LEP Overrides Easements?

Easements play a crucial role in property law by granting certain rights over land to benefit another parcel of land or person. However, there are circumstances where these rights can be overridden or suspended, particularly when they conflict with development plans under local environmental regulations. This article explores how a Local Environmental Plan (LEP) can overrule an easement, drawing on the case of JEA Holdings (Aust) Pty Ltd v Registrar-General of New South Wales [2024] NSWSC 85 as a practical example.

Understanding Easements and Local Environmental Plans

What Is an Easement?

An easement is a legal right that allows the holder to use another person’s land for a specific purpose. Common examples include rights of way, drainage easements, and rights to light and air. Easements are attached to the land (known as the servient tenement) and benefit another piece of land or person (the dominant tenement).

What Is a Local Environmental Plan (LEP)?

An LEP is a statutory instrument under the Environmental Planning and Assessment Act 1979 (NSW) (EPA Act) that guides planning decisions by local councils. It sets out zoning and development controls to manage land use and environmental protection within a local government area.

The Legal Framework Allowing LEPs to Override Easements

Section 3.16 of the EPA Act

Section 3.16 empowers LEPs to suspend the operation of certain “regulatory instruments” to facilitate development. It states:

“(2) For the purpose of enabling development to be carried out in accordance with an environmental planning instrument… a regulatory instrument specified in that environmental planning instrument shall not apply to any such development or shall apply subject to the modifications specified…”

A “regulatory instrument” includes any Act (other than the EPA Act), rule, regulation, by-law, ordinance, proclamation, agreement, covenant, or instrument.

Clause 1.9A of the Liverpool LEP

Clause 1.9A specifically addresses the suspension of covenants and agreements:

“(1) For the purpose of enabling development on land in any zone to be carried out in accordance with this Plan… any agreement, covenant or other similar instrument that restricts the carrying out of that development does not apply to the extent necessary to serve that purpose.”

This clause allows for the suspension of certain legal instruments that would otherwise hinder development approved under the LEP.

Case Law on LEPs Overriding Easements

Cracknell and Lonergan Pty Limited v Council of the City of Sydney [2007]

In this case, the court considered whether a right of way (a positive easement) could be suspended under an LEP. The court held that the right of way did not “purport to impose restrictions on the carrying out of development” because it did not expressly or impliedly restrict development.

Carey-Evans v Wu [2022]

This case involved a negative easement for light, air, and prospect, which did restrict development above a certain height. The court held that the easement could be suspended under the LEP because the instrument creating it was an “agreement, covenant or other similar instrument” that restricted development.

The JEA Holdings Case: A Practical Example

Background

• JEA Holdings (Aust) Pty Ltd (JEA) purchased a parcel of land (Lot 4) intended for development.
• The land was subject to an easement benefiting a neighbouring property (Lot 5), owned by Awar Pty Ltd (Awar).
• The easement required that Lot 4 be used as a car parking area for free public use and permitted certain structures above 12 feet that did not obstruct parking.

Legal Issue

JEA sought to develop Lot 4 into a mixed-use development, which included retail spaces and residential units, potentially conflicting with the easement’s restrictions. The question arose: Could the LEP suspend the easement to allow the proposed development?

Court’s Analysis

Is the Easement an “Agreement, Covenant, or Other Similar Instrument”?

The court held that the instrument creating the easement—a memorandum of transfer—qualified as an “agreement, covenant or other similar instrument” under clause 1.9A of the LEP.

Does the Easement Restrict Development?

The easement expressly restricted the use of the ground level to car parking, conflicting with the proposed development’s retail and residential components. Therefore, it restricted the carrying out of development as per the LEP.

Application of Clause 1.9A

• The court concluded that clause 1.9A allowed the council to suspend the easement to the extent necessary for the development.
• The easement could be overridden to facilitate development approved under the LEP.

Outcome

• JEA was permitted to proceed with its development despite the easement.
• The court clarified that LEPs could suspend easements when they meet the criteria outlined in clause 1.9A and section 3.16 of the EPA Act.

Implications for Property Owners and Developers

• Positive vs. Negative Easements: Both types can potentially be suspended under an LEP if they restrict development.
• Express Restrictions: Easements that expressly or impliedly restrict development are more likely to be suspended.
• Due Diligence: Property owners should be aware that easements may not be absolute barriers to development if an LEP applies.
• Council’s Role: Local councils have discretion under LEPs to suspend easements to enable approved developments.

Conclusion

The JEA Holdings case demonstrates how LEPs can override easements that restrict development. Under section 3.16 of the EPA Act and corresponding clauses in LEPs like clause 1.9A, councils have the authority to suspend agreements, covenants, and similar instruments, including easements, to facilitate development in accordance with planning objectives. Property owners and developers should consider this legal mechanism when assessing the impact of easements on potential developments.

Disclaimer: This article provides a general overview of legal principles and is not legal advice. For specific legal concerns, consult a qualified legal professional.