Solicitors:
Grace Lawyers (Plaintiff)
T K Legal (Defendants)
File Number(s): 2015/51343
[2]
Judgment
HIS HONOUR: The plaintiff is the owners' corporation of a strata scheme of subdivision of a property in Maroubra Road, Maroubra. The second defendant is the owner of two adjoining properties.
The first defendant was engaged by the second defendant as its project manager and site supervisor. I am told by counsel for the defendants today that the first defendant no longer holds that position.
The second defendant proposes to build 67 residential units and one commercial unit on the properties that adjoin the plaintiff's land. Development consent was obtained by the second defendant's predecessor in title on 9 October 2013. Demolition of the existing buildings on the second defendant's property was completed in December 2014. On 9 January 2015 the second defendant's builder commenced excavation works on the second defendant's land. The builder has not been joined as a defendant in these proceedings.
These proceedings concern the plaintiff's complaint that the excavation work has removed support to its building. As part of the final relief sought the plaintiff seeks a mandatory injunction to require the reinstatement of support. The plaintiff feared that parts of its building were in danger of collapse. The soil on which both properties stand is sandy and the water table is high. The position of the plaintiff was supported by evidence of a structural engineer retained by it, a Mr Nicholas Joannides of Partridge Remedial Pty Limited.
On 18 February 2015 the plaintiff obtained from McDougall J, sitting as Duty Judge, on an ex parte application, an interlocutory injunction for a short period restraining further excavation works on the property. The injunction, with occasional modification, has been continued by consent or without opposition to today.
The plaintiff's cause of action is brought under s 177 of the Conveyancing Act 1919 (NSW). It relevantly provides:
"177 Duty of care in relation to support for land
(1) For the purposes of the common law of negligence, a duty of care exists in relation to the right of support for land.
(2) Accordingly, a person has a duty of care not to do anything on or in relation to land (the 'supporting land') that removes the support provided by the supporting land to any other land (the 'supported land').
(3) For the purposes of this section, 'supporting land' includes the natural surface of the land, the subsoil of the land, any water beneath the land, and any part of the land that has been reclaimed.
…
(8) Any right at common law to bring an action in nuisance in respect of the removal of the support provided by supporting land to supported land is abolished by this section.
…
(12) A reference in this section to the removal of the support provided by supporting land to supported land includes a reference to any reduction of that support."
There is no dispute that the excavation works undertaken for the second defendant have caused material damage to the building on the plaintiff's land. The structural engineer retained for the second defendant, a Mr George Khalil, disputed that the damage was caused by the withdrawal of support for the plaintiff's land. He said, in substance, that the damage was localised and was caused by the builder's using inappropriate techniques to install sheet metal piling against the common boundary of the properties that caused excessive vibration.
But the defendants have not disputed that the plaintiff is entitled to some form of mandatory injunctive relief to restore support to the plaintiff's building, which, I think, necessarily assumes that support has been removed or reduced. That fact is in any event well established by the evidence of Mr Joannides and Mr Ziade, and by the admission of Mr Khalil. (See in particular paras 5.1 and 5.2 of Mr Joannides' report of 17 February 2015; paras 7.1.5 to 7.1.7 of his report of 27 March 2015; and para 32 of Mr Ziade's affidavit of 30 March 2015).
In cross-examination Mr Khalil was questioned about the condition of the development consent that provided:
"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."
It was put to Mr Khalil that that condition had not been complied with. His initial response was that the design documentation complied. He then gave the following evidence:
"Q. That's not what the condition says. It doesn't say the design documents have to say that. It is a statement that says how the work is to be done and it is to prevent the movement of the soil and to support the adjacent land and buildings, now that hasn't been met has it?
A. Clearly not."
Mr Chen, who is authorised to act on behalf of the second defendant, has deposed:
"26 Based on the current plans, I agree that the plaintiff's land has a right of support from the Property and the second defendant is more than willing to provide this support. I am happy to have ground anchors installed under the plaintiff's property in accordance with the plans of our structural engineer and pay the plaintiff reasonable compensation to do so.
