Fincob Pty Ltd v Campbelltown City Council [2010] NSWSC 349 (14 April 2010)

CITATION :	Fincob Pty Ltd v Campbelltown City Council [2010] NSWSC 349

HEARING DATE(S) :	12 and 13 April 2010
JUDGMENT DATE :	14 April 2010

JURISDICTION :	Equity

JUDGMENT OF :	White J

EX TEMPORE JUDGMENT DATE :	14 April 2010

DECISION :	1. I note the undertakings of the plaintiff by its counsel to the Court and to the defendant (which I initial and date today and place with the papers) that the plaintiff will: a) do all things necessary to cause to be created and registered with the NSW Department of Lands a new easement to become part of easement F in the position depicted in purple on the plan ER01 (Rev P5) annexed to the further amended summons (“the Plan”) and there called “Proposed Relocated Easement F 1222SQM” and on the terms identical to the terms of the easement “F” that is to be partially extinguished pursuant to the orders below. b) do all things necessary to cause to be created and registered with the NSW Department of Lands a new easement in the position depicted in orange on the Plan and there called “Proposed Relocated Easement G 955SQM” and on the terms identical to the terms of easement “G” to be extinguished pursuant to the orders below. c) cause to be widened and converted into a disabled car park space the car park space marked “Relocated Disabled Parking Space” on the Plan and cause to be created and registered with the NSW Department of Lands a new easement to become part of easement “M” over the car park space cross-hatched on the Plan and there called New Relocated Parking Space on the terms identical to the terms of easement M to be partially extinguished under the orders below. d) construct and complete the physical works required to be carried out within the proposed easements referred to in (a), (b) and (c): i) in accordance with the requirements of Campbelltown City Council (in its capacity as statutory consent authority) and any other relevant governmental authority; ii) with respect to the new easements referred to in paragraph (a) and (b), access roads within those easements must be constructed at least to the standards required under Council’s Specification for Construction of Subdivisional Road and Drainage Works (as amended) and the Campbelltown (Sustainable) City DCP 2007 Volume 2. 2. Order that the new easements to be created pursuant to the undertakings noted in para 1(a), (b) and (c) not be lodged for registration until completion of the construction of the works to be carried out pursuant to the undertaking noted in para 1(d). 3. Order that provided the new easements to be created pursuant to the plaintiff’s undertakings noted in para 1(a), (b) and (c) are registered within three years, that upon the registration of such new easements: a) Easement “G” encumbering Lot 133 DP 1000304 and shown in green on the Plan be extinguished pursuant to s 89 of the Conveyancing Act 1919 (NSW). b) The part of easement “F” encumbering Lot 133 DP 1000304 and shown in yellow on the Plan be extinguished pursuant to s 89 of the Conveyancing Act 1919 (NSW). c) The part of easement “M” encumbering Lot 133 DP 1000304 which consists of the carpark space hatched in pink and orange on the Plan be extinguished pursuant to s 89 of the Conveyancing Act 1919 (NSW). 4. Liberty to apply on reasonable notice. 5. Exhibits may be returned after 28 days. 6. These orders may be entered forthwith. I note the undertakings of the plaintiff by its counsel to the court and to the defendant set out in para 1 in the document headed “Short Minutes of Order”, which I initial, date today and place with the papers. 7. I make orders in accordance with paras 2, 3, 4 and 5 of those short minutes and I make a further order 6 that these orders may be entered forthwith. 8. I make no order as to costs of the proceedings, with the intent that each party bear its own costs. Without affecting the parties’ liability for the remuneration of the single experts pursuant to r 31.45(2), those expenses are to be borne by the parties equally.

CATCHWORDS :	REAL PROPERTY – EASEMENTS – application under s 89 of Conveyancing Act to extinguish easements – undertakings to create replacement easements – proposed extinguishment would not cause substantial injury to any person entitled to easements – non-joinder of person entitled to easement not basis for refusing orders – whether conditional orders can be made under s 89 – whether proceedings to be adjourned pending completion of works – conditional orders for extinguishment to take effect on creation of new easements

LEGISLATION CITED :	Conveyancing Act 1919 (NSW)

CASES CITED :	Manly Properties Pty Ltd v Castrisos [1973] 2 NSWLR 420 Webster v Bradac (1993) 5 BPR 12,032 Re Bona Vista Properties Ltd [2007] NSWSC 1278 Durack v de Winton [1999] NSWSC 83; (1998) 9 BPR 16,403 Loclot Pty Ltd v Pullen [2003] NSWSC 67; (2003) 56 NSWLR 592 Tanlane v Moorebank Recyclers Pty Limited [2008] NSWSC 1341 Oshlack v Richmond River Council [1998] HCA 11; (1998) 193 CLR 72 Markos v O R Autor Pty Ltd [2007] NSWSC 810 Phillips v Walsh (1990) 20 NSWLR 206 Australian Hardboards Ltd v Hudson Investment Group Ltd [2007] NSWCA 104; (2007) 70 NSWLR 201

PARTIES :	Plaintiff: Fincob Pty Ltd Defendant: Campbelltown City Council

FILE NUMBER(S) :	SC 2010/14661

COUNSEL :	Plaintiff: R J Weber SC with C G Arnott Defendant: D R Pritchard SC

SOLICITORS :	Plaintiff: Minter Ellison Defendant: Marsdens Law Group

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION
EXPEDITION LIST

WHITE J

Wednesday, 14 April 2010

2010/14661 Fincob Pty Ltd v Campbelltown City Council
JUDGMENT
1 HIS HONOUR: This is an application under s 89(1)(c) of the Conveyancing Act 1919 (NSW) for the extinguishment, in whole or in part, of certain easements. Three easements are affected. Two are rights of carriageway and one is an easement for car parking.

