New South Wales Supreme Court CITATION : Cosentino v Medich [2003] NSWSC 606 HEARING DATE(S) : 28-30/4/03, 1-2/5/03, 19/6/03 JUDGMENT DATE : 7 July 2003 JURISDICTION: Common Law Division JUDGMENT OF : Cripps AJ at 1 DECISION : 1.Judgment for the plaintiff; 2.The plaintiff to be awarded damages in the sum of $55,000; 3.The defendant to pay the plaintiff's costs a scale appropriate to the findings I have made; 4.The defendant to have judgment against the Council in the sum of $55,000. 5.The Council to pay the defendant's costs of the cross-claim and the costs the defendant is obliged to pay the plaintiff. CATCHWORDS : Nuisance - erection of wall adjacent to plaintiff's property - loss of city views - loss of sunlight - radiated heat - reflection of glare - whether Council negligent - damages awarded. CASES CITED : Directors of St Helen's Smelting Co v Tipping (1865) 11 HLC 642. Antonino Cosentino (Plaintiff) PARTIES : Peter Medich Properties Pty Limited (Defendant/Cross Claimant) Leichardt City Council (Cross Defendant) FILE NUMBER(S) : SC 20988/01 D Murr SC (Plaintiff) COUNSEL : M B J Lee (Defendant/Cross claimant) S Glascott (Cross Defendnant) Anderson Lawyers (Plaintiff) SOLICITORS : Marsdens Law Group (Defendant/Cross claimant) Phillips Fox (Cross defendant) IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION Cripps AJ Monday 7 July 2003 20988/01 - Antonio Cosentino v Medich Properties Pty Ltd JUDGMENT 1 HIS HONOUR: Mr Cosentino (the plaintiff) is the owner of residential unit 4, 30/45 Norton Street, Leichhardt. Peter Medich Properties Ltd (the defendant) is the owner of Norton Plaza, a commercial development on land immediately to the east of the plaintiff's unit. 2 In January 1999 in the course of constructing the development for which development consent had been granted by the Leichhardt City Council (the Council) the defendant erected a large wall adjacent to the plaintiff's unit, having the effect of obliterating his views of the city. 3 Prior to the granting of development consent the Council notified residents. It received a number of objections one of which was from the plaintiff. He objected on the ground that the development would unacceptably intrude on his amenity and deprive him of his view. His objection was unsuccessful. 4 The wall was raised as a large single slab. It was less than 1 metre from the plaintiff's unit, and extended across the entire length of his unit and well above the level of the interior ceiling. 5 The plaintiff immediately complained to the Council that the wall had diminished the value of his unit and caused him significant loss of amenity which, at that time, he described as being the denial to him of morning sunlight. 6 Of relevance to the present proceedings is the circumstance that at that time and in the months which followed when he repeated his complaints he made no mention of the adverse effects on him of radiated heat and reflection of glare which is now the basis of his claim against the defendant. 7 The plaintiff saw his former solicitor Mr Brown, a partner in the firm Connah, Steed and Co. Mr Brown advised him that he may have a cause of action against the Council for negligent discharge of its planning function. Mr Brown's opinion concerning the potential liability of the Council was buttressed by an opinion from counsel. Mr Brown also thought the plaintiff might have a claim in negligence against the defendant although he was less confident of a successful outcome if action were taken against the defendant than if action were taken against the Council. 8 On instructions Mr Brown referred the matter to a valuer in March 1999 and received advice that the value of the plaintiff's unit by reason of the construction of the wall with the consequent obliteration of view and adverse affects on amenity, was reduced from $240,000 to $200,000. At the time he provided his valuation the valuer was not asked to take into account the effects of radiated heat and the reflection of glare for the reason, I infer, that this was not then the subject of any complaint by the plaintiff. 9 The Council denied liability. However members of the Council were obviously concerned about the damage suffered by the plaintiff. It is not clear from the evidence why either the Council or the defendant entered into negotiations with the plaintiff. If I had to speculate about the matter it would be that although the Council may have felt confident it would succeed in a claim of negligence against it, it may have had less confidence that it would have been able to resist a claim by the plaintiff in the Class 4 jurisdiction of the Land and Environment Court that its planning consent relevantly miscarried. The defendant for its part probably realised that a challenge by the plaintiff would result in delay and it was anxious to proceed with the development as speedily as possible. 10 But however that may be, the defendant offered to add, at its expense, an additional bedroom above the upper level of the plaintiff's unit so that, from that room at least, the plaintiff's view would be restored. However the Owner Corporation refused to consent to the addition of the room which was for that reason abandoned. 11 In September 1999 the plaintiff instructed Mr Brown to commence proceedings against the Council and to claim the sum of $40,000 being the difference between the value of the unit before and after the erection of the wall and the sum of $21,836 for professional fees paid to his lawyer, an architect and the valuer. 