Lawrence v Inner West Council

[2019] NSWLEC 46

Land and Environment Court

New South Wales

Medium Neutral Citation:

Lawrence v Inner West Council [2019] NSWLEC 46

Hearing dates:

19 March 2019

Date of orders:

05 April 2019

Decision date:

05 April 2019

Jurisdiction:

Class 2

Before:

Pain J

Decision:

(1) The Applicants’ notice of motion dated 15 February 2019 is upheld to the extent that the amended application in Class 3 proceedings can be relied on.

 

(2) The Applicants may file an amended statement of facts and contentions which accords with this judgment within 21 days.

 

(3) Costs are reserved.

 (4) The proceedings are stood over to the Class 3 list on Friday 3 May 2019 with liberty to the parties to apply through online Court for an earlier list date.

Catchwords:

PRACTICE & PROCEDURE – Class 2 appeal against order issued under Local Government Act 1993 requiring repair of collapsed retaining wall on public land and claim for compensation – application to amend Class 2 appeal – amended application allowed including transfer of proceedings from Class 2 to Class 3 – amendment of statement of facts and contentions not allowed

Legislation Cited:

Civil Liability Act 2002 s 45
Civil Procedure Act 2005 ss 56, 58, 64, 65
Conveyancing Act 1919 s 177
Government Information (Public Access) Act 2009
Land and Environment Court Act 1979 s 19
Land and Environment Court Rules 2007 r 3.7
Local Government Act 1993 ss 124, 180, 181
Roads Act 1993 s 91

Cases Cited:

Aon Risk Services Australia Ltd v Australian National University (2009) 258 ALR 14; [2009] HCA 27
Connor v Smith Hire Services (Casino) Pty Ltd [2017] NSWLEC 7
Etna v Arif [1999] 2 VR 353; [1999] VSCA 99
Mailey v Sutherland Shire Council (2017) 226 LGERA 188; [2017] NSWCA 343

Category:

Procedural and other rulings

Parties:

Natalie Lawrence (First Applicant)
Aaron Lawrence (Second Applicant)
Inner West Council (Respondent)

Representation:

COUNSEL:
C Ireland (Applicant)
G Farland (Respondent)

  SOLICITORS:
Piper Alderman (Applicant)
Lindsay Taylor (Respondent)

File Number(s):

18/271173

Judgment

1. The Applicants filed an appeal against an order (Order) issued by the Respondent the Inner West Council (the Council) under s 124 of the Local Government Act1993 (LG Act). The Order required the repair of a collapsed retaining wall on land controlled by the Council adjoining the Applicants’ land. The Applicants appealed against the terms of the Order as provided by s 180 of the LG Act in Class 2 proceedings filed on 4 September 2018. Their notice of motion dated 15 February 2019 before the Court seeks to amend the appeal in the Class 2 proceedings. They seek an order permitting a claim for compensation based on s 181 of the LG Act and the transfer of the proceedings from Class 2 to Class 3 of the Land and Environment Court Act 1979 (LEC Act). Consent to rely on amendments to the statement of facts and contentions (SOFAC) is also sought. If the amendments are allowed no appeal relying on s 180 is to be made.

Local Government Act 1993

2. Relevant sections of the LG Act provide:

Part 2 Orders

Division 1 Giving of orders

124 Orders

A council may order a person to do or to refrain from doing a thing specified in Column 1 of the following Table if the circumstances specified opposite it in Column 2 of the Table exist and the person comes within the description opposite it in Column 3 of the Table.

…

A person who fails to comply with an order is guilty of an offence—see sec 628.

Table

Orders

…

Orders requiring the protection or repair of public places

Column 1		Column 2	Column 3
To do what?		In what circumstances?	To whom?
…
28	To take whatever steps are necessary to prevent damage to a public place and to repair damage to a public place	There is actual or likely damage:
a) by excavation or removal of material from or adjacent to the public place, or	Person responsible for the excavation or the removal of the material
(b) by a work or structure, or	Owner or person entitled to the benefit of the work or structure
(c) by surface drainage or irrigation	Owner or occupier of land from which surface drainage flows or from which spray emanates
…

Part 5 Appeals

Division 1 Approvals and orders

…

180 Appeals concerning orders

(1)   A person on whom an order is served may appeal against the order to the Land and Environment Court.

(2)   (Repealed)

(3)   The appeal must be made within 28 days after the service of the order on the person or, if an order is given under section 141, within 28 days after the service of the order given under section 141 on the person. The person may make an appeal within the later period whether or not the person has made an appeal within the earlier period.

(4)   On hearing an appeal, the Court may:

(a)   revoke the order, or

(b)   modify the order, or

(c)   substitute for the order any other order that the council could have made, or

(d)   find that the order is sufficiently complied with, or

(e)   make such order with respect to compliance with the order as the Court thinks fit, or

(f)   make any other order with respect to the order as the Court thinks fit.

(5) This section does not apply in relation to order No 22A in the Table to section 124.

181 Awarding of compensation concerning orders

(1)   The Land and Environment Court, on the hearing of an appeal or otherwise, has a discretion to award compensation to a person on whom an order is served for any expense incurred by the person as a consequence of the order, including the cost of any investigative work or reinstatement carried out by the person as a consequence of the order, but only if the person satisfies the Court that the giving of the order was unsubstantiated or the terms of the order were unreasonable.

(2)   A claim for compensation may not be made more than 28 days after the date on which the Court gives its decision on the appeal or more than 3 months after the date of the order if an appeal is not made against the order.

(3)   Compensation under this section is to be awarded against the council.

…

Civil Procedure Act 2005

3. Relevant sections of the Civil Procedure Act 2005 (CP Act) provide:

Part 6 Case management and interlocutory matters

…

Division 1 Guiding principles

56 Overriding purpose (cf SCR Part 1, rule 3)

(1)   The overriding purpose of this Act and of rules of court, in their application to civil proceedings, is to facilitate the just, quick and cheap resolution of the real issues in the proceedings.

...

58 Court to follow dictates of justice

(1)   In deciding:

(a)   whether to make any order or direction for the management of proceedings, including:

(i)   any order for the amendment of a document, and

(ii)   any order granting an adjournment or stay of proceedings, and

(iii)   any other order of a procedural nature, and

(iv)   any direction under Division 2, and

(b)   the terms in which any such order or direction is to be made,

the court must seek to act in accordance with the dictates of justice.

…

Division 3 Other powers of court

64 Amendment of documents generally (cf SCR Part 20, rules 1 and 4; DCR Part 17, rules 1 and 4)

(1)   At any stage of proceedings, the court may order:

(a)   that any document in the proceedings be amended, or

(b)   that leave be granted to a party to amend any document in the proceedings.