2 The plaintiff owns a shopping centre in Macquarie Fields, New South Wales, called the Glenquarie Shopping Centre. On 16 December 2008 the defendant, the Campbelltown City Council, approved the plaintiff’s application to expand the shopping centre, subject to conditions.

3 The plaintiff proposes to construct a supermarket to be leased by Woolworths Limited, and to construct specialty and other shops. The construction will be over the site of one of the rights of carriageway called easement “F”. The plaintiff proposes to relocate the affected part of that right of carriageway and proposes to relocate the other right of carriageway called easement “G”. The relocation of easement “G” leads to the proposal to modify the right of car parking called easement “M”.

“(1) Where land is subject to an easement ... the Court may ... on the application of any person interested in the land, by order modify or wholly or partially extinguish the easement ... upon being satisfied:

(c) that the proposed modification or extinguishment will not substantially injure the persons entitled to the easement ...”

5 In Manly Properties Pty Ltd v Castrisos [1973] 2 NSWLR 420 Holland J rejected a submission that the enquiry whether a proposed modification or extinguishment would cause substantial injury is limited to the effect of the proposed modification or extinguishment, independently of a proposed substitution for the existing easement (at 423-425). This has been followed in subsequent cases.

6 Ultimately the defendant did not contend that I should depart from this principle, which is of longstanding authority on a question affecting property rights upon which the public must have acted frequently.

7 The issues on the present application are, first, whether, having regard to the proposed substituted easements, the proposed extinguishment of the whole or part of existing easements would substantially injure any person entitled to the easements.

8 Secondly, whether the application should be refused for the non-joinder of the lessee of one of the lots entitled to the benefit of easement “F”, notwithstanding that that lessee has had notice of the proceedings and has not sought to appear.

9 Thirdly, if I am satisfied that the proposed extinguishment of easements would not occasion substantial injury to any persons entitled to the benefit of the easements, and there being no - or no other - discretionary reason to refuse the application, whether the proceedings should be adjourned to allow the plaintiff to construct the roads to be built along the side of the proposed new rights of carriageway on its land, and to allow the plaintiff to prepare and register new easements, before orders are made for the extinguishment of the existing easements.

10 Fourthly, whether orders under s 89(1)(c) can be made conditionally on the construction of the new roads along the proposed new rights of carriageway and the creation and registration of the proposed new easements.

11 Fifthly, whether orders to extinguish the existing easements should be made to take effect before the new easements are registered.

12 The plaintiff owns Lot 133 in Deposited Plan 1000304. The Glenquarie Shopping Centre is constructed on this lot. The proposed expansion involving the construction of a supermarket and other shops will also be built on this lot.

13 The defendant, Campbelltown City Council (“the Council”), is the registered proprietor of two adjoining lots, namely Lot 134 in DP 1000304 and Lot 118 in DP 589441. A library and neighbourhood centre is built on Lot 134 DP 1000304. There is an hotel on Lot 118, DP 589441, subject to a long term registered lease in favour of Glenquarie Hotel Pty Limited.

14 The three easements the plaintiff proposes to be extinguished, in whole or in part, are known as easements “F”, “G” and “M”. The proposed new or modified easements are depicted on a plan annexed to the further amended summons which I incorporate in these reasons as Annexure “A”.

15 For ease of description I will treat the left hand side of that plan as facing north, the upper side of the plan as facing east, the right hand side as facing south and the lower side as facing west.

16 The existing easement “F” is a right of carriageway 7.4 metres wide but of variable width. It provides access from Brooks Street to a car park opposite the library and neighbourhood centre, and then continues a considerable distance to the boundary of Lot 118 in DP 589441.

17 The existing easement “F” is shown in yellow and turquoise on the plan. It runs through the land on which the plaintiff proposes to construct the Woolworths supermarket. The plaintiff proposes that the western portion of the easement coloured yellow be relocated to provide different access to Brooks Street. The relocated part of the easement is marked purple on the plan and runs behind or to the south of the proposed new development. The lots entitled to the benefit of easement “F” include Lot 118 in DP 589441 and Lot 134 in DP 1000304.

18 The second easement affected by the proposal is called easement “G” and is marked green on the plan. It is a right of carriageway ten metres wide. It is located on the eastern side of the car park adjacent to the library and neighbourhood centre. It intersects the existing easement “F”. It provides access to a roadway which provides an alternative access to Brooks Street to the north. The roadway to which it provides access, which lies immediately to the east of the library and neighbourhood centre and the police station, fire brigade and ambulance station, is not a public road, but is a formed road on the plaintiff’s land.

19 The plaintiff proposes that the existing easement “G” be wholly extinguished and be replaced by the easement coloured orange on the plan, to join the relocated easement “F”.