27 The second defendant is more than happy to repair any damage to the plaintiff's property caused by work on the Property. The second defendant would be more than willing to attend to any urgent repairs to the plaintiff's property immediately. To date I have not been requested by the plaintiff to attend to any urgent repairs. In relation to any non-urgent repairs, the second defendant would prefer to wait until after laying the first foundation or after the first floor has been constructed. The only reason for this preference is to avoid having to repeat any repairs which may be required before the laying of the foundations."
By its summons the plaintiff sought substantially the following relief:
"1 An Order that until further order the first defendant and second defendant are not to conduct or permit to be conducted any works on the property located at 169-171 Maroubra Road and 1-3 Robey Street, Maroubra, folio number 10/1202378.
2 A Declaration that the plaintiff's land located at 185 [Maroubra] Road, Maroubra NSW 2035, Strata Plan No 11011, has a right of support from the first defendant's land located at 169-171 Maroubra Road and 1-3 Robey Street, Maroubra, folio number 10/1202378 pursuant to Section 177 of the Conveyancing Act [1919] (NSW).
3 An Order that the first defendant and/or second defendant reinstate the support for the plaintiff's land or install sufficient building(s), structure(s) and/or work(s) to the defendant's land to support the plaintiff's land in a proper and workmanlike manner and to the satisfaction of the plaintiff's engineer.
4 An Order that the first defendant and/or second defendant repair the damage to [the] plaintiff's land and property in a proper and workmanlike manner and to the satisfaction of the plaintiff's engineer.
5 Damages."
In written submissions delivered shortly before the hearing the defendants said:
"5. The first and or second defendants do not deny that the Plaintiff is entitled to relief pursuant to prayers 2, 3 and 4 of the Summons (subject to further submissions below). The 'type of support' or 'requisite support' has been the subject of negotiations and discussions since the commencement of these proceedings.
6. Prayer 2 of the Summons (Right of Support) is conceded and the Plaintiff is entitled to that relief at common and statute law.
Issues for Determination:
7. It appears from the Defendants' perspective that the only real issue (save for an argument on damages, interest and costs) is Prayer 3 of the Summons.
8. Prayer 3 of the Summons (re-instate the Support) is also conceded subject to the following. It appears that the only 2 outstanding issues for determination (save for those prayers referred to in [7] above) is the 'type of support' that is required."
I should say that although prayer 2 of the summons that is described as the right of support is conceded, and although it was said that the plaintiff is entitled to relief at common law and under statute, I do not think that any purpose would be served by making a declaration as sought in prayer 2. The declaration sought simply states the position that obtains under s 177 of the Conveyancing Act. A declaration in those terms would have no utility.
There is, however, no question but that the plaintiffs are entitled to some relief arising from breach of a duty of care to provide support to the plaintiff's land and building (see Piling Contractors (Qld) Pty Limited v Prynew Pty Limited [2008] NSWSC 118 at [55]). The defendants did not oppose an order in terms substantially sought in para 4 of the summons. Nor was there any issue that the plaintiff was entitled to a mandatory injunction for the reinstatement of support. The question is what measures should be provided to give that support.
Mr Khalil said that if any measure were required it should be by way of grout injection.
Mr Joannides said that it should be by way of underpinning the footings to three walls on the plaintiff's land with concrete. This work would require the removal of sheet metal piling installed next to the boundary of the second defendant's land and the plaintiff's land known as The Cheescake Shop external wall; the removal of a concrete fill or plug that was installed by the builder to prevent water penetrating between the sheet metal piling and the wall; the removal of existing concrete piling installed by the builder; excavating under the footings of the plaintiff's building to the level of the excavations on the second defendant's land proposed by it; carrying out those excavations progressively so as to minimise the risk of instability from the excavations; providing temporary shoring to allow for access to the excavations; monitoring the water table and obtaining hydrology reports to ascertain what, if any, dewatering process should be carried out to allow the excavations associated with the underpinning to be carried out safely; and pouring concrete under the footings to provide the underpinning.
This process would involve greater delays compared with the grout injection method proposed by the second defendant. It would also carry some risks. In particular, Mr Khalil gave evidence that the removal of the sheet metal piling against the boundary wall would necessarily cause vibrations that could damage or further damage the plaintiff's building. This piling is interlocked. It was the vibrations associated with the installation of the sheet metal piling that, according to Mr Khalil, caused, or according to Mr Joannides, contributed to, damage to the plaintiff's building.
