Shalhoub v Johnson

The lay evidence - affidavits

1. Susan Shalhoub gave evidence that when she came to live at No 8 in 1980 there was a single-storey dwelling on the property. She says that a second storey was added in about 1982. She says that there has always been a concrete retaining wall running between No 8 and No 6.
2. Ms Shalhoub gave evidence about the condition of the property "prior to 2012". She deposed: I observed no cracking in the property at 8 Helena Street prior to 2012. I observed no cracking in the footpath, garage or carport areas of 8 Helena Street prior to 2012. The retaining wall between 8 Helena Street and 6 Helena Street appeared to me to be standing straight prior to 2012. I observed no cracks in the retaining wall prior to 2012.
3. Ms Shalhoub gave evidence about the works conducted on No 6 in 2012. She deposed: I observed development and construction works taking place at 6 Helena Street throughout 2012. I observed that during 2012 the ground level of the backyard of 6 Helena Street and the area between the side of the house and the retaining wall was lowered by up to a metre in some areas. I observed that no support was put in place for the retaining wall from the 6 Helena Street side whilst those excavations were taking place during 2012.
4. Ms Shalhoub continued: In late 2012 observed that the retaining wall and fence between 8 Helena Street and 6 Helena Street had started to lean away towards 6 Helena Street. I observed that the retaining wall had lowered and separated away from the concrete footpath along the side of our property. In late 2012 I also saw cracks appearing in the retaining wall. In late 2012 I also saw that cracks had appeared in the concrete pillars in the carport and the concrete benches in the carport. I observed that cracks had appeared in the concrete slab which forms the floor of the garage and carport area.
5. Ms Shalhoub gave further evidence about various cracks appearing in structures on No 8 "since 2012" (see Affidavit at paragraphs 14 to 17 and 19), and deposed that since 2012 she has observed that "the retaining wall has continued to lean further towards 6 Helena Street".
6. Nicholas Shalhoub also gave evidence that when he came to live at No 8 in 1980 there was a single-storey dwelling on the property and that a second storey had been added by around 1982. Mr Shalhoub deposed: Since the Property was purchased by my parents in 1973, but for the second storey being added around 1982 and the new boundary footpath around 1995, no significant changes, developments, alterations or renovations have taken place on the Property. The garage and carport which are currently on the Property were on the Property when it was purchased by my parents in 1973. Since we moved in to the Property in 1980, it has always been our usual practice to park one or two vehicles in the garage and carport area. The existing hot water system has been installed on the Property since 1981. The existing garden beds and brick planter boxes have been on the Property since before 2012. I recall they were installed around 1981 or 1982. Prior to 2012 there was no cracking in those planter boxes.
7. Mr Shalhoub also gave evidence about the condition of the property "prior to 2012". He deposed: Prior to 2012 I observed no cracking in the retaining wall. Prior to 2012 I observed no cracking in the footpath along the western boundary of the Property. That footpath has been in place since around 1995. Prior to 2012 I observed no cracking in the garage or carport structures on the Property. Prior to 2012 I observed no cracking in the concrete slab at the rear of the Property. The concrete slab, which forms the floor of our carport and garage consists of two smaller slabs. The seam between those slabs runs parallel to the boundary between the Property and the Next Door Property. Prior to 2012 the two slabs sat flush besides each other such that I observed no gap between the slabs. Prior to 2012 I observed the retaining wall to not be leaning. The retaining wall had appeared to be stable and standing vertically until the second half of 2012.
8. In relation to the works carried out on No 6 in 2012, Mr Shalhoub deposed: Works began on the Next Door Property pursuant to the Development Application as early as January 2012 and continued through to December 2012. During this period, I observed the following development works taking place: (a) Excavations of the land on the Next Door Property, in particular in the yard area, (b) Installation of an inground pool, (c) Significant landscaping works (completed around 2013 or 2014), and (d) Removal and replacement of the dividing fence which ran on top of the retaining wall between the properties.
9. Mr Shalhoub exhibited to his affidavit a number of photographs, taken at various times in 2012, that show the works in the rear yard of No 6 (and for a short distance along the side of the house on No 6). There is some controversy about the dates of two of the photographs (which appear in the Court Book, Exhibit H, at pages 35 and 36), in particular as to whether they were taken on 10 November 2012 as stated by Mr Shalhoub, or rather at some time between 21 June 2012 and 5 September 2012. This matter, and a related question about one of the photographs exhibited to Mr Johnson's affidavit, will be returned to later.
10. Mr Shalhoub continued: The excavations were performed using a mobile backhoe, which also had a large chisel type attachment, and a jackhammer. When the excavations were taking place in the Next Door Property, I could feel vibrations in our house. I observed that the excavation resulted in the ground level in the yard of the Next Door Property side being lowered by approximately 60cm. I observed that the removed stone and soil filled approximately 30 bins, each about 6 or 10 cubic metres in capacity. I can only recall seeing a thin layer of soil being returned so that artificial turf could be installed upon it around 2013 or 2014. Whilst these works were being performed, I observed that no underpinning or any supports for the retaining wall being put in place during the above described excavations.
11. Mr Shalhoub deposed: Around September or October 2012 I first observed cracks appearing in the footing of the retaining wall. I also observed that the concrete benches in the carport were separating from the concrete columns in the carport. I observed that the retaining wall had separated from the concrete footpath along the western boundary and was leaning towards the Next Door Property. I could also see that the seam in the concrete slab at the rear of the property had opened so that a gap was visible.
12. On 24 October 2012 Mr Shalhoub sent a letter to the Randwick City Council which included the following: There is a retaining wall between 6 and 8 Helena Street. This wall has now started to lean more since a backhoe was used to dig out the pool. The backhoe place and then moved tons of earth and sandstone against this wall and now have lowered the height of earth against the wall. The wall is now tilting more since this happen and is a danger of falling. On Randwick council's advice I was told to contact Paul Roff certifier. I spoke to him and he said that would come and inspect the wall and damage between 6 and 8, I never hear from him again. There is cracking in the garden walls and cracks and structural damage in the car port and its column on our side of the retaining wall I have photos of the backhoe right up against the retaining wall. Could you please send out a council engineer to inspect the wall and damge. Mr Shalhoub does not recall receiving any response to the letter. I note that no photographs of the backhoe "right up against the retaining wall" were put in evidence.
13. He deposed that in late-November 2012 he arranged for Mr Mark Chapman "to inspect the retaining wall", and that the inspection took place on 29 November 2012. Mr Shalhoub deposed: Mr Chapman inspected the retaining wall on 29 November 2012. The builder working on the Next Door Property allowed Mark Chapman on to the Next Door Property to inspect the retaining wall. I can distinctly recall that around the area which is now the barbeque and patio area of the Next Door Property the ground level alongside the retaining wall had been lowered….I can then recall hearing the following exchange between Mark Chapman and the builder: Mr Chapman: This retaining wall needs to be underpinned to stop it moving. You can see that it is already moving. The builder: I can see that. To underpin the wall with piers would probably cost around $4,000. I will ask the owners about this.
14. Mr Shalhoub exhibited to his affidavit a copy of a letter dated 24 January 2013 he received from Mr Chapman concerning the inspection and related matters. The letter was written under the letterhead of Chester Group Development and Project Management, a firm of which Mr Chapman is a director. I note that Mr Chapman does not claim to have any qualifications as an engineer. The letter included the following: After visiting your property on 29th November 2012 and inspecting the issues you have raised, I note the following as items of concern and significance. Obvious slant of boundary fence on the western side of the property. Separation and cracks in concrete slab and drop in slab level in south west corner of slab in front of carport at rear of property. Along the western boundary, there are signs of cracking and movement in the concrete structures due to movement in the soil and footings along the neighbouring boundary. Movement to the fence footings and concrete structures along the western boundary appear to have been caused by the excavation of neighbouring land along the western boundary and is visible where soil was not in place under the strip footing for the boundary fence. Significant signs of the movement can be seen in the separation of render on the brick pillars and structures and also in the concrete slab. The contracting builder on the neighbouring property gave me permission to look at the strip footing from the neighbours side of the fence where I was able to put my hand in under the strip footing and see a significant gap where soil had fallen away from under the footing due to the excavation of surrounding soil and earth.
15. Mr Shalhoub further deposed: I have observed that no work was done following 29 November 2012 to support or underpin the retaining wall. During the period of October to December 2012 I observed the leaning or rotation of the retaining wall to continue to increase in angle towards the Next Door Property. I could also observe that the cracking and separation was worsening and widening during this period. Over this period of about six weeks the separation of the retaining wall from the concrete footpath had opened to an extent that I was able to slide my hand into the gap. Following December 2012 the rate at which the retaining wall was leaning and the rate at which cracks were opening slowed, but these have continued to worsen at a steady, but slower, rate since late 2012.
16. Mr Shalhoub gave further evidence about various cracks appearing or opening up in structures on No 8 "since late 2012" (see Affidavit at paragraphs 39 and 60) and a number of photographs of the cracks are exhibited to his affidavit.
17. Finally, Mr Shalhoub gave some evidence about the sewer line for No 8 that runs underground near the boundary with No 6. He deposed that in about 1995 the old terracotta pipe was replaced with a new PVC pipe, and a new footpath was laid by the Council along part of that boundary area. Mr Shalhoub deposed that apart from that "new boundary footpath" and the second storey, no significant changes, developments, alterations or renovations have taken place on No 8 since 1973. He also deposed that aside from the removal of some roots from the sewer pipe in 2011, there have not been any issues with the sewer line since 1995. A report Mr Shalhoub obtained from a plumber in May 2017 suggests that there were then "no major cracks or misaligned joints within the system".
18. Mr Chapman deposed that he attended No 8 on 29 November 2012 and observed that the boundary fence and retaining wall "was visibly slanted or rotated towards the neighbouring property at 6 Helena Street". He deposed that a builder in the backyard of No 6 agreed to let him come over "to have a look at the footings for the fence". Mr Chapman further deposed: Once on the 6 Helena Street side of the boundary wall I observed that there was a gap between the base of the boundary retaining wall and the ground beneath. I was able to run my hand along this gap under the strip footing. I was able to observe that there were no visible props or support for the retaining wall or fence. I then had a short conversation with the builder to the following effect: Mr Chapman: This wall needs support to stop it from moving. It is already moving.
19. Mr Chapman annexed to his affidavit his letter to Mr Shalhoub dated 24 January 2013, as well as a letter dated 10 January 2017 (written on Chester Group letterhead) sent to Mr Shalhoub following another visit to No 8 on 10 January 2017.