20 Lot 118 on DP 589441, being the land on which the Glenquarie Hotel is situated, does not have the benefit of easement “G”. Lot 134 does. Other lots having the benefit of easements “F” and “G” are the lots on which the police station, fire brigade and ambulance station are constructed, owned by the Minister for Police and Emergency Services on behalf of Her Majesty Queen Elizabeth II, the Minister for Emergency Services on behalf of Her Majesty and the Health Commission of New South Wales. The owners of those lots have consented to the orders sought. The lessee of the Glenquarie Hotel has not consented to the order for the extinguishment of part of easement “F”.

21 The further easement affected by the proposal is called easement “M”. It is coloured pink on the plan. It is an easement for parking and is for the benefit of the library and the neighbourhood centre. The proposed easement “G” will cut off a corner of the parking space on easement “M”, which is currently designated as the space for disabled parking.

22 The plaintiff proposes that another space immediately adjacent to Lot 134 be designated as a space for disabled parking. It proposes that an easement for parking for an additional space be created on the western boundary of the car parking as shown cross-hatched in black on the plan.

23 Although, as shown on the plan, there is an easement for parking over some car spaces outside the library and neighbourhood centre, that area is but a small part of the car park. There is no physical feature to distinguish the land subject to easement “M” and the remainder of the car park.

Whether there would be substantial injury to any person entitled to the easements

24 I turn to the question whether the proposed extinguishment of the easements would cause substantial injury to any person entitled to the benefit of those easements, if the proposal for the creation of new easements is implemented.

25 On the face of things, the proposal to, in effect, realign two rights of carriageway and substitute car spaces will cause no injury to those entitled to the easements. Patrons of the Glenquarie Hotel will be directed to the hotel along a slightly altered route. Access to the car park outside the library and neighbourhood centre will be along slightly different routes. One car space in a car park will be substituted for another.

26 The defendant adduced no evidence on the application. The parties proposed to call expert evidence on questions of traffic impact and the effect, if any, of the proposed changes on the value of the defendant’s land.

27 Pursuant to r 31.37 of the Uniform Civil Procedure Rules I directed the appointment of a single expert on each subject matter. Mr Kenneth Hollyoak was appointed as the parties’ single expert on the issue of traffic impact. Mr Russell Briggs was appointed as the parties’ single expert on the issue of valuation.

28 Mr Hollyoak raised no issue as to the proposal’s effect on easement “F”. He did not suggest that that relocation would create injury to any person. There was no evidence that the relocation of part of easement "F" would create any injury to any person.

29 Mr Hollyoak raised an issue in relation to the modifications proposed to the car park adjacent to the library and neighbourhood centre. The issue he raised did not concern the proposed changes to the easements, per se, but rather concerned wider issues of possible changes to the management of traffic flow in that area.

30 A consultant to the plaintiff, a Mr Timothy Rogers of Colston Budd Hunt & Kafes Pty Limited, who specialises in traffic and transport planning, had prepared a traffic management signage and line marking plan for the plaintiff. That plan was prepared with a view to satisfying a condition of the development consent that:

Where the applicant is required to construct a prescribed traffic control device, a traffic control facility, install linemarking or erect sign posting, as a result of the development, suitable plans of the proposed works shall be submitted to Council for referral to the Local Traffic Committee. The recommendations of the Traffic Committee shall be incorporated in the engineering drawings and approval obtained prior to Council or an accredited certifier issuing a construction certificate.”

31 Mr Hollyoak observed that under that traffic management plan cars entering the car park outside the library and neighbourhood centre from the north coming along the roadway which lies to the east of that building, would not be able to turn directly to the right to the car parking spaces outside the library and neighbourhood centre.

32 Rather, traffic coming from that direction would be directed to the southern end of the car park along what is presently easement “G”, being land which would become free of that easement. The traffic proceeding along that part of the land would move in one direction from north to south. The traffic would then be directed to do a U-turn back into the car park along the relocated easement “G” to parking spaces outside the library and neighbourhood centre.

33 Mr Hollyoak observed that vehicles entering the car park from this direction would have to drive further than they do at the moment to find a vacant available car space outside the library and neighbourhood centre. He also observed that the construction of a new retail centre would increase the demand for car parking spaces, and this could be expected to increase the time to negotiate the way into and out of the car parking spaces.

34 As appears from the plan annexed to these reasons, there is not presently an easement from the northern end of the roadway, which lies to the east of the library and neighbourhood centre, which entitles visitors to that building to turn right from that roadway into the car parking spaces opposite that building.

35 The matters raised by Mr Hollyoak were properly raised, consistently with his duty to the court to address potentially relevant matters. It is no criticism of him to say that the matters he raised do not indicate any likely injury to any person by reason of the extinguishment of the existing easement "G", and its replacement by a new easement "G".

36 Under both the existing and the proposed new easement "G", traffic could move in both directions to and from each end of the easement. The proposed restrictions on traffic flow to which Mr Hollyoak referred are restrictions on traffic manoeuvres over the plaintiff's land that would not be the subject of the new easement.

37 So far as appears, such restrictions could be imposed by the plaintiff over the car park as it presently exists, except in relation to the existing easement, although there may be no current need to do so. That is to say, the effect on traffic flow does not arise from the extinguishment and relocation of easement "G", nor the relocation of part of easement "F", but from proposed procedures for traffic management on the plaintiff's land.

