Supreme Court New South Wales

• Medium Neutral Citation: Tanlane Pty Ltd v Moorebank Recyclers Pty Ltd (No 2) [2011] NSWSC 1286
• Hearing dates: 8, 9, 10 August 2011
• Decision date: 04 November 2011
• Jurisdiction: Equity Division
• Before: Young JA

Decision

Decision in favour of the plaintiff conditionally granting an easement. Stand over for short minutes of order to be brought in to record the orders formally.

• Catchwords: REAL PROPERTY- easements- Conveyancing Act 1919, s 88K- necessary pre-conditions for making an order; reasonable necessity, public interest, compensation and discretion, to be considered as a whole, not scored under separate heads- whether possible to grant a conditional easement to prevent sterilization of servient tenement- conditional easement granted.; ISSUE ESTOPPEL- whether the precise question of fact or law was determined in the earlier proceedings as a fundamental basis for the decision- question was whether consent for road bridge required a weight capacity which would accommodate the defendant's trucks- question was not a fundamental basis of the earlier proceedings therefore judge not estopped from considering the issue.
• Legislation Cited: Conveyancing Act 1919, s 88K; Environment Planning and Assessment Act 1979, Part 3A, s 5; Liverpool Local Environment Plan 1997 (Amendment No 75) cl 8; Liverpool Local Environment Plan 1997 (Amendment No 76)
• Cases Cited: 117 York Street Pty Ltd v PSP 16123 (1998) 43 NSWLR 504; Blair v Curran (1939) 62 CLR 464; Blulock Pty Ltd v Majic [2001] NSWSC 1063; 10 BPR 19,143; Champerslife Pty Ltd v Manojilovski [2010] NSWCA 33; 75 NSWLR 245; Durack v de Winton (1998) 9 BPR 16,403; Hanny v Lewis (1998) 9 BPR 16,205; ING Bank (Aust) Ltd v O'Shea [2010] NSWCA 71; 14 BPR 27,317; Katakouzinos v Roufir [1999] NSWSC 1045; (2000) 9 BPR 17,303; Khattar v Wiese [2005] NSWSC 1014; 12 BPR 23,235; Krehl v Burrell (1878) 7 Ch D 551; Leeds Industrial Co-operative Society Ltd v Slack [1924] AC 851; Lonergan v Lewis [2011] NSWSC 1133; Mison v Randwick MC (1991) 23 NSWLR 734; Moorebank Recyclers Pty Ltd v Liverpool City Council [2009] NSWLEC 100; Owners Strata Plan 13635 v Ryan [2006] NSWSC 221; 12 BPR 23,485; Petroleum and Chemical Corporation (Aust) Ltd v Morris (1973) 1 ALR 269; Rainbowforce Pty Ltd v Skyton Holdings Pty Ltd [2010] NSWLEC 2; 171 LGERA 286; Sharman v Evans [1977] HCA 8; 138 CLR 563; Shercliff v Engadine Acceptance Corporation Pty Ltd [1978] 1 NSWLR 729; Spencer v Commonwealth [1907] HCA 82; 5 CLR 418; Tanlane Pty Ltd v Moorebank Recyclers Pty Ltd [2008] NSWSC 1341; Tregoyd Gardens Pty Ltd v Jervis (1997) 8 BPR 15,845; Wengarin Pty Ltd v Byron Shire Council [1999] NSWSC 485; 9 BPR 16,985
• Category: Principal judgment
• Parties: Tanlane Pty Ltd (Plaintiff); Moorebank Recyclers Pty Limited (Defendant)
• Representation: Counsel: T S Hale SC and Z Steggall (Plaintiff); G Inatey SC and D P Wilson (Defendant); Solicitors: Minter Ellison (Plaintiff); Mark McDonald & Associates Lawyers Pty Ltd (Defendant)
• File Number(s): SC 2008/277351

Judgment

1 YOUNG JA : I dealt with all aspects of this litigation except one in my decision of 15 December 2008, [2008] NSWSC 1341. The outstanding matter was whether an easement in favour of the plaintiff should be granted pursuant to s 88K of the Conveyancing Act 1919.

2 That matter was stood over because there was pending litigation in the Land and Environment Court as to whether the relevant development consent had been validly granted. Lloyd J has now held that it was valid, see [2009] NSWLEC 100. The parties have now requested that the case be concluded.

3 The further hearing was conducted on behalf of the plaintiff by Mr T S Hale SC and Ms Z Steggall and on behalf of the defendant by Mr G Inatey SC and Mr D P Wilson.

4 I had a view on 5 August and heard further evidence, with addresses following, on 8, 9 and 10 August 2011.

5 I set out the facts in my earlier judgment, but it is expedient to set out the basic facts again for the better understanding of what follows.

6 The parties own land close to the Georges River at Moorebank. The plaintiff's land (the "Tanlane Land") fronts Newbridge Road to the north and is bordered by the Georges River to the east. The defendant's land (the "Moorebank Land") only has a panhandle access to Newbridge Road and is immediately to the south of the Tanlane Land, also bordering the river.

7 At present, the Tanlane Land is used for extractive industry with some recycling of building material and waste. The Moorebank Land is undeveloped.

8 Both parties wish to redevelop their land. The plaintiff wants to use the northern part of its land for residential purposes (ie the subdivision of land so that a number of dwelling houses may be erected thereon) and the southern portion of its land as a marina. The defendant wishes to use its land for concrete recycling.

9 At present, both lots have access to Newbridge Road. The Tanlane Land at a point known as 146 Newbridge Road and the Moorebank Land at the northern extremity of the panhandle. However, both parties accept that, on change of use, the RTA will not permit that access to continue and that their access will solely be via Brickmakers Drive which is to the west of the subject land.

10 To complete the picture, on the western side of Brickmakers Drive is land owned, or formerly owned by Boral Ltd which is being used for residential purposes. On the eastern side of the Tanlane Land is land owned by "Flower Power", seemingly used as a nursery. The Flower Power land has access via Davy Robinson Drive which connects with Newbridge Road.

11 The parties, Liverpool City Council and Boral have been discussing redevelopment of all their lands for some time. They once reached agreement that access to both parties' land would be from Brickmakers Drive and then over a bridge to be constructed at a high level.

