The Extracurial dealings between the parties
20The dealings between the parties and their representatives, outside the formal court process, must also be examined, as the movement from the 8 July draft document to the 22 August agreed document is very material to both sides of the argument on costs.
21The applicant was originally represented by Massey Bailey solicitors, but Peter John Snelgrove (whose affidavits of 3 and 22 August 2011 have been read on costs) has been acting for Mr Harrison in both the Supreme Court proceedings and in the encroachment dispute since November 2010. Counsel for the applicant is Ms L M Byrne. At the hearing on costs she read two affidavits from Mr Snelgrove.
22The respondent appears to have been represented throughout by Redmond Hale Simpson ('Redmonds' - primarily Michael John Sommerville), briefing Mr R W Tregenza of counsel. At the hearing on costs, Mr Tregenza read some of an affidavit sworn by Mr Owen on 29 July 2011, and relied on some other documents. (Some were included in Exhibit ' E01 ' to that affidavit, and others were tendered before me as Exhibit 01 ).
23On 29 September 2009, Mr Harrison wrote personally to Mr Owen, attaching a set of documents regarding his development application (2009/136) for works at No.178, the Lockley survey report re No.178 dated 26 February 2004, the Holt survey report re No.180 dated 28 May 2004, drawings, sketches and photographs, and a Statement of Environmental Effects related to his proposed alteration to No.178. The letter concludes: " Since the Development Application involves work relating to a party wall, Leichhardt Municipal Council requires your written consent as the neighbouring owner and joint owner of the party wall. The purpose of this letter is to seek your written consent to the attached Development Application ".
24On 2 October 2009, Redmonds wrote to Massey Bailey regarding that letter, saying: " As you can see, this letter makes no reference to you acting in this matter [the Supreme Court proceedings] and we would be pleased if you could let us know whether you are acting for Mr Harrison in this regard or at all, so that we may provide a response to the matters raised therein ".
25On 23 October 2009, Massey Bailey and Elizabeth Olsson SC (as Her Honour then was) wrote to Leichhardt Council, noting that the proposal set out in the DA for No.178 involved the removal of the upper floor encroachment of No.180 over No.178 and other relevant works. The objective of the proposal contained in the application was stated to be achievement of compliance with condition 27, and the letter asserted damage to the party wall by the encroachment.
26Harrison wrote to a Council officer on 27 October 2009, and Council replied to Mr Harrison on 13 November 2009, relating also to a meeting held on a pre-DA basis on 12 November. The Council had considered various expert reports, the surveys, and Mr Harrison's letter of 27 October. There had been a site inspection. The Council noted that the proposal involved:
(i) Removal of a structure erected without development consent, being the extension to the party wall that encroaches onto No.178 at Nelson Street; and
(ii) Repair of the of damaged masonry ,
Council noted and advised that no development consent was required to demolish a structure erected without the prior consent of the Council, namely the " extension to the party wall which encroaches onto No.178 .... Similarly, minor repairs to an existing brick wall do not require development consent ".
27Massey Bailey wrote to Redmonds on 26 November 2009, noting that Mr Owen had not consented to the encroachment DA, and enclosing a copy of the Council's letter of 13 November 2009. The letter continued:
Given that the removal of the encroachment is a matter that is outside the scope of the Heads of Agreement and is a matter for our client we are instructed that our client intends to remove the encroachment in accordance with the details set out in the Encroachment DA served on your client on 29 September 2009 and in accordance with good building practice and as soon as possible on an urgent basis.
28The reference to " Heads of Agreement " would appear to relate to the outcome of an attempt to mediate the Supreme Court proceedings. Mr Ian Bailey SC appears to have been involved. Some agreement is included among the documentation in 'E01' to Owen's affidavit, but was not read on the question of costs. The outcome appears to remain a matter of continuing dispute.
29Redmonds replied to that Massey Bailey letter on 10 December 2009, noting that in about September 2008, Harrison had filed a Notice of Motion seeking leave to file a further amended summons in the Supreme Court matter, seeking specific relief against Owen in respect of the encroachment. Attention was drawn to various remarks made by McDougall J on 27 November 2008. The letter continued:
The difficulty of course as you know now is your client's insistence on taking these matters into his own hands, indicating to us that parts of the wall will be removed on an urgent basis.
...
As it appears that your client is frustrating all attempts by the relevant parties to complete and perform the scope of works, we consider it inappropriate and a clear abuse of process for your client to now threaten works to be performed to the property in respect of the encroachment.
