Chenery v Conti

[1999] WASCA 258

CHENERY & ANOR -v- CONTI [1999] WASCA 258

Jurisdiction:	SUPREME COURT OF WESTERN AUSTRALIA	Citation No:	[1999] WASCA 258
Court:	THE FULL COURT (WA)
Case No:	FUL:145/1998	Heard:	19 MAY 1999
Coram:	WALLWORK J OWEN J STEYTLER J	Delivered:	15/11/99
No of pages:	23	Judgment Part:	1 of 1
Result:	Appeal allowedMatter remitted for further consideration
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Parties:	JOHN MICHAEL CHENERY LOIS DAWN CHENERY ANNE ELIZABETH CONTI
Catchwords:	Torts Claim by respondent of damage to her land due to construction of defective dam by appellants on their land Order that trial be "as to liability only" Respondent successful Whether mandatory injunction could issue before further hearing.
Legislation:	Nil
Case References:	Nil Ainsworth v Wilding [1896] 1 Ch 673 Almeroth v W E Chivers & Sons Ltd [1948] 1 All ER 53 Banque Commerciale SA (In Liq) v Akhil Holdings Ltd (1990) 169 CLR 279 Bell v Pitt [1956] Tas SR 161 Brady v Damon (1972) QWN 37 Corbett v Pallas (1995) 86 LGERA Davey v Harrow Corporation [1958] 1 QB 60 Dominion Co v Maskinonge Steam Ship Co [1922] 2 KB 132 Elston v Dore (1982) 149 CLR 480 Fullwood v Fullwood (1878) 8 Ch D 176 Gartner v Kidman (1962) 108 CLR 12 Gordon v MacGregor (1909) 8 CLR 316 Introvigm v Commonwealth (1981) 32 ALR 251 Kennaway v Thompson [1981] QB 88 Kraemers v Attorney-General for Tasmania [1956] Tas SR 113 Lawrence v Kempsey Shire Council (1995) A Tort Rep 81-344 Laws Holdings Pty Ltd v Short (1972) 46 ALJR 563 March v E & M H Stramare Pty Ltd (1990) 171 CLR 506 Margiotta v Michielan (1981) 26 SASR 356 Medlin v State Government Insurance Commission (1995) 182 CLR 1 Pantalone v Alaouie (1989) 18 NSWLR 119 Parramatta City Council v Lutz (1988) 12 NSWLR 293 Polskie Towarzystwo 'Elektrim' v Electric Furnace Co Ltd [1956] 1 WLR 562 Pride of Derby Angling Association v British Celanese [1953] Ch 149 Proprietors of Strata Plan No 14198 v Cowell (1989) 24 NSWLR 478 Redland Bricks Ltd v Morris [1970] AC 652 State of Queensland v J L Holdings Pty Ltd (1997) 189 CLR 146 Thynne v Petrie [1975] Qd R 260 Travis v Vanderloos (1984) 54 LGRA 268 Ward v Cannock Chase DC [1986] Ch 546

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA TITLE OF COURT : THE FULL COURT (WA) CITATION : CHENERY & ANOR -v- CONTI [1999] WASCA 258 CORAM : WALLWORK J

OWEN J
STEYTLER J

HEARD : 19 MAY 1999 DELIVERED : 15 NOVEMBER 1999 FILE NO/S : FUL 145 of 1998 BETWEEN : JOHN MICHAEL CHENERY

LOIS DAWN CHENERY
Appellants

AND

ANNE ELIZABETH CONTI
Respondent

Catchwords:

Torts - Claim by respondent of damage to her land due to construction of defective dam by appellants on their land - Order that trial be "as to liability only" - Respondent successful - Whether mandatory injunction could issue before further hearing.

Legislation:

Nil

(Page 2)

Result:

Appeal allowed

Matter remitted for further consideration

Representation:

Counsel:

Appellants : Mr M J Buss QC & Mr M T Ritter
Respondent : Mr K J O'Toole

Solicitors:

Appellants : Michael Whyte & Co
Respondent : Kevin James O'Toole & Associates

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

Nil

Case(s) also cited:

Ainsworth v Wilding [1896] 1 Ch 673
Almeroth v W E Chivers & Sons Ltd [1948] 1 All ER 53
Banque Commerciale SA (In Liq) v Akhil Holdings Ltd (1990) 169 CLR 279
Bell v Pitt [1956] Tas SR 161
Brady v Damon (1972) QWN 37
Corbett v Pallas (1995) 86 LGERA
Davey v Harrow Corporation [1958] 1 QB 60
Dominion Co v Maskinonge Steam Ship Co [1922] 2 KB 132
Elston v Dore (1982) 149 CLR 480
Fullwood v Fullwood (1878) 8 Ch D 176
Gartner v Kidman (1962) 108 CLR 12
Gordon v MacGregor (1909) 8 CLR 316
Introvigm v Commonwealth (1981) 32 ALR 251
Kennaway v Thompson [1981] QB 88
Kraemers v Attorney-General for Tasmania [1956] Tas SR 113
Lawrence v Kempsey Shire Council (1995) A Tort Rep 81-344


(Page 3)