20. Ms Krassoi deposed that she lived at No 6 between June 1998 and December 2005. After referring to the retaining wall, and stating that its height varied between approximately 20cm and 45cm, she deposed: I observed that the retaining wall had a lean to it. It had a minor leaning towards my house that ran for the full length of the house starting at the southern boundary. I did not notice any further leaning or additional deterioration of the retaining wall during the period we lived at the property. … I observed not only a lean in the fence, but also in the supporting retaining wall.
21. Mr Blackshaw gave evidence to the same effect.
22. Ms Royles deposed that she and Mr Johnson moved into No 6 in 2005. In relation to the retaining wall, Ms Royles deposed: The retaining wall varied in height between approximately 20cm and 45cm and has not changed. When my husband and I purchased our property, I saw that the retaining [wall] was leaning towards our house and say that it had a greater leaning towards the rear of our property than it did at the Helena frontage of our property.
23. Ms Royles deposed to various other matters concerning the relationship between the parties but it is not necessary to refer to these matters here. Commendably, the case was conducted by Counsel in a fashion that focused upon the central issues of legal significance, rather than other matters. I appreciate, of course, that some of these other matters would without doubt be important in the lives of these neighbours.
24. Mr Johnson deposed, in relation to the retaining wall: The boundary between 6 Helena Street and 8 Helena Street is approximately 36.5 metres in length. A concrete retaining wall runs along the entire length, adjacent to the boundary but located within Our Property. The height of the retaining wall is approximately 400mm, as measured from Our Property side (i.e. the lower side). Until March 2018, the retaining wall supported a timber fence, which was attached to the top of the retaining wall by steel posts set into the piers of the concrete retaining wall. Following our purchase of Our Property and prior to 2012, I observed that an approximately 22 metre section of the retaining wall at the rear (i.e. north) of Our Property exhibited some cracks and was leaning inwards towards Our Property. The most noticeable consequence of the retaining wall's lean was the corresponding angle at which the timber fence also leaned. At page 2 of MJJ Documents is a photo of my daughter on a trampoline in 2010. In the background can be seen the fence, exhibiting a lean towards 6 Helena Street. As a point of comparison, I have included at page 3 of MJJ Documents a more recent photo (taken 27th March 2018) of the section of the retaining wall that exhibits a lean. … In contrast to the condition of the retaining wall at the rear, I observed prior to 2012 that an approximately 14 metre section of the retaining wall at the front (i.e. south) of the property was standing largely upright and has remained in that condition since.
25. Mr Johnson gave evidence about the works undertaken on No 6 in 2012, including the following: In February 2012, my family and I vacated Our Property to allow renovations to be undertaken (Renovation). These renovations comprised the remodelling of the rear of our house, the addition of an upstairs level, the construction of an in-ground pool adjacent to the western boundary of Our Property and landscaping at the rear of Our Property. In October 2012, the renovations to the house were largely complete, and my family and I moved back into Our Property. Further landscaping at the rear (north) of Our Property was completed in November and December 2012. The Renovation design required excavation of two areas at the rear of Our Property: first, construction of an in-ground pool along the western boundary (i.e. more than 8 metres from the eastern boundary); and, second, removal of an approximately 3-4 metre length section of garden bed along the eastern boundary (i.e. adjacent to Our Neighbour's Property, 8 Helena Street - being the Plaintiff's property). The section of garden bed removed from the eastern boundary was approximately 400mm in height and was located immediately adjacent to the retaining wall along the eastern boundary. The width of the section of garden bed that was removed varied from 1 to 2 metres. At pages 7, 8 and 9 of MJJ Documents are photos of the garden bed, prior to the removal of a 3-4 metre length section. In the photographs I have identified the approximate section length of the garden bed removed with red rectangles. The reference to "MJJ Documents" is to the exhibit to Mr Johnson's affidavit.
26. Mr Johnson later deposed, specifically in response to the affidavits served by the plaintiff: The only area where the ground level was lowered was through the removal of a 3-4 metre long section of garden bed, of between one to two metres in width, alongside the retaining wall, approximately adjacent to the Plaintiff's carport. The height of the garden bed removed was approximately 400mm.
27. Mr Johnson continued: The excavation and removal of the section of garden bed was undertaken in November 2012 to allow for a concrete slab to be poured, prior to the laying of paving. In the days following the removal of the section of garden bed, a 100mm-thick steel-reinforced concrete slab was poured across a large section of the backyard, including covering the area from which the stated section of garden bed had been removed. To provide additional support to the exposed 3-4 metre section of retaining wall, our builder also constructed a steel-reinforced concrete 'lip', of approximately 200mm in height, buttressed up against the exposed retaining wall. At pages 10 and 11 of MJJ Documents are photos of the concrete slab and additional lip, adjacent to the retaining wall. The additional support of the concrete lip was added at my request, following a discussion I had with the Plaintiff in which she raised a concern about the potential impact upon her property by the removal of the stated section of garden bed. In November 2012, I commenced discussions with the Plaintiff regarding the replacement of the dilapidated fence between our two properties…. During discussions with me about the fence, the Plaintiff alleged that movement of the retaining wall had caused damage to her property and she asked that we repair or replace the leaning section of retaining wall. The Plaintiff indicated that she would not agree to replacement of the fence until we had first repaired the retaining wall.
28. Mr Johnson deposed that in December 2012 he engaged a consulting engineering firm (SDA Structures Pty Ltd) to assess the retaining wall. A report received by Mr Johnson from Mr Kevin Mongey of SDA Structures Pty Ltd dated 22 December 2012 includes the following: As requested, Kevin Mongey from SDA Structures visited your property at 6 Helena Street, Randwick on 19th December, 2012. We were requested to examine the existing eastern boundary fence and base wall between numbers 6 & 8 Helena Street, comment on the condition of the fence and footing and the notable lean of the structure. Over time there have been many occurrences which may have affected the fence and concrete base wall causing it to lean and some of these that we are aware of are noted below but it is beyond the scope of this report to explore the actual causes of the wall lean. … The eastern timber fence and concrete footing wall at 6 Helena Street, Randwick was inspected. The structure is over 10 years old, is approximately 1.8m high from the side of 6 Helena Street and consists of a timber paling fence with some timber framing and steel angle posts, set into a concrete base wall of unknown dimensions below ground (retaining approximately 0.5m of raised ground level on the side of number 8 Helena Street). The entire fence and footing wall is in a very poor condition and dilapidated state and has been in this state for many years. The top of the fence leans into the site of 6 Helena Street by over 200mm in some areas, it has planting growing on sections of it, has many loose/missing palings and any steel nails or angle posts are all badly rusted and loose. There has been no visual record or dilapidation survey presented to us for number 6 or number 8 Helena Street so we are unaware of the prior state of any structures before the date of our inspection. The natural ground level of the area falls from number 8 downwards towards the west across the site of number 6 Helena Street. This is a relatively gentle land slope but may add to the natural pressure on the base wall of the fence causing it naturally to lean over time as this base is retaining approximately 0.5m of the higher ground level of number 8 Helena Street. The footing size of the concrete base wall is unknown and may be an unsuitable [sic] for a permanent structural retaining wall. Sandy soil conditions are most likely present on site, which are prone to natural ground movement around inadequate existing retaining structures. … There is a history of construction work at the properties including the recent renovation works at number 6. From inspection of the brickwork landscaping walls at number 8 adjacent to the boundary, and some concrete bench structures around the pergola, these minor structures are cracked and showing signs of distress from the leaning concrete base wall of the boundary structure. The cracking inspected has certainly been present for some time and is not a recent occurrence in our opinion given the visible growth of moss and aged appearance of the cracked areas. It is possible that these cracks have widened recently but this is not a quantifiable item as no records are available to us of any previous conditions prior to the recent renovations at number 6. An area of paving slab in the centre of the site at number 6 has been newly built in the last few weeks and this would have lowered the ground level locally for a length of 2m to 3m here. With no visual record of the boundary structure prior to the paving slab being built, it is not possible to quantify any damage which may have occurred. Although it is not unreasonable that some existing damage could have worsened or new damage occurred during the building of this slab, given the dilapidated state of the boundary structure it is not reasonable to apportion all cause of deterioration to the building of this slab. The rusting out of all metal in relation to the boundary structure and the lack of maintenance carried out to it has certainly exacerbated the deterioration of the boundary structure. … The base wall is not deemed to be in a condition which could collapse and this structure could well remain in place without much further deterioration for many years. Any further deterioration would be deemed to be an extremely low risk of causing damage to persons or property.
29. Mr Hatzon deposed that he has been a builder for 29 years. In relation to the works done on No 6 in 2012, he gave evidence that the job took 9 months, and he was the only builder on the site, assisted by several tradesmen. In relation to the condition of the retaining wall, Mr Hatzon deposed: During my time working at 6 Helena Street there was a retaining wall that ran along the length of the boundary between 6 and 8 Helena Street. I noticed that the retaining wall had a lean. The lean was more pronounced at the middle and rear of 6 Helena Street than at the front. I say that the retaining wall was dilapidated.
30. In relation to the work carried out, Mr Hatzon deposed: I never saw the bottom of the retaining wall whilst working on the Job. I dug only to the level required for the laying of the concrete slab, which was a maximum of 200 millimetres in depth next to the retaining wall. I dug to a depth of no more than 200 millimetres of soil at the rear area of the property next to the retaining wall to level the ground. I then built a reinforced concrete slab. I put a "return" on the slab. This supported the retaining wall, which was already leaning inwards, that is to the west. I could see the retaining wall. I could not see any gap between the base of the retaining wall and the ground beneath. … I used shovels and picks to complete the Job at 6 Helena Street. I did not use a jackhammer or any vibrating machinery to carry out the Job. I did not use any machines other than shovels and picks during the Job. A pool subcontractor used a mini-excavator to dig the hole for the pool on the western side of the back yard. This machinery was used only for the pool excavation. I made arrangements for a large waste bin to be brought onto the property during the Job for depositing building waste. The bin was brought onto the rear of the property by removing part of the back fence.
31. Mr Hatzon denied that he had ever given consent to Mr Chapman to access No 6.
32. Mr Hatzon further deposed: I had coffee a number of times at 8 Helena Street with Maria Shalhoub at her house at 8 Helena Street, Randwick. I met Nicholas Shalhoub on a couple of occasions. Maria Shalhoub wanted to add a second storey to her garage at the rear of 8 Helena Street. I was invited to look at the rear yard of 8 Helena Street by Maria Shalhoub. While in the rear yard I saw: a. that the existing concrete slab at the back of the garage at 8 Helena Street was very old. In my opinion, the slab had no reinforcement. The slab looked cracked and like it had moved a lot; and b. that there was a gap approximately 50 millimetres wide between the footpath in the rear yard and the retaining wall.

