Lord v McMahon - [2015] NSWSC 1619

Supreme Court

New South Wales

Amendment notes

Medium Neutral Citation: Lord v McMahon [2015] NSWSC 1619
Hearing dates: 12, 13, 17 November & 1, 12 December 2014
Date of orders: 24 November 2015
Decision date: 24 November 2015
Jurisdiction: Equity
Before: Slattery J
Decision:
On the plaintiff’s summons no trespass or continuing trespass found. Claims for flooding nuisance at the dam and the table drains upheld. A relief hearing ordered. Part of nuisance case fails with respect to dam wall leakage. Plaintiff’s case in relation to the encroachment of table drains also fails. On the cross claim the claims in proprietary estoppel and under the Encroachment of Buildings Act dismissed.

Catchwords:
TRESPASS - from dam construction - large dam built on land close to the boundary of lower lying rural neighbouring property - batter from dam construction placed onto lower-side neighbour’s land - whether a trespass - whether a continuing trespass - where defendant’s conduct permanently altered the plaintiff’s land - defence to trespass - whether adjoining lower-side neighbour gave permission for dam to be built and batter to be placed on lower-side neighbour’s land - what amounts to consent – where injunctive relief sought to prevent trespass to land.

TRESPASS - from table drain construction - table drains built near boundary along the “battle-axe handle” of two subdivided rural properties - whether the table drains concentrate surface water into channels causing erosion of the plaintiff’s property.

NUISANCE - from dam leaking water onto lower land of neighbour - whether leakage amounts to a nuisance - from table drain - whether leakage causes nuisance to plaintiff’s land by erosion.

EQUITY – proprietary estoppel – where Torrens title land transferred after alleged equitable interest arose - personal equities exception to indefeasibilty.

EQUITY – equitable relief – injunctive relief – relief to be granted upon conditions as to the sharing of the cost burden of the relief.

ENCROACHMENT OF BUILDINGS - whether an easement can and should be granted under the Encroachment of Building Act 1922 s 3 to authorise the maintenance of batter on the lower-side neighbour’s land – whether an earthen dam wall is a ‘building’ under the Act.
CIVIL PROCEDURE - discretion to admit tender of evidence at late stage in proceedings - where evidence tendered after oral evidence given and final written submissions served
Legislation Cited: Conveyancing Act 1919, s 88B, Schedule 8, Part 6,
Encroachment of Buildings Act 1922, ss 2, 3(1), 4, 5, 8, 10, 14
Evidence Act 1995, ss 54, 131
Real Property Act 1900, ss 42, 43
Cases Cited: Ashton v Pratt [2015] NSWCA 12; 88 NSWLR 281
Bahr v Nicolay (No. 2) (1988) 164 CLR 604
Behrens v Richards [1905] 2 Ch 614
Benjamin v Storr (1874) LR 9 CP 400
Boed Pty Limited v Seymour (1989) 15 NSWLR 715
Break Fast Investments Pty Ltd v PCH Melbourne Pty Ltd (2007) ATR 81–930
Breskvar v Wall (1971) 126 CLR 376
Cantamessa v Sanderson (1993) 6 BPR 13,127
Clearlite Holdings Ltd v Auckland City Corporation [1976] 2 NZLR 729
Clegg v Dearden (1848) 12 QB 575; 116 ER 986
Clune v Collins Angus & Robertson Publishers Pty Ltd (1992) 25 IPR 246
Cuthbert v Hardy (1989) 17 NSWLR 321
Droga v Proprietors Strata Plan 51722 (1996) 93
LGERA 120
Ex parte Van Achterberg (1984) 1 Qd R 160
Cuthbert v Hardy (1989) 17 NSWLR 321
Delaforce v Simpson-Cook [2010] NSWCA 84; (2010) 78 NSWLR 483
Duic v Duic [2013] NSWCA 42
Evans Marshall & Co Ltd v Bertola SA [1973] 1 WLR 349
Farah Constructions Pty Ltd v Say-Dee Pty Ltd (2007) 230 CLR 89
Gales Holdings Pty Limited v Tweed Shire Council [2013] NSWCA 31
Gardner v Hodgson’s Kingston Brewery Ltd [1903] AC 229.
Goldman v Hargrave [1967] 1 AC 645; 115 CLR 458
Grant Pastoral Co Pty Ltd v Thorpes Ltd (1953) 54 SR (NSW) 129
Grgic v Australian and New Zealand Banking Group Ltd (1994) 33 NSWLR 202
Halliday v Nevill (1984) 155 CLR 1
Healey v Hawkins [1968] 1 WLR 1967
Hudson v Nicholson (1839) 5 M & W 437; 151 ER 185
Jaggard v Sawyer [1995] 1 WLR 269
Jones v Dunkel (1959) 101 CLR 298
Jones v Williams (1843) 11 M & W 176; 152 ER 764
Konskier v Goodman Ltd [1928] 1 KB 421
Lagan Navigation Co v Lamberg Bleaching Dyeing
and Finishing Co [1927] AC 226
Lemmon v Webb [1894] 3 Ch 1; [1895] AC 1
Lipman v Clendinnen (1932) 46 CLR 550
Logue v Shoalhaven Shire Council [1979] 1 NSWLR
537
Lowndes v Bettle (1864) 33 LJ Ch 451
Melaleuca Estate Pty Limited v Port Stephens Council [2006] NSWCA 31
McKenzie v Powley [1916] SALR 1
Miller v Jackson [1977] QB 966
Milling v Hardie [2014] NSWCA 163
Plenty v Dillon (1991) 171 CLR 635
Plunkett v Bull (1915) 19 CLR 544
Port Macquarie Hastings Council v Mooney [2014] NSWCA 156; 201 LGERA 314
Redland Brick Co v Morris [1970] AC 652
Re Hodgson (1885) 31 Ch D 177
Richardson v Forestry Commission (1988) 164 CLR 261
Ruthning v Ferguson [1930] St R Qd 325
Ryan v Brain [1994] 1 Qd R 681
Joseph Saliba & Anor v Thomas Tarmo [2009] NSWSC 581
Sedleigh-Denfield v O’Callaghan [1940] AC 880
Shelfer v City of London Electric Lighting Co [1895] 1 Ch 287
Sidhu v Van Dyke [2014] HCA 19; 251 CLR 505
Soich v Sutherland Shire Council (1980) 2 BPR 9273
Snowlong Pty Ltd v Choe (1991) 23 NSWLR 198.
Tran v Nominal Defendant [2011] NSWCA 220; 58 MVR 462
Thomas v Oakley (1811) 18 Ves 184; 34 ER
287
Thorpes Ltd v Grant Pastoral Co Pty Ltd (1955) 92 CLR 317
Varma v Varma [2010] NSWSC 786; 6 ASTLR 152
Vukic v Luca Grbin and Ors; Estate of Zvonko Grbin [2006] NSWSC 41
Waddell v Waddell [2012] NSWCA 214; 292 ALR 788
Wantagong Farms Pty Ltd as Trustee for the Bulle
Family Trust v Bulle [2015] NSWSC 1603
Ward v Griffiths (1987) 9 NSWLR 458
Weeks v Hrubala [2008] NSWSC 162
Yarrabee Coal Co Pty Ltd v Lujans [2009] NSWCA 85; 53 MVR 187
Texts Cited: Halsbury’s Laws of Australia, LexisNexis online
B McFarlane, The Law of Proprietary Estoppel (1st ed 2014, Oxford University Press)
RP Meagher, JD Heydon, MJ Leeming, Meagher, Gummow & Lehane’s Equity: Doctrines and Remedies (4th ed 2002, Butterworths LexisNexis)
RP Meagher, JD Heydon, MJ Leeming, Meagher, Gummow & Lehane’s Equity: Doctrines and Remedies (5th ed 2015, Butterworths LexisNexis)
C. Sappideen and P. Vines, Fleming’s The Law
of Torts (10th ed 2011, Lawbook Co)
PW Young, C Croft, ML Smith, On Equity (1st ed 2009, Thomson Reuters)
Category: Principal judgment
Parties: Plaintiff: Heather Lord
First Defendant: Stephen McMahon
Representation:
Counsel:
Plaintiff: C.A. Vindin
Defendant: G. Waugh
Solicitors:
Plaintiff: Glenn Henniker
Defendant: Grant John Hodgson

File Number(s): 2013/223473
Publication restriction: No

Judgment

The plaintiff, Heather Lord and the defendant, Stephen McMahon own adjoining rural land in the Shoalhaven Heads District on the New South Wales South Coast. Their two battle axe shaped properties lie generally in an east-west direction at the foot of Mount Coolangatta about ten minutes’ drive from the township of Berry. Mr McMahon’s property is the higher of the two and is closer to Mount Coolangatta. Both properties have driveway access to Coolangatta Road, which at the access point runs approximately north-south.
By her Summons filed in July 2013 Mrs Lord seeks relief against Mr McMahon in nuisance and trespass, in relation to three principal matters: (1) the effects of a substantial dam Mr McMahon constructed on his property in 2000, the embankment wall of which encroaches on Mrs Lord’s land; (2) the effects of the ingress of water and excavated earthen material from the dam site into Ms McMahon’s land since construction by the action of the elements; and (3) a table drain Mr McMahon constructed alongside the access road to his property, which drain is said to encroach upon and cause erosion to the plaintiff’s land.
By his Cross Summons, filed just before the hearing of these proceedings in November 2014, Mr McMahon claims: (1) that he has the benefit of a proprietary estoppel against Mrs Lord requiring her to concede an easement for batter (as defined by Conveyancing Act 1919, Schedule 8, Part 6) over the earthen material that was placed onto Mrs Lord’s land in order to construct the embankment wall of the dam; and (2) an order under the Encroachment of Buildings Act 1922 for an easement for batter in respect of this embankment material.
The proceedings were heard over five days in November and December 2014. Mr Vindin of counsel appeared for Mrs Lord. Mr Waugh of counsel appeared for Mr McMahon.

A Dispute about a Dam – 1996 to 2014

The following is a narrative of the relevant history leading to the present action. This narrative represents the Court’s findings on the matters covered, except to the extent that the context indicates that only the parties’ allegations are being recorded in the narrative. For reasons of economy this narrative does not always include reference to versions of the facts that the Court has rejected.

The Subdivision – 1985 to 1999

In August 1985 DP714402 recorded the subdivision of an oblong parcel of land to the west of Coolangatta Road into three lots, which are referred to in these proceedings as Lot 1, Lot 2 and Lot 3. Coolangatta Road runs approximately north-south in the vicinity of this subdivision. DP714402 actually subdivides the land it encompasses into four lots. But only the three lots running east-west within the oblong parcel of DP714402 are relevant to the issues in these proceedings. Of these three lots Lot 1 is closest to Coolangatta Road. Lot 2 lies to the west of Lot 1. Lot 3 lies further to the west of Lot 2, closest to Mount Coolangatta. Lot 4 is a large block that lies to the south of the oblong parcel.
In 1996 Mrs Lord’s husband, Geoffrey Lord, purchased Lot 2 of the DP714402 subdivision. That same year Mr McMahon purchased Lot 3. Mr Lord died in 2007. Lot 2 passed under his will to Mrs Lord.
Lot 1 slopes gently from north to south. So does much of Lot 2. Moving in a westerly direction towards Mount Coolangatta, the ground in Lot 2 ascends more steeply, especially in the vicinity of Lot 3. The western end of Lot 2 is higher than Lot 1. Lot 3 is higher than Lot 2.
DP714402 was a Conveyancing Act, s 88B instrument, which provided for the subdivision of these four lots, and for the access roads and easements for services to each of the lots.
A diagram of the subdivision in DP714402, showing Lots 1, 2, 3 and 4 appears as Figure 1 below.