Laws Holdings Pty Ltd v Short (1972) 46 ALJR 563
March v E & M H Stramare Pty Ltd (1990) 171 CLR 506
Margiotta v Michielan (1981) 26 SASR 356
Medlin v State Government Insurance Commission (1995) 182 CLR 1
Pantalone v Alaouie (1989) 18 NSWLR 119
Parramatta City Council v Lutz (1988) 12 NSWLR 293
Polskie Towarzystwo 'Elektrim' v Electric Furnace Co Ltd [1956] 1 WLR 562
Pride of Derby Angling Association v British Celanese [1953] Ch 149
Proprietors of Strata Plan No 14198 v Cowell (1989) 24 NSWLR 478
Redland Bricks Ltd v Morris [1970] AC 652
State of Queensland v J L Holdings Pty Ltd (1997) 189 CLR 146
Thynne v Petrie [1975] Qd R 260
Travis v Vanderloos (1984) 54 LGRA 268
Ward v Cannock Chase DC [1986] Ch 546

(Page 4)

1 WALLWORK J: These are my reasons for judgment after the hearing of an appeal against a judgment of a Judge of this Court. Amongst other things, the judgment ordered that the appellants fill in a dam on their property and restore the contours in the area of the dam to as nearly as possible to the contours prevailing prior to the construction of the dam.

2 The dispute had arisen after the dam, which had been constructed by the appellants on their land, had discharged water onto the respondent's land. The discharged water had allegedly eroded a drain which had been constructed on the respondent's land prior to the construction of the dam by the appellants. The discharged water had also allegedly caused other damage to the respondent's land.

3 Before the hearing of the action, it had been agreed that the question of liability would be decided first. The order made by a Judge on 21 October 1997 was that: "The trial shall be a trial as to liability only."

4 The primary question for decision in this appeal is whether at the conclusion of the trial "as to liability only" the learned Judge without further proceedings and against the expressed wishes of the appellants, had the power to order that the dam be filled in.

5 A secondary question is whether the learned Judge should have ordered, as he did, that:

"The determination of damages including damages for the restoration and reinforcement of the drainage trench on the plaintiff's land down-slope of the land on Lot 34, and including general damages and interest, be adjourned for assessment by a Master pursuant to O 34 r 18."

6 There is no assistance to be gained from the materials available to this Court as to exactly what the parties had in mind when they consented to the order that the trial be a trial as to liability only. The learned Judge who made the order had been presented with a minute of proposed orders including the relevant order. There was nothing said at that time as to what orders could be made at the conclusion of that part of the trial. The relevant order was never revoked or varied in any way prior to the mandatory injunction to fill in the dam, being ordered.

7 It was contended for the appellants on this appeal that the trial was conducted without the respondent having provided any particulars of her alleged loss and damage and that a determination of the relief which could be granted to the respondent would have required further particulars to be

(Page 5)

given and further evidence to be called, plus further discovery, in relation to causation and mitigation. Further, it was contended that a plaintiff in a nuisance action, such as this action, has the duty to take reasonable steps to mitigate his or her loss.

8 It was contended for the appellants that although the normal measure of damages for negligence or nuisance causing damage to land is the diminution in the value of the land, the plaintiff in a case like this may recover the cost of reinstatement unless that cost is out of all proportion to the diminution in value. Further, that it was fundamental in determining whether to grant injunctive relief to assess whether it would be just in all the circumstances to grant that relief.

9 The learned trial Judge found, amongst other things, that at all material times a drainage channel on the respondent's land had been located close to the boundary between the respondent's land and the land of the appellants. It had been known by the parties that the channel was fragile and that its walls were subject to erosion. His Honour found that the condition of the channel had encouraged damage due to water seepage, but that prior to the construction of the dam by the appellants, erosion to the channel had not been a serious problem. There had however been a marked acceleration of erosion after the dam had been constructed.

10 The learned Judge found that there was very significant risk, to the point of inevitability, of the dam failing, due to erosion backwards from the channel towards the dam, or alternatively, of water escaping from cracks in the dam wall in consequence of ground movement of the foundations beneath the dam wall.

11 When delivering his reasons for judgment on 5 August 1998, the learned trial Judge concluded with the following words:

"I am satisfied that in constructing the dam where they did, the defendants did not act reasonably. They were aware of the fragility of the channel which the plaintiff had constructed on her land, as she was entitled to do. Although the defendants were of course lawfully entitled to build a dam on their property, the dam in fact constructed by them was so located as to cause damage to the plaintiff's land. I would apply the decisions in Whalley v Lancashire and Yorkshire Railway Company …; Sedleigh-Denfield v O'Callaghan …; Elston v Dure …, and Hurdman v North Eastern Railway Company …

(Page 6)

to which I have referred above and hold that, while the construction of a dam on the defendant's property was otherwise a lawful act, it was actionable in all the circumstances, particularly having regard to its effect on the plaintiff's land. The evidence shows that it could have been constructed higher up the slope with a consequence that it would not have caused the nuisance which it has caused.

I shall hear from counsel as to the appropriate orders in accordance with these reasons."

12 Pursuant to that last-mentioned invitation, counsel appeared before the learned Judge on 24 August 1998 and made submissions as to the appropriate orders. His Honour indicated to counsel that he wanted to hear from them "only as to the appropriate orders to be made in the light of the decision which I have already made."

