Who is the correct applicant in an NSW Class 1 LEC appeal? This article explores key cases and the rules on agents, principals, substitutions and subsequent purchasers.
Introduction An encroachment arises where a building or structure built on one parcel of land extends into an adjoining owner's land — whether above ground, at ground level, or even below the surface. The intrusion may be minor — a fence post, a roof eave, or a retaining wall footing — or it may involve a substantial part of a permanent structure. The principal legislation governing encroachments in New South Wales is the Encroachment of Buildings Act 1922 (NSW) (the Act ). The Act gives the NSW Land and Environment Court (the Court ) a broad discretionary jurisdiction to deal with encroachments in a way that is just and equitable in all the circumstances. This reflects a pragmatic recognition that removal or demolition of an encroachment is not always a proportionate response, particularly where the encroachment has stood unchallenged for many years. Two recent decisions of the Court — Gabriel v Billett [2023] NSWLEC 85 and Johnston v Cutbus h [2025] NSWLEC 1482 — illustrate the way in which these principles are applied in practice and offer valuable guidance for property owners confronted with encroachment issues. The Legal Framework: Encroachment of Buildings Act 1922 (NSW) Who Can Apply? Under section 3(1) of the Act, either the Encroaching Owner or the Adjacent Owner may apply to the Court for relief. The Act defines these terms as: Encroaching Owner — the owner of the land from which the encroaching building or structure originates. Adjacent Owner — the owner of the land into which the encroachment extends. This dual standing is important. An adjacent owner who feels their land is encroached upon may wish to apply to the Court for a remedy to deal with the encroachment. An encroaching owner may wish to apply for an easement or other formal entitlement to recognize an existing encroachment. Remedies Available to the Court Section 3 of the Act provides a number of remedies to deal with an encroachment. The range of orders the Court may make include: compensation to the Adjacent Owner for the encroachment and any loss suffered; the conveyance, transfer, or lease of the encroached-upon land to the Encroaching Owner; the grant of an easement, right, or privilege in favour of the Encroaching Owner; or removal of the encroachment. Crucially, the Court is not limited to a binary choice between removing the encroachment and doing nothing. It may, and frequently does, grant an easement over the affected portion of the neighbouring land — a remedy that allows the encroaching structure to remain, while providing the Adjacent Owner with legally recognized compensation and formal protection. Factors the Court Considers In determining which of the remedies is appropriate, section 3(3) of the Act directs the Court to have regard to several factors, including: whether the applicant is the Encroaching Owner or the Adjacent Owner. the situation and value of the land in question, and the nature and extent of the encroachment. the character and purpose of the encroaching building or structure. the loss and damage that has been or will be caused — both to the Adjacent Owner by the encroachment, and to the Encroaching Owner if removal were ordered. the circumstances in which the encroachment was made, including whether it was intentional, negligent, or the result of an innocent mistake. This multi-factorial assessment means that outcomes are highly specific to each case. The Court must weigh these competing interests and arrive at a solution that is, on balance, just and equitable. Compensation Section 4 of the Act deals with compensation. Where the Encroaching Owner can prove the encroachment was neither intentional nor the result of negligence, the minimum compensation payable is the value of the subject land. In any other case, compensation of up to three times the value of the land can be awarded. In assessing compensation above the minimum, the Court has regard to the improved or unimproved value of the land to the Adjacent Owner, the loss suffered, and the circumstances in which the encroachment was made. Case law Recent cases are illustrative of how the Court deals with encroachments under the Act. Gabriel v Billett [2023] NSWLEC 85 Decision Decided 15 August 2023 before Robson J (Class 3 application). The Court ordered removal of the encroaching portion of a shed within four months at the Adjacent Owner's cost. Facts Gabriel owned a property on which a small timber and metal shed (18m² in total) had been built. 