Fennell v Wright - [2006] SADC 88

DISTRICT COURT OF SOUTH AUSTRALIA
(Civil: Minor Civil Review)
FENNELL v WRIGHT
[2006] SADC 88
Judgment of His Honour Judge Tilmouth
2 August 2006
FENCES AND BOUNDARIES
A dispute arose between two neighbours as to the height of a fence and garage wall on the boundary of adjoining properties. A settlement agreement between the parties following mediation, provided that the fence would be 2.2 metres in height on the (respondent's) side and 1.5 metres on the (applicant's) side. Paragraph 2 referred to a garage wall "3.4 metres in height". A disagreement arose as to the meaning of this. A Magistrate, pursuant to s12(f) of the Fences Act 1975, found the description of the wall as "3.4 metres in height" was unambiguous and required the Defendant to reduce the height of the garage wall accordingly.
The Defendant appeals on the grounds that the order was made without jurisdiction, that the construction given to paragraph 2 was erroneous in light of previous dealings between the parties and that the Magistrate did not afford her sufficient opportunity to present her case.
Held: A garage wall is not a "dividing fence" within the meaning of the Fences Act 1975, therefore the Magistrate had no jurisdiction to hear the matter.
Held: Assuming jurisdiction, that paragraph 2 was ambiguous. Having regard to the circumstances preceding the agreement, the expression "3.4 metres in height" ought to read as meaning "3.4 metres in height from the Defendant's side".
Fences Act 1975 s3, s12; Development Act 1993 s38; Magistrates Court Act 1991 s38(4)(a), s38(5), s38(7), s27(3); Magistrates Court Civil Rules 1992 r13(4)(b); District Court Rules r95.07(e), referred to.
Codelfa Constructions v State Rail Authority of New South Wales (1982) 149 CLR 337; City of Greater Geelong v Herd (1997) 94 LGERA 149, applied.
Fullston v Fennell & ACCLAW Pty Ltd (1996) 187 LSJS 71; Bank of Australasia v Palmer [1897] AC 540 ; Hoyts Pty Ltd v Spencer (1919) 27 CLR 133; Saggers v Sydney Market Authority (1998) 66 LGRA 42; Life Insurance Co of Australia Ltd v Phillips (1925) 36 CLR 60; DTR Nominees Pty Ltd v Mona Homes Pty Ltd (1978) 138 CLR 423; Rankin v Scott Fell & Co (1904) 2 CLR 164; Horsfall v Braye (1908) 7 CLR 629; Bacchus Marsh Concentrated Milk Co Ltd (in liq) v Joseph Nathan & Co Ltd (1919) 26 CLR 410; White v ANZ Theatres Ltd (1943) 67 CLR 266; Bank of New Zealand v Simpson [1990] AC 181; Secured Income Real Estate (Aust) Ltd v St Martins Investments Pty Ltd (1979) 144 CLR 596; Giliberto v Kenny (1983) 57 ALJR 283, considered.

FENNELL v WRIGHT
[2006] SADC 88
Introduction

Mrs Wright has lived at 47 Bertha Street, Mount Gambier for over 40 years. Ms Fennell, the adjoining owner of contiguous land situated at 49 Bertha Street, purchased that property in 2004 and built a two-storey home on it in 2005. These neighbours fell into dispute as to the height of a garage wall and a fence erected by Ms Fennell on the boundary dividing the two properties, which found its way into the Magistrates Court as a fencing dispute, under the Fences Act 1975 (SA) (“the Act”).
The matter is of some consequence for both parties. If Ms Fennell is required to replace or repair the garage wall, that will involve costly structural changes. So far as Mrs Wright is concerned, the wall unnecessarily blocks out much of the natural light coming into her home, restricts the flow of fresh air and obstructs her view.[1]
[1] For example refer Hilderbrandt v Stephen [1964] NSWR 740, and Young “Some thoughts on Fences” (1994) APLJ 78.
The dispute comes to this Court by way of an application by Ms Fennell to review a minor civil decision, pursuant to s38(6) of the Magistrates Court Act 1991 (SA). At the heart of the complaint on review, is an error by the Magistrate at first instance relating to the proper interpretation of consent orders made on 17 June 2005, following a court ordered mediation between the parties.
