Emil Ford Lawyers

Being nice is not enough ... developer to pay compensation

A recent decision of the NSW Supreme Court, Court of Appeal has confirmed an earlier decision of the Land and Environment Court requiring a developer to pay significant compensation for the grant of an easement under section 88K of the Conveyancing Act.

The developer had hoped to acquire the easement for access for nothing because it had “helped” the Council.

Section 88K entitles a land owner to obtain an easement where it is “reasonably necessary” and where other circumstances apply.

In this case, what made the easement “reasonably necessary” was the fact that the land owned by the developer was “land locked” and had no access to a roadway. The developer believed that it should not have to pay compensation for the easement (over Council land) to access a roadway (and therefore make the development site useable) because the developer had facilitated the original closure of part of the roadway for the Council. The developer thought that, either explicitly or implicitly this would mean that the Council would provide an easement over its land without charge, or at least, that the Council would be forced to do so.

Both the Land and Environment Court and NSW Supreme Court, Court of Appeal saw the situation differently.

 

If the developer thought that its arrangements with the council would be “mutually advantageous” then it should have insisted upon any such arrangement being in writing.

It did not.

In the end, the developer was left with a compensation bill of half a million dollars and a load of legal costs. Any arrangement whether involving Councils, other land owners, other developers or other government authorities should be properly documented if it is intended to rely upon them in the future – it is not worth the risk of losing the entire value of the development site.

Emil Ford Lawyers

If you would like to discuss any aspect of this, please contact or . Emil Ford Lawyers provides advice and service to clients in the property development and construction industry including in relation to acquisition, contracts and agreement, building contracts and disputes, sub-division and sales.

 

 

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