New South Wales Supreme Court CITATION : Owners SP 30339 v Torada Pty Ltd & Anor [2008] NSWSC 1154 HEARING DATE(S) : 1 & 2 September 2008; final submissions in writing on 05.09.08 & 10.09.08. JUDGMENT DATE : 4 November 2008 JURISDICTION : Equity Division JUDGMENT OF : Palmer J DECISION : Plaintiff entitled to damages for trespass, to be assessed; injunction refused. CATCHWORDS : REAL PROPERTY – BOUNDARY WALL – TRESPASS – NUISANCE – Whether encroaching boundary wall owned by one or both adjoining owners – whether defendant committed trespass to plaintiff's property by demolishing wall – whether nuisance created – whether mandatory injunction for restoration of wall should be granted – quantum of damages. LEGISLATION CITED : Dividing Fences Act 1991 (NSW) Strata Schemes Management Act 1996 (NSW) – s 11 CATEGORY : Principal judgment - Burton v Winters [1993] 3 All ER 847 - Denney, Ex parte (1925) 42 WN(NSW) 12 CASES CITED : - Lagan Navigation Co v Lambeg Bleaching, Dyeing & Finishing Co Ltd [1927] AC 226 - Matts v Hawkins (1813) 5 Taunt 20 (128 ER 593) - Wake v Hall (1882) 8 App Cas 195 - Walsh v Elson [1955] VLR 276 Owners Strata Plan No 30339 (Plaintiff) PARTIES : Torada Pty Ltd (First Defendant) Owners Strata Plan No 80811 (Second Defendant) FILE NUMBER(S) : SC 3147/08 COUNSEL : A.M. Gruzman (Plaintiff) J.B. Simpkins SC (Defendants) SOLICITORS : G.J. Gooden (Plaintiff) McKees Legal Solutions (Defendants) 3147/08 Owners SP 30339 v Torada Pty Ltd & Anor JUDGMENT 4 November, 2008 Introduction 1 The Plaintiff is an owners corporation incorporated under s 11 of the Strata Schemes Management Act 1996 (NSW) and is the registered proprietor of the common property in Strata Plan 30339. That Strata Plan relates to the land known as 17 Bungan Street, Mona Vale. Upon the land is a two storey building divided into retail shops on the ground floor and commercial premises on the floor above. For convenience, I will refer to the Plaintiff's property as "No 17". 2 The First Defendant ("Torada") was, until June 2008, the registered proprietor of land adjoining the Plaintiff's land and known as 24 Waratah Street, Mona Vale. Torada has caused Strata Plan 80811 to be registered relating to 24 Waratah Street so that the owner corporation is now the Second Defendant. For convenience, I will refer to the land now owned by the Second Defendant as "No 24". 3 In September 2006, Torada commenced construction of a commercial development on No 24. In the course of construction it demolished a retaining wall on its own land and also a low wall erected by the Plaintiff, contiguous with the retaining wall, both walls running along the boundary between No 17 and No 24. The demolition of both walls allowed pedestrian access from No 24 to a pedestrian arcade situated on No 17 and running along the boundary between No 17 and No 24. After demolition of the walls and completion of the construction work, pedestrians could move freely from the arcade on No 17 to the commercial development on No 24 and vice versa. 4 The Plaintiff claims that the boundary wall (as distinct from the retaining wall) was its property and that, in demolishing the boundary wall without the Plaintiff's consent, Torada committed a trespass to the property of the Plaintiff. The Plaintiff says that the removal of the boundary wall so as to permit pedestrian access between the two properties constitutes a continuing nuisance to the Plaintiff's land. 5 The Plaintiff seeks: – a mandatory injunction requiring Torada to restore the boundary wall, thereby preventing access between the two properties, in order to abate the alleged continuing nuisance to No 17; – in the alternative, damages, being the cost of re-erecting a boundary wall on No 17 if the Plaintiff elects to do so itself. The issues 6 The issues may be summarised thus: – as between the Plaintiff and Torada, who owned the boundary wall at the time of its demolition; – if the Plaintiff owned the boundary wall, did Torada demolish it without the Plaintiff's consent and in breach of the Dividing Fences Act 1991 (NSW). 7 If Torada demolished the boundary wall without the Plaintiff's consent: – has a nuisance thereby been created, constituted by licensees or invitees of the Defendants being able to come onto No 17; – should the Court order Torada to reconstruct the boundary wall at its cost; – if the Court refuses such an order, should the Plaintiff have, as damages for trespass, the cost of rebuilding the boundary wall on its own land. The location of the boundary wall 8 No 17, which is in the shopping and commercial precinct of Mona Vale, is a long rectangular strip of land having two street frontages: to the north, it fronts Akuna Lane; to the south and running downhill, it fronts Bungan Street. There is an open pedestrian arcade running along the whole length of the western boundary of No 17. The evidence shows that, since completion of the construction of the building on No 17 in 1985, members of the public have been able to come freely onto the arcade from Akuna Lane, where there is a large parking lot, in order to go downhill directly to Bungan Street. Likewise, members of the public can come into the arcade from Bungan Street in order to go to the car park in Akuna Lane. Doubtless the arcade was designed to attract passing trade from this pedestrian traffic, because the development has retail shops on the ground floor opening onto the arcade. 