Kalgovas v Iliopoulos

The properties

1. The properties at No 18 and No 20 are rectangular blocks that run in a generally north-westerly direction from Ingrid Road to the foreshore of Oyster Bay in the Georges River. The photographic and survey evidence shows that there is a considerable slope downward from the Ingrid Road end of the properties towards the bay. The land in that area slopes gently downwards from roughly west to east (i.e. from the property at No 16 towards the property at No 22).
2. The property boundaries at Ingrid Road can be regarded as the southern boundaries; the property boundaries at Oyster Bay can be regarded as the northern boundaries; and the boundary between No 18 and No 20 can be regarded as either the eastern boundary of No 18 or the western boundary of No 20. That boundary is approximately 36.33m in length. Each of No 18 and No 20 is a little over 15m in width.
3. Mr White gave evidence that when he purchased No 16 in 1979 there was a dwelling house on No 18 and No 20 was vacant. The records of Sutherland Shire Council indicate that a development consent was issued in November 1982 for construction of a residential dwelling on No 20. The consent was issued to the defendants, who had become registered as the proprietors of No 20 on 18 May 1982. The Council records further indicate that the development was undertaken in the period from about December 1982 (by which time some excavation had taken place) to about March 1987 (by which time the dwelling appeared to be complete and occupied). It seems that the excavation and other works including the construction of the dry stone retaining wall, that are the focus of these proceedings, were carried out during that period.

Works carried out on No 20

1. However, there is evidence that Mr Iliopoulos undertook earth works on No 20 as early as March 1982, after the defendants had exchanged contracts to purchase the property but prior to completion of the contract. On 23 March 1982 an occupier of No 22 (G Lyras) complained to the Council about Mr Iliopoulos placing fill on No 20. It seems that Council officers attended the site on the following day and on that occasion took some photographs (see Exhibit C1 pages 269-70). Council records show that a Council officer spoke to Mr Iliopoulos on the telephone on 24 March 1982, and an arrangement was made for Mr Iliopoulos to attend the Council for an interview on 25 March 1982. Mr Iliopoulos denied in cross-examination that he spoke to a Council officer on the telephone, but I think that the Council record is very likely correct. On 25 March 1982 the Council issued a Notice to Comply to Mr Iliopoulos (under the Sutherland Planning Scheme Ordinance) to forthwith "cease filling, excavating or altering the vacant land" at No 20. In cross-examination, Mr Iliopoulos said that he had put some road base onto the land at that time but he denied that he had excavated or cut away the land. The photograph taken by the Council officer of that part of No 20 near the southern boundary clearly shows the deposit of what may be road base. It also shows an area near the western boundary of No 20, to the east of the concrete driveway that was then on No 18. I note that in cross-examination Mr Demlakian suggested (at Transcript 186) that the photograph showed some cut faces in that area, apparently made by a backhoe. However, in his report of 9 September 2020 Mr Demlakian expressed the view (at paragraph 6.30) that there would be no need for a retaining wall on the boundary in that area until there were excavations below the natural ground level at No 20.
2. It appears that excavations for the purposes of construction of the dwelling had occurred by December 1982. A note on the Council file dated 8 December 1982 records: Site inspection on 8.12.82 revealed excavation has taken place excavated material is stacked up at rear of block. Red sticker left to contact me Mr Iliopoulos rang me he said the excavated material will go back around the brick walls once the walls are built…
3. Mr Iliopoulos deposed that the excavation "commenced in stages from the front boundary to the rear boundary". He gave evidence to the effect that the excavation came no closer than 1.5m away from the wall of the house on No 18. (There is evidence that this wall is approximately 1.5m away from the boundary between the two properties.) In cross-examination, Mr Iliopoulos denied that he excavated into No 18.
4. Mr White gave evidence in relation to the excavation of No 20 as follows: Some time after we moved into our new house at 16 Ingrid Road I noticed building works taking place at 20 Ingrid Road. The building works consisted of excavation work taking place on 20 Ingrid Road. On occasions I would see an excavator on 20 Ingrid Road. The excavation works on 20 Ingrid Road commenced at the top of the allotment, adjacent to the Ingrid Road frontage, and continued down the allotment towards Oyster Bay, at the rear of the property. I have been shown, photographs numbers 1-3, true copies of which are annexed to this affidavit. I did not take those photographs, but I recognise the areas shown in the photographs. Photograph number 1 shows the still vacant property at 20 Ingrid Road Kareela and the property at 18 Ingrid Road Kareela looking in a general north-westerly direction from either the south-eastern end of 20 Ingrid Road, or from 22 Ingrid Road. It shows an area on the street side, in front of the concrete driveway of 18 Ingrid Road. In that area was part of the area excavated by the person or persons who undertook excavation on 20 Ingrid Road. Prior to that excavation the land at the front of 18 Ingrid Road ran across towards where the photographer was standing in a more or less level plane and contained vegetation. … The excavation works that I saw went below the north-eastern corner of the dwelling at 18 Ingrid Road. The excavations at 18 Ingrid Road extended down towards Oyster Bay and appeared to be below the foundations of 18 Ingrid Road. I recall the excavation works were very close to the boundary with No. 18 Ingrid Road. I saw the excavations taking place at 20 Ingrid Road over a period of time and I recall the persons involved in the excavation works did not place any supports adjacent to 18 Ingrid Road to support the land, which I particularly recall as I thought it was odd as it was so close to the house on 18 Ingrid Road. Over a period of time I also saw the concrete slab for the building at 20 Ingrid Road being laid below the north-eastern corner of the dwelling on No. 18 Ingrid Road and, over a period of time, the construction of the house at 20 Ingrid Road. I recall the excavations on 20 Ingrid Road were below the ground floor level of No. 18 Ingrid Road. I also recall when the slab was laid at 20 Ingrid Road there was no support of the adjacent land at 18 Ingrid Road.
5. There is a dispute between the parties as to when the dry stone retaining wall was constructed. Mr Iliopoulos maintains that it was constructed in 1982. The plaintiffs suggest that it was constructed in 1986, at around the time or shortly before they moved into No 18 in July 1986.
6. The defendants retained a surveyor in relation to the development, namely, John B White and Associates. That firm produced various plans in the course of the development. A plan dated 26 January 1983 refers to nails being placed in formwork at the rear (northern) end of the dwelling to be constructed. Another plan, dated 1 August 1983, shows the outline of a "brick cottage" under construction, with a verandah at the rear and a patio at the front that extends to the boundary with No 18. The plan contains notations across the boundary just north of the patio and at a point approximately level with the rear of the "brick cottage". These notations are: "bdy wall".
7. In my view, the plan dated 1 August 1983 suggests that the dry stone retaining wall is likely to have been constructed by that date. That is not inconsistent with Mr White's general observation that the retaining wall was constructed around the same time as building works on No 20. Neither is the conclusion inconsistent with the 2 May 1986 survey plan of No 18 which merely notes that the boundary is not fenced.
8. I note that both Mr Kalgovas and Mrs Kalgovas gave evidence to the effect that they did not see the wall when they inspected No 18 in about April 1986. Further, Ms Georgevits gave evidence that she does not recall seeing the wall when she went to the property in July 1986 shortly before Mr and Mrs Kalgovas moved in. However, the likelihood is that the wall was not noticed because, as stated by Mr Kalgovas, the yards on both sides of No 18 were "badly overgrown", and there was then no stairway or path on the eastern side of the house on No 18 that would readily enable a close inspection of the boundary in that area. Both Mr and Mrs Kalgovas gave evidence that they first noticed the wall after they moved in, but I think it is unlikely that the wall was constructed in the period from about April 1986 to July 1986, as suggested by the plaintiffs in submissions.
9. Mr Iliopoulos deposed, in relation to the construction of the wall, as follows: In order to retain the existing natural ground level of 18 Ingrid Road, a retaining wall was constructed on the common boundary between the Property [No 20] and 18 Ingrid Street [sic]. The retaining wall was constructed of dry stone. The natural ground level of 18 Ingrid Street [sic] at the common boundary, which needed to be retained, was approximately 500mm above the excavated ground level of the Property towards the rear of the house on 18 Ingrid Street [sic], and gradually increased to a maximum of approximately 1100mm above the excavated ground level of the Property towards the front of the existing concrete block retaining wall on the eastern side of the house on 18 Ingrid Street [sic]. The dry stone wall ended near the front of the house on 18 Ingrid Street [sic] due to a large rock or boulder formation located across common boundary. As the dry stone wall was being built the excavator onsite compressed and secured the first layers with the excavators bucket. The dry stone wall that was completed was roughly half the height of what it is at the time of swearing this affidavit. The height of the wall was subsequently increased as described at paragraphs 25 and 26 below. During the detailed excavation of 20 Ingrid Road, a 1200 hydraulic hammer attached to the dipper arm or stick of the excavator was used to break the hard rock on the Property. At no time did the detailed excavation move or interfere with the dry stone wall.
10. In cross-examination, Mr Iliopoulos explained that he started the dry stone wall at a place where there was "a big boulder into my land". He said that he followed the contours of the land down towards the river. Mr Iliopoulos stated that the wall was constructed before he did the excavation "for the balance of the house". He said that an excavator was used in the construction of the wall. He agreed that an excavator could not have been used if the construction had taken place in 1986. It can be inferred that the construction of the house by that time would not have left sufficient space for an excavator to work in that area. Mr Iliopoulos maintained that the height of the wall was subsequently increased by the placement of backfill in the course of construction works undertaken by the plaintiffs on No 18; although he conceded that he did not see any importing of fill onto the land or backfilling in relation to the stairway built on No 18.
11. Mr Iliopoulos agreed that he knew from his experience that if he excavated near the boundary he would need to retain the plaintiffs' land, such that it would not erode, crumble or wash away at the boundary. Mr Iliopoulos said that there was not much hydrostatic pressure behind a wall of 900mm in height, and that he did not need to make any allowance for any hydrostatic pressure behind the dry stone wall. Mr Iliopoulos said that the use of a geofabric was "not required". He agreed that no geotechnical report was obtained before the wall was built, and that a written design for the wall was "not required".
12. Mr Iliopoulos denied that the wall (or a section of it) "collapsed" in 1990, and denied that he repaired or rebuilt the wall (or a part of it) at that time. He stated, however, that some rocks fell down from the wall which they (the plaintiffs) built up. He said that some stones falling down was "not a big issue".
13. The location of the dry stone wall is depicted on a number of plans in evidence. Very broadly, it extends along the boundary in a southerly direction from a point approximately opposite the verandah at the rear of the house on No 20 to a point towards the front of the house, where the wall turns in so that it meets the wall of the house. It can be inferred that at this point the boulder referred to by Mr Iliopoulos would have prevented construction of the stone wall further south.
14. That is not to say that south of that point the boundary lacks any retaining wall. Another wall consisting of a concrete block component and an adjacent brick component extends from a point approximately opposite the front of the house on No 20 in a southerly direction to a point in front of the house (and opposite the garden and driveway area in front of the house on No 18). This wall sits on top of a cantilevered concrete slab that extends out from the house on No 20. (Parts of this wall can be seen, for example, in photographs 1, 2, 3, 45 and 53 in the report of Mr Kokolis dated 3 December 2019.)
15. It should be noted at this point, however, that there is a section of the boundary beneath the cantilevered slab that is not retained by any structure (see, for example, photographs 50 to 52 of Mr Kokolis' report dated 3 December 2019). There is a brick wall along or close to the boundary in that area, but this wall does not extend any further south than the point where it intersects with a wall that runs in an east to west direction from the boundary into No 18. This brick wall (sometimes referred to as a dwarf brick wall) was constructed in about 1986 as part of the construction of the stairway on the eastern side of No 18. It is convenient to turn now to the various works the plaintiffs have carried out on No 18 in areas close to the boundary with No 20.