38 Mr Rogers deposed that the "no entry" signs regulating traffic flow and the one way roads, on which Mr Hollyoak based his opinion, were not essential to the traffic management plan.

39 He prepared an amended traffic plan to address the concerns raised by Mr Hollyoak. Mr Hollyoak said that if the amended plan were implemented it would alleviate his concerns.

40 Ultimately the traffic plan to be implemented will require the approval of the Traffic Committee pursuant to condition 21 of the development consent. It is common ground that the committee will comprise representatives of the police, the Council and the Roads and Traffic Authority. It is not possible to say what traffic plan will be approved. It is not possible to say whether members of the committee might consider that, although the amended plan proposed by Mr Rogers alleviates the concerns initially raised by Mr Hollyoak, it creates other issues.

41 However that might be, I do not consider that the concerns initially raised by Mr Hollyoak would create substantial injury to any person entitled to the benefit of the existing easements as a result of the extinguishment in whole or in part of the easements. In this connection a substantial injury does not mean a serious injury but an injury of material substance.

"... my main concern in this initial instance is to provide comments in relation to the effect on the freehold or leasehold value of Lot 134 in Deposited Plan 1000304 (being Neighbourhood Centre and Library) through the extinguishment of Easement G and the creation of a new Easement G as depicted on Plan ER01. In consideration of the above comments I would contend in line with the recent comments provided in Mr Hollyoak’s report (that being there will be a slight disruption of pedestrian and vehicle and traffic flow and movement) that a minor detriment in value may be argued, albeit very marginal.

Lot 134 currently comprises an area of 1,640 square metres and in consideration of the comments above and to the relocation of the easements noted, I would consider that a decrease in value in the order of 5% could be argued on a before and after analysis.

There are few retail sites that have sold (or are currently for sale) over the last twelve (12) to eighteen (18) months in and around the subject location. We have had regard to a recent sale of the Glenmore Park Town Centre and an adjoining piece of land which comprised an additional piece of developable land of approximately 10,870 square metres that would be considered superior to the existing Glenquarie Centre. After a formal analysis of the centre and land sale (details of which are predominantly confidential) the analysed land component reflects a rate of $322 per square metre.

Although there is no actual loss of land or development opportunity to Lot 134 due to the changes in Easements F & G, it is my opinion based on the comments from Mr Hollyoak (as above) that there is some minor detriment to the site through these changes, albeit very marginal.

In the absence of hard evidence on a ‘Before & After’ basis it is difficult to provide a detailed reasoning as to whether any diminution value would be appropriate on Lot 134. However based on the comments provided by Mr Hollyoak it would seem feasible to me that an adjustment on the unimproved land value may result in a minor diminution in value to this site due to the altered Easement conditions.

In this regard I consider that this diminution of market value is considered to be in the order of 5%, which is no doubt subjective.”

43 Neither expert considers there will be any substantial injury occasioned by the change to easement “F”.

44 Mr Briggs’ opinion as to the arguable change in value to the neighbourhood centre and library was dependent on Mr Hollyoak's opinion. I have concluded that Mr Hollyoak's opinion does not establish a substantial injury to any person from the modification or extinguishment of the easements. Therefore Mr Briggs’ evidence does not support the defendant's position that if the traffic plan originally identified by Mr Hollyoak is ultimately adopted, this would lead to a diminution in the value of the defendant's land from the modification or extinguishment of the easements.

45 The defendant did not oppose the orders for extinguishment of the easements if conditions it sought were imposed. It sought an order that:

"Within 7 days the plaintiff will make an application to the defendant in its regulatory capacity to modify the traffic plan associated with the Development of Glenquarie Shopping Centre in accordance with the affidavit of Mr Rogers sworn 8 April 2010 and, if that modification is refused or if there is no successful appeal from any such refusal, the plaintiff shall pay the defendant the sum of $32,800 within 28 days of the later of the refusal or unsuccessful appeal."

46 $32,800 was the figure attributed by Mr Briggs as being a subjective assessment of the diminution of the market value arguably arising from the matters initially raised by Mr Hollyoak.

47 Had I found that the proposed extinguishment of the existing easements might result in a diminution in value of the defendant's land it would not be appropriate to make a conditional order for the payment of compensation. The appropriate course in that event would be to refuse the order under s 89(1)(c). If such a finding were made I could not be satisfied that the proposed extinguishment would not substantially injure a person entitled to the easement.

48 This was not the position taken by the plaintiff. Counsel for the plaintiff submitted that there is no conceptual difference between assessing the existence or absence of substantial injury with regards to the proposed alternative new easements, and assessing the existence or absence of substantial injury by an offer or an order to pay compensation. I do not agree.

49 The payment of compensation would be for the redress of an injury that would be suffered by the extinguishment of the easement. The redress might be meagre or ample, but to acknowledge the need for payment of compensation would be to accept that substantial injury would be occasioned by the extinguishment of the easement. By contrast the substitution of a new easement of equal or greater benefit would prevent any injury arising.

50 Accordingly, had I accepted the defendant's submission the result would not be a conditional order for the payment of compensation as the defendant sought, but rather the refusal of the relief sought by the plaintiff. However, for the reasons I have given I am satisfied that there would be no substantial injury to persons entitled to the benefit of the easements from their extinguishment on the basis that the new proposed easements are created in their place.

