Civil and Administrative Tribunal New South Wales Medium Neutral Citation: Nham & anor v Hayes & anor [2018] NSWCATCD 17 Hearing dates: 26 April 2018 Date of orders: 23 May 2018 Decision date: 23 May 2018 Jurisdiction: Consumer and Commercial Division Before: D Ash, General Member Decision: (1) Yvonne Rao is joined as the second applicant. (2) The application is dismissed. Catchwords: Land Law – Dividing Fences – Retaining Walls Legislation Cited: Dividing Fences Act 1991 Dividing Fences and Other Legislation Amendment Act 2008 Cases Cited: Larney v Johannson [2013] NSWCA 409 Texts Cited: New South Wales Law Reform Commission, Dividing Fences Report, LRC 59, 1988 Category: Principal judgment Parties: Vi Sieu Nham and Yvonne Rao (applicants) Lawrence Hayes and Janet Hayes (respondents) Representation: Counsel: Greg Niven (applicants) Michael Kloosters (respondents) Solicitors: Gary Pickering (applicants) Snelgroves (respondents) File Number(s): COM 17/08882 Publication restriction: Unrestricted REASONS FOR DECISION JURISDICTION 1. This application was commenced on 20 February 2017 by the lodgement of a Dividing Fences Application at the Tribunal. In item 10 of the application, orders under section 12(1) of the Dividing Fences Act 1991 (NSW) (the Act) are sought. No other orders are sought. 2. The Tribunal receives jurisdiction to hear and determine any matter under the Act, by s 13(1). The Tribunal is satisfied that it has jurisdiction to hear and determine the application. The application was heard by the Tribunal on 26 April 2018. These and the following paragraphs are the Reasons for Decision. BACKGROUND 3 The applicant who lodged the application is Mr Vi Sieu Nham is a co-owner of 50A ************** ("the applicants' land"). 1. The co-owner is Ms Yvonne Rao. Ms Rao appeared at the hearing and gave evidence. The Tribunal proposed and no-one including Ms Rao opposed the making of an order that Ms Rao be joined as an applicant. That order was made at the hearing and is recorded in the Decision above. 5 The respondents are Mr Lawrence Hayes and Mrs Janet Hayes. The respondents are the owners of 52 ************** ("the respondents' land"). 1. The applicants' and the respondents' lands adjoin and they share a common boundary. 2. On 25 July 2016 the applicants served the respondents with a notice pursuant to s 11 of the Act ("the Fencing Notice") by posting it. It is not in contest but the Tribunal finds that it was received on or before four business days later, namely 1 August 2016. 3. The Fencing Notice contained a proposal: 1. The properties to be affected were the applicants' land and the respondents' land. 2. The position of the fencing work was on the existing fencing line. (Along the length of or close to the common boundary there are a number of structures. There is no issue that "the existing fencing line" was a reference to, and each party understood it to refer to, these structures. It will be necessary to consider whether these structures comprise a sufficient dividing fence within the meaning of sections 4 and 6(1) of the Act.) 3. The fencing work was: Length of fence: 70 metres Height of fence: 1.5 metres Type of fence: paling and construct a treated retaining wall from 200 x 100 sleepers, posts to be set in concrete and fixed with galvanised nails. Wall varying in height to a maximum of 800 mm where necessary. 1. The applicants together, and the respondents together, would pay for the fencing work and would pay half the estimated cost. 1. The application was accompanied by the covering letter from the applicants' solicitor and three quotations. The particulars in the Fencing Notice appear to have been drawn from one of the quotations, which reads: Quote: Remove all small trees, shrubs and plants together with the existing boundary retaining wall to clear a path for a new retaining wall. Construct a treated-pine retaining wall from 200 x 100 sleepers. Posts to be set in concrete and fixed to with galvanised nails. Wall varying in height to a maximum 800mm where necessary. Backfill with soil on site. All trees and shrubs to be removed off site and premises left clean upon completion. Construct a 1.5[m] paling fence over a distance of approximately 60 metres then tapering down to 1.2[m] over the remaining 10 metres at the entrance to the property. 1. The Tribunal observes that tapering a paling fence at the entrance to adjoining properties is a common practice. Possibly a requirement in some areas, probably aesthetic in others, to avoid a sense of each property being walled in. The practice didn't migrate from the quotation to the Fencing Notice itself. Nothing turns on this. THE LACK OF AGREEMENT AND THE SUBSEQUENT APPLICATION 1. The effect of s 12(2) of the Act was that if the parties did not agree within one month after 1 August 2017 as to the fencing work to be carried out, either party could apply to the Tribunal. 2. As already noted, the Fencing Notice was served on or before 1 August 2017. By s 12(2) of the Act, either set of parties could apply to the Tribunal for an order determining the manner in which the fencing work (if any) was to be carried out. 3. The respondents did not agree to the proposed fencing work. 4. As already noted, the applicants made that application on 20 February 2017, well after the prescribed month. The application was duly made. THE SUPREME COURT PROCEEDINGS 1. On 3 October 2017, after the applicants had applied to the Tribunal, the respondents filed a statement of claim in the Supreme Court of New South Wales. The applicants are the defendants. The substantive claims are in negligence and trespass. They are discussed further below. For current purposes, the Tribunal notes that the pleading also identifies interim relief, being a stay of these proceedings before the Tribunal until further order of the Court. 