Weissflog v Community Association DP 270159

The plaintiffs in these proceedings, Mr Nikolas Weissflog and Ms Tamara Dunlop, are the owners of land in Folio Identifier 98/755773 (hereafter referred to as “Lot 98”). Lot 98 is located in a rural and bushland setting near Meadow Flat, south of the Great Western Highway between Lithgow and Bathurst. The land is within the Bathurst Regional Council area. Under the Bathurst Regional Local Environmental Plan 2014 the land is zoned RU1 Primary Production. By their Summons, the plaintiffs seek an order under s 88K of the Conveyancing Act 1919 (NSW) (“the Act”) for the imposition of an easement in the nature of a right of carriageway over the land in Folio Identifier 1/270159. That land is owned by the defendant, the Community Association DP 270159.

DP 270159 is a community plan of subdivision that was established as a community scheme in 1998. The community scheme is known as the Mount Haven Estate. The defendant’s land (which will hereafter be referred to as “Lot 1”) is the community property within the scheme. The scheme includes numerous other lots that have been developed and used for residential purposes, and a farm lot (which will hereafter be referred to as “Lot 63”).

Vehicular access to the community scheme is obtained from Diamond Swamp Road, which runs in a southerly direction off the Great Western Highway. Diamond Swamp Road connects with a road within the scheme known as Mount Haven Way. Mount Haven Way forms part of Lot 1. It is not a public road. Mount Haven Way runs through the scheme and provides, either directly or indirectly, a means of vehicular access to all of the residential lots. Toward its end (the end furthest away from Diamond Swamp Road), a dirt access road made with a crushed granite base runs off it to the right. The dirt access road runs to a Crown Road on Lot 63.

From that intersection, the Crown Road runs in a generally southerly direction across Lot 63 to the plaintiffs’ Lot 98, and in a generally northerly direction across Lot 63 to Lot 1 in DP 580287. This property, which is not part of the community scheme, is owned by Mr Patrick Reen. For convenience, this property will hereafter be referred to as the “Reen Land”. The Crown Road continues in a generally northerly direction across the Reen Land until it meets a public road at a point not far from the intersection of Diamond Swamp Road and Mount Haven Way at the entrance to the community scheme.

However, there is evidence that the portion of the Crown Road on the Reen Land is presently unsuitable for vehicular traffic. In practical terms, vehicular access between the plaintiffs’ Lot 98 and the public road system is presently available only by using Mount Haven Way and the dirt access road on Lot 1, and the southern part of the Crown Road on Lot 63. In these circumstances, the plaintiffs contend that for the purposes of s 88K(1) of the Act it is reasonably necessary for the effective use or development of Lot 98 to impose a right of carriageway over Lot 1 for the benefit of Lot 98.

The defendant opposes the application for the imposition of the easement on various grounds. First, the defendant denies that the easement is reasonably necessary for the effective use or development of the plaintiffs’ land within the meaning of s 88K(1) of the Act. In that regard, the defendant says that while it is open to the plaintiff to arrange for alternative access over the Crown Road, they have failed to take steps to do so. The defendant further says that the plaintiffs have developed their land and carried out commercial activity upon it without development consent and in circumstances where the commercial activity (of a cat breeding business) is a prohibited use. The defendant also says that the proposed easement would have a serious impact upon the amenity of the community scheme.

The defendant also contends that as the conduct of the cat breeding business is prohibited (such that development consent could never be granted), it would be inconsistent with the public interest to impose the easement (see s 88K(2)(a) of the Act).

The defendant appears to accept that if an easement were to be imposed it could be adequately compensated for the loss and disadvantage that would thereby 7arise (see s 88K(2)(b) of the Act). There is, however, a dispute about the amount of compensation that would be appropriate in that event. The defendant appears also not to dispute that the plaintiffs have made all reasonable attempts to obtain the easement sought but have been unsuccessful (see s 88K(2)(c) of the Act).

Finally, the defendant contends that even if the requirements of s 88K(1) and s 88K(2) of the Act are satisfied, the Court should not exercise its discretion to impose the easement, primarily due to unreasonable conduct on the part of the plaintiffs. The alleged unreasonable conduct of the plaintiffs includes purchasing Lot 98 without adequately informing themselves in relation to access to the property, and thereafter undertaking building works and carrying on the cat breeding business without seeking necessary approvals and without first resolving the issue of access. It was also put that a matter weighing against exercise of the power under s 88K was that the plaintiffs, having purchased Lot 98 at a price that reflected its problems with access, would obtain a windfall if the easement were to be imposed.

The general configuration of the roads in the relevant area is broadly described in the preceding section. The annotated aerial photograph that appears in Exhibit C2 at page 375 provides a useful overview of the area. It contains references to lot numbers, and depicts Mount Haven Way and the dirt access road (in red) as well as the Crown Road (in green).

The plaintiffs entered into a contract to purchase Lot 98 on 23 December 2014. The purchase price was $190,000. The plaintiffs had inspected the property on four occasions prior to their entry into the contract. On these visits, access to the property was obtained via Mount Haven Way, the dirt access road and then the Crown Road. The selling agent who conducted the inspections had, or obtained, a green key to a locked gate across the dirt access road. This gate was generally referred to in the evidence as the “green key gate”. Mr Weissflog deposed that on settlement the plaintiffs received two green keys to the green key gate. The evidence is not clear as to the circumstances in which keys to the green key gate were made available to the plaintiffs.

