November 2018

Crane Access Licence Agreements – what you need to know

With high levels of construction activity in both the residential and commercial sectors in Australia, particularly NSW, comes the significant presence of cranes across the skyline – 346 in Sydney alone.

73% of the Sydney cranes are working on residential developments. And that raises interesting legal issues that can sometimes descend into disputes.

Legal issues arise from the fact that property owners also own the rights to the airspace above their land. Developers or contractors (who we’ll henceforth refer to only as “developers” for brevity’s sake) who allow the jib of a crane to oversail into neighbouring airspace without either the owner’s consent or an access order from the court, will commit a trespass and may find construction stopped by a court order.

The negotiation of crane licence agreements is therefore an important issue for developers and neighbouring property owners, including owners’ corporations.

If agreement cannot be reached, the NSW Local Court may order a ‘neighbouring land access order’ under the Access to Neighbouring Land Act 2000 (NSW), or the NSW Supreme Court may order an easement under section 88K of the Conveyancing Act 1919 (NSW).

However, it is better for all if agreement can be reached without recourse to the courts. Applications for such court orders, and defending such applications, can be protracted and expensive.

Key Considerations:

  1. Legal advice and costs: Before negotiating, all parties should obtain independent legal advice. While crane licence agreements can be cost effective, they are not free. Costs include legal and other expert advice. Property owners should request written agreement that the developer will reimburse their costs before entering into negotiations, and the developer should expect to pay those costs.

  2. Compensation: Neighbouring property owners are entitled to compensation, usually by way of a licence fee. What is fair and reasonable in the circumstances is a matter for agreement, and will be influenced by the term of the licence and the amenity discussed below. Provision should be made for the amount, method and timing of payment in the agreement.

  3. Length of access: Access to the airspace should be confined to a specified and realistic timeframe, allowing for delays (including unexpected) that characterise most building projects.

  4. Crane specifications and amenity: A crane licence should identify and specify:

    • the type, size and relevant specifications of the crane

    • its operating hours

    • its allowable loads

    • the method of installation and removal

    • engineering certification that the crane footing and foundations have been designed in accordance with the relevant standard (AS1418)

    • the maintenance and repair of the crane

    • procedural or operational issues such as likely noise from the crane’s operation, including communication by radio or whistle between the crane operator and dogman.

  5. Indemnities: A crane licence agreement should contain an indemnity for loss or damage caused by the developer (including damage to property or personal injury), or where the developer breaches their obligations under the agreement. If the owner requires an indemnity, the developer should ensure it excludes indirect or consequential loss not contemplated by the parties.

  6. Crane safety: Cranes may cause catastrophic damage to neighbouring properties. It may be prudent for a safety consultant to examine the crane and ensure it is inspected regularly in accordance with Australian Standard 2550. Developers should expect to provide safety schedules before a neighbouring property owner will agree to allow a crane to oversail into its airspace.

  7. Insurance: Neighbouring property owners should satisfy themselves that the developer and crane supplier maintain acceptable levels of insurance with appropriate cover. They should also request copies of insurance policies to ensure they are noted as an ‘insured person’ and that the policy provides the appropriate cover against damage from the crane or its operation. As a minimum, they should ensure the developer has public liability insurance.

What happens if an appropriate crane access licence cannot be agreed

A developer who needs access to carry out construction on another property can apply to the NSW Local Court for an access order under the Access to Neighbouring Land Act 2000 (NSW).

In considering such an application, the Court will take into account whether:

  • the work would be significantly more difficult without the crane access

  • the access would result in unreasonable hardship to the neighbour.

The court may make an access order subject to certain conditions including, for example, the developer obtaining insurance against damage to the property.

If a developer swings a crane across a neighbour’s airspace without consent, the owner can apply to the Court for an injunction.

For example, in Janney & Ors v Stellar Works Pty Ltd [2017] VSC 363 the Court in Victoria granted an injunction restraining the developer from allowing the crane, while in weathervaning mode (where the crane is not in use and allowed to move freely with the wind to minimise stress against the crane structure), to pass through the neighbour’s airspace.

In that decision, the developer proposed using a crane with a jib reaching 38 metres from the centre. The property owners asserted they were concerned for their safety and requested, but were refused, compensation for temporary accommodation during construction.

The crane was erected and an application for an interlocutory injunction filed by the owners seeking to restrain the developer from encroaching into their airspace.

Justice Riordan found the developer had committed a trespass to the owners’ property and granted the injunction. In ordering that, rather than damages, the judge considered:

  1. The infringement of the owners’ legal rights to be material

  2. The owners’ safety concerns could not be adequately compensated by a small payment

  3. The granting of an injunction would not be oppressive for the developer.

It was noted that while legislation in states such as New South Wales and Queensland provide for statutory imposition of easements to promote land development, no such statutory provision exists in Victoria. 

Conclusion

If developers or property owners find themselves in situations where cranes will oversail into neighbouring airspace, it is prudent to seek legal advice.

The effective negotiation of crane licence agreements can save time and minimise the risk of unnecessary and expensive court proceedings.


Authors: Mark Glynn and Kate Cormican 

Further contacts: David Creais, Gavin Stuart, Sharon Levy and Adam Cutri