Works carried out on No 18

1. In about 1986, after the plaintiffs moved in to No 18, they arranged for the construction of a stairway running down the eastern side of the house. At that time there was no convenient means of access from the Ingrid Road end of the property to the Oyster Bay end other than through the house itself.
2. The stairway was (at least in part) supported by a dwarf brick wall that was built upon No 18 close to the boundary. Mr Kalgovas said that this wall was at least 25cm away from the boundary. The stairway incorporated pre-cast concrete stair treads that extend from or very close to the side of the house. At the top of the stairway, construction was facilitated by the removal of a portion of the wall that runs east to west from the boundary into No 18. There is a landing about halfway down the stairway. At that point a window on the side of the house was converted into a doorway. It seems from the evidence of Mr Williams that this occurred in early 1987. Later, some additional stairs (the photographical evidence suggests seven in total) were added to the bottom of the stairway. These stairs rest on the ground and are not supported by the dwarf brick wall.
3. In 1988, the plaintiffs had various landscaping works carried out on No 18. These works included the removal of the concrete driveway slab and its replacement with pavers. It is apparent that the paving works incorporated drainage. It seems that the paving extended some distance towards the boundary with No 20, beyond the point reached by the former concrete slab. The pavers extend to the top of the stairway on the eastern side of the house. Paving was also installed in an area at the rear of the house. Whilst not entirely clear, it seems likely that at that time pavers were also installed in the area bellow the stairway on the eastern side of the house. That is the area, referred to by Mr Kalgovas in his evidence as the bottom landing, upon which two gas cylinders (installed in April 2010) now sit. It also seems likely that the additional stairs were installed at that time.
4. There is a dispute between the parties in relation to the construction of the dwarf brick wall. The defendants assert, and the plaintiffs deny, that in the course of its construction soil was filled between the dry stone wall and the dwarf brick wall and extra soil and rockery was placed on top of the dry stone wall and the height of that wall was increased. This issue will be returned to later in these reasons.

The "collapse" of the dry stone wall in 1990

1. Both Mr and Mrs Kalgovas gave evidence to the effect that in about mid-1990 Mr Iliopoulos said that the stone wall had collapsed, and that he would fix it up. Mr Kalgovas gave evidence that on the following Saturday he saw Mr Iliopoulos and another man "rebuilding" the wall at a point about halfway down the stairs. He said that Mr Iliopoulos appeared to be pushing grey cement in between rocks in the wall. Mr Kalgovas gave evidence that after the weekend Mr Iliopoulos said that he had rebuilt the wall, "differently to last time", and gave an assurance that it would not collapse again. Mrs Kalgovas gave evidence that Mr Iliopoulos said that he had fixed the wall and that it would not fall again.
2. Mr Iliopoulos gave evidence that neither he nor anyone under his instruction rebuilt the stacked stone wall. He denied that conversations occurred as asserted by the plaintiffs. This evidence of Mr Iliopoulos sits awkwardly with what is contained in a letter he sent to the plaintiffs' solicitors on about 13 July 2015 shortly prior to the commencement of the proceedings. The letter contains the following: In 1990 the rubble wall that collapsed was the works that your client executed, not anything that I constructed. And I paid money for a labourer to fix your clients mistake from their badly constructed and unapproved retaining wall that sat on top of the heavy rock wall. I have the right to claim that money but never did to keep any peace.
3. In cross-examination, Mr Iliopoulos denied that he carried out repair works to the rock wall in 1990. He denied that the wall suffered damage. When confronted with what he had written in 2015 he maintained that there was no collapse, but stated in effect that portions of the wall, where its height had been increased by the plaintiffs, fell down. He said that some stones had fallen down and he had put them up. Mr Iliopoulos later accepted that what he had written about paying for a labourer was not true. He seemed to agree that he wrote it to assist his argument or case against the plaintiffs. Mr Iliopoulos then said that he and his son had fixed up the wall in 1990. Mr Iliopoulos' evidence on this topic was less than satisfactory, and it casts doubt upon the accuracy and reliability of his testimony generally.
4. Before leaving this topic it should be noted that Mrs Kalgovas deposed: I saw the reconstructed wall for the first time in late August 1990 when I walked down the stairs and I observed the following: i. the reconstructed section of the dry stacked stone retaining wall had stones which were in a darker grey colour to the stones in the original wall; and ii. the reconstructed wall was higher than the original wall and had been built against the dwarf brick wall and the precast stair treads on 18 Ingrid Road. There used to be a gap between the dwarf brick wall, the pre-cast stair treads and the original dry stacked stone retaining wall which was no longer there.
5. I accept that evidence and also the evidence given by Mr and Mrs Kalgovas to the effect that the construction works for the stairway did not involve any importation or movement of fill or any increase in the height of the dry stone retaining wall. Their evidence is to be preferred to that given by Mr Iliopoulos on these matters. The evidence given by Mr Iliopoulos here was not convincing, including his attempt to depict on photographs the extent to which the height of the wall was allegedly increased by the plaintiffs. In my opinion the cross-examination of Mr Iliopoulos (at Transcript pages 134 to 136) showed the depiction to be inaccurate and unreliable. I find that the wall was wholly constructed by or at least under the supervision of Mr Iliopoulos, who also carried out some repairs to a portion of it in 1990 when at least a few stones became dislodged in the section of the wall near the stairway landing. It is likely that the height of the wall in that area was increased to some extent as a result of the repairs. I do accept that some minor removal and reinstatement of stones may have earlier occurred when the stairway was constructed in 1986, but I consider that any such work would have been of a cosmetic nature only (see the report of Mr Demlakian dated 9 September 2020 at paragraph 6.36).

Discovery of damage to structures on No 18

1. The plaintiffs moved away from No 18 in about September 1995. They resumed living there in about late-2002.
2. Mr Kalgovas deposed that in about September 2014 his wife drew his attention to an apparent bowing out of the stacked stone wall towards No 20 in the paved area near the gas cylinders. Mr Kalgovas went to the area and noticed a 3cm to 5cm depression more fully described in his 4 January 2016 affidavit (at paragraph 62; see also the photograph at Exhibit C1 page 257). Mr Kalgovas further deposed that in about November 2014 he became aware of subsidence of the driveway when this was pointed out to him by an officer of the Council. Mr Kalgovas says that the Council officer also showed him that there was no retaining wall under the cantilevered concrete slab and the block and brick wall on No 20 to hold back the soil beside the plaintiffs' driveway.
3. Mr Kalgovas' evidence in respect of the appearance of damage, as referred to above, was not directly challenged. It was put to him that he had been aware since at least 1990 that there was an issue with the retaining wall. Mr Kalgovas denied that, and the matter was not further pursued. There had of course been the incident in 1990 referred to in the preceding section of these reasons. However, both plaintiffs gave evidence to the effect (which I accept) that Mr Iliopoulos had assured them that the wall would not collapse again. It would not be unreasonable to accept that assurance in circumstances where Mr Iliopoulos, who had built the wall, apparently had experience and expertise as a builder.