The lay evidence - cross-examination

1. Each of the abovementioned witnesses was cross-examined, albeit only briefly in the cases of Ms Krassoi, Mr Blackshaw and the second defendant, Ms Royles.
2. Ms Shalhoub was challenged about her evidence that prior to 2012 the retaining wall appeared to be standing straight, but started to lean towards No 6 in late-2012. She was also challenged on her evidence about various cracks only appearing from late-2012 and thereafter. She essentially maintained the position as set forth in her affidavit.
3. I did not form a favourable impression of Ms Shalhoub as a witness. She seemed to me to be exceedingly defensive in giving her answers and at times appeared evasive. An example of the former is her response (at Transcript 16) to a photograph of the boundary taken from Helena Lane and said to have been taken in November 2009. Ms Shalhoub was at pains to question the assumption she had been asked to make about the date of the photograph before, it should be said, going on to make a valid point about the poor quality of the photograph (see also at Transcript 18). Another example is her similar reaction (at Transcript 20) to a photograph of the fence she was asked to assume was taken on 8 December 2010. Ms Shalhoub also seemed very defensive (at Transcript 14) when asked about the fence above the retaining wall. She said that she did not remember the fence that well.
4. Ms Shalhoub appeared evasive when she was asked questions about what she meant by "standing straight". At one point (at Transcript 19) she avoided a simple question, and when asked to answer it she stated that she did not "agree with the question". The evasion in relation to that matter continued when she claimed (at Transcript 20) not to understand another question.
5. Some other parts of Ms Shalhoub's evidence were unimpressive. Her evidence (at Transcript 20-24) about what she could actually observe from No 8 about the works (in particular excavation) on No 6 in 2012 is an example. Here, she did not appear to me to be trying to give direct and truthful answers. One answer she gave was to the effect that it was "obvious" that the level of parts of No 6 had been "lowered by up to a metre". That evidence was implausible.
6. I would not be prepared to accept the evidence of Ms Shalhoub unless it was corroborated by other evidence that is likely to be reliable.
7. Mr Shalhoub was cross-examined at some length. He was challenged about most aspects of his testimony, including by reference to events concerning No 8 going back to the 1990s. I did not form a favourable impression of Mr Shalhoub as a witness.
8. He, too, was evasive at times. After initially accepting that he had signed an application to the Council in February 1993 for the removal of a tree located on the footpath outside the front of No 6, and written a letter to the Council in April 1992 about the tree, Mr Shalhoub suggested (at Transcript 48) that there was "something really wrong" about the documents because there were said to be two different versions of his signature. Mr Shalhoub also had a tendency to be concerned about what the cross-examining counsel was trying to achieve, rather than simply trying to answer the question asked.
9. I note that Mr Shalhoub also took issue (at Transcript 70-71) with the photograph of the boundary taken from Helena Lane and said to have been taken in November 2009. Mr Shalhoub stated that he did not see it as "a genuine photo", and that it was a fake, altered by someone. Mr Shalhoub was prepared to agree that the photograph appeared to show the fence and retaining wall to be tilted or leaning towards No 6, but asserted that he knew that not to be true. He went so far as to state that without a doubt he was one hundred percent sure that the retaining wall and fence were straight up and down. That claimed degree of certainty stood in marked contrast with other parts of his evidence where he appeared keen to portray that he almost never went into the rear portion of No 8. Mr Shalhoub gave several answers to that effect (at Transcript 77-79) when asked about the photograph of the fence taken on 8 December 2010. I think that Mr Shalhoub was deliberately playing down his involvement in this regard in order to avoid close questioning about the condition of the fence (see also at Transcript 82).
10. The evidence given by Mr Shalhoub (at Transcript 92-94) about the concrete "lip" that was constructed on No 6 near the retaining wall was problematic. Mr Shalhoub was shown a photograph of the concrete slab and lip, said to have been taken on 24 November 2012. He suggested that the lip (the "return" referred to by Mr Hatzon in his affidavit) was not constructed until well into 2013. This evidence was not contained in Mr Shalhoub's affidavit and appears contrary to the pleaded case which refers to works concluding in mid-December 2012. Mr Shalhoub went on to say that he knew the lip was not there until 2013 because in 2013 he went onto No 6 with an engineer and "ran my hand underneath". Mr Shalhoub suggested that the retaining wall "basically hung there in 13 [2013] unsupported". Again, there was no mention of these matters, which would plainly be relevant and indeed significant, in Mr Shalhoub's affidavit.
11. The evidence given by Mr Shalhoub (at Transcript 106-107) about no issues with the sewer line after 1995 is also problematic. It is firmly contradicted by documents in the records of the Council which I regard as reliable (in particular the City Services report of 5 September 2005 and the Works Report of 11 November 2008).
12. Overall, I gained the impression that Mr Shalhoub was prepared to tailor his evidence in the interests, as he perceived it, of the plaintiff's case. I do not regard him as a reliable witness. I would not be prepared to accept his evidence unless it was corroborated by other evidence that is likely to be reliable.
13. Mr Chapman readily conceded that he had a close relationship with Mr Shalhoub. He was quite certain that he carried out his inspection on 29 November 2012. When confronted with the photograph said to have been taken on 24 November 2012, and the suggestion that it was not physically possible to run a hand along a gap under a strip footing in that location, Mr Chapman said that he was not lying but may be mistaken. He also suggested that he "could have been further along" to the side of the house on No 6, and offered that whilst he could not recall, his best memory was that he was able to put his hand under a strip footing "along that fence line in that area".
14. Notwithstanding the friendship between Mr Chapman and Mr Shalhoub (which Mr Shalhoub appeared to play down in the witness box), and Mr Chapman's evident desire to assist Mr Shalhoub (for example, by providing the letter dated 24 January 2013), I am prepared to accept that the claimed inspection is not entirely an invention on his part. I do not think it likely that Mr Chapman would deliberately give false evidence about the matter, and I am therefore prepared to accept that on about 29 November 2012 he went on to No 6 (although probably not at the invitation of Mr Hatzon, who denied that he allowed Mr Chapman onto the site).
15. Difficulties nonetheless remain with Mr Chapman's account. If one accepts (as I do) that the photograph was indeed taken on 24 November 2012, and if one further accepts (as I do) Mr Hatzon's evidence that it would be impossible to put a hand under the retaining wall in the area of the concrete slab, Mr Chapman cannot on 29 November 2012 have placed his hand in any gap between the base of the retaining wall and the ground beneath, in that area. In these circumstances it is difficult to be confident about what Mr Chapman actually did and what he actually observed. No assistance is obtained from any notes or photographs taken by Mr Chapman of the occasion. He agreed that he did not make any notes or take any photographs. There is a considerable degree of imprecision about the evidence including, as conceded by Mr Chapman, as to where he may have been when he made his observations.
16. As already noted, Ms Krassoi and Mr Blackshaw were cross-examined only briefly. The testimony of neither was challenged in any fundamental way. Mr Blackshaw confirmed that from 1998 he could observe that there was a minor lean in the paling fence on top of the retaining wall, and a minor lean in the retaining wall itself. He said that you would not need a plumb line to tell that the fence was leaning into No 6.
17. Ms Krassoi said that the wall had a lean and the fence was in a pretty poor state. She agreed that there was a minor lean in the fence and, by reference to the 8 December 2010 photograph of the fence, said that "it was worse than that at the back". Ms Krassoi agreed that from 1998 to 2005 both the retaining wall and the fence had a minor lean "off vertical, a little bit".
