These proceedings come before me on remitter from the Appeal Panel of the Tribunal.
In 2017 the respondents in these proceedings, Mr Hayes and Ms Henmen, brought an application under the Dividing Fences Act 1991 (NSW) seeking orders for the construction of a dividing fence on the boundary between their property and that owned by the applicants in these proceedings, Mr and Mrs Hylton.
The respondents' application relied upon a notice pursuant to s 11 of the Dividing Fences Act served upon the applicants by the respondents on 5 April 2017. There were three quotations attached to the notice. The lowest quotation was for a Colorbond fence at a cost of $2,035 or for "1.8[m] TPLap + Cap $1900". The other two quotes were for "1800mm high T/Pine Fence…Lapped and Capped $3,150" and "3 rail butted paling treated pine fencing…Lap and Cap style" in the amount of $2,662.
The respondents' application came before the Tribunal against the background of an ongoing dispute between the parties regarding the construction of retaining walls.
At the initial hearing of the respondents' application on 29 November 2017, after the Member presiding had made it clear that the Tribunal had no jurisdiction to resolve the dispute regarding retaining walls, the parties consented to orders relevantly in the following terms:
1. "The applicants arrange for a 1.8 metre timber lap and cap fence to be built along the common boundary line of the two properties the subject of this dispute.
2. That a 1.8 metre timber lap and cap fence be built along the common boundary line of the two properties the subject of this dispute by a fencing contractor of the applicants' choosing. The boundary line is that which is indicated on the survey by DP Surveying, Land & Engineering Surveyors dated 11 January 2016 ref 2832 which is Annexure E to the Statement of Mr Hayes dated 27 July 2017, between the two properties being Lot 51 of DP ***** and Lot 33 DP *****. If there is any issue whatsoever about what has been described in this order the parties can apply for access to the Tribunal's file as I have highlighted the common boundary line in orange highlighting.
3. That the contributions for the fencing work be $950 from the respondents and the rest paid for by the applicants. This is on the basis of 50% of the cheapest quotation in evidence today. The respondents are to pay their $950 contribution into the applicants' solicitor's trust account within 14 days of these orders. No order is made against the applicants' solicitor on the basis that he will pay the fencing contractor in accordance with the terms and conditions that bind the applicants and the contractor, in due course, as an officer of the Tribunal.
4. An order determining the time within which the fencing work is to be carried out which is 12 months from today being by 29 November 2018. The respondents must do their best to assist the applicants to complete the fence as per Order 2 as quickly as possible.
5. The parties must allow such access as is reasonably required to enable fencing contractors engaged by the applicants to give further quotations for the proposed fencing work.
6. The parties must allow such access as is reasonably required to enable the construction of the fence by the fencing contractor of the applicants' choice."
The applicants paid the $950 and the respondents retained the contractor who had provided the quote for $1,900 to construct the fence. The fence was constructed of treated pine.
It transpired that, in the relevant area, by reason of the risk of bushfires, the Local Council requires that fences be constructed of fire resistant materials such as steel or hardwood. Treated pine is not a fire resistant material. The Council became aware of the construction of the fence in circumstances which I will canvass below and issued a notice requiring demolition of the fence.
I note that by the time of the hearing before me, Mr Hayes had demolished the fence and had incurred tip costs of $50.40 in disposing of the debris.
After receiving the notice requiring demolition of the fence, the applicants commenced proceedings in the Tribunal seeking to renew the application (pursuant to clause 8 of Schedule 4 to the Civil and Administrative Tribunal Act 2013 (NSW)) on the basis that the respondents had failed to comply with the orders made on 29 November 2017.
That application was dismissed by the Tribunal in circumstances canvassed in the Appeal Judgment ([2019] NSWCATAP 18) which it is not necessary to consider further. The appeal by the applicants was upheld on the basis that they had been denied procedural fairness. The Appeal Panel did not make any comment regarding the substance of the dispute.
At the hearing before me the applicants were represented by Mr Muriniti, solicitor, instructed by Ms Sarah Hylton, the applicants' daughter, who has been responsible for managing the proceedings on her parents' behalf.
The respondents appeared in person and both addressed the Tribunal.