11m² of the shed crossed onto the neighbouring property owned by Billett. The encroachment predated both owners. Gabriel had been aware of the encroachment since purchasing his property in 1996. Gabriel commenced proceedings seeking a transfer of 34.5m² of Billett's land at unimproved land value. Billett opposed this and sought removal of the 11m² encroachment. The cost of removal was quoted at $925. Decision Robson J refused Gabriel's application and ordered removal of the encroaching 11m² of the shed within four months, with Billett bearing the removal costs by way of indemnity. Reasoning Three factors were decisive. First, the Court had no jurisdiction to transfer the 34.5m² sought — the Act limits any transfer to the 'subject land' directly beneath the encroachment (11m²), and no broader buffer zone can be transferred. Second, Gabriel had known about the encroachment since 1996 and continued using his neighbour's land for storage throughout, which weighed heavily against him under section 3(3)(f) (the circumstances in which the encroachment was made). Third, removal of the encroachment would cost only $925 — a trivial sum. The shed was dilapidated with no meaningful heritage value, and the encroachment constrained Billett's plans to develop the rear of her small allotment. With hardship to the Encroaching Owner (Gabriel) minimal and hardship to the Adjacent Owner (Billet) real, removal was the just outcome. Johnston v Cutbush [2025] NSWLEC 1482 Decided 7 July 2025 before Commissioner Gray (Class 3 application). The Court ordered removal of a studio, composting toilet building and grey water tank within 60 days at the Encroaching Owners' expense. Facts Johnston (Adjacent Owner) purchased a 40.68-hectare rural property in 2016. A survey confirmed that three structures built by her neighbours — Cutbush (Encroaching Owner) — encroached onto Johnston’s land: a detached studio (encroaching by up to 5.57 metres), a waterless composting toilet building (wholly on Johnston's land but part of the studio's sewage system), and a grey water tank and pipework. The Encroaching Owner had owned their adjoining 6-hectare property since 1992 and over three separate periods between 1992 and 2008 had progressively enlarged an existing shed into a studio and installed a sewage management system — each time without development consent or building approval, and each time without commissioning any survey to verify the boundary. When the Encroaching Owner later sought to regularise the structures through council applications in 2008, those applications were accompanied by plans that misrepresented the studio as being wholly within their title. The 2008 approvals and building certificate did not authorise works already carried out, and did not authorise any structures on Johnston's land. Decision Commissioner Gray ordered removal of the studio, composting toilet building and grey water tank within 60 days at the Encroaching Owner’s expense. The alternative of a land transfer — which the Encroaching Owner supported — was refused. Reasoning The Commissioner's reasoning centered on the circumstances of the encroachment. The respondents had carried out three rounds of unauthorised works over two decades without taking any steps to verify the boundary — no survey, no pegging, no professional advice. They then misrepresented the location of the structures in council applications. Whether deliberate or careless, this demonstrated sustained disregard for the adjoining owner's property rights. Beyond the $65,900 removal cost, no evidence of concrete hardship to the respondents was led. By contrast, Johnston gave detailed evidence of plans to use an area of her property for ecotourism and glamping — plans directly frustrated by the encroachments. The land transfer was also refused because the area required to be transferred (177m²) was more than three times the subject land as defined by the Act (approximately 50m²); it was inappropriate to compel the Adjacent Owner to surrender significantly more land than that directly beneath the encroachment in circumstances where the Encroaching Owners had acted without authorisation or care. Key Takeaways Removal is a live remedy. Courts do not default to allowing encroachments to remain. Where the Encroaching Owner bears responsibility for creating the encroachment and it is shown that the encroachment arose out of negligence, removal is a likely outcome. The circumstances of the encroachment are decisive. Knowing, long-standing use of a neighbour's land and unauthorised construction without boundary verification both may attract removal orders. Council approvals do not defeat private encroachment claims. A building certificate prevents council enforcement only — it does not legalise works already carried out or bar an Adjacent Owner's claim under the Act. Transfers are limited to the subject land. The Act cannot be used to transfer a buffer zone beyond the encroachment footprint. Landowners should commission a survey before building near a boundary. Both cases arose from failure to verify the boundary location before construction began. Negotiate early and in good faith. Entrenched positions and unreasonable demands were noted adversely by the Court in both cases. The contents of this article are a general guide and intended for educational purposes only. Determination of issues of the kind discussed in this article is often complex and varies greatly from case to case. Each individual case is different and requires a detailed understanding of matters of fact and degree upon which reasonable minds may differ. DO NOT RELY ON THIS ARTICLE AS A SUBSTITUTE FOR COMPETENT LEGAL ADVICE.