9 No 24, which lies on the western boundary of No 17, also has two street frontages: to the north, it fronts Akuna Lane and to the west it fronts Waratah Street, which runs at right angles to Akuna Lane. The common boundary between No 17 and No 24 runs only about a third of the length of the western boundary of No 17. 10 In 1978, both No 17 and No 24 were owned by a company controlled by Dr Roche. Dr Roche decided to build a medical centre on No 24. No 24 then sloped downwards towards the boundary with No 17. Dr Roche caused to be constructed a retaining wall along the boundary with No 17 so that No 24 could be filled and levelled. The retaining wall was 60mm inside the boundary of No 24. 11 Dr Roche's company sold No 17 in 1983 and construction of the building now erected on No 17 commenced shortly afterwards. Dr Roche observed that the new owner of No 17 built a low brick wall alongside the retaining wall on No 24. Dr Roche said that he saw that the boundary wall abutted against the retaining wall and appeared to be affixed to it with mortar. The owner of No 17 did not seek Dr Roche's consent to the construction of the boundary wall, and Dr Roche did not object, because he believed that the boundary wall was on No 17, not on No 24. Dr Roche did not contribute to the cost of the boundary wall. Photographs strongly suggest that the boundary wall, which is a single brick wide, was constructed only for aesthetic purposes, to mask the retaining wall on No 24, which had been constructed of rough concrete blocks. 12 It is unclear precisely how much of the boundary wall is situated on No 17. Mr A. Gruzman of Counsel, who appears for the Plaintiff, says that as a single brick is about 120mm in width and as the boundary wall is attached to the retaining wall which is set back 60mm inside the boundary of No 24, it may be assumed that the boundary wall is approximately half on the No 17 side of the boundary line and half on the No 24 side of the boundary line – at least at the end nearest Akuna Lane, although a survey seems to indicate that the boundary wall at the Bungan Street end was on the No 17 side of the boundary to the extent of 95mm. 13 Because it is impossible to determine with precision how much of the boundary wall was on the No 24 side and how much was on the No 17 side at various points along the boundary, I shall proceed on the basis that, for practical purposes, the boundary wall may be taken to be half on No 17 and half on No 24. The ownership of the boundary wall 14 Mr Gruzman says that, despite the fact that half the boundary wall was on Torada's land, the whole of the wall was the property of the Plaintiff because the evidence is clear that the owner of No 24 at the time of its construction, i.e. Dr Roche's company, did not contribute to the cost of constructing it. 15 Mr Gruzman relies upon a decision of Campbell J in Ex parte Denney (1925) 42 WN(NSW) 12, at 13. 16 That decision is not in point. The case concerned the ownership of materials comprising a dividing fence, after the fence had been demolished. It did not concern ownership of the fence while it was still affixed to the land. When some thing, such as a wall, is permanently affixed to land it becomes part of the land, and its ownership follows the ownership of the land. However, if the fixture is removed from the land, the materials comprising it may revert to the ownership of the person who owned them before they were affixed: see Wake v Hall (1882) 8 App Cas 195, at 204 per Lord Blackburn. 17 In the present case, the question is: who owned the boundary wall at the time of its demolition. The answer, clearly, is that Torada owned that part of the boundary wall which was situated on No 24. 18 Mr Gruzman submits that, notwithstanding the principle of law to which I have referred, the owner of No 24 at the time that the wall was built (i.e. Dr Roche's company) impliedly gave consent to the construction of the boundary wall, thereby acknowledging the right of the owner of No 17 to retain the wall as its own property, because Dr Roche saw the boundary wall being built and took no action. 