Perpetual Trustee Company Limited v The Council of the City of Sydney

1. [1]

   I heard this matter on 20 April 2015 and, having formed a firm view on the basis of the materials provided to the Court, made the orders sought by the plaintiff on that date. The defendant neither consents to nor opposes the application, but the proposed terms of the orders to be made in the event the plaintiff is successful have been agreed between the parties. I indicated at that time that I would publish some short reasons dealing with the matters raised by the plaintiffs.

2. [2]

   These proceedings concern an application by the plaintiff to have an easement imposed pursuant to s 88K of the Conveyancing Act 1919 (NSW) over a portion of land (Lot 1 in DP 75006) vested in the defendant and known as the Jesse Street Gardens (JSG).

Background Facts

1. [3]

   DEXUS is the responsible entity of the Gateway Trust and registered proprietor of the Gateway Building at 1 Macquarie Place in Sydney (Lot 53 in DP 787143) (Site). The plaintiff (Perpetual) is the agent of DEXUS.

2. [4]

   The Gateway Building is bounded by Alfred St, Pitt St, Loftus St and Reiby Place and is adjacent to JSG. JSG is a public reserve which is vested in the defendant (Council).

3. [5]

   Perpetual has a development application before the Council for the refurbishment and redevelopment of the Gateway Building. The proposed development covers refurbishment of the podium of the Gateway Building on levels five, six, seven and eight in addition to works within the two basement levels, three and four. The proposal is inclusive of an upgrade to JSG to follow the temporary use of JSG for construction purposes.

4. [6]

   The purpose of the redevelopment is to refurbish the retail podium in order to create a more permeable and connected Site. The food and retail offerings in the Gateway Building will be enhanced under the proposal. The proposed redevelopment would also improve the interface between JSG and the Gateway Building in addition to the aforementioned upgrade to JSG. It is also intended to be consistent with the future light rail on Alfred Street and the redevelopment of the AMP precinct.

5. [7]

   The imminent construction of the CBD and South East Light Rail (CSELR) bears upon this matter because there will be restricted access to Alfred St and Loftus St during the refurbishment period due to the construction of a CSELR station directly adjacent to the Gateway Building.

6. [8]

   Perpetual seeks an easement for 11 months over JSG for the purposes of carrying out the following works (Works):

   1. (1)

      The placement of Class A hoarding or other hoarding as required by any relevant authority;

   2. (2)

      The erection of scaffolding;

   3. (3)

      The handling or storage of demolition and construction materials;

   4. (4)

      The passage of conveyance vehicles; and

   5. (5)

      The housing of materials and equipment over the Gateway Building.

7. [9]

   The proposed easement does not cover the entirety of JSG. It covers a trapezoidal section with a circular area removed at the bottom of the trapezoidal section.

8. [10]

   DEXUS and Perpetual have offered to enter into a draft Voluntary Planning Agreement under the Environmental Planning and Assessment Act 1979 (NSW) (VPA). As mentioned above, this includes the reinstatement and enhancement of JSG following the completion of the development. Once the terms of the VPA are agreed with the Council, implementation of the VPA will be a condition of development consent being granted with respect to the proposed development.

9. [11]

   The Site is zoned as a “B8 Metropolitan Centre” under the Sydney Local Environment Plan 2012 (NSW). Under that plan, a variety of uses are permissible in the zone and the objectives of the zone include recognising and providing for the pre-eminent role of business, office, retail, entertainment and tourist premises in Australia’s participation in the global economy, providing opportunities for an intensity of land use commensurate to Sydney’s global status, permitting a diversity of compatible land uses and promoting uses with active street frontage on main streets.

10. [12]

    The defendant neither consents to nor opposes the grant of the easement. JSG is classified as “community land” pursuant to ss 25 and 26 of the Local Government Act 1993 (NSW) (LGA). Section 45 of the LGA provides, relevantly:

11. [13]

    Section 46 sets out the circumstances in which leases, licences and “other estates” in respect of community land may be granted. These include in circumstances such as where the interest in land is required for the provision of public utilities. As the easement sought by the plaintiff is not referrable to the provision of public utilities, in order for the defendant to consent to the grant of the easement, it would require express authorisation in the plan of management that applies to JSG.

12. [14]

    Pursuant to the relevant plan of management, JSG is categorised as a “park.” According to s 36G of the LGA:

13. [15]

    The defendant’s position is that the plan of management in force in relation to JSG does not authorise it to grant an easement to the plaintiff when regard is had to Table 6.1, 6.2 and 5.1 of the plan of management. Relying on Marshall v The Council of the City of Wollongong [2000] NSWSC 137 (Marshall v CCW), the defendant considers that as a consequence it cannot actively consent to the granting of the easement.