Introduction In New South Wales, section 88K of the Conveyancing Act 1919 is the principal mechanism by which a court can impose an easement on a neighbour's land, even without that neighbour's consent. This article explains how the provision works, the key principles governing its application, and how recent cases have continued to shape the law in this area. What Is an Easement by Necessity? An easement by necessity arises where land is effectively landlocked or otherwise incapable of practical use without the benefit of some right over adjoining land. At common law, such easements are implied into grants of land where, without the easement, the grantee's land would be entirely inaccessible. However, implied easements are limited in scope and often difficult to establish. As an alternative, the broader, statutory mechanism is section 88K of the Conveyancing Act 1919 . Section 88K: The Court's Power to Impose an Easement Inserted into the Conveyancing Act 1919 in 1995, section 88K empowers the Supreme Court — and, in certain development-related circumstances, the Land and Environment Court (under s 40 of the Land and Environment Court Act 1979) — to impose an easement over land without the owner's consent. Section 88K(1) provides that 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. The power is conditional: all four preconditions in subsections (1) and (2) of section 88K must be satisfied before an order can be made. The Four Preconditions 1. Reasonably Necessary for Effective Use or Development This is the governing requirement. As Bryson J explained in Stepanoski v Chen (cited with approval in Samy Saad v City of Canterbury [2012] NSWSC 389), the primary purpose of section 88K relates to the public interest in effective land use — but that is not enough on its own to justify a positive exercise of the discretion; the effect on the servient land is also relevant and important. The leading elaboration of this requirement is found in Rainbowforce Pty Ltd v Skyton Holdings Pty Ltd [2010] NSWLEC 2 ( Rainbowforce ), decided by Preston CJ in the Land and Environment Court. A useful checklist of principles emerges from that decision: The requirement of reasonable necessity does not mean absolute necessity. The question is whether the easement is reasonably necessary for the effective — not merely convenient — use or development of the dominant land. "Effective" carries its ordinary meaning: serving to produce the intended result. The easement must be reasonably necessary for the effective use or development of the land itself , not merely for the current owner's personal enjoyment. The greater the burden imposed on the servient tenement, the stronger the applicant's case must be to justify a finding of reasonable necessity. The Court may impose an easement even where an alternative route exists; reasonable necessity does not demand there be no alternative. Reasonable necessity is assessed at the time of the hearing, not at the date of the application. These principles were reinforced in Arcidiacono v Owners of Strata Plan No 17719 [2020] NSWCA 269, where the NSW Court of Appeal held that reasonable necessity means the use or development of the land with the easement must be at least substantially preferable to use or development without it. A useful boundary case is Aussie Skips Recycling Pty Ltd v Strathfield Municipal Counci l [2020] NSWCA 292, where the proposed easement was found not to satisfy the requirement because it would enclose an area constituting 68% of the Council's land, making it incompatible with the continued beneficial ownership by the Council of the servient tenement. 2. Not Inconsistent with the Public Interest Section 88K(2)(a) requires the Court to be satisfied that the use of the dominant land — that is, the land having the benefit of the easement — will not be inconsistent with the public interest. Importantly, as Rainbowforce makes clear, it is the use of the dominant tenement, not the use of the easement on the servient tenement, that is the focus of this inquiry. The public interest requirement involves consideration of broader planning and development goals, including the implementation of planning criteria for the area. As observed in Samy Saad v City of Canterbury [2012] NSWSC 389, Parliament recognised that private development may be beneficial to the public, and the Act empowers the Court to facilitate such development while balancing competing private interests. There are, however, limits. Community land attracts heightened scrutiny, and courts have remarked that it would be rare that an easement over actively used community land would be considered to be in the public interest. 3. Adequate Compensation Section 88K(2)(b) requires the Court to be satisfied that the owner of the servient land can be adequately compensated for any loss or other disadvantage arising from the imposition of the easement. Critically, the Court must determine what compensation is payable at the time it makes the order. If it cannot do so, it has no power to grant the easement: Studholme v Rawson [2020] NSWCA 76 at [46]. Compensation is assessed by reference to the loss suffered by the servient tenement, not the benefit derived by the dominant tenement: Rainbowforce . Ordinarily, compensation covers three elements: The diminution in the market value of the affected land; Associated costs caused to the servient owner; and Losses arising from insecurity and loss of amenities — such as loss of peace and quiet, or loss of privacy from strangers using the easement. Any compensating advantages flowing from the easement must be credited against these losses: Wengarin Pty Ltd v Byron Shire Council [1999] NSWSC 485. In exceptional cases where it is extremely difficult to assess compensation, but the applicant stands to