In cross-examination, Mr Weissflog agreed that prior to entering into the contract no one had told him that access from a public road to the property could lawfully be obtained through the Mount Haven Estate. He agreed that he did not make that enquiry with the solicitor who acted on the purchase. Mr Weissflog said that he assumed that lawful access could be obtained through the estate because that was the route used for the inspection of the property.

At the time of the purchase, Lot 98 had only a simple shed upon it which contained a loungeroom, a bedroom and a kitchen. There was an outside toilet and shower. The plaintiffs proposed to construct improvements to the dwelling. By no later than October 2017 the plaintiffs had covered the existing building, enclosed its sides, and added an inside bathroom and another bedroom.

The plaintiffs and their two children moved in to live on Lot 98 in April 2015. Mr Weissflog gave evidence that they obtained access to the property from Diamond Swamp Road by driving through Mount Haven Estate to the Crown Road and then along the Crown Road to Lot 98.

However, in about June or July 2015, Mr Weissflog was told by Mr Robert Hood that the road through the estate was not the plaintiffs’ “legal access”. Mr Hood is the controller of Hood Rural Resources Pty Ltd, which was at that time the owner of Lot 63.

Mr Hood said words to the effect that “your access is over the Crown Road which runs through Pat Reen’s property”. In cross-examination, Mr Weissflog confirmed that his evidence was that it was only then that he became aware that legal access to Lot 98 was via the Crown Road not via Mount Haven Way.

The conversation with Mr Hood prompted Mr Weissflog to approach Mr Reen about the matter. Mr Weissflog deposed that Mr Reen told him that “the Crown Road through my property is not passable as there are dams across it”.

The plaintiffs continued to use Mount Haven Way and the dirt access road. It seems that they must have made a request to the management committee of the defendant to continue that use. On 28 August 2015 the Chair of the committee sent a letter to Mr Weissflog in the following terms:

Shortly thereafter the plaintiffs engaged Crennan Legal on the matter of access for Lot 98. Mr Crennan took steps toward obtaining the agreement of the defendant for the current access to continue. Arrangements of a temporary nature were subsequently agreed upon in that regard. These arrangements have since been the subject of ongoing negotiation, and at times contention. It is not necessary to refer to the details of what occurred. It is sufficient to note that the plaintiffs have, more or less continuously, and subject to various conditions, enjoyed access to Lot 98 using Mount Haven Way and the dirt access road. At present the arrangement is stated to be in place until the determination of these proceedings.

Mr Crennan also made contact with Mr Reen. In a letter to Mr Reen dated 17 September 2015, Mr Crennan stated:

Mr Crennan had indeed written a letter (also dated 17 September 2015) to the Crown Lands Authority to inform them of the plaintiffs’ interest in ensuring that the Crown Road remained available to provide access to Lot 98. It was further stated in the letter that they intended to have discussions with the owner of the land (Mr Reen) about the situation.

Mr Reen sent a letter in response to Mr Crennan dated 20 October 2015 which included the following:

Little progress seems to have been made in dealing with the problem of access until early 2017. On 28 March 2017 the plaintiffs obtained a survey of the Crown Road route across the Reen Land. The survey shows that the route is impeded by three dams (two across the whole or almost the whole width, and one across about half the width of the road area). Markings on the survey suggest that the length of the route across the Reen Land is in the order of about 1.3km.

At around this time, the Department of Industry-Lands was investigating the carrying out of certain works on the Crown Road on Lot 63. These works were carried out by a contractor engaged by the plaintiffs. The Department was concerned that the works had been carried out without the permission of the Crown. Mr Gregory Campbell of the Department sent an email to the plaintiffs on 5 April 2017 about the matter. The email included the following:

By July 2017 the plaintiffs had made contact with the Bathurst Regional Council in relation to the development of Lot 98 and access to Lot 98. It seems that the plaintiffs had by that time already undertaken construction work upon Lot 98. It is not in dispute that the plaintiffs did not have a development consent for such works. Mr Daniel Dwyer, a planner at the Council, sent an email to the plaintiffs on 26 July 2017 which included the following:

On 5 October 2017 Mr Dwyer and a more senior Council planner visited Lot 98. Mr Weissflog deposed that he recalls one of them saying that “as soon as you have obtained access you can put in a development application for your building”.

Mr Weissflog agreed in cross-examination that he understood that in order to complete the building works a consent was needed. It is clear, however, that since the inspection on 5 October 2017, the plaintiffs carried out further construction including the addition of a deck and living room, a pool and what Mr Weissflog described as “the cat area”. Mr Weissflog was not sure whether the photo room and gymnasium had been commenced at that time. He agreed that he knew that all of the building works (whether constructed before or after October 2017) were constructed without the Council’s consent in circumstances where he knew that such consent was required.

The plaintiffs made further enquiries in relation to the question of access in early 2018. On 12 February 2018 Mr Darrel Lawrence of the Department of Industry-Crown Lands & Water Division sent an email to the plaintiffs (copied to the Office of the Member for Bathurst) which set out options to consider to achieve access to their property as follows:

Mr Lawrence also reminded the plaintiffs that they must not carry out any works on Crown Roads, or other Crown Land, without the approval of the Department.

On 1 March 2018 the plaintiffs sent an email to Mr Eric Young, the Chair of the executive committee of the defendant. The email stated that having discussed the various options with Mr Lawrence “the best option at this stage is for us to apply through his office to construct the crown road to a fire trail standard and restrict access i.e. not open to the general public as a full road”. The email stated that the plaintiffs were “in the process of this application” and that they would advise the outcome.

