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[2026] NSWCA 17
mixed. The appeals were dismissed and the cross-appeals allowed. The orders were varied to enter judgment for Mr Brown in the sum of $2,172,232 against the developer, Nick and Alex; to preserve the specified...
The Court of Appeal upheld the findings that Alex and Nick were involved in excavation that crossed onto the plaintiffs’ land and contributed to the collapse of their driveway. It confirmed that a person can commit trespass by intentionally excavating across a boundary even if they do not know exactly where that boundary lies. It also held that a party seeking to reduce its share of liability through proportionate liability must identify the proposed concurrent wrongdoers in its pleading. Because the trespass established against Alex and Nick was intentional, they could not rely on proportionate liability to reduce Mr Brown’s trespass judgment. The Court left the existing 70% and 30% allocation reflected in the specified orders, while changing which defendants were liable for Mr Brown’s full judgment. It also upheld rectification-cost damages in light of the property’s use as the plaintiffs’ home and the evidence at trial.
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2,322 words · generated 08/10/2026
Edmund Brown and Irena Saric lived on Lot 71, a residential property in Gosford. Its driveway ran from the street to their home and abutted Lot 73, where Etna Developments planned an apartment building with an underground carpark. Excavation on Lot 73 destabilised the adjoining land. The driveway eventually collapsed, leaving the plaintiffs without normal street access and trapping a car and two motorcycles: [3]-[7], [56].
The defendants included the developer and builder, as well as members of the Kalantzis family involved in the works. Alex Kalantzis worked as a subcontractor. Nicholas Kalantzis was found to be a de facto director of the builder and to have participated in site and project management. The primary judge found that the individual defendants had excavated at or near the boundary, that the excavation removed support from Lot 71, and that the plaintiffs had established negligence and trespass: [11]-[12], [57]-[68].
Alex and Nick appealed on grounds including the factual findings, trespass, apportionment and, in Nick’s case, the measure of damages. Mr Brown cross-appealed, arguing that his intentional trespass claim should not have been apportioned. The Court of Appeal dismissed both appeals and allowed the cross-appeals. The operative orders gave Mr Brown judgment for $2,172,232 against the developer, Nick and Alex, while retaining specified 70% and 30% amounts in the other varied orders: [150], [152]-[154].
The Court’s analysis was confined by the proceedings and the parties. Mr Brown cross-appealed against Alex and Nick only. The Court said it could not vary Ms Saric’s orders, because she was not a cross-appellant, or make an order against Frank or Kon on the cross-appeals when they were not parties to them: [19]. That procedural boundary explains why the judgment’s legal conclusion about intentional trespass did not produce a wider variation of every party’s orders.
The appeal court accepted that the primary judge had a substantial evidentiary basis for finding who operated the machinery. The plaintiffs had observed activity over an extended period, identified the individual defendants, and gave evidence about excavation on or over their land. Their evidence was considered with videos, photographs, surveys and evidence from other witnesses: [84]-[85], [121]-[125]. The Court rejected the proposition that oral evidence identifying an excavator operator had to be corroborated by contemporaneous photographs: [125].
Alex’s appeal also sought to advance an alternative explanation of his work near the boundary. His trial position had been that he did not excavate there. On appeal, his counsel argued that even if he operated machinery at the western boundary, the evidence did not establish that he removed material in a way that withdrew support. The Court treated that as a new case, not run at trial, and declined to entertain it because further evidence or explanation might have been relevant had it been raised earlier: [82]-[83]. That procedural reasoning was separate from the Court’s substantive causation conclusion.
On causation, the Court accepted that the primary judge could infer contribution from the sequence and location of events. Alex removed supporting soil near the driveway shortly before the collapse. The Court held that a causal inference from such a sequence did not require expert evidence about the precise mechanism: [89]-[90]. It also emphasised that a defendant’s act need only cause or contribute to the harm, not be its sole cause: [91]-[92].
The trespass issue turned on the physical entry, not knowledge of the legal boundary. The Court said the plaintiffs did not have to prove Alex knew that the land was theirs. Excavation was intended where it occurred, and the evidence established that it crossed onto Lot 71: [94]-[97], [103]. The Court therefore rejected the argument that lack of boundary knowledge converted the established conduct into negligent rather than intentional trespass.
The apportionment issue depended on the pleadings. The List Response named Kon as a concurrent wrongdoer but did not identify the other individual defendants in that capacity. The Court held that the defence had to be pleaded and the proposed concurrent wrongdoer identified with sufficient particularity. The statutory regime did not operate as an unpleaded defence simply because a party asked the court to apply it: [109]-[117]. Finally, the Court upheld rectification damages because the property was the plaintiffs’ home, they had remained there, and the defendants had not put to them that they did not intend to reinstate it: [141], [147]-[149].
The judgment did not purport to restate the whole law of trespass or proportionate liability. It applied existing principles to the facts and identified a live debate about the interaction between trespass and Part 4 of the Civil Liability Act 2002 (NSW).
On trespass, the Court relied on the distinction between intending the physical act and knowing that the act is unauthorised. It adopted the proposition that a person may commit trespass by intentionally entering land despite an honest or reasonable mistake about ownership or the boundary: [96]-[97]. The judgment thus confirms, in this factual setting, that an excavator operator’s lack of knowledge of the boundary does not itself prevent a finding of intentional trespass where the operator intended to excavate at that location and the excavation crossed onto the plaintiff’s land: [103].
On proportionate liability, the judgment recorded differing judicial views about whether a trespass claim can ever be an apportionable claim where reasonable care is not an element of the cause of action. It referred to the approaches discussed in Perpetual Trustee and the later doubts expressed in Gerrard Toltz: [99]-[101]. The Court did not resolve the broader debate. It said it was unnecessary to address those authorities further because the trespass established in this case was intentional and the plaintiffs’ case had been put on that basis: [103], [152].
The judgment’s concrete holding was that the defendants could not apportion this intentional trespass claim. In parallel, it applied the pleading rule that a proportionate liability defence must identify the alleged concurrent wrongdoer and provide adequate particulars: [109]-[117]. That rule mattered independently of the scope of the statutory regime: even where apportionment might otherwise be available, the defence must be properly raised.
The decision also applies, rather than displaces, established damages principles. It treats reasonableness as the criterion for choosing reinstatement costs over diminution in value, and recognises that residential use can affect the assessment: [144]-[148]. It does not establish that rectification costs always prevail, regardless of proportionality, intended use or evidence.
At [89], the Court stated: “The court is entitled to act on the inference of causation arising from the sequence of events despite the absence of expert evidence on that question.” In plain English, a court may infer that conduct contributed to damage from the timing and surrounding circumstances, even if an expert cannot explain every technical step in the failure. Here, the excavation was near the affected driveway and shortly preceded the collapse. The Court did not treat expert evidence as indispensable to that particular causal inference.
At [96], the Court said that trespass does not require proof that the defendant “knew the boundary of the plaintiff’s land” but requires proof of encroachment. The practical distinction is between intending the physical act and knowing its legal significance. An operator can intend to excavate in a particular place without knowing the surveyed boundary, yet the act can still amount to trespass if it enters the plaintiff’s land.
At [97], the Court described the relevant physical act as “entry upon the possessor’s territory” and said that entry below the surface at any depth can be trespass. This matters in excavation disputes because a surface fence or visible ground line may not reveal the full extent of a subsurface intrusion.
At [109], the Court explained that a defendant relying on proportionate liability must identify the alleged concurrent wrongdoer and plead the case with the particularity of a cross-claim. In plain English, a general list of possible contributors, or a late submission that another person should bear some responsibility, is not necessarily enough. The opposing party must have fair notice of who is alleged to have caused the same loss and on what basis.
At [152], the Court said the finding of intentional trespass meant the proportionate liability provisions did not apply. The result was specific to the intentional trespass claim decided in these proceedings. The Court did not decide every possible question about negligent trespass or all possible formulations of an apportionable claim.
The decision is particularly relevant to disputes where excavation, piling, tunnelling or other works near a boundary are alleged to have entered a neighbour’s land or removed support from it. A claimant’s case may involve both negligence and trespass, but those causes of action remain distinct: [102]. Evidence may include surveys, eyewitness accounts, photographs, videos, geotechnical material and the chronology of ground movement. This judgment illustrates that a lack of photographs identifying every operator or every moment of excavation is not necessarily fatal where the trial judge accepts credible oral evidence: [94]-[95], [122]-[125].
The causation reasoning may matter where the physical mechanism of collapse is not fully captured by expert evidence, but the location and timing of the defendant’s work support a reasonable inference of contribution: [89]-[92]. It does not mean that timing alone will always prove causation. The inference here rested on accepted factual findings about excavation near the driveway and the surrounding sequence of events.
For trespass, the case is relevant where a defendant says they did not know the precise boundary. The judgment indicates that boundary knowledge is not required if the physical entry was voluntary and the defendant intended to undertake the act that produced the entry: [96]-[97]. The factual question remains whether the defendant’s conduct actually crossed the boundary.
For proportionate liability, the decision highlights the importance of pleadings that identify the proposed concurrent wrongdoer and the acts or omissions said to have caused the same loss: [109]-[117]. A general assertion that several participants worked on a project does not, by itself, establish that each has been properly nominated for statutory apportionment. The Court also warns that self-representation does not remove a party from procedural rules, although courts may be patient and may allow appropriate leniency: [114].
For property damage remedies, the case is relevant where rectification costs substantially exceed diminution in value. The residential nature of the property, the owner’s continuing use, the evidence about intended reinstatement, and whether those matters were tested in cross-examination may all be significant: [141], [144]-[148].
The judgment supplied here is dated 4 March 2026 and does not contain decisions of later courts applying or distinguishing it. The later-treatment history therefore cannot be established from this source alone.
The judgment itself discusses earlier authorities, not subsequent treatment of this decision. It applies the principles in Adelaide Stevedoring and Sea Coatings to causation by inference: [89]. It relies on Bingo Holdings and Johnson v Mackinnon in discussing the need to plead a proportionate liability defence: [109]-[112]. It also refers to Nobarani in explaining that an unrepresented litigant remains subject to procedural rules: [114].
On the relationship between trespass and apportionment, the Court notes decisions and judicial observations that reflect competing approaches, including Perpetual Trustee, Rahme, Rove Estate and Gerrard Toltz: [99]-[101]. Those are part of the legal background considered by this Court. They should not be described as later courts’ treatment of Kalantzis v Brown, which was decided after them.
The judgment’s outcome is also bounded by its procedural posture. The Court allowed only the cross-appeals brought by Mr Brown against Alex and Nick. It expressly explained why the outcome could not be extended to Ms Saric, Frank or Kon on those cross-appeals: [19], [153]. Any later analysis of the decision would need to consider both the substantive finding about intentional trespass and those limits on the orders made.
The judgment expressly leaves open the broader question of how Part 4 applies to a trespass claim in circumstances other than the intentional trespass established here. It records the competing approaches to whether the claim must include failure to exercise reasonable care as an element, and notes that Gerrard Toltz questioned the formulation adopted in earlier authority: [99]-[103]. Because the Court held that the trespass in this case was intentional, it did not need to decide that broader issue.
The judgment also does not set out a comprehensive test for distinguishing intentional trespass from negligent trespass across all fact patterns. It held that the relevant intention was present because the defendants intended to excavate where they did, and that the resulting encroachment was established: [103]. Different facts, including unintended movement of soil or an intrusion caused by a separate event, could raise questions not answered here.
The causation discussion confirms that expert evidence is not invariably needed to infer contribution from a sequence of events. It does not define how strong that sequence must be in other cases, or when technical evidence would be necessary to distinguish between several possible causes. The Court’s reasoning depended on the accepted evidence of excavation near the driveway shortly before collapse, together with the wider factual record: [89]-[92].
The damages discussion is similarly fact-sensitive. The Court upheld rectification costs for a home where the plaintiffs continued to live and where their intention to reinstate was not challenged in cross-examination: [141], [147]-[148]. It did not create a presumption that owners of damaged homes always receive rectification costs, nor did it specify a numerical threshold at which a difference between rectification cost and diminution in value becomes unreasonable.
Finally, the judgment leaves no account of later judicial treatment. Whether subsequent courts adopt, narrow or distinguish its discussion of intentional trespass and apportionment cannot be answered from the judgment supplied.
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Source: NSW Caselaw (www.caselaw.nsw.gov.au). Converted to plain text by ZoeLaw. Not the official version.
Medium Neutral Citation: Kalantzis v Brown; Brown v Kalantzis;; Kalantzis v Brown; Brown v Kalantzis [2026] NSWCA 17
Hearing dates: 19 February 2026
Decision date: 04 March 2026
Before: Ward P at [1]
Mitchelmore JA at [2]
Adamson JA at [3]
Decision: Proceedings 2025/192733 and 2025/198389
(1) Dismiss the appeal.
(2) Allow the cross-appeal.
(3) Vary orders (1), (2) and (3) made by Rees J on 30 April 2025 as follows:
1 Judgment against the first, fourth and sixth defendants in favour of the first plaintiff in the sum of $2,172,232.
2 Judgment against the third, fourth and sixth defendants in favour of the first plaintiff in the sum of $1,520,562.40, being 70% of $2,172,232.
3 Judgment against the fifth defendant in favour of the first plaintiff in the sum of $651,669.60, being 30% of $2,172,232.
(4) Order the appellant to pay the first and second respondents’ costs of the appeal.
(5) Order the cross-respondent to pay the cross-appellant’s cost of the cross-appeal.