The Fencing Dispute
There is quite a history to the matter. By notice given in the form provided for under the Act of 25 January 2005, Ms Fennell proposed fencing work to be carried out in relation to a “fence dividing the … contiguous land … as detailed and described in City of Mount Gambier Development Number 381/0139/2003 which provides for the construction of a 3.4 metre high limestone boundary fence between the two properties … ”. The total cost was stated at $27,000, but she sought a contribution from Mrs Wright only in the sum of $612, as “the proportionate share … for a standard colourbond fence”.
As it transpires, on 24 July 2004, the City of Mount Gambier “granted Provisional Development Plan Consent for the development … ” based on the above plan. The amended plan, which is before the Court, marked the internal height of Ms Fennell’s garage at 2.4 metres, and it shows the external boundary wall to be somewhat higher. It is possible, by measuring according to the scale on the plan, to ascertain the external wall was to be about 3.4 metres high[2].
[2] See plan 2 of 4, being part of Annexure “WF2” to the affidavit of Wendy Fennell sworn 30 November 2005.
Mrs Wright served a cross-notice in accordance with Form 3 under the Act on 27 January 2005, claiming there was “already a well maintained limestone fence dividing the boundaries” and that the “excessive height of new proposed fence will block light and airflow to the southern wall of my living area. This will greatly decrease my quality of life”.
Ms Fennell then issued proceedings under the Act in March 2005. Then on 4 May 2005 Mrs Wright brought her own proceedings under the Act. When listed for directions hearing on 11 May 2005, they were referred by the Magistrate for mediation. An injunction in favour of Mrs Wright was given on 3 June 2005 and extended on 6 June 2005. This was lifted by agreement of both parties on 16 June 2005.
Later Mrs Wright commenced further proceedings out of the Small Claims Jurisdiction of the Magistrates Court at Mt Gambier, seeking an order, apparently pursuant to s12(2)(f) the Act. This application was described by the Magistrate in his reasons as an application “on 5 July for the Court to review the terms of settlement that were endorsed by the Court on 17 June about the height of a dividing fence between the parties”. In point of fact Mrs Wright’s application, the last to be made by either party, was issued on 1 July, returnable for the 5^th. At this time she sought orders for the reduction of the height of the ‘dividing fence’ to ‘no more than 2.2 metres’, but made no application with respect to the garage wall. For some reason which is by no means clear, this application was ultimately treated in some way or another as if it were a construction summons relating to the proper interpretation of the agreement and consequential consent orders, concerning the height of the wall, rather than the fences.
The mediation process produced an agreement to settle on 16 June 2005. The terms of that agreement so far as presently relevant, were: -
1.The Applicant agrees to the Defendant building a besser block boundary fence 2.2 metres in height on the Applicant’s side of the property and 1.5 metres in height on the Defendant’s side of the property (taking into consideration the differing heights of the properties) for approximately 8 metres from the rear of the Defendant’s property.
2.The Applicant agrees to the erection of a garage of limestone with a 6 metre long wall of 3.4 metres in height to continue towards the front of the properties as a continuation of the fence as described in (1) with the remaining fencing to be the same height as in (1) above and of the same building material.
The Court records show an endorsement of the same date “Respondent requests the terms of the agreement to be recorded to ensure local Council agreement”. Orders in terms of this agreement were embodied in a judgment of the Court by consent of the parties, on the following day[3].
[3] Under the Magistrates Court Act 1991 s27(5).
As it transpires, the height of the garage wall as built, from the ground on Mrs Wright’s side is 4 metres, whereas from Mrs Fennell’s side it is 3.018 metres. The dispute between the parties arises from the interpretation to be given to the terms of settlement, especially clause 2, more particularly as to which side of the boundary fence the measurement of 3.4 metres was to be taken.
The Application For Review
It should first be noted that on 24 March 2006 a Master of this Court made an order extending the time for Ms Fennell to bring her application, as well as other consequential orders. The application for review is brought against a judgment of the Magistrate of 2 December 2005, in which he purported to construe the settlement agreement.
The Magistrate proceeded to hear the parties on the issue, determined the order was unambiguous insofar as it described a wall of “3.4 metres in height”, and after a site inspection, found that the measurement from the ground on Mrs Wright’s side was 4 metres. Accordingly his Honour ordered the wall was to be “reduced in height” to 3.4 metres “in accordance with the order of this Court and the agreement entered into between the parties”.
It appears this order was one purportedly made pursuant to s12(2)(f) of the Act, which provides so far as relevant to the matter, that the Magistrates Court may “determine … the manner of [the] performance of fencing work under the Act”.
