Clifton Developments (Vic) Pty Ltd v; Owners Corporation 1 Plan No. Ps510766u
[2012] VCC 695
•6 June 2012
| IN THE COUNTY COURT OF VICTORIA | Revised Not Restricted |
AT MELBOURNE
CIVIL DIVISION
COMMERCIAL LIST
BUILDING CASES DIVISION
Case No. CI-12-00214
| CLIFTON DEVELOPMENTS (VIC) PTY LTD (ACN 136 357 447) | Plaintiff |
| v | |
| OWNERS CORPORATION 1 PLAN NO. PS510766U | Defendant |
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JUDGE: | HIS HONOUR JUDGE GINNANE | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 23 May 2012 | |
DATE OF JUDGMENT: | 6 June 2012 | |
CASE MAY BE CITED AS: | Clifton Developments (Vic) Pty Ltd v | |
MEDIUM NEUTRAL CITATION: | [2012] VCC 695 | |
REASONS FOR JUDGMENT
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CATCHWORDS – TRESPASS – encroachment of building footings on adjoining land –liability of subsequent owners
PRACTICE - summary judgment application by plaintiff – strike out application by defendant - Civil Procedure Act 2010 ss 63 and 64
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Ms G Gray | Rigby Cooke |
| For the Defendant | Mr S Stuckey | LMS Lawyers Pty Ltd |
HIS HONOUR:
1 The plaintiff, Clifton Developments (Vic) Pty Ltd (“Clifton”), which owns 28 Clifton St Prahran, sues the defendant, Owners Corporation 1 Plan No. PS510766U (“the Owners Corporation”), which owns the neighbouring property, 26 Clifton St, in trespass for an encroachment extending from its land onto Clifton’s land. This encroachment is a concrete footing, on which the building at 26 Clifton St rests and which extends in part onto the land at 28 Clifton St.
2 Clifton alleges that the presence of the footing on its land is a continuing trespass.
3 Clifton seeks summary judgment with damages to be assessed. The Owners Corporations seeks orders that Clifton’s claim be struck out as disclosing no cause of action and as liable to prejudice, embarrass or delay the fair trial of the proceeding.
4 The issue argued was whether the Owners Corporation could be liable in trespass for the encroachment, when it did not own the land when the encroachment was built.
5 The affidavits filed reveal the following facts, which I adopt for the purposes of deciding the two summonses.
6 Clifton purchased 28 Clifton St on 14 April 2011. It is building eleven apartments and one shop on the land. The completion date set for the works was 11 May 2012. The Owners Corporation is the registered proprietor of the common property located at 26 Clifton Street, on which is built a three storey development consisting of eight units. Those units were constructed between 2004 and 2006. That was before the incorporation of the Owners Corporation on 22 September 2006. The plan of subdivision was certified as registered also on 22 September 2006. The Owners Corporation states that the footings of its building were inspected in April and May 2004 and a final inspection occurred on 8 September 2006. It states that it was incorporated, and became the registered proprietor of the land, when the building was already substantially complete.
7 The issue of the encroachment first arose on 8 August 2011, when excavation works for the footings were in progress at 28 Clifton St. A section of concrete footings running from 26 Clifton Street onto the land of 28 Clifton Street along the southern boundary was discovered. Excavation could not continue along the southern boundary, construction of the footings could not proceed as designed and the development was suspended for a time. The encroachment extends from approximately 10 millimetres to 600 millimetres onto Clifton’s land.
8 Clifton notified the representative of the Owners Corporation of the encroachment on 10 August 2011. It arranged for the uncovering of the entire encroachment, so that an assessment of its size and impact on the development could be made.
9 Clifton received advice that the encroachment was a footing for the Owners Corporation’s building, rather than an over pour and that cutting away the encroachment could disturb the footings on the Owners Corporation’s land. The engineering advice proposed that the Owners Corporation could either cut back and demolish the encroachment or, that an alternative design for the footings for the land at 28 Clifton Street could be used. That latter alternative was referred to as the “cantilevered approach” by reference to the method of construction that would be used. Mr R Casey, of Intrax Engineers, who prepared the original footings for Clifton’s development at 28 Clifton Street, stated in a site instruction on 16 August 2011:
“The section of neighbouring footing encroaching approximately 100mm tapers towards the base of the footing and appears to be an over pour. We have no objections to this proportion of footing being cut back provided care is taken not to disturb remaining existing footing and any associated vibration during these works is kept to a minimum.
The section of neighbouring footing encroaching approximately 560mm appeared to be a footing and not over pour. As discussed we suggested either the owner of the neighbouring property demolish this encroaching footing or an alternative detail is adopted.
As requested we have prepared an alternative detail…
We have designed a cantilevering footing to pick up the load bearing reinforced block work wall on boundary. This footing has been designed to tie back to pad footings or fixed to tie beams that are fixed to car stacker in-situ concrete walls.”