(2) Subject to section 58, all necessary amendments are to be made for the purpose of determining the real questions raised by or otherwise depending on the proceedings, correcting any defect or error in the proceedings and avoiding multiplicity of proceedings.

(3) An order under this section may be made even if the amendment would have the effect of adding or substituting a cause of action that has arisen after the commencement of the proceedings but, in that case, the date of commencement of the proceedings, in relation to that cause of action, is, subject to section 65, taken to be the date on which the amendment is made.

(4)   If there has been a mistake in the name of a party, this section applies to the person intended to be made a party as if he or she were a party.

(5)   This section does not apply to the amendment of a judgment, order or certificate.

65 Amendment of originating process after expiry of limitation period (cf SCR Part 20, rule 4; DCR Part 17, rule 4)

(1)   This section applies to any proceedings commenced before the expiration of any relevant limitation period for the commencement of the proceedings.

(2) At any time after the expiration of the relevant limitation period, the plaintiff in any such proceedings may, with the leave of the court under section 64 (1) (b), amend the originating process so as:

(a)   to enable the plaintiff to maintain the proceedings in a capacity in which he or she has, since the proceedings were commenced, become entitled to bring and maintain the proceedings, or

(b)   to correct a mistake in the name of a party to the proceedings, whether or not the effect of the amendment is to substitute a new party, being a mistake that, in the court’s opinion, is neither misleading nor such as to cause reasonable doubt as to the identity of the person intended to be made a party, or

(c)   to add or substitute a new cause of action, together with a claim for relief on the new cause of action, being a new cause of action that, in the court’s opinion, arises from the same (or substantially the same) facts as those giving rise to an existing cause of action and claim for relief set out in the originating process.

(3)   Unless the court otherwise orders, an amendment made under this section is taken to have had effect as from the date on which the proceedings were commenced.

(4) This section does not limit the powers of the court under section 64.

(5) This section has effect despite anything to the contrary in the Limitation Act 1969.

(6)   In this section, originating process, in relation to any proceedings, includes any pleading subsequently filed in the proceedings.

4. The Applicants are the owners of 40 Moodie Street, Rozelle (Property).

5. On 15 January 2018 the Applicants commenced construction works on the Property. On 25 January 2018, a retaining wall adjacent to the Property and owned by the Council collapsed onto the Property. Following the collapse of the retaining wall, the Applicants notified the Respondent of its collapse.

6. On 29 January 2018, officers of the Council attended and inspected the Property. After inspecting the Property, on 31 January 2018, the Inner West Council inspection report for 40 Moodie Street, Rozelle (Inspection Report) was prepared.

7. On 29 June 2018, the Council issued to the Applicants a notice of proposed order LGA/2018/221 (Proposed Order). The Proposed Order contained the “Reasons for the Proposed Order” which included reference to “[a]n inspection conducted by council's development compliance officers on Monday 29 January 2018”.

8. On 10 August 2018, the Council issued to the Applicants’ order LGA/2018/221 (Order).

9. The Applicants commenced these Class 2 proceedings on 4 September 2018. The Applicants filed a SOFAC on 27 September 2018. The Council filed a reply to the SOFAC on 31 October 2018.

10. The Inspection Report was provided to the Applicants on 27 November 2018 following an informal access to information application under Government Information (Public Access) Act 2009 (GIPA Act), an information request pursuant to the Land and Environment Court’s Practice Note for Classes 1, 2 and 3 Miscellaneous Appeals, and a formal access to information application under the GIPA Act. The Inspection Report is the focus of the amendments the Applicants seek to make.

Terms of order under LG Act

11. The Order was issued in the terms of the Proposed Order which stated as follows:

NOTICE OF PROPOSED ORDER

LGA/2018/221 – LOCAL GOVERNMENT ACT 1993

PREMISES: 40 Moodie Street, ROZELLE NSW 2039

Lot 201 DP 1243342

Pursuant to Section 132 of the Act, Council advises that it intends to give you the following Order in terms of Order No. 28 in the Table to Section 124 of the Act.

The Proposed Order:

1.   Carry out works in accordance in accordance [sic] with the details set out on Drawing No’s 3219, Pages 1-7, prepared by M&G Consulting Engineers Pty Ltd, dated 28 may 2018, and the following specifications and standards:

a)   Council’s Specifications for Road and Drainage Works, July 2008

b)   Council’s standard drawings: R1-SD; R3-SD

c)   AUS-SPEC#2-Roadworks Specifications.

…

Circumstances giving rise to the issue of the Proposed Order:

Actual damage has been caused to a public place, namely part of Park Street, Rozelle, by the excavation and/or removal of material from that public place and/or 40 Moodie Street, Rozelle which is adjacent to that public place.

Reasons for the Proposed Order:

1.   An inspection conducted by Council’s Development Compliance Officers on Monday 29 January 2018, revealed the following:

a)   The building located on 40 Moodie Street was demolished contrary to approved CDC No. 170127/02, particularly the plans referenced therein.

b)   The demolition works involved, either directly or indirectly, the excavation and/or removal of materials from or adjacent to Park Street including the sandstone retaining wall that previously supported the footpath within Park Street

c)   Subsidence and damage of Council’s footpath in Park Street occurred by reason of the unauthorised demolition reference in paragraph (a)

d)   The recipient of this Order is responsible for the unauthorised demolition referenced in paragraph (b) as it was carried out by contractors engaged to perform the demolition.

2.   A review of Council’s records failed to reveal any evidence of an approval being granted for the above demolition to take place.

Inspection report dated 31 January 2018

12. The Inspection Report prepared on 31 January 2018 following the site inspection by council officers on 29 January 2018 stated:

Inner West Council

Compliance Inspection Report

conducted for

40 Moodie St, Rozelle

Council Reference (DWS) No.