12 What I have described as a "bridge" is in fact an elevated roadway about 5.7 metres above ground level which would span the panhandle and pass over a swamp ("Environment Protection - Conservation" or "7(c)" land under the Liverpool Local Environmental Plan 1997 (Amendment No 75) ("LEP 75")), and a creek or drainage channel leading onto the plaintiff's land. That bridge would be constructed over land that was part of Boral's land, but which has now been ceded to the local council and is described in evidence as the "2(a) land".

13 The plaintiff seeks the grant of an easement over the panhandle which is part of the defendant's freehold.

14 Section 88K of the Conveyancing Act 1919 is as follows:

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.

(6) Such an easement may be:

(a) released by the owner of the land having the benefit of it, or

(b) modified by a deed made between the owner of the land having the benefit of it and the persons for the time being having the burden of it or (in the case of land under the provisions of the Real Property Act 1900 ) by a dealing in the form approved under that Act giving effect to the modification.

(7) An easement imposed under this section, a release of such an easement or any modification of such an easement by a deed or dealing takes effect:

(a) if the land burdened is under the Real Property Act 1900 , when the Registrar-General registers a dealing in the form approved under that Act setting out particulars of the easement, or of the release or modification, by making such recordings in the Register kept under that Act as the Registrar-General considers appropriate, or

(b) in any other case, when a minute of the order imposing the easement or the deed of release or modification is registered in the General Register of Deeds.

(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.

(9) Nothing in this section prevents such an easement from being extinguished or modified under section 89 by the Court.

15 As can be seen from the section, a person seeking an order must establish five matters:

A. That the proposed easement is reasonably necessary for the effective use or the development of the applicant's land;

B. The use of the land having the benefit of the easement will not be inconsistent with the public interest;

C. The owner of the land to be burdened by the easement can be adequately compensated for any loss or other disadvantage that will arise from imposition of the easement;

D. 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; and

E. The Court, in its discretion, considers it just that the order be made.

16 I will deal with each of these factors under the appropriate distinguishing letter and then consider:

F. What is the appropriate amount of compensation; and

G. The result of the case.

17 However, it is not a correct approach to score the applicant's proposal under each separate head; the total effect of all the factors must be weighed: ING Bank (Aust) Ltd v O'Shea [2010] NSWCA 71; 14 BPR 27,317 at 27,336 [155].

18 In my earlier judgment I said that I thought that the evidence at that stage showed that A, B and D were made out or not disputed and that, if I was satisfied about C and E, I would be inclined to grant an easement. However, it was not appropriate to consider the matter further until after the Land and Environment Court had ruled on the validity of the development consent.

19 As I stated at the commencement of the resumed hearing, my earlier decision does not operate so that the defendant has now to disprove factors A, B or D. The question, if the factors are at issue, is whether the additional material, taken together with what was before me in 2008, means that the plaintiff has established its case: cf Shercliff v Engadine Acceptance Corporation Pty Ltd [1978] 1 NSWLR 729.

20 I will deal with the evidence received during the 2011 hearing and relate it to the findings of 2008 before dealing with points A to G.

21 It is rather difficult to describe the topography and the land the subject of this dispute. At present the Tanlane Land appears to be used principally for extracting and carting away black river sand. It is hard to judge levels as there are stockpiles of the commodity strewn throughout the northern part of the land and there are heaps of overlay piled in artificial hills.

22 The Moorebank Land of about 65 hectares is undeveloped. At least part of it appears marshy from the marsh grass growing on it and the water that, at the time of the view, was still pooling on the surface despite a week of fine weather. About 75% of the western side of the main body of the Moorebank Land is filled while the remainder on the eastern side is relatively isolated and in a natural state.

23 It is thus difficult at present to judge levels but, from the plans, it would appear that, without excavation, the bottom of the bridge construction will be about 5.7 metres from the natural level of the panhandle.

24 It would seem that 9.7 hectares of the Moorebank Land are above the one in 20 year flood level but below the one in 100 year flood level.

25 At the 2008 hearing, the principal problem appeared to be whether, if access to Newbridge Road via the panhandle was closed, the defendant's loaded trucks weighing some 40-48 tonnes would be able to climb up 5.7 metres, turn left onto the elevated roadway and make their way safely onto Brickmakers Drive and thence to Newbridge Road.

26 However, on 2 May 2006, Moorebank lodged an application with the Department of Planning for a materials recycling facility on the Moorebank Land with an annual capacity of 500,000 tonnes pursuant to Part 3A of the Environment Planning and Assessment Act 1979 (the "EP&A Act"), (the "Part 3A Application").

27 Under the Part 3A Application, in accordance with plans of Mr Lyle Marshall, access to the proposed materials recycling facility is to be over the panhandle and corridor land without the need for a road bridge. What is more, if the proposed easement is imposed by the Court and the bridge constructed, access to the Moorebank Land as contemplated in the Part 3A Application would be denied.

28 The Part 3A Application has been lodged and is being assessed, but it is not known when the Part 3A Application will be determined.

29 I have no memory of being informed of this when I gave my earlier decision in December 2008. My previous reasons proceeded on the basis of an earlier proposal involving ramps onto the bridge.

30 As noted in my earlier judgment, the plaintiff's proposal is basically that which was the subject of an agreement made in 2002 between the parties, the local council and others, an agreement which expired in 2007.

31 I now pass to consider what I have listed above as A-G.

32 A. In my earlier judgment I noted at [92] that it is trite law that "reasonably necessary" does not mean absolutely essential. Whilst mere desirability is insufficient, it must at least be shown that the use of the claimant's land with the easement is substantially preferable to its use without the easement; see eg 117 York Street Pty Ltd v PSP 16123 (1998) 43 NSWLR 504 at 509; 8 BPR 15,917 at 15,920 and see Katakouzinos v Roufir [1999] NSWSC 1045; (2000) 9 BPR 17,303 at 17,307.

33 The Court must consider the question of "reasonable necessity" at the date of the hearing: Durack v de Winton (1998) 9 BPR 16,403 at 16,449. However, this does not mean that one only looks to see what is reasonably necessary for the plaintiff's land at that date. What is reasonably necessary for the development of that land is also relevant: Tregoyd Gardens Pty Ltd v Jervis (1997) 8 BPR 15,845 at 15,854 .