The evidence is not entirely clear as to the precise nature and fate of the application referred to. I note, however, that Mr Weissflog deposed that to the best of his knowledge the suggestion that the Crown Road become a fire trail with limited public access was “not possible”. That evidence was not challenged in cross-examination. I infer that Mr Weissflog’s understanding is likely to have derived from responses given to enquiries he made with the Department. The Department had certainly made it clear to the plaintiffs by March 2020 that it could only consent to small scale road works on Crown Roads, and that the Crown Road (on both Lot 63 and the Reen Land) would require major or extensive works. Further, Mr Weissflog agreed in cross-examination that an application to upgrade the Crown Road through the Reen Land was rejected on the basis that the works were clearly not small scale works.

It is clear that the plaintiffs have never made any application for the Crown Road to be transferred into the control of the Council. This was accepted by Mr Weissflog in cross-examination. He agreed that he has instead made applications for the carrying out of certain maintenance works on the southern section of the Crown Road (on Lot 63). The plaintiffs have continued to use that section of the Crown Road, as well as Mount Haven Way and the dirt access road, to obtain access to Lot 98.

I note in passing that on 9 May 2019 the National Parks and Wildlife Service (“NPWS”) sent a letter to the defendant to express interest in the possible creation of an easement across the estate for the benefit of NPWS to facilitate access to the Eusdale Nature Reserve, located to the west of the estate.

On 23 October 2019 the plaintiffs, through Crennan Legal, made a formal request for an easement for access through Mount Haven Estate. Reference was made to “productive discussions” regarding the provision of an easement. It was noted that an easement already existed across the estate in favour of Lot 11 DP 755773. That lot is located to the west of Lot 63, slightly to the north of Lot 98. The letter stated that the plaintiffs would be happy to make contributions of time, tools and machinery for “working bees” in the estate.

On 25 October 2019, solicitors retained by the defendant, Le Fevre & Co, responded to the request. It was stated, amongst other things, that the plaintiffs had failed to show any progress toward resolving the issue of legal access to their property, and that the informal permission for access via the estate would be withdrawn on 1 November 2019. It was further stated that there had been no productive discussions, nor indeed any discussions, regarding the provision of an easement.

Le Fevre & Co sent a further letter to Crennan Legal on 1 November 2019. The letter included the following:

A further letter from Le Fevre & Co, dated 1 December 2019, stated that it was made “especially clear” at the extraordinary general meeting of the defendant held on 24 November 2019 that the community had no interest in providing an easement through the estate to any third party.

On 11 March 2020 NPWS sent a letter to the defendant in relation to its proposal for an easement across the estate. The letter included the following:

On 23 March 2020 the Department of Industry and Environment sent a letter to Mr Weissflog concerning his enquiry about constructing a Crown Road. The letter included the following:

On 31 March 2020 Watkins Tapsell Solicitors, the plaintiffs’ present solicitors, sent a letter to Le Fevre & Co which contained an offer to pay $25,000 plus costs of $5,000 for an easement for access (and an easement for services) burdening the access ways of the estate “along the shortest formed road route from Diamond Creek Road to the new gate on the Crown Road”. The reference to the new gate is to a gate installed in January 2020 at the end of the dirt access road as it meets the Crown Road on Lot 63. The letter further stated that the plaintiffs would agree to pay $400 p.a. contribution to the cost of maintenance and repair.

In April 2020 the plaintiffs made a request for a right of carriageway through the Reen Land. The terms of the request are not in evidence. However, on 29 April 2020 Mr and Mrs Reen sent a letter to the plaintiffs in which it was stated that, for various reasons, the request would not be considered. On 30 April 2020 the plaintiffs commenced these proceedings.

Since the commencement of these proceedings, the plaintiffs have made an application to the Council seeking “retrospective” approval for the dwelling and cat breeding establishment on Lot 98. The application appears to have been lodged in early December 2021. On 8 December 2021 the Council sent a letter to the plaintiffs’ planning expert, Mr Anthony Daintith, stating that the application had been rejected pursuant to cl 51 of the Environmental Planning and Assessment Regulation 2000 (NSW). The letter included the following:

On 28 January 2022 the Council sent a letter to Mr Weissflog in relation to the recent submission of a geotechnical report. The letter went on to note that the only remaining impediment to the lodgement of a new development application is submission of evidence of legal and physical access.

Section 88K of the Conveyancing Act provides:

The principal concept is whether the easement sought to be imposed is reasonably necessary for the effective use or development of the land that will have the benefit of it. An important statement of the relevant principles is found in the decision of the Court of Appeal in Moorebank Recyclers Pty Ltd v Tanlane Pty Ltd (2012) 16 BPR 31,257; [2012] NSWCA 445 at [154]-[159]. The Court of Appeal there stated:

In Khattar v Wiese (2005) 12 BPR 23,235; [2005] NSWSC 1014, Brereton J (as his Honour then was) stated at [27] that “[t]he authorities repeatedly point to the confiscatory nature of s 88K as requiring firm proof of the reasonable necessity for the easement, and that the court bear in mind that property rights are valuable rights not lightly to be taken away”.

Reference should also be made to the decision of the Court of Appeal in ING Bank (Aust) Ltd v O’Shea (2010) 14 BPR 27,317; [2010] NSWCA 71 where Giles JA (with whom Campbell JA agreed) said at [48]-[49]:

The requirement of reasonable necessity is to be assessed by reference to the circumstances as they exist at the time of the hearing (see Gordon v Lever (supra) at [89]; Gordon v Lever (No 2) (supra) at [40]).

