Rodgers v De Mol Investments Pty Ltd - [2010] WASC 284

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION: RODGERS -v- DE MOL INVESTMENTS PTY LTD [2010] WASC 284

CORAM: KENNETH MARTIN J

HEARD: 18 AUGUST 2010

DELIVERED : 18 AUGUST 2010

PUBLISHED : 19 OCTOBER 2010

FILE NO/S: CIV 2192 of 2010

BETWEEN: LYNDON DOUGLAS RODGERS
ROBERTA WINIFRED RODGERS
First Plaintiffs
GILROG PTY LTD
Second Plaintiff
AND
DE MOL INVESTMENTS PTY LTD
First Defendant
JAMAC CONSTRUCTION GROUP PTY LTD
Second Defendant

Catchwords:

Private nuisance - Support undermined - Damage to neighbouring property by excavation - Vibration cracks from street piling and hammering - Injunction sought against builder

Legislation:

Nil

Result:

Interlocutory injunction refused

Category: B

Representation:

Counsel:

First Plaintiffs                :     Mr A Metaxas
Second Plaintiff             :     Mr A Metaxas
First Defendant              :     No appearance
Second Defendant         :     Mr J Thomson

Solicitors:

First Plaintiffs                :     John Benari & Associates
Second Plaintiff             :     John Benari & Associates
First Defendant              :     Avon Legal
Second Defendant         :     Tottle Partners

Case(s) referred to in judgment(s):

Australian Broadcasting Commission v O'Neill [2006] HCA 46; (2006) 227 CLR 57
Australian Broadcasting Corporation v Lenah Game Meats Pty Ltd [2001] HCA 63; (2001) 208 CLR 199
Castlemaine Tooheys Ltd v South Australia [1986] HCA 58; (1986) 161 CLR 148
Philip Morris Incorporated v Adam P Brown Male Fashions Pty Ltd [1981] HCA 7; (1981) 148 CLR 457

KENNETH MARTIN J:
(This judgment was delivered extemporaneously on 18 August 2010 and has been edited from the transcript.)

This is the plaintiffs' application by chamber summons on notice seeking an interlocutory injunction against the second defendant builder, Jamac Construction Group Pty Ltd.
The first defendant is the owner of development properties in Beaufort Street, Mount Lawley, on which a ground excavation is currently taking place - preceding the intended construction of a six-level building (two lower levels and four upper levels in the new building under construction).
The first defendant has not yet entered an appearance and so has not participated in these proceedings. No interlocutory relief is sought against it.