13 After he had heard submissions from counsel on 24 August 1998, on 28 August 1998, his Honour said:

"…it is I think appropriate that I record that the conclusion to which I have referred was arrived at on the basis that I would not have the power to direct that the plaintiff carry out work on her land or permit the defendants to carry out work on her land, in the circumstances that she had not infringed any of the defendants' legal or equitable rights. Nor did I feel entitled to direct a creation, in effect, of an easement over the plaintiff's land in favour of the defendants as an alternative to the removal of the dam. While therefore it is true that the solution suggested by the experts were not limited to the removal of the dam, the only alternative solution proposed by any of them involved the filling in of the channel on the plaintiff's land or the installation of a slotted pipe in that channel, so that the water emanating from the defendants' dam could be led into that channel. I consider that my finding that the plaintiff was not at fault in the matter and that she had not infringed the defendants' legal or equitable rights precludes any order by me requiring work on her land to remedy the nuisance caused by the construction of the defendants' dam and the place in which it is located. (Incidentally, as I indicated to counsel, the conclusion to which I came and which is quoted above should not be construed as a finding by me that the location of the dam on the defendants' land further up the slope would be safe or proper - any question

(Page 7)

of the construction of a new dam would necessarily involve expert advice and I should not like it to be thought that I have made a finding to the effect that any such dam should be constructed in any particular part of the defendants' property)."

14 In his reasons delivered on 28 August 1998, the learned Judge discussed a possible solution to the problem of the dam which had been proposed by an expert witness who had been called on behalf of the appellants, a Mr Cocks, concerning a proposed filling-in of the drainage channel on the respondent's land and the insertion of a pipe so that any water leaking from the dam would be taken away from the land of the respondent. His Honour quoted from Meagher, Gummow and Lehane: "Equity: Doctrines and Remedies", 3rd ed [par 311] where the learned authors say with reference to the maxim that "he who seeks equity must do equity":

"However the limits of the maxim must be remembered. It does not empower a court of equity to impose on a plaintiff as a condition of relief, any term which it considers reasonable. It can only impose terms which flow from the defendants' legal or equitable rights."

15 His Honour said that those words applied to this case and prevented him from making an order requiring in effect that the respondent grant to the appellants an easement to discharge the water from their land onto the respondent's land, that is to say, into the respondent's channel. He commented that the erosion of the channel on the respondent's land had been largely caused by the existence of the dam in its location and that the removal of the dam, and the restoration of the appellants' land to its original contours, would most probably result in the cessation of significant erosion in the respondent's channel.

16 Having discussed the questions concerning the removing of the dam his Honour said:

"However there is no evidence at all before me as to the cost of removing the dam and I am unable therefore to determine whether such cost would or might be disproportionate to the benefit of the mandatory injunction, although in the circumstances, I doubt that that would be so. In my opinion, there should have been an appropriate pleading in this regard and evidence should have been led at the trial, if the defendants wish to raise this defence to the plaintiff's claim for a mandatory

(Page 8)

injunction. There was no such pleading or evidence. Counsel for the defendants submits that, because the trial was as to liability and not as to 'remedies', as he put it, the matters in question can still be raised in the next stage of the action, namely the stage of the determination of damages. With respect, that submission cannot be right and I reject it."

17 It can be seen from that last-mentioned comment, that his Honour had rejected the proposition for the appellants, that the claim for a mandatory injunction could not be determined at that stage because that part of the trial was "as to liability only."

18 Prior to that comment in his reasons on 28 August 1998, the matter had been raised before his Honour on 17 August 1998. In the course of submissions by counsel for the respondent, counsel had said:

"…the trial that took place was a trial as to liability only. The orders, in setting down the matter, that were put before the court before Anderson J on 21 October 1997 made that clear, that the trial shall be a trial as to liability only. That matter has been dealt with by the court to the extent, for example, that Your Honour has found that the dam represents a danger to the plaintiff's land. What was not in issue at that trial, or was not to be tried, was the question of the remedies that flowed from the finding as to liability."

19 His Honour replied: "Is that right? The plaintiff was seeking an order for the mandatory injunction that I have mentioned. Surely that is not a question of damages, that is a question of whether that order should be made?"

20 It can be seen from his Honour's comment, that he was at that time drawing a distinction between a trial as to liability and a question of damages.

21 Counsel continued:

"It is not a question of damages, no. It is a question of remedy as opposed to liability and that, of course, is a key part of our submissions, that although the liability is there, the question of remedy is a matter of some discretion."

22 After some further remarks, counsel continued:

(Page 9)

"No, Your Honour for these reasons: firstly the question as to the trial being one of liability as opposed to remedy, as I have put it. Secondly, even if I am wrong in that, or found against on that, we are still left with a situation where the final orders have not been made and there was an invitation by Your Honour at the very least to provide, as I understand it, affidavits on the issues of hardship and suchlike in relation to complying with what Your Honour suggested in your reasons was the only reasonable course."

23 His Honour replied:

"I don't think that is right. I think that is where the misunderstanding may exist. What I really wanted was submissions as to the form of the order which would be appropriate in the light of the reasons that I had published."