4718085

Purpose of Inspection

Initial Investigation

Conducted on

1/29/18, 2:40 PM

Prepared by

Sonja Waters – Development Compliance Officer – 9335 2263

Additional Officer also in attendance

Andrew Zapantis – Development Compliance Officer – 9367 9240

…

Question		Response		Details
Alleged Offence
Complaint summary		Whole building demolished which has seen the adjacent footpath in Park St undermined.
Relevant Statutory Legislation		Environmental Planning and Assessment Act 1979, Local Government Act 1993
Alleged offence(s)?		Development not accord consent, Dangerous and unsafe structure
Site Details
Is there a relevant application(s)?		Yes
Relevant Application Number(s)		CCD 170127/01
Is there a responsible person on site?		No
Inspection Details
Inspection Photographs
…
Inspection Findings		Attended site, no one present. Observations made, showed no dwelling exists on the premises which indicates it has been demolished. Further to this, fencing has been installed around the perimeter as the footpath situation in Park St has been undermined by the works. Perusal of the CDC and associated plans indicates works are not according to that consent where parts of the structure had to be retained.
Has the alleged offence been substantiated?		Yes
Who is the responsible person for the offence?		Not known at this particular time, as no one onsite further discussions to be held with builder and owner and PCA
Is a formal caution required at this stage of the investigation?		No
Action
Recommended action		Verbal Stop Works Order Given – Written Stop Works Order to follow, Issue Emergency Order
Has the applicable statute of limitations for this offence being considered pursuant to s127(5) and 127(6) of the Environmental Planning and Assessment Act 1979?		Yes
Council officer	Sonja Waters		1/31/18 9:35 AM		[signature]
I acknowledge I hold appropriate delegation, I am adequately trained and have all necessary qualifications to perform this inspection.		Yes
I acknowledge I am using the appropriate Personal Protective Equipment.		Yes
I agree that the risks are considered to be consistent with Council’s risk assessment and Safe Work Method Statement.		Yes
…
Team Leader Review
This report has been reviewed and the following determination has been made;		The investigation may proceed in accordance with the Officer’s recommendation
Team Leader Development Compliance	Michael Davies		1/31/18 1:49 PM		[signature]

13. The Inspection Report also included a number of photographs. Some of these show the Applicants’ land with no house located on it.

Terms of original application

14. The original Class 2 application filed on 4 September 2018 stated:

1 The Order be modified to require the Respondent pay for the cost of complying with the order pursuant to section 180 of the Local Government Act 1993.

2 Respondent pays the Applicants compensation for the cost of complying with the order to date and the costs incurred as a result of the retaining wall collapsing pursuant to section 181 of the Local Government Act 1993.

…

Terms of amended application

15. The terms of the amended application the subject of the notice of motion are as follows:

1 Pursuant to section 181 of the Local Government Act 1993, the First Respondent pays to the Applicants the costs incurred as a result of complying with Order No 28 LGA/2018/221 dated 10 August 2018.

2   The First Respondent pays the Applicants' costs of these proceedings.

…

Applicants’ proposed amended SOFAC

16. It is useful to set out in full the proposed amended SOFAC, with additions underlined and deletions struck out:

AMENDED STATEMENT OF FACTS AND CONTENTIONS

Part A Facts

1.   The subject of the appeal

1.1   The Inner West Council (Respondent) issue Order No 28 LGA/2018/221 dated 10 August 2018 under s 124 of the Local Government Act 1993 (Order) to Aaron James Lawrence and Natalie Megan Lawrences (Applicants).

2.   The statutory context

2.1 The Respondent issued the Order to the Applicants to carry out works pursuant to section 124 of the Local Government Act 1993 (NSW) (Act).

2.2   The Applicants have appealed the Order pursuant to section 180 of the Act. The Applicants have also sought seek compensation pursuant to section 181 of the Act.

2.3   The Land and Environment Court has jurisdiction to hear this appeal application pursuant to section 18 19(d) of the Land and Environment Court Act 1979 (NSW).

2.4 Section 177 of the Conveyancing Act 1919 (NSW) and section 91 of the Roads Act 1993 (NSW) are also relevant to this appeal.

3.   The land

3.1   The Applicants are the registered proprietors of the property at 40 Moodie Street, Rozelle which is Lot 20 in Deposited Plan 1099930 (Property).

3.2   The eastern boundary of the Property is adjacent to Park Street, Rozelle. The street level of Park Street is situated at a higher elevation than the base of the Property. A retaining wall sits between the Property and Park Street that supports the road, the footpath and the surrounding soil (Retaining Wall).

3.3   The Retaining Wall is owned by the Respondent.

4.   Circumstances

4.1   The Applicants undertook to renovate the house on the Property. The Applicants engaged Segmento Architects to design plans for renovating the house.

4.2   On 22 November 2017, Complying Development Certificate 170127/02 (CDC) was issued by Mr Scott Hackett of Hackett Certification and Fire Consulting for the renovation works.

4.3   In December 2017, the Applicants commenced construction work. The first stage involved demolition of the house, whilst retaining the substructure (i.e. the brick piers, timber bearers and joists, and the timber floorboards).

4.4   Around late January 2018, excavation commenced on the site for strip footing to support the structure of the house. The designs required strip footing to be placed centrally under the walls and columns of the house.

4.5   On 25 January 2018, Eexcavation for the strip footing on the side of the house adjacent to the Retaining Wall and Park Street was around 75% complete when the Retaining Wall collapsed. The Retaining Wall collapsed onto the retained substructure of the house. On the same day the Applicants contacted the Respondent and the property was inspected by the Respondent’s officer Kiru Kanapathipallai.

4.6   Shortly after the Retaining Wall collapsed it was determined by Mr Darryn Maynard of Barracuda Building (Contractor), the contractors on site, that the retained substructure had become unsafe and had to be immediately demolished. The Applicants were informed by the Contractor that the works were required in order to make the Property safe.

4.7   On 29 January 2018, the Respondent’s Development Compliance Officers, Ms Sonja Water and Mr Andrew Zapantis, attended the Property to inspect the site. On the same date, the Respondent issued a Stop Work Order requiring the Applicants to cease all unauthorised building works at the site and also issued an Emergency Order requiring the Applicants to make safe and secure the underside of the footpath that fronts Park Street, from within the premises of the Property.

4.8   Between February 2018 and May 2018, the Applicants engaged in discussions and negotiations with the Respondent to reach an agreement on the apportionment of the costs for replacing the Retaining Wall and repairing the footpath.

4.9   On 29 June 2018, the Respondent issued Notice of Proposed Order LGA/2018/221 to the Applicants (Proposed Order).

4.10   On 11 July 2018, in response to the Proposed Order, the solicitor for the Applicants wrote to the Respondent setting out the reasons why the Respondent was wholly or partly responsible for the cost of the works in the Proposed Order and made an offer to the Respondent to apportion the cost of the works.

4.11   On 10 August 2018, the Respondent issued the Order to the Applicants in the same form as the Proposed Order. The Order required the Applicants to complete the works in the Order at their own cost.

4.12   On 14 August 2018, Mr Joe Strati, General Counsel for the Respondent, wrote to the solicitor for the Applicants to address some of the matters raised in the Applicant’s letter to the Respondent dated 11 July 2018.

5.   Actions of the party

5.1   On 4 September 2018, the Applicants filed Class 2 application in the Land and Environment Court of New South Wales.

5.2   The Applicants have undertaken steps to comply with the Order.

5.3   At the request of the Respondent the Applicants have submitted the new Development Application D/2018/381 dated 19 September 2018.

Part B Contentions

6.   The Applicants contend that the appeal should be upheld because the giving of the Order was unsubstantiated or the terms of the Order were unreasonable or both:

Background

7.   On or around 25 January 2018, the Respondent became aware that the retaining wall between 40 Moodie Street, Rozelle and Park Street had collapsed.