Expert engineering evidence

1. The evidence of the expert engineers relating to the adequacy of the dry stone retaining wall and the likely causes of the damage upon No 18 was the central focus of the hearing. As already noted, the engineering evidence consisted of the reports and oral evidence of Messrs Demlakian and Kokolis, as well as the reports of Mr Mitsopoulos and Mr Smith (geotechnical engineer). The evidence is voluminous. The plaintiffs relied upon no fewer than six reports of Mr Demlakian (albeit that there was a large overlap between the contents of the first three reports dated 3 July 2019, 17 September 2019 and 9 October 2019), in addition to the two reports of Mr Smith (dated 30 November 2017 and 13 December 2017) and the two reports of Mr Mitsopoulos (dated 16 September 2016 and 17 August 2017). The defendants relied upon the two reports of Mr Kokolis (dated 3 December 2019 and 8 December 2020). Both Mr Demlakian and Mr Kokolis placed some reliance upon aspects of Mr Smith's reports. As noted earlier, Mr Smith was not required for cross-examination.
2. Mr Smith's first report contains the details and results of his geotechnical investigation. The investigation involved six locations (five bore holes using a hand auger and one test pit dug with hand tools) close to the boundary between the properties. The report also records various observations made of parts of the boundary area, including the following: In the property to the east (20 Ingrid Road), a three storey brick house was located towards the southern end of the site, and was predominantly set back 1.5m from the common boundary, however, at the southern end of the neighbouring house, a suspended concrete patio extended to the site boundary, adjacent to the southern end of the stairs at 18 Ingrid Road. Beneath the concrete patio, to the south of the concrete masonry retaining wall at 18 Ingrid Road, unsupported fill material was present, i.e. there was no retaining wall supporting the eastern side of 18 Ingrid Road, beneath the paved driveway area, over an approximate 1m length (north-south), see Photo 4 below. The exposed material comprised brick and concrete fragments, sandstone cobbles, plastic and metal fragments in a soil matrix. Over the northern half of the area between the houses at numbers 18 and 20 Ingrid Road, a rough sandstone boulder retaining wall, predominantly located within 20 Ingrid Road, supported 18 Ingrid Road, with the crest of the sandstone wall immediately beneath the brick wall supporting the stairs. The sandstone wall was about 1m high at the northern end of the houses, and was a maximum of 1.4m high at its southern end, where it returned to the east to abut the house at 20 Ingrid Road. Portions of the retaining wall appeared to have bulged and rotated, however, given the 'rough' nature of the wall, the amount of movement was not possible to determine with certainty. Nevertheless, assuming the wall was constructed straight along its north-south portion originally, bulging of about 200mm has occurred towards the northern end of the house at 18 Ingrid Road. This bulging corresponds to a subsided section of paving within 18 Ingrid Road, immediately behind the wall. Photograph 5 below shows this apparent bulging. At the toe of the retaining wall, i.e. within 20 Ingrid Road, the ground surface was near level over the northern end, then stepped up to the south towards the southern end of the wall. In the area were [sic] the ground surface at the toe of the wall stepped up, the ground surface within 20 Ingrid Road sloped down to the north at a maximum of 400 and a tree fern was growing in this area. To the south of the wall within 20 Ingrid Road, the ground surface sloped up to the south at 100 to the area beneath the suspended concrete patio. In this area, it appeared that the ground surface had progressively dropped since the time it was constructed, with 'tide lines' evident on both the house at 20 Ingrid Road and the brick wall supporting the eastern side of the stairs at 18 Ingrid Road. Such 'tide lines' are a typical indicator of previous ground surface levels, where painting or rendering was stopped. Photograph 6 showing the 'tide line' at 20 Ingrid Road is presented below.
3. Mr Smith also made various comments about the sub-surface conditions, including a statement that, where tested, the fill was assessed as being poorly compacted. I note that Mr Kokolis placed some emphasis upon that statement. In relation to the footing of the dwarf brick wall exposed at the test pit, Mr Smith said that the footing was founded within the poorly compacted fill profile at a depth of 0.44m below adjacent surface levels. Mr Smith also stated that sandstone bedrock was encountered at certain locations, and that at other locations the presence of sandstone bedrock is inferred only.
4. In his second report, Mr Smith expressed a number of opinions, including those in the following paragraphs: 4.1 Subsurface Conditions at The Site and 20 Ingrid Road 47. The subsurface conditions encountered during the geotechnical investigation are detailed in the report in Appendix C. In general, the encountered subsurface conditions comprised granular fill over a limited thickness of natural soils, with sandstone bedrock at shallow to moderate depth. 48. Based on the depth to sandstone bedrock in BH4, BH5 and BH6, I consider the majority of the wall is most likely founded on the surface of the sandstone bedrock profile. The sandstone bedrock encountered in the BH5 and BH6 was of extremely low strength. However, based on experience in similar geotechnical environments, I would expect the sandstone bedrock strength to increase rapidly with depth. 49. I consider the sandstone bedrock present at the site and 20 Ingrid Road to be geotechnically suitable to support both the wall (existing) as well as any replacement retaining wall. 50. No groundwater was encountered during the geotechnical investigation. However, I note that the investigation was completed during an extended period of dry weather. Given the topography of the site, I would expect some groundwater flows to be present at shallow depth across the surface of the sandstone bedrock during and after heavy or extended period of rainfall. 51. In general, I consider a rough sandstone block wall to be a geotechnically suitable form for the subsurface conditions present on the subject site. In this regard I note that this would be subject to such a wall being appropriately designed and constructed, taking into account the subsurface conditions. 52. Provided any new retaining wall is founded on the sandstone bedrock profile and incorporates appropriate subsurface drainage, I consider that there would be no specific consequences related to the subsurface conditions. … 4.2 Materials Used to Build the Wall 53. The Wall is predominately constructed from rough sandstone blocks. In general, I consider such to be a suitable, industry standard, construction material for gravity retaining walls, and for the encountered conditions. 54. The Wall, or at least the majority of the wall, is founded on the underlying sandstone bedrock profile, which I consider is geotechnically suitable to support the wall. With the wall founded on sandstone bedrock, I consider the limited embedment depth of the wall footing to be geotechnically appropriate. 55. From my geotechnical investigation (Appendix C), the backfill to the wall comprises granular soils, clayey sand and silty sand, with brick, tile and gravel inclusions. From the provided documents, in particular the survey drawings and photos, it is apparent that the wall was constructed to retain the site when excavation was completed at 20 Ingrid Road. Given the nature of the wall, excavation must have been completed into the site to facilitate the construction of the wall. … 57. Whilst I consider rough sandstone blocks to be a suitable retaining wall construction material, the performance of retaining walls is contingent on the wall being appropriately designed, and being subsequently constructed in accordance with such a design. For the wall, I would expect the thickness of the wall, at its base, to be roughly 50% of the height of the wall, i.e. for a 1m high wall, the base of the wall should be 0.5m thick. I note that this wall thickness is a rough 'rule of thumb' only, based on my extensive experience with gravity retaining walls, and would need to be validated by calculation taking into account site specific considerations. Given the location of the crest of the wall, if the width of the base of the wall was 50% of the height of the wall at any location, the wall would extend into the site along most of its length. 58. Walls constructed from rough sandstone blocks are highly permeable, and to protect against migration of soil through the wall, such walls must incorporate a layer of non-woven geotextile to act as a filter. I saw no evidence of such a geotextile being present when I visited the site on 13 September 2017. 4.3 What is Causing The Wall, the Paved Driveway, Pre-Cast Stairs and The Site to Subside The Wall 59. From my extensive experience with rough sandstone block walls, I consider the wall has most likely moved (i.e. the apparent rotation and bulging) due to the wall being structurally inadequate. This could be due to a number of factors including: 60. Insufficient thickness of the wall related to its height; 61. Poor construction, with poor laying of individual blocks in the wall; 62. Loss of material through the wall; and 63. Breaking of individual blocks in the wall, which was apparent at a number of locations, e.g. towards the northern end of the wall as shown in Photograph 1 below. … 64. I also note that the blocks used to construct the wall were generally 'small' with apparent poor interlock between individual blocks. An example of poorly interlocked blocks is shown in photograph 2 below, where there are a series of smaller blocks sitting on a single horizontal course above a larger block. Where blocks are poorly interlocked in a dry stacked wall, there is an increased risk of instability of the wall occurring, with sliding or displacement where there is poor interlock. … The Paved Driveway 65. The area where the paved driveway appears to have subsided is located in close proximity to the area where the eastern boundary of the site is unsupported, below the suspended patio at 20 Ingrid Road. In this area, it appeared that collapse of material from the site into 20 Ingrid Road had occurred. Further, it appears that soil materials from within the fill have 'washed out' leaving only larger particles within the fill profile. Given the apparent loss of material from this area within 20 Ingrid Road, as evidenced by the observed 'tide lines' I consider it likely that soils which previously supported the site in this area have gradually been washed away, leading to the current situation. … 68. In my opinion, the subsidence in this area, i.e. the north-east corner of the driveway, is most likely due to loss of material where the site is unsupported, i.e. beneath the suspended patio at 20 Ingrid Road. As material has been lost into 20 Ingrid Road, the soil beneath the pavement has moved into the resulting voids, resulting in the settlement. If support of the site was still present in this area (below the patio), e.g. a retaining wall, I consider that the subsidence would most likely not have occurred. The Pre-Cast Stairs 69. Movement of the stairs appears to have occurred at the landing, with the brick wall supporting the eastern side of the landing having 'dropped' away from the concrete deck… 70. Given the observed movement of the wall, I consider the observed cracking of the brick wall supporting the stairs is most likely due to movement of the wall, as well as possible consolidation settlement of the backfill to the wall, which as I note above, was most likely not compacted during placement.
