Collick v Robinson

[2022] NSWLEC 1243

Land and Environment Court

New South Wales

Medium Neutral Citation:

Collick v Robinson [2022] NSWLEC 1243

Hearing dates:

7-8 March 2022

Date of orders:

10 May 2022

Decision date:

10 May 2022

Jurisdiction:

Class 3

Before:

McEwen AC

Decision:

The Court orders that:

(1) Within six months of the date of these orders, or such later date as may be agreed between the parties, the applicant and the respondents are to remove the encroachments on no. 2C Dumaresq Road, Rose Bay (as depicted in the survey dated 8 July 2020 by Harrison Friedman & Associates Pty Limited) upon the following terms:

(a) The laundry and brick carport buildings are to be demolished in their entirety generally in accordance with the methodology set out in Scenario 1 in the expert report of Mr E. Brincat dated 1 October 2021 (the demolition works);

(b) The paling fence is to be demolished in its entirety.

(2) The parties are to contribute to the cost of the demolition works on a pro-rata basis according to the percentage of their respective shareholding as tenants in common in no. 4 Dumaresq Road, with the applicant to contribute 81.57% and the respondents to contribute 18.43% of such costs, provided that the respondents’ contribution is not to exceed $24,800 exclusive of GST.

(3) The applicant is to arrange and shall bear the total cost of the removal of the paling fence and of the removal of any vegetation necessary to enable the removal of such fence.

(4) The applicant is to arrange and shall bear the total cost of the erection of a new dividing fence upon the common northern boundary of no. 4 Dumaresq Road with no. 2C Dumaresq Road.

(5) The parties will instruct the building manager of no. 4 Dumaresq Road to obtain three quotes for the demolition works and instruct the building manager to accept the most cost-efficient quote and generally oversee the demolition works.

(6) The parties shall each contribute to the reasonable costs of the building manager’s fees incurred as a consequence of order 5 above, in the percentages set out in order (2) above, but irrespective of the cap.

(7) Exhibits B, D, 1 and 2 are retained and Exhibits A, C and E are returned.

Catchwords:

ENCROACHMENT OF BUILDINGS – laundry, carport and paling fence – whether construction of a new laundry should be ordered as a condition of demolition

Legislation Cited:

Encroachment of Buildings Act 1922, ss 2, 3

Land and Environment Court 1979, s 19(c1)

Cases Cited:

Hofer v Howell Developments Pty Limited [2000] NSWLEC 191

Towers v Stolyar [2017] NSWSC 526

Category:

Principal judgment

Parties:

Anthony Martin Collick (Applicant)
Michael Patrick Robinson (First Respondent)
Roshan Ara Robinson (Second Respondent)

Representation:

Counsel:
M Fisher (Applicant)
D Weinberger (Respondents)

Solicitors:
Rachel Clarke Legal (Applicant)
Mark O’Brien Legal (Respondents)

File Number(s):

2020/266913

Publication restriction:

Nil

JUDGMENT

1. COMMISSIONER: These proceedings are an application for relief under the Encroachment of Buildings Act 1922 (EB Act). Pursuant to s 19(c1) of the Land and Environment Court Act 1979 (L&E Act) the Court has jurisdiction in class 3 of its jurisdiction to hear and dispose of the matter.

2. The applicant is an ‘adjacent owner’ and the respondent is an ‘encroaching owner’ as both terms are defined in s 2 of the EB Act. As an ‘adjacent owner’ the applicant has exercised his entitlement to apply to this Court for relief under the EB Act in respect of an encroachment on his land (s 3(1)).

3. Specifically, the applicant seeks orders for the removal of encroachments constituted by a brick laundry with attached toilet, a three-bay brick carport and a paling fence (the encroaching structures).

Outcome of the proceedings

4. For the reasons set out in this judgment, I have concluded that the encroaching structures should be removed, on terms, within six months of the date of these orders. The Court’s orders will not require the replacement of the laundry.