51 I turn then to the second issue concerning the non-joinder of Glenquarie Hotel Pty Limited. That company holds a long-term registered lease of the hotel at Lot 118 DP 589441. In correspondence with the Council of 22 December 2009 it advised that it would consent to the proposal for extinguishment of the easements, including easement F, if it were allowed access to a certain number of car park spaces on the plaintiff's land and given other rights in relation to the car park on the plaintiff's land adjacent to the hotel. It did not specify any injury it might or would suffer if easement F were partially relocated, as is proposed, to go around the proposed new building.

52 These proceedings were commenced on 15 January 2010. On 22 February 2010 Minter Ellison, solicitors for the plaintiff, wrote to the directors of Glenquarie Hotel Pty Limited advising them of the commencement of these proceedings and providing them with a copy of the summons. Minter Ellison stated:

“We are instructed to inform you that the road forming the new part of easement F (highlighted in purple on the coloured plan attached to the Summons) will be created before the access to the road forming the old part of easement F (highlighted in yellow on the coloured plan attached to the summons) is blocked or built over.

If you have an objection to the proposed order that Fincob is seeking, you may seek to be joined as a party to the proceeding.

Please note that if you choose to be joined as a party to the proceedings, you participate at your own risk as to costs on the hearing of the application. Fincob will object to the allowance of more than one set of costs, if any, to objectors.

As the proceedings are before the Court this Friday, 26 February 2010 for the hearing of Fincob’s expedition application and directions, if you do have any objections to the proposed relocation of easements F and G, please notify us of your objections in writing by 4pm on 25 February 2010.”

53 No objection was raised from Glenquarie Hotel Pty Limited. It was advised by Minter Ellison of the hearing date but did not seek to appear.

54 In Webster v Bradac (1993) 5 BPR 12,032 McLelland CJ in Eq said (at 12,035):

"If ... particular persons do not after due notice assert any claim to injury to them on purely subjective grounds of this kind, then it may be open to the Court to infer that there is no injury of that kind to those persons, although the absence of objection does not remove from applicants for relief under s89(1) the onus of establishing their case."

55 Sub-section 89(5) contemplates that orders may be made under s 89(1), although not all affected persons are joined as parties or given notice of the proceedings. Sub-section 89(4) provides:

“(4) Notice of any application made under this section shall, if the Court so directs, be given to the council of the area (within the meaning of the Local Government Act 1993) in which the land is situated, and to such other persons and in such manner, whether by advertisement or otherwise, as may be prescribed by rules of Court or as the Court may order.”

56 In Re Bona Vista Properties Ltd [2007] NSWSC 1278, Hamilton J said (at [10]):

“[10] It flows from the terms of s 89 that it is not necessary to join defendants to proceedings for extinguishment under that section: see specifically s 89(4). The practice of this Court has been that defendants are not initially joined in the summons for an order under s 89. On the first return of the summons, directions are given by the Court as to service of notice of the application. These directions will specify both the persons to be served and the form of the notice. The people specified to be served will be people who are likely to be affected by the order. In the case of a large residential subdivision, this will not necessarily include all persons who are entitled to the benefit of the easement or restriction. For example, in the case of a restriction as to the materials of a dwelling house, the owner of a lot distant from the relevant lot and unlikely to be affected by the visual impact of impermissible materials need not be joined. Those given notice who wish to oppose the making of the order may attend and do so at their own risk as to costs. For completeness, it should be stated that, if more than one objector appears, generally only one set of costs will be allowed in favour of successful objectors: see Neville and Ashe, Equity Proceedings with Precedents (New South Wales) 1981 [1024].”

57 In the present case, directions as to service were not sought or given under s 89(4). However, Glenquarie Hotel Pty Ltd has been served with a summons, although not joined as a party. The other owners and occupiers of affected land consent to the orders sought. No other person has been identified as potentially adversely affected by the orders. All users of the hotel and the library and neighbourhood centre are potentially affected, but it would be impractical to give notice to them all.

58 In my view, there is no real prospect of the relocation of the easement causing injury of any particular substance to anyone. Given that the Glenquarie Hotel Pty Ltd is aware of these proceedings and has not raised any objection to the relief sought, the court is justified in proceeding to deal with the plaintiff's application. It is not necessary that Glenquarie Hotel Pty Ltd be joined as a defendant.

59 For these reasons it is appropriate to make orders under s 89(1)(c) for the extinguishment of the easements, provided they are replaced by the proposed new easements, and provided roads along the rights of carriageway are constructed by the plaintiff to provide alternative routes.

60 In Manly Properties Pty Ltd v Castrisos the plaintiff did not seek an order modifying or extinguishing the easement at the time of the hearing. Holland J said (at 425-426):

“In the present case, regard has to be paid to the fact that the plaintiff does not presently seek a formal order. The plaintiff desires to have the view of the court as to what would be considered in the circumstances of the case a fair substitution for the existing easement which would both advance the interests of the plaintiff and fully protect the interests of the defendants. That being so, the jurisdiction to make the actual order is not presently invoked. I can see no sensible reason why the court should not be prepared to entertain an application put on this basis.