Catchwords: TORT — negligence — trespass — where appellants in two separate appeals and their family members conducted excavation works on the development site causing the driveway of the first respondent’s property to collapse — where primary judge finds appellants liable in trespass for encroachment over the first respondent’s boundary and negligence constituting a breach of the duty of care pursuant to s 177(2) of the Conveyancing Act 1919 (NSW) — whether respondents established that the appellants encroached on the first respondent’s property and contributed to the collapse
TORT — appeal — cross-appeal — trespass — apportionment of liability — whether Civil Liability Act 2002 (NSW) applies to alleged trespass
TORT — appeal — negligence — principles of causation — tortious act need only have caused or contributed to harm — not necessary that it be the sole cause
TORT — remedies — damages — whether compensation ought be measured by cost of rectification or diminution of value of affected land — relevance of proportionality and intentions of landowners — whether the affected land is the plaintiff’s residence
CIVIL PROCEDURE — pleading — proportionate liability defence pursuant to Pt 4 of the Civil Liability Act 2002 (NSW) — importance of identifying concurrent wrongdoer and basis of claim — no error in primary judge holding appellants to pleaded defence
APPEALS — from findings of fact — credibility of witnesses — oral evidence can be accepted without corroboration — no need for comprehensive photographic evidence — difficulties of judging distances and depth from photographic evidence
Legislation Cited: Civil Liability Act 2002 (NSW) ss 5B, 5D, 34, 35, 35A, Pt 4
Conveyancing Act 1919 (NSW) s 177
Uniform Civil Procedure Rules 2005 (NSW) r 51.36
Cases Cited: Adelaide Stevedoring Co Limited v Forst (1940) 64 CLR 538; [1940] HCA 45
Basely v Clarkson (1681) 3 Lev 37; 83 ER 565
Bendix Mintex Pty Ltd v Barnes (1997) 42 NSWLR 307
Bingo Holdings Pty Ltd v GC Group Company Pty Ltd [2021] NSWCA 184
Blacktown City Council v Hocking [2008] NSWCA 144
Coulton v Holcombe (1986) 162 CLR 1; [1986] HCA 33
Cowell v Corrective Services Commission of New South Wales (1988) 13 NSWLR 714
Evans v Balog [1976] 1 NSWLR 36
Gerrard Toltz Pty Ltd v City Garden Australia Pty Ltd (in liq) (No 2) [2024] NSWCA 232
Hawkins v Clayton (1988) 164 CLR 539; [1988] HCA 15
Johnson v Mackinnon [2021] NSWCA 152
Moon v Whitehead (2015) 10 ACTLR 309; [2015] ACTCA 17
Nobarani v Mariconte (2018) 265 CLR 236; [2018] HCA 36
Perpetual Trustee Company Ltd v CTC Group Pty Ltd (No 2) [2013] NSWCA 58
Rahme v Benjamin & Khoury Pty Ltd (2019) 100 NSWLR 550; [2019] NSWCA 211
Rajski v Scitec Corporation Pty Ltd (Court of Appeal (NSW), 16 June 1986, unrep)
Roberts v Goodwin Street Developments Pty Ltd (2023) 110 NSWLR 557; [2023] NSWCA 5
Rove Estate Pty Ltd atf Lane Cove Estate Trust v Chomp Excavations & Demolition Pty Ltd (No 3) [2023] NSWSC 274
Ruddock v Taylor (2005) 222 CLR 612; [2005] HCA 48
Sea Coatings (Australia) Pty Limited v Pascoe [2008] NSWCA 54
State of New South Wales v Knight [2002] NSWCA 392
Sved v Woollahra Municipal Council (1995) 86 LGERA 222
Tabcorp Holdings Ltd v Bowen Investments Pty Ltd (2009) 236 CLR 272; [2009] HCA 8
Water Board v Moustakas (1988) 180 CLR 491 [1988] HCA 12
Williams v Milotin (1957) 97 CLR 465; [1957] HCA 83
Texts Cited: Fleming’s The Law of Torts (11th ed, 2024, Thomson Reuters)
Category: Principal judgment
Parties: Proceedings 2025/192733
Alexander Kalantzis (Appellant / Cross Respondent)
Edmund Brown (First Respondent / Cross Appellant)
Irena Saric (Second Respondent)
Etna Developments Pty Ltd (Third Respondent)
Nutek Constructions Pty Ltd (Fourth Respondent)
Fotis Kalantzis (Fifth Respondent)
Nicholas Kalantzis (Sixth Respondent)
Konstadinos Kalantzis (Seventh Respondent)
Proceedings 2025/198389
Nicholas Kalantzis (Appellant / Cross Respondent)
Edmund Brown (First Respondent / Cross Appellant)
Irena Saric (Second Respondent)
Representation: Counsel:
Proceedings 2025/192733
F Corsaro SC (Appellant)
A Rogers (First and Second Respondents)
Proceedings 2025/198389
Appellant (Self-represented)
A Rogers (First and Second Respondents)
Solicitors:
Proceedings 2025/192733
Stewart & Associates (Appellant)
Kent Law Group (First and Second Respondents)
Proceedings 2025/198389
Gibbins Law Firm (Appellant)
Kent Law Group (First and Second Respondents)
File Number(s): 2025/192733; 2025/198389
Decisions under appeal
[This headnote is not to be read as part of the judgment]
The primary judge found four family members, Alexander Kalantzis (Alex), Nicholas Kalantzis (Nick), Kon Kalantzis (Kon) and Frank Kalantzis (Frank), liable to Edmund Brown and Irena Saric, the respondents, in trespass and negligence for the collapse of the driveway on Mr Brown’s property in Gosford (Lot 71). Alex and Nick separately appealed, including on the grounds that her Honour erred in finding that each appellant had trespassed onto Lot 71 and caused the collapse of the driveway and that the primary judge was in error in apportioning liability under Pt 4 of the Civil Liability Act 2002 (NSW) 30% (Kon): 70% (Frank, Nick and Alex).
Mr Brown cross-appealed in both proceedings on the sole ground that the primary judge erred in finding that the claim in trespass was apportionable.
In the proceedings below, Mr Brown and Ms Saric alleged that Lot 71 was damaged as a result of excavation conducted by Nutek Constructions Pty Ltd (the builder) on behalf of Etna Developments Pty Ltd (the developer) for the purposes of building an apartment block with an underground carpark on the development site next door. Mr Brown claimed damages for the cost of rectification and both respondents claimed general damages for pain and suffering. Each of the individual defendants were engaged in excavation work on the development site. Frank was the legal director of the builder and Nick and Kon were its de facto directors.
The Court held (Adamson JA, Ward P and Mitchelmore JA agreeing) dismissing the appeals and allowing the cross-appeals:
In proceedings 2025/192733 (Alex’s appeal):
(1) There was no error in the primary judge’s finding that Alex undertook excavation work at or near the boundary between the development site and Lot 71 and in so doing removed support from Lot 71: at [76]-[86]. On appeal, Alex sought to run an alternative case which had not been put in the Court below and which ought not be entertained.
Coulton v Holcombe (1986) 162 CLR 1; [1986] HCA 33; Water Board v Moustakas (1988) 180 CLR 491; [1988] HCA 12 applied.
Causation
(2) The primary judge was entitled to infer that Alex’s removal of soil at a proximate location shortly prior to the collapse materially caused or contributed to the collapse. This reasoning was available based on the sequence of events and did not require expert evidence: at [89].
Adelaide Stevedoring Co Limited v Forst (1940) 64 CLR 538; [1940] HCA 45; Sea Coatings (Australia) Pty Limited v Pascoe [2008] NSWCA 54 applied.
Trespass
(3) The primary judge correctly found that in performing excavation work, Alex encroached onto Lot 71: at [103].
(4) To establish trespass, it is not necessary for a plaintiff to prove that the defendant actually knew where the boundary of the plaintiff’s land was located. The relevant physical act is entry upon the possessor’s territory. Entry below the surface at any depth is trespass. Alex and Nick can have had no basis for believing that the plaintiffs had granted them an implied licence to encroach on Lot 71. They intended to excavate where they in fact excavated, which encroached on Lot 71: at [96]-[97], [103].
Fleming’s The Law of Torts (11th ed, 2024, Thomson Reuters); Williams v Milotin (1957) 97 CLR 465; [1957] HCA 83 cited.
(5) The trespass was intentional: at [103]. (See in relation to Mr Brown’s cross-appeal at (10) below).
Williams v Milotin (1957) 97 CLR 465; [1957] HCA 83; see also, State of New South Wales v Knight [2002] NSWCA 392; and Perpetual Trustee Company Ltd v CTC Group Pty Ltd (No 2) [2013] NSWCA 58 applied.
In proceedings 2025/198389 (Nick’s appeal):
(6) No error was established in the primary judge’s finding that Nick excavated over the boundary of Lot 71 and was therefore liable in trespass: at [121]-[126].
(7) The primary judge was correct to find that Nick owed the plaintiffs a duty of care, both personally and as a de facto director of the builder, and that he had breached it by failing to take reasonable precautions to address the relevant risk of harm: at [128]-[132].
(8) The primary judge was not in error in awarding damages on the basis of the cost of rectification of Lot 71 ($2,122,232) as opposed to diminution ($745,000). It was open to the primary judge to regard the failure of the individual defendants to put to either Mr Brown or Ms Saric, that they did not intend to rectify Lot 71, as forensically significant: at [135]-[150].
Tabcorp Holdings Ltd v Bowen Investments Pty Ltd (2009) 236 CLR 272; [2009] HCA 8; Sved v Woollahra Municipal Council (1995) 86 LGERA 222; Roberts v Goodwin Street Developments Pty Ltd (2023) 110 NSWLR 557 considered and Evans v Balog [1976] 1 NSWLR 36 applied.
Apportionment (in both proceedings)
(9) Nick and Alex relevantly identified Kon, but not each other, as a concurrent wrongdoer in their proportionate liability defence in the Court below. In these circumstances, the primary judge was correct to hold the parties to their pleading and limit the apportionment accordingly: at [109]-[117]; [133]-[134].
Bingo Holdings Pty Ltd v GC Group Company Pty Ltd [2021] NSWCA 184; Nobarani v Mariconte (2018) 265 CLR 236; [2018] HCA 36 applied.
Mr Brown’s cross-appeal (in both proceedings)
(10) In the Court below, the plaintiffs established trespass as an intentional tort. The effect of the finding that the trespass was intentional is that the provisions relating to proportionate liability do not apply. Accordingly, Mr Brown is entitled to an order that each of the cross-respondents to his cross-appeals, Alex and Nick, is liable for the whole of the judgment, without apportionment: at [152].
Parties
(11) As the only cross-respondent to Mr Brown’s cross-appeals was each of the appellants (Nick and Alex), it is not open to the Court to vary the orders for judgment against Frank and Kon since they have not had an opportunity to be heard as they were not parties to the cross-appeal: at [19] and [153].
(12) As Ms Saric did not file a cross-appeal, the orders in her favour ought not be varied by the finding that the principles of proportionate liability do not apply to her claim in trespass: at [19].
WARD P: I agree with Adamson JA.
MITCHELMORE JA: I agree with Adamson JA.
ADAMSON JA: Edmund Brown and his partner, Irena Saric, (the plaintiffs) brought proceedings in the Equity Division of the Supreme Court (the Court below) for damages for negligence and trespass, arising from the collapse of the driveway on Mr Brown’s property in Gosford (Lot 71), where they both lived. They alleged that Lot 71 was damaged as a result of excavation conducted by Nutek Constructions Pty Ltd (the builder) on behalf of Etna Developments Pty Ltd (the developer) for the purposes of building an apartment block with an underground carpark on Lot 73, the land next door (the development site) and that, in addition, they were entitled to general damages for pain and suffering.
In addition to suing the builder and the developer, the plaintiffs also sued:
Fotis Kalantzis (Frank), the builder’s sole legal director;
Nicholas Kalantzis (Nick) and Konstadinos Kalantzis (Kon), as the builder’s two alleged shadow directors; and
Alexander Kalantzis (Alex), whom the builder had engaged as a subcontractor and was alleged to have engaged in excavation work on the development site.
The individual members of the Kalantzis family are referred to by their first names in order to distinguish more readily between them. Kon and Nick are brothers. Kon is the father of both Frank and Alex and Nick is their uncle. Lot 71 and the development site were located on the southern side of a street in Gosford, which ran in a west-east direction. Lot 71 was a battle axe block. Its driveway travelled from the street frontage in a southerly direction to the remainder of the block, where the plaintiffs’ home was situated. The driveway on Lot 71 abutted the western boundary of the development site.
As a consequence of excavation works carried out on the development site, the driveway of Lot 71 sank into the earth, making Mr Brown’s motor vehicle and a couple of motor bikes inaccessible and depriving the plaintiffs of their street access.
In substance, the plaintiffs’ case, which was accepted by the primary judge, was that, in the course of conducting excavation works on the development site and over the boundary onto Lot 71, the defendants were negligent in that they failed to take reasonable care to support the soil under Lot 71 and trespassed on Lot 71.