24 On 24 August 1998, counsel for the appellants had said to the learned Judge:

"My submission is that there has been no hearing as yet on the question of remedy and so it would be open to the parties to adduce evidence on that question either in the form of the affidavits that have been filed by either parties or seeking leave to provide further evidence in a hearing as to the question of remedy. If that is the case, Your Honour, then there is no difficulty in these amendments being allowed by reason of the fact that there has been no evidence to date on some of these points, or not complete evidence in the sense that it is in the form of the affidavits that have been filed, but perhaps they don't go as far as one may go on a trial as to the question of remedy." (Respondent's supplementary appeal book p 10)

25 Counsel submitted to the learned Judge that if there were points of a potential good defence to the claim for a mandatory injunction, then the appellants ought to be allowed to litigate those, "particularly in a case like this where there has, as I say, been a division between the hearing on the question of liability and the hearing on the question of damages and remedy." (Supplementary AB 11)

26 In the course of the hearing on 24 August 1998, the learned trial Judge had said:

(Page 10)

"We have reached the situation where I have found the plaintiff is entitled to be granted a remedy. … I have also so far not been persuaded that I can make an order requiring the plaintiff to do anything because I do not, at this stage, consider that it is clear that the defendants have any legal or equitable right which has been infringed by the plaintiff.," (Supplementary AB 16)

27 The submissions of the appellants' counsel on 17 August 1998 and 24 August 1998 were consistent with the outline of submissions which had been presented to the learned Judge on 6 April 1998. Paragraph 2 of those submissions had said "The present trial is solely about the issue of liability."

28 Although counsel for the appellants had submitted to the learned Judge that the trial had been as to liability only, there had been affidavits presented to his Honour before his order on 28 August 1998, which had dealt with the question of the hardship to the appellants if the dam was to be removed. Also counsel had cross-examined witnesses during the trial on these issues and there had been various submissions made on that question.

29 However, it is clear from the transcript that by 17 August, and before the learned Judge made the order for the mandatory injunction, his Honour was aware that counsel for the appellants was contending that there should not be an order made for a mandatory injunction at that stage of the trial, as it had been conducted to that stage on the basis that it was a trial as to liability only.

30 The first question for this Court is, did the fact that the first part of the trial was to be a trial as to liability only prevent the learned Judge from ordering a mandatory injunction against the expressed wishes of the appellants before hearing all the evidence and submissions they wished to make on that question. Was the question of the granting of a mandatory injunction to be part of the first stage of the trial?

31 In the course of his reasons for judgment on 28 August 1998, the learned Judge said that counsel for the appellants had applied for leave to amend the defence by the addition of a par 10A. That proposed amendment was to the effect that the court ought not to grant the mandatory injunction sought by the respondent due to alleged undue hardship which would be caused to the appellants. It further raised an alleged failure of the respondent to mitigate her loss by taking steps to alleviate or minimise the effect of the discharge of water into the drainage

(Page 11)

trench. It also raised the question of delay in the making of an application for a mandatory injunction and the question of reasonable alternative means to prevent the dam being a danger to the respondent's land without the infilling of it.

32 The learned Judge said that in his opinion the application to add the proposed par 10A was far too late and must be refused. His Honour said:

"…the proper consideration of the issues proposed to be raised therein would, in my opinion, require evidence to be called on both sides, with additional discovery and pleadings, so that the trial of the issue of liability would need to be reopened. The matters referred to should all have been raised before the trial, if at all. I refuse the application to amend by adding the proposed 10A."

33 His Honour continued:

"Paragraph 10B is, I think, in a different category and is directed to the assessment of damages which are still to be determined."

34 It can be seen that again his Honour was drawing the distinction between a trial as to liability and the assessment of damages. He was placing the granting an order for an injunction within the scope of the trial on the issue of liability.

35 At the hearing of this appeal it was argued for the appellants that the proposed new par 10A had raised various issues relevant to remedy or relief, including the issues of undue hardship for the appellants; the respondent's alleged failure to mitigate; her alleged delay in making application for a mandatory injunction and the availability of alternative means to remove the danger to the respondent's land. It was submitted that all of these issues and other issues relating to causation and mitigation were relevant in determining whether a mandatory injunction should be granted, and if so, its terms; also to the quantum of the respondent's damages.

36 It was further contended for the appellants that rather than ordering that the determination of damages be adjourned for assessment by a Master pursuant to O 34 r 18, the learned trial Judge should have programmed the proceedings for a trial as to damages or other relief. This was because it would be necessary to hear further evidence and make substantial findings of fact before the matter was concluded.

(Page 12)

37 In Spry ,"Equitable Remedies", 3rd ed at 508 it is said:

"This is not to deny that on applications for mandatory injunctions it sometimes appears that the making of an order against the defendant will cause him very great expense or inconvenience and that matters of this nature may be of considerable weight in inducing the court to confine the plaintiff to damages, in accordance with the general equitable principles in reference to which the balance of justice is determined."

