The Owners - Strata Plan No 8534 v Woollahra Municipal Council

Applicant's circumstances 9Subsequently, the Applicant then became aware of some cracking in both the subject (western) boundary wall and the adjoining public footpath in or around September 2010. Some footpath maintenance was undertaken. 10It also appears that Sydney Water carried out repair works to the water mains outside the site on 4 July 2011, 17 November 2011 and 28 November 2011. The evidence is that these works may have effected the underground (hydrostatic) pressure on the boundary wall. 11The applicants again engaged SES who inspected the site on 27 September 2011 and presented a report dated 7 October 2011, which stated that: "The north western section of the retaining wall was observed to be significantly out of vertical and horizontal alignment. The free standing clay brick section of the wall has cracked and broken. The mortar used in the remedial works performed in 2003 has cracked, indicating the wall is still moving ... We recommend that the strengthening and stabilisation works be carried out by a reputable builder". 12On 27 February 2012, the Respondent issued a Notice of Intention to Give an Order upon the Applicant to repair the failed retaining wall adjacent to the Ocean Avenue alignment. This proposed Order required the Applicant "to repair the failed front masonry wall and supporting stone retaining wall located on the front, western boundary of the subject boundary". 13On 8 March 2012 a senior design engineer, Mr D Cully from SES further inspected the retaining wall and contacted the respondent with his concerns. A colleague, Mr D Nolan was to prepare a specification for stabilisation. Mr Cully advised that the area in the vicinity of the wall (on the building side) was to be cordoned off and no access permitted. 14The north-western boundary wall collapsed at the site at approximately 4 pm on Friday, 9 March 2012, the following day. The applicant undertook temporary stabilisation works on to make the site safe on 12 March 2012. 15Based on observations made during various site inspections, Mr Nolan reported on 3 July 2012 that the following factors likely caused the collapse of the north western section of the boundary wall at the site: (1)Works to Public Footpath by Respondent, (2)Compaction of Fill Behind Wall, and (3)High Rainfall Levels. 16Based on these findings, the applicant considers the council should be responsible for a portion of the repair costs.

The evidence 17Joint expert reports were tendered from:

• Mr G Mostyn, Respondent's consulting geotechnical engineer
• Mr L Speechley, Applicant's consulting geotechnical engineer
• Mr A Wright Respondent's consulting structural engineer
• Mr W Costin Applicant's consulting structural engineer 18The geotechnical engineers undertook site investigations and reviewed the previous engineering reports noting that:
• By 2003 the retaining wall had moved significantly (horizontally and by rotation) and was marginally stable.
• Based on the SES October 2011 report, the condition of the wall was 'essentially' the same as observed in 2003 (i.e. marginally stable at the time).
• The repairs to the water mains outside 20 Ocean Avenue were carried out after the SES October 2011 report. 19The geotechnical engineers agree that the primary or major cause of the wall failure is inadequate drainage for the size of the wall. The combined effect of water pressure and associated soil pressure has been the major contributor to the wall deflection and ultimate collapse. However, they also agree that the wall movement has been exacerbated by the placement of some asphalt for repairs to the footpath, which has introduced compaction stresses on the wall. 20The structural engineers separately conferred and agree on the following matters:
• The evidence indicates that the footpath was cracked adjacent to the subject fence/wall in October 2003.
• Vertical movement of a section of the wall was caused by the lifting of tree roots through a horizontal joint in the wall but this was repaired in 2003.
• There are no records of vertical or horizontal misalignment of the wall prior to 2011.
• Most of the movement appears to have happened after 2003.
• Insofar as cracking has occurred in the footpath, this has been incremental over a number of years and any repairs during the 2003 - 2011 period would be regarded as minor and not expected to indicate a major instability of the wall. 21In their joint report, the structural engineers agreed that there was no one cause for the failure of the wall but it was due to a combination of the following factors:
• Structural inadequacy of the wall to act as a retaining wall and lack of weep holes.
• Hydrostatic pressure exerted on the wall due to
• Ground water and surface runoff during periods of intense rainfall causing flooding of the street, and overflowing gutters flowing down the footpath on Ocean Avenue and entering the subgrade through cracks in the pavement adjacent to Wall 1.
• The water main incidences 17 and 28 of November 2011 outside 20 Ocean Avenue would have contributed to the instability of the wall because of possibly increased hydrostatic pressure. This hydrostatic pressure could come from water passing through the gap in the original retaining wall, Wall 2, as well as seepage through and over Wall 2. 22Mr Costin's opinion is that as the subject retaining wall remained stable from 1939 until sometime between 2003 - 2011, then the introduction of new fill during this later period has contaminated the filter layer between the walls and impeded its ability to dissipate hydrostatic pressure at a sufficient rate to withstand horizontal pressure on the wall. Furthermore, he says that the compaction of the fill behind the wall increased the density and active pressure, which also inhibited the ability of the wall to effectively drain. 23However, Mr Wright does not accept this proposition and says that based on his observations of the granular filling behind the wall, then a properly designed wall should be capable of withstanding a build-up of hydrostatic pressure. Furthermore, in referring to the opinion of Mr Mostyn that the effect of surface compaction during repair was minor, he says that the only reason for the repair was movement of the wall and once the wall rotated from vertical its instability was exacerbated.

