Trespass in Building and Construction (Part 2)

Construction

What conditions must be satisfied if the Court grants an Easement?

When granting an Easement, the Court will look to whether the following seven conditions have been satisfied. The Court will consider:

A. Whether the granting of an easement is a “reasonable necessity”

This was considered relatively recently by Henry J in The Owners – Strata Plan No 17719 v Arcidiacono [2019] NSWSC 1307. A “reasonable necessity” means:

i. more than mere desirability but less than absolute necessity;

ii. does not mean necessary for the “best and highest use” of the land;

iii. requires consideration of “servient tenement” (The greater the burden on the servient land, the stronger the case required to find that the easement is reasonably necessary and it is noted that a matter will be determined when order is made not when application filed); and

iv. cannot be considered in isolation.

B. Whether the easement is inconsistent with public use

C. Whether all reasonable attempts to negotiate have been exhausted

The Court will consider whether all people effected have been afforded an opportunity to consider. It is important to note that an applicant is not required to continue negotiations when it becomes clear that those negotiations are futile.

D. Whether the neighbour can be adequately compensated

E. Whether it should exercise its discretion in imposing an easement

F. The amount of compensation

The Court will turn its mind to diminished market value; associated costs; compensation for insecurity, loss of amenities, etc.

G. Costs

These will usually be payable by the Applicant unless the Applicant can show the Respondent’s conduct was unreasonable.

Case study – Twelve Walker Street Pty Ltd v Lee [2017] NSWSC 1807

Facts

A Developer proposed to install rock anchors under its property and under neighbouring properties to support the piling system and retain the surrounding land during excavation. The Owners objected to the use of rock anchors on the basis they would hinder the planned excavation of their land for their own development while the rock anchors were in tension or in place. The parties could not negotiate an agreement and the developer sought relief under s 88K of the Conveyancing Act 1919 for  an easement which would permit subterranean access to the neighbouring land for the purpose of installing and, within a two year period, de-stressing the rock anchors.

Issues

In determining whether an easement was valid, the Court answered the questions as follows:

  1. Whether the granting of an easement is a “reasonable necessity”

 Yes. Although there were other ways of retaining the land (ie using a bracing system), the Court held that the proposed rock anchors was a reasonable means of retaining the faces of the excavation (which was some 30m in depth in some instances). This was because the rock anchors were considered to be more reliable, safer and cheaper than the other alternatives. It is noted that the rock anchors would be $1.4 million less expensive than a bracing system.

  1. Whether the easement is inconsistent with public use

No. The Court could not be convinced that the easement was inconsistent with the public interest as it would enable the carrying out of an approved development in a safe, simple and efficient manner.

  1. Whether all reasonable attempts to negotiate have been exhausted

Yes. The parties had taken reasonable steps to negotiate over an extended period of time. Consideration was also given to developer’s offers to pay compensation, which was not for an insignificant amount.

  1. Whether the neighbour can be adequately compensated

Yes. The Court determined the Neighbours could be adequately compensated.

Compensation was ultimately awarded in the sum of $267,000 to the neighbouring landowners.

The quantum was broken down as being “$10,000 for blot on title, $52,000 for a “rock anchor installation fee”, and $205,000 in respect of additional excavation costs.” Darke J further held that “compensation in that amount is appropriate to adequately compensate the defendants for the losses or other disadvantages that will arise from imposition of the easement sought by the plaintiffs.”

  1. Whether it should exercise its discretion in imposing an easement

In all the circumstances, the Court held that it should proceed to exercise its discretion in favour of the grant of relief and granted the easement.

  1. The amount of compensation

Compensation was ultimately awarded in the sum of $267,000 to the neighbouring landowners.

The quantum was broken down as being “$10,000 for blot on title, $52,000 for a “rock anchor installation fee”, and $205,000 in respect of additional excavation costs.” Darke J further held that “compensation in that amount is appropriate to adequately compensate the defendants for the losses or other disadvantages that will arise from imposition of the easement sought by the plaintiffs.”

  1. Costs

The Court Ordered that the developers pay the neighbours costs of the proceedings.

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