Materials on application

An affidavit of Lyndon Douglas Rodgers sworn 30 July 2010 contains some quite graphic photographs of damage to a house at 612 Beaufort Street, Mt Lawley, which the first plaintiffs, Mr Rodgers and his wife, own together. Mr Rodgers also operates a real estate business from that house in conjunction with the second plaintiff. In particular I would refer to LDR6 in the affidavit, a series of photographs which show what looks to be significant physical damage to 612 Beaufort Street in various quarters. For instance, a photograph that appears in LDR6 at page 33 shows a pole or brace erected to provide structural support on the outside front verandah at 612 Beaufort Street. This is even more graphically observed in the photograph at page 34. I also note the internal supports seen in the photograph at page 35. Numerous cracks in the house are evident in other photographs.
The scale of the excavation on the adjacent properties owned by the first defendant is clearly seen from the photograph at page 41, showing the current level of excavation extending up to the boundary wall bordering 612 Beaufort Street.
From what I was told by counsel for the second defendant, this excavation is only half complete. What is anticipated is even more excavation work, significantly deeper than what is currently seen in the photograph at page 41.
In terms of the foundational building and excavation work completed to date, the builder, in accordance with its contractual obligations to the first defendant, has implemented what is referred to as a sheet piling system. This involves the hammering of sheet piles into the site. Consequently, there have been resulting vibration issues in the surrounding neighbourhood, associated with the required hammering.
Apart from a second series of ground anchors not yet finished, it appears that the sheet piling work was completed in the period before July 2010.
During July 2010 excavation work followed, as seen in the photograph at page 41.
The cracking and structural problems recently experienced at 612 Beaufort Street are, for the purposes of the interlocutory injunction proceedings, accepted by the builder as being causatively attributable to the works on the neighbouring land - essentially from the sheet piling or excavation that has occurred to date. That concession is relevant to the plaintiffs' need to establish, in seeking an interlocutory injunction, a serious question to be tried at an eventual trial.
Also read on behalf of the plaintiff on the application was an affidavit of Peter Grant Airey, a structural engineer engaged by the plaintiffs, sworn 13 August 2010. The affidavit contains two engineering reports prepared by Mr Airey. The first report, also found in Mr Rodgers' affidavit, is dated 6 July 2010 and addressed to the plaintiffs' instructing solicitor, Mr Benari. In particular, I mention observations in that report by Mr Airey found at the penultimate page, subparagraphs (a) to (g), which describe the likely consequences of the works on the neighbouring land, and the combination and succession of adverse accumulating factors. Mr Airey continued in the first report:
Thus a series of damage developments could have and should have been anticipated, being immediate damage when the sheet piling is installed (without even retaining anything) followed by further movement prior to the installation of anchors when it is in the cantilever phase and more movement induced damage when the sheet piling becomes loaded by the soil during the excavation process.
In the Investigating Engineer's opinion, serious consideration should be given to halting the construction on the adjoining site to avoid the exacerbation of existing damage. Future much worse damage is mathematically predictable. Recourse to a completely different system of soil retention which is stiff rather than flexible adjacent to 612 Beaufort Street is necessary to avoid major further movement rendering the building untenable and potentially dangerous.
The first report was provided early in July 2010. Thus, it was completed before the bulk of excavation work carried out after sheet piling had largely finished.
In a second engineering report of 2 August 2010 (PA1 to the affidavit), Mr Airey relates a more recent inspection of the premises at 612 Beaufort Street on 30 July 2010 and says (at page 1):
Attention was focused on the damage which had occurred to the building and to the development adjacent to the building site to the south at the corner of Beaufort Street and Barlee Street on which Jamac Builders and their sub‑contractors, GFWA, have driven sheet piling.
Mr Airey's first inspection on 2 July 2010 (preceding the excavation work on the site) revealed damage which, in terms of the Australian Standard AS 2870, appendix C, classification of damage due to foundation movements, was assessed by Mr Airey at (higher) levels of category 3 or 4 damage.
Mr Airey described the most recent inspection at site on 30 July 2010 in his second report. At the penultimate page he observed:
Within the building a new form of damage was present which was that the entire floor of the southern section of the building had translated southward leading to the development of gaps between the lower portion of the walls running north-south and their neighbours to the north and gaps within the floor and central east-west walls, all attesting to translational southward movement of the entire southern segment of the building. This is best understood by the splits in the walls which are wider near the floor than higher up, which have developed since the original inspection as shown below. This form of movement is to be expected as excavation proceeds.
I repeat that, at present, the intended depth of the proposed excavation work remains only half complete.
On the last page of the second report, Mr Airey (beneath a photograph taken on 30 July 2010) said:
We understand that the excavation on the adjoining site has not yet reached the depth to which it is proposed to proceed. If this is the case, further translational and vertical movement of the southern section of the building must be anticipated. Under these circumstances and even at the present moment the building cannot be considered to be safe. It is recommended that, for duty of care reasons, the building be vacated.
Should further comment be required could you please contact me.
Notwithstanding that duty of care warning by Mr Airey, I was told by counsel for the plaintiffs that Mr Rodgers was still conducting, or attempting to conduct, his real estate business from the 612 Beaufort Street premises.
In opposition to the interlocutory injunction, the second defendant read and relied upon an affidavit of John Giovanni Abrusci, sworn on 17 August 2010. In that affidavit, Mr Abrusci exhibits the second defendant's building contract with the first defendant, as well as correspondence passing between solicitors for the respective parties, including with the solicitor representing the owner and first defendant, Avon Legal.