The background to the application

5. The applicant’s property is legally described as lot A DP 33652 and is known as 2C Dumaresq Road, Rose Bay (subject property). Its western boundary is adjacent to the waters of Rose Bay, and it is a battleaxe block. The subject property has an area of approximately 676 m². On its northern side it has an east/west access handle approximately 38 m in length and approximately 1.83 m in width, which provides a narrow eastern street frontage to Dumaresq Road. The encroaching structures stand partly upon the access handle of the subject property close to the street frontage and partly upon the adjacent property to the south being 4 Dumaresq Road.

6. The respondents are the owners of unit 3 in a six-unit residential flat building which stands upon land legally described as lot C DP 33652. That land, as referred to above, is known as 4 Dumaresq Road, Rose Bay (no. 4) and is a parcel of land which is relevantly contiguous with the subject land. It has an eastern frontage to Dumaresq Road and its northern boundary adjoins the access handle of the subject property. Its western boundary adjoins the eastern boundary of the subject property.

7. It should be noted that the applicant is now the owner of the remaining five units within the residential flat building on no. 4. Accordingly, the applicant is also an ‘encroaching owner’ within the meaning of the EB Act.

8. The applicant and the respondents are tenants in common of no. 4.

9. Pursuant to a ‘Co-Ownership Deed’ dated 15 February 1988 (the deed) entered into by predecessors in title, each co-owner and their successors were entitled to exclusive use and occupation of certain areas, those being the six units and three parking spaces located within the brick carport and have rights in common to use the laundry and toilet building. By reason of his holdings, the applicant has exclusive rights over the three car spaces. The deed records that there are a total of 678 shares held in common. By virtue of their respective holdings, the parties agree that the applicant holds 533 shares (81.57%) and the respondents hold 125 shares (18.43%).

10. Both the subject property and no. 4 were originally part of a single parcel of land legally known as Certificate of Title 4950 Folio 211. That original parcel was subdivided into three lots in 1951 as lot A, B, C in DP 33652. Lot A is the subject property at 2C Dumaresq Road and lot C is no. 4 Dumaresq Road. It is agreed that the laundry, toilet and carport were likely erected prior to 1951. Accordingly, it is the 1951 subdivision of the land that first gave rise to the structures becoming encroachments as defined in s 2 EB Act.

11. As previously observed, the access handle has a length of approximately 38 m and a width of approximately 1.38 m. A survey dated 9 November 2020 (affidavit RG Harrison sworn 29 September 2021, Annexure E) incorporates an earlier survey of 8 July 2020 and records that the brick carport and laundry encroach upon the access handle of the subject property from 1.435 m up to 1.51 m and occupy an area of 16.9 m². The paling fence encroaches from 1.48 m up to 1.79 m and occupies a further area of 43.1 m². Thus, the total encroached area is 60 m². This is approximately 9% of the site area (676 m² of the subject property).

12. It is agreed that with a width of only 1.83 m, the access handle is unsuitable for use by motor vehicles and would be limited to pedestrian access. The encroachments and surrounding vegetation currently impede access of any type to its eastern end. Further, the existence of a retaining wall and parking structure (which the owner of no. 6 Dumaresq Road has a legal right to occupy) across the handle at its western end constitutes a further impediment to pedestrian access from Dumaresq Road to the waterfront dwelling at the western end of the subject property.

Relevant provisions of the Encroachment of Buildings Act

13. So far as is relevant to these proceedings, s 2 of the EB Act sets out relevant definitions and s 3(2) and (3) of the EB Act set out the Court’s powers for the grant or refusal of relief in respect of the encroachment:

2 Definitions

In this Act, unless the context or subject-matter otherwise indicates or requires:

Adjacent owner means the owner of land over which an encroachment extends.

Boundary means the boundary line between contiguous parcels of land.

Building means a substantial building of a permanent character and includes a wall.

Court means the Land and Environment Court.

Encroaching owner means the owner of land contiguous to the boundary beyond which an encroachment extends.

Encroachment means encroachment by a building, and includes encroachment by overhang of any part as well as encroachment by intrusion of any part in or upon the soil.

Owner means any person entitled to an estate of freehold in possession:

(a)  whether in fee simple or for life or otherwise,

(b)  whether at law or in equity,

(c)  whether absolutely or by way of mortgage,

and includes a mortgagee under a registered mortgage of a freehold estate in possession in land under the Real Property Act 1900.