[2]
Evidence
The material before the Tribunal included all the material which had been placed before the Appeal Panel. The parties did not refer me to most of that material. The material to which I was referred by Mr Muriniti and regard as being tendered in evidence by the applicants was:
the statement of Sarah Hylton dated 22 November 2017 and annexures (being Tab 1 of the applicants' "Supplementary Book";
the statement of Sarah Hylton dated 21 November 2017 (being Tab 2 in the applicants' Supplementary Book);
the transcript of the original hearing on 29 November 2017 (being Tab 8 in the applicants' main folder of evidence);
the applicants' renewal application dated 31 July 2018;
a photograph showing the current state of the boundary and a screenshot of a web page both of which were admitted subject to relevance;
two letters forwarded by the respondents to the applicants and to Mr Muriniti dated respectively 16 February 2018 and 21 February 2018 (being Tabs 12 and 13 in the applicants' main folder of evidence);
the site plan relating to renovations currently being conducted by the applicants and two quotes obtained by Ms Sarah Hylton.
The respondents placed before me a bundle of material headed "Reply to Renewal Proceedings" and also referred to a statement of Mr Hayes dated 16 November 2018 and to page 9 of the annexure to Ms Hylton's statement of 22 November 2017, being a letter from Ms Hylton to the respondents dated 11 March 2016.
The respondents also tendered a quotation from Elite Fencing dated 12 April 2019 and a receipt dated 7 April 2019 for tipping fees in the amount of $50.40.
Each of Ms S Hylton and Mr Hayes gave oral evidence and was asked questions by the other side and by the Tribunal.
Mr Muriniti submitted that the consent orders, on their proper construction, required the respondents to arrange the construction of a lap and cap fence complying with all legislative requirements including the Council's requirement that it be fire resistant.
Mr Muriniti relied upon s 4 of the Dividing Fences Act, particular sub-paragraphs (e) and (f) which provide:
4 Determination as to "sufficient dividing fence"
In any proceedings under this Act, the Local Court or the Civil and Administrative Tribunal is to consider all the circumstances of the case when determining the standard for a sufficient dividing fence for the purposes of this Act, including the following:
…
(e) any policy or code relating to dividing fences adopted by the council of the local government area in which the adjoining lands are situated,
(f) any relevant environmental planning instrument relating to the adjoining lands or to the locality in which they are situated,
Mr Muriniti submitted that it was implicit in the fact that the Tribunal made the orders under the Dividing Fences Act, that the fence the respondents were required to construct be a fence which complied with legislative requirements.
Mr Muriniti also submitted that Mr Hayes had been aware of the requirement that the fence be fire resistant. He pointed to the letter from Ms Sarah Hylton dated 11 March 2016, which Mr Hayes acknowledged receiving, in which Ms Hylton referred to the requirement that the fence be fire resistant and to the fact that at the time the respondents acquired their property, it had been subject to a demolition order in respect of the rear deck (apparently because it was not constructed of fire resistant material).
Mr Hayes' evidence was that by the time it came to the service of the fencing notice he did not recall that the fence needed to be fire resistant. Mr Hayes also gave evidence that he had no knowledge at that time whether treated pine was an approved material for the construction of the fence.
I accept Mr Hayes' evidence. He appeared to be genuinely seeking to tell the truth. His evidence is also in my view inherently likely. I see no reason why Mr Hayes would seek orders for the construction of a fence which he knew would be liable to be ordered to be removed.
Ms Hylton gave evidence that she did not realise that the quote for $1,900 was for a treated pine fence. She said she had no reason to understand that the letters "TP" appearing on the quote stood for "treated pine". She maintained that position notwithstanding that she acknowledged that it was clear that the other two quotes attached to the fencing notice referred to treated pine.
Ms Hylton also gave evidence that she had not known at the time of the consent orders that treated pine was not an acceptable material. Ms Hylton said that she had discovered that fact after the fence had been completed when she had been told that by a fire safety inspector who had been inspecting works on her parents' property.