18. There is no reason not to accept the evidence given by Ms Krassoi and Mr Blackshaw as honestly given to the best of their recollections. It is preferred to the evidence given by Ms Shalhoub and Mr Shalhoub about the retaining wall and fence.
19. Mr Hatzon was principally challenged about the extent of excavation of No 6 carried out in 2012, and whether shoring of the retaining wall should have been installed in accordance with a condition of the development consent (condition 29). Condition 29 is in the following terms: All excavations and backfilling associated with the erection or demolition of a building must be executed safely in accordance with appropriate professional standards and excavations must be properly guarded and supported to prevent them from being dangerous to life, property or buildings. Retaining walls, shoring or piling must be provided to support land which is excavated in association with the erection or demolition of a building, to prevent the movement of soil and to support the adjacent land and buildings, if the soil conditions require it. Adequate provisions are also to be made for drainage. Details of proposed retaining walls, shoring or piling are to be submitted to and approved by the Principal Certifying Authority for the development prior to commencing such excavations or works.
20. Mr Hatzon gave his evidence in a confident manner. He appeared to have a reasonably good recollection of the works he undertook on No 6 in 2012, and generally seemed to be attempting to directly answer the questions put to him. I formed a favourable impression of him as a witness and I generally accept his evidence.
21. In relation to condition 29 of the development consent, Mr Hatzon gave evidence to the effect that he complied with the condition but there was no need for shoring of the retaining wall because there was no excavation (as opposed to soft soil removal) in that area. He later stated (at Transcript 126) that there was excavation of 100mm for the concrete slab, as well as the removal of soil from the garden bed near the retaining wall and fence. Mr Hatzon gave evidence (at Transcript 131 and 143) that there was about 200mm of soft soil taken away from the garden bed. (Mr Hatzon had earlier suggested at Transcript 129 that there was about 300mm of soft soil in the garden bed.) Mr Hatzon denied (at Transcript 132) that any hard compacted ground was removed near the retaining wall. Mr Hatzon maintained that he did not use any machinery when excavating or removing soil. He also denied (at Transcript 143) that he dug at the base of the retaining wall.
22. Mr Hatzon also gave evidence about the condition of the retaining wall (which he sometimes described as a "bund wall"). He said that when he established the site at the start of the project, he noticed that the whole of the retaining wall had a lean, which was more pronounced at the middle and rear of the property than at the front. He declined to accept that it was "mostly vertical but not 100% vertical". Mr Hatzon said it was "more than not vertical" and that it was "poor". Mr Hatzon said that he saw that the retaining wall was dilapidated, and that it had failed many years earlier. He said that the lean in the fence was not necessarily due to the wall underneath it. Mr Hatzon denied that after he finished his works the retaining wall leaned much more significantly into No 6, and that he destabilised the wall so as to cause a lot more rotation. I note that it was not put to Mr Hatzon that he had a conversation with Mr Chapman about movement of the wall or a need for underpinning of the wall.
23. In relation to the lip, Mr Hatzon said that he put it in for structural reasons, to retain or stabilise the wall, to "stop the roll of the retaining wall continuing". Mr Hatzon agreed that he did not seek the advice of an engineer about the lip.
24. It should be noted that Mr Hatzon stated that there had been no existing concrete slab. He said that there were only pavers laid on dirt which were removed to make way for the concrete slab. He identified the slab in the photograph at Exhibit H page 38 (said to have been taken by Mr Shalhoub on 5 September 2012). Mr Hatzon also stated that the barbeque area shown on the construction plan (Exhibit E) was not built.
25. Finally, it should be noted that Mr Hatzon said that when he established the site he noticed that on No 8 there was a gap of about an inch or an inch and a half long between the concrete slab on the side of the house and the retaining wall.
26. Ms Royles was tested about her evidence as to the lean of the fence and the retaining wall. She agreed that when she first moved into No 6 she noticed a minor lean in those structures, and she agreed that it was a little bit worse at the back. She recalled that the retaining wall was tilted so the fence was tilted. When shown the photograph of the fence taken on 8 December 2010, Ms Royles agreed that that was the area where it had the biggest lean, although she later said that she recalled that "further back" it leaned a little bit more. Ms Royles said that in the six years between 2012 and 2018 (when the fence was replaced with a new fence) she did not see any additional movement of the wall. She denied that around September 2012 the fence "had rotated even more". She said she did not know anything about cracks starting to open up in No 8, and continuing to get worse, since the building works done in 2012.
27. Ms Royles gave her evidence in a straightforward manner. I accept her evidence.
28. Mr Johnson was asked about complaints from the neighbours at No 8 in relation to the retaining wall. He said that he had no recollection of any complaints prior to 2012 that the retaining wall was failing. He agreed that around 2012 when works were being done there were conversations, generally with the plaintiff, that involved her concerns about the retaining wall "about where their carport is". (I interpolate that the plaintiff's carport is located to the south of the garage.) Later, Mr Johnson agreed that the plaintiff had expressed concerns after the removal of the garden bed, and he had then suggested to the builder that additional support be added. Mr Johnson did not accept that the concerns expressed by the plaintiff were about the possible destabilisation of the retaining wall. However, even if words such as that were not used, I think it likely that there was concern expressed about the adequacy of the wall, and this prompted Mr Johnson's suggestion to Mr Hatzon of some additional support. I nonetheless accept Mr Johnson's denial that one of the reasons he made the suggestion was that he considered that the wall needed additional support.
29. When shown the photograph of the fence taken on 8 December 2010, Mr Johnson said that the fence showed a clear lean, but he would not disagree if someone said it was "minor". Mr Johnson did not accept that there was a much clearer lean in the wall after the builder had done his works, and he denied that he saw it as a lot more precarious.
30. Mr Johnson was tested about the reasons why he retained SDA Structures Pty Ltd in December 2012. He stated that he (and Ms Royles) largely wanted to know whether to build a new fence on top of the wall or put it to one side. He said that the fence was then in a worse condition due to more missing palings. Mr Johnson denied that he engaged the engineers to assess whether the lean in the wall was getting worse, but accepted that he wanted an assessment of the structural integrity of the wall. Mr Johnson said he was not qualified to know whether there was any substance to the plaintiff's complaint, but thought that a report would rule out "the prospect of the retaining wall being problematic for us" (see Transcript at 175 in re-examination).
31. Mr Johnson said that he did not believe that the retaining wall has continued (presumably since 2012) to rotate towards No 6 causing damage to No 8.
32. Finally, Mr Johnson denied that he had any connection with Mr Hatzon other than that Mr Hatzon was "the builder who came to us through the architect".
33. Mr Johnson gave his evidence clearly, and he was apparently doing his best to give accurate evidence. I note that at one point (at Transcript 167) he quickly corrected an error in an earlier answer. I note further that in so doing he stated that he "absolutely did get a consulting engineering firm to come and assess the retaining wall". This episode, whilst minor in itself, is indicative of a witness wanting to give accurate answers without being overly concerned with whether the answers would help or hinder their cause. Overall, I formed a favourable impression of Mr Johnson as a witness, and I generally accept his evidence.