A natural gully diagonally traverses the western third of Lot 2 in a north-westerly to south-easterly direction and conveys storm water from upstream catchments across Lot 2. This natural gully commences in the north-western corner of Lot 2, where a number of natural water courses, bringing water further from the north and the west (through the adjacent DP623778), all converge. This convergence is closely proximate to the northern perimeter of the dam Mr McMahon built on Lot 3.
The owner of Lot 1 in DP714402 (“Lot 1”) is not a party to these proceedings. Lot 1 is not affected by the issues in these proceedings. Lot 1 occupies the frontage to Coolangatta Road, such that the subdivision of Lots 2 and 3 required the creation of “battle axe” shaped blocks behind and to the west of Lot 1.
As Figure 1 shows, the battle axe “handles” required for access to Lots 2 and 3 are contiguous to the southern boundary of Lot 1. The battle axe handle of Lot 2 and the battle axe handle of Lot 3 are contiguous all the way from Coolangatta Road up to the point where they join their respective lots. As this was a rural subdivision, the distances in the battle axe handles are substantial. Lot 2 has a battle axe handle to Coolangatta Road which is 6 metres wide and 260.77 metres long, as measured from the common boundary of Lot 2 and Lot 1.
Lot 3 also has its own battle axe handle access to Coolangatta Road. But it commences further to the west, at the common boundary of Lot 3 and Lot 2. This battle axe handle is also 6 metres wide and 737.83 metres long, as measured to Coolangatta Road. The contiguous battle axe handles of Lots 2 and 3 are burdened by rights of carriageway for the benefit of the subdivision. The Lot 2 battle axe handle is burdened by right of carriageway 6 metres wide, which benefits Lot 1. The Lot 3 battle axe handle is burdened by right of carriageway 6 metres wide, which benefits Lots 1 and 2.
The land within the battle axe handles also provides access for water supply to the homes on Lots 1, 2 and 3. DP714402 creates an easement for the supply of water for the benefit of the Shoalhaven City Council. The easement is 6 metres wide and is situated in the Lot 2 battle axe handle. It continues on to the common boundary of Lots 2 and 3, and is at all times contiguous with Lot 3’s battle axe handle. Lot 3 receives its water supply by a pipe situated in this easement for water supply.
Figure 2 is an enlargement of DP714402 showing the eastern end of the Lot 2 and Lot 3 battle axe handles, where they meet Coolangatta Road. Figure 2 shows Lot 2 abutting the southern side of Lot 1, and shows Lot 3 to the south of Lot 2. The north-eastern corner of the much larger Lot 4 is visible in Figure 2 south of the Lot 3 battle axe handle access:

The present disputes between Mrs Lord and Mr McMahon concern two distinct places on Lots 2 and 3. The first area of dispute is about a dam Mr McMahon constructed in 2000 at the eastern end of Lot 3 close to its boundary with the western end of Mrs Lord’s Lot 2. The second area of dispute relates to a table drain that lies along the contiguous boundary of the Lots 2 and 3 battle axe handles.
Issues concerning the dam occupied most of the Court’s time in the hearing of these proceedings, so the history set out in this first part of the narrative concerns that principal issue. A separate narrative and of events in relation to the table drain is set out later in its own part of these reasons

The Early Years – 1996 to 1999

Although Mr Lord purchased the property in 1996 Mrs Lord says it was not until Christmas of 1997 that she and her children moved in to prepare for the 1998 school year at the local schools. The domestic residence and associated buildings on Lot 2 stand on the higher ground of that lot and face south. When the Lords eventually sold a property they owned in Fairy Meadow in 2000, Mr Lord joined the rest of his family in the house at Lot 2.
The domestic residence on Lot 3 is positioned on that lot so that it overlooks Lots 1, 2 and 4 below it. Until 2000 a small dam about 3 metres by 4 metres was situated down the slope of Mr McMahon’s land about 6 metres from its eastern boundary with Lot 2.
Mr McMahon purchased Lot 3 in December 1996. He and his wife Zoe and their family moved into the house at that time. They remained living there until March 2010. The property was then leased for a short period until August 2013, when Mr and Mrs McMahon moved back in. The McMahons visited Lot 3 regularly during the 3 years that it was leased.
Shortly after the Lords moved in to Lot 2 Mrs Lord commenced to use the property to conduct a miniature pony breeding/cow and calf raising business. She principally relied upon the natural pasture growing on the land to feed the ponies and cattle. This business was at all times run by Mrs Lord rather than the late Mr Lord, who had other interests.
Mr McMahon and Mr Lord developed a neighbourly friendship. At first the two families were on good terms with one another. The McMahons and the Lords socialised on occasions in one another’s homes. They helped each other out with handyman tasks. Their children caught the same school bus together. They had brief but positive interactions with one another as they passed on the way to and from their houses along their common battle axe driveways.
Mr Lord and Mr McMahon seemed to be the principal source of friendship between the two families. On occasion the two men would go ocean fishing or trout fishing together. When they returned from fishing trips in the Snowy Mountains, the two families would share a meal from the fish they had caught. Mr McMahon and Mr Lord would chat from time to time about matters of mutual interest: the state of their properties; plans they had to improve or alter their land; or problems they might encounter in doing so. During one such discussion between the two men an issue emerged about building the dam, the subject of these proceedings.
Just when this friendship between the families ended is a matter of some significance in deciding the issues in this case. Mr McMahon traces the deterioration in the relationship to a period after Mr Lord’s death in 2007. It is at least implicit in Mrs Lord’s case that because of the complaints she says that she was making to Mr McMahon about his construction of the dam that the relationship between the two families had deteriorated, at least so far as it involved her, as early as 2000 – 2001.
The discussions between Mr McMahon and Mr Lord in late 1999 and early 2000, and subsequently between Mr McMahon and Mrs Lord, laid the ground for the dispute now before the Court. Because Mr Lord died in 2007, the principal witnesses at trial were Mr McMahon and Mrs Lord. The Court was required to assess their credibility. So first the Court will make some general observations about their credibility.

General Credibility and the Expert Evidence

Mrs Lord was bitter about what she perceived was Mr McMahon taking advantage of her late husband and about her husband’s weakness in not standing up to Mr McMahon. Her bitterness was long-standing and was so profound that it required her evidence to be assessed cautiously. Her evidence changed or was inconsistent in places that threw doubt upon her overall reliability. These aspects of her evidence are dealt with in more detail in the course of these reasons.
Mr McMahon was a self-confident and single-minded witness who was sure of what he had seen and what he had heard in his exchanges with Mr Lord. But his single-mindedness meant that he did not notice some things. He did not accept that Mrs Lord had made any complaints to him about the dam after its construction. But he could not have failed to hear what she said to him on the occasions I find that she did complain. He screened out her complaints until about 2009, dismissing them as being irrelevant in his mind. He had dealt with her husband who was then the owner of Lot 2 in 1999. He seemed unwilling to take much notice of anything Mrs Lord said against the dam, once it was built.
Each party called expert evidence. Mrs Lord called evidence from a civil engineer, Mr Phil Diversi of the Bowdens Group Australia Pty Limited (when he delivered his first expert report dated 25 January 2013 and later of Opus International Consultants (Australia) Pty Limited (when he delivered his second report of 6 may 2014). Mr Diversi’s evidence covered a variety of engineering solutions to remove the encroachment from the dam wall onto Mrs Lord’s Lot 2 and other matters concerning the table drain. His 6 May 2014 report was in part the product of a visit to the site by a collegue at Opus, a Mr Greg Gearin, a business manager at Opus, a matter that became the subject of comment in the course of the expert evidence.
Mr McMahon adduced expert evidence from Mr Geoff McVey, also a civil engineer. Mr McVey’s report of 7 July 2014 contradicted Mr Diversi’s opinions in a number of respects, discussed below, both with respect to the dam wall issue and the table drain issue. Both civil engineers were able to agree on many matters. They participated in a joint session of expert evidence for which they had usefully prepared an agenda which covered all the issues relevant to them and which the Court followed. There was no issue about the qualifications of each expert to give his opinion on the matters in issue.

Dam Construction – Late 1999 to Early 2000

Overview. In late 1999 or early 2000 I accept that in the course of one of their regular informal conversations Mr McMahon explained to Mr Lord that Mr McMahon was experiencing trouble in keeping his plantation of citrus trees well-watered during the then drought period. Their conversation turned to Mr McMahon’s proposed expansion of his existing dam to better service his orchard. Mrs Lord was not present during this conversation.

I accept that Mr McMahon said to Mr Lord that the existing dam on Lot 3 (of about 12 square metres) was insufficient to supply water for the number of trees Mr McMahon had planted and that they had a conversation to the following effect about the proposed dam:

Mr McMahon:   “I’m having trouble keeping my orchard alive due to the lack of water”.
Mr Lord:      “Why don’t you build a dam?”
Mr McMahon:      “I don’t really have the space.”
Mr Lord:   “Why don’t you build it as close as possible to my western boundary.”
Mr McMahon:   “Would you be happy with that, because there would be a mound on your property?”
Mr Lord:      “Yes. That will be fine.”

Mr McMahon says that by this conversation Mr Lord gave his consent for the new dam wall to extend onto the property of Lot 2, in the manner that it was actually built. For the reasons which will explained below on their own the words used did not have quite such a broad effect.
Mr Lord is now deceased. Caution should therefore be exercised in assessing Mr McMahon’s account of his conversation with Mr Lord. In Clune v Collins Angus & Robertson Publishers Pty Ltd (1992) 25 IPR 246 (“Clune”), at 253, Wilcox J said:

“[I]t is trite to say that evidence of conversations between a living witness and a dead person should be scrutinised with particular care, especially where there was no occasion for the dead person to record his version of them before his death. Of course, that is not to say that such evidence cannot be true; it obviously may. But it does mean that any matter adversely affecting the credit of the witness has special importance; the witness cannot be refuted in any way”

In Varma v Varma [2010] NSWSC 786; 6 ASTLR 152 at [418] – [419] (“Varma”) Ward J (as her Honour then was) collected and applied authorities that show that “careful scrutiny is required” by the Court in cases where a claim is based on an assurance made by a deceased person: Plunkett v Bull (1915) 19 CLR 544; Clune at 253). Citing Weeks v Hrubala [2008] NSWSC 162 at [20], in Varma her Honour explained that the Court generally looks for corroboration of those claims: Re Hodgson (1885) 31 Ch D 177; Vukic v Luca Grbin and Ors; Estate of Zvonko Grbin [2006] NSWSC 41.
These principles are most frequently applied in actions against the estates of deceased persons. But they apply here as well. The conversation with the late Mr Lord that Mr McMahon relies upon founds both Mr McMahon’s claim in proprietary estoppel against Mrs Lord and his defence to her action in trespass.
Many objective indicators corroborate the inference that Mr Lord did give consent to some dam building earthworks on his land. The dam took about one and a half to two weeks to build and Mr Lord was fully aware of the building works. He did not make any attempt to stop them, even though they were carried out in plain view. Mrs Lord says that Mr Lord was not living at Lot 2 at the time. That could well be right but Mr Geoff Rumble, the earthmoving contractor who did the work and whose evidence I accept, makes clear that Mr Lord was about on site every few days and observed the work. The work included the removal of an old common boundary fence on the low side of the existing dam and the moving of heavy machinery on both Lot 2 and Lot 3. Once the dam was finished a new fence was re-erected on the high side of the dam, with Mr Lord’s assistance, with the consequence that Mrs Lord’s animals had direct access to the water in the dam. Notwithstanding that Mr Lord is now deceased these factors are strong indicators that the alleged conversation did occur. A conversation of this kind is the probable explanation for Mr Lord’s conduct once the building work started. And I accept Mr McMahon’s evidence that it did. Despite that acceptance, for the reasons explained below, what that consent meant and what is to be inferred from the conversation that took place and the conduct thereafter require closer analysis.
Mr Geoff Rumble and his uncle, Mr Kerry Rumble constructed the expanded dam in late 2000. Much of the spoil from the construction was placed as batter supporting the dam in a wall that extended onto Lot 2 along a distance of about 57 metres of the Lot 2 – Lot 3 boundary.
Upon completion, the existing dam of approximately 3 by 4 metres (12 square metres) at full water level had expanded to a dam that was approximately 57 metres along the Lot 2 – Lot 3 boundary by 14 metres deep into Lot 3 (some 798 square metres). This was an increase in the dam’s surface area of over 66 times. Much of the excavation spoil was deposited on Lot 2. The enlarged dam was now positioned with its high water line less than 1 metre inside the Lot 2- Lot 3 boundary fence inside Lot 3, along a distance of approximately 57 metres.
The experts agreed that the dam wall encroached about 20 metres into Lot 2. Mr McMahon’s surveyors, Johnston Proctor Surveyors, undertook a survey of the extent of the dam wall that encroached into Lot 2 which was accepted as correct by both parties. The relevant part of the Johnston Proctor survey is set out in Figure 3 below:

As-built the dam was, I find, much larger than Mrs Lord had anticipated. Mrs Lord says, and I accept, that it was also much larger than her husband told her that he had anticipated. I find that Mrs Lord and Mr Lord expected that the dam would be expanded to about size of a nearby seepage pond (visible in photograph C8 to Mrs Lord’s July 2013 affidavit), which was somewhat larger than the existing dam but nothing like the size of the dam which was ultimately built. It is common ground in the proceedings that no development approval from the local council was required for the construction of the dam. None was sought. None was obtained.
The contests between the parties about the 2000 events of dam construction fall into three periods: (1) what was said and happened just before the construction and what consent on Mr Lord’s part may be implied from what was said; (2) what happened during construction; and (3) what happened in the immediate aftermath of the construction. These reasons now deal with each of these in turn.
(1) The Pre-construction Conversations. As earlier indicated, I accept that Mr Lord spoke the pre-construction words that Mr McMahon attributes to him. But it is not automatically to be inferred from these words alone that Mr Lord thereby expressly assented to a dam of the size that Mr McMahon actually built being sited “as close as possible to my western boundary”.
In the first place, Mr McMahon’s own evidence of these words does not clearly show that Mr Lord knew just how big the dam would be. Mr McMahon’s own version is that he represented to Mr Lord that “there would be a mound on your property”. Mr McMahon seems to have assumed from his exchange with Mr Lord that this meant he had Mr Lord’s agreement that much of the over-50-metre-long dam wall could be placed on his Lot 2. Mr McMahon admitted, “that is an assumption I made. I can’t tell you why I made it…”. He went on to explain that he “considered that the advantage was having the water body as close to the well, the dam, which I consider to be the water body, as close to the boundary as possible”. In my view Mr McMahon’s representation to Mr Lord that there would be a “mound” on Lot 2 falls well short of accurately portraying a picture of an embankment supporting a 50-metre-plus-long side wall of a dam, which wall was wholly on Mr Lord’s property from a point one metre to the east of the dam’s eastern water line. Mrs Lord’s closing submissions persuasively describe Mr McMahon as engaging in a “leap in logic” in assuming from this conversation that he could place most of such a long dam wall on Mr Lord’s land.
In the second place, Mr Lord’s domestic situation made it unlikely he understood the volume of the earthworks that were proposed to be placed on his property. It would have been an act of domestic insanity for him to consent to a 50-metre- plus dam wall being placed on Lot 2 with its water line one metre from the Lot 2 - Lot 3 boundary. Mr McMahon does not say that he clearly identified these dimensions for Mr Lord at the time he had this discussion. Had he laid this out clearly at the time, and had Mr Lord conveyed these dimensions to his wife, her later evidence compels the conclusion that her reaction to the idea would have been one of the firmest rejection.
Whatever Mr Lord owed Mr McMahon in friendship, Mrs Lord’s evidence makes clear that it would be as nothing compared to the domestic controversy that such a massive dam enlargement was likely to cause him. It is improbable that if Mr McMahon had given Mr Lord a clear explanation of the size of the dam together with its location then Mr Lord would have risked significant domestic disharmony by agreeing to a construction of that size at that location.
But I nevertheless accept Mr McMahon’s evidence that Mr Lord did give a non-specific verbal assent to the carrying out of some earthworks in the words that Mr McMahon describes. A mismatch of expectations resulted: Mr McMahon thought he had a general permission to build what he liked. Mr Lord I infer thought that there would be a “mound” constructed on his property.
In the third place, the absence of any written plan of the expanded dam is puzzling. Mr McMahon commissioned no drawings, no diagrams and on his own evidence, gave Mr Lord no other measurement of the size of the proposed excavation and embankment. Mr McMahon’s evidence is that some laser levels of the terrain were available and there had been a “walk around” of the affected area involving Mr Lord and Mr McMahon. But Mrs Lord persuasively submits that this conduct would probably not have indicated to Mr Lord the true size of the proposed dam. The unavailability of contemporaneous documents supports the inferences that: (1) Mr Lord probably had only a general idea exactly how big the as-built dam was going to be; and therefore (2) probably assumed it was going to be perhaps a few multiples in size of the nearby seepage dam but still much smaller than it turned out to be.
Even Mr McMahon confessed a degree of surprise at how large the dam had become. He said “I was not aware of how much room you needed around the dam and obviously I did not appreciate its exact dimensions, as that was driven by the local topography really and the local rainfall.” Mr McMahon did suggest that Mr Lord and he “got a better idea of how big it would be when we did the walk around with the Rumbles… that really laid out the footprint of it”. But this was only “a better idea” and fell well short of what clear written plans would have indicated.
Mr McMahon counters this with a submission that “common sense and human experience” suggest that Mr Lord consented to the building of the dam. After all, Mr McMahon contends, why did Mr Lord acquiesce in the building of the dam? It is true: there is no evidence of Mr Lord later protesting about the size of the dam during its construction. He did not write letters in opposition. He did not engage lawyers to seek injunctive relief. He did not physically try to do anything at the time to stop the construction of the dam. And there is no direct evidence from which the Court could infer that Mr Lord voiced to Mr McMahon himself any concern that the dam was much bigger than he had originally expected.
Why did he do nothing? Mrs Lord’s evidence provides what I find is the most probable explanation for this: having held the pre-construction conversation with Mr McMahon he felt obliged to go along with what was happening during the construction, even though the expanding dam structure was far larger than he had expected. He had given his general consent to the building of the dam and he was too embarrassed to confront Mr McMahon about this, so he did not do so.
Mr Waugh submits that the hunter and outdoorsman that both Mr McMahon and Mrs Lord describe Mr Lord to have been was unlikely to have behaved in this way: a man too cowed to confront his neighbour about a dam. But on this issue I prefer the picture that Mrs Lord painted of her late husband: a man in part lacking in courage and in part more ready to stand by his word to his male friend than stand up for his wife. She knew him better than anyone. She had her differences with him. But even allowing for those differences, I accept her evidence that she pleaded with her husband to go and confront Mr McMahon and asked him to do something about the dam. But Mr Lord would not. Consistent with his later conduct, in my view at the time the dam was being built Mr Lord was also unwilling to confront Mr McMahon about the growing mismatch between his expectations and the growing size of the dam that Mr McMahon was actually building. Mr Lord felt conflicted because he did get on with well with Mr McMahon and had given his agreement to the dam expansion. Despite her differences with him, even Mrs Lord accepted that her husband was “a man of his word”.
Mr Lord also went along with the construction of the dam because he had given his general assent to the construction of the dam and this had been witnessed by the contractor engaged to do the work, Mr Geoff Rumble. I generally accept Mr Rumble’s affidavit and oral evidence about his conversations with Mr McMahon and Mr Lord before the construction took place and during the construction. His account was that he had advised Mr McMahon that if the dam was to be constructed it would be beneficial to both Mr Lord and Mr McMahon if the dam wall were pushed partly onto the Lords’ property. That way, Mr McMahon could get a bigger dam and the batter would be more visually pleasing from the Lords point of view than if it were built further up the hill to the west.
Mr McMahon, Mr Lord and Mr Rumble all walked over the site together before the construction. Mrs Lord was not present. Mr Rumble’s uncle, Mr Kerry Rumble was also involved with him in completing this work. But Mr Geoff Rumble conducted 95 per cent of the contractors’ conversations with the two other parties. In those circumstances I draw no adverse inference from the McMahon parties not calling Mr Kerry Rumble as a witness.
Mr Geoff Rumble clearly got the impression that Mr Lord was gaining his first insight from him, Mr Rumble, and had not previously found out from Mr McMahon, just where the dam was proposed to be sited. Although the demonstration showed as Mr Rumble said, “from point A to point B and finished levels”, I do not accept that the full size of the dam as it would be constructed was really conveyed to Mr Lord. Mr McMahon did not really appreciate that either. But nor do I accept that Mr Rumble would have proceeded without obtaining a general permission from Mr Lord for what he was about to do. Mr Geoff Rumble came across as a reliable witness and the kind of operator who would not have just proceeded without Mr Lord’s general consent.
Mrs Lord challenges Mr McMahon’s case that Mr Lord agreed to the construction of a dam. She claims it is a contradiction that Mr McMahon could contend on the one hand that Mr Lord was allegedly “happy” about the construction of the dam, right up until his death in 2007, but that despite that Mr McMahon nevertheless failed for those seven years to ask Mr Lord for an easement for batter over Lot 2. Asking for that should not have been at all difficult given Mr Lord’s alleged acquiescence in the construction, Mrs Lord submits.
There is no contradiction. The situation is readily explained. After the dam was built Mr McMahon was not interested in spending more money on solutions to issues that were not then presenting themselves as problems that he immediately had to solve. Whilst Mr Lord was alive and not protesting about the dam, Mr McMahon did not perceive any need for him to take any further action. Mrs Lord has not shown that the subtleties of the Encroachment of Buildings Act or of easements for batter were ever drawn to Mr McMahon’s attention before Mr Lord’s death, such that Mr McMahon should have been expected to act on them with a then complaisant Mr Lord.
(2) Events During Construction. The parties actively contested a number of differing versions of events during construction of the dam. The first issue related to the removal of a stock proof fence and the granting of permission for heavy earthmoving machinery to come onto Lot 2. I accept Mr McMahon’s evidence that Mr Lord gave that permission. But I accept Mrs Lord’s evidence that she did not want the machinery on Lot 2. She says and I accept that she was apprehensive about the damage the heavy machinery might do to her pasture, so she disagreed with what was being proposed. But initially she expressed her disagreement only to her husband, who had already given his consent to Mr McMahon to this intrusion. I accept that she requested that her husband “go up and rescind permission to the fence to come down”. But he did not go and confront Mr McMahon. So despite her reservations the fence was taken down. Mrs Lord told Mrs Lord that he had agreed “because he thought it was reasonable”. I accept Mr Lord did this through this short period of time to “keep the peace”.
At one stage in her evidence under cross-examination Mrs Lord gave the impression that she thought that Mr Lord had only given permission for the fencing to be removed, so that it would not become entangled in the earthmoving machinery during the works, but that he had not given permission for the machinery come onto Lot 2. She did not persist in that version which seems to have arisen from a degree of confusion in communication during her questioning.
Her evidence on this point was heavily criticised. But I found it largely consistent and any apparent inconsistency really arises from her, adding more detail to her version which was originally expressed in a summary way in her first affidavit of 17 July 2013. In that affidavit she suggested that notwithstanding her opposition, “my husband agreed with the proposal by” Mr McMahon to remove the fence. In her affidavit she also acknowledged that permission had been given despite her concerns “about the damage the heavy machinery might do to (their) pasture”. Under cross-examination, her account was more that although her husband had given permission, she thought that he had later rescinded it at her behest only to find out when the work started that the fence was taken down. She correctly inferred that this meant that either her husband had not gone back to rescind the permission or Mr McMahon was ignoring Mr Lord’s rescission. I accept Mr McMahon’s evidence that no permission was rescinded. So the correct inference to reconcile Mr McMahon’s and Mrs Lord’s respective versions on this issue, is that Mr Lord did not go back and do what his wife requested of him.
Other issues between the parties were the roles that Mr Lord and Mrs Lord played during the works. Mr Rumble’s evidence is instructive in resolving these issues. I accept his evidence that Mr Lord came to chat to Mr Rumble about the progress of the works on two to three days each week late in the afternoons after work. Mr Lord did not express opposition to Mr Rumble about the size of the dam. I also accept Mr Rumble’s evidence that Mrs Lord did not express to him her opposition to the construction of the dam during the works. The best explanation for this is that Mrs Lord had decided then to confine her opposition to the dam to trying to persuade her husband to take the matter up with Mr McMahon. It was only later that she realised that course was ineffective and she decided to complain to Mr McMahon directly.
As will be seen immediately below I accept that straight after the works Mrs Lord witnessed Mr Lord making some enquiries of Mr McMahon about finishing off the works in a way that was more satisfactory to the Lords. Mrs Lord was present on some of these occasions with Mr Lord and Mr McMahon. For example I accept Mrs Lord’s evidence that on several occasions over a period of about 8 months after the construction started Mr Lord asked Mr McMahon to complete the works and acquire the materials, so that the fence could be placed around the dam. The fence was ultimately placed well away from the Lot 2 – Lot 3 boundary, on the western or high side of the new dam, the far side of the dam from the boundary. But none of this amounted to Mr Lord opposing the construction of the dam during its early building phase. It was during these occasions that Mrs Lord began to voice some complaints about the dam. But those complaints were in a context of making adjustments to the result of the construction work, to live with what had been done. I do not accept Mr McMahon’s evidence that he was unaware of her complaints until 2009.

