Croese v Maidment

The claim at first instance

1. In the hearing at first instance, the Respondent relied on a detailed written statement from himself. Both parties also relied on additional documents and made submissions. The Member found, after considering the matter and briefly setting out the background and applicable legislation, that the fence was substantially in accordance with the agreement reached between the parties as reflected in the quote and ordered Mr and Mrs Croese to pay the sum of $725 to Mr Maidment.
2. The Member rejected the argument of the Appellant that the fence did not substantially comply with the quote as agreed.

Applicable statutory provisions

1. The terms "dividing fence" and "fence" are defined in section 3 of the Act as follows: "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."
2. Sections 14, 15 and 16 of the Act provide as follows: "14 Orders as to fencing work (1) The Local Court or the Civil and Administrative Tribunal may, in respect of an application under this Act, make an order determining any one or more of the following: (a) the boundary or line on which the fencing work is to be carried out, whether or not that boundary or line is on the common boundary of the adjoining lands, (b) the fencing work to be carried out (including the kind of dividing fence involved), (c) the manner in which contributions for the fencing work are to be apportioned or re-apportioned or the amount that each adjoining owner is liable to pay for that work, (d) which portion of the dividing fence is to be constructed or repaired by either owner, (e) the time within which the fencing work is to be carried out, (f) the amount of any compensation (in the form of an annual payment to either of the adjoining owners) in consideration of loss of occupation of any land, (g) that, in the circumstances, no dividing fence is required in respect of all or part of the boundary of the adjoining lands. (1A)Despite subsection (1), no order may be made for the carrying out of fencing work on critical habitat within the meaning of the Threatened Species Conservation Act 1995 without the consent of the Director-General of National Parks and Wildlife. (2) The occupation of land on either side of a dividing fence, as a result of an order determining that fencing work is to be carried out otherwise than on the common boundary of the adjoining lands, is not taken to be adverse possession as against the owner or to affect the title to or possession of the land, except for the purposes of this Act. 15 Enforcement of agreements and orders (1) If an agreement is reached by adjoining owners or an order is made by the Local Court or the Civil and Administrative Tribunal and an adjoining owner bound by the agreement or order fails within the required time to perform his or her part of the agreement or to comply with the order, the other adjoining owner: (a) may carry out the fencing work as agreed on or as determined by the order, and (b) may recover from the defaulting adjoining owner the amount agreed or ordered to be paid by that adjoining owner or (if the agreement or order does not specify the amount to be paid) half the cost of the fencing work carried out. (2) The "required time" is the time specified in the agreement or order or, if no time is specified, within 3 months after the making of the agreement or order. 16 Substantial compliance sufficient (1) Substantial compliance with the terms of any agreement or order referred to in section 15 is sufficient for the purposes of this Act. (2) However, the adjoining owner who carries out the fencing work is liable to the other adjoining owner for any defect or omission in the fencing work."

The Appeal

1. On 26 April 2016, the Appellant lodged his Notice of Appeal against the order made on 29 March 2016. This was within the 28 day appeal period established by Rule 25(4)(c) of the Civil and Administrative Tribunal Rules 2014.

Scope and nature of the Appeal

1. A party may appeal against an "internally appealable decision" of the Tribunal as of right on any question of law, or with the leave of the Appeal Panel on any other ground: s80(2)(b) of the Civil and Administrative Tribunal Act 2013 ("NCAT Act"). It is not in dispute between the parties that the Tribunal's decision is an internally appealable decision.
2. Where, as in this case, the decision under appeal is a decision of the Consumer and Commercial Division of the Tribunal, the Appeal Panel may only grant leave to appeal where the appellant may have suffered a "substantial miscarriage of justice" because the decision under appeal was not fair and equitable, was against the weight of evidence, or significant new evidence has arisen: clause 12(1) of Schedule 4 to the NCAT Act.

