Lord v McMahon - [2015] NSWSC 1619 - NSWSC 2014 case summary — Zoe

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Lord v McMahon

[2015] NSWSC 1619

Supreme Court of NSW|2014-12-12|Before: Slattery J

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Source facts

Court

Supreme Court of NSW

Decision date

2014-12-12

Before

Slattery J

Source

Original judgment source is linked above.

Judgment (34 paragraphs)

[1]

1 Qd R 160 Cuthbert v Hardy (1989) 17 NSWLR 321 Delaforce v Simpson-Cook [2010] NSWCA 84; (2010) 78 NSWLR 483 Duic v Duic [2013] NSWCA 42 Evans Marshall & Co Ltd v Bertola SA [1973] 1 WLR 349 Farah Constructions Pty Ltd v Say-Dee Pty Ltd (2007) 230 CLR 89 Gales Holdings Pty Limited v Tweed Shire Council [2013] NSWCA 31 Gardner v Hodgson's Kingston Brewery Ltd [1903] AC 229. Goldman v Hargrave [1967] 1 AC 645; 115 CLR 458 Grant Pastoral Co Pty Ltd v Thorpes Ltd (1953) 54 SR (NSW) 129 Grgic v Australian and New Zealand Banking Group Ltd (1994) 33 NSWLR 202 Halliday v Nevill (1984) 155 CLR 1 Healey v Hawkins [1968] 1 WLR 1967 Hudson v Nicholson (1839) 5 M & W 437; 151 ER 185 Jaggard v Sawyer [1995] 1 WLR 269 Jones v Dunkel (1959) 101 CLR 298 Jones v Williams (1843) 11 M & W 176; 152 ER 764 Konskier v Goodman Ltd [1928] 1 KB 421 Lagan Navigation Co v Lamberg Bleaching Dyeing and Finishing Co [1927] AC 226 Lemmon v Webb [1894] 3 Ch 1; [1895] AC 1 Lipman v Clendinnen (1932) 46 CLR 550 Logue v Shoalhaven Shire Council [1979] 1 NSWLR 537 Lowndes v Bettle (1864) 33 LJ Ch 451 Melaleuca Estate Pty Limited v Port Stephens Council [2006] NSWCA 31 McKenzie v Powley [1916] SALR 1 Miller v Jackson [1977] QB 966 Milling v Hardie [2014] NSWCA 163 Plenty v Dillon (1991) 171 CLR 635 Plunkett v Bull (1915) 19 CLR 544 Port Macquarie Hastings Council v Mooney [2014] NSWCA 156; 201 LGERA 314 Redland Brick Co v Morris [1970] AC 652 Re Hodgson (1885) 31 Ch D 177 Richardson v Forestry Commission (1988) 164 CLR 261 Ruthning v Ferguson [1930] St R Qd 325 Ryan v Brain [1994] 1 Qd R 681 Joseph Saliba & Anor v Thomas Tarmo [2009] NSWSC 581 Sedleigh-Denfield v O'Callaghan [1940] AC 880 Shelfer v City of London Electric Lighting Co [1895] 1 Ch 287 Sidhu v Van Dyke [2014] HCA 19; 251 CLR 505 Soich v Sutherland Shire Council (1980) 2 BPR 9273 Snowlong Pty Ltd v Choe (1991) 23 NSWLR 198. Tran v Nominal Defendant [2011] NSWCA 220; 58 MVR 462 Thomas v Oakley (1811) 18 Ves 184; 34 ER 287 Thorpes Ltd v Grant Pastoral Co Pty Ltd (1955) 92 CLR 317 Varma v Varma [2010] NSWSC 786; 6 ASTLR 152 Vukic v Luca Grbin and Ors; Estate of Zvonko Grbin [2006] NSWSC 41 Waddell v Waddell [2012] NSWCA 214; 292 ALR 788 Wantagong Farms Pty Ltd as Trustee for the Bulle Family Trust v Bulle [2015] NSWSC 1603 Ward v Griffiths (1987) 9 NSWLR 458 Weeks v Hrubala [2008] NSWSC 162 Yarrabee Coal Co Pty Ltd v Lujans [2009] NSWCA 85; 53 MVR 187 Texts Cited: Halsbury's Laws of Australia, LexisNexis online B McFarlane, The Law of Proprietary Estoppel (1st ed 2014, Oxford University Press) RP Meagher, JD Heydon, MJ Leeming, Meagher, Gummow & Lehane's Equity: Doctrines and Remedies (4th ed 2002, Butterworths LexisNexis) RP Meagher, JD Heydon, MJ Leeming, Meagher, Gummow & Lehane's Equity: Doctrines and Remedies (5th ed 2015, Butterworths LexisNexis) C. Sappideen and P. Vines, Fleming's The Law of Torts (10th ed 2011, Lawbook Co) PW Young, C Croft, ML Smith, On Equity (1st ed 2009, Thomson Reuters) Category: Principal judgment Parties: Plaintiff: Heather Lord First Defendant: Stephen McMahon Representation: Counsel: Plaintiff: C.A. Vindin Defendant: G. Waugh

[5]

The Subdivision - 1985 to 1999

In August 1985 DP714402 recorded the subdivision of an oblong parcel of land to the west of Coolangatta Road into three lots, which are referred to in these proceedings as Lot 1, Lot 2 and Lot 3. Coolangatta Road runs approximately north-south in the vicinity of this subdivision. DP714402 actually subdivides the land it encompasses into four lots. But only the three lots running east-west within the oblong parcel of DP714402 are relevant to the issues in these proceedings. Of these three lots Lot 1 is closest to Coolangatta Road. Lot 2 lies to the west of Lot 1. Lot 3 lies further to the west of Lot 2, closest to Mount Coolangatta. Lot 4 is a large block that lies to the south of the oblong parcel.
In 1996 Mrs Lord's husband, Geoffrey Lord, purchased Lot 2 of the DP714402 subdivision. That same year Mr McMahon purchased Lot 3. Mr Lord died in 2007. Lot 2 passed under his will to Mrs Lord.
Lot 1 slopes gently from north to south. So does much of Lot 2. Moving in a westerly direction towards Mount Coolangatta, the ground in Lot 2 ascends more steeply, especially in the vicinity of Lot 3. The western end of Lot 2 is higher than Lot 1. Lot 3 is higher than Lot 2.
DP714402 was a Conveyancing Act, s 88B instrument, which provided for the subdivision of these four lots, and for the access roads and easements for services to each of the lots.
A diagram of the subdivision in DP714402, showing Lots 1, 2, 3 and 4 appears as Figure 1 below.
A natural gully diagonally traverses the western third of Lot 2 in a north-westerly to south-easterly direction and conveys storm water from upstream catchments across Lot 2. This natural gully commences in the north-western corner of Lot 2, where a number of natural water courses, bringing water further from the north and the west (through the adjacent DP623778), all converge. This convergence is closely proximate to the northern perimeter of the dam Mr McMahon built on Lot 3.
The owner of Lot 1 in DP714402 ("Lot 1") is not a party to these proceedings. Lot 1 is not affected by the issues in these proceedings. Lot 1 occupies the frontage to Coolangatta Road, such that the subdivision of Lots 2 and 3 required the creation of "battle axe" shaped blocks behind and to the west of Lot 1.
As Figure 1 shows, the battle axe "handles" required for access to Lots 2 and 3 are contiguous to the southern boundary of Lot 1. The battle axe handle of Lot 2 and the battle axe handle of Lot 3 are contiguous all the way from Coolangatta Road up to the point where they join their respective lots. As this was a rural subdivision, the distances in the battle axe handles are substantial. Lot 2 has a battle axe handle to Coolangatta Road which is 6 metres wide and 260.77 metres long, as measured from the common boundary of Lot 2 and Lot 1.
Lot 3 also has its own battle axe handle access to Coolangatta Road. But it commences further to the west, at the common boundary of Lot 3 and Lot 2. This battle axe handle is also 6 metres wide and 737.83 metres long, as measured to Coolangatta Road. The contiguous battle axe handles of Lots 2 and 3 are burdened by rights of carriageway for the benefit of the subdivision. The Lot 2 battle axe handle is burdened by right of carriageway 6 metres wide, which benefits Lot 1. The Lot 3 battle axe handle is burdened by right of carriageway 6 metres wide, which benefits Lots 1 and 2.
The land within the battle axe handles also provides access for water supply to the homes on Lots 1, 2 and 3. DP714402 creates an easement for the supply of water for the benefit of the Shoalhaven City Council. The easement is 6 metres wide and is situated in the Lot 2 battle axe handle. It continues on to the common boundary of Lots 2 and 3, and is at all times contiguous with Lot 3's battle axe handle. Lot 3 receives its water supply by a pipe situated in this easement for water supply.
Figure 2 is an enlargement of DP714402 showing the eastern end of the Lot 2 and Lot 3 battle axe handles, where they meet Coolangatta Road. Figure 2 shows Lot 2 abutting the southern side of Lot 1, and shows Lot 3 to the south of Lot 2. The north-eastern corner of the much larger Lot 4 is visible in Figure 2 south of the Lot 3 battle axe handle access:
The present disputes between Mrs Lord and Mr McMahon concern two distinct places on Lots 2 and 3. The first area of dispute is about a dam Mr McMahon constructed in 2000 at the eastern end of Lot 3 close to its boundary with the western end of Mrs Lord's Lot 2. The second area of dispute relates to a table drain that lies along the contiguous boundary of the Lots 2 and 3 battle axe handles.
Issues concerning the dam occupied most of the Court's time in the hearing of these proceedings, so the history set out in this first part of the narrative concerns that principal issue. A separate narrative and of events in relation to the table drain is set out later in its own part of these reasons

[6]

The Early Years - 1996 to 1999

Although Mr Lord purchased the property in 1996 Mrs Lord says it was not until Christmas of 1997 that she and her children moved in to prepare for the 1998 school year at the local schools. The domestic residence and associated buildings on Lot 2 stand on the higher ground of that lot and face south. When the Lords eventually sold a property they owned in Fairy Meadow in 2000, Mr Lord joined the rest of his family in the house at Lot 2.
The domestic residence on Lot 3 is positioned on that lot so that it overlooks Lots 1, 2 and 4 below it. Until 2000 a small dam about 3 metres by 4 metres was situated down the slope of Mr McMahon's land about 6 metres from its eastern boundary with Lot 2.
Mr McMahon purchased Lot 3 in December 1996. He and his wife Zoe and their family moved into the house at that time. They remained living there until March 2010. The property was then leased for a short period until August 2013, when Mr and Mrs McMahon moved back in. The McMahons visited Lot 3 regularly during the 3 years that it was leased.
Shortly after the Lords moved in to Lot 2 Mrs Lord commenced to use the property to conduct a miniature pony breeding/cow and calf raising business. She principally relied upon the natural pasture growing on the land to feed the ponies and cattle. This business was at all times run by Mrs Lord rather than the late Mr Lord, who had other interests.
Mr McMahon and Mr Lord developed a neighbourly friendship. At first the two families were on good terms with one another. The McMahons and the Lords socialised on occasions in one another's homes. They helped each other out with handyman tasks. Their children caught the same school bus together. They had brief but positive interactions with one another as they passed on the way to and from their houses along their common battle axe driveways.
Mr Lord and Mr McMahon seemed to be the principal source of friendship between the two families. On occasion the two men would go ocean fishing or trout fishing together. When they returned from fishing trips in the Snowy Mountains, the two families would share a meal from the fish they had caught. Mr McMahon and Mr Lord would chat from time to time about matters of mutual interest: the state of their properties; plans they had to improve or alter their land; or problems they might encounter in doing so. During one such discussion between the two men an issue emerged about building the dam, the subject of these proceedings.
Just when this friendship between the families ended is a matter of some significance in deciding the issues in this case. Mr McMahon traces the deterioration in the relationship to a period after Mr Lord's death in 2007. It is at least implicit in Mrs Lord's case that because of the complaints she says that she was making to Mr McMahon about his construction of the dam that the relationship between the two families had deteriorated, at least so far as it involved her, as early as 2000 - 2001.
The discussions between Mr McMahon and Mr Lord in late 1999 and early 2000, and subsequently between Mr McMahon and Mrs Lord, laid the ground for the dispute now before the Court. Because Mr Lord died in 2007, the principal witnesses at trial were Mr McMahon and Mrs Lord. The Court was required to assess their credibility. So first the Court will make some general observations about their credibility.

[7]

General Credibility and the Expert Evidence

Mrs Lord was bitter about what she perceived was Mr McMahon taking advantage of her late husband and about her husband's weakness in not standing up to Mr McMahon. Her bitterness was long-standing and was so profound that it required her evidence to be assessed cautiously. Her evidence changed or was inconsistent in places that threw doubt upon her overall reliability. These aspects of her evidence are dealt with in more detail in the course of these reasons.
Mr McMahon was a self-confident and single-minded witness who was sure of what he had seen and what he had heard in his exchanges with Mr Lord. But his single-mindedness meant that he did not notice some things. He did not accept that Mrs Lord had made any complaints to him about the dam after its construction. But he could not have failed to hear what she said to him on the occasions I find that she did complain. He screened out her complaints until about 2009, dismissing them as being irrelevant in his mind. He had dealt with her husband who was then the owner of Lot 2 in 1999. He seemed unwilling to take much notice of anything Mrs Lord said against the dam, once it was built.
Each party called expert evidence. Mrs Lord called evidence from a civil engineer, Mr Phil Diversi of the Bowdens Group Australia Pty Limited (when he delivered his first expert report dated 25 January 2013 and later of Opus International Consultants (Australia) Pty Limited (when he delivered his second report of 6 may 2014). Mr Diversi's evidence covered a variety of engineering solutions to remove the encroachment from the dam wall onto Mrs Lord's Lot 2 and other matters concerning the table drain. His 6 May 2014 report was in part the product of a visit to the site by a collegue at Opus, a Mr Greg Gearin, a business manager at Opus, a matter that became the subject of comment in the course of the expert evidence.
Mr McMahon adduced expert evidence from Mr Geoff McVey, also a civil engineer. Mr McVey's report of 7 July 2014 contradicted Mr Diversi's opinions in a number of respects, discussed below, both with respect to the dam wall issue and the table drain issue. Both civil engineers were able to agree on many matters. They participated in a joint session of expert evidence for which they had usefully prepared an agenda which covered all the issues relevant to them and which the Court followed. There was no issue about the qualifications of each expert to give his opinion on the matters in issue.

[8]

