Articles

By Lovegrove & Cotton – Construction and Planning Lawyers

The unprecedented high-rise residential boom has punctuated Australian city skylines with cranes for some years now. As noted by the ABC, in 2016 Australia’s eastern coast was host to more cranes than the entirety of North America [1]. Cranes are integral apparatus for high-rise construction yet they can pose dangers to site personnel and adjoining properties. Legal cases pertaining to airspace rights and crane oversail have been increasingly subject to media coverage and scrutiny. It is profoundly clear that in this era of prolific crane use, crane safety must be of paramount importance.

In August 2016, the Canberra Times reported the death of a 62 year old man caused by a mobile crane that toppled over at a Canberra hospital work site [2]. Between 2007 and 2013 Cranes accounted for three deaths in Western Australia, and crane deaths apparently account for eight percent of deaths on building sites in America.

Cranes have also been known to damage adjoining property. In February 2016 the arm of a crane crashed on to a road in St Kilda damaging cars [3].

Again, in 2017, there were two high-profile catastrophic crane failures in Sydney. As reported by the ABC, on the 7th of August, a tower crane operating on a high-rise apartment block at Wolli Creek collapsed due to a mechanical/engineering fault [4]. Worryingly, the crane fell onto an adjoining high-rise residential building. Similarly, in late August, a crane in Sydney Harbour toppled, flinging a section of wire hundreds of meters onto the famous Luna Park entrance [5]. Given incidents such as these, it is evident that crane failures have a very real possibility of damaging adjoining property and the potential to harm residents and the public.

In light of the dangers that cranes can pose, Australian standard 2550 is dedicated to inspection protocols for cranes.

Little wonder then that there has emerged an astute practice where adjoining or neighbouring property owners negotiate and execute crane over sail agreements with developers and or contractors whom are intent on using cranes. Cranes can cause a degree of danger and the use of cranes requires a fair measure of safety dexterity and rigor.

As cranes can have a deleterious impact upon adjoining property, it is very important that neighbours satisfy themselves that risks of crane-inspired surprises are removed. As neighbouring property owners by law own air rights proximate to and above their land holdings, they can leverage of those rights by ensuring that licence agreements are fashioned to document crane handling procedures that minimise the threat of adverse impacts to surrounding properties. It follows that crane over sail licences are paramount legal instruments that can be utilised to minimise said risks.

Air Rights and trespass

The law of trespass dictates that property owners are entitled to enjoy exclusive dominion over their properties and are likewise entitled to determine who may set foot on their properties. There is an assumption in that prerogative that the permission of the property owner must be forthcoming before a visitor sets foot or intrudes into the owner’s realm. Those who choose to venture into an owners’ property absent requisite permission commit an act of trespass, regardless of whether the intrusion occurs on the land, the building above the land or the air above the building or the land.

It follows that developers and builders must have regard to the property rights of neighbours and consistent with this regard is an understanding that they must obtain the permission of the neighbours to operate a crane in circumstances where crane apparatus such as the those where a jib is likely to aerially rotate or manoeuvre above neighbouring property.

The requirement to obtain permission to enter another’s domain is a well-established common law doctrine, known as the Cujus Est Solum Doctrine. Some acts of Parliament have, in more recent times, promulgated regulations that enshrine that right.

His Lordship, Scott J in Anchor Brewhouse Developments v Berkeley House (Docklands Development) Ltd (1987) 284 EG 625 had this to say about such rights: “if an adjoining owner places a structure on his (the adjoining owner’s) land, he thereby takes into his possession air space to which his neighbour is entitled”.

Graham v KD Morris & Sons Pty Ltd [1974] Qd R 1 further amplifies the application of the Cujus Est Solum Doctrine. In this case, a crane jib on a number of occasions intruded into a neighbouring property’s airspace. His Honour WB Campbell determined that trespass was evident and his Honour found that the defendant had interfered with that part of the airspace above her land and this impacted upon her use, enjoyment and value of that land.

The case law thus establishes that if a developer fails to obtain the permission of neighbours to operate a crane in circumstances that will involve aerial trespass, the neighbour(s) can seek injunctive relief from a court of law to compel the developer to refrain from operating the crane until permission is forthcoming. However, the success of such injunctions is contingent upon ‘reasonableness’.

In Woolerton and Wilson Ltd v. Richard Costain Ltd [1970] 1 WLR 411, trespass was claimed as a result of the crane in the adjoining property oversailing the plaintiff’s property. Despite the defendant admitting trespass and offering substantial compensation, the plaintiff refused to grant an over sail licence. The plaintiffs sought and obtained an injunction that was subsequently suspended by the court. A consideration as part of the suspension was whether contractor had acted reasonably in offering payment.

It follows that developers and neighbours alike should at the earliest opportunity parley with the view to documenting the basis of an agreement which will take the form of an over sail license.

Key matters to consider and incorporate into an over sail licence

Safety is the primary concern; hence, neighbours would be well advised to engage the services of a suitable safety consultant to examine the crane machinery, safety integrity, over sail radius drawings and so forth.

The consultant will also need to be satisfied that severe winds will not generate any deleterious impact upon adjoining property on account of jib movement or rotation.

Equally, regard must be had to the matter of how the crane is maintained and whether the crane has been regularly inspected in accordance with AS 2550. The lawyers negotiating a crane over sail agreement should as, part of their due diligence, obtain assurances that the crane is in ‘tip-top’ condition as it were.

