Jukes v Larter

ex tempore Judgment 1Before me is an application to extend an interlocutory injunction that was originally granted by Hislop J on 25 March 2012 and then was extended by an undertaking given to the Court by the defendants. Mr Laughton SC for the plaintiffs has reformulated the relief sought in light of certain experts' reports that have recently been obtained. The matter proceeded before me as a contest over that reformulated relief. 2The plaintiffs, Mr and Mrs Jukes, are the owners and occupiers of 10 The Circlet, Rathmines, on Lake Macquarie. To the immediate north of their property is 8 The Circlet, Rathmines, which is owned and occupied by the defendants, Mr and Mrs Larter. Number 10 is higher than number 8. To the west of both properties is the street and to the east is Lake Macquarie. 3For a period of time Mr Larter has been excavating and building additions beneath his house. This work commenced in 2006 and comprises two stages. Stage 1 involved the excavation, underpinning of existing concrete strip footings, construction of a concrete block retaining wall and floor slabs. Stage 1 is situated beneath the western part of the home at number 8 and is now completed. The retaining wall built during stage 1 runs approximately halfway along the southern side of Mr Larter's home and is adjacent to Mr and Mrs Jukes' home. 4Stage 2 involves excavation and the building of retaining walls beneath the eastern part of the house at number 8. Stage 2 commenced in February of this year. It led to approximately three to four metres on the southern side of Mr and Mrs Larter's home being excavated but as yet no retaining wall for that portion has been built. This unexposed part is adjacent to Mr and Mrs Jukes' home. 5Mr and Mrs Jukes fear that the safety and integrity of their house might be jeopardised by the excavation work at number 8 having regard to the proximity and depth of the excavation work relative to the position of the two-storey northern wall and the supporting footings of their house at number 10. After the stage 2 works commenced there was correspondence between the legal representatives of the parties and the commissioning of experts' reports. On or around 8 March 2012 Mr Larter agreed to cease excavation work. On 23 March 12 Mr Larter resumed excavation work. Mr and Mrs Jukes then approached the Court. On 25 March 2012 Hislop J granted an ex-parte injunction restraining the undertaking of further excavation work. 6As I have indicated, since that time Mr and Mrs Larter have proffered undertakings in the form of the order that was made by Hislop J. Those undertakings were due to expire at 5 pm yesterday but, as I reserved my judgment overnight, they were extended until 5 pm today. 7Tendered before me on the hearing of this application were a number of reports from an engineer retained by Mr and Mrs Jukes, Mr John Burke, and an engineer retained by Mr and Mrs Larter, Mr P M Jessup from P M Engineering Services Pty Ltd and a firm of geo-technicians retained by Mr and Mrs Larter, Douglas Partners. 8The manner in which the plaintiffs framed the form of relief they sought was said to follow from various comments in the most recent reports from three sources. I address that relief below. 9At the outset it is necessary to note a debate over certain diagrams depicting the so-called "batter slope" of the recent excavation. The "batter slope" appears to be a geo-technical phrase which, at least in this case, projects the area of affectation arising out of the excavation work. It seems that any building or structure falling within the area of the batter slope may be adversely affected by excavation work. 10In October 2009 PM Engineering prepared a calculation sheet concerning the project, which included a batter slope. It depicted the footings of Mr and Mrs Jukes' home as falling outside the batter slope and a pathway to their property and the common fence falling within it. The calculations were premised on the depth of excavation to 2700 mm and a likely width between the low point of excavation and the footings of Mr and Mrs Jukes' home of 2500 mm. 11On or about 27 February 2012 Mr Jukes personally prepared a revised diagram of the batter slope based upon a depth of excavation of 3450 mm and a width of 1900 mm. This diagram depicted the footings to his house falling within the area of affectation. In a report dated 5 March 2012 Mr Burke commented on that diagram. In an affidavit filed on 24 March 2012, Mr Burke again commented on that diagram. He also addressed the reliability of the diagram prepared by P M Engineering in October 2009. In particular, he noted that that diagram relied upon a geo-technical report which was not directed to addressing the potential affectation of adjoining properties. 12Attached to the most recently obtained report from Douglas Partners is a further diagram depicting the batter slope. It is based upon a width of 2190 mm between the footings of Mr and Mrs Jukes' home and the low point of the excavation and a depth of excavation of 2350 mm. It also incorporates a recent geo-technical assessment of the soil being excavated. I understand that these measurements are now agreed by all the experts. This diagram depicts the footings of Mr and Mrs Jukes' home as just outside the batter slope. 