Dam Construction - Late 1999 to Early 2000

Overview. In late 1999 or early 2000 I accept that in the course of one of their regular informal conversations Mr McMahon explained to Mr Lord that Mr McMahon was experiencing trouble in keeping his plantation of citrus trees well-watered during the then drought period. Their conversation turned to Mr McMahon's proposed expansion of his existing dam to better service his orchard. Mrs Lord was not present during this conversation.
I accept that Mr McMahon said to Mr Lord that the existing dam on Lot 3 (of about 12 square metres) was insufficient to supply water for the number of trees Mr McMahon had planted and that they had a conversation to the following effect about the proposed dam: Mr McMahon: "I'm having trouble keeping my orchard alive due to the lack of water". Mr Lord: "Why don't you build a dam?" Mr McMahon: "I don't really have the space." Mr Lord: "Why don't you build it as close as possible to my western boundary." Mr McMahon: "Would you be happy with that, because there would be a mound on your property?" Mr Lord: "Yes. That will be fine."
Mr McMahon says that by this conversation Mr Lord gave his consent for the new dam wall to extend onto the property of Lot 2, in the manner that it was actually built. For the reasons which will explained below on their own the words used did not have quite such a broad effect.
Mr Lord is now deceased. Caution should therefore be exercised in assessing Mr McMahon's account of his conversation with Mr Lord. In Clune v Collins Angus & Robertson Publishers Pty Ltd (1992) 25 IPR 246 ("Clune"), at 253, Wilcox J said: "[I]t is trite to say that evidence of conversations between a living witness and a dead person should be scrutinised with particular care, especially where there was no occasion for the dead person to record his version of them before his death. Of course, that is not to say that such evidence cannot be true; it obviously may. But it does mean that any matter adversely affecting the credit of the witness has special importance; the witness cannot be refuted in any way"
In Varma v Varma [2010] NSWSC 786; 6 ASTLR 152 at [418] - [419] ("Varma") Ward J (as her Honour then was) collected and applied authorities that show that "careful scrutiny is required" by the Court in cases where a claim is based on an assurance made by a deceased person: Plunkett v Bull (1915) 19 CLR 544; Clune at 253). Citing Weeks v Hrubala [2008] NSWSC 162 at [20], in Varma her Honour explained that the Court generally looks for corroboration of those claims: Re Hodgson (1885) 31 Ch D 177; Vukic v Luca Grbin and Ors; Estate of Zvonko Grbin [2006] NSWSC 41.
These principles are most frequently applied in actions against the estates of deceased persons. But they apply here as well. The conversation with the late Mr Lord that Mr McMahon relies upon founds both Mr McMahon's claim in proprietary estoppel against Mrs Lord and his defence to her action in trespass.
Many objective indicators corroborate the inference that Mr Lord did give consent to some dam building earthworks on his land. The dam took about one and a half to two weeks to build and Mr Lord was fully aware of the building works. He did not make any attempt to stop them, even though they were carried out in plain view. Mrs Lord says that Mr Lord was not living at Lot 2 at the time. That could well be right but Mr Geoff Rumble, the earthmoving contractor who did the work and whose evidence I accept, makes clear that Mr Lord was about on site every few days and observed the work. The work included the removal of an old common boundary fence on the low side of the existing dam and the moving of heavy machinery on both Lot 2 and Lot 3. Once the dam was finished a new fence was re-erected on the high side of the dam, with Mr Lord's assistance, with the consequence that Mrs Lord's animals had direct access to the water in the dam. Notwithstanding that Mr Lord is now deceased these factors are strong indicators that the alleged conversation did occur. A conversation of this kind is the probable explanation for Mr Lord's conduct once the building work started. And I accept Mr McMahon's evidence that it did. Despite that acceptance, for the reasons explained below, what that consent meant and what is to be inferred from the conversation that took place and the conduct thereafter require closer analysis.
Mr Geoff Rumble and his uncle, Mr Kerry Rumble constructed the expanded dam in late 2000. Much of the spoil from the construction was placed as batter supporting the dam in a wall that extended onto Lot 2 along a distance of about 57 metres of the Lot 2 - Lot 3 boundary.
Upon completion, the existing dam of approximately 3 by 4 metres (12 square metres) at full water level had expanded to a dam that was approximately 57 metres along the Lot 2 - Lot 3 boundary by 14 metres deep into Lot 3 (some 798 square metres). This was an increase in the dam's surface area of over 66 times. Much of the excavation spoil was deposited on Lot 2. The enlarged dam was now positioned with its high water line less than 1 metre inside the Lot 2- Lot 3 boundary fence inside Lot 3, along a distance of approximately 57 metres.
The experts agreed that the dam wall encroached about 20 metres into Lot 2. Mr McMahon's surveyors, Johnston Proctor Surveyors, undertook a survey of the extent of the dam wall that encroached into Lot 2 which was accepted as correct by both parties. The relevant part of the Johnston Proctor survey is set out in Figure 3 below:
As-built the dam was, I find, much larger than Mrs Lord had anticipated. Mrs Lord says, and I accept, that it was also much larger than her husband told her that he had anticipated. I find that Mrs Lord and Mr Lord expected that the dam would be expanded to about size of a nearby seepage pond (visible in photograph C8 to Mrs Lord's July 2013 affidavit), which was somewhat larger than the existing dam but nothing like the size of the dam which was ultimately built. It is common ground in the proceedings that no development approval from the local council was required for the construction of the dam. None was sought. None was obtained.
The contests between the parties about the 2000 events of dam construction fall into three periods: (1) what was said and happened just before the construction and what consent on Mr Lord's part may be implied from what was said; (2) what happened during construction; and (3) what happened in the immediate aftermath of the construction. These reasons now deal with each of these in turn.
(1) The Pre-construction Conversations. As earlier indicated, I accept that Mr Lord spoke the pre-construction words that Mr McMahon attributes to him. But it is not automatically to be inferred from these words alone that Mr Lord thereby expressly assented to a dam of the size that Mr McMahon actually built being sited "as close as possible to my western boundary".
In the first place, Mr McMahon's own evidence of these words does not clearly show that Mr Lord knew just how big the dam would be. Mr McMahon's own version is that he represented to Mr Lord that "there would be a mound on your property". Mr McMahon seems to have assumed from his exchange with Mr Lord that this meant he had Mr Lord's agreement that much of the over-50-metre-long dam wall could be placed on his Lot 2. Mr McMahon admitted, "that is an assumption I made. I can't tell you why I made it…". He went on to explain that he "considered that the advantage was having the water body as close to the well, the dam, which I consider to be the water body, as close to the boundary as possible". In my view Mr McMahon's representation to Mr Lord that there would be a "mound" on Lot 2 falls well short of accurately portraying a picture of an embankment supporting a 50-metre-plus-long side wall of a dam, which wall was wholly on Mr Lord's property from a point one metre to the east of the dam's eastern water line. Mrs Lord's closing submissions persuasively describe Mr McMahon as engaging in a "leap in logic" in assuming from this conversation that he could place most of such a long dam wall on Mr Lord's land.
In the second place, Mr Lord's domestic situation made it unlikely he understood the volume of the earthworks that were proposed to be placed on his property. It would have been an act of domestic insanity for him to consent to a 50-metre- plus dam wall being placed on Lot 2 with its water line one metre from the Lot 2 - Lot 3 boundary. Mr McMahon does not say that he clearly identified these dimensions for Mr Lord at the time he had this discussion. Had he laid this out clearly at the time, and had Mr Lord conveyed these dimensions to his wife, her later evidence compels the conclusion that her reaction to the idea would have been one of the firmest rejection.
Whatever Mr Lord owed Mr McMahon in friendship, Mrs Lord's evidence makes clear that it would be as nothing compared to the domestic controversy that such a massive dam enlargement was likely to cause him. It is improbable that if Mr McMahon had given Mr Lord a clear explanation of the size of the dam together with its location then Mr Lord would have risked significant domestic disharmony by agreeing to a construction of that size at that location.
But I nevertheless accept Mr McMahon's evidence that Mr Lord did give a non-specific verbal assent to the carrying out of some earthworks in the words that Mr McMahon describes. A mismatch of expectations resulted: Mr McMahon thought he had a general permission to build what he liked. Mr Lord I infer thought that there would be a "mound" constructed on his property.
In the third place, the absence of any written plan of the expanded dam is puzzling. Mr McMahon commissioned no drawings, no diagrams and on his own evidence, gave Mr Lord no other measurement of the size of the proposed excavation and embankment. Mr McMahon's evidence is that some laser levels of the terrain were available and there had been a "walk around" of the affected area involving Mr Lord and Mr McMahon. But Mrs Lord persuasively submits that this conduct would probably not have indicated to Mr Lord the true size of the proposed dam. The unavailability of contemporaneous documents supports the inferences that: (1) Mr Lord probably had only a general idea exactly how big the as-built dam was going to be; and therefore (2) probably assumed it was going to be perhaps a few multiples in size of the nearby seepage dam but still much smaller than it turned out to be.
Even Mr McMahon confessed a degree of surprise at how large the dam had become. He said "I was not aware of how much room you needed around the dam and obviously I did not appreciate its exact dimensions, as that was driven by the local topography really and the local rainfall." Mr McMahon did suggest that Mr Lord and he "got a better idea of how big it would be when we did the walk around with the Rumbles… that really laid out the footprint of it". But this was only "a better idea" and fell well short of what clear written plans would have indicated.
Mr McMahon counters this with a submission that "common sense and human experience" suggest that Mr Lord consented to the building of the dam. After all, Mr McMahon contends, why did Mr Lord acquiesce in the building of the dam? It is true: there is no evidence of Mr Lord later protesting about the size of the dam during its construction. He did not write letters in opposition. He did not engage lawyers to seek injunctive relief. He did not physically try to do anything at the time to stop the construction of the dam. And there is no direct evidence from which the Court could infer that Mr Lord voiced to Mr McMahon himself any concern that the dam was much bigger than he had originally expected.
Why did he do nothing? Mrs Lord's evidence provides what I find is the most probable explanation for this: having held the pre-construction conversation with Mr McMahon he felt obliged to go along with what was happening during the construction, even though the expanding dam structure was far larger than he had expected. He had given his general consent to the building of the dam and he was too embarrassed to confront Mr McMahon about this, so he did not do so.
Mr Waugh submits that the hunter and outdoorsman that both Mr McMahon and Mrs Lord describe Mr Lord to have been was unlikely to have behaved in this way: a man too cowed to confront his neighbour about a dam. But on this issue I prefer the picture that Mrs Lord painted of her late husband: a man in part lacking in courage and in part more ready to stand by his word to his male friend than stand up for his wife. She knew him better than anyone. She had her differences with him. But even allowing for those differences, I accept her evidence that she pleaded with her husband to go and confront Mr McMahon and asked him to do something about the dam. But Mr Lord would not. Consistent with his later conduct, in my view at the time the dam was being built Mr Lord was also unwilling to confront Mr McMahon about the growing mismatch between his expectations and the growing size of the dam that Mr McMahon was actually building. Mr Lord felt conflicted because he did get on with well with Mr McMahon and had given his agreement to the dam expansion. Despite her differences with him, even Mrs Lord accepted that her husband was "a man of his word".
Mr Lord also went along with the construction of the dam because he had given his general assent to the construction of the dam and this had been witnessed by the contractor engaged to do the work, Mr Geoff Rumble. I generally accept Mr Rumble's affidavit and oral evidence about his conversations with Mr McMahon and Mr Lord before the construction took place and during the construction. His account was that he had advised Mr McMahon that if the dam was to be constructed it would be beneficial to both Mr Lord and Mr McMahon if the dam wall were pushed partly onto the Lords' property. That way, Mr McMahon could get a bigger dam and the batter would be more visually pleasing from the Lords point of view than if it were built further up the hill to the west.
Mr McMahon, Mr Lord and Mr Rumble all walked over the site together before the construction. Mrs Lord was not present. Mr Rumble's uncle, Mr Kerry Rumble was also involved with him in completing this work. But Mr Geoff Rumble conducted 95 per cent of the contractors' conversations with the two other parties. In those circumstances I draw no adverse inference from the McMahon parties not calling Mr Kerry Rumble as a witness.
Mr Geoff Rumble clearly got the impression that Mr Lord was gaining his first insight from him, Mr Rumble, and had not previously found out from Mr McMahon, just where the dam was proposed to be sited. Although the demonstration showed as Mr Rumble said, "from point A to point B and finished levels", I do not accept that the full size of the dam as it would be constructed was really conveyed to Mr Lord. Mr McMahon did not really appreciate that either. But nor do I accept that Mr Rumble would have proceeded without obtaining a general permission from Mr Lord for what he was about to do. Mr Geoff Rumble came across as a reliable witness and the kind of operator who would not have just proceeded without Mr Lord's general consent.
Mrs Lord challenges Mr McMahon's case that Mr Lord agreed to the construction of a dam. She claims it is a contradiction that Mr McMahon could contend on the one hand that Mr Lord was allegedly "happy" about the construction of the dam, right up until his death in 2007, but that despite that Mr McMahon nevertheless failed for those seven years to ask Mr Lord for an easement for batter over Lot 2. Asking for that should not have been at all difficult given Mr Lord's alleged acquiescence in the construction, Mrs Lord submits.
There is no contradiction. The situation is readily explained. After the dam was built Mr McMahon was not interested in spending more money on solutions to issues that were not then presenting themselves as problems that he immediately had to solve. Whilst Mr Lord was alive and not protesting about the dam, Mr McMahon did not perceive any need for him to take any further action. Mrs Lord has not shown that the subtleties of the Encroachment of Buildings Act or of easements for batter were ever drawn to Mr McMahon's attention before Mr Lord's death, such that Mr McMahon should have been expected to act on them with a then complaisant Mr Lord.
(2) Events During Construction. The parties actively contested a number of differing versions of events during construction of the dam. The first issue related to the removal of a stock proof fence and the granting of permission for heavy earthmoving machinery to come onto Lot 2. I accept Mr McMahon's evidence that Mr Lord gave that permission. But I accept Mrs Lord's evidence that she did not want the machinery on Lot 2. She says and I accept that she was apprehensive about the damage the heavy machinery might do to her pasture, so she disagreed with what was being proposed. But initially she expressed her disagreement only to her husband, who had already given his consent to Mr McMahon to this intrusion. I accept that she requested that her husband "go up and rescind permission to the fence to come down". But he did not go and confront Mr McMahon. So despite her reservations the fence was taken down. Mrs Lord told Mrs Lord that he had agreed "because he thought it was reasonable". I accept Mr Lord did this through this short period of time to "keep the peace".
At one stage in her evidence under cross-examination Mrs Lord gave the impression that she thought that Mr Lord had only given permission for the fencing to be removed, so that it would not become entangled in the earthmoving machinery during the works, but that he had not given permission for the machinery come onto Lot 2. She did not persist in that version which seems to have arisen from a degree of confusion in communication during her questioning.
Her evidence on this point was heavily criticised. But I found it largely consistent and any apparent inconsistency really arises from her, adding more detail to her version which was originally expressed in a summary way in her first affidavit of 17 July 2013. In that affidavit she suggested that notwithstanding her opposition, "my husband agreed with the proposal by" Mr McMahon to remove the fence. In her affidavit she also acknowledged that permission had been given despite her concerns "about the damage the heavy machinery might do to (their) pasture". Under cross-examination, her account was more that although her husband had given permission, she thought that he had later rescinded it at her behest only to find out when the work started that the fence was taken down. She correctly inferred that this meant that either her husband had not gone back to rescind the permission or Mr McMahon was ignoring Mr Lord's rescission. I accept Mr McMahon's evidence that no permission was rescinded. So the correct inference to reconcile Mr McMahon's and Mrs Lord's respective versions on this issue, is that Mr Lord did not go back and do what his wife requested of him.
Other issues between the parties were the roles that Mr Lord and Mrs Lord played during the works. Mr Rumble's evidence is instructive in resolving these issues. I accept his evidence that Mr Lord came to chat to Mr Rumble about the progress of the works on two to three days each week late in the afternoons after work. Mr Lord did not express opposition to Mr Rumble about the size of the dam. I also accept Mr Rumble's evidence that Mrs Lord did not express to him her opposition to the construction of the dam during the works. The best explanation for this is that Mrs Lord had decided then to confine her opposition to the dam to trying to persuade her husband to take the matter up with Mr McMahon. It was only later that she realised that course was ineffective and she decided to complain to Mr McMahon directly.
As will be seen immediately below I accept that straight after the works Mrs Lord witnessed Mr Lord making some enquiries of Mr McMahon about finishing off the works in a way that was more satisfactory to the Lords. Mrs Lord was present on some of these occasions with Mr Lord and Mr McMahon. For example I accept Mrs Lord's evidence that on several occasions over a period of about 8 months after the construction started Mr Lord asked Mr McMahon to complete the works and acquire the materials, so that the fence could be placed around the dam. The fence was ultimately placed well away from the Lot 2 - Lot 3 boundary, on the western or high side of the new dam, the far side of the dam from the boundary. But none of this amounted to Mr Lord opposing the construction of the dam during its early building phase. It was during these occasions that Mrs Lord began to voice some complaints about the dam. But those complaints were in a context of making adjustments to the result of the construction work, to live with what had been done. I do not accept Mr McMahon's evidence that he was unaware of her complaints until 2009.
(3) The Immediate Aftermath. The dam wall was constructed mainly from excavated shale and clay drawn from the dam excavation. Mr Rumble says, and I accept, that the topsoil was stripped off the parts of Lot 2 and Lot 3 being excavated and placed in a heap at the top of the batter. Then the underlying natural ground material was ripped and the dam was built on top of the ripped material with loose excavated material of shale and clay, which was heaped and then compacted into the underlying natural ground. Then the works were dressed again with the topsoil that had been set aside. I accept that Mr Rumble did a competent job and restored the topsoil as he said that he did, a matter relevant to Mrs Lord's later complaints of nuisance.
Mrs Lord says that: this material was left bare after the construction; its surface was not seeded with grass; weeds grew over the surface of the excavation; and the area was incapable of growing the good quality pasture typical of the terrain that pre-dated the construction of the dam.
Mr McMahon denies this. He says that the 150 tonnes of topsoil which had been removed from the area of excavation were replaced on the surface of the new dam wall at the end of construction. And he says that this topsoil was full of kikuyu grass underground stems (rhizomes), supplemented later by some kikuyu seed that Mrs Lord herself added.
On this issue I prefer Mr McMahon's evidence. It accords with Mr Rumble's evidence, which I accept. And the early photographs Mrs Lord took closer to the time of the construction of the dam but after its enlargement (see photographs C5 to C9 of her first affidavit) show its surface as apparently fairly well grassed, which I infer was the result of a reasonably well bedded-in grass in the topsoil.
There is no doubt that by the time of the trial when the Court viewed the site that was not the case. But between 2000 and the trial, Mrs Lord herself had undertaken the various earthworks on the surface of the dam that are set out later in these reasons. These later earthworks involved substantial interference with the surface of the dam wall. Mrs Lord's own evidence was that these works included the removal of some topsoil. In my view much of the disturbance to the topsoil of the surface of the dam wall was caused by Mrs Lord's own later earthworks.

[9]

Discord After Construction

Mrs Lord said she and her husband had minimal discussions about the dam once it had been built. She said her husband was embarrassed about having been "used" by Mr McMahon through the construction of the dam. I accept her evidence as to this. I accept that the building of the dam was a continuing point of contention between husband and wife. It is not surprising they tried to avoid the subject.
I accept Mrs Lord's evidence that therefore she felt she had to, and did, convey her complaints directly to Mr McMahon, due to her husband's inaction. Her attitude at first was that Mr Lord had let the dam be built in the first place and that therefore, he should be the one to fix the problem. But I accept her evidence that Mr Lord would not take responsibility and would respond to her: "you live here, you go and sort it out". She maintained, and I accept, that her husband would shut down and refuse to deal with the issue by retiring to his workshop. So she did try and "sort it out" by trying to complain to Mr McMahon directly.
Mr McMahon submits that there is no evidence that Mr and Mrs Lord pursued complaints about the dam and that the Court should infer she and her husband were both content to have it built. Yet Mrs Lord's great discontent about the dam was unmistakable at the time of the hearing. It is to be doubted that at any stage Mrs Lord, as the Court saw her in 2014, could ever have been content with the construction of the dam. The idea that she had once been accepting of it and then later changed her mind makes little sense. Her distaste for the dam was unambiguous. She complained about the dam in writing after her husband's death. She ultimately commenced these proceedings in 2013. Her antipathy to the dam was so profound that it was in my view unlikely that it could have developed at some time well after the dam's construction.
I accept Mrs Lord's evidence that she did complain directly to Mr McMahon about the dam soon after it was built. Indeed Mrs Lord was the kind of person who would not have hesitated to communicate her displeasure about the construction of a dam being larger than she had expected and encroaching on Lot 2 more than she expected.
Mrs Lord maintained she approached Mr McMahon in 2001 on at least three occasions to discuss the dam. She recalls, and I accept, that he brushed her off. He gave various excuses at the time for not dealing with the issue: "I'm busy going somewhere"; "I am busy doing something else and I can't do it"; "It's wet and I can't do it"; and finally when pressed "I don't need to speak to you because your name is not on the title deed, so go away". I accept that she did approach him and that he said these things to her. He denies that these encounters occurred but I do not accept his denials on this issue.
Mrs Lord also maintains that Mr McMahon grossly insulted her during some of these encounters. But on this her evidence should not be accepted. On one of these occasions she says that she was present with her husband, when the couple met Mr McMahon on their adjoining driveways. Mrs Lord remembers that Mr McMahon's response to her repeating her complaint was to look at Mr Lord and ask: "Are you going to listen to this thing, woman, or are you going to be a man and do what you said?" She says that on this occasion her husband's reaction was to say nothing at all. I accept Mr Lord disliked conflict. But this incident sounds improbable, as described. Had this been said, it was so grossly insulting that no matter how phlegmatic Mr Lord was, he would be likely to have become enraged and reacted.
On the second day of Mrs Lord's cross-examination, her account of her subsequent complaints about the dam appeared to alter slightly. When asked whether her husband confronted Mr McMahon about his displeasure with the dam, this time Mrs Lord said that he did, but that he eventually gave up in frustration as nothing was being done to rectify the problem. She said that on a number of occasions in the first eight months after the dam was built Mr Lord had confronted Mr McMahon but was rebuffed. Whilst it seems at first difficult exactly to reconcile her two versions (an account of no action by Mr Lord, then an account of some action), it seems likely that Mr Lord told her at some point that he had tried to raise the issue with Mr McMahon. But I accept Mr McMahon's evidence that he did not do so.
Mrs Lord was not present during most of her husband's post 2000 dealings with Mr McMahon. I accept that Mr Lord would occasionally go up the hill to Lot 3 to visit Mr McMahon's house, to socialise and to discuss the dam. But he would return, as she described, "full of port". Mr Lord reported to her that no further advances had been made on the issue of the dam. It is difficult to infer what actually passed between Mr Lord and Mr McMahon on these social occasions beyond the conclusion that Mr Lord did not raise with Mr McMahon what his wife wanted him to raise.
But in the meantime Mrs Lord got on with living with what had happened and making use of the dam. Mrs Lord's miniature horses and stock were able to access the water of the dam and the pasture right around it, as the dam was entirely fenced into Lot 2. I accept that Mr Lord and his son Owen helped Mr McMahon to construct this fence. And in 2002 Mr and Mrs Lord constructed a fence across the dam so that there were two paddocks created for Mrs Lord's miniature horses and stock, which Mrs Lord used for her pastoral purposes until 2008.

[10]

Other Consequences of the Dam's Construction - Seepage and Overflow

Mrs Lord also alleges that from the time of the dam's construction, a number of other consequential nuisance-related problems emerged from the earthworks. She says that the dam walls began to seep in various locations. There were frequent overflows at the northern end of the dam. Mrs Lord's case is that over time the combination of this seepage and the dam overflow resulted in erosion of the surrounding soil and that the overflow in particular spread clay sediment from the dam onto Mrs Lord's paddocks, forming a film of sediment over the adjacent Lot 2 pasture. Mrs Lord complained that with the passing of time, this continuous build-up of sediment began to form a clay crust over the top of the soil of Lot 2, near Lot 3. This in turn she says inhibited the growth of good quality pasture in that area.
But the causes of these alleged problems are disputed. In 2006 Mr McMahon says that he witnessed Mrs Lord's miniature horse stock causing erosion along the top of the dam and the spillway at the northern end of the dam.
Mrs Lord in turn denies this. She claims that she would not have allowed her stock to drink from the dam, out of concern for their health. And she says that any erosion on the spillway at the northern end of the dam was caused by the machinery cutting into the surface when the dam was constructed. But I do not accept Mrs Lord's evidence about her stock not drinking from the dam as she and her husband and Mr McMahon had fenced the dam to allow her stock to have drinking access to the dam. I accept that her stock grazed on the pasture around the dam until 2008.
This is one of several disputed issues in these proceedings in which the Court is asked to draw inferences from what was seen on the view and from photographs. The Court may draw any reasonable inference from what it saw, heard or otherwise noticed on the view: Evidence Act 1995, s 54.
The Court must take care as to what use it makes of the photographic evidence. Photographic evidence cannot trump testimonial evidence but can be used by the tribunal of fact to explicate the evidence or to determine which of the explanations given by witnesses appears to be most worthy of acceptance: Tran v Nominal Defendant [2011] NSWCA 220; 58 MVR 462 at [172]. If it is not clear, for example from photographs what depths or distances are involved, care must be exercised in relying upon photographs, although they are generally helpful in understanding the nature of the evidence given: Port Macquarie Hastings Council v Mooney [2014] NSWCA 156 at [47]. The limitations in using photographs to draw inferences are explained in Yarrabee Coal Co Pty Ltd v Lujans [2009] NSWCA 85; 53 MVR 187 at [20] - [29] (per Beazley JA) and [179] - [180] (per Giles JA, with whom Allsop P agreed).
In my view Mrs Lord is partly right about the causes of erosion from dam overflow. But the allegations of seepage are more problematic and must be assessed in the light of the expert evidence analysed below.

