This article will discuss the fourth and last element that must be satisfied for a court to create an easement under s 88K of the Conveyancing Act 1919 (NSW). This element requires the court to be satisfied that the applicant has made all reasonable attempts to obtain an easement or one having a similar effect but has been unsuccessful.

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 a consensus would be reached if further steps had been taken. There is a suggestion that the requirement is for the applicant to have negotiated until it is extremely unlikely that consensus will be reached in the foreseeable future (Coles Myer New South Wales Ltd v Dymocks Book Arcade Ltd (1996) 7 BPR 14). In Bilton v Ligdas (2016) 18 BPR 36, this element was found to be satisfied when the servient tenement rejected an offer that was double the maximum market value as assessed by experts.

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 considering whether this requirement has been met, the Court may consider all conduct leading up to the making of the order (Studholme v Rawson [2020] NSWCA 76, [83]). As such, in Govindan-Lee v Sawkins (2016) 18 BPR 35,883, this was satisfied by the Applicant making an offer of $10,000 following the commencement of proceedings. This suggests that an applicant may satisfy this without negotiating outside of Court, even though this does not seem consistent with the Parliament’s intention for the element.

There are not many cases where the respondent uses this section to impede the imposition of an easement. One of the few examples is PD Consultants Pty Ltd v Childs [2004] NSWSC 1076, which ended with Brownie AJ adjourning the matter, suggesting that they try to reach some agreement and put the dispute behind them.

However, courts will generally not impose an easement where the respondent prefers a license to achieve the same thing (Vella v Nergl Developments Pty Ltd [2020] NSWSC 1405, [166] (Slattery J). This relates to their underlying discretion as to whether they grant an easement, even if all the requirements have been satisfied.

This article will discuss the third element that must be satisfied for a court to create an easement under s 88K of the Conveyancing Act 1919 (NSW). This element requires the court to be satisfied that the owner of servient land can be adequately compensated for any loss or other disadvantage that would arise from the imposition of the easement.

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). It has been noted that the Court should not err on the side of generosity and that although the applicant may generate profit from the development in connection with which the easement is sought, this does not justify any departure from the basic principles of compensation discussed below (Mitchell v Boutagy (2001) 118 LGERA 249, [31]).

There is a requirement for a causal relationship between the loss or disadvantage for which the claim is made and the imposition of the easement (Mitchell v Boutagy (2001) 118 LEGRA 249, [26]).

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]). It will also cover compensation for loss of the proprietary rights taken by the easement and for the disturbance effected by carrying out the initial work and subsequent repair and maintenance (Tregoyd Gardens Pty Ltd v Jervis (1997) 8 BPR 15, 845). An offset for any compensating advantages is allowed, so that the final amount is a reflection of the real detriment suffered (Wengarin Pty Ltd v Byron Shire Council [1999] NSWSC 485, [26]).

The onus of proof in a case for compensation is borne by the applicant (Mitchell v Boutagy (2001) 118 LGERA 249, [34]). This is part of their duty to satisfy the Court that the person can be adequately compensated (117 York St Pty Ltd v Proprietors of Strata Plan No 16123 (1998) 43 NSWLR 504, 516).

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]).

Generally, if the court 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]). However, in some cases, the Court may determine that compensation is not payable because of special circumstances (Property Partnerships Pacific Pty Ltd v Owners of Strata Plan 58482 [2006] NSWLEC 709, [11]).

This article will discuss the first element that must be satisfied for a court to create an easement under s 88K of the Conveyancing Act 1919 (NSW), which is that the easement is reasonably necessary for the effective use or development of the dominant land.

This element does not require that there be absolute necessity, with Barret J observing in Kent Street Pty Ltd v Sydney City Council [2001] NSWSC 268, [12] that this does not ‘direct attention to what is indispensable.’ It also does not require the applicant to show that the easement is necessary to achieve the highest and best use of the land (Moorebank Recyclers Pty Ltd v Tanlane Pty Ltd [2012] NSWCA 445, [154]-[155]). The element may be satisfied by showing that the proposed development is appropriate to the area and is an economically rational use of the land.

To meet the ‘reasonably necessary’ standard, a court needs to be satisfied that the proposed use is reasonable compared with other possible alternatives. The court must further be satisfied that use of the land with the easement is substantially preferable to use without it, as clearly outlined by Hodgson CJ in 117 York St Pty Ltd v Proprietors of Strata Plan No 16123 (1998) 43 NSWLR 504, 508-9. Therefore, 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)). As such, 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).

The applicant bears the onus of showing reasonable necessity and adducing evidence about alternatives. If they fail to do so, the Court may not be able to accept their primary submission that an easement is reasonably necessary (Govindan-Lee v Sawkins (206) 18 BPR 35, 3883, [48]-[50]).

Reasonable necessity must be measured having regard to the burden the easement would impose on the servient land. As Hodgson CJ found in Katakouzinos v Roufir Pty Ltd [1999] NSWSC 1045, [42], the greater the burden the stronger the case needed to justify a finding of reasonable necessity. The court must bear in mind the confiscatory nature of an easement and that property rights are valuable rights that the court should not lightly interfere with (Woodland v Manly Municipal Council [2003] NSWSC 392, [19]).

For example, the 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.

In assessing whether the easement is reasonably necessary, the court must make a value judgement with no exercise of discretion (Woodland v Manly Municipal Council [2003] NSWSC 392, [10]). However, once this element is satisfied, if the others are as well, then the Court will have the discretion on whether or not to grant the easement.

In New South Wales the Conveyancing Act 1919 (“the Act”) is the legislation which expresses and regulates the essential law relating generally to land in NSW. Other legislation, such as The Real Property Act 1900 and the acts relating to Strata Titles and Crown Lands, cover specific kinds of title. This article will explain the […]

If you’ve received a letter in the mail saying that someone wants to build a pipe through your land or needs an easement from you or they will take you to Court, you have every right to be baffled.  You’re probably thinking a lot of different things which we wouldn’t want to necessarily place here […]