13I have recounted the above for two reasons. First, because it was suggested that the original injunction that was granted by Hislop J occurred in circumstances where his Honour was mislead as to the appropriate measurements. It seems accepted that the measurements made by Mr Jukes and reflected in his diagram were inaccurate. However, this is a long way from establishing a misleading of Hislop J in the relevant sense. In fact, all the experts and Mr Jukes appeared to have revised their figures over time. The suggestion that his Honour was misled in the relevant sense is not made out. The suggestion that there was a provision to his Honour of deliberately inaccurate figures was unwarranted. 14Second, the changes to these diagrams over time confirms the need to be careful in placing reliance on them when seeking assurances of the likelihood that there will not be any damage to Mr and Mrs Jukes' property from the excavation work. The diagrams are merely an illustration of the potential area of affectation. They are dependent upon measurements which are imprecise and otherwise involve matters of judgment upon which persons may reasonably disagree. 15It is now necessary to set out the salient parts of the recent reports of the experts. In their report dated 3 April 2012 Douglas Partners stated, inter alia, under the heading "Comments": "Likelihood of affect on number 20 if excavation proceeds to its anticipated conclusion? ... The excavation for the heel of the retaining wall footing needs to be completed to allow retaining wall construction to proceed; For the sake of caution and in order to manage the risks associated with unsupported excavation, excavation further to the east should not proceed until the existing excavation is supported by the retaining wall; Reduction in unsupported length of excavation and construction in stages is a recognised method of managing risk of instability in excavations." (emphasis added) 16On the next page under the same heading, the authors proceed to state: "The footing of No 10, shown on Fig 3, would transfer its load directly to the rock beneath it (through the 01 m thickness of clay, as described in the log of Pit 2 of the report by Valley Civilab). The underside of the footing lies outside the zone of influence, as defined by the two batter slopes shown in Fig 3, attached as Annexure 1, and the risk of effect from the existing excavation is minimal. The footing, therefore is not affected by the "maximum batter" shown on Fig 3. These comments notwithstanding, the excavation face is vertical and there is some risk of instability associated with a vertical unsupported face. The risk can be reduced by minimising the time that the excavation is left unsupported and carefully monitoring the excavation until the support measures have been completed. Assumptions, Reasoning and Conclusions expressed by Mr Burke? Mr Burke states that "... there is a clear and present danger, growing hour by hour ..." (of removal of support to the land at No 10 by the excavation at No 8). In his affidavit and report, Mr Burke presents no technical basis for this conclusion. Having regard to Mr Burke's assessment, we are not able to assess the growth rate of the risk but we agree with the opinion that the risk of instability increases with time. It is our opinion that the retaining wall should be constructed as a matter of priority to provide support for the excavation." 17The report continues on p 8, again under the heading "Comments" to state as follows: "We consider the risk to No 10, due to the existing unsupported excavation at No 8, is low but is increased by the delay in completion of the retaining wall. The excavation over about 4 m to 5 m length is at the maximum proposed depth, except for the 200 mm deep heel for the retaining wall footing. We recommend that the retaining wall should be completed as a matter of priority to provide support for the excavation. Similarly, the permanent drainage measures should be completed as a high priority as part of the excavation support works. We recommend that the excavation and retaining wall construction at No 8 should be subject to weekly inspection by the engineer, P M Engineering Services Pty Ltd, who should record the progress of the works by means of notes and photographs, view the exposed soil and rock and, if appropriate, request Douglas Partners to inspect the site to check stability of the excavation and risks to structures at No 10." 18In his report of 4 April 2012 Mr Burke stated, inter alia, in relation to the Douglas Partners' report: "Burke Engineering Services agree with the recommendations described in section 6 of their report titled "Comments". In particular we highlight Douglas Partners recommendation that "the retaining wall should be completed as a matter of priority to provide support to the evacuation. Further we recommend that P M Engineers be requested to provide structural certification that the existing and future construction works are structurally adequate to support & resist the imposed loads including any loads from No 10." 