[12]

Pre-Suit Correspondence - 2009

Mr McMahon's case is that in 2009 he gradually became aware that Mrs Lord had what he described as "a problem with the dam". He says he was unaware of her concerns before 2009. I do not accept that this is correct. In contrast I prefer her evidence that she had complained about the dam in the years immediately after it was built.
But Mrs Lord eventually sought legal advice about her options for the removal or rectification of the dam earthworks on Lot 2. This resulted in legal correspondence between the parties in the second half of 2009.
Analysis of this correspondence resolves an important issue. Mrs Lord accused Mr McMahon of recent invention in relation to his defence that Mr Lord had consented to the construction of the dam. Mrs Lord's final submissions alleged that there had been no mention of any alleged consent by Mr Lord in Mr McMahon's solicitors' response to the first letter from the solicitors for the plaintiff in 2009. She submitted it should be inferred from this that Mr McMahon knew that Mr Lord had not given his consent to the construction of the dam.
But Mr McMahon did clearly raise the issue of Mr Lord's consent in correspondence. And I accept Mr McMahon's evidence that he at all times believed in his own mind that Mr Lord had consented to the construction of the dam. Mr Lord was generally agreeable to the construction of some earthworks before the dam was dug and did not confront Mr McMahon afterwards about the fact that the dam's size had exceeded his expectations. Mr McMahon's own letter of 21 July 2009, and the instructions it can be inferred that Mr McMahon gave to his solicitors to write the 22 September 2009 letter are consistent with Mr McMahon having a long-held belief that Mr Lord had consented to the enlargement of the dam.
The correspondence shows this clearly. PJ Carey, the then solicitor for Mrs Lord wrote to Mr McMahon on 17 July 2009 concerning the encroachment of the dam wall. Although it was marked "without prejudice save as to costs", this letter was tendered without objection in the proceedings. It did not contain an offer of settlement of the proceedings, which would be privileged under the Evidence Act 1995, s 131. The letter relevantly provided as follows: "We have been asked to write to you regarding the encroachment of the dam wall constructed by you and which encroaches upon our client's property. We note that surveyors have placed pegs on the dam wall and that the boundary of your property with the neighbours property is within the dam wall structure. The surveyors pegs are indeed confirmation that the wall encroaches upon the neighbours property. We are further instructed that the spillway that you have excavated on the uphill or eastern edge of the dam directs overflow water from your dam directly onto our client's property. Of most concern to our client is the flooding of the pasture lands from your overflow such that the full potential of that section of the property has been seriously compromised. The ground is sodden underfoot and so unstable as to not being able to support the horses that our client breeds. The construction of the dam wall is a trespass and must be rectified by you. In rectifying the trespass you are to restore the topography of the area to it's original contours and restore the ground the ground cover. In the immediate future you are to provide adequate and alternative drainage for your dam so that the overflow is directed away from our client's property. Such drainage could be piped under your access road to the downhill slope opposite the properties and thence to the natural waterway below. Unless removal of the dam wall and remediation of the damaged paddock is not undertaken and completed within 28 days of the date of this letter we are instructed to commence Supreme Court proceedings for trespass without further reference to you and in doing so will be seeking orders for the removal and remediation of the property as well as damages and costs."
On 21 July 2009 Mr McMahon replied in person to this letter. His reply dealt with issues of the granting of consent to the construction of the dam, the spillway and the encroachment of the dam wall onto Lot 2. The reply was in the following terms: "I would like to advise you that the dam in question was built with the permission of my neighbour Heather Lord and her late husband Geoff. Since the completion, approximately eight years ago, Heather Lord has been grazing her stock in and around the dam and using the water it holds for her stock. This dam was an enlargement of an existing small dam that was located in a gully that runs through both our properties. The said spillway was not created in the dam construction but was part of the existing gully which has always drained the surrounding uphill slopes. This is the natural waterway and it has always flowed through Heather Lord's property. My increasing the dam size logically has decreased the amount of water that flows through her fields not increased the amount of rainfall in our area. The dam wall is not a necessary part of the dam construction and consists only of topsoil removed prior to excavation. This was all approved by Mr. and Mrs. Lord at the time otherwise the work would not have been able to be completed. Therefore it is not a trespass. Mr. Lord and I constructed the fences around the new dam. With the deteriorating relationship between Mrs. Lord and all her neighbours we now find it necessary to construct a fence between our properties, however the existing dam and dam wall we intend to leave as she agreed to their construction many years ago and they, in fact, can not contribute to any problems in her paddocks."
Mr Carey wrote again on 17 August 2009 indicating that Mrs Lord is proceeding to Court action, in the following terms: "We note that you have not provided your solicitors details, accordingly we write to you directly. The time has now passed for you to have removed the dam wall and restored the property. Apart from a letter to Mrs Lord about a fence we have no proposal from you to resolve the matter. Noting that you have not provided your solicitors details we are now instructed to serve the Supreme Court Summons on you at the address noted above."
By early September, Messrs Mariott Oliver solicitors had become involved on behalf of Mr McMahon Mr Carey wrote to them on 15 September 2009 recording some of the conversation said to have passed between the parties at that time, in the following terms: "We confirm that we act for Ms Lord and note that you act for Mr McMahon. We refer to the writer's recent telephone conversation with your office and confirm your advice that Mr McMahon will be removing the dam wall and restoring the topography of that location to it's original structure and configuration. The matter of the water flow from the uphill end of the dam is of concern. Mr McMahon cannot direct overflow water onto Ms Lord's property. We understand that Mr McMahon is of the view that the water follows a natural water course. This is simply not true. The effect of the present overflow location (western side of the dam) is that excess water will concentrate on an uphill section of our clients property and then flow downhill and fan out across our client's property in such a way as to direct more water onto her property than would otherwise be the case. The simple solution is a buried pipeline directing flow from the eastern side to the road and then across the road to the creek in the adjoining fields. We are yet to confirm our client's agreement to jointly funding the installation of a boundary fence. We are instructed that the original fence, which was of adequate construction and an appropriate style, was removed by your client to allow him to place the material from the dam onto our client's land. Please advise of the timetable that your client proposes for the wall removal and the land restoration."
Mariott Oliver responded on 22 September 2009 with a proposal for partial resolution of the matter, in the following terms: "As discussed we advise that we act for the Stephen McMahon in relation to this matter. Our client's proposal isn't quite as contained in your letter of 15 September. By way of background we advise that the dam was constructed in that position with the consent of your client and her late husband approximately ten years ago. The reason that boundary wasn't fenced was to permit Mrs Lord and her husband's 2 horses access to the dam. The position of the dam is not a trespass. When the dam was originally constructed, the original contours of the land (ie the gully) were maintained. Without the impact of the overuse by your client, the dam simply captured some of the flow which would naturally run across the land. It should also be added that your client's paddocks near the dam have historically been damp in wet weather, made worse especially in the winter because they are in shade for a lot of the day. Since original construction, Mrs Lord has increased the number of horses accessing the dam to approximately 15-20 miniature horses. The result of this level of use is a serious erosion of the dam wall and surrounding ground level. Our client estimates that the ground level has dropped about 10 cm. We enclose photos showing the degradation of the land. Our clients do not have stock accessing the dam. We are instructed that a proposal was put to Mrs Lord via a contractor whereby all the water would run through the dam and then by trickle pipe flow into your client's dam. This solution would have dried the paddocks and water would only have flowed through the gully in heavy downpours. This proposal was rejected by your client. In an attempt to resolve this matter amicably, our clients are prepared to share equally with your client the cost of cutting back the dam wall, restoring the ground level where it has eroded (using soil from the dam wall) and fencing the boundary. All work is to be carried out in a proper tradesman like manner. We would suggest that 3 quotes from suitably qualified tradesman be obtained for carrying out the work and each party pay their share of the lowest quote into the solicitor's trust account, so that the work can commence in a timely fashion. If the matter cannot be resolved in this fashion, then before either of our clients embarks upon a litigious course, the parties should attempt alternative dispute resolution with a mediator."
Each side sought to use the silence after this correspondence to his or her advantage. Mrs Lord submitted that Mr McMahon's failure to engage further after this date confirms that his approach has been one of long-term obstruction towards her claims. On the other hand, Mr McMahon submits that Mrs Lord failed co-operatively to engage with his offer of mediation of their differences. Neither view is a wholly accurate assessment of the past. I infer from her other evidence that Mrs Lord failed to take up the offer of mediation because of her distrust of Mr McMahon. And Mr McMahon's failure to take the matter further was a reaction to Mrs Lord's apparent lack of interest in the process.

[13]

More Earthworks on the Dam Wall - September 2011

Mrs Lord was not satisfied with legal correspondence. She decided to take matters partially into her own hands. In September 2011 she engaged a contractor to level out the top of the dam embankment on Lot 2. I accept Mr McMahon's evidence that this was done without any prior notice to him.
The plaintiff engaged Mr David Rumble (a relative of Mr Geoffrey Rumble), an earthmoving contractor (a relative of Mr Geoff Rumble who had done the earthworks in 2000), to undertake this work on the dam embankment. His work began on 16 September 2011.
Although these works were technically on Mrs Lord's property, they appeared to Mr McMahon potentially to affect the structure of the dam. When he noticed what was going on, Mr McMahon called the Police. They arrived and spoke with Mr Rumble. Mr McMahon's reaction to the work, including calling the Police, supports his account that Mrs Lord gave him no prior notice of these earthworks. The extent of this work, the fact that he had not been previously warned of it and that it was on Lot 3 caused Mr McMahon to call the police.
Mr McMahon alleges that over the next few days further earthmoving works were carried out on Lot 2, adjacent to the dam. But this is disputed. Mrs Lord contends that after the Police were called and spoke with the contractor, he ceased work and refused to return until the issues between the parties were resolved.
The two accounts of these events contrast markedly. Mrs Lord says in her first affidavit that in 2012 she "attempted to carry out some remedial works to the dam wall on my property, in order to reduce the steepness of the slope so that it could be maintained". She explains Mr McMahon's involvement in the following terms, "the defendant intervened part way through the works and insisted that the contractors cease work immediately".
But I accept that these earthworks occurred as Mr McMahon describes them and the account below from him represents the Court's relevant findings on the issue.
Mr McMahon's affidavit account of what happened in September 2011 was more detailed. He says that on 16 September 2011 whilst he was visiting Lot 3, he first observed Mr David Rumble removing part of the toe of the dam wall on Lot 2 but that he (Mr McMahon) did not intervene at that stage. When leaving the property some hours later he said he saw Mr Rumble building a berm wall along the common boundary of Lot 2 and Lot 3, to the south of the dam and approximately 2 metres wide and 60 centimetres high, using the material that he had moved from the toe of the dam. Mr McMahon also observed that Mr Rumble had increased the height of the land in the spillway out of the dam on Lot 3, at its northern end and in the adjacent gully on Lot 2 by approximately 40 centimetres. Added to this Mr McMahon says that Mr Rumble had pushed the topsoil that he had excavated into two mounds situated along the northern boundary of Lot 2. Mr McMahon says that he also observed topsoil and some underburden in mounds adjacent to the area of the toe of the dam that Mr Rumble had levelled.
Mr McMahon has collected in his 16 October 2013 affidavit photographs of the dam area taken by his wife Mrs Zoe McMahon on 13 June 2011, before these events, on 16 September 2011, the day of these events, and then after these events, respectively on 1 October 2011, 14 June 2012 and 17 June 2012.
The photographs taken before these September 2011 earthworks (D1 and D2) are instructive in showing how close the large body of water of the dam is to the spillway and the watercourse that runs down south west to north earth onto Lot 2. It is inevitable in my view that such a large body of water, which would fill with rainwater and not absorb rain into the earth, would contribute to increased run off into that watercourse. This has relevance to Mrs Lord's later nuisance claim.
The two photographs taken on the day of the earthworks (D3 and D4) show the extent of Mr David Rumble's removal of topsoil exposing massive amounts of underburden and the flat surface of the berm wall. This confirms the extent of the topsoil removed, which is also evident in photographs D5. The mounds were still there nine months later in June 2012, as is evident in photographs D6 and D7.
Mr McMahon called the Police. Then what he describes as a "long and heated debate" took place between the Police and Mrs Lord. Mr Rumble removed the berm created below the dam but the rest of the uncompleted work remained as it was: namely the mounds of dirt along the northern boundary of Lot 2, the raised area in or adjacent to the spillway and a flat area approximately 2 metres to 2.5 metres wide for the approximate length of the dam, where the dam toe used to be, leaving a step up to the top of the dam wall of approximately 30 centimetres in height and mounds of dirt on Mrs Lord's Lot 2, somewhat to the east of the flattened area.
Surprising as it may seem, after the Police had been called, according to Mr McMahon, Mr Rumble continued working on Mrs Lord's property for another two days. He cleaned out the natural gully on Lot 2 and constructed another berm wall on Lot 2, this time south of the dam and adjacent to the common boundary of Lot 2 and Lot 3 as far down as the Lot 3 battle axe handle, and down to the dam on Lot 2, which is immediately adjacent to Lot 3's battle axe handle. The photographs taken by Mrs McMahon in October 2011 show these various walls.

[14]

A Trench Appears in the Dam Wall - 2012

In 2012 a trench first appeared in the dam wall. Mr McMahon claimed Mrs Lord had caused the trench to be dug. Mrs Lord denied this. She said that erosion caused it. The issue was strongly contested. In closing submissions both parties ultimately accepted that determining the precise origins of the trench did not assist the Court in deciding any issue of trespass. But were the trench naturally occurring, it may arguably have been relevant to Mrs Lord's action in nuisance. The issue ultimately became a touchstone of the credibility of each party.
The issue arose in about June 2012, when Mr McMahon first observed that part of Mrs Lord's paddock adjacent to the dam had become wet. Upon further inspection he discovered a trench approximately 500mm deep, 400mm wide and 2.5 metres long leading from the body of water inside the dam onto the area where Mrs Lord's contractor had previously carried out the 2011 earthworks. Mr McMahon thought the trench showed evidence of having been constructed. Mr McMahon noticed water running through the trench after rainfall. So he decided to block it with a concrete plug, to stop the flow of water. The plug was effective.
Mrs Lord vehemently denied creating the trench. She also denied that her partner, Mr Stephen Lanyon (who by that stage resided with her in the house on Lot 2) had dug the trench at her request. In cross-examination on the issue she asked her questioner the rhetorical questions, "So what on earth benefit would I have of digging into his dam and having all his stuff that I don't want on my property on my property? Why would I dig a big ditch on my property so that my horses can't use the property so that they can injure themselves? It is of no benefit to me." It is certainly not obvious that her digging a trench in this location would benefit her in any way. It would, as she said, arguably risk her miniature horses suffering injury. It is difficult to conceive of any rational self-interested explanation for her to arrange the digging of this trench, other than that she wanted the dam to appear unstable before these proceedings were commenced.
What created the trench? The Court must analyse the lay evidence, with associated photographs, and then the expert evidence to decide this question.
The Lay Evidence. Mr McMahon's wife, Mrs Zoe McMahon took photographs of the trench on 14 June, the day it was discovered: photograph D11, D12 and D13 to Mr McMahon's 16 October 2013 affidavit. The colour photograph D11 shows a trench with at least one smooth wall, which suggests that this part of the trench was constructed and not eroded by natural forces.
The additional photographs that Mrs McMahon took on 17 June 2012, photographs D12 and D13, also show the clear lines of the start of the trench, as does Mr McVey's photograph taken nearly a year later on 29 May 2013, which shows the concrete plug that Mr McMahon had by then placed in the trench (Exhibit 4).
Photographs D11, D12 and D13 also show adjoining trenches at right angles, which the plaintiff described in her oral evidence as forming a "T" intersection. Quite apart from the expert evidence on this issue, which is referred to below, it seems inherently unlikely that such linear formations would be the product of natural causes.
But the development of Mrs Lord's case on this issue undermines the Court's confidence in her as a witness of truth. The first evidence in the proceedings about the trench came through Mr McMahon's affidavit sworn 16 October 2013 (at [49.1]). In Mrs Lord's affidavit in reply of 11 December 2013 (at [40]), she committed herself to the position that "the ditch naturally eroded at the original dam wall overflow point meeting the non-compacted fill being the weakest point. It is a result of water erosion and not a dug trench". Mrs Lord herself referred to photographs D11, D12 and D13 and said they give "a graphic illustration of the extent of water that flows from the dam and the damage that it causes across my paddocks". During this account she did not hint at the possibility that any part of the ditch had been dug by anybody within her knowledge or at her direction.
But when Mrs Lord was cross-examined she admitted she was aware that part of the channel had actually been dug by hand. She said she was in fact responsible for digging part of one of the channels. She says that she did not dig the full trench Mr McMahon had observed but she and her partner Mr Stephen Lanyon "dug a much smaller trench". She admits doing so so that "the water could run away … from the surrounding hills". She says that what she and Mr Lanyon dug was "at the top of the T". She agrees that they used a trenching shovel which is capable of digging about 3 inches wide by 3 inches deep. But Mrs Lord sought to confine the size of her and Mr Lanyon's work, calling it at one stage a "small indent".
Mrs Lord's account about this work is disturbing at several levels. One would have expected a candid witness in her position to have explained in her 11 December 2011 affidavit that she and Mr Lanyon had been involved in digging some channels in this area, rather than conceding this for the first time only in cross-examination. This caused the Court to doubt that she has been candid on this issue. And once having admitted so late that Mr Lanyon was doing some digging work in the area, her credibility on the issue is weakened to the point that the Court is not prepared to accept the limits that she placed upon the quantity of the work that they did. The Court does not accept her denials that she or Mr Lanyon dug this trench.
The Court reaches that conclusion without the need to draw an inference based on Jones v Dunkel ((1959) 101 CLR 298) principles. Mr Stephen Lanyon was in Court during the plaintiff's case and was not called to give evidence. The inference is clear without having to rely upon his absence as a witness. And the expert evidence supports it.
Expert Evidence about the Trench. The experts did not discuss the trench in their reports. They first considered the issue of the trench during their cross-examination. Mr McVey, Mr McMahon's expert, thought for two reasons that the trench was unlikely to have been caused by natural flows of water and instead thought that it was more likely to have been cut by hand.
In the first place, Mr McVey explained that although it was theoretically possible for a concentrated flow of water to spill over the top of the embankment of the dam and then create a trench through the dam, in this case that mechanism of trench creation was unlikely. He explained that the inflow to the dam is from the drainage line down the natural watercourse at the northern end of the dam and that once the dam fills up with water the natural overflow of the dam was likely to return to that watercourse from where it had come. He reasoned that there would never be sufficient water coming down from the watercourse into the dam to go over the top of the dam. It would always escape another way - back towards the northern end of the dam and then flowing lower down the watercourse from where it had come.
In the second place, Mr McVey said that the appearance of the trench was not consistent with the kind of "piping" failure that can occur in dam walls due to the natural flow of water. His view was that the part of the trench passing through the dam wall looked as though it had been "cut", rather than having been eroded by a water leak. Mr McVey's observations are important in deciding this issue. He saw the trench on 29 May 2013, just under 12 months after it appeared. He rejected the theory that the trench could have been caused by "water flow through a point of weakness". His expert opinion was that such water flow "causes slumping of embankment and the slumping is not uniform". Indeed he pointed out that away from the point where the trench left the surface water of the dam, t the banks of the trench had indeed slumped and that his observations in that area were that the slumping was "quite a different and noticeable effect".
Mr McVey explained the slumping mechanism that causes erosion channels in such an environment. He said because the compacted soils in the dam wall were stuck together and "rolled together in an homogenous manner" when water starts to flow through them it will not cut "in a direct vertical system". He conceded that materials such as sand may appear to be cut in a uniform manner by the action of water but a compacted homogenous embankment such as this one will not. Mr McVey's evidence both as to his observations and of the slumping mechanism of what he would expect from the natural action of water were persuasive.
Mr Diversi, Ms Lord's expert, disagreed with both Mr McVey's reasons for discounting that forces of nature had caused the trench. He thought that there would be a sufficient volume of water coming down the watercourse to overtop the dam wall and cause the erosion of the trench. He also thought that the appearance of the trench was consistent with natural rather than man-made causes.
But Mr Diversi's evidence was less persuasive on this issue. He did not really contradict Mr McVey's explanation of the mechanism of failure of compacted soils through erosion as more likely to cause irregular slumping. But this trench does result in a "T" intersection in the channel once the trench has penetrated the dam wall. Mr Diversi was not convincingly able to explain how such a "T" intersection would naturally occur in such geometrical form as a result of the natural forces of erosion.
Both experts agreed that the trench is no longer there. The Court must decide what created the trench in the past, based upon the testimony of the lay and expert witnesses and the available photographs.
Mrs Lord's credibility does not come out of this well. Mr McVey's evidence clearly supports the inference that the trench running from the edge of the water in the dam and through the dam wall was dug rather than eroded. It is probable that Mrs Lord herself appreciated that the photographs and the evidence of Mr McVey pointed strongly in the same direction: that the trench had been dug. By the time she got to hearing she was prepared to concede that she and Mr Lanyon were involved in the digging to an extent. But I do not accept her as a reliable witness when she seeks to place limitations on the extent of their digging work.
This inference damages the plaintiff's credit. She was prepared to propound what I find was a misleading account of her actions in relation to the dam and to tailor her evidence to minimise the extent of her and Mr Lanyon's work.