34 In Rainbowforce Pty Ltd v Skyton Holdings Pty Ltd [2010] NSWLEC 2; 171 LGERA 286, Preston CJ considered this requirement in great detail. Whilst I broadly agree with what his Honour said, it is unnecessary to go into such detail in this case.

35 At the 2011 hearing, Mr Inatey basically submitted that the easement was not reasonably necessary because of the detriment that would be suffered by the defendant if the easement were granted. That detriment is said to be the inability to use its land for the recycling of material, because of lack of appropriate access.

36 Whilst there is no doubt that one cannot assess the plaintiff's case without considering the whole picture including its detrimental effect on the defendant's land ( ING Bank (Aust) Ltd v O'Shea at [155]), there is a little debate as to where one fits in the question of detriment to the defendant. Mr Inatey puts it in category A as I seem to have put it in ING Bank (Aust) Ltd v O'Shea. On more reflection, I would put it in category E. It really does not matter under which sub-head one considers the point. In my present view, when considering A, one looks only to whether the plaintiff's proposal is reasonably necessary for its land. Questions as to counter considerations fall under E. The factor raised by Mr Inatey is clearly important: I will deal with it under E.

37 Mr Inatey puts that the only reason for the proposed easement is because the plaintiff wishes to change the use of its land. Further, he says there is no evidence that the changed use makes the plaintiff's land more valuable. Indeed, there is no evidence as to what is the highest and best use of the plaintiff's land.

38 In my view, these matters are irrelevant. The plaintiff is entitled to use its land as it wishes (subject to zoning, etc). If a legitimate use of its land is proposed that is reasonable as compared with the possible alternative uses and developments of the land and that use makes the proposed easement reasonably necessary, the plaintiff has raised circumstances entitling it to make an application under s 88K, see 117 York St at 509.

39 I do not perceive any factors other than those discussed above or those I evaluated in 2008 on this aspect of the case. Thus, I continue to find that the proposed easement is reasonably necessary.

40 B. In 2008, I said that this factor was not in issue. However, by oversight, the term "public interest" was used in [104] instead of "discretion" which was the cause of some confusion. At the present hearing what was called "public interest" was clearly argued by both sides, but, again, many of the submissions more logically fit under Section E, "Discretion".

41 The submissions properly under this head focus on whether the use of the Tanlane Land with the proposed easement is in the public interest. This involves a wider question of public interest, namely the implementation of the planning and development of the area for residential development.

42 Tanlane says that use of the Moorebank Land as a recycling facility does not sit comfortably with the residential uses zoned for the Boral lands adjacent to Brickmakers Drive or on the Tanlane Land. The use of Brickmakers Drive by heavy loaded trucks will attract objection.

43 I do not consider that the above submission has any relevance to the question whether Tanlane's proposed use of its land with the easement is or is not consistent with the public interest. In any event, it does not have weight. Moorebank has a right to use its land for recycling up until 2018 and has a right of access to a public road. The fact that Moorebank's exercise of its existing rights might upset purchasers of residential land is by the bye. Moorebank needs to use Brickmakers Drive as other modes of accessing a public road have been foreclosed.

44 Tanlane submits that the evidence overwhelmingly shows that the public interest rests with the implementation of the planning and development of the general area for residential development and that this is well illustrated by the Liverpool Development Control Plan.

45 I favour the Tanlane position. However, I remind the parties that the question to be considered is whether the use of the plaintiff's land with the proposed easement will be inconsistent with the public interest. Proof that it is indeed actually consistent with it is unnecessary.

46 If the easement is granted, the Tanlane Land will be able to be developed for residential use. The planning policies of the local council clearly favour such use. Thus, I conclude that the proposed easement which allows the development is not inconsistent with the public interest.

47 C. The question of compensation is one of the crucial issues in this case.

48 Moorebank submits that, for the reasons set out in its submissions which I have reproduced in section E, it cannot be adequately compensated, unless it is for the full value of its land. If the land is sterilized by the granting of the easement, then the value of the land with the development potential is its value. As will appear subsequently, I reject this approach. I am proceeding on the basis that Moorebank's land is not sterilized by the grant of the easement.

49 Assessing compensation is usually an exercise of some difficulty, not the least of which is the fact that valuation is not an exact science.

50 Section 88K(2)(b) provides that the Court may only make an order for the grant of an easement if it is satisfied that the owner of the land to be burdened can be adequately compensated for any loss or other disadvantage that will arise from the imposition of the easement.

51 The meaning of s 88K(2)(b) has not, as far as I am aware, been fully fleshed out in the decisions on the section. Just reading the words in a natural way the Court must consider: (a) what loss; and (b) what other disadvantage will arise because of the easement.

52 "Loss" appears to include loss of intangible benefits, Khattar v Wiese [2005] NSWSC 1014; 12 BPR 23, 235 at 23,248 [49], and to include the suffering of potential loss of privacy as a result of strangers using the easement: Hanny v Lewis (1998) 9 BPR 16,205 at 16,209.

53 Such losses of intangible benefits are hard to value and, as Brereton J said in Khattar , may mean that compensation for such losses cannot be assessed so that no easement can be granted.

54 That problem is not present in the instant case.

55 A problem that does arise is what semantic significance should be given to the word "will" in the phrase "disadvantage that will arise". Does this mean that the Court does not need to consider (except as to discretion) disadvantages that might possibly arise or even those which have a 50/50 chance of occurring and only consider, under this head, those that will arise as a matter of virtual certainty?

56 This point was not argued. However, it seems to me that the word "will" means that the Court is only prevented from making an order under the section where the alleged disadvantage is one which is going to occur as a matter of virtual certainty if the easement is granted. Possible disadvantages that may occur will be properly considered as matters going to discretion.

57 In Wengarin Pty Ltd v Byron Shire Council [1999] NSWSC 485; 9 BPR 16,985 at [26], I set out the heads of compensation. These were adopted by Preston CJ in Rainbowforce at [111]. 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, compensating advantages (if any). See also Owners Strata Plan 13635 v Ryan [2006] NSWSC 221; 12 BPR 23,485 at [85].

