Vaughan v Byron Shire Council [1999] NSWCA 235 | Case summary

Court of Appeal (NSW)|1999-07-15|Before: Handley JA, Powell JA, Fitzgerald JA, Lloyd J, Gleeson CJ

The Applicant is the registered proprietor of further land in the vicinity and adjacent to Lot 6, being Lot 7 in Section 3 of DP 1623, Lot B in FP 371044 and Lots 1 ad 2 in DO 521030 ("the other land").

If the Respondents are required to pay compensation under the Encroachment of Buildings Act ("the Act"), the valuation of such compensation will be deferred. The Vaughans argued in this Court that the order for removal made in the Land and Environment Court was precluded by para 4 of the parties' "Agreed Statement of Issues". It is sufficient to state that that is patently incorrect.

It is the registered proprietor of Lot 6 and as such is the owner of such land for the purposes of the Act.

The Respondents or their predecessors in title have erected improvements on Lot 6.

The Respondents should remove the improvements from Lot 6 and within 900mm of the boundary or they should pay compensation under the Act.

Whether the Respondents are entitled to raise a defence of adverse possession in these proceedings. The issues raised by paras 8 and 9 were decided against the Vaughans in the Land and Environment Court and were abandoned in this Court. The issues raised by paras 16 to 17 also were not pressed in this Court.

If such a defence can be raised, whether the Respondents and the predecessors have been in adverse possession of Lot 6 and, if so, throughout what period has such adverse possession been maintained.

Whether the Respondents are entitled to raise a defence of estoppel in these proceedings.

If such a defence can be raised, whether the Applicant is estopped by reason of its conduct and representations concerning Lot 6, from asserting any title over Lot 6. In this Court, the Vaughans argued that the Council was estopped from asserting title over only that part of Lot 6 on which portion of the house is constructed.

Whether because of the defences raised in 8 to 11 above, the Applicant is an "adjacent owner" and whether the improvements erected on Lot 6 are an "encroachment" for the purposes of the Act.

Whether the improvements erected on Lot 6 are an encroachment for the purposes of the Act, because the improvements are part of a house erected on Lots 5 and Lot 6.

Whether, in the exercise of the Court's discretion pursuant to s3(3) of the Act, the application should be refused. The only additional issue which this paragraph seems to raise is the parties' agreement recorded in para 4.

If the application should not be refused, in the exercise of the Court's discretion, what orders should be made pursuant to s3(2) of the Act.

Whether, pursuant to the matters raised in paragraphs 8 to 13 above, the respondents are entitled to seek declarations in these proceedings.