[15]

Some Further Earthworks on Mrs Lord's land - 2013

In 2013 Mrs Lord directed the carrying out of further earthworks in her paddock at the western end of Lot 2 adjacent to the dam. Mrs Lord was present when her partner, Mr Lanyon executed these works. She describes them in evidence, as does Mr McMahon. It is convenient to deal with his account first.
Mr McMahon noticed these further earthworks having occurred in May and June 2013. He saw that the topsoil which had been located in mounds on the northern boundary of Lot 2, after the 2011 earthworks, had been moved to other locations on Lot 2. Before that he had observed rain action had gradually dispersed some of this earth, as well as other spoil from the 2011 earthworks, the trench and the raised spillway.
The photographs that Mr McMahon's wife took in June 2013 (photographs D15, D16 and D17) show the changes to these topsoil mounds, through the dispersal of some of their soil and the growth of grass on the mounds that remain.
These photographs also show two other important features of the combined earthworks. Firstly, photograph D15 shows just how much mud and spoil was created by Mrs Lord's 2011-2013 earthworks. The area shown at this time is very churned up and muddy in contrast to the photographs taken before 2011 which show reasonably stable pasture.
But photograph D17 is also significant. It shows the sheer volume of water coming out of the spillway of the dam as constructed in 2000 and forming a torrent in the watercourse across Lot 2.
Mrs Lord says that she did remove so much of these topsoil mounds "as would allow drainage from the adjacent land to the northwest but not all the soil". Her plan seems to have been to use the soil that she left to restore the area. I accept that Mrs Lord did use the topsoil in these mounds to restore other parts of her Lot 2 paddock in the area adjacent to Lot 3. She says that the soil was used to fill holes that had been eroded in other parts of Lot 2 by the water flowing out of the dam on Lot 3. But this must have been very ad hoc, as the area was still very eroded, pot holed and with some mounds still evident on the view.
There is an issue between the parties as to whether more than one watercourse converges in the area of these mounds. Mr McMahon says that there is a watercourse along the fence line on the northern boundary of Lots 2 and 3. The Court does not accept that there is a significant watercourse here of the kind Mr McMahon claims. Any watercourse along the Lot 2 and Lot 3 northern boundary only appears to contribute insignificantly to the flow of water into Lot 2. Most of the water flowing into Lot 2 at its north western corner appears to come from the substantial watercourse sending water in a south-easterly direction into Lot 2 from the higher ground to the north-west of Lot 2 combined with the water coming out of the dam itself.
Ultimately the differences between the parties on the 2013 earthworks are not very great and bear more on Mrs Lord's nuisance claim. It is common ground that the mounds Mrs Lord had heaped up during the 2011 earthworks were dispersed to a degree by her action in 2013. She says that the dispersal was to fill other erosion holes created by the spill over from the dam. Mr McMahon says that the action of water had caused the dispersal of this material onto Lot 2. This is also partly true.
On the issue of the 2013 earthworks and what preceded them, I accept Mrs Lord's account that she used the mounds as a resource to fill holes created by erosion on Lot 2 from dam spill over. But I do not accept there was much material being deposited on Lot 2 from the trench in 2013. Mr McMahon had blocked it by September 2012. And the spillway at the northern end of the dam seemed to have been well grassed by this period after the 2011 earthworks. What is more likely to have been a significant source of the clay and shale deposited on Lot 2 was the berm wall along the dam that Mrs Lord created by Mr Rumble's September 2011 earthworks. Those earthworks had left the underburden of infertile clay material exposed and therefore likely to wash away under the action of water.
The net result of what was flowing onto Mrs Lord's Lot 2 in times of significant rainfall after the 2011-2013 earthworks was: (1) an extra-concentrated water flow down the northwest-southeast watercourse into Lot 2; and (2) general runoff along the length of the dam wall of the clay material exposed by Mr Rumble's unfinished September 2011 earthworks. Thus some of the erosion and spoilage of pasture on Mrs Lord's property was being caused by concentrated water flow out of the northern end of the dam. But some of the erosion and spoilage of pasture on Lot 2 was also caused by the very work that Mrs Lord had herself undertaken in September 2011 including excavation of material out of the dam spillway. Trying to separate out these various components of the spoilage of Mrs Lord's pasture is very difficult. The Court is not greatly assisted by the expert evidence on this subject so that it can attempt to undertake any real separation of the relative effect of these two components.

[16]

The Trial and the Pleadings - November and December 2014

The issues in the proceedings were not defined by pleadings. Rather, the plaintiff had issued a Summons and the defendant a Cross Summons. This led to some mismatch in the expectations between the parties as to exactly what was being alleged on each side. This was particularly evident in relation to the table drain issue. For that reason it is useful to set out the principal prayers for relief in the Summons and the Cross Summons.
The Summons contained the following prayers for relief: "1. A Declaration that a dam constructed by the defendants on their land, described as 91C (Lot 3) Coolangatta Road, Coolangatta NSW ('the defendants' land') encroaches onto the plaintiffs land, described as 91B (Lot 2) Coolangatta Road Coolangatta NSW ('the plaintiff's land'). 2. A Declaration that the said encroachment constitutes a nuisance and trespass on plaintiffs land. 3. An Order that the said encroachment on the plaintiff's land be removed by the defendants and the defendants do all such works necessary to return the location of the encroachment to its pre-encroachment physical state. 4. A Declaration that during the construction of the said dam, the defendants deposited excavated earthen material from the dam site onto the plaintiffs land. 5. A Declaration that the said excavated earthen material deposited onto the plaintiffs land constitutes a nuisance and trespass on the plaintiffs land. 6. An Order that the said excavated earthen material deposited onto the plaintiffs land be removed by the defendants and the defendants do all works necessary to allow for the return of all of the plaintiffs land affected by the said deposited material to be returned to its physical state existing prior to the said material being so deposited. 7. A Declaration that a table drain constructed by the defendants on their land alongside their access road encroaches onto the plaintiffs land, alongside her access road. 8. A Declaration that the said encroachment constitutes a nuisance and trespass on the plaintiffs land. 9. An Order that the said encroachment on the plaintiffs land be removed and the defendants do all such works necessary to the plaintiffs affected land so as to enable it to return to its pre-encroachment physical state. 10. A Declaration that the physical state of the defendant's said table drain allows the flow of water from the defendants' land onto the plaintiffs land causing flooding and thereby constitutes a nuisance. 11. An Order that the defendants do all such works necessary to their table drain so as to prevent the flow of water from the said table drain onto the plaintiffs land and thereby causing flooding. 12. Such further or other orders that the Court deems appropriate. 13. Costs."
The Cross Summons contained the following prayers for relief: "1. A declaration that the cross-defendant is estopped from denying that the cross-claimant is entitled to a right over that part of the cross-defendant's land identified by the line marked "Toe of dam wall" on the Plan of Boundary Marking prepared by Johnson Proctor Surveyors Pty Ltd dated 26 June 2009, a copy of which is annexure B to the cross-claimant's affidavit sworn 16 October 2013, in the nature of an easement for batter as defined in Part 8 of Schedule 8 of the Conveyancing Act, 1919. 2. In the alternative, a declaration that the cross-defendant is estopped from denying that cross-claimant is entitled to maintain the dam wall identified by the said line marked on the said plan. 3 In the alternative, an order pursuant to s.3 of the Encroachment of Buildings Act, 1922 that the cross-defendant grant the cross-claimant an easement for batter as defined in Part 8 of Schedule 8 of the Conveyancing Act, 1919 over the said part of the cross-defendant's land. 4. Such further or other order sees fit. 5. Costs."
The issues raised in the cross claim only concerned the dam wall issue, not the table drain issue.

[18]

The Dam - Trespass

The parties do not dispute that the batter from the dam wall encroaches onto Lot 2. The survey evidence clearly shows the extent of the encroachment. Mr McMahon did not advance a case to contradict Mrs Lord's evidence that there was an encroachment.
Acts of Trespass. The principles of relevant law of trespass to land may be shortly stated. One of the elements of the tort is that there be an "unjustified entry", namely an "entry effected otherwise than with the consent of the occupier or under lawful authority": Halsbury's Laws of Australia, LexisNexis at [415 - 480]. A person who enters the land of another must justify that entry by showing that he or she has entered with the consent of the occupier or otherwise had lawful authority to enter the premises: Plenty v Dillon (1991) 171 CLR 635 at 647, per Gaudron and McHugh JJ. And trespass includes the physical intrusion into land by tangible objects, be they persons or things: Miller v Jackson [1977] QB 966 at 978. Absent consent, Mr McMahon's actions in entering, excavating on and dumping material on Lot 2 in 2000 are capable of constituting a trespass.
Consent - conduct in 2000. Mrs Lord submitted that it was difficult to infer that her husband gave any consent to the construction of the dam. She submits Mr McMahon has not shifted the burden that lies on him of proving that Mr Lord gave "fully informed" consent to the dam-building works that took place on Lot 2. She submits that Mr Lord did not really know how big the dam was going to be before it was built and therefore he could not have given his consent to what was built. The Court's findings support her submission in part: the Court has found that Mr Lord did not realise at first, merely through the pre-construction conversation, how big the dam was going to be. But the Court's findings do not completely support her contention: Mr Lord nevertheless let the dam be built to completion.
It is a defence to an action for trespass to land for a defendant to prove that the entry onto the land was by the leave or licence of the person then in possession of the land: Halsbury's Laws of Australia, Lexis Nexis online at [415 - 525]. Although strictly speaking it is necessary for the plaintiff to negative consent to make out the action in trespass. The defence of consent to trespass to land is usually framed in terms that the plaintiff gave the defendant "leave or licence" to enter the land. Even though rights in real property are involved, an oral leave and licence will be sufficient: Healey v Hawkins [1968] 1 WLR 1967 and Gardner v Hodgson's Kingston Brewery Ltd [1903] AC 229.
The test as to whether there has been implied leave and licence granted is objective, not subjective, and is essentially a question of fact: Halliday v Nevill (1984) 155 CLR 1 at 6 - 7. For example, an occupier will not be heard to say that whilst he or she has not done anything to negate or revoke such a licence, that consent should nevertheless not be implied, because subjectively he or she had not intended to give it: Lipman v Clendinnen (1932) 46 CLR 550 at 556 - 557.
Leave or licence may be implied by conduct. In this case, the absence of clear leave and licence through the pre-construction conversation was nevertheless overcome in my view by Mr Lord's subsequent conduct. The Court has found that Mr Lord must have had personal misgivings about the extent of the works that Mr McMahon was undertaking on Lot 2. But he kept them to himself and did not articulate them to Mr McMahon. His failure to draw a line to stop Mr McMahon's creeping expansion of the work beyond the verbal permission that had been given, encroaching indeed on Mr Lord's goodwill, was nevertheless the grant by Mr Lord of an implied licence for Mr McMahon to continue what he was doing. And in my view this negated any action that Mr Lord might otherwise have been able to bring in trespass.
But Mrs Lord argues that any consent Mr Lord gave was not "fully informed" consent and therefore is no defence to trespass. This argument is not persuasive, either factually or legally. As a matter of fact, at the time that Mr McMahon was excavating, what he was doing could readily be seen and could have been stopped. As the bulldozers began to carve out the large site of the dam over a period of a week-and-a-half to two weeks Mr Lord must soon have understood how big it was becoming. He would have understood that before the dam became very deep. Indeed this aspect was sufficiently obvious that the Court has found that Mrs Lord complained about it contemporaneously to Mr Lord and later to Mr McMahon.
As a matter of law, doctrines of informed consent are more apt to actions for trespass to the person, where a person may be deceived or coerced into submission throughout the whole action upon their body for which their consent is claimed to be a defence to an assault, such as a medical procedure: see Sappideen and Vines (eds), Fleming's The Law of Torts (10th ed 2011, Lawbook Co) ("Fleming's"), at [5.30] - [5.50]. But here for this alleged trespass to land, where the trespass occurs in plain sight over a period of two weeks, the objective nature of the test and the subject matter of trespass to real estate leave little obvious room for doctrines of informed consent to operate.
Later withdrawal of consent - continuing trespass. But Mrs Lord also seeks to rely upon doctrines of continuing trespass. She submits that even if there were no trespass in 2000, the dam wall became a continuing trespass once she communicated, as a later registered proprietor, that she did not consent to its remaining on her land. This raises the question whether the circumstances here were the kind of trespass to land where the injured party could withdraw their consent to the trespassory conduct, so that thereafter a continuing trespass might arise.
A continuing trespass is one for which the cause of action is renewed on each day that the wrong is not remedied: a continuing trespass may be committed where, for example, a building is erected on another's land without permission, or objects are attached to a building intruding into the air space above neighbouring land, or goods are allowed to remain on another's land without permission.
The law of continuing trespass applies to chattels brought onto land. If a chattel is placed on the land with the possessor's consent, the termination of the licence to so place the chattel creates a duty to remove it and a continuing trespass is committed by failure to remove it within a reasonable time: Fleming's at [3.40] and Konskier v Goodman Ltd [1928] 1 KB 421 ("Konskier").
Like the present case the plaintiff in Konskier was an owner who acquired ownership subsequent to the initial acts that founded the trespass. The materials in question in Konskier were chattels (being builders' mortar, debris and rubbish from a neighbouring property, where building works were being conducted) and the licence in question required the workmen to remove the rubbish, either when they were finished or after a reasonable time. In Konskier a continuing trespass was held to commence from the expiry of a reasonable time after the completion of the building works, without the rubbish being removed.
Konskier is authority for a number of propositions relevant to these proceedings. First, not removing chattels from a plaintiff's property can become a trespass even though an earlier owner of the same property had given permission for placing those chattels on the plaintiff's premises. Second, if the terms on which the licence to place chattels on the plaintiff's property was granted have been exceeded a trespass may be committed. For example, the licence in Konskier would have justified the defendant builders allowing the debris to fall upon the subject premises during the building works but would have required it to be removed either during the building operations or within a reasonable time thereafter. Upon the expiry of a reasonable time the debris constituted a continuing trespass upon the plaintiff's premises. In summary, Konskier is an example of a situation in which a prior owner's consent to a trespass can expire (or be revoked) and a continuing trespass may commence and endure, allowing a subsequent owner to complain, notwithstanding the prior owner's consent.
Konskier itself cites earlier authority to the same effect: in Hudson v Nicholson (1839) 5 M & W 437; 151 ER 185, shores and timbers had been placed by the defendants upon certain land before the plaintiff came into possession of the land. After the plaintiff came into possession he requested the defendants remove the offending items; they were not removed and the Court found that trespass was available to the plaintiff.
But a continuing trespass does not arise upon every expiry (or withdrawal) of consent to a trespass to land, such as in Konskier. Mr McMahon submits in the present case that the earthen embankment placed onto and encroaching onto Lot 2 was not a chattel. He accepts the force of Konskier that the doctrine of continuing trespass can apply to the omission to remove something like a chattel, which was brought on the land and wrongfully left there. But he submits that it does not apply where a defendant does something to the land and then fails to restore the land to the same condition in which he originally found it, as for example when the defendant digs a pit in a neighbour's garden and later fails to fill it up. In such situations Mr McMahon submits the plaintiff may treat the initial entry as a trespass but the plaintiff then has but one single action in trespass, in which action damages are recoverable for both past and future loss: Fleming's at [3.40]. Mr McMahon's submission is persuasive and represents the applicable law.
This principle has been long established. In Clegg v Dearden (1848) 12 QB 575; 116 ER 986 ("Clegg"), an issue arose between the owners of two adjacent coal mines. In December 1838 the defendant in Clegg trespassed into his then neighbour's coal mine, excavating coal and leaving a large aperture through which flooding into the neighbour's coal mine then occurred. The neighbour later transferred title to the coal mine into which the trespass had occurred to the plaintiff. In 1841, after the transfer, the plaintiff requested the defendant to restore the excavation and stop up the aperture. The plaintiff complained that the defendant wrongfully "continued and caused to be kept and continued for a long an unreasonable time the aperture and excavation open and unfilled" whereby the flooding continued.
Lord Denman CJ found for the defendant. In doing so he distinguished situations in which a chattel is brought onto and not removed from neighbouring land (where continuing trespass may occur for every day that the chattel is not removed) from other circumstances in which the neighbouring land is physically altered by the trespasser and not subsequently filled or restored by the trespasser to its condition before the trespass occurred. His Lordship elaborated the distinction in the following way (at (1848) 116 ER 986 at 995): "The gist of the action, as stated in the declaration, is the keeping open and unfilled up an aperture and excavation made by the defendant into the plaintiffs' mine. By the custom, the defendant was entitled to excavate up to the boundary of his mine without leaving any barrier: and the cause of action, therefore, is the not filling up the excavation made by him on the plaintiffs' side of the boundary and within their mine. It is not, as in the case of Holmes v. Wilson (10 A. & E. 503), a continuing of something wrongfully placed by the defendant upon the premises of the plaintiffs; nor is it a continuing of something placed upon the land of a third person to the nuisance of the plaintiffs, as in the case of Thompson v. Gibson (7 M. & W. 456). There is a legal obligation to discontinue a trespass or remove a nuisance; but no such obligation upon a trespasser to replace what he has pulled down or destroyed upon the land of another, though he is liable in an action of trespass to compensate in damages for the loss sustained. The defendant, having made an excavation and aperture in the plaintiffs' land, was liable to an action of trespass: but no cause of action arises from his omitting to re-enter the plaintiffs' land and fill up the excavation: such an omission is neither a continuation of a trespass nor of a nuisance; nor is it the breach of any legal duty. … It appears to us that the defendant, upon the facts found by the jury, is entitled to have the verdict entered for him upon the plea of not guilty."
His Lordship pointed out that the case before the Court in Clegg was one in which nuisance from continuous flooding had not been pleaded and therefore the action should be considered only in trespass. He then went on to consider whether, notwithstanding that the plaintiff in Clegg had already recovered some compensation for the initial act of trespass, he could recover for the failure to fill up the excavation. His Lordship said (at 116 ER 986 at 995): "The question that arises upon the new assignment is not very different from that which arises upon the plea of not guilty. The plaintiffs have already recovered damages against the defendant for making the aperture; and the omitting to enter the plaintiffs' mine and fill up that aperture, in consequence of which the water continued to flow from the defendant's mine into the plaintiffs', affords no distinct ground of action, as for the continuance of a trespass or a nuisance : the flowing of the water, and the damage thereby to the plaintiffs, is merely consequential to the making the aperture ; and for that the plaintiffs have already received compensation. The defendant, therefore, in out opinion, is entitled to have the verdict entered for him upon the issue taken upon the replication to the plea to the new assignment. Judgment accordingly (a)."
How do these principles apply here? Could what was not a trespass in 2000 have become a continuing trespass later, because Mr McMahon did not remove the dam wall on Lot 2 at Mrs Lord's request? In my view, the answer is in the negative. Mr McMahon's initial conduct was not the leaving of some movable item on the surface of lot 2. He effected a permanent alteration to the surface of the land of Lot 2 which could only be restored by his returning onto Lot 2 and removing the dam wall (and no doubt at the same time shifting the position of the dam on Lot 3). This case does not involve the leaving of anything like chattels on Lot 2. The earth spoil Mr McMahon placed on Lot 2 was compacted into and changed the surface of Lot 2. The compacted material thereby ceased to be distinguishable from the surface of the land and ceased to be a readily removable chattel, owned by the defendant Mr McMahon, if it ever had that quality. Once it was compacted into the land the material that had been transported onto Lot 2 became part of the real property to which Mr Lord and later Mrs Lord had title. This case is therefore not analogous to Konskier.
The principle in Clegg is directly applicable here. No continuing cause of action in trespass arises from Mr McMahon's failure on a daily basis to re-enter Lot 2 and remove the compacted material that he placed there. It makes little sense here to speak, as it did in Clegg, of "a legal obligation [on a trespasser or on a person who becomes a trespasser by the effluxion of time] to discontinue a trespass", when such an obligation can only be discharged by changing the land itself again by removing something, which is now the property of Mrs Lord not Mr McMahon.
Perhaps two points of distinction exist between the present case and Clegg. But they do not make this a Konskier case. The first potential point of distinction is that in Clegg, to use the language of Denman CJ, the trespasser "pulled down or destroyed" something "upon the land of another". Whereas here Mr McMahon added to the land. But that difference is not material. The important common point here and in Clegg is that the putative trespasser permanently alters the surface of the land in a way that could only be rectified by further action by the trespasser altering the land itself, which was by then the property of the plaintiff.
The second potential point of distinction is that in Clegg the first owner of the plaintiff's land had brought an action in trespass against the encroaching defendant and recovered damages for the past and for the future. Here Mr Lord did not bring any prior action and had not previously recovered any damages for trespass. But there is no difference in principle here from Clegg. Even though there was no prior action for damages for trespass Mr Lord's consent meant that there was no trespass when the relevant alteration took place to the land on Lot 2, so that later it makes no sense to speak in the language of Clegg of "a legal obligation to discontinue a trespass". There is no trespass because there is nothing any longer belonging to Mr McMahon on the surface of the land, which is licenced to remain and in respect of which the licence can be revoked.