38 In discussing the requirements for the grant of mandatory injunctions at 509, the learned author says:

"Fourthly, it must appear that damages are not adequate, that is, that they would not put the plaintiff in as favourable a position in all respects as if he had received equitable relief in specie. Fifthly, it must appear that in all the circumstances, and particularly in view of equitable considerations such as laches and hardship and inconvenience as between the parties, that the most just course is that the particular injunction that is sought should be granted. These conditions may be regarded as both necessary and sufficient; that is, wherever they are all fulfilled - but only if they are all fulfilled - a restorative injunction in the appropriate mandatory form is granted."

39 At 511 the learned author continues:

"But the extent of the inconvenience or injury to the plaintiff which would be caused if he were refused relief, and hence the extent to which that injury or inconvenience may be only of a minor nature, is a matter of importance when questions as to the exercise of the discretion of the court arise, in view of the balance of hardship when it may appear that in all the circumstances the most just course is to confine him to remedies in damages, whether equitable or legal, as the case may be."

40 In Meagher, Gummow and Lehane: "Equity: Doctrines and Remedies" (supra) at 616 the learned authors say:

"Two comparatively recent decisions of the English courts are particularly worthy of note: Redland Bricks Ltd v Morris [1970] AC 652 and Acro (Automation) Ltd v Rex Chainbelt Inc [1971] 1 WLR 1676 … In Redland Bricks Ltd v Morris the facts were singular; the plaintiffs were carrying on the business of market

(Page 13)

gardeners and the defendant's quarrying activity caused the subsidence of the plaintiff's land. The defendant's activities were wrongful, but not wilfully so. At the time of the writ, further subsidence was feared and all witnesses agreed it would probably occur. The defendants did not dispute the plaintiff's entitlement to an injunction restraining future quarrying activities from causing further subsidence, but the plaintiffs insisted on and in the Court of Appeal obtained, a mandatory injunction restoring the land to its original state…The House of Lords reversed the Court of Appeal. The speech of Lord Upjohn with whom the rest of the House agreed, promulgated four principles: [1970] AC at 652:

(a) a mandatory injunction can only be granted when the plaintiff shows a very strong probability upon the facts that grave damage will occur to him in the future;

(b) damages must be an insufficient remedy;

(c) unlike negative injunctions, regard must be paid to


(i) whether the defendant behaved wantonly or unreasonably,

(ii) the hardship which would be caused by the grant of an injunction to a defendant who had behaved reasonably but wrongfully, and


(d) if an injunction be granted, it must be so worded as to bring the defendant's attention to exactly what it is he is expected to do."

41 It can be seen from the above extracts from learned authors that in this case the appellants' contention that the question of a mandatory injunction came within the context of a remedy rather than liability, should be sustained. It follows that in this case the learned trial Judge erred in not allowing the appellants to call further evidence and to make submissions before ordering the injunction.

42 The appellants are entitled to orders that the appeal be allowed and the order of the learned trial Judge of 28 August 1998 that the dam be filled in be set aside.

(Page 14)

43 With respect to the first ground of appeal that the learned trial Judge erred in law in refusing the appellants leave to amend their defence by the addition of the proposed new par 10A, that matter can be dealt with in due course when the matter is back before the learned Judge.

44 With respect to the second ground of the appeal, which is that the learned trial Judge erred in law in ordering that the determination of damages be adjourned for assessment by a Master pursuant to O 34 r 18 and that the learned trial Judge should have programmed proceedings for a trial as to damages or other relief before his Honour or another Judge, that ground should be sustained.

45 With respect to ground 4 which is that the learned trial Judge erred in law in ordering on 28 August 1998, that the respondent be entitled to a mandatory injunction, that ground has been dealt with.

46 The remaining ground is ground 3 which is that the learned trial Judge erred in law in failing to decide that one land owner cannot by altering the condition of his or her land, deprive another of using his or her land in a way in which that person is entitled to and that his Honour thereby erred in finding that the appellants' construction of the dam was unreasonable, given the presence of the fragile drainage channel on the respondent's land.

47 In support of this ground of appeal it was submitted that the learned Judge had focused on the wrong issue, in that it was not the construction of the dam but rather the manner of its construction and the way in which the dewatering operation had been carried out, which had caused the problem. It was submitted for the appellants that a use of land only ceases to be an ordinary use of land, if it is not done properly. In this case, if the dam had been constructed properly, and there had been no de-watering and no ploughing operation, and if there had been no leakage above that which is common to rural dams, it should not have been determined that there had been a nuisance when the respondent happened to have a fragile channel on her land which she had chosen to leave in a fragile condition. It was conceded that the effect of the de-watering and the ploughing operation had been to saturate the sub-soil and that that had been a condition all the year round, which had been reinforced by the leakage. However, it was submitted that if the matter were to go back to the learned trial Judge, or before another Judge, the reasons for decision concerning the negligent siting of the dam would be still in place. That this might carry some weight in determining whether the dam should be filled in, rather than it being acknowledged that a dam properly

(Page 15)

constructed in that location would not constitute negligence or nuisance even if the effect of constructing a dam in a proper manner would have caused some erosion to the respondent's trench. It was submitted that the erosion was properly attributable to the condition in which the respondent had chosen to leave the trench.

