An easement is a legal right that allows one party to use or access another party’s land for a specific purpose. This can include rights such as the right to access a shared driveway or to use a shared water source.
In New South Wales, s 88K Conveyancing Act 1919 gives the court power to create easements under certain conditions. This provision was inserted in 1995 to enable applicants to obtain easements over neighbouring land in circumstances deemed ‘reasonably necessary’.
If all of the following elements are fulfilled, the court may make an order for an easement, specifying its nature and terms (Gordon v Lever (2018) 97 NSWLR 90, [97]:
- The easement is reasonably necessary for the effective use or development of the other land that will have the benefit of the easement (‘dominant tenement’) (s 88K(1)).
- The use of the land having the benefit of the easement will not be inconsistent with the public interest (s 88K(2)(a)).
- The Court is satisfied that the owner of the land to be burdened by the easement (‘servient tenement’) can be adequately compensated for any loss or other disadvantage that will arise from the imposition of the easement (s 88K(2)(b)).
- The Court is satisfied that all reasonable attempts have been made by the applicant to obtain the easement but have been unsuccessful (s 88K(2)(c)).
Reasonably necessary:
In determining whether the easement is reasonably necessary for the effective use or development of the land, the threshold is above something that is simply convenient but it is less than absolute necessity (D & D Corak Investments Pty Ltd v Yiasemides [2006] NSWSC 1419, [13] (Young J)). Therefore, an easement can be granted even if the land could theoretically be effectively used and developed without it (117 York St Pty Ltd v Proprietors of Strata Plan No 16123 (1998) 43 NSWLR 504).
However, the Court must be satisfied that the proposed use or development is reasonable in comparison with possible alternatives. In Moorebank Recyclers Pty Ltd v Tanlane Pty Ltd [2012] NSWCA 445, it was found that it is sufficient to show that the proposed development is economically rational and appropriate to the area. In Arcidiacono v Owners of Strata Plan No 17719 [2020] NSWCA 269, the Court found that reasonable necessity means that the use or development of the land with the easement must be at least substantially preferable to the use or development without it.
A salient consideration is the impact on the servient tenement (ING Bank (Australia) Ltd v O’Shea (2010) 14 BPR 27, 325 [48]-[49]). The greater burden on the servient tenement, the stronger the applicant’s case needs to be to justify a finding of reasonable necessity (Aussie Skips Recycling Pty Ltd v Strathfield Municipal Council [2020] NSWLEC 22). Accordingly, the applicant’s past use of the land and the servient tenement’s past consent are relevant to the possible impact on the servient tenement but it cannot be solely used to manufacture ‘reasonable necessity’ (Gordon v Lever (2018) 97 NSWLR 90).
This element was not made out in Aussie Skips Recycling Pty Ltd v Strathfield MC [2020] NSWCA 292, where the Court found that the proposed easement was incompatible with the continued beneficial ownership of the servient tenement as it would enclose the area constituting 68% of the Council’s land. It was therefore incapable of comprising an easement.
Use of land not inconsistent with the public interest
The easement will not be granted if the use of the dominant land would be illegal (Gordon v Lever (2018) 97 NSWLR 90, [97]). However, the necessity for the use of the land to not be inconsistent with public interest is a lower threshold than being in the public interest.
Adequate compensation
To grant an easement, the Court needs to be satisfied that the servient tenant can be adequately compensated for any loss or other disadvantage that will arise from the easement. If it cannot make a determination as to the compensation payable at the time the order is made, it has no power to grant the easement (Studholme v Rawson [2020] NSWCA 76, [46]).
The compensation amount is determined by reference to the loss incurred by the servient tenement and not the benefit derived by the dominant tenement (Rainbowforce Pty Ltd v Skyton Holdings Pty Ltd (2010) 171 LEGRA 286). Compensation will cover the diminished market value of the affected land and associated costs, as well as any loss arising from insecurity or loss of amenities such as the loss of peace (Wengarin Pty Ltd v Byron Shire Council (1999) 9 BPR 16, 985; Acorp Developments Pty Ltd v HWR Pty Ltd [2018] NSWLEC 68, [153]).
Legal costs are usually payable by the applicant unless the servient tenement’s conduct warrants an adverse costs order. Behaviour that might warrant that includes presenting false evidence or manufacturing a case (Bilton v Ligdas (206) 18 CBPR 36, 379) but does not include refusing a reasonable offer (Owners Strata Plan No 13635 v Ryan [2006] NSWSC 342, [32]).
All reasonable attempts have been made to obtain the easement
This element was incorporated into s 88K to encourage applicants to initiate negotiations and treat s 88K as a last resort (New South Wales, Parliamentary Debates, Legislative Council, 4 December 1995, 4000 (Douglas Moppett).
In assessing reasonableness, the court must consider the likelihood that consensus would be reached if further steps had been taken (Coles Myer New South Wales Ltd v Dymocks Book Arcade Ltd (1996) 7 BPR 14). The Applicant does not have to show that they offered an amount that was later considered fair compensation by the court, as long as they showed a willingness to negotiate and respond to the other party reasonably (Katakouzinos v Roufir Pty Ltd [1999] NSWSC 1045, [75]
In Bilton v Ligdas (2016) 18 BPR 36, this element was found to be satisfied when the servient tenement had rejected an offer that was double the maximum market value as assessed by experts.
The court retains discretion
The court retains the discretion to refuse an application for an easement even if the applicant has satisfied all the requirements (Khatter v Wiese (2005) 12 BPR 23, 235, [59]; Bloom v Lepre (2008) 13 BPR 24, 923[ 100]-[104]). In Bloom v Lepre, the applicant was refused an easement for a wider driveway because he purchased the property knowing of its existing narrow driveway. It was noted that the Court’s discretion is to be exercised having regard to the purpose of the second, which was to facilitate the reasonable development of land.
Another reason that an application may be denied despite meeting all of the requirements is that no payment will be able to compensate the burdened owner for the imposition of the easement. This is especially so if it interferes with the peace or privacy of the landowner or is ultimately detrimental to their lifestyle (Wengarin Pty Ltd v Byron Shire Council [1999] NSWSC 485, [26]).
Courts have also refused applications upon considerations of safety. In Sodhi v Stanes [2007] NSWSC 177, the court refused an applicant’s request for an access road to their banana plantation on the basis that expert evidence suggested that the road which would have a very steep gradient would be dangerous.
Further, the court will generally not impose an easement where the servient tenement prefers utilising a license to achieve the same result (Vella v Nergl Developments Pty Ltd [2020] NSWSC 1405, [166]]).
The court needs to specify terms
It has been consistently held that the Court approving a request for an easement needs to outline its terms (Studholme v Rawson [2020] NSWCA 76, [44] (Basten JA; Bell P and Gleeson JA agreeing); Moorebank Recyclers Pty Ltd v Tanlane Pty Ltd [2012] NSWCA 445; Gordon v Lever (2018) 97 NSWLR 90, [97] (Sackville AJA, McColl and White JJA agreeing)). The relevant terms include time limitation (under s 88K (3)) and compensation, unless the Court determines that compensation is not payable because of a special circumstance (under s 88K(4)).
Other ways the court may grant an easement
The Land and Environment court may also grant an easement as an ancillary order to the grant of development consent, under s 40 of the Land and Environment Court Act 1979 (NSW).