The Contentions of Ms Fennell
Ms Fennell claims this order relating to the garage wall was one made without jurisdiction, as it did not pertain to a “dividing fence” within the meaning of the Act, that the construction given to the mediation agreement was erroneous in light of the previous dealings between the parties, and that she was afforded an insufficient opportunity to draw the material evidencing those dealings to the Magistrate’s attention, or to fully present her case with respect to them.
The applicant further contended that she “adhered to and proceeded upon the basis of the development … granted by the Council” under the Development Act 1993 (SA). According to her, the garage wall formed an integral part of the development authorised by the local council, which also incorporated the construction of a new house on her property.
The application for review complains that the consent terms should be interpreted “to provide for a height of the garage wall as 3.4 metres from the modified ground level on [Ms Fennell’s] side of the garage wall fixed by and described by the approval given by the City of Mt Gambier dated 27 July 2004”.
The documents relating to the Development Plans lodged with the City of Mt Gambier and the formal development documents themselves, disclose the proposed height of the garage never changed during the course of those various processes and it appears from those documents that the focal point of the measurement of 3.4 metres along the common boundary, was one always taken from her side on 49 Bertha Street.
The correspondence is said to make the position clear. In the first place, a letter written on behalf of Mrs Wright of 10 March 2005[4] refers to the height of the garage wall at 3400 mm, which information Mrs Wright or her solicitor could only have obtained at the time of an inspection of the plans lodged with the Council. Secondly, in a letter to the solicitors for Mrs Wright of 16 March 2005, the solicitors for Ms Fennell referred to “the height of the garage to the top of the parapet wall is 3.4 metres from my client’s ground level and 3.6 metres from Mrs Wright’s ground level”[5]. Thirdly, a letter from Mrs Wright’s solicitors in response of 10 May 2005[6] stated her position to be that she “does not object to … a garage on the boundary in accordance with the plans approved by the Council”. Finally, the Council itself in a letter to Ms Fennell of 14 October 2005, also pointed out that the plan approved by the Council on 30 November 2004, provided the garage wall was to be constructed at 3.4 metres[7]. That letter was not apparently shown to Mrs Wright, however.
[4] Annexure “WFI” to the affidavit of Wendy Fennell sworn 30 November 2005.
[5]Annexure WF3 to the Affidavit of Wendy Fennell sworn 30 November 2005.
[6]Annexure WF4 to the affidavit of Wendy Fennell sworn 30 November 2005.
[7]Annexure WF5 to the Affidavit of Wendy Fennell sworn 30 November 2005.
The contentions of Mrs Wright
According to Mrs Wright work commenced on the fence on Tuesday 3 May 2005 without prior permission or notice. Furthermore, on 1 June 2005, builders commenced to erect a concrete block dividing fence.
In a letter dated 18 May 2005, the solicitors for Ms Fennell agreed to “the reduction in the height of the fence so that the combined height of the retaining wall and fence was to be 2.2 metres from ground level on Mrs Wright’s side[8]. This agreement was incorporated by the parties to clause 1 of the mediation agreement.
[8] Annexure D to the Affidavit of Gwen Ruth Wright sworn 1 July 2005.
In her affidavit of 1 July 2005 Mrs Wright deposed:-
10.The height of the fence is a very important issue for me. The fence is about four feet from the side of my house. My living room and kitchen window face the fence. Initially I wanted the fence to be 1.8 metres or lower so that I did not lose too much natural light. I compromised with the defendant and agreed that the fence could be 2.2 metres high. When the fence was 2.2 metres high I became quite sad because it cut out so much of my natural light. My home became quite dark and gloomy and the narrow path between my house and the fence became damp and cold. However, I was prepared to put up with the situation because I had agreed to it.
11.The defendant has now built the fence higher than we agreed. This has substantially reduced the amount of light that enters my home. I have not consented to the defendant building the fence more than 2.2 metres high as measured from the ground level on my side of the boundary.
She contends it was understood on both sides when the agreement was struck following mediation, that the “unequivocal” reference in clause 2 to 3.4 metres was intended to be measured from the ground level on her side of the boundary. Mrs Wright maintains the garage wall was to be 3.4 metres high, as recorded in the mediation agreement and that as it is now 4 metres, the Magistrate was correct in ordering the height to be reduced. The current problem arose, she believes, because the ground level was later built up before the garage was constructed, therefore making it higher that originally proposed from the natural ground level.