If the Court concludes that the imposition of an easement is reasonably necessary within the meaning of s 88K(1), the Court can proceed to make an order imposing the easement, but only if satisfied of the matters set out in s 88K(2). Even then, the Court retains a discretion as to whether to proceed to make the order (see Khattar v Wiese (supra) at [2]).

The above summary of the applicable principles is taken from the recent decision in Tout v Johnson [2021] NSWSC 1311 at [67]-[72].

The first question to consider is whether the easement sought by the plaintiffs is reasonably necessary for the effective use or development of Lot 98, so as to satisfy s 88K(1) of the Act. The plaintiffs, in supplying particulars of their claim, identify the relevant use or development as use as a residence and for all other purposes permitted within the RU1 zoning now and in the future. At the present time, the plaintiffs seek the easement in aid of the use of the land as a residence and also as a cat breeding facility. The easement is sought to enable vehicular access between Lot 98 and Diamond Swamp Road, a road open to the public.

As the authorities cited above demonstrate, in approaching the question of reasonable necessity the Court must, amongst other things, consider any alternative methods by which the use or development of the land could be achieved and must consider the effect the proposed easement would have upon the servient tenement. Ultimately, the question of whether an easement is reasonably necessary for the effective use or development of land must be determined by an evaluation of all the relevant factors in conjunction with each other.

The primary submission of the plaintiffs is that the imposition of the easement is necessary to enable Lot 98 to be effectively used as a residence. The plaintiffs further submit that the easement is necessary to enable Lot 98 to be effectively used as a cat breeding facility. It is submitted that both uses are permitted with consent under the applicable zoning. The plaintiffs contend that without access across the estate, Lot 98 is effectively landlocked. In my view, the existence of the Crown Road between Lot 98 and the public road system means that Lot 98 cannot strictly be described as landlocked, but the present unsuitability of parts of the Crown Road for vehicular traffic means that vehicular access between Lot 98 and the public road system can only be practically obtained by traversing the roads that pass through Mount Haven Estate.

The plaintiffs submitted that they have investigated the possibility of taking steps to have the Crown Road made trafficable, but have been unsuccessful. The plaintiffs submitted that the evidence shows that the works that would be required would be very substantial and involve great expense. The plaintiffs further submitted that the effect of the proposed easement on the servient tenement itself (as opposed to other lots within the community scheme) was not substantial, and they pointed out that Lot 1 is already burdened by a similar easement in favour of Lot 11.

The defendant accepted in its submissions that portions of the Crown Road “are in a state of substantial disrepair and blocked by obstacles, such that substantial works would be required to render it passable by vehicle and facilitate access to the Plaintiffs’ Land”. The defendant contends, however, that the Crown Road remains a lawful alternative means of access, and the proper course is for the plaintiffs to take steps to establish practical access over the Crown Road. The defendant submitted that the plaintiffs have not taken such steps or at least have not exhausted all of available avenues to establish access, and, moreover, have not obtained approval for their uses of Lot 98. The defendant further submitted that approval for the cat breeding facility could never be given as it is a prohibited use. The defendant submitted that in these circumstances, and having regard to the burden the easement would impose on Lot 1, the plaintiffs have failed to show that the easement sought is reasonably necessary within the meaning of s 88K(1) of the Act. The defendant emphasised that the onus of proof rests upon the plaintiffs, and submitted that they have failed to discharge their onus, particularly in relation to the alleged impracticality and high cost of establishing access over the Crown Road.

It is correct to say that the plaintiffs have not exhausted all available avenues to establish access using the northern section of the Crown Road, in particular as it runs across the Reen Land. They have not, for example, made an application for the Crown Road to be transferred to the Council so that the Council would become the road authority with responsibility for the road. A transfer of that nature could occur at the request of the Council or, in some circumstances, even without the consent of the Council (for example, where a Council grants a development consent which contains a condition that a Crown Road be maintained to a particular standard). The administrative guidelines in evidence indicate that the Crown Lands authority would consult with a Council before making a transfer in the absence of consent.

In answer to a question in re-examination, Mr Weissflog said that whilst no formal application had been made, he had made some “preliminary inquiries” with the engineering department of the Council. He said, in effect, that he was told that it was unlikely that the Council would be prepared to “take it on”. However, the evidence suggests that even if the Council were prepared to “take it on”, it would be on the basis that the plaintiffs would commit to constructing the road to the Council’s rural public road standard which (at least in 2017) requires a bitumen seal. A construction bond might also be required from the plaintiffs.

As pointed out by the defendants in submissions, there was no cogent evidence of how much it would probably cost to construct such a road. The quotation obtained by Mr Reen in 2021 concerning the cost of a road across the Reen Land – not necessarily along the Crown Road route – was not admitted as to the truth of its contents. Nevertheless, I am satisfied on the evidence that the cost would be very substantial indeed. The length of the Crown Road across the Reen Land alone is in the order of 1.3km. The length of the Crown Road between the plaintiffs’ land and the Reen Land is approximately twice that length. The route across the Reen Land is impeded by three dams and there is evidence that, due to the topography of the Reen Land, extensive drainage works would be required to stabilise any road constructed. South of the Reen Land, on Lot 63, the route is impeded by a severely eroded gully. There is evidence that major works would be required “to stabilise and form the crown road across the gully”. There are other impediments along the route, including large piles of dumped earth.