The developers and the contractor should also sign indemnities that indemnify the adjoining property holders for any liabilities or damage that may emanate from crane use. Insurance too must
be obtained, and the lawyer should consult with an insurance broker to ensure that the developer obtains the right amount of cover and the appropriate scope of cover.

Key Case Law on Point – Janney & Ors v Steller Works Pty Ltd

Janney & Ors v Steller Works Pty Ltd [2017] VSC 363 is a reasonably recent Victorian case that sets a significant common law precedent for the rights of adjoining property owners to obtain an injunction in circumstances where crane oversail breaches the ‘Cujus est Solum Doctrine’.

To summarise the facts of Janney & Ors v Steller Works Pty Ltd, the Developer (defendant) served a Form 3 Protection Work Notice noting that an overhead crane would be used for the development. Immediately after receiving this notice, the plaintiffs voiced their concerns regarding the crane’s safety. After repeated discussions with the Developer, the plaintiffs wrote to the Developer requesting that they pay compensation costs for relocation due to safety concerns and the loss of amenity. Otherwise, the crane was not to be installed. The relevant section of the letter dated 20th April 2017 is as follows:

“Our preference is not to live under a crane boom so we believe that it is fair and reasonable that Steller compensate us to relocate our family to a similar home within Elwood for the duration of the build to ensure our safety and not negatively impact our amenity and our quality of life. The alternative would be that a tower crane is not erected on the site; other large developments in Elwood have been built without the need for a tower crane.”

The Developer initially responded by rejecting the payment of any such compensation. However, the Developer later offered to pay for a licence fee for $3,000, and subsequently offered to pay a fixed sum of $20,000 to cover “reasonable rental and reasonable removal costs and legal costs”.

His Honour, Judge Riordan did not make a determination of an amount of compensation, leaving this as a matter for the parties to negotiate themselves. However, on the question of the monetary value of a licence arrangement, it was seen plausible that the sum of $106,500 suggested by the plaintiffs during the proceeding was a reasonable sum. His Honour at paragraph 34 of the decision stated:

“Neither in money terms is the encroachment insignificant. As Lord Selbourne pointed out in Goodson v Richarson (1874) 9 LR Ch App 221, 224, an interest in land may have ‘precisely the value which that power of veto upon its use creates’.”

It is also important to note that His Honour, in considering the ‘good working rule’ principle established in Shelfer v City of London Electric Lighting Co [1895] 1 Ch 287, 322, stated: “the prospects of the defendant resisting the plaintiffs’ claim for an injunction on this basis are negligible”. Reflecting on the aforementioned case, His Honour, Judge Riordan did not consider that:

the infringement of the plaintiffs’ legal rights to be small;
the plaintiffs’ safety concerns could be adequately compensated by a small money payment; or
the granting of an injunction would be oppressive for the Developer.
In paragraph 33 of the determination, His Honour made a topical statement regarding the risk of a crane collapse: “Collapses of cranes are not unknown… …Owners of property should not have to live with the fear that at any time the boom of a crane may be above their home and the risk (however small) that it may crash.”

Thus, developers that intend to use cranes that oversail adjoining properties must enter into an arrangement with an adjoining owner prior to starting the Building Works. Suitable and reasonable compensation must be provided for access to adjoining owners’ airspace. In circumstances where no agreement is established, entry may be refused and the adjoining owner will have the ability to obtain an injunction.

Operation of cranes close to airports

Worthy of mention is the fact that it is an offence under the Airports Act 1996 to operate a crane proximate to an airport and legal advice should be sought by crane operators to ensure that they do not offend the provisions of said legislation.

As cranes can, in certain circumstances, pose dangers to not only operators, but also those who come within their radius or aerial ambit, if you will. It is very important that adjoining property owners have input into crane risk management and risk minimisation. The deployment of lawyers to negotiate and finalise crane over sail agreements is an integral part of that risk minimisation process along with the input of an experienced safety consultant who can work in cohorts with the lawyer to deliver an optimum risk mitigation outcome.

Works Cited

[1] Letts, S 2016, Apartment glut warning: More cranes on Australian east coast than in North America, ABC, accessed at <http://www.abc.net.au/news/2016-10-21/real-estate-warning-more-cranes-in-australia-than-us/7954108>

[2] Clare Sibthorpe, Construction worker’s death at University of Canberra hospital worksite sparks safety calls, The Canberra Times, accessed at <http://www.canberratimes.com.au/act-news/construction-workers-death-at-university-of-canberra-hospital-worksite-sparks-safety-calls-20160804-gqlkif.html>

[3] Craig Butt, Crane catches fire, collapses on St Kilda Road worksite, The Age, accessed at http://www.theage.com.au/victoria/crane-catches-fire-collapses-on-st-kilda-road-worksite-20160223-gn1iz0.html

[4] ABC, 2017, Crane collapses onto apartment block at Wolli Creek; residents unable to return home, accessed at <http://www.abc.net.au/news/2017-08-06/crane-falls-onto-unit-block-at-wolli-creek-sydney/8779014>

[5] Stuart, R 2017, Crane topples into Sydney Harbour after wire rope snaps and lands in Luna Park, accessed at <http://www.abc.net.au/news/2017-08-29/crane-topples-into-sydney-harbour/8852658>

Adrian J Bradbrook, 1988, The Relevance Of The Cujus Est Solum Doctrine to the Surface Landowner’s Claims to Natural Resources Located Above and Beneath the Land, p. 476.

Janney & Ors v Steller Works Pty Ltd [2017] VSC 363, accessed at <http://aucc.sirsidynix.net.au//Judgments/VSC/2017/T0363.pdf>