International Computer Network Pty Ltd (ACN 050 104 188) v Talon Construction Group Pty Ltd (ACN 124 131 497)

[2018] NSWSC 120

Supreme Court

New South Wales

• Amendment notes

Medium Neutral Citation:

International Computer Network Pty Ltd (ACN 050 104 188) v Talon Construction Group Pty Ltd (ACN 124 131 497) [2018] NSWSC 120

Hearing dates:

15 February 2018

Date of orders:

15 February 2018

Decision date:

15 February 2018

Jurisdiction:

Equity - Duty List

Before:

Slattery J

Decision:

Court lists the 2017 proceedings and notifies all parties to those proceedings of the 2018 proceedings. Directions given to isolate the parties’ respective positions on the issues upon which further dispute has recently arisen.

Catchwords:

REAL PROPERTY – easement – alleged nuisance and obstruction of easement – proceedings commenced in 2018 to remove obstructions and abate nuisance – proceedings commenced in 2017 between same parties and one other party had settled, although settlement had not been fully performed – parties now in dispute about issues that had arisen after the settlement of the 2017 proceedings.

Legislation Cited:

Encroachment of Buildings Act 1922

Category:

Procedural and other rulings

Parties:

Plaintiff: International Computer Network Pty Ltd (ACN 050 104 188)
Defendant: Talon Construction Group Pty Ltd (ACN 124 131 497)

Representation:

Counsel:

 

Plaintiff: L. Finch

 

Solicitor:

  Plaintiff:
Defendant: Mr Rick Smith in person for Talon Construction Group Pty Ltd (ACN 124 131 497)

File Number(s):

(2018/48063)(2017/135633)

Publication restriction:

No

EX TEMPORE Judgment

1. The Summons in this matter had its first return date in the Equity duty list this morning. The Court gave leave for the plaintiff to file the Summons and abridged the time for its service on Tuesday. The defendant appeared to meet the Summons at the hearing to today.

2. The plaintiff, International Computer Network Pty Limited (International), is the owner of land that will merely be described in these reasons as Lot 704 (Lot 704) in the City of Wollongong. Lumos International Pty Limited (Lumos), is the owner of the adjacent Lot 703. These adjacent lands are situated between Kiera Street and Thomas Street, Wollongong. The defendant, Talon Construction Pty Limited (Talon), is at the tail end of constructing a multi storey residential building with approximately 25 apartments on lot 703.

3. Lot 703 has frontal access to Thomas Street. Lot 704 has frontal access to Kiera Street, one of the main streets of Wollongong. Thomas Street is a secondary street. The commercial and retail premises erected on Lot 704 face Kiera Street. Lot 704 is shaped with a pan handle that extends from the rear of Lot 704 right through to Thomas Street. The pan handle of Lot 704 provides commercial access and parking at the rear of the Lot 704 premises, via Thomas Street. Additional practical width is given to Lot 704’s pan handle by means of a right of way provided by Lot 704’s easement over the adjacent part of lot 703. This facilitates the passage of vehicles to and from the building on Lot 704.

4. When the proceedings first came before the Court, Mr Finch of counsel presented them as a claim by International to prevent Talon from leaving skip bins and other rubbish on the right of way during the building works on Lot 703 and otherwise from interfering with the right of way. The claim is of importance to International, which has leased Lot 704 to a commercial enterprise, which conducts a busy import/export and retail business. The alleged misuse of the right of way is said to be adversely affecting the tenant’s business and in turn potentially putting International in breach of its lease with the tenant.

5. Mr Finch came to the Court on a direct access brief from International. It was only when Mr Rick Smith, who the Court has given leave to appear on behalf of Talon, appeared at Court today and filed an affidavit that it became clear that there were other earlier related proceedings between these parties, of which Mr Finch was unaware. This surprising turn of events caused the Court to look more closely at the two sets of proceedings, particularly because Talon’s construction work on Lumos’ land is about to finish and a number of other disputes have now broken out between these parties particularly with respect to an incomplete settlement agreement in the earlier proceedings.