2. Notwithstanding the interim relief appearing in the pleading, no interim order has been made; significantly, the Tribunal was informed by the parties that the Court had expressed the view that it may be appropriate for the application in the Tribunal to be determined. If the application is successful, there should be a 28-day stay on the operation of the order to permit the parties to consider their positions. If the application is unsuccessful, the Tribunal was initially minded to take the same approach but there would be no utility. APPLICANTS' EVIDENCE 1. The applicants' evidence was: 1. The application itself attaching the Fencing Notice and other documents. 2. The first applicant's witness statement lodged with the Tribunal on 28 August 2017. 3. Each applicant's affidavit in the Court proceedings, both lodged on 8 March 2018. 4. An affidavit of the applicants' solicitor lodged on 23 April 2018. 5. Oral evidence from each applicant at the hearing. RESPONDENTS' EVIDENCE 1. The respondents' evidence was: 1. An expert report, lodged with the Tribunal on 10 March 2017. 2. The first respondent's first affidavit in the Tribunal application, lodged on 21 December 2017. 3. The Supreme Court pleadings, lodged on 13 March 2018. 4. The first respondent's second affidavit in the Tribunal application, lodged on 18 April 2018. THE TRIBUNAL'S ROLE AND ITS JURISDICTION TO MAKE ORDERS 1. The Tribunal has already expressed its satisfaction that it has jurisdiction to hear and determine the matter. 2. The word "jurisdiction" is also commonly used to identify whether what is sought by an applicant is something that the Tribunal can order. In the balance of these Reasons for Decision, the word is used in this second sense. 3. The Tribunal's function is to hear and determine the parties (1) on whether it has jurisdiction to make an order as to fencing work; and (2) if it does, what order should be made. 4. In the normal course, a Tribunal finding that it does not have jurisdiction may yet go on to determine (2) on the hypothesis that it does. This course tends to have the benefit of assisting the parties and, if there is an appeal, the relevant appellate body or bodies. 5. This is not the normal course. There are the proceedings before the Supreme Court. Those proceedings will include issues about the "structures" already referred to in these Reasons for Decision. The respondents qua plaintiffs (1) allege that there are four structures on or nearby the common boundary; (2) identify them as the Original Log Retaining Wall, the Roof Sheeting Retaining Wall, the Carport Retaining Wall, and the New Retaining Wall; (3) allege "Problems" are caused by at least two of the structures; and (4) allege the applicants qua defendants are legally responsible for the problems. 6. The evidence before the Tribunal includes (1) affidavits by the applicants qua defendants in the Supreme Court; and (2) an expert report directed to what the respondents qua plaintiffs refer to as "the New Retaining Wall", ie a report on an extant structure in issue elsewhere and not on any proposed fencing work. 7. Evidence in relation to the four structures, what they are, and what the parties may or may not have said about them in the past, can only be relevant to the application before the Tribunal in one of two ways. 1. On whether there is a sufficient dividing fence. This is dealt with below, and can be dealt with without considering any conflicting evidence. 2. Assuming the Tribunal finds jurisdiction, the evidence may be relevant res may be relevant to the second of the Tribunal's tasks, if it arises, namely what order should be made. 1. For the reasons given below, the Tribunal finds on its first task that it has no jurisdiction. 2. Because a hypothetical exercise of the second task will cross matters squarely before the Supreme Court, the Tribunal declines to follow what it has described as the normal course. The parties are engaged before that Court, that Court will make its own findings if asked to, and hypothetical findings by an inferior Tribunal which has already found it has no jurisdiction cannot assist any mediation or settlement talks which may take place. A SUFFICIENT DIVIDING FENCE 1. Section 6 of the Act is headed "General principles – Liability for fencing work". It states: (1) An adjoining owner is liable, in respect of adjoining lands where there is no sufficient dividing fence, to contribute to the carrying out of fencing work that results or would result in the provision of a dividing fence of a standard not greater than the standard for a sufficient dividing fence. (2) This section applies whether or not a dividing fence already separates the adjoining lands. 