12 At that stage the Council, through its General Manager Mr Foster, repeated its denial of liability and suggested that the plaintiff should take up his complaint with the defendant. 13 As I have said, it is fairly clear that elected members of the Council were concerned about the effect of the wall on the plaintiff's property and Mr Foster endeavoured to persuade the defendant to contribute $40,000 for payment to the plaintiff in satisfaction of his claim. 14 On 10 November 1999 Mr Brown wrote to Mr Medich telling him that the Council had advised that the defendant had agreed to make $40,000 available to the plaintiff to compensate him for the loss of value to his property by reason of the erection of the wall. He also said the plaintiff would accept that amount in full satisfaction of any claim against the defendant arising from the wall and that the letter could operate as a release of all claims the plaintiff might have against the defendant. He added that, if the defendant wished, the plaintiff would enter into a deed of release. 15 The defendant did not respond to the letter and did not make any payment at that stage to any person. 16 On 16 November 1999 Mr Brown again asked Mr Medich whether the defendant was prepared to do what he, Mr Brown, had understood it was prepared to do and on 18 November 1999 had a telephone conversation in which Mr Roy Medich said that his company was prepared to pay $40,000 but needed more time. On 25 November 1999 Mr Brown wrote to Mr Medich saying the plaintiff was prepared to accept what he, Mr Brown, considered to be an unconditional offer but was not prepared to wait on action that may be taken by a "third party" (plainly a reference to the Council). In the letter he asked Mr Medich to pay the sum of $40,000 to the plaintiff or if he wished the plaintiff to wait to put his reasons in writing. 17 The defendant did not respond to the letter and had no further communication with Mr Brown. 18 From that time onwards Mr Brown dealt exclusively with the Council. I have already mentioned that Mr Brown, on the plaintiff's instructions, held the Council liable but was prepared to deal with the defendant because the Council had told him of a $40,000 contribution offered by the defendant. 19 In February 2000 Mr Brown wrote to the General Manager Mr Foster, in which he repeated that the plaintiff held the Council liable for the diminution in value of the property and, amongst other things, said in the letter: "If the Council has made some private arrangement with Medich Development Pty Ltd whereby that Company has agreed to contribute some payment to our client that is a matter entirely between the Council and that Company". 20 On the same day Mr Foster wrote to Mr Brown saying he didn't anticipate any problems in making $40,000 available to the plaintiff but that he, Mr Foster, would make Council funds available and later seek Council's endorsement of his action. 21 Mr Foster said he was under some pressure from elected members of the Council to settle the plaintiff's claim. 22 On 3 March 2000 Mr Brown wrote to Mr Foster and said that he awaited receipt of a draft Deed of Release and that it should encompass nothing outside the plaintiff's complaints. 23 On 17 March 2000, Mr Foster prepared a report to the Council which dealt with his negotiations with the defendant and in which he made certain recommendations as to the amount of compensation to be paid to the plaintiff. In particular he recommended that the Council make available to the plaintiff the sum of $40,000 "as full and final payment for the compensation to Mr M. Cosentino (the plaintiff) for the loss of value suffered by him as a result of the construction of the Medich Development adjacent to his property". He also recommended that "Council continues to press for reimbursement of this amount ($40,000) from Medich Enterprises". In the report Mr Foster mentioned that the defendant would contribute $40,000 but that the funds had not been provided to Council. He concluded by recommending payment to the plaintiff whether or not $40,000 was paid by the defendant. 24 On 21 March 2000 the Council resolved that it pay $40,000 to the plaintiff and that it should "continue to press for reimbursement of this amount from Medich Enterprises". 25 On 27 March 2000, the plaintiff and the Council executed a deed of release. The defendant was not a party to the deed, was not referred to in it and, indeed, had no knowledge about it until after the commencement of the subject litigation. 26 The deed of release was drafted by Mr Foster. In the recitals it stated that the plaintiff alleged the Council was negligent in granting development consent and it recorded that on receipt of $40,000 together with legal and other costs amounting to $23,000, the plaintiff released the Council from any claims he had against the Council in respect of the wall. 27 Until 25 July 2000, the defendant was unaware that the Council had paid the plaintiff the sum of $63,000. It knew nothing of the deed of release and, as I have said, it was not a party to it. 28 On 25 July the Council wrote to the defendant and recording that it had paid money to the plaintiff said: "There now seems to be a complete reluctance to meet any obligation you have taken personally. Any semblance of shared responsibility or obligation has been forgotten. Indeed, that Council's, and particularly my own, efforts have been tied to some commercial advantage to yourselves is extremely disappointing to say the least. You have been fully aware of my circumstances yet you have still procrastinated. I respectfully request therefore that you meet your previously accepted moral obligations and that you forward your contribution at the earliest opportunity." 