6. The Court called for the file in the earlier proceedings. These other proceedings are numbered 2017/00135633 (“the 2017 proceedings”). International is also a plaintiff in the 2017 proceedings. And Lumos is the first defendant and Talon, is the second defendant in the 2017 proceedings. These will be respectively referred to in this judgment as “the 2017 proceedings”. And the present proceedings will be referred to as “the 2018 proceedings”.

7. In May 2017 International sought relief in the 2017 proceedings to prevent Lumos and Talon causing trespass to, nuisance to and interference with Lot 704 in various ways, including obstructing Lot 704’s easement. Construction on Lot 703 had commenced in late 2016. The issues the subject of the 2017 proceedings appear to have emerged in the first third of 2017. The 2017 proceedings came before Darke J in the Real Property List on 12 May 2017 and his Honour made comprehensive orders which apparently on their face would appear to have solved the trespass, easement obstruction and nuisance problems.

8. But all the disputes between the parties in the 2017 proceedings were not resolved by May 2017. The parties sensibly agreed to a mediation of the remaining issues. A successful Court annexed mediation resolved most of these issues. The terms of the parties’ agreement were recorded in heads of agreement dated 28 July 2017 (“the July 2017 Heads of Agreement”) which on their face appear to be binding between the parties.

9. The July 2017 Heads of Agreement were executed between International, Lumos and Talon and provided: for Lumos and Talon to make good certain damage to the pan handle of Lot 704 and to Lot 704’s easement over Lot 703 and to repair the consequences of nuisance and trespass damage to buildings on Lot 704; for Lumos to convey to International the part of Lot 703 currently burdened by the right of way for the benefit of Lot 704, with International bearing all costs and expenses of the conveyance; for International and Talon to continue in the meantime the existing access arrangements for the right of way; for International to pay to the defendants $15,000 each upon completion of these various steps by 1 December 2017; all to be followed by dismissal of the 2017 proceedings and mutual releases. Heads of Agreement declared that they were “intended to be immediately binding on the parties”, although a more formal deed might need to be prepared.

10. The July 2017 Heads of Agreement clearly required co-operation on the part of all three parties to achieve the legal results that it contemplated. Unless International and the other parties retain solicitors to undertake some of the conveyancing work which is involved, it is difficult to see how the Heads of Agreement would be carried into effect. The surprising thing about this case is that substantial financial advantages will accrue to both Lumos and International if the Heads of Agreement are carried into effect, but surprisingly the momentum to do so has been absent.

11. Four new disputes now appear to have emerged between the parties. Regrettably because Mr Finch was unaware of the 2017 proceedings, the party who, along with International, is most interested in resolving the issues that have now arisen in the 2017 proceedings, Lumos, the owner of Lot 703 is not present. All the 2018 proceedings really do is repeat current claims about interference with the right of way. They do not really address the issues that Mr Finch and Mr Smith have now informed the Court have arisen since the 2017 proceedings.

12. The Court attempts to quell disputes and to give final relief if possible in respect of all issues between the parties. For that reason, the Court has decided of its own motion to list the 2017 proceedings before it with the 2018 proceedings. The Court will adjourn both proceedings to Friday week, 23 February 2018, with a view to the parties addressing the remaining four issues that have arisen. If they cannot do so by then the Court will then give directions for their final resolution.

13. These new issues will be briefly explained in these reasons, so that Lumos will be in a position to tell the Court what attitude it takes to these issues, it appears when this matter returns to Court next Friday.

14. All that remains now is for the Court to identify four issues that have arisen lately: (1) an encroachment issue; (2) a fire escape issue;(3) a sewer issue; and (4) a completion issue. The Court will deal with each of these in turn.

15. First, as to the encroachment issue, a survey report of 8 August 2017 commissioned by International, indicates there may be some very slight encroachments onto Lot 704, or onto 704’s easement over Lot 703 by the building erected on Lot 703.

16. Mr Finch points out this issue can probably be resolved either by an adjustment of the boundary, between Lot 703 and Lot 704 which will require, it seems to me, the consent of both the local Council and Registrar-General. Another approach would be the granting of a minimal easement to accommodate the encroachment under the Encroachment of Buildings Act 1922. With appropriate amendments to the Summons in the 2017 proceedings this Court has jurisdiction to make Encroachment of Buildings Act orders. But neither of these should present major obstacle to these parties and should be able to be achieved as part of the mechanics of the final conveyance associated with performing the July 2017 agreement.