Mr Brown claimed damages, in negligence and trespass, for restitution of Lot 71 or, in the alternative, the diminution in its value, as well as general damages for trespass. Ms Saric claimed general damages for trespass. The plaintiffs succeeded in the Court below. Both Alex and Nick have appealed against the orders made against them. Neither Frank nor Kon took an active part in the appeal, to which they were parties.
| Name | Party in Court below/ representation | Party in Court of Appeal in Alex**’s appeal** | Referred to in judgment | | Edmund Brown | First plaintiff (represented by counsel at the hearing) | Respondents to Alex’s and Nick’s appeals; cross-appellants in Alex’s appeal | Mr Brown or, with Ms Saric, the plaintiffs | | Irena Saric | Second plaintiff (represented by counsel at the hearing) | Ms Saric or, with Mr Brown, the plaintiffs | | Etna Developments Pty Ltd (receiver and manager appointed) | First defendant (no active part taken in the Court below) | Third respondent (no appearance filed) | Developer | | Nutek Constructions Pty Ltd (in liquidation) | Second defendant (proceedings in the Court below stayed) | Fourth respondent (no appearance filed) | Builder | | Fotis Kalantzis | Third defendant (self-represented at hearing) | Fifth respondent (no appearance filed) | Frank | | Nicholas Kalantzis | Fourth defendant (represented by counsel at hearing in Court below) | Sixth respondent (appeared for himself in Court of Appeal, although solicitor on the record) | Nick | | Konstadinos Kalantzis | Fifth defendant (self-represented at hearing) | Seventh respondent (no appearance filed) | Kon | | Alexander Kalantzis | Sixth defendant (self-represented at hearing) | Appellant (represented by counsel) | Alex |
1 Judgment against the [developer] in favour of [Mr Brown] in the sum of $2,172,232.
2 Judgment against [Frank, Nick and Alex] in favour of [Mr Brown] in the sum of $1,520,562.40.
3 Judgment against [Kon] in favour of [Mr Brown] in the sum of $651,669.60.
4 Judgment against the [developer] in favour of [Ms Saric] in the sum of $50,000.
5 Judgment against [Frank, Nick and Alex] in favour of [Ms Saric] in the sum of $35,000.
6 Judgment against [Kon] in favour of [Ms Saric] in the sum of $15,000.
7 Order the defendants to pay the plaintiffs’ costs of the proceedings.
These orders were consequential on the primary judge’s findings (set out in more detail below) that:
the developer and each of Frank, Nick, Alex and Kon were liable in negligence and trespass to Mr Brown, as the owner of Lot 71;
Mr Brown was entitled to damages assessed by reference to the rectification cost of Lot 71, together with general damages of $50,000, amounting to a total of $2,172,232;
the developer and each of Frank, Nick, Alex and Kon were liable in trespass to Ms Saric, as an occupier of Lot 71;
Ms Saric was entitled to general damages in trespass in the amount of $50,000;
the claims in trespass and negligence were apportionable because each arose from a failure to take reasonable care within the meaning of s 34(1)(a) of the Civil Liability Act 2002 (NSW);
Kon, the only defendant (other than the builder against which proceedings were stayed) alleged in the individual defendants’ joint defence to be a concurrent wrongdoer within the meaning of Pt 4 of the Civil Liability Act, was found to be a concurrent wrongdoer and liable for 30% of the total damages;
accordingly, Nick, Frank and Alex were jointly and severally liable to the plaintiffs for 70% of the damages to which they were entitled, being $1,520,562.40 for Mr Brown, and $35,000 for Ms Saric; and
Kon was liable for 30% of the damages to which the plaintiffs were entitled, being $651,669.60 for Mr Brown, and $15,000 for Ms Saric.
1 The trial judge erred in finding that [Alex] undertook excavation work at or near the western boundary and removed support to [Mr Brown’s and Ms Saric’s] property. The finding was based primarily on anecdotal lay observations and a limited number of videos and photographs, none of which clearly depicted [Alex] carrying out excavation of or across the boundary.
2 The trial judge erred in concluding that [Alex’s] conduct materially contributed to the destabilisation and collapse of [Mr Brown’s and Ms Saric’s] driveway and land. The finding that the removed support materials [caused] or contributed to the failure of the land was contrary to the weight of the evidence and the trial judge should have found that [Alex’s] conduct involved the jack hammering and removal of rock away from the affected boundary.
3 The trial judge erred in applying the civil standard of proof by drawing adverse findings against [Alex] from inferences that were not supported by persuasive or probative evidence. [Alex’s] observed activity was limited in scope and duration, yet the trial judge attributed significant legal consequences without establishing a clear causal connection between his actions and the alleged harm.
4 The trial judge erred in finding that [Alex] committed trespass onto and over [Mr Brown’s and Ms Saric’s] land. There was no finding that [Alex] knowingly entered or caused a physical intrusion onto the land. The inference of trespass was drawn from general site involvement and the rejection of [Alex’s] evidence, rather than from direct evidence of any act amounting to trespass by [Alex] personally.
5 The trial judge erred in apportioning liability to [Alex] in a manner inconsistent with the findings on responsibility and site management. While the Court acknowledged that [Alex] carried out works as supervised by [Kon] and that [Nick] held relevant reports and approvals, it attributed equivalent responsibility to [Alex] without clear justification.
6. Not pressed.
1 The primary judge erred in finding [that Nick] operated an excavator over the boundary of [Mr Brown’s and Ms Saric’s] property, [J[161]-[164], [208]], when the evidence was insufficient to establish this on the balance of probabilities.
2 The primary judge erred in finding [Nick] directly liable for trespass, [J[209]], in circumstances where the evidence was not capable of establishing on the balance of probabilities that [Nick] trespassed upon [Mr Brown’s and Ms Saric’s] land.
3 The primary judge erred in holding [Nick] liable as a joint tortfeasor on the basis of his directing or procuring Nutek Constructions Pty Ltd’s trespass, and negligence; [J[236]-[240], [246]].
4 The primary judge erred in apportioning 70% liability to the appellant vis a vis [Kon], under ss 34(1)(a), 35(1), 35A of the Civil Liability Act 2002 (NSW); [J[283], [287]-[289]].
5 The primary judge erred in awarding damages by reference to rectification costs, ($2,122,232), when there was such disproportionality to the diminution in value, ($745,000), as to make such an award unreasonable; [J[256], [271]-[272]].
Mr Brown cross-appealed in both Alex’s and Nick’s appeals on a single ground, alleging that the primary judge erred in finding that the claim in trespass was apportionable.
In his cross-appeal in Alex’s appeal proceedings, Mr Brown joined only one respondent, Alex. In his cross-appeal in Nick’s appeal proceedings, Mr Brown joined only one respondent, Nick.
This forensic choice has an impact on the orders which the Court can make. No order can be made which benefits Ms Saric as she is not named as a cross-appellant. Because of the requirements of procedural fairness, no order could be made in either cross-appeal against Frank or Kon unless they had first been joined as parties to the cross-appeal. The Court is, understandably, unaware of the financial position of any of the parties or putative parties. This factor may have informed Mr Brown’s choice not to join Frank or Kon as parties to the cross-appeal. It is not fruitful to speculate as to the reason why they were not joined since Mr Brown is bound by this forensic choice. Nor is it any answer to the limitations on the orders which the Court can make that Frank and Kon were served with Alex’s appeal and chose not to participate. Each may reasonably have adjudged that they would not be adversely affected by the appeal or might not have wished to engage in adversarial litigation against a family member. That they were joined to Alex’s appeal does not make them parties to Mr Brown’s cross-appeal, which had the potential, if upheld, to make each liable for the whole amount of Mr Brown’s damages. This matter will be revisited when Mr Brown’s cross-appeal is addressed later in these reasons.
From in and about 2017 to the present date the [developer], either personally or by its servant or agent the [builder], [Frank, Nick, Kon and Alex] undertook and continued to undertake until early 2023 building works on the Development Land (“the Building Works”****) in such manner as to interfere with the Plaintiffs’ use and enjoyment of the Plaintiffs’ Land.
A. Particulars of Building Works performed by the [developer, the builder, Frank, Nick, Kon and Alex] interfering with the Plaintiffs**’** Use and Enjoyment
(i) Removal of soil in and about the boundary of the Plaintiffs[’] Land with the Development Land.
(i)(a) Removing subsoil from the Plaintiffs[’] Land.
(ii) Failure to take any or sufficient proper steps to secure the stability of the Plaintiffs[’] Land.
(iii) Trespass to the Plaintiffs[’] Land.
Trespass insofar as it’s an intention[al] tort is not caught by the provisions of the Civil Liability Act. If there is a finding that any of the parties are liable in trespass they are liable for the entirety of the judgment. I have to concede that if there’s a finding in relation to negligence then insofar as your Honour were to find that there were co-tortfeasors then the Civil Liability Act would apply.
4 By reason of the above matters the Plaintiffs have suffered loss and damage.
Particulars
(i) Rectification of the driveway referred to in particulars to paragraph 3(i), (ii) above;
(ii) Rectification of the Plaintiffs’ dwelling on the Plaintiffs’ Land;
(iii) Rectification of the carport on the Plaintiffs’ Land;
(iv) Inability to access the Plaintiffs’ Land;
(v) Loss of income;
(vi) Cost of alternative accommodation during rectification works;
(vii) Cost of storage of goods and chattels and cost of removal to alternative accommodation[;]
(viii) Cost of hiring an alternative vehicle.
10 The Negligence Claim and/or the Trespass Claim are each apportionable claims within the meaning of Part 4 of the Civil Liability Act.
11 As part of the Building Works undertaken, a number of other parties were undertaken to perform construction and building work, including;
(a) Nutek Constructions Pty Ltd (ACN 603 941 546) [the builder against which the proceedings were stayed]
(b) Nutek Investments Pty Ltd (ACN 609 230 962)
(c) Konstadinos Kalantzis Sole Trader [Kon]
(d) Allworks Civil Contracting Pty Ltd (ACN 615 683 862) [Alex’s company]
(e) Troys Heavy Haulage
(f) JS Plumbing Group Pty Ltd (ACN 609 122 125)
(g) Manda Capital Pty Ltd (ACN 165 044 646)
(h) Kings Constructions Pty Ltd
(i) Ian Frazier Excavations
(j) Technical Projects Consultants (Consulting Engineers)
(k) PDS Group (Project Manager)
(I) Construction Sciences (Geotech Engineers)
(m) Structural Holdings Pty Ltd (ACN 154 068 283)
12 For the purpose of this pleading of proportionate liability only (and otherwise without admission) the Third, Fourth, Fifth and/or Sixth Defendants repeats mutatis mutandis paragraphs 3 to 7 of the Plaintiff’s Claim against each of the Concurrent Wrongdoers, such that;
(a) A reference to the Third, Fourth, Fifth and /or Sixth Defendants is a reference to the Concurrent Wrongdoer;
(b) A reference to the duty owed by the Third, Fourth, Fifth and/or Sixth Defendants is a reference to the duty owed by the Concurrent Wrongdoer; and
(c) A reference to Building Work refers to work undertaken by a Concurrent Wrongdoer in respect of its respective subcontract with the Second Defendant.
13 By reason of the matters pleaded in 9 to 11 above:
(a) the Plaintiff has suffered the alleged loss and damage arising from the Trespass Claim and Negligence Claim by reason of the conduct of the Concurrent Wrongdoers;
(b) the Plaintiff would be entitled to damages as against the Concurrent Wrongdoers;
(c) the Concurrent Wrongdoers are concurrent wrongdoers within the meaning of Part 4 of the Civil Liability Act; and
(d) Pursuant to sections 34 and 35 of the Civil Liability Act, any liability of the Third, Fourth, Fifth and/or Sixth Defendants in regard of the Trespass Claim (which is denied), is limited to an amount reflecting the proportion of the loss or damage claimed that the Court considers just, having regard to the extent of responsibility of the Concurrent Wrongdoers for the loss or damage[;]
(e) Pursuant to sections 34 and 35 of the Civil Liability Act, any liability of the Third, Fourth, Fifth and/or Sixth Defendants in regard of the Negligence Claim (which is denied), is limited to an amount reflecting the proportion of the loss or damage claimed that the Court considers just, having regard to the extent of responsibility of the Concurrent Wrongdoers for the loss or damage.
14 These pleadings serve as notice pursuant to section 35A of the Civil Liability Act.
Alex was an intelligent young man who was, on occasion, evasive. Some of his evidence was unlikely, for example, that he would not have used an excavator even if requested to do so by his father. The plaintiffs accepted that Alex’s evidence was not troubled with the same difficulties as to credit or reliability as that of Frank, Nick or Kon. I agree insofar as the comparison is drawn with Nick and Kon. Nonetheless, I have approached Alex’s evidence with caution.
The development was to be implemented substantially in accordance with the plans and supporting documents, including the geotechnical report. All building works were to be carried out in accordance with the Building Code of Australia. No activity was to be carried out on-site until a Construction Certificate was issued, other than site investigation for the preparation of the construction and/or implementation of environmental protection measures that were required by the consent, such as erosion control.
“If an excavation associated with the erection or demolition of a building extends below the level of the base of the footings of a building on an adjoining allotment of land, the person causing the excavation to be made is responsible to notify the neighbour and responsible for the protection and preservation of the adjoining allotment of land.”
…
Action the following when an excavation extends below the level of the base of the footings of any building, structure or work on adjoining land:
a. notify the owner of the adjoining land, and
b. protect and support the building, structure or work from possible damage from the excavation, and
c. underpin the building, structure or work where necessary, to prevent any such damage.
These actions must be undertaken by the person having the benefit of the development consent at their own expense.
… CFA shoring is a widely used method for supporting deep excavations, offering a reliable and efficient solution for retaining soil and preventing ground collapse during construction. In CFA shoring, a continuous auger is drilled into the ground to create a vertical shaft, simultaneously removing soil and injecting concrete. This process creates a continuous wall of overlapping concrete columns, forming a sturdy shoring system that supports the surrounding soil.
As I read it, the supplementary geotechnical report modified the original recommendation to install CFA piles along the western boundary for any excavation. Instead, temporary excavation batter slopes could be used at specified angles, depending on the depth of overburden. Otherwise, CFA piles or benches were required. Which method to adopt was to be the subject of assessment by a geotechnical engineer.
The primary judge found that the existing drainage sump at the rear of the development site was filled in (J[48]) and that Kon broke up a stormwater drain that collected water from the Rumbalara Reserve (to the south of Lot 71 and the development site) (J[50]). The primary judge also found that “during these early works, no retaining was built, nor site drainage constructed” (J[52]).