Subject land means that part of the land over which an encroachment extends.

3   Encroachments

(1)  Either an adjacent owner or an encroaching owner may apply to the Court for relief under this Act in respect of any encroachment.

(2)  On the application the Court may make such orders as it may deem just with respect to:

(a)  the payment of compensation to the adjacent owner,

(b)  the conveyance transfer or lease of the subject land to the encroaching owner, or the grant to the encroaching owner of any estate or interest therein or any easement right or privilege in relation thereto,

(c)  the removal of the encroachment.

(3)  The Court may grant or refuse the relief or any part thereof as it deems proper in the circumstances of the case, and in the exercise of this discretion may consider amongst other matters:

(a)  the fact that the application is made by the adjacent owner or by the encroaching owner, as the case may be,

(b)  the situation and value of the subject land, and the nature and extent of the encroachment,

(c)  the character of the encroaching building, and the purposes for which it may be used,

(d)  the loss and damage which has been or will be incurred by the adjacent owner,

(e)  the loss and damage which would be incurred by the encroaching owner if the encroaching owner were required to remove the encroachment,

(f)  the circumstances in which the encroachment was made.

14. The parties are agreed, and I am satisfied, that these proceedings are properly constituted.

15. Section 3 invests the Court with a broad discretion for the making of orders disposing of this application and the exercise of the Court’s discretion is unconfined: Hofer v Howell Developments Pty Limited [2000] NSWLEC 191 at [18]. Section 3(3) sets out factors which may be considered where appropriate. The consideration of these factors is not obligatory, nor does it confine the matters that may be considered.

The respective positions of the parties

16. The parties agree that the encroaching structures should be removed but disagree as to whether that removal should be conditional upon the construction of a new external laundry to stand wholly upon lot 4. The applicant does not want a replacement laundry, but the respondents do. There is also some disagreement with respect to conditions which might be associated with the removal of the encroaching structures.

17. Despite their position in support of the conditional removal of the encroaching structures, the respondents, somewhat paradoxically, urge that the Court should, in the exercise of its discretion, refuse to order the removal of the encroachment. The respondents claim that such an order would lack utility in circumstances where the applicant has not demonstrated that the access handle would be useable for any purpose identified by the applicant, such as pedestrian, wheelchair or rubbish bin access, due to the existence of the retaining wall and the easement for vehicular parking within, and adjacent to, a carport in favour of the owner of no. 6 Dumaresq Road. Both the retaining wall and the easement and carport are located adjacent to each other at the western end of the access handle of the subject property.

18. The parties are agreed that the costs of any removal works should be borne as a percentage in accordance with their shareholdings as tenants in common in no. 4: i.e., the applicant to pay 81.57% and the respondents to pay 18.43%. They are further agreed that the costs of any replacement laundry which might be ordered by the Court, should be borne 50/50 as between the applicant and the respondents.

The evidence

19. The applicant relied upon the affidavit evidence of expert witnesses with respect to surveys of the land and the encroaching structures, the value of the land upon which the encroaching structures stand, the cost of demolition and any replacement structures and the utility of retaining any part of the laundry, toilet and brick carport standing on no. 4 insofar as those structures do not constitute an encroachment. The respondents do not rely upon expert evidence and do not dispute the expert evidence relied upon by the applicant. No expert witnesses were required to give oral evidence.

20. The unchallenged evidence of Mr D. Gallagher, a quantity surveyor, (Exhibit C) is that the likely minimum cost of complete removal of the encroachments and reconstruction of a new laundry is $329,240 and that the cost of removal of the encroachments, including repair and reinstatement of the laundry, is $373,579 due to difficulties incorporating any new section of the laundry with the old section. The evidence is unclear as to the cost of a new external laundry alone, which would stand wholly upon no. 4, but it may be inferred from the evidence to be in the order of $100,000. Owing to the extent and dilapidated state of the encroaching structures, neither party contended that it would be feasible to retain any part of those structures which might be left standing on lot 4 after demolition of the encroaching sections.