(3) The Immediate Aftermath. The dam wall was constructed mainly from excavated shale and clay drawn from the dam excavation. Mr Rumble says, and I accept, that the topsoil was stripped off the parts of Lot 2 and Lot 3 being excavated and placed in a heap at the top of the batter. Then the underlying natural ground material was ripped and the dam was built on top of the ripped material with loose excavated material of shale and clay, which was heaped and then compacted into the underlying natural ground. Then the works were dressed again with the topsoil that had been set aside. I accept that Mr Rumble did a competent job and restored the topsoil as he said that he did, a matter relevant to Mrs Lord’s later complaints of nuisance.
Mrs Lord says that: this material was left bare after the construction; its surface was not seeded with grass; weeds grew over the surface of the excavation; and the area was incapable of growing the good quality pasture typical of the terrain that pre-dated the construction of the dam.
Mr McMahon denies this. He says that the 150 tonnes of topsoil which had been removed from the area of excavation were replaced on the surface of the new dam wall at the end of construction. And he says that this topsoil was full of kikuyu grass underground stems (rhizomes), supplemented later by some kikuyu seed that Mrs Lord herself added.
On this issue I prefer Mr McMahon’s evidence. It accords with Mr Rumble’s evidence, which I accept. And the early photographs Mrs Lord took closer to the time of the construction of the dam but after its enlargement (see photographs C5 to C9 of her first affidavit) show its surface as apparently fairly well grassed, which I infer was the result of a reasonably well bedded-in grass in the topsoil.
There is no doubt that by the time of the trial when the Court viewed the site that was not the case. But between 2000 and the trial, Mrs Lord herself had undertaken the various earthworks on the surface of the dam that are set out later in these reasons. These later earthworks involved substantial interference with the surface of the dam wall. Mrs Lord’s own evidence was that these works included the removal of some topsoil. In my view much of the disturbance to the topsoil of the surface of the dam wall was caused by Mrs Lord’s own later earthworks.

Discord After Construction

Mrs Lord said she and her husband had minimal discussions about the dam once it had been built. She said her husband was embarrassed about having been “used” by Mr McMahon through the construction of the dam. I accept her evidence as to this. I accept that the building of the dam was a continuing point of contention between husband and wife. It is not surprising they tried to avoid the subject.
I accept Mrs Lord’s evidence that therefore she felt she had to, and did, convey her complaints directly to Mr McMahon, due to her husband’s inaction. Her attitude at first was that Mr Lord had let the dam be built in the first place and that therefore, he should be the one to fix the problem. But I accept her evidence that Mr Lord would not take responsibility and would respond to her: “you live here, you go and sort it out”. She maintained, and I accept, that her husband would shut down and refuse to deal with the issue by retiring to his workshop. So she did try and “sort it out” by trying to complain to Mr McMahon directly.
Mr McMahon submits that there is no evidence that Mr and Mrs Lord pursued complaints about the dam and that the Court should infer she and her husband were both content to have it built. Yet Mrs Lord’s great discontent about the dam was unmistakable at the time of the hearing. It is to be doubted that at any stage Mrs Lord, as the Court saw her in 2014, could ever have been content with the construction of the dam. The idea that she had once been accepting of it and then later changed her mind makes little sense. Her distaste for the dam was unambiguous. She complained about the dam in writing after her husband’s death. She ultimately commenced these proceedings in 2013. Her antipathy to the dam was so profound that it was in my view unlikely that it could have developed at some time well after the dam’s construction.
I accept Mrs Lord’s evidence that she did complain directly to Mr McMahon about the dam soon after it was built. Indeed Mrs Lord was the kind of person who would not have hesitated to communicate her displeasure about the construction of a dam being larger than she had expected and encroaching on Lot 2 more than she expected.
Mrs Lord maintained she approached Mr McMahon in 2001 on at least three occasions to discuss the dam. She recalls, and I accept, that he brushed her off. He gave various excuses at the time for not dealing with the issue: “I’m busy going somewhere”; “I am busy doing something else and I can’t do it”; “It’s wet and I can’t do it”; and finally when pressed “I don’t need to speak to you because your name is not on the title deed, so go away”. I accept that she did approach him and that he said these things to her. He denies that these encounters occurred but I do not accept his denials on this issue.
Mrs Lord also maintains that Mr McMahon grossly insulted her during some of these encounters. But on this her evidence should not be accepted. On one of these occasions she says that she was present with her husband, when the couple met Mr McMahon on their adjoining driveways. Mrs Lord remembers that Mr McMahon’s response to her repeating her complaint was to look at Mr Lord and ask: “Are you going to listen to this thing, woman, or are you going to be a man and do what you said?” She says that on this occasion her husband’s reaction was to say nothing at all. I accept Mr Lord disliked conflict. But this incident sounds improbable, as described. Had this been said, it was so grossly insulting that no matter how phlegmatic Mr Lord was, he would be likely to have become enraged and reacted.
On the second day of Mrs Lord’s cross-examination, her account of her subsequent complaints about the dam appeared to alter slightly. When asked whether her husband confronted Mr McMahon about his displeasure with the dam, this time Mrs Lord said that he did, but that he eventually gave up in frustration as nothing was being done to rectify the problem. She said that on a number of occasions in the first eight months after the dam was built Mr Lord had confronted Mr McMahon but was rebuffed. Whilst it seems at first difficult exactly to reconcile her two versions (an account of no action by Mr Lord, then an account of some action), it seems likely that Mr Lord told her at some point that he had tried to raise the issue with Mr McMahon. But I accept Mr McMahon’s evidence that he did not do so.
Mrs Lord was not present during most of her husband’s post 2000 dealings with Mr McMahon. I accept that Mr Lord would occasionally go up the hill to Lot 3 to visit Mr McMahon’s house, to socialise and to discuss the dam. But he would return, as she described, “full of port”. Mr Lord reported to her that no further advances had been made on the issue of the dam. It is difficult to infer what actually passed between Mr Lord and Mr McMahon on these social occasions beyond the conclusion that Mr Lord did not raise with Mr McMahon what his wife wanted him to raise.
But in the meantime Mrs Lord got on with living with what had happened and making use of the dam. Mrs Lord’s miniature horses and stock were able to access the water of the dam and the pasture right around it, as the dam was entirely fenced into Lot 2. I accept that Mr Lord and his son Owen helped Mr McMahon to construct this fence. And in 2002 Mr and Mrs Lord constructed a fence across the dam so that there were two paddocks created for Mrs Lord’s miniature horses and stock, which Mrs Lord used for her pastoral purposes until 2008.

Other Consequences of the Dam’s Construction – Seepage and Overflow

Mrs Lord also alleges that from the time of the dam’s construction, a number of other consequential nuisance-related problems emerged from the earthworks. She says that the dam walls began to seep in various locations. There were frequent overflows at the northern end of the dam. Mrs Lord’s case is that over time the combination of this seepage and the dam overflow resulted in erosion of the surrounding soil and that the overflow in particular spread clay sediment from the dam onto Mrs Lord’s paddocks, forming a film of sediment over the adjacent Lot 2 pasture. Mrs Lord complained that with the passing of time, this continuous build-up of sediment began to form a clay crust over the top of the soil of Lot 2, near Lot 3. This in turn she says inhibited the growth of good quality pasture in that area.
But the causes of these alleged problems are disputed. In 2006 Mr McMahon says that he witnessed Mrs Lord’s miniature horse stock causing erosion along the top of the dam and the spillway at the northern end of the dam.
Mrs Lord in turn denies this. She claims that she would not have allowed her stock to drink from the dam, out of concern for their health. And she says that any erosion on the spillway at the northern end of the dam was caused by the machinery cutting into the surface when the dam was constructed. But I do not accept Mrs Lord’s evidence about her stock not drinking from the dam as she and her husband and Mr McMahon had fenced the dam to allow her stock to have drinking access to the dam. I accept that her stock grazed on the pasture around the dam until 2008.
This is one of several disputed issues in these proceedings in which the Court is asked to draw inferences from what was seen on the view and from photographs. The Court may draw any reasonable inference from what it saw, heard or otherwise noticed on the view: Evidence Act 1995, s 54.
The Court must take care as to what use it makes of the photographic evidence. Photographic evidence cannot trump testimonial evidence but can be used by the tribunal of fact to explicate the evidence or to determine which of the explanations given by witnesses appears to be most worthy of acceptance: Tran v Nominal Defendant [2011] NSWCA 220; 58 MVR 462 at [172]. If it is not clear, for example from photographs what depths or distances are involved, care must be exercised in relying upon photographs, although they are generally helpful in understanding the nature of the evidence given: Port Macquarie Hastings Council v Mooney [2014] NSWCA 156 at [47]. The limitations in using photographs to draw inferences are explained in Yarrabee Coal Co Pty Ltd v Lujans [2009] NSWCA 85; 53 MVR 187 at [20] – [29] (per Beazley JA) and [179] – [180] (per Giles JA, with whom Allsop P agreed).
In my view Mrs Lord is partly right about the causes of erosion from dam overflow. But the allegations of seepage are more problematic and must be assessed in the light of the expert evidence analysed below.

The Title to Lot 2 Changes and Concrete is Laid on Lot 2 - 2007 to 2008

Mr Lord passed away in 2007. His will left Lot 2 to Mrs Lord. She became its registered proprietor in 2008.
In 2008 Mrs Lord constructed an extensive concrete pad of approximately 600 m² on Lot 2 between her house and the Lot 3 and Lot 2 battle axe handles. Subsequently Mrs Lord also constructed a concrete driveway over the Lot 2 battle axe handle. Mr McMahon observed that in his opinion this concrete had been laid without any special provision for drainage to contain the run-off from such a large hard surface area. This alleged lack of runoff is relevant to the table drain nuisance issue considered later in these reasons.