19In their report dated 4 April 2012 P M Engineering stated, inter alia: "10.I note the recommendations of the Douglas Partners Report No. 49450.01 relating to inspections and staging of works. I have no objection to the works being carried out in two stages of approximately 4m and 3m lengths of excavation and retaining (as a risk minimisation strategy). I note, however, that if the entire works were carried out promptly, in one continuous operation with regular inspection of the works (including monitoring of the condition of the excavation embankment), the majority of risk would relate to structures above the maximum batter line such as pathways and the boundary fence. The number and spacing of inspections and any staging of the works can be determined once a scope of works, procedures, and program have been agreed to and confirmed by the owners of 8 The Circlet." 20Mr Laughton SC, for Mr and Mrs Jukes, contended that this material is capable of demonstrating to the relevant standard three matters. First, he submits that it is capable of demonstrating there is presently an appreciable risk to Mr and Mrs Jukes' home from the existing unsupported excavation. Second, he submits that there is a risk that any further excavation to the east of the existing point of the excavations on the southern boundary wall will exacerbate the existing risk from the unsupported excavation. Thirdly, he submits that whatever be the position in the past, Mr and Mrs Larter are now on notice of those matters, as they have been stated in their own experts' report. 21I agree and accept those three submissions. It is true that Douglas Partners described the risk from the existing excavation as low but that did not cut across their assessment that excavation further to the east should not proceed until the existing excavation is supported by the retaining wall. As I will explain, it is that observation which is critical to the reformulated relief that is sought. 22That reformulated relief was in the following terms: "1. Upon the plaintiffs' giving the usual undertaking as to damages, the defendants by themselves, their servants or agents are hereby restrained from undertaking any excavation whether by jack hammer or otherwise on the property at 8 The Circlet, Rathmines until further order of the Court save and except that the defendants may undertake such excavation as is necessary to construct a retaining wall on the exposed part of the excavation on the southern boundary of 8 The Circlet, Rathmines. 2. The defendants allow John Burke, Engineer, or his nominee to attend upon the property at 8 The Circlet, Rathmines, for the purpose of carrying out inspections from time to time of the continuation of the retaining wall." 23There are a number of suggested amendments to these orders that were debated, to which I will return. For present purposes, it is important to note how prayer 1, if made, would affect Mr and Mrs Larter. 24By its terms, Prayer 1 will prevent further excavation work except to the extent necessary to erect any retaining wall over the portion of the exposed excavation work on Mr and Mrs Jukes' northern boundary adjacent to their house. 25Counsel for Mr and Mrs Larter has sought to characterise the relief sought as a form of mandatory injunction. I do not think that is correct. If made, it will be open to Mr and Mrs Larter to do nothing and leave the excavation as is, with all parties wearing the risk of adverse consequences should they eventuate. It is true that this is unlikely to happen if the order is made. I think it is most likely that Mr Larter would, if the relief were granted, modify his approach to the balance of the work and first build a retaining wall on the exposed section before endeavouring to complete the balance of the excavation. However, if that was to occur, it would be a result of his choice in responding to the injunction. It will not convert the injunction to a mandatory order. 26To grant an order in the form sought in prayer 1 I must apply the test appropriate for the grant of interlocutory relief. The test was considered in ABC v Lenah Game Meats Pty Ltd (2001) 208 CLR 199. At [13] Gleeson CJ quoted from the well-known passage from Mason ACJ in Castlemaine Tooheys Ltd v South Australia (1986) 161 CLR 148 at 153 to the effect that: "In order to secure such an injunction the plaintiff must show: (1) that there is a serious question to be tried or that the plaintiff has made out a prima facie case, in the sense that if the evidence remains as it is there is a probability that at the trial of the action the plaintiff will be held entitled to relief; (2) that he will suffer irreparable injury for which damages will not be an adequate compensation unless an injunction is granted; and (3) that the balance of convenience favours the granting of an injunction." 27In relation to the first element, Gummow and Hayne JJ at [91] emphasised the need to identify the "legal ... or equitable rights which are to be determined at trial and in respect of which there is sought final relief which may or may not be injunctive in nature." 