Milner v Busways Management Pty Limited

At a point identified on the sketch by the Examining Surveyor it was noted "footing encroaches by up to 0.12. Other footing encroachments unknown" .

The advice by the Director of Land Titles also noted it was found that some of the footings of the factory complex on Lot 1 DP 839 626 encroach onto Lot 27 Section 5 DP 744 by up to 0.12 metres. The Director continued "The location and extent of other footing encroachments was not investigated".

In the meantime, on 25 March 1998 the applicant filed an application class 3 in this Court seeking relief under s 3 and s 9 of the Encroachment of Buildings Act 1922 ("the Encroachment of Buildings Act").

Subsequently, at the request of the applicant, the Registrar General referred the determination of the title boundary to this Court in a further application class 3, matter No 30014 of 2000, filed on 2 March 2000 pursuant to s 135J of the Real Property Act.

Matter No 30014 of 2000 was finalised on 30 June 2000 by consent orders as follows:- 1. The proceedings be discontinued.

3. The Boundary between lot 26 in Deposited Plan 744 and lot 27 in Deposited Plan 744 be fixed as stated in the determination of the Registrar General dated 22 December 1999.

On 22 October 1999 these present proceedings were stood out of the list to enable the applicant to make the application to the Registrar General for a determination of the boundary. On 2 November 2000 the matter was set down for hearing on 12 February 2001. When the matter came before Lloyd J on 12 February 2001 the hearing date was vacated, at the applicant's request.

The final hearing took place before me on 20 September 2001.

Mr Coombs opened the applicant's case by explaining that Mr Milner believes he is being evicted from his land and as an ex-serviceman that should not be permitted. There was no evidence to support this opening flourish but notwithstanding this Mr Coombes repeated it during his closing submissions.

The applicant did not pursue the relief sought under s 9 of the Encroachment of Buildings Act. Section 3 of the Encroachment of Buildings Act leaves the Court with a wide discretion to order the payment of compensation to the adjacent owner, or the conveyance transfer or lease of the subject land to the encroaching owner or the grant to the encroaching owner of any estate or interest therein or any easement right or privilege in relation thereto, as well as to order the removal of the encroachment.

The substance of the applicant's claim is that the respondent should pay "the current fair open market rental value of the encroachment" at the rate of $940.70 per annum.

Both parties rely on a statement of evidence by their respective expert valuer.

The respondent's valuer, John Kinchington, was not required for cross-examination.

However, the applicant's valuer, Les Fleischner, gave oral evidence. Rather than accepting the determination of boundaries by the Registrar General, Mr Fleischner relied on a later survey made by Registered Surveyor, John Brown ("the Brown Survey"), on 18 April 2000. The Brown Survey purports to establish the boundary in a different location to that determined by the Registrar General. It also provides information in respect of the alleged location of the encroachment of the footings for the building erected on the adjoining land at different locations. In each case he describes the encroachment as "Footings (0.14 over)" and states "The adjoining concrete slab building stands outside the boundary but the footings encroach up to .14 upon subject land". Surveyor Brown's certificate and report were admitted into evidence over objection, subject to relevance and weight. The applicant did not make Mr Brown available for cross-examination, notwithstanding a demand by the respondent counsel, Mr Ayling, that he do so.

It is not appropriate to give any significant weight to the evidence in the Brown Survey in circumstances where the boundary determination by the Registrar General has already been accepted by the applicant when he agreed to the consent orders in matter No 30014 of 2000. Furthermore, the evidence, which is in conflict with the determination by the Registrar General, has not been tested. Questions of estoppel arise but do not need to be finally determined in these class 3 proceedings where the rules of evidence do not apply. In other proceedings estoppel would be treated as an exclusionary rule of evidence. The Brown Survey can only assist the Court to understand how Mr Fleischner established the area of the encroachment for the purpose of establishing the rental value. Ultimately the actual rental value is not a relevant matter for the reasons the Court will come to later.

It is to be observed that Mr Fleischner was not asked to form any opinion as to the practical effect of the encroachment. He was not able to observe any physical signs of the encroachment. He assumed that it must be subterranean. He based his calculation of the area of the encroachment solely upon information given to him by Mr Milner, namely that the concrete footings encroached 0.14 metres onto Lot 27. He did not know the depth of the encroachment below the surface. In his calculation of the area affected he allowed for an encroachment of 0.14 metres along the total length of the common boundary, namely 60.96 metres. The building is in fact set back from the Wellington Street frontage.