Pre-Suit Correspondence - 2009

Mr McMahon’s case is that in 2009 he gradually became aware that Mrs Lord had what he described as “a problem with the dam”. He says he was unaware of her concerns before 2009. I do not accept that this is correct. In contrast I prefer her evidence that she had complained about the dam in the years immediately after it was built.
But Mrs Lord eventually sought legal advice about her options for the removal or rectification of the dam earthworks on Lot 2. This resulted in legal correspondence between the parties in the second half of 2009.
Analysis of this correspondence resolves an important issue. Mrs Lord accused Mr McMahon of recent invention in relation to his defence that Mr Lord had consented to the construction of the dam. Mrs Lord’s final submissions alleged that there had been no mention of any alleged consent by Mr Lord in Mr McMahon’s solicitors’ response to the first letter from the solicitors for the plaintiff in 2009. She submitted it should be inferred from this that Mr McMahon knew that Mr Lord had not given his consent to the construction of the dam.
But Mr McMahon did clearly raise the issue of Mr Lord’s consent in correspondence. And I accept Mr McMahon’s evidence that he at all times believed in his own mind that Mr Lord had consented to the construction of the dam. Mr Lord was generally agreeable to the construction of some earthworks before the dam was dug and did not confront Mr McMahon afterwards about the fact that the dam’s size had exceeded his expectations. Mr McMahon’s own letter of 21 July 2009, and the instructions it can be inferred that Mr McMahon gave to his solicitors to write the 22 September 2009 letter are consistent with Mr McMahon having a long-held belief that Mr Lord had consented to the enlargement of the dam.
The correspondence shows this clearly. PJ Carey, the then solicitor for Mrs Lord wrote to Mr McMahon on 17 July 2009 concerning the encroachment of the dam wall. Although it was marked “without prejudice save as to costs”, this letter was tendered without objection in the proceedings. It did not contain an offer of settlement of the proceedings, which would be privileged under the Evidence Act 1995, s 131. The letter relevantly provided as follows:

“We have been asked to write to you regarding the encroachment of the dam wall constructed by you and which encroaches upon our client's property.
We note that surveyors have placed pegs on the dam wall and that the boundary of your property with the neighbours property is within the dam wall structure. The surveyors pegs are indeed confirmation that the wall encroaches upon the neighbours property. We are further instructed that the spillway that you have excavated on the uphill or eastern edge of the dam directs overflow water from your dam directly onto our client's property.
Of most concern to our client is the flooding of the pasture lands from your overflow such that the full potential of that section of the property has been seriously compromised. The ground is sodden underfoot and so unstable as to not being able to support the horses that our client breeds.
The construction of the dam wall is a trespass and must be rectified by you. In
rectifying the trespass you are to restore the topography of the area to it's original contours and restore the ground the ground cover. In the immediate future you are to provide adequate and alternative drainage for your dam so that the overflow is directed away from our client's property. Such drainage could be piped under your access road to the downhill slope opposite the properties and thence to the natural waterway below.
Unless removal of the dam wall and remediation of the damaged paddock is not undertaken and completed within 28 days of the date of this letter we are instructed to commence Supreme Court proceedings for trespass without further reference to you and in doing so will be seeking orders for the removal and remediation of the property as well as damages and costs.”

On 21 July 2009 Mr McMahon replied in person to this letter. His reply dealt with issues of the granting of consent to the construction of the dam, the spillway and the encroachment of the dam wall onto Lot 2. The reply was in the following terms:

“I would like to advise you that the dam in question was built with the permission of my neighbour Heather Lord and her late husband Geoff. Since the completion, approximately eight years ago, Heather Lord has been grazing her stock in and around the dam and using the water it holds for her stock.
This dam was an enlargement of an existing small dam that was located in a gully that runs through both our properties. The said spillway was not created in the dam construction but was part of the existing gully which has always drained the surrounding uphill slopes. This is the natural waterway and it has always flowed through Heather Lord's property. My increasing the dam size logically has decreased the amount of water that flows through her fields not increased the amount of rainfall in our area.
The dam wall is not a necessary part of the dam construction and consists only of topsoil removed prior to excavation. This was all approved by Mr. and Mrs. Lord at the time otherwise the work would not have been able to be completed. Therefore it is not a trespass. Mr. Lord and I constructed the fences around the new dam.
With the deteriorating relationship between Mrs. Lord and all her neighbours we now find it necessary to construct a fence between our properties, however the existing dam and dam wall we intend to leave as she agreed to their construction many years ago and they, in fact, can not contribute to any problems in her paddocks.”

Mr Carey wrote again on 17 August 2009 indicating that Mrs Lord is proceeding to Court action, in the following terms:

“We note that you have not provided your solicitors details, accordingly we write to you directly.
The time has now passed for you to have removed the dam wall and restored the property. Apart from a letter to Mrs Lord about a fence we have no proposal from you to resolve the matter.
Noting that you have not provided your solicitors details we are now instructed to serve the Supreme Court Summons on you at the address noted above.”

By early September, Messrs Mariott Oliver solicitors had become involved on behalf of Mr McMahon Mr Carey wrote to them on 15 September 2009 recording some of the conversation said to have passed between the parties at that time, in the following terms:

“We confirm that we act for Ms Lord and note that you act for Mr McMahon.
We refer to the writer's recent telephone conversation with your office and confirm your advice that Mr McMahon will be removing the dam wall and restoring the topography of that location to it's original structure and configuration.
The matter of the water flow from the uphill end of the dam is of concern. Mr
McMahon cannot direct overflow water onto Ms Lord's property. We understand that Mr McMahon is of the view that the water follows a natural water course. This is simply not true. The effect of the present overflow location (western side of the dam) is that excess water will concentrate on an uphill section of our clients property and then flow downhill and fan out across our client's property in such a way as to direct more water onto her property than would otherwise be the case. The simple solution is a buried pipeline directing flow from the eastern side to the road and then across the road to the creek in the adjoining fields.
We are yet to confirm our client's agreement to jointly funding the installation of a boundary fence. We are instructed that the original fence, which was of adequate construction and an appropriate style, was removed by your client to allow him to place the material from the dam onto our client's land.
Please advise of the timetable that your client proposes for the wall removal and the land restoration.”

Mariott Oliver responded on 22 September 2009 with a proposal for partial resolution of the matter, in the following terms:

“As discussed we advise that we act for the Stephen McMahon in relation to this matter.
Our client's proposal isn't quite as contained in your letter of 15 September.
By way of background we advise that the dam was constructed in that position with the consent of your client and her late husband approximately ten years ago. The reason that boundary wasn't fenced was to permit Mrs Lord and her husband's 2 horses access to the dam. The position of the dam is not a trespass.

When the dam was originally constructed, the original contours of the land (ie the gully) were maintained. Without the impact of the overuse by your client, the dam simply captured some of the flow which would naturally run across the land. It should also be added that your client's paddocks near the dam have historically been damp in wet weather, made worse especially in the winter because they are in shade for a lot of the day.
Since original construction, Mrs Lord has increased the number of horses accessing the dam to approximately 15-20 miniature horses. The result of this level of use is a serious erosion of the dam wall and surrounding ground level. Our client estimates that the ground level has dropped about 10 cm. We enclose photos showing the degradation of the land. Our clients do not have stock accessing the dam.
We are instructed that a proposal was put to Mrs Lord via a contractor whereby all the water would run through the dam and then by trickle pipe flow into your client's dam. This solution would have dried the paddocks and water would only have flowed through the gully in heavy downpours. This proposal was rejected by your client.
In an attempt to resolve this matter amicably, our clients are prepared to share equally with your client the cost of cutting back the dam wall, restoring the ground level where it has eroded (using soil from the dam wall) and fencing the boundary. All work is to be carried out in a proper tradesman like manner. We would suggest that 3 quotes from suitably qualified tradesman be obtained for carrying out the work and each party pay their share of the lowest quote into the solicitor's trust account, so that the work can commence in a timely fashion.
If the matter cannot be resolved in this fashion, then before either of our clients embarks upon a litigious course, the parties should attempt alternative dispute resolution with a mediator.”

Each side sought to use the silence after this correspondence to his or her advantage. Mrs Lord submitted that Mr McMahon’s failure to engage further after this date confirms that his approach has been one of long-term obstruction towards her claims. On the other hand, Mr McMahon submits that Mrs Lord failed co-operatively to engage with his offer of mediation of their differences. Neither view is a wholly accurate assessment of the past. I infer from her other evidence that Mrs Lord failed to take up the offer of mediation because of her distrust of Mr McMahon. And Mr McMahon’s failure to take the matter further was a reaction to Mrs Lord’s apparent lack of interest in the process.

More Earthworks on the Dam Wall – September 2011

Mrs Lord was not satisfied with legal correspondence. She decided to take matters partially into her own hands. In September 2011 she engaged a contractor to level out the top of the dam embankment on Lot 2. I accept Mr McMahon’s evidence that this was done without any prior notice to him.
The plaintiff engaged Mr David Rumble (a relative of Mr Geoffrey Rumble), an earthmoving contractor (a relative of Mr Geoff Rumble who had done the earthworks in 2000), to undertake this work on the dam embankment. His work began on 16 September 2011.
Although these works were technically on Mrs Lord’s property, they appeared to Mr McMahon potentially to affect the structure of the dam. When he noticed what was going on, Mr McMahon called the Police. They arrived and spoke with Mr Rumble. Mr McMahon’s reaction to the work, including calling the Police, supports his account that Mrs Lord gave him no prior notice of these earthworks. The extent of this work, the fact that he had not been previously warned of it and that it was on Lot 3 caused Mr McMahon to call the police.
Mr McMahon alleges that over the next few days further earthmoving works were carried out on Lot 2, adjacent to the dam. But this is disputed. Mrs Lord contends that after the Police were called and spoke with the contractor, he ceased work and refused to return until the issues between the parties were resolved.
The two accounts of these events contrast markedly. Mrs Lord says in her first affidavit that in 2012 she “attempted to carry out some remedial works to the dam wall on my property, in order to reduce the steepness of the slope so that it could be maintained”. She explains Mr McMahon’s involvement in the following terms, “the defendant intervened part way through the works and insisted that the contractors cease work immediately”.
But I accept that these earthworks occurred as Mr McMahon describes them and the account below from him represents the Court’s relevant findings on the issue.
Mr McMahon’s affidavit account of what happened in September 2011 was more detailed. He says that on 16 September 2011 whilst he was visiting Lot 3, he first observed Mr David Rumble removing part of the toe of the dam wall on Lot 2 but that he (Mr McMahon) did not intervene at that stage. When leaving the property some hours later he said he saw Mr Rumble building a berm wall along the common boundary of Lot 2 and Lot 3, to the south of the dam and approximately 2 metres wide and 60 centimetres high, using the material that he had moved from the toe of the dam. Mr McMahon also observed that Mr Rumble had increased the height of the land in the spillway out of the dam on Lot 3, at its northern end and in the adjacent gully on Lot 2 by approximately 40 centimetres. Added to this Mr McMahon says that Mr Rumble had pushed the topsoil that he had excavated into two mounds situated along the northern boundary of Lot 2. Mr McMahon says that he also observed topsoil and some underburden in mounds adjacent to the area of the toe of the dam that Mr Rumble had levelled.
Mr McMahon has collected in his 16 October 2013 affidavit photographs of the dam area taken by his wife Mrs Zoe McMahon on 13 June 2011, before these events, on 16 September 2011, the day of these events, and then after these events, respectively on 1 October 2011, 14 June 2012 and 17 June 2012.
The photographs taken before these September 2011 earthworks (D1 and D2) are instructive in showing how close the large body of water of the dam is to the spillway and the watercourse that runs down south west to north earth onto Lot 2. It is inevitable in my view that such a large body of water, which would fill with rainwater and not absorb rain into the earth, would contribute to increased run off into that watercourse. This has relevance to Mrs Lord’s later nuisance claim.
The two photographs taken on the day of the earthworks (D3 and D4) show the extent of Mr David Rumble’s removal of topsoil exposing massive amounts of underburden and the flat surface of the berm wall. This confirms the extent of the topsoil removed, which is also evident in photographs D5. The mounds were still there nine months later in June 2012, as is evident in photographs D6 and D7.
Mr McMahon called the Police. Then what he describes as a “long and heated debate” took place between the Police and Mrs Lord. Mr Rumble removed the berm created below the dam but the rest of the uncompleted work remained as it was: namely the mounds of dirt along the northern boundary of Lot 2, the raised area in or adjacent to the spillway and a flat area approximately 2 metres to 2.5 metres wide for the approximate length of the dam, where the dam toe used to be, leaving a step up to the top of the dam wall of approximately 30 centimetres in height and mounds of dirt on Mrs Lord’s Lot 2, somewhat to the east of the flattened area.
Surprising as it may seem, after the Police had been called, according to Mr McMahon, Mr Rumble continued working on Mrs Lord’s property for another two days. He cleaned out the natural gully on Lot 2 and constructed another berm wall on Lot 2, this time south of the dam and adjacent to the common boundary of Lot 2 and Lot 3 as far down as the Lot 3 battle axe handle, and down to the dam on Lot 2, which is immediately adjacent to Lot 3’s battle axe handle. The photographs taken by Mrs McMahon in October 2011 show these various walls.