Expert evidence

1. The plaintiff called evidence from a structural and civil engineer, Mr Daniel Cully. He prepared a report dated 16 July 2019. Two earlier reports, dated 20 February 2018 and 19 March 2019, were appendices to the report. Mr Cully made a number of inspections of the site, including on 13 October 2017, 17 January 2018, 31 January 2018, 2 February 2018 and 26 October 2018. Mr Cully was asked to express his opinion on various matters including as to the cause or causes of the movement in the retaining wall.
2. On 13 October 2017 Mr Cully established a number of monitoring points on what he described as the corridor under investigation. Some of these points are referred to at pages 12-16 of the report. These points are upon structures other than the retaining wall itself. Mr Cully undertook measurements of movement over time at these points. The details of these measurements do not seem to be contained in the report.
3. Mr Cully conducted an analysis of existing survey data. The available surveys were: 1. Hill & Blume 31 May 2011; 2. Jackson 7 February 2013; 3. Ballenden 11 April 2017; and 4. CMS 17 January 2018.
4. Mr Cully excluded the Hill & Blume survey because it lacked data in respect of No 8. That survey only included survey points on No 6.
5. In brief, Mr Cully considered the survey data from the other surveys in respect of either side of the retaining wall and derived figures for "wall height" at various points, from the difference between the levels on No 8 and No 6. The wall heights at those points were then compared over time across the different surveys.
6. Mr Cully concluded, based on his review, that the ground level on the No 6 side of the retaining wall in the vicinity of the corridor under investigation "was altered (excavated and filled), each time, in between the dates of each survey".
7. It should be stated at once that the survey information relied upon concerned a period of time that commenced after the carrying out of the works on No 6 in 2012 that are the focus of the plaintiff's case. In cross-examination, Mr Cully accepted, in relation to one of his figures for percentage increase in retaining wall height, that it said nothing about what occurred on site in 2012 or prior to 2012 (see Transcript at 184). In any event, Mr Cully's analysis of the survey data (which is set out at pages 18 to 20 of his report) led him to conclude that, except for two locations, the ground level on No 6 was reduced (excavated) in the period between 7 February 2013 and 17 January 2018. He stated that this excavation or lowering of the ground level "has had the effect of increasing the height of the retaining wall by between 7% to 43%" (see report at page 20).
8. Mr Cully also referred to a monitoring program undertaken by CMS Surveyors in respect of the period 17 January 2018 to 17 October 2018. This program was compromised to a degree by damage to or disturbance of some of the 91 monitoring points. Data in respect of a number of the monitoring points was accordingly disregarded. Based on the results of the monitoring program Mr Cully concluded, inter alia: Excluding the damaged or destroyed monitoring point results, the monitoring results indicate that the wall is moving generally in a westerly direction, towards No.6 Helena Street. The movement direction and magnitude are consistent with the expected rotation of the wall due to destabilization as a result of excavation of material at the base of the boundary retaining wall on the western side. … Following a review of the surveys provided, it is clear that the ground level on the No 6 side of the boundary retaining wall has been lowered. The current state of the path and wall (misalignment/gaps etc) indicate that prior to commencement of the monitoring program, significant movement of the retaining boundary wall had occurred. This is documented in Triaxial Consulting Report TX12845.00-01.rpt.dc. The monitoring program has confirmed and proven that the retaining boundary wall is moving in a westerly, destabilizing direction. The monitoring program has provided data indicating clear and measurable movement of the structures within the corridor under investigation, for the full length of the boundary.
9. In relation to the cause or causes in the movement of the retaining wall, Mr Cully stated: It is my opinion that the lowering of the ground level (up to 43% increase in wall height) on the No.6 side is the main cause contributing to the previous and ongoing movement of the boundary wall and structures located to the east of the boundary wall in the corridor under investigation. I am of the opinion that the excavation undertaken along the common boundary of retaining wall under consideration, on the No.6 side, has resulted in destabilizing of the retaining wall structure. … The excavation has resulted in destabilizing and overloading of the retaining wall (from the retained side) beyond its retaining capacity, following the removal of the soil on the No.6 side. The removal of soil from the No.6 side of the retaining wall resulting in the removal of passive (restoring) forces, critical for the stability of the wall structure, increasing the loading on the wall. Following removal of the passive forces from the retaining wall force system (due to excavation), unbalancing of the force system occurred, resulting in excessive deflection/rotation of the wall.
10. In a later section of his report, Mr Cully responds to a report of Dr Martens dated 9 March 2019. It is not necessary to refer here to that part of Mr Cully's report. The essential points of agreement and disagreement between the experts can be seen from their most recent reports and particularly from their Joint Report dated 12 August 2020. I will note, however, that it is apparent from Mr Cully's response that he relies to a significant extent upon the instructions contained in the letter of instruction from Oliveri Lawyers dated 14 June 2019, and the content of Mr Shalhoub's letter to the Council of 24 October 2012 and Mr Chapman's letter to Mr Shalhoub dated 24 January 2013. Mr Cully states, for example, that prior to the execution of the renovation works on No 6 "there were no issues in the corridor along the common boundary" and that "the common boundary retaining wall was stable prior to the renovations to 6 Helena Street in 2012" (see pages 38, 39 and 47 of the report; see also pages 18 to 21 and 26 of Mr Culley's report of 20 February 2018).
11. Dr Martens is a civil, environmental and geotechnical engineer. He inspected the site on 17 December 2018. He compiled a history of construction works that have occurred on or near to No 6 and No 8 Helena Street. He considers it likely that the retaining wall was constructed in the 1920s, around the time of construction of the original homes on the properties. Dr Martens expressed the view that many of the construction works on No 8 over the years were in close proximity to the retaining wall, and are likely to have adversely affected its integrity, position and stability. Dr Martens referred to some Google Street View photographs, including the photograph referred to earlier said to have been taken from Helena Lane in November 2009. He stated that the photograph shows the fence post on the retaining wall to be leaning. However, as I have said, the quality of the photograph is poor. Dr Martens also referred to the SDA Structures Pty Ltd letter of 19 December 2012 in which it was stated, inter alia, that "the entire fence and footing wall is in a very poor condition and dilapidated state and has been in this state for many years".
12. Dr Martens then considered Mr Cully's report of 16 July 2019, and in particular his analysis of survey data. He expressed the view that the analysis was flawed for a number of reasons, including the failure to consider the Hill & Blume survey of 2011 (which Dr Martens considered to be a critical omission), and that almost none of the ground level observation points fall on an actual survey point.
13. Dr Martens carried out his own analysis of the available survey data. This analysis (which is set out at Attachment D to the report) suggests that at Observation Point D, near the area of the garden bed that was removed in 2012, there may have been a reduction in ground level between 31 May 2011 and 7 February 2013 of 24.8cm. I note, however, that Dr Martens states that as many of the survey data points are a considerable distance from the Observation Point there is considerable uncertainty associated with each ground level estimate, in the order of +/- 5cm, or possibly +/- 10cm where the levels are estimated from survey points which are more than 2m from the Observation Point. Dr Martens notes that there have been no material changes in ground level at Observation Point D since 2013.
14. The next section of Dr Martens' report concerns the monitoring program undertaken by CMS Surveyors. Dr Martens listed a number of matters that in his view cast doubt upon the reliability or accuracy of the results. He expressed the opinion that the results cannot be relied upon as evidence of retaining wall movement to the west or to demonstrate that there has been any consistent retaining wall movement during the survey period (17 January 2018 to 17 October 2018).
15. In relation to the causes of rotation in the retaining wall, Dr Martens stated: It is my opinion based on the information that I have considered, together with what I have observed on 6 and 8 Helena St and my experience with similar retaining walls, that the rotation observed in the Retaining Wall has been on-going for many years and has been caused by a number of factors, many of which are attributable to construction works and activities on 8 Helena St, and have little if anything to do with the 2012 renovation works on 6 Helena St. … The Retaining Wall has not been constructed with any drainage holes at its base, nor has it been constructed so that any water accumulating in the backfill can be adequately drained via a piped drainage system to an appropriate discharge point. It is accepted engineering practice to incorporate drainage behind retaining structures so as to relieve elevated pore pressures on a retaining wall when water accumulates behind the retaining wall. Drainage behind a retaining wall prolongs the life of the retaining wall and reduces the risk of failure. This opinion is not speculative as asserted in the Third Triaxial Report, but rather is based on my visual observation of the wall. The fact that some of the backfill may be sandy is irrelevant in terms of drainage because water accumulating behind the Retaining Wall still requires somewhere to drain to. There are numerous potential sources of water and therefore elevated pore pressure adjacent to the Retaining Wall… Since its construction, the Retaining Wall has been subject to various significant increases in load on 8 Helena St behind the Retaining Wall. These load increases have caused on-going long-term pressure on the Retaining Wall acting in a westerly direction, likely causing it to rotate to the west, and include: Construction of the brick garage adjacent to the northern portion of the Retaining Wall. On-going loading from vehicles parked in the garage will further contribute to this load. Construction of the carport, including oversized concrete columns and concrete benches adjacent to the brick garage. On-going loading from vehicles parked under the carport will further contribute to this load. Construction of the first floor additions to the dwelling on 8 Helena St, including temporary loading with construction equipment and scaffolding, but particularly the building extensions to the north and sought of the pre-existing dwelling which would generate long-term on-going loads. Construction of the footpath and any services behind the Retaining Wall on 8 Helena St. Construction of the raised brick Garden Bed 1 adjacent to the southern portion of the Retaining Wall. Construction of the raised brick Garden Bed 3 on and adjacent to the central portion of the Retaining Wall. The underpinning works undertaken on the north west portion of the dwelling on 8 Helena St. Garden Bed 1 and Garden Bed 3 contain vegetation which has, through the action of its roots, the capacity to exert considerable westerly pressure on the Retaining Wall, contributing to a westerly rotation. Garden Bed 3 in particular maintains vegetation very close to the Retaining Wall. I have directly observed the vegetation, and in my experience it is not uncommon for low retaining walls to be rotated over time where the action of root growth and poor drainage exert on-going pressure on a wall. Historically there is also evidence that the Fig tree growing in nature strip adjacent to 8 Helena St as early as 1993 (which was removed by Council in 2008) has penetrated behind the Retaining Wall, with this penetration extending the full length of the dwelling. … I am convinced that based on the survey evidence with which I have been provided, that significant excavation at the base of the Retaining Wall did not occur as part of the redevelopment works on 6 Helena St during between January 2012 and December 2018. The detailed analysis I have undertaken of survey data on 6 Helena St between adjacent to the Retaining Wall for 2011, 2013, 