Construction of a suitable road along the northern section of the Crown Road does not appear to be impossible or even impractical, but it would undoubtedly require very substantial expenditure. I do not think it is necessary in the circumstances of this case to arrive at a precise estimate of the likely cost. I think that I can broadly conclude, based on the evidence described above, that the cost to construct a road across the northern section of the Crown Road could extend to some hundreds of thousands of dollars. Quite apart from the cost of materials and labour for construction, there would be professional costs associated with the engineering design of the road, given the need for drainage works to stabilise the road.

The defendant made the point that the plaintiffs had failed to adduce satisfactory evidence concerning the obtaining of access using the Crown Road, and in particular as to the cost of establishing such access. Reference was made to Govindan-Lee v Sawkins (2016) 18 BPR 35,883; [2016] NSWSC 328 at [49]-[50] and Tout v Johnson (supra) at [97]-[106] (see also Gordon v Lever (No 2) (supra) at [39]). The observations made in in those cases are relevant to the situation here, but it is of course necessary to consider the particular circumstances of each case. In the present case, the point that the plaintiffs are best placed to adduce evidence as to the alternative means of access is to some degree lessened by the fact that (unlike the two cases cited) the alternative access under consideration is not access across the plaintiffs’ own land. In saying that, I of course recognise that the onus of establishing reasonable necessity for the purposes of s 88K(1) of the Act always rests upon the applicant.

The defendant adduced evidence from a number of residents of the estate as the anticipated effects of the easement sought by the plaintiffs. The residents raised a number of concerns, including the following:

The imposition of the easement is likely to bring about an increase in traffic through the estate. There was little evidence going to the precise extent of the likely increase, although I note that the Statement of Environmental Effects submitted to the Council in December 2021 suggests that the development (involving both the residence and the cat breeding facility) would likely generate an additional six traffic movements per day. I regard that as a modest increase in the context of an estate that consists of more than 40 residential lots.

It is relevant to observe here that the defendant would be entitled to maintain a locked gate across the easement (such as the existing green key gate). The existence of a locked gate, the unlocking of which would require a key, coupled with restrictions upon the availability of keys, would tend to limit the number of potential users of the easement and inhibit the frequency of its use. I accept that practical difficulties, including potential conflicts, could arise in connection with gates (especially locked gates) on the easement. However, provided that the rights conferred by the easement are clearly expressed in this regard, significant problems ought not arise.

The increased traffic will of course involve some additional wear and tear on the estate roads, particularly on the dirt access road, but the plaintiffs have indicated a willingness to pay an appropriate levy to cater for that. It would be possible to include, as a condition of any easement, a requirement that such a levy be paid to the defendant.

The increased traffic would also generate additional noise and dust. These effects seem to me to fall more upon the residents of the estate (particularly on those living in closest proximity to the dirt access road) rather than upon the defendant as the owner of what would become the servient tenement. A similar point can be made about any reduced serenity or security. These effects are nonetheless relevant to the consideration of the question of reasonable necessity (as they are in relation to the consideration of the public interest).

There is undoubtedly a prospect that users of the easement will not observe the road rules within the estate. In this regard, the plaintiffs have expressed a willingness to agree to be bound by those rules, which are contained in the Management Statement for the estate. Again, it would be possible to include a condition to that effect.

The Council has expressed the view that for a development application for Lot 98 to be lodged, evidence of “legal and physical access” is required. To that extent, the imposition of the easement can be seen as something that would facilitate the development of the plaintiffs’ land. However, I do not think that the easement itself is otherwise likely to make future development of the land more probable. Any future development will need to be the subject of an application which will be assessed and determined in accordance with the planning laws then applicable. Nor do I think that imposition of the easement would “create a precedent” for others (such as NPWS) to seek an easement over the estate. Again, any future application for the imposition of an easement would be determined on its own merits in accordance with the principles established for applications under s 88K of the Act. It is not possible to hypothesise as to whether the imposition of the easement sought by the plaintiffs would make any future application more or less likely to succeed.

Overall, the adverse effects the proposed easement would probably have upon Lot 1 and the residents of the estate seem to me to be relatively minor. Moreover, these effects can be ameliorated to a substantial degree by the inclusion of conditions of the character referred to above.

Another matter to consider on the question of reasonable necessity is the lawfulness of the proposed use of the plaintiffs’ land. The defendant submitted that the Court should assess the prospects of the plaintiffs obtaining the requisite approvals for the use of the land as a residence and as a cat breeding facility (see Evans v Cornish Nominees Pty Ltd (2009) 14 BPR 27,257; [2009] NSWSC 1295 at [52]-[56]). The defendant submitted that development consent cannot be granted for use as a cat breeding facility as it is a prohibited use. The defendant further submitted that the plaintiffs have failed to show that it is reasonably likely that approval will be obtained for use as a residence.

I think that there is a real chance that the plaintiffs will obtain approval for use of the existing dwelling on Lot 98 as a residence (see 117 York Street Pty Ltd v Proprietors of Strata Plan No 16123 (1998) 43 NSWLR 504 at 511-2). Mr Apps, the town planner called by the defendant, accepted in cross-examination that, leaving aside the present lack of access for the property, the only barrier to obtaining consent was the absence of certain information (such as a Building Information Certificate, and information that the building complies with bushfire protection standards). Mr Apps agreed that the problem was capable of being remedied by providing the requisite information. I note that the Council has been aware of the plaintiffs’ construction and use of the dwelling (without approval) since the inspection carried out in mid-2017, but has not taken steps to restrain the use. There is no evidence to suggest that the Council has any concern that living in the residence is in any way unsafe.