[19]

The Dam - the Encroachment - Relief

Mrs Lord sought an injunction in equity's auxiliary jurisdiction to restrain alleged legal wrongs of trespass and nuisance in relation to the dam. She has established her standing as registered proprietor of Lot 2 to protect these legal rights which are proprietary in nature. The evidence of actual or threatened infringement of Mrs Lord's legal rights has been examined above and the Court has concluded that no trespass occurred.
There is therefore no basis for granting relief of any kind in trespass. But as the issue of such relief was the subject of expert evidence and was debated extensively in submissions, some findings and legal analysis on the issue may assist were these proceedings to be further considered. These reasons now briefly consider what relief might have been appropriate were a trespass to have been made out.
Injunctions and Trespass. Mr McMahon submitted that no injunctive relief should be given here because Mrs Lord has not suffered an irreparable injury and therefore damages would be an adequate remedy. Ordinarily if damages were an adequate remedy, a plaintiff should be relegated to that remedy and only if damages were an inadequate remedy will an injunction lie: RP Meagher, JD Heydon, MJ Leeming, Meagher, Gummow & Lehane's Equity: Doctrines and Remedies (5th ed 2015, Butterworths LexisNexis) at [21-040].
The requirement that irremediable damage or irreparable injury would result were an injunction not to be granted is really no more than another way of saying that damages must be shown to be inadequate as a remedy, because all damage is in equity considered irremediable or irreparable if not adequately compensable in damages: RP Meagher, JD Heydon, MJ Leeming, Meagher, Gummow & Lehane's Equity: Doctrines and Remedies (4th ed 2002, Butterworths LexisNexis) at [21-040]. The question for the Court can be formulated as "is it just in all the circumstances the plaintiff should be confined to his remedy of damages?": Evans Marshall & Co Ltd v Bertola SA [1973] 1 WLR 349 at 379. The requirement for damages to be established to be an adequate remedy remains important: Richardson v Forestry Commission (1988) 164 CLR 261 at 274-6.
But generally speaking, equity will not regard common law damages as an adequate remedy for an injury to land: PW Young, C Croft, ML Smith, On Equity (1st ed 2009, Thomson Reuters) at [16.210]. And equity has long granted injunctions in the auxiliary jurisdiction to restrain trespasses to land or the continuation or repetition of such trespasses: Thomas v Oakley (1811) 18 Ves 184 at 186; 34 ER 287 at 288. Prima facie a landowner is entitled to an injunction to restrain a trespass: Break Fast Investments Pty Ltd v PCH Melbourne Pty Ltd (2007) ATR 81 - 930 ("Break Fast").
But if there is no question of irreparable injury involved, the injunction may nevertheless not be granted. Injunctions have been refused because the trespass involved no appreciable damage to a plaintiff: Behrens v Richards [1905] 2 Ch 614. Authorities to the contrary on this issue are probably unsupportable: Jaggard v Sawyer [1995] 1 WLR 269 and RP Meagher, JD Heydon, MJ Leeming, Meagher, Gummow & Lehane's Equity: Doctrines and Remedies (4th ed 2002, Butterworths LexisNexis) at [21-110].
In this context the so-called "good working rule" stated in Shelfer v City of London Electric Lighting Co [1895] 1 Ch 287 ("Shelfer") has often been applied in Australia: Break Fast. The rule, which is perhaps no more than a guide to the exercise of the Court's Lord Cairns Act discretion to award damages in lieu of an injunction, allows that damages may appropriately be awarded in lieu of an injunction in trespass cases where: (1) the injury is small, (2) is capable of being estimated in money, (3) may be compensated by small money payment, and (4) the grant of an injunction would be oppressive to the defendant.
Injunctions - Mandatory Relief. Mrs Lord sought a mandatory injunction requiring Mr McMahon to remove any encroachment caused by the dam and to return her land to its pre-encroachment physical state. The applicable principles may be shortly stated. Though now commonly regarded as too conservative, the law in relation to mandatory injunctions is still that stated in Redland Brick Co v Morris [1970] AC 652 per Lord Upjohn: the plaintiff must show a very strong probability of grave damage; damages must be an insufficient remedy; regard must be had as to whether the defendant behaved wantonly or unreasonably and to the hardship that might be caused by the grant of an injunction against a defendant who had behaved reasonably but wrongfully; and finally, the injunction must be worded to bring to the defendant's attention exactly what the defendant is expected to do.
The learned authors of "On Equity" draw similar conclusions. They say that the Court has traditionally been more wary of granting mandatory restorative injunctions than prohibitory injunctions. They point out that mandatory restorative injunctions will only usually be granted where the following can be established: (1) that had the plaintiff applied in time the plaintiff would have been given a prohibitory injunction; (2) that the circumstances which the prohibitory injunction would have prohibited have now at least partially come into being; (3) that it would be possible to restore the parties to the previous position; and (4) that a mandatory order would be a more appropriate remedy than damages: PW Young, C Croft, ML Smith, On Equity (1st ed 2009, Thomson Reuters) at [16-110].
Where a mandatory injunction is sought and the injunction claimed would subject the defendant to a loss out of all proportion to that which would be suffered by the plaintiff if it were refused, then it may be refused: Jaggard at 288 C-D.
The Dam - Relief. Although the Court found that no trespass occurred, Mrs Lord submitted that the appropriate remedy for any trespass that were to be found would have been the grant of a mandatory injunction to remove the dam wall encroaching onto Lot 2 and to reinstate her pasture at natural ground level. She submits that this would cost Mr McMahon a figure in the range $50,000-$70,000 and therefore would not have been a disproportionately expensive remedy in the circumstances.
Mrs Lord submitted that as a matter of discretion the encroachment should not have been allowed to remain for several reasons. First, the sheer size and impact that the encroachment has on her land is such that the discretion should be exercised. Secondly, there is an ongoing cost to Mrs Lord in her loss of the use of that part of her land. Thirdly, Mr McMahon has conceded that he does not have a present need for such a large capacity dam to service his orchard which has reduced in size since 2000, such that both experts were able to agree upon the construction of a smaller "tank" dam on his land commensurate with those reduced needs. Fourthly, Mrs Lord submits that Mr McMahon's failure to seek an easement from Mr Lord from the time of construction of the dam, until just before the hearing in November 2014, is so long a period that the delay should weigh against him in the exercise of any discretion.
Mr McMahon contests each of Mrs Lord's submissions. He submits that: Mr Lord substantially consented to the construction of the dam; removal would be disproportionately costly; and Mrs Lord is guilty of laches.
The expert evidence bore on the question of the form of relief. This will also be considered upon the assumption, contrary to the fact, that a trespass were to have been found.
Expert Evidence on Dam Reconstruction. There was a large measure of agreement between the experts about the cost of reconstructing the dam in a way that would remove the toe of the batter from Mrs Lord's Lot 2. They agreed that it would cost about $50,000 to remove the dam wall from Mrs Lord's property. At same time another dam could be built on Mr McMahon's property and incorporated into the works that would otherwise be done for the $50,000. But it would cost additional time and money to form up another dam on Mr McMahon's property and to engage in a design process to ensure that the new dam met current regulations for dam building and met standards to prevent future leakage.
The expert evidence was that to build a dam on the McMahon's property at the same time as the dam wall was removed from the western end of Lot 2 may add a further $20,000 to the construction cost, bringing the total cost to about $70,000. Mr McVey explained that the intention of his costings was to take advantage of the fact that the original dam had been excavated down directly into clay and shale and that the surrounding surface is relatively stable around that hole. The result is what the experts say the dam industry calls "an excavated tank", which can store water below ground level. Mr McVey says this would be a fairly small structure which would not normally incur pre-construction geotechnical costs on a farm.
But Mr Diversi was of the view that the exercise would be more expensive. He said that if a new dam embankment were to be located on the McMahon property it would have to be designed to current civil engineering standards to make it stable and then sealed, so the range of costs would escalate to between $100,000 and $150,000. Mr Diversi explained that these greater costs would be due to the requirement for greater geotechnical control and material compaction. He also pointed out that there is some uncertainty as to the depth of the existing dam wall and where the natural ground begins. This would have to be determined by geotechnical survey.
McVey thought that even if all the spoil and material is moved from Mrs Lord's land that it would still not return Mr McMahon's land to its original condition. But he was also of the opinion that if there is going to be a future dam on the site, the present location is probably the best one to use for a re-engineered dam. More of the experts conclusions are considered below in relation to relief for nuisance in relation to the dam.
Conclusions on injunctive relief. Were a case in trespass to have been made out, the lay and expert evidence would have led the Court to the conclusion that a mandatory injunction should have been granted to Mrs Lord. That injunction could have readily been crafted with sufficient precision to require Mr McMahon to reduce the surface of Lot 2 to its natural ground profile before Mr McMahon built the dam wall embankment on the Lot.
This conclusion follows for several reasons. First, if the principle in Clegg did not apply this would not have been a trivial trespass. Damages would not have been an appropriate substitute for the grant of an injunction on the Shelfer good working principle. The intrusion onto Lot 2 created an extensive reshaping of a substantial length of the Lot 2 - Lot 3 boundary.
Secondly, the basis for the estimation of any money damages for the intrusion is not clear and would not obviously amount to only a small money payment in compensation.
Thirdly, the grant of an injunction would not have been oppressive to Mr McMahon. If the removal of so much earth from Lot 2 brought into play the considerations relevant to the grant of a mandatory restorative injunction attracting Redland Brick Co v Morris principles, Mr McMahon would be treated as having behaved reasonably but wrongfully. But the Court would find that no real hardship would be suffered by Mr McMahon if a mandatory injunction were granted. I do not regard $50,000 to $70,000 as a particularly burdensome rectification cost that Mr McMahon be required to expend in order to comply with a mandatory injunction to remove the dam wall on Lot 2. The costs of each party to these proceedings could well exceed this sum.
Finally, Mrs Lord is not guilty of laches. The Court has accepted Mrs Lord's evidence that from the time of the dam's construction she did complain about it directly to Mr McMahon and that Mr McMahon was aware of the general unhappiness within the Lord household about the dam construction. And Mrs Lord was in no position to bring an action against Mr McMahon, whilst her husband was the sole registered proprietor of Lot 2. Laches has little weight as a discretionary factor against injunctive relief.

[20]

The Dam - Nuisance

Mrs Lord also brings a claim in nuisance in respect of two results of the construction of the dam wall. She submits that water leaks through the dam wall. And she submits that the dam overflows from time to time causing spoilage of her pasture.
An understanding of the contours of Lot 2 and Lot 3 in the vicinity of the dam is important for assessing Mrs Lord's claims in nuisance. In this connection the experts, Mr Diversi and Mr McVey, were both prepared to use a survey (Exhibit B) as the basis for the oral evidence they gave to the Court. Exhibit B was tendered without objection and shows the contours of relevant parts of Lot 2 and Lot 3 near the dam. This part of the Opus Survey is extracted below as Figure 4. The survey also shows Lot 2 and Lot 3 along the battle axe handles: this part of Exhibit B will be extracted later in these reasons, as Figure 5. The contour lines in particular show the dam on Lot 3, and the watercourse leading in a south-easterly direction across Lot 2 towards a much smaller dam on Lot 2, closer to Mrs Lord's house. A copy of the parts of the Opus Survey relevant to the dam is now set out in Figure 4 below.
Nuisance - principles. The law relevant to this claim may be shortly stated. Nuisance is an action for unreasonable interference with the use and enjoyment of land by a person entitled to that land. Nuisance extends to invasions that do not involve a physical act being done directly to the plaintiff's land but by something taking place outside the land affected: Clearlite Holdings Ltd v Auckland City Corporation [1976] 2 NZLR 729. Those invasions may be of any kind but flooding, the complaint in this case, is a common form of nuisance complaint: Melaleuca Estate Pty Limited v Port Stephens Council [2006] NSWCA 31 and Gales Holdings Pty Limited v Tweed Shire Council [2013] NSWCA 31.
To constitute an actionable nuisance the annoyance or discomfort complained of must be substantial and unreasonable and there must be an inconvenience materially interfering with the ordinary physical comfort of human existence, and not measured merely according to elegant and dainty habits of living but rather according to plain and sober notions among ordinary people: Ruthning v Ferguson [1930] St R Qd 325 at 326. The injury must be of a substantial character and not fleeting or evanescent: Benjamin v Storr (1874) LR 9 CP 400 at 407. The character and duration of the interference are important, so that where the injury is more readily observed and measured and damages more easily ascertained it is easier to show the necessary substantial harm: McKenzie v Powley [1916] SALR 1
Although the law of nuisance once exempted rural occupiers from a duty to remedy conditions of natural origin, whatever the potential peril of these conditions to neighbours, that has not been the law since the Privy Council's decision in Goldman v Hargrave [1967] 1 AC 645; 115 CLR 458. Some of the water flowing down the water course in a north-easterly direction partly into the dam on Lot 3 and then into Lot 2 is a natural flow of surface water in this district. An owner may put up barriers and pin back such flows of surface water: Grant Pastoral Co Pty Ltd v Thorpes Ltd (1953) 54 SR (NSW) 129; Thorpes Ltd v Grant Pastoral Co Pty Ltd (1955) 92 CLR 317.
Mrs Lord's construction of earthworks to the dam wall in 2011 was an act of self-help. It can perhaps be seen as an attempt to abate what she then saw as a nuisance. The law of abatement of nuisance is clear. There is no privilege of entry to abate a nuisance unless a mandatory injunction would be issued to achieve the same result. Otherwise a person would be able to attain a particular end by acts of self-redress, which end might otherwise have been denied if the person had recourse to judicial process. The law shows a strong tendency to deprecate self-help and insists on notice as a pre-requisite: Lagan Navigation Co v Lambeg Bleaching Dyeing and Finishing Co [1927] AC 226. But no notice is necessary if the abatement does not involve entry onto the other person's land, or is required in an emergency: Lemmon v Webb [1894] 3 Ch 1; [1895] AC 1 and Jones v Williams (1843) 11 M & W 176; 152 ER 764.
Finally, it is a defence to an action for nuisance that the plaintiff consented to the existence or creation of the nuisance and it is also a defence that the plaintiff acquiesced in the nuisance: Halsbury's Laws of Australia at [415-810]. The consent to the nuisance may be express or implied: Fleming's at [21.240].
Nuisance - Leakage through the dam wall. There was lay and expert evidence on this issue.
The lay evidence on leakage through the dam wall was confusing. Mr McMahon denied there was any leakage through the dam wall. Mrs Lord said there was. There was some dampness evident at the time of the view. But whether that dampness was located right at the toe of the batter or was even the result of water escaping from the dam itself could not be discerned readily from lay observation at a view. The Court drew no inference about such leakage from the view.
Mrs Lord was of the opinion that the leakage was evident to her. She said that "the enlarged dam consequently seeps through its wall in a number of locations". In my view her lay opinion on this issue is unreliable. First, it is very difficult to tell with a lay eye where water is coming from. Secondly, one of the locations from which water is coming through the dam wall was created by Mrs Lord herself. The Court is not prepared to rely upon Mrs Lord's opinions to form conclusions to identify different locations through which water is said to be coming through the dam.
The parties' experts' opinions also markedly diverged on the issue of leakage though the dam wall. Neither of the experts addressed the question of whether the dam should be moved on account of leakage through the wall. They both agreed that if the toe and the batter of the dam wall was to be removed from Mrs Lord's land the dam had to be moved for reasons other than leakage, it was not necessary for them to address the question in any detail. As a result, the experts only incidentally dealt with the issue of the probable causation of any leakage through the dam.
Mr Diversi was of the view that if the dam wall had to be moved anyway to get material off Mrs Lord's property that any leakage problems would be addressed automatically upon the reconstruction of the dam wall in its new location. Mr Diversi conceded that his initial brief was not to look at the stability of the dam wall or whether or not it was leaking. But he refused to concede that his evidence that there was leakage was mere speculation. He had based his opinion on the advice that he had discussed with the expert who had gone to the site for him. And he was prepared, on the basis of that, to say that there was leakage through the dam wall. But in part because the basis of his observations on this subject was second hand and in part because of the force of Mr McVey's reasoning, I prefer Mr McVey's denial that there was any leakage through the dam wall.
Mr McVey had considered that the dam was leaking after it was built and before Mr Rumble did the work organised by Mrs Lord in September 2011 and before Mrs Lord dug the trench in the side of the dam in 2012. Mr McVey's evidence as a result of those investigations was that the dam as originally built was stable. That stability is inconsistent with the kind of leakage that Mr Diversi says is possible.
But Mr Diversi's evidence to the contrary was not based on his own scientific investigations or even those by geotechnical engineer. Mr Diversi did offer the opinion that in the original construction the dam lining should be clay. But I accept Mr Rumble's evidence that he did put clay in the mix and used a method still approved, according to Mr McVey, by the Department of Soil Conservation.
Mrs Lord has not yet established that there is leakage through the dam wall. The Court is not prepared to find on the lay and limited expert observations on this issue so far that any dampness around the foot of the dam is occasioned by leakage through the dam wall. The Court accepts the evidence of the lay and expert witnesses who say that from time to time the foot of the dam wall has been observed to be damp and at other times dry. If there were leakage through the dam wall I accept Mr McVey's evidence that one would expect the dampness to be there all the time.
This is a matter on which the experts were not agreed. But it is equally a matter on which the experts indicated that further exploration may be warranted. On the present evidence the Court would dismiss Mrs Lord's Summons on this ground. But because nuisance is an action that accrues from day to day, Mrs Lord would be entitled to bring another action on this ground almost immediately to require this issue to be investigated. Subject to the parties' submissions on the question, it may well be more efficient to allow an opportunity for the parties and their experts to investigate this issue further. In permitting the parties further to explore this course the Court is mindful of safety issues to stock or people that may be presented in the event of a catastrophic failure of this dam due to instability evidenced by leakage.
Nuisance - Dam overflow. Mrs Lord also alleged that the dam overflowed spilling water and debris onto her lower pasture. Mrs Lord's evidence, which I accept, was that since the construction of the dam on Lot 3 it "often overflows at its northern end onto my property bringing with it clay sediment, which then forms a film of clay over the pasture which has eventually formed a crust of clay over the soil thereby preventing good quality pasture from growing and also causing deep erosion gullies to develop. As a consequence, significant portions of my property have become silted and remain sodden and unusable for long periods after any rain. In addition, the eroded materials are spread from the dam wall through my paddocks and depositing silt in the small dam near my house".
Photographs H2, H3, H4 and H5 attached to Mrs Lord's first affidavit well show these waterflows, the erosion and the spread of material, with one caveat. The photographs were taken after Mrs Lord commenced her earthworks in the area in the period 2011 - 2013. Some of the disturbed earth in these photographs is clearly the result of Mrs Lord's own activities. But the volumes of water evident in photographs such as photograph H2 and H5 show just how much water is coming out of the dam during rainfall, over the spillway and being concentrated into a substantial flow of water across Lot 2.
Other photographs show the same effects. Exhibit E is a good example. Looking north in the opposite direction to the group of photographs just mentioned, Exhibit E shows very substantial quantities of water flowing in a north-west to south-easterly direction down in front of the dam wall from the spillway at its northern end.
Mr Waugh contended on behalf of Mr McMahon that part of the waterflow in Exhibit E was contributed to by the trench which the Court has now found had been dug by Mrs Lord. The source of such water is said to be evident from the red arrows moving on Exhibit E from left to right. But the trench that Mrs Lord dug only emerged in June 2012, so that does not matter. It is quite evident from the photograph that the vast bulk of the water is coming from the spillway and further up the catchment.
Mr McMahon sought in submissions to undermine the effect of Mrs Lord's evidence on this issue by pointing out that such substantial flows of water are not present in photographs taken before Mr David Rumble shaved the top off the dam embankment (see for example C5 and C8 attached to Mrs Lord's first affidavit). But this point is of little weight because photographs C5 and C8 were not taken when rain was falling in the area.
Mr McVey's expert evidence was also said to have undermined this conclusion. But in my view it does not. Mr Waugh quotes Mr McVey as saying that this dam was stable when it was constructed as somehow being an answer to the proposition that, if it rains, water overflowing the dam would cause serious erosion. Mr McVey's evidence can be accepted that the dam wall was stable. But because of the concentrated nature of the overflows from the dam at its northern end they do cause a torrent of water to flow down the watercourse bringing some mud and debris from inside the dam with the water.
Mr McVey's report did calculations about the catchment area draining to the dam being some 3.7 hectares and he said that when the dam was full its spillway allows water to flow to the natural drainage line to Lot 2. He has calculated that the probable flow velocity of 2 metres per second in this area is actually below the velocity which might cause erosion for soils of moderate erodibility, such as those in this area.
Whilst this bodes well for a good outcome if Lot 2 is re-grassed, in my view the evidence on the ground indicates large volumes of water bringing material (see Exhibit E) onto Lot 2 from the dam during rainfall. It may be that some of the erosion presently observable is actually erosion into material that has been placed in the area by Mrs Lord. But the concentrated strength of the torrent cannot be denied in my view.
Finally, Mr McVey pointed out in the joint expert evidence that theoretically no more water could come out of the dam than had come into it from the catchment above. Whilst that is theoretically true, the direct testimony of Mrs Lord and the photographs seems to show that the large body of water of the dam does spill in a concentrated way into Lot 2, in contrast to the behavior of a fully grassed catchment, thereby causing the nuisance of which she complains. And Mr Diversi says, and I accept, that the water can back up and over top the spillway.
In my view, in times of rain, Mrs Lord experiences on Lot 2 a substantial and unreasonable concentrated inundation of water from the dam and spillway on Lot 3, which materially interferes with her use and enjoyment of her land. Indeed these inundations represent a material interference with ordinary physical comfort and potentially the safety of stock and persons in their vicinity. In my view all the necessary elements of a nuisance are established with respect to these waterflows onto her land.
In summary, Mrs Lord has established nuisance due to overflows from the Lot 3 dam spillway. The water flows from the source to which Mrs Lord deposes are also evidenced in the photographs and supported by the expert evidence and show a concentration of water flowing from Lot 3 over the spillway, and flowing in substantial quantities onto Lot 2.