The primary judge found (J[48]):
In August 2017, work commenced on the development site. Bushes and trees on the boundary with the plaintiffs’ land were removed.
An aerial photograph of the development site in December 2017 indicates that the site had been stripped of vegetation; tyres had been stockpiled.
60 Given Kon’s initial acceptance that he undertook this work, Nick’s agreement that Kon did so, and the fact that Ms Saric saw Kon doing the work means that I am comfortably satisfied that he did it. The initial clearing and excavation of the development site was undertaken by Kon, with the assistance of his son Frank, and with the knowledge and involvement of Nick.
61 There are no invoices which shed light on whether the developer was charged for this initial work by Nutek or by Kon, Frank or Nick. Both Kon and Nick said “we” undertook the preliminary works, that is, it was done collectively rather than individually. Nick then understood that Nutek might be engaged in the future to undertake building work on the site. Where Nick was presumably hoping that Nutek would be so engaged, it is likely that the early works were provided via Nutek.
I find that the early works were done by Nutek. It is likely that the builder had the development approval and construction certificate at the time, setting out the conditions and restrictions which governed how those works could be done and I so find.
Ultimately in May 2020, the developer and the builder signed a building contract whereby the builder was to construct the development for $18 million (J[68]). Nick conducted the negotiations on behalf of the builder although the contract was signed by Frank, as the builder’s sole director (J[68]). The primary judge found that the builder was provided with the conditions of the development approval and the construction certificate when it undertook the initial site clearing and excavation in 2017 and that the builder had the geotechnical reports before the contract was signed in May 2020 (J[77]).
The primary judge preferred the evidence of the expert engineers to that of the defendants. Her Honour said:
74 The engineering experts agreed that the builder was obliged to follow the recommendations of the geotechnical engineer, as they had expertise in relation to the stability of the ground, whilst the builder and the structural engineer did not. Mr Phillips himself deferred to the expertise of the geotechnical engineer.
…
77 I comfortably prefer the evidence of the experts to that of Nick or Kon. I have already found that Nick had the geotechnical reports for some time before the building contract was signed. The geotechnical reports were sent to Nutek’s office when they were available in July 2015 and March 2017. I have also found that Nutek had the conditions of development approval and the construction certificate when Nutek undertook the initial site clearing and excavation in 2017. The defendants accepted that these materials came into their possession in any event when the building contract was signed in May 2020.
78 Where Nick liaised with consultants as part of his role, and appears to have been involved in commissioning the geotechnical reports, I do not accept that he did not look at the reports or thought they were irrelevant to Nutek. Where Nick’s area of responsibility was ensuring compliance with planning instruments and liaising with council, nor did I accept that he considered that the conditions of development consent did not apply to the builder undertaking the construction on behalf of a developer. Nor do I accept Kon’s evidence that he did not think it necessary to familiarise himself with the geotechnical reports or the conditions of development approval.
79 By these documents, Nick and Kon (and Nutek) were on notice that the risk of a landslide along the western boundary was “assessed to be possible and consequence major indicating high risk”. To address this risk, either CFA piles had to be installed prior to excavation or, failing that, temporary batters and benches had to be constructed under the supervision of a geotechnical engineer. Further, the work was to be undertaken in conformity with the conditions of development approval, which were directed to minimising erosion and sedimentation and addressing the natural watercourse and stormwater flows along the western boundary.
(Emphasis in original.)
In January 2021, work recommenced on the development site (J[83]). Excavation work was being conducted at the boundary with Lot 71. Alex said that Allworks entered into an oral contract with the builder to remove material from the development site, which was said to involve hammering rock in the middle of the site and removing it (J[83]).
The primary judge found (J[86]) that, on 11 February 2021, Mr Rahimi, the developer’s original engineer, issued a “Structural Statement”, through Structural Holdings Pty Ltd (alleged, but not found, to be a concurrent wrongdoer) which said as follows:
We have reviewed the stability of current state of bulk excavation around boundary of the above mentioned site, considering mechanical properties of cut soil, rock and the distances from the boundaries, we consider current bulk excavation around boundaries as stable for temporary construction stage.
Her Honour noted that the addressee of the statement was unidentified and the basis for the statement, whether instructions or information, did not appear from the evidence (J[87]). Her Honour accepted Mr Ball’s evidence that: “[the statement would] be out of date virtually the next day” (J[91]).
The primary judge found (J[92]):
By this time [about February 2021], Mr Brown had noticed an increase to the damage to his property. The window in the living room now rattled when the front door was closed. He noticed cracks in the internal gyprock sheets at the eastern end of his home. There were also slight gaps appearing in the panels of the roof eaves at that end of the house. The slabs in the driveway were noticeably tipping further towards the development site.
In March 2021, Kon offered to purchase Lot 71 from Mr Brown for $670,000 (J[93]). Although Mr Brown was amenable to selling, no transfer ever eventuated.
On 19 March 2021, Mr Brown noticed that the power pole, which was on the driveway on Lot 71 near the boundary with the development site, was looking precarious as the soil around the base of the pole had been washed away (J[94]-[95]). He sent Kon a text with photographs and asked him to “send someone to shore it up” (J[96]). Her Honour found (J[97]):
Kon arranged for fill from the development site to be moved into the void. The site fencing was put back together. He took a photograph after this had been done. Evident in both the ‘before’ and ‘after’ photograph are old tyres. The landslip revealed that the tyres already encountered on the development site in 2017 continued in the fill underneath the plaintiffs’ driveway.
What this event must have indicated to Nick and Kon was that, whatever the Structural Statement said, the stability of the “current state” of the excavation around the boundary may well have changed since 11 February 2021. Further advice was needed from a geotechnical engineer as to what measures, if any, should now be taken to preserve the integrity of the plaintiffs’ land.
On 28 April 2021, the plaintiffs obtained a report from a building inspector on the state of their house. The building inspector considered that the excavation works in the adjoining development site had contributed to the damage observed, together with the removal of mature trees. The building inspector identified a number of safety issues, which required immediate rectification. In short, “there does seem to [be] a considerable amount of movement” to the driveway and house, with resulting cracks, gaps, misalignments, leaning and subsidence. In addition, the site posed major safety concerns for the public …
110 … Mr Ball observed that “it is clearly evident that the land dividing [the lots] is unstable and displays areas of localised landslip.” No temporary shoring was evident. Mr Ball also observed that there were “tyres everywhere”, which appeared to have been “just pulled out of the fill”, that is, different tyres from the neat stockpile photographed in 2017. As Mr Ball later informed the NSW Building Commissioner, he then formed the view that the building works were unsafe and posed a very significant risk to the stability of the plaintiffs’ property.
111 On 24 June 2021, the plaintiffs obtained a boundary survey from David Armstrong, who observed encroachments by the excavation works had gone beyond the boundary by some 2 metres in places.
The finding in J[111] is relevant to the plaintiffs’ claim in trespass.
Mr Ball retained a geotechnical engineer, David Mehan, to conduct a “desk-top” assessment of the stability of the site and also attended the site on 27 July 2021 (J[112]). The primary judge extracted the following summary from his report (J[112]):
- Excavation being undertaken at … Etna Street has proceeded without provision of temporary excavation support apart from placement of excavated spoil against the cut on the common boundary. This is unusual for deep excavation in the Central Coast region.
- The subsurface conditions along the common boundary are a deep sandy clay soil. This material would not usually be expected to stand unsupported at anything more than a metre deep. The height of unsupported soil appears to be in the order of 2-3m and collapse of this material has a high risk of occurring.
- The ground along the common boundary shows evidence of ground subsidence and differential movement between the ground on either side of the boundary and, in places, constitutes a landslip.
- The cause of the landslip and subsidence has been the loss of support of the ground which had occurred due to the excavation on the construction site.
- Spoil and rock have been placed along the common boundary presumably to support the excavated land, however the steepness of the slope and presence of water from existing broken drainage pipes at the base of the excavation (together with the drainage concentrated to this location) leads me to the view that further subsidence and or slip on the common boundary will occur.
- Interference with pre-construction drainage pipework has increased the risk of instability.
7. The risk of subsidence or landslip on or near the common boundary is high to very high.
- Excavation support is required to reduce the risk of landslip/subsidence on the common boundary.
(Emphasis in original report.)
In light of Mr Mehan’s report, Mr Ball was of the view that the house was not in imminent danger of collapse but did display evidence of movement. The ground forming the boundary with the excavation was “unstable, has already collapsed in part, and is in imminent danger of further collapse”. In light of this, “remedial works in the form of a piled retaining wall MUST BE undertaken immediately”.
(Emphasis in original.)
It would appear that, by this point in time, the developer and builder knew that work needed to be undertaken to stabilise the western boundary, and had obtained an engineering design from Mr King to do so. This was, of course, four years after the early works in 2017 and nine months after resumption of work in January 2021.
On 23 September 2021, work began on a retaining wall but it was done at the street frontage of the site rather than near the plaintiffs’ house. Kon was doing this work. However, on 25 September 2021, the plaintiffs took a video of “Alex excavating below [them]” (J[126]). The primary judge also accepted Mr Brown’s evidence that he saw Alex digging up rocks and depositing them in a truck and that this was not the only occasion on which he saw Alex doing digging work at or near the boundary (J[127]).
The primary judge reproduced a still photo taken from the plaintiffs’ video of 25 September 2021 in the reasons for judgment (J[126]). It depicts an excavator immediately below the position of the camera, close to the fence (which Nick admitted was on Lot 71 (J[203])) and on the other side of the power pole (which was also on Lot 71).
On 26 November 2021, following heavy rain, there was “significant ground movement” on the site. Mr Ball confirmed on inspection that “significant landslip had occurred, and that further landslip was likely in view of forecasted rain” (J[130]). Another significant landslip occurred on 28 November 2021, which resulted in the plaintiffs’ driveway falling 7m onto the development site. Mr Brown’s car and two motorbikes were parked in the driveway and remained trapped there (J[132]).
When addressing the cause of the collapse of the plaintiffs’ driveway, the primary judge found:
148 I am comfortably satisfied that the collapse of the land on the western boundary was caused by excavation on the development site. Mr Phillips did not suggest otherwise. The risk of such a landslide was clearly identified in the geotechnical report and reflected in the conditions of development approval.
…
151 The works were not conducted substantially in accordance with the geotechnical report of July 2015 or the supplementary geotechnical report. CFA piles were not installed along the western boundary, either prior to excavation or at all. No temporary batters and benches were installed under the guidance of a geotechnical engineer. Nor were the works carried out in accordance with the Building Code of Australia. Sediment control measures do not appear to have been installed or maintained. Where the excavation on the development site was to a level below the base of the footings of the plaintiffs’ home and driveway, no steps were taken to support the home or driveway from possible damage from the excavation or to underpin the house, driveway or works where necessary, to prevent any such damage. The conditions of development approval were observed in the breach.
152 In short, the collapse of the plaintiffs’ land and the related damage to their house, carport and driveway were caused by the excavation on the development site and the lack of any measures taken to protect the plaintiffs’ land, notwithstanding clear indications to the developer and builder that such measures were needed.
161 As to whether Nick undertook excavation work, he denied this as he did not have a ticket to operate an excavator. Whilst Nick accepted that not everybody that operated a machine necessarily had a ticket to do so, “Well, I abide by the law, so I’m different.” Nick said “I had … some labouring work that I did, as far as securing the site, helping out where I could, if I was there. That was about it.” Alex said he saw Nick doing a bit of truck driving on-site.
162 Against this, Mr Brown saw Nick digging all over the site and driving trucks, maybe 10 or 20 times. Mr Brown saw Nick digging along the boundary and on the plaintiffs’ side of the boundary. Ms Saric also saw Nick operating the excavator between January and November 2021. Mr Brown and Ms Saric both agreed that they did not take any photos of Nick engaged in excavation work and were relying on their memory. But Ms Saric denied that she had confused Nick with Kon, “When I see your client, I know your client, because there has been years I have just staring at them hoping they can do their jobs.”
163 When Mr Ball looked at the excavation site from the street, he could not positively say whether it was Nick or Kon operating a machine, “I could tell that there was an elder gentleman operating this machine [or] a younger guy operating the other one.” On other occasions, Mr Ball would walk up the driveway, “I could see the guys operating the machines from there … sometimes I could identify them individually.” He saw Nick operating the excavator “maybe four or five” times, including around the landslip area, “I think I saw them all doing work up in that area … I definitely saw them, yeah.” Mr Ball agreed that it was possible that, when he thought he saw Nick, he may have been looking at Kon, as he “wasn’t making any effort to identify the operator. I was looking at the work that was being done and looking at the risk of further movement and collapse that might jeopardise the safety of my client.”
164 Certainly, in the videos and photographs taken by the plaintiffs, Nick was wearing hi-visibility workwear and steel-capped boots. Nick looked like he had been undertaking construction work, as his garments and boots were dirty. I attach no weight to Nick’s protestation that he would not have operated an excavator as he was a law-abiding person. Where Nick was seen doing just that, by Mr Ball, Mr Brown and Ms Saric, I prefer their evidence and I am satisfied that he did undertake this work from time to time.
168 As to whether Alex undertook excavation work, he denied being involved in excavation on the boundary with the plaintiffs’ property. Rather, Alex was asked by Kon to run the rock breaker machine and load trucks with soil material on the opposite boundary of the development site. Alex denied that he did any digging himself, as he was there to hammer and load trucks. Alex denied that he would have undertaken excavation work if his father had asked him to, “No, I wouldn’t have done it. … because I don’t dig … I was told to hammer, and then I was told to … load trucks. That was my job.” Alex maintained that he would have refused an instruction from Kon to operate the excavator, “because that was Kon’s job. … I wouldn’t have done it. … I didn’t do any excavation-type work. I didn’t do any digging. All I did was move soil from there to there.”
