Foxlodge Pty Ltd v Barronrib Pty Ltd

[1995] QCA 16

Appeal No. 153 of 1994

Brisbane
[Foxlodge v. Barronrib]

BETWEEN

FOXLODGE PTY LTD

(Plaintiff) Appellant

AND

BARRONRIB PTY LTD

(Defendant) Respondent

Fitzgerald P.
McPherson J.A.

Pincus J.A.

Judgment delivered 20/02/95

Joint reasons for judgment by McPherson and Pincus JJA.

Separate concurring reasons by Fitzgerald P.

CROSS-APPEAL DISMISSED AND APPEAL DISMISSED WITH COSTS.

CATCHWORDS NUISANCE - CAUSATION - Whether mould and mildew caused by physical passage of moisture or cold transference - Difficulty in determining relief if plaintiff successful - Injunction; Damages; Declaration - Barbagallo v. J. & F. Catellan Pty. Ltd. [1986] 1 Qd.R. 245 - Section 92(3)(b) District Courts Act 1967 - Callinan v. Boyne Smelters Ltd. [1984] 2 Qd.R. 501.

Counsel:	I. Callinan Q.C., with him K. Howe, for the appellant
G. Radcliffe for the respondent

Solicitors: A.D. Mitchell Solicitors (NSW) for the

appellant
H.W. Smith & Associates for the respondent

Hearing Date: 7 February 1995

IN THE COURT OF APPEAL	[1995] QCA 016
SUPREME COURT OF QUEENSLAND	Appeal No. 153 of 1994
Brisbane
Before	Fitzgerald P. McPherson J.A. Pincus J.A.

[Foxlodge P/L v. Barronrib P/L]

BETWEEN:

FOXLODGE PTY LTD

(Plaintiff) Appellant

AND:

BARRONRIB PTY LTD

(Defendant) Respondent

REASONS FOR JUDGMENT - FITZGERALD P.

Judgment delivered 20/02/1995

The appellant was the unsuccessful plaintiff in a District Court action which is described in the reasons for judgment of McPherson and Pincus JJ.A. Unfortunately, the trial judge's reasons for dismissing the appellant's claims might have been better and more fully explained, and that might have encouraged this appeal. However, I agree that it must fail.

The respondent's air-conditioned butcher shop adjoins the appellant's store room, which is not air-conditioned. There is only a small gap between the southern wall of the butcher shop and the northern wall of the store room. The butcher shop contains a cold room, the southern wall of which is separated from the southern wall of the butcher shop by another small gap. The appellant's claim was that mould which formed on the northern wall of the store room was caused by the presence of the cold room.

Various bases were put forward for this assertion, some related to the penetration of moisture from the respondent's premises, either the cold room or the immediate vicinity, and another - or others - related to the southern cold room wall causing a reduction of temperature on the corresponding section of the northern store room wall, resulting in condensation on that wall of the store room.

The appellant's case suffered the fundamental deficiency that neither the mould nor the temperature variations between different points on the northern store room wall were confined to the sections of that wall which corresponded to the cold room. On the contrary, the mould extended to much of the northern store room wall (and the opposite wall - which the appellant sought to explain away), and the temperature variations existed at various points which could not be related to the locality of the store room. With the evidence in this state, the appellant's various theories lacked any satisfactory foundation.

In the circumstances, any inadequacy in the trial judge's reasons are immaterial; the appellant failed to prove - or even adequately plead - its case.

I agree with what McPherson and Pincus JJ.A. have said on the cross-appeal with respect to costs, and with the order they have proposed.

IN THE COURT OF APPEAL

SUPREME COURT OF QUEENSLAND

Appeal No. 153 of 1994

Brisbane

Before Fitzgerald P.
McPherson J.A.
Pincus J.A.

[Foxlodge v. Barronrib]

BETWEEN

FOXLODGE PTY LTD

(Plaintiff) Appellant

AND

BARRONRIB PTY LTD

(Defendant) Respondent

JOINT REASONS FOR JUDGMENT - McPHERSON & PINCUS JJA.