Resolution of application for interlocutory injunction

Counsel for the plaintiffs, as he commenced his oral submission, acknowledged that the relief by way of restraint against the builder, which was sought on an interlocutory basis, was absolute in its negative formulation against all further construction work. The interlocutory relief claimed was that:
until further order, the second defendant be restrained and an injunction be granted restraining the defendant from continuing construction work on the land situated at 602 - 608 and 610 Beaufort Street, Mt Lawley, more particularly the lands in Certificates of Title Volume 533 Folio 117A, Volume 1033 Folio 339 and Volume 1031 Folio 993.
Notwithstanding a proposed absolute interlocutory constraint against further construction work, it was explained by counsel that the plaintiffs' real concern was over any further damage being sustained to 612 Beaufort Street. Counsel said that the plaintiff's intent was not to permanently thwart the ultimate construction of the proposed six-level building, currently in its early phase of foundational construction on the adjacent land to the plaintiffs' property. Rather, the plaintiffs' interlocutory object was expressed as merely to restrain further work from continuing, on the basis that it could resume if any further works did not cause additional damage to the plaintiffs' property. That position, I think, raises a conceptual issue of some difficulty that confronts the plaintiffs, and to which I will return.
Each party filed written submissions on the application, which were helpful in terms of formulating the parties' respective cases. There is, as I have indicated, for the purposes of this application, a qualified acceptance by the builder (second defendant) of a serious question to be determined as to causation of the damage already sustained at 612 Beaufort Street.
The plaintiffs' causes of action raised against the builder are essentially common law in derivation. The plaintiffs have filed a statement of claim, by which the plaintiffs contend for the existence of common law duties of care owed to them, both by the first defendant (landowner) and the second defendant (builder). The plaintiffs also raise a common law cause of action grounded on private nuisance against both defendants. In addition, the plaintiffs raise an ancient cause of action based upon the removal of ground support to an existing property.
The High Court of Australia has recently explained the threshold legal considerations applicable for an interlocutory injunction: see Australian Broadcasting Commission v O'Neill [2006] HCA 46; (2006) 227 CLR 57 [19], [65] ‑ [72]. In addition, the serious question and balance of convenience thresholds are not assessed as concepts in isolation. Sir Anthony Mason in Castlemaine Tooheys Ltd v South Australia [1986] HCA 58; (1986) 161 CLR 148, 154 ‑ 155 (that decision subsequently being referred to in Australian Broadcasting Corporation v Lenah Game Meats Pty Ltd [2001] HCA 63; (2001) 208 CLR 199, 217) observed that the assessment of the serious question and balance of convenience are 'related' considerations, in the overall analysis.
That being so, an assessment of a balance of convenience may be less weighty in favour of a plaintiff in a scenario where that plaintiff has shown a strong arguable case for its causes of action, as a matter of their perceived merit at a forthcoming trial. Or, where the balance of convenience overwhelmingly favours a plaintiff, then a less strong serious question may be enough to sustain the interlocutory injunctive relief that is sought. Each particular case must be assessed on its individual overall merits towards the interlocutory relief that is sought.
Furthermore, Meagher R P, Heydon J D and Leeming M J, Meagher, Gummow and Lehane's Equity: Doctrines and Remedies (4^th ed, 2002) [21‑035], [21‑345], [21‑375], explain that the pursuit of equitable relief (ie injunction), in a situation where exclusively common law causes of action are raised, will require an evaluation as to whether common law damages alone may be an adequate remedy for the plaintiff in respect of the grievances of which it complains. That situation is to be contrasted to a case where purely equitable causes of action are raised - in which case a consideration as to an alternative remedy in common law damages alone as a potential outcome will not present.
The second defendant's submissions in opposition identified five basic reasons as to why interlocutory relief should not be granted at this time. Under pars 8.1.1 and 8.2.1 of the written submissions, the second defendant raises arguments going either to laches, waiver or acquiescence against the plaintiffs - in terms of the plaintiffs either sitting by and doing nothing from the time building works commenced on the neighbouring development properties, or by not taking earlier or more adequate steps to protect their overall position, and thereby acquiescing, waiving, or essentially delaying in not pursuing relief more timeously - to the extent that it is said that the court, in an exercise of its equitable jurisdiction at this time, ought be persuaded to deny equitable relief, as a matter of discretion. It was even put that the plaintiffs had positively supported the neighbouring building work at a public meeting.