Particulars

(a)   Notes of customer request dated 25 January 2018.

8.   Sonja Water and Andrew Zapantis were development compliance officers of the Respondent. On or about 29 January 2018, Sonja Waters and Andrew Zapantis attended the Property. By on or about 31 January 2018, after inspecting the property, Sonja Waters prepared the Inner West Council Inspection for 40 Moodie Street, Rozelle (Inspection Report).

Particulars

(a)   Inner West Council Inspection Report dated 31 January 2018.

9.   From in or about 25 January 2018, the Applicants and representatives of the Respondent exchanged communication by email and telephone regarding the liability for the collapse of the Retaining Wall. In the course of these communications the Applicants made repeated representations to the Respondent that the Applicants were not liable for the Retaining Wall collapsing or the costs associated with the remediation works.

Particulars

(a)   Email from Aaron Lawrence to Sonja Water dated 29 January 2018.

(b)   Email from Aaron Lawrence to Maurice Morsanuto dated 5 February 2018.

(c)   Email from Aaron Lawrence to Wal Petschler dated 5 February 2018.

(d)   Email from Aaron Lawrence to Wal Petschler dated 8 February 2018.

10.   From on or about 19 March 2018, Tim Coleman, the solicitor for the Applicants, and representatives of the Respondent exchanged written communication by email regarding the liability for the collapse of the Retaining Wall. In the course of these communications, Tim Coleman made repeated representations to the Respondent that the Applicants were not liable for the Retaining Wall collapsing or the costs associated with the remediation works.

Particulars

(a)   Letter from Tim Coleman to Andrew Zapantis dated 19 March 2018.

(b)   Letter from Tim Coleman to Andrew Zapantis dated 4 May 2018.

(c)   Letter from Tim Coleman to Andrew Zapantis dated 17 May 2018.

11.   On or about 3 May 2018, the Applicants and Tim Coleman attended a meeting with the Respondent. At this meeting, the Applicants and Tim Coleman made representations to the Respondent that the Applicants were not liable for the Retaining Wall collapsing or the costs associated with the remediation works.

Particulars

(a)   Letter from Tim Coleman to Andrew Zapantis dated 4 May 2018.

12.   From in or about July 2018, the Applicants engaged in communication with Clr John Stamolis by email, telephone, and in meetings regarding the liability for the collapse of the Retaining Wall. In the course of these communications the Applicants made repeated representations to the Clr John Stamolis that the Applicants were not liable for the retaining wall collapsing or the costs associated with the remediation works.

Particulars

(a)   Email from Aaron Lawrence to Clr John Stamolis dated 10 July 2018.

(b)   Emails between Aaron Lawrence to Clr John Stamolis dated 12 July 2018.

(c)   Email from Aaron Lawrence to Clr John Stamolis dated 16 July 2018.

13.   From in or around February 2018, the Applicants provided expert reports to the Respondent which related to liability for the remediation of the Retaining Wall and the surrounding areas. These reports provided included information that supported the representations that the Applicants were not liable for the retaining wall collapsing.

Particulars

(a)   Report by Nastasi & Associates dated 5 February 2018.

(b)   Report by Nastasi & Associates dated 19 March 2018.

14.   On or about 29 June 2018, the Respondent gave to the Applicants the Proposed Order which included the reasons for the Proposed Order.

Particulars

(a)   Notice of Proposed Order LGA/2018/221 dated 29 June 2018.

15.   On or about 11 July 2018, in response to the Proposed Order, Tim Coleman sent an email to the Respondent which made representations on behalf of the Applicants concerning the Proposed Order. The representations repeatedly asserted that the reasons for the Proposed Order were factually incorrect and asserted that the Applicants were not liable for the retaining wall collapsing or the costs associated with the remediation works.

Particulars

(a)   Letter from Tim Coleman to Andrew Zapantis dated 11 July 2018.

16.   On or about 10 August 2018, the Respondent gave the Order to the Applicants.

Order was Unsubstantiated or the terms of the Order were Unreasonable

17.   From on or around January 2018 through on or about 10 August 2018, the Applicants and their representatives made repeated representations to the Respondent which asserted that the Applicants were not liable for the retaining wall collapsing or the costs associated with the remediation works, and that the reasons for the Proposed Order were factually incorrect.

18.   The only evidence the Respondent obtained at any time was the Inspection Report dated 31 January 2018. The Inspection Report contains limited findings of fact.

18.1   The Inspection Report does no more than confirm that the building on the Property had been demolished and fencing had been installed around the perimeter.

18.2   The Inspection Report does not provide any evidence about what caused the Retaining Wall to fail or about whether the CDC was complied with.

18.3   The Inspection Report was based solely on the observations of Sonja Waters and Andrew Hernandez, neither of whom were engineers or otherwise qualified to determine the cause of the retaining wall failing.

18.4   The Inspection Report was based solely on a visual inspection from outside of the Property and did not involve going onto the site or speaking to anyone on the site.

19.   From on or about 1 February 2018 through on or about 10 August 2018, the Respondent took no steps to investigate the cause of the Retaining Wall collapsing or to otherwise determine liability for the Retaining Wall collapsing or the costs associated with the remediation works.

19.1   The Respondent did not prepare an investigation plan.

19.2   The Respondent did not take any steps to gather any oral evidence from any witnesses or other persons with relevant knowledge or information.

19.3   The Respondent did not take any steps to gather documentary evidence.

19.4   The Respondent did not take any steps to obtain expert evidence.

19.5   The Respondent did not take any steps to gather any physical evidence.

19.6   The Respondent did not carry out any further site inspections with persons suitably qualified to investigate the cause of the Retaining Wall collapsing.

20.   On or about 10 August 2018, at the time the Respondent gave the Order to the Applicants, the only evidence the Respondent had to substantiate the Order was the Inspection Report. The Inspection Report does not substantiate the statements of fact at paragraphs 1(b), (c) and (d) of the reasons for the Order.

21.   The Respondent giving the Order to the Applicants was unsubstantiated.

21.1   The giving of the order was not based on evidence.

21.2   The Respondent took no steps to investigate the circumstances relating to the Order, despite that the Applicants and their representatives repeatedly put the Respondent on notice that the Applicants disputed that they were liable for the costs associated with the collapse of the Retaining Wall and the reasons for the Order.

21.3   The Respondent’s failure to investigate the matter and ensure its decisions was based on evidence breached section 5 of the Leichhardt Municipal Council Compliance & Enforcement Policy (which applied to the Respondent).

21.4   The reasons for the Order were factually incorrect and were not based on evidence.

21.5 The Respondent giving reasons for the Order that were factually incorrect, in effect a failure to give reasons, breached section 136 of the Local Government Act 1993.