2017, 2018 and 2019 demonstrates that apart from say a short 4m section adjacent to Garden Bed 3 on 8 Helena St where levels were lowered by 10-30cm, ground levels did not materially change between 2011 and 2019. The short section of lowered ground levels on 6 Helena St was braced and stabilised with a resisting concrete slab and concrete lip that acted to prevent any significant material loss from behind the Retaining Wall that could cause wall rotation, and caused further improved base stability for the Retaining Wall. The survey analysis presented in the Third Triaxial at Tables 1 to 7 report cannot be relied on. Firstly, the Tables do not document the level of uncertainty associated with each measurement, which in my opinion is significant; and secondly, the Tables only report findings on total wall height and wall height changes, rather than assessing ground level changes on 6 Helena St. It follows that the view expressed in the Third Triaxial Report that 'excavation undertaken along the common boundary of retaining wall under consideration, on the No. 6 side, has resulted in destabilising of the retaining wall structure' is erroneous. Based on my site observations and review of available information, the Retaining Wall has been rotated towards the west for a considerable period of time prior to 2012. My view is that the 1956 garage and the 1981-1982 first floor dwelling additions were likely significant sources of pressure on the Retaining Wall, but that other historical works on 8 Helena St as well as the impacts of vegetation roots behind the Retaining Wall, were also contributing factors. The CMS Monitoring Surveys conducted during January, April and October 2018 contain a number of inconsistencies and are the subject of survey error in the order of +/- 7mm in an east-west and north-south direction. The CMS Monitoring Surveys do not in my opinion provide strong evidence of any westerly wall movement during January to October 2018. It is worth observing that no significant excavation or construction works occurred on 6 Helena St during that period. Based on my inspection of the Retaining Wall, as well as my consideration of various historical works within 8 Helena St, I am of the view that the Retaining Wall has rotated over time as a result of excessive loads imposed behind [or upslope of] the Retaining Wall (surcharge loads), the impact of plant roots behind the Retaining Wall, and increased pore pressures and poor drainage behind the Retaining Wall on 8 Helena St. These factors have likely occurred and acted over a considerable period of time on the Retaining Wall, and are not associated with any construction or excavation works on 6 Helena St.
16. Finally, Dr Martens expressed the opinion that the retaining wall in its current condition is not at risk of collapse and will likely be capable of remaining in service without any material change for many years.
17. The Joint Report of the experts records some points of agreement. These are: 1. the retaining wall was constructed in approximately the 1920s; 2. ground survey points near to or on the boundary retaining wall between 6 and 8 Helena Street are not located in the same position between consecutive survey events; 3. based on the information available, the works undertaken on 6 Helena Street from 2012 are generally described as consisting of - rear dwelling additions; landscaping; pool construction; footpath reconstruction adjacent to the retaining wall; and replacement and relocation to the west of the existing timber fence that was formerly located on the retaining wall; 4. the dwelling additions were minor and at a sufficient distance from the retaining wall so as not to cause any structural deterioration of the retaining wall; 5. the pool construction was undertaken a considerable distance (approximately 7m) from the retaining wall and could not have caused any structural deterioration of the retaining wall; and 6. there is no survey data revealing any rotation caused by the excavation works (noting, however, that Mr Cully resiled from this in cross-examination at Transcript 252-3).
18. Otherwise, the Joint Report reflects the continuing differences between the experts. Some of these differences were taken up in cross-examination, particularly in the cross-examination of Mr Cully.
19. Mr Cully was cross-examined at length. In part, this may be explained by the fact that the methodology that lay beneath his analysis of the survey data was not disclosed in his report (see Transcript at 195 and 197-8). The methodology was largely brought out in the course of cross-examination. Mr Cully was firmly tested about his analysis generally, and in particular by reference to his figure of a 43% increase in retaining wall height at point A1, which is near the boundary about one third of the way along from the front of the houses on No 6 and No 8. Mr Cully was of the view that the increase in height was likely attributable to excavation taking place on No 6 at or near to that point. It was put to Mr Cully (at Transcript 191) that there was no suggestion of any works in that area in 2012. Mr Cully said that the surveys he used to determine the ground level in that area "suggest that there was [sic] works undertaken in that corridor". However, as already noted, the figures derived by Mr Cully for increases in retaining wall height say nothing about what occurred on site in 2012. Moreover, Mr Cully later conceded (at Transcript 234) that his estimates of wall heights are not a measure of excavation. I would add that insofar as the 43% figure concerns the 2013-2018 period, there was no evidence to suggest that any substantial works involving excavation occurred during that period on No 6 at point A1.
20. Mr Cully was asked questions about various matters dealt with in the Joint Report. He agreed that he did not know the depth of the piers in the retaining wall, and did not know the geotechnical properties of the sub-surface materials below and adjacent to the wall. He conceded that it was a fair point that one cannot make an assessment of the impact of works on No 6 without knowing the structure of the retaining wall (see Transcript 219-220).
21. Mr Cully agreed that he did not carry out any investigations to satisfy himself independently that the wall was not leaning prior to 2012 (see Transcript 220). He confirmed that the assumption he was asked to make about the condition of the retaining wall in 2012 differed from what appeared in the SDA Structural report of December 2012 (see Transcript 221).
22. Mr Cully confirmed (at Transcript 229) that the various structural unknowns he referred to in the Joint Report (at page 7), which he said made it impossible to make an assessment of the stability of the wall, were still unknown to him.
23. Mr Cully said (at Transcript 229-230) that the retaining wall was quite thin, about 120mm wide at the top, and it was not known whether it thickens or thins from there. At Transcript 231 Mr Cully agreed that he did some calculations in relation to loads from garden beds on No 8 but did not share the information with Dr Martens.
24. Mr Cully was referred to his statement in the Joint Report (at page 12) about various matters that were unknown and were "critical and will influence the stability of the wall". Mr Cully agreed that he made no attempt to investigate those matters, but did not accept that the absence of the information meant that valid conclusions about the impact of any excavation on No 6 cannot be reached (see Transcript at 239). In relation to geotechnical properties of the soil, Mr Cully said (at Transcript 240) that the condition of the wall was such that it would be reckless to do intrusive investigations and he agreed that he did not discuss with a geotechnical engineer whether investigations could be safely done (see also at Transcript 250-251). At Transcript 241-2, Mr Cully agreed that he did not address a number of matters identified by Dr Martens as ones that could affect survey data.
25. At Transcript 251-2, Mr Cully agreed that in his reasoning concerning the destabilising effect of excavation on No 6, he used a generic diagram which does not quantify any forces, depths of embedment, wall properties, geotechnical properties or heights.
26. Mr Cully was questioned about various other possible causes of destabilisation of the retaining wall. He agreed that elevated pore pressure could arise due to a sewer line not being in a sound condition (see Transcript 255 and also 259). He agreed (at Transcript 260 and 264) that it would have been useful to know that tree roots had been growing under the house at No 8, and that roots had to be cleared from sewer pipes. Mr Cully agreed that he was unaware of those matters.
27. Finally, Mr Cully agreed (at Transcript 267) that he could not see any weep holes in the retaining wall. In that regard he was referred to Australian Standard 4678-2002 concerning Earth-retaining structures. At Transcript 268-9 Mr Cully agreed that a retaining wall should be designed to allow for proper drainage of seepage from behind the structure, but said that he could not speak about whether a retaining wall without weep holes means that the most important consideration in the design of earth-retaining structures was probably overlooked.
28. Dr Martens was asked to make some assumptions about the works on No 6 in 2012 that concerned the removal of the garden bed near the retaining wall. The assumptions included: 1. that to lay the slab it would be necessary to go down at least 650mm from the bottom of the wooden palings of the fence; and 2. that between 1998 and 2005 the retaining wall had a minor lean towards the house on No 6.
29. Dr Martens said (at Transcript 278) that he did not think that it would be reasonable for the builder, about to commence works, to suspect that there may be tree roots impacting the structural stability of the wall. He said that it would be reasonable to assume that pore pressure had an impact on the long-term stability of the wall but not reasonable to assume that such pressure would have an impact on the stability of the excavation if it was undertaken. Dr Martens went on to say that the removal of the garden bed was of such a minor extent that any other issues such as pore pressure could not have affected the structural stability or the inclination of the retaining wall. He said (at Transcript 279) that if it had been raining for some time he would advise the builder to be very cautious and excavate or remove the garden bed in a slow fashion.
30. At Transcript 282 Dr Martens said in effect that it would not have been reasonable (and would have been unnecessary) for the builder to put some shoring in place in relation to the retaining wall before commencing work. He said that the works proposed were of such a minor and shallow depth that for the length of the wall they could not have an impact on the stability of the wall. Later, when asked about a view expressed in the SDA Structures Report, Dr Martens stated (at Transcript 284) that removal of the garden bed in that 2m to 3m area is very unlikely to have caused any damage, and would say that it is not reasonable to think that it could have worsened any existing damage.
31. Dr Martens was asked to assume that a person claims that he could run his hand along the bottom of the retaining wall. Dr Martens said (at Transcript 282) that this would not be a concern for the stability of the wall because it would only take away pressure from the wall. He said that the loss of some soil from behind the wall would not cause the wall to destabilise in any way.
32. At Transcript 282 Dr Martens expressed the view that it was reasonable in this instance for the builder to put in the lip without first consulting an engineer. Dr Martens said, that if anything, the lip would provide extra bracing for the wall to secure it from any potential movement in the future (see also at Transcript 295-6).
33. Dr Martens was then asked to assume that new cracks opened up during the building of the slab. Dr Martens maintained (at Transcript 285 and also at Transcript 286 and 287) that any such damage should not be apportioned (or attributed) to the building of the slab. He again referred to the minor and limited extent of excavation, and stated that the retaining wall was structurally supported by the piers, not the concrete panels (see also Transcript 297). Dr Martens did agree (at Transcript 288) that removing the soil from the garden bed would remove some support for the wall. He elaborated upon that answer in re-examination at Transcript 300-301. Dr Martens said (at Transcript 297) that he would issue a stop work order if cracks were opening up on the adjoining property, and investigate the situation.
34. Dr Martens was then challenged (at Transcript 290) about his failure to respond to Mr Cully's monitoring program (referred to above at [78]). Dr Martens agreed that he did not object to the methodology or comment on photographs either in his report or in the Joint Report. Dr Martens said, amongst other things, that the methodology was not relevant to the question of retaining wall rotation, being concerned with structures some distance away (see Transcript 291), and structural distress, not movement (see Transcript 294 and 299).

