By Anthony Whealy, Partner and Ben Salon, Senior Associate

A recent decision in the Land and Environment Court has seen easements for light and air automatically suspended by a clause in the relevant Local Environmental Plan to allow building work under a development consent on the adjacent land, to which the easements applied (restrictively).

Such suspending clauses in planning instruments such as SEPPs and LEPs have historically been known as “covenant busters”. However, following the decision in 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’), that name may no longer be broad enough to describe the breadth of instruments the suspending power of the clauses can apply to.

The Decision

In Carey-Evans, the Applicant unsuccessfully sought to use an instrument registered on title, containing certain easements for light and air, to prevent building work in accordance with development consent on neighbouring land. In these proceedings we acted for the First Respondent/Cross Claimant, the developer and owner of the neighbouring land.

The Chief Judge of the Land and Environment Court found that clause 1.9A in the relevant Local Environmental Plan operates so as to cause, amongst other things, the subject easements for light and air benefiting the dominant land (the Applicant’s Land) to “not apply to the extent necessary” to serve the purpose of enabling development on the servient land (the Respondent’s Land) to be carried out in accordance with the consent granted by the Council.

The decision in Carey-Evans has clarified and further developed the law from the long-standing decision in Cracknell and Lonergan Pty Limited v Council of the City of Sydney (2007) 155 LGERA 291 (‘Cracknell’) on what “agreements, covenants or other similar instruments” do not apply to development to be carried out in accordance with an Environmental Planning Instrument (‘EPI’) or in accordance with a consent granted under the Environmental Planning and Assessment Act 1979 (NSW) (the ‘EP&A Act’).

Previously, pursuant to Cracknell, it had been held that such ‘covenant busting’ clauses in environmental planning instruments did not override easements, because easements are by their nature permissive in nature, not restrictive (for example, an easement for access or stormwater permits something, rather than prohibiting it).

However, as stated by the Chief Judge in Carey-Evans:

[90] In the present case, not only is the language of cl 1.9A of [the Woollahra Local Environmental Plan 2014 (‘WLEP’)] different [from that in Cracknell] but the easement and covenant created by the relevant instrument, the Dealing, are different. The easement for light and air is a negative easement, giving the dominant owner the right to stop the servient owner from building on the servient land above the specified horizontal plane and interrupting the flow of light and air … In terms, the Dealing creating the easement … does restrict the carrying out of development on the servient land in these ways.

[91] The Dealing therefore answers the description of being an instrument of the kind specified in cl 1.9A of WLEP that “restricts the carrying out of that development”.

Key Takeaways

These findings demonstrate that it is not necessarily the characterisation or name (ie easement, covenant, etc) of the instrument registered on title that is important in determining whether it is suspended by an EPI. Rather, what is important is the language of the specific suspending clause in an applicable EPI, and also the specific terms and effect of the subject instrument/s.

In practice, often the types of covenants that are readily suspended are those which expressly limit the height of a building, or which require specific setbacks, for example, to protect views for an adjacent property. These covenants on title have often been imposed historically at the time of a subdivision of the relevant land parcels. They are in practice often entirely unenforceable, because of the principles explained in this article, and reinforced powerfully by the recent decision in Carey-Evans.

The power to include a suspending clause in an EPI arises from section 3.16 of the EP&A Act, and suspending clauses can be found in the range of EPIs including Local Environmental Plans (‘LEPs’) and State Environmental Planning Policies (‘SEPPs’). However, as we see in practice and from the decisions in Carey-Evans and Cracknell, the language of these clauses in LEPs and SEPPs are not uniform.

In addition, the beneficiary of the instrument can be determinative of whether it can be suspended by an EPI. This is because the suspending clauses usually contain exceptions to the operation of the clause. For example, if the instrument is imposed by or benefits a Council, then it usually cannot be suspended by an EPI. These exceptions can vary widely across the range of EPIs.

Lastly, in practice we see a range of terms and effect of instruments registered on title such as covenants and easements that is almost limitless. As was noted in Carey-Evans, the instrument the subject of the proceedings was not only materially different from that in Cracknell (in that case a right of carriageway for access and travel), but the easements for light and air were also materially different from those upheld in other cases.  For example and importantly, the easements for light and air in Carey-Evans were found to be drafted as one easement (and not two), and burdened the whole (and not part) of the servient land across a horizontal plane, and benefitted the whole of the dominant land (and not just the defined windows/doors of building/s on that land).

These nuances played a determinative role in the Carey-Evans decision. Accordingly, careful consideration must be given to both the language of any applicable suspending clause in an EPI, and the terms and effect of the subject instrument registered on title, as together these will have a determinative impact on the effect and application of the particular suspending clause to the circumstances at hand.

Need further assistance?

If you are considering purchasing and/or developing land that is burdened or benefitted by instruments that restrict development, such as covenants and easements registered on title, then reach out to us for advice on whether any applicable EPIs might see the operation of those instruments suspended for the purposes of development. Of course, and as demonstrated by Carey-Evans, we are also experienced in litigating such issues should the suspending power of a clause need to be defended or challenged.