19 Dr Roche said in evidence that he saw the boundary wall being constructed so as to abut the retaining wall and he recollected that there was mortar affixing the boundary wall to the retaining wall. But Dr Roche did not say that he knew the boundary wall was partly built on No 24. Indeed, he said in his affidavit that he raised no objection to the boundary wall because he believed it was not on his property. He was not cross examined on that evidence. 20 In these circumstances, I cannot find that Dr Roche had such knowledge of the location of the boundary wall that his company, as owner of No 24 at the time, can be taken to have consented to the encroachment of the boundary wall on No 24 and to have acknowledged that the boundary wall remained the property of the Plaintiff. Was consent to demolish the boundary wall necessary 21 Mr Simpkins SC, who appears for the Defendants, says that Torada did not need the express consent of the Plaintiff to demolish the boundary wall. He says that the Plaintiff had affixed the single skin boundary wall to the retaining wall, which was wholly within No 24, in such a way that demolition of the retaining wall could not be carried out without necessarily destroying the boundary wall affixed to, and integrated with, it. 22 Mr Simpkins says that there is no evidence that the Plaintiff obtained the consent of the owner of No 24 (Dr Roche's company) to the construction of the boundary wall in such a way that it encroached upon No 24. Accordingly, he says, the Plaintiff must be taken to have acknowledged that the owner of No 24 was entitled to demolish the retaining wall and, with it, the boundary wall attached to, and integrated with, the retaining wall. 23 Mr Gruzman says the evidence does not support a finding that the boundary wall was integrated with the retaining wall to such a degree that demolition of the retaining wall would necessarily involve demolition of the boundary wall. I do not agree. 24 Such photographic evidence as there is shows that, at the Akuna Lane end of the boundary wall, it is very low and almost entirely integrated with the retaining wall, to the extent that the boundary wall does not appear to be even half a brick wide. Further down towards Bungan Street, the boundary wall is several courses high and a full brick in width. It appears to be affixed to the retaining with mortar – and Dr Roche's evidence confirms this observation – although the mortar is now broken away at the top and there is a slight crack between the two walls. It is a fair assumption that, lower down, the walls are still attached by mortar between them. 25 Because the boundary wall was physically attached to the retaining wall and encroached upon No 24, I infer, and find, that it was not built to define or mark the boundary between the two properties but was, rather, built to mask the retaining wall and to improve the appearance of the arcade on No 17. I find that demolition of the retaining wall would necessarily involve demolition of that part of the boundary wall which is integrated with it and attached to it. I find that the degree of integration and attachment is so large that demolition of the entire retaining wall would necessarily involve demolition of the entire boundary wall. 26 Mr Simpkins did not cite any authority for the proposition that, on the facts of this case as I have found them, the Plaintiff must be taken to have consented to the demolition of the boundary wall if such demolition was the inevitable result of Torada exercising its unquestioned right to demolish its own retaining wall. My own researches have not found a case which supports the proposition. 27 A factual difficulty in the way of an inference that the Plaintiff consented to the demolition of the boundary wall if the owner of No 24 demolished the retaining wall is that the evidence does not make it clear that it was the Plaintiff which constructed the boundary wall. On the contrary, the evidence suggests that the boundary wall was constructed before the Plaintiff was incorporated. 28 Mr Simpkins suggested that Burton v Winters [1993] 3 All ER 847 was authority that Torada was entitled to exercise a remedy of self help to remove the whole of the boundary wall as an encroachment. However, I do not think that that case is of assistance here. 29 The remedy of self help to abate an encroachment is available only in simple cases, such as overhanging branch, where the expense of legal proceedings to restrain a nuisance caused by the encroachment is unwarranted, or in urgent cases where immediate action is necessary: see Burton v Winters (supra); Lagan Navigation Co v Lambeg Bleaching, Dyeing & Finishing Co Ltd [1927] AC 226, at 244.9ff. Self help by demolition of the boundary wall could not have been available to Torada in this case. 30 In my opinion, the true analysis of the position is that, as I have noted above, the property in the boundary wall followed the property in the land upon which it was erected – in the present case, the owners of No 17 and No 24 each owned that part of the wall which stood upon its land: Matts v Hawkins (1813) 5 Taunt 20 (128 ER 593); Walsh v Elson [1955] VLR 276. As O'Bryan J said in Walsh v Elson at 280, ­in such a case "either owner of part of a party wall may do what he wishes with his part of the wall. He may demolish it if he wishes, provided he does no injury to his neighbour's half. Each, of course, has the ordinary remedy for any injury done to his portion of the wall" . 