58 I believe that, in this case, one should pay particular attention under (c) to any injurious affectation factor.

59 Moorebank's basic position is that, given that the assessment of compensation in this case relies on so many factual possibilities that remain uncertain, the burden on its land if the easement is imposed is so great that the requirements of s 88K(2)(b) have not been met.

60 It also put this proposition in an alternate way, viz that, given that so many factual possibilities remain uncertain (and hence the impact on the redevelopment of Moorebank's land if the easement is imposed remains unknown), the Court is not in a position to presently determine the amount of compensation that should be paid to Moorebank.

61 In many cases where a court has to assess damages or compensation, the Court is faced with an almost impossible task. As Menzies J said in Petroleum and Chemical Corporation (Aust) Ltd v Morris (1973) 1 ALR 269, 271, "Damages cannot, however, be perfect compensation." All a court is expected to do is to fix a fair estimate, even though it is recognized that it is not a perfect assessment: Sharman v Evans [1977] HCA 8; 138 CLR 563, 585.

62 At common law that fair estimate is legitimately obtained by a combination of fact, deduction, estimation and discount for contingencies. Likewise compensation under s 88K may be assessed as adequate if a fair result can be produced by these methods.

63 Further, it is not uncommon in cases dealing with the valuation of land that a court has to make assumptions as to the capacity for land to be rezoned by the grant of a development application, see the classic case of Spencer v Commonwealth [1907] HCA 82; 5 CLR 418.

64 Thus, determining whether the potential servient owner can be adequately compensated is not stymied by the court's ordinary difficulties in the assessment process. The focus is on whether the person on the Bondi bus would recognize that, as a matter of fairness, there has been adequate compensation.

65 I need then to ask myself what disadvantages must, as a matter of virtual certainty, flow to Moorebank if the easement is granted. In my view, the answer is "none". Moorebank's vast hectares can be used for whatever it wants to use them for and access is available.

66 It should also be borne in mind, as Ball J said in Lonergan v Lewis [2011] NSWSC 1133 at [50], that there is a real distinction between the question in s 88K(2)(b) - can there be adequate compensation and the question in s 88K(4), assuming there can be adequate compensation, what is the fair assessment of it.

67 I will make a conditional order below which removes the effect of most of the uncertainties. If the local authorities kybosh the ramps, etc (preventing access to the Moorebank Land), then the easement will be extinguished and compensation refunded. Thus, compensation can be assessed on the basis that the ramp proposal, discussed in detail under E, is viable.

68 I will deal with matters of quantum under head F after I have discussed other matters.

69 D. There is no real issue here. It is true that there is little evidence of Tanlane having made adequate offers of compensation. However, it is abundantly plain that, in the circumstances, the parties were so far apart as to the proper basis for compensation that this is of little significance. Indeed, counsel inform me that there have been serious negotiations, but there is no realistic chance of agreement.

70 E. The authorities make it clear that, even if conditions A-D are satisfied, the Court still has a discretion as to whether it will make an order in the plaintiff's favour.

71 As to such discretion, I agree with what Brereton J said in Khattar v Wiese at 23,250 [60]:

"That discretion is to be exercised having regard to the purpose of the section, which might be summarised as facilitating the reasonable development of land while ensuring that just compensation be paid for any erosion of private property rights... While the confiscatory nature of the section may be relevant, and likewise the extent of the burden which would be imposed on the servient land, the mere reluctance of the servient owner to accept an easement is not relevant... The existence of a superior alternative might well remain at least a relevant discretionary consideration, if it is not determinative of 'reasonable necessity'."

72 It is clear that considerations of discretion and other considerations may overlap. Indeed, in the instant case, some of the matters listed by Messrs Inatey and Wilson in their written submissions have already been considered under other heads.

73 I now turn to the principal argument put for the exercise of the discretion against the Tanlane proposal: that if the easement is granted, the Moorebank Land will be sterilized.

74 If sterilization of the Moorebank Land is established, it would be a significant matter. Section 5 of the EP&A Act, when setting forth the objectives of the Act, includes the orderly and economic use and development of land. Moorebank points out that the planning instruments for Liverpool have permitted the use of the Moorebank Land for materials recycling since the amendment of the Liverpool LEP 1997 by LEP 76 in 2005. Continuing to permit the use of the Moorebank Land for materials recycling was in the face of LEP amendments which progressively permitted the Boral Land and the Tanlane Land to be rezoned for residential use.

75 Moorebank's basal submission is that, if the road bridge is constructed, it will obstruct the only ingress/egress to and from the Moorebank Land. The bridge and the Moorebank access cannot co-exist. This is the principal part of the "burden" or the "counter considerations" referred to in [36] above.

76 Moorebank's submissions are that the Moorebank Land will be sterilized if the easement is granted, the bridge is constructed and the ramps are not constructed because the bridge will be constructed on the 2(a) land, Moorebank will not get access north of the 2(a) land in the event of any redevelopment of its land and there is no other access available to Moorebank. The 2(a) land is the only land available to Moorebank for access to its land in the event of redevelopment of its land.

77 I should note here that in February 2008, ownership of Lots 308 and 309 was transferred from Boral to the Council. Lot 308 is the land upon which Brickmakers Drive is presently being constructed. Lot 309 is the 2(a) land that abuts the panhandle on the Moorebank Land. In January 2010, ownership of Lot 310 (the 7(c) land) was transferred from Boral to the Council.

78 The reason Moorebank submits that the ramps will not be constructed is that at least part of the land on which the ramps or bridge is proposed to be built is in the ownership of the Council and, by its letter of 14 July 2011, it has made it plain that no access will be given. The Council in that letter was speaking both as a consent authority and as a landowner. Thus, the effect of granting the easement is that the bridge will be constructed and the only access by Moorebank to Brickmakers Drive will be denied to it. Access to Brickmakers Drive is necessary for the development of the Moorebank Land.

79 Tanlane submits that the Council's letter of 14 July 2011 should not be accepted as offering a change of position of the Council with respect to the bolt on ramps. It points out that the minutes of the Liverpool Council Extraordinary Meeting held on 15 June 2011 indicate that the Council resolved to send a letter to Moorebank and the State Government "immediately to recommend refusal for this development as the proposed use of this site is incompatible with the current and planned residential and recreational uses of the area.