169 Against this, Mr Brown saw Alex digging with an excavator and breaking rocks. He saw Alex working all over the site, including across the boundary into the plaintiffs’ property. He saw Alex doing this 10 or 20 times. Whilst Mr Brown never spoke to Alex, his brother, father and uncle pointed him out, “That’s Alex doing the digging. That’s Alex there”. Mr Brown said he saw Alex on numerous occasions over the course of a year, “When I’ve been on my driveway I’ve seen you working right underneath it.” As to who was doing the excavation work at the time of the main collapse, Ms Saric said, **“**On that day of the collapse it was Alex. I watched him. I was standing right above him.”
170 Alex’s suggestion that he would have refused to operate the excavator, even if asked by his father, was unlikely. Alex was engaged on-site to operate heavy machinery. He did use the excavator after the landslide, and so he was well able to do so. I see no reason why Alex would have refused a request by his father to operate the excavator before the landslide. Ms Saric took a photograph of Alex “excavating before us” on 25 September 2021: see [134]. Mr Brown observed Alex digging up rocks. The machine has an excavation bucket attached to it. A pile of large rocks is seen near a tip truck. Likely, Alex is using the machinery to collect the rocks and put them into the truck for removal off-site. The only thing stopping Alex from using the same machine and bucket to excavate material from the development site is his description of an immutable delineation of roles on-site. Where there is reliable evidence that Alex’s role was not so delineated, I am satisfied that he operated the excavator, including at the western boundary.
(Emphasis added to indicate what Mr Corsaro accepted was “the high point of the evidence” against Alex.)
In the Court below, as the primary judge summarised at J[195]-[197], the plaintiffs contended that the developer, the builder and each of Frank, Nick, Kon and Alex removed soil near the boundary and subsoil from Lot 71 and also excavated over the boundary into Lot 71. Each of the defendants denied this contention.
The primary judge said:
200 For the purposes of the tort of trespass to land, land includes the soil, subsoil and fixtures such as a house: Sappideen at [4.20].
201 The first thing to note is that the builder does not appear to have clearly marked the boundary. Alex said “I wouldn’t even know where the boundary was. … No one’s showed me any pegs to show where the boundary was, so I don’t know if [Kon] dug past it.” As recorded in the video of 18 September 2021, Nick said “We had the pegs done the other day. …” Mr Brown replied, “Nick. You had the pegs done 6-weeks ago, and … they’re all gone. You’ve thrown them out.”
There is reliable evidence from Mr Brown that each of the defendants were seen on multiple occasions to operate an excavator at and over the western boundary. Absent a continual video or photographic record, or continuing surveillance by the plaintiffs or Mr Ball, it is not possible to say which of Kon, Nick, Frank or Alex was operating the excavator when any piece of the plaintiffs’ land or subsoil was removed. What can be said is that each of the defendants worked together to advance the excavation of the site. Kon did the bulk of the work, supported by his sons. Kon supervised the excavation work being done by the other defendants. Nick assisted from time to time. The videos taken by the plaintiffs most clearly identify Alex as operating an excavator at the point where the landslide later occurred, and not long before it did, on 25 September 2021: see [126]. In addition, Ms Saric noted in her email to the council on 23 November 2021 that a week earlier the builders had removed the rocks placed by Kon underneath their collapsed driveway. Where it was Alex’s job to collect rocks and place them in a truck for removal off-site, it is most likely that Alex attended to this task in respect of the rocks near and underneath the plaintiff’s driveway.
(Emphasis added in bold to indicate the passages particularly relied on by the plaintiffs and emphasis added in italics to indicate the passage on which Mr Corsaro relied in support of his submission that the finding had the consequence that the plaintiffs could not prove causation.)
Duty of care in relation to support for land
…
… 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).
(Emphasis in original.)
I am satisfied that the developer and builder’s conduct in this regard was negligent and in breach of a duty of care owed by each to the plaintiffs. The fact that Nutek was not an employee does not preclude the developer from owing a duty of care to the plaintiffs in the circumstances: Stevens v Brodribb Sawmilling Co Pty Ltd (1986) 160 CLR 16. I repeat my observations at [149]-[152]. In short, the developer and builder were on notice, through the geotechnical report, that the western boundary posed a high risk of landslide, absent CFA piling. The risk of destabilising Mr Brown’s land by the excavation works was plainly foreseeable. It was a risk that was not insignificant and reasonable persons in the position of the developer and builder would have taken further precautions against that risk: s 5B, Civil Liability Act. The further precautions that these defendants ought reasonably have taken, but failed to take, were detailed in the geotechnical reports and the conditions of development approval.
I am satisfied that the damage to Mr Brown’s land, and the resulting inconvenience to both Mr Brown and Ms Saric, would not have occurred had the developer and builder not breached their duty of care: s 5D, Civil Liability Act. The developer is liable in negligence. For, essentially the same reasons, Nutek is also liable.
On 25 September 2021 and likely on other occasions as well, Alex was operating an excavator below the plaintiffs’ driveway. As I have already noted, Alex was most likely the person who, in November 2021, removed the rocks placed by Kon underneath the collapsed driveway. This was shortly before the main landslip. Where Alex must have known that this material had been placed under the plaintiffs’ driveway in order to address an earlier landslip, it must have been very obvious that removing that material would likely result in a further landslip. It is appropriate for the scope of Alex’s liability to extend to the harm so caused, which was foreseeable at the time of the breach. I consider in these circumstances that Alex is also liable in tort for damages then sustained by Mr Brown to his land.
236 Where a director trespasses on land on behalf of his or her company, the director is personally liable. As Starke J explained in O’Brien v Dawson (1942) 66 CLR 18 at 32:
… it does not follow that a director of a company would escape personal liability under cover of the company’s responsibility if he himself became an actor and invaded the plaintiff’s rights, as by trespassing on his land, or seizing his goods and so forth.”
237 As to whether the directors of Nutek are personally liable for torts committed by the company, directors are not personally liable for a company’s torts merely because they have general control of the company’s business: Ian Ramsay, Company Directors: Principles of Law and Corporate Governance (2nd ed, 2023, LexisNexis) at [14.8]. That said, the learned author continued at [14.11]:
238 Where the conduct of a director acting on behalf of, or as an organ of, a company constitutes a tort of the director, the fact that he or she was engaged in corporate activity will not absolve the director from liability. …
As Jacobson and Gordon JJ explained in Australian Securities and Investments Commission v Narain (2008) 169 FCR 211; [2008] FCAFC 120 at [94]:
… the High Court has followed the House of Lords in holding that in the world of tort law the status of a person as an employee or director of a company does not divest him or her of personal liability for wrongful acts committed in that capacity …
239 Where a duty of care is an element of the tort, a director will not be personally liable unless she or he can be seen to have assumed that duty: Ramsay at [4.11]. The question in each case is “whether all of the elements of the contravention are made out against the individual or whether he or she merely acted as a corporate organ, binding the company but not the person individually”, this being a question of fact: ASIC v Narain at [96]-[97].
240 A director will also be personally liable if they direct the company to commit a tort. Much ink has been [spilt] on two divergent tests as to the circumstances in which directorial liability will arise, being the “direct or procure” test and the “making the wrongful act their own” test. In Anchorage Capital Master Offshore Ltd v Sparkes (2023) 111 NSWLR 304; [2023] NSWCA 88, the principles and authorities were extensively reviewed by Ward P, Brereton JA and Griffiths AJA, who concluded that a director’s liability in these circumstances is simply as a joint tortfeasor, where two or more persons take “concerted action to a common end” and in the course of that action any one of them commits a tort: at [275]. At [294]:
[T]he liability of a director for procuring a tort of the company is a form of joint liability, the director and the company being joint tortfeasors. Where the director or officer is merely acting as a corporate organ in the ordinary way, no such liability arises ... In order to incur liability as a joint tortfeasor, the director must be so personally involved in directing or procuring the tort as to “make it his or her own” tort, above and beyond reasonably and in good faith directing the company’s decision‐making as a director.
241 The Court of Appeal in Anchorage approved of the extensive analysis of the case law by the Full Federal Court in JR Consulting & Drafting Pty Ltd v Cummings (2016) 329 ALR 625; [2016] FCAFC 20, before concluding at [295]:
… the liability of a procurer as a joint (or even sole) tortfeasor is not accessorial but principal, in which it is implicit that the same cause of action lies against the procurer as against the actual infringer. When applied to the tort of negligence, this dictates that an essential element of the cause of action against the alleged procurer is that he or she personally owes the plaintiff a duty of care.
244 A reasonable person in the position of Nick, Kon or Frank could not have failed to be aware that the excavation work being undertaken on the development site posed a serious risk of harm to the plaintiffs’ land. As much was made plain in the geotechnical report. The risk was foreseeable and not insignificant. In the circumstances, a reasonable person in their position would have taken the precautions described in the geotechnical reports. As already canvassed at length, no steps were taken by the directors to adhere to the recommendations of the geotechnical engineer or the conditions of development approval in undertaking the excavation work. The duty of care was breached.
…
246 Each of the directors were engaged on a day-to-day basis in the excavation works. Nick was aware of the excavation work being undertaken, as he visited the site two to three times a week and also worked on-site from time to time himself. Frank accepted that Nick would have seen Kon undertaking excavation work, “He had to have seen it, I don’t know.” While Nick probably had less ‘hands on’ involvement in the excavation, he was fully aware of what was going on and did nothing to protect the plaintiffs’ right of support for their land. I am satisfied that each of these defendants is also personally liable as a director of the builder.
As to the evidence concerning the diminution in value of the plaintiffs’ land, Mr Konidaris valued the plaintiffs’ property in its current state, including the fact that vehicular access from Etna Street was not possible. The current market value was $75,000. If the damaged driveway was restored so that vehicular access was available, then the value would be $245,000. If the structural damage to the property, including the house, was also corrected, then the property was worth $820,000.
271 There is a big difference between the diminution in value of Mr Brown’s house and land, of $745,000, and the cost of rectifying the house and land, being $2,122,232. Obviously enough, Mr Brown bought an affordable and modest property. It is now effectively worthless as a result of the excavations at the development site and the resulting landslips along the western boundary, preventing access to the house other than by foot. As to whether it is reasonable to nonetheless award damages to enable Mr Brown to be put in the same position he would have been in if the tort had not been committed by the defendants, it remains the case that Mr Brown has, in effect, lost his home. Mr Brown and Ms Saric have lived in their Etna Street home since they bought the property in 2015. It was not suggested to the plaintiffs that they had a strong desire to move. They were not asked whether they had been looking around. The fact is that, since all of these events have occurred, they had not moved house.
272 In these circumstances, I consider that this is one of those cases “where the measure of the plaintiffs’ loss is such that there is only one mode of fairly repairing it. If that turns out to be more expensive than another, the wrongdoer has no one but himself to blame”: Evans v Balog at 40. I consider that the cost of rectification is prima facie reasonable, including by reason of the fact that the damage has been done to Mr Brown’s home and where the defendants have not discharged their onus of establishing that the costs are unreasonable, either because there is no actual intent to reinstate the land or that there is such a disproportionality to the diminution of capital value that it would be unreasonable to award such costs: Roberts v Goodwin Street at [119].
The plaintiffs submitted that the claim in trespass was not an apportionable claim under the Civil Liability Act as it was an intentional tort. If there was a finding that any of the defendants were liable in trespass, then they were liable for the entirety of the judgment.
280 Section 5A of the Civil Liability Act provides that Part 1A will apply to “any claim for damages for harm resulting from negligence, regardless of whether the claim is brought in tort, in contract, under statute or otherwise”. Section 34(1)(a) of the Civil Liability Act provides that an apportionable claim is a claim for economic loss or damage to property in an action “arising from a failure to take reasonable care”. As Leeming JA explained in Paul v Cooke (2013) 85 NSWLR 167; [2013] NSWCA 311, “the effect of s 5A is that Pt 1A of the Act applies uniformly to a class of claims for damage, irrespective of how the cause of action has been formulated, so long as the damage results from a failure to exercise reasonable care and skill”: at [41].
281 In Reinhold v New South Wales Lotteries Corporation (No 2) (2008) 82 NSWLR 762; [2008] NSWSC 187, Barrett J expressed the view that the requirement for an action to be ‘arising from a failure to take reasonable care’ would be made out where if, at the end of the trial, the evidence warrants a finding to that effect and regardless of the absence of any plea of negligence or a failure to take reasonable care: at [30]. In Perpetual Trustee Co Ltd v CTC Group Ltd (No 2) [2013] NSWCA 58*,* Macfarlan JA disagreed with Barrett J’s reasoning in Reinhold, suggesting that section 34(1)(a) required the failure to exercise reasonable care to be an element of the cause of action brought against the defendant: at [22]-[23]. However, Macfarlan JA’s views did not form the ratio of that case, as Barrett JA disagreed (at [37]-[38]) and Meagher JA chose not to express a view on the matter (at [36]). In Rahme v Benjamin Khoury Pty Ltd [2019] NSWCA 211; (2019) 100 NSWLR 550, however, the Court of Appeal adopted Macfarlan JA’s approach: at [135] (per Macfarlan JA, Bathurst CJ and McCallum JA agreeing).