28In this matter, the final form of injunctive relief that Mr and Mrs Jukes may seek is quia timet relief under s 66(2) of the Supreme Court Act 1970 to restrain a threatened or apprehended breach of the duty of care owed by Mr and Mrs Larter. The existence of such a duty of care is either assumed or created by s 177 of the Conveyancing Act 1919 which provides: "177 Duty of care in relation to support for land (1) For the purposes of the common law of negligence, a duty of care exists in relation to the right of support for land. (2) Accordingly, a person has a duty of care not to do anything on or in relation to land (the supporting land) that removes the support provided by the supporting land to any other land (the supported land). (3) For the purposes of this section, supporting land includes the natural surface of the land, the subsoil of the land, any water beneath the land, and any part of the land that has been reclaimed. (4) The duty of care in relation to support for land does not extend to any support that is provided by a building or structure on the supporting land except to the extent that the supporting building or structure concerned has replaced the support that the supporting land in its natural or reclaimed state formerly provided to the supported land. (5) The duty of care in relation to support for land may be excluded or modified by express agreement between a person on whom the duty lies and a person to whom the duty is owed. (6) Any such agreement: (a) has effect in relation to any agent of the person on whom the duty lies, and (b) has effect in relation to any successor in title of the supported land if the agreement is embodied in a registered easement for removal of support relating to that land. (7) The right to agree to the removal of the support provided by supporting land to supported land is a right of the kind that is capable of being created by an easement. (8) Any right at common law to bring an action in nuisance in respect of the removal of the support provided by supporting land to supported land is abolished by this section. (9) Any action in negligence that is commenced after the commencement of this section in relation to the removal of the support provided by supporting land to supported land may be wholly or partly based on something that was done before the commencement of this section. However, this subsection does not operate to extend any period of limitation under the Limitation Act 1969. (10) This section extends to land and dealings under the Real Property Act 1900. (11) This section does not apply in relation to any proceedings that were commenced before the commencement of this section. (12) A reference in this section to the removal of the support provided by supporting land to supported land includes a reference to any reduction of that support. (13) This section binds the Crown in right of New South Wales and, in so far as the legislative power of the Parliament of New South Wales permits, the Crown in all its other capacities." 29This provision was discussed in detail by Macready AsJ in Piling v Prynew [2008] NSWSC 118. At [55], his Honour construed the phrase "support for land" in s 177(1) as extending to "support for the land and the buildings erected upon it", which in this case would be Mr and Mrs Jukes' home. 30It is an interesting question as to how Divisions 1 and 2 of the Civil Liability Act 2002 would apply to a claim for relief in the form of a quia timet injunction to restrain a threatened or apprehended breach of a duty of care. Subsection 5A(1) of the Civil Liability Act 2002 only purports to apply to any claim for "damages" and not to an application for an injunction. I need not dwell on this because, in my view, irrespective of whether those provisions apply or it is the common law (to the extent there is any difference), there is a prima facie case in the sense discussed in Castlemaine Tooheys v South Australia for final quia timet relief restraining any further excavation to the east of the existing excavation. On the evidence, such further excavation without the building of a retaining wall on the existing excavation would increase the risk of danger to Mr and Mrs Jukes'home. In my view, that is the effect of the material from Douglas Partners that I have outlined above. 31In the light of the relief as formulated, it is unnecessary for me to decide at this stage whether there is a prima facie case for final relief in the form of a mandatory injunction requiring the building of a retaining wall to the current exposed portion of the excavation. 32I am further satisfied of the second and third elements discussed in the passage from Castlemaine Tooheys that I have extracted above. In this case, the irreparable injury is the increased risk flowing from the further excavation to the east of the existing excavation. The balance of convenience strongly favours Mr and Mrs Jukes. The risk of damage to the footings of their home is a worry that they should not have to bear. Against that, the form of order that I am contemplating will enable Mr and Mrs Larter to either elect to do nothing or continue with the work on their home by modifying their approach to the remaining work. 33Before addressing the form of orders, I will address a number of the submissions made on behalf of Mr and Mrs Larter in opposition to the grant of relief. 