80 Tanlane also submits that in relation to the alternative means of access proposed in the current form of the Part 3A Application:

a. The road bridge the subject of the development consent together with the bolt on ramps is the approved means of access. It was open to the defendant to rely upon this access for its part 3A application. Development Consent has not been sought from the Council for the bolt on ramps even though the Council owns the land upon which the ramps are to be constructed. There is no reason to believe that the Council would not grant consent to the construction of the bolt on ramps. The road bridge together with the bolt on ramps would give the defendant access to Brickmaker's Drive.

b. The alternative access proposed in the Marshall Design is contrary to the planning for the precinct because it does not give access to any lands to the east, other than the defendant's. It requires the other eastern lands to obtain access from Newbridge Road or Davy Robinson Drive. The Marshall Design has not been the subject of any approval. There is no evidence that it is likely to obtain any approval.

81 There is some material to suggest that the political will of the Council has changed since the original consensus was reached in 2002 and that the Council currently does not favour concrete recycling on the Moorebank Land and may consider itself justified in blocking that use by refusing access across its land. The fact that Moorebank has sought development under Part 3A of the EP&A Act means that the Council has limited avenues of blocking what it might now consider an undesirable development.

82 Moorebank then submits that one must be careful to realize that, if Tanlane succeeds in this application, it will obtain an incorporeal hereditament and will be enabled to have the easement recorded on Moorebank's title. This will constitute an immediate blot on the title. However, there is no certainty as to if and when the bridge would be constructed.

83 In addition, the imposition of the proposed easement would only allow for the construction and maintenance of the approved bridge. It would not provide access to the Tanlane Land (or any other land) from Brickmakers Drive.

84 In my 2008 judgment at [111] I remarked that "if the bridge is not constructed, the plaintiff's land will be virtually sterilized". As can be seen from the following, I adhere to that view.

85 Moorebank says that the Tanlane Land has direct access to and from Newbridge Road. Vehicles are left in, left out of the Tanlane site. The present use of this land can continue with this access arrangement. Tanlane rejects this view. Indeed, it says that unless it has access via the proposed easement, its land will effectively be sterilized.

86 Tanlane says that I should accept Mr Mitchell's evidence that the planned development of Tanlane's land could not occur without a collector road linking it to Brickmakers Drive and that the chosen location of the road bridge is a basic pillar of the Structure Plan, the LEP and the DCP. There is no appropriately zoned (or otherwise planned) alternative road corridor and the construction of the road bridge could only occur in the area of the 2(a) land and, as a consequence of this, the easement over the defendant's land is essential for the planned development of Tanlane's land.

87 Tanlane submits that I should accept Mr Mitchell's evidence and reach the following conclusions:

a. The approved bridge together with the bolt on ramps would give Moorebank access from its land to Brickmakers Drive;

b. That access is in accordance with the link road connecting the east precinct to the west precinct required by the controls in the DCP for the development of Moorebank East;

c. Were a development application to be made by Moorebank for the construction of the ramps, it is likely to be approved, whether made before or after the construction of the road bridge;

d. As a consequence, it cannot be said that the grant of the easement will render the defendant's land landlocked or sterilise it;

e. There is a distinction to be made between, on the one hand the construction and use of the ramps and the bridge to gain access to Brickmakers Drive and, on the other hand, the defendant's proposal for a Materials Recycling facility on the scale proposed. That does not sit comfortably with the residential uses zoned for the Boral lands adjacent to Brickmakers Drive or on the plaintiff's land. The use of Brickmakers Drive through the residential areas will clearly attract objection, which will render uncertain the outcome of the defendant's application for the facility;

f. It is clear that both the approved road bridge and the defendant's proposed Marshall Design cannot both be built;

g. There is no evidence that the Marshall Design has any realistic prospect of being approved;

h. The evidence suggests it is unlikely to be approved because, amongst other things, it does not provide access to any other properties in the eastern precinct. The eastern properties if they are to be developed in accordance with the zoning would have to have access from Newbridge Road and Davy Robinson Drive contrary to the fundamental pillars of the planning for the precinct and contrary to the DCP;

i. The defendant's present access to Newbridge Road via the panhandle is inadequate for any redevelopment and is inconsistent with the DCP.

The defendant's most likely prospect of obtaining access to Brickmakers Drive is by means of the approved road bridge and the bolt on ramps. The defendant would then obtain the advantage of the road bridge constructed by the plaintiff at its expense.

88 I do not consider that I have sufficient material to make a judgment on who is right in their predictions as to what various planning authorities might or might not do, nor need address the point except to discard any hopeless scheme.

89 It is clear, as both sets of counsel have pointed out, that the approved road bridge and Moorebank's scheme based on the Marshall Plan cannot both be built.

90 However, the Marshall Plan is not the only way in which the Moorebank Land can be saved from sterilization. The ramp system is a possibility which cannot be excluded. Although there would seem to be difficulties in its way from the Council consent viewpoint, it is not hopeless.

91 Moorebank submits that there are insuperable difficulties with respect to use by third parties of the bridge and the grant of the easement will cause delay to the grant of Moorebank's present or any amended 3A Application.

92 Tanlane has entered into a Voluntary Planning Agreement with the Council (the " VPA ") on 11 June 2008. It would seem to me that Moorebank is correct in saying that, pursuant to the VPA, Tanlane will be obliged to dedicate the bridge to the Council.

93 Moorebank noted that, whilst the easement sought is a private easement and the development consent is for the construction of the bridge only, the terms of the easement sought by Tanlane include a right of carriageway and a right of footway as defined in Schedule 8 of the Conveyancing Act 1919.

94 Moorebank submits that, for all intents and purposes, in due course the Council envisaged that the bridge would be used as a public road. Moorebank makes the point that, as Tanlane would only hold an easement over the bridge and not the fee simple, it was difficult to see how, in law, there could be a dedication of the bridge to the Council. I agree with this doubt.

95 The road bridge the subject of the Consent is about 12 metres wide (see Condition 32 of the modified consent). Condition 32 also provides that the bridge is to accommodate pedestrians and cyclists. The approved plans did not include a pedestrian or cycle way.

