Berengo v Menelle

[2010] VCC 1227

IN THE COUNTY COURT OF VICTORIA Revised

Not Restricted

AT MELBOURNE
CIVIL DIVISION

COMMERCIAL LIST – EXPEDITED CASES DIVISION

Case No. CI-09-03510

PAUL BERENGO, MARK BERENGO and	Plaintiffs
ROBERT BERENGO
v
ROBERT MENELLE	Defendant

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JUDGE:	HIS HONOUR JUDGE ANDERSON
WHERE HELD:	Melbourne
DATE OF HEARING:	7 September 2010
DATE OF JUDGMENT:	16 September 2010
CASE MAY BE CITED AS:	Berengo & Ors v Menelle
MEDIUM NEUTRAL CITATION:	[2010] VCC 1227

REASONS FOR JUDGMENT

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Catchwords: Practice and procedure – Costs – Dispute over boundary wall between two residential properties – Plaintiffs’ success in proceeding confined to limited award of damages – Relevance of previous offers of compromise –

Desirability of encouraging resolution of such disputes without recourse to litigation – No order made as to the costs of the proceeding.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiffs	Mr J. M. Forrest	Amad & Amad Lawyers
For the Defendant	Mr T. R. Messer	Mills Oakley Lawyers
HIS HONOUR:

1           On 6 May 2010, I delivered my reasons for judgment in this matter indicating that, “I

will make final orders after the parties have had the opportunity to study these
reasons for decision and to make further submissions in relation to the form of orders

and questions of costs”.

2           On 7 September 2010, the parties returned before me and made further submissions, principally in relation to costs. Both parties appeared to concede that the appropriate orders on the plaintiffs’ claims were:

a.	Judgment for the plaintiffs against the defendant for $100 damages in respect of the encroachment onto the plaintiffs’ land next door of the side wall between the defendant’s house and the boundary wall, approximately 22 metres from the front of the property at 1170 Burke Road North Balwyn;
b.	Otherwise, the plaintiffs’ claims made in the Amended Statement of Claim dated 12 March 2010 be dismissed.

3           In relation to the question of costs, the plaintiffs sought an order that the defendant pay their costs on a party/party basis to 30 December 2009 and indemnity costs thereafter, or alternatively that there be no order as to costs. The principal submission relied upon the following matters:

a.	the plaintiffs had succeeded in the action by obtaining an award of damages;
b.	the content of two offers of compromise from the plaintiffs dated 5 June 2009 and 23 December 2009.

4           On the other hand, the defendant submitted that the plaintiffs should pay his costs because:

a.	the plaintiffs were largely unsuccessful in the action;
b.	the plaintiffs unreasonably rejected the defendant’s offer of compromise made 11 December 2009.

5           In my reasons for judgment on 6 May 2010, I set out the plaintiffs’ claims and the decisions I had reached. Essentially, the plaintiffs’ success in the proceeding was limited to the award of the sum of $100 damages. The plaintiffs were unsuccessful in

their claims for “a mandatory injunction compelling the defendant to remove the paint

on the northern face of the boundary wall and to remove the parts of the defendant’s

front fence and wing wall which are on the plaintiffs’ land”, and in their claim for
“exemplary and aggravated damages”.

6           It is necessary to examine the three offers of compromise:

a. the plaintiffs’ offer dated 5 June 2009 “required the defendant to remove the

paint from the wall but allowed him to retain the south-west pillar and the wing

wall in their location notwithstanding that they encroached the plaintiffs’ land

according to the Absolute Survey”. That survey was prepared at the
defendant’s request and a copy had been forwarded to the plaintiffs’ solicitors
on 2 June 2009. The offer also provided that each party pay their own costs of

the proceeding.

c. The defendant’s offer dated 11 December 2009 provided that

“(1)	Our client will remove the paint which he placed upon the wall from the front fence to the side gate. The cost of the removal of the paint will be borne by our client.
(2)	Our client will bear his own costs that he has incurred to date which amount to in excess of $10,000”.

d. The plaintiffs’ offer dated 23 December 2009, as with the earlier offers, required the removal of the paintwork on the part of the wall in the defendant’s front yard at the defendant’s cost but also required the defendant to pay the plaintiffs’ costs of the proceeding to date to be taxed on Scale D in default of agreement.

7           The issue of the painting of the boundary wall by the defendant, particularly the part in his front yard which was visible from the street, was the issue which had poisoned relations between the parties and had led to the litigation. It was also the focus of the offers of compromise and much of the evidence and submissions at the trial.