I have some doubt about this evidence, as documentation from the Council, included in the annexures to Ms Hylton's statement, disclosed that she had made a complaint to Council about the construction of the fence in treated pine, specifically stating that the fence was required to be of hardwood because of the bushfire rating, on 29 March 2018, when the fence was in the course of construction.
Ms Hylton sought to suggest that the Council documents might be unreliable because the Council officer who subsequently investigated the matter had been the subject of a complaint by her. However, one document produced from the Council was a call log dated 29 March 2018, recording the substance of Ms Hylton's complaint to the Council, which was not prepared by the Council officer about whom Ms Hylton had complained.
[3]
Determination
It seems to me that it does not matter whether Ms Hylton knew at the time of the consent orders that treated pine was not an acceptable material.
In my view, the consent orders do not, properly construed, require the construction of a hardwood fence. It is, in my view, clear from the background circumstances, including the fact that the orders reflect a cost of construction of $1,900, which is explicitly acknowledged as being the amount of "the cheapest quotation in evidence" and is clearly referable to the quotation for that amount attached to the fencing notice, that the parties intended that the respondents would, if they chose, be entitled to retain the contractor who had provided that quotation, to construct the fence, the subject of that quotation.
It was not necessary for the Tribunal to enter upon an examination of whether the fence proposed would be compliant with Council requirements when the parties had agreed to consent orders. As an Appeal Panel stated in Yuen v Thom [2016] NSWCATAP 243 at [45]:
45 … Where the parties have struck a bargain and approach the Tribunal to make consent orders, it is not for the Tribunal to dissuade the parties from their bargain. The Tribunal need only be satisfied that there is an agreement, it has been reduced to writing, signed by the parties and that the Tribunal has power to make the types of orders sought: s 59 of the Act. Where those factors are established, as here, it is not unfair or inequitable to make orders to reflect the agreement.
To the extent that it might be said that the Tribunal did not have the power to make orders requiring the construction of a treated pine fence, the orders would be unenforceable.
On the other hand, if, contrary to my conclusion above, the orders did require the respondents to build a compliant fence, in my view the orders were clearly, if I accept Ms Hylton's evidence, founded upon a common mistake which was fundamental to the parties' agreement (in that both parties believed that the fence, the subject of the quote for $1,900 attached to the fencing notice, was a satisfactory fence), and were therefore susceptible to being set aside.
In Yuen v Thom the Appeal Panel said at [33] to [39]:
33. At common law, a consent order may be set aside on the same basis that the underlying agreement may be set aside. This was considered by the Appeal Panel in Loch v New South Wales Land and Housing Corporation [2014] NSWCATAP 110. The Appeal Panel said at [27]:
At common law, the grounds for setting aside a consent order are the same as those for setting aside the agreement on which it is based: Bernard Cairns, Australian Civil Procedure (8th ed, 2009 Law Book Co) at 418. In Harvey v Phillips (1956) 95 CLR 235, the High Court said, at 243-4, that:
The question whether the compromise is to be set aside depends upon the existence of a ground which would suffice to render a simple contract void or voidable or to entitle the party to equitable relief against it, grounds for example such as illegality, misrepresentation, non-disclosure of a material fact where disclosure is required, duress, mistake, undue influence, abuse of confidence or the like.
37. To set aside a consent order on one of the above bases, it must be possible to point to some contumelious conduct on behalf of the respondent. For instance, in the case of duress it must be shown that illegitimate pressure was placed on the appellant such that there was no reasonable alternative for her but to submit: Crescendo Management Pty Ltd v Westpac Banking Corporation (1988) 19 NSWLR 40, 46A. There is no suggestion that illegitimate pressure was brought to bear, the complaint here is that the appellant did not fully understand the process.
38. With respect to undue influence one must point not only to a source of power to deprive another person of free voluntary consent, but also the result of the actual influence: Johnson v Buttress (1936) 56 CLR 113, 134. This is not a case where one of the presumed relationships of undue influence arises such as for a parent and child or solicitor and client: White v Wills [2014] NSWSC 1160, [64], [75]. Here, no actual influence was pointed to.