The defendant made detailed submissions to the effect that the proposed cat breeding facility falls within the Local Environmental Plan definition of “commercial premises” and is thus a prohibited use. It was put that even though the proposed facility also falls within the definition of “animal boarding or training establishment”, which would be permitted with consent, the development would be prohibited (see Botany Bay City Council v Pet Carriers International Pty Ltd (2013) 201 LGERA 116; [2013] NSWLEC 147 at [55]). However, it is not necessary that I express a concluded view on the question whether the proposed facility falls within the definition of “commercial premises”. Indeed, since the relevant material before the Court may not be the same as the material that is ultimately placed before the Council as the consent authority, it is perhaps undesirable that I do so. Even if it is assumed, in the defendant’s favour, that consent for a cat breeding facility will never be obtained, given that there is a real chance that the plaintiffs will obtain approval for use of the existing dwelling on Lot 98 as a residence, I am satisfied on the whole of the evidence that the easement sought by the plaintiffs is reasonably necessary for the effective use or development of Lot 98 as a residence (or other uses that might be approved), such that s 88K(1) of the Act is satisfied.

In my opinion, such use or development of Lot 98 with the proposed easement is at least substantially preferable to its use or development without it. The effective use of Lot 98 as a residence (or other uses that might be approved) requires that vehicles be able to travel the substantial distance between the property and the public road system. That access is not currently available along the length of the Crown Road. Obtaining the requisite permission to establish access by that route in the future is uncertain, and in any event the cost of construction of a road would undoubtedly be very substantial. On the other hand, the easement sought by the plaintiffs would provide the required access in a way that would not cause Lot 1 or the residents of the estate to be affected adversely in more than relatively minor respects, particularly if suitable conditions are included. The imposition of the easement would of course detract from the property rights of the defendant, but it is relevant to note that Lot 1 is already burdened by a similar easement in favour of Lot 11.

As the requirement of reasonable necessity within s 88K(1) has been satisfied, I turn to consider the three further requirements of s 88K(2) of the Act.

The first of these requirements is that use of the land having the benefit of the easement will not be inconsistent with the public interest (see s 88K(2)(a)). The focus of this provision is upon the use of the dominant tenement (see City of Canterbury v Saad (2013) 195 LGERA 329; [2013] NSWCA 251 at [48]). The question is whether the use of that land, with the benefit of the easement, will not be inconsistent with the public interest.

The plaintiffs are currently using Lot 98 as a residence and as a cat breeding facility. The plaintiffs do not have a development consent for either of those uses. The plaintiffs intend to seek such consent, but the Council has taken the position that an application cannot be adequately considered (and thus should not be lodged) until the plaintiffs can confirm that the land has legal and physical access. If the easement they seek is granted the plaintiffs will be in a position to pursue their development application. The defendant has submitted that if the easement is imposed over its objection, it should be made conditional upon the plaintiffs obtaining a development consent within two years.

Accordingly, the present case is not one where there is an existing consent for the use of the land (cf Shi v ABI-K Pty Ltd (2014) 87 NSWLR 568; [2014] NSWCA 293 at [70]). The absence of an existing consent is not, however, a bar to the grant of an easement under s 88K (see City of Canterbury v Saad (supra) at [57]). The question of whether use of the land having the benefit of the easement will be inconsistent with the public interest depends upon the particular facts of each case (see City of Canterbury v Saad (supra) at [54]).

The defendant submitted that as the proposed cat breeding facility is a prohibited use, such that no development consent could ever be granted for it, it would be inconsistent with the public interest to impose an easement where one of the proposed uses cannot be made lawful.

It remains to be seen whether development consent will be granted for a cat breeding facility. If the defendant is correct, so no consent can be given, that use will continue to be unlawful. Use of Lot 98 with the benefit of the easement for that purpose could thus be seen to be inconsistent with the public interest. The same could be said about use of Lot 98 as a residence if no consent is given for that use.

However, as I have said, I think that there is a real chance that the plaintiffs will obtain approval for use of the existing dwelling on Lot 98 as a residence. Further, I would not dismiss the possibility that an approval will be given for a cat breeding facility. Whether such consents are given will depend upon the determination made by the Council as the consent authority.

There is merit in the suggestion that the easement, if imposed, be subject to a condition that would require the plaintiffs, within a reasonable period, to obtain a development consent for the use of Lot 98. The easement could also be made subject to a condition that it not be used for any purpose not connected with a use of Lot 98 that is the subject of a development consent.

If conditions of that nature were imposed, it is difficult to see why use of Lot 98 having the benefit of the easement would be inconsistent with the public interest, although I acknowledge that the land would continue for a period to be used unlawfully. It would of course be open to the Council (or indeed other persons) to take action to restrain such use if it was considered appropriate to do so in the circumstances. It seems, however, that the Council, at least up to now, has not seen fit to take such action.

`In these circumstances I am satisfied that use of Lot 98 having the benefit of the easement will not be inconsistent with the public interest for the purposes of s 88K(2)(a) of the Act.

The second requirement under s 88K(2) is that the defendant, as 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 (see s 88K(2)(b)). (There does not seem to be any other person with an estate or interest in Lot 1 pursuant to a registered instrument who may be required to be compensated.)