If they are so entitled, whether, by reason of the matters raised in paragraph 8 to 13 above, any relief by way of declaration or otherwise should be made in favour of the Respondents in respect of Lot 6 or in respect of Lot 6 and the other land." 37 The Vaughan's primary case is that the Encroachment of Buildings Act 1922 does not apply to the portion of the house which is on the Council's land. It is not apparent why or how such a conclusion would practically benefit the Vaughans, at least unless they also succeed on their "estoppel" contention. Between 60 and 65% of the house is on the Vaughans' Lot 5 and between 35 and 40% of the house is on the Council's Lot 6. According to the Vaughans, such a building is not an "encroachment" as defined in s2 of the Act, essentially because too much of the house is on Lot 6. The underlying premise is that there is no "encroachment" within the meaning of the Act unless a building is "in substance" on only one of the two blocks of land on which it is situated, and it was submitted that this must be tested by considering the building as a whole in relation to the boundary line between the adjoining properties. It is only a building which is "in substance" on one block of land and extends only to an undefined "insubstantial" extent onto another block of land which constitutes an "encroachment" on the latter. If "the substance" of a building is on each of two blocks so that it cannot be said that the building is "substantially" on only one of the blocks, there is no "encroachment". 38 There is no suggestion that the Act is concerned with such subtle and imprecise distinctions in the decision of the High Court in Amatek Limited v Googoorewon Pty Limited. (1993) 176 CLR 471. There, the Court considered that 'encroachment' is a term appropriate to describe "… the intrusion by some inanimate thing on an area broader than the area properly or previously occupied by it". 176 CLR, at p.475. Further, although there is no encroachment when a building does not straddle the boundary but is wholly erected on another's land, the Court said: 176 CLR, at p.pp477-478. "The encroachment by a building of which the Act is speaking is a horizontal encroachment 'beyond the boundary' between the land of the encroaching owner and the land of the adjoining owner … an 'encroachment' under the Act traverses the 'boundary' between the contiguous parcels of land." 39 The Vaughans sought to bolster their primary argument by pointing out that the statutory concept of "encroachment" is associated with the other statutory concepts of "encroaching owner" and "adjacent owner", which are also defined in s2 of the Act. It is unnecessary for the decision of the present case to decide whether there might be circumstances in which so much of a building is located on an adjoining property owned by another person that the owner of the former block who built or purchased the house cannot be described as an "encroaching owner" and the owner of the latter block as an "adjacent owner" or the building as an "encroachment". That is not this case. There is no doubt that the Vaughans paid for the house, which had been mistakenly erected straddling the boundary by the predecessor in title from whom they purchased their land, or that the house which the Land and Environment Court held was an "encroachment", correctly in my view, would have been fully and solely owned by the Vaughans but for such rights as inhere in the Council by virtue of its partial construction on the Council's land. Subject to the Vaughan's estoppel contention. The Act is concerned with the adjustment of rights in such circumstances, except perhaps in exceptional cases with which this Court is not presently concerned. 