48 It was conceded that the action had been essentially fought in relation to the defective dam. However, it was submitted that if his Honour had found negligence and nuisance in relation to the manner of construction of the dam, then he should have said so in clear and unequivocal terms. Complaint was made of the learned Judge's conclusion:

"I am satisfied that, in constructing the dam where they did, the defendants did not act reasonably. They were aware of the fragility of the channel which the plaintiff had constructed on her land, as she was entitled to do. Although the defendants were, of course, lawfully entitled to build a dam on their property, the dam in fact constructed by them was so located as to cause damage to the plaintiff's land. I would apply the decision in Whalley v Lancashire and Yorkshire Railway Company …; Sedleigh-Denfield v O'Callaghan …; Elston v Dure …, and Hurdman v North Eastern Railway Company … to which I have referred above and hold that, while the construction of a dam on the defendant's property was otherwise a lawful act, it was actionable in all the circumstances, particularly having regard to its effect on the plaintiff's land. The evidence shows that it could have been constructed higher up the slope with a consequence that it would not have caused the nuisance which it has caused."

49 It was conceded that the learned Judge had accepted the evidence of Dr McInnes, which he had quoted extensively in his reasons for judgment. However, it was contended that the learned trial Judge had focused not merely on the manner in which this dam had been constructed but that in essence his Honour had been saying that the construction of any dam in that location would have been negligent or would have caused a nuisance. It was his finding that any dam should not have been constructed there which concerned the appellants. It was common ground that leakage occurs even from a properly constructed dam. It was said that such a "proper" leakage may have had some impact on the respondent's trench.
(Page 16)

50 It was submitted that these questions went to whether or not a mandatory injunction should have been granted. It was conceded that if all his Honour was saying was that the construction of this dam in that location in a defective manner was negligent, then there would be no problem. However, it was contended that the negligence was not in the location of the dam but in the manner in which it had been constructed.

51 It was submitted for the appellants that the best way of removing the problem would be to set aside the learned Judge's findings that the dam represented a danger which could only be removed by the removal of the dam and its re-location higher up the slope (AB 32A) and that in constructing the dam where they did, the appellants had not acted reasonably (AB 35C-D, 42C-D). It was also suggested that the consequential findings at AB 48C-49A should be set aside.

52 Involved in the question of whether a mandatory injunction should issue would be matters such as whether the leaks in the dam have now been reduced to normal proportions and whether the dam should be resited; also any proposals which the appellants might make to alleviate the situation.

53 In my view his Honour's reasons for judgment should be viewed in the light that he was discussing the dam in question and whether it should have been built in that location. He was not dealing with the question of whether or not any proper dam should have been constructed in that place. He was always dealing with the defective dam.

54 In my view ground 3 is not sustained.

55 I would favour an order that the matter be returned to the learned Judge to consider the question of the remedies which the respondent should now have. If that course is taken, the findings complained of will be revisited.

56 In view of the above, in my opinion the respondent's notice of cross-contention concerning the proposed amendment of par 10A should not now be dealt with.

57 With respect to the cross-appeal which is that the learned Judge erred in law in allowing the amendment, par 10B, concerning the question of a reduction in the respondent's damages due to an alleged failure to mitigate her loss, that matter also could be dealt with in due course at the resumed hearing.

(Page 17)


58 The cross-appeal should therefore be dismissed.

59 OWEN & STEYTLER JJ: The facts appear sufficiently from the judgment of Wallwork J, with which we are in general agreement. However, there are some matters on which we wish to make particular comment.

60 On 21 October 1997 Anderson J made an order in these terms: "The trial shall be a trial as to liability only". This order was made by consent and without argument. The fiat signed by the Anderson J refers to a minute of proposed order which was obviously handed up that day. The minute is not on the court file and the order was not extracted. We must therefore discern what we can from the materials and the surrounding circumstances so as to ascertain what the order means. It is critical to the disposition of this appeal whether the relief that the trial Judge granted was properly granted taking into account the terms of the order.

61 As at 21 October 1999 the statement of claim contained allegations of negligence, trespass and nuisance arising from the construction of the dam on the appellants' property and the escape of water from the dam on to the respondent's land. It also alleged that the appellants' dam was unstable and consequently likely to cause further harm to the respondent's property. Unless the appellants were made to remove it and to reinstate the original contours of their land it was likely to endanger the respondent and her property. In separate prayers for relief the respondent claimed damages and an injunction requiring the appellants to remove the dam and reinstate the natural contours and stability of the appellants' land. In the defence the appellants denied that their dam posed any threat to the respondent or her land and denied that the respondent was entitled to the relief claimed but did not otherwise specifically plead matters in opposition to the claim for an injunction. There is a counterclaim in which the appellants seek an injunction requiring the respondent to carry out remedial work on a drainage channel on her land, damages and other relief.

62 It is readily apparent that the trial Judge approached the matter on the basis that the order made on 21 October 1997 split the issues of liability and damages. Another way of putting it is that his Honour proceeded on the basis that all issues raised on the pleadings, except matters going to the quantum of damages, were alive. The neat question raised by the first ground of appeal is whether the order split the issue of liability from the question of remedies generally or whether the term "liability" is to be

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understood as extending to the claim for injunctive relief, leaving only the quantum of damages for later assessment.