17. The second issue concerns a fire escape. The development consent given for the erection of the apartment building on Lot 703 allows for a fire escape to open onto what was part of Lot 703, facing the pan handle of Lot 704. But once Lot 703 is conveyed under the July agreement to International, this fire escape will open onto what will become Lot 704's land. It seems to be a matter of common sense that, as Lot 704 is getting all of the Lot 703 land formerly part of the easement, that some license should be given by Lot 704 so the fire escape can open onto Lot 704. It cannot be a source of vehicular access onto Lot 704. The fire authorities probably have a capacity to order such an easement or licence to be created. But the Court expects the parties to try and resolve this by agreement.

18. The third issue relates to the sewer. A sewer line servicing Lot 703 runs across Lot 704. One of the urgent matters Mr Smith has pointed out that Lumos and Talon must attend to before they can achieve practical completion for the building lot on Lot 703 and for the apartment owners to then move in, is for jetting holes to be placed into this sewer line on Lot 704.

19. Mr Yang is fearful that this will interfere with the future development of Lot 704. He may be right. He may be wrong. But it seems to the Court to be incumbent upon him now to bring this issue forward in these proceedings. It should either be determined or disposed of so that there is no further delay in resolving all the issues between the parties: so Lumos can take its profit on developing Lot 703 and so International will have certainty about its future use of Lot 704.

20. Mr Yang must be able to determine whether or not there is a better place for the jetting hole to be placed, so that its placement will interfere less with Lot 704’s future development. He can inquire to see if it could be placed differently. But ultimately it is Sydney Water who will decide under the Water Act as to what technical sewer requirements will dictate as to placement. Both International and Lumos, and Talon will no doubt have to accommodate Sydney Water's requirements.

21. There is a fourth issue about completion of the July 2017 Heads of Agreement. The plaintiff seems to be doubtful that the July 2017 Heads of Agreement are binding and expressed concern as to exactly how they can be brought into effect. The parties should obviously attend as soon as possible to what steps are required to undertake the necessary conveyancing work to give to effect to the July 2017 Heads of Agreement. Otherwise this issue will linger on unnecessary and interfere substantially with the future occupation of lot 703 by its owners.

22. Although the parties gave mutual releases in the July 2017 Heads of Agreement Mr Smith's and Mr Finch's submissions make clear that the Heads of Agreement do not cover all current issues between the parties. These present matters will still have to be attended to because, the encroachment issue, the fire escape issue and the sewer issue all seem to be matters which arose subsequent to the agreement and would not be covered by the releases. And the completion issue only exists so effect can be given to the July 2017 Heads of Agreement.

23. All of this indicates that the Court should make directions for the parties to attempt to reach agreement on these issues and, if not, to state their position to the Court so the Court can give final directions for a hearing to resolve them.

24. In conclusion the Court's directions are:

1. Direct that a copy of these orders be served on the solicitors for Lumos International Pty Ltd (“Lumos”), care of Mr J. Pokoney, Acorn Lawyers, 15 Victoria Street, Wollongong, NSW 2500 ([email protected]), by 5pm today, and a copy of the Court’s reasons as soon as possible thereafter.

2. Direct all three parties, International Computer Network Pty Ltd (ACN 050 104 188) v Talon Construction Group Pty Ltd (ACN 124 131 497) and Lumos to enter discussion to attempt to resolve the encroachment issue, the fire escape issue, the sewer issue and the completion issue as identified in the Court’s ex tempore judgment today (“the issues”) by Friday, 23 February 2018.

3. In the event that the parties cannot resolve the issues, then the Court directs the parties to provide a written submission of no more than 1 page as to what their position is on the issues and to file those submissions by sending them to my Associate by 4pm on 22 February 2018.

4. Adjourn these proceedings and proceedings no 2017/135633 into the Equity Duty List at 10am on Friday, 23 February 2018, with a view to giving directions to assist in the issues including, if necessary, by amending the pleadings and setting the issues down for hearing.

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Amendments

23 February 2018 - coversheet - add parties details.

Decision last updated: 23 February 2018