Pye v Johnson

[2021] NSWLEC 1479

Land and Environment Court

New South Wales

Medium Neutral Citation:

Pye v Johnson [2021] NSWLEC 1479

Hearing dates:

Conciliation conference on 30 June 2021 and 21 July 2021

Date of orders:

23 August 2021

Decision date:

23 August 2021

Jurisdiction:

Class 3

Before:

Peatman AC

Decision:

See orders at [11]-[12] below

Catchwords:

ENCROACHMENT OF BUILDINGS – rural land – compensation payable – conciliation conference – agreement between the parties – orders

Legislation Cited:

Encroachment of Buildings Act 1922 ss 2, 3

Land and Environment Court Act 1979 ss 19 (c1), 39

Category:

Principal judgment

Parties:

David William Pye (Applicant)
Brad Johnson (First Respondent)
Teresa Johnson (Second Respondent)
Bryan Maurice Johnson (Third Respondent)

Representation:

Counsel:
J Walker (Applicant)
L Raffaele (Respondents)

Solicitors:
Brock Partners Lawyers (Applicant)
Bartier Perry (Respondents)

File Number(s):

2021/109996

Publication restriction:

No

Judgment

1. COMMISSIONER: This is an application by the Applicant pursuant to s 2(1) of the Encroachment of Buildings Act1922 (EB Act) to transfer certain land to the Applicant pursuant to s 3(2)(a) and for the Applicant to pay compensation to the Respondent pursuant to s 3(2)(b) of the EB Act. In summary:

1. The proceedings have been brought under s 3(1) of the EB Act.

2. The proceedings fall within Class 3 of the Court jurisdiction pursuant to s 19(c1) of the Land and Environment Court Act 1979 (LEC Act).

3. The statutory power or function to be exercised in determining the proceedings is pursuant to s 3 of the EB Act, and ss 34(3) and 39 of the LEC Act.

Background

2. The Applicant is the owner in fee simple of Lot 75 DP 657804, also known as 338 Baldry Road, Cumnock (the Applicant’s Land).

3. The Respondents are the owners in fee simple of Lot 15 DP 753224 (the Respondents’ Land).

4. The boundaries of the Applicant’s Land and the Respondents’ Land are as shown in the attached Sketch by Carpenter, Collins & Craig at Annexure A to this judgment.

5. The Court arranged a conciliation conference under s 34(1) of the LEC Act between the parties, which was held on 30 June 2021 and 21 July 2021. I presided over the conciliation conference.

6. At the conciliation conference, the parties reached agreement as to the terms of a decision in the proceedings that would be acceptable to the parties. This decision involved the Respondents transferring certain land to the Applicant, and the Applicant paying compensation to the Respondents in the sum of $25,000 together with all legal costs, including the costs of the Respondents’ mortgagee granting consent to the said transfer of land.

7. Under s 34(3) of the LEC Act, I must dispose of the proceedings in accordance with the parties’ decision if the parties’ decision is a decision that the Court could have made in the proper exercise of its functions. The parties’ decision involves the Court exercising the function under ss 3 and 4(1)(a)-(c) of the EB Act and s 39 of the LEC Act to transfer the relevant part of the Respondents’ Land to the Applicant, and for the Applicant to pay compensation to the Respondents.

8. There are jurisdictional prerequisites that must be satisfied before this function can be exercised. The parties identified the jurisdictional prerequisites of relevance in these proceedings to be as set out as follows, and explained how the jurisdictional prerequisites have been satisfied:

1. A concrete block cottage built partly upon the Applicant’s Land encroaches upon the Respondents’ Land. Various other structures within the curtilage of the cottage, including metal stockyards, a garage, a cubby house, aviary and swimming pool compound also encroach upon the Respondents’ Land.

2. The Applicant is therefore an “encroaching owner” and the Respondents are an “adjoining owner” within the meaning of s 2 of the EB Act.

3. Under s 3 of the EB Act, an encroaching owner may apply to the Court for relief under this Act in respect of an encroachment.

4. The orders to which the parties have agreed in these proceedings are in the s 34 Agreement dated 18 August 2021, being an order for the payment of compensation to the adjacent owner in the amount of $25,000 and orders to enable the transfer of part of the Respondents’ Land to the Applicant. These are orders which may be made under s 3(2)(a) and (b) of the EB Act, respectively.

5. The parties are agreed that the encroachments were not intentional and did not arise from negligence. Therefore the minimum compensation payable under s 4(1) of the EB Act is the value of the subject land (that is the land on which the encroachments stand). The parties are agreed that the value of the subject land is $25,000.