Mr Kinchington, on the other hand, relied upon the boundary determination by the Registrar General. He notes that the report by Examining Surveyor Wallis, shows the wall of the respondent's building as being clear of the boundary of Lot 27 by 0.04 metres to 0.10 metres and that Mr Wallis has identified only one point of encroachment. Mr Kinchington was not able to gain access to the applicant's property. He formed an opinion that on the evidence available to him it would appear that the encroachment is limited to one concrete pier, as identified by Surveyor Wallis, with the possibility that there has been further encroachment by other concrete piers down the western side wall of the respondent's building. He says that assuming there are 19 piers along the western wall where it abuts Lot 27 and assuming these piers are 600 millimetres in diameter and that the encroachment by each pier is 0.12 metres the maximum area of Lot 27 encroached upon is estimated at 0.8 m 2 .

In Mr Kinchington's opinion, neither the encroachment specifically identified by Mr Wallis nor the further assumed encroachment, by additional piers, has any practical effect on the current use of the applicant's property. Furthermore, in the event that the applicant's property is redeveloped with an industrial building it is Mr Kinchington's view that, taking into account the Blacktown City Council's Industrial Development Control Plan and his observations of recently completed industrial buildings at other sites in Riverstone, the encroachment as identified (and as assumed) would not restrict future development.

He concludes as follows:- For the reasons set out above, the identified encroachment and the assumed encroachment would not affect the current use of the property or the redevelopment potential of it. In this context there would be no loss in value to the Milner property.

If, however, the Court finds that the encroachment demands an assessment of compensation Mr Kinchington says compensation would be less than $100.

As I have already said, Mr Kinchington was not required for cross-examination and accordingly, his opinion remains unchallenged except to the extent that Mr Fleischner has expressed a contrary view.

The evidence of Mr Fleischner is not based on any substantive inquiry. Furthermore, during cross-examination it became apparent that a number of assumptions he made were clearly wrong and his methodology of applying the rental value of a brand new air-conditioned factory unit to the calculation of a rental value for the vacant land is, in the Court's opinion, fundamentally flawed.

There is evidence before the Court that the respondent, without admission of liability, has consistently made offers to overcome any disadvantage to the applicant. It has been prepared to remove the encroachment by the concrete piers on the basis that the respondent would be responsible for any expense involved. There has been no positive response to this offer.

It is not in dispute that there is some encroachment by part of the footings installed during the construction of the building on the respondent's land. All of the available evidence confirms that the encroachment is slight and has no impact by way of a constraint on the applicant's present or future use of the land. Based on the survey information before the Court it is reasonable to assume that on the balance of probabilities the encroachment lies entirely outside a fence constructed 0.14 metres off the boundary and within the applicant's land. Even if the Brown Survey is accepted, which it is not, the encroachment, such as it is, can only be described as minimal.

Although the applicant has established that he is the adjacent owner for the purposes of s 3(3)(a) of the Encroachment of Buildings Act, the situation and value of the subject land, the character of the encroaching building and the loss and damage which has been or will be incurred by the adjacent owner, referred to in subsections 3(b), (c) and (d) respectively, have not been established.

Mr Ayling sought to demonstrate the extent of the encroachment by one pier by dramatically holding up a standard saucer and indicating it could amount to no more than the area of one and a quarter saucers. Equally dramatically, Mr Coombs produced a drawing on brown paper purporting to show the extent of the encroachment if the Court accepted the measurement of 0.14 metres. In either case the area is small, although Mr Ayling's demonstration has more creditability on an evidentiary basis.

The Court is not able to conclude that a lease of the subject land or the grant of an easement is required. Even so, the amount of compensation payable would be a minim.

Having regard to the whole of the evidence and the submissions made on behalf of both parties and taking into account such of the matters specified in s 3(3) of the Encroachment of Buildings Act as are relevant the Court concludes that the proper exercise of its discretion in the circumstances is to refuse the relief that the applicant seeks.

It is indeed unfortunate that this dispute has expanded to the point where both parties have expended significant costs in obtaining professional advice and legal costs.

The only explanation for the applicant's pursuit of a remedy comes from the submission made by Mr Coombs and to which I made specific reference at the outset. These are not matters that should be attributed significant weight, if any, in determining whether the Court should make an order for costs. Indeed in the absence either of evidence or an admission by the respondent that they have some bearing on the case they are irrelevant matters.

Furthermore, the respondent has consistently offered to remedy the encroachment in response to the applicant's complaint by seeking to gain access for the purpose of removing the subterranean concrete intrusion into the applicant's land. These offers have not been accepted. The applicant does not seek that relief from the Court.

In the exercise of the Court's discretion, pursuant to s 69 of the Land and Environment Act 1979, it is appropriate to take account of the fact that the respondent has been wholly successful in the proceedings. The Court will, therefore, make an order for costs in favour of the respondent.

The Court makes the following formal orders:- (1) Application dismissed. (2) The applicant is ordered to pay the respondent's costs.

(3) The exhibits, except exhibit 2, may be returned.

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