282 That approach was recently questioned obiter in Gerrard Toltz Pty Ltd v City Garden Australia Pty Ltd (in liq) (No 2) [2024] NSWCA 232 per Stern JA and Basten AJA. However, as the law presently stands, the Civil Liability Act 2002 (NSW) does not apply to an action in trespass – where trespassory interference will generally be intentional – unless a defendant is sued for a negligent trespass. For example, in Rove Estate Pty Ltd atf Lane Cove Estate Trust v Chomp Excavations & Demolition Pty Ltd (No 3) [2023] NSWSC 274, Williams J held that s 34(1)(a) did not apply in relation to a trespass to land claim at [209]:
… In order for s 34(1)(a) to apply, it is necessary for the absence of reasonable care to have been an element of the cause of action on which the plaintiff succeeded: Rahme v Benjamin & Khoury Pty Ltd (2019) 100 NSWLR 550; [2019] NSWCA 211 at [135]–[137] (Macfarlan JA, Bathurst CJ and McCallum JA agreeing). In the present case, negligence was neither pleaded as an element of the causes of action in trespass, nor found as a matter of fact giving rise to the defendants’ liability for trespass. It follows that [the] claim … is not an “apportionable claim” within the meaning of s 34(1)(a), that s 35 of the Civil Liability Act therefore does not apply. …
283 The plaintiffs’ pleading of their claim in trespass is not entirely clear on this subject. As mentioned, the defendants are said to have undertaken building works on the development site in such a manner as to interfere with the plaintiffs’ use and enjoyment of their land. Particulars of the building work which are said to have so interfered include removal of the soil and subsoil in and about the boundary, trespassing on the plaintiffs’ land, together with “failure to take or any sufficient proper steps to secure the stability of the plaintiffs’ land.” In these circumstances, I consider that the claim in trespass is apportionable, where the failure to exercise reasonable care is an element of the cause of action brought against the defendants.
Finally, Nick submitted that his fellow defendants, particularly Kon, should bear more of the blame. In doing so, Nick relied on para 12 of the Technology and Construction List Response as articulating such a claim. This was, with respect, a misreading of that paragraph. However, I have since noticed that “Konstadinos Kalantzis Sole Trader” was listed as a concurrent wrongdoer in para 11(c) of the pleading. While Nick did not press this sub-paragraph is closing submissions, in an abundance of caution, I will treat Kon as having been identified as a concurrent wrongdoer by Nick. Whilst Frank and Alex did not make any written or oral submissions on this subject, as they were self represented and had filed a common defence with Kon and Nick, I will treat them as having embraced the same submission.
287 There is no doubt that Kon ran the building site. He undertook the bulk of the excavation work and supervised the excavation work of others. But I do not see him as primarily responsible for what happened. Kon does not appear to have had any particular interest in paperwork. Nick was the person in charge of the paper. Nick was in possession of the relevant reports and information, in particular, the geotechnical reports. Nick was responsible for liaising with the council. Nick was well aware of the risks identified by the geotechnical engineer and the steps which were recommended in order to ameliorate those risks.
288 Nick was also well aware of what was happening on-site; he attended the site frequently. Nick did labouring and truck driving on site and, as I have found, excavation work as well. Nick was best placed to stop what Kon was doing, if he perceived that it was contrary to the geotechnical engineer’s advice or the conditions of development approval. Nick was also best placed to ensure that Kon took steps to comply with the geotechnical engineer’s advice or the conditions of development approval if needed.
289 Whilst Kon was more actively engaged in the activity causing loss, in the sense that he operated the excavator and supervised excavation work by others, Nick was more effectively able to prevent the loss occurring by communicating the necessary information in the geotechnical report and the conditions of approval to Kon and others, allocating the resources of Nutek to attend to those matters, and ensuring that this happened. In these circumstances, I do not consider that any significant apportionment in favour of Kon would be just in the circumstances. I consider that Kon should be responsible for 30% only.
In substance, the complaint in this ground is that the primary judge did not accept Alex’s evidence that he did not do excavation work and that he did not do work on or near the boundary between Lot 71 and the development site. This evidence formed the basis of Alex’s case in the Court below. Alex specifically denied using any excavation machinery to do any excavation. He said that the only work he did near the boundary was work performed after the collapse of the driveway in November 2021 to shore up the subsidence with rock from elsewhere on the site. He was adamant that he did not use the excavator and would not have done so if anyone had asked him to do it. He explained: “I don’t dig”.
In the Court below, Mr Brown identified Alex as the person operating the machine depicted in the still photograph from the video taken on 25 September 2021. Alex put to Mr Brown in cross-examination that he was not the operator of the machine.
In cross-examination, Alex said that his role on the development site was as “a truck driver and … a hammer operator [who] was hammering the rock in the middle of the site”. He denied using excavation machinery to do any excavation on the development site. He agreed that he came onto the development site in January 2021. He said that he only took direction from Kon.
In final oral submissions, Alex, who appeared for himself, said:
… I was working to the best of [my] ability that was given onsite and under supervision of Kon in relation to the work I was doing on the other side of the boundary.
… at no time did I dig into or on the plaintiffs[’] boundary or any other part of the site that required detail excavation as this would have been out of my scope of works as I wasn[’]t provided with any structural drawings or boundary pegs from the time I was onsite, as that was [Kon’s] job.
The primary judge rejected Alex’s evidence about the type and location of his work. Alex’s evidence was inconsistent with the evidence of the plaintiffs, Mr Ball and the other defendants.
Mr Corsaro submitted in this Court, in writing and orally, that, if, contrary to Alex’s evidence, he had been operating an excavator on the western boundary (between Lot 71 and the development site) it had not been shown that Alex used the excavator to remove uncontrolled fill at the boundary in a way which withdrew support from the plaintiffs’ land. Mr Corsaro further submitted that, if Alex had been rock-breaking and loading close to the boundary, this would not have caused the subsidence occasioned by the loss of support for the soil on Lot 71 and that, on this basis, Alex ought not to have been found liable to the plaintiffs.
Not only was this case not run in the Court below, but it did not fall within any of Alex’s grounds of appeal or indeed with Alex’s case, which was that he did not operate the machine depicted in the photograph of 25 September 2021. In addition, no notice pursuant to Uniform Civil Procedure Rules 2005 (NSW) (UCPR), r 51.36(2) has been filed. Such a notice is a significant requirement in an appeal. Alex’s submission in this Court falls within the prohibition against raising new points on appeal where, if the point had been taken at trial, further evidence might have been led or it might have been capable of explanation or qualification: Coulton v Holcombe (1986) 162 CLR 1 at 6-8; [1986] HCA 33; Water Board v Moustakas (1988) 180 CLR 491 at 497; [1988] HCA 12. Accordingly, this Court ought not entertain this new case on appeal.
The primary judge’s reasons for making the relevant findings were set out in detail and have been extracted and summarised above. I discern no error in her Honour’s fact-finding. The plaintiffs observed the development site and the activity of the individual defendants over a period of years. Their identification of individual defendants was assisted by prolonged and anxious observation as well as the generational difference between Kon and Nick, who were the older brothers, and the next generation, being Kon’s sons, Frank and Alex. Further, the defendants identified themselves and each other to the plaintiffs, as well as to Mr Ball, who came onto the site less frequently but at important times. In addition, the plaintiffs took a video of Alex excavating “below them” on 25 September 2021. Ms Saric’s unequivocal evidence was that on the day of the “main collapse”, it was Alex above whom she was standing. Alex did not cross-examine Ms Saric at all. As referred to above, Alex cross-examined Mr Brown about a photograph taken on 25 September 2021 which Mr Brown said depicted Alex operating an excavator near his boundary.
Having regard to this evidence from various sources, including from the other individual defendants themselves, the primary judge was both entitled, and correct, to reject Alex’s evidence that he had only done work in the middle or on the other side of the development site and to prefer the evidence of the plaintiffs and Mr Ball, which was supported by the photographic evidence, the video evidence and the evidence of statements made by Kon, Nick and Frank, which identified Alex.
Mr Corsaro identified the “logical steps” in the primary judge’s reasoning that Alex had caused the alleged harm as follows: first, that the excavation of the western boundary caused the collapse; second, that Alex personally undertook excavation at the boundary; and, third, that liability for the damage followed from Alex’s participation in excavation activities that caused the collapse. He submitted that the primary judge was in error in treating the temporal sequence of rock removal followed by a collapse as supporting a causal inference when there was no expert evidence to establish the mechanism by which the collapse could have occurred.
The primary judge’s findings on causation implicating Alex were not only open but correct. Alex had no alternative case at trial. His only case was that he had not done any work close to the boundary prior to the major collapse of the driveway. Although her Honour did not express her findings by reference to the phrase the “sequence of events”, this was plainly the basis of her Honour’s reasoning. Alex had removed supporting soil at a time proximate to the collapse, from which it can be inferred that the removal of soil at the location and at that time, caused or contributed to the collapse. Such reasoning did not require expert evidence to support it: Adelaide Stevedoring Co Limited v Forst (1940) 64 CLR 538 (Forst) at 563-564; [1940] HCA 45. As this Court (Handley AJA, Hodgson and Tobias JJA agreeing) said in Sea Coatings (Australia) Pty Limited v Pascoe [2008] NSWCA 54, applying Forst, at [47]:
The court is entitled to act on the inference of causation arising from the sequence of events despite the absence of expert evidence on that question.
The expert evidence was relevant to other issues, such as the risk of harm; and what the duty of care which the defendants owed to the plaintiffs required by way of reasonable precautions to avoid excavation near the boundary leading to subsidence because of inadequate support for Lot 71. The expert evidence established what was required to be done and that no reasonable precautions were in fact taken. However, the plaintiffs were entitled to rely on, and the primary judge was entitled to find causation established on the basis of, the sequence of events.
As Mason P explained in Bendix Mintex Pty Ltd v Barnes (1997) 42 NSWLR 307 (Bendix) at 317:
It can be demonstrated that the common law is not unsympathetic to the plight of plaintiffs who are faced with multiple defendants yet uncertain as to which of them was legally responsible, where it appears that not all of them were. First, proof that any defendant caused or contributed to injury or damage by negligent breach of a duty of care will suffice to impose liability on that defendant. In other words, the law readily embraces the notion that several persons may bear legal responsibility for the one injury. Secondly, the trier of fact is entitled (indeed encouraged) to take a “robust and pragmatic approach” to proof of causation. The inability to call lay or expert evidence that shows the precise way in which something has happened is not fatal: see Adelaide Stevedoring Co Ltd v Forst (1940) 64 CLR 538 at 563-564, 569; Tubemakers of Australia Ltd v Fernandez.
Mr Corsaro submitted that the primary judge erred in finding Alex liable in trespass because it had not been shown that Alex had encroached on either the soil or the subsoil of Lot 71. He submitted that the photograph dated 25 September 2021 showed no more than that Alex (on the assumption that Alex was the operator of the machine, as the primary judge found) operated the machinery adjacent to the western boundary or that the excavation extended onto Lot 71 and that therefore the claim in trespass had not been made out.
The photographic evidence must be viewed in the light of the plaintiffs’ oral evidence as to the location of Alex’s machinery, including that Alex was working “under” Lot 71. This Court has often warned about the dangers of using photographic evidence alone without oral testimony of eyewitnesses as to what is depicted in them or expert evidence to interpret them: see generally Blacktown City Council v Hocking [2008] NSWCA 144. Thus, it is not productive to look at the still photograph of 25 September 2021 and for this Court to assess whether the machine depicted actually encroached onto Lot 71 at the time the photograph was taken. However, the Court below had the benefit of seeing and hearing the plaintiffs, who took the video, as to what they saw, which was that Alex was “below them” and, therefore, had encroached onto their land. Her Honour was entitled to accept that evidence and to find, accordingly, that Alex was liable in trespass because of his personal acts in encroaching on Lot 71.
I understand it ultimately to have been accepted by Mr Corsaro that it was not necessary for the plaintiffs to prove that Alex knew precisely where the boundary between the development site and Lot 71 was in order to succeed in their claim in trespass against him. However, he submitted that, if Alex was not shown to know where the boundary was, it would amount to negligent trespass rather than intentional trespass. I reject that submission.
The cause of action in trespass does not require the plaintiff to prove that the defendant knew the boundary of the plaintiff’s land but only that he or she was trespassing by encroaching on the plaintiff’s land, whether the defendant knew it was the plaintiff’s land or not. The position was summarised in Fleming*’s The Law of* Torts (11th ed, 2024, Thomson Reuters) at [3.20]:
The requisite intent is present if the defendant desires to make an entry, although unaware that the intrusion interferes with another’s rights. Thus it makes no difference whether the intruder knows the entry to be unauthorised or honestly and reasonably believes the land to be his or hers. It may, however, affect the quantum of damages.
A trespasser who honestly believes that he or she is the owner or has the owner’s authority or merely mistakes the boundary is nonetheless guilty of unlawful entry.
The argument is in my opinion misconceived. The trespass in this case is the unlawful detention of the appellant. The first respondent intended to detain him and its conduct should therefore be regarded as intentional. In these circumstances the question of negligence or fault does not arise... [W]here the trespass is intentional there is no occasion to consider underlying fault or whether the defendant was negligent. Furthermore it is not a necessary element of assault (and battery) that the defendant intended to injure the plaintiff... In the context of trespass by way of false imprisonment it is the intention to detain which is important. If one couples that intention with the unlawfulness of the detention the tort is complete. There is no call to consider negligence. It is irrelevant. Similarly the lack of awareness that the detention is unlawful is irrelevant.
The distinction between intentional trespass and negligent trespass was addressed but not decided by Williams J in Rove Estate Pty Ltd atf Lane Cove Estate Trust v Chomp Excavations & Demolition Pty Ltd (No 3) [2023] NSWSC 274*,* as her Honour was satisfied that the alleged trespass was intentional: [20]. Further, her Honour said, obiter, citing Rahme v Benjamin & Khoury Pty Ltd (2019) 100 NSWLR 550; [2019] NSWCA 211 at [135]-[137] (Macfarlan JA, Bathurst CJ and McCallum JA agreeing), that the claim in trespass was not an apportionable claim within the meaning of s 34(1)(a) of the Civil Liability Act since the absence of reasonable care was not an element of the cause of action in trespass.