21.6   The Respondent gave the Order, despite that the Applicants gave to the Respondents evidence, including submissions and expert reports, and made submissions to the Respondent that the reasons, that dispute the reasons for the Order.

22.   The terms of the Order were unreasonable because the Order required the Applicants to bear the entire cost of complying with the Order despite that the Applicants were not liable for the collapse of the Retaining Wall.

6.   Requirements of the CDC

6.1   The CDC permitted minor excavation adjacent to the Retaining Wall and Park Street.

6.2   The CDC required footing to be placed centrally under walls and columns unless otherwise noted. This required footing to be placed along the perimeter of the house adjacent to the Retaining Wall and Park Street.

6.3   The CDC required the footing to be 450mm wide and 450mm deep and to be constructed using concrete with trench mesh placed on the top and bottom. This required excavation under the walls and columns of the house, including the wall of the house adjacent and parallel to the Retaining Wall and Park Street.

Particulars

(a)   Complying Development Certificate 170127/02 dated 22/11/2017.

(b)   Structural Plans by Nastasi & Associates dated 26/10/2017.

7.   Construction of the footing

7.1   To construct the footing under the wall of the house adjacent to the Retaining Wall a small section of flooring along the side of the house and approximately 800mm wide was removed to allow access to the area under the wall that was to be excavated (this area of flooring was to be reinstated after the construction of the footing).

7.2   After the removal of the flooring, the soil under the wall was gradually excavated by hand. The excavation was limited to the area where the footing would sit and no soil was removed from the Retaining Wall or from underneath the Retaining Wall.

8.   Collapse of the Retaining Wall

8.1   Excavation for the footing on the side of the house adjacent to the Retaining Wall was around 75% complete when the Retaining Wall collapsed.

8.2   The Retaining Wall collapsed onto the Property and the retained substructure of the house. The force of the Retaining Wall collapsing shunted the structure of the house sideways and caused it to become structurally unsound.

8.3   It was determined by the Contractor on site at the time that the structure of the house had become unsafe and that it had to be demolished.

Particulars

8.4   Report by Darryn Maynard of Barracuda Building (the Contractor on site).

9.   Reasons for the Order

9.1   The decision to issue the Order in its current form is insufficiently supported by reason as the factual bases for making the Order are incorrect.

9.2   The Order contains the “Reasons for the Proposed Order” (Reasons), which are:

1.   An inspection conducted by council's Development compliance officers on Monday 29 January 2018, revealed the following:

a)   The building located on 40 Moodie Street was demolished contrary to approved CDC No. 170127/02, particularly the plans referenced therein.

b)   The demolition works involved, either directly or indirectly, the excavation and/or removal of materials from or adjacent to Park Street including the sandstone retaining wall that previously supported the footpath within Park Street.

c)   Subsidence and damage of Council's footpath in Park Street occurred by reason of the unauthorised demolition referenced in paragraph (a).

d)   The recipient of this Order is responsible for the unauthorised demolition referenced in paragraph (b) as it was carried out by contractors engaged to perform the demolition.

2.   A review of council's records failed to reveal any evidence of an approval being granted for the above demolition to take place.

9.3   The Applicants contend that the factual bases on which the Reasons proceed are incorrect. Significantly, the construction work undertaken up to the collapse of the Retaining Wall was carried out in accordance with the CDC and no material was removed from the Retaining Wall.

Particulars

(a)   Repeat and rely on paragraphs 23.1 to 25.3.

9.4   The Reasons misconceive the cause of the Retaining Wall collapsing and the subsequent damage to the footpath in Park Street. The Reasons proceed on the basis that the demolition of the house was the cause of the Retaining Wall collapsing. The Applicants contend this is not the case as the Retaining Wall collapsed prior to the demolition of the substructure of the house. It was the collapse of the Retaining Wall into the house that compromised the substructure of the house to the extent that it was necessary to remove that substructure.

9.5   Further and in the alternative, even if the construction works were not in compliance with the CDC, the Reasons incorrectly presume that the non-compliance with the CDC was the cause of the Retaining Wall collapsing.

10.   Condition of the Retaining Wall

10.1   The primary cause of the Retaining Wall collapsing was its condition at the time it collapsed. The Retaining Wall was at the end of its design life and was no longer capable of supporting itself, the footpath, or the surrounding soil.

10.2   Age of the Retaining Wall:

(a)   The Retaining wall around 100 years old.

10.3   Structure of the Retaining Wall:

(a)   The Retaining Wall was a mass gravity retaining wall made of up sandstone block construction and bearing on a sand bedding.

(b)   The Retaining Wall was approximately 2.5 meters tall at its highest point.

(c)   There was no mortar between the sandstone blocks.

(d)   The Retaining Wall had no footing/foundation.

(e)   The Retaining Wall had no continuous vertical support through the structure.

(f)   It appears that a course had been added to the top of the Retaining Wall.

10.4   Footpath on Park Street:

(a)   The asphalt foot path on Park Street was placed directly on top of the Retaining Wall which would have had the effect of putting a lateral pressure on the Retaining Wall.

10.5   Failure of the Retaining Wall:

(a)   The Retaining Wall was failing and falling onto the structure of the house prior to the construction works. The house was being pushed into by the Retaining Wall prior to the construction works.

(b)   The existence of cracks in the bitumen footpath on Park Street prior to the construction works suggest that the Retaining Wall was sinking.

10.6   Australian Standards

(a)   The Retaining Wall design did not comply with the Australian standards for Earth retaining structures (AS4678).

Particulars

(a)   Particulars in the form of an expert report may be required to determine the contributing and primary causes of the Retaining Wall collapsing.

(b)   Report by Darryn Maynard of Barracuda Building (the Contractor on site).

(c)   Report by Nastasi & Associates dated 5 February 2018.

(d)   Report by Nastasi & Associates dated 19 March 2018.

(e)   Photos of the Property and the Retaining Wall taken before the construction works and after the collapse of the Retaining Wall.

11.   Duty of care in relation to support for land

11.1   The Retaining Wall provided support for land (including the footpath and road on Park Street) and had replaced the natural support of the land. The Respondent therefore had a duty of care in relation to the land supported by the Retaining Wall.

Particulars

(a) Section 177 of the Conveyancing Act.

(b) Section 91 of the Roads Act 1993 (NSW)

11.2   The house on the Property was a free standing structure. It did not function to provide support to the Retaining Wall or the land supported by the Retaining Wall. Further, the house had not replaced the natural support for any of the land next to it. The Applicants therefore did not have a duty of care in relation to any support the house on the Property may have provided to the land supported by the Retaining Wall.

Particulars

(a) Section 177 of the Conveyancing Act.

