Owners Corporation SP 46510 v Tan

[2020] NSWSC 1564

Supreme Court

New South Wales

Medium Neutral Citation:

Owners Corporation SP 46510 v Tan [2020] NSWSC 1564

Hearing dates:

19 to 21 October 2020

Decision date:

05 November 2020

Jurisdiction:

Equity - Real Property List

Before:

Robb J

Decision:

See pars [95] to [101].

Catchwords:

TORTS — Private nuisance — Interference with use and enjoyment of land — where, in the course of developing his property, the defendant has caused water to penetrate through to the adjoining property — where, unless remedied, the water ingress will continue — plaintiff established a prima facie case — where cumulative negligence claim not adequately pleaded or proven — nuisance established.

Legislation Cited:

Civil Liability Act 2002 (NSW)

Cases Cited:

Bell v Pitt [1956] Tas SR 161

Burnie Port Authority v General Jones Pty Ltd (1994) 179 CLR 520; [1994] HCA 13

Cambridge Water Co v Eastern Counties Leather Plc [1994] 2 AC 264

Corbett v Pallas (1995) 86 LGERA 312

Dimitrios Michos v Council of the City of Botany Bay [2012] NSWSC 625; (2012) 189 LGERA 25

Fennell v Robson Excavations Pty Ltd [1977] 2 NSWLR 486

Gales Holdings Pty Ltd v Tweed Shire Council (2013) 85 NSWLR 514; [2013] NSWCA 382

Gartner v Kidman (1962) 108 CLR 12; [1962] HCA 27 Kraemers v Attorney-General (Tas) [1966] Tas SR 113

Quick v Alpine Nurseries Sales Pty Ltd [2010] NSWSC 1248

Sutherland Shire Council v Becker (2006) 150 LGERA 184; [2006] NSWCA 344

Category:

Principal judgment

Parties:

Owners Corporation SP 46510 (plaintiff)
Larry Tian Seng Tan (defendant)

Representation:

Counsel: B Oliak (plaintiff)
R Tregenza (defendant)

Solicitors: Errol Berman & Co (plaintiff)
Paul A Brown & Co (defendant)

File Number(s):

2018 / 257080

Judgment

1. The plaintiff is Owners Corporation SP 46510 (the Owners Corporation). At all material times since 11 April 1994, when the strata plan was registered, the Owners Corporation has been the proprietor of land situated at Glebe Point Road in Glebe upon which has been erected a substantial shopping centre and residential building (the OC Property). The OC Property has a basement carpark with an entry from Campbell Lane, which is parallel with Glebe Point Road at the back of the property.

2. The defendant, Mr Larry Tian Seng Tan (Mr Tan), has been since 1983 the owner of property adjoining the OC Property on Glebe Point Road on the north-west boundary of the OC Property (the Tan Property). At the front of the Tan Property is a shop, which is estimated to be over a century old.

Summary of events giving rise to dispute

3. The events that have led to these proceedings can be described relatively simply. I will provide the necessary elaboration below. At the time the building on the OC Property was constructed, the rear portion of the Tan Property was relatively impervious to water, being covered by a concrete and asphalt driveway, an area of brick pavers, and a raised flowerbed that was sealed with a concrete slab. As will be seen, 90% of the rainfall naturally falling on the rear of the property would have flowed as surface water towards Campbell Lane, at the back of the Tan Property, and run away naturally. Only 10% of the water would have seeped into the subsurface.

4. In 2015, Mr Tan caused the surface covering at the back of the Tan Property to be removed, and excavated some of the soil below its original level. The excavation exposed the top of the basement retaining wall on the OC Property. Some of the spoil from the excavation was placed above the altered ground level. The rear of the Tan Property was untended and poorly maintained after the work was carried out.

5. At present, after Mr Tan has remediated aspects of the original excavation works by removing the spoil and increasing the surface level by laying down and levelling fill on the rear portion of the Tan Property, only approximately 40% of the rainwater run-off now flows to the rear lane and the remaining 60% is absorbed into the soil. There is evidence of water pooling on the rear area after rainfall events before the recent works, and it may be that for a substantial period there was even less natural run-off than at present.

6. In about March 2017, water was observed entering the basement carpark on the OC Property along the boundary between that property and the Tan Property.

7. It is the Owners Corporation's case that the ingress of water into the basement carpark was caused by the excavation works carried out by Mr Tan on the Tan Property and the state in which that property was left after the works had been carried out.

Owners Corporation’s pleaded claim

8. The Owners Corporation commenced these proceedings by statement of claim filed on 21 August 2018. The Owners Corporation amended its pleadings, and the hearing was conducted on the basis of a further amended statement of claim (FASOC) filed on 20 August 2019.

9. The FASOC pleaded claims against Mr Tan in the torts of nuisance and negligence.

Nuisance claim

10. In the FASOC, the Owners Corporation pleaded its nuisance case against Mr Tan in the following terms:

3. In or around June 2015, Mr Tan began to develop [the] Neighbouring Property.

4. The development by Mr Tan included excavation works (the "Excavation Works") to the rear (northeast) yard (the "Rear Yard") of the Neighbouring Property.

5. During the course of developing the Neighbouring Property, to date, Mr Tan has:

(a)   failed to install downpipes or gutters on the two roofs of the rear of the south and east ends of the building on the Neighbouring Property;

(b)   failed to provided (sic) adequate surface water drainage to the courtyard of the Neighbouring Property;

(c)   as a result of the Excavation Works:

1. altered the original surface water runoff from the Rear Yard;

2. created an excavation which collects water which is not dispersed via a surface water drainage system from the Neighbouring Property; and

3. exposed the rear of the retaining wall of the basement of the OC Property; and

4. allowed litter and debris to restrict the adequate drainage of the Rear Yard of the Neighbouring Property,

which has caused water to penetrate through the Wall and onto the OC Property that has unreasonably interfered with the use and enjoyment of the OC Property (the "Nuisance").

11. As I understand the Owners Corporation's case, it does not pursue the claim in par 5(a) that the water ingress into its basement carpark has been caused by any failure on the part of Mr Tan to install downpipes or gutters on the roofs of the building on the Tan Property.