40 Although the Vaughans did not make a claim for relief in the Land and Environment Court and, so far as this Court is aware, have not done so in any other proceeding, their alternative contention is that based on the premise that they are entitled by estoppel to the part of Lot 6 on which portion of the house is constructed. Their primary submission on this point is that this Court should dismiss the Council's application on the basis of their title by estoppel to that part of Lot 6. Alternatively, a retrial is sought, at which they would presumably ask the Land and Environment Court to dismiss the Council's application on the basis of their claimed title by estoppel to the material part of Lot 6. Interwoven into this aspect of the Vaughans' case were an application for this Court to receive additional evidence, and an argument that, if the Vaughans are not entitled by estoppel to the part of Lot 6 on which the portion of the house is constructed, the Council is nonetheless estopped from requiring the Vaughans to remove that part of the house from Lot 6. 41 The Vaughans' estoppel argument is founded on a sewerage plan provided by the Council to a solicitor acting for their predecessor in title to Lot 5 which was appended to the contract by which the Vaughans purchased that property. That plan showed the house on Lot 5 to which sewerage is connected as wholly constructed on that Lot. According to the Vaughans, the sewerage plan was a representation by the Council that the house on Lot 5 is wholly constructed on that Lot, they relied on that representation to their detriment in purchasing the property, and it would be unjust Or unconscionable or unconscientious. for the Council to retain ownership of the part of Lot 6 on which the portion of the house is constructed. 42 The Land and Environment Court rejected the Vaughans' claim to title by estoppel. Subject perhaps to their application to adduce additional evidence, their appeal to this Court can only be allowed if the Land and Environment Court erred in law. Land and Environment Court Act 1979, s 16 and subs 19(c1) and 57(1) 43 The Land and Environment Court's primary power on an application under the Encroachment of Buildings Act is to be found in subs 3(2) of that Act. Land and Environment Court Act s 16 and subs 19(C1). The application may be granted or refused, Encroachment of Buildings Act subs 3(3). and, if granted, one of the orders which may be made is an order for removal of an encroachment. Encroachment of Buildings Act subs 3(2)(c). I see no reason to doubt that the Court's wide discretion Encroachment of Buildings Act subs 3(2) and (3). extends to an order for removal by either or both the "encroaching owner" and the "adjacent owner". 44 Subsection 16(1A) and ss 22 and 23 of the Land and Environment Court Act also deal with the power of the Land and Environment Court, but it is difficult to find scope for their operation in the present case See National Parks & Wildlife Service v Stables Perisher Pty Ltd (1990) 20 NSWLR 573; Tweed Byron Aboriginal Land Council v The Minister (1990) 69 LGRA 269. It is necessary to consider whether the Land and Environment Court has power to make a declaratory order under these provisions. Such an order is not authorised by the Encroachment of Buildings Act. . If the Vaughans make good their claim to title by estoppel they seek dismissal of the Council's application. 45 A respondent to an application under the Encroachment of Buildings Act who is alleged to be an "encroaching owner" can obviously defend such an application on the footing that there is no encroachment because he or she is entitled, by estoppel or otherwise, to the land on which there is alleged to be an encroachment. However, the Vaughan's claim to title by estoppel to part of Lot 6 oversimplified the position and failed to give effect to the principle - which they acknowledged - an estoppel would only entitle them to rights in relation to Lot 6 to the extent necessary to do justice between them and the Council. See, for example, Giumelli v Giumelli (1999) HC 10. Any estoppel favouring the Vaughans can, and should if possible, be accommodated in the order made on the Council's application under the Encroachment of Buildings Act. 46 In rejecting the Vaughans' claim to title by estoppel to the part of Lot 6 on which the portion of the house is constructed, the Land and Environment Court held that:

(i) "… the first notice that the [Council] had of the true location of the boundary between lots 5 and 6 was when it obtained [a] survey plan of 25 March 1996 …", which was well after the Vaughans acquired Lot 5. Their contract of purchase was dated 11 September 1987, and they were regarded as proprietors on 15 October that year; (ii) the Council did not have earlier "constructive notice" of the "true location of the boundary between Lots 5 and 6"; and (iii) "Estoppel requires knowledge by the party said to be estopped of the facts giving rise to the estoppel and of the fact that the other party has exposed himself or herself to his or her detriment by acting on the basis of a false assumption".

The last of these propositions in wrong in law. 47 Nonetheless, the state of the Council's knowledge of the location of the boundary between Lots 5 and 6 and of the situation of the house in relation to that boundary at the time when it provided the sewerage plan which showed the house on Lot 5 to which sewerage is connected as wholly constructed on that Lot is plainly material to the order which should be made on the Council's application in the exercise of the discretion provided for by subs 3(2) and (3) of the Encroachment of Buildings Act. 48 The Vaughans' conduct at the time when they acquired Lot 5 is also material to the exercise of that discretion. They did not obtain a survey at the time of purchase, and the Land and Environment Court held that the sewerage plan "[did] no more than identify the location of the sewerage main and sewerage services in relation to improvements and [did] not purport to show the accurate location of property boundaries" and that "… it was not reasonable for the [Vaughans] … to rely upon [the sewerage plan] as representative of the location of property boundaries". 49 The Land and Environment Court's factual findings are immune from direct attack except on the basis of error of law. In an effort to circumvent that difficulty, the Vaughans sought a retrial on the basis that their has been a miscarriage of justice.cf Stead v State Government Insurance Commission (1986) 161 CLR 141; Commonwealth Bank of Australia v Quade (1991) 178 CLR 134. For this purpose, they relied on the Council's failure to comply fully with a notice to produce at the Land and Environment Court hearing. Although the notice to produce was sufficiently broad to encompass a copy of a Department of Lands Compass & Chain Survey Plan dated 23 February 1979 which was in the Council's possession, the Council did not produce the Plan, which clearly shows that the house on Lot 5 encroaches onto Lot 6. The Council's solicitor was aware of the Compass & Chain Survey Plan prior to that hearing, and his explanation for the Council's failure to produce it was unconvincing. On the other hand, the Vaughans knew at the time of the Land and Environment Court hearing that the Council had possession of the Compass & Chain Survey Plan, as that Court found. No attempt was made by the Vaughans to investigate in the Land and Environment Court when the Council obtained possession of the Compass & Chain Survey Plan, and the submission to this Court that "… the time at which the Council became aware of [a survey showing that the house was partly built on Lot 6] was the single most important factual issue in the litigation" is obviously very much an afterthought. 50 The Vaughans argued in this Court that "[h]ad the [Compass & Chain] survey been produced pursuant to the notice to produce, it would have been tendered as a Council document, and supported the inference that the Council had in its possession prior to the [Vaughans] purchasing [Lot 5] a survey showing that the house was partly built on Lot 6". However, that is fallacious. Not only was the question of when the Council first had possession of the Compass & Chain Survey Plan available for investigation in the Land and Environment Court if it was then thought to be material by the Vaughans, but in the absence of evidence from the Council concerning when it received the Compass & Chain Survey Plan or that it had no information concerning that issue, any inference adverse to the Council which could have been drawn had it produced the Compass & Chain Survey Plan was equally available from proof that it had a copy of that Plan in its possession. Instead, there was a concession by the Vaughans in the Land and Environment court that "the evidence [did] not disclose when [the Compass & Chain Survey Plan] was obtained by the [Council]". In my opinion, the Vaughans are not entitled to a retrial because of the Council's non-compliance with the notice to produce. 51 The Vaughans also objected to the Land and Environment Court's order for removal of the material part of the house from Lot 6 without evidence that removal was feasible. However, the Land and Environment Court is a specialist court and had photographs of the house and curtilage. It was open to it to conclude that an order for removal was feasible and appropriate and, although doubtless unattractive to the Vaughans, one method of removal, namely demolition of the encroachment, was plainly open. I am not persuaded that, if otherwise appropriate, the Land and Environment Court's order requiring removal of the part of the house which is constructed on Lot 6 involved any error of law because of the asserted deficiency in the evidence. 52 Because its attention was materially confined to the Vaughans' claim to title by estoppel to the part of Lot 6 on which the portion of the house is constructed, and it erred in considering that claim, the Land and Environment Court did not exercise its discretion under subss 3(2) and 3(3) of the Encroachment of Buildings Act. The remaining question is whether the matter should be remitted to that Court and if so for what purpose, or whether this Court should exercise the statutory discretion on the basis of the factual findings made by the Land and Environment Court. 53 This Court's powers arise under subs 57(2) of the Land and Environment Court Act and s 75A if the Supreme Court Act 1970. Although it is sometimes preferable for this Court to remit matters to the Land and Environment Court for its specialist judges to exercise necessary discretions ACR Trading Pty Ltd v Fat-Sel Pty Ltd (1987) 11 NSWLR 62, 82B; see also Richmond River Shire Council v Ramsey (1988) 66 LGRA 210., in a case such as the present it is preferable for this Court to make the necessary discretionary judgment in order to save time and costs. cf Tynan v Meharg and Newcastle City Council (NSWCA 40119/98, unreported, 16 September 1998). In my opinion, the circumstances found by the Land and Environment Court are such that the position should be regularised by the removal from Lot 6 of the portion of the house constructed on that Lot, but the Vaughans should not bear the entire costs of removal. Both parties contributed to the problem, and I consider that neither is significantly more or less responsible than the other. In my opinion, they should be equally liable for the cost of removal of the portion of the house constructed on Lot 6 from that Lot. 54 I would therefore allow the appeal with costs, and vary the order made by the Land and Environment Court by substituting an order that the Council and the Vaughans remove the part of the house which is presently constructed on Lot 6 and relocate the house to a site on Lot 5 chosen by the Vaughans which complies with the Byron Shire planning scheme and by-laws. Since the Vaughans opposed any order under the Encroachment of Buildings Act, the order that they pay the costs of the Land and Environment Court proceeding should stand.

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.

New South Wales Court of Appeal CITATION : Vaughan v Byron Shire Council [1999] NSWCA 235 FILE NUMBER(S) : CA 40596/98 HEARING DATE(S) : 26/03/99-29/03/99 JUDGMENT DATE : 15 July 1999