10 On 25 August 2011, Clifton received advice from its builder about these options for dealing with the encroachment. The first option was the excavation approach, which was excavating and saw cutting the concrete encroachment and removing the debris. It would not carry out that work for structural reasons. The second option was to use redesigned footings with a cantilevered approach, which would enable the development to continue with only a small part of the encroachment needing to be cut away.
11 Clifton held discussions with the Owners Corporation and wrote to it on 31 August 2011 asking which approach it wished Clifton to proceed with, but says that it received no firm response.
12 On 9 September 2011, Clifton’s solicitors wrote a letter to the Owners Corporation’s solicitors, the concluding parts of which stated:
“ In the circumstances, our client cannot simply stand by and allow its interests to be prejudiced by the inability of your client to make a decision.
Accordingly, unless the parties are able to come to a commercial agreement in relation to the removal of the over pour or adoption of the cantilever approach, together with an agreement on payment (including the delay costs being incurred by our client) by 12 noon on Tuesday, 13 September 2011, we are instructed that:
(a) Our client will instruct its builder to accept the cantilever solution and to commence with these works;
(b) Our client will commence proceedings against your client to recover loss, cost and expenses at the earliest opportunity.”
13 On 3 October 2011, Clifton directed the builder to proceed with the cantilevered approach. The work had been delayed for 42 days.
14 On 22 March 2012, the Owners Corporation’s lawyers wrote to Clifton’s lawyers asserting that they had been unable to locate support for the proposition that the Owners Corporation was liable for the trespass.
15 Clifton claims loss and damage of at least the sum of $243,426. It says that it will also have to seek an extension of its finance facility and incur a finance facility fee. The amended statement of claim seeks the sum of $294,376.75.
16 The legal issue between the parties is whether the Owners Corporation is liable for a continuing trespass for which it bore no responsibility when the initial trespass occurred. In deciding this issue to the extent required to determine the summonses I was assisted by the oral submissions and subsequent written submission of both counsel.
17 Clifton relies on the following statement of the law in the current edition of Professor Fleming’s, The Law of Torts:
“If a structure or other object is placed on another’s land, not only the initial intrusion but also failure to remove it constitutes an actionable wrong. There is a ‘continuing trespass’ as long as the object remains; and on account of it both a subsequent transferee of the land may sue and a purchaser of the offending chattel structure be liable, because the wrong gives rise to actions de die in diem until the condition is abated.” [1]
[1]10th Ed 2011 p 53
18 In turn, Fleming relied on American authority, including the following statement in The Restatement of The Law of Torts:
Failure to Remove Thing Tortiously Placed on Land
(1) A trespass may be committed by the continued presence on the land of a structure, chattel, or other thing which the actor has tortiously placed there, whether or not the actor has the ability to remove it.
(2) A trespass may be committed by the continued presence on the land of a structure, chattel or other thing which the actor’s predecessor in legal interest therein has tortiously placed there, if the actor, having acquired his legal interest in the thing with knowledge of such tortious conduct or having thereafter learned of it, fails to remove the thing.”[2]
[2]Torts 2d p 289 [161]
19 Fleming also relied on the statement in Prosser and Keeton on the Law of Torts:
“Continuing Trespass
The ordinary trespass is complete when it is committed; the cause of action accrues, and the statute of limitations begins to run at that time, although the consequence may be a permanent injury to the land. But in many cases, as where the defendant erects a structure or dumps rubbish upon the land of the plaintiff, the invasion is continued by a failure to remove it. In such a case, there is a continuing wrong so long as the offending object remains. A purchaser of the land may recover for the continuing trespass, and a transferee of the defendant’s interest in the structure may be liable.”[3]
[3]5th ed p83 The authorities cited for this proposition include the judgment of Cardozo J in Zenith Bathing Pavilion Inc v Fair Oaks S.S. Corporation (1925) 240 N.Y. 307;148 N.E. 532
20 Clifton also relied on the judgment of Dodds-Streeton JA in Break Fast Investments Pty Ltd v PCH Melbourne Pty Ltd[4] and on two decisions of the Western Australia Supreme Court in which the statement in Fleming has been applied[5].
[4](2007) 20 VR 311 at 331 [113]
[5]Clifton also relied on the decision of the District Court of Western Australia in MacWilliam v Walker [2008] WADC 31, where the allegation was of a retaining wall, constructed by a previous owner of land, encroaching onto the adjoining property.
