Bernadette Mills v GM Amalgamated Investments

Judgment 1The plaintiff is the proprietor of the land contained in folio identifier 2101/1030519 at St Helens (the plaintiff's lot). The defendants are the proprietors of the adjacent property being the land contained in folio identifier 2113/1030519 (the defendants' lot). The defendants' lot adjoins the plaintiff's land along its northern boundary. The defendants are the owners of the dominant tenement under an easement to drain water over a strip of the plaintiff's land along the common boundary. In these proceedings the plaintiff, as owner of the servient tenement, claims damages against the defendants for loss caused by subsidence resulting from defective work done in the course of replacing drainage pipes within the easement. 2The defendants dispute the claims. They deny that the condition of the servient tenement was caused by defective workmanship when the pipes were replaced. Liability is also denied on grounds that the work was carried out by an independent contractor, alternatively, that the proceedings were commenced outside the statutory six year limitation period.

Background 3In about 1969 the defendants acquired unimproved property at St Helens Park (lot 10) for development and subdivision. Since about 1995 Mr Samuel Mir has been the general manager of the defendants. In about 1996 Mr Mir arranged for Sheraton Homes Pty Ltd (Sheraton), a company related to the defendants, to engage Grinsell & Johns Pty Ltd (G&J), civil engineers, to design and undertake the subdivision of lot 10. 4In about July 2001 the plan of subdivision of the land in DP 1030519 (the plan) was registered. The easement with which these proceedings are concerned (the easement) was created upon registration of the plan. The plan included an instrument headed: "Instrument setting out terms of easements ... intended to be created pursuant to s 88B of the Conveyancing Act 1919". Part 1 of the instrument identified the easement as: "Easement to drain water 1.5 wide". Relevantly, the lot burdened is identified as lot 2101 and the lot benefited as 2113. Under s 88B(3)(c) Conveyancing Act 1919 (the Act) the easement was created upon registration of the plan. The instrument, as a dealing, was recorded under s 47 Real Property Act 1900 (the RP Act) with entries on the folios of the register for the land benefited and the land burdened. Upon registration the instrument has the effect of a deed (RP Act s 3(1), s 36(11). 5Pursuant to s 181A and Pt 3, Sch 8 of the Act the expression "easement to drain water" in the instrument is to be read as follows: "Part 3 Easement to drain water Full and free right for every person who is at any time entitled to an estate or interest in possession in the land herein indicated as the dominant tenement or any part thereof with which the right shall be capable of enjoyment, and every person authorised by that person, from time to time and at all times to drain water (whether rain, storm, spring, soakage, or seepage water) in any quantities across and through the land herein indicated as the servient tenement, together with the right to use, for the purposes of the easement, any line of pipes already laid within the servient tenement for the purpose of draining water or any pipe or pipes in replacement or in substitution therefor and where no such line of pipes exists, to lay, place and maintain a line of pipes of sufficient internal diameter beneath or upon the surface of the servient tenement, and together with the right for the grantee and every person authorised by the grantee, with any tools, implements, or machinery, necessary for the purpose, to enter upon the servient tenement and to remain there for any reasonable time for the purpose of laying, inspecting, cleansing, repairing, maintaining, or renewing such pipe line or any part thereof and for any of the aforesaid purposes to open the soil of the servient tenement to such extent as may be necessary provided that the grantee and the persons authorised by the grantee will take all reasonable precautions to ensure as little disturbance as possible to the surface of the servient tenement and will restore that surface as nearly as practicable to its original condition." 6The plaintiff purchased her lot in November 2001. In February 2002 she entered into a contract for the construction of a dwelling on the lot. Building work commenced in about February 2002 and was completed in about December 2002. 7During 2002 G&J determined that the drainage pipes should be unearthed and replaced with pipes of 2.5 metres diameter. In early October 2002 Sheraton, through Mr Mir as its managing director, contracted with Josa Pty Ltd (Josa) to carry out the work. 8By letter of 23 October 2002 to the plaintiff, G&J advised as follows: "We understand that you are the registered proprietor of lot 2101 DP 1030519 being no. ## ### ### St Helens Park. We are currently engaged by Sheraton Homes in the design and construction supervision of the estate under construction to the west of your property. In the course of these works we need to upsize a portion of the pipeline, as shown on plan herewith, laid within the easement burdening your property and benefiting the land currently under development upstream. We give you notice that we will instruct our contractors, JK Williams to, within the next 14 days, undertake these works under the terms of the 88b instrument creating the easement and to take all reasonable precautions to ensure as little disturbance as possible to your property and to restore the surface as nearly as practical to its original condition." 9Between November and 15 December 2002 the drainage work was carried out by Josa. The final stages of construction of the dwelling on the plaintiff's lot took place during this period and were completed by June 2003. 10By letter of 5 December 2002 to the plaintiff, Sheraton advised: "Pursuant to the notice given to you by Grinsell & Johns Pty Ltd consulting surveyors on the 23 October 2002, we confirm that upon completion of the implementation of the common drainage line, within the easement area of your property by the contractor. The surface and the boundary fence will be restored as nearly as practical to the original condition prior to work commencing." By letter of 5 December 2002 to Josa, Sheraton stated: "We refer to the site meeting and your subsequent fax this morning in respect to the above matter. We confirm our written advice given to Mrs Mills today, the owner of the above property, that the land surface and boundary fence will be restored as nearly as practical to the original condition prior to the commencement of the work. It is important that the trench is well compacted after back filling. However, should you have any further enquiry in this regard, please do not hesitate to contact the writer." 11The plaintiff took possession of the dwelling on about 15 December 2002. Thereafter she and her husband undertook work in the yard which included laying a concrete pavement across the whole of the site, and creating a garden bed on the northern boundary. Mr Mills carried out the concreting work for the pavement with the assistance of two other concreters. Laying of the concrete path commenced in early January 2003. Shortly after the concrete had cured it developed surface cracks over the whole of the pavement. Subsequently other cracks have continued to develop with differing degrees of severity. 12On 4 March 2003 G&J certified that the drainage works were situated within the easement. 13On 21 November 2003 the plaintiff sent Mr Mir a facsimile in the following terms: "Please be advised that my property lot 2101 is experiencing post easement works groung movement. This is due to not compacting the earth at the rear corner of my home was my house where the machine could not get in to compact apaoriately. You will recall the area of ground between my house slab and the boundary fence this area of my slab was undermined and your contactor whiles completing easement works on my property damaged plumbing. It is in the exact place where discussions between yourself and I took place in regards to if any damage is incurred to my property or home during these works that your would repair. Well now due to this I feel your presence is required to view this costly occourance of damaged concrete and brickwork due to ground movement of non-compacted grounds, which was discussed and your responsibility." 14By letter of 9 March 2006 to G&J the plaintiff referred to the letter to her of 23 October 2002, and notified it of a claim in respect of the work carried out within the easement. 15On 12 December 2008 the statement of claim was filed.