12. The case that the Owners Corporation now seeks to make out by reference to the damage caused by the ingress of water alleged in par 6 is limited to the consequences of the water leaking into the basement carpark.

13. The Owners Corporation alleged a failure by Mr Tan to abate the nuisance in pars 7 to 9 of the FASOC. The failure consisted of an absence of a response by Mr Tan to emails from the Owners Corporation dated 9 March 2017 and 17 March 2017, as well as emails from the solicitors for the Owners Corporation dated 2 June 2017, 14 September 2017 and 20 June 2019.

Negligence claim

14. The Owners Corporation pleaded its negligence claim against Mr Tan in the FASOC in the following terms:

12. Mr Tan (by himself and/or through his servants, agents and contractors) created the Nuisance and knew, or ought to have known, that as a consequence of his actions [the] harm to the OC Property was reasonably foreseeable.

13. Mr Tan had a duty to take positive action a reasonable person in his position and circumstance[s] would take to eliminate the foreseeable risk of damage from the Nuisance.

14. Mr Tan has not taken any positive steps at all to abate the Nuisance.

15. The Nuisance has caused (and continues to cause unless abated) loss and damage to the OC Property.

16. In the premises, Mr Tan has been negligent in relation to creating and continuing the Nuisance and the Owners Corporation is entitled to and seeks:

(a)   orders requiring Mr Tan to take remedial steps to abate the Nuisance; and

(b)   equitable damages for the loss and damage to the OC Property resulting from the Nuisance (as set out in paragraph 15 above).

15. I have omitted from the extract of the FASOC set out above the particulars appended to the allegations. All of the particulars given consisted of the repetition of identified paragraphs of the FASOC in which the Owners Corporation's nuisance claim was pleaded.

16. It is to be noted that the FASOC does not contain any allegation that Mr Tan committed nuisance or was negligent because he failed to comply with any condition in the development approval that led to him undertaking the excavation works at the rear of the Tan Property, or that Mr Tan failed to comply with any applicable building code.

Mr Tan’s defence

17. Mr Tan responded in his amended defence filed on 5 September (AD) to the FASOC generally in a manner that put the Owners Corporation to proof.

18. However, at par 2 of the AD he described the work that he carried out in about June 2015 in the following terms:

2… the defendant:

a. removed a concrete and asphalt parking area at the rear of the property on the opposite side of his land from that of the plaintiff's land and leveled (sic) a raised garden bed which was situated between the said parking area and the common boundary between the plaintiff's and the defendant's land and in the course of the removal thereof removed soil necessary to effect the same;

b. did not construct anything on or otherwise develop the land…

19. In par 8 of the AD, Mr Tan denied that any flows of water from the Tan Property to the OC Property were or are caused by him or by anything done by him, and in the event of there being any such flows denied that he was capable of stemming the same.

Evidence of the condition of the Tan Property

20. It is necessary to address the evidence of the changes to the state of the rear part of the Tan Property, before I consider the structural circumstances of the building on the OC Property that may have allowed water seepage from the former into the basement carpark of the latter.

21. The evidence concerning the initial condition of the rear portion of the Tan Property is comprised primarily of survey drawings prepared by a surveyor, Mr Geoffrey Swalwell, for the purposes of a redevelopment of the Tan Property that Mr Tan proposed to carry out as of about March 2012 (Exhibit D1), and a series of photographs of the Tan Property taken by Mr Swalwell on 21 March 2012 (Court Book (CB) 804 – 824).

Survey evidence at March 2012

22. The survey plan shows a dish drain running along the boundary between the Tan and the OC Properties on the Tan Property side. There is an area adjacent to the dish drain that is surrounded on three sides by what is described as a low brick wall. The dish drain and the area surrounded by the low brick wall occupy about half of the width of the rear portion of the Tan Property. The other half is occupied by what is described as a concrete drive, and along the far boundary opposite the boundary between the Tan and the OC Properties there are three metal sheds. Between the rectangular area bounded by the low brick wall and the back of the building is an area described as brick paving.

23. The part of the rear of the property comprising the brick paving is shown by the point measurements of the surface level above Australian Height Datum, measured in metres, to be relatively level, with the surface on one side of the Tan Property at 22.78 m and 22.83 m on the other side. The concrete drive sloped relatively gently towards Campbell Lane from 22.87 m to 22.13 m. At the boundary between the Tan Property and Campbell Lane, it sloped generally downwards towards the OC Property from 22.58 m to 21.93 m.

Photographs taken by surveyor at March 2012

24. The photographs show the brick paving area as being apparently relatively level with a small amount of low-growth weeds (CB 809). The area that Mr Tan described as a garden bed was confined by a brick wall about four bricks high at the Campbell Lane end of the rectangular garden bed and even with the brick pavers at the other end. It is covered with a level and apparently horizontal concrete slab (CB 812 and 813). The driveway appears to be a level concrete slab with an asphalt border that slopes gently down towards a gate on Campbell Lane (CB 813 and 815). The dish drain occupied the area between the wall of the building on the OC Property and the low brick wall confining the so-called garden bed closest to the boundary. The dish drain appears to be slightly more than one brick deep (CB 824).

Joint expert evidence concerning water run-off before 2015

25. It will be convenient to note, at this stage, that the parties' structural engineers agreed in their joint expert report (Exhibit P1) that, prior to 2015, the majority of the rainwater run-off (approximately 90%) in the rear of the Tan Property would have flowed along the concrete surface towards the rear laneway, and the remaining 10% would have been absorbed into the surface.

Additional photographs before excavation works by Mr Tan

26. An aerial photograph of the environs of the OC and Tan Properties, as at 4 July 2015, appears to show that the concrete surface remained on the Tan Property (CB 625). A photograph taken from Campbell Lane in August 2015 appears to show all of the concrete structures on the Tan Property removed (CB 620). So does an aerial photograph taken on 1 September 2015 (CB 626).

Excavation works by Mr Tan

27. In mid-2015, between about 4 July and August 2015, contractors for Mr Tan removed most of the brick paving, the concrete drive, the low brick wall and the concrete slab over the so-called garden bed, as well as the dish drain. The contractors also removed some of the underlying soil, to the extent that part of the structure of the building on the OC Property that was originally below the surface of the Tan Property was exposed.