29 On 1 August 2000, Mr Foster acknowledged receipt of $40,000 from the defendant. 30 In evidence Mr Foster said that he was, in effect, deputed by the defendant to negotiate with the plaintiff for settlement of his claim. This was also the understanding the defendant. The defendant said it had no further communication directly with the plaintiff after 1999 because the defendant did not wish to be involved in negotiations bearing in mind the Council was negotiating on its behalf. 31 Mr Foster's evidence concerning why he did not tell the defendant about the settlement and the deed of release is not satisfactory. He did not tell the defendant until four months later when he wrote seeking a $40,000 contribution. The defendant paid the $40,000 in ignorance of the deed of release believing, and on reasonable grounds as I find, that payment by it of $40,000 would put and end to any claims the plaintiff had against it arising out of the erection of the wall. 32 In December 2001 the plaintiff commenced the present proceedings against the defendant. He alleged that he had been denied access to sunlight and easterly breezes which he enjoyed before the wall was erected and that during hot weather the wall reflected excessive heat into his unit and he was subjected to excessive glare from the wall. He claimed to be entitled to any injunction against the defendant which, if granted in terms as asked for by him, would have meant the demolition of the wall. He also claimed general damages not only as compensation for radiated heat and reflective glare but also for diminution in the value of his unit. 33 When the proceedings came on for hearing, the plaintiff abandoned a claim for damage for diminution in the value of his unit by reason of the wall. Shortly after the hearing had commenced he abandoned what had previously been a claim for an order of the Court requiring the defendant to demolish the wall. 34 The defendant denies the radiated heat and glare constitute actionable negligence. It asserts that there had been no complaint of excessive radiated heat or excessive glare until after the plaintiff received $40,000 which, it alleged, he must have known came from the defendant. (That is not so, of course, because when the plaintiff made his first complaint in May 2000, the defendant had not paid the sum of $40,000 to the Council). The defendant also alleged there could be no claim for nuisance arising from the construction of the wall because of statutory authorisation deriving from the development consent. However that aspect of its defence was abandoned during the hearing. It also maintained that the Court should not entertain the plaintiff's case in the light of the facts referred to above. It is submitted that in all the circumstances, it would be unconscionable for the plaintiff to be awarded damages and/or for the Court to make the restraining order claimed by him. The defendant maintained that it would not have contributed to the plaintiff's compensation had it believed that the plaintiff's dispute with it concerning the wall was not, by the contribution made by it, resolved. That as I find, was probably so, but as at 27 March 2000 the plaintiff did not know that. 35 The defendant has cross-claimed against the Council claiming that if it is liable to the plaintiff its liability should be passed onto the Council as there was an agreement between it and the Council that it would contribute $40,000 to the plaintiff's claim with respect to the wall if the Council caused the payment of that sum to end any liability it might have to the plaintiff. 36 The Council cross-claimed against the plaintiff alleging, as far as I could make out, that Mr Brown had behaved deceitfully with the Council and he settled the matter on behalf of the plaintiff knowing that $40,000 was coming from the defendant and at a time when he knew that it was a condition of the defendant's contribution of $40,000 that it would be released from all claims against it arising out of the wall. 37 There are two aspects of this case which need to be addressed. The first is that the criticism of Mr Brown is, in my opinion, entirely without merit. He was acting for the plaintiff against the Council and the defendant. Whether he was correct in his view that the Council could be liable in negligence he was entitled to advance an arguable claim that it was and, as I have said, he had an opinion of counsel favourable to the plaintiff's claim. In my opinion it is distorting the facts to claim that he had any obligation to the defendant with respect to his dealings with the Council. In fact he gave the defendant every opportunity to settle the matter with the plaintiff before the end of 1999. Thereafter the defendant had no further communication with him and, as he said in the letter I have referred to above, that his client was looking to the Council for compensation and was not interested in whether a third party was prepared to contribute to the claim. 