A Trench Appears in the Dam Wall - 2012

In 2012 a trench first appeared in the dam wall. Mr McMahon claimed Mrs Lord had caused the trench to be dug. Mrs Lord denied this. She said that erosion caused it. The issue was strongly contested. In closing submissions both parties ultimately accepted that determining the precise origins of the trench did not assist the Court in deciding any issue of trespass. But were the trench naturally occurring, it may arguably have been relevant to Mrs Lord’s action in nuisance. The issue ultimately became a touchstone of the credibility of each party.
The issue arose in about June 2012, when Mr McMahon first observed that part of Mrs Lord’s paddock adjacent to the dam had become wet. Upon further inspection he discovered a trench approximately 500mm deep, 400mm wide and 2.5 metres long leading from the body of water inside the dam onto the area where Mrs Lord’s contractor had previously carried out the 2011 earthworks. Mr McMahon thought the trench showed evidence of having been constructed. Mr McMahon noticed water running through the trench after rainfall. So he decided to block it with a concrete plug, to stop the flow of water. The plug was effective.
Mrs Lord vehemently denied creating the trench. She also denied that her partner, Mr Stephen Lanyon (who by that stage resided with her in the house on Lot 2) had dug the trench at her request. In cross-examination on the issue she asked her questioner the rhetorical questions, “So what on earth benefit would I have of digging into his dam and having all his stuff that I don’t want on my property on my property? Why would I dig a big ditch on my property so that my horses can’t use the property so that they can injure themselves? It is of no benefit to me.” It is certainly not obvious that her digging a trench in this location would benefit her in any way. It would, as she said, arguably risk her miniature horses suffering injury. It is difficult to conceive of any rational self-interested explanation for her to arrange the digging of this trench, other than that she wanted the dam to appear unstable before these proceedings were commenced.
What created the trench? The Court must analyse the lay evidence, with associated photographs, and then the expert evidence to decide this question.
The Lay Evidence. Mr McMahon’s wife, Mrs Zoe McMahon took photographs of the trench on 14 June, the day it was discovered: photograph D11, D12 and D13 to Mr McMahon’s 16 October 2013 affidavit. The colour photograph D11 shows a trench with at least one smooth wall, which suggests that this part of the trench was constructed and not eroded by natural forces.
The additional photographs that Mrs McMahon took on 17 June 2012, photographs D12 and D13, also show the clear lines of the start of the trench, as does Mr McVey’s photograph taken nearly a year later on 29 May 2013, which shows the concrete plug that Mr McMahon had by then placed in the trench (Exhibit 4).
Photographs D11, D12 and D13 also show adjoining trenches at right angles, which the plaintiff described in her oral evidence as forming a “T” intersection. Quite apart from the expert evidence on this issue, which is referred to below, it seems inherently unlikely that such linear formations would be the product of natural causes.
But the development of Mrs Lord’s case on this issue undermines the Court’s confidence in her as a witness of truth. The first evidence in the proceedings about the trench came through Mr McMahon’s affidavit sworn 16 October 2013 (at [49.1]). In Mrs Lord’s affidavit in reply of 11 December 2013 (at [40]), she committed herself to the position that “the ditch naturally eroded at the original dam wall overflow point meeting the non-compacted fill being the weakest point. It is a result of water erosion and not a dug trench”. Mrs Lord herself referred to photographs D11, D12 and D13 and said they give “a graphic illustration of the extent of water that flows from the dam and the damage that it causes across my paddocks”. During this account she did not hint at the possibility that any part of the ditch had been dug by anybody within her knowledge or at her direction.
But when Mrs Lord was cross-examined she admitted she was aware that part of the channel had actually been dug by hand. She said she was in fact responsible for digging part of one of the channels. She says that she did not dig the full trench Mr McMahon had observed but she and her partner Mr Stephen Lanyon “dug a much smaller trench”. She admits doing so so that “the water could run away … from the surrounding hills”. She says that what she and Mr Lanyon dug was “at the top of the T”. She agrees that they used a trenching shovel which is capable of digging about 3 inches wide by 3 inches deep. But Mrs Lord sought to confine the size of her and Mr Lanyon’s work, calling it at one stage a “small indent”.
Mrs Lord’s account about this work is disturbing at several levels. One would have expected a candid witness in her position to have explained in her 11 December 2011 affidavit that she and Mr Lanyon had been involved in digging some channels in this area, rather than conceding this for the first time only in cross-examination. This caused the Court to doubt that she has been candid on this issue. And once having admitted so late that Mr Lanyon was doing some digging work in the area, her credibility on the issue is weakened to the point that the Court is not prepared to accept the limits that she placed upon the quantity of the work that they did. The Court does not accept her denials that she or Mr Lanyon dug this trench.
The Court reaches that conclusion without the need to draw an inference based on Jones v Dunkel ((1959) 101 CLR 298) principles. Mr Stephen Lanyon was in Court during the plaintiff’s case and was not called to give evidence. The inference is clear without having to rely upon his absence as a witness. And the expert evidence supports it.
Expert Evidence about the Trench. The experts did not discuss the trench in their reports. They first considered the issue of the trench during their cross-examination. Mr McVey, Mr McMahon’s expert, thought for two reasons that the trench was unlikely to have been caused by natural flows of water and instead thought that it was more likely to have been cut by hand.
In the first place, Mr McVey explained that although it was theoretically possible for a concentrated flow of water to spill over the top of the embankment of the dam and then create a trench through the dam, in this case that mechanism of trench creation was unlikely. He explained that the inflow to the dam is from the drainage line down the natural watercourse at the northern end of the dam and that once the dam fills up with water the natural overflow of the dam was likely to return to that watercourse from where it had come. He reasoned that there would never be sufficient water coming down from the watercourse into the dam to go over the top of the dam. It would always escape another way – back towards the northern end of the dam and then flowing lower down the watercourse from where it had come.
In the second place, Mr McVey said that the appearance of the trench was not consistent with the kind of “piping” failure that can occur in dam walls due to the natural flow of water. His view was that the part of the trench passing through the dam wall looked as though it had been “cut”, rather than having been eroded by a water leak. Mr McVey’s observations are important in deciding this issue. He saw the trench on 29 May 2013, just under 12 months after it appeared. He rejected the theory that the trench could have been caused by “water flow through a point of weakness”. His expert opinion was that such water flow “causes slumping of embankment and the slumping is not uniform”. Indeed he pointed out that away from the point where the trench left the surface water of the dam, t the banks of the trench had indeed slumped and that his observations in that area were that the slumping was “quite a different and noticeable effect”.
Mr McVey explained the slumping mechanism that causes erosion channels in such an environment. He said because the compacted soils in the dam wall were stuck together and “rolled together in an homogenous manner” when water starts to flow through them it will not cut “in a direct vertical system”. He conceded that materials such as sand may appear to be cut in a uniform manner by the action of water but a compacted homogenous embankment such as this one will not. Mr McVey’s evidence both as to his observations and of the slumping mechanism of what he would expect from the natural action of water were persuasive.
Mr Diversi, Ms Lord’s expert, disagreed with both Mr McVey’s reasons for discounting that forces of nature had caused the trench. He thought that there would be a sufficient volume of water coming down the watercourse to overtop the dam wall and cause the erosion of the trench. He also thought that the appearance of the trench was consistent with natural rather than man-made causes.
But Mr Diversi’s evidence was less persuasive on this issue. He did not really contradict Mr McVey’s explanation of the mechanism of failure of compacted soils through erosion as more likely to cause irregular slumping. But this trench does result in a “T” intersection in the channel once the trench has penetrated the dam wall. Mr Diversi was not convincingly able to explain how such a “T” intersection would naturally occur in such geometrical form as a result of the natural forces of erosion.
Both experts agreed that the trench is no longer there. The Court must decide what created the trench in the past, based upon the testimony of the lay and expert witnesses and the available photographs.
Mrs Lord’s credibility does not come out of this well. Mr McVey’s evidence clearly supports the inference that the trench running from the edge of the water in the dam and through the dam wall was dug rather than eroded. It is probable that Mrs Lord herself appreciated that the photographs and the evidence of Mr McVey pointed strongly in the same direction: that the trench had been dug. By the time she got to hearing she was prepared to concede that she and Mr Lanyon were involved in the digging to an extent. But I do not accept her as a reliable witness when she seeks to place limitations on the extent of their digging work.
This inference damages the plaintiff’s credit. She was prepared to propound what I find was a misleading account of her actions in relation to the dam and to tailor her evidence to minimise the extent of her and Mr Lanyon’s work.

Some Further Earthworks on Mrs Lord’s land - 2013

In 2013 Mrs Lord directed the carrying out of further earthworks in her paddock at the western end of Lot 2 adjacent to the dam. Mrs Lord was present when her partner, Mr Lanyon executed these works. She describes them in evidence, as does Mr McMahon. It is convenient to deal with his account first.
Mr McMahon noticed these further earthworks having occurred in May and June 2013. He saw that the topsoil which had been located in mounds on the northern boundary of Lot 2, after the 2011 earthworks, had been moved to other locations on Lot 2. Before that he had observed rain action had gradually dispersed some of this earth, as well as other spoil from the 2011 earthworks, the trench and the raised spillway.
The photographs that Mr McMahon’s wife took in June 2013 (photographs D15, D16 and D17) show the changes to these topsoil mounds, through the dispersal of some of their soil and the growth of grass on the mounds that remain.
These photographs also show two other important features of the combined earthworks. Firstly, photograph D15 shows just how much mud and spoil was created by Mrs Lord’s 2011-2013 earthworks. The area shown at this time is very churned up and muddy in contrast to the photographs taken before 2011 which show reasonably stable pasture.