Photographs taken by surveyor at December 2016

28. Photographs that were taken at various stages after the excavation works carried out by Mr Tan in mid-2015 show that the topography of the rear portion of the Tan Property changed on a number of occasions as a result of additional works carried out by Mr Tan.

29. Mr Swalwell took further photographs of the rear of the Tan Property on 7 December 2016.

30. One photograph depicts an exposed soil wall apparently about 0.5 m deep running across the Tan Property close to the remaining brick pavers and the remaining shed on a line perpendicular to the boundary with the OC Property (CB 779). The excavation appears to have broken a subsurface white PVC drainage pipe (probably formerly used to drain rainwater from the roof gutters on the building towards Campbell Lane).

31. Another photograph of the end of the exposed soil wall adjacent to the boundary with the OC Property shows that the excavation has exposed the structure of the building on the OC Property that was previously below the surface level of the Tan Property (CB 781). New PVC piping has been laid (apparently to drain water collected from the roof gutters). Because of the depth of the excavation of the soil below the original surface level, part of the PVC piping is above ground, supported by house bricks laid on their ends. The soil that is not covered by weeds appears to be loose. The excavated area is covered with builders’ refuse and substantial rubble piles in a number of places, apparently consisting of the broken pieces of concrete and other materials that had been removed from the surface of the Tan Property (CB 777). The height of the rubble piles can only be inferred, and one at least appears to be more than 1 m high. This rubble pile is relatively close to the boundary with Campbell Lane, and is located on the half of the Tan Property that is further away from the boundary with the OC Property (CB 778). The excavated land appears to slope generally down towards the junction between the Tan and OC Properties and Campbell Lane.

32. Significantly, the photographs depict that the surface of the Tan Property at the junction between that property and the OC Property and Campbell Lane is below the level of the lane (CB 778 and 784). Someone has installed a silt trap made out of hessian-like material running along the boundary between the Tan Property and Campbell Lane up to the boundary with the OC property (CB 778 and 784). It is evident that the person responsible for installing the silt trap wished to prevent water flowing from the Tan Property carrying silt and other detritus onto Campbell Lane. It is significant that the surface of the Tan Property lies below the surface of Campbell Lane, as this would likely act as a sump for the retention of water flowing from the Tan Property towards Campbell Lane.

Photographs by structural engineer at July 2017

33. The Owners Corporation’s expert structural engineer, Mr Eamonn Madden, took another set of photographs on 7 July 2017.

34. The rubble piles appear to be no longer on the Tan Property. It also appears that additional soil has been deposited on the property as the exposed soil wall is no longer evident (Photos 20 to 23 at CB 607), and the white PVC drainage pipes that were previously elevated above the surface of the land have been partly buried (Photos 24, 25 and 27 at CB 608). The surface of the soil appears to be loose, and there is clear evidence of small depressions that give the appearance of being eroded by water flow (Photos 25, 26, 27 and 28 at CB 608 and 609). A number of photographs depict a tape measure that appears to show about 21 inches of exposed wall of the building on the OC Property that was previously below the surface level (Photos 37 and 38 at CB 611). Significantly, there are voids in the soil on the Tan Property at the junction with the building on the OC Property that clearly would have a propensity to collect water flowing over the Tan Property and direct it downwards along the previously subsurface part of the wall on the OC Property (Photos 40, 41, 42 and 43 at CB 612 and 613).

Survey evidence at May 2019

35. Although, for various purposes, Mr Swalwell prepared further survey plans at a number of dates after 29 March 2012, he did not survey the surface level again until 24 May 2019. The relevant survey plan is revision E in Exhibit D1.

36. This final survey plan shows a relatively significant excavation of the rear of the Tan Property. The only metal shed remaining is the metal shed that was close to the back of the building on the Tan Property. The two metal sheds closer to Campbell Lane have been removed.

37. Running across the Tan Property, perpendicular to the boundary with the OC Property, and adjacent to the remaining brick paving close to the back of the building, is an earth bank that is at a height of 22.57 m to 22.65 m at its top and 22.07 m to 22.22 m at the bottom. That is a high of about 0.5 m at one end and 0.4 m at the other. Thus, the excavation exposed a wall of soil running across the Tan Property.

38. At the point where the earth wall runs across the Tan Property, the rear portion of the property slopes down towards the boundary with the OC Property from 22.2 m to 22.07 m. There is a slightly greater slope down towards the point where the boundary between the two properties meets Campbell Lane. At that point the surface height is 21.80 m. At the time Mr Swalwell carried out his second survey, the rear portion of the Tan Property was relatively level.

Roof drainage

39. Mr John Barker, an expert quantity surveyor, gave evidence in his 6 April 2020 report of a site inspection that he carried out of the Tan Property on 11 October 2019. He said that he observed a lean-to-roof that connected the existing building to the building on the OC Property. Mr Barker concluded that the roof was constructed after the building on the OC Property. Mr Barker could not see roof guttering or a drainage system to discharge water from this lean-to-roof. As a result, water draining from this roof would discharge directly onto the ground adjacent to the north western boundary of the OC Building. This evidence by Mr Barker was not challenged by Mr Tan.

Evidence of water ingress into OC Property

40. Mr John Walker, who was at the time employed by the Owners Corporation as strata manager, observed the excavation works undertaken by Mr Tan at the rear of the Tan Property in about 2015. On a later visit in 2015 or 2016, he observed that, as a result of the excavation works, the concrete had been removed and nothing replaced it. On about 9 March 2017, Mr Walker visited the OC Property and observed that a section of the rear yard on the Tan Property was excavated and that water was pooling in the excavated area. Mr Walker also observed water pooling in the excavated sections of the Tan Property on 16 March 2017.

41. Mr George Amaro is the owner of one of the lots in the strata plan, from which he conducts his business as an optometrist. He is also a member of the strata committee of the Owners Corporation. Mr Amaro inspected the building on the OC Property after heavy rain on a number of occasions between October and December 2018 to see whether there was any water ingress or flooding. Following these inspections, he observed that flooding usually occurred in the basement of the building, when the water would enter from the wall that is shared with the Tan Property. Mr Amaro took photographs of the effect of the water ingress. The photographs show water running down the basement wall and pooling at the bottom, overflowing a small dish drain intended to collect water that precipitated or seeped through the wall, and flowing downhill along the basement carpark driveway towards a lift well.