1. Section 4 of the Act sets out the requirements to make a determination of what is a sufficient dividing fence as follows: In any proceedings under this Act, the Local Court or a local land Tribunal is to consider all the circumstances of the case when determining the standard for a sufficient dividing fence for the purposes of this Act, including the following: (a) the existing dividing fence (if any), (b) the purposes for which the adjoining lands are used or intended to be used, (c) the privacy or other concerns of the adjoining land owners, (d) the kind of dividing fence usual in the locality, (e) any policy or code relating to dividing fences adopted by the council of the local government area in which the adjoining lands are situated, (f) any relevant environmental planning instrument relating to the adjoining lands or to the locality in which they are situated, (g) in the case of a dividing fence affecting land the subject of a lease under the Western Lands Act 1901 , any order in force under section 18A of that Act. 1. The question of whether s 4 of the Act is a jurisdictional threshold for the purposes of s 6 or merely a prescription of the metes and bounds for determining the appropriate standard to found contribution under s 7, is not necessary to decide, and see Larney v Johannson [2013] NSWCA 409, [70] per Emmett JA. It is unnecessary to determine because (1) the Tribunal proceeds on the basis that it must make a determination within s 4; (2) the Tribunal has considered all the circumstances of the case; (3) the Tribunal has had particular regard to photographs to the structures, the averment by the respondents qua plaintiffs to the pleaded "Problems" in relation to at least two of the structures, and the issue of a notice by the relevant local council in relation to one of the structures, and the absence of any contrary argument; and (4) the Tribunal finds that there is no sufficient dividing fence. 2. It may be noted that neither party asserts there is no dividing fence. However, consent is irrelevant if the issue is jurisdictional. THE SOLE ISSUE IN THIS APPLICATION 1. The sole issue in this application is whether what the Fencing Notice proposes as fencing work, is fencing work under the Act. LEGISLATIVE PROVISIONS 1. The relevant extracts from the Act follow. Long title An Act to provide for the apportionment of the cost of dividing fences; to repeal the Dividing Fences Act 1951; and to amend certain other Acts. 3 Definitions In this Act: dividing fence means a fence separating the land of adjoining owners, whether on the common boundary of adjoining lands or on a line other than the common boundary. ... fence means a structure, ditch or embankment, or a hedge or similar vegetative barrier, enclosing or bounding land, whether or not continuous or extending along the whole of the boundary separating the land of adjoining owners, and includes: (a) any gate, cattlegrid or apparatus necessary for the operation of the fence, and (b) any natural or artificial watercourse which separates the land of adjoining owners, and (c) any foundation or support necessary for the support and maintenance of the fence, but does not include a retaining wall (except as provided by paragraph (c)) or a wall which is part of a house, garage or other building. [Words underlined by the Tribunal were inserted by an amending Act, the Dividing Fences and Other Legislation Amendment Act 2008.] fencing work means: (a) the design, construction, replacement, repair or maintenance of the whole or part of a dividing fence, and (b) the surveying or preparation of land (including the trimming, lopping or removal of vegetation) along or on either side of the common boundary of adjoining lands for such a purpose, and includes: (c) the planting, replanting and maintenance of a hedge or similar vegetative barrier, and (d) the cleaning, deepening, enlargement or alteration of a ditch, embankment or watercourse that serves as a dividing fence. 11 Notice to carry out fencing work (1) An adjoining owner may require the other adjoining owner to contribute, under this Act, to the carrying out of fencing work by serving a notice in writing to that effect on the other owner. (2) The notice is to specify the following: … (b) the type of fencing work proposed to be carried out, 26 Act not to affect agreements etc, retaining walls or other Acts Nothing in this Act affects: … (b) any law relating to retaining walls, easements of support or other rights of support in relation to land… THE CASE PUT BY EACH PARTY 1. The applicants' case on the sole issue was that a Fencing Notice was duly served and that it seeks an order for fencing work. 2. The respondents' case was put on a number of grounds. Because of the outcome it is unnecessary to consider each. However, it is appropriate to consider the primary ground. It is this: 1. When considering whether a retaining wall is part of fencing work, the Tribunal uses the "principle purpose test". If the retaining wall's principle purpose is to provide a foundation or support to a dividing fence, the Tribunal has jurisdiction. It becomes more difficult to make a determination if the principle purpose of a retaining wall is to support or retain earth and the support of a fence is ancillary. 2. On these facts, the principle purpose of "the New Retaining Wall" is manifestly to support or retain earth to improve the amenity of the applicants' land. 3. The applicants' own evidence is sufficient to establish this. The respondents rely on the first applicant's witness statement lodged with the Tribunal on 28 August 2017, [13], [16], [33] and [51]; the first applicant's affidavit in the Supreme Court proceedings, [5], [6] and [10]; and the second applicant's affidavit in the Supreme Court proceedings, [7]. 