ACEGROUP Enterprises Pty Ltd v Sheehan - [2010] WASC 118

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION: ACEGROUP ENTERPRISES PTY LTD -v- SHEEHAN [2010] WASC 118

CORAM: MASTER SANDERSON

HEARD: 3 MAY 2010

DELIVERED : 2 JUNE 2010

FILE NO/S: CIV 2053 of 2009

BETWEEN: ACEGROUP ENTERPRISES PTY LTD
Plaintiff
AND
TINA LEE SHEEHAN
CHRIS SHEEHAN
Defendants

Catchwords:

Property law - Application by owner of lot for an order owner of adjoining land remove encroaching structure - Turns on own facts

Legislation:

Nil

Result:

Order for removal

Category: B

Representation:

Counsel:

Plaintiff: Mr A D Read
Defendants: Mr H J Ginbey

Solicitors:

Plaintiff: Wojtowicz Kelly
Defendants: Ginbey & Co

Case(s) referred to in judgment(s):

Bunney v The State of South Australia [2000] SASC 141
Executive Seminars Pty Ltd v Peck [2001] WASC 229

MASTER SANDERSON: By originating summons the plaintiff seeks an order that the defendant remove from the plaintiff's property a section of boundary fence and a pergola/patio owned by the defendants and erected on the plaintiff's property. It is not in dispute that the section of fence complained of and the pergola/patio are owned by the defendants and are encroaching upon the plaintiff's property. Nonetheless, the defendants resist this application.
The facts in this case may be summarised in this way. The principal business of the plaintiff is as a developer of residential property. At all material times the plaintiff was the sole registered proprietor of a vacant block of land situated at 4 Avalon Lane, Wattle Grove. Throughout the proceedings this land is referred to a 'Lot 9000'. That is the description which I will adopt.
The plaintiff also owned the block of land immediately adjacent to Lot 9000 which was sub‑divided and which included Lot 193. This lot is 7 Marriott Crescent, Wattle Grove. Lot 193 was sold to the defendants.
The plaintiff entered into a contract for sale of land with the defendants on 16 March 2006.
In support of this application the plaintiff relies on two affidavits of Foh En Chin, the first sworn 5 June 2009 and the second sworn 25 September 2009. Appearing as annexure FEC3 to the first affidavit is a copy of the contract of sale for Lot 193. In the contract the property is described as 'vacant land'. Under 'Special Conditions' reference is made to annexures 'A' and 'B' and both annexures are said to form part of the contract. Annexure A is in the following terms:
1.The Buyer makes this Offer to Seller for the Purchase of the Lot hachured in the diagram annexed hereto ('Annexure B') even though the Land has not been approved as a separate Lot, is subject to final conditions of subdivision, final survey and the Land may:
(a)vary in respect of its:
(i)size or area, not exceeding more then [sic] 3% of the overall size or area;
(ii)location of its boundaries;
(iii)ground level; and
(iv)the angles of the lot boundaries.
(b)become subject to easements:
(i)For electricity.
(ii)Water.
(iii)Sewerage.
(iv)Gas.
(v)Right of way.
(vi)Easements in gross favor [sic] of the Local Government.
(c)become subject to restrictive covenants including:
(i)Estate covenants.
(ii)Restrictive covenants in gross in favor [sic] of the Local Government.
2.Where upon final survey the overall Lot size or area is varied by more then [sic] 3%, either Party may terminate after which time no Party will have any claim or right of action against the other arising from the termination, except in respect of any matter which arose before the termination, if the Buyer terminates the agreement on the basis the Seller will refund the Deposit within 15 days.
3.Clause 13.5 of the Joint form of General Conditions for the Sale of Land is hereby deleted.
4.If the Planning Commission grants approval for the subdivision of the Lot from the Original Land subject to a condition:
(a)that makes the subdivision un‑viable in the opinion of the Seller; or
(b)that the Seller is unwilling to comply with,
the Seller may terminate this contract by refunding the Deposit and giving notice to the other Party, after which time no Party will have any claim or right of action against the other arising from the termination, except in respect of any matter which arose before the termination.
5.If any matter arises prior to the subdivision being carried out that in the opinion of the Seller makes the subdivision un‑viable the Seller may terminate this contract by refunding the Deposit and giving notice to the other Party, after which time no Party will have any claim or right of action against the other arising from the termination, except in respect of any matter which arose before the termination.
6.The Buyer makes this Offer knowing that the Land is part of an overall subdivision and that easements and restrictive covenants are made without the notice to the Buyer or without compensation paid to the Buyer, and the Buyer accepts such encumbrances on title knowing that these bind any transferees of the land.
7.The Seller shall, as part of subdivision of the Seller's land, have been or required by Regulations to have its Surveyors install survey pegs at each corner of the land. Whether the land is pegged in satisfaction of the Regulations by the Seller's Surveyor prior to or after the Date of Contract, once the land is so survey pegged, the Seller shall become under no additional liability to secure the positioning of the survey pegs or to reinstate the survey pegs on the land either before or after settlement.