42. The basement carpark wall between the OC Property and the Tan Property is constructed out of shotcrete sprayed against the excavated face of the subsurface, supported by soldier piles. This structure is a wet wall, in the sense that it is expected that minor amounts of water will seep through the shotcrete by capillary action, and it was for that reason that a small dish drain was constructed at the foot of the wall. The purpose of the drain was to collect seepage through the concrete and to store it during the process of evaporation.

Mr Madden’s evidence

43. According to Mr Madden’s evidence in his 17 April 2019 report, at par 7.0(a)(i), the excavation work carried out by Mr Tan on his property has caused water to pool in the backyard and drain onto the OC Property. The excavation had exposed the top of the basement retaining walls. Mr Madden said:

…

The spoil from this excavation appears to have been placed above the original ground level, to the rear of the excavation significantly changing the slope and falls across the site and overland flow…

The excavation is likely to collect surface runoff from the courtyard and areas of the garden and rely on soakage from the base of the excavation for dispersal of this water.

The excavation work has:

1. Altered the original surface water runoff from the rear of the [Tan Property];

2. Created an excavation which collects water which is not disbursed via a surface water drainage system from the property;

3. Exposed the rear face of the basement retaining wall at [the OC Property].

   44. After describing the method of construction of the shotcrete wall and the ground floor slab, Mr Madden said at par 7.0(a)(ii):

…

Externally the construction joint (CJ) at the junction of the top of the shotcrete wall and the slab soffit has been exposed at the base of the excavation in [the Tan Property] (Photos 8 & 9).

Sitting above and connected to the ground floor slab there is a retaining wall which supported the rear yard / garden of [the Tan Property]. The external face of this wall has an applied liquid membrane which has been exposed over a significant length of the retaining wall. (Photos 3, 4, 5 and 7 to 9).

45. Mr Madden then gave the following explanation of the cause of the leaking of water into the OC Property at par 7.0(b):

Water is entering at the junction of top of shotcrete wall and the ground floor slab adjacent to the top of the soldier pile just to the north of Grid B… We are advised that the water entry at this location worsened after the excavation of the rear yard of [the Tan Property].

The excavation of soil within the [rear] yard of [the Tan Property] and lack of adequate drainage provided to the yard following this excavation, allows water to collect adjacent to the back of the masonry retaining wall and has increased the flow of water through the basement wall at this location, evidenced by the clay deposits that have accumulated at the base of the basement wall in the dish drain at the base of the wall in the garage (photos 14-16).

The dish drain is partially blocked with clay deposits from water flowing from the adjoining yard.

Joint expert report

46. Initially, there were some significant differences of expert opinion between Mr Madden and the structural engineer retained by Mr Tan, Mr Angelo John Vardouniotis. However, following a conclave between the experts, they resolved their principal differences and provided to the Court a joint expert report that stated the following principal conclusions (Exhibit P1) (I have paraphrased some of the report to make it more readily understandable):

The parties agree that:

A)   Tan’s rear yard prior to 2015 was mostly fully sealed by concrete/brick paving including a concrete dish drain adjacent to the west wall of [the OC Property].

B)   Although the yard was mostly fully paved prior to 2015 [there was a localised depressed brick paved surface approximately 5 m upstream to the leaking basement wall that would have allowed some minor water entry into the soil under].

C)   …

D)   After 2015 all concrete slab and dish drains and some portion of brick paving were fully removed and the ground level lowered leaving an unsealed soil surface.

E)   The rear yard from 2015 until last observed by [Mr Madden] in early 2020 had remained as an unsealed soil surface.

F)   Prior to 2015, the majority of rainwater runoff (approximately 90%) in Tans rear yard would have flowed along the concrete surface towards the rear laneway based on typical surface run-off co-efficients…and the remaining 10% absorbed into the surface.

G)   Following the rear yard excavation works in 2015 (first ground works), which resulted in an unsealed soil surface, approximately 40% of rainwater runoff flowed to the rear lane based upon typical surface runoff co-efficients for an exposed soil surface…and the remaining 60% absorbed into the soil.

47. The joint expert report expresses the following conclusion, in response to a question seeking an opinion as to the source and cause of the water penetration into the OC Property:

The experts agree that:

the source of water and soil entering the basement of [the OC Property] is originating from the [Tan Property] rear yard.

The basement wall is most likely constructed directly against a soil face and the nature of this construction does not enable it to be waterproofed.

A dish drain has been constructed at the base of the wall internally and its purpose [is] to collect moisture that penetrates the basement wall.

There is evidence of a construction (pour) joint near the top of the basement wall to the north of the soldier pile and evidence of water staining on the internal face of the wall below this joint indicating that water penetration has occurred across this joint for an undisclosed period of time including prior to 2015.

More recently significant water penetration has occurred at a distinct location, adjacent to the southern edge of the concrete encased soldier pile…

This water penetration is likely occurring through the basement wall most likely at a joint between different concrete pause.

The excavation works in [the Tan Property] has resulted in an increase in water penetration (with clay deposits) through the basement wall.

48. For completeness, Mr Vardouniotis added that he was of the view that the internal dish drain in the basement carpark had no adequate means of draining away water, the size of the catchment on the Tan Property was no more than 40 m², that the cause of the water penetration to the OC Property is likely to be a pre-existing void in the construction joint and that the excavation works on the Tan Property resulted in an increase in water flow that eventually penetrated this void with water and soil.

49. I accept the evidence given by the parties’ expert structural engineers in their joint report, as well as that part of the evidence given by Mr Madden that I have set out above.

Failure to abate nuisance

50. In its written submissions, the Owners Corporation did not support a claim that the failure by Mr Tan to abate the nuisance after being informed of it by the Owners Corporation created a second basis of liability.