The grounds of appeal

1. The grounds of appeal are set out in the Notice of Appeal as follows: "As stated in Tribunal response "the issues in respect of the erection of the retaining wall and the siting of the fence on top of the wall fall outside the Tribunal's power". Upon legal advice the underlined is not correct. As explained by myself the Applicant has not erected a 1.8m high colour bond fence as agreed between the two parties at natural ground height. Regardless of there being a retaining wall or not the 1.8m colour bond fence still stands 2.54m above natural ground height. Therefore removing the non‑approved retaining wall (that does not retain the first 30 centimetres of fill - as per engineer's report) the fence would be suspended in mid air with footings 16 centimetres in natural ground. I also have no evidence that the Applicant paid the additional $725 to the builder on my behalf. The builder told myself personally when I told him that I wasn't paying him due to the fence not constructed as quoted "I guess I'll just have to cut my losses, because I'm not pulling it down.""
2. The Appeal Panel takes this ground of appeal as essentially being that the fence constructed was not actually or substantially in accordance with the quote as agreed between the parties.
3. Both parties sought to rely on new material which was clearly in the main available at the time of the first hearing.

The Appellant's submissions

1. The Appellant filed detailed written submissions and supplemented them at the hearing with oral submissions.
2. The Appellant's submissions in summary were as follows: 1. the fence which was erected was constructed by Mr Butcher of Newstart Constructions under the direction of Mr Maidment; 2. the fence which was erected did not comply with the written quote from Mr Butcher dated 24 September 2014. The fence as erected was placed upon wooden sleepers or boards which raised the height of the fence above that referred to in the quote. Further, the sleepers or boards are not referred to in the quote. There is no mention in the quote of the construction of a retaining wall or the use of sleepers or boards; 3. the fence should have been constructed at natural ground level not finished ground level being the level of the concrete slab on which Mr Maidment's house was built. The ground level had not changed but rather fill had been placed on the Respondent's block. The fence was much higher than the 1.8m of height referred to in the quote. If the sleepers or boards were removed the fence would be hanging in the air which would not have been intended and there would be a substantial gap; 4. the fence as erected is not structurally sound and is held by a number of roofing screws into the concrete slab. The depth of the fence posts is also inadequate. Run‑off of dirt will occur from the Respondent's block to the Appellant's block. The erection of the fence will necessitate a retaining wall being constructed by the Appellant; 5. the earth batter which was cut away by the Appellant after the construction of the fence was always going to be cut away, thus leaving the fence as erected exposed and its foundations insecure. Further, the fence as constructed due to its height affects the lighting and amenity of the Appellant's property; 6. leave should be granted to the Appellant to rely upon reports from a surveyor and real estate agents to establish that the Appellant will suffer damages in excess of $14,000 due to the incorrectly erected fence, which damages should be awarded in the appeal; 7. the fence did not substantially comply with the agreement as reflected in the quote and it should be removed and a proper fence complying with the quote constructed. The Appellant was willing to pay half the costs of constructing the new fence subject to him reserving the right of obtaining his own quote; 8. the Appellant sought his costs in relation to the appeal.

The Respondent's submissions

1. The Respondent also filed detailed written submissions and supplemented them orally at the hearing of the appeal.
2. The Respondent's submissions were as follows, in summary: 1. the Respondent agreed that the agreement reached with the Appellant was that the fence would be constructed in accordance with Mr Butcher's quote dated 24 September 2014. The Respondent submitted that the fence as erected substantially complied with the agreement as reflected in the quote; 2. the Appellant's argument effectively required the insertion of the words "at natural ground level" into the quote and those words did not appear there. There was never any requirement or agreement to build the fence at natural ground level; 3. the agreement had to be seen in the context of a fence which had already been constructed at the adjacent property at the time the agreement was reached which was placed on sleepers. The current fence in question was consistent with the fence on the other property; 4. the path at the side of the fence on the Respondent's property was laid after the fence was constructed but was placed at the same level as the concrete slab on which the Respondent's house was constructed and the fence as erected was a similar height to the slab; 5. the Appellant had removed the earth batter supporting the fence after the fence was constructed. The Respondent denied that it was contemplated that the earth batter would be removed; 6. the wooden sleepers or boards were placed to retain the dirt on the Respondent's property, not to support the fence and therefore the fence as erected did not include the sleepers or boards within the definition of "fence" in section 3 of the Act; 7. in all the circumstances the fence as erected substantially complied with the agreement made between the parties; 8. the grounds of appeal relied upon by the Appellant do not constitute questions of law but are issues of fact or mixed fact and law and leave should not be granted to the Appellant to rely on these grounds of appeal; 9. leave should not be granted to the Appellant to rely on the surveyor's or real estate agent's reports as these were prepared after the decision at first instance and were fresh evidence which was reasonably available at the time the proceedings under appeal were being dealt with; 10. the Respondent sought his costs of the appeal.