5. The first report of Mr Mitsopoulos contains, amongst other things, a number of observations he made at an inspection of the properties on 30 June 2016, including the following: Location 1 Pavers This location basically covers the driveway and pavers of the top of the concrete stairs and the adjacent concrete block wall including the brickwork on the adjacent property at No. 20 Ingrid Road, Kareela. The concrete pavers are of size 230 x 190mm and are laid on a bed of sand/cement mortar. The pavers are generally graded towards the top of the concrete stairs and into the grated drains (photos F1 - F6). These pavers show evidence of settlement, in particular between the eastern garage door and the edge of the stairs (photos F2 and F4). The white calcium deposits on the surface and in between the pavers is an indication of weakened or subsided subgrade material. That is, the subgrade support material has moved vertically and horizontally. Consequently, the pavers have moved vertically and horizontally. This is evidenced by the pavers which would have been laid even at the time of construction, are now uneven (F3). Front Yard to No. 20 Concrete Block The concrete block retaining wall at the top of the stairs and adjoining the pavers adjacent the northern garage has rotated in a forward direction and failed (photos F9 and F10). The concrete block retaining wall sitting on the neighbour's suspended concrete slab to the front courtyard has also subsided and is now leaning inwards towards the property at No. 18 (photos F11, F12, F14). This wall has also cracked (photos F6). An inspection beneath the neighbour's front courtyard revealed the following: The slab is bearing on loose boulders (photo F13) The material beneath the structure of the house at No. 18 is loose backfill providing little or no support to the overburden material or structure The construction of the neighbour's courtyard has been made by removing the natural ground and therefore the natural support material, adjacent to the driveway pavers and the top of the concrete stairs to No. 18. This is evidenced from the survey plans and photographs. These indicate that the natural support material has been removed or excavated, thus affecting the support material or the natural subgrade material below the driveway pavers situated at the top of the concrete stairs. Concrete Stairs The top of the concrete stairs have subsided up to 5mm in relation to the adjoining brickwork (photos F9, F10). The lower section of these stairs has moved sideways away from the house wall by up to 10mm (photos F29, F30, F31) due to subsidence along the boundary. General The driveway and front yard of No. 18 Ingrid Rd has a number of areas where water can penetrate into the subgrade, including the landscaped garden along the eastern boundary (photo F1), the joins between the pavers (photos F3, F4) as well as the gap between the block retaining wall and the stairs (photos F5, F6). The cause of the gaps between the pavers is a result of water flowing through and over the paver joints over a period of time. Also contributing to this water ingress is from water flowing through the garden-bed in front of No. 20 (photo F7). This water ingress contributes to the erosion of the unsupported material beneath the pavement and stairs on No. 18. Note that all measurements were estimated and/or measured by myself on site. Location 2 The top three treads of the stairs are bearing on loose rubble. Below the top stairs area, the concrete steps are bearing on the brick walls, which appear to bear on natural ground. Below these stairs and the landing, the following observations were made concerning the sandstone block wall: The top 700 - 800mm of this wall is bulging outwards. This is due to poor construction of the sandstone retaining wall. (F11, F13, F14) The ground material at the base of these sandstone boulders has eroded, undermining this retaining wall. The stairs have translated sideways by up to 10mm (F29, F30, F3) due to subsidence of the support material along the boundary, which was meant to support the natural ground which supports the stair structure. Location 3 This area consists of the lower flight of stairs adjacent [to] the house at No. 18 Ingrid Rd, Kareela. The top half of these stairs is supported on a brick wall (F18). This brick wall appears to be bearing on natural ground as shown on the attached survey plan SK02A where surface profiles are indicated (F18). The Lower half of the stairs has unknown support material, however adjacent to this material is a sandstone wall extending down to the excavated lower level of the adjoining house, No. 20 (photos F16, F17, F18, F20, F23, F25 and F32). The Concrete steps in this location have moved laterally away from the brick wall to No. 18 by up to 18mm (photo F26). The sandstone boulder wall in this location is poorly constructed with loose to very loose sandstone blocks. These were easily moved or dislocated by simple hand movements. Sections of this retaining wall have bulged outwards making the wall structurally unsound (photo F25). In particular, no mortar bedding was evident. Mortar bedding would have enhanced the strength of this wall over time. Location 4 This section of the affected area is the lower landing at the base of the stairs. There exist concrete pavers laid on a natural material overlain with compacted sand. It is supported on the boundary by a sandstone block retaining wall approximately 900mm higher than the existing adjoining ground level at No. 20 Ingrid Rd, Kareela. This retaining wall has bulged into the property at No. 20. The top of the retaining wall has extended beyond its base resulting in an unstable situation (photos F19, F21, F22, F23 and F24). The concrete pavers adjoining this retaining wall have subsided significantly up to 100mm. Those pavers closer to the retaining wall have subsided further and have moved laterally up to 180mm (photos F15, F19, F21, F22, F23, F24 and F27). It is evident that this sandstone wall has failed due to its bulging and loose sandstone blocks and provides very little structural support. This part of the wall could collapse without warning.
6. I do not propose to summarise the detail contained throughout the reports of Messrs Demlakian and Kokolis. However, reference should be made to their Joint Report to show the essence of the positions ultimately reached by them. The Joint Report includes the following: 2.1 Firstly, the experts considered the section of unretained earth on the boundary south of the front façade of the building line of 18 Ingrid Road giving rise to subsidence of the adjacent driveway paving next to and in-the front of the garage at 18 Ingrid Road and the need to provide a retaining wall to stabilize this section of earth. Refer to Wall denoted as W2 on Sketch SK-01 attached which details the area of concern. 2.2 Secondly, the experts considered whether the dry stack retaining wall along the boundary between 18 and 20 Ingrid Road is stable and structurally adequate. The experts also considered, what rectification/replacement measures are to be provided to achieve structural stability and adequacy, if the wall is inadequate or unstable. 2.3 Thirdly, the experts considered whether the stairs and brick wall and footing supporting the stairs running on the eastern side of 18 Ingrid Road along the boundary between 18 and 20 Ingrid Road are stable and structurally adequate? They also considered, what rectification/replacement measures are required to restore their stability and adequacy, if the above structures are found not adequate or not stable. 2.4 The experts considered causation and responsibility for the issues referred to above. 2.5 Finally, the experts considered and discussed items 2.3 and 2.4 above in view of both whether the encroachment of the existing dry stack wall needs to be remedied or not as whilst both the parties acknowledge that this is more a question for the solicitors and ultimately the court to decide, they have differing views which have only been provided to assist the court. … 3.1 The parties agree that the southern section of unretained boundary south of the front façade of No 18 is unstable and requires the construction of a retaining wall to arrest the lack of support. Ken [Demlakian] is of the opinion that this is not only the cause of [sic] both the cause of loss of consolidation of the soils under the paved driveway of No 18 and the required remedy. Nicholas [Kokolis] is of the opinion that this is possibly the cause of the loss of consolidation of the soils in this area, however, agrees that these works are required. 3.2 Further, the parties agree that for a length to be determined but from the drawings considered to be approximately 2.5m in length, the works should be as follows: - a) Remove the pavers in the driveway that have subsided and within the zone of influence of the section of retaining wall to be constructed. Remove the top four treads of the stair on No 18 south of the existing nib block wall at the front of No 18. b) Remove the rubble and fill both under the stairs on No 18 and the cantilevered balcony on No 20 with stable batters down to the rock level, as determined in the geotechnical investigation report prepared by JK Geotechnics. c) Depending upon the quality of rock exposed, provide either a suitably designed reinforced concrete footing or levelling strip with suitably designed stainless steel dowels epoxy grouted into the rock. d) Construct a suitably designed reinforced block or concrete wall up to a height that is approximately 100mm above the surface level of the paving of No 18. Denoted as Wall W2 on the attached sketch SK-02. e) Install and connect sub-soil drainage, free draining back fill encapsulated with an appropriate geotechnical filter fabric and reinstate fill sufficiently consolidated to support the driveway pavers of No 18 and replace the pavers and stairs as required. 3.3 The parties also agree on the proposed rectification method for the existing dry stack retaining wall at 20 Ingrid Road in the event the encroachment of the existing retaining wall onto 18 Ingrid Road is to be remedied by the removal of the wall. 3.4 The parties agree that in the above scenario, the works should be as follows: a) Remove and dispose of the stairs and the supporting brick wall and footing along the eastern façade of No 18 adjacent the boundary with No 20. b) Remove and dispose of the existing dry stack retaining wall along the boundary. … g) Construct a suitably designed reinforced block or concrete wall up to a height that is equivalent to the height of a fence relative to the pre-excavated ground levels for the full length of stairs and paved lower landing level as required extending in the northly [sic] direction. Refer to Wall W3 & W4 on sketch SK-02 attached. … j) Construct a suitably designed suspended concrete stairs (including columns, as required) along the eastern façade of 18 Ingrid Road with flights and landings to match existing, in accordance with drawings 219084 / S01 Rev. 02 and S05 Rev. 00 prepared by Demlakian Engineers. … 4.1 The parties disagree with respect to the stability and adequacy of the existing dry stack retaining wall in its current condition. Nicholas' Opinion Nicholas is of the opinion that the workmanship of the existing dry stack wall is not "the best" and agrees that movement has occurred. It is possible however that the deformed structure has reached equilibrium and is stable in its bulged condition. Nicholas is unable to undertake a design verification of the wall because the configuration of the wall is unknown. The wall profile, position and inclination of the back face of the wall, characteristics of backfill, specific weight of the wall, etc cannot be established without rigorous invasive investigations at various intervals along the length of the wall. Such investigations require partial dismantling of the wall and hence are not possible nor advisable as they may cause additional distress and possible instability of the wall itself and the stair structure located above the wall. On that basis and in order to ensure the safety of the boundary conditions Nicholas recommends that the existing dry stone wall be left in place and stabilized by construction of a new shotcrete wall with concrete footing in front of the existing structure, as per sketches provided on pages 52 to 54 inclusive in Appendix F of Kokolis report dated 8 December 2020. Ken's Opinion Ken is of the opinion that the dry-stack wall is unstable and structurally inadequate requiring demolition and reconstruction. Ken is also of the opinion that wall stabilization proposed by Nicholas is inadequate and inappropriate for the following reasons: Firstly, retaining the existing dry stack retaining wall in its present condition will not eliminate or rectify the problem of loss of consolidation of the ground under the stair brick wall caused by past movement of the dry stack wall. This will lead to ongoing settlement of the brick stair wall, and further damage to the brick wall and the stairs, with no expectation that the founding material will re-consolidate given its colluvial nature. Secondly, the stabilization method proposed by Nicholas cannot be applied to the southern part of the dry stack retaining wall, where the wall has greater retaining heights and runs directly adjacent to the building wall. In this location, there is inadequate access and space to provide the stabilization method proposed by Nicholas. Thirdly, the remedial works proposed by Nicholas required further excavation in front of and below the existing unstable dry-stack wall in order to achieve adequate founding on rock for the new proposed shotcrete wall. This will further undermine and destabilize a wall that is already unstable, not cohesive and unable to withstand further movement, particular at is base. Ken is of the opinion that the safest and most practical way of providing stability, integrity and serviceability to the stairs, as well as the ground at 18 Ingrid Road, is to remove the retaining wall and the stairs and reconstruct the stairs as a suspended structure, not relying on a retaining wall for support. Whilst a new retaining wall may be provided to restore the ground at 18 Ingrid Rd, it may be possible to limit the height of this wall to a lower level than currently existing but enough so as to provide the ground level required without the need to support the stair.