51. In Mr Walker’s 9 March 2017 email to Mr Tan, his primary complaint was of water flooding into shop 3 on the OC Property. The Owners Corporation has not pursued its claim that this flooding came from the Tan Property. Mr Walker also said: “In addition to the lack of proper drainage off the roofs, it is also noted that a section of rear yards has been excavated and in heavy rains the excavation fills with water and again water flows into the [OC Property]”. Mr Walker requested that Mr Tan “attend to the defects mentioned in order to prevent water flowing onto the [OC Property]”. In his email to Mr Tan dated 17 March 2017, Mr Walker repeated: “[i]t was observed that water was pooling at the rear yard of your property, hence water was being allowed to drain into the building [on the OC Property]”. A similar complaint was made in the Owners Corporation’s solicitors’ letter to Mr Tan dated 2 June 2017, sent by email, in par 3. The solicitors sent a letter of demand to Mr Tan on 14 September 2017, again by email. None of these communications explained how and where water was seeping into the basement carpark. They referred more specifically to the other water damage that the Owners Corporation has not pursued against Mr Tan. The letter of demand sent on 14 September 2017 attached tax invoices from repairers, all of which appear to have concerned the other damage and not the leaking into the basement.

52. Mr Tan was cross-examined as to why he did not respond to the email communications sent to him on behalf of the Owners Corporation: T 41.39 – T 42.34. Mr Tan agreed that the email address to which the communications were sent was his. He denied receiving any of the communications. His explanation was that he did not have a computer since 2015 or 2016. Faced with this response, counsel for the Owners Corporation moved to a different subject. Mr Tan’s answer was not otherwise challenged. While it would have been difficult for counsel to do otherwise, Mr Tan’s response was implicitly accepted.

53. In these circumstances, it is not necessary for the Court to consider further the possibility that Mr Tan’s failure to remediate the consequences of the excavation works on the Tan Property after the email communications were forwarded to him is an element of his liability for nuisance. It is clear that Mr Tan did not act to remediate the consequence of the works after he was first served with the Owners Corporation’s statement of claim.

Consideration

54. For the following reasons, I am satisfied that the Owners Corporation has established its case that Mr Tan has committed nuisance in the manner in which he has carried out works on the Tan Property which has caused, and will continue to cause unless remedied, an excessive amount of water to leak into the basement carpark on the OC Property.

Principles relied upon by Owners Corporation

55. As the Owners Corporation's nuisance claim against Mr Tan involved the consequences of surface water flow from the Tan Property to the OC Property, the Owners Corporation relied upon the following statement of principle by Priestley JA, with whom Mahoney and Meagher JJA agreed, in Corbett v Pallas (1995) 86 LGERA 312 (Corbett) at 316, 317:

I do not think it necessary for present purposes to retrace the ground covered by Windeyer J and Burbury CJ. I simply rely on the reasons given in the three decisions for the following propositions, the first four of which adapt what Burbury CJ said in Kraemers (at 118) and the fifth what Windeyer J said in Gartner (at 48):

1. Where the nuisance alleged is damage caused by water entering the plaintiff's land it is sufficient in order to establish a prima facie case for the plaintiff to allege and prove that material damage to his property has resulted from an increase in the flow or percolation of surface water due to the defendant's act in altering the conformation of land in the course of the defendant's use of it.

2. It is not for the plaintiff to allege or prove unnatural or unreasonable use of the land by the defendant.

3. So far as the conformation of the land is altered in the course of some specific use which may avoid liability, the burden of proof is on the defendant to allege and establish it as a distinct defence.

4. Unreasonable use is not an ingredient of the cause of action but certain types of user may amount to a “natural” and reasonable user of the land and afford a defence.

5. Whether a particular user of land is “natural” must be determined reasonably having regard to all the circumstances, including the purposes for which the land is being used and the manner in which the flow of water was increased.

56. Priestley JA distilled those principles from the judgments in Bell v Pitt [1956] Tas SR 161, Gartner v Kidman (1962) 108 CLR 12; [1962] HCA 27 (Gartner) and Kraemers v Attorney-General (Tas) [1966] Tas SR 113.

57. Mr Tan placed an emphasis on the need, in respect of the water naturally falling on the Tan Property, for the Owners Corporation to establish that Mr Tan concentrated the water and allowed it to escape. In view of the emphasis, it will be appropriate to set out the following part of the judgment of Windeyer J in Gartner (with whom Dixon J agreed) at 48:

The following propositions concerning surface waters relate only to water which came naturally upon the land from which it flows, as distinct from water artificially brought or concentrated there and allowed to escape as in Rylands v Fletcher.

With the above limitations in mind, the rights and obligations of the proprietors of contiguous closes, one on a higher level than the other, may be stated as follows:

The higher proprietor: He is not liable merely because surface water flows naturally from his land on to lower land.

He may be liable if such water is caused to flow in a more concentrated form than it naturally would.

It flows in a more concentrated form than it naturally would if, by the discernible work of man, the levels or conformations of land have been altered, and as a result the flow of surface water is increased at any particular point.

If a more concentrated flow occurs simply as the result of the “natural” use of his land by the higher proprietor, he is, generally speaking, not liable. What is a natural use is a question to be determined reasonably having regard to all the circumstances, including the purposes for which the land is being used and the manner in which the flow of water was increased: as for example whether it is agricultural land drained in the ordinary course of agriculture, whether it is timbered land cleared for grazing, whether it is a mining tenement, or is used for buildings and so forth.

58. In Gales Holdings Pty Ltd v Tweed Shire Council (2013) 85 NSWLR 514; [2013] NSWCA 382 (Gales), Emmett JA (Leeming JA and Sackville AJA agreeing) stated the principles governing the circumstances in which the flow of surface water can give rise to nuisance, at [133]-[137], in terms that are wholly consistent with the extracts from Gartner and Corbett that have been set out above.

Owners Corporation’s primary submission

59. The Owners Corporation's primary submission was that it had, on the evidence, established the prima facie case required by Priestley JA's proposition 1, and Mr Tan had neither pleaded nor proved the matters referred to in propositions 3 to 5.

Mr Tan’s submissions

60. Mr Tan responded to the Owners Corporation's submissions in his own opening written submissions by submitting that Mr Tan had no duty to prevent naturally occurring water on his land from draining to the OC Property unless he had concentrated it and it had escaped: par 10. He denied that he had concentrated the water or that it had escaped. He submitted that the Owners Corporation bore the onus to show the concentration of the water and its escape.