Proceedings in the Court below
When the matter came before the Magistrate on 2 December 2005 the parties were in dispute as to the interpretation of the agreement, the material terms being quoted above. His Honour proceeded to record, following his inspection of the properties, that the settlement terms as to the boundary fence “has been complied with” and so far as the garage was concerned, the height was measured at 4 metres on Mrs Wright’s side “whereas the agreement was for the wall to be 3.4 metres”. He went on to observe that Ms Fennell drew a distinction between a retaining wall and a garage wall, but that nowhere in the agreement was there a reference to that distinction and certainly not in clause 2. Based on these observations his Honour proceeded to make a final order that “the portion of the fence that exceeds 3.4 metres is reduced in height …”.
The Review Proceedings
When this matter was first called over in this Court, the solicitor for Ms Fennel applied to represent his client pursuant to s38(4)(a) of the Magistrates Court Act 1991 (SA), an application opposed by the solicitor for Mrs Wright. After hearing submissions from the parties, the court formed the view that neither would be unfairly disadvantaged if unrepresented, having regard to the expense that might have been occasioned to them, within the meaning of Rule 13(4)(b) of the Magistrates Court Civil Rules 1992. Nor was the court satisfied there was any other “proper cause” to grant legal representation, but since it appeared legal issues might arise, the court gave leave to the parties to file written submissions through their respective solicitors, if so advised. That has been done and those submissions have been duly considered.
The Court initially retained this view during the course of the hearing, despite an application by Ms Fennell to reconsider the issue, for the same reasons. However, after an adjournment was granted in order to permit the parties to approach the mediator and to call her for the purposes of clarifying the intention of the parties behind the settlement agreement, Mrs Wright filed an extensive affidavit going into some detail as to the mediation process. Ms Fennell objected to this as being inadmissible, and in any case contended that the fences dispute was sent to mediation, but the height of the garage wall was not. In that case, the only way to resolve these conflicting issues was to go into oral evidence. Since important questions of the admissibility arose because of the fresh affidavit, and because Mrs Wright would be especially disadvantaged in giving evidence unassisted and in cross-examining, the Court gave leave for both parties to obtain legal representation and adjourned the matter for taking oral evidence.
On the application for review, this Court is obliged by s38(7) of the Magistrates Court Act to inform itself as it thinks fit, unbounded by the rules of evidence, and it has the power to affirm, rescind, or substitute a judgment it thinks appropriate for that given in the Court below. In doing so this court must make its own judgment of the issues, having regard to the substantial merits of the case.
The Proceedings in this Court
As just mentioned, the parties initially proceeded by way of reliance on the respective papers filed on their behalf in the court below, and by making fresh oral submissions, supported by the written submissions filed by their respective solicitors. The respective cases were based, in the main, on various documents exhibited to the affidavits filed in the lower court. The matter proceeded before a Magistrate, as it did before this court, very much as an issue of construction, having regard to the contemporary documents before both Courts upon affidavit. Each side then submitted photographs. Accordingly, the Magistrate did not hear any evidence on the matter. However both parties eventually sought to call evidence. This court, also took a view of the subject properties and of the dividing fence and the garage wall. As a result the case proceeded initially on the basis of documentary evidence, focussed on prior dealings between the parties.
It should be noted that the mediator was unavailable to give evidence due to ill-health, so that no further fruitful line of enquiry could be made in that direction. No inference therefore can be drawn against either party on that account, assuming of course, any evidence would have been admissible in relation to the discussions between the parties immediately proceeding the drawing up of the terms of settlement, terms apparently drafted by her[9].
[9] Refer s27(3) Magistrates Court Act 1991 (SA) and Chapman v Allan & Draper (1999) 74 SASR 274, [71-92].
The proposed oral evidence
Mrs Wright in her affidavit of 12 July 2006 went into some detail relating to the course of events and of discussions occurring in the course of mediation process. The reception of this material was opposed by counsel for the applicant, as being inadmissible because s27(3) of the Magistrates Court Act 1991 (SA) applied to it. That provides:-
Evidence of anything said or done in an attempt to settle an action by mediation under this section is not subsequently admissible in the proceedings or in related proceedings.

Not surprisingly when the matter came on again, the tender of the affidavit was not pressed.