We require a written undertaking from your client that he will refrain from commencing any work in relation to the encroachment, until such time as there is some definite progress underway with respect to the matters raised in the Heads of Agreement. Once this has occurred, we will be able to liaise with you to hopefully reach a resolution on this issue.
30Massey Bailey wrote to Redmonds on 15 February 2010. By this stage the Supreme Court proceedings had been stayed. The letter pointed out that it was plain to all parties that real progress under the Heads of Agreement has not been made. The letter also points out that Owen has received advice from the Council which:
... confirms that outside wall of the upstairs bedroom of your client's property is built exclusively on and encroaching on our client's side of the party wall. Its removal and the removal of the bricks encroaching on our client's property would reduce the load on the party wall and in turn would assist in the overall rectification of No.178 and No.180. According to the LMC our client is entitled to remove those bricks and return them to your client.
As the encroachment is outside the scope of the Agreement, our client is exploring how this can be achieved in accordance wit the LMC requirements and the BCA.
31The letter went on to note that Harrison had not taken any steps to remove the encroachment and that Owen's side had not replied concerning removal. It continued:
The encroachment issue cannot be resolved unless its removal is incorporated into the rectification works under the Agreement. The scope of the rectification works under the Agreement is not yet known. Mr Bailey has determined to not consider or take into account the encroachment as part of any rectification works under the Agreement. It is clear that there will not be any definite progress under the Agreement in the near future and that its goals cannot be achieved.
...
Our client will not provide the undertaking as drafted and sought by your client in your letter. The undertaking sought is unreasonable given the fact that the rectification works are as yet still unknown, the encroachment issue is not to be taken into account as part of those works and further investigative works are yet to take place.
What is now plain is that the objectives of the Agreement cannot be achieved either by the method proposed by Mr Bailey or without consideration of the encroachment. Whilst your client continues to deny the encroachment it is clear that the resolution of this matter cannot be achieved under the Agreement and it is necessary to approach the Court for orders.
32On 18 February 2010, Redmonds wrote to Massey Bailey, referring to the proposed amended summons in the Supreme Court proceedings, especially a paragraph thereof in which Mr Harrison sought orders under the Encroachment of Buildings Act . The letter said that Mr Owen was seriously considering consenting to the orders sought, but wished to ascertain his financial exposure before deciding. Massey Bailey were asked to advise whether Harrison would allow a valuer appointed by Owen to inspect the premises to give an opinion as to s 4 of the Encroachment of Buildings Act (which deals with matters of compensation). There was no reply by Harrison or his solicitors, and, on 20 May, Redmonds wrote a follow-up letter seeking a response.
33These proceedings were commenced on 4 March 2011, and Redmonds filed their appearance on 11 March 2011. On that same day, Snelgrove wrote to Redmonds suggesting that the Land and Environment Court proceedings not proceed further when they came on for first directions on 25 March 2011, until the expert evidence was " on " in the Supreme Court. By letter dated 15 March 2011, Mr Sommerville agreed to the adjournment, and accepted the offer that Snelgroves would mention the matter on behalf of both parties.
34On 29 April 2011, Byrne emailed Snelgrove advising what occurred at the directions hearing before Biscoe J that morning. Owen's side wanted access for a valuer, and were talking about an easement, not removal of the wall. " Mr Tregenza did not want to take a direction that they serve any evidence in the event that they may want to apply for a stay of these proceedings pending the determination of the proceedings in the Supreme Court. His Honour understood that but said any such concern was met by the liberty to apply to bringing the matter back. He was keen to move the matter forward, unlike the Supreme Court proceedings ... ".
35During May Snelgrove wrote to Redmonds serving various expert reports, at least some of which had also been served in the Supreme Court proceedings, and on 1 June Redmonds served on Snelgrove a valuation report.
36On 27 May 2011, Byrne emailed Snelgrove to report on the directions hearing before Craig J that morning. The matter was stood over to Friday 3 June 2011 as the respondent's evidence was not ready to file. She notes in the email that Craig J " was satisfied we had complied with the directions and I explained that we had only served but not filed our reports because there was some prospect of resolving the matter. He mentioned the possibility of transfer and I briefly explained that the Supreme Court proceedings were not anywhere close to a hearing of the substantive matter and we wanted to take some practical steps towards getting the house fixed up - hence this application in the LEC. Mr Tregenza stated they had thought about it but were not going to make any such application ".