In my opinion, it is open to the court to deal with an application so put and to indicate what order the court would be prepared to make in the event that certain conditions were fulfilled. I think that that is only procedurally different from an order that an easement be extinguished subject to certain events occurring, such as by postponing the date on which the extinguishment should take effect or by ordering extinguishment subject to certain specified events that were capable of being certainly established having taken place. I think it would be an undue restriction on the jurisdiction of the court under a section such as this to hold that the only order that in effect the court could make would be an order for extinguishment after the circumstances justifying it had already occurred.

... I would indicate that, in my view, the court would be justified in extinguishing the existing easement, if it were replaced by an easement as set out in the plan 314/18 subject to there being no column supporting the building at the southern or the western section of the boundaries of lot 1 that are shown on the plan without the consent of the defendants; subject to there being no constructions on or at the periphery of the turning area as shown in the plan which would impede the manoeuvring of vehicles within that area; and subject to a 12 feet minimum height limitation. I would reserve for the present the question whether any provisions ought to be made or conditions laid down in respect of lighting of the covered areas.”

61 In Durack v de Winton [1999] NSWSC 83; (1998) 9 BPR 16,403 at 16,441, Einstein J accepted undertakings proffered by the cross-claimants to the court, to create a new easement and to carry out works, which would mean that no substantial injury would be caused by the extinguishment of the existing easement (at 16,433 and 16,440). His Honour also adjourned the proceedings (at 16,452) but said (at 16,432):

“It seems to me that Holland J [in Manly Properties Pty Ltd v Castrisos] was entirely correct in his view that it would be an undue restriction on the jurisdiction of the court under s 89 to hold that the only order that, in effect, the court could make would be an order for extinguishment after the circumstances justifying it had already occurred.”

62 In Loclot Pty Ltd v Pullen [2003] NSWSC 67; (2003) 56 NSWLR 592, Gzell J said (at 596 [18]):

“[18] In my view, it is an over-generous interpretation of the power in s 89 of the Act to ‘modify or wholly or partially extinguish’ an easement, profit à prendre, restriction or obligation, to conclude that the power extends to the imposition of conditions upon a modification or extinguishment.”

“[9] It is not clear to me that the court can impose conditions upon the exercise of power under s 89(1)(c) of the Act. The provision is silent in this respect. It stands in stark contrast to the correlative power of the court to create easements. In that case, s 88K(3) provides that the court is to specify the terms of the easement. On its face, s 89(1) seems to me to be limited to mere modification or extinguishment.”

64 The condition to which his Honour was referring at [18] was a condition that the defendant sought be imposed on the applicant in that case for the order for modification under s 89(1)(c), namely that when the plaintiff built over the surface of the existing right of carriageway which was to be extinguished, a clearance of 4.2 metres above the surface be maintained (at [8] and [19]).

65 It does not appear to me that his Honour was denying that it would be open to a court asked to make an order modifying or extinguishing an easement under s 89(1)(c) to make the order conditional on a new easement being first created. (See also his Honour’s conclusion at [40]).

66 In Manly Properties Pty Ltd v Castrisos, in the passage quoted earlier in these reasons at [60], Holland J contemplated that such an order could be made. In Tanlane v Moorebank Recyclers Pty Limited [2008] NSWSC 1341, Young CJ in Eq (as his Honour then was) considered (at [83]) that the section confers power to extinguish an easement wholly or partially on conditions.

“... it is inappropriate to read a provision conferring jurisdiction or granting powers to a court by making conditions or imposing limitations which are not found in the words used.”

68 In my view the court has the power to make orders for extinguishment of the easements on the condition that new easements be created.

69 In Markos v O R Autor Pty Ltd [2007] NSWSC 810 Austin J said (at [117]):

"... the law now seems to be that a relocation of the site of an easement so that it traverses a completely different track is outside the power conferred by s 89(1)(c): Tujilo v Watts (2005) 12 BPR 23,257 at [52] per Campbell J."

70 That observation has to be read in context. So understood, it is clear in my view that his Honour was saying only that such a relocation is outside the power to modify an easement. His Honour is not to be taken as saying that it is outside the power of the court to extinguish an easement on a condition that a new easement on a different site be created. It is also necessary that the applicant, for an order under s 89(1)(c), be a person interested in the servient tenement (see Markos v O R Autor Pty Ltd at [115] and Tanlane v Moorebank Recyclers Pty Limited). I do not understand Young CJ in Eq in the latter case to be departing from anything said in Manly Properties Pty Ltd v Castrisos.

Whether proceedings should be adjourned and when orders for extinguishment should take effect

71 In the present case the plaintiff does not seek an adjournment until after the new roads along the proposed new rights of carriageway are constructed and instruments in registrable form for the creation of new easements are executed, including preparation of the necessary plans of survey. Rather, the plaintiff seeks the following orders and proffers the following undertakings to the court and to the defendant:

1. Easement G encumbering Lot 133 DP 1000304 and shown in green on the plan ER01 (rev P5) (‘Plan’) attached be extinguished pursuant to section 89 of the Conveyancing Act 1919 (NSW).

2. The part of easement F encumbering Lot 133 DP 1000304 and shown in yellow on the Plan be extinguished pursuant to section 89 of the Conveyancing Act 1919 (NSW).

3. The part of the easement M encumbering Lot 133 DP 1000304 which consists of the carpark space hatched in pink and orange on the Plan be extinguished pursuant to section 89 of the Conveyancing Act 1919 (NSW).