Judgment delivered the 20th day of February 1995

This is an appeal by the unsuccessful plaintiff in an action in the District Court at Southport claiming a declaration, injunction and damages for what is alleged to be a nuisance created or maintained by the defendant on its premises at 19 McLean Street, Cooloongatta. The law governing the rights and responsibilities of the parties is not in doubt. The only question on appeal is, as it was at the trial, whether the plaintiff has succeeded in proving that the defendant caused the alleged nuisance, which is mould or mildew on the surface of a wall forming part of the plaintiff's building next door at 21 McLean Street.

The plaintiff acquired its building in 1985, and uses it, or the relevant portion of it, as a store room for its business as a pharmaceutical chemist. In the adjoining building at no. 19 McLean Street, the defendant conducts the business of a butcher, which it acquired from a Mr Jeffrey in about 1990. The boundary separating the two adjoining parcels runs through the centre of a solid brick wall, which was described in the proceedings as a party wall but which in fact comprises the two external walls of each of the buildings. They are notionally separated by a space of no more than about 10 mm; but it is accepted that, because of the presence of protruding bricks, mortar, slurry and so on, the two walls are for present purposes effectively a single structure.

For the purpose of its butchery business the defendant uses a cold room which is located on its side of the party wall and which extends along part of the length of that wall. The walls and the ceiling of the cold room are of standard construction consisting of two skins of colourbond steel sheeting packed with polystyrene insulating material.

The cold room walls are set vertically into channels on a concrete slab or base that are designed to drain away any moisture which might collect and run down the walls. Above the cold room ceiling there is a space of about 250 mm. between it and the ceiling or roof of the building.

According to the evidence of Mr Jeffrey who built it, the cold room was constructed leaving a uniform margin of about 15 mm. between its external skin and the inside surface of the party wall, so that the two structures are not contiguous but separated.

Initially the plaintiff's case was that the presence of the mildew on the inside of the wall at no. 21 was caused by the physical passage of moisture from the cold room from and through the party wall. Relics of this hypothesis continue to be visible in the plaintiff's pleadings and evidence at the trial; but in the course of the proceedings it was abandoned and replaced by a hypothesis of cold transference. What is meant by this is that the refrigerating effect of the cold room created a cold atmosphere in the 15 mm. space between the outer skin of the cold room and the party wall, which was then transferred through that wall, and cooled it to such a degree that the natural humidity in the air condensed on the surface of the party wall in no. 21 creating conditions suited to the growth of the mould complained of. It may strictly be more accurate to speak of it as involving a transmission of heat from the surface of the wall in no. 21 which resulted in that surface becoming colder; but the practical result is the same and it is convenient to retain the description used at the trial, which was cold transference.

On appeal the major criticism of the judgment dismissing the plaintiff's case was directed to the following two passages in the reasons for that judgment:

"On consideration of all the evidence it is hard to resist the argument that there is logically a direct co-relation between the position of the coldroom in No. 19 and the mould on the party wall in No. 21, the greater preponderance of which is directly contiguous with the coldroom's location. On that basis I must conclude that the Plaintiff

has established a prima facie case that there is a direct cause of that mould related to the coldroom in the defendants premises.

However it seems to be beyond question that for the coldroom to be providing cold air or moisture causing the mould in No. 19 (sic) there would have to be a leak from the coldroom through the insulated walls or through the joins in those walls adjacent to the party wall. It is also been shown that if such a leak existed it would be permanent (unless rectified of course). There is no evidence at all to show or even to suggest that there is a leak of cold air from the Defendants cold room. An attempt was made by Mr Croft, an engineer called belatedly by the Plaintiff, to establish such a leak. Appended to his report (Exh. 48) is a purported plan of the coldroom in No. 19 suggesting that the concrete topping on the floor of the coldroom extends to the party wall thus providing a conduit for moisture beyond the insulated coldroom panel. I find that there is no factual basis whatever for that suggestion.

Indeed, on the evidence called on behalf of the Defendant, I am satisfied that the coldroom was properly constructed so as to prevent the leakage of cold air or moisture."