37Redmonds wrote at some length to Snelgroves on 12 July 2011, in response to the document handed up to Pepper J. Mr Sommerville noted in the second paragraph of the letter ('E01', p18): " It came as a surprise to Mr Tregenza and us that Mr Harrison's legal representative submitted to Her Honour that the draft Orders did not satisfy the entirety of the relief sought in the Application (save for costs and the terms and conditions upon which the first floor wall was to be removed); that additional relief being the removal of an alleged encroachment of the first floor party brick wall ".
38Mr Sommerville pointed out that there was no reference to the ground floor party wall in the class 3 application, and that the annexed Lockley survey made clear that the encroachment complained of was the first floor wall. He then noted that the June 2011 Lockley survey report had already been served in the proceedings, and that it also identified only an encroachment by the " additional first floor adjoining wall ". Mr Owen had set out to meet a case in relation to the first floor wall only, and no amendment of the class 3 application had been sought.
39Repair of the ground floor party wall remained the subject of some dispute following a mediation, and Mr Sommerville submitted that Mr Harrison would have to bring proceedings in the Supreme Court, under s 10 of the Encroachment of Buildings Act , to remove any alleged encroachment of the party wall and that any amendment to include the ground floor party wall in the Land and Environment Court proceedings would be an abuse of process.
40On 3 August 2011, Snelgrove wrote Redmonds in reply to the letter of 12 July 2011, disagreeing with some conclusions expressed in that letter in relation to Mr Harrison's application, and affirming that Harrison's position was as set out in the document(s) of 29 June 2011. The letter (in Exhibit 01 ) continued:
Our client does not seek the removal of the ground floor party wall but seeks the repair of consequential damage to the original ground floor party wall caused by the encroachment.
Our client's position remains unchanged and he requires the removal of that part of the wall that does encroach and for abundant clarity that your client repair the consequential damage that the encroachment has caused to the original ground floor party wall.
In addition, for abundant clarity we enclose the Orders that our client would agree to.
Accordingly, we do not accept that our client needs to make any application to amend.
41The attachment to that letter sets out the applicant's " proposed consent orders " in the following terms (also in Exhibit 01 ):
- The Respondent will remove the encroachment on the Applicant's property at 178 Nelson Street Annandale, Lot 1 in DP 910393, being that part of the additional first floor adjoining wall marked 'AB' shown on the plan of 9 June 2001 prepared by registered Surveyor Joseph Monardo, Lockley Land Title Solutions and described in the survey report dated 23 June 2011, that encroaches on the subject property by 0.13, 0.14 and 0.145 metres as shown on the said survey plan, on the following terms:
a. The work will commence within 14 days of the entering into consent orders;
b. The Respondent will make good any consequential damage caused by the removal of the encroachment;
c. The Respondent is to pay for the cost of removal of the encroachment and any work as identified in (b) above;
d. The works contemplated by (a) and (b) ('the proposed works'), are to be completed within 10 weeks of the commencement of the removal of the encroachments;
e. The proposed works are to be carried out in accordance with the Building Code of Australia and the development consent granted by Leichhardt Municipal Council No D/2001/895;
f. In the event that the costs of the proposed works will exceed $12,000 the Respondent's builder is required to take out Home Warranty Insurance with an approved insurer naming both the applicant and respondent as beneficiaries;
g. In the event that the Home Warranty Insurer referred to in the preceding paragraph will only note the Respondent as beneficiary the Respondent will indemnify the Applicant for any defective work by his builder in carrying out the proposed works.
h. The Respondent shall cause to have the proposed works carried out in accordance with a scope of works prepared by a structural engineer and will further upon completion of the proposed works have that work certified by a structural engineer;
i. The proposed works will be carried out by a licenced building contractor.
- The parties have liberty to apply on 3 days notice.
- The Applicant is to file a Notice of Discontinuance of the proceedings within 14 days of the completion of the removal of the encroachment on the terms agreed between the parties.
- Matter listed for directions hearing on the 2011 [fix as necessary] to be vacated if the Notice of Discontinuance is filed prior to this date.
- The Respondent is to pay the applicant's costs as agreed or assessed.
Notes:
- The Applicant will grant access to his property for the carrying out of any works contemplated by these orders, such access to be arranged through his solicitor in a reasonable time frame.
- Any further works to the first floor wall of No 180 Nelson Street Annandale or any other part of the Respondent's property are not to encroach on the Applicant's land, are to be built in accordance with the development consent granted by Leichhardt Municipal Council No D/2001/895, the BCA and are to be at the Respondent's expense.