96 Furthermore, the Consent is for the construction of a bridge only and not its use. Condition 7 of the Consent is:

7. Consent is not granted or implied to any future usage of the road bridge as a private road that provides access to development that is not permissible within a Residential 2(a) zone.

97 Moorebank submits that this would not permit use of the bridge by either the marina development or the commercial development on the Tanlane Land in the RE1, RE2 or B6 zones under the current LEP.

98 Again, Moorebank notes that Condition 32 of the Bridge Consent (as modified) requires a combined cycle way and pedestrian way and there is no evidence to suggest that the bridge has been redesigned in accordance with Condition 32.

99 I do not regard the two matters just noted as having great significance. They merely go to the fact that at least some more work has to be done on adjusting the terms of the consent and the development concept to remove anomalies.

100 What is more significant is that, even if the Marshall Plan does not come to fruition and Moorebank needs to revert to its 2008 plan, there would be difficulty in Moorebank making use of the bridge.

101 Moorebank puts that the bridge appears to have been designed with a low load bearing capacity which would be insufficient to accommodate its trucks. Furthermore, if Moorebank were to gain access to the bridge, ramps would have to be constructed and some of these would need to traverse environmentally sensitive land and there is no certainty that any application for their connection would be approved. Indeed it says, the previous suggestion that Moorebank could access the bridge by a ramp up the western side of its panhandle cannot now be implemented because the council, as owner of the 2(a) land has refused the defendant access over that land.

102 This, to my mind, is not conclusive. First, the Council could change its mind, secondly, the defendant could make an application under s 88K against the Council and thirdly, there may be a right to review in respect of what the Council has done by using administrative law remedies. This third matter was briefly discussed in argument without consensus or resolution.

103 It is almost inevitable that the grant of the easement will cause delay. However, compared with other factors this is a minor factor, though frustrating for the parties.

104 In 2008, I deferred making a decision until the environmental law position was made more certain. Subsequent events show that that was not a wise course to take as the delay has not assisted resolution of the parties' problems. Whatever decision I make will still only be effective if planning authorities make compatible decisions. The decision thus should be made.

105 The question arose in my mind as to whether it would be possible to frame a conditional order in such a way as to allow both parties to make as much economic use of their land as possible without overly impinging on the use of the other party's land.

106 However, I initially had doubt as to whether the Court could make a conditional order for the grant of an easement under s 88K.

107 In 117 York Street Pty Ltd at 522, Hodgson CJ in Eq, as his Honour then was, pointed to s 88K(3), which tells the court to specify the terms of the easement in its order, as thus permitting the court to impose conditions in the order.

108 Again in Khattar v Wiese , Brereton J assumed that he had power to impose conditions. I propose to follow those decisions.

109 I have come to the view that it is possible to frame a conditional order in such a way that the possibility of either party's land being sterilized is minimised. Thus, in accordance with the policy behind s 88K I am in favour of granting an easement.

110 Although the 2002 agreement came to an end by effluxion of time, I believe it is relevant to take into account that there was at one stage an agreement that a bridge be built over the panhandle, the creek and the swamp to access Brickmakers Drive.

111 It is also significant that a major reason why that scheme did not succeed is that the plans put the proposed bridge in the wrong place.

112 Moorebank had, under the original concept plan, a way of accessing its land via the proposed bolt on ramps and the bridge.

113 The Marshall Plan was a unilateral change in direction by Moorebank.

114 There are at least two very significant problems with Moorebank having access over the bridge according to the original plan, first, there is some doubt in my mind as to whether the bridge is sufficiently strong to take 48 tonne laden trucks, secondly, there is doubt as to whether the appropriate approvals can be obtained for the ramps.

115 Tanlane put that the question as to whether the proposed bridge would support 48 tonne trucks had already been decided in its favour by Lloyd J and that there was an issue estoppel.

116 Tanlane says that one of the issues before Lloyd J in the Land and Environment Court proceedings was whether the bridge approved by the development consent would be of sufficient load bearing capacity to deal with the trucks and loads required by the defendant's potential future use. The argument went to the proper construction of condition 45 of the development consent, in particular, whether the reference to AS5100 provided for the bridge, the subject of the consent, to comply with AS5100.

117 At [44]-[50] of his reasons, Lloyd J referred to the competing evidence of the two engineering experts, Mr Marshall and Dr French on that issue. At [50], he concluded:

"I conclude from this evidence, therefore, that condition 45 of the development consent which requires the bridge to be designed in accordance with the loads prescribed in AS5100 would be sufficient to deal with the trucks and loads required for Moorebank's future use."

118 Again at [91] Lloyd J said:

"I also reject the second submission relating to the structural adequacy of the bridge. Mr Wilson submits on behalf of Moorebank that condition 45 requiring the bridge to comply with AS5100 - Bridge Design Code, enables a bridge to be constructed which has a load and geometric capacity less than that which would accommodate Moorebank's proposed use...It is self-evident that if access ramps are to have the structural adequacy to accommodate such vehicles then so, too, must the bridge to which the access ramps are attached. In this respect I reject the evidence of Moorebank's engineering expert, Mr Marshall, to the contrary."

119 Thus the plaintiff submits, the issue was disposed of once and for all in the Land and Environment Court proceedings and cannot be raised in these proceedings. The question of the structural adequacy of the bridge the subject of the development consent cannot be an issue in these proceedings.

120 The test for issue estoppel is objective, as this Court stated in Champerslife Pty Ltd v Manojlovski [2010] NSWCA 33; 75 NSWLR 245, 263 at [106]:

"For issue estoppel it is whether the precise question of fact or law sought to be litigated in the later proceedings was decided in the earlier as a fundamental basis for the decision."

121 Moorebank's riposte is that, whilst it accepts the test stated in the previous paragraph, it says that the findings by Lloyd J in [50] and [91] were not necessary, essential or fundamental bases for his decision.

122 In my view, Mooreban k's riposte should be accepted. At [3] of his reasons, Lloyd J said, "the question before me is a relatively narrow one, namely, whether a development consent for construction of a road bridge is valid".