3 The defence of estoppel, if successful, could be an answer to the Council's application for the removal of the encroachment. Depending on the relief granted to accommodate the estoppel, it could defeat the Council's claim to be an adjacent owner, and establish that there was no encroachment. The estoppel would also be relevant to the exercise of the Court's discretion under s 3(2). 4 The Court therefore had jurisdiction to entertain the defence of estoppel and grant appropriate relief in accordance with the decision in National Parks and Wildlife Service v Stables Perisher Pty Ltd (1990) 20 NSWLR 573, 582 where Gleeson CJ said: "The Land and Environment Court, of course, in resolving a claim that is properly brought within its jurisdiction, has the power and the duty to decide all questions of fact or law that need to be decided in order to deal with that claim. Such questions might be questions of such a nature that they could also very well have arisen for decision in another forum … In this connection s 22 is not to be understood as extending the jurisdiction of the Court, but as conferring on it full power to exercise a jurisdiction that is granted elsewhere". 5 The task of the Court in considering this defence was made more difficult by the failure of the Vaughans to properly particularise the estoppel relied on, and the failure of the Council to insist on such particulars being given. This is not a private matter which is solely their concern, but is also a matter of public significance. The omission has also complicated the task of this Court. The Court, for its own protection, should insist on a defence such as this being properly particularised. The Vaughans should have been required to identify the conduct and the representations referred to, the detriment relied on, and the relief they claimed. 6 The trial Judge rejected the defence of estoppel. Because the appeal from the Court in a Class 3 case is limited to questions of law, I need only refer to two of the matters relied upon, namely the Council's sewerage connection plan of 25 February 1985 (the plan) and a compass and chain survey dated 23 February 1979 (the survey) prepared by the Department of Crown Lands. A copy of the plan was in the possession of the Vaughans' solicitors at the time of their purchase in 1987. It showed the subject house located entirely within what appears to be lots 3-5, with a sewerage connection 44 feet from what appears to be the northern boundary of the combined lot. 7 The survey, a copy of which was in the possession of the Council, shows a dwelling located across the boundaries of Lots 5 and 6. The evidence did not disclose when the survey came into the possession of the Council. 8 Mrs Dale, a solicitor who swore an affidavit for the Council, stated that she would not advise a client to rely upon a sewerage connection plan to establish the boundaries of the property because it only indicates where sewerage lines are located in relation to improvements such as a building or a fence. She was not cross-examined and her evidence was accepted. The Judge held that it was not reasonable for the Vaughans or their solicitors to rely upon the plan as a representation of the location of property boundaries because such documents did not purport to show "the accurate location of property boundaries". 9 The fact that the plan did not purport to show the accurate location of the property boundaries does not mean that it was incapable of conveying a representation. A representation to found an estoppel must ordinarily be clear and unequivocal. See Low v Bouverie [1891] 3 Ch 82 CA; and Woodhouse AC Israel Cocoa Ltd v Nigerian Produce Marketing Co Ltd [1972] AC 741. It is at least arguable that the construction of the plan, in this respect, involves a question of law (see Woodhouse AC Israel Cocoa Ltd v Nigerian Produce Marketing Co Ltd ibid) and that it was capable of conveying a clear and unequivocal representation. 10 The plan does not identify the lot or lots on which the house and the sewerage line are located, but does indicate with clarity that the sewer line from Manfred Street is located 44 feet away from what appears to be a side boundary. The evidence does not include a detailed survey of the property. There is a survey report and drawing prepared by Canty's, surveyors of Byron Bay, dated 25 March 1996 which shows the location of the house across the boundary between Lots 5 and 6 and the location of a fence near the northern boundary of Lot 6. The drawing shows that 35-40% of the building is on Lot 6, but not its dimensions or its exact location in relation to the boundaries or the fence. It states that it should not be used for scaling. There is no evidence of the precise distances between the house and the side fence, or from the house to the boundary with Lot 7. The Court is therefore unable to determine whether the 44 feet was measured from the boundary or the fence. 