On behalf of the applicant, it was accepted that he (like the respondents) was aware of the encroachment at the time the applicant purchased the subject property in March 2020. Settlement took place on 29 April 2020 and, through his solicitors, by letter dated 4 May 2020, he promptly asserted his intention to require demolition. These proceedings were commenced by the applicant on 14 September 2020.
With respect to the deed, the applicant relied upon the Kirby letter dated 12 February 1988 and further submitted that the terms of the deed did not prevent him from maintaining these proceedings or oblige him to agree to the replacement of the laundry structure, for which he had no use, and did not require or desire it.
He noted that the value of the land affected by the encroachment could not be regarded as insignificant having regard to the purchase price of the whole of the subject property ($16.6 million). The applicant relied upon the valuation evidence of Mr L. Bridges (Exhibit A) who opined in September 2021 that the value of the site was approximately $20.3 million, equating to $30,000 per m2. Mr Bridges valued the access handle (60 m2 x $30,000/m2) at $1.8 million and the value of the area encroached upon by the laundry and brick carport alone at approximately $500,000 (16.9 m2 x $30,000/m2). Accordingly, it was the applicant's submission that the value of the land affected by the encroachment was approximately $500,000.
The applicant further submitted that the encroachments effectively prevented any use of the access handle, which was the only land owned by the applicant by which access could be gained directly to Dumaresq Road.
The applicant stated that he had a number of reasons for seeking the removal of the encroachments. These were to facilitate the following:
1. Disability access to the dwelling.
2. Safe and more convenient access for pedestrians, occupiers and visitors when compared to the rights of way.
3. Direct wheelie bin access.
The applicant acknowledged that no investigation as to what form of construction of a pathway or 'skybridge' over the retaining wall and parking structure had been undertaken to date but stated that he had a number of options depending upon the outcome of the proceedings because he remained the owner of the land below the retaining wall where the parking easement was located: Towers v Stolyar [2017] NSWSC 526 at [51] and [52]. These Supreme Court proceedings did not involve the current parties but did relate to the entitlement of a prior owner of the subject property, notwithstanding the existence of the easement for parking and garaging adjacent to the retaining wall at the western end of the access handle, to construct an access structure to bridge over the parking easement.
The applicant submitted that it was not reasonable or just to require the laundry to be rebuilt when, as the owner of five of the six units in the building at no. 4, he had no need for it. He noted that the cost of reconstruction of the laundry, based on the evidence of Mr Gallagher (Exhibit C) was likely to be not less than $80,000 - $100,000 plus ongoing costs. The applicant further noted that the owner of unit 3 might sell that unit in due course and if an owner installed a laundry within the unit, then the new structure would become entirely redundant.
He pointed out that the respondent had not put forward any compelling evidence as to why a laundry could not be installed in unit 3 and that there was no reason why that could not be done, as evidenced by the applicant's renovations of units 4, 5 and 6 and his intended renovations for units 1 and 2.
In addition, the applicant observed that the only person affected by the demolition of the brick carport was himself because his combined holdings as a tenant in common in no. 4 entitled him to exclusive use over the whole of the carport.
Finally, the applicant accepted that he would bear all of the costs of removal and reinstatement of the encroaching paling fence and the removal of any necessary vegetation.
[2]
The respondents' submissions
The first respondent's submissions were made on behalf of himself and the second respondent. The first respondent's fundamental submission was that the Court should decline to order demolition of the laundry because there would be no utility in circumstances where the existence of the retaining wall and the easement in favour of no. 6 to park below it and maintain the carport structure, effectively prevented the use of the access handle as a pedestrian ramp in any event. He noted that the applicant had provided no evidence that the construction of a ramp (which would necessitate a form of 'skybridge') was feasible or likely to be approved by the council. He noted that pedestrian, wheelchair and wheelie bin access was already available via existing rights of way.
The first respondent urged that in the circumstances, the order sought by the applicant was not 'just' and that no loss would be suffered by the applicant by reason of the encroachments remaining, other than an 'inconvenience'. He also stated that the applicant had provided no evidence that the construction of a pathway within the access handle on the subject property would be any more convenient in terms of distance or gradient. He urged the Court to have regard to the fact that the applicant's evidence did not explain why he was unable to convey his parents to or from his waterfront dwelling by motor vehicle using the northern right of carriageway on no. 6 Dumaresq Road. It was said that these were all discretionary considerations that weighed against the making of an order for demolition.
The first respondent also directed the Court's attention to the fact that in its consideration, the Court may consider 'the loss and damage which would be incurred by the encroaching owner if the encroaching owner were required to remove the encroachment' (s 3(e) EB Act).
Counsel for the respondents focused upon the laundry and stated that it should be regarded as an 'asset' of his clients and that clause 4 of the deed amounted to a binding covenant that the respondents should have the continuing use and enjoyment of the laundry facility and that clause 8(iv) obliged the parties to retain or repair the laundry. Any order to demolish the laundry without a corresponding order to reinstate it upon no. 4 would amount to a serious disamenity to the respondents, which the applicant had no right to force upon them. In short, the respondents urged that it would be unjust not to order the reinstatement of the laundry, particularly in circumstances where there was no evidence that there was the capacity to reconfigure unit 3 to provide for an alternative laundry facility.