61. Mr Tan then submitted, in par 11, that liability for damages in both nuisance and negligence is dependent upon foreseeability of harm. Mr Tan relied upon Cambridge Water Co v Eastern Counties Leather Plc [1994] 2 AC 264 (Cambridge Water) at 301; Burnie Port Authority v General Jones Pty Ltd (1994) 179 CLR 520; [1994] HCA 13; Fennell v Robson Excavations Pty Ltd [1977] 2 NSWLR 486 at 492; Sutherland Shire Council v Becker (2006) 150 LGERA 184; [2006] NSWCA 344 at [137]; and Gales. Mr Tan did not elaborate this submission, or explain in detail how he related these authorities to the principles laid down in Corbett concerning liability in nuisance in respect of escaping surface water.

62. A consideration of the parts of the authorities relied upon by Mr Tan for which specific references are given, being Cambridge Water and Becker, shows that Mr Tan was referring to the issue of whether foreseeability of harm of the relevant type is an essential element of liability in nuisance. That may be accepted. As is shown by the judgment of Emmett JA in Gales, his Honour referred, at [139], to the circumstance: “Nuisance covers a variety of tortious acts or omissions and the relevant conduct need not be negligent.” Emmett JA then said at [144]:

[144] In certain classes of nuisance, such as creating a danger to persons or property in navigable waters, foreseeability is essential for liability: Wagon Mound (No 2) at 640. However, it is not appropriate to apply different tests for limiting damages in nuisance according to whether the impugned conduct be done intentionally or negligently. Such an approach, even if open as a matter of precedent, which may be doubted, would increase the complexity and decrease the coherence of the law of nuisance for the sake of an illusory symmetry. Either foreseeability limits damages in all cases of nuisance or in none. It is not sufficient to show that the loss suffered is the direct result of nuisance. It must also be shown that the loss was, in the relevant sense, foreseeable: Wagon Mound (No 2) at 640.

63. I propose to proceed upon the basis that, in determining whether Mr Tan committed the tort of nuisance, I am required by authority to apply the principles stated by Priestley JA in Corbett and repeated by Emmett JA in Gales. That their Honours did not directly address the issue of foreseeability in this context may perhaps reflect the proposition that, if the higher up proprietor changes the topography of that proprietor’s land in a way that concentrates water naturally flowing onto the land, it is foreseeable that the greater volume of water caused to flow onto neighbouring land may cause damage to that land. Even accepting that there may always be a question of whether the damage suffered was reasonably foreseeable, that is not an issue that causes difficulty in the present case, because the nature of the damage complained of is of a type that will be caused directly and naturally by the water flowing onto the land of the lower proprietor. In short, the damage complained of is plainly reasonably foreseeable in the present case.

64. Mr Tan submitted, in par 11, that to the extent that the removal of the driveway and the so-called flowerbed was a use of the land, it was ordinary work the nature of which was likely to be done by any owner of land, without causing damage to the lower land.

65. Mr Tan then submitted, in par 12, that what were removed from the Tan Property were improvements to the land. Those were the concrete and asphalt driveway, the raised garden bed and the soil that had been under the driveway so as to make it level. In relation to the evidence of the dish drain that ran along the boundary on the Tan Property adjacent to the OC Property, which was removed as part of the works carried out by Mr Tan, he submitted that there was no allegation that there was an easement in relation to any of those things that were removed from the Tan property. He submitted that he had no obligation to maintain the hard surfaces of the driveway or the dish drain.

63. In par 14, Mr Tan submitted that water occurring naturally on the Tan Property ran downhill across the entire land towards the OC Property and Campbell Lane. He submitted that the question is: what would have been the natural flow of the land without the driveway, the dish drain and the raised garden bed being added? He submitted that it is insufficient to compare the drainage characteristics of the land from immediately prior to the removal of those improvements to what it was after the removal.

64. Mr Tan appears to have accepted the case made by the Owners Corporation that water seepage into the basement carpark was first observed in January 2017. That is because Mr Tan submitted, in par 15, that as the excavation work on the Tan Property was undertaken in mid-2015, in order to draw the inference that it was that work that caused the water seepage, the Owners Corporation must demonstrate why it took approximately 18 months for the water to travel less than 10.5 m. This was in light of the observation that water falling onto the back of the Tan Property would have taken minutes or, more likely, seconds to reach the OC Property. Mr Tan submitted that there is insufficient temporal correlation between the work done by Mr Tan and the appearance of water in the basement carpark on the OC Property for an inference of causation to be drawn.

65. Mr Tan made a submission in par 20 that the structure at the basement carpark level on the OC Property was built with a wet wall construction, such that it was to accommodate an influx of water from the Tan Property, and that the excavation carried out by Mr Tan on his property had simply returned the rear area of that property to a largely unimproved state. Mr Tan submitted that there is no obligation for him to keep anything on his property, be it concrete or foliage, and the Owners Corporation cannot complain in the absence of evidence of concentration increasing the surface and subsurface flows, of which Mr Tan said there was no evidence.

66. Finally, Mr Tan submitted, in par 21, that the removal of improvements by a person from his land, in the absence of easements, was a reasonable use of that land, and Mr Tan had behaved reasonably in removing the driveway and the garden bed.

Conclusion on liability in nuisance

70. I do not accept that Mr Tan’s submissions reflect the reality of the nature of the excavation works carried out by Mr Tan’s contractors in mid-2015 or the consequences of those or the subsequent works.

71. The evidence did not establish what the topography of the rear of the Tan Property was before some previous owner to Mr Tan laid down the brick pavers, the concrete driveway, and the dish drain, and concreted the top of the flowerbed. The structures were placed on the Tan Property at a time that makes it impossible on the evidence to tell what the original surface contours were.

72. There is no reason to believe that the soil that supported the brick pavers and the concrete structures before Mr Tan’s excavation works was not part of the original land.

73. Mr Tan’s excavation works removed a considerable part of the original soil. That had the effect of exposing part of the boundary wall of the building on the OC Property, and creating conditions for the concentration of water on the rear of the Tan Property following natural rainfall that would otherwise not have occurred. That is an outcome that was observed. Because of its location, the environs of the Tan Property are hydrologically constrained. Apart from relatively small levels of seepage and evaporation, water falling onto the Tan Property would only drain away rapidly if it could run over the surface onto Campbell Lane. The lowering of the surface level of the rear of the Tan Property, particularly where the level was below the adjacent level of Campbell Lane, created a form of sump that would naturally store water during heavy rainfall events.