The condition of the retaining wall in 2012

1. I do not accept the evidence given by Ms Shalhoub and Mr Shalhoub about the condition of the retaining wall in 2012 before the works were carried out on No 6. In particular, I do not accept that the wall was standing straight, or not leaning. That evidence is contradicted by the evidence of Ms Krassoi, Mr Blackshaw, Mr Hatzon, and both defendants. I prefer the evidence of those witnesses which I regard as much more reliable and accurate.
2. Neither do I accept the evidence of Ms Shalhoub and/or Mr Shalhoub to the effect that in late 2012, about the time the works were undertaken on No 6: 1. the retaining wall and fence started to lean towards No 6; 2. the retaining wall separated from the concrete path along the side of No 8; and 3. cracks appeared in the retaining wall.
3. This evidence is not corroborated by other evidence that is likely to be reliable. It is contrary to the evidence given by Mr Hatzon, which I prefer, about the state of the wall when he established the site, and his denial that after he finished the works the retaining wall was leaning more significantly into No 6. The evidence about the separation of the wall from the concrete path is contradicted by Mr Hatzon's evidence that he saw a gap of approximately 50mm in width between the wall and the footpath in the rear yard of No 8. The evidence further appears to be contrary to the observations made by Mr Mongey of SDA Structures Pty Ltd in December 2012, who recorded that the entire fence and footing wall was in a very poor condition and dilapidated state "and has been in this state for many years".
4. Furthermore, I am unable to accept the evidence of Ms Shalhoub and Mr Shalhoub to the effect that cracks in the retaining wall and other structures on No 8 including the carport and garage floor slab appeared in late 2012. I note that in December 2012 Mr Mongey observed, in relation to cracks in some brickwork landscaping walls, and concrete benches around the pergola (that is, the carport), that the cracking "has certainly been present for some time…given the visible growth of moss and aged appearance of the cracked areas".

The carrying out of works on No 6 in 2012

1. As I have said, I generally accept the evidence of Mr Hatzon. I think that his account of how the works were carried out on No 6 in 2012 was honestly given and likely to be reasonably accurate, even allowing that he was recalling events that occurred some years ago.
2. Based upon the photographs said to have been taken by Mr Shalhoub on 5 September 2012 (Exhibit H pages 37 and 38), it seems that the concrete slab had been laid by that time. One of the photographs shows a man standing on what appears to be a slab. Mr Hatzon said in the witness box that he was that man, standing on the slab. It is not clear precisely when the lip was constructed. I infer from Mr Johnson's evidence that it was added later, following his request. It is shown on the photograph said to have been taken by Mr Johnson on 24 November 2012 (Exhibit H page 127). I accept that the photograph was taken by Mr Johnson on that date. His evidence on that matter was not challenged. The paving or tiling of the slab (evident in Exhibit D) must have occurred at a later date.
3. I mentioned earlier (at [20]) that there is some controversy about the dates when two photographs were taken by Mr Shalhoub (see Exhibit H pages 35 and 36). He states that they were taken on 10 November 2012. That is consistent with the metadata associated with the photographs. However, the photographs do not show the concrete slab. It seems to me likely that the photographs were in fact taken prior to 5 September 2012, although another possibility is that they show an area where the slab has been temporarily covered over with loose dirt, as is the case with the photographs said to have been taken on 5 September 2012. Differences between the points where the photographer was standing, and the directions and angles of the photographs, makes it impossible to be definitive about this matter. Although the metadata suggests that the photographs were taken on 10 November 2012, it was agreed between the parties that a person can alter the metadata in a relatively simple way. I think it likely that this occurred in relation to these photographs, although I do not find that this occurred deliberately or with any intent to deceive. I note that whilst it was put to Mr Shalhoub that the photographs were probably taken between 21 June 2012 and 5 September 2012, it was not suggested to him that he had altered the metadata.

The alleged negligence

1. The plaintiff's claim in negligence is based upon the duty of care established by s 177 of the Conveyancing Act. The relevant parts of the section are set out at [1] above.
2. Adopting the terminology of the provision, which refers to the supporting land and the supported land, it is not enough that something is done on or in relation to the supporting land that in fact removes or reduces the support provided by that land to the supported land. In order to establish liability against a person for breach of the duty, it must be shown that the person has failed to take reasonable care in doing something on or in relation to the supporting land that removes or reduces the support provided by that land to the supported land. As stated by Campbell JA in Lym International Pty Ltd v Marcolongo (supra) at [209]: Even though the decision to use sheet piling was made with a view to providing support for the neighbouring land, the judge was right, in my view, in concluding that the Developer had done something in relation to land that removed the support. The inquiry that s 177(2) calls for is: (i) whether the defendant has done anything on or in relation to land; (ii) if "yes" to (i), has what the defendant did in fact removed the support, and (iii) if "yes" to (ii), did the defendant exercise reasonable care in doing that particular thing. (See also Piling Contractors (QLD) Pty Ltd v Prynew Pty Ltd [2008] NSWSC 118 at [56]; The Owners - Strata Plan 30791 v Southern Cross Constructions (ACT) Pty Ltd [2019] NSWSC 440 at [283]-[284].)
3. There is no doubt that various works were carried out on No 6, the supporting land, in 2012. These include the landscaping works undertaken near the retaining wall that involved the removal of soil from garden beds adjacent to the wall and the laying of a concrete slab. It seems that the removal of the soil would have in fact removed some support from the retaining wall itself (see the evidence given by Dr Martens referred to above at [109]). However, the retaining wall is not (at least at that location) part of No 8, the supported land. The retaining wall is a structure on the supporting land that provides support to the supported land. It therefore seems to me that the removal of some support from the wall is not necessarily the removal or reduction of the support provided by the supporting land to the supported land. Whether there was such a removal or reduction is likely to depend upon whether the retaining wall has moved so as to remove or reduce the support it would have otherwise provided. I do not think it has been shown that the works carried out on No 6 caused or contributed to movement of the retaining wall so as to remove or reduce the support it would have otherwise provided to No 8 (see later in these reasons at [132]-[139]). However, even if it was assumed that the works had that effect, the plaintiff would still need to show that what was done on No 6 to remove or reduce the support was done negligently, without the exercise of reasonable care.
4. In the present case, the plaintiff alleges that the landscaping work carried out near the retaining wall in 2012 was done negligently, and it destabilised the wall, causing cracking and damage to the plaintiff's property. The works involved the removal of soil from garden beds adjacent to the retaining wall, and the laying of a concrete slab. The essence of the case is that undertaking the excavation and movement of soil involved in those works, without providing any shoring of the retaining wall, amounted to a failure to exercise reasonable care in the circumstances. The plaintiff contends that the conclusion of negligence is further supported because there was a failure to comply with condition 29 of the development consent (set out above at [62]).
5. The question of negligence is to be determined in accordance with the statutory framework laid down in Part 1A of the Civil Liability Act 2002 (NSW), in particular ss 5B and 5C which provide: 5B General principles (1) A person is not negligent in failing to take precautions against a risk of harm unless - (a) the risk was foreseeable (that is, it is a risk of which the person knew or ought to have known), and (b) the risk was not insignificant, and (c) in the circumstances, a reasonable person in the person's position would have taken those precautions. (2) In determining whether a reasonable person would have taken precautions against a risk of harm, the court is to consider the following (amongst other relevant things) - (a) the probability that the harm would occur if care were not taken, (b) the likely seriousness of the harm, (c) the burden of taking precautions to avoid the risk of harm, (d) the social utility of the activity that creates the risk of harm. 5C Other principles In proceedings relating to liability for negligence - (a) the burden of taking precautions to avoid a risk of harm includes the burden of taking precautions to avoid similar risks of harm for which the person may be responsible, and (b) the fact that a risk of harm could have been avoided by doing something in a different way does not of itself give rise to or affect liability for the way in which the thing was done, and (c) the subsequent taking of action that would (had the action been taken earlier) have avoided a risk of harm does not of itself give rise to or affect liability in respect of the risk and does not of itself constitute an admission of liability in connection with the risk.
6. Before proceeding further, it should be noted that the case as pleaded is that the defendants negligently caused the relevant works to be undertaken. The defendants did not of course personally undertake the building works; these were carried out by Koro Constructions Pty Ltd, a building company associated with Mr Hatzon. There was little attention given to the nature of the relationship between the defendants and Koro Constructions Pty Ltd, but it should be concluded on the evidence that the company was an independent contractor. It was not explained how, in such circumstances, the defendants would be liable for any negligence on the part of the builder. It was not submitted, for example, that s 177 of the Conveyancing Act imposed upon the defendants, as the owners or occupiers of supporting land, a non-delegable duty to ensure that reasonable care was taken by persons carrying out work on the supporting land (see Civil Liability Act, s 5Q).
7. It is unnecessary to further consider this matter as I am in any event not satisfied on the evidence that the building works were carried out negligently as alleged.
8. Mr Hatzon gave evidence to the effect that there was no need for any shoring of the retaining wall because the extent of soil removal or excavation adjacent to or in the vicinity of the retaining wall did not warrant it. He explained that next to the retaining wall he removed soft soil from the garden bed as opposed to excavation of any hard compacted ground. He variously estimated the depth of soil removed from the garden bed as 200mm or 300mm. He stated that the garden bed (which Mr Johnson said had a height of approximately 400mm) was only half full of soil. In my view it is likely that the depth of soil removed from adjacent to the wall was on average closer to 200mm than to 300mm. I accept Mr Hatzon's evidence that he did not remove any hard compacted ground near the retaining wall, although it does seem that there was some further excavation of around 100mm of soil quite close to the wall in order to accommodate the concrete slab.
9. The plaintiff did not adduce any expert evidence concerning standards and practices of builders in circumstances such as those faced by Mr Hatzon, including as to any precautions that might be expected to be taken by a reasonably competent builder. It was not put to Mr Hatzon that shoring of a particular type or extent should have been employed in order to cater for a risk of destabilisation of the retaining wall. The lack of evidence of that character is not necessarily fatal to the plaintiff's claim but it makes it difficult for the Court to conclude that Mr Hatzon was negligent in failing to install shoring of some kind as a precaution against that risk.
10. The drawing of such a conclusion is made even more difficult when Dr Martens' evidence is considered. His evidence was to the effect that it would not have been reasonable, and indeed would have been unnecessary, for a builder to put some form of shoring in place for the retaining wall before commencing work. Dr Martens was of the opinion that the works were of such a minor extent and shallow depth that they could not have had an impact on the stability of the wall. Dr Martens gave his evidence, both in writing and in the witness box, in a clear and cogent manner. I generally accept his evidence, including his evidence to the effect of that just referred to.
11. I have not overlooked the evidence given by Mr Hatzon about the lean in the wall and its dilapidated, poor state. He was evidently of the view that the wall had failed many years earlier, but nonetheless made the judgment that no shoring was called for in the circumstances. Having considered the totality of the evidence, including the evidence about the construction of the lip, I am not satisfied that his decision to carry out the works he did, in the fashion he did, without employing any shoring of the retaining wall, was unreasonable in the circumstances. That is, I am not satisfied that a reasonable builder in Mr Hatzon's position would have employed shoring in those circumstances as a precaution against the risk that the works might destabilise the retaining wall.
12. It is also my view that it was not established that the failure to install shoring for the retaining wall amounted to a breach of condition 29 of the development consent. It was not shown that the soil conditions required such shoring in relation to the limited excavation that was carried out near the wall. There was little in the way of evidence concerning the soil conditions, apart from a general observation recorded in the SDA Structures Pty Ltd report that there were "sandy soil conditions". No evidence was adduced of the results of any particular geotechnical investigations.
13. Finally, I should state that the present case is not one where the principle of res ipsa loquitur can be applied to find negligence. The rejection of the evidence of Ms Shalhoub and Mr Shalhoub to the effect that an apparently sound retaining wall started to lean and move at about the same time as the works were undertaken near it on the defendant's land, means that it could not be said that the facts of the occurrence, if left unexplained, warrant the inference of negligence because the occurrence is of such a kind that it does not ordinarily occur without negligence (see Schellenberg v Tunnel Holdings Pty Ltd (2000) 200 CLR 121; [2000] HCA 18 at [22]-[25] and [105]). Moreover, the evidence given by Dr Martens, and some of the concessions made by Mr Cully in cross-examination (e.g. at Transcript 259 and 260), demonstrate that a retaining wall such as this may fail in the manner it has due to various factors that do not involve any negligence at all.