7. It can thus been seen that whilst these experts agreed that the unretained section of the boundary south of the building line of No 18 is unstable and has given rise to the subsidence of the driveway paving, they remain at odds in relation to the stability and adequacy of the dry stone retaining wall. It should be noted, however, that Mr Kokolis accepts that there has been movement of the wall, and merely suggests that it is possible that the deformed structure has reached equilibrium and is stable in its bulged condition. The remaining differences between the experts, including on the question of what remedial works may be required, became the focus of the questions asked during the session of concurrent evidence.
8. The opinions of Mr Demlakian are broadly summarised in paragraphs 9.1 to 9.10 of his report dated 3 July 2019 (see also his reports dated 17 September 2019 and 9 October 2019) as follows: 9.1 From my site observations, I conclude that the system installed in the vicinity of the boundary between 18 and 20 Ingrid Road to retain the soil at 18 Ingrid Road to be completely inadequate and defective. 9.2 Firstly, the Southernmost section of the brick wall under the stairs is missing which results in migration of fill soils under the driveway and surrounding areas through the gap created in the retaining system. Having reviewed the Bolan Drawing dated 30 May 2016, I conclude that the lack of the wall in this location would not cause fill migration, if the original ground levels at 20 Ingrid Road were not cut and lowered. However, with the ground at 20 Ingrid Road excavated in the vicinity of this location to lower levels, fill migration takes place, which leads to loosening of the fill material under the driveway and the resulting subsidence of the paved driveway at 18 Ingrid Road. 9.3 Also, it is noted that the above migration of soils will have a de-stabilising effect on the stormwater pipes located under the driveway. If such de-stabilisation is sufficient to cause the pipes to be broken or disconnected as a result of fill movement, leaking pipes would exacerbate the problem of fill erosion under the driveway and accelerate the problem exponentially. 9.4 Secondly, the stack sandstone boulder retaining wall displays poor and inadequate interlock between the individual boulders. This creates weakness in the wall, compromises its structural integrity and increases its susceptibility to deformations due to lateral pressure from fill materials behind. Such deformations have been observed, in particular in the Northern extremity of the wall, where displacement and bulging of the wall resulted in loosening of the fill behind the wall and subsidence of the paved bottom landing of the stairs. 9.5 Also, as noted by JK [Mr Smith], no evidence of the pressure of a non-woven geotextile layer behind the wall was observed which is essential in retaining walls. The selection of blocks for the construction of the stack wall led to creation of large gaps between the individual blocks. The above makes the wall highly permeable and it is imperative that less permeable geotextile barrier is provided at the back face of the wall. The lack of such barrier would lead to widespread fill loss through the gaps between the boulders or worse where migration of soils blocks off the gaps in the wall stopping water from seeping through and allowing a build up of increased hydrostatic pressure. Retaining walls are not designed as water retaining structures and hence are incapable of resisting hydrostatic loads, particularly this wall which is also structurally compromised. 9.6 Finally, although no intrusive investigation of the wall was carried out by me, considering the height of the wall I concur with JK that the wall thickness at the base is not likely to be adequate for the wall to act as a gravity wall. The required thickness of the wall would most certainly not be able to be achieved without a major encroachment onto 18 Ingrid Road along the majority of the length of the wall and inhibited by the presence of the building on 18 Ingrid Road which is only 1.5m away. 9.7 It should be noted that the stack sandstone boulder retaining wall was constructed for the benefit of excavations carried out at 20 Ingrid Road, as noted in paragraph 7.6 above. Therefore, I am of the opinion that the structural adequacy and stability of the wall remains the responsibility of the Defendants. 9.8 The defects and inadequacies in the stack sandstone wall caused fill and soil migration, as well as the associated damage referred to above. The observed damage included subsidence of the paved driveway to the South of the dwelling at 18 Ingrid Road, subsidence of the bottom landing of the stairs at 18 Ingrid Road, as well as subsidence and cracking of the brick wall under the stairs. 9.9 In view of the above, I conclude that the wall needs to be demolished and re-built. Considering the wall is for the benefit of 20 Ingrid Road, it should be constructed entirely within 20 Ingrid Road. Based on the ground profile and conditions, I expect that the maximum height of the wall at its Southern extremity would be in the order of 3.5m to 4.0m. 9.10 From my experience, and given the site parameters and characteristics, a reinforced block retaining wall, or an in-situ concrete wall is most suitable for retaining scenarios of this type. It should be noted, however, that for retaining walls of this height with a maximum width of the footing of 1500mm as required to fit the footing within 20 Ingrid Road, some modification to commonly detailed retaining walls would be required to achieve stability in this environment. Those modifications are detailed in Appendix C to this report.
9. The opinions of Mr Kokolis may not be so readily summarised. However, it is apparent from his report of 3 December 2019 that he attributes the observed damage to the stairway on No 18 (such as the cracking of the brick wall beneath the landing) to an inadequate footing system or settlement of poorly compacted fill below the footing system (see, for example, paragraphs 2.1.48, 2.1.51, 2.1.52 and 3.3.4) rather than to any inadequacy of the dry stone retaining wall (see also paragraph 2.3.5 in relation to the pavers at the base of the stairway). Mr Kokolis agrees that the workmanship of the wall is "not the best" but does not accept, in the absence of design analysis to the contrary, that it is structurally inadequate.
10. However, Mr Kokolis went on to state (at paragraph 3.3.7): It is possible that cracking observed within the eastern brickwork wall may be a combination of differential settlement of the poorly compacted material behind the dry-stone retaining wall as well as some lateral movement of the retaining wall. This cannot be proven without understanding the exact configuration of the retaining wall at this location in order to conduct the respective analysis and design checks. Mr Kokolis also stated (at paragraph 2.2.34) that: As illustrated above, there are many variables that are dependent on the stability of the wall. These variables are hidden and in order to verify adequacy by analysis, rigorous invasive investigations (dismantling) need to take place at various locations along the length of the wall which may render the wall and adjacent stair structure unstable.
11. Mr Kokolis went on to say that if the wall was found to be structurally inadequate it could be strengthened by the construction of a wall in front of the existing dry stone wall (see paragraph 3.10.4). The strengthening works suggested by Mr Kokolis are detailed in the drawings at Appendix F to his second report dated 8 December 2020.
12. Having read and considered the reports of Messrs Demlakian and Kokolis, and further considered the evidence given in the concurrent session, I have concluded that the opinions expressed by Mr Demlakian in relation to the adequacy of the dry stone retaining wall and the likely causes of the damage upon No 18 should generally be accepted. I formed a favourable impression of Mr Demlakian as a witness. The conclusions he reached, and the reasoning he outlined in support of those conclusions, seemed to me to be soundly based in the evidence, coherent and logical. Mr Demlakian was firmly challenged on aspects of his reasoning and ultimate conclusions, but in my view he satisfactorily answered those challenges, including in respect of the vexed issue of whether the treads on the stairway on No 18 lent towards No 18 or towards No 20. In addition, important aspects of Mr Demlakian's reasoning and conclusions are supported by the evidence contained in the reports of both Mr Smith and Mr Mitsopoulos as referred to earlier.
13. Mr Demlakian was confronted with the levels of the stair treads as ascertained by Mr Isherwood, surveyor, which were to the effect that all of the treads were lower towards No 18. Mr Demlakian accepted that he had personally measured only about eight or ten of the stairs (using a spirit level) but firmly maintained that his measurements, which showed that some of the treads were lower towards No 20, were correct (see Mr Demlakian's report of 9 September 2020 at paragraphs 6.7 to 6.10). I am prepared to accept that Mr Demlakian's measurements are indeed correct. In this regard it is relevant to note that Mr Kokolis later conceded that one of the photographs of his own spirit level measurement of a stair tread showed that the step sloped down towards No 20 (see Transcript at page 205). It is not possible to definitively reconcile these results with those obtained by Mr Isherwood (using a Leica measuring instrument, from which results are electronically recorded). In any event, Mr Demlakian explained that in either scenario there is a loss of support underneath the stairway which he attributes to "the movement of the wall and loss of lateral restraint" (see Transcript at page 165). Mr Kokolis did not accept that view, but I think that his opposing position, which relies on Mr Isherwood's results, is weakened by his concession about one of his own measurements. I would add that insofar as Mr Kokolis' views in relation to damage beneath the landing depend on the view that the stairwell is plum, those views are weakened to some extent by his erroneous measurements of the stair wall (see Transcript at page 172). The wall was in fact 3.2 degrees off the vertical, not 0.2 degrees as stated by Mr Kokolis in his first report.
14. Mr Kokolis attributes the stairway damage to an inadequate footing system or settlement of poorly compacted fill beneath the footing system. I did not find that evidence to be convincing. I do not think there is good reason to assume poor practice on the part of the stair constructor. Of course, it is not possible to now measure what the compaction of the fill was at the time of construction, but even if the fill at that time is assumed to be in the condition as later assessed by the geotechnical engineer, it would allow a bearing pressure of 50 kPa. Mr Demlakian explained, based on calculations he performed, that the maximum pressure under the footing would be no more than 19 or 20 kPa (see Mr Demlakian's report of 9 September 2020 at paragraphs 6.19 to 6.23).
15. I also think that Mr Kokolis' opinion is weakened by the fact that no damage to the stairway was observed until many years after its construction. If the stairway had been built on poorly compacted fill not able to withstand the loads put upon it, cracking is likely to have occurred much sooner. Mr Demlakian's evidence to that effect is accepted.