According to Mr Khalil the piling cannot be removed vertically and its removal would apply lateral forces to the adjacent sand and the plaintiff's building. He doubted that there was any machine that could remove the piling vertically. Mr Joannides did not agree. He said that there was no reason that, if proper methods were used, the sheet metal piling should skew to create additional forces that could damage the plaintiff's building. He said to his knowledge there were machines available to carry out that process.
There appears to be no dispute that the process of grout injection proposed by the defendants and Mr Khalil would be a simpler and quicker process. No evidence was given by either party as to the likely cost of each process, although Mr Khalil did give evidence that:
"Based on my experience, I believe that the grout injection would be most efficient. It may be costlier but it would be faster. So the offset of it, the costs of grout injection would be offset by the speed, so you get it done real quick. The boys can get back on site and construction can proceed."
No evidence was given by either party to explain how the process of grout injection would be able to proceed immediately without the obtaining of hydrology reports, given, as I understand the effect of the evidence, that the proposed depth of the excavation on the second defendant's land would take the excavation below the water table. But as this was not a question addressed in the evidence I pass it by.
Mr Joannides said at [7.5.2] of his 27 March 2015 report:
"I have considered ground injection to stabilise the loosened or removed material but my experience is that ground injection possesses a risk of not being carried out correctly as the injection is below ground and not observable and so I consider not acceptable."
This was a reference to the grout injection method.
In his affidavit of 9 April 2015 Mr Khalil disagreed with Mr Joannides' rejection of the grout injection underpinning method. Mr Khalil deposed:
"Using grout injection to underpin the existing foundation is a standard, industry accepted underpinning technology which is carried out in Sydney by reputable applicators."
In oral evidence Mr Joannides responded to this by saying:
"I considered the grout injection and I accept what Mr Khalil has said. But in 35 years of practice I have carried out 30 odd jobs that have involved grout injections. Out of those 30 jobs, there's [sic] three specific jobs that failed under grout injection to stabilise the ground. And for that reason I believe that it wasn't warranted to be considered in this case."
Mr Joannides said that he considered that the 10 per cent failure risk was too high. He said that if grout injection failed the failure would normally happen in the first three to six months depending on the soil and water table conditions. He expected that any failure would become known within six months. If grout injection failed, there would be ongoing settlement of the foundations resulting in ongoing cracking and dislocation of the building. Potentially the boundary wall could fall down. The risk of failure was reduced by the fact that the grout injection would be made into porous, virgin sands. It was because the injection was not observable that Mr Joannides had expressed the view in his report of 27 March 2015 quoted above.
Mr Khalil accepted that there was a risk that grout injection would not be successful, although he said that the underpinning proposed by Mr Joannides involving the pouring of concrete below the footings was not more likely to provide stabilisation to the plaintiff's walls than would grout injection. This, according to Mr Khalil, was because both methods required the insertion of some form of concrete. That was not Mr Joannides' view.
I generally prefer the opinion of Mr Joannides to that of Mr Khalil. That is so for a number of reasons. First, Mr Joannides has far greater experience. Secondly, he was an independent expert. Whilst I am satisfied that Mr Khalil genuinely held the opinions he expressed, there is a real risk that subconsciously his opinions may be influenced by the fact that it is his designs that are in issue in the present case. Thus his opinion that there has been no structural damage to the plaintiff's property, but that the damage exhibited was due to error on the part of the builder, may well be influenced by a sense of self-protection. Thirdly, and related to the first point, I do not accept Mr Khalil's opinion that damage to the walls was not caused by the undermining of the boundary wall footings due to the adjoining excavations. I prefer Mr Joannides' opinion on that matter that is consistent with both the opinion of Mr Ziade and the evidence of the widening of cracks over time.