Their Exhibit 7 design incorporated a concrete dish drain crossing at 350 metres from Coolangatta Road. This dish drain was a concrete dip in the road surface designed to allow water that might otherwise dam up on the high side (that is the Lot 2 side) of the cambered gravel road on the Lot 3 battle axe at its low point, to escape towards the south into the broader landscape of Lot 4. The experts ultimately did not cost the table drain or the dish drain, because they were unsure whether the Court would allow the table drain to be built encroaching onto Lot 2.
The experts agreed that information about some table drain issues could await the Court’s judgment. They agreed that if the Court required, it would not be difficult for them to reach mutually agreeable figures about the costs of reconstruction of the road; the requirements of access for maintenance of the table drain; and the costs of retaining the road but altering the ancillary drainage works.
They also indicated that without adding other infrastructure that the remedial work would not be very expensive. They said that they did not think that “there would be much cost in leaving the system as it is and tidying it up … but you do need to add some concrete dish drains across the road to pick up the stormwater drainage”. Mr Diversi had already indicated a probable cost of $30,000 to $40,000. They indicated that the top of the table drain could be designed, reviewed and then agreed, so that the design levels were acceptable to both parties and minimised the impact on Lot 2 from any resultant encroachment from the finished table drain.
Table Drain – Nuisance Conclusions. The flooding that Mrs Lord experiences on Lot 2 in times of rain is substantial, unreasonable and materially interferes with her use and enjoyment of her land. The depth and speed of flood waters, together with their width in places are an inconvenience for Mrs Lord that materially interferes with her ordinary physical comfort and potentially her safety.
These waters do not entirely emanate from Lot 3. Mr Diversi estimates a 6 hectare catchment draining onto the Lot 3 road. But much of that catchment is the upper part of the driveway on and leading to Lot 3, which is itself some 2.3 hectares whilst Lot 2 is slightly smaller at 2.15 hectares and slopes to the south to a degree but not as steeply as Lot 3 and the land on Lot 2 near it. The extent of the erosion evident in the upper parts of the Lot 3 battle axe handle near the boundary with Lot 3 is evidence of the substantial amounts of water coming through that area, even before any contribution to the waters from Lot 2 is taken into account. Also the speed of delivery of the water down the table drain is to a significant extent contributed to by the steep topography of Lot 3.
But dividing the watersources between Lot 2 and Lot 3 does not really assist Mr McMahon to defend the nuisance case. Even if some of the water has come from Lot 2, the way the road and the table drain are constructed on the Lot 3 battle axe handle, itself causes the nuisance on Lot 2. They produce an artificial dam, interfering with the natural flow of water across the Lot 3 battle axe handle and re-directing it back onto Lot 2. This would not occur if the road on Lot 3 were not artificially raised or the cross road drainage were more efficient.
In the result the nuisance is created by the volume of water coming from Lot 3 and the way the road on the Lot 3 battle axe is constructed, directing the combined water of Lot 2 and Lot 3 back onto Lot 2, and finally by the poorly maintained culverts under the Lot 3 battle axe handle.

The Table Drain - Relief

What relief should be granted for the nuisance? The expert evidence points the way to formulating an appropriate grant of relief in respect of the table drains. The Court has found that although Mrs Lord has not established that the table drains encroach on Lot 2 (the group 1 issues), the water flowing through them does occasion a flooding nuisance in Lot 2 from water that appears to come substantially more from Lot 1 than from Lot 2 (the group 2 issues). First the choice must be made between damages and what will be a mandatory restorative injunction.
Damages would not be an adequate remedy. The floodwater nuisance from the table drains, which can be seen in the Lot 2 and the Lot 3 battle axe handles in the photographs during times of high rainfall, is sufficiently deep that it not only risks future erosion and carving out of gullies in the long-term but in the short-term, such uncontrolled quantities of water located close to housing and to motor vehicle traffic on Lot 2 are potentially dangerous to people (especially children) and to any livestock in the area. An award of damages would not alleviate these risks and dangers, which would otherwise be ever-threatening for Mrs Lord.
I accept that Mr McMahon has not behaved wantonly or unreasonably in his actions with respect to the table drains. But the grant of a mandatory restorative injunction to effect the kind of works detailed in Exhibit 7 would not create a hardship for him: the works should not be prohibitively expensive; Mrs Lord will have to contribute something to them (see below); and the works will probably benefit him by better controlling water flow off his gravel road on the Lot 3 battle axe handle.
A prohibitory order in general terms would not be sufficient here. Such an order would ordinarily be couched in terms that prohibited Mr McMahon from allowing water to run off the Lot 3 battle axe handle so as to cause a flooding nuisance to Lot 2. Whilst such an order is often appropriate, in this case requires both Mr McMahon and Mrs Lord to make the decisions before relief is finally formulated. And as a result, a more detailed formulation of relief will better meet the needs of this case. Moreover, this judgment demonstrates the long-standing hostility between these parties. The Court is not confident that simply defining relief in general terms will lead to final resolution rather than further disputation. A more prescriptive solution is required.
Any relief must be conditional. And Mrs Lord needs to make a decision. The Court is prepared to grant injunctive relief to require the installation of a table drain of the general characteristics of that agreed by Mr Diversi and Mr McVey in Exhibit 7. But as a condition of the grant of that relief Mrs Lord should be required to accept that the table drain can be constructed in a way that partly encroaches upon her property, Lot 2. The experts have indicated that they can design such a table drain so as to minimise the overall impact upon Lot 2. Mrs Lord needs to indicate unequivocally that she is prepared, as the price of the Court granting mandatory restorative injunctive relief, to have a table drain built or encroaching on her property that will drain water from the cambered gravel road on Lot 3. If she is not prepared to accept this then the grant of mandatory restorative relief may have to be revised, unless a retaining wall on Lot 3 does not cause excessive traffic hazard or other inconvenience to Mr McMahon.
Mr McMahon also must make decisions relevant to relief. Mr McMahon should have the opportunity to make choices about what infrastructure changes he wants or does not want on the Lot 3 battle axe handle at the same time as Exhibit 7-type works are carried out. For instance, he may wish to upgrade the existing road on Lot 3, or he may not. He may wish to build other infrastructure on Lot 3 for his own benefit at the same time. Before the experts commence to design a final form of table drain Mr McMahon’s decisions about these matters will need to be known. Orders will need to be crafted so that he will have this option but he will be required to exercise it within a limited time.
Lot 2 partly contributes to the flooding. There is substance in Mr McMahon’s argument that some of the water that finds its way into the flooded table drains on the Lot 3 and Lot 2 battle axe handles evident in the photographs taken after rain, comes across into the drains from Lot 2, not from Lot 3. And Mrs Lord’s 2009 construction contributed to the problem. Therefore in formulating appropriate relief it would be unfair to place the full cost burden of constructing new table drains onto Mr McMahon. Were the Court to order that Mr McMahon bear the full cost, Mrs Lord would get a free ride, gaining the benefit of infrastructure installed at Mr McMahon’s cost in order to solve a flooding problem partly caused by runoff from her own property and construction that she has undertaken.
Justice therefore requires Mrs Lord to contribute to the cost of any table drain infrastructure the Court orders. But the Court has not yet heard from the parties as to what level of contribution should be required from Mrs Lord as the price of ordering the installation of infrastructure in the nature of table drains and dish drains on the battle axe to Lot 3. The formulation of the correct dollar amount or percentage contribution can be reserved for a hearing on the form of orders for relief, which hearing will need to take place in the near future. All the Court has found so far on this issue is that Lot 3 is the source of substantially more of this water, which together with the dam effect of the road on Lot 3 and the inefficient cross-road drainage warrants the grant of relief for nuisance. The precise quantum of the contribution may be able to be agreed and if not will be determined in a supplementary hearing on relief.
A number of variables will potentially govern the fixing of an appropriate dollar amount or percentage contribution, including: whether or not Mr McMahon elects to upgrade the road surface of the Lot 3 battle axe handle; how substantial any encroachment that Mrs Lord has to bear on Lot 2 is as a result of the construction of an Exhibit 7-type table drain; the cost of repairing the culvert under the road on Lot 3 that Mrs Lord damaged with her concrete works; and whether or not Mr McMahon wishes to install other infrastructure solely for the benefit of Lot 3. All that can be said at this stage is that looking at the bare minimum infrastructure requirements necessary to channel water off the cambered gravel road on Lot 3 into a controlled drain, without any additional optional infrastructure for the benefit of Lot 3, Mr McMahon should probably bear substantially more than half the cost of that infrastructure because of the substantially greater contribution to the flooding that the Court has found derives from the works on and water from Lot 3.
All these matters, and potentially others, will need to be considered in a short relief hearing in relation to the table drain issue. This can be held at the same time as the relief hearing discussed above in respect of the dam issue. The Court would observe at this point though that even now, the parties should attempt to negotiate a solution, or indeed exchange Calderbank letters, about the precise form of relief to be granted and contribution to be made.
Despite their professional differences on some issues, Mr Diversi and Mr McVey exhibited a very high degree of practical cooperation in coming up with various technical solutions in this case. Drawing upon their professional assistance, it may be possible for the parties at least to reduce the matters in issue in formulating relief.
These reasons assume that the Exhibit 7 table drain works can be designed to be carried out without any significant final encroachment on Lot 1, which is owned by a non-party to these proceedings. If that assumption is incorrect notice may need to be given to the owner of Lot 1 to determine that owner’s attitude to the final form of relief proposed.

Mrs Lord Offers Further Table Drain Encroachment Evidence at the End of the Trial

On the last day of the trial 12 December 2014, just before final oral submissions were due to commence and after final written submissions had been served, Mrs Lord, through her counsel, Mr Vindin, sought to supplement the evidence in her case about the table drain. She sought to tender a survey undertaken by a surveyor since the last hearing day, 1 December 2014. The document she proposed to tender was said to be an up-to-date survey of part of the two driveways on Lots 2 and 3 and the area between them, showing the table drains, the area of the alleged erosion, the relative levels of the two driveways and other matters said to be relevant to Mrs Lord’s case.
Mr Waugh objected to the tender of the survey. The Court declined to admit the document into evidence at that stage of the proceedings. Instead it was marked for identification. Mr Waugh’s submissions on behalf on Mr McMahon, that the tender of this survey should not be permitted, were persuasive.
First, Mrs Lord’s application to tender the survey came very late and after a number of submissions that the evidence in Mrs Lord’s case about the table drain was insufficient without additional documentation. These submissions had been made in response to submissions from the defendant and queries from the Bench during the trial about the adequacy of the evidence about the physical layout of the table drains in relation to the boundary of the two properties. Mr McMahon had pointed out in written submissions before trial that there was no up-to-date survey of the two driveways such as would found a case that the table drain encroached on Mrs Lord’s land and that the Court should therefore not grant a mandatory injunction for the removal of the table drain.
Mr Waugh submitted that he would need time to respond to this material were it to be admitted into evidence, and would be prejudiced unless there was an opportunity to put on evidence in reply. That was obviously not possible unless further time was granted after December 2014.
The Court raised with the parties the possibility that the Court might perhaps be able to accommodate Mrs Lord, if she wished to tender this survey, by dealing with the dam issue first, and then, whilst the Court was preparing judgment on that issue, the parties could finalise their evidence in relation to the table drain issue. But before the Court could split the judgment into two this way it would need to be satisfied that there were no credit issues between the parties on the table drain question.
Mr Waugh submitted that there were credit questions associated with the table drain issue. He submitted on behalf of Mr McMahon that Mrs Lord’s uncorroborated evidence should not be accepted on either the dam issue or the table drain issue. That was consistent with the way that Mr McMahon had put his case. Therefore he submitted that adjourning part of the proceedings to allow further evidence to be put on was not a practical way of accommodating the late service of this evidence.
Although Mr Vindin gave a good account of why the survey had not been served even a few days earlier than it had been, no evidence was advanced to support the tender by showing why the survey had not been commissioned before trial or at an earlier time during the trial. It was not possible in these circumstances to permit the tender to take place without generating one or more further hearing days in a trial which had already gone beyond its allotted time.
Mr Waugh also submitted that the proposed tender did not even show that the table drain was an encroachment. Mr Vindin suggested that what it really showed was “deep trenches on my client’s side of the boundary; the close contours”. The Court does not have to decide that question.
In the course of seeking to tender the survey Mr Vindin also suggested the possibility of an amendment to the Summons “to simply add in a few words about the encroachment being not merely the drain but the water that flows down it when it rains”. Mr Vindin submitted that “…it’s not about the drain, it is about the water that should be flowing down a table drain nicely next to Mr McMahon’s road, but in fact it is just discharging willy-nilly and digging these trenches on my client’s side of the boundary”.
This submission revealed a misunderstanding between the parties about the nature of the case being made about the table drain. They were both right on this. Mr Waugh’s submission was that he was prepared to meet at trial what was claimed in the Summons, which is a declaration that the “table drain encroaches” on the plaintiff’s land and that a mandatory injunction should be granted for its removal. But that is only true of prayers for relief 7, 8 and 9. Prayers for relief 10 and 11 do seek relief in respect of a flooding nuisance, upon which Mr Vindin relied.