12.   Responsibility for the Retaining Wall

12.1   The Respondent had responsibility for the Retaining Wall as it was a fixture on the Respondent’s land. If the Respondent had become aware that it was necessary to repair the Retaining Wall, the Respondent would have been responsible for the costs.

12.2   Given the condition of the Retaining Wall at the time it collapsed, if the Retaining Wall had been inspected by the Respondent prior to its collapse, the result would likely have been that the Respondent would have formed the view that it had to substantially stabilise, repair or replace the Retaining Wall. The works required would have been similar or greater in time and expense to the works required by the Order.

Applicants’ evidence

17. The Applicants tendered:

1. exhibit TC-1 to the affidavit of Mr Coleman solicitor for the Applicants affirmed 15 February 2019 (exhibit A);

2. exhibit TC-2 to the affidavit of Mr Coleman affirmed 25 February 2019 (exhibit B);

3. exhibit TC-3 to the affidavit of Mr Coleman affirmed 13 March 2019 (exhibit C);

4. email correspondence between Mr Kohn solicitor for the Applicants and Mr Bonanno solicitor for the Respondent regarding costs (exhibit D); and

5. the Applicants’ Class 2 application filed 4 September 2018 (exhibit E).

18. Mr Coleman stated in his affidavit affirmed on 15 February 2019 that on 5 July 2018 the Applicants lodged an informal access to information application under the GIPA Act. A copy of this request is in exhibit A. This request sought documents relating to the retaining wall at 40 Moodie Street, Rozelle and documents as a result of the inspection conducted by the council’s development compliance officers on 29 January 2018. An email dated 12 July 2018 from the Council to Mr Kohn stated that the Council held information within the scope of the Applicants’ request and that the relevant documents could be downloaded and viewed. On 27 November 2018 the Council provided documents in response to that and other requests, including a request pursuant to par 15 of Land and Environment Court Classes 1, 2 and 3 Miscellaneous Appeals Practice Note dated 31 October 2018, and a formal access request under the GIPA Act lodged 23 October 2018.

18. Mr Coleman stated that the first time the Applicants were provided with a copy of the Inspection Report (contained in exhibit A) was on 27 November 2018. This is despite the Inspection Report supposedly being captured under the ambit of the informal access request. The Applicants did not have the benefit of this information when initially preparing their application and SOFAC.

19. Mr Coleman stated in his second affidavit affirmed on 25 February 2019 that on 14 December 2018 he sent the Council an email containing an offer of settlement to the Applicants (a copy of which is in exhibit B).

20. Mr Coleman’s third affidavit affirmed on 13 March 2019 attaches email correspondence from the Council to Mr Coleman dated 14 August 2018. The Council stated that it was in fundamental disagreement with the Applicants’ description of the complying development certificate 170127/01 (CDC) relating to the subject property. In the Council’s view, the CDC did not authorise the demolition of the house.

Council’s evidence

22. The Respondent tendered CDC (exhibit 1), the proposed site plan (exhibit 2), and development consent D/2018/381 dated 13 March 2019 (exhibit 3).

23. According to the CDC, the scope of building works covered by the CDC included alterations and addition to an existing dwelling. Within the compliance table in exhibit 1 there is a comment which states that “[t]here is an exception to the side boundary standard as the existing side boundary wall is being retained”.

24. The proposed site plan shows that the Applicants’ house wall is on the boundary of the site on Park Street and immediately adjacent to this was the retaining wall.

25. Condition 2 of the development consent specifies issues that the structural engineering report, which must be submitted to the Council, must address at a minimum. Condition 18 states that if any excavation extends below the level of the base of the footings of a building on an adjoining property, the person causing the excavation is required to do certain things. This condition states that the owner of the adjoining allotment of land is not liable for any part of the cost of work carried out for the purposes of the condition.

Applicants’ submissions

26. The Court has power to permit the amendments sought under s 64 of the CP Act. The proposed amendments are not time-barred and no new cause of action is being added. A claim for compensation under s 181 is contained in the original Class 2 application. No damages are being claimed. Alternatively the amendments can be made by virtue of s 65(3) of CP Act. The amendments will enable the real issues in dispute to be considered per Aon Risk Services Australia Ltd v Australian National University (2009) 258 ALR 14; [2009] HCA 27 (Aon Risk) at [71]-[72], [82]-[85].

27. The existence and contents of the Inspection Report go directly to the content of the Applicants’ claim for compensation under s 181(1) of the LG Act on the basis that the giving of the Order was unsubstantiated or the terms of the Order were unreasonable or both. The reasons in the Order are premised on “[a]n Inspection conducted by Council's Development Compliance Officers on Monday 29 January 2018”. It is safe to infer that the creation of the Inspection Report following this inspection formed the documentary basis upon which the Order was made.

28. The existence and contents of the Inspection Report are important for two reasons. First, it was only when the Inspection Report was disclosed (late) that it became apparent that the Council had gathered almost no evidence to substantiate the making of the Order. Prior to the disclosure of the Inspection Report, the only information available to the Applicants about why the Council had issued the Order were in the “Reasons for the Order” and an email from Mr Strati, general counsel of the Council, which provided further reasons.

29. It appeared that the Council had gathered some evidence in respect of the Order as demonstrated by its reference to the “inspection conducted by the council's development compliance officers on Monday 29 January 2018”. However, the extent of the evidence that the Council had was unknown. When the Inspection Report was disclosed, and the contents of the Inspection Report had been reviewed, the extent (or lack thereof) of the Council’s evidence to substantiate the giving of the Order became apparent.

30. Second, it was only when the Inspection Report was disclosed that it became apparent that the Council had no evidence to support the reasons for the Order. The reasons for the Order rely on the inspection conducted on 29 January 2018 to substantiate the facts asserted in the reasons. As previously stated, this inspection was recorded in the Inspection Report. When the Inspection Report was disclosed, and the contents of the Inspection Report had been reviewed, the Applicants became aware that the Inspection Report, and ergo any facts gathered during the inspection on 29 January 2018, did not support the facts asserted in the “Reasons for the Order”.

31. Consequently, it was only when the Inspection Report was disclosed that it became apparent that the giving of the Order was unsubstantiated or the terms of the Order were unreasonable, and that the most appropriate claim for the Applicants to have brought was a claim for compensation under s 181 of the LG Act. No tasks were carried out and no inspection by an engineer or person with engineering qualification was carried out. No proper investigation was carried out and the report lacks content, for example, it contains photographs about which no observations were made. No inference can be drawn as to the cause of the retaining wall collapsing from the Inspection Report. No reasonable basis for issuing the Order is identified in the “Reasons in the Order”.

32. The existence and contents of the Inspection Report are directly and materially relevant to the proceedings brought by the Applicants. The material contained in the Inspection Report goes directly to the issues of whether the Order was unsubstantiated and/or whether the terms of the Order were unreasonable.