As to those arguments, I must say firmly that, on my assessment of the materials, I see no sufficient basis made out towards any respectable argument, even evaluated at the interlocutory stage, that the plaintiffs have been at all dilatory in terms of exercising their rights - and sufficient to sustain a platform to deny equitable relief, or by them acting in such a fashion as to (arguably) cause prejudice to the positions of either defendant. On my (interlocutory) assessment of the materials, a number of diverse occurrences seem to have been happening associated with this construction, including, at some point, the local authority, the Town of Vincent, taking steps in the State Administrative Tribunal (SAT) to obtain a restraint against the builder's sheet piling works. A restraint did issue by SAT for a period. Subsequently, however, after community negotiations which included surrounding property owners, the interim restraint imposed by SAT was lifted.
There is also a not insignificant consideration here, in that a reasonable neighbour in the plaintiffs' position could well anticipate, accept or be prepared to put up with a likelihood of a manageable degree of noise, discomfort or inconvenience caused by neighbouring building works before and as they commence. That anticipation of manageable inconvenience is distinct from having to confront later on a reality of a far greater level of disturbance, with consequent damage to their property as a result of what actually manifests, and then deciding what to do about it, as the whole disturbance issue materialises and rises to one of far higher concern. Reasonable scope for negotiation and dialogue is to be expected (indeed, encouraged) in an emerging situation, for a time. I also bear in mind that a cause of action in private nuisance is predicated upon there being a need for a plaintiff to establish a 'substantial interference' against a property right. Thresholds of reasonableness are applied by courts in terms of assessing parties' responses to local disturbances, and applying contemporary standards of modern urban living in assessing the reasonableness of the levels of interruption, disturbance or damage with which a subjected party is confronted.
So I do not hesitate to say here that I am not at all persuaded that there can be, on what I have seen at least, any basis to deny relief to the plaintiffs predicated upon considerations such as laches, acquiescence, waiver, delay or disqualifying conduct against relief of that kind as against the plaintiffs.
Otherwise then, in evaluating an overall balance of convenience, and as part of an equation, addressing the question of whether common law damages may ultimately be an adequate remedy for the plaintiffs, a number of potentially conflicting considerations need to be balanced. I do so in the context of the claimed interlocutory relief preceding trial, whilst also having an eye to the type of final relief that may ultimately eventuate at a trial, coupled with what may, or what needs reasonably to be done, to hold a status quo until trial.
I accept that the plaintiffs are asserting legitimate property owners' rights and that it is no small thing for a proprietary right to be interfered with, by the external infliction of what looks to be substantial physical damage. I repeat that there is no argument here by the builder, from a causation of damage perspective, over (for the purposes of this application) a serious question being shown by these plaintiffs, arising from what I would primarily characterise as acts of private nuisance by the second defendant, as well as a rather obvious undermining by excavation of existing ground support for the plaintiffs' property - from the already deep neighbouring site excavation, and then, from the even deeper excavation threatened in future.
A significant countervailing consideration, however, is that the excavation work at site has currently been wholly interrupted - and for some weeks now - due to an external factor, being dewatering problems encountered by the builder. This problem caused the builder to cease all work and to decommission itself from site, for the present, with a view to the dewatering problem being remedied in the interim.
The level of present threat, then, presented by further excavation work, in terms of a need for urgent injunctive relief, is not as pressing as it otherwise may have been - had, say, I been faced today with a more imminent prospect of deeper excavation work on the development site resuming today, or tomorrow. Indeed it would appear that, at the time of hearing the plaintiffs' application, a resumption of work at site may be at least a couple of weeks off, due to the unresolved dewatering issue. My assessment as to the imminence of the threat sought to be restrained is an important interlocutory consideration, in terms of the actual threatened conduct that needs to be restrained.
Another consideration against interlocutory relief at this time, relevant to the balance of convenience, is that a certain amount of physical damage has undoubtedly already been caused to 612 Beaufort Street, and which damage looks, prima facie, to be of a serious nature. The issue then is whether, bearing in mind the stage at which work on the adjoining development site has reached, further work proposed at site is capable of being continued by the builder (particularly further excavation work) in such fashion that, if implemented, the work would result in no more, or at least minimal, further damage being caused to 612 Beaufort Street.