[21]

The Dam - Nuisance - Relief

Relief for nuisance here is complicated by a number of factors. First, Mrs Lord's loss of pasture is not only the product of erosion caused by the substantial and concentrated quantities of water spilling out of the dam from Lot 3, but also due to the spreading of excavated clay and broken shale which has been exposed by the earthworks that Mrs Lord herself undertook on the main wall of the dam in September 2011. The removal of topsoil and grading of this material have created a large source of shale and clay material that could degrade the pasture on Lot 2 when spread over time by the elements and in my view has done so. But this shale and clay material is more efficiently carried across Lot 2 by reason of the substantial amounts of water spilling out of the northern end of the dam.
Secondly the matter is further complicated by the fact that the experts have not really prepared an appropriate joint technical solution for solving the spillway problem from the dam without also removing the dam wall from Lot 2 onto Lot 3 because it was an encroachment. The Court has found that the fact that the dam wall encroaches in the colloquial sense onto Lot 2, does not mean that it can be removed in law. It is not a continuing trespass. That conclusion undermines the experts' core reasoning for removing the dam wall without their having to consider other lesser issues such as rectifying the flooding nuisance through the spillway alone. Thus if relief is to be given in respect of this nuisance alone, without removal of the dam wall, the experts will need to readdress the proper way to provide such a solution. The experts have commendably exhibited a high degree of co-operation in the work that they have already done but it is anticipated that they may now have to do a little more to devise an appropriate technical solution to this combination of findings.
The authorities suggest that the Court may craft relief in general terms, restraining Mr McMahon from having water discharged from the spillway. That relief would permit him to use the spillway but require him to do so "so as not to occasion a nuisance by flooding upon Lot 2". But the Court is reluctant to grant such general relief in this case for reasons which are elaborated again below on the table drain issues. Principal among the reasons for rejecting such generalized relief in this case is the long term hostility between these parties and the lack of confidence the Court has that they could work out the detail of any relief between them.
The Court has found that a nuisance emanates from the spillway at the northern end of the dam. The solutions which suggest themselves in this case to reduce the nuisance may include actions such as the following: (1) reducing the size of the dam, particularly at its northern end, but otherwise without altering the position of the embankment; (2) modifying the spillway to disperse the water far more widely; or (3) incorporating some such works into any wider works that involve removing the wall in the event that further investigation of the dam wall reveals there is a stability problem due to leakage through the wall. If none of these solutions are technically possible the parties may have to contemplate moving the dam wall off Lot 2 and reducing the size of the dam on this ground alone.
Any relief for nuisance granted to Mrs Lord must be conditional. Her attempts at abatement in 2011, her digging of a trench in 2012, and her incomplete earthworks through Mr Lanyon in 2013 have only served to worsen the surface of Lot 2 near Lot 3. The Court has made extensive findings about these various actions above in the narrative in relation to the dam and they need not be repeated. But these three successive actions on her part have left the Lot 2 pasture susceptible to repeated further damage unless they are rectified. As a condition of obtaining relief in nuisance the Court will require Mrs Lord to arrange the repair of the damage that she has caused through these various actions.
Making relief conditional this way serves the ends of fairness in a number of ways. First, Mr McMahon's responsibility for waterborne nuisance from Lot 3 into Lot 2 does not include responsibility for rainborne debris spreading from the 2011 excavations onto Lot 2. That damage is her responsibility. Secondly no practical or reasonable objective is achieved by the Court requiring Mr McMahon to stop a flooding nuisance from damaging Mrs Lord's land, when she has created her own substantial pasture damage in the same general area of Lot 2 through excavations.
As a condition of relief in nuisance for the concentration of water over the dam spillway therefore Mrs Lord should be required to restore or pay the costs of restoration of her 2011-2013 works. Mr McMahon stopped up the trench that she dug in 2012 and Mr Lanyon's work in shifting mounds of earth in 2013 was somewhat incomplete or ineffective in restoring the topsoil. So the main exercise that now needs to be costed is the restoration of the embankment that she denuded of topsoil and partially excavated in 2011 to create a berm wall. Mrs Lord must obtain expert quotations acceptable to the Court for the restoration of this work as a condition of her obtaining relief in nuisance.
The Court's final orders will need to require either the simultaneous, or immediately sequential, undertaking (1) of work by Mrs Lord to repair the dam wall on Lot 2, and (2) the execution by Mr McMahon on Lot 3 of all necessary earthworks to reduce the nuisance occasioned through the dam spillway.
This may of course be able to be achieved by one contractor so that both parties would make either agreed contributions, or contributions as determined by the Court if no agreement is possible. The extent of the work to be done on the dam very much depends upon how much the flow of water out of the spillway can be reduced. These are matters which will need to be considered in a separate hearing on relief after the parties have had an opportunity to consider these reasons and formulate their proposals for final relief.
Mrs Lord also seeks a mandatory restorative injunction based on her allegations of nuisance. The relevant principles for the grant of such relief have been set out earlier in these reasons in relation to Mrs Lord's claim in trespass.
I accept that Mr McMahon has not behaved wantonly or unreasonably in his actions with respect to the dam. He took expert advice from Mr Rumble. He had Mr Lord's overt consent. But the grant of a mandatory restorative injunction, even if it were as substantial as moving the dam wall from Lot 3 onto Lot 2, would not create a hardship for him or be prohibitively expensive in the context of the resources already expended in this case. And any arguable harshness to him would be alleviated by the fact that some of the associated earthworks would be funded by Mrs Lord. This is not a case where it could be said that a flooding nuisance due to the concentration of water out of the spillway onto Mrs Lord's land could be adequately compensated in money. Moreover any money damages would only be for the past and potentially result in the brining of successive nuisance actions.

[23]

The Cross-Summons - Estoppel

Mr McMahon's Cross Summons seeks a declaration that he is entitled to a right over that part of the cross defendant's (Mrs Lord's) land identified by the line marked "toe of dam wall" on the plan of boundary marking prepared by Johnson Proctor Surveyors Propriety Ltd ("the Johnson Proctor survey"). In the alternative, Mr McMahon seeks a declaration that Mrs Lord is estopped from denying that Mr McMahon is entitled to maintain the dam wall identified by the said line in the Johnson Proctor survey.
Mr McMahon submits that the rights that he claims for the benefit of Lot 3 over the western end of Lot 2 can be characterised as an "easement for batter" as defined in Conveyancing Act, Schedule 8, Part 6, and that such rights are capable of being the subject of a claim for proprietary estoppel.
Claims in proprietary estoppel, a species of equitable estoppel are often based upon an allegation of "estoppel by encouragement", the essence of which is that the person seeking to assert the estoppel has been induced by the owner of property to alter his or her position detrimentally in the belief that he or she would obtain an interest in that property: Ashton v Pratt [2015] NSWCA 12; 88 NSWLR 281 ("Pratt") at [108]; Milling v Hardie [2014] NSWCA 163 ("Hardie") at [36], [50]; Wantagong Farms Pty Ltd as Trustee for the Bulle Family Trust v Bulle [2015] NSWSC 1603 ("Bulle") at [60]. It is the inducement or encouragement of the expectation of a proprietary interest, and its subsequent desertion, that founds the equity upon which the Court may grant relief and compel the owner of property to give effect to that expectation, in whole or in part.
The most recent statements of principle concerning equitable and proprietary estoppel are: Sidhu v Van Dyke [2014] HCA 19; 251 CLR 505 ("Sidhu"); Pratt; Bulle; Hardie; Duic v Duic [2013] NSWCA 42 ("Duic"); Waddell v Waddell [2012] NSWCA 214; 292 ALR 788 ("Waddell"); and Delaforce v Simpson-Cook [2010] NSWCA 84; (2010) 78 NSWLR 483 ("Delaforce").
The necessary elements of a proprietary estoppel are as follows. The plaintiff must establish: (1) the owner of property encouraged or induced in the plaintiff an expectation of obtaining an interest in property; (2) the expectation has arisen reasonably from the defendant's conduct; (3) knowledge by the defendant of the plaintiff's expectation or belief; (4) the plaintiff altered his or her position in reliance on the expectation; (5) the plaintiff would suffer an identifiable detriment from his or her change of position were the expectation not fulfilled; (6) the circumstances render it unconscionable for the defendant to disappoint the expectation.
Mr McMahon submits that Mr Lord encouraged him to build a dam on the exact location that he did with the knowledge the dam wall would encroach onto his land. And he then stood by and let Mr McMahon expend money on the construction of the dam in the exact location that it was built. Mr McMahon says that in the circumstances Mr Lord, the then owner of the property, would have been estopped from denying that Mr McMahon had a right to leave the dam wall in that location on Lot 2 during the life of the dam, a right which is equivalent to an easement for batter.
Mr McMahon further submits that Mrs Lord took her interest in the land with notice of Mr McMahon's right against Mr Lord, or alternatively acquired her interest in the land voluntarily (by transmission upon the death of her husband) and so now holds it subject to all existing equitable interests. Mr McMahon submits that she is bound by the same estoppel that bound Mr Lord and that she is estopped from denying that Mr McMahon holds a right in the nature of an easement for batter over the relevant location on Lot 2, a right which Mr McMahon submits that he may also rely upon to defeat Mrs Lord's claim to a mandatory injunction. Estoppel is a recognised defence to a claim for a mandatory injunction: Jaggard, at 287F - G.
The proprietary interest that Mr McMahon claims is an easement for batter. An easement for batter is defined in Conveyancing Act 1919, Schedule 8, Part 6, as follows: "1 The owner of the lot benefited may: (a) construct and maintain on the lot burdened, but only within the site of this easement, whatever batter or embankment is reasonably necessary to support the surface or subsurface of the lot benefited or any part of it, or any structure or works on the lot benefited, and (b) do anything reasonably necessary for that purpose, including: • entering the lot burdened, and • taking anything on to the lot burdened, and • carrying out work. 2 The owner of the lot burdened must not: (a) interfere with the batter or embankment or the support it offers, or (b) use the site of this easement, or any other part of the lot burdened, or any other land, in a way which may detract from the stability of or the support provided by the batter or embankment. 3 If the owner of the lot burdened does or allows anything to be done which damages the batter or embankment or impairs its effectiveness, the owner of the lot benefited may serve not less than 14 days' notice on the owner of the lot burdened requiring the damage to be repaired or the impairment removed. If the owner of the lot burdened does not comply with the notice, the owner of the lot benefited may enter and repair the damage or remove the impairment and may recover any reasonable costs from the owner of the lot burdened. 4 In exercising those powers (whether or not after serving such a notice), the owner of the lot benefited must: (a) ensure all work is done properly, and (b) cause as little inconvenience as is practicable to the owner and any occupier of the lot burdened, and (c) cause as little damage as is practicable to the lot burdened and any improvement on it, and (d) restore the lot burdened as nearly as is practicable to its former condition, and (e) make good any collateral damage."
Prior to the definition of the easement for batter being added into Schedule 8, easements for batter were commonly crafted by public authorities to provide support on private land for the construction of road works and other earthworks on public land: Soich v Sutherland Shire Council (1980) 2 BPR 9273.
It is not contested that Mr McMahon and Mr Lord did not discuss between themselves the grant of an easement for batter, nor did they use any similar term. So, if Mr McMahon is otherwise successful in a claim in proprietary estoppel one issue will become whether the Conveyancing Act, Schedule 8, Part 6 "Easement for Batter" is the appropriate way that any such proprietary right should be described.
But the primary questions are whether Mr McMahon has made out the elements of the proprietary estoppel he claims and then whether Mrs Lord is also bound by the estoppel.
Mr McMahon has not made out the elements of the proprietary estoppel against Mrs Lord. The Court reaches this conclusion, even though Mrs Lord's action in trespass has not been made out.
A proprietary estoppel claim was available as between Mr McMahon and Mr Lord. Mr Lord did verbally encourage Mr McMahon to build the dam on Lot 2 and he further encouraged that course by standing by whilst the excavation work was done. Although no precise interest in land was discussed or agreed between Mr McMahon and Mr Lord, an easement for batter is the appropriate interest to be inferred from their mutual conduct. Mr McMahon's expectation was that he would have what was in substance an easement for batter and this expectation that did arise reasonably from Mr Lord's conduct objectively assessed. The ordinary expectation that would arise from a person in Mr McMahon's position from what Mr Lord did was that Mr McMahon would be entitled to an easement for batter. Mr Lord cannot but have appreciated that Mr McMahon would form such an expectation. Whatever be his private battles with Mrs Lord and whatever be his failure to confront Mr McMahon, whether due to embarrassment or having given his word to Mr McMahon in general terms, Mr Lord's failure to confront Mr McMahon ultimately meant that he, Mr Lord, must have appreciated that Mr McMahon would expect that he had consented to an interest like an easement for batter. Mr McMahon went ahead on the basis of reliance on his expectation that he would have an easement for batter. Mr McMahon would undoubtedly suffer an identifiable detriment from his change of position were the expectation not fulfilled. If an easement for batter is not granted Mr McMahon will have to shift the dam well back onto Lot 3.
Were Mr Lord or his estate the named defendant in these proceedings the circumstances would have rendered it unconscionable for Mr Lord to disappoint the expectation so created. Relief might have been available against Mr Lord's estate. But there is no point in such relief being granted because the property has been transferred.
And Mr Lord is not the defendant. The real question now becomes whether Mrs Lord's conscience is bound by what has happened. In my view because of Mrs Lord's conduct at the time and thereafter because of the transfer of Lot 2 to her under the Real Property Act pursuant to the terms of Mr Lord's will her conscience is not bound. She did not encourage the building of the dam and she protested at the time the dam was built and continuously thereafter.
Mr Waugh argues that if Mr Lord is bound by the estoppel then Mrs Lord is also bound because she is not a purchaser for value without notice of the estate the subject of the estoppel. She is a volunteer. She received the property by way of gift from Mr Lord. Mr Waugh submits that Mrs Lord took her interest in the land with notice of Mr McMahon's right and so now, as a volunteer, holds it subject to all existing equitable interests: RP Meagher, JD Heydon, MJ Leeming, Meagher, Gummow & Lehane's Equity: Doctrines and Remedies (4th ed 2002, Butterworths LexisNexis) at 338 [8-230], pg 338. Volunteers may take subject to proprietary interest claims: see B McFarlane, The Law of Proprietary Estoppel (1st ed 2014, Oxford University Press) at [8.47], [8.49], [8.63], [8.87], [8.98]-[8.100] and [8.114].
But this is Torrens title land. Any argument that Mrs Lord acquires the property on notice as to Mr McMahon's rights in equity encounters Real Property Act, s 42 and the doctrines of indefeasibility. Section 42 of the Real Property Act provides as follows: "42 Estate of registered proprietor paramount (1) Notwithstanding the existence in any other person of any estate or interest which but for this Act might be held to be paramount or to have priority, the registered proprietor for the time being of any estate or interest in land recorded in a folio of the Register shall, except in case of fraud, hold the same, subject to such other estates and interests and such entries, if any, as are recorded in that folio, but absolutely free from all other estates and interests that are not so recorded except: (a) the estate or interest recorded in a prior folio of the Register by reason of which another proprietor claims the same land, (a1) in the case of the omission or misdescription of an easement subsisting immediately before the land was brought under the provisions of this Act or validly created at or after that time under this or any other Act or a Commonwealth Act, (b) in the case of the omission or misdescription of any profit à prendre created in or existing upon any land, (c) as to any portion of land that may by wrong description of parcels or of boundaries be included in the folio of the Register or registered dealing evidencing the title of such registered proprietor, not being a purchaser or mortgagee thereof for value, or deriving from or through a purchaser or mortgagee thereof for value, and (d) a tenancy whereunder the tenant is in possession or entitled to immediate possession, and an agreement or option for the acquisition by such a tenant of a further term to commence at the expiration of such a tenancy, of which in either case the registered proprietor before he or she became registered as proprietor had notice against which he or she was not protected: Provided that: (i) The term for which the tenancy was created does not exceed three years, and (ii) in the case of such an agreement or option, the additional term for which it provides would not, when added to the original term, exceed three years. (iii) (Repealed) (2) In subsection (1), a reference to an estate or interest in land recorded in a folio of the Register includes a reference to an estate or interest recorded in a registered mortgage, charge or lease that may be directly or indirectly identified from a distinctive reference in that folio. (3) This section prevails over any inconsistent provision of any other Act or law unless the inconsistent provision expressly provides that it is to have effect despite anything contained in this section."
Mr McMahon did not obtain an easement for batter from Mr Lord or seek to register such an interest before Mr Lord's death in 2007. Authority clearly establishes that Real Property Act, s 42 now protects Mrs Lord from prior equitable interests of which she had notice upon transmission of Lot 2 to her, even though she has not paid valuable consideration for the transfer. Real Property Act, s 42 protects Mrs Lord's title from interests that may be acquired by proprietary estoppel, even though as the transferee of the property concerned she might only be a volunteer: Farah Constructions Pty Ltd v Say-Dee Pty Ltd (2007) 230 CLR 89 at 167-172 [190] -[198] ("Say-Dee"). Apart from any consideration of personal equities available against Mrs Lord, the application of s 42, as explained in Say-Dee, is a complete answer to Mr McMahon's proprietary estoppel claim against Mrs Lord.
But can Mr McMahon invoke the Breskvar v Wall (1971) 126 CLR 376 at 385 "personal equities" exception to indefeasibilty? The applicable principles may be shortly stated. A personal equity may arise out of the conduct of the registered proprietor personally or persons for whom the registered proprietor is responsible: Logue v Shoalhaven Shire Council [1979] 1 NSWLR 537 at 563 and Bahr v Nicolay (No. 2) (1988) 164 CLR 604. To acquire title with the mere notice of an unregistered interest is not enough to raise a personal equity, for that would be inconsistent with the protection against notice afforded by Real Property Act, s 43: Ryan v Brain [1994] 1 Qd R 681. But a personal equity may be raised where additional factors exist that indicate that the person taking title under the Torrens system agrees to be bound by the unregistered interest: Snowlong Pty Ltd v Choe (1991) 23 NSWLR 198. A plaintiff cannot assert a personal equity unless a known legal or equitable cause of action is enforceable against the registered proprietor: Grgic v Australian and New Zealand Banking Group Ltd (1994) 33 NSWLR 202 at 222 and Say-Dee at [193].
A personal equity is not available against Mrs Lord. None of Mrs Lord's conduct, as distinct from her husband's conduct, encouraged Mr McMahon to build the dam. Nor did Mr McMahon look to Mrs Lord as a source of permission for him to build the dam. As the Court's earlier findings show, from the time Mrs Lord first became aware of the dam building proposal, and then the dam building, she was opposed to it and strongly opposed when she found out how large it would be. The Court has found that at an early opportunity she communicated her displeasure about the dam building to Mr McMahon. To the extent that her attitude to the dam building is relevant, she made clear to Mr McMahon she did not agree with it and that she did not support her husband's decision to allow it. Mr McMahon could not reasonably have relied upon anything that Mrs Lord said for him to proceed with the construction.
And there was no reason for Mr McMahon to look to Mrs Lord as a source of permission to build. The dynamic in the relationship between Mr McMahon and Mr Lord was such that Mrs Lord's opinions were sidelined. Mr McMahon was content to deal with Mr Lord and to accept his permission to proceed without having to pay much attention to whether Mr Lord had consulted Mrs Lord and without seeking anything formal from Mr Lord to preserve his (Mr McMahon's) rights in equity in the future, such as by negotiating an easement for batter or similar interest. Mr McMahon's sole focus was on the permission that Mr Lord gave him. Mr McMahon's failure to do anything more formal means in the circumstances of this case that he never gained any relevant proprietary estoppel rights against Mrs Lord.
Mr McMahon cannot make out the personal equities exception to Mrs Lord's indefeasibilty of title. His proprietary estoppel action in equity against Mrs Lord fails. This part of Mr McMahon's Cross Summons should be dismissed.