4. Simultaneously upon the registration of the extinguishment of that part of easement F depicted in yellow on the Plan, the plaintiff will do all things necessary to cause to be created and registered with the NSW Department of Lands a new easement to become part of easement F, in the position depicted in purple on the Plan and on the terms identical to the terms of the easement that is to be extinguished under paragraph 2.

5. Simultaneously upon the registration of the extinguishment of easement G depicted in green on the Plan, the plaintiff will do all things necessary to cause to be created and registered with the NSW Department of Lands a new easement in the position depicted in orange on the Plan and on the terms identical to the terms of the easement that is to be extinguished under paragraph 1.

6. Simultaneously upon the registration of the extinguishment of that part of easement M hatched in pink and orange on the Plan, the plaintiff will:

(i) cause to be widened and converted into a disabled carpark space, the carpark space marked ‘relocated disabled parking space’ on the Plan; and

(ii) cause to be created and registered with the NSW Department of Lands a new easement to become part of easement M over the carpark space cross-hatched on the Plan, on the terms identical to the terms of the easement that is to be extinguished under this paragraph 3.

7. The plaintiff will construct and complete any physical works required to be carried out within the proposed easements referred to in paragraphs 4, 5 and 6:

(i) in accordance with the requirements of Campbelltown City Council (in its capacity as statutory consent authority) and any other relevant governmental authority;

(ii) with respect to the proposed easements referred to in paragraph 1 and 2, access roads within those easements must be constructed at least to the standards required under Council’s Specification for Construction of Subdivisional Road and Drainage Works (as amended) and the Campbelltown (Sustainable) City DCP 2007 Volume 2; and

(iii) prior to the registration of the extinguishment of those easements in accordance with this undertaking.

8. The plaintiff will pay the reasonable costs incurred by the defendant in attending to any matters required of the defendant to allow the plaintiff to carry out the matters referred to in paragraphs 4, 5 and 6.

(i) Upon completion of the roadway [along] the proposed new easement depicted in purple on the Plan (Roadway F), grant a non-exclusive licence to the owners and occupiers (and their invitees) of Lot 115 DP 589310, Lot 119 DP 600441, Lot 134 DP 1000304 and Lot 118 DP 589441 to use Roadway F on terms identical to the terms of easement F that is to be extinguished under paragraph 2;

(ii) upon completion of the roadway [along] the proposed new easement depicted in orange on the Plan (Roadway G), grant a non-exclusive licence to the owners and occupiers (and their invitees) of Lot 115 DP 589310, Lot 116 DP 589310, Lot 119 DP 600441 and Lot 134 DP 1000304 to use the Roadway G on terms identical to the easement G that is to be extinguished under paragraph 1; and

(iii) upon completion of Roadway F and Roadway G, grant a non-exclusive licence to the defendant and its invitees to use the car park space cross-hatched on the Plan on terms identical to the terms of easement M that is to be extinguished under paragraph 3.

10. The licences under paragraph 9 shall terminate immediately once the new rights of carriageway and easement for car parking contemplated by paragraphs 4, 5 and 6 are registered.”

72 These proceedings were expedited because the plaintiff is under time constraints to commence and complete the building work for the new centre so as to secure Woolworths Limited as a tenant.

73 I was informed by counsel for the plaintiff that the plaintiff is concerned that there may be delays in registering the new easements with the New South Wales Department of Lands. Hence it seeks orders that would permit it to lodge for registration the orders extinguishing the existing easements after the new roads had been built, and which would allow orders for the extinguishment of the existing easements to take effect by being registered, notwithstanding that there might be delays in registering the new easements. In the interim it proffers licences to the defendant and to the occupiers and invitees of the lots entitled to the benefit of the easements over the route of the new easements pending registration of the new easements.

74 No evidence was adduced as to the likelihood or extent of delays in registering the new easements, nor as to what matters might cause any such delays.

75 The defendant submits that its existing legal rights as a person entitled to the existing easements should not be extinguished until rights of the same character are created by the registration of the new easements. I agree with this submission.

76 One way of dealing with the matter would be to adopt the course taken in other cases and simply adjourn the present application until the plaintiff has carried out the building works on the site of the new easements and prepared all the necessary documents for the creation and registration of the new easements. It could do so in the knowledge that the court has indicated that in due course orders will be made for the extinguishment of the existing easements.

77 However, I do not think that is a desirable course. I think it desirable that the parties have the certainty of final orders, albeit conditional orders, rather than the proceeding merely being adjourned. Before it embarks upon these works, or at least shortly into them, the plaintiff is entitled to know whether there may be an appeal. It would be in a most invidious position if it carried out work in expectation of final orders being made and registered new easements, but there was a successful appeal against the orders extinguishing the easements when these orders finally were made, after the work had been done and the new easements created.

78 For the reasons earlier stated I consider that orders can be made on conditions. Clearly it would not be satisfactory for the existing easements to be extinguished before at least the new access roads were built. I do not understand the plaintiff to contend to the contrary. In effect, the plaintiff proffers undertakings not to register the orders extinguishing the easements until the physical works on the site of the proposed easements are completed.

79 Nonetheless, I do not see why the defendant should have to depend upon the plaintiff observing such an undertaking. By saying that I am not for a moment suggesting that an undertaking not to register orders, providing for the immediate extinguishment of the easements, would not be honoured. But I do not think the defendant should have to depend upon such an undertaking being honoured.