21. Both the applicant and the respondents relied upon their individual affidavits and the applicant and the first respondent gave additional brief oral evidence during the hearing.

22. The applicant purchased the subject land for the sum of $16.6 million in March 2020. He completed the purchase on 29 April 2020. He was aware of the encroachments. By letter dated 4 May 2020, his instructing solicitors first wrote to the then owners of no. 4 demanding that the encroaching structures be demolished and removed. There was subsequent correspondence between those parties, but no agreement was reached. The applicant commenced these proceedings on 14 September 2020.

23. Subsequently, there was a meeting of the co-owners of no. 4 on 18 August 2021, by which time the applicant was the owner of all of the units on no. 4, with the exception of unit 3, owned by the respondents, and unit 4, which was subsequently purchased by the applicant in October 2021. It was unanimously resolved at the meeting that the encroachments should be removed, but the terms upon which this should occur were never resolved. The sticking point was related to the reinstatement of any external laundry.

24. The subject of some attention during the hearing, and relied upon by the respondents and the applicant, was the deed signed 15 February 1988 referred to earlier in this judgment. A copy of the deed is Annexure A to the affidavit of the first respondent dated 24 December 2021. The deed records that the then six co-owners of no. 4 agreed to join in the deed to record their various covenants, rights and obligations in respect of no. 4. Lot C in DP 33652 (no. 4) was defined as ‘the Property’ in that deed.

25. Clause 4 of the deed stated in part:

“The Co-Owners acknowledge each to the other that all Co-Owners shall be equally entitled to use and enjoy in common all Common Areas of The Property. For the purposes of this Deed, the term ‘Common Areas’ shall mean the laundry ...”.

26. Clause 8(b)(iv) and (vii) provide:

“8 The Co-Owners covenant each with the other as follows: ...

(b) That they will contribute in the proportions of their fractional holdings as tenants in common in The Property ... such moneys as are required from time to time to meet all ... maintenance and repairs and other expenses of The Property and in particular ...

(iv) Repairs maintenance and periodic repainting of Common Areas.

(vii) All such other charges and expenses of a common and reasonable nature or character as may be agreed upon between the Co-Owners.”

27. It should be observed that the ‘Property’ cannot include the access handle of the subject land because it is not part of no. 4. Accordingly, the ‘Common Areas of the Property’ cannot include or be referable to so much of the structures as constitute encroachments, the subject of these proceedings.

28. On 12 February 1988, three days before the signing of the original deed, Mr Kirby, the owner of the subject property at that time and also an owner as a tenant in common of a car space on no. 4, wrote to the solicitor for the managing agents of no. 4 advising:

“I do not by executing the deed waive objection to these encroachments. In due course I will want something done about them. However, this is not the time and that is why I have executed the deed, subject to this letter.

Please arrange for copy of this letter to be drawn to the notice, and attached to the counterpart copies, of the Co-ownership Deed which I return now executed by me” (the Kirby letter) (Annexure G applicant’s affidavit sworn 1 October 2021).

The Kirby letter is relied upon by the applicant in response to the proposition that he was aware of the encroachments when he purchased the car space and the subject land and took no active steps to seek the removal of the encroachments.

29. On the question of whether the laundry should be rebuilt on the common area of no. 4, the applicant, who is the owner of units 1, 2, 4, 5 and 6 said that he had renovated units 4, 5 and 6 and included an internal laundry in each of them, and was proposing to do the same for units 1 and 2. Accordingly, his evidence was that he had no desire to participate in the rebuilding of any new laundry because it would be of no benefit to him or his tenants. He stated that leases with tenants did not include the right to use the existing laundry.

30. Regarding future intended use of the access handle, subsequent to the removal of the encroaching structures, the applicant explained that his parents, currently resident in Japan, were elderly and that he intended for them to come to Australia for extended periods and live with him at his dwelling on the subject land. His mother and father are both wheelchair bound. The applicant stated that he intended to construct a ramp within the access handle to provide safe wheelchair access from Dumaresq Road to his foreshore dwelling so that his parents could be taken for walks in the local community. He further explained that there were currently two forms of off-site access to the waterfront dwelling, but neither were, in his opinion, suitable for safe wheelchair access.