63 In some ways the problem has an Austinian dimension. In his "Lectures on Jurisprudence" Austin drew the distinction between primary rights and duties and secondary rights and duties. Austin thought that the former were those which exist "in and per se" and are the ends for which the law exists. The latter are conferred for the better protection and enforcement of the former. It would, we think, follow in the facts of the present case that the questions "were the appellants negligent" and "did the appellants commit a nuisance" are to be regarded as matters of primary rights and duties while the question "is the respondent entitled to an injunction" is a secondary right. This is because there must be a finding whether the facts admit of a right or duty which exists "in and per se" before it can be decided whether a secondary right, which arises from a violation of the primary right, is available and should be ordered.

64 The practice of splitting issues often leads to unforseen and unfortunate results. It is trite to say that a tort is not complete until damage has ensued. Matters of liability will, therefore, almost inevitably involve a consideration of damage. The question usually arises as to the wrong that a plaintiff says it has suffered (liability in the strictest sense), whether damage has ensued and whether the damage found to have been suffered was caused by the wrong done by the defendant (liability in an extended sense). The question that then follows is whether the damage found to have been suffered and to have been caused by the defendant can be quantified and compensated for in monetary terms. That is a question of remedy, not liability.

65 Here, the primary problem does not concern damages. The appellants were found to have committed a tortious wrong. The trial Judge also found that the appellants' dam represented a continuing danger to the respondent's land. The question which then arose was whether it was appropriate to fashion the remedy in terms of a mandatory injunction without affording the parties, and more particularly the appellants, the opportunity to lead further evidence and make additional submissions in that regard and leaving only monetary compensation to be assessed at a later date. It is essentially a question of what the parties intended when they invited Anderson J, by consent and without argument, to order that "the trial be as to liability only".

66 It is implicit in par 1(b)(iii) of the grounds of appeal that the trial (at least in so far as the appellants were concerned) was conducted by the appellants on the basis that it was limited to liability in the sense that the

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whole issue of remedies was to be left for another day. This is important because it has an impact on the question of prejudice and, accordingly, on the way in which the appeal should be determined. The issue is not only whether the appellants approached the trial in that way but whether they were justified in thinking that this was the result of the programming order.

67 The trial commenced on 6 April 1998. The appellants' written outline of submissions dated 6 April 1998 note that the trial is about liability only, although there are some limited comments about damages and the bland comment that as the dam was structurally sound and a reasonable use of the appellants' land, injunctive relief should not compel them to fill in or move the dam. It seems to us that the issue whether or not the dam was structurally sound and a reasonable use of the appellants' land could be seen as going both to liability and to relief. That is because the appellants disputed that the manner of construction and location of their dam was unreasonable. They said that the problems complained of by the respondent were the product of shortcomings in the drainage trench embankment on her property. The materials presented at the appeal include the opening and closing addresses of counsel. We think it is a fair summary that the addresses of counsel for the appellants concentrated on issues of liability in the narrower sense and did not deal with matters associated with relief. The opening address of counsel for the respondent likewise concentrates on liability.

68 After the trial Judge had reserved his decision but before delivery of judgment and in accordance with leave granted by him, the parties lodged further written submissions and statements of contentions. The appellants' documents were filed on or about 18 June 1998. Once again, we think it is a fair summary that they deal only with liability in the narrower sense and not with remedies.

69 In one of the myriad of appeal books there is a document entitled "Plaintiff's Supplementary Outline of Submissions for Trial" dated 10 June 1998, which is the date on which oral closing submissions were taken. Those submissions deal in some detail with the law relating to injunctions and aggravated damages. There is no indication of the use, if any, to which that document was put. There is no reference to it in the oral closing address. Nor, as we have already said, is the question of remedies directly and comprehensively addressed in oral closings. In a document entitled "Plaintiff's Submissions on Expert Evidence" dated 19 June 1998 the respondent contends that "the evidence both favours and satisfies the requirements for the grant of the injunctive relief sought by

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[the respondent]". This suggests that counsel for the respondent might have had it in mind that remedies would be dealt with, at least partially, in the initial reasons for judgment. However, on no view of the facts could it be argued (and neither is it argued) that damages were in issue at this stage. Looked at from that point of view the reference in the document of 10 June 1998 to aggravated damages is a little surprising and suggests that the purpose of the submissions was preliminary in nature, perhaps to support the contention that the appellants' conduct constituted a serious wrong from which damage (in the sense of real injury) flowed.

70 The chain of events from early August 1998 is of lesser significance in the disposition of the appeal. On 4 August 1998 the trial Judge gave the parties a draft copy of the reasons which he was formally to hand down on 5 August 1999. Counsel for the respondent immediately prepared a minute of proposed orders, including the mandatory injunction. It is not surprising, therefore, that the written submissions and affidavits that followed are replete with material related to the grant or otherwise of injunctive relief. The issue first came squarely before the trial Judge on the motion for judgment heard on 24 August 1998. During that hearing counsel for the appellant made the submission that as the trial had been as to liability only the respondent's entitlement to an injunction had not, by that stage, been tried. His Honour rejected the contention on the basis that "the [respondent] was seeking an order for a mandatory injunction … surely that is not a question of damages, that is a question of whether that order should be made".