The conclusion stated at the end of the first of these two paragraphs must, despite the qualification added in the second, have formed a powerful stimulus to the institution of this appeal. It was submitted that, in dismissing the action, the learned trial judge had focussed on the plaintiff's original, but abandoned, case of physical passage of moisture from the cold room, and had overlooked the alternative or substituted hypothesis of cold transference to and through the party wall. On that footing, so it was contended, the judge had failed to resolve the primary issue in the proceedings, and the plaintiff was entitled to an order for a new trial.

It is, however, plain that, in speaking of both "cold air or moisture", the trial judge was directing his remarks to both hypotheses that were or had formed part of the plaintiff's case at trial and which were not always separated in the evidence given at the trial. He said there was no evidence to show or suggest any leak of "cold air" from the defendant's cold room, and he concluded by saying he was "satisfied that the coldroom was properly constructed insulated so as to prevent the leakage of cold air or moisture". By "cold air" he must have been intending to comprehend cold transference through the space between the cold room outer skin and the party wall on the plaintiff's side. So long as his finding to that effect continues to stand, it prevents this appeal from succeeding. It was nevertheless contended that the trial judge could have arrived at the conclusion he did only by ignoring evidence given on behalf of the plaintiff and particularly the results of the thermoscan inspection of the surface of the wall inside no. 21.

A thermoscan is an instrument used to measure temperatures and identify temperature variances within a given area. A Mr Rolland attended at no. 21 McLean Street on the afternoon of 9 May 1994 (which was on the third day of the trial) and carried out a thermoscan inspection of the party wall on the plaintiff's side. On that occasion the ambient temperature of the store room at no. 21 was 23oc.

According to his report, the thermoscan inspection of the wall showed temperatures varying from a low of 20.5oc at floor level at the eastern end to a high of 23.1oc at the west. The plaintiff contended that the inspection demonstrated a 2 degree variation in temperature along the length of the wall. Mr Rolland himself did not give evidence and his report is accompanied by a diagram which is not altogether easy to interpret or reconcile with the report. A Mr Croft, an engineer who on 9 and 11 May 1994 inspected the premises at no. 19 and no. 21 and prepared a report of his own, also gave evidence on behalf of the plaintiff. His opinion was that the 2 degree variation would not occur naturally and that -

"It would not be possible if there was not a cold source touching the wall at the bottom of the wall .... The source of the condensation is caused by some form of contact between the coldroom and the party wall which is lowering its temperature below that of the dew point of the adjacent area of 21 McLean Street".

As an explanation for the phenomenon of this "cold bridging" which he thought must be taking place between the cold room and the wall surface, Mr Croft advanced the hypothesis that the concrete slab floor of the cold room at some point or points extended to make contact with the party wall on the defendant's side. However, there was no evidence to support that assumption; on the contrary, the evidence was given by Mr Jeffrey, who constructed the cold room, was that the concrete slab was constructed so as to finish short of the party wall. His evidence that there was a gap between the cold room and that wall was evidently accepted by the trial judge, as appears from the extract from the reasons already set out. His Honour's finding to that effect has not been challenged.

There was thus no evidentiary basis for Mr Croft's opinion as to the source of the temperatures recorded on the party wall surface in no. 21. Moreover, the recordings made by means of the thermoscan were not correlated with the location of the cold room in no. 19. According to Mr Croft, he was accompanied on his inspection by a Mr Peter Hockley, who carried out measurements to determine the relationship of the cold room in no. 19 to the wall surface in no. 21.

Croft said he assisted Hockley to carry out those measurements and, as a result, formed the opinion that the cold room was further to the east than shown on a previous plan and "that this lined up with the area under the stair where the mould was beginning to grow". Mr Hockley's measurements do not appear in evidence, so that once again the factual basis for Mr Croft's opinion is not demonstrated. It was not clearly shown that the area under the stair, where the lowest temperature recording was obtained, coincided with the location in no. 19 of the cold room on the other side of the wall.