39. In relation to mistake, the misapprehension must arise in relation to a fact, law or circumstances that affects the substance of an obligation or the mistaken party's motives for entering into the contract: Clasic International Pty Ltd v Lagos (2002) 60 NSWLR 241, [39], [42]-[43]. Assuming for the purposes of argument, that the appellant was mistaken as to whether or not she could refuse the respondent's offer, the question is whether that mistake was of a type that vitiates her consent. A common mistake arises when the mistaken belief is held by both parties: Clasic International Pty Ltd v Lagos (2002) 60 NSWLR 241, [41], applying Solle v Butcher [1950] 1 KB 671, 693. That does not arise here. A unilateral mistake is where one party is mistaken but the other party should have been aware of the mistake: Taylor v Johnson (1983) 151 CLR 422, 432. The appellant does not contend that the respondent ought to have known of any mistake upon which she was operating. A mutual mistake arises where both parties are mistaken, but their mistakes are different such that there is no meeting of minds: Charitou v The Owners of Strata Plan 10394 [2015] NSWSC 1059, [22]. Here, the parties both understood the bargain that was made; there is no misapprehension about the terms of the purported agreement. The issue is, was there an agreement reached even though the appellant did not understand the bargaining process. The Appeal Panel is of the view that the answer is yes because a reasonable observer would have concluded that an agreement was reached: see N Seddon, R Bigwood and M Ellinghaus, Cheshire & Fifoot Law of Contract (LexisNexis, 10th Aus ed, 2012) at [3.9].
In Clasic International Pty Ltd v Lagos (2002) 60 NSWLR 241 Palmer J stated at [39] to [43]:
39 The Defendants invoke the principle that equity may set aside a contract if both parties were induced to enter into it by a common mistake as to a fundamental matter, provided that the party seeking to set aside the contract was not at fault.
40 The principle is expressed thus by Denning LJ in Solle v Butcher [1950] 1 KB 671, at 692:
"A contract is also liable in equity to be set aside if the parties were under a common misapprehension either as to facts or to their respective rights, provided that the misapprehension was fundamental and that the party seeking to set it aside was not himself at fault."
41 Mr Carruthers does not submit that Solle v Butcher is not good law in Australia. He makes only two submissions. First, that it is not yet clear in Australia that the principle of common mistake is applied to a mistake of law rather than only to a mistake of fact and in the present case there was a mistake of law not of fact; second, the terms of s.16(2) RLA are mandatory and override any rights under the general law which may otherwise operate upon the validity of a retail shop lease.
42 I do not need to consider the vexed question of whether the mistake in the present case is one of fact or one of law. As to whether, in the law of Australia, the doctrine of common mistake applies to a mistake of law, I need do no more than set out the following passage from Cheshire and Fifoot's Law of Contract , 8th Aust Ed., para.12.8:
"Operative mistake traditionally has been confined to mistakes of fact and not of law. This distinction has always been blurred and has been notoriously difficult to apply. It appears that equity did not draw a clear line between mistakes of fact and law. If there was such a rule, it was often honoured in the breach. In Western Australia the law/fact distinction has been abolished by legislation (with certain safeguards). The whole question has now almost certainly been laid to rest by the decision of the High Court in David Securities Pty Ltd v Commonwealth Bank (1992) 175 CLR 353. In that case the distinction between mistake of law and mistake of fact was rejected in the light of a very considerable body of judicial and academic criticism of the distinction:
… the rule precluding recovery of moneys paid under a mistake of law should be held not to form part of the law in Australia.
Admittedly, this was a case about the law of restitution and so it could be argued that the case has nothing to say about mistakes of law in contract. However, the High Court has also rejected the distinction between law and fact for the purpose of estoppel, (see Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387; Foran v Wight (1989) 168 CLR 385; Commonwealth v Verwayen (1990) 170 CLR 394) and so the conclusion is inescapable that the distinction must now be regarded as dead, wherever it might arise."
43 In my opinion, the conclusion expressed in the last sentence of this passage is correct and ought now to be accepted as the law in Australia.
If, contrary to her evidence, Ms Hylton was actually aware that the proposed fence was treated pine and that treated pine was not an acceptable material, she must have understood that the respondents were operating under a misapprehension, and failed to correct it. In those circumstances the consent orders would also be liable to be set aside on the principles enunciated in Yuen v Thom.