(There are in fact 10 clauses in annexure A. However, the final three clauses are not relevant to this application.)
Annexure B is a copy of what is described as 'Deposited Plan 43024 unlodged version'. It was prepared by surveyors. It shows Lot 193 and it is 'hachured'. On the left hand side of the plan to Lot 193 appear the defendants' initials. It was not denied that the defendants initialled annexure B when they signed the contract of sale.
On 23 May 2006 Cottage & Engineering Surveys surveyed the boundary of Lot 193 on instruction from Blueprint Homes. The defendants had engaged Blueprint Homes to construct a house on Lot 193. The survey was prepared prior to the construction commencing. The survey showed the boundary pegs as being in their correct place as depicted on attachment B to the contract.
On 23 August 2006 the defendants entered into a building contract with Blueprint Homes. The contract included a site plan prepared by Cottage & Engineering Surveys, and it showed the boundary pegs as being in their correct place. The proposed house which was eventually built had its rear corner 1.04 m from the boundary fence at its nearest point.
Prior to taking possession of the house the defendants engaged a contractor to erect the rear fence. The rear fence was not constructed along the surveyed boundary as depicted on the title or as shown in the Cottage & Engineering Surveys' plan. The fence at the south‑east corner was 7.13 m into Lot 9000. At the nearest point to the corner of the house the fence was not 1.04 m away but was over 4 m away.
In June 2007 the defendants' home was completed and they moved in. In August 2007 the defendants met with the Shire of Kalamunda and it was pointed out that the fence was not on the line shown on the site plan. The defendants' subsequently proceeded to have a patio constructed at the rear of the house which encroached on Lot 9000.
On 16 February 2009 Mr Chin received a report from Drake Surveys which indicated that a section of the fence and patio constructed by the defendants had significantly encroached into Lot 9000. This was the first time that Mr Chin had become aware of the problem. The survey had been prepared because the plaintiff was preparing to construct a dwelling on Lot 9000 for the purposes of sale. Pending resolution of the dispute as to the alleged encroachment the plaintiff did not construct any dwelling on Lot 9000.
There then followed correspondence between the plaintiff and the defendants and eventually between their respective solicitors. At no time prior to the hearing did the defendants concede the fence and the patio encroached on the plaintiff's land. But the evidence on the point is all one way. At the hearing of the application counsel for the defendants could point to nothing which suggested the fence and the patio were not encroaching on the plaintiff's land. Effectively the point was conceded.
Against that background the plaintiff sought the following orders:
1.the Defendant forthwith at the Defendants' own cost and expense remove and carry away from Lot 9000 the section of the boundary fence and pergola/patio, owned by the Defendants, which are encroaching upon a portion of Lot 9000, and on such removal leave the Lot 9000 in a clean and tidy condition and free of any fence and pergola/patio materials, rubble or debris.
2.If the Defendant has not complied with order 1 within 14 days of the date of this order the Plaintiff is authorised by itself or its workmen, officers, servants, agents, contractors and others acting under the authority of the Plaintiff, with or without equipment:
a.to remove and carry away from Lot 9000 the section of the boundary fence and pergola/patio, owned by the Defendants, which are encroaching upon a portion of Lot 9000 together with all fence and pergola/patio materials, rubble or debris and for that purpose may enter upon Lot 193 on deposited plan 45024 being the land comprised in Certificate of Title Volume 2627 Folio 441 ('Lot 193') or any part of Lot 193; and
b.in the Plaintiff's absolute discretion to dispose of all fence and pergola/patio materials, rubble or debris removed from Lot 9000 either by depositing such materials, rubble or debris upon Lot 193 or by delivery to an authorised waste disposal facility.
3.the Defendants pay to the Plaintiff on an indemnity basis all cost, loss, damage, expense and liability incurred or suffered by the Plaintiff as a result of removing and carrying away from Lot 9000, and disposal of, the boundary fence and pergola/patio together with all fence and pergola/patio materials, rubble or debris.
4.There be liberty to either party to apply in regard to assessment of any amount payable pursuant to order 3.
5.the Defendants pay the Plaintiff's costs of this Originating Summons.
In opposition to the application the defendants relied upon an affidavit of the second‑name defendant sworn 8 September 2009. It is difficult to know what to make of this affidavit. It is shot through with irrelevant material. At no point does the second‑named defendant deny the encroachment. Perhaps all that can be said is that the defendants deny they were in any way responsible for repositioning the survey pegs or that they knowingly erected either the fence or the patio on the plaintiff's land. Between pars 70 and 101 of the second‑named defendant's affidavit he deals with discussions he and the first‑named defendant held with representatives of the Shire of Kalamunda. It is not entirely clear whether he was told the fence encroached on the plaintiff's land. He does point out that plans for the construction of the patio were approved by the Shire without comment.