80 Once the physical works are constructed and new easements executed and lodged for registration, the defendant's position is more secure. It and users of its buildings would have a licence to use the new roadways. But if for any reason the new easements were not registered, perhaps, for example, because a prior mortgagee's consent was required but was refused, the defendant would still be in an invidious position if the existing easements had been extinguished.

81 In my view the orders should expressly provide for the easements to be extinguished upon registration of the new easements.

82 The defendant sought orders that if the new easements are not registered within three years, then orders for the extinguishment of the existing easements should be vacated. I do not understand the plaintiff to oppose this as it intends to register the new easements as soon as possible.

83 The parties are also agreed, as I understand it, that there should be liberty to apply. Counsel for the defendant raised an issue as to whether such liberty to restore could be granted if final orders were made, unless by consent. I see no difficulty in reserving liberty to apply for the purpose of dealing with any matter which might arise in the course of working out the orders to be made. Such liberty relates to the enforcement of the orders to be made and does not offend the principle of finality of judgment. (See generally Phillips v Walsh (1990) 20 NSWLR 206 at 210; and Australian Hardboards Ltd v Hudson Investment Group Ltd [2007] NSWCA 104; (2007) 70 NSWLR 201 at [50]- [57].)

84 In Australian Hardboards Ltd v Hudson Investment Group Ltd, Campbell JA, with whom Tobias JA agreed, said (at [72]) that:

“[72] If the orders in a suit also reserve further consideration, that enables matters not disposed of by the orders made thus far in the suit to be dealt with on a later occasion.”

85 I am not conscious of there being any such matters, but if counsel can identify any, then I would also make an order reserving the proceedings for further consideration.

86 Subject to any further submissions which counsel may wish to make, I propose to make orders which I will hand down to counsel for their consideration upon the provision of undertakings by the plaintiff in relation to the creation of new easements and the construction of the works.

[Counsel had no submissions on the form of the short minutes of order.]

1. I note the undertakings of the plaintiff by its counsel to the Court and to the defendant (which I initial and date today and place with the papers) that the plaintiff will:

a) do all things necessary to cause to be created and registered with the NSW Department of Lands a new easement to become part of easement F in the position depicted in purple on the plan ER01 (Rev P5) annexed to the further amended summons (“the Plan”) and there called “Proposed Relocated Easement F 1222SQM” and on the terms identical to the terms of the easement “F” that is to be partially extinguished pursuant to the orders below.

b) do all things necessary to cause to be created and registered with the NSW Department of Lands a new easement in the position depicted in orange on the Plan and there called “Proposed Relocated Easement G 955SQM” and on the terms identical to the terms of easement “G” to be extinguished pursuant to the orders below.

c) cause to be widened and converted into a disabled car park space the car park space marked “Relocated Disabled Parking Space” on the Plan and cause to be created and registered with the NSW Department of Lands a new easement to become part of easement “M” over the car park space cross-hatched on the Plan and there called New Relocated Parking Space on the terms identical to the terms of easement M to be partially extinguished under the orders below.

d) construct and complete the physical works required to be carried out within the proposed easements referred to in (a), (b) and (c):

i) in accordance with the requirements of Campbelltown City Council (in its capacity as statutory consent authority) and any other relevant governmental authority;

ii) with respect to the new easements referred to in paragraph (a) and (b), access roads within those easements must be constructed at least to the standards required under Council’s Specification for Construction of Subdivisional Road and Drainage Works (as amended) and the Campbelltown (Sustainable) City DCP 2007 Volume 2.

2. Order that the new easements to be created pursuant to the undertakings noted in para 1(a), (b) and (c) not be lodged for registration until completion of the construction of the works to be carried out pursuant to the undertaking noted in para 1(d).

3. Order that provided the new easements to be created pursuant to the plaintiff’s undertakings noted in para 1(a), (b) and (c) are registered within three years, that upon the registration of such new easements:

a) Easement “G” encumbering Lot 133 DP 1000304 and shown in green on the Plan be extinguished pursuant to s 89 of the Conveyancing Act 1919 (NSW).

b) The part of easement “F” encumbering Lot 133 DP 1000304 and shown in yellow on the Plan be extinguished pursuant to s 89 of the Conveyancing Act 1919 (NSW).

c) The part of easement “M” encumbering Lot 133 DP 1000304 which consists of the carpark space hatched in pink and orange on the Plan be extinguished pursuant to s 89 of the Conveyancing Act 1919 (NSW).

4. Liberty to apply on reasonable notice.

5. Exhibits may be returned after 28 days.

6. These orders may be entered forthwith.

87 I note the undertakings of the plaintiff by its counsel to the court and to the defendant set out in para 1 in the document headed “Short Minutes of Order”, which I initial, date today and place with the papers.

88 I make orders in accordance with paras 2, 3, 4 and 5 of those short minutes and I make a further order 6 that these orders may be entered forthwith.

89 I make no order as to costs of the proceedings, with the intent that each party bear its own costs. Without affecting the parties’ liability for the remuneration of the single experts pursuant to r 31.45(2), those expenses are to be borne by the parties equally.

Supreme Court of New South Wales

Fincob Pty Ltd v Campbelltown City Council [2010] NSWSC 349 (14 April 2010)