11 The plan purports to show either the fences on all four sides of the property or its boundaries. It refers to an inspection of the work on Lots 3-5 on 31 May 1974. There is evidence that the whole of that block as occupied by the Vaughans' predecessors in title was fenced at that time of the sale to the Vaughans (combined AB 53, 60). When the proceedings were commenced there was "an old fence for a short distance from the street to the north of the house" (red AB 5). The affidavits of Kevin Vidler and John Vaughan refer to the fencing and annex photographs of the property taken in 1950, 1962 and 1965. However it is not clear whether the combined block then thought to comprise Lots 3-5 was fenced on all sides in 1974. 12 The origin and purpose of sewerage connection plans were explained by Mr Cooney, the Council's Health and Environment Manager, in his affidavit. They are prepared after sewerage works have been carried out from field notes made by Council inspectors prior to the plumbers backfilling the trenches containing the lines. The location of the lines is defined in relation to the existing buildings or fences and not the surveyed boundaries. 13 The house was built by predecessors in title of the Vaughans, and the sewerage connections were installed in 1974 presumably by plumbers engaged by Mr Vidler. The plan was prepared in 1985 by the Council's Health and Environment Department. It is not clear whether the lines marking out the block represented the fencing in existence in 1974, or the assumed boundaries of the combined Lots 3-5 obtained from other records of the Council. 14 The evidence of Mrs Dale established that it would not be reasonable for solicitors to act on information in a sewerage connection plan as evidence that improvements were located within title boundaries. The contract of sale to the Vaughans signed by the vendor is dated 11 September 1987 (combined 106), but the plan was not annexed (ibid 111) and schedule 4 which contemplated that such a plan might be annexed was struck out. The plan was obtained by the Vaughans' solicitors from the Council in late August or early September 1987 when they were acting for Mr & Mrs Vidgen who were then interested in purchasing Lots 3-5 (ibid 24-5, 123, red 36) and was tendered from their conveyancing file for the purchase by the Vaughans (ibid 46-7). 15 Mr Vaughan said in his affidavit (red 82) that, at the time of his purchase, he believed that the house was located in the middle of lots 3-5 as Council documentation supplied at that time had shown the house in that position. He did not discover that this was incorrect until 1996 after the letter of demand from the Council solicitors. It was not clear from his affidavit whether Mr Vaughan saw the plan before he entered into the contract, or before its completion on 24 September 1987 or later still. The evidence includes letters from their solicitors dated 7, 17 and 24 September 1987. The letter of 7 September forwarded the draft contract for execution, but this did not include the plan, and the letter does not refer to it. 16 Mr Vaughan in his oral evidence said that Mr Black, his solicitor, sent a copy of this plan to him in Melbourne in August 1987 (combined 9). He was asked whether he read the contract and its annexures before he signed the contract and said that he "would have" done so (ibid 17-19). 17 The other two letters in evidence from their solicitors also contain no reference to the plan and one is inclined to doubt Mr Vaughan's evidence that he received a copy of the plan in August or September 1987. However he was not cross-examined on these letters, and it was not put to him that he did not receive the plan until after completion of the purchase. He referred to the plan in his affidavit of 6 February 1998 which annexed a photostat of the copy date stamped 28 August 1987 which his solicitors obtained on behalf of the Vidgens. He did not himself speak to Mr Black in connection with the purchase (combined 45). He was living in Melbourne at the time and had the assistance of a Melbourne solicitor, Mr Smith, who reviewed the contract for him (44). Mr Smith told him that he had spoken to Mr Black in connection with the purchase (ibid 17-19). 18 In my opinion therefore there was evidence in the plan of a representation made by the Council in August 1987 to solicitors who commenced to act for the Vaughans soon afterwards in a transaction relating to the same property, and there is evidence that this was communicated to Mr Vaughan before the contract for the purchase of Lots 3-5 was completed. There is therefore evidence, which the Court could have accepted, of the basic elements of an estoppel by representation which was not excluded merely because the plan did not purport to show "the accurate location of property boundaries". This is not a case where the encroachment is measured in centimetres. The Judge found that it was not reasonable for the Vaughans' solicitors to rely upon the plan, and there was evidence to support this finding. He also found that it was not reasonable for the Vaughans themselves to rely upon it, but, with respect, there was no evidence to support that finding. 