71 In the end, the trial Judge limited the parties to further submissions on the form of the order that should be made. The additional affidavit material that he permitted to be filed went only to the form of the order (in the hope that there could be some accommodation or co-operative solution) rather than to the substantive issues involved in the grant of injunctive relief. His Honour also indicated that the approach then advocated by the appellants might involve reopening some of the issues at trial. He said that he would not permit that to happen.

72 It seems to us that the term "liability" in the order of 21 October 1997 ought to be construed as excluding considerations going to injunctive relief. There is no warrant, either in the natural and ordinary meaning of the words or in the circumstances of the case, for giving the term "liability" a meaning that would extend it in part into the area of remedies. This is particularly so in circumstances in which one of the remedies sought is a mandatory injunction, the grant of which might depend on the availability of other, less drastic, measures. It seems to us,

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with respect, that the parties never really came to grips with the problem that the order splitting the issues was likely to cause and which it has caused. There was a degree of confusion and misunderstanding that, unfortunately, has left the process in an unsatisfactory state. The matter will have to go back to a Judge for further consideration.

73 The first ground of appeal challenges the decision of the trial Judge to reject the appellants' application for leave to amend the defence and counterclaim so as to put squarely in issue matters going to the nature of the relief to be granted. The second ground is related in that it contends, in effect, that the proper course is for the entire question of remedies to be dealt with together. It will be apparent from what we have said that we believe the trial did not adequately canvass the interrelated issues involved in selecting appropriate remedies. To that extent the decision to reject the proposed amendment proceeded on a false premise and ought to be revisited. The issues raised by the respondent in her notice of contention really fall away as a result. Grounds 1 and 2 have been made out.

74 In relation to the third ground of appeal, we believe that the trial Judge was entitled to come to the conclusion that the construction of the defective dam was unreasonable given the appellants' knowledge of the presence of the fragile drainage channel on the respondent's land. In this respect there is little we could add to what Wallwork J has said. His Honour made these findings in the process of arriving at the conclusion that the construction of the dam, though otherwise a lawful act, was actionable. To that extent, the findings should not be reopened on any resumed hearing. It still leaves open the question of the most appropriate remedy in all the circumstances.

75 So far as concerns the fourth ground of appeal it must follow from what we have already said that we accept that the trial was as to liability only and that a further hearing was necessary before the question of remedies could finally be resolved. Accordingly, we agree that the trial Judge's conclusion that the danger represented by the dam could only be removed by the removal of the dam and its location higher up the slope was premature. However, the finding as to the fact of the danger which the dam posed was open on the evidence. Having regard to the pleadings in that respect we think that finding was properly to be regarded as a matter of liability only.

76 Ground 4(d) contains a complaint that the trial Judge decided, in effect, that the injunction had to be granted in the absence of an

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infringement by the respondent of the legal or equitable rights of the appellants. We have already said that the question whether a mandatory injunction will be granted might depend on availability of other, less drastic, measures. It might, once further evidence has been led and additional submissions made, appear (although we would not want it to be thought that we are expressing any opinion in that respect) to be more equitable in all the circumstances to confine the respondent to a remedy in damages. Those damages may be calculated in a range of different ways but one measure of compensation, or partial compensation, might be the cost of remedial works, if these can be undertaken effectively, on the respondent's land. This situation would arise if it is concluded that a remedy of that kind should in all the circumstances, as they appear, prove to be the more equitable. An award of that type would not be one which would require the respondent to do any work on her land, although it may be assumed she would do so. We do not, consequently, read anything said by the trial Judge as suggesting that he had no jurisdiction to make such an award. However, if we are wrong in that and his Honour is to be taken as suggesting that an award of that kind is not open to him in the circumstances of the case then we would respectfully disagree with him. The fact that there was no infringement of the appellants' legal or equitable rights is a matter which would have to be taken into account. It could well bear significant weight but it would not necessarily be determinative. In view of the conclusions we have reached on the earlier grounds of appeal it is unnecessary for us further to consider this aspect.

77 The respondent, by leave, cross-appealed challenging the decision of the trial Judge to allow the appellants to amend the defence and counterclaim by adding par 10B. This paragraph pleads that any damages awarded to the respondent should be reduced by reason of her failure to mitigate the loss. It is said that particulars would be provided prior to any assessment of damages taking place. Given the history and the course that this hearing took we think that the delay in applying for leave to amend has been explained satisfactorily. It would be appropriate to allow the appellant to raise matters going to mitigation. The plea means very little in its present form and it needs to be filled out by the presentation of particulars. The respondent will not be precluded from challenging the adequacy or relevance of the particulars once they are given. Care will need to be taken to ensure that the medium of particulars in relation to mitigation is not used as a collateral challenge to critical findings that have already been made and which have been confirmed (expressly or implicitly) in the reasons of this Court. With that caveat, we think the cross-appeal should be dismissed.

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78 This matter will have to go back to a Judge for further consideration. Despite the time that has elapsed, we think it is desirable that it go back to the trial Judge because he has the background knowledge. There will need to be programming directions including, but not limited to, amendments to the pleadings to cater for the hearing concerning remedies, particulars relating to damages and the course of further evidence.