In forming a judgment as to which form of restoration and support should be ordered I have to assess the risks that have been identified which, as Mr Joannides said, includes the risk that the grout injection method might not be correctly carried out. In making that assessment I have regard to the facts, first, that no-one from the builder or the first defendant, that is the site supervisor and project manager, gave evidence. Secondly, I take into account that the excavation work that has been done to date has already caused damage that on any view should not have been caused. Thirdly, there are other aspects of the defendants' compliance with conditions of the development consent that give grounds for concern.
Clause 26(c) of the conditions of development consent required that a report be obtained from a suitably qualified and experienced professional engineer which detailed to the satisfaction of the certifying authority a demonstration that the proposed methods of excavation (and construction) were suitable, and should not result in any damage to the adjoining premises as a result of the works and any associated vibration (my emphasis). Mr Khalil said his report complied with that requirement. Nonetheless, the work done has not complied with the objective of that condition.
Condition 26(d) stated that the report must include the following details:
"The adjoining land and buildings located upon the adjoining land must be adequately supported at all times throughout demolition, excavation and building work, to the satisfaction of the Principal Certifying Authority."
There was no evidence that the prescribed certifying authority had supervised or investigated the work, nor how it formed the opinion that at all times the adjoining land, that is, the plaintiff's land, was being adequately supported when the evidence indicates that it was not.
Condition 35(d) was that:
"Details of the proposed methods of managing groundwater, tanking and waterproofing must be prepared by a suitably qualified and experienced Hydrogeological Engineer and be submitted to and approved by the certifying authority, prior to issuing the construction certificate." (Emphasis in original.)
That condition was not complied with.
Mr Khalil gave evidence that the site has two levels of basement on one side and three levels of basement on the other. He said that according to the geotechnical investigation report the standing water table was approximately at the level of basement two, being five or six metres below the natural ground level, plus or minus one metre. He said that the hydrogeologists preferred to get to within two to three metres of the standing water table for their reports and recommendations in order to give advice as to how to treat the groundwater, that is, how to lower the groundwater. It is clear from Mr Khalil's evidence that no report had been provided in accordance with condition 35(d). His view was that:
"So, just because it's in here it may not be practical and it does come down to the professionals who are involved on the project. So I know it says it there but it's not practical to do it right now.
Q. Is it the usual standard practice?
A. Yes. If a professional - I need to qualify that, if a professional can deem it to be something that can be dealt with, I am not saying ignore it. We are saying look we'll deal with it when we get to that stage."
He said that this was how he treated such issues in other projects he had been involved in in the past.
This is clearly unacceptable. The emphasised condition in the development consent was that the details of proposed methods of managing groundwater and similar issues were to be prepared by the hydrogeological engineer and submitted to and approved by the certifying authority before the construction certificate was issued. If the view were taken by the second defendant or its advisors that that condition was not practical, the only proper course was to have sought its amendment. It is a matter of some concern that the construction certificate was issued by the certifying authority when the condition had not been satisfied.
I therefore consider that the conduct of the project to date by those retained by the second defendant does raise a proper basis for the concern expressed by Mr Joannides in his report of 27 March 2015 that the process of grout injection might not be carried out properly.
The question then is what might be the consequence of failure of grout injection, or what are likely to be such consequences.
Mr Joannides said that if the first round of grout injection failed there would have to be a second round. The failure of the first round would be demonstrated by an instantaneous failure where the plaintiff's building would develop severe cracking. This in his opinion would not be likely to lead to immediate collapse, but severe cracking would be observable. A second grout injection could then be attempted at that stage. If that failed, then in Mr Joannides opinion the plaintiff's building would have to be rebuilt.
There was no clear exposition as to the likely stage the second defendant's development would have reached by the period of about six months by which any failure of grout injection should be evident. Mr Khalil said that the defendant's building involved the creation of a basement through which machines could come to provide a second, and he said a third, grout injection if the first (or second) failed. This would not require access to the plaintiff's land and the putting of machines through the shop which adjoins the boundary which is on the plaintiff's land, known as The Cheesecake Shop. No clear programme was provided that demonstrated that at the time any failure of the grout injection method became manifest the construction works on the second defendant's side would have been at a point that access from the second defendant's side would be available. But I infer from Mr Khalil's evidence that that would be the case. In any event, the evidence was that access to the plaintiff's land through The Cheesecake Shop could be had, although not without disruption for perhaps a week to the business of the tenant in that shop.