34As I have noted, it was submitted on their behalf that the injunction that was granted by Hislop J was procured by misleading conduct. I have already addressed that. It should also be remembered that by the time I heard the matter the injunction had passed into history because the restraint that was imposed on them had in the meantime been brought about by undertakings they had agreed to. 35It was further submitted that the relief being sought was, in effect, final in nature. This is addressed by my observation in response to the submission that the relief made was, in substance, mandatory. As I have stated, if the order is made it will leave it open to Mr and Mrs Larter to do nothing and leave the work as it is. They can elect to proceed to a final hearing based on the current state of the work. Any such hearing would consider whether relief of a final nature should be granted in favour of Mr and Mrs Jukes based on the excavation that has occurred to this time. If, as a result of the relief granted today, a retaining wall is built over the exposed portion of the work then the scope of the matters to be determined at any final hearing may narrow considerably. However that will not render the relief that I have granted today final in nature or effect. 36I now turn to the form of relief that is sought. I note five matters. First, I have extracted prayer 2 of the relief sought above. Mr Laughton SC indicated that relief in this form was akin to either the Court ordering discovery or inspection of property or machinery by an expert. Leaving aside the question whether I have power to make such an order, I consider that an order allowing the open ended entry by a stranger onto private property too draconian to allow. I add that Mr and Mrs Larter would be best advised to consider allowing such an inspection in order to minimise the scope for further litigation. However, I will not make such an order at this stage. 37Second, counsel for Mr and Mrs Larter queried the words, "as is necessary" in proposed order 1. He contended that it would leave his clients in a state of uncertainty as to their compliance or non-compliance with the order. He suggested that the words "as certified by P M Engineering Services Pty Ltd as reasonably necessary" be substituted for "as is necessary". Mr Laughton SC did not oppose that modification. I agree that it is appropriate. 38Third, counsel for Mr and Mrs Larter submitted that the order should only operate until PM Engineering certified that any retaining wall that might be built on the exposed portion had been properly built. This was submitted desirable to allow the project to continue without the necessity to return to Court. I agree that that is desirable but I will build into any such modification of the order a condition as to notification of the certification to Mr and Mrs Jukes. 39Fourth, counsel for Mr and Mrs Larter submitted that I should specify that the costs of any supervision by PM Engineering should form part of the undertaking as to damages so as to enable their later recovery if his clients were successful on a final hearing. I decline to do so. If the undertaking for damages is ever called upon then it will be for Mr and Mrs Larter to establish the loss they have suffered from the injunction having been granted (see Air Express Ltd v Ansett Transport Industries (Operations) Pty Ltd (1981) 146 CLR 249). It is not appropriate for me to attempt to specify in advance what might be recoverable in such circumstances. 40Finally, I should foreshadow that in the event the matter returns at some later point, with the immediate risk to Mr and Mrs Jukes' home having been removed, then the Court will give consideration to compulsorily referring the matter to mediation without making any further orders. 41The expense and personal toll in proceedings of this kind can be considerable. While no doubt at present relations between the parties are probably strained, to say the least, neither or them should underestimate the expense and personal toll that will be occasioned if the matter is pursued to a final hearing. The factual and legal issues in a case such as this are complex even though to lay people it appears that they should be straight forward given it is a dispute between neighbours over the supporting structures to their homes. In most, if not all, cases such as this a compromise between the parties is far more preferable outcome than a Court imposed solution. 42I will distribute to the parties for their consideration forms of order to reflect the judgment that I have just made. 43[Draft orders were provided to the parties.] 44The parties have now had the opportunity to consider the orders I proposed. There have been some minor amendments. Neither party consents to the orders but they agree that the orders, as now amended, reflect the effect of my judgment. 45Accordingly, I make orders 1, 2, 3 and 4 in the document that has been handed up and initialled by me and dated today. On the question of costs, I order that costs be reserved. 46In reserving costs, I bear three matters in mind. First, to make an order for costs may exacerbate what is already a strained neighbourhood dispute. Second, it may be that the reformulated relief sought by the plaintiffs concerning the exposed area of excavation on their northern boundary was something that resulted from the earlier relief that they obtained. I am not in a position to judge that but that may be weighed in the overall mix of costs at the end of the day. Thirdly, it should be noted that the orders I will make largely involve an acceptance of at least prayer 1 that Mr Laughton SC outlined yesterday morning. As I have stated, that order was based upon an assessment of the effect of the recently obtained expert material. It was open to Mr and Mrs Larter to negotiate around that framework yesterday rather than pursue a contested hearing.