Findings 24Having considered the detailed technical evidence, the submissions and undertaken a view, I am satisfied that it is reasonable to issue a new Order requiring the failed retaining wall to be properly repaired so that satisfactory public safety is restored. Such Order should be issued to the Owners Corporation because the retaining wall forms part of their property. A secondary question concerns whether the Council should be required to proportionally contribute towards the repair works. 25Insofar as all the engineering experts have reviewed the available material on the history of the subject wall, I understand that their primary conclusion is that the wall failure was due to inadequate drainage in the original design and construction. However they say that this failure was exacerbated by a number of other factors, including footpath repairs/compaction, heavy rainfall events and water main/service repairs. But these factors only contributed to a minor extent. 26In this regard, I note that Mr Wright departed from the joint report conclusions on the basis that he considered that an adequately designed wall should have been able to withstand these other factors. 27Based on the primary conclusion, I am satisfied that it is reasonable to issue a new s 121B Order on the Owners Corporation. In doing so, I accept that there could be a case for (minor) apportionment of costs due to the other factors. However, I do not consider that this Court has the power to order any such costs and that it should be a separate application. 28Nevertheless, the evidence before the Court indicates that the retaining wall appears to have performed structurally satisfactorily from its construction in 1939 to about 2003 when the first cracking in the wall and footpath movements were observed. Consequently, some repairs were undertaken and certified as satisfactory by the engineering consultants SES on 23 January 2004. 29But further footpath cracking and wall movement has occurred in the period until March 2011 when resident complaints were made and council inspections undertaken. This resulted in repair works being programmed and undertaken. Whilst the exact nature and specification of those repairs is uncertain, nevertheless the experts generally agree that it involved the placement and compaction of filling, predominantly asphalt to repair the cracks and dishing in the footpath. 30According to the engineer's evidence, which I rely on, the compaction most probably involved use of some form of "wacker packer", which could have exacerbated pressure on the wall, contributing to its failure. But in my assessment, it is uncertain whether this type of backfilling action caused contamination of the original rubble drain between the two walls that materially contributed to the failure of the wall, that Mr Costin referred to. 31I also note that around the 2011 period there was a nearby water service failure and Sydney Water mains breakage that may have altered the surface water regime, thereby contributing to the hydrostatic water pressure exerted on the wall. However the experts' evidence is inconclusive on the extent of such contribution. 32In summary then, I am satisfied that the main cause of the retaining wall failure was its apparent inadequate original design, in particular its inadequate drainage provision to reduce hydrostatic pressure by way of weep holes or other accepted method. However given the history of the cracked footpaths adjacent to the walls, I am inclined to accept the predominant view of the experts that the type of backfilling and compaction repairs on the footpath likely contributed to a minor extent to the failure of the retaining wall. 33Notwithstanding this, as noted I do not consider that this Court has the power to award any costs. Nevertheless, I have considered the submissions for the applicant that under the provisions of s 121ZL of the EPA Act then proportional costs should be ordered in these proceedings. Based on the agreement of the geotechnical experts that the compaction of the asphalt/fill layers at the surface represents 5% to 10% increase in the turning moment due to the void between the retaining walls being filled with water, the applicant seeks costs pursuant to s 121 ZL of the EPA Act, in the order of 7.5% of the repairs costs. 