Claim pursuant to s 177 of the Conveyancing Act

1. The primary claim advanced by the plaintiffs is the claim in negligence pursuant to s 177 of the Conveyancing Act. Section 177 provides: (1) For the purposes of the common law of negligence, a duty of care exists in relation to the right of support for land. (2) Accordingly, a person has a duty of care not to do anything on or in relation to land (the supporting land) that removes the support provided by the supporting land to any other land (the supported land). (3) For the purposes of this section, supporting land includes the natural surface of the land, the subsoil of the land, any water beneath the land, and any part of the land that has been reclaimed. (4) The duty of care in relation to support for land does not extend to any support that is provided by a building or structure on the supporting land except to the extent that the supporting building or structure concerned has replaced the support that the supporting land in its natural or reclaimed state formerly provided to the supported land. (5) The duty of care in relation to support for land may be excluded or modified by express agreement between a person on whom the duty lies and a person to whom the duty is owed. (6) Any such agreement - (a) has effect in relation to any agent of the person on whom the duty lies, and (b) has effect in relation to any successor in title of the supported land if the agreement is embodied in a registered easement for removal of support relating to that land. (7) The right to agree to the removal of the support provided by supporting land to supported land is a right of the kind that is capable of being created by an easement. (8) Any right at common law to bring an action in nuisance in respect of the removal of the support provided by supporting land to supported land is abolished by this section. (9) Any action in negligence that is commenced after the commencement of this section in relation to the removal of the support provided by supporting land to supported land may be wholly or partly based on something that was done before the commencement of this section. However, this subsection does not operate to extend any period of limitation under the Limitation Act 1969. (10) This section extends to land and dealings under the Real Property Act 1900. (11) This section does not apply in relation to any proceedings that were commenced before the commencement of this section. (12) A reference in this section to the removal of the support provided by supporting land to supported land includes a reference to any reduction of that support. (13) This section binds the Crown in right of New South Wales and, in so far as the legislative power of the Parliament of New South Wales permits, the Crown in all its other capacities.
2. The section was introduced in 2000. However, s 177(9) makes it clear that an action in negligence in relation to the removal of support of land that is commenced after the commencement of the section may be based upon conduct that occurred prior to the commencement. Any such action remains subject to any period of limitation under the Limitation Act 1969.
3. The effect upon the existing law of the introduction of s 177 was discussed by Macready AsJ in Piling Contractors (Qld) Pty Ltd v Prynew Pty Ltd [2008] NSWSC 118 at [40]-[48]. In essence, the common law action in nuisance that arose from the right of a landowner to have the land in its natural state supported by the land of an adjoining owner was abolished, but a common law action in negligence in relation to the right of support for land was recognised. It is not necessary to determine whether such an action in negligence was already available at common law or whether the action was brought into existence by the enactment of s 177. As noted by Young AJA in Llavero v Shearer [2014] NSWSC 1336 at [36], whilst the section abolished the action in nuisance, it did not abolish the common law right of support.
4. In these circumstances, s 177(2) operates so that the defendants as the then owners of No 20 had a duty of care not to do anything on or in relation to No 20 that removes the support provided by No 20 to No 18 (including the natural surface of, and the subsoil of, No 18). Removal of support in this context includes any reduction of support (see s 177(12)).
5. I do not think there is any doubt that the excavation works undertaken on No 20 in connection with the construction of the dwelling on that property had the effect of reducing the support provided by No 20 to No 18. That is, the excavation works that were carried out in various places in close proximity to the boundary with No 18, including in the area where the dry stone wall was erected, reduced the support that had previously been provided to No 18 (see, for example, Mr Demlakian's report of 10 September 2020 at paragraphs 6.56 to 6.60 and 6.73 to 6.79). It was appreciated by Mr Iliopoulos that there was thus a need for the installation of structures to properly retain the soil on No 18.
6. It therefore becomes necessary to consider whether the conduct of the defendants, in undertaking the excavation works and taking steps to restore the support to No 18 that had thereby been reduced, amounted to a discharge of their duty of care or, as alleged by the plaintiffs, involved a breach of the duty of care. For the reasons which follow I have concluded that the defendants' conduct in that regard was negligent and in breach of their duty of care.
7. The risk of destabilisation at No 18 by the excavation works was in my view plainly foreseeable; it was a risk which was not insignificant; and in the circumstances reasonable persons in the position of the defendants would have taken further precautions against that risk (see Civil Liability Act 2002 (NSW), s 5B).
8. The further precautions the defendants ought reasonably have taken, but failed to take, include at least the following: 1. the installation of an appropriate retaining wall on the boundary south of the front façade of the dwelling on No 18 (see Mr Demlakian's report of 3 July 2019 at paragraph 9.2 and the Joint Report at paragraphs 2.1, 3.1 and 3.2); and 2. the installation of a retaining wall in about the location of the dry stone retaining wall, designed and appropriately constructed to cater for expected hydrostatic pressure and migration of soil (see report of Mr Demlakian of 3 July 2019 at paragraphs 9.4, 9.5 and 9.8).
9. As to (a), the defendants simply failed to provide any retaining wall for a section beneath the cantilevered concrete slab that extends out from the house on No 20. Messrs Demlakian and Kokolis agree that the unretained boundary at that point is unstable and that a retaining wall is necessary to arrest the lack of support.
10. As to (b), the evidence shows that no engineering design was obtained for a retaining wall in that location, and Mr Iliopoulos did not make any particular allowance for hydrostatic pressure (or drainage), and did not incorporate any geofabric or other means of dealing with soil migration, when constructing the dry stone retaining wall. Moreover, I accept the evidence that the wall as constructed displayed poor and inadequate interlock between the individual boulders (according to Mr Demlakian), and that the workmanship was not the best (according to Mr Kokolis - although I note that in cross-examination he said that he was mainly referring to the aesthetics of the wall). The wall was neither adequately designed nor constructed, and in my opinion was not adequate for the purpose of maintaining the support for No 18 that was reduced by the excavation works on No 20. I note that in his report dated 8 December 2020, Mr Kokolis expressed the opinion (at paragraph 3.3.1) that the dry stone retaining wall was initially constructed to act simply as a garden wall and not to provide support to a substantial structure.
11. It seems that the dry stone wall may not have been intended to serve as a retaining wall on a permanent basis. Mr Kalgovas and Mrs Kalgovas gave evidence of statements made by Mr Iliopoulos to the effect that the wall was a temporary measure until the area beside the house on No 20 was backfilled. That there was an intention to backfill using excavated material that had been moved to the rear of the property is supported by the note in the Council record dated 8 December 1982 that has already been referred to (see [13] above). Reference should also be made to the letter from the Council to the defendants dated 17 October 1984 which noted that one of the items still to be completed was: Clean up and backfill trenches to side, front and rear yards.