In their renewal application, which is the matter before me, the applicants seek orders that the respondents construct a hardwood fence at their own cost.
Regardless of how I reach the result, it is clear in my view that the Tribunal should not order the respondents to construct a replacement fence at their own cost. The appropriate outcome is that the parties should share the cost of the replacement fence.
The parties agreed at the hearing before me that, in the event I was not minded to make an order that the respondents construct a replacement fence at their own cost, I should make an order requiring the applicants to construct a colorbond fence in cream colour in accordance with the quotation from Elite Fencing dated 12 April 2019 in the amount of $2,800. Ms Sarah Hylton expressly offered to take responsibility for the construction of the fence.
Mr Muriniti submitted that in the event I made an order that both parties share the cost of the fence, the applicants should nevertheless receive credit for the $950 they have already paid to the respondents for the original fence.
In light of my findings above I see no basis for such an order. The construction of a non-complying fence was not solely the responsibility of Mr Hayes. The parties share the responsibility for that error.
It follows that the applicants should also be liable for half the cost of disposing of the non-complying fence. As Mr Hayes demolished the fence himself there is no cost of demolition to be taken into account. The only relevant cost is the cost of the tipping fees relating to the disposal of the debris.
The applicants also ask that the construction of the replacement fence be delayed four months so as to permit their contractors to complete work on a retaining wall on their property. The respondents opposed that course pointing out that they have a child and a dog and the construction works are a danger to both. The respondents acknowledged that they have put temporary fencing in place.
To avoid the possibility of damage to the fence while the works on the applicants' property are being completed, I consider it to be the better course to permit the delay sought by the applicants, despite the inconvenience this will cause to the respondents. As the orders I propose to make will require the applicants to arrange the construction of the fence, I consider it is efficient to direct that the fence be completed within six months of the date of these orders, leaving it to the applicants to arrange a convenient time for construction and noting that the orders I make should not be construed as requiring construction to occur before the completion of the retaining works on the applicants' land, provided that occurs within six months.
[4]
Costs
Both parties sought their costs of the application.
Pursuant to s 60 of the Civil and Administrative Tribunal Act I can only make an order for costs if there are special circumstances. In that regard s 60(3) provides:
(3) In determining whether there are special circumstances warranting an award of costs, the Tribunal may have regard to the following:
(a) whether a party has conducted the proceedings in a way that unnecessarily disadvantaged another party to the proceedings,
(b) whether a party has been responsible for prolonging unreasonably the time taken to complete the proceedings,
(c) the relative strengths of the claims made by each of the parties, including whether a party has made a claim that has no tenable basis in fact or law,
(d) the nature and complexity of the proceedings,
(e) whether the proceedings were frivolous or vexatious or otherwise misconceived or lacking in substance,
(f) whether a party has refused or failed to comply with the duty imposed by section 36 (3),
(g) any other matter that the Tribunal considers relevant.
Although this dispute has clearly been expensive for both parties, I am unable to conclude that there are special circumstances. In particular: I do not consider that either party has "conducted the proceedings in a way that unnecessarily disadvantaged another party"; I do not consider that either party "has been responsible for prolonging unreasonably the time taken to complete the proceedings"; and I do not consider that either party "has made a claim that has no tenable basis in law". The issues involved were difficult and it cannot be said that either party maintained a hopeless position or failed to comply with the duty imposed by s 36(3) of the Civil and Administrative Tribunal Act, that is the duty to co-operate with the Tribunal to give effect to the "guiding principle", "to facilitate the most quick and cheap resolution of the real issues in the proceedings".
Accordingly I will order:
1. Within six months of the date of this decision the applicants are to arrange the construction, along the boundary line of the properties the subject of this dispute, of a Colorbond fence 1.8 metres high in cream.
2. The respondents are to pay the applicants, to their solicitors' trust account, half the cost of construction of the fence, as established by a contractor's invoice, less the sum of $25.20 being half the tip fees incurred by the respondents in disposing of the pine fence. That payment is to be made within seven days of completion of the fence.
3. There will be no order as to costs of the application.
[5]
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: 02 July 2019