The pros and cons of a water easement

Catchwords: Property law, easements, water supply, riverbank rights, riparian land, enforcement, S 88K Conveyancing Act (NSW), easements for carriageway, right of way

A thirsty farmer (let’s call him “Thirsty”) seeking an easement for water supply over another person’s riverbank or riparian land (“Rivers”), has new rights since Section 88K came into force in New South Wales in early 1996.

Procuring such an easement in the Courts has radically opened up the old law, which was protective of private property rights.

If the easement is “reasonably necessary”, meaning substantially preferable for Thirsty’s development (e.g. because Thirsty has limited catchment water), Thirsty could be successful. This legal invasion of private property rights was thought necessary if the private development also benefited the public.

However, the way s 88K came out is that Thirsty’s easement could comply if it is “not … inconsistent with the public interest”.

The trade-off for loss of private property rights for public benefit is watered down. After all, the interest is, in reality, the private interest of Thirsty being well watered.

Wide windfall compensation for Rivers is not on. Rivers should be concerned if Thirsty’s new easement is over a small strip of land where the pumping site and pipes are remote from Rivers’ homestead. The land would be of nominal value and the disturbance of noise or Thirsty’s access for repairs could be minimal or nothing.

If that’s the case, so would be the compensation to Rivers. The Court only has to order adequate compensation unless there are “special circumstances”.

If Rivers can show a legitimate economic advantage or loss of a personal right in having an  easement and that no amount of compensation could make up for the interference, the Court will not impose one.

For instance, if down-river water is tight, this could help Rivers. But this is an argument for no easement, not for compensation, if Thirsty is successful through the Court.

Thirsty can only proceed to Court once “all reasonable attempts” to negotiate the easement have been fruitless.

The New South Wales Attorney-General at the time, Jeff Shaw, thought that this would stop exorbitant ransom demands for money.

However, the way it works in practice is that if Rivers holds out for more money and Thirsty won’t pay, Thirsty can then drag Rivers into Court.  Thirsty then makes Rivers a defendant in expensive legal proceedings.

These principals above equally apply to easements for right of way or carriageway, particularly over land locked blocks. The Court may make an order imposing an easement over land if the easement is reasonably necessary for the effective use or development of other land that will have the benefit of the easement (S88K(1) CA).

Even though the applicant is required to pay the costs of the proceedings, this is subject to any order of the Court to the contrary (S88K(5) CA).

So there is no guarantee that giving up an easement in Court, having contested it all the way, perhaps even unreasonably, will result in an automatic payment of all solicitor-client legal costs plus a gift of a windfall compensation order. Whether it is water easement for pipes to the river or an easement for carriageway or a right-of-way access to a block of land, it may not be worth the costs of fighting over it.

Jonathan de Vere Tyndall

Updated 3 April 2015, originally published in The Land on 11 March 1999.

Editors note: The articles published contain comment only and not legal advice, for which you should retain a solicitor. No responsibility is accepted for the accuracy of the contents.