123 His Honour then set out the structure of his reasons. Parts 2 and 3 are the relevant parts for present purposes. These were essentially headed: whether the Council had assessed the application in accordance with the EPA Act; and whether the consent ran foul of the principle in Mison v Randwick MC (1991) 23 NSWLR 734 as modified by statute.

124 It seems clear, and this is reinforced by the plaintiff's written submissions, that the question of the capacity of the bridge was seriously presented before Lloyd J as a key point in the consideration of one of the sub-issues which led to his determination of two of the three issues which he considered that the parties needed him to decide (listed above). The bridge capacity point was not the only point involved in those issues.

125 Dixon J in Blair v Curran (1939) 62 CLR 464 said at 532-3:

"Nothing but what is legally indispensable to the conclusion is thus finally closed or precluded. In matters of fact the issue estoppel is confined to those ultimate facts which form the ingredients of the cause of action... Findings, however deliberate and formal, which concern only evidentiary facts and not ultimate facts forming the very title to rights give rise to no preclusion. Decisions upon matters of law which amount to no more than steps in a process of reasoning tending to establish or support the proposition upon which the rights depend do not estop the parties if the same matters of laws arise in subsequent litigation."

126 Lloyd J's reasons make it clear that his conclusion with regard to the capacity of the bridge was not an ultimate fact. When stating his conclusions on issue 2, he found at [79] that "if [the Council] came to incorrect conclusions in the course of [considering s 79 of the EPA Act], that does not invalidate the decision" to give consent. Whether the bridge was adequate or not did not affect validity under this issue, the fundamental fact was whether the Council had considered its adequacy.

127 The capacity of the bridge required by condition 45 was one of five submissions put to the judge when deciding Part 3. The defendant submits that the "real question in this context was whether the conditions fell foul of the requirements of Mison ", ie whether a condition imposed will leave open the possibility that it will significantly alter the development, consent must be final and certain. The ultimate fact is thus whether the development is final and certain. The adequacy of the bridge, if challenged, is not a fact "so cardinal to [the decision] that without [it] it cannot stand": Blair v Curran per Starke J at 510.

128 It thus does not seem to me that the findings in [50] and [91] were fundamental to the decision of Lloyd J so that the parties are estopped from litigating it.

129 Although I have reached the view that there is no issue estoppel on the matter as to whether the proposed bridge will support 48 tonne trucks, it is apparent that an experienced judge in the Land and Environment Court has analysed the expert evidence and said that the bridge as proposed will support those trucks.

130 I thus consider I can proceed on the basis that the bridge will support Moorebank's laden trucks.

131 Even assuming the weight issue against the defendant, there is still the issue as to whether the appropriate consents can be obtained for ramps to access the bridge.

132 There is also the problem that it would seem that too little attention has been given to the distinction between a private right of way and a public road. (I have considered this matter to some extent above).

133 Courts must also bear in mind Jessel MR's view in Krehl v Burrell (1878) 7 Ch D 551, 554-5 that courts do not presume that legislation enables the rich, via the courts, to purchase the poor man's property against his will. This passage inspired Lord Sumner's dictum in Leeds Industrial Co-Operative Society Ltd v Slack [1924] AC 851, 872, where his Lordship doubted whether:

"it is complete justice to allow the big man...to have his way and to solace the little man...by giving him a cheque that he does not ask for."

134 The authorities do make it plain that the property right of the defendant to be able to use his or her land unimpeded by the plaintiff's proposed easement is a significant factor in the discretion. I have taken it into account in the present case. However, the whole purpose of s 88K is that that right is to give way to the plaintiff's claim in the appropriate case.

135 I am reminded of the observation of Windeyer J in Blulock Pty Ltd v Majic [2001] NSWSC 1063; 10 BPR 19,143, 19,150-1 at [21] with which I agree:

"Yet while it may be perfectly reasonable for a property owner to wish to maintain that property unencumbered rather than to be paid compensation for the encumbrance, the purpose of s 88K is to enable that wish to be overborne in appropriate cases in the interest of enabling land to be used to its fullest extent. Thus it is not necessarily a case of weighing up the competing interests and there ought generally to be a predilection towards a grant..."

136 Ordinarily, if preconditions for the making of an order are made out, the court should make the order unless it can see that there is some good reason for doing otherwise.

137 Were it not for one major matter, not to make an order would be against what the parties agreed in 2002 and how (until the Marshall Plan) Tanlane and some of the neighbours, as well as Moorebank up to a point, have acted and expended a large amount of resources.

138 I understand the point that the agreement ceased in 2007 by effluxion of time, but this was mainly a result of technical difficulties getting in the way of its consummation rather than any acts or defaults of any of the parties.

139 The major matter is that, whilst it should not be said that sterilization of the Moorebank Land is virtually certain if the bridge is built, it is a real possibility.

140 Because it is a real possibility, any inlending purchaser would be put off or would offer less. However, this factor is dealt with by allowing compensation for injurious affectation.

141 I do not find any discretionary reasons for declining to make the order for grant of an easement.

142 Thus I should grant an easement on terms that Tanlane undertakes to the Court to have the easement extinguished, if, despite the best endeavours of both parties (ie there is to be no undermining directly or indirectly of each other's efforts), after all appeals to the Land and Environment Court (or appeals therefrom) are exhausted, Moorebank cannot obtain access for 48 tonne trucks from its land across the proposed easement to Brickmakers Drive.

143 Should the easement be extinguished, Moorebank is to undertake to the Court to return the compensation with simple interest at, say, 8%.

144 It follows that, if the 3A Application succeeds, it cannot be fully implemented unless this order is set aside or the easement granted by this order is later extinguished.

145 I will invite the parties to prepare short minutes to set out more precisely the terms and conditions.

146 F. As to the value of the land itself the subject of the proposed easement, with provision for blot on title , Mr Wotton, Tanlane's valuer, assessed the quantum of compensation arising from the imposition of the proposed easement as less than $10,000.

147 However, this appears to be a very rubbery figure. It is an assessment made by Mr Wotton who, in summary, reasons thus:

(a) Moorebank's land is worth about $5,000,000 or $24.35 per square metre.

(b) The land affected is 120.89 square metres. Thus its value $2,944.23.