12. It further seems that Mr Iliopoulos had an intention to build stairs down into the area between the house and the boundary with No 18, commencing from the cantilevered concrete slab. Mr and Mrs Kalgovas gave evidence that Mr Iliopoulos spoke about the building of stairs in that area. The existence of such an intention is supported by the fact that the slab area was constructed in such a way as to leave a gap suitable as a commencing point for stairs. Mr Iliopoulos' explanation that the gap was merely to provide access, perhaps by means of a step ladder, was unconvincing. Again, the evidence of Mr and Mrs Kalgovas in relation to these matters is to be preferred to that of Mr Iliopoulos. I do not accept his denials that he made the statements as recalled by Mr and Mrs Kalgovas.
13. Whatever Mr Iliopoulos' intentions at the time he constructed the dry stone wall, the fact remains that due to negligence in its design and construction the wall was not adequate for the purpose of maintaining the support for No 18 that had been reduced. The defendants' failures in that regard, and the failure to install an appropriate retaining wall south of the house on No 18, amount to breaches of the duty referred to in s 177 of the Conveyancing Act. Insofar as the retaining works carried out by the defendants can be regarded as a "system", it was, as concluded by Mr Demlakian, inadequate and defective (see his report of 3 July 2019 at paragraph 9.1). Further, I am satisfied that those failures of the defendants have caused damage to the plaintiffs' land. The failures to take reasonable precautions in the respects I have found mean that the support hitherto provided by No 20 to No 18 has not been maintained. I am satisfied that this on-going state of affairs has brought about the damage to No 18 that was first noticed by the plaintiffs in 2014.
14. In particular, I am satisfied on the evidence: 1. that the failure to install an appropriate retaining wall on the boundary south of the house on No 18 has resulted in subsidence in the area of the paved driveway on No 18 (see Mr Demlakian's report of 3 July 2019 at paragraph 9.2; see also the Joint Report at paragraphs 2.1 and 3.1); and 2. that the inadequacy of the dry stone retaining wall has resulted in subsidence of the paved area at the bottom landing of the stairway, and subsidence and cracking of the dwarf brick wall under the stairway landing (see Mr Demlakian's report of 3 July 2019 at paragraphs 9.4 and 9.8; see also Mr Kokolis' report of 3 December 2019 at paragraph 3.3.7).
15. I am not satisfied of the existence of other possible causes of the damage to No 18, as postulated by Mr Kokolis. Accordingly, I have concluded that the damage to No 18 would not have occurred had the defendants not breached their duty of care as described above (see Civil Liability Act 2002, s 5D).
16. I do not accept the defendants' submission that the plaintiffs' cause of action in negligence is statute barred because relevant damage first occurred in 1990 when portion of the dry stone retaining wall "collapsed". The defendants noted in their submissions that the evidence in relation to that event was limited. The only direct evidence of what occurred came from Mr Iliopoulos who said that some stones had fallen down, and they had been put back up. Mr Iliopoulos assured the plaintiffs that the wall had been fixed and would not fall again. I do not think it has been established that whatever damage occurred to the wall constituted damage to the plaintiffs' land. In any case, the evidence in relation to this event does not enable the Court to be satisfied that any damage suffered in 1990 is damage of the same type as that which became manifest in 2014 when subsidence on the plaintiffs' land was noticed. In my opinion, that is when non-negligible damage was first suffered by the plaintiffs as a result of the defendants' breaches of their duty of care. The cause of action in negligence arose at that time, and these proceedings were commenced within the period prescribed by s 14 of the Limitation Act.
17. As noted earlier, whilst the relief claimed by the plaintiffs includes a claim for damages, the principal relief sought is mandatory injunctive relief to require the defendants to carry out works on No 20 that would have the effect of restoring adequate support for No 18. In my opinion, relief of that character is appropriate in the circumstances of this case where the evidence establishes that unless remedial works are undertaken on No 20 there is likely to be on-going damage occasioned to No 18. I note that the defendants did not submit that such relief was not available as a matter of principle in the event the Court found a breach of the duty of care under s 177. The thrust of the defendants' case in this respect was upon the scope of any injunctive relief.
18. Having regard to the agreement reached between Messrs Demlakian and Kokolis concerning the nature of works required in respect of the unretained boundary south of the house on No 18, the defendants accepted that if liability was relevantly established, an order requiring works of that character would be appropriate. However, there was a live issue concerning relief in respect of any liability arising from the dry stone retaining wall. The defendants took the position that it would not be appropriate to order them to carry out the works recommended by Mr Demlakian which would involve the entire removal of the wall (and the stairway on No 18) and the construction of a new retaining wall. The defendants contend that it would be appropriate to only require the existing wall to be strengthened by the construction of a new wall in front of it on No 20, as recommended by Mr Kokolis.
19. The divergence between the experts on this issue is dealt with in the Joint Report, especially at paragraphs 3.5 and 4.1 to 4.3. The issue was the subject of numerous questions in the course of the concurrent evidence session.
20. The approach favoured by Mr Kokolis is referred to in his 3 December 2019 report at paragraph 3.10, and further developed in his 8 December 2020 report at paragraphs 2.1.72 to 2.1.79 and Appendix F (drawings SK9, SK10 and SK11). Mr Demlakian's concerns and objections to this approach are essentially set out in his 9 September 2020 report at paragraphs 6.70 to 6.72, his 10 September 2020 report at paragraphs 6.17 to 6.22 and 6.44 to 6.46, and his 12 April 2021 report at paragraphs 6.85 and 6.94 to 6.105.
21. Having considered that evidence, and the further evidence adduced in the concurrent session, I have concluded that whilst Mr Demlakian's concerns are genuine and cannot be lightly dismissed, Mr Kokolis' proposal for the stone retaining wall to be strengthened by the construction of a new wall in front of it appears to be a feasible and appropriate response to the problems caused by the deficiencies in the existing wall. There are of course risks and uncertainties involved in the implementation of the proposal, but the same can be said of Mr Demlakian's proposal. In reaching the above conclusion I have taken into account the evidence of the likely costs of the proposals. That evidence suggests that the cost of Mr Demlakian's proposal would be very much greater than the cost of Mr Kokolis' proposal. It was Mr Cohen's opinion that Mr Demlakian's proposal would cost in the order of $490,000 (including nearly $225,000 for approvals and other fees). Mr Cohen considered that Mr Kokolis' proposal would cost in the order of $52,000.
22. It should be noted that in his report of 10 September 2020 (at paragraphs 6.17 and 6.46), Mr Demlakian accepted that the new retaining wall concept proposed by Mr Kokolis could be designed in such a way as to replace the natural support previously provided by No 20 to No 18, provided certain features were incorporated into the design (e.g. the wall would have to be designed for the pressure "at rest" of the soil behind it to prevent further loss of consolidation of the fill behind the wall). Further, one of the reasons for Mr Demlakian's opposition to Mr Kokolis' proposal is that it would not overcome the encroachment of the existing wall onto No 18, but in my view the issue of encroachment itself is not significant in the context of framing a remedy to address a breach of the duty referred to in s 177 of the Conveyancing Act.
23. In all the circumstances I consider that an order should be made requiring the defendants to carry out works essentially as recommended by Mr Kokolis to strengthen the dry stone retaining wall. That order is in addition to an order requiring the defendants to undertake the works in respect of the unretained section of the boundary, essentially as agreed between Mr Demlakian and Mr Kokolis.
24. I consider that all questions of assessment of damages should be deferred until the requisite works have been carried out. At that stage, the extent to which the plaintiffs have suffered loss (including because structures on No 18 need to be repaired or replaced) will be better known.