[3]
The encroachments should be removed and no order should be made to reinstate a laundry
Having given careful consideration to s 3(2), and s 3(3) of the EB Act and to the evidence (including the deed and the Kirby letter), as well as the detailed submissions of the parties, I have decided that it is just in the proper exercise of the wide discretion reposed in me to order that the encroaching structures (being the laundry/toilet, brick carport and paling fence) should be demolished and removed. Further, I have decided that, in the circumstances of this case, it would not be reasonable or just to order such removal subject to a condition that a new laundry be constructed.
The terms of the order for removal of the encroachments will oblige the removal to occur within six months of the date of these orders unless otherwise agreed by the parties. The costs of removal and remediation of the subject land are to be determined upon the basis of the most cost efficient of three quotes to be commissioned by the building manager of no. 4 Dumaresq Road. In accordance with their respective shareholdings as tenants in common of no. 4, the applicant will be required to pay 81.57%, and the respondents will be required to pay 18.43% of those costs. This is subject to the proviso that the respondents' costs are capped at $24,800 exclusive of GST. The applicant is to pay 100% of the cost of demolition and replacement of the paling fence on its correct boundary alignment, as well as the removal of any necessary vegetation within the access handle.
The terms set out above were eventually the subject of broad agreement between the parties during the hearing in the event of a demolition order being made.
The reasons for my decision are as follows:
1. The encroachments were not deliberate because they were erected prior to the 1951 subdivision and only acquired that status as a consequence of the later subdivision of the land contained in Certificate of Title 4950 Folio 211 by which three new lots were created. The subject property, no. 2C Dumaresq Road (lot A DP 33652) and no. 4 (lot C DP 33652) were two of those resulting lots.
2. Both parties were aware of the fact and nature of the encroachments and the terms of the deed at the dates of purchase of their respective shares as tenants in common of no. 4 Dumaresq Road.
3. The extent and value of the land encroached upon (possibly as much as $500,000 if limited to the laundry and carport) and which is owned by the applicant cannot be reasonably regarded as insignificant.
4. The location of the encroachments prevents any practical access to the applicant's land directly from Dumaresq Road. A private access handle must reasonably be regarded as an important and valuable attribute to an otherwise landlocked block. It should be able to be used for that purpose by the owner, the occupiers, employees and visitors.
5. The existence of the current impediments within the access handle, which are unrelated to the encroachments (its gradient, the retaining wall and parking easement) do not, in my opinion, displace the applicant's entitlement to a demolition order. I make this finding regardless of the fact that there has been no inquiry as to the feasibility of the design or particular method of construction of any pedestrian, wheelchair or bin access ramp from the street to the dwelling on the subject property. I do not regard the potential of such future access as fanciful or unviable. Its ultimate configuration and use are properly a matter for the applicant, as owner, to resolve in due course.
6. There is no doubt that the removal of the external laundry will constitute a loss to the respondents of an important facility, but there is also no doubt, in my opinion, that this loss need only be of a temporary nature. There is no compelling reason, having regard to the evidence, why alterations could not be made to unit 3 to install an internal laundry or washing machine, as has already occurred in units 4, 5 and 6, and as is intended to form part of the renovation of units 1 and 2. The cost of a new external laundry has been estimated at between $80,000 to $100,000. Since the parties do not dispute this approximate cost and are agreed that if it were ordered they should contribute on a 50/50 basis, it follows that it could cost each of them $50,000. I believe that it is reasonable to infer that the respondents could install an internal laundry or, at least a washing machine, in unit 3 for a cost of less than $50,000 and that, in any event, the inclusion of this facility would ultimately be beneficial to the occupiers of unit 3. Further, the installation of an internal laundry would not visit ongoing costs of electricity, repairs and maintenance on the majority of the unit holders now or in the future when such costs would relate solely to the use by occupiers of unit 3.
7. Regardless of the actual cost of the instalment of an internal laundry or washing machine in lot 3, the objective fact is that five out of the six unit owners do not want a new external laundry to be constructed because they (currently the applicant) do not have any need for it. This is a circumstance which weighs in favour of the applicant's position when an obvious and proven alternative is available to the respondents to overcome the temporary loss of the external washing facility.
8. With respect to the deed (and its relevance to the respondents' legitimate expectations) I make the following observations: whilst the Court is not bound by the terms of a private agreement between the parties, I have taken it into consideration as part of the 'circumstances of the case' (s 3(3) EB Act). In doing so, I note that:
1. The deed cannot apply to so much of the laundry structure as stands upon the access handle because the access handle is not part of the 'property' to which the deed pertains. In my opinion, this is dispositive of the respondents' arguments on this point and in particular, the respondents' argument that clause 4 constitutes a binding covenant in favour of the respondents that they are entitled to use and enjoy the laundry as constructed.