19 Mr Vaughan was not cross-examined to establish his awareness of the unreliability of the plan as a general indication of title boundaries. Although he did not speak to Mr Black personally at this time, but only to Mr Smith, he gave no evidence of any discussions with the latter about the plan. He was not cross-examined to establish that Mr Smith advised him that the plan was unreliable or that he should obtain a survey. There was therefore evidence that Mr Vaughan knew of and relied upon this plan and no evidence that he acted unreasonably in doing so. Mrs Dale's affidavit contains no such evidence as it was directed to the advice a competent solicitor would give his or her client about such a plan. 20 Knowledge of facts obtained by a solicitor in the course of acting for a client in a conveyancing transaction is imputed to the client (Sargent v ASL Developments Ltd (1974) 131 CLR 634, 649 per Stephen J), but it is not clear that knowledge of the significance of those facts will be imputed in the same way. In any event it was not established that Mr Black realised that a sewerage connection plan should not be relied upon as a general indication of title boundaries. It may be that he was negligent in not appreciating this, but the knowledge that an agent ought to have but does not is not imputed to his principal although it may constitute constructive notice for some purposes. Without proper argument I am not prepared to find that it was unreasonable for the Vaughans personally to rely upon this plan simply because their solicitor knew or ought to have known this. See generally Spencer Bower and Turner "Estoppel by Representation" 3rd ed 1977 pp 91-2, 130-5. 21 The Judge also rejected this defence because he held that "estoppel requires knowledge by the party said to be estopped of the facts giving rise to the estoppel and of the fact that the other party has exposed himself or herself to his or her detriment by acting on the basis of a false assumption". With respect there is no such requirement in estoppel by representation which, unlike fraud, may arise from false representations innocently made. See Spencer Bower ibid 155-6. The position is different in the case of estoppel by acquiescence as explained in Willmott v Barber (1880) 15 Ch D 96, 105-6 by Fry J where knowledge of the facts and of a party's own legal rights is required. Estoppel by acquiescence is an exception to the general rule that silence is not a representation, but in this case there was evidence that the Council had made a positive representation. 22 The Vaughans therefore have established that the rejection of their defence of estoppel was vitiated by legal errors, and that there was evidence capable of establishing all the elements of this defence. The appeal therefore should succeed on this ground. 23 Where the appeal is limited to questions of law this Court can grant any relief to which the successful party is entitled as a matter of law on the findings made by the trial court. However it cannot make additional findings of fact or exercise a judicial discretion where different orders are open as a matter of law. Compare House v The King (1936) 55 CLR 499, 504-5. 24 Where an estoppel by representation is established the Court holds the representor to his representation and it has been thought that there is no discretion to mould relief, to ensure that it is proportional to the representee's detriment. Equitable estoppel is different in this respect and the Court's function is to determine the minimum equity to do justice between the parties. These distinctions have recently been questioned and a discretion to mould the relief for an estoppel by representation may be recognised. See The Commonwealth v Verwayen (1990) 170 CLR 394, 409-413 per Mason CJ and Giumelli v Giumelli (1999) 73 ALJR 547, 549-550. 25 In my judgment therefore the only order that this Court can make is for a new trial. 26 The Vaughans also applied for leave to adduce fresh evidence in the affidavit of Mr Pagotto, their solicitor, of 11 March 1999. A notice to produce had been served on the Council's solicitors before the trial which sought production of all surveys in its possession relating to the true boundaries of Lot 6 which had been brought into existence between 1 January 1975 and 31 December 1997. It was returnable on 18 June 1998 but no documents were produced that day. On the first day of the trial on 22 June some documents were produced, but these did not include any copy of the survey of 23 February 1979. 27 Mr Vaughan gave oral evidence at the trial that he had seen a copy of the survey in the Council's Beach Management Library. Mr Johnson, the Council's Property and Enterprise Officer, gave evidence that he had not seen a copy of the survey until that morning, and he could not say whether or not a copy was held in the Council's Library. The trial concluded without any attempt by the legal advisers for the Vaughans to require production of any copy of the survey in the Council's possession, or of other documents which might have established how and when a copy had first come into its possession. 