31 Before demolishing the boundary wall Torada could have sought a mandatory injunction requiring the Plaintiff to remove that part of the wall which encroached upon No 24. If it had obtained such an order, it is inevitable that the Plaintiff would have had to remove the whole of the boundary wall. Torada sought neither such an order nor the consent of the Plaintiff to the demolition. Accordingly, it has committed a trespass to the Plaintiff's half of the wall. Restoration of the wall 32 The Plaintiff seeks a mandatory injunction requiring Torada to restore the whole of the boundary wall in its original position. That order is sought, not as a remedy for trespass, but in order to abate the nuisance which the Plaintiff says Torada created by demolition of the wall. 33 The nuisance is said to be two-fold. First, as access from No 24 to the arcade on No 17 is now unimpeded, the Plaintiff says that the Second Defendant is inviting onto the Plaintiff's land all manner of undesirable persons who may come onto No 24 for the purpose of doing business with all manner of undesirable businesses which the Second Defendant could, in the future, have as tenants in its building, such as "pinball parlours, youth entertainment shops, roller-blading and skate-board shops, sex shops" . Such undesirable persons could cause damage both to the property of the occupiers and owners of No 17 and to their trade and goodwill. 34 I am compelled to say that this apprehended nuisance is utter fantasy. Photographs and plans of the Defendants' building show that it is a modern commercial development of a high standard. There is no evidence whatsoever, and nothing otherwise to suggest, that the Defendants propose to turn a new commercial development into a sleazy den of iniquity. 35 The only evidence adduced by the Plaintiff in support of this apprehended nuisance is that of the Chair of the Executive Committee of the Plaintiff, Dr Robyn McNamara. Dr McNamara says at paragraph 7 of her affidavit dated 1 September 2008: "7. The Plaintiff wishes to maintain control of its walkway. I am aware that a nearby commercial and retail building, Waratah Court, nearby in Waratah Street has had problems with graffiti and youths. At Waratah Court concertina type security doors have been installed to prevent public access. These are locked at night and opened early in the morning. 8. Mr Hill, a physiotherapist, who has premises on the ground floor level at 17 Bungan Street, has said me: 'There have been groups of young men loitering in the carpark and near our pathway and intimidating elderly patients at night'. " 36 I observe, first, that the statement attributed to Mr Hill is hearsay of the most unspecific kind, which has no weight and no significance as nothing done on No 17 or No 24 will prevent "groups of young men loitering in the car park" on the other side of Akuna Lane and near the entrance to the arcade on No 17. 37 Second, the fact is that for twenty years before the demolition of the boundary wall the public has had completely free access to the arcade on No 17 from both Akuna Lane and Bungan Street. The evidence adduced by the Defendants shows that this access is very frequently used, both by day and by night. If problems of the kind described by Dr McNamara had occurred, or were likely to occur during this time, one would have expected the Plaintiff to have done something by now to restrict access. 