74. It may be, as Mr Tan submitted, that the excavation works made the underlying surface level. However, the works lowered the surface level so that the likelihood that water would be concentrated and retained on the rear of the Tan Property was increased.

75. Furthermore, the fact that Mr Tan left detritus and rubbish piles on the rear of the Tan Property would naturally interrupt the flow of water off the land and tend to concentrate it as it flowed against and passed the rubble piles.

76. Mr Tan’s submission that the excavation works were ordinary work the nature of which was likely to be done by any owner of land without causing damage to the lower land may have been true, if the effect of the works was temporary, and Mr Tan had proceeded to complete his proposed development in a manner that dealt appropriately with water run-off. But what Mr Tan did was to leave the rear of the Tan Property in an unfinished state for as much as five years.

77. It is clear from the photographic evidence that a consequence of the untended and uncompacted state of the rear of the Tan Property was that voids gradually developed in the surface of the soil. Those voids would, naturally and progressively over time, channel water into the subsurface and in particular the subsurface adjacent to the wall of the building on the OC Property.

78. As I have accepted the joint expert opinion that the excavation works on the Tan Property were the cause of the ingress of water into the basement carpark on the OC Property, it may not be necessary to deal with Mr Tan’s argument that the temporal connection between the carrying out of the works and the discovery of the basement carpark leaks was insufficient to justify a conclusion that the former was the cause of the latter. However, I would not, in any event, have accepted that an immediate temporal connection was necessary to establish causation. It is not feasible for the actual mechanism that led to water ingress into the basement carpark to be understood. It is a matter of common knowledge that it may take a significant time for the effects of unexpected water penetration of structures to become apparent.

79. I do not accept Mr Tan’s argument that the absence of any easements in favour of the OC Property over his property that required the retention of any particular form of drainage has any significance to the question of whether the consequences of the excavation works carried out by Mr Tan on his property constituted a nuisance that is actionable by the Owners Corporation.

80. I therefore find, in conformity with proposition 1 stated by Priestley JA in Corbett above, that the Owners Corporation has suffered damage to the OC Property caused by water entering that property from the Tan Property as a result of an increase in flow and percolation of surface water due to Mr Tan’s act in altering the conformation of the Tan Property in the course of his use of that property.

81. Mr Tan may have been able to establish that his excavation works amounted to a natural and reasonable use of his land, had the works been temporary, and part of more elaborate works that sufficiently prevented the concentration of water on the Tan Property and the increase in the flow of that surface water into the OC Property. However, Mr Tan has failed to carry the burden of proof imposed upon him by reason of the fact that he left the rear of the Tan Property in the state in which it was in at the completion of the excavation works for an entirely unreasonable length of time.

82. I have not based my conclusion on any failure by Mr Tan to adhere to the conditions in the development approval that initially caused Mr Tan to undertake the excavation works on the Tan Property. Nor have I acted on the claim that the works did not adhere to the applicable building code. Mr Madden gave some evidence on those issues and they were the subject of some cross-examination of Mr Tan. However, the issues were not developed in submissions and, as I have noted above, the Owners Corporation did not plead that any failure by Mr Tan to comply with any condition or building code was an integer of the nuisance committed by him.

Remedy

83. Mr Madden gave evidence in his 16 April 2019 report concerning the likely effect of the ingress of water into the basement carpark on the OC Property in the following terms:

I have formed the following view:

1. The existing basement retaining walls and the internal concrete slabs at the property that are subject to regular inundation with water are therefore likely to require to be designed to meet a higher exposure classification (B1) than that for which they are likely to have been designed (A1 and A2).

2. Long term exposure to this higher exposure classification would lead to reinforcement corrosion and concrete spalling.

3. The internal dish drain provided at the base of the basement retaining wall is not able to adequately drain the additional water entering from the adjoining property. As a result, uncontrolled water is overflowing across the basement floor slab and draining into the lift well.

This uncontrolled water is a nuisance and a hazard to pedestrians in the car park and the drainage is unlikely to have been designed to collect this volume of water.

84. Mr Madden also expressed the opinion that the consequences of the inundation that he referred to would continue until the repair works that he recommended were carried out.

85. Those repair works were described by Mr Madden in the following terms:

A   External works in rear yard of [Tan Property]

To address this water penetration the following works are required:

1. Excavate alongside the rear face of the retaining wall on the boundary for a minimum of 0.5m below the current soil level to expose a minimum 300mm height of the waterproof membrane currently protected by soil which has not been exposed to UV radiation.

2. Clean back and prepare the wall surface above the new excavation level and reinstate the waterproof membrane up to the top of the retaining wall in accordance with the membrane manufacturer’s recommendations.   

3. Conduct a water test of the new membrane to ensure the adequacy of the new waterproof membrane, repair and further repair until no water ingress…

4. Protect the face of the membrane with fibre cement sheeting.

5. Backfill the soil behind the retaining wall to the original soil level. Regrade the surface level of the soil to achieve surface water runoff to a design prepared by a Hydraulic/Civil engineer to prevent water ponding behind the retaining wall.

B   Internal works to concrete wall and encasement of steel soldier pile in [the OC Property]

At the location of water entry with the basement carry out the following:

1. Carry out a hammer test over the full height of the face of the wall and remove loose and cracked concrete.

2. A qualified structural engineer is to inspect the condition of the cast in steel soldier pile and the reinforcement for any deterioration and signs of corrosion.

3. Wire brush and clean back all areas of corrosion.

4. Applied primer and reinstate concrete cover using Sika. of 300 mm

   86. In his 6 April 2020 report, Mr Barker, the quantity surveyor, gave the expert opinion that the cost to carry out the repair work recommended by Mr Madden on the Tan Property was $18,425 including GST. The cost to carry out the work on the OC Property was $5,775 including GST. In addition, the cost to pump out water from the lift well on the OC Property was estimated to be $1,650 including GST.