Causation of harm

1. My conclusion that negligence has not been established is sufficient to determine the case adversely to the plaintiff. However, in case that conclusion is wrong, I will go on to consider whether the plaintiff has established that the undertaking of the works near the retaining wall in 2012 without providing any shoring of the retaining wall was a cause of any damage to the retaining wall and to structures on No 8 as alleged. In this regard, the determination must be carried out in accordance with ss 5D and 5E of the Civil Liability Act, which sections relevantly provide: 5D General principles (1) A determination that negligence caused particular harm comprises the following elements - (a) that the negligence was a necessary condition of the occurrence of the harm (factual causation), and (b) that it is appropriate for the scope of the negligent person's liability to extend to the harm so caused (scope of liability). (2) In determining in an exceptional case, in accordance with established principles, whether negligence that cannot be established as a necessary condition of the occurrence of harm should be accepted as establishing factual causation, the court is to consider (amongst other relevant things) whether or not and why responsibility for the harm should be imposed on the negligent party. … (4) For the purpose of determining the scope of liability, the court is to consider (amongst other relevant things) whether or not and why responsibility for the harm should be imposed on the negligent party. 5E Onus of proof In proceedings relating to liability for negligence, the plaintiff always bears the onus of proving, on the balance of probabilities, any fact relevant to the issue of causation.
2. For the reasons which follow, I do not think that the plaintiff has discharged her onus of proving, on the balance of probabilities, that the works carried out on No 6 in 2012 caused damage as alleged.
3. In seeking to prove factual causation, the plaintiff primarily relied upon the expert opinion of Mr Cully. Mr Cully, for his part, evidently placed significant reliance upon the instructions provided to him, including through the Oliveri Lawyers letter of instruction of 14 June 2019. That letter of instruction includes the following: We are instructed that the rotation of the wall was first observed during the excavations along the boundary as part of the renovation of 6 Helena Street in 2012 and has worsened since 2012. Mr Cully stated in the Joint Report that prior to the execution of the renovation works on No 6 "there were no issues in the corridor along the common boundary" and "the common boundary retaining wall was stable prior to the renovations to 6 Helena Street in 2012" (see the further references at [86] above; see also at Transcript 221).
4. The rejection of the evidence of Ms Shalhoub and Mr Shalhoub concerning the condition of the retaining wall clearly reduces the confidence that might otherwise be able to be placed upon Mr Cully's opinions. In addition, Mr Cully's analysis of survey data is in my view unconvincing and of little assistance. As I have already noted, the survey information he used concerned a period of time that commenced after the carrying out of the works on No 6 in 2012. The figures he derived for increases in wall height (which he treated as reflective of excavation or the lowering of ground levels on No 6) say nothing about what occurred on No 6 in 2012 or prior to 2012. Moreover, at least one of the figures upon which Mr Cully seemed to place some weight (the 43% figure in respect of point A1) was not supported by any evidence that substantial works involving excavation occurred at that point in the 2013-2018 period.
5. I also found the results of the CMS Surveyors monitoring program to be of little assistance on the issue of causation. The program was directed to measuring movement in the period 17 January 2018 to 17 October 2018. The results were said by Mr Cully to be "consistent with the expected rotation of the wall due to destabilisation as a result of excavation of material at the base of the boundary retaining wall". The results do not themselves seem to say much about why the observed movement was occurring. In addition, and quite apart from the problems associated with damaged or disturbed monitoring points, I think that the various matters raised by Dr Martens do cast doubt upon the reliability and accuracy of the results of this monitoring program. Mr Cully conceded that he did not address those matters.
6. Insofar as Mr Cully referred to his own monitoring program to support his opinions, it must be said that this was unconvincing in circumstances where the results of this program were not set out in any detail in his report. Dr Martens was criticised for not challenging Mr Cully about his monitoring program, but he explained that the program had no relevance to the question of retaining wall rotation.
7. Mr Cully made a number of concessions in cross-examination to the effect that he lacked knowledge of matters that would be required in order to carry out assessments in relation to the retaining wall. These matters included the geotechnical properties of the sub-surface materials, and the structure of the wall itself. These and other limitations appear to explain why Mr Cully resorted to a "generic diagram" which did not quantify any forces, depths of embedment, wall properties, geotechnical properties, or heights. Mr Cully also conceded that he was unaware of a number of matters that would have been useful to know when considering what may have caused rotation to occur in the retaining wall.
8. In the above circumstances, I am unable to accept Mr Cully's opinions to the effect that the retaining wall has been destabilised, and is moving or rotating, as a result of excavation of material on No 6 near the base of the wall. I prefer, and accept, the opinion of Dr Martens that the retaining wall has rotated over time due to a number of factors, not associated with any works carried out on No 6, which have acted upon the wall over a considerable period of time, including excessive loads imposed behind the wall and increased pore pressures and poor drainage behind the wall on No 8. As I have said, I generally accept Dr Martens' evidence, which was given in a clear and cogent manner. That includes his evidence that the loss of some soil from behind the wall would not cause the wall to destabilise in any way.
9. The plaintiff has not established that the works carried out on No 6 in 2012 caused or contributed to the destabilisation, movement or rotation of the retaining wall, or the sustaining of damage to any structures on No 8. The plaintiff has not established that any negligence in the carrying out of those works was a necessary condition of the occurrence of any damage to her property.

Conclusion

1. The plaintiff's claim in negligence has not been made out. It is not necessary in this case to go on to consider the question of damages in case the conclusion on negligence is incorrect. Damages received almost no attention in the course of the hearing. This is because the quantum of damages claimed, an amount of $137,685, was not disputed by the defendants, save for two minor matters (totalling $4,560). These items were amounts for repairs to the rear porch and the front porch of No 8. The defendants submitted that these items should be excluded as it was common ground that any movement of the retaining wall would not affect the structural integrity of the western wall of the house on No 8. A claim for injunctive relief to compel the defendants to cease work and restore support to No 8 was not pressed at the hearing. The Court will order that the Amended Statement of Claim be dismissed with costs.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 29 September 2020