31. Exhibit 2 (aerial photograph) depicts existing off-site access to the subject property. From that document and other evidence, it is apparent that the subject property benefits from an easement for pedestrian access comprising stairs and ramp sections from Dumaresq Road down no. 2B Dumaresq Road adjacent to the southern boundary of no. 4. It is not suitable for a wheelchair. In addition, there is an easement for vehicular access via a driveway down the access handle of no. 6A Dumaresq Road which lies to the north of no. 4 and is separated from no. 4 by a neighbouring streetfront property at no. 6 Dumaresq Road.

32. The applicant said that the driveway is very narrow, is unsuitable as wheelchair access due to its steepness, and services not only the subject land but also two other properties, namely no. 6 and 6A Dumaresq Road, whose occupants drive their cars up and down the driveway on a regular basis throughout the day. The applicant is of the opinion that there is an unacceptable risk of conflict between vehicles and any wheelchair using the driveway.

29. The applicant advised that he cannot provide visitor parking close to his dwelling and that although current visitors to his dwelling do walk down the stairway and driveway, he wishes to provide private access for them via the access handle. Construction of a pedestrian ramp within the access handle would provide safe passage for himself, his family, friends, visitors and any aged care workers that might be employed to care for his elderly parents. In addition, it would provide more convenient wheelie bin access from the dwelling to Dumaresq Road. Such bin access is required on a weekly basis.

30. He agreed in cross-examination that some form of ‘skybridge’ would be necessary to ramp over the retaining wall and car space/carport used by the occupants of no. 6. He agreed he had not investigated the feasibility or nature of that construction, had obtained no quotes, and had not made any inquiries of council in that regard. The applicant said this was because he was awaiting the outcome of these proceedings before incurring such costs which might otherwise be wasted. It was put to the applicant that in the above circumstances, he was not genuine in his asserted aspirations for a ramp. The applicant denied this claim.

31. The first respondent gave evidence that he and his wife purchased unit 3 at no. 4 in April 2003 and lived in it for a total of four years since that time. It does not have an internal laundry. Past tenants of no. 3 have used the external laundry. Like other subsequent purchasers, he signed the deed and was aware of its terms from the date of purchase. In recent times the respondents renovated unit 3 but did not make any provision for an internal laundry. The first respondent maintained that there was nowhere to put a washing machine. He said this because, “the renovation did not permit it.” He was aware that some units owned by the applicant had an internal washing machine installed and that those units were of a similar footplate to unit 3. He has made no inquiry as to the feasibility of alterations to existing cabinetry to accommodate a washing machine within the unit. The first respondent agreed that he proposed and voted in favour of the removal of the encroaching structures in August 2021 and that remains his position, but that this should be understood in the context that he also proposed in August 2021 that a new laundry structure be erected. Resolutions related to the new laundry were defeated. He seeks that a new laundry be erected on the external common property of no. 4 and offers to pay 50% of the cost despite his lesser 18.43% holding as a tenant in common of no. 4.

The submissions and draft orders of the parties

36. The Court had the benefit of written submissions filed by the parties prior to the hearing and the further submissions made by the parties in the course of the hearing, as a result of which elements of the written submissions were not pressed or were varied and refined. Each party also proposed draft orders for the disposal of the proceedings. These were the subject of some discussion during the hearing, with the main disagreement relating to the utility of an order requiring the reinstatement of a new laundry upon demolition of the whole of the encroaching structures. I summarise the salient submissions below.

The applicant’s submissions

37. On behalf of the applicant, it was accepted that he (like the respondents) was aware of the encroachment at the time the applicant purchased the subject property in March 2020. Settlement took place on 29 April 2020 and, through his solicitors, by letter dated 4 May 2020, he promptly asserted his intention to require demolition. These proceedings were commenced by the applicant on 14 September 2020.

38. With respect to the deed, the applicant relied upon the Kirby letter dated 12 February 1988 and further submitted that the terms of the deed did not prevent him from maintaining these proceedings or oblige him to agree to the replacement of the laundry structure, for which he had no use, and did not require or desire it.