The Fences Act Issue
A Magistrates Court has jurisdiction to resolve disputes arising under the Act relating to “a fence dividing contiguous land of adjoining owners”[10]. A fence as such is not defined, although “fencing work” is; “the erection of a new dividing fence, or replacement, repair or maintenance work in relation to an existing dividing fence”. The common denominator is that a “fence” or “fencing work” must be in issue, in some relevant way.
[10] s3 Fences Act 1975 (SA)
The Oxford English Dictionary defines a fence to be “a railing or barrier constructed of posts or of any of various materials connected by wire, planks, etc. used to enclose and prevent entry to an exit from a field, yard, etc:” and the Macquarie Dictionary defines a fence as “(A)n enclosure or barrier – usually of wire or wood, as around or along a field, garden etc.”, and refer City of Greater Geelong v Herd[11]. The jurisdiction of the Magistrates Court under s12 is conferred in relation to disputes arising in relation to “fencing work” or any liability arising under the Act. Those powers are distributed in the sub-sections to s12 to be exercised only in relation to “fences or fencing work”.
[11] (1997) 94 LGERA 149 at 172
Upon these definitions, the structures erected on the boundary line to the front and to the rear of the garage, were clearly fences within the meaning of the Act, and therefore susceptible of disputation thereunder. But the wall of the garage itself was not. The garage formed part of an application to build the two-storey house, the subject of approval by the Council, pursuant to the Development Act 1993. The garage wall itself forms an integral part of the structure of the garage - in no sense could it be described as a fence. The plans submitted to the Council related to a ‘proposed residence’, and they depicted the garage as part of the entire structure, containing a ‘limestone parapet wall to the boundary’. In contrast the fences at either end of the wall was described in the plans and being constructed of ‘rendered besser block boundary fence’. It must follow that the garage in this case fell within the definition of a “building” under the latter Act which means a “building or structure or a portion of a building or structure (including any fixtures or fittings which are subject to the provisions of the Building Code of Australia), whether temporary or permanent, moveable or immovable …”.
It must also follow that any difficulty Mrs Wright had with the wall was one to be ventilated in the planning and development process, such as they are, under s38 of that Act. As a consequence the dispute relating to the garage wall alone was not one otherwise justiciable under the Act, simply because no fence and no fencing work was involved.
This conclusion is reinforced by the fact that if Ms Fennell were to comply with the order of the Magistrate, the necessary alterations, even if possible, would bring her into non-compliance with Schedule 9 of the Development Regulations 1993 in relation to the wall separation and roofing storm water requirements. In particular, those Regulations adopt the Building Codes of Australia, which require a wall of at least 450 mm above the combustible roofline.
When the proceedings were referred to mediation, it was competent for the court to make consent orders in terms of clause 1 of the settlement agreement of 16 June 2005, but it was not so in respect of clause 2. Insofar as clause 2 purported to reflect an agreement as to the height of the garage wall, that was a matter for the consideration of the Council, either as an objection by Mrs Wright or an amended application for approval by Ms Fennell, in any event according to the procedures laid out in the Development Act, or possibly an action in breach of contract to enforce the consent judgment[12]. Otherwise the agreement, for “the erection of a garage of limestone … 3.4 metres in height” was not a subject matter over which a Magistrates Court was vested with jurisdiction under the Act, and not one over which it was empowered to enter orders with respect to. Accordingly when it came to the meaning attributable to the expression “3.4 metres in height,” the Magistrates Court had no jurisdiction to determine that matter and consequently it had no power to make the orders it purported to make.
[12] See Fullston v Fennell & ACCLAW Pty Ltd (1996) 187 LSJS 71, 73-73.
This court then, is forced to the view that the court below had no jurisdiction to enter the order it did on 2 December 2005; in as much as it provided for “the portion of the fence that exceeds 3.4 metres is reduced in height”. On that basis the order for review must be granted; the proper order would have been one declining jurisdiction to interpret clause 2 of the consent order giving effect to the relevant agreement.
It is a pity that the Act does not deal with issues of this kind more explicitly. It is not surprising at all that people such as the litigants in this case can become confused between liabilities and responsibilities under both Acts. After all, the garage wall in this case does coincidentally also serve the function of a dividing wall, as well as serving other structural functions as a garage. It is possible to conceive of situations where a wall on a dividing fence between adjoining properties might be both a fence and subject of development approval, such as a large or elaborate wall, incorporating for example a fountain or extensive outdoor cooking facilities. This however, is not such a case. Nevertheless Parliament might consider it desirable to amend the Act, in order to bring to the attention of neighbours, who in the main are forced to litigate their fencing disputes and navigate their way through the relevant legislation, without the benefit of legal representation.