4. If the New Retaining Wall is a substantial and material part of the fencing work proposed by the applicants, and if its principle purpose is to support or retain earth to improve the amenity of the applicants' land, and if the applicants do not seek to sever the work from the order sought (and they did not), the Tribunal can make no order. 1. The Tribunal accepts (4). 2. As to (2) and (3), the evidence relied on by the respondents goes more to the proposition that the existing wall, that is the wall that they propose to replace with the New Retaining Wall, was built with the primary purpose of retaining soil for their benefit. However, in the circumstances of the case, the Tribunal infers that the New Retaining Wall is proposed for the same purpose. 3. As the Tribunal accepts (2) to (4), the Tribunal would accept the respondents' ground were it necessary to do so, and dismiss the application on this basis. 4. However, the matter depends on definitions in an Act. Those definitions do not refer to the intention of either party. The Tribunal is of the view that a conclusion is properly reached by considering the text of the Act. DETERMINATION 1. This dispute focuses on the operation of "fence" and "fencing work" in circumstances where there is no extant dividing fence and part of the work proposed is a retaining wall. In particular, it turns on the meaning and intent of the expression "fence … includes… (c) any foundation or support necessary for the support and maintenance of the fence" in its interaction with the expression "fencing work". 2. The meaning and intention is clear: 1. Fencing work involves, relevantly, the design, construction, replacement, repair or maintenance of the whole or part of a dividing fence. 2. Where there is an extant dividing fence and the proposed work is the design, construction, replacement, repair or maintenance of a foundation or support necessary for its support or maintenance, the work is fencing work. 1. This is so whether or not that foundation or support is also incidentally a retaining wall. That is, the work is inside the inclusion and therefore beyond the operation of the exclusion. 2. This proposition recognises that the person liable under the general law cannot seek contribution for the structure qua retaining wall but only for the structure qua foundation or support necessary for the extant dividing fence. 3. In practical terms, a person serving a fencing notice which includes work on a retaining wall should take care to ensure that no contribution is sought in respect of work on the wall which is not a foundation or support necessary for the support and maintenance of the extant dividing fence. 1. Where there is no extant dividing fence, there is nothing to replace, repair or maintain. If anything is being done, it is design or construction. In this situation: 1. Reading the definition of "fence" out of context and without regard to the purpose of the Act, it is possible to conclude that the design and construction of a retaining wall can never amount to "any foundation or support necessary for the support and maintenance of the fence", because the relevant fence has not yet been built. 2. Such a reading benefits the respondents in this matter but gives no practical effect to the amending words read in context. 3. An available interpretation which gives practical effect to the amending words read in context is that "fence … includes… (c) any foundation or support necessary for the support and maintenance of the [not-yet-built] fence". 4. This accords with the interpretation applicable in the case of extant dividing fences. 5. Again, in practical terms, a person serving a fencing notice which includes work constructing a retaining wall should take care to ensure that no contribution is sought in respect of work on the wall which is not a foundation or support necessary for the support and maintenance of the proposed dividing fence. 1. It is not necessary to go to extrinsic material. However, the Second Reading Speech for the bill leading to the amending Act contains an informative example of the amending Act's intended operation. The Parliamentary Secretary the Hon Penny Sharpe informed the Legislative Council on 21 October 2008: The first proposal will not override other general laws applicable to the construction and maintenance of a retaining wall, including requirements for development approval. Similarly the proposal will not override any legislation providing protection to vegetation including trees. Legislation protecting vegetation includes the Environmental Planning and Assessment Act 1979. This allows for the making of environmental planning instruments that may contain provisions protecting or preserving trees or vegetation. An interim heritage order made under the Heritage Act 1977 may prevent a person from causing damage or destruction to a tree or other vegetation subject to the order. In the event that any relevant work on a retaining wall would require development approval under planning legislation, the local land board or the Local Court will need to see any required development approval before a final order regarding a dividing fence is made. The local land board or the Local Court must also ensure that a proposed fencing order will apply in a way that is consistent with other legislation protecting vegetation. Amendments found in the bill ensure that the proposed limited power for an order to be made affecting a retaining wall, tree or other vegetation is reflected