6. The parties have also agreed on an amount that the Applicant will pay to the Respondents, representing the Respondents’ costs of these proceedings. The Court has power to order the payment of costs under s 14 of the EB Act.

Legislation

Encroachment of Buildings Act 1922

2 Definitions

In this Act, unless the context or subject-matter otherwise indicates or requires:

Adjacent owner means the owner of land over which an encroachment extends.

Boundary means the boundary line between contiguous parcels of land.

Building means a substantial building of a permanent character and includes a wall.

Court means the Land and Environment Court.

Encroaching owner means the owner of land contiguous to the boundary beyond which an encroachment extends.

Encroachment means encroachment by a building, and includes encroachment by overhang of any part as well as encroachment by intrusion of any part in or upon the soil.

Owner means any person entitled to an estate of freehold in possession:

(a) whether in fee simple or for life or otherwise,

(b) whether at law or in equity,

(c) whether absolutely or by way of mortgage,

and includes a mortgagee under a registered mortgage of a freehold estate in possession in land under the Real Property Act 1900.

Subject land means that part of the land over which an encroachment extends.

3 Encroachments

(1) Either an adjacent owner or an encroaching owner may apply to the Court for relief under this Act in respect of any encroachment.

(2) On the application the Court may make such orders as it may deem just with respect to:

(a) the payment of compensation to the adjacent owner,

(b) the conveyance transfer or lease of the subject land to the encroaching owner, or the grant to the encroaching owner of any estate or interest therein or any easement right or privilege in relation thereto,

(c) the removal of the encroachment.

(3) The Court may grant or refuse the relief or any part thereof as it deems proper in the circumstances of the case, and in the exercise of this discretion may consider amongst other matters:

(a) the fact that the application is made by the adjacent owner or by the encroaching owner, as the case may be,

(b) the situation and value of the subject land, and the nature and extent of the encroachment,

(c) the character of the encroaching building, and the purposes for which it may be used,

(d) the loss and damage which has been or will be incurred by the adjacent owner,

(e) the loss and damage which would be incurred by the encroaching owner if the encroaching owner were required to remove the encroachment,

(f) the circumstances in which the encroachment was made.

(4) The Court may refer any question involved in proceedings on the application to:

(a) any registered land surveyor (within the meaning of the Surveying and Spatial Information Act 2002), or

(b) any valuer.

(5) This section applies to encroachments made either before or after the commencement of this Act.

4 Compensation

(1) The minimum compensation to be paid to the adjacent owner in respect of any conveyance, transfer, lease, or grant to the encroaching owner shall, if the encroaching owner satisfies the Court that the encroachment was not intentional and did not arise from negligence, be the land value of the subject land, and in any other case three times such land value.

(2) In determining whether the compensation shall exceed the minimum, and if so by what amount, the Court shall have regard to:

(a) the value, whether improved or unimproved, of the subject land to the adjacent owner,

(b) the loss and damage which has been or will be incurred by the adjacent owner through the encroachment and through the orders proposed to be made in favour of the encroaching owner,

(c) the circumstances in which the encroachment was made.

14 Costs

In any application under this Act the Court may make such order as to payment of costs charges and expenses as it may deem just in the circumstances and may take into consideration any offer of settlement made by either party.

Land and Environment Court Act 1979

19   Class 3—land tenure, valuation, rating and compensation matters

The Court has jurisdiction (referred to in this Act as “Class 3” of its jurisdiction) to hear and dispose of the following—

…

(c1)  proceedings under the Encroachment of Buildings Act 1922,

…

39   Powers of Court on appeals

(1)  In this section, appeal means an appeal, objection, reference or other matter which may be disposed of by the Court in proceedings in Class 1, 2 or 3 of its jurisdiction.

(2)  In addition to any other functions and discretions that the Court has apart from this subsection, the Court shall, for the purposes of hearing and disposing of an appeal, have all the functions and discretions which the person or body whose decision is the subject of the appeal had in respect of the matter the subject of the appeal.

(3)  An appeal in respect of such a decision shall be by way of rehearing, and fresh evidence or evidence in addition to, or in substitution for, the evidence given on the making of the decision may be given on the appeal.

(4)  In making its decision in respect of an appeal, the Court shall have regard to this or any other relevant Act, any instrument made under any such Act, the circumstances of the case and the public interest.

(5)  The decision of the Court upon an appeal shall, for the purposes of this or any other Act or instrument, be deemed, where appropriate, to be the final decision of the person or body whose decision is the subject of the appeal and shall be given effect to accordingly.