Such legislation exists in most other Australian jurisdictions, no doubt for those very reasons. For example the Dividing Fences Act 1991 (NSW),[13] the Dividing Fences Act 1953 (Qld) and the Fences Act 1972 (NT), expressly exclude from their operation walls forming part of a “house, garage or other building” from the definition of a fence. In Victoria s3 of the Fences Act 1968 defines a “dividing fence” to mean “a fence separating the lands of different occupiers”. The Victorian Law Reform Committee in its report “Review of the Fences Act 1968” was critical of the legislation, concluding that the New South Wales Act provided the best model for the definition of a fence.
[13] Refer to Kontikis & Anon v Schreiner [1989] 16 NSWLR 706, Warringah Properties Pty Ltd v Babij (Snr) [2006] NSWSC 702 ;
Denial of Procedural Fairness?
The second ground of the application for review was in effect an alleged denial of natural justice. There is no transcript available to the court of the proceedings below, however the solicitor for Ms Fennell in his written submission wrote that he was not given an adequate opportunity to present oral submissions to the court “in support of the affidavit material filed” and that the Magistrate “refused to hear him on any issues relevant to the determination of the issues before the court”. In response, the written and oral submission for Mrs Wright was that the Magistrate heard from both parties and their solicitors. The reasons delivered by His Honour of 2 December 2005 indicate that he paid no regard to that material, ostensibly because ‘the matter would then need to be ‘relitigated’. This rather suggests there may be some force in the point made by the applicant on this score. The failure to consider the power of the Court to intervene, bearing in mind the limited orders sought in the application of Mrs Wright, and concerning the alleged misdescription of the wall as a ‘fence’, reinforce that view.
Since this court heard the matter afresh, the point need not be taken any further.
The Proper Interpretation of the Mediation Agreement
Although not strictly falling for decision, it is desirable to set out the view the Court has reached in relation to the interpretation issue. It is not desirable to force the parties into further litigation over the contract comprised in the settlement agreement, if that can be avoided.
It is perhaps somewhat surprising that clause 2 did not specify the point from which the height of 3.4 metres was to be measured. In that respect it stands in stark contrast to clause 1, which specifically delineates between the measurements taken from both sides of the dividing fence. It seems impossible therefore to think that the differential in height between the two properties was not in the mind of the mediator and of the parties when the agreement was made, so that the absence of equally clarifying language in clause 2, must have an explanation in some other consideration.
Before embarking upon an examination of the contemporary documents in order to ascertain their relevance, if any, to the common intention of the parties when the settlement was reached, it is important to bear in mind the limitations inherent in that exercise. The question whether evidence may be received as to the meaning of terms employed in a contract, is governed by the general principle that extrinsic evidence is generally inadmissible, if it would have the effect of varying or contradicting the terms of the contract: Bank of Australasia v Palmer[14], Hoyt’s Pty Ltd v Spencer[15], Saggers v Sydney Market Authority[16]. This remains so, even though one of the parties believe something said or written preceding the contract remains binding: Life Insurance Co of Australia Ltd v Phillips[17]. Accordingly, such evidence is not admissible in order to construe the contract by reference to the subjective intentions of only one of the parties: DTR Nominees Pty Ltd v Mona Homes Pty Ltd[18].
[14] [1897] AC 540, 545.
[15] (1919) 27 CLR 133.
[16] (1998) 66 LGRA 42.
[17] (1925) 36 CLR 60.
[18](1978) 138 CLR 423, 429.
The application of this principle means that the Legal Services Commission brochure “Fences and the Law” in which it is recorded on page 5 that the Fences Act “applies to all kinds of fences, but not to retaining walls or the walls of buildings”, could not be received, as it was not evidence of a shared or common understanding of both parties. Likewise for the Council Letter of 14 October 2005.
A significant exception to this basic principle, is that parole evidence is relevant and admissible to resolve any ambiguity in a written document “not to contradict or vary the contract but to apply it to the facts which the parties had in their minds and were negotiating about”: Rankin v Scott Fell & Co.[19], Horsfall v Braye[20], Bacchus Marsh Concentrated Milk Co Ltd (in liq) v Joseph Nathan & Co Ltd[21], White v ANZ Theatres Ltd[22], Bank of New Zealand v Simpson[23], Abram v A V Jennings Ltd.[24]
[19] (1904) 2 CLR 164, 173-174.