Conclusions and orders

The result of these proceedings on the Summons and the Cross Summons may be shortly summarised. The plaintiff, Mrs Lord, has failed to prove that the dam wall that the defendant placed on Lot 2 in 2000 is either a trespass or a continuing trespass upon her land. But she has been successful on one aspect of her nuisance claim associated with the dam wall that straddles the boundary of Lot 2 and Lot 3: she has established that overflows of water from the dam onto her property cast excessive water and some debris upon it, thereby eroding Lot 2 and reducing the quality of her pasture on Lot 2. But some of that debris on Lot 2 is also the product of her own unsuccessful attempts to abate any nuisance emanating from the dam on Lot 3. Given the complexities of this the Court has determined an appropriate structure for relief on this issue. Parties may wish to put submissions on the form of relief on this issue.
But Mrs Lord has been unsuccessful in showing on the evidence presently before the Court that the dam wall is leaking. The expert evidence indicated that if it is leaking then potentially a catastrophic failure of the dam is possible. A conclusion that such a failure is in any sense “on the cards” is not justified on the evidence before the Court. But the experts indicated that it is one issue that could be further investigated. For the reasons elaborated earlier in this judgment, because of the potential dangers to persons of such a failure, the Court has decided to hear from the parties as to whether they want an opportunity to undertake these investigations. The Court has therefore reserved further consideration of this issue.
On the Cross Summons, Mr McMahon fails on his proprietary estoppel claim. He has not established that Mrs Lord’s conscience was bound by his dealings with Mr Lord. He also fails in his Encroachment Act claim for failure to prove that the dam wall on Lot 2, was a “building” within the meaning of that Act.
Mrs Lord has also failed to establish on the evidence that the table drain along the Lot 2 and Lot 3 battle axe handles encroaches onto Lot 3, but she has been successful in proving that the road on Lot 3 causes a flooding nuisance on Lot 2. Once the parties have had an opportunity to analyse these reasons, the Court will hear the parties as to the conditions to be placed in the precise form of relief to remedy the nuisance that has been found.
Both parties have had some success in the proceedings. This may lead to arguments about the appropriate order for costs in the circumstances and one or other party may seek a special costs order. The Court will hear submissions on costs after the parties have had an opportunity to consider these reasons and then to formulate and put submissions about appropriate orders for such relief as has been found in the plaintiff’s favour.
The court’s orders are as follows:

Direct the parties to bring in short minutes of order to give effect to these reasons.

Direct the parties to file any submissions in relation to relief and costs by 4pm on Friday, 12 December 2015.

The parties should list the proceedings for argument about final relief by arrangement with my Associate.

Grant liberty to apply.

**********

Amendments

18 December 2015 - [244] - hyperlink from case amended

26 November 2015 - Paragraph [29], change may to May, change collegue to colleague.

Paragraph [59], change "Mrs Lord told" to "Mr Lord told".

Paragraph [159], change "150 ER" to "116 ER".

Paragraph [149], [152], [156], change "Flemings" to "Fleming's".

Paragraph [242], change "Mrs Lord requires the property because she is on notice" to "Mrs Lord acquires the property on notice"

Paragraph [244], change "whom" to "for whom"

25 November 2015 - [194] "Privy Council" from "House of Lords"

Decision last updated: 18 December 2015

Medium Neutral Citation:	Lord v McMahon [2015] NSWSC 1619
Hearing dates:	12, 13, 17 November & 1, 12 December 2014
Date of orders:	24 November 2015
Decision date:	24 November 2015
Jurisdiction:	Equity
Before:	Slattery J
Decision:	On the plaintiff’s summons no trespass or continuing trespass found. Claims for flooding nuisance at the dam and the table drains upheld. A relief hearing ordered. Part of nuisance case fails with respect to dam wall leakage. Plaintiff’s case in relation to the encroachment of table drains also fails. On the cross claim the claims in proprietary estoppel and under the Encroachment of Buildings Act dismissed.
Catchwords:	TRESPASS - from dam construction - large dam built on land close to the boundary of lower lying rural neighbouring property - batter from dam construction placed onto lower-side neighbour’s land - whether a trespass - whether a continuing trespass - where defendant’s conduct permanently altered the plaintiff’s land - defence to trespass - whether adjoining lower-side neighbour gave permission for dam to be built and batter to be placed on lower-side neighbour’s land - what amounts to consent – where injunctive relief sought to prevent trespass to land. TRESPASS - from table drain construction - table drains built near boundary along the “battle-axe handle” of two subdivided rural properties - whether the table drains concentrate surface water into channels causing erosion of the plaintiff’s property. NUISANCE - from dam leaking water onto lower land of neighbour - whether leakage amounts to a nuisance - from table drain - whether leakage causes nuisance to plaintiff’s land by erosion. EQUITY – proprietary estoppel – where Torrens title land transferred after alleged equitable interest arose - personal equities exception to indefeasibilty. EQUITY – equitable relief – injunctive relief – relief to be granted upon conditions as to the sharing of the cost burden of the relief. ENCROACHMENT OF BUILDINGS - whether an easement can and should be granted under the Encroachment of Building Act 1922 s 3 to authorise the maintenance of batter on the lower-side neighbour’s land – whether an earthen dam wall is a ‘building’ under the Act. CIVIL PROCEDURE - discretion to admit tender of evidence at late stage in proceedings - where evidence tendered after oral evidence given and final written submissions served
Legislation Cited:	Conveyancing Act 1919, s 88B, Schedule 8, Part 6, Encroachment of Buildings Act 1922, ss 2, 3(1), 4, 5, 8, 10, 14 Evidence Act 1995, ss 54, 131 Real Property Act 1900, ss 42, 43
Cases Cited:	Ashton v Pratt [2015] NSWCA 12; 88 NSWLR 281 Bahr v Nicolay (No. 2) (1988) 164 CLR 604 Behrens v Richards [1905] 2 Ch 614 Benjamin v Storr (1874) LR 9 CP 400 Boed Pty Limited v Seymour (1989) 15 NSWLR 715 Break Fast Investments Pty Ltd v PCH Melbourne Pty Ltd (2007) ATR 81–930 Breskvar v Wall (1971) 126 CLR 376 Cantamessa v Sanderson (1993) 6 BPR 13,127 Clearlite Holdings Ltd v Auckland City Corporation [1976] 2 NZLR 729 Clegg v Dearden (1848) 12 QB 575; 116 ER 986 Clune v Collins Angus & Robertson Publishers Pty Ltd (1992) 25 IPR 246 Cuthbert v Hardy (1989) 17 NSWLR 321 Droga v Proprietors Strata Plan 51722 (1996) 93 LGERA 120 Ex parte Van Achterberg (1984) 1 Qd R 160 Cuthbert v Hardy (1989) 17 NSWLR 321 Delaforce v Simpson-Cook [2010] NSWCA 84; (2010) 78 NSWLR 483 Duic v Duic [2013] NSWCA 42 Evans Marshall & Co Ltd v Bertola SA [1973] 1 WLR 349 Farah Constructions Pty Ltd v Say-Dee Pty Ltd (2007) 230 CLR 89 Gales Holdings Pty Limited v Tweed Shire Council [2013] NSWCA 31 Gardner v Hodgson’s Kingston Brewery Ltd [1903] AC 229. Goldman v Hargrave [1967] 1 AC 645; 115 CLR 458 Grant Pastoral Co Pty Ltd v Thorpes Ltd (1953) 54 SR (NSW) 129 Grgic v Australian and New Zealand Banking Group Ltd (1994) 33 NSWLR 202 Halliday v Nevill (1984) 155 CLR 1 Healey v Hawkins [1968] 1 WLR 1967 Hudson v Nicholson (1839) 5 M & W 437; 151 ER 185 Jaggard v Sawyer [1995] 1 WLR 269 Jones v Dunkel (1959) 101 CLR 298 Jones v Williams (1843) 11 M & W 176; 152 ER 764 Konskier v Goodman Ltd [1928] 1 KB 421 Lagan Navigation Co v Lamberg Bleaching Dyeing and Finishing Co [1927] AC 226 Lemmon v Webb [1894] 3 Ch 1; [1895] AC 1 Lipman v Clendinnen (1932) 46 CLR 550 Logue v Shoalhaven Shire Council [1979] 1 NSWLR 537 Lowndes v Bettle (1864) 33 LJ Ch 451 Melaleuca Estate Pty Limited v Port Stephens Council [2006] NSWCA 31 McKenzie v Powley [1916] SALR 1 Miller v Jackson [1977] QB 966 Milling v Hardie [2014] NSWCA 163 Plenty v Dillon (1991) 171 CLR 635 Plunkett v Bull (1915) 19 CLR 544 Port Macquarie Hastings Council v Mooney [2014] NSWCA 156; 201 LGERA 314 Redland Brick Co v Morris [1970] AC 652 Re Hodgson (1885) 31 Ch D 177 Richardson v Forestry Commission (1988) 164 CLR 261 Ruthning v Ferguson [1930] St R Qd 325 Ryan v Brain [1994] 1 Qd R 681 Joseph Saliba & Anor v Thomas Tarmo [2009] NSWSC 581 Sedleigh-Denfield v O’Callaghan [1940] AC 880 Shelfer v City of London Electric Lighting Co [1895] 1 Ch 287 Sidhu v Van Dyke [2014] HCA 19; 251 CLR 505 Soich v Sutherland Shire Council (1980) 2 BPR 9273 Snowlong Pty Ltd v Choe (1991) 23 NSWLR 198. Tran v Nominal Defendant [2011] NSWCA 220; 58 MVR 462 Thomas v Oakley (1811) 18 Ves 184; 34 ER 287 Thorpes Ltd v Grant Pastoral Co Pty Ltd (1955) 92 CLR 317 Varma v Varma [2010] NSWSC 786; 6 ASTLR 152 Vukic v Luca Grbin and Ors; Estate of Zvonko Grbin [2006] NSWSC 41 Waddell v Waddell [2012] NSWCA 214; 292 ALR 788 Wantagong Farms Pty Ltd as Trustee for the Bulle Family Trust v Bulle [2015] NSWSC 1603 Ward v Griffiths (1987) 9 NSWLR 458 Weeks v Hrubala [2008] NSWSC 162 Yarrabee Coal Co Pty Ltd v Lujans [2009] NSWCA 85; 53 MVR 187
Texts Cited:	Halsbury’s Laws of Australia, LexisNexis online B McFarlane, The Law of Proprietary Estoppel (1st ed 2014, Oxford University Press) RP Meagher, JD Heydon, MJ Leeming, Meagher, Gummow & Lehane’s Equity: Doctrines and Remedies (4th ed 2002, Butterworths LexisNexis) RP Meagher, JD Heydon, MJ Leeming, Meagher, Gummow & Lehane’s Equity: Doctrines and Remedies (5th ed 2015, Butterworths LexisNexis) C. Sappideen and P. Vines, Fleming’s The Law of Torts (10th ed 2011, Lawbook Co) PW Young, C Croft, ML Smith, On Equity (1st ed 2009, Thomson Reuters)
Category:	Principal judgment
Parties:	Plaintiff: Heather Lord First Defendant: Stephen McMahon
Representation:	Counsel: Plaintiff: C.A. Vindin Defendant: G. Waugh Solicitors: Plaintiff: Glenn Henniker Defendant: Grant John Hodgson
File Number(s):	2013/223473
Publication restriction:	No