33. If the Inspection Report had been provided before the commencement of the proceedings, the existence and contents of the report would have informed the proceedings brought by the Applicants. The Council’s failure to disclose the Inspection Report when it was requested until after the Applicants commenced the proceedings have ultimately led to the Applicants incurring costs that it would have otherwise not incurred. There is no delay in bringing this application in these circumstances.

34. The failure to comply with the CDC does not prevent a claim under s 181. No challenge to an order is required to underpin a claim for compensation under s 181. The Council’s submissions address substantive questions better dealt with at a hearing not on an application to amend. The issue remains of who or what caused the wall to collapse. For the Applicants to be solely responsible for the costs of repairing the whole retaining wall is unreasonable.

35. The Applicants are not making a tortious claim. The cases of Mailey v Sutherland Shire Council (2017) 226 LGERA 188; [2017] NSWCA 343 and Connor v Smith Hire Services (Casino) Pty Ltd [2017] NSWLEC 7 are entirely distinguishable from this matter.

36. The amendments allow the real matters in dispute between the parties to be litigated and are consistent with the dictates of ss 56 and 58 of the CP Act.

Council’s submissions

37. The notice of motion is misconceived and should be dismissed with costs.

Amendments futile

38. The amendments identify a case which is futile. The primary relief originally sought in the Class 2 application of amendment of the Order is now abandoned. The case sought to be made in reliance on the Inspection Report is not a basis for amendment of the SOFAC. The “stop work” notice and subsequent Order were entirely justified. The Council was not obliged to obtain independent engineering advice as to the source of the collapse. To so require is contrary to public policy. The Council does not bear an onus of proof of establishing that the wall fell over for reasons other than demolition of the Applicants’ house before the Order was issued.

39. The CDC issued did not permit demolition of the wall adjoining Parks Road on which the retaining wall was located. The Applicants accept that the whole of house demolition that occurred was not authorised by the CDC. That concession, which is clearly correct, means there can be no argument as sought to be made in the amended SOFAC. The two council officers arrived at the site on 29 January 2018 to find that no house existed, suggesting total demolition contrary to the CDC. They took photographs showing that. That discovery is reflected in the first reason for giving the Order. Because no opportunity to impose a condition relating to a development application (DA) such as obtaining a dilapidation report was available to the Council there was no ability to control what the Applicants did concerning the house demolition. The cause of the retaining wall failing is irrelevant. The conclusion of the skilled council officers that the Order should be issued was open to them.

40. The Applicants’ criticism of the Inspection Report as the sole basis for the Order being issued has no foundation. The minds of the council officers are highly relevant. Two officers attended the inspection on 29 January 2018, as can be seen in the Inspection Report. The “Team Leader Development Compliance” signed off on the report. The officers were required to certify three matters in the report, including that they had appropriate delegation and the adequacy of their qualifications and training to perform the inspection inter alia as set out above in [12].

New cause of action

41. The Applicants no longer seek any amendment to the Order, and have in fact complied with it. Given the abandonment of the appeal against the Order as provided by s 180 of the LG Act, the claim as articulated in relation to s 181 is a new claim.

42. The amendments seek to obtain damages for negligence not compensation under the LG Act. These proceedings are not the appropriate vehicle for such a claim.

43. The claim is against public policy because the Council is a roads authority for the purposes of s 45 of the Civil Liability Act 2002. The Applicants assert the Council should have been aware of the state of the retaining wall but that is not realistic. The Applicants should remove all reference to duty, and focus solely on whether the Order was unsubstantiated or unreasonable.

44. The requested change from Class 2 to Class 3 demonstrates the significant shift in the Applicants’ position.

Unwarranted delay

45. The notice of motion alternatively seeks leave to proceed out of time under s 181(2) of the LG Act, as the amendment is sought more than three months after the order was made. The original application predicated the order for compensation on amendment of the Order. The SOFAC did not contend that the Order was unreasonable or unsubstantiated.

46. The claim that the Order is unreasonable or unsubstantiated is new, and out of time, as the amendment seeks a completely different source of power as a foundation for the claim. No basis for the unwarranted delay is provided.

Consideration

47. The power to amend documents in proceedings is identified in s 64 of the CP Act. Subsection (2) identifies that all necessary amendments are to be made to determine the real questions raised in proceedings. Section 65 concerns the amendment of proceedings after the expiry of a limitation period where proceedings were commenced before the expiration of a relevant limitation period. Under subs (2)(c) a new cause of action can be added that in the court’s opinion arises from the same facts as those giving rise to the existing cause of action. Appeals under s 180 of the LG Act are to be commenced within 28 days of the service of an order (s 180(3)). Proceedings for compensation for complying with an order where no appeal is made must be commenced within three months of the date of an order (s 181(2)). The Order was dated 10 August 2018. The Applicants commenced Class 2 proceedings within time on 4 September 2018.

48. The requirement to ensure proceedings are conducted to achieve the just, quick and cheap resolution of matters in issue mindful of the dictates of justice is found in ss 56 and 58 of the CP Act. The Applicants’ reliance on Aon Risk at [71]-[83] and Etna v Arif [1999] 2 VR 353; [1999] VSCA 99 at [31]-[32] concerning the desirability of the real issues in dispute being placed before a court can be accepted. At issue is the extent to which a real issue has been identified in the amendments the subject of the notice of motion. The proposed amended application and the proposed amended SOFAC raise different considerations.

No new claim in amended application

49. The relief sought in the original application set out above in [14] refers, firstly, to the modification of the Order so that the costs of complying with it are paid by the Council. Secondly, a claim for compensation for the costs of complying with the Order under s 181 was also made. These two prayers for relief seek essentially the same outcome. As the Applicants submitted, a claim for compensation under s 181 was included from the outset. The Applicants’ notice of motion seeks to amend the original application by deleting prayer 1, namely any reference to modification of the Order under s 180. The sole claim for relief in the amended application is a claim for compensation under s 181 which is a matter to be determined in Class 3 proceedings as nominated in s 19(d) of the LEC Act. That the proceedings were commenced as Class 2 proceedings and would now be transferred to Class 3 is simply a consequence of the operation of the LEC Act.

50. A claim under s 181 can be made in the Court in the absence of a challenge to an order under s 180 given the reference in s 181 to “… or otherwise …”. The substance of the claim in the proposed amended application has remained the same so that the timeframe of three months for commencing an action relying on s 181 was satisfied in these circumstances. I do not consider there is any substantive difference between the original and the proposed amended application in relation to a claim under s 181. This is an amendment to which s 64 of the CP Act can apply. The Applicants need not rely on s 65(2)(c) of the CP Act as the claim is not out of time.

