the consents necessary to make the erection of the proposed crane legal, and the plaintiff wishes to proceed in some different manner.

Finally, out of abundant caution, perhaps liberty to apply should be reserved to the plaintiff if any difficulties arise in obtaining the written consent required by the easement.

I direct the plaintiff to bring in Short Minutes complying with this judgment at a time to be arranged with my Associate.