Consideration of grounds of appeal

1. The real question in dispute between the parties is whether the fence as erected by Mr Butcher substantially complied with the quote dated 24 September 2014 which was agreed between the parties. The Member at first instance considered that it did. The quote of Mr Butcher which was before the Member makes no reference to the use of sleepers or boards or that the fence had to be constructed at natural ground level or finished ground level, being the level of the Respondent's land once his house was constructed on it on the concrete slab. In the Tribunal's view the agreement reached between the parties has to be seen in its factual context.
2. In Cordon Investments Pty Limited v Lesdor Properties Pty Limited [2012] NSWCA 184 Bathurst CJ (with whom Macfarlan and Meagher JJA agreed) stated at [52] as follows: "The principles underlying the construction of written contracts are well established and it is not necessary to deal with them at length. A contract is to be construed by reference to what a reasonable person would understand by the language in which the parties have expressed their agreement having regard to the context in which the words appear and the purpose and object of the transaction: Pacific Carriers Ltd v BNP Paribas [2004] HCA 35; (2004) 218 CLR 451 at [22]; Toll (FGCT) Pty Limited v Alphafarm Pty Limited [2004] HCA 52; (2004) 219 CLR 165 at [40]; International Air Transport Association v Ansett Australia Holdings Ltd [2008] HCA 3; (2008) 234 CLR 151 at [53]. At least in the case of ambiguity, resort can be had to the surrounding circumstances known to the parties in interpreting the particular provision: Codelfa Construction Pty Limited v State Rail Authority of NSW [1982] HCA 24; (1982) 149 CLR 337 at 352; Western Export Services Inc v Jireh International Pty Limited [2011] HCA 45; (2011) 282 ALR 604."
3. In Electricity Generation Corporation v Woodside Energy Limited (2014) 251 CLR 640, the majority of the High Court said the following at paragraph [35]: "Both Verve and the Sellers recognised that this Court has reaffirmed the objective approach to be adopted in determining the rights and liabilities of parties to a contract. The meaning of the terms of a commercial contract is to be determined by what a reasonable businessperson would have understood those terms to mean. That approach is not unfamiliar. As reaffirmed, it will require consideration of the language used by the parties, the surrounding circumstances known to them and the commercial purpose or objects to be secured by the contract. Appreciation of the commercial purpose or objects is facilitated by an understanding "of the genesis of the transaction, the background, the context [and] the market in which the parties are operating". As Arden LJ observed in Re Golden Key Ltd, unless a contrary intention is indicated, a court is entitled to approach the task of giving a commercial contract a businesslike interpretation on the assumption "that the parties ... intended to produce a commercial result". A commercial contract is to be construed so as to avoid it "making commercial nonsense or working commercial inconvenience"."
4. Accordingly, the meaning of the terms used in the quote agreed between the parties is to be determined by what a reasonable businessperson would have understood those terms to mean. It requires consideration of the language used, the surrounding circumstances known to the parties at the time and the commercial purpose or objects to be secured by the agreement. The background and context of the agreement are important. What the parties now say was their intention is irrelevant in the absence of a rectification claim.
5. In the Tribunal's view, the agreement has to be seen in the context of the following factors which were in evidence before the Tribunal member at first instance: 1. the existing fence of the adjacent neighbour as shown in photographs which was similar to the fence ultimately constructed by Mr Butcher; 2. the fact that the earth batter revealed in photographs was present on the Appellant's side of the fence as erected when the fence was constructed. There is no satisfactory evidence that both parties understood that the earth batter would be removed as has ultimately occurred; 3. the fact that the Respondent's house had already been constructed on a concrete slab on land that gently sloped up from the Appellant's house block; 4. the need for a fence to ensure privacy between the two neighbours; 5. the need to approach the matter in a practical and commercial fashion.
6. The Tribunal is not persuaded that the material sought to be relied upon by the parties which post-dated the original hearing should be considered following a grant of leave. This material includes: 1. the surveyor's and real estate agent's opinions sought to be relied upon by the Appellant in support of his claim for damages; 2. the further statement of evidence relied upon by the Respondent dated 22 May 2016.