Persons in the position of the plaintiff whose land is encroached upon by another are afforded relief by s 123 of the Property Law Act 1969 (WA). The relevant provision giving specific relief is s 123(2)(b). This is in the following term:
(2)If in the opinion of the Court it is just and equitable in the circumstances that relief should be granted to the applicant or any other person, the Court may if it thinks fit make an order -
…
(b)allowing any person or persons specified in the order to remove the building and any chattels and fixtures or any of them from the piece of land wrongly built upon.
The operation of this section was considered by Hasluck J in Executive Seminars Pty Ltd v Peck [2001] WASC 229. This case concerned a residential property where the builder had made an error in constructing the dividing walls between three adjoining lots in Subiaco. The original owners had agreed to resurvey and create new titles but for some reason this never occurred. One of the original owners subsequently claimed a portion of an adjoining lot that they were meant to receive pursuant to the agreement between the original owners. The original owners brought a claim against the subsequent purchaser of one of the adjoining lots pursuant to s 122 and s 123 of the Property Law Act. His Honour was able to extract the following principles from the sections and the case law:
1.Section 122 and s 123 of the Property Law Act are remedial in nature and are to be construed liberally. Section 123 is available as a remedy where a building has been erected because of a mistake as to any boundary;
2.With reference to the decision of Bunney v The State of South Australia [2000] SASC 141, his Honour held the court enjoyed a very wide discretion when determining what orders are to be made. The court in Bunney held that the purpose of the legislation is to 'provide a fair means of adjusting rights where an encroachment has occurred … The Act is remedial in character' [29].
3.It was important to examine closely the conduct of the respective parties as s 122(2) of the Property Law Act required an opinion to be formed as to what is just and equitable in the circumstances. His Honour held that the same considerations apply with respect to any relief granted under s 123;
4.The court should examine the circumstances of the encroachment including:
(i)who was responsible for the encroachment occurring;
(ii)the extent of the encroachment;
(iii)the duration of the encroachment;
(iv)relevantly the conduct of the parties.
Without going into the facts of Executive Seminars v Peck it is relevant to note his Honour made the following findings:
1.There had been no impropriety on the part of the plaintiff who was claiming the land [176];
2.The defendant must have been aware that there were problems with the title [175];
3.The defendant admitted in evidence that he was aware of the discrepancy concerning the boundary [177];
4.When the evidence was viewed objectively the defendant was on notice as to the encroachment and could not be characterised as a bona fide purchaser for value of the area of the land encroached upon [183];
5.Even when it was quite apparent that the disputed land belonged naturally to the plaintiff's lot, the defendant was still determined to obtain money for it [187]; and
6.In all the circumstance it was just and equitable to grant the plaintiff the area of land in dispute [192].
It was submitted on behalf of the plaintiff that applying the principles set out by his Honour in Executive Seminars v Peck to the facts in this case led inevitably to the conclusion the plaintiff should have the orders they sought. In particular:
1.There was no evidence before the court of any fault on the part of the plaintiff which could have led to the fence being constructed in the wrong place. The plans attached to the contract of sale clearly identify the correct boundary location;
2.The defendant was on notice of the correct boundary location by virtue of the plan attached to the contract of sale and by virtue of the plan prepared by Cottage & Engineering Surveys;
3.The survey peg was moved after the defendants became the registered proprietors of Lot 193 - even if the defendants had no involvement in or were not responsible for the movement of the survey pegs;
4.The defendant admits in his affidavit that he was aware of a discrepancy between the location of the fence and the boundary before the patio was erected;
5.The defendants in their evidence have raised no issue which would make it just and equitable to refuse the orders sought by the plaintiff; and
6.The duration of the encroachment is a short time - the plaintiff acted promptly once it became aware of the encroachment.
In all the circumstances the plaintiff is entitled to the orders it seeks. In relation to those orders what is anticipated is an order the defendants remove the fence and the patio from the land on which they encroach. If the structures are not moved within a specified time then the plaintiff seeks an order authorising it to arrange for the removal of the structures. Both orders are reasonable. However, I will hear the parties as to the appropriate timeframe within which the defendants are to remove the structures before it is open to the plaintiff to take any steps.
The costs of this application including reserved costs ought be paid by the defendants.