(c) Discount to 30% as an easement only is being taken, thus arriving at a figure of $883.27.

(d) Add allowance for the blot on title to bring the figure to just under $10,000.

148 Moorebank's valuer, Mr Dempsey, considered that, in valuing the Moorebank Land at its highest and best use, one should assume that the land was used as a recycling facility, that reasonable access was available for that purpose and that the 3A Application was approved.

149 Mr Dempsey values the Moorebank Land by splitting it into four areas, area 1 with a value of $285 per square metre, area 2 $92 per square metre, areas 3 and 4 $30 per square metre, arriving at a total value of $25,249,118. If use of potential is denied, Mr Dempsey says the whole land is worth $30 per square metre or $6,159,000 in all.

150 Thus he assesses Moorebank's loss at $19,100,000.

151 However, this figure is not the value of the land being taken out of Moorebank's ownership, but the alleged consequential loss in value of Moorebank's remaining land.

152 So far as the value of the land taken is concerned, I think it appropriate to take Mr Dempsey's $30 per square metre, multiply by Mr Wotton's 120.89 and discount 30%. This gives a figure of $1088. What Mr Wotton refers to as the "blot on the title" will be dealt with as injurious affectation under (c). I will thus fix land value at $1,500.

153 It is difficult to assess the other components of compensation. Although reference was made to it, no-one has submitted that the suggestion I made in Wengarin v Byron SC should be applied in the present case, that is, that it may be appropriate in some cases to assess compensation on the value of a licence fee for allowing the plaintiff's land to be developed profitably.

154 Because the valuers focused on the value of the Moorebank Land as if it were totally sterilized, there was little hard evidence as to the loss suffered by Moorebank if the bridge were erected and its land was not sterilized.

155 To my mind, compensation for the factors under (b) and (c) in the list must be very substantial. Under (b) these include the additional costs of redoing its plans and making an amended Part 3A Application.

156 In the projected circumstances, Moorebank would probably suffer inconvenience. It has doubtless also spent considerable monies on the Marshall Plan which will have been wasted. While it is true that the Court should look to detriment to the defendant's land and not to the defendant personally, it seems to me that if the grant of the proposed easement renders useless costs expended on the possible reasonable future use of the subject land, that matter can be taken into account when assessing compensation.

157 There is little evidence as to the amount of such costs (I mean costs other than the costs of preparing the evidence for the present case). However, general experience shows that it is rare in this sort of case for expert consultant assistance to be less than a six figure sum.

158 Under (c) the factors include disturbance while the plaintiff's work people construct the bridge and associated works as well as disturbance during times of future maintenance. They also include loss of income and extra costs caused by delay and in redrafting Moorebank's own planning documents.

159 As to disturbance, I consider that this will be minimal in view of the current use of the Moorebank Land.

160 Delay is a relevant matter as Moorebank only has limited time (until 2018) to use its land for materials recycling. There have already been delays of at least three years whilst the present litigation is pending and probably there will be a further one year delay if plans have to be redrawn and approved if the Marshall Plan becomes impracticable.

161 There is limited evidentiary material as to the monetary consequence of that delay. All I really know is that, currently, Moorebank is paying rates on land which is not being used productively, whereas it could be used to produce substantial income. Three to four years' loss of net income suitably discounted would seem to me to be appropriate. However, I do not have the figures to make a meaningful calculation of this loss.

162 In my view, with respect to these factors, the range is between $100,000 and $250,000. I will take the mid point of the range and will fix it at $175,000. However, Moorebank should be given the opportunity of electing, at its own risk as to costs, an inquiry to determine actual figures of probable losses for which it should receive compensation.

163 As to injurious affectation, I have already set out Mr Dempsey's estimate of $19,100,000. This is on the basis of sterilization of the Moorebank Land which I have rejected.

164 If, as I consider likely, Moorebank is able to use its land for its highest and best use (even with some inconvenience) then the factor for injurious affectation is minimal.

165 Injurious affectation is the same factor as has been referred to by Mr Wotton as "blot on the title". Mr Wotton allowed just over $9,000 for this factor. Mr Dempsey does not specifically refer to it, but notes that, if the Moorebank Land is sterilized, its value is reduced by $19,100,000. He gives no guidance, however, to how a reasonable, but willing purchaser might discount the value of the Moorebank Land because of the possibility of sterilization.

166 The concurrent evidence session with the valuers did not further elucidate this problem.

167 Mr Wotton's estimate of $9,000 or so is, I consider, a little under the value of the injurious affectation. On the other hand, even taking 1% of Mr Dempsey's figure would be too high. If the Moorebank Land is not sterilized, a reasonable commercial purchaser will find some good use for the land.

168 I would fix injurious affectation at $25,000.

169 Thus, I fix compensation at $201,500 being:

Land value $1,500.00

Injurious affectation $25,000.00

Other factors $175,000.00

170 I consider I should add the proviso that, if Moorebank so elects, it may have an inquiry before an associate judge as to what, after considering all the available evidence proffered by the parties, is the proper figure to be allowed as compensation to Moorebank for associated costs that would be caused to it by the grant of the easement and for insecurity and loss of amenities.

171 I could be persuaded that, if Tanlane wishes an inquiry at its own risk as to costs, it should be granted its wish.

172 G. Accordingly, the result of the application is that, essentially, I am in favour of granting Tanlane an easement on the conditions that are set out above with compensation at $201,500. However, there will need to be deep thought as to the exact terms of the order to be made and I should stand the matter over for the plaintiff to bring in short minutes of order to a date about three weeks hence which I will fix when these reasons are delivered.

173 Under the section, the plaintiff must be ordered to pay the costs of the application. If there are to be any submissions as to why the statute should be displaced or whether the costs of some issues should receive special consideration, they should be in writing served a week before the short minutes are brought in with a copy to my Associate. The Court requires both an electronic version and a hard copy of the final draft.

174 This case has been proceeding for too long. I remind the parties that I retire as a full time Supreme Court judge on 23 April 2012 and that it would be best for all concerned for me to conclude the case at first instance well before then if that be at all possible. It should be anticipated that the Court will not brook delay in finalising this aspect of the parties' dispute.

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Decision last updated: 04 November 2011