Posted on April 11, 2024 by Bianca Crapis and Sue Puckeridge
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Update on a consent authorities’ power to suspend the operation of an easement
The question of whether a consent authority has power to suspend the operation of an easement for the purpose of enabling development to be carried out in accordance with a development consent has again been the subject of consideration in a recent Supreme Court decision. The decision is consistent with a recent decision of the Land and Environment Court.
Background
In JEA Holdings (Aust) Pty Ltd v Registrar-General of New South Wales [2024] NSWSC 85 (JEA Holdings), there were several issues for consideration, but the focus of this blog is the question of whether a council, in the granting of development consent can suspend the operation of an easement (as distinct from a restrictive covenant), such that the restrictions in the easement no longer apply to the development.
Clause 1.9A of the standard LEP permits a council to suspend an easement entirely in its consideration of the development application. The LEP in question was the Liverpool Local Environment Plan 2008 (LEP).
The case involved two parcels of land. One parcel (Lot 4) was a parcel of vacant land comprising an open ‘at grade’ car park. The other parcel adjoined Lot 4 and was used for a hotel (Lot 5). The easement burdening Lot 4 provided for the hotel to park motor vehicles on Lot 4 (Easement). The Easement benefited Lot 5.
The Easement was created by memorandum of transfer (Transfer) in 1963 from the Housing Commission to Green Valley Shopping Centre Pty Ltd. Following this transfer, Green Valley Shopping Centre Pty Ltd executed a memorandum of transfer of Lot 5 to Tooth & Co Ltd. Upon registration of the land, new certificates of title were issued in relation to each of Lots 4 and 5. Schedule 2 of the certificate of title for Lot 5, the benefitted land, recorded the ‘covenant’, however certificate of title for Lot 4, the burdened land, did not.
JEA Holdings submitted that an easement was not a “regulatory instrument” within the meaning of the definition in s 3.16(1) of the Environmental Planning Assessment Act 1979 (EPA Act), in particular because an easement is not “an agreement, covenant or instrument” but rather is an interest in land, and consequently it cannot fall within cl 1.9A of the LEP.
The Court referred to 2 earlier cases:
Cracknell and Lonergan Pty Limited v Council of the City of Sydney (2007) 155 LGERA 291; [2007] NSWLEC 392 (Cracknell) where Preston J has found that while the deed which created the right of way was “an agreement or similar instrument”, it was not an agreement or similar instrument that “purports to impose restrictions on the carrying out of development on the land”: [37]. No restriction was expressly stated or necessarily implied in the agreement or instrument.
William Lloyd Carey-Evans and Jennifer Anne Quist as Executors of the Estate of Robert Rufus Carey-Evans v Wenhao Wu [2022] NSWLEC 144 (Carey-Evans) involved land in Vaucluse that overlooked Sydney Harbour. The respondent owned an adjoining property downhill from the applicants’ property towards Sydney Harbour. Registered on the title of both properties was an easement for light, air and prospect across and above a specified horizontal plane over the respondent’s property. This easement benefited the applicants’ property and burdened the respondent’s property. The respondent obtained development consent to construct a new house that was higher than his existing house and higher than the horizontal plane specified in the dealing. Preston CJ determined that cl 1.9A of the WLEP operated to suspend the operation of the easement as it clearly restricted the carrying out of development in accordance with the development consent.
In Carey – Evans, Preston CJ set out a three stage test:
- identify what interest is created by the instrument that is the dealing;
- ascertain whether the dealing creating that interest is “any agreement, covenant or other similar instrument”; and
- determine whether the dealing “restricts the carrying out of that development”, being development in accordance with the consent granted by the Council.
The Court in JEA Holdings agreed with the approach set out in Carey Evans. In applying this approach it found:
- The interest created by the Transfer was an easement.
- The Transfer was properly regarded as either an agreement (set out in the Transfer), a covenant (as that is how it is expressed) or a similar instrument to an agreement or covenant.
- The Transfer restricted the carrying out of development as it required that the ground level up to a height of 12 feet must be exclusively used for parking (at [79] and [80]).
Consequently, clause 1.9A of the LEP applied and could be relied upon to suspend the operation of the Easement.
Takeaways
Previous cases have tended to rely on Cracknell as authority for the proposition that clause 1.9A of the standard LEP does not apply to easements or rights of way. However, JEA Holdings and Carey-Evans make it clear that Cracknell did not go this far. Rather, the test is more nuanced and careful consideration needs to be given to whether the terms of the easement would restrict the carrying out of development.
The judgment in JEA Holdings (Aust) Pty Ltd v Registrar-General of New South Wales [2024] NSWSC 85 can be accessed here.
If you wish to discuss anything in this article, please leave a comment below or contact Sue Puckeridge on 02 8235 9702 or Bianca Crapis on 02 8235 9728
It is great to see this clause retested and confirmed by the court. In council development assessment we regularly invoke this clause when assessing development applications against restrictive covenants that were imposed by developers during subdivision. I often wonder whether there are civil litigation risks for proponents who construct council approved developments that conflict with restrictive covenants. Similarly, I wonder whether Council has authority to prevent the establishment of these covenants when approving 88B instruments during subdivision.