In Gerrard Toltz Pty Ltd v City Garden Australia Pty Ltd (in liq*)* (No 2) [2024] NSWCA 232, this Court doubted whether this formulation is the better view (Stern JA at [182] and Basten AJA at [240]-[243]). An alternative approach was suggested in Perpetual Trustee Company Ltd v CTC Group Pty Ltd (No 2) [2013] NSWCA 58 by Barrett JA, who said at [42]:
It cannot be suggested (nor do I think it has been suggested in any decided case) that the nature or quality of a “claim” is, for relevant purposes, to be determined solely by looking at the court’s decision in relation to it. Nor is the nature or quality of a “claim” to be determined solely by looking at the terms in which it is framed. Rather, it is a combination of the terms in which the claim is framed (or pleaded) and relevant findings of the court in relation to it that must be assessed in order to decide whether it is a claim “in an action for damages . . . arising from a failure to take reasonable care” and has the other attributes of an “apportionable claim” under s 34(1)(a) [of the Civil Liability Act].
… the only basis upon which this Court held that CTC was liable to Perpetual was that CTC failed to exercise reasonable care in identifying the proposed borrower and confirming his authority to submit the loan application: Perpetual Trustee Company Ltd v CTC Group Pty Ltd [2012] NSWCA 252 at [4], [5], [23], [33], [34].
It is well established that the causes of action in negligence and trespass (whether negligent or intentional) are separate causes of action which may be pursued in the same proceedings: Williams v Milotin (1957) 97 CLR 465 at 474 (Dixon CJ, McTiernan, Williams, Webb and Kitto JJ); [1957] HCA 83; see also, State of New South Wales v Knight [2002] NSWCA 392 at [16] (Meagher JA, Handley and Ipp JJA agreeing).
It is not necessary to address these decisions further. In the present case, the relevant intention was present and the plaintiffs’ case was put on that basis. The defendants can have had no basis for believing that the plaintiffs had granted them an implied licence to encroach on Lot 71. They intended to excavate where they in fact excavated, which encroached on the plaintiffs’ land. It was common ground that the fence which was erected at the edge of the excavated soil near the boundary was erected on Lot 71. The encroachment was established by a wealth of evidence, including surveys taken as early as June 2021. Ground 4 has not been made out. The relevance of a finding of intentional trespass arises in relation to Mr Brown’s cross-appeals against Alex and Nick respectively, which will be addressed later in these reasons.
Mr Corsaro argued that the effect of the primary judge’s orders was that Alex was liable for 70% of the defendants’ liability to the plaintiffs and that this figure involved error as a correct apportionment would have assessed his liability at a lesser figure.
Mr Corsaro submitted in substance that the form of the List Response “could not displace the statutory operation of Part 4 of the Civil Liability Act” or the primary judge’s finding that each of the individual defendants was a concurrent wrongdoer, in the general sense of being jointly responsible for the damage to the plaintiffs. He submitted that the concession made by counsel for Nick at the hearing that, of the lengthy list of concurrent wrongdoers in paragraph 11 of the List Response, only “Structural Holdings Pty Ltd” was relied on as another concurrent wrongdoer ought not be found to be binding on Alex who was, by the time the matter was heard, unrepresented.
I regard the “concession” made by Nick’s counsel (that none of the other persons, corporate or natural, in the list in paragraph 11 was relied on) as an acceptance that there was no reliable evidence against any other alleged concurrent wrongdoer in the list apart from Kon. As referred to above, the evidence against Structural Holdings Pty Ltd was limited to a single document framed in heavily qualified terms.
Accordingly, the real question for this Court is: what is the appropriate way of dealing with a pleading, filed on behalf of parties who, at the time of filing, had a solicitor on the record who represented them, which names one defendant but not the other three individual defendants as a concurrent wrongdoer?
Mr Corsaro submitted that, because Alex was unrepresented at the hearing, this Court ought, in effect, disregard the pleading; proceed to apply Pt 4 of the Civil Liability Act for his benefit; and determine the matter as if he had been named as one of the putative concurrent wrongdoers in paragraph 11 of the List Response.
I reject this submission. The importance of a defendant pleading the proportionate liability defence has long been emphasised. As this Court (Meagher, Payne and Brereton JJA) confirmed in Bingo Holdings Pty Ltd v GC Group Company Pty Ltd [2021] NSWCA 184 (Bingo) at [20], Pt 4 of the Civil Liability Act requires “concurrent wrongdoer” within the meaning of s 34(2) as well as the acts and omissions of the concurrent wrongdoer to be identified. A defendant who relies on a proportionate liability defence (by alleging that a person is liable to a plaintiff in respect of the same loss suffered by the plaintiff) must identify the alleged concurrent wrongdoer and “plead that claim with the same degree of particularity as if bringing a cross-claim against the alleged concurrent wrongdoer”: Bingo at [30]. This principle is no less important when the alleged concurrent wrongdoer is already a defendant.
… it is well established, by the authorities to which the primary judge referred, that [the proportionate liability defence] must be pleaded. In this respect, it is analogous to a Limitation Act defence. The appellant’s contention that his Honour was bound to apply it regardless of it not being pleaded is not correct.
Accordingly, the submission that Pt 4 of the Civil Liability Act applies of its own force, irrespective of whether it is pleaded as a defence must be rejected.
Thus, as with a limitation defence, a defendant must plead a proportionate liability defence. It plainly falls within the matters that, if not specifically pleaded, would take the plaintiff by surprise: UCPR, r 14.14(2)(b). Of the four individual defendants, only Kon was named in their joint List Response as a “concurrent wrongdoer”. There is no explanation for this. However, if Frank, Alex or Nick wanted to have their liability to the plaintiff apportioned between themselves, it was necessary for each of them to be identified as concurrent wrongdoers in the List Response.
Further, the primary judge highlighted the deficiency in the course of closing submissions in an exchange with Mr Gauja, who appeared for Nick in the Court below, as to the alleged proportionate liability of the developer as follows:
GAUJA: In relation to apportionment as and against the defendants, paragraph 12 of the list response refers to each of the third, fourth, fifth and/or sixth defendants as also being concurrent wrongdoers, your Honour will also need to assess the position of the first defendant in all of this, who was the developer. In order to undertake the exercise of apportionment your Honour will need to--
HER HONOUR: Sorry, where is it pleaded that the developer was a concurrent wrongdoer? It’s not pleaded.
GAUJA: I’m just looking at paragraph 12.
HER HONOUR: Paragraph 12 basically says you need to go back and reread three to seven of the technology and construction list statement but replacing particular words in order to make it make sense, but there’s no reference there to the first defendant.
GAUJA: I accept that. It’s my submission that that’s not necessarily fatal to your Honour’s analysis. I’m just looking at--
HER HONOUR: I think it is. If you don’t actually identify someone as a concurrent wrongdoer you can’t stand up in closing submissions and say that the Court should apportion liability to an unnominated party. How can you do that?
GAUJA: Perhaps section 35A of the Civil Liability Act--
HER HONOUR: Does it talk about pleading?
GAUJA: No. It provides that it’s the duty of a defendant to inform plaintiffs about concurrent wrongdoers …
HER HONOUR: But, that can’t override - are you suggesting that if on closing submissions a defendant says “Oh, by the way, I’ve thought of another concurrent wrongdoer” that the Court should deal with it in a judgment …?
GAUJA: I don’t think that necessarily overrides what your Honour has indicated. I agree that there should have been at least some advance notice of this. It was not pleaded.
HER HONOUR: It is not pleaded. … I’m not going to deal with it. There’s a whole Civil Procedure Act, Uniform Civil - there’s all these rules here and the purpose of them is so that when we come to trial and I have to deal with it everybody is on notice of what your case is. So Mr Rogers can address it. I can have the benefit of evidence on the issue that’s been collated in accordance with the ordinary processes of the Court.
…
HER HONOUR: … There is no pleading that the third, fifth and sixth defendants are concurrent wrongdoers vis-à-vis your client. There is none. And perhaps that’s explained by the fact that this technology and construction list response was filed by a solicitor who was then acting for all of the third, fourth, fifth and sixth.
GAUJA: I accept what your Honour says.
… the absence of legal representation on one side ought not to induce a court to deprive the other side of one jot of its lawful entitlement ... An unrepresented party is as much subject to the rules as any other litigant. The court must be patient in explaining them and may be lenient in the standard of compliance which it exacts. But it must see that the rules are obeyed, subject to any proper exceptions. To do otherwise, or to regard a litigant in person as enjoying a privileged status, would be quite unfair to the represented opponent.
In any event, Alex and Nick were relevantly in the same interest (in that they would both have benefited by a pleading of the proportionate liability defence against each other and Frank) and Nick was represented and Alex was not. There is no suggestion that Mr Gauja did not put all that could have been put in favour of Nick in closing submissions. That he did not apply to amend the List Response at that stage is an indication of his appreciation that it was too late to do so.
Mr Corsaro, in his written submissions in support of this ground, has elided the distinction between the expression “concurrent wrongdoers”, in its meaning of defendants who have been found liable to the plaintiff and the expression, as defined in Pt 4 of the Civil Liability Act, which extends to parties, including those sued, who have been nominated by defendants as bearing potential proportionate liability to the plaintiffs. Although each of the individual defendants is a concurrent wrongdoer in the general sense of parties liable to the plaintiff, this does not, without more, convert each into a “concurrent wrongdoer” for the purposes of Pt 4, unless identified in the List Response of the defendants as such.
The primary judge’s apportionment of Kon’s liability at 30% was the product of the portion of the proportionate liability defence in their List Response, which named him, but not the other individual defendants, as a concurrent wrongdoer. While it can reasonably be inferred that, if the combined liability of Nick, Alex and Frank was 70%, the share of each would, had it been apportioned, have been found to be less than 70%, there was no pleading which entitled the primary judge to apportion the liability of any of the other defendants amongst themselves. In these circumstances, her Honour was correct to refrain from doing so. The parties are bound by their pleading. Further, her Honour gave the parties fair warning in closing submissions of how she read the List Response and how her Honour would deal with the proportionate liability defence.
Ground 5 has not been made out.
Nick accepted in written submissions that it was open to the primary judge to find that, contrary to Nick’s own evidence, Nick had engaged in excavation work near the boundary with Lot 71. However, Nick submitted that the evidence did not establish that he had excavated on Lot 71 itself and pointed to the lack of photographic or video evidence of his doing excavation work across the boundary. He also submitted that the surveys established that any encroachment onto Lot 71 was only in the order of 2m.
Mr Brown’s evidence, which formed the basis for her Honour’s factual finding that Nick excavated on Lot 71, was as follows:
Q. In that period between March 2021 and late November 2021 how many times did you see Nick Kalantzis doing any digging?
A. Maybe ten, 20 times.
Q. Where was he digging?
A. All over the site.
Q. In respect of your site what digging might he have done?
A. With respect to our site, digging along the boundary, yes.
Q. Again, always within his side of the boundary, or?
A. No. No. On our - digging on our side of the boundary.
(Emphasis added.)
Mr Brown confirmed that his memory of this time was clear.
Mr Brown, when cross-examined by Nick’s trial counsel:
agreed that he had not taken photographs of Nick performing excavation work and that he was relying on his memory of having seen Nick do that work;
denied that he confused Nick with any other worker on the site;
denied the proposition that, in substance, his evidence that Nick had been engaged in excavations was a recent invention as it had not been referred to in his affidavits; and
confirmed that when he observed Nick excavating, he had already had several surveys of the boundary done although he was not relying on any particular report.
The primary judge rejected Nick’s evidence (that he had not done any excavation work) and accepted Mr Brown’s evidence that he had seen Nick conduct excavation work across his boundary. It was not necessary that Mr Brown’s evidence be corroborated by contemporaneous photographs. Mr Brown was unshaken in cross-examination that this is what he saw. Although the wording of the question, “what digging might he have done”, in the exchange extracted above, was infelicitous, no objection was taken to the form. Mr Brown was not cross-examined to the effect that his answer was speculative by reason of the form of the question. Nor did Nick’s trial counsel make anything of the form of the question in submissions.
I am not persuaded that either of grounds 1 or 2 has been made out.
In the written submissions filed on behalf of Nick, no issue was taken with the primary judge’s summary of the legal principles that apply to the attribution of liability of a company’s directors for torts committed by the company. However, it was submitted on behalf of Nick that the plaintiffs had not established either that:
Nick personally owed a duty of care to Mr Brown or that Nick personally should have taken reasonable precautions against the risk of harm in the form of the manner of excavation and any works recommended by geotechnical engineers when Kon was the site supervisor, lead excavator operator and in control of the works on the site; or
Nick directed or procured the builder’s breaches.
There was ample basis for the primary judge’s finding that Nick owed the plaintiffs a duty of care and that he had breached it by failing to take reasonable precautions to address the relevant risk of harm.
The primary judge found that Nick personally performed excavation work on the development site and across the boundary with Lot 71 (see grounds 1 and 2 above). Her Honour also found that he was the “project manager” (J[15]); was in charge of the project with Kon (J[18]); organised matters relating to the project (J[18]); ran the office; did not require direction (J[19]); was on-site for two to three days a week for two to three hours (J[19]); liaised with Safework, the council and consultants (J[19]); held himself out as the builder (J[21]); and was a de facto director (J[21]).
Further, the primary judge found that, from at least 13 September 2021, Nick was on notice that the excavation had caused a severe weakening in the land beneath Mr Brown’s driveway; there was a danger that the driveway would collapse; the land dividing the properties was unstable; Mr Brown’s house displayed signs of movement which was likely to have resulted from the earthworks; the ground around the boundary, including Mr Brown’s driveway was unstable and in imminent danger of collapse; and, accordingly, remedial works needed to be undertaken immediately (J[116]).
The primary judge’s findings on Nick’s liability as a director are set out at J[236]-J[245]. No error has been shown in these findings.