28 On 1 December 1998 Mr Pagotto received an itemised bill of costs from the Council's solicitors which disclosed that on 4 November 1997 Mr Sochacki, its solicitor, had perused a Council file which contained a copy of the survey. This established that a copy had been in the Council's possession, that its solicitors had become aware of its existence, and that the Council had failed to comply with the notice to produce. Mr Sochacki swore two affidavits dated 26 March in which he deposed to the steps taken to ensure that the Council complied with the notice to produce, which contained his recollection of what had occurred when he inspected documents at the Council on 4 November 1997. He was cross-examined and I agree with Fitzgerald JA that his explanation for the Council's failure to produce its copy of the survey was unconvincing. 29 The Council's failure to produce its copy or copies of the survey prima facie attracts the principles applied in Quade v Commonwealth Bank (1991) 178 CLR 134. However Mr Vaughan and his solicitors knew that the Council had at least one copy of the survey in its possession. They established this in evidence, but failed to take the matter any further. 30 The discretionary power to receive fresh evidence on appeal conferred by s 75 A(7), (8) and (9) of the Supreme Court Act is more ample than the common law power. See CDJ v VAJ (1998) 72 ALJR 1548. Nevertheless the common law requirements are relevant to the exercise of the statutory discretion. These included the requirement that the party seeking the admission of the evidence should have exercised reasonable diligence to discover such evidence prior to or at the trial. See Wollongong Corporation v Cowan (1955) 93 CLR 435. 31 It is evident that the legal advisers for the Vaughans failed to use reasonable diligence in following up their knowledge that a copy of the survey was in the possession of the Council in its Library. This may have been a copy of the survey inspected by Mr Sochacki on 4 November 1997, and this may have been evident from notations. It is not clear whether the copy produced at the hearing in this Court was that previously inspected by Mr Sochacki, or came from the Council's Library. It has not been established that the copy inspected by Mr Sochacki came into the Council's possession before the plan was prepared in 1985, or before a copy of it was supplied to the solicitors in 1987. Nor has it been established that this plan was part of the records of the Council which should have been consulted when the plan was prepared, or before a copy was supplied to the solicitors. 32 In my judgment the discretion to receive the fresh evidence should be exercised against the Vaughans because of the failure of their legal advisers to exercise reasonable diligence to obtain the evidence before or at the trial. However the Council's non compliance with the notice to produce before and at the trial makes it inappropriate for the new trial to be limited to the evidence given at the first trial. In my opinion the following orders should be made: (1) Appeal allowed with costs, other than costs occasioned by the motion for the admission of fresh evidence. (2) Orders 2 and 3 of the Land and Environment Court of 14 July 1998 set aside. (3) Remit the proceedings to that Court to determine the issues raised by paras 11, 12, 14, 15 and 17 of the agreed statement of issues of April 1998. (4) Costs of the first trial to abide the order of the Judge presiding at the new trial. (5) The Council, if qualified, to have a certificate under the Suitors Fund Act. 33 POWELL JA: I agree with Handley JA. 34 FITZGERALD JA: The appellants, Mr and Mrs Vaughan, have appealed against a judgment of the Land and Environment Court delivered on 14 July 1998. On an application by the respondent Council under the Encroachments of Buildings Act 1923, the Land and Environment Court declared that the house on Lot 5 of Section 3 in Deposited Plan 1623 (which is owned by the Vaughans) is also partly constructed on Lot 6 (which is owned by the Council), and ordered the Vaughans to remove that part of the house which is on Lot 6 before 5pm on 13 July 1999. Although they do not dispute that the house is partly constructed on Lot 6, the Vaughans seek to have both the declaration and the order for removal made by the Land and Environment Court set aside and the Council's application to that court dismissed or a retrial ordered. 35 While they made no cross-claim in the Land and Environment Court, there was an "issue" in that Court concerning whether any relief should be granted to the Vaughans, but that is not pressed in this Court. Conversely, although the order for removal for which the Council applied to the Land and Environment Court included any part of the house "which is within 900mm of the boundary between Lots 5 and 6 of Section 3 in Deposited Plan 1623", the Council did not ask this Court to extend the Land and Environment Court's judgment. 36 The trial in the Land and Environment Court took place on 22 and 23 June 1998. Some months beforehand, the parties had settled an "Agreed Statement of Issues", which provided: " It is agreed 1. The applicant is the registered proprietor of land being Lot 6 in DP 1623 ("Lot 6")

Vaughan v Byron Shire Council

At a glance

Court

Decision date

Before

Catchwords

Source

Catchwords

Judgment (18 paragraphs)

Parties

Cases Cited (13)

Cited By (1)