in the permissible scope of work that may be included in a fencing notice. An adjoining owner may serve a fencing notice to request a contribution for certain proposed fencing work. The bill also limits the amount of the contribution that may be claimed. An adjoining owner will only be liable to pay a contribution in respect of the removal or trimming of vegetation or for works proposed regarding a retaining wall to the extent that those works are necessary for the provision of a sufficient dividing fence. In view of the proposed limitations on the permissible scope of the fencing orders that refer to a retaining wall, tree or vegetation, it is appropriate for the existing general rule to apply that adjoining owners should make such contributions in equal proportions. Payment in equal proportions is fair and reasonable in the circumstances where a contribution only need be made to the cost of works affecting a retaining wall, tree or vegetation, to the extent those works allow for a sufficient dividing fence. A dividing fence will usually benefit both parties equally. However, an adjoining owner, as a result of fencing work relating to a retaining wall, tree or vegetation performed under the Act, may gain a particular benefit. A particular benefit arises where, for example, one owner has the benefit of relevant excavations beneath a retaining wall or has the benefit of clearing. The bill will allow an adjoining owner to construct a retaining wall or to clear vegetation that provides that owner with a particular benefit but prevents him or her from claiming a contribution for that work from the adjoining owner if that work is not part of constructing a sufficient dividing fence. 1. The Tribunal finds that the Fencing Notice seeks contribution in respect of a retaining wall and a paling fence atop the wall. However, there is no evidence before the Tribunal as to which part if any of the retaining wall is a foundation or support necessary for the support and maintenance of the fence. CONCLUSION 1. The relationship between dividing fences and retaining walls is complex. But the legislature has consistently shown an intention that contribution for dividing fences is generally the province of an inferior court or tribunal, and that liability for a retaining wall is a substantive legal issue affecting property which is the province of the Supreme Court. 2. As to the position prior to the primary Act, the Law Reform Commission Report prompting the Act is informative. In particular, it noted how the difference between the purpose of a retaining wall and the purpose of a dividing fence told against altering the legislature's consistent intention: see New South Wales Law Reform Commission, Dividing Fences Report, LRC 59, 1988, [4.8]. 3. In 2008, Parliament made a minor adjustment to the Act. That adjustment did not give the Tribunal any jurisdiction with respect to the general law of retaining walls. Rather, it confirmed that if a person sought contribution for work and if that work included retaining wall work, the Tribunal's jurisdiction in respect of contribution both includes and is spent by, consideration of the retaining wall work which is associated with the dividing fence in the terms of paragraph (c) of the definition of fence. 4. The adjustment implicitly addresses a different but related problem, the practical difficulty of making an order under s 14 of the Act relating to the nature and extent of fencing work, in circumstances where there is also work to be done on a retaining wall. The adjustment does so because it puts the task of differentiation squarely with the person giving a fencing notice, ie the applicant. If the overall work and the overall cost includes work and cost for that work which is outside the Act, the person giving a fencing notice must isolate that part of the work and the cost in respect of which the Tribunal can make orders. The Fencing Notice in this matter, on its face, does not do this. 5. The Tribunal only adds that a person charged with liability for a retaining wall under the general law was before the amending Act and remains since the amending Act, free to discharge that liability before turning to the issue of contribution for fencing. 6. In circumstances where there is no dispute that the proposed work includes the construction of a retaining wall, it is necessary that the applicants bring evidence as to what part of the retaining wall work falls within paragraph (c) of the definition of fence and evidence of how that is to be addressed in terms of orders that can be made under section 14, both as to the work itself and as to contribution. 7. The Fencing Notice on its face makes clear that the proposed work includes the construction of a retaining wall and that a 50% contribution is sought in respect of the whole of the proposed work. No further evidence is brought. No separation of work and of contribution for the separated work was undertaken. In the circumstances of the case, the Tribunal is being asked to infer that the construction of the retaining wall is wholly within paragraph (c) of the definition of fence. There is no basis for the Tribunal to make this inference. 8. The application is dismissed. David Ash General Member Civil and Administrative Tribunal of NSW 23 May 2018 I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales. Registrar 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. Decision last updated: 10 August 2018