38 I do not accept that the Plaintiff has made out a case for restoration of the boundary wall as necessary to abate an apprehended nuisance of undesirable people coming onto the Plaintiff's land or of depriving the Plaintiff of control over access to its land. 39 The second aspect of the alleged nuisance created by Torada is described by Dr McNamara in her affidavit of 11 August 2008 [29]: "The Plaintiff is also considering the redevelopment of its property which would involve building to the boundary with the Defendant's property. Such redevelopment may be conducted in conjunction with the owners of 15 Bungan Street, Mona Vale." 40 When I first read this evidence, I was under the impression that the Plaintiff's plans for redevelopment of its land were imminent or, at least, in process and that the effect of Torada's development of No 24 may well have made it more difficult for the Plaintiff to obtain development approval to build up to its boundary with No 24. Mr Chidiac, the Managing Director of Torada, said in cross examination that the Defendants would object to a redevelopment of the Plaintiff's land which restricted the present access to No 24. It seemed to me that what Torada had done by removal of the boundary wall was to put itself and the Second Defendant in a better position to insist upon retaining the benefit of the arcade on No 17 than would have been the case otherwise. There seemed to be substance in this ground put forward by the Plaintiff for the restoration of the boundary wall. 41 However, upon cross examination, Dr McNamara's evidence as to the redevelopment of No 17 proved to be quite misleading. In fact, the Executive Committee of the Plaintiff has not given any consideration to any redevelopment of No 17, no one has produced any plan or proposal for such redevelopment, Dr McNamara has not discussed redevelopment with the Council or an architect, no general meeting of the body corporate of the Plaintiff has discussed redevelopment and, in particular, there has been no communication with the owners of No 15 Bungan Street as to any possible joint development. In short, the "Plaintiff's consideration" of a redevelopment of No 17 consists of nothing more than an idea in Dr McNamara's mind. 42 In those circumstances, the redevelopment of No 17 in such a way as would be affected by the removal of the boundary wall is nothing more than hypothesis. The restoration of the boundary wall is not warranted in aid of a hypothesis. 43 Finally, because restoration of the boundary wall in its original position would restore an encroachment upon No 24, without compensation, I would decline the order sought on that ground also. 44 If the Plaintiff really wishes to establish, for the first time, control over access to the arcade on its land, and if it wishes to define correctly the boundary between No 17 and No 24 for the purposes of a future development, it may do so by constructing any wall it wishes on its own land, subject, I assume, to obtaining the requisite approval from the Council. The Dividing Fences Act 45 Much of Mr Gruzman's submissions were directed to establishing that the boundary wall was a "dividing fence" within the operation of the Dividing Fences Act . Mr Simpkins said that this issue was a 'red herring' . I agree. 46 If the Plaintiff wishes to obtain an order under s 7 Dividing Fences Act for the construction of a new dividing fence on the common boundary, it may commence proceedings in the Local Court under Part 3 of the Act. The result 47 The Plaintiff fails in its claim for a mandatory injunction requiring Torada to restore the boundary wall. The interlocutory order of the Court made on 11 June 2008 requiring the Defendants to construct and maintain a temporary fence between No 17 and No 24 is dissolved. 48 The Plaintiff has succeeded in establishing that Torada has committed a trespass to its property in demolishing that half of the boundary wall which was located on No 17. The Plaintiff is entitled to damages for such trespass. 49 The Plaintiff does not claim damages on the basis that the demolition of the boundary wall has diminished the value of its land. Rather, it claims damages being the cost of constructing a new wall. 50 The damages to which the Plaintiff is entitled for trespass is the amount required to construct on the Plaintiff's wall of the same width, height and character as that part of the boundary wall which was located on No 17, i.e. a wall of about half a brick in width and of low but variable height. 51 As a matter of reality, I doubt whether the Plaintiff will wish to construct such a peculiar wall on its land. No 24 has been constructed and landscaped in such a way as to enhance, rather than detract from, the amenity of the Plaintiff's arcade. Nevertheless, if the Plaintiff really wishes to erect a wall on the arcade and obtains Council's approval to do so, it is entitled to a contribution to the cost calculated as above. 52 The parties have agreed that if a calculation of damages is required, it should be referred to a building expert, rather than be established by a formal enquiry as to damages. 53 I will stand the matter for a short time to enable the parties to bring in Short Minutes of Order reflecting these reasons. I will then hear argument as to costs, including costs of an issue as to nuisance from water discharge, which was resolved prior to trial. – oOo – 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. 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