39. He noted that the value of the land affected by the encroachment could not be regarded as insignificant having regard to the purchase price of the whole of the subject property ($16.6 million). The applicant relied upon the valuation evidence of Mr L. Bridges (Exhibit A) who opined in September 2021 that the value of the site was approximately $20.3 million, equating to $30,000 per m². Mr Bridges valued the access handle (60 m² x $30,000/m²) at $1.8 million and the value of the area encroached upon by the laundry and brick carport alone at approximately $500,000 (16.9 m² x $30,000/m²). Accordingly, it was the applicant’s submission that the value of the land affected by the encroachment was approximately $500,000.

40. The applicant further submitted that the encroachments effectively prevented any use of the access handle, which was the only land owned by the applicant by which access could be gained directly to Dumaresq Road.

41. The applicant stated that he had a number of reasons for seeking the removal of the encroachments. These were to facilitate the following:

1. Disability access to the dwelling.

2. Safe and more convenient access for pedestrians, occupiers and visitors when compared to the rights of way.

3. Direct wheelie bin access.

42. The applicant acknowledged that no investigation as to what form of construction of a pathway or ‘skybridge’ over the retaining wall and parking structure had been undertaken to date but stated that he had a number of options depending upon the outcome of the proceedings because he remained the owner of the land below the retaining wall where the parking easement was located: Towers v Stolyar [2017] NSWSC 526 at [51] and [52]. These Supreme Court proceedings did not involve the current parties but did relate to the entitlement of a prior owner of the subject property, notwithstanding the existence of the easement for parking and garaging adjacent to the retaining wall at the western end of the access handle, to construct an access structure to bridge over the parking easement.

43. The applicant submitted that it was not reasonable or just to require the laundry to be rebuilt when, as the owner of five of the six units in the building at no. 4, he had no need for it. He noted that the cost of reconstruction of the laundry, based on the evidence of Mr Gallagher (Exhibit C) was likely to be not less than $80,000 - $100,000 plus ongoing costs. The applicant further noted that the owner of unit 3 might sell that unit in due course and if an owner installed a laundry within the unit, then the new structure would become entirely redundant.

44. He pointed out that the respondent had not put forward any compelling evidence as to why a laundry could not be installed in unit 3 and that there was no reason why that could not be done, as evidenced by the applicant’s renovations of units 4, 5 and 6 and his intended renovations for units 1 and 2.

45. In addition, the applicant observed that the only person affected by the demolition of the brick carport was himself because his combined holdings as a tenant in common in no. 4 entitled him to exclusive use over the whole of the carport.

46. Finally, the applicant accepted that he would bear all of the costs of removal and reinstatement of the encroaching paling fence and the removal of any necessary vegetation.

The respondents’ submissions

47. The first respondent’s submissions were made on behalf of himself and the second respondent. The first respondent’s fundamental submission was that the Court should decline to order demolition of the laundry because there would be no utility in circumstances where the existence of the retaining wall and the easement in favour of no. 6 to park below it and maintain the carport structure, effectively prevented the use of the access handle as a pedestrian ramp in any event. He noted that the applicant had provided no evidence that the construction of a ramp (which would necessitate a form of ‘skybridge’) was feasible or likely to be approved by the council. He noted that pedestrian, wheelchair and wheelie bin access was already available via existing rights of way.

48. The first respondent urged that in the circumstances, the order sought by the applicant was not ‘just’ and that no loss would be suffered by the applicant by reason of the encroachments remaining, other than an ‘inconvenience’. He also stated that the applicant had provided no evidence that the construction of a pathway within the access handle on the subject property would be any more convenient in terms of distance or gradient. He urged the Court to have regard to the fact that the applicant’s evidence did not explain why he was unable to convey his parents to or from his waterfront dwelling by motor vehicle using the northern right of carriageway on no. 6 Dumaresq Road. It was said that these were all discretionary considerations that weighed against the making of an order for demolition.

49. The first respondent also directed the Court’s attention to the fact that in its consideration, the Court may consider ‘the loss and damage which would be incurred by the encroaching owner if the encroaching owner were required to remove the encroachment’ (s 3(e) EB Act).

