These proceedings concern a dispute between the owners of 150 Carrington Road, Randwick (the plaintiffs) and the owners of 148 Carrington Road, Randwick (the defendants). The dispute concerns a timber retaining wall that was constructed many years ago on the defendants' property. The retaining wall was built upon or close to the boundary with the plaintiffs' property. The plaintiffs' property sits at a lower level than the defendants' property. The plaintiffs claim that the retaining wall has started to fail and now encroaches upon the plaintiffs' property, creating a nuisance.
The proceedings were commenced by Summons filed on 25 January 2018. The defendants filed an appearance on 7 February 2018. The plaintiffs seek orders pursuant to the Encroachment of Buildings Act 1922 (NSW), including an order that the defendants remove the encroaching parts of the wall. The plaintiffs also seek mandatory injunctions requiring the defendants to do what is necessary to bring the alleged nuisance to an end. Declarations are also sought, including a declaration to the effect that the retaining wall is not a fence or a dividing fence within the meaning of the Dividing Fences Act 1991 (NSW).
The defendants take the view that the retaining wall forms part of a fence for the purposes of the Dividing Fences Act. They claim that it is a foundation or support necessary for the support and maintenance of a steel fence that has been erected a short distance in from the retaining wall. In December 2017 and January 2018, the defendants served fencing notices under s 11 of the Dividing Fences Act upon each of the plaintiffs, and on 26 February 2018 the defendants commenced proceedings in the Local Court seeking orders under the Dividing Fences Act for certain fencing and retaining wall work to be carried out, and for the cost to be shared equally between the parties.
It seems to be common ground that the retaining wall needs to be repaired or replaced. It further seems to be common ground that the cost of replacing the wall with a concrete block wall would be in the order of $46,000.
By a Notice of Motion filed by the plaintiffs in these proceedings on 27 April 2018, the plaintiffs seek an order that the Local Court proceedings be stayed pending further order of this Court. The plaintiffs submit that the subsequent institution and carrying on of the Local Court proceedings by the defendants is vexatious or oppressive, and thus an abuse of process. The plaintiffs submit that s 23 of the Supreme Court Act 1970 (NSW) and the inherent jurisdiction of this Court as a superior court of record gives the Court the power to stay the Local Court proceedings. In that regard, reference was made to the observations made by McDougall J in Urban Traders Pty Ltd v Paul Michael Pty Ltd [2009] NSWSC 1072 at [37].
The defendants did not contend that the Court lacked power to stay the Local Court proceedings. I am in any event satisfied that the Court does have that power, and that the power may be exercised in circumstances where the continuance of the Local Court proceedings would be oppressive or vexatious, amounting to an abuse of process (see Batistatos v Roads and Traffic Authority of New South Wales (2006) 226 CLR 256; [2006] HCA 27 at [9]-[15]).
The plaintiffs contend that the Local Court proceedings should be stayed because they seek to agitate the same issues as those that require determination in these proceedings, which were commenced first. It was submitted that the applicability of the Dividing Fences Act is a central issue in these proceedings, and in any event these proceedings cover the same subject matter as the Local Court proceedings. The plaintiffs submitted that a stay of the Local Court proceedings is appropriate as only that would bring an end to the vexation, oppression and duplicated costs (as well as the potential for conflicting outcomes) caused by the commencement of those proceedings.
The defendants submitted that the Local Court proceedings are not an abuse of process. They contend that the jurisdiction of that court was properly engaged, and that they have a reasonably arguable case that the Dividing Fences Act applies to the fence and the retaining wall which is said to constitute a necessary foundation or support for the fence. The defendants submitted that the question is really whether this Court or the Local Court is the appropriate jurisdiction to resolve the issues between the parties. In that regard, it was submitted that as a practical matter the issues that arise on the Summons can all be satisfactorily addressed in the Local Court through orders made under s 14 of the Dividing Fences Act. The defendants also pointed to the small monetary amount in issue as a reason why the Local Court (which has significant experience in fencing disputes) was a more appropriate forum than this Court. It was further submitted that if the proceedings were heard in this Court, they would take three to five days rather than one to one and half days in the Local Court, and the costs would be commensurately greater. Finally, the defendants took issue with the contention that the proceedings in this Court were commenced first. It was submitted that the fencing notices that are required to be served at least one month before the commencement of proceedings under the Dividing Fences Act were all served prior to the filing of the Summons in this Court. It was put that in these circumstances the Local Court proceedings should be considered to have commenced first.
In my view, notwithstanding the notice requirements under the Dividing Fences Act, the proceedings in this Court should be considered to have been commenced first. The plaintiffs first threatened proceedings in late 2015, and threatened proceedings in this Court from as early as February 2016. It appears that the parties engaged in some negotiations thereafter, until matters came to a head in late 2017. From that time both sides acted reasonably promptly in commencing the proceedings they considered appropriate, but it remains the case that the plaintiffs commenced first.