2. In the context of the deed (and clause 8 in particular), read as a whole, it is at best doubtful that a covenant by the co-owners to repair and maintain the common areas of the 'property' (clause 8(b)(iv)) (which, as previously noted, would not include that part of the laundry which encroaches upon the access handle) could extend to the rebuilding of a new laundry in circumstances where both parties agree that it is not feasible to reuse the remnants of the laundry which would remain after demolition of the encroachment.
3. To the extent covered at all by the deed, the rebuilding of the laundry could, at best, fall within clause 8(vii): "All such other charges and expenses of a common and reasonable nature or character as may be agreed upon between the Co-Owners." In this regard there is a respectable argument that the expense of a new laundry may not be reasonable and clearly, such expense has not been agreed upon by the co-owners.
For the foregoing reasons, I place minimal weight upon the deed in my consideration of the appropriate nature of relief in these proceedings. That relief is embodied in the orders set out below.
[4]
Orders
The Court orders that:
1. Within six months of the date of these orders, or such later date as may be agreed between the parties, the applicant and the respondents are to remove the encroachments on no. 2C Dumaresq Road, Rose Bay (as depicted in the survey dated 8 July 2020 by Harrison Friedman & Associates Pty Limited) upon the following terms:
1. The laundry and brick carport buildings are to be demolished in their entirety generally in accordance with the methodology set out in Scenario 1 in the expert report of Mr E. Brincat dated 1 October 2021 (the demolition works);
2. The paling fence is to be demolished in its entirety.
1. The parties are to contribute to the cost of the demolition works on a pro-rata basis according to the percentage of their respective shareholding as tenants in common in no. 4 Dumaresq Road, with the applicant to contribute 81.57% and the respondents to contribute 18.43% of such costs, provided that the respondents' contribution is not to exceed $24,800 exclusive of GST.
2. The applicant is to arrange and shall bear the total cost of the removal of the paling fence and of the removal of any vegetation necessary to enable the removal of such fence.
3. The applicant is to arrange and shall bear the total cost of the erection of a new dividing fence upon the common northern boundary of no. 4 Dumaresq Road with no. 2C Dumaresq Road.
4. The parties will instruct the building manager of no. 4 Dumaresq Road to obtain three quotes for the demolition works and instruct the building manager to accept the most cost-efficient quote and generally oversee the demolition works.
5. The parties shall each contribute to the reasonable costs of the building manager's fees incurred as a consequence of order 5 above, in the percentages set out in order (2) above, but irrespective of the cap.
6. Exhibits B, D, 1 and 2 are retained and Exhibits A, C and E are returned.
[5]
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 May 2022
Parties
Applicant/Plaintiff:
Collick
Respondent/Defendant:
Robinson
Cases Cited (2)
Relevant provisions of the Encroachment of Buildings Act
So far as is relevant to these proceedings, s 2 of the EB Act sets out relevant definitions and s 3(2) and (3) of the EB Act set out the Court's powers for the grant or refusal of relief in respect of the encroachment:
2 Definitions
In this Act, unless the context or subject-matter otherwise indicates or requires:
Adjacent owner means the owner of land over which an encroachment extends.
Boundary means the boundary line between contiguous parcels of land.
Building means a substantial building of a permanent character and includes a wall.
Court means the Land and Environment Court.
Encroaching owner means the owner of land contiguous to the boundary beyond which an encroachment extends.
Encroachment means encroachment by a building, and includes encroachment by overhang of any part as well as encroachment by intrusion of any part in or upon the soil.
Owner means any person entitled to an estate of freehold in possession:
(a) whether in fee simple or for life or otherwise,
(b) whether at law or in equity,
(c) whether absolutely or by way of mortgage,
and includes a mortgagee under a registered mortgage of a freehold estate in possession in land under the Real Property Act 1900.
Subject land means that part of the land over which an encroachment extends.
3 Encroachments
(1) Either an adjacent owner or an encroaching owner may apply to the Court for relief under this Act in respect of any encroachment.
(2) On the application the Court may make such orders as it may deem just with respect to:
(a) the payment of compensation to the adjacent owner,
(b) the conveyance transfer or lease of the subject land to the encroaching owner, or the grant to the encroaching owner of any estate or interest therein or any easement right or privilege in relation thereto,
(c) the removal of the encroachment.
(3) The Court may grant or refuse the relief or any part thereof as it deems proper in the circumstances of the case, and in the exercise of this discretion may consider amongst other matters:
(a) the fact that the application is made by the adjacent owner or by the encroaching owner, as the case may be,
(b) the situation and value of the subject land, and the nature and extent of the encroachment,
(c) the character of the encroaching building, and the purposes for which it may be used,
(d) the loss and damage which has been or will be incurred by the adjacent owner,
(e) the loss and damage which would be incurred by the encroaching owner if the encroaching owner were required to remove the encroachment,
(f) the circumstances in which the encroachment was made.
The parties are agreed, and I am satisfied, that these proceedings are properly constituted.
Section 3 invests the Court with a broad discretion for the making of orders disposing of this application and the exercise of the Court's discretion is unconfined: Hofer v Howell Developments Pty Limited [2000] NSWLEC 191 at [18]. Section 3(3) sets out factors which may be considered where appropriate. The consideration of these factors is not obligatory, nor does it confine the matters that may be considered.