7. In the Tribunal's opinion, leave should not be granted to rely on this material as the parties would not, in the Tribunal's opinion, suffer a substantial miscarriage of justice if the new evidence was not allowed. The Tribunal does not regard the new evidence as significant new evidence within clause 12 of Schedule 4 of the NCAT Act as it was evidence that was reasonably available at the time the proceedings under appeal were being dealt with. The Appellant could have obtained the experts reports for the purposes of the decision at first instance and the Respondent could have supplemented his original statement for the purposes of the initial hearing.
8. Therefore the Tribunal does not grant leave to rely on this new material.
9. In relation to the argument of the Respondent that the Appellant's grounds of appeal do not constitute pure errors of law which would give rise to an appeal as of right, in our view the question whether the fence as erected fell within sections 15 and 16 of the Act amounts to a question of law for which leave is not required.
10. We have carefully considered the submissions, both written and oral, of the parties which were thoroughly prepared and which were of great assistance to the Tribunal. In the end, the question to be determined is whether the fence as erected substantially complied with the agreement between the parties.
11. In the Tribunal's opinion, the reasoning at first instance discloses no error in approach or conclusion. In our view, the fence as erected by Mr Butcher did substantially comply with the terms of the agreement between the parties as reflected in Mr Butcher's quote for the following reasons: 1. the agreement has to be seen in the context referred to above. That context included the similar fence of the neighbour adjacent to the Respondent's property constructed with sleepers or boards; 2. it also included the presence of the earth batter at the time the fence was agreed; 3. it also included the level of the Respondent's house slab on which the Respondent's house was constructed; 4. whilst there is no reference to sleepers or boards in the quote, there is similarly no reference to the need for the fence to be constructed at "natural ground level". This is a gloss to the agreement which is not present in the agreement. The agreement between the parties has to be seen in the context of the slab present on the ground at the time the agreement was made; 5. the fence as erected appears to be substantially at the same level as the Respondent's house slab and the path which was subsequently constructed after the fence was erected. The path reflected the existing level of the house slab; 6. the sleepers or boards used in the construction do not appear to us to be part of the "fence" as defined in section 3 of the Act as being "any foundation or support necessary for the support and maintenance of the fence" but consist of a retaining wall to keep the dirt on the Respondent's side of the fence. If we are wrong in that conclusion and the sleepers or boards do form part of the fence the Tribunal would still be of the view that the fence substantially complies with the agreement; 7. the issues raised by the Appellant relating to the quality of the fence as constructed are not relevant to the question whether the built fence substantially complied with the quote. If there are defects in the fence that is a matter to take up with Mr Butcher; 8. the issue of privacy is relevant. If the fence was lowered substantially as the Appellant seeks, the Tribunal is of the view that it would compromise the privacy between the parties. Although the Appellant relied on the height of the fence as affecting his family's amenity, the Tribunal is of the view that privacy issues are also significant.
12. In the end, the question is a matter of judgment and assessment in all the circumstances at the time the agreement was reached and the Tribunal is of the view that the Member at first instance's reasoning is correct, that is that the fence as constructed is substantially in compliance with the terms of the agreement between the parties.
13. Having regard to the Tribunal's conclusion, the claim for damages by the Appellant fails. In any case, the Tribunal does not believe it should have been permitted where it was not raised by the Appellant at first instance. The Appellant conceded that he only thought of claiming damages following the hearing at first instance.
14. Both parties have sought their costs of the appeal. The Respondent has been successful in relation to the appeal. We have carefully considered all the factors in relation to the appeal.
15. In our opinion the position adopted by the Appellant was clearly an arguable one in a difficult set of factual circumstances. The complex and detailed nature of the submissions and argument reflects that.
16. Taking all matters into consideration, including the amount at issue, the Tribunal is not of the view as an exercise of its discretion that an order for costs would be warranted in the present proceedings.
17. The Tribunal makes the following orders: 1. the appeal is dismissed; 2. leave to rely on the fresh evidence is refused in relation to both parties; 3. the parties are to pay their own costs of the appeal; 4. any stay in relation to the orders made on 29 March 2016 is vacated.

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: 29 June 2016