If the grout injection proposed by Mr Khalil failed it seems fairly clear that by the time that failing would be likely to become manifest, work on the defendants' land would have proceeded to such a point that underpinning would no longer be a feasible alternative.
Both proposals carry some risk of failure. I accept that the method of grout injection would be quicker and simpler. But I also accept Mr Joannides' opinion that the proposed underpinning and associated works, if properly carried out, carry a materially lower risk of failure. The risk of failure of the underpinning proposal I think is materially less, having regard to Mr Joannides' opinion, than under a properly implemented grout injection procedure. And there is a risk that the procedure might not be properly implemented. Nonetheless, even if properly implemented, there is a significant risk. It must be recognised that the prospect of restoring support under either proposal is good. The prospect of successfully doing so by underpinning is better.
On balance, I do not think that the plaintiff should be subjected to the greater risk of failure attendant on the grout injection proposal. I accept Mr Joannides' opinion on this question, and his opinion as to the proper steps that should be taken to restore support to the plaintiff's land.
Mandatory injunctions are rare. One reason is that they can sometimes require the continual supervision of the Court. But in this case there is no issue that some form of mandatory injunction should be granted. So far as possible it is desirable that the injunction be couched in specific and unambiguous language so that the person bound knows exactly what he, she, or it, is obliged to do. Mr Joannides has proposed a specific description of the steps that should be taken to implement the underpinning procedure. Subject to any final submissions counsel or solicitors might have, I propose substantially to make a detailed order as described by Mr Joannides.
I have said that I see no reason to make the declaration sought in the summons. Mr Joannides' opinion is that the underpinning process should be completed prior to further works being carried out on the adjoining site, that is to say, on the second defendant's land. That is necessary, or probably necessary, to prevent further damage to the plaintiff's land.
The result is that the existing interlocutory injunction which retrains the defendants from conducting any excavations on the second defendant's land, and carrying out any drilling, coring or piling on the common boundary between the plaintiff's land and the second defendant's land, should be discharged. In its place I will make a limited final injunction.
The final injunction will be in the same terms as the existing interlocutory injunction, but will be subject to two qualifications. The first is that the injunction will not apply to the carrying out of the works to be ordered for the underpinning procedures. Secondly, the injunction will cease, by the terms of the order, upon the completion of the underpinning work.
The remaining question concerns repairs and damages. As set out earlier, the second defendant has offered to repair the damage to the plaintiff's building. There is no contest about that. The plaintiff accepts that, in those circumstances, it cannot press its claim for damages because its claim for damages would be limited to the cost of repairs which the second defendant will carry out or cause to be carried out.
Most of the repairs concern damage that has been caused by settling of the plaintiff's land, or as Mr Khalil would have it, by the vibrations associated with the excavation. It is preferable that those repairs not be carried out until the underpinning procedure has been carried out, because of the acknowledged risk that the procedure might cause vibration which could require further repairs.
There are, however, two matters raised by the plaintiff that do not require any delay. One concerns the blockage of sand to a storm water outlet on the boundary wall, and the other is roof flashing. The latter claimed need for repair arises as a result of the demolition of the building on the second defendant's land and the removal of flashing associated with that.
The second defendant accepts that new roof flashing should be installed on the plaintiff's building to protect it from rain, where the protection previously afforded by the building on the second defendant's land has been removed. Those repairs should be carried out as soon as possible, but in any event, within seven and 14 days respectively.
The orders that I will make, as outlined by Mr Joannides, will provide for the removal of the sheet metal piling, the concrete plug between the sheet metal piling and the plaintiff's wall, and existing concrete piles, to enable excavation to below the footings on the plaintiff's wall. It will require the removal of the sheet metal piling, the existing concrete plug, and the concrete piles to be carried out with the exercise of reasonable care and diligence to avoid causing vibrations that could further damage the buildings on the plaintiff's land.
The orders will require vibration monitors to be installed on the plaintiff's building to monitor the degree of vibration caused by such works.