I am satisfied that the defendant can, by means of an award of monetary compensation, be adequately compensated for any loss or other disadvantage it would suffer if the easement is imposed. Valuation evidence was called by each side on that issue. The valuers produced a joint report dated 6 August 2021 which records their respective conclusions, as contained in their earlier reports, concerning the appropriate amount of compensation. Those conclusions fell within a range of $10,000 to $67,000. I note that the defendant did not submit that this requirement was not satisfied.

The third requirement under s 88K(2) is that all reasonable attempts have been made by the plaintiffs to obtain the easement but have been unsuccessful (see s 88K(2)(c)). I am also satisfied of this matter, and again the defendant did not submit to the contrary. It is clear that following the formal request made by the plaintiffs on 23 October 2019 for an easement for access, the defendant rejected the request, stating through its solicitors on 1 December 2019 that a general meeting of the defendant had made it clear that the community had “no interest” in providing an easement through the estate to any third party. The defendant has not since shown any willingness to grant an easement for the benefit of the plaintiffs’ land.

The Court is therefore satisfied of each of the matters identified in s 88K(2) of the Act.

The next matter to consider is whether the Court should proceed to exercise the discretion to make an order under s 88K to impose the easement sought by the plaintiffs.

The defendant raised a number of matters which it said should lead the Court to decline to exercise the discretion to make the order. It was submitted that any reasonable necessity for the easement only exists because of previous unreasonable conduct on the part of the plaintiffs. In this regard the unreasonable conduct of the plaintiffs is said to consist of:

The defendant also relied upon the unlawful conduct of the plaintiffs more generally as going to the exercise of the discretion. In addition to the unlawful conduct referred to above, the defendant also pointed to evidence which suggests that certain works that were carried out at the behest of the plaintiffs in 2015 on the southern section of the Crown Road were undertaken without consent, and thus unlawfully.

The defendant also submitted that as the plaintiffs purchased Lot 98 at a discounted price (of $190,000) which reflected its lack of practical access, they would obtain a windfall benefit if the Court imposed an easement that overcame that problem.

It is correct that the plaintiffs purchased Lot 98 without adequately informing themselves about access to the property. The contract disclosed no easement or other right in favour of Lot 98 to use the roads in Mount Haven Estate, and there is no evidence that the plaintiffs were given legal advice prior to entry into the contract that there was any such right. Mr Weissflog seems to have assumed that lawful access could be obtained through the estate because that was the route used for the inspections of the property. He gave evidence that although he knew that Mount Haven Estate was community title, he did not know that its road system was. In my view, the plaintiffs were careless in proceeding with the purchase on the assumption that there was a right of access through the estate. There was no firm basis to make that assumption.

It is also correct that the plaintiffs subsequently undertook building work on Lot 98, and conducted a business on the land, without obtaining the requisite development consents. Mr Weissflog accepted in cross-examination that he knew that consent was needed for at least the building work. He said that he only found out about two years ago that a consent was required for the cat breeding business. He said that he had believed that the activity fell under the banner of a home business or hobby, such that no consent was required. Even if that evidence is correct, it nonetheless shows a somewhat cavalier attitude towards compliance with planning laws. No enquiries seem to have been made with the Council concerning the proposed activity.

As submitted by the defendant, the conduct of the plaintiffs in these respects can be fairly described as unreasonable. I am not convinced, however, that the conduct is the reason the reasonable necessity for the easement exists. The reasonable necessity essentially arises from the fact that parts of the Crown Road are unsuitable for vehicular traffic, and that vehicular access between Lot 98 and the public road system is required in order for Lot 98 to be effectively used as a residence. That was the situation at the time of the plaintiffs’ purchase. There was a residence on Lot 98 at that time, however rudimentary it may have been. The improvements made by the plaintiffs and the establishment of the cat breeding business (which is not open to the public) may have brought about some increase in the volume of traffic, but these changes did not themselves create the reasonable necessity for the easement.

This case is not really like the situation referred to by Young J (as his Honour then was) in Hanny v Lewis (1998) 9 BPR 16,205 where his Honour said (at 16,209) that s 88K “does not exist for people to build right up to the boundary of their property or to build without adequate access and then expect others to make their land available for access”. Similarly, I do not think that it is accurate to say that the plaintiffs have come to Court seeking an easement which would alleviate the consequences of their knowingly unlawful behaviour.

The plaintiffs’ unlawful development and use of the property is to be deprecated. As I have said, it reveals a cavalier attitude. Against that, it appears that the Council has taken the view (since it became aware of the development of Lot 98) that the question of access would need to be resolved before any development applications could be accepted. The carrying out in 2015 of what seems to be extensive works on the southern section of the Crown Road also exhibits a cavalier attitude on the part of the plaintiffs. Mr Weissflog proceeded to have the works done on the Crown Road without making enquiries of the relevant authority. I do not regard these matters as trivial. However, I find it difficult to see how they bear strongly against the exercise of the power to impose the easement which I have found to be reasonably necessary for the effective use or development of Lot 98. Although the plaintiffs, as the owners of Lot 98, benefit from the imposition of the easement, it should not be overlooked that the underlying rationale of the power under s 88K of the Act is to facilitate the effective use or development of land, provided various conditions are satisfied (see Khattar v Wiese (supra) at [60]; Rainbowforce Pty Ltd v Skyton Holdings Pty Ltd (2010) 171 LGERA 286; [2010] NSWLEC 2 at [134]).

