In brief - Land could not be used in accordance with residential zoning unless easement granted
The decision of the Court of Appeal in City of Canterbury v Saad, shows that an easement of necessity can be granted in accordance with Section 88K of the Conveyancing Act even where a party acquires a property knowing that the property suffers from a defect which will require an easement to rectify it.
Council argues that granting easement over public land not in the public interest
This case City of Canterbury v Saad  NSWCA 251 involved land which was land locked and which adjoins a large public reserve in the City of Canterbury.
The only way access could be obtained was over two areas of land owned by council which formed part of a large recreation area.
Council argued that the easement was not reasonably necessary, that to grant it over public land would be inconsistent with the public interest (and one of the criteria of Section 88K is that any grant of easement must not be contrary to the public interest) and that it was improper for the court to exercise its discretion in granting the easement.
Easement the only option if land to be used for its zoned purpose
Ultimately, the Court of Appeal unanimously rejected the council's arguments.
The land acquired, even though it was land locked, was zoned residential and could not be used for that purpose without an easement.
The court found that, in the circumstances, the easement was the only realistic solution to enable the land to be used for its zoned purpose and that the area of the right of way was fairly insignificant when compared to the total recreation area adjoining the land locked portion.
The court held, following the decision in Rainbowforce Pty Limited v Skyton Holdings Pty Limited in 2010, that when deciding whether an easement is reasonably necessary, it is irrelevant to consider whether, when acquiring the property, the purchaser had taken a commercial risk.
Easement to cause minimal interference to public use of recreation reserve
Whilst the court acknowledged, in accordance with prior decisions, that the impact of an easement on the property that the easement would burden and the diminution in the value of the property the subject of the easement are matters to be taken into account in assessing whether an easement is reasonably necessary, these matters are not finally determinative of whether the easement is reasonably necessary.
In the circumstances, even though there would be some minor inconvenience to members of the public by having the right of way in existence over public land, the nature of an easement is that it involves a shared use and the minimal interference would not have any significant and adverse affect on the public use of the recreation reserve.
Therefore, the public interest argument of council failed and the court held that there were no facts or circumstances that justified the court overturning the exercise of discretion by the judge at first instance.
Acquiring a property which requires an easement can cost you time and money
The courts seek to facilitate development and use of properties for their permitted purposes by the grant of easements, provided there are no material adverse consequences for either the public or the party which owns the property.
Whilst, in this instance, the applicant went to extraordinary lengths to stop the grant of the required easement (probably because it is a public authority), it highlights that if you acquire a property intending to take the commercial risk with respect to granting an easement, it can be both a lengthy and costly exercise. These matters need to be taken into account in determining the amount of the compensation that may be offered to the party from which you are seeking the easement.
It is also worth bearing in mind that in similar proceedings, the party seeking to prevent the easement from being granted risks an order for costs against it.
This is commentary published by Colin Biggers & Paisley for general information purposes only. This should not be relied on as specific advice. You should seek your own legal and other advice for any question, or for any specific situation or proposal, before making any final decision. The content also is subject to change. A person listed may not be admitted as a lawyer in all States and Territories. © Colin Biggers & Paisley, Australia 2020.