It was submitted for the plaintiff that an order should be made that the concrete be removed, not using jackhammers, whether large or small, but with a saw so as to minimise vibrations. Mr Joannides' opinion, which I accept, is that it cannot be known at this stage whether that would be required. That will depend upon the level of vibration that is exhibited when the work commences.
I accept that opinion, and I do not think that a specific order should be made requiring the use of a saw rather than a jackhammer. Nonetheless, if the use of a saw is necessary to avoid the vibrations which would otherwise cause damage to the building, then the effect of the orders will be that that procedure be adopted.
For these reasons, subject to any final submissions that the parties might have to make as to the precise form of the orders, I propose to make the following orders:
Order that the existing interlocutory injunction restraining the defendants from conducting or permitting to be conducted any excavation or further excavation works on the property located at 169-171 Maroubra Road, Maroubra, and 1-3 Robey Street, Maroubra, ("the second defendant's land") and any drilling, coring or piering on the common boundary between the plaintiff's land and the second defendant's land be discharged.
Order that except to carry out the works referred to in order 3, until the completion of the works in order 3, the second defendant by itself, its servants or agents, be restrained from conducting or causing or permitting to be conducted:
(a) any further excavation works on the second defendant's land; and
(b) any drilling, coring or piering along the common boundary between the plaintiff's land and the second defendant's land.
Order that as soon as practicable the second defendant reinstate support to the plaintiff's land by providing, or causing provision of, concrete underpinning of the walls known as The Cheesecake Shop external wall, The Cheesecake Shop courtyard wall, and the rear boundary wall on the plaintiff's property, in a proper and workmanlike manner, as referred to in paras 7.5.1, 7.5.3, and 7.5.4 of the report of Nicholas Joannides of Partridge Remedial Pty Limited, dated 27 March 2015, which is annexure NJ1 to his affidavit of 31 March 2015, and in particular:
(a) in accordance with order 1, such works to be carried out before the carrying out of further works on the second defendant's land the subject of order 1;
(b) the sheet metal piling on the boundary to The Cheesecake Shop external wall, the existing concrete plug between the sheet metal piling and the wall, and the existing concrete piles, be removed with the exercise of all reasonable care and diligence to avoid causing vibrations that could further damage the buildings on the plaintiff's land;
(c) that vibration monitors be installed on the plaintiff's building to monitor the degree of vibration caused by such works;
(d) that excavations under the footings of the said walls be carried out to the level of the proposed excavation on the second defendant's land;
(e) that such excavations proceed successively as the underpinning by concrete pour proceeds at a maximum of 900 millimetre segments of underpinning at each stage of the work;
(f) that adequate temporary shoring be installed as such excavation work proceeds to allow access to the excavation;
(g) that the water table be monitored whilst the work is being carried out; and
(h) that the second defendant obtain or cause to be obtained a hydrogeological report to ascertain what, if any, dewatering procedures should be carried out to allow the excavations associated with the underpinning to be carried out safely, and cause any such dewatering procedures to be implemented.
Order that within seven days the second defendant clear or cause to be cleared the sand blockage to the storm water outlet in the boundary wall referred to at para 34(h) of the affidavit of Jack Ziade dated 30 March 2015.
Order that within 14 days the second defendant install or cause to be installed roof flashing to the building on the plaintiff's land that abuts the common boundary in substitution for the roof flashing formerly on the building on the second defendant's land that has been demolished.
Order that within 28 days of the completion of the works referred to in order 3, the second defendant cause repairs to be carried out to repair the damage to the plaintiff's land and buildings identified in the affidavits of Jack Ziade of 30 March 2015 and the reports of Nicholas Joannides in a proper and workmanlike manner.
Order that the plaintiff's claims for relief in the summons be otherwise dismissed, save as to costs.
Order that the bond paid by the second defendant into the trust account of its solicitor, pursuant to order 5 made on 26 February 2015, be released to the second defendant.
[Parties addressed.]
I make those orders.
I will hear the parties on costs.
[Parties addressed.]
I order that the defendants pay the plaintiff's costs of the proceedings, except for the hearing on 27 April 2015. I order the plaintiff pay the defendants' costs of the hearing on 27 April 2015.
[3]
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Decision last updated: 13 May 2015