8           The plaintiffs’ claim for this relief failed at trial primarily because:

a.	The end point of the plaintiffs’ wing wall had clearly been on the boundary alignment of the previous long-standing paling fence.
b.	It was therefore not possible to precisely locate the boundary at the front of the properties because the old brick pillar had been replaced in 2007.

9           The three offers of compromise all concentrated on the painting issue. The plaintiffs’ counsel, Mr Forrest, submitted it was appropriate that the plaintiffs receive their costs because, if the defendant had accepted the plaintiffs’ 5 June 2009 offer, the parties

would not have spent money on costs to simply reach a point on 11 December 2009
when the defendant would make a similar offer and suggest it should be accepted
because the defendant was prepared to bear the $10,000 costs he had expended
since the plaintiffs’ offer.

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Ordinarily, offers of compromise are looked at by the court to determine the determination by the court. In the present case, the defendant was ultimately successful on the issue of the painting of the wall and any “unreasonableness” on his part was unrelated to his legal liability. Nevertheless, I consider that I should pay some regard to the conduct of the parties in relation to their pursuit of the litigation including the efforts made through their solicitors to resolve the dispute.

11         Plaintiffs’ counsel submitted that “potential litigants should not be discouraged from bringing their disputes to the courts”. The present parties, very early, appeared to lose their capacity for rational action. For the defendant, the “theme” he and his wife wished to pursue for their renovations became more important than promises he had made to his neighbours. On the other side, there were actions taken by Mr Robert Berengo which were entirely inappropriate. Even the intervention of solicitors was not able to resolve matters. A court decision was needed.

12         However, the decision I reached on 6 May 2010 only went part of the way towards resolving potential disputes between the parties over their boundary wall. My reasons for judgment contain the seeds for much fruitful litigation, unless the parties are discouraged from pursuing it and are encouraged to use alternative and more appropriate methods of resolving their disputes.

13         My judgment leaves unresolved the following issues:

a.	The difficulty of determining legal entitlements in relation to the boundary by using the results of “best fit” surveys.
b.	The need to attempt to “reconstruct” the location of the previous boundary paling fence for that purpose.
c.	The likelihood that parts of some of the brick piers of the boundary wall at the rear of the defendant’s property encroach onto his land, giving rise to doubt as to the legal rights of the parties.
d.	The fact that the defendant’s wing wall continues to encroach onto the plaintiffs’ land and, possibly, there is encroachment by the new corner pillar of the defendant’s front fence.
e.	The (hopefully unlikely) possibility that in the future the plaintiffs may exercise their right to demolish the boundary wall (perhaps excluding parts of certain piers) and to demolish the encroaching part of the defendant’s wing wall.

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boundary and the status of the boundary wall which was originally intended as a

Perhaps the most significant of these matters is the lack of certainty as to the title by co-operation between the parties.

15         In all the circumstances of the case, I consider I should make no order as to the costs of the proceeding. The principal reasons for me to do so are as follows:

a.	The plaintiffs have had limited success in the proceeding having obtained an award of a relatively small sum of damages.
b.	The plaintiffs have otherwise failed to obtain the other relief they sought.
c.	The parties attempted to settle the matter, essentially agreeing that the issue between them was the removal of paint on the front part of the wall, and costs. In hindsight, a settlement in June 2009 would have been very sensible. By December 2009, the parties regarded their legal costs as an impediment to settlement. However, when viewed against the ultimate result of the case, the defendant succeeded on the painting issue.
d.	The parties have, at times, behaved inappropriately. Both sides in the litigation obviously have the financial capacity to pursue expensive court proceedings if they decide to do so.
e.	Many issues relating to the title boundary and the boundary wall remain unresolved. The parties should not be encouraged to believe that resolution of legal issues by court order is the best option, particularly in disputes concerning neighbours. In such disputes, the courts must be ready to intervene, as otherwise resort to self-help may ensue. However, resolution of these disputes by the parties themselves (with or without the assistance of their solicitors) is to be encouraged.
f.	An analysis of “success” or “reasonableness” in this context has a degree of unreality.

16         Finally, I wish to acknowledge the assistance of both counsel. The trial was run efficiently. On the hearing of the costs argument I received comprehensive written submissions with copies of the relevant case law. Without expressly referring to the cases, I have attempted to apply the relevant (and often quoted) principles in reaching my conclusion on the issue of costs.

Certificate

I certify that these 6 pages are a true copy of the reasons for decision of His Honour Judge

Anderson delivered on 16 September 2010.

Dated: 16 September 2010

Hannah Christensen

Associate to His Honour Judge Anderson