Ground 3 has not been made out.
Ground 4 of Nick’s appeal is relevantly indistinguishable from ground 5 of Alex’s appeal. For the same reasons, it has not been made out.
I note that, as the submissions on apportionment developed in the course of the appeal, the parties were given leave to put on further written submissions on the question of apportionment. Although Nick appeared for himself at the hearing of the appeal, his solicitor availed himself of the leave granted and put on written submissions on the question of apportionment. The substance of these submissions has been addressed in the reasons relating to ground 5 of Alex’s appeal since they largely correspond with Mr Corsaro’s oral and supplementary written submissions on the topic.
Nick did not challenge the figure of $50,000 for general damages, the figure of $2,122,232 for the cost of rectification or the amount of $745,000 for diminution of value. However, it was submitted on his behalf that there was a disproportionality which was productive of unreasonableness between the rectification cost of $2,122,232 and the diminution value of $745,000. He relied on Tabcorp Holdings Ltd v Bowen Investments Pty Ltd (2009) 236 CLR 272; [2009] HCA 8 (Tabcorp) at [17]-[19]; Sved v Woollahra Municipal Council (1995) 86 LGERA 222 at 237 (Giles J); Evans v Balog [1976] 1 NSWLR 36 at 40; and Roberts v Goodwin Street Developments Pty Ltd (2023) 110 NSWLR 557; [2023] NSWCA 5 at [119] (Kirk JA and Griffiths AJA). Nick also relied on the circumstance that Mr Brown had been prepared to sell Lot 71 to the builder as evidence that there was no necessary inference that Mr Brown would, in fact, rectify Lot 71, rather than sell it (for its residual value of $75,000) and retain the damages assessed by reference to rectification costs as a windfall. No basis has been established in the present case for the suggestion that Mr Brown, as the innocent party, is “merely using a technical breach to secure an uncovenanted profit”: see Tabcorp at [17].
As referred to above, Mr Brown particularised his damages by reference to the cost of rectification. The List Response simply denied that damage had been suffered. Mr Rogers said in opening:
Mr Ball has calculated the cost of rectification of the driveway and the house at a touch over $2 million. It’s a serious amount of money.
In his affidavit evidence, Mr Brown deposed as to the damage to Lot 71. He also said that he had been unable to sell the house because of ongoing issues. While Mr Brown was cross-examined about alleged discussions between him and Nick about rectification works (which he denied or did not recall), he was not cross-examined about whether he would actually undertake rectification works on Lot 71.
Ms Saric deposed that the plaintiffs’ main reason for buying Lot 71 was to provide easier access for loading and unloading the van used for her business of repairing motorcycle leathers than was available in Sydney and to open up a market for customers from Newcastle and the Central Coast. They had planned to build a garage/shed on the eastern side of their house to use in the business.
It was not put to either Mr Brown or Ms Saric in cross-examination that they did not intend to rectify Lot 71 or that, once the proceedings were over, they would sell Lot 71.
In closing address, the following exchange took place between Nick’s counsel and the primary judge about damages:
GAUJA: In relation to damages the plaintiff claims, as my friend’s indicated, the cost of rectification, which on the analysis of Ms Chen is at the lowest level of around about 2 million, and in the alternative a diminution in the value of the property. My friend indicated that there’s an estimate diminution of about $800,000.
The fourth defendant accepts that the plaintiff may elect between the costs of rectification and the diminution in value, but this is subject to the important qualification that the cost of rectification is not disproportionate to the diminution in value. It’s the fourth defendant’s submission that based on the above figures the cost of rectification would be disproportionate to the diminution in value.
In relation to remediation or rectification the expert conclave revealed that there were evidentiary issues with the rectification option. Both experts agreed that until investigations in relation to the underlying tyres were undertaken any remedial works may in effect be counterproductive. The quantity surveyor report does not address these issues. This provides a further reason why the Court would prefer the diminution in value option because the costs of rectification are at this stage entirely unknown.
HER HONOUR: It’s not that they’re unknown. It’s that the rectification costs are on the low side, because if the quantity surveyor costed the additional cost in relation to the presence of tyres then potentially the defendants, if I should find that they’re responsible, would be up for more than what the plaintiffs are actually seeking.
GAUJA: Yes, I accept that, and that goes to the aspect of disproportionality.
HER HONOUR: No, it goes to the aspect that your clients if they were found liable would be getting off lightly.
GAUJA: I take your Honour’s point. I won’t take it any further.
In her Honour’s reasons for assessing Mr Brown’s damages on the basis of the cost of rectification (J[271]-[272], extracted above), the primary judge took account of the lack of challenge by the individual defendants to the plaintiffs’ intention to rectify Lot 71. Her Honour noted that it was not suggested to the plaintiffs that they had a “strong desire to move”. Nor were they asked whether they had been “looking around” for an alternative property. In my view, it was open to the primary judge to regard the failure of the individual defendants to put these matters to either Mr Brown, as the owner of Lot 71, or to Ms Saric, who lived with him there, as forensically significant and correct for her Honour to do so. This omission lends force to the primary judge’s finding that the damages ought be assessed on the basis of the rectification cost.
The relevant principles appear from the authorities.
In Evans v Balog, Mr and Mrs Balog, who owned a home in Bronte, where they lived, claimed damages against Evans, a developer of the neighbouring land. Evans had taken no precautions to protect Mr and Mrs Balog’s home from the excavation work which the developer was conducting on the neighbouring land. Their home cracked; a portion of the ceiling fell; and an extension for the living room split completely away from the rest of the building. At trial, Mr and Mrs Balog were awarded damages on the basis of the cost of rectification. Evans appealed, arguing that the highest and best use of the Balogs’ property was as a development site, with the consequence that there had been no diminution of value and that, accordingly, it was not reasonable to assess damages by reference to the cost of rectification.
This Court (Samuels JA, Moffitt P and Hutley JA agreeing) dismissed Evans’ appeal and held, at 39-40, that damages for tortious damage to a building may be the cost of reinstatement or diminution in value of land and improvements. The Court adopted the following passage from McGregor on Damages at p 713 as articulating the true criterion of the selection between diminution of value and the cost of reinstatement:
The test which appears to be the appropriate one is the reasonableness of the plaintiffs’ desire to reinstate the property; this will be judged in part by the advantages to him of reinstatement in relation to the extra cost to the defendant in having to pay damages for reinstatement rather than damages calculated by the diminution in value of the land.
The Court also said, at 40, that the statement “that a plaintiff may have the cost of restoration provided that it is not disproportionate to the diminution in value … is merely an alternative way of stating the principle expressed in McGregor on Damages.”
In Sved v Woollahra Municipal Council, the council was found to have been negligent in issuing a s 317A certificate to Mr and Mrs Sved in respect of a residential property in Vaucluse which they purchased. Within a short time, defects emerged in the building. Giles J, the trial judge, found that damages ought be assessed on the basis of the cost of rectification rather than the diminution of value. His Honour said at 233-234:
Here Mr and Mrs Sved have retained the property notwithstanding its defects, and property values have altered (in general, they have fallen in the relevant area); Mr and Mrs Sved have lived in the property for many years, and there was no suggestion that they wished to or might sell it. The property was not an article of commerce, but a home which could be made the home they thought they had purchased by appropriate rectification work. Although the cost of rectification was not fully canvassed in the hearing, from the $260,000 taken by Mr Egan it seems unlikely that the cost of rectification would exceed $520,000: if it did, the Council has by its submission accepted the additional burden. I was not referred to any authority precisely in point, but in pursuing the objective earlier identified I consider that Mr and Mrs Sved will appropriately be placed in the position in which they would have been but for the Council’s breach of duty if the defects are rectified. They will have the property which they wished to have free of the defects of which they now complain.
In this Court, Nick sought to distinguish Evans v Balog or Sved v Woollahra Municipal Council on the basis that it was not implicit that there was an intention on the part of Mr Brown to reinstate his property to its condition before it was tortiously damaged. Nick relied on the disproportionality between the cost of reinstatement and the diminution in value as well as the undisputed circumstance that, in March 2021, Mr Brown had been prepared to sell Lot 71 for $670,000. However, as Mr Brown’s intentions were not explored at all in cross-examination, I do not consider that it would have been fair for the primary judge to infer, when assessing damages as at 30 April 2025, that, Mr Brown, having lived on Lot 71 for another four years since March 2021 would simply sell up rather than rectify Lot 71. Such evidence as there was indicated that when Mr Brown tried to sell Lot 71, he was unable to due to “ongoing issues”. This answer was not explored in cross-examination.
Further, where, as here and in Evans v Balog and Sved v Woollahra Municipal Council, the property in question is a residential home in which the plaintiffs live, concepts of reasonableness take on a different complexion. Indeed, in Evans v Balog, Hutley JA, at 41, described Evans’ appeal as “quite ridiculous”, which I take to be a reference to Evans’ submission that, as the highest and best use of the Balogs’ home was for development, they had lost nothing. This analysis harks back to the general principle that a party ought not be permitted to profit from its own breach: see generally, Hawkins v Clayton (1988) 164 CLR 539 at 590; [1988] HCA 15 (Deane J).
I am not persuaded that the error alleged in ground 5 has been made out.
As none of the grounds of Nick’s appeal has been made out, the appeal ought be dismissed.
Mr Brown submitted that the primary judge was in error in apportioning the damages for trespass as they had established intentional trespass, which was not apportionable as the provisions of the Civil Liability Act which authorise apportionment did not apply to intentional torts.
For the reasons given above with respect to ground 4 of Alex’s appeal, the cross-appeal ought be allowed. In the Court below, the plaintiffs established trespass as an intentional tort. The effect of the finding that the trespass was intentional is that the provisions relating to proportionate liability do not apply. Accordingly, Mr Brown is entitled to an order that each of the cross-respondents to his cross-appeals, Alex and Nick, is liable for the whole of the judgment, without apportionment.
This result can be achieved by amending order (1) made by the primary judge to include Nick and Alex as parties who, with the developer, are jointly and severally liable for 100% of the damages awarded. It is not necessary to amend the substantive content of orders (2) and (3) as to apportionment since they preserve the apportionment as between Alex, Frank and Nick, on the one hand, and Kon, on the other. However, it is desirable to add the words, “being 70% of $2,172,232” at the conclusion of order (2) and “being 30% of $2,172,232” at the conclusion of order (3) to make clear that the amount of the judgment sum in the order corresponds with the primary judge’s apportionment as between Alex, Frank and Nick, on the one hand, and Kon, on the other. Further, order (2) not only limits Frank’s liability to the first plaintiff to 70% of the damages assessed but will enable him, if he pays more than a third of 70% of the damages assessed, to obtain contribution from Alex and Nick.
For the reasons given above, I propose the following orders in proceedings 2025/192733 and 2025/198389:
Dismiss the appeal.
Allow the cross-appeal.
Vary orders (1), (2) and (3) made by Rees J on 30 April 2025 as follows:
1 Judgment against the first, fourth and sixth defendants in favour of the first plaintiff in the sum of $2,172,232.
2 Judgment against the third, fourth and sixth defendants in favour of the first plaintiff in the sum of $1,520,562.40, being 70% of $2,172,232.
3 Judgment against the fifth defendant in favour of the first plaintiff in the sum of $651,669.60, being 30% of $2,172,232.
**********
"sunk" replaced by "sank" - [6]
“intention” replaced with “intention[al]” - [22], quote replaced full stop with “[;]” - [23], quote replaced full stop with “[;]” - [25], quote “All Works” replaced with “Allworks” - [27] and [41] “[be]” inserted after “seem to” - [48], quote “is” replaced with “[in]” - [74], quote “197” replaced with “497” - [83] “Limited” replaced with “Ltd” - [105] “[182]” replaced with “[280]” - [110] “r 14.4(2)(b)” replaced with “r 14.14(2)(b)” - [112] inserted “an” after “submissions in” - [113] inserted “as” after “developer” - [113] “25” replaced with “27” - [114] “Mr Guaja” replaced with “Mr Gauja” - [115] deleted “that” - [127(2)] “(J[18])” replaced with “(J[19])” - [129] “(J[166])” replaced with “(J[116])” - [130]
(1940) 64 CLR 538
(1997) 42 NSWLR 307
(1986) 162 CLR 1
(1988) 13 NSWLR 714
(1988) 164 CLR 539
(2015) 10 ACTLR 309
(2018) 265 CLR 236
(2019) 100 NSWLR 550
(2023) 110 NSWLR 557
(2005) 222 CLR 612
(1995) 86 LGERA 222
(2009) 236 CLR 272
(1988) 180 CLR 491
(1957) 97 CLR 465
(1986) 160 CLR 16
(1942) 66 CLR 18
(2008) 169 FCR 211
(2023) 111 NSWLR 304
(2016) 329 ALR 625
(2013) 85 NSWLR 167
(2008) 82 NSWLR 762
The appeals were dismissed and the cross-appeals allowed. The orders were varied to enter judgment for Mr Brown in the sum of $2,172,232 against the developer, Nick and Alex; to preserve the specified 70% and 30% allocations between the relevant defendants; and to make the stated appeal and cross-appeal costs orders: [154].
In the Court below and in this Court, Mr Rogers appeared for Mr Brown and Ms Saric. Nick was the only one of the defendants to be represented in the Court below. He appeared for himself in this Court, following the Court’s refusal of his application for an adjournment on the morning of the hearing. Mr Corsaro SC appeared for Alex in this Court.
The parties in the Court below and in this Court are identified in the table below.
For these reasons, ground 1 has not been made out.
In [23] of Bingo, this Court cited the explanation given in Johnson v Mackinnon [2021] NSWCA 152 at [280] (Brereton JA, Macfarlan JA and Simpson AJA agreeing):