51. Whether there is otherwise a substantive change in the Applicants’ case and whether that change is futile requires consideration of the original and proposed amended SOFAC.

52. Informing my consideration are the four reasons for issuing the Order. The Applicants do not dispute reason 1(a), that the building on 40 Moodie Street was demolished contrary to the CDC, and consequently cannot dispute reason 1(d), that their contractor caused the demolition of the whole house. They dispute reasons 1(b) and (c), namely that the demolition works on their land directly or indirectly caused the removal of materials from the adjacent sandstone retaining wall and that they caused unauthorised subsidence and damage to the footpath in Park Street.

Reliance on Inspection Report in amended SOFAC alone futile

53. Substantial amendment of the SOFAC is now sought on the basis that the Order was unsubstantiated or the terms of the Order were unreasonable. These criteria were not explicitly identified in the original SOFAC as can be seen above in [16]. The core matter requiring consideration now given the Council’s submissions is whether at this stage of the proceedings, before a substantive hearing of the merits of the claim, the proposed amendments can be found to be futile and should therefore be refused.

54. The original SOFAC set out in [16] above refers to the requirements of the CDC; the construction of the footing by the Applicants’ builder; the collapse of the retaining wall; criticism of the reasons for the Order because the collapse of the retaining wall was not caused by the demolition of the house on the Applicants’ land, rather the collapse of the retaining wall onto the Applicants’ land caused the remaining house to be substantially damaged so that it required demolition; the poor condition of the retaining wall; the duty of care in relation to support for land in s 177 of the Conveyancing Act 1919 and s 91 of the Roads Act 1993; and the responsibility for the retaining wall resting with the Council. While not stated explicitly, these matters would support arguments about whether the Order was reasonable or unsubstantiated.

55. The amended SOFAC at pars 7-16 includes a background section where the lengthy correspondence between the Council and the Applicants’ solicitors between 25 January 2018 and 11 July 2018 concerning the cause of the collapse of the retaining wall and the response to the Proposed Order dated 29 June 2018 is summarised.

56. The amended substantive claim at pars 17-22 is identified under the heading “Order was unsubstantiated or the terms of the Order were unreasonable”. Paragraph 17 summarises the lengthy background section concerning the Applicants’ representations to the Council. The particulars of the claim at pars 18-21 essentially criticise the Inspection Report as being an insufficient basis to issue the Order because the two council officers whose visual observations were relied on were not engineers and lacked relevant qualifications to determine the cause of the retaining wall failing, they did not speak to anyone on the site and the report did not provide any evidence about what caused the retaining wall to fail. This is described as a failure to investigate. The steps the Council allegedly failed to take are identified in proposed par 19. The Applicants submitted that the Council should have inter alia interviewed witnesses, gathered physical evidence and obtained an expert (engineer’s) report before issuing the Order.

57. I agree with the Council’s submissions concerning the Inspection Report and the importance of the minds of the council officers as set out above in [40]. There is no basis for the Applicants’ assertion that the Council had no evidence on which to base the Order and that the Inspection Report lacked relevant content. The criticism that no-one on site was spoken to is unwarranted given that there was no-one there on the day of the inspection by the council officers. The statement in par 21.1 that there was no evidence is simply incorrect. The same must be said of pars 21.3 and 21.4. That the Order was issued contrary to the views of the Applicants as supported by expert reports (par 21.6) is not relevant to whether there was no evidence before the Council.

58. The factual circumstances of this case may give rise to complex causal questions in my view. The Applicants cannot limit the matters in issue by relying solely on the Inspection Report and avoid relying on expert reports as the proposed amended SOFAC seeks to do. Seeking to limit the issues and therefore the scope and cost of a hearing is a commendable goal, but the Applicants’ preferred approach will mean the issues are too truncated to enable resolution of the matters in issue. The amendments to the SOFAC at pars 18-20 and 21.1-21.6 are futile on their own. The case as articulated in the original SOFAC appears to support the relief sought in the amended application focussing solely on s 181. There is no difficulty in referring to the Inspection Report as part of the background of the matter or maintaining the current arguments about it as part of a wider case mounted by the Applicants.

59. As this is not a substantive hearing, I do not determine the Council’s submission that by virtue of the operation of the CDC, which did not permit the demolition of the whole house, a claim for compensation under s 181 is not available to the Applicants. Nor do I determine the correctness of the council’s submission that the cause of the wall collapsing is irrelevant. Nor do I finally resolve whether the Applicants’ claim is really for damages for negligence by the Council in failing to repair the retaining wall rather than compensation under s 181.

53. The questions arising are akin to “the chicken or the egg scenario” in that the Applicants wish to submit that the failure of the retaining wall on council land was not the result of their actions in implementing the building work approved by the CDC. The Applicants wish to argue their land does not support the retaining wall on council land. The Council will submit that because the Applicants availed themselves of a CDC there was no opportunity for assessment by the Council of a DA for demolition of the whole house by calling for a dilapidation report which might have highlighted problems with the retaining wall, if any.

54. Given that the Applicants have had to incur the substantial financial burden of restoring the adjacent retaining wall on council land at a cost of some $100,000, I was informed at the hearing, their complaint that they should not be liable for the whole amount appears understandable albeit on the assumption they can make good their case. As a consequence of my findings above, a hearing which will require expert evidence will be necessary and is likely to be costly. Rather than incurring such costs it appears to me most efficient of time and money for useful discussion between the parties about whether the Council can contribute towards the cost of repairing the retaining wall on its land in at least the amount it would otherwise spend on a contested court hearing. Any such arrangement can be made without admission of liability by the Council. I would urge the parties to consider such a course of action.

55. The proceedings are now transferred from Class 2 to Class 3. In certain Class 3 proceedings, the Court is not to make an order for the payment of costs unless the Court considers that the making of an order as to the whole or any part of the costs is fair and reasonable in the circumstances, per r 3.7(2) of the Land and Environment Court Rules 2007. Section 181 compensation claims are not included in the list of proceedings to which r 3.7(2) applies. The normal costs rule would apply in this case, namely costs follow the event, further underlining the substantial costs that may be incurred by the parties.

56. The notice of motion dated 15 February 2019 is partly upheld. It may be that the Applicants wish to fine tune the SOFAC in light of my findings and should have the opportunity to do so. No costs order is sought in the notice of motion.

Orders

64. The Court orders that:

1. The Applicants’ notice of motion dated 15 February 2019 is upheld to the extent that the amended application in Class 3 proceedings can be relied on.

2. The Applicants may file an amended statement of facts and contentions which accords with this judgment within 21 days.

3. Costs are reserved.

4. The proceedings are stood over to the Class 3 list on Friday 3 May 2019 with liberty to the parties to apply through online Court for an earlier list date.

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Decision last updated: 08 April 2019