38 The second matter which needs to be addressed is the credibility of the plaintiff. I find him to be an unconvincing witness. It is, perhaps, understandable that the plaintiff has a hostile attitude both to Council and the defendant by reason of the construction of the wall. It may be that he has allowed his dislike of the defendant to preclude a coherent account of matters leading up to the commencement of these proceedings, and to the effects of the wall upon him. Because, as I find, he perceived it to be to his advantage to do so, he claimed he would never have entered into any arrangement with the Council had he known that the defendant was contributing any part of the compensation payable to him – and that had always been his position. His assertions in this regard are patently untrue as the letters written by Mr Brown towards 1999 make perfectly clear. 39 The plaintiff has also alleged that the effects of the wall are so gross that he cannot remain in the flat for any period of time. In my opinion, and on any view of the evidence, the radiation of heat and increased glare has not made his unit uninhabitable. He has said that his unit is not liveable in, and that he has been told by a "scientist" that he could not eat in his unit or stay there because to do so would put his life at risk. No evidence was called to support his claim, and I record that, in my opinion, more probably than not, the plaintiff simply made it up. I do not propose to catalogue all the plaintiff's complaints. Most were gross exaggerations and some, as I have said, were fabricated. 40 However, that does not end the matter. The plaintiff has called evidence, which I accept, that the wall has had adverse impacts, by reason of heat and glare on the plaintiff. I refer to the evidence of Mr Forwood and Dr Hayman. I would not characterise the effects on the plaintiff as "trivial", I would, however, characterise them as minor in the sense that the wall does cause the plaintiff some discomfort by reason of heat and glare, but nothing like that described by the plaintiff himself. 41 It is common ground that a private nuisance may occur by the unreasonable interference with the use and enjoyment of property rights (see Directors of St Helen's Smelting Co v Tipping (1865) 11 HLC 642). It also clear that to be actionable nuisance, the matter complained of must be productive of what Lord Westbury LC referred to as "sensible personal discomfort" and what that amounts to must depend on all the circumstances. In the present case the defendant has submitted that the plaintiff, perhaps by reason his age and certainly by his deep hostility to the defendant, could not be said to be reflecting the sort of "sensible personal discomfort" to that degree necessary to maintain the action against the defendant. I find, however, that the wall constitutes a nuisance by reason of radiated heat and excessive glare. 42 In the present case the plaintiff and defendant have each produced what is claimed to be an appropriate solution to the abatement of the nuisance suffered by the plaintiff. 43 Mr Grieve, called by the defendant, opined that the nuisance could be addressed by the installation of insulated and painted metal sheeting to be affixed to the outside of the defendant's wall; using paint that minimises glare reduction over an area of 140 square metres; raising the wall at the northern end of the plaintiff's balcony to the height of the roof slab; installing a computer controlled vergola at the roof slab level; and installing vertical blinds and tinting the windows of the plaintiff's unit, and installing a two split-type room air-conditioner. Mr Grieve would estimate the cost of undertaking the above work to be approximately $55,000. 44 The remedial steps suggested by the defendant in the course of proceedings (but without admitting liability) were the provision of non-reflective paint, the installation of vertical blinds and window tinting, and the installation of an air-conditioner. The cost of that work would be approximately $20,000. 45 The failure to raise the northern wall and vergola would not prevent or minimise sunlight falling on the wall and, as Mr Grieve has said, the wall would need to be insulated to function as intended. Accordingly I accept the remedial steps proposed on behalf of the plaintiff. 46 The Council was derelict, in my opinion, in the obligation it had undertaken to attend to the interests of the defendant. That obligation was to ensure, if possible, that upon the defendant contributing $40,000 towards the plaintiff's claim it would thereafter be released from all liability to the plaintiff arising out of the construction of the wall. It did not do this. The defendant has been criticised by Council for its failure to remain in communication with the plaintiff. However I accept the defendant's reasons for leaving matters to the Council. Mr Brown may have believed that the defendant was dragging its feat in making the sum of $40,000 available – but he made his client's position quite clear, that he was looking to the Council for compensation. The defendant did not know that on 27 March 2000 the Council had settled the claim of the plaintiff and, contrary to the submissions of Mr Murr SC for the plaintiff, I have formed the opinion that the defendant, when it paid $40,000, believed that the payment of that money to the Council for payment to the plaintiff would put an end to any claim the plaintiff had against the defendant arising out of the construction of the wall. I am also of the opinion that notwithstanding the plaintiff's fervent denials, he would, more probably than not, have entered into a deed of release had the defendant been party to it, and in the knowledge that the defendant was contributing $40,000 towards the finalisation of his claim. But I am not satisfied, as at 27 March 2000, that the plaintiff settled his claim on an understanding by him that he was, by accepting the money offered by the Council, releasing the defendant from any liability. 