Finally, I do not think that it is correct that the plaintiffs would obtain a windfall benefit if the easement they seek is imposed. There was some valuation evidence given to the effect that the plaintiffs’ purchase of Lot 98 may have occurred at a significant discount to reflect the difficulties with access. I would not treat that as evidence that the plaintiffs paid less than a fair market price for the property. On the contrary, the evidence suggests that the price was discounted below what it would have been in the market had there been no difficulties with access. In short, it seems that the plaintiffs paid a price that reflected the negative impact of the access issue. In order to overcome that problem, the plaintiffs have ultimately resorted to s 88K of the Act. That is itself an expensive exercise to undertake, even if the plaintiffs are successful. Apart from their own legal costs, it is very likely that the plaintiffs will have to pay the defendant’s costs (see s 88K(5) of the Act), as well as a substantial amount of monetary compensation (see s 88K(4) of the Act). In these circumstances, I cannot see that the plaintiffs will obtain any windfall benefit if the easement is imposed. In all the circumstances, and particularly taking into account the above matters raised by the defendant, I consider that I should proceed to exercise the discretion to make an order imposing an easement as sought by the plaintiffs.

The next matter to consider is the amount of compensation the plaintiffs should pay to the defendant for loss or other disadvantage that will arise from imposition of the easement.

The valuer called by the plaintiffs, Mr David Lunney, assessed the diminution in value of Lot 1 by the imposition of the easement at a nominal amount of $10,000. In so doing, he stated that it was difficult, if not impossible, to reliably quantify any diminution in value by applying either the “before and after” or the “piecemeal” methods of valuation (see report dated 9 July 2020 at paragraphs 90-102). No additional amounts were included for costs arising from the easement, or for reduced amenity or security.

The valuer called by the defendant, Mr Kent Wood, assessed the diminution in value of Lot 1 by both the “before and after” and “piecemeal” approaches, as $66,615 and $67,000 respectively (see report dated 9 December 2020 at page 17). The “before and after” approach ascribed a “before” value of $444,100 to Lot 1, and an “after” value of $377,485 (a reduction of 15% or $66,615). The “piecemeal” approach ascribed a value of $69,000 to the easement area (that is, Mount Haven Road and the dirt access road), from which 1/3, or $23,000, was deducted for the imposition of the easement, and a further $44,000 (being about 10% of the value of the entire Lot 1) was deducted for injurious affection.

In the Joint Report dated 6 August 2021, Mr Lunney noted the relatively small difference between his $10,000 and Mr Wood’s $23,000 figures, and stated that to give the benefit of any genuine doubt to the defendant he could accept that $23,000 may also be seen as an appropriate nominal sum representing the amount of compensation payable for loss or other disadvantage suffered by the defendant by reason of the imposition of the easement. Mr Lunney maintained that no further diminution in value would be suffered by Lot 1. The question of whether some further amount should be added for injurious affection thus became the centre of the dispute between the valuers.

Having read and considered the reports of the valuers (including Mr Lunney’s report in reply dated 23 February 2021), and the further evidence given by them in concurrent session, I generally prefer Mr Lunney’s approach to the question. I think that his opinions on the matter are cogent and logically expressed. He appeared to me to approach the matter with an open mind, conscious of the difficulties inherent in the exercise. He was prepared to accept in cross-examination that the additional traffic generated due to the easement might affect the recreation areas that form part of Lot 1, and that a further nominal amount could be added for that affectation. When pressed to assess a nominal amount, Mr Lunney said that it would be less than $10,000.

Mr Wood steadfastly maintained that his assessment of injurious affection was correct, but he struggled to explain the reasoning which underpinned his opinion. Even making due allowance for the fact that the matter clearly involves a large degree of professional judgment which rests upon experience, I was left unpersuaded that the easement, which is likely to cause only a small increase in traffic, would cause a 10% reduction in the value of Lot 1 as a whole. So, even if Mr Wood’s assessment of the overall value of Lot 1 is accepted, I am unable to accept that an amount in the order of $44,000 should be added for injurious affection.

However, having regard to Mr Lunney’s concession that a nominal amount of something less than $10,000 might be justified, I consider that a further nominal amount should be added for injurious affection. Taking into account Mr Lunney’s other concession (referred to at [100] above), I think that a total amount of compensation of $30,000 would be appropriate. I should add that it is accepted by the plaintiffs that it should be a condition of any easement imposed that they (or, more accurately, the owners of Lot 98 as the dominant tenement) would pay a levy or contribution at a suitable rate to compensate the defendant for additional costs that may be incurred as a result of the additional traffic likely to be generated due to the easement.

As mentioned earlier, there are other terms and conditions which ought to be imposed in respect of the easement. These include a condition that the users of the easement observe the estate road rules as contained in the Management Statement, and terms relating to the locked gate the defendant wishes to maintain across the dirt access road. I think that there should also be a condition that would require the owners of the dominant tenement to obtain, within a reasonable period, a development consent for the use of Lot 98, and a condition that the easement not be used for purposes that are not connected with an approved use.

These, and other terms and conditions, have been the subject of discussion between the parties. There is measure of agreement, but some differences remain. It would be appropriate to give the parties a further opportunity to seek to reach agreement concerning these issues, and as to a suitable levy or contribution to be paid to compensate for additional traffic. Depending upon the extent of any remaining disagreement, the Court may be able to proceed to settle final orders in Chambers without the need for any further oral hearing.

Accordingly, the parties are directed to confer and attempt to reach agreement as to a form of final orders to give effect to these reasons. Either an agreed form of orders or, in the absence of agreement, suggested forms of orders, should be submitted to my Associate within 21 days for the consideration of the Court.