   87. I accept the evidence given by Mr Madden and Mr Barker. It is possible that the repair costs have escalated since the date of Mr Barker’s report.

Negligence claim

88. In a similar case involving cumulative claims of nuisance and negligence arising out of the same conduct, Ward J (as her Honour then was) considered the requirements for a properly pleaded case in negligence in Quick v Alpine Nurseries Sales Pty Ltd [2010] NSWSC 1248 (Quick) at [104]-[108] in the following terms:

[104] The claim of negligence, as pleaded in para 29 of the Amended Statement of Claim (and without reference, for the moment, to the particulars appended to para 29), could on no stretch of the imagination be seen as compliant with the rules of pleading. It simply states a conclusion of law:

Further, or in the alternative, the matters complained of by the Plaintiffs were caused by the negligence of the Defendants.

[105] It is not sufficient that a pleading simply express a conclusion drawn from facts which are not stated (Trade Practices Commission v David Jones (Aust) Pty Ltd (1985) 7 FCR 109, at 114 (though in some circumstances to plead a conclusion may be to plead a material fact — Kernel Holdings Pty Ltd v Rothmans of Pall Mall (Aust) Pty Ltd (unreported, French J, Federal Court of Australia, 3 September 1991)). What is required is that there be a clear pleading of the material facts on which the cause of action is founded. There is no such recitation of material facts in para 29.

[106] Further, the matters asserted to have been caused by the alleged negligence have not been identified other than that they are matters of which complaint has been made (the “matters complained of”). The paragraph does not make clear whether those complaints are the ones referred to in the preceding paragraphs of the pleading or elsewhere, whether or not in the pleading. The defendants are entitled to know just what matters are said to have been caused by the alleged negligence.

[107] The fact that Mr and Mrs Quick have made numerous complaints in various forums over a period of years in relation to the operation at the nursery compounds the pleading problem, since it illustrates the uncertainty as to what complaints are being relied upon for the claim in negligence.

[108] In Re Bega Co-operative Society Ltd & Anor v Milk Authority of the Australian Capital Territory [1997] FCA 200, at [24], Neaves J summarised the relevant principles and noted that not only must all material facts be pleaded (those being all facts necessary for the purpose of formulating a complete cause of action) but they must be pleaded with a sufficient degree of specificity, having regard to the general subject matter of the claim, to convey to the opposite party the case that party has to meet (there citing Ratcliffe v Evans (1892) 2 QB 524, at 532; Charter Carter Pty Ltd v Shop, Distributive and Allied Employees’ Assn (WA) (1987) 13 FCR 413, at 417.

89. While the claim in negligence in the present case is pleaded more elaborately than the claim considered by her Honour, as appears from [104], I do not consider that the pleading of the negligence claim in the present case is adequate. It is little more than an assertion that the basic allegations that constitute the pleading of the nuisance claim are adequate also to plead the negligence claim. That approach is not correct. The Owners Corporation was required to plead, in a specific way, all of the essential facts that were necessary to satisfy the elements of a claim in negligence.

90. In particular, s 5B(1)(a) of the Civil Liability Act 2002 (NSW) provides that a person is not negligent in failing to take precautions against a risk of harm unless the risk was foreseeable (that is, it is a risk of which the person knew or ought to have known). Section 5B(1)(c) further requires that a reasonable person in Mr Tan's position would have taken the precautions necessary to avert the harm occurring. In determining whether a reasonable person would have taken those precautions, s 5B(2) requires the Court to consider (a) the probability that the harm would occur if care were not taken, and (b) the likely seriousness of the harm.

91. In the present case, those considerations raise questions concerning whether Mr Tan knew or ought to have known that the works that he undertook in removing the relatively impervious surface covering on the back of the Tan Property gave rise to a risk that water would enter into the basement carpark on the OC Property, as a result of subsurface leaking through the particular structure erected by the Owners Corporation at the boundary between the carpark and the subsurface of the Tan Property.

92. In the present case, the FASOC does not allege specific facts capable of establishing that the harm that occurred was foreseeable in the required manner so as to impose a duty of care on Mr Tan.

93. In any event, as I perceived the forensic contest between the parties, the Owners Corporation did not seriously maintain its claim in negligence, if its nuisance claim failed. In its outline of opening written submissions, all the Owners Corporation said in relation to the negligence claim is found at par 29 in the following terms: "The principles of negligence are axiomatic: duty, breach, causation and damages. The elements of negligence are pleaded in the FSAC (sic) at [12] to [16]". The Owners Corporation did not mention the negligence claim in its supplemental written submissions provided at the end of the hearing, save to say, by reference to the judgment of Slattery J in Dimitrios Michos v Council of the City of Botany Bay [2012] NSWSC 625; (2012) 189 LGERA 25 at [65] that the "common law readily imposes a duty of care on owners or occupiers of neighbouring properties in relation to one another".

94. I am not satisfied that the Owners Corporation has adequately pleaded or proved a negligence claim against Mr Tan. In any event, the view that I take in relation to the Owners Corporation’s nuisance claim makes it unnecessary for the Court to decide the negligence claim as a separate matter.

Orders

95. The Owners Corporation has established an entitlement to a verdict against Mr Tan for nuisance.

96. It follows from Mr Madden’s description of the necessary repair works that access will be required to the Tan Property for those works to be done.

97. There is also a question as to who should carry out the works and how the costs should be determined.

98. Further, there was evidence that Mr Tan was in the process of obtaining a new development approval to supersede the one that was associated with the original excavation works that he carried out. It is possible that the performance of the works recommended by Mr Madden on the Tan Property may be wasted if subsequent substantial works are carried out on the rear of the Tan Property during the course of some future development.

99. I propose to invite the parties to discuss the orders that should be made, and if agreement can be reached, to submit draft short minutes of order to my Associate. If agreement cannot be reached, then the matter should be relisted by arrangement with my Associate.

100. The discussions should take place on the basis that the Owners Corporation is entitled, subject to agreement between the parties to the contrary, to relief that will lead to the repair of the cause of the inundation of the OC Property generally in the manner described by Mr Madden.

101. The Owners Corporation is entitled to an order for its costs of the proceedings on the ordinary basis.

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Decision last updated: 05 November 2020