(6)  Notwithstanding any other provision of this section, if an appeal relates to an application made to a council within the meaning of the Local Government Act 1993 or a consent authority within the meaning of the Environmental Planning and Assessment Act 1979 and that council or consent authority may not approve of, consent to, or deal with, or grant a permission in respect of, the application except after consultation with, or with the concurrence or approval of, any person or body—

(a)  the Court may determine the appeal whether or not the consultation has taken place and whether or not the concurrence or approval has been granted, and

(b)  in a case where the concurrence or approval has been granted—the Court may vary or revoke any conditions imposed by that person or body or may impose any conditions that could have been imposed by that person or body.

1. A)    (Repealed)

(7)  The functions of the Court under this section are in addition to and not in derogation from any other functions of the Court.

(8) This section (other than subsection (5)) does not apply to proceedings under section 30 or 31 of the Access to Neighbouring Land Act 2000.

9. I am satisfied that the parties’ decision is one that the Court could have made in the proper exercise of its functions, as required by s 34(3) of the LEC Act:

1. The Applicant is the registered proprietor of Lot 75 in Deposited Plan 657804.

2. The Respondents are the registered proprietors of Lot 15 in Deposited Plan 7543224.

3. The Applicant is an “encroaching owner” as his improvements encroach upon the Respondents’ Land; and the Respondents are an “adjoining owner” within the meaning of those definitions in s 3 of the EB Act.

4. The Applicant has standing to bring these proceedings pursuant to s 3(1) of the EB Act.

5. The Court has power to determine the matter in accordance with ss 3 & 4 of the EB Act and s 39 of the LEC Act as follows:

1. The value of the subject land to the adjacent owner (s 4(2)(a) of the EB Act);

2. The loss and damage which has been or will be incurred by the Respondents through the encroachment and through the orders and through the orders proposed to be made in favour of the encroaching owner (s 4 (2)(b) of the EB Act);

3. The circumstances in which the encroachment was made (s 4(2)(c) of the EB Act).

4. As noted above, the parties agreed that the encroachments were not intentional and did not arise from negligence. Therefore the minimum compensation payable under s 4(1) of the EB Act is the value of the subject land which is to be transferred. The parties have agreed the value to be $25,000 (s 14(1) of the EB Act).

5. The parties have agreed that the Applicant will pay the Respondents’ costs in accordance with s 14 of the EB Act.

10. As the parties’ decision is a decision that the Court could have made in the proper exercise of its functions, I am required under s 34(3) of the LEC Act to dispose of the proceedings in accordance with the parties’ decision.

11. The Court orders:

1. The ownership in fee simple of that part of Lot 15 in Deposited Plan 753224 as identified between the lines marked “2 BARB 3 PLAIN NETT FENCE ABT 70 YEARS OLD” and “NOT FENCED” (highlighted in yellow) between approximately 20 metres and 44 metres wide in the Survey Report and Sketch prepared by Timothy Collins of Carpenter, Collins & Craig dated 15 January 2021 set out in Annexure A be transferred unencumbered to the Applicant pursuant to s 3(2)(a) of the Encroachment of Buildings Act 1922, on the terms and conditions as set out below (Subject Land).

2. Within 14 days of the date of these orders, the Applicant will arrange for a survey of the Subject Land to be prepared in a form appropriate for lodgement with Land Registry Services NSW.

3. Within 14 days of receipt of the survey required by Order (2), the Applicant will do all things necessary to prepare and provide the transfer forms to the Respondents together with a copy of the survey, for review and execution.

4. Within 14 days of obtaining mortgagee consent, and unless additional time is required due to unforeseen circumstances, the Respondents will provide to the Applicant executed documents for registration together with a detailed schedule of costs.

5. Within 14 days of receipt of the documents required by Order (4), the Applicant shall pay to the Respondents compensation pursuant to s 3(b) of the Encroachment of Buildings Act 1922 the sum of $25,000.

6. Within 7 days of receiving payment by the Respondents of the final payment of costs in accordance with the agreement between the parties noted below, the Respondents shall do all things necessary to transfer the Subject Land to the Applicant, and to have that transfer registered with Land Registry Services NSW.  

12. The Court notes the agreement between the parties in relation to the payment of costs as follows:

1. The Applicant is to pay the Respondents’ costs of the proceedings in the amount of $8,552.50 inclusive of GST, within 21 days of the date of these orders.

2. Within 14 days of obtaining mortgagee’s consent, the Respondents are to provide a schedule of costs to be reimbursed by the Applicant (including but not limited to, legal costs and disbursements, mortgagee’s costs, registration fees, and any other fees associated with the transfer of the Subject Land).

…………………………

M Peatman

Acting Commissioner of the Court

Annexure A (876468, pdf)

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Decision last updated: 23 August 2021