14. [16]

    Marshall v CCW concerned an application under s 88K of the Conveyancing Act for a permanent right of way over land classified as community land and owned by a council authority. The relevant council in that case also considered that it was not empowered to grant the easement or to consent to an order of the Court: see [13]. After accepting the correctness of this position, Bryson J went on to note that the limitations on the council did not impose any constraints upon the Court’s powers under s 88K of the Conveyancing Act: see [24]. His Honour did observe, at [25], that the fact land is community land and is protected through the imposition of limits on how a council might deal with such land is relevant to the exercise of the general discretion conferred by s 88K.

Legal Principles

1. [17]

   Section 88K of the Conveyancing Act is in the following terms:

2. [18]

   In 117 York Street Pty Ltd v Proprietors of Strata Plan No 16123 (1998) 43 NSWLR 504 at 508-9, which was cited with approval in Moorebank Recyclers Pty Ltd v Tanlane Pty Ltd [2012] NSWCA 445 at [154], Hodgson CJ in Eq considered that:

3. [19]

   In Rainbowforce Pty Ltd v Skyton Holdings Pty Ltd [2010] NSWLEC 2 at [83], Preston CJ made the following observations:

4. [20]

   This approach was cited with approval by the NSW Court of Appeal in City of Canterbury v Saad [2013] NSWCA 251 at [57].

Consideration

1. [21]

   In support of their application, the plaintiff read an affidavit of Mr John Stalley, an expert in construction and project management, of 27 March 2015. Mr Stalley has a BAppSc (Marine Science) from UNSW and a BAppSc (Construction Management) from NSWIT. He has 25 years of experience in construction and project management as a head contractor and 10 years of experience as the plaintiff’s representative in the Sydney construction industry.

2. [22]

   I will refer to Mr Stalley’s evidence as it is pertinent to my consideration of whether the orders sought by the plaintiff should be granted.

3. [23]

   As already mentioned, the easement is said to be necessary because of the imminent construction of the CSELR and the challenges this poses for access to the Gateway Building for the purposes of the refurbishment. The responsible entity for the CSELR supports the use of JSG for temporary access to the Gateway Building.

4. [24]

   The Gateway Building was constructed in the mid-1980s and has not undergone any substantial alterations since this time. The upgrade is sought in order to provide better amenities for tenants and visitors and to ensure compliance with current building and environmental codes and standards.

5. [25]

   Mr Stalley’s affidavit sets out at [30]-[33] the absence of any feasible alternative for access to the building. There are, it seems, serious safety concerns attendant upon utilising other available adjacent land for construction purposes.

6. [26]

   Mr Stalley’s affidavit refers to and annexes a letter of GTA Consultants dated 22 December 2014 that expresses the opinion that the building works cannot be carried out without access to JSG because of transportation and access limitations. The letter from GTA Consultants attaches a table which compares Reiby Place, the Alfred Street frontage, the existing on-site loading dock and JSG as access sites for the refurbishment and redevelopment of the Gateway Building.

7. [27]

   It is clear from the table that the use of Reiby Place would cause significant disruption to vehicle movement as Reiby Place would need to be closed to accommodate the loading and unloading of vehicles. This could cause queuing into Loftus Street and has the potential to restrict access to parts of Macquarie Place. It would also have the effect of forcing vehicular traffic on to a part of Alfred Street that is primarily designed to cater for bus, taxi and loading vehicle movement rather than through traffic. Although the provision of traffic signals to control two-way vehicle movements over the one-way section of Reiby Place was considered, there is insufficient room to allow vehicles to queue. Using Reiby Place would also require all vehicles on Loftus Street to use Alfred Street to exit the precinct. As Alfred Street may need to be temporarily closed due to the CSELR construction, this has the potential to cause substantial difficulties for traffic.

8. [28]

   The use of the Alfred Street frontage would cause significant disruption to the high volume of pedestrian traffic along Alfred Street and would come with a high risk of a pedestrian-related incident. As noted above, parts of Alfred Street may also need to be closed for the CSELR construction.

9. [29]

   The existing on-site loading dock cannot cater for the larger vehicles that will be required to service the site for the refurbishment.

10. [30]

    Although utilising JSG may cause some disruption to pedestrian traffic on Loftus Street and a reduction to the bus layover area on Loftus Street adjacent to the proposed easement, GTA Consultants concludes in their letter that the preferred location from a transport perspective is JSG.