As to that issue, the evidence before me is not currently satisfactory. I have carefully read the engineer's two reports, as regards this issue. Mr Airey is critical of the use of sheet piling as a process used at this site. He seems to suggest, particularly in his first report, that there was an alternative, less problematic method of proceeding - which would not, in its implementation, have been likely to have generated the same extent of damage as has been witnessed to 612 Beaufort Street. However, I would interpolate that the building contract entered between the first defendant and the second defendant expressly requires that sheet piling be implemented as the stipulated method for performing the ground works. So, from the second defendant's perspective as builder, it has done little other than to faithfully implement, it would say, the requirements of its contractual obligations with the first defendant.
That consideration, however, cannot ultimately deter a court from being satisfied, if it be the case, that a sufficient basis is shown by the plaintiffs to establish arguable breaches of the second defendant builder's duty of care to the plaintiffs. Nor would it deflect the builder's potential exposure in private nuisance to the plaintiffs, possibly entitling the plaintiffs to injunctive relief, or to damages against the second defendant.
But I return to the consideration that there is presently a much reduced threat factor, with the likely resumption of work possibly still weeks off. My assessment in terms of whether it would, at this point, be possible for the balance of the proposed excavation and foundational site work to be completed by a process that will not cause even further damage to 612 Beaufort Street, or at least not damage it further to any substantial degree, is an outstanding evidentiary (expert) issue needing to be better addressed. I cannot say at this time whether, on the present materials, that I am satisfied that a relatively harm free resumption of the work would be possible, bearing in mind where the progress of the excavation overall currently lies. It may or may not be possible from now on for an alternative construction method to be implemented that would be assessed as less likely to cause further substantial physical damage to 612 Beaufort Street. But that issue requires better clarification.
A third factor against interlocutory relief being granted now, is that the degree of damage already caused to 612 Beaufort Street needs to be better explained. I have seen what Mr Airey has written in his second report about duty of care and his recommendation that 612 Beaufort Street be vacated. Where this leaves that property in terms of its overall structural stability for the future, and whether the property may at this point have already been irreparably damaged to such a degree that demolition be the only option, is another issue that requires greater clarification, along with some better insight as to the expense of remedial options (if any).
Fourth, the worth of the plaintiffs' property needs to be better established. This is not because a neighbour or their builder may proceed with impunity in carrying on damaging excavation and constructional work in willy nilly fashion that wholly ignores the property rights of neighbours, by simply accepting and end exposure to a potentially large damages bill. However, from the court's point of view in assessing whether common law damages may be an adequate remedy, for what, in the end, may be a substantial damages award, the overall value of the damaged property is key information the court requires in the balancing of interests exercise it must discharge. Here again, I do not know enough about the valuation issue at present.
A fifth matter is the present absence of the owner/developer (first defendant) from the litigation, in terms of any participation in these proceedings, to date. The owner has not been served with the papers for this interlocutory injunction application. It has not yet entered an appearance. This is a matter of concern, given that in some ways the second defendant builder's position may be seen as something akin to being 'meat in the sandwich'. The builder says it only implements its contractual obligations. I derive the impression from passing solicitors' correspondence in Mr Abrusci's affidavit that the owner, to date, has manifested something of a 'hands off' approach, as expressed in correspondence from Avon Legal, sent on behalf of the first defendant. An undesirable consequence of a remote approach from the owner/developer, is that the present neighbouring damage problem, which is real, could slip between defendants - in terms of how the problem is first apprehended, then remedied. The builder expresses, by reference to its contractual obligations, a legitimate understanding of its contractual obligations as builder, on the face of it. Avon Legal, speaking for the owner, expresses in correspondence a distinct interpretation - by reference to the builder's obligations set down under provisions of the building contract. However, disputation as between the defendants only results in the plaintiffs suffering in the meantime - as a consequence of what looks to be something of a stand‑off, between owner and builder. This cannot continue.
The building work is ultimately for the benefit of the first defendant. The first defendant's attitude, at least to date, looks to me to be too remote in terms of a desirable degree of active participation to resolve this problem. It ought be more proactive towards contributing now to a potential resolution of what is an obvious and potentially expensive problem by reason of what looks to be significant physical damage already caused to at 612 Beaufort Street.
If the court is to grant interlocutory injunctive relief here, it ought to be in the holistic context of the participation of all parties with relevant interests in the present problem, rather than by just 'cherry picking' out the builder.
In all the circumstances, recognising the legitimate proprietary interest of the plaintiffs, but then balancing the conflicting interests, at this time by reference to balance of convenience considerations, I am not persuaded that it is appropriate to grant interlocutory relief at this time.
The most significant consideration against relief now, is that it would seem that there will be no further work by the builder on site in the immediate present. A resumption of work may still be some weeks away. On that basis, I propose to dismiss the plaintiffs' application on the present chamber summons, framed as it is in wide and absolute prohibitory terms. That absolute nature of a proposed interlocutory restraint, I think, is another conceptual difficulty that will need to be addressed. That absolute interlocutory restraint is essentially a default position, due to the plaintiffs being unable to presently formulate a more limited, and possibly less unpalatable (to the defendants), interlocutory restraint.
This outcome, of course, is a decision I have reached on the facts as they subsist at 12.17 pm on Wednesday, 18 August 2010. The underlying interlocutory facts may later change, in which case it is always open to a plaintiff to renew its interlocutory application for injunctive relief based on altered facts: see Philip Morris Incorporated v Adam P Brown Male Fashions Pty Ltd [1981] HCA 7; (1981) 148 CLR 457.
It is appropriate that this matter be case managed henceforth. On that basis I propose, having dismissed the plaintiffs' application for the interlocutory injunction upon the plaintiffs' chamber summons of 2 August 2010, to order that this action be entered in the CMC list to be case managed. I will hear the parties as to when there should be a directions hearing.
There is already an amended statement of claim, filed on behalf of the plaintiffs. A memorandum of appearance has been entered on behalf of the second defendant. No appearance on behalf of the first defendant has been filed to date.
In due course, defences should be forthcoming from the first and second defendant.
There should be an early directions hearing with a view to settling how the matter is to proceed. It may be that one of the mechanisms available, which I also balance in the overall scheme, is the option of an expedited trial, towards a grant of permanent injunctive relief for the plaintiffs.