Breach of statutory duty

1. In my opinion, the breaches of the duty under s 177 of the Conveyancing Act, as found above, also amount to breaches of Part 31.3 of Ordinance No 70 made under the Local Government Act 1919. Part 31.3, which was in force at the time the defendants carried out the excavation and other works, provided: 31.3 Wherever the soil conditions so require, retaining walls or other approved methods of preventing movement of the soil shall be provided and adequate provision made for drainage.
2. I am satisfied on the evidence of the engineers that the soil conditions required retaining walls (or other approved methods of preventing movement of soil) on the boundary between No 18 and No 20 due to the excavation works carried out on No 20 in the vicinity of that boundary. It is clear that those works reduced the level of support for No 18 that had hitherto been provided by No 20. However, the defendants failed to install an appropriate retaining wall on the boundary south of the front façade of the dwelling on No 18, and the dry stone retaining wall that was erected further to the north was designed without any allowance for hydrostatic pressure or drainage.
3. These breaches of Part 31.3 would give rise to a private action for damages at the suit of the plaintiffs (see Kebewar Pty Ltd v Harkin (1987) 9 NSWLR 738 at 744).
4. The plaintiffs also relied in their pleading upon Part 31.4(1) of Ordinance No 70 as giving rise to a right of action against the defendants (see Pantalone v Alaouie (1989) 18 NSWLR 119 at 130-132). Part 31.4(1) provided: 31.4(1) Where an excavation 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 shall, at his own expense - (a) preserve and protect such building from damage; and (b) if necessary underpin and support such building in an approved manner. This claim was not referred to in the plaintiffs' written submissions and was not developed in oral submissions. It was not suggested that the house on No 18 suffered any damage. Even if the defendants also breached Part 31.4(1), there was no evidence that any such breach caused, or is likely to cause, damage additional to that caused by the defendants' breaches of the s 177 duty and Part 31.3.
5. Similar observations can be made about the plaintiffs' claims based upon alleged breaches of various conditions of the defendants' development consent. In addition, I agree with the submissions made by the defendants to the effect that the plaintiffs have failed to explain how such breaches, which can give rise to liability for a penalty under s 317 of the Local Government Act 1919, would give rise to a private right to claim damages against the defendants. The existence of such a right does not seem to me to be supported by the decision in Pantalone v Alaouie (supra) that was cited by the plaintiffs in submissions.

Claim under the Encroachment of Buildings Act

1. The plaintiffs complain that the dry stone retaining wall encroaches upon No 18. In that regard they primarily rely on the evidence of the surveyor, Mr Loomes, and his survey of the boundary (see Annexure D to Mr Loomes' affidavit of 4 October 2016). This evidence, which was not challenged, shows that at least the top section of the wall encroaches to a minor (and unspecified) extent upon No 18 in two areas, including an area near the stairway. The evidence is unclear as to whether, and if so the extent to which, the wall encroaches upon No 18 at lower levels including at levels below the surface. Mr Demlakian gave some evidence to the effect that if the width of the wall at its base was 1m there would be encroachment onto No 18 along the entire length of the wall, in extreme cases of up to 700mm.
2. The plaintiffs allege that the encroachment prevents their land from being properly supported, and that they are unable to remove the encroachment without going onto No 20. The plaintiffs seek an order under s 3 of the Encroachment of Buildings Act for the defendants to remove the encroachment. The plaintiffs further say that it would be just for the defendants to support the plaintiffs' land upon the removal of the wall. The plaintiffs alternatively make a claim for compensation under s 3 of the Act.
3. Section 3 of the Encroachment of Buildings Act provides: (1) Either an adjacent owner or an encroaching owner may apply to the Court for relief under this Act in respect of any encroachment. (2) On the application the Court may make such orders as it may deem just with respect to: (a) the payment of compensation to the adjacent owner, (b) the conveyance transfer or lease of the subject land to the encroaching owner, or the grant to the encroaching owner of any estate or interest therein or any easement right or privilege in relation thereto, (c) the removal of the encroachment. (3) The Court may grant or refuse the relief or any part thereof as it deems proper in the circumstances of the case, and in the exercise of this discretion may consider amongst other matters: (a) the fact that the application is made by the adjacent owner or by the encroaching owner, as the case may be, (b) the situation and value of the subject land, and the nature and extent of the encroachment, (c) the character of the encroaching building, and the purposes for which it may be used, (d) the loss and damage which has been or will be incurred by the adjacent owner, (e) the loss and damage which would be incurred by the encroaching owner if the encroaching owner were required to remove the encroachment, (f) the circumstances in which the encroachment was made. (4) The Court may refer any question involved in proceedings on the application to: (a) any registered land surveyor (within the meaning of the Surveying and Spatial Information Act 2002), or (b) any valuer. (5) This section applies to encroachments made either before or after the commencement of this Act.
4. I am not persuaded that in the circumstances of this case it would be appropriate to make an order to remove the encroachment by removal of the dry stone retaining wall. The evidence, so far as it goes, does not establish more than the existence of a minor encroachment. There is no evidence that the existence of the encroachment per se gives rise to any particular or substantial impediment or restriction upon the plaintiffs' use of No 18. That is so even if it is assumed that there might be an encroachment beneath the surface of as much as 700mm in some places. It is true that the encroachment is effected by a wall which, as I have found, is inadequate to maintain the support for No 18 that had been reduced by the defendants' works. Nevertheless, as submitted by the defendants, the problems caused by the inadequacies in the wall are not brought about by its encroaching nature. I have concluded that those problems ought to be able to be satisfactorily remedied by the undertaking of works that do not involve the removal of the wall. To require the wall to be removed, and thus necessitate the construction of a new retaining wall, would likely impose a very significant financial burden upon the defendants (perhaps as much as about $490,000) compared to the likely cost of the wall strengthening works (perhaps in the order of about $52,000). That additional burden seems to me to be well out of proportion to the benefit that would arise from the elimination of the encroachment itself.
5. The assessment of any compensation under the Act will be deferred, together with all other questions of assessment of damages.

Claim in trespass

1. The plaintiffs further alleged that the construction of those parts of the dry stone retaining wall which are located on or in the plaintiffs' land amount to a trespass to the plaintiffs' land that is a continuing trespass. The allegation that there is a continuing trespass is evidently intended to overcome the limitation period difficulty that would exist in relation to a cause of action in trespass that arose in about 1983 when the wall was constructed.
2. It is doubtful whether the existence of the encroaching elements of the dry stone retaining wall, which are fixtures in and thus part of the plaintiffs' land, amount to a continuing trespass (see, for example, Lord v McMahon [2015] NSWSC 1619 at [160]-[161] per Slattery J; McIntosh v Morris [2021] NSWCA 225 at [74] per White JA and [102] and [104]-[107] per Brereton JA). I tend to think that there is no continuing trespass, and that any cause of action to sue for any trespass that occurred in about 1983 is statute barred.
3. However, even making the assumption, favourable to the plaintiffs, that the trespass claim is maintainable, any relief would not exceed that available under the Encroachment of Buildings Act. For reasons similar to those set out in the preceding section, I do not think it would be appropriate to order the defendants to remove the encroachment by removal of the dry stone retaining wall. Further, I do not think that any damages would exceed the amount of any compensation that would be ordered under the Act.

Claim in nuisance

1. The plaintiffs make a further claim that the construction of the parts of the dry stone retaining wall which are located on or in the plaintiffs' land amount to a nuisance that is a continuing nuisance. The damage alleged to have been suffered as a result of the nuisance is said to arise because the wall is unstable such that it requires removal and/or repair. As submitted by the defendants, it is not suggested that any encroachment has, of itself, occasioned any loss to the plaintiffs.
2. In these circumstances it is difficult to see how this claim adds anything to the primary claim advanced pursuant to s 177 of the Conveyancing Act. If available, the cause of action would not give rise to relief any more extensive than that to be granted for the primary claim.
3. I will add that it is in any event questionable whether this claim in nuisance, which is framed by reference to damage due to the inadequacy of the dry stone retaining wall, is maintainable in the face of s 177(8) of the Conveyancing Act. That provision abolishes any right to bring an action in nuisance "in respect of the removal of the support provided by supporting land to supported land". In the circumstances, it is not necessary to determine that question, which was not the subject of any submissions.

Conclusion

1. The plaintiffs have succeeded on their primary claim pursuant to s 177 of the Conveyancing Act. It is considered appropriate for mandatory injunctive relief to be given in the first instance, as described above, with the assessment of any damages (or compensation pursuant to the Encroachment of Buildings Act) to be deferred until the requisite works have been carried out.
2. After considering these reasons, the parties will need to confer in respect of the form of relief. In addition to the formulation of a sufficiently precise identification of the works to be performed, the parties will need to consider matters such as the obtaining of any necessary approvals and the terms of a certification of the works following completion. The parties will be given a fair time to deal with these matters as it is highly desirable that the orders clearly and precisely embody a practical and workable regime that has been fully considered by the affected parties.
3. The matter will be listed for mention in the near future at a time to be arranged with my Associate.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 08 February 2022