34Section 121 ZL of the EPA Act states: 121ZL Awarding of compensation concerning orders (1) The Land and Environment Court, on the hearing of an appeal or otherwise, has a discretion to award compensation to a person on whom an order is served for any expense incurred by the person as a consequence of the order, including the cost of any investigative work or reinstatement carried out by the person as a consequence of the order, but only if the person satisfies the Court that the giving of the order was unsubstantiated or the terms of the order were unreasonable. (2) A claim for compensation may not be made more than 28 days after the date on which the Court gives its decision on the appeal or more than 3 months after the date of the order if an appeal is not made against the order. (3) Compensation under this section is to be awarded against the person who gave the order. 35However the respondent submits that this Court cannot make such cost order that would extend to ordering the issuing party to make a contribution because this involves determining questions about causes of action such as nuisance or negligence. The submissions are that whilst there are broad powers under s 121 ZK, this does not contemplate scope for compensation under s 121 ZL. Instead any such claim should be made in Class 3 proceedings. 36This submission is supported by reference to In D'Arcy v Campbelltown City Council (2003) 126 LGERA 401 where the applicant lodged an appeal in class 1 of the Court's jurisdiction against the issue of an order under 121B of the EPA Act. After the proceedings were commenced, the Council revoked its order. The applicant did not discontinue the class 1 proceedings, but instead claimed compensation under s121ZL of the EPA Act. 37The Council brought an application for summary dismissal of the proceedings. In upholding the Council's motion to dismiss the proceedings, Pain J held that an application seeking compensation under s 121ZL could not be entertained by the Court in a class 1 appeal, and separate proceedings in class 3 of the Court's jurisdiction needed to be commenced: see D'Arcy at [7]. 38In addition to this, the Respondent also submits that if D'Arcy is not to be followed then the Applicant's statement of facts and contentions does not plead that the s 121 B Order is 'unsubstantiated' or 'the terms of the order unreasonable'. The Applicant has to satisfy the Court of these matters before the power of s 121 ZL can exercised. The submission is based on: "In Gardiner v Hornsby Shire Council [2000] NSWLEC 37, Pearlman J considered the meaning of 'unsubstantiated' or 'the terms of the order unreasonable'. Gardiner concerned proceedings in relation to an order given under s124(1) of the Local Government Act 1993 (LG Act). The Applicant sought compensation under s181 of the LG Act which is in identical terms to s121ZL of the EPA Act. Pearlman J held that 'unsubstantiated' referred to the circumstances giving rise to the order set out in the table to s124 of the LG Act. In the present case, there is no claim by the Applicant that the circumstances giving rise to the order are not substantiated by reference to Item 4 of the s121B of the EPA Act. Accordingly, the power under s121ZL cannot arise on the basis that the order is 'unsubstantiated'. Pearlman J held that the order was 'unreasonable' on the basis that the evidence demonstrated that it was confusing and unclear to the recipient [15]. However, no such claim is made in the present case." 39Consequently, the Respondent submits that it is not responsible for the failure of the wall and therefore the order cannot be 'unreasonable'. 40Having considered the submissions regarding costs, I am satisfied to rely on the respondent's submissions that this Court does not have the power to make the desired cost order. Any such cost application should be subject to a separate application such mentioned in D'Arcy. 41Accordingly, the Court intends to make final orders requiring the Applicant to arrange the necessary repairs to the retaining wall within a reasonable period.

Court Orders 42The Court orders: (1) The appeal is dismissed (2) The Applicant is to comply with the terms of the Order of the Respondent dated 28 September 2012 as annexed hereto and marked "A", pursuant to Part 6, Division 2A, S.121B of the Environmental Planning & Assessment Act 1979. (3) The time for completion to be amended to ninety (90) days from the date of this order. (4) The exhibits be returned except for 2, 3, 4 & A. R Hussey Commissioner of the Court 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: 17 April 2013