[20] (1908) 7 CLR 629.
[21] (1919) 26 CLR 410.
[22] (1943) 67 CLR 266.
[23] [1990] AC 181, 187.
[24] (2002) 84 SASR 363, [37-66].
This exception is condensed in the much cited judgment of Mason J. in Codelfa Constructions v State Rail Authority of New South Wales[25]:
The true rule is that evidence surrounding circumstances is admissible to assist in the interpretation of the contract if the language is ambiguous or susceptible of more than one meaning. But it is not admissible to contradict the language of the contract when it has a prime meaning. Generally speaking facts existing when the contract was made would not be receivable as part of the surrounding circumstances as an aid to construction unless they were known to both parties …..
It is here that a difficulty arises with respect to the evidence of prior negotiations. Obviously the prior negotiations will tend to establish objective background facts which were known to both parties and the subject matter of the contract. To the extent to which they have this tendency they are admissible. But insofar as they consist of statements and actions of the parties which are reflective of their actual intentions and expectations they are not receivable. The point is that such statements and actions reveal the terms of the contract which the parties intended or hoped to make. They are superseded by, and merged in, the contract itself. The object of the parol evidence rule is to exclude them, the prior oral agreement of the parties being inadmissible in aid of contraction, though admissible in an action for rectification.
Consequently when the issue is which of two or more possible meanings is to be given to a contractual provision we look, not to the actual intentions, aspirations or expectations of the parties before or at the time of the contract, except insofar as they are expressed in the contract, but to the objective framework of facts within which the contract came into existence, and to the parties’ presumed intention in this setting. We do not take into account the actual intentions of the parties and for the very good reason that an investigation of those matters would not only be time consuming but it would also be unrewarding as it would tend to give too much weight to these factors at the expense of the actual language of the written contract.
[25] (1982) 149 CLR 337 at 352.
Even then the cases emphasise the meaning of a contract is to be discerned from the objective inferences to be drawn from facts within the knowledge of both parties, taken in conjunction with the document itself: Secured Income Real Estate (Australia) Ltd v St Martins Investments Pty Ltd[26], Codelfa (above at 352).
[26] (1979) 144 CLR 596.
Even a cursory perusal of the settlement agreement reveals ambiguity, in that it refers to the height of the garage wall as 3.4 metres in clause 2, but singularly fails to articulate where that measurement is to be taken from. That ambiguity is magnified when the language is contrasted with that employed in clause 1, which clearly distinguishes between the height of the boundary fence on either side of the adjoining properties; that is the meaning of clause 2 is obscured by the omission of the clarifying language employed in clause 1[27].
[27] Giliberto v Kenny (1983) 57 ALJR 283.
The relevant documents exchanged between the parties preceding the settlement are summarised above. In tracing backwards through the negotiations between them, the reference to “3.4 metres in height” with respect to the garage wall, has its origin in the documents and plans lodged with the Council, as confirmed by the letter written by Mrs Wright’s solicitors of 10 March 2005 following her inspection of them. In that correspondence Mrs Wright specifically sought particulars of the ‘height of the garage on the northern boundary’. Next there is the express communication adverting to the difference in height, in the letter of 16 March 2005 which could hardly be clearer, because it unequivocally states that the “parapet wall is 3.4 metres from … Ms Fennell’s side, and 3.6 metres from Mrs Wright’s ground level”. Mr Fairholm, who signed the letter pointed out in the course of his submissions that the reference to 3.6 metres was an oversight on his part, so he relied on the distinction made between the height from either side, rather than the empirical measurements; 3.4 metres from his client’s side was always going to be 4 metres or more on Mrs Wright’s side. Mrs Wright agreed in her submissions before the court that this letter was drawn to her attention by her solicitor, but responds that those measurements were, as the letter says, taken from ‘ground level’. These documents themselves were the prelude to the letter written on her behalf of 10 May 2005, in which she indicated having no objection to building the garage “in accordance with the plans approved by the council”.