47 Why Mr Foster did not keep the defendant informed of developments and that the matter was being settled is not clear. It may have been that he was under such pressure from the elected members of the Council to attend to what they apparently perceived to have been a wrong done to the plaintiff that he settled the matter without reference to the defendant in the belief that the defendant would contribute $40,000 eventually, and the plaintiff would no longer hold the defendant liable to him. It is not, perhaps, unimportant to note that in his letter of 25 July 2000 Mr Foster referred to the defendant's "moral" obligation to contribute to the plaintiff's claim. Mr Foster is not a lawyer, but he drew up the deed of release. It may be that he misunderstood its effect. But however all that may be, he settled the matter without paying regard to the obligation he had to the defendant. Had the defendant been told in March 2000 that settlement was proposed it would, in my opinion, have paid $40,000 to the Council in part satisfaction of the plaintiff's claim. As I have said earlier, I do not accept the plaintiff's evidence that had he known the defendant was contributing to his claim he would not have settled the matter. It would follow, in my opinion, that the loss suffered by the defendant by reason of the conduct of the Council is to be measured by reference to the liability of the defendant which, in this case, as I have said, amounts to $55,000. Remedy 48 Mr Murr SC, on behalf of the plaintiff, has submitted that I should order the defendant be restrained from the continuance of the said nuisance or the committal of any nuisance of like kind with respect to the plaintiff's unit, but that such an order should be stayed conditional upon the defendant within two months and at its expense carrying out the work and providing and installing the fixtures, fittings and equipment referred to in the report of Anthony Grieve. 49 As I have said, the nuisance though not trivial may properly be characterised as minor. I do not propose to grant injunctive relief in these circumstances because, as it seems to me, that would be apt to increase litigation between the parties. The doing of the work would necessarily involve the defendant's servants entering upon the plaintiff's premises. I have no confidence that the plaintiff would willingly cooperate with them for the doing of the work that is claimed on his behalf to be necessary to abate the nuisance. Throughout the proceedings it was my understanding of the plaintiff's evidence that he would be satisfied with nothing less than the demolition of the wall. The plaintiff has suffered a nuisance. The cost of undertaking the work reasonably necessary is $55,000. The plaintiff may wish to spend $55,000 on carrying out the work or not, as he sees fit. In my opinion the appropriate order for me to make is to award the plaintiff the sum of $55,000 in damages. Costs 50 The defendant has submitted that the plaintiff should not have an order for costs because the case should have been brought in the District Court. As originally framed, the plaintiff's case was appropriate to have been brought in the Supreme Court. His claim was for the demolition of the wall. That was not abandoned until the first day of the hearing when the defendant sought to adduce evidence of the cost to it, if the wall were demolished. The case extended over a number of days, during which issues were pursued by the defendant and the Council which became irrelevant to the question ultimately I have to decide. The plaintiff was successful in the proceedings even though no injunctive relief was granted. The length of hearing was not the fault of the plaintiff. I order the defendant to pay the plaintiff's costs. 51 So far as the Council is concerned, in final address it made no attempt to defend its liability to the defendant should the defendant be held liable and it maintained that it would be unjust and inequitable for the plaintiff to have an award of damages against the defendant. Its main defence, and which took up a considerable amount of time, was the unmeritorious attack on the integrity and competence of Mr Brown which, as I have said, was wholly unjustified and, as I would understand it, was abandoned in final address. The defendant had no choice but to join the Council in the proceedings if it wished to pass on its liability to the plaintiff. Accordingly I order the Council to pay the defendant's costs of the proceedings, including the costs ordered to be paid by the defendant to the plaintiff. 52 Accordingly, the formal orders I make are: 1. Judgment for the plaintiff; 2. The plaintiff to be awarded damages in the sum of $55,000; 3. The defendant to pay the plaintiff's costs a scale appropriate to the findings I have made; 4. The defendant to have judgment against the Council in the sum of $55,000. 5. The Council to pay the defendant's costs of the cross-claim and the costs the defendant is obliged to pay the plaintiff. ********** Last Modified: 07/14/2003 DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.