50. Counsel for the respondents focused upon the laundry and stated that it should be regarded as an ‘asset’ of his clients and that clause 4 of the deed amounted to a binding covenant that the respondents should have the continuing use and enjoyment of the laundry facility and that clause 8(iv) obliged the parties to retain or repair the laundry. Any order to demolish the laundry without a corresponding order to reinstate it upon no. 4 would amount to a serious disamenity to the respondents, which the applicant had no right to force upon them. In short, the respondents urged that it would be unjust not to order the reinstatement of the laundry, particularly in circumstances where there was no evidence that there was the capacity to reconfigure unit 3 to provide for an alternative laundry facility.

The encroachments should be removed and no order should be made to reinstate a laundry

51. Having given careful consideration to s 3(2), and s 3(3) of the EB Act and to the evidence (including the deed and the Kirby letter), as well as the detailed submissions of the parties, I have decided that it is just in the proper exercise of the wide discretion reposed in me to order that the encroaching structures (being the laundry/toilet, brick carport and paling fence) should be demolished and removed. Further, I have decided that, in the circumstances of this case, it would not be reasonable or just to order such removal subject to a condition that a new laundry be constructed.

52. The terms of the order for removal of the encroachments will oblige the removal to occur within six months of the date of these orders unless otherwise agreed by the parties. The costs of removal and remediation of the subject land are to be determined upon the basis of the most cost efficient of three quotes to be commissioned by the building manager of no. 4 Dumaresq Road. In accordance with their respective shareholdings as tenants in common of no. 4, the applicant will be required to pay 81.57%, and the respondents will be required to pay 18.43% of those costs. This is subject to the proviso that the respondents’ costs are capped at $24,800 exclusive of GST. The applicant is to pay 100% of the cost of demolition and replacement of the paling fence on its correct boundary alignment, as well as the removal of any necessary vegetation within the access handle.

53. The terms set out above were eventually the subject of broad agreement between the parties during the hearing in the event of a demolition order being made.

54. The reasons for my decision are as follows:

1. The encroachments were not deliberate because they were erected prior to the 1951 subdivision and only acquired that status as a consequence of the later subdivision of the land contained in Certificate of Title 4950 Folio 211 by which three new lots were created. The subject property, no. 2C Dumaresq Road (lot A DP 33652) and no. 4 (lot C DP 33652) were two of those resulting lots.

2. Both parties were aware of the fact and nature of the encroachments and the terms of the deed at the dates of purchase of their respective shares as tenants in common of no. 4 Dumaresq Road.

3. The extent and value of the land encroached upon (possibly as much as $500,000 if limited to the laundry and carport) and which is owned by the applicant cannot be reasonably regarded as insignificant.

4. The location of the encroachments prevents any practical access to the applicant’s land directly from Dumaresq Road. A private access handle must reasonably be regarded as an important and valuable attribute to an otherwise landlocked block. It should be able to be used for that purpose by the owner, the occupiers, employees and visitors.

5. The existence of the current impediments within the access handle, which are unrelated to the encroachments (its gradient, the retaining wall and parking easement) do not, in my opinion, displace the applicant’s entitlement to a demolition order. I make this finding regardless of the fact that there has been no inquiry as to the feasibility of the design or particular method of construction of any pedestrian, wheelchair or bin access ramp from the street to the dwelling on the subject property. I do not regard the potential of such future access as fanciful or unviable. Its ultimate configuration and use are properly a matter for the applicant, as owner, to resolve in due course.

6. There is no doubt that the removal of the external laundry will constitute a loss to the respondents of an important facility, but there is also no doubt, in my opinion, that this loss need only be of a temporary nature. There is no compelling reason, having regard to the evidence, why alterations could not be made to unit 3 to install an internal laundry or washing machine, as has already occurred in units 4, 5 and 6, and as is intended to form part of the renovation of units 1 and 2. The cost of a new external laundry has been estimated at between $80,000 to $100,000. Since the parties do not dispute this approximate cost and are agreed that if it were ordered they should contribute on a 50/50 basis, it follows that it could cost each of them $50,000. I believe that it is reasonable to infer that the respondents could install an internal laundry or, at least a washing machine, in unit 3 for a cost of less than $50,000 and that, in any event, the inclusion of this facility would ultimately be beneficial to the occupiers of unit 3. Further, the installation of an internal laundry would not visit ongoing costs of electricity, repairs and maintenance on the majority of the unit holders now or in the future when such costs would relate solely to the use by occupiers of unit 3.