11. [31]

    A letter of Taylor Thomson Whitting Consulting Engineers dated 9 December 2014, also annexed to the affidavit of Mr Stalley, contains advice to the effect that because of significant traffic, safety and structural issues the safest and preferred location for access to the Gateway Building is over JSG. The letter notes the substantial traffic and pedestrian disruption that would be caused by the use of Alfred Street, the problems with the existing loading dock, and the fact that Reiby Place would not only have to be closed, but also that it does not have a feasible location for a crane. The letter concludes that JSG is the “only location available for this site”.

12. [32]

    A further annexure is a letter from Transport for New South Wales, the entity responsible for the CSELR, dated 5 February 2015, which advises that access to the Gateway Building from Loftus or Alfred Streets during the construction of the light rail stop adjacent to the Gateway Building will be complicated by potential overlap between the needs of the plaintiff and the needs of Transport for New South Wales. The letter notes that “should agreement be reached with the City of Sydney we would not have any objection to the use of Jessie [sic] Street Gardens as a construction zone”.

13. [33]

    In the circumstances, I am satisfied that the easement is reasonably necessary for the use and development of the Gateway Building.

14. [34]

    The plaintiff submits that it is sufficient to show that the easement is required or reasonably necessary to allow the carrying out of the proper commercial development of the Gateway Building consistent with its zoning. The plaintiff says that the zoning of the Gateway Building allows for its development and refurbishment, and that this requires the use of the construction compound and an easement across JSG.

15. [35]

    The plaintiff submits that temporary access through JSG is not inconsistent with the public interest and, indeed, that it promotes the public interest through the refurbishment of the Gateway Building and the upgrade to JSG. The plaintiff noted the decision of the New South Wales Court of Appeal in City of Canterbury v Saad [2013] NSWCA 251 at [56]-[58], where Beazley P, Meagher and Leeming JJA noted that where land is zoned for a particular purpose that allows development, access may be required across other land to allow its development, and that such access may be consistent with the public interest even where it requires use of a public reserve or park.

16. [36]

    The plaintiff also submits that the proposed development, including the upgrades to JSG, is consistent with the plan of management and the zoning applying to JSG as the relevant plan of management allows for development of JSG for the purposes of improving access to and amenities within the park. The Council has not accepted that the refurbishment is consistent with the plan of management. Counsel for the plaintiff submitted at the hearing that this is not a critical issue in determining whether the granting of the easement is inconsistent with the public interest and that it was not necessary for me to determine whether or not the development is consistent with the plan of management. I accept that this is the case.

17. [37]

    There are detailed conditions of access, which DEXUS will comply with in order to minimise the impact on the public and neighbouring buildings. Mr Stalley’s opinion is that the proposed development will have no long term negative impact on JSG and will, in fact, improve the amenity and visual character of JSG.

18. [38]

    Noting the upgrade to the park, the lack of opposition from the defendant, the nature of the refurbishment and the temporary nature of the access required, I am satisfied that the grant of the easement is not inconsistent with the public interest.

19. [39]

    The plaintiff and defendant have agreed than an amount of $344,520 should be paid to the defendant. This reflects the rates specified in the schedule of fees and charges applied by the defendant for construction zones. There is no evidence before the Court that would suggest the agreed amount of compensation is inadequate.

20. [40]

    The plaintiff has been in negotiations with the Council since October 2014. On 18 December 2014 the Council advised the plaintiff by letter that it had come to the conclusion it could not grant access to JSG because it did not have the power to do so under the LGA. I accept the correctness of this position having regard to the remarks of Bryson J in Marshall v CCW.

21. [41]

    Perpetual advised the Council on 6 February 2015 that it intended to seek access to JSG pursuant to the Access to Neighbouring Land Act 2000 (NSW). By letter dated 26 February 2015 the Council indicated that in the Council’s view it would be more appropriate to seek access under s 88K of the Conveyancing Act. The Council went on to say that, provided the terms of proposed access and compensation were acceptable to the Council, the Council would not oppose an application under s 88K of the Conveyancing Act. Further communications in March 2015 established acceptable terms for the proposed access.

22. [42]

    In these circumstances, it is clear that the plaintiff has made every attempt to obtain the easement through negotiation with the defendant.

Conclusion

1. [43]

   I am satisfied that it is appropriate that the easement be granted. I note that the plaintiff accepted that the plaintiff should pay the defendant’s costs of these proceedings.