21 The first was the decision of Ipp J in Comco Constructions Pty Ltd v Westminster Properties Pty Ltd[6], where a building contractor failed to obtain an interlocutory injunction to restrain the employer under a building contract from calling up guarantees granted by it. The employer alleged that it had validly terminated the building contract, because the builder had been unable to obtain an architect’s certificate, that it had constructed the whole of the works within particular boundaries stipulated in the building agreement. Ipp J, in refusing the interlocutory injunction, considered that the employer, or its successor in title, faced a risk of having to face claims in relation to trespass, because some pilings attached to the building being constructed encroached onto the neighbouring land. His Honour applied the passage in Fleming, although stating that:
“ …the points on which this decision turns were raised at a very late stage in the proceedings and were less than fully argued, and neither counsel cited any authority for or against them.”[7]
[6]Unreported, 22 March 1990, BC9001418
[7]Supra at pps 10-11
22 The second Western Australian decision was Campbell v John Hollywood Pty Ltd[8] in which Owen J accepted that the land owner was not liable for the trespass of its builder in constructing an encroaching wall, but was liable for it after it had taken possession of the land with knowledge of the encroachment.[9]
[8]Unreported, 9 March 1993, BC9301093
[9]Supra at pps 55-56
23 The Owners Corporation referred to statements in English and Australian texts, which when dealing with trespass, do not suggest that a subsequent purchaser of land, not involved in the original trespass, can be liable for it. It submitted that trespass to land is an intentional tort and the Owners Corporation was not alleged to have engaged in any act in respect of the encroachment. Thus Street on Torts states:
“But in all cases the intrusion on to the claimant’s land must result from some act on the part of the defendant, or persons for whom he is responsible.”[10]
[10]13th ed pp 311- 312
24 The Owners Corporation submitted that an existing owner does not commit a trespass, when the builder that it has engaged excavates beyond the boundary line without authority and thereby interferes with the neighbour’s land: Stoneman v Lyons[11]. It also submitted that Clifton now owned the part of the footing that extended onto its land.
[11](1975) 133 CLR 550
25 The Owners Corporation relied on the decision of the Full Court of the Supreme Court of Victoria in Doolan v Hill[12] as suggesting that a defendant to an action for trespass is not liable unless he is shown to have been present at, and taken part in the trespass, or to have authorised or instigated others to commit it for him. However that case dealt with a one off entry onto land, which is not the present situation.
[12](1879) 5 VLR (L) 290
26 The Owners Corporation submitted that there was no way in which it could have discovered the existence of the concrete encroachment, without trespassing onto Clifton’s land. There was no wrongful failure to remove the encroachment. There was no evidence to show that the construction of the footing constituted a trespass by anyone when it was constructed. Clifton embarked on a building program without determining that it could construct the building on the land in the manner in intended.
27 The Owners Corporation alleges that it was not in existence at the time of the commencement of the alleged trespass. It argues that there was no deliberate act by it constituting the original trespass. In its Notice of Defence, it alleges that Clifton’s redesign of the footings and cantilever approach has made it impossible for it to remedy any alleged continuing trespass. It argues that it received little time to remove the encroachment.
28 The Owners Corporation also argued by analogy that where a wall is built over the boundary of two adjacent properties, each party may deal with that part of the wall which stands on their own land as it suits them and, providing they are not negligent, the person so dealing is not responsible for any nuisance or inconvenience occasioned by his user.[13]
[13]Walsh v Elson [1955] VLR 276
29 The Owners Corporation also submitted that Clifton had never made a demand to remove the encroachment, rather it required the Owners Corporation to choose a method of solving Clifton’s difficulties and committing to pay for it and the delay costs. Clifton allowed the Owners Corporation only a short period to remove, the encroachment and that was conditional on paying substantial damages.
Decision
30 Clifton’s summary judgment application can be granted only if it has established that the Owners Corporation’s defence has no real prospects of success: s.63 of the Civil Procedure Act 2010. I do not consider that that matter has been established for the following reasons.
31 No Australian authority was cited for the proposition that a subsequent purchaser of land, from which an encroachment continues to extend to adjoining land and who had no involvement in, or knowledge of, the creation of the encroachment is liable in trespass for that continuing encroachment. The Western Australian authorities deal with circumstances where the persons said to be liable for the trespass were aware of the encroachment at the time they took possession of the land. The decision in the Break Fast Investments Pty Ltd’s case does not directly deal with the present issue.
32 The question of a subsequent purchaser’s liability for a continuing trespass caused by an encroachment, which when first occurring was concealed from view, is an important point that should be determined at trial after final findings of fact have been made. Clifton’s case may succeed because of the proper application of, or extension of, the law of trespass, but that decision should be made at trial.
33 There is also the arguable issue of what period of time Clifton should have allowed to the Owners Corporation to remove, or otherwise deal with, the encroachment.
34 In any event, I consider that the issues arising in this proceeding are of sufficient importance to allow the proceeding to go to trial in accordance with s 64 of the Civil Procedure Act.
35 In respect of the Owners Corporation’s summons, I consider that Clifton has pleaded an arguable cause of action, resting, as it does, on the authorities to which I have referred. The Owners Corporation summons cannot succeed.
36 I therefore dismiss both summonses and will give any directions required for the trial of the proceeding.
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