In addition, there was evidence from witnesses on both sides that the area in which mould was present on the wall surface in no. 21 extended along that wall to a point well beyond the limits of the cold room in no. 19. The plaintiff's response to this was that, once mould started to grow, it would tend to travel far beyond the point where it started. There was, however, another explanation for the mouldy condition of the wall surface of which the plaintiff complained. The two buildings in question, which are both over 60 years old, are situated near a prominent hill from which there is a substantial run-off and percolation of water during or after wet weather. For many years subterranean water and dampness has created problems for owners or occupiers of the buildings and land. Several witnesses attested to its presence and to seeing mould in the plaintiff's premises before the subject cold room was installed. After referring to this evidence in the course of his reasons the learned judge went on:

"There is no ground for doubt that the area immediately beneath the slab on which 19 and 21 are built would be in contact with water after any significant rainfall. In those circumstances any break in the moisture barrier presumably installed beneath the slab would allow penetration of moisture into the slab and thus into the walls constructed thereon."

On appeal it was submitted for the plaintiff that in saying this the learned judge was simply reciting the evidence given for the defendant at the trial. The form in which the final part of those reasons is expressed suggests, however, that his Honour was making a finding of fact. In any event, in assessing the evidence for the purposes of this appeal, it is enough to say that there is apparently credible evidence, which was not rejected, that is capable of affording a rational competing explanation of the mouldy condition of the plaintiff's side of the wall, and that it is an explanation which the plaintiff has not succeeded in excluding.

It may be that it was in part because his Honour considered that there were competing hypotheses of equal degrees of probability that were capable of explaining the presence of the mould that he expressed his final conclusion in the form that the plaintiff had failed to show on the balance of probabilities that the moisture damage to the wall in no. 21 McLean Street was being caused by condensation of cold air or moisture escaping from the defendant's cold room. On all the evidence at the trial, it was open to him to arrive at such a conclusion. The notice of appeal does not say what relief would be sought in the event of the appeal succeeding, although in the course of his submissions on appeal Mr Callinan Q.C. for the appellant appeared to favour an order for a new trial. Even so, there is in the present state of the material some difficulty in determining what relief might be granted if the plaintiff were successful. The plaintiff's evidence included an estimate of $18,750 for the work needed to rectify the state of affairs for which it claims the defendant is responsible.

One item in the total is for installation of a waterproof membrane to the party wall, which would seem to be of little value if the case ultimately established at trial turned out to be one of cold transference. Another item is the cost of installing a false wall to the affected area, which is work that has already been done.

If work has been or can be done at an estimated cost of as small as $18,750, there would be little point in issuing an injunction to restrain whatever action of the defendant is said to amount to nuisance. The problem could be readily solved by an award of damages in an amount sufficient to enable the work to be completed. Even before the jurisdictional extension in 1989, a District Court had jurisdiction to award damages in such circumstances : see Barbagallo v. J. & F. Catellan Pty. Ltd. [1986] 1 Qd.R. 245.

The additional claim for a declaration which is made in the plaint here would serve no useful purpose and as such would not on its own suffice to bring this appeal within the terms of s.92(3)(b) of the District Courts Act 1967. Without that element, the present appeal is not one that falls to be determined by way of rehearing, but one in which the powers of this Court on appeal are subject to the limitations explained in Callinan v. Boyne Smelters Ltd. [1984] 2 Qd.R. 501, 505.

For each and all of these reasons, there is no basis for ordering a new trial. No other relief was sought or proposed be given here. The appeal should accordingly be dismissed. There is also a cross-appeal seeking to vary the order for costs in favour of the defendant so as to ensure that those costs are taxed on the scale appropriate to a claim exceeding $50,000. The argument in support of that cross-appeal is that, without the claim for a declaration or injunction, the action could have been maintained in the magistrates court instead of the District Court. That, however, affords no cogent reason for increasing rather than reducing the level of costs awarded. The question of costs was a discretionary matter and the order made by the judge in that regard is not shown to have involved an error of principle.

The cross-appeal should be dismissed. The appeal should be dismissed with costs.

IN THE COURT OF APPEAL
SUPREME COURT OF QUEENSLAND