7. Regardless of the actual cost of the instalment of an internal laundry or washing machine in lot 3, the objective fact is that five out of the six unit owners do not want a new external laundry to be constructed because they (currently the applicant) do not have any need for it. This is a circumstance which weighs in favour of the applicant’s position when an obvious and proven alternative is available to the respondents to overcome the temporary loss of the external washing facility.

8. With respect to the deed (and its relevance to the respondents’ legitimate expectations) I make the following observations: whilst the Court is not bound by the terms of a private agreement between the parties, I have taken it into consideration as part of the ‘circumstances of the case’ (s 3(3) EB Act). In doing so, I note that:

1. The deed cannot apply to so much of the laundry structure as stands upon the access handle because the access handle is not part of the ‘property’ to which the deed pertains. In my opinion, this is dispositive of the respondents’ arguments on this point and in particular, the respondents’ argument that clause 4 constitutes a binding covenant in favour of the respondents that they are entitled to use and enjoy the laundry as constructed.

2. In the context of the deed (and clause 8 in particular), read as a whole, it is at best doubtful that a covenant by the co-owners to repair and maintain the common areas of the ‘property’ (clause 8(b)(iv)) (which, as previously noted, would not include that part of the laundry which encroaches upon the access handle) could extend to the rebuilding of a new laundry in circumstances where both parties agree that it is not feasible to reuse the remnants of the laundry which would remain after demolition of the encroachment.

3. To the extent covered at all by the deed, the rebuilding of the laundry could, at best, fall within clause 8(vii): “All such other charges and expenses of a common and reasonable nature or character as may be agreed upon between the Co-Owners.” In this regard there is a respectable argument that the expense of a new laundry may not be reasonable and clearly, such expense has not been agreed upon by the co-owners.

55. For the foregoing reasons, I place minimal weight upon the deed in my consideration of the appropriate nature of relief in these proceedings. That relief is embodied in the orders set out below.

Orders

56. The Court orders that:

1. Within six months of the date of these orders, or such later date as may be agreed between the parties, the applicant and the respondents are to remove the encroachments on no. 2C Dumaresq Road, Rose Bay (as depicted in the survey dated 8 July 2020 by Harrison Friedman & Associates Pty Limited) upon the following terms:

1. The laundry and brick carport buildings are to be demolished in their entirety generally in accordance with the methodology set out in Scenario 1 in the expert report of Mr E. Brincat dated 1 October 2021 (the demolition works);

2. The paling fence is to be demolished in its entirety.

2. The parties are to contribute to the cost of the demolition works on a pro-rata basis according to the percentage of their respective shareholding as tenants in common in no. 4 Dumaresq Road, with the applicant to contribute 81.57% and the respondents to contribute 18.43% of such costs, provided that the respondents’ contribution is not to exceed $24,800 exclusive of GST.

3. The applicant is to arrange and shall bear the total cost of the removal of the paling fence and of the removal of any vegetation necessary to enable the removal of such fence.

4. The applicant is to arrange and shall bear the total cost of the erection of a new dividing fence upon the common northern boundary of no. 4 Dumaresq Road with no. 2C Dumaresq Road.

5. The parties will instruct the building manager of no. 4 Dumaresq Road to obtain three quotes for the demolition works and instruct the building manager to accept the most cost-efficient quote and generally oversee the demolition works.

6. The parties shall each contribute to the reasonable costs of the building manager’s fees incurred as a consequence of order 5 above, in the percentages set out in order (2) above, but irrespective of the cap.

7. Exhibits B, D, 1 and 2 are retained and Exhibits A, C and E are returned.

……………………….

C McEwen

Acting Commissioner of the Court

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Decision last updated: 10 May 2022