Viewing the matter broadly, the parties are in dispute on two principal issues: whether the defendants are liable for the deformation of the retaining wall and the resulting encroachment upon the plaintiffs' property, and whether the Dividing Fences Act has any application in relation to the matter. The proceedings in this Court raise those issues for determination. The first issue would be dealt with as part of the plaintiffs' claims for relief based on nuisance, and might also be relevant to the claims for relief under the Encroachment of Buildings Act. The second issue would be dealt with as part of the plaintiffs' claims for declaratory relief in respect of the Dividing Fences Act. It is true that if the second issue was determined adversely to the plaintiffs, the question of what, if any, orders should be made under the Dividing Fences Act would not be dealt with in this Court. That is a function of the fact that the statute confers power to make such orders on only the Local Court and the New South Wales Civil and Administrative Tribunal (and in certain circumstances the Land and Environment Court). The proceedings commenced by the defendants in the Local Court are not so limited in that respect. However, those proceedings do not encompass the question whether the defendants are liable in nuisance, or any question concerning relief under the Encroachment of Buildings Act.
It is clear (and both parties seem to accept) that the simultaneous prosecution of both proceedings would subject the parties to this dispute, which in monetary terms is relatively minor, to highly undesirable duplication of litigious effort, and increased costs. In these circumstances, I have come to the conclusion that the continuation of the later Local Court proceedings would be oppressive and vexatious and in that sense an abuse of process.
I am prepared to accept that the defendants have a reasonably arguable case that the Dividing Fences Act applies to the fence and the nearby retaining wall, but I am equally of the view that there is a substantial prospect that the statute will be held not to apply. Given that the question of the applicability of the statute would be determined in the proceedings already commenced in this Court (and, if determined favourably to the defendants, would leave them free to seek orders under the statute), I do not think it was reasonable for the defendants to commence their own proceedings when they did.
The commencement of those proceedings immediately placed the parties in the invidious position of litigating in two places in respect of a dispute which, despite encompassing a number of issues both under general law and under statute, is essentially based on a single set of underlying facts. In my opinion the continuation of those proceedings whilst the present proceedings remain on foot would be oppressive and vexatious in the circumstances. It seems to me that in order to prevent the oppressive and vexatious effect of continuation of the Local Court proceedings whilst proceedings are pending in this Court, it is appropriate, and in the interests of justice to both parties, to order that the Local Court proceedings be stayed pending the determination of the proceedings in this Court.
If the Dividing Fences Act does not apply, the proceedings in this Court can determine all issues between the parties. If this Court determines that the Act does apply, it would remain open to the defendants, if they wish, to pursue orders under the Act in the proceedings in the Local Court. In the meantime, the parties should be spared having to face litigation in two courts simultaneously.
The question whether the Local Court proceedings should be stayed has been determined on the ground that the continuation of those proceedings whilst the proceedings in this Court are pending would amount to an abuse of process. Contrary to the submissions of the defendants, I do not think that the relevant question is whether this Court or the Local Court is the appropriate jurisdiction to resolve the issues between the parties. If the Dividing Fences Act applies (as the defendants contend) neither court can resolve all the issues between the parties. That is so even if relief given under the Dividing Fences Act might have the practical effect of bringing the dispute to an end. As I have said, the Local Court proceedings do not encompass the plaintiffs' claims in nuisance or their claims for relief under the Encroachment of Buildings Act.
I am also unable to accept the defendants' submission that the hearing of the proceedings in this Court would take longer than the hearing of the proceedings in the Local Court, or that the costs would be significantly greater. It seems to me that a contested hearing in either court would take roughly the same time, and should result in the incurring of roughly the same costs.
It is relevant that the monetary value of the dispute is quite small, being of a magnitude suitable for the Local Court. However, the issues between the parties (notably the claims for mandatory injunctive relief) extend beyond mere monetary claims. Moreover, the small monetary value itself underscores the fact that the simultaneous prosecution of two sets of proceedings would be highly undesirable.
For the above reasons, the Court will order that Local Court proceedings 2018/63487 be stayed pending the determination of these proceedings, or further order of the Court. The costs of the Notice of Motion filed on 27 April 2014 should follow the event. Accordingly, the Court will order that the defendants pay the plaintiffs' costs of the motion. The proceedings will stand over for directions on 29 June 2018. The Court was informed that certain open offers of compromise were being "actively considered". An adjournment to 29 June 2018 should afford the parties ample opportunity to reach an agreement and thus avoid the incurring of further legal costs.
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Decision last updated: 30 May 2018