derive a considerable benefit, compensation may be assessed as a percentage of the profits made: Wengarin , as later applied in Lonergan's case. 4. All Reasonable Attempts to Negotiate Have Failed Section 88K(2)(c) requires the Court to be satisfied that all reasonable attempts have been made by the applicant to obtain the easement, but those attempts have been unsuccessful. The precondition is designed to ensure that litigation is a last resort. As Rainbowforce sets out, the following principles apply: The applicant must make an initial genuine attempt to obtain the easement by negotiation, including a monetary offer. The applicant must sufficiently inform the servient owner of what is being sought and give that person an opportunity to consider their position. The applicant is not required to make endless concessions until consensus is reached. Once it is objectively apparent that further negotiations are unlikely to produce consensus within the foreseeable future, the applicant may be taken to have made all reasonable attempts. In Govindan-Lee v Sawkins (2016) 18 BPR 35,883, this element was satisfied even where the applicant made a monetary offer only after proceedings had commenced — though this approach may not be consistent with the provision's evident purpose of encouraging pre-litigation resolution. Who bears the costs? Section 88K(5) creates a default rule that the applicant bears the costs of the proceedings, unless the Court orders otherwise. This reflects the fact that seeking a court-imposed easement is an indulgence — a judicially endorsed interference with property rights — and the servient owner is entitled to have the preconditions tested. An "otherwise order" shifting costs to the servient owner requires something more than a mere refusal of a reasonable compensation offer. As the NSW Court of Appeal confirmed in Shi v ABI-K Pty Ltd [2014] NSWCA 293, a property owner is entitled to refuse consent, thereby putting the applicant to proof on all preconditions including public interest and reasonable necessity. The mere rejection of a reasonable offer does not, without more, justify a costs order against the servient owner. However, the courts have progressively identified conduct that will warrant a departure from the default rule: Making the proceedings unnecessarily expensive: Studholme v Rawson [2020] NSWCA 76; Rainbowforce . Actively pursuing defenses beyond merely putting the plaintiff to proof: Crawley v Baxter (No 3) [2023] NSWSC 955. Presenting patently false or manufactured evidence: Ross Bilton & Ors v Georgia Ligdas (Costs) [2016] NSWSC 1585. The significance of these principles was brought sharply into focus in Jeffrey v Adams [2023] NSWSC 1270, a recent decision involving a right of carriageway in rural NSW. The Jeffreys sought a deviation around an obstruction (a dam) that had blocked their existing right of way. The defendants not only resisted the claim without rational or legal basis but filed expert evidence on which the co-defendants also relied. The Court granted the easement, finding the alternative road was the most direct route around the dam and had been used historically without opposition. Given the defendants' active and baseless resistance, the Court departed from s88K(5) and ordered the defendants to pay the Jeffreys' costs. As the Court observed, the defendants' conduct prolonged the hearing and went beyond merely putting the plaintiffs to proof. Practical Implications A few practical points emerge from the case law: For applicants: The more generous and patient the applicant is in negotiations, the stronger their eventual application — and the better positioned they are to argue for a departure from the default costs rule if the neighbour acts unreasonably in the proceedings. For servient owners: Mere refusal of compensation does not attract a costs penalty. A servient owner is entitled to put the applicant to proof on all statutory preconditions. However, obstructive conduct, filing excessive evidence, or pursuing defenses with no proper legal foundation risks a significant adverse costs order. For developers: Section 88K applications are increasingly common, particularly in infill development contexts where access, drainage, and service easements are frequently needed across tight urban blocks. The Land and Environment Court may also grant easements as ancillary orders to development consent under section 40 of the Land and Environment Court Act 1979 (NSW), which offers an alternative avenue where the matter is already before that Court. Conclusion Section 88K of the Conveyancing Act 1919 (NSW) represents a carefully calibrated intervention in private property rights. It allows the courts to facilitate development and effective land use while protecting the servient owner through the requirements of reasonable necessity, public interest compatibility, and adequate compensation. The body of case law — from Rainbowforce to Jeffrey v Adams — has progressively refined how each precondition is assessed and, crucially, when a neighbour's conduct in resisting an easement crosses the line from legitimate defense to unreasonable obstruction. In an era of increasing urban density and development pressure, familiarity with this provision has never been more important for landowners, developers, and their advisers alike. The contents of this article are a general guide and intended for educational purposes only. Determination of issues of the kind discussed in this article is often complex and varies greatly from case to case. Each individual case is different and requires a detailed understanding of matters of fact and degree upon which reasonable minds may differ. DO NOT RELY ON THIS ARTICLE AS A SUBSTITUTE FOR COMPETENT LEGAL ADVICE.
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