Those plans do not of themselves make it clear the wall was to be 3.4 metres in height from the Fennell’s side, although to a trained eye that may well be the case. It is highly doubtful that a woman in her 80’s, as Mrs Wright is, would have appreciated that fact. All the same, by the time her solicitor wrote the letter on 10 May 2005, she had not only inspected the plans, she had also taken legal advice with respect to them, had been referred to the letter of 16 March 2005 clearly pointing out the difference in height measured from either side, and had in that context indicated no objection to the garage being built in accordance with the plans.
In those combined background circumstances the correspondence clearly indicates that when the settlement agreement was reached pegging the height of the garage wall at 3.4 metres, that must have picked up and been referable to consistent expressions in the earlier correspondence to the height from Ms Fennell’s side. That too, would explain the omission of any specific reference to the differing measures in clause 2, it being unnecessary to do so, given the unequivocal context of the 3.4 metres reference in previous dealings, as known and appreciated by both parties.
Furthermore, the letter of 10 May 2005 is not only admissible as parole evidence to that end, but it also constitutes an admission on behalf of Mrs Wright through her agent solicitors, of an acceptance of the garage wall at the height recorded in the plans approved by the council which, as has been seen, was one closer to 3.4 metres, taken from Ms Fennell’s side. She may have held a mistaken belief that the wall would be lower when measured from ground level, but that was a unilateral or subjective mistake; the ultimate question remains what was the common understanding of both parties. Since the Council has since inspected the building and certified that it was built according to the plans, that is conclusive of the issue.
Accordingly, should it become necessary and assuming there is jurisdiction to so order, the expression “3.4 metres in height” in the settlement agreement and consent orders, ought to be read as meaning (in keeping with the language of clause 1) “3.4 metres in height on the defendant’s [Fennell] side”.
Costs
Ms Fennell indicated these various proceedings have been costly to her as significant legal costs were involved. She seeks an order for costs. No order was made in the court below, which is hardly surprising given that s38(5) of the Magistrates Court Act only enables that court to award costs if it is “of opinion that there are special circumstances justifying the award of costs”. The section is silent on the position and jurisdiction of this court as to costs upon review. However, pursuant to DCR 95.07(e), the powers and authority conferred under s38, authorise this court to “make such order as to costs of the trial or the review proportionate to the amount in issue as it deems fit”.
In this matter the Magistrate was bound by s38(5), and there appears to be no consideration suggestive of special circumstances, justifying an award of costs, before him, and none was made. Moreover it was no fault of Mrs Wright that the documentary evidence or the jurisdiction issue were not canvassed in the court below. Accordingly it would not be appropriate to make orders for the costs of the trial.
As to the proceedings in this court, it can be seen that the issues dealt with in this judgment were not issues canvassed in any detail by the Magistrate, perhaps because the parties did not make full submissions as to the implications of the various documents referred to, because of the indication given in the reasons by his Honour. The jurisdictional issue seems to have been overlooked on all sides. Furthermore, it appears that Mrs Wright was genuinely surprised; at least by the time the wall was completed, by the imposing height of the garage wall and as to the consequences the structure then presented. It is hardly surprising that she would have been confused by the documents leading her into thinking the measurements were to be made from her side. As it happens, that view is erroneous, but in those circumstances it would be inappropriate to make an order for costs against her.

Accordingly there will be no order as to costs of the application for review to that point. However once her recent affidavit was filed putting in issue matters raised during the mediation process, matters stand differently. That process meant the matter had to be adjourned for taking oral evidence and for legal submissions on the admissibility point. In the event the proposed tender was abandoned by her. In those circumstances she ought to accept some responsibility for the consequences reflected in an adverse order for costs. It was not unreasonable for the applicant’s solicitor to come to Mount Gambier in the circumstances and briefing a local practitioner to attend on her behalf would perhaps have proved more costly. In all the circumstances there will be an order in favour of the applicant for costs in the sum of $1200 plus the court costs of filing her application of $67, together with the airfare of her solicitor of $363.10.
Substantive Orders
For the above reasons, the application for review is granted, the decision of the Magistrate in the court below of 2 December 2005, insofar as it purports to order “the portion of the fence that exceeds 3.4 metres is reduced in height”, is rescinded and in lieu thereof there will be an order that the application by Mrs Wright under the Fences Act commenced on 1 July 2005, insofar as it related to clause 2 of the agreement of 16 June 2005, be dismissed for want of jurisdiction. This order leaves intact clause 1 of the terms of the settlement. The applicant is to have her legal costs fixed at $1200, plus the court costs of filing her application of $67, together with the airfare of her solicitor of $363.10.