[24]

The Cross-Summons - Relief under the Encroachment of Buildings Act 1922

Mr McMahon makes an alternative claim on his Cross-Claim under the Encroachment of Buildings Act 1922 ("the Encroachment Act"). Mr McMahon submits that the earthen embankment of the dam wall is a "building" within the definition of that term in the Encroachment Act, s 2; the dam wall is an "encroachment" within the meaning of the Act; and Mr McMahon is an "encroaching owner" able to apply to the Court for relief under s 3(1) in respect of this encroachment.
The relevant provisions of the Encroachment Act are as follows. Section 2 provides definitions of "building", "encroachment" and "encroaching owner", as follows: "In this Act, unless the context or subject-matter otherwise indicates or requires - "Adjacent owner" means the owner of land over which an encroachment extends. "Boundary" means the boundary line between contiguous parcels of land. "Building" means a substantial building of a permanent character and includes a wall. "Court" means the Supreme Court in its equitable jurisdiction or such other court outside the county of Cumberland as is proclaimed by the Governor. "Encroaching owner" means the owner of land contiguous to the boundary beyond which an encroachment extends. "Encroachment" means encroachment by a building, and includes encroachment by overhang of any] art as well as encroachment by intrusion of any part in or upon the soil. "Owner" means any person entitled to an estate of freehold in possession - (a) whether in fee simple or for life or otherwise; (b) whether at law or in equity ; (c) whether absolutely or by way of mortgage; and includes a mortgagee under a registered mortgage of a freehold estate in possession in land under the Real Property Act, 1900. "Subject land" means that part of the land over which an encroachment extends."
Section 3 provides: for an encroaching owner to apply to the Court for relief under the Encroachment Act; for the nature of the orders that the Court may deem just; and for certain relevant considerations in the exercise of the Court's discretion to grant s 3 relief, as follows: "3(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 him of any estate or interest therein or any easement light or privilege in relation thereto; (c) the removal of the encroachment. (3) The courts 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 he incurred by the encroaching owner if he were required to remove the encroachment ; (f) the circumstances in which the encroachment was made. (4) The court may refer any question involved to a licensed surveyor or a valuer. (5) This section applies to encroachments made either before or after the commencement of this Act."
The Encroachment Act also deals with issues of compensation (s 4), of charges on land (s 5) vesting orders (s 8) and costs (s 14).
The Encroachment Act, s 10 confers jurisdiction principally upon the Land and Environment Court (section 2; definition of "Court"). But the Act also permits in any proceedings before this Court that it may exercise any of the powers conferred by the Act on the Land and Environment Court. These proceedings are before the Supreme Court for relief other than under the Encroachment Act so s 10 vests this Court with jurisdiction to make the orders sought if the circumstances warrant their being made.
But the primary difficulty in this part of Mr McMahon's case is whether he can establish "encroachment by a building" in order to found s 3 relief. To do this Mr McMahon must satisfy the s 2 definition of "encroachment". I doubt that what is no more than a mound of earth heaped up to prevent water escaping can be classified as a "building" for the purposes of the Encroachment Act. The Encroachment Act defines "building" as meaning a "substantial building of a permanent character": Encroachment Act, s 2. There is little doubt that the dam embankment in this case could be described as "substantial" and "of a permanent character". But the difficulty is in classifying it as a "building", as "encroachment" in the Encroachment Act requires "encroachment by a building".
The requirement that a "building" be a "substantial building" of a "permanent character" and that it "includes a wall" has been interpreted broadly. It has been held, for example, to encompass a concrete driveway (Ward v Griffiths (1987) 9 NSWLR 458), a concrete block wall (Cuthbert v Hardy (1989) 17 NSWLR 321), a retaining wall (Boed Pty Limited v Seymour (1989) 15 NSWLR 715), protruding floor beams (Droga v Proprietors Strata Plan 51722 (1996) 93 LGERA 120) and a weld mesh fence set in concrete foundations (Ex parte Van Achterberg (1984) 1 Qd R 160). But it is been held not to include small structures such as swimming pool pump houses and filters (Cuthbert v Hardy (1989) 17 NSWLR 321) or courtyard paving (Cantamessa v Sanderson (1993) 6 BPR 13,127).
The difficulty with accepting that the Encroachment Act applies here is that the giant mound of earth that is the dam wall does not readily fit into the ordinary meaning of the word "building". The Macquarie Dictionary defines "building" in its primary meaning as "a substantial structure with roof and walls, as a shed, house, department store, et cetera". This mound does not fall within this description. The Encroachment Act has no application to these facts. This part of Mr McMahon's Cross Summons should also be dismissed.

[25]

The Table Drain issue - Summons prayers for relief 7, 8, 9, 10 and 11.

The disputed table drains channel water down the battle axe handle of Lots 2 and 3 in an easterly direction, away from the high ground on Lot 3, through the lower ground of Lot 2 and towards Coolangatta Road.
Using the same approach as with the dam issue, the narrative of facts below sets out the Court's findings on the table drain issue.
The matter of the table drain is raised by Mrs Lord's prayers for relief 7, 8, 9, 10 and 11. These prayers for relief fall into 2 groups of issues: (1) prayers that the table drain, as constructed, encroaches on Mrs Lord's land, constitutes a nuisance and trespass and should be removed (prayers, 7, 8 and 9); and (2) prayers that the physical state of the table drain allows water to flow from Lot 3 into lot 2, causing a flooding nuisance and that earthworks should now be completed to prevent this flow of water (prayers, 10 and 11). The first of these two groups related to a problem with the construction and alleged encroachment by the table drain. The second group related to the drain allegedly falling into disrepair and causing flooding.
A starting point for analysis of this subject is the eastern part of the Opus Survey, which shows a number of the topographical features in the vicinity of the Lot 2 and Lot 3 battle axe handles. This eastern part of the Opus Survey is set out in Figure 5 below:
The contours of Figure 5 show what is evident on the ground: that the battle axe handles fall as one travels from Lot 3 in the direction of Coolangatta Road. But at a point about midway along Lot 1 the ground rises up again slightly to meet Coolangatta Road. Thus the entrance to Coolangatta Road is slightly higher than the lowest point of the battle axe handles. At that lowest point water will tend to pond to the north of the raised cambered gravel road on the Lot 3 battle axe handle, which acts rather like a small dam unless this water is channelled away to the south into Lot 4.

[26]

The Table Drain Narrative

The original developer of the subdivision constructed a table drain along the entire length of the Lot 3 access handle immediately adjacent to the common boundary between Lot 3 and Lot 2. This drain seems to have been ancillary to what was then a single gravel road along the access handle of Lot 3, over which the owners of Lot 2 and Lot 1 had rights of carriageway. It was not until 2009 that Mrs Lord built a concrete driveway over her own Lot 2 battle axe handle.
From the time of the original development, little drainage work was done on the battle axe handles of Lots 2 and 3 until about 3 years after the Lords and the McMahons moved in to the area. Sometime in the years 2000 or 2001 Mr McMahon, Mr Lord and the owner of Lot 1 contracted with Mr Geoff Rumble to upgrade the gravel road on the Lot 3 battle axe handle. The upgrade involved the dumping shale, the grading and rolling the road and cleaning out the drain adjacent to the Lot 3 battle axe handle. The upgrade also domed the camber of the gravel road on the Lot 3 battle axe handle, raising its centre and causing it to act more like a dam for water caught to its north.
At the same time Mr Lord arranged for a contractor to install a pipe and culvert in the vicinity of Lot 1 under the Lot 3 battle axe handle, to drain away to the south the water that would otherwise pond on the low ground on the Lot 2 and Lot 3 battle axe handles after travelling east and downhill but before the table drain reached Coolangatta Road. This pipe and culvert is close to the area where Lot 1's driveway enters the battle axe handles for Lots 2 and 3.
Mrs Lord says and I accept that at the time of these 2000 - 2001 works Mr McMahon constructed another table drain that still exists, and which generally follows the direction of the original drain but which in places is located either on the boundary, or appears to be inside Mrs Lord's property (by reference to the fenceline).
In her oral evidence Mrs Lord explained through photographs (photographs L1 to L5 referred to in her principal affidavit sworn on 17 July 2013) that loose material was washed off Lot 3 onto Lot 2 and that the raised area of cambered road on Lot 3 dams the water running down the table drains so that it accumulates on Lot 2. She said the position had been exacerbated because the grading machine that undertook the 2000 - 2001 works went beyond the boundary and onto Lot 2 when upgrading the road surface on the Lot 3 axe handle. The photographs taken during rainfall (see photographs M1 - M10) show a substantial accumulation of water in this area. The photographs L1 - L5 also show a substantial pipe and culvert under the Lot 3 axe handle that Mr McMahon built which was also said to encroach onto Lot 2.
In mid-2008 Mrs Lord constructed the concrete pad of about 600 square metres outside her house. Mr McMahon claims there is no provision for drainage from this and the adjacent concrete areas on Lot 2, which causes excessive water to flow into Lot 3. Like Mrs Lord's claims about the table drains, it is difficult without precise expert hydrological evidence to assess the validity of his claim that concrete on Lot 2 does contribute to excessive water flows on Lot 3. But in my view Mr McMahon is partly right about this and it can be accepted that there is some contribution from this hard surface source.
In December 2009 Mrs Lord constructed a concrete driveway over the whole Lot 2 battle axe handle down to Coolangatta Road. Mr McMahon's evidence also was that there was no provision for drainage made at the time that this driveway was constructed. Certainly no ancillary drainage structures associated with this driveway were evident at the time of the Court's view at the site in November 2014. Mrs Lord did not claim that any had been constructed together with the concrete driveway at her direction. Mr McMahon claimed that along parts of this driveway - especially for example, where the driveway for Lot 1 exited from the Lot 2 and Lot 3 battle axe handles - erosion was evident in Lot 3, which he attributes to excessive runoff from the inadequately drained Lot 2 concrete driveway. Again, in the absence of precise hydrological expert evidence about the exact sources and flows of all water in this area, it is difficult to attribute any particular erosion to any particular water source or drainage structure. But once again I accept that Mr McMahon is partly right that this is an additional source of water in the table drain and on Lot 2.
I accept that Mrs Lord has planted vegetation along the Lot 2 - Lot 3 boundary in order to reduce the effect of flooding, particularly in the vicinity of Lot 1. This is evident in a number of the photographs of the area (see photograph L5). This has to some extent reduced the speed of the flow of this water. But the quantities of water flowing during rainfall are still substantial (see photographs M5, M6, M7 and M8). These plantings have to some extent also alleviated the effect of the disrepair in the table drain which is more evident on the higher ground closer to Lot 3.

[28]

Group 1 Issues - Construction and Encroachment

The principal difficulty with Mrs Lord's evidence in relation to the table drain was that she had not taken precise measurements and had not engaged a surveyor to survey the course of the second table drain in relation to the true boundary between Lots 2 and 3. Her case only relied upon general descriptions of where the table drain was located in relation to the boundaries between Lots 2 and 3. The issue was raised in the course of the hearing that her own observations that the table drain was encroaching into her property, based on the position of the existing fence line between the two properties, were potentially unlikely on their own to be an adequate basis for the Court to find that the table drain had encroached on Lot 2.
The Court is not confident that Mrs Lord has established the principal assumption behind her reasoning that the present course of the table drain encroaches in places upon her property, Lot 2: namely her contention that the fence line was a reliable indicator of the boundary between the Lots 2 and 3 battle axe handles. Mrs Lord did not attempt to establish independently that the fence line was a reliable indicator of the position of the boundary. She did not adduce survey evidence to show that the fence was either on the boundary or at an identifiable distance from the boundary. Nor did she adduce evidence as to the construction of the fence in the position that it was so as to ground an inference that it was on the boundary, an inference that cannot just be taken for granted in rural areas. As a result the Court has no reliable basis on which it can use the fence line as a proxy for the boundary in order to infer encroachment by the table drain into Lot 2 by reference to the table drain's relative position to the fence line.
For example, Mrs Lord adduced oral evidence in relation to the subject of paragraph [19] of her first affidavit, of photographs (L1 - L5) that showed the table drain and what she claimed was "its relativity to the boundary between Lots 2 and 3". But these photographs at best show the table drain in relation to the fence line, which without more is not an adequate basis to infer an encroachment.
Mr Diversi's opinion based on his site inspection was that "it is evident that the table drains along the northern sides of the axis road/driveway had been formed and cut beyond the fenceline and assumed boundary of the ROC (Right of Carriageway). We note that the surface adjacent to the fenceline is generally uneven and may be difficult to mark". He accordingly recommended that the table drain along the common boundary be "filled, compacted, re-cut and shaped so that the table drain for [the] Lot 3 axis road is wholly contained within the ROC". Whilst this is suggestive of an encroachment, without surveying evidence it does not establish an encroachment, and so the first group of nuisance prayers for relief are not made out.
But the encroachment issue in all probability will ultimately disappear. The reasons below indicate the Court will grant relief in respect of the second group of table drain nuisance issues and will order a mandatory restorative injunction to avoid a nuisance. In relation to that remedy, the experts have agreed that if a new table drain system was constructed it would have to be constructed in a way that encroached as little as possible upon Lot 2. Achieving that objective necessarily involves undertaking a survey of the boundary between Lot 2 and Lot 3 in the battle axe handles to achieve the minimum encroachment possible. If there is now any substantial encroachment beyond the boundary, particularly in the higher ground near Lot 3, where such potential encroachment was pointed out on the view in November 2014, then it would be eliminated as part of the relief granted on the fighting nuisance issues.
Mrs Lord fails on prayers for relief 7, 8 and 9 in her Summons.

[29]

Group 2 Issues - Flooding and Nuisance

Mrs Lord's evidence was better in support of her second group of issues about the table drain: namely that poor maintenance of the table drain had led to regular build ups of water, causing flooding and erosion. She said that since Mr McMahon had constructed the table drain, "it has had virtually no maintenance, and consequently does not carry the water properly, which results in large build ups of water, causing flooding and erosion to my property". She said that the situation is exacerbated "by the flow of surface water along the surface of the defendant's access handle which has been constructed with a camber towards my property". In her principal affidavit she annexes photographs that she says demonstrate this (at [20]). I accept her evidence as to these matters. Her evidence was supported by the photographs of the area and was seen on the Court's view in November 2014.
Some expert hydrological evidence would have been useful in this case to show: (1) that Mr McMahon's earthworks had made flooding on the battle axe handle of Lot 2 worse than it would otherwise have been and thereby caused any resultant nuisance; or (2) that flooding occurs from Lot 3 onto Lot 2 such as would thereby occasion a nuisance. Mrs Lord does not have the expertise to discern whether Mr McMahon's work on the table drain encroaches on Lot 2. But she has given her lay evidence on the water flows supported by photographs which I accept. And some of Mr Diversi's expert evidence is that Mr McMahon's works on the Lot 3 access handle road did channel water onto Lot 2, thereby causing it flooding. This evidence is analysed below.
Mrs Lord has verbally requested Mr and Mrs McMahon to rectify the table drain. I accept that the McMahons have not done anything of substance to ensure that it is cleared of debris such that it does not contribute to flooding on Lot 2.
Mrs Lord submitted that the gravamen of her complaint was that the table drain had fallen into such disrepair that its only function in heavy rain was to direct water to drain down the side of Mr McMahon's Lot 3 road and onto her land. She submits that the fact that the table drain might have been built many years ago by the subdivision developer does not absolve Mr McMahon of liability for a flooding nuisance caused by water runoff from Lot 3 onto Lot 2.
Mrs Lord submits that the experts agree that the state of the table drain is so poor that its rectification lies beyond the scope of mere maintenance. Mrs Lord's expert evidence from Mr Diversi describes what is needed to rebuild the table drain to be effective. Mrs Lord submits that the narrow width of Mr McMahon's access handle requires the construction of a new table drain which either encroaches slightly onto her land, or is contained by a retaining wall on or near the Lot 2 - Lot 3 boundary.
Table Drain - The Experts. Mr Diversi made a preliminary estimate of the catchment drainage area for the Lot 3 road shoulder as "up to 6 hectares, resulting in a flow of 1.2 m3/s for the two year ARI which would require a channel of 2.7 metres wide by 0.7 metres deep". In his first report he recommended that a "nominal table drain" be provided which is smaller in capacity than this, namely only 1.2 metres wide by about 0.2 metres deep. He thought such a "nominal table drain" could be construed "at a cost of about $35,000 to $40,000, subject to detailed survey design and construction quotes from contractors". Mr Diversi's second report of 6 May 2014 reported no noticeable change to the shape and encroachments on Lot 2 from the table drains or the cost of constructing a new table drain.
Mr McVey's expert evidence also dealt with the table drain issue. He pointed out that there are two culverts located under the Lot 3 battle axe handle, or as he described it, an "access road". One of these culverts is located at a high point and not at a sag point and is ineffective. The second culvert is broken and blocked and is ineffective due, he says, to Mrs Lord's 2009 construction of the concrete driveway on Lot 2. His opinion, which I accept, is that the poor state of these culverts is leading to erosion of the road, the road verge and the discharge points surrounding the culverts. His opinion is the culverts should be repaired and upgraded so as to properly perform their functions.
To the extent the culverts are blocked, the blockage appears in part to be the responsibility of both Mr McMahon and in part Mrs Lord. I accept Mr McVey's evidence that the underroad culvert near the concrete driveway that Mrs Lord laid over Lot 2 will need to be restored so that it can be efficient in the future. I accept Mr McVey's evidence that the blockage was caused by Mrs Lord's concrete works. For that reason the restoration of this culvert will need to be at her cost. The restoration of the other culvert will need to be at Mr McMahon's cost.
Mr McVey also points to inadequacies in the drainage at the entrance to Lots 1, 2 and 3 that is obtained by the two 6 metre wide roadways, one on the Lot 2 battle axe handle and one on the Lot 3 battle axe handle. The repair work Mr McVey suggests be undertaken in this area includes re-designing and reconstructing and clearing various pipes and channels. But this work will largely be accounted for by the remedial work that Mr McVey and Mr Diversi agreed upon during their expert conclave that was recorded in Exhibit 7.
Mr Diversi and Mr McVey usefully agreed upon a number of remedial measures in relation to the table drain. They prepared a plan for a proposed road on the Lot 3 battle axe handle with a 4 metre pavement and 2 x 0.5 metre shoulders. Although the Lot 3 battle axe handle is 6 metres wide, the joint experts' road plan cross-section (Exhibit 7) showed that such a road, together with the necessary shoulders, would require the construction of a table drain that encroached onto Lots 1 and 2. They concluded that a suitable road on the Lot 3 battle axe handle would need to be of acceptable width to accommodate motor vehicle traffic and comply with council regulations, but not interfere with existing physical features and a one metre wide electricity easement. That would mean that the ancillary table drain must encroach onto Lot 2 and in places into Lot 1. The experts said that it was theoretically possible to place a small retaining wall on the boundary of Lot 3 to keep the works to retain storm water on Lot 3 self-contained but they preferred to put forward the plan (Exhibit 7), which had the table drain encroaching a little onto Lot 2.
Their Exhibit 7 design incorporated a concrete dish drain crossing at 350 metres from Coolangatta Road. This dish drain was a concrete dip in the road surface designed to allow water that might otherwise dam up on the high side (that is the Lot 2 side) of the cambered gravel road on the Lot 3 battle axe at its low point, to escape towards the south into the broader landscape of Lot 4. The experts ultimately did not cost the table drain or the dish drain, because they were unsure whether the Court would allow the table drain to be built encroaching onto Lot 2.
The experts agreed that information about some table drain issues could await the Court's judgment. They agreed that if the Court required, it would not be difficult for them to reach mutually agreeable figures about the costs of reconstruction of the road; the requirements of access for maintenance of the table drain; and the costs of retaining the road but altering the ancillary drainage works.
They also indicated that without adding other infrastructure that the remedial work would not be very expensive. They said that they did not think that "there would be much cost in leaving the system as it is and tidying it up … but you do need to add some concrete dish drains across the road to pick up the stormwater drainage". Mr Diversi had already indicated a probable cost of $30,000 to $40,000. They indicated that the top of the table drain could be designed, reviewed and then agreed, so that the design levels were acceptable to both parties and minimised the impact on Lot 2 from any resultant encroachment from the finished table drain.
Table Drain - Nuisance Conclusions. The flooding that Mrs Lord experiences on Lot 2 in times of rain is substantial, unreasonable and materially interferes with her use and enjoyment of her land. The depth and speed of flood waters, together with their width in places are an inconvenience for Mrs Lord that materially interferes with her ordinary physical comfort and potentially her safety.
These waters do not entirely emanate from Lot 3. Mr Diversi estimates a 6 hectare catchment draining onto the Lot 3 road. But much of that catchment is the upper part of the driveway on and leading to Lot 3, which is itself some 2.3 hectares whilst Lot 2 is slightly smaller at 2.15 hectares and slopes to the south to a degree but not as steeply as Lot 3 and the land on Lot 2 near it. The extent of the erosion evident in the upper parts of the Lot 3 battle axe handle near the boundary with Lot 3 is evidence of the substantial amounts of water coming through that area, even before any contribution to the waters from Lot 2 is taken into account. Also the speed of delivery of the water down the table drain is to a significant extent contributed to by the steep topography of Lot 3.
But dividing the watersources between Lot 2 and Lot 3 does not really assist Mr McMahon to defend the nuisance case. Even if some of the water has come from Lot 2, the way the road and the table drain are constructed on the Lot 3 battle axe handle, itself causes the nuisance on Lot 2. They produce an artificial dam, interfering with the natural flow of water across the Lot 3 battle axe handle and re-directing it back onto Lot 2. This would not occur if the road on Lot 3 were not artificially raised or the cross road drainage were more efficient.
In the result the nuisance is created by the volume of water coming from Lot 3 and the way the road on the Lot 3 battle axe is constructed, directing the combined water of Lot 2 and Lot 3 back onto Lot 2, and finally by the poorly maintained culverts under the Lot 3 battle axe handle.

[30]

The Table Drain - Relief

What relief should be granted for the nuisance? The expert evidence points the way to formulating an appropriate grant of relief in respect of the table drains. The Court has found that although Mrs Lord has not established that the table drains encroach on Lot 2 (the group 1 issues), the water flowing through them does occasion a flooding nuisance in Lot 2 from water that appears to come substantially more from Lot 1 than from Lot 2 (the group 2 issues). First the choice must be made between damages and what will be a mandatory restorative injunction.
Damages would not be an adequate remedy. The floodwater nuisance from the table drains, which can be seen in the Lot 2 and the Lot 3 battle axe handles in the photographs during times of high rainfall, is sufficiently deep that it not only risks future erosion and carving out of gullies in the long-term but in the short-term, such uncontrolled quantities of water located close to housing and to motor vehicle traffic on Lot 2 are potentially dangerous to people (especially children) and to any livestock in the area. An award of damages would not alleviate these risks and dangers, which would otherwise be ever-threatening for Mrs Lord.
I accept that Mr McMahon has not behaved wantonly or unreasonably in his actions with respect to the table drains. But the grant of a mandatory restorative injunction to effect the kind of works detailed in Exhibit 7 would not create a hardship for him: the works should not be prohibitively expensive; Mrs Lord will have to contribute something to them (see below); and the works will probably benefit him by better controlling water flow off his gravel road on the Lot 3 battle axe handle.
A prohibitory order in general terms would not be sufficient here. Such an order would ordinarily be couched in terms that prohibited Mr McMahon from allowing water to run off the Lot 3 battle axe handle so as to cause a flooding nuisance to Lot 2. Whilst such an order is often appropriate, in this case requires both Mr McMahon and Mrs Lord to make the decisions before relief is finally formulated. And as a result, a more detailed formulation of relief will better meet the needs of this case. Moreover, this judgment demonstrates the long-standing hostility between these parties. The Court is not confident that simply defining relief in general terms will lead to final resolution rather than further disputation. A more prescriptive solution is required.
Any relief must be conditional. And Mrs Lord needs to make a decision. The Court is prepared to grant injunctive relief to require the installation of a table drain of the general characteristics of that agreed by Mr Diversi and Mr McVey in Exhibit 7. But as a condition of the grant of that relief Mrs Lord should be required to accept that the table drain can be constructed in a way that partly encroaches upon her property, Lot 2. The experts have indicated that they can design such a table drain so as to minimise the overall impact upon Lot 2. Mrs Lord needs to indicate unequivocally that she is prepared, as the price of the Court granting mandatory restorative injunctive relief, to have a table drain built or encroaching on her property that will drain water from the cambered gravel road on Lot 3. If she is not prepared to accept this then the grant of mandatory restorative relief may have to be revised, unless a retaining wall on Lot 3 does not cause excessive traffic hazard or other inconvenience to Mr McMahon.
Mr McMahon also must make decisions relevant to relief. Mr McMahon should have the opportunity to make choices about what infrastructure changes he wants or does not want on the Lot 3 battle axe handle at the same time as Exhibit 7-type works are carried out. For instance, he may wish to upgrade the existing road on Lot 3, or he may not. He may wish to build other infrastructure on Lot 3 for his own benefit at the same time. Before the experts commence to design a final form of table drain Mr McMahon's decisions about these matters will need to be known. Orders will need to be crafted so that he will have this option but he will be required to exercise it within a limited time.
Lot 2 partly contributes to the flooding. There is substance in Mr McMahon's argument that some of the water that finds its way into the flooded table drains on the Lot 3 and Lot 2 battle axe handles evident in the photographs taken after rain, comes across into the drains from Lot 2, not from Lot 3. And Mrs Lord's 2009 construction contributed to the problem. Therefore in formulating appropriate relief it would be unfair to place the full cost burden of constructing new table drains onto Mr McMahon. Were the Court to order that Mr McMahon bear the full cost, Mrs Lord would get a free ride, gaining the benefit of infrastructure installed at Mr McMahon's cost in order to solve a flooding problem partly caused by runoff from her own property and construction that she has undertaken.
Justice therefore requires Mrs Lord to contribute to the cost of any table drain infrastructure the Court orders. But the Court has not yet heard from the parties as to what level of contribution should be required from Mrs Lord as the price of ordering the installation of infrastructure in the nature of table drains and dish drains on the battle axe to Lot 3. The formulation of the correct dollar amount or percentage contribution can be reserved for a hearing on the form of orders for relief, which hearing will need to take place in the near future. All the Court has found so far on this issue is that Lot 3 is the source of substantially more of this water, which together with the dam effect of the road on Lot 3 and the inefficient cross-road drainage warrants the grant of relief for nuisance. The precise quantum of the contribution may be able to be agreed and if not will be determined in a supplementary hearing on relief.
A number of variables will potentially govern the fixing of an appropriate dollar amount or percentage contribution, including: whether or not Mr McMahon elects to upgrade the road surface of the Lot 3 battle axe handle; how substantial any encroachment that Mrs Lord has to bear on Lot 2 is as a result of the construction of an Exhibit 7-type table drain; the cost of repairing the culvert under the road on Lot 3 that Mrs Lord damaged with her concrete works; and whether or not Mr McMahon wishes to install other infrastructure solely for the benefit of Lot 3. All that can be said at this stage is that looking at the bare minimum infrastructure requirements necessary to channel water off the cambered gravel road on Lot 3 into a controlled drain, without any additional optional infrastructure for the benefit of Lot 3, Mr McMahon should probably bear substantially more than half the cost of that infrastructure because of the substantially greater contribution to the flooding that the Court has found derives from the works on and water from Lot 3.
All these matters, and potentially others, will need to be considered in a short relief hearing in relation to the table drain issue. This can be held at the same time as the relief hearing discussed above in respect of the dam issue. The Court would observe at this point though that even now, the parties should attempt to negotiate a solution, or indeed exchange Calderbank letters, about the precise form of relief to be granted and contribution to be made.
Despite their professional differences on some issues, Mr Diversi and Mr McVey exhibited a very high degree of practical cooperation in coming up with various technical solutions in this case. Drawing upon their professional assistance, it may be possible for the parties at least to reduce the matters in issue in formulating relief.
These reasons assume that the Exhibit 7 table drain works can be designed to be carried out without any significant final encroachment on Lot 1, which is owned by a non-party to these proceedings. If that assumption is incorrect notice may need to be given to the owner of Lot 1 to determine that owner's attitude to the final form of relief proposed.

[31]

Mrs Lord Offers Further Table Drain Encroachment Evidence at the End of the Trial

On the last day of the trial 12 December 2014, just before final oral submissions were due to commence and after final written submissions had been served, Mrs Lord, through her counsel, Mr Vindin, sought to supplement the evidence in her case about the table drain. She sought to tender a survey undertaken by a surveyor since the last hearing day, 1 December 2014. The document she proposed to tender was said to be an up-to-date survey of part of the two driveways on Lots 2 and 3 and the area between them, showing the table drains, the area of the alleged erosion, the relative levels of the two driveways and other matters said to be relevant to Mrs Lord's case.
Mr Waugh objected to the tender of the survey. The Court declined to admit the document into evidence at that stage of the proceedings. Instead it was marked for identification. Mr Waugh's submissions on behalf on Mr McMahon, that the tender of this survey should not be permitted, were persuasive.
First, Mrs Lord's application to tender the survey came very late and after a number of submissions that the evidence in Mrs Lord's case about the table drain was insufficient without additional documentation. These submissions had been made in response to submissions from the defendant and queries from the Bench during the trial about the adequacy of the evidence about the physical layout of the table drains in relation to the boundary of the two properties. Mr McMahon had pointed out in written submissions before trial that there was no up-to-date survey of the two driveways such as would found a case that the table drain encroached on Mrs Lord's land and that the Court should therefore not grant a mandatory injunction for the removal of the table drain.
Mr Waugh submitted that he would need time to respond to this material were it to be admitted into evidence, and would be prejudiced unless there was an opportunity to put on evidence in reply. That was obviously not possible unless further time was granted after December 2014.
The Court raised with the parties the possibility that the Court might perhaps be able to accommodate Mrs Lord, if she wished to tender this survey, by dealing with the dam issue first, and then, whilst the Court was preparing judgment on that issue, the parties could finalise their evidence in relation to the table drain issue. But before the Court could split the judgment into two this way it would need to be satisfied that there were no credit issues between the parties on the table drain question.
Mr Waugh submitted that there were credit questions associated with the table drain issue. He submitted on behalf of Mr McMahon that Mrs Lord's uncorroborated evidence should not be accepted on either the dam issue or the table drain issue. That was consistent with the way that Mr McMahon had put his case. Therefore he submitted that adjourning part of the proceedings to allow further evidence to be put on was not a practical way of accommodating the late service of this evidence.
Although Mr Vindin gave a good account of why the survey had not been served even a few days earlier than it had been, no evidence was advanced to support the tender by showing why the survey had not been commissioned before trial or at an earlier time during the trial. It was not possible in these circumstances to permit the tender to take place without generating one or more further hearing days in a trial which had already gone beyond its allotted time.
Mr Waugh also submitted that the proposed tender did not even show that the table drain was an encroachment. Mr Vindin suggested that what it really showed was "deep trenches on my client's side of the boundary; the close contours". The Court does not have to decide that question.
In the course of seeking to tender the survey Mr Vindin also suggested the possibility of an amendment to the Summons "to simply add in a few words about the encroachment being not merely the drain but the water that flows down it when it rains". Mr Vindin submitted that "…it's not about the drain, it is about the water that should be flowing down a table drain nicely next to Mr McMahon's road, but in fact it is just discharging willy-nilly and digging these trenches on my client's side of the boundary".
This submission revealed a misunderstanding between the parties about the nature of the case being made about the table drain. They were both right on this. Mr Waugh's submission was that he was prepared to meet at trial what was claimed in the Summons, which is a declaration that the "table drain encroaches" on the plaintiff's land and that a mandatory injunction should be granted for its removal. But that is only true of prayers for relief 7, 8 and 9. Prayers for relief 10 and 11 do seek relief in respect of a flooding nuisance, upon which Mr Vindin relied.

[32]

Conclusions and orders

The result of these proceedings on the Summons and the Cross Summons may be shortly summarised. The plaintiff, Mrs Lord, has failed to prove that the dam wall that the defendant placed on Lot 2 in 2000 is either a trespass or a continuing trespass upon her land. But she has been successful on one aspect of her nuisance claim associated with the dam wall that straddles the boundary of Lot 2 and Lot 3: she has established that overflows of water from the dam onto her property cast excessive water and some debris upon it, thereby eroding Lot 2 and reducing the quality of her pasture on Lot 2. But some of that debris on Lot 2 is also the product of her own unsuccessful attempts to abate any nuisance emanating from the dam on Lot 3. Given the complexities of this the Court has determined an appropriate structure for relief on this issue. Parties may wish to put submissions on the form of relief on this issue.
But Mrs Lord has been unsuccessful in showing on the evidence presently before the Court that the dam wall is leaking. The expert evidence indicated that if it is leaking then potentially a catastrophic failure of the dam is possible. A conclusion that such a failure is in any sense "on the cards" is not justified on the evidence before the Court. But the experts indicated that it is one issue that could be further investigated. For the reasons elaborated earlier in this judgment, because of the potential dangers to persons of such a failure, the Court has decided to hear from the parties as to whether they want an opportunity to undertake these investigations. The Court has therefore reserved further consideration of this issue.
On the Cross Summons, Mr McMahon fails on his proprietary estoppel claim. He has not established that Mrs Lord's conscience was bound by his dealings with Mr Lord. He also fails in his Encroachment Act claim for failure to prove that the dam wall on Lot 2, was a "building" within the meaning of that Act.
Mrs Lord has also failed to establish on the evidence that the table drain along the Lot 2 and Lot 3 battle axe handles encroaches onto Lot 3, but she has been successful in proving that the road on Lot 3 causes a flooding nuisance on Lot 2. Once the parties have had an opportunity to analyse these reasons, the Court will hear the parties as to the conditions to be placed in the precise form of relief to remedy the nuisance that has been found.
Both parties have had some success in the proceedings. This may lead to arguments about the appropriate order for costs in the circumstances and one or other party may seek a special costs order. The Court will hear submissions on costs after the parties have had an opportunity to consider these reasons and then to formulate and put submissions about appropriate orders for such relief as has been found in the plaintiff's favour.
The court's orders are as follows: 1. Direct the parties to bring in short minutes of order to give effect to these reasons. 2. Direct the parties to file any submissions in relation to relief and costs by 4pm on